TMI Tax Updates - e-Newsletter
March 7, 2020

Case Laws in this Newsletter:

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

TMI SMS

• Continuation of area Based Exemption under GST regime as granted under central excise - doctrine of promissory estoppel not applicable - HC

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Articles

1. WHETHER THE DETERMINATION OF THE ISSUE OF ‘PLACE OF SUPPLY’ CAN BE THE SUBJECT MATTER OF ADVANCE RULING?

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Yes Bank's digital partners hit by moratorium

2. Micro, Small and Medium Enterprises: Challenges and Way Forward (Shri Shaktikanta Das, Governor, Reserve Bank of India - March 6, 2020 - at the 15th ASSOCHAM Annual Banking Summit)

3. Extension of last of receipt of public comments on the Competition (Amendment) Bill, 2020

4. Competition Commission of India organises Fifth Edition of National Conference on Economics of Competition Law

5. CBDT issues FAQs on Direct Tax Vivad se Vishwas Scheme, 2020

Notifications

Customs

1. 20/2020 - dated 5-3-2020 - Cus (NT)

Exchange Rates Notification No.20/2020-Custom (NT) dated 05.03.2020

FEMA

2. FEMA.398/RB-2020 - dated 18-2-2020 - FEMA

Foreign Exchange Management (Foreign Exchange Derivative Contracts) (First Amendment) Regulations, 2020

Income Tax

3. 16/2020 - dated 5-3-2020 - IT

Securities listed on a recognised stock exchange located in any International Financial Services Centre notified.

Circulars / Instructions / Orders

Companies Law

1. 08/2020 - dated 6-3-2020

Filing of forms in the Registry (MCA-21) by the Insolvency Professional (Interim Resolution Professional (IRP) or Resolution Professional (RP) or Liquidator) appointed under Insolvency Bankruptcy Code, 2016 (IBC, 2016)

2. 07/2020 - dated 5-3-2020

Extension of the last date of filing of Form NFRA-2

Highlights / Catch Notes

GST

• PHFMS Service Classification Dispute with DME Unresolved; Pending in Madras High Court, Section 98(2) CGST/TNGST Act.

  Case-Laws - AAR : Classification of services - services provided by Padmavathi Hospitality & Facilities Management Services (PHFMS) to DME - Pure services or Composite Supplies? - application cannot be admitted as per Proviso to Section 98(2), of the CGST /TNGST ACT as the question raised is already pending in the Hon’ble Madras High Court. - AAR
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• GST Treats Works Contracts as Services; Mobilisation Advances Before GST Are Exempt per Section 142(11)(b) of the Act.

  Case-Laws - AAR : ‘Supply of Works Contract’ is deemed to be a service under GST. Under the pre-GST regime, service tax was leviable on the service portion of the Works Contract, which in the case at hand being original work, was levied on 40% of the value. - GST is not payable on the Mobilisation advance which has been received prior to GST implementation as per Section 142(11)(b) of the Act. - AAR
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• Non-Woven Polypropylene Rice Bags Classified Under Chapter Heading 6305 3300 for GST, Rules AAR.

  Case-Laws - AAR : Classification of goods - Non-woven PP Rice Bags / Sacks - applying the Explanation of HSN to Heading 6305, the product is classifiable under Chapter Heading 6305 3300. - AAR
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• Advertising Services in Print Media Not Exempt from GST, Rules Authority for Advance Rulings (AAR.

  Case-Laws - AAR : Exemption from GST - Pure services - selling of space/ time for advertisement in print media in case of advertising companies - Supply of service viz. "Sale of Space for Advertisement in Print Media" is not a "Pure Service" and the exemption to said services are not admissible - AAR
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• GST Area-Based Exemptions Can't Continue via Promissory Estoppel if Statutory Provisions Contradict, per Section 174(2)(c) CGST Act.

  Case-Laws - HC : Continuation of area Based Exemption under GST regime as granted under central excise - doctrine of promissory estoppel - The plea of promissory estoppel cannot be enforced against an act done in accordance with the statutory provisions of law. Under Section 174 (2) (c) of the CGST Act, express provision has been made by the Parliament to provide that any tax exemption granted as an incentive against investment through a notification under, inter alia, the erstwhile Central Excise Act, shall not continue as a privilege if the said notification is rescinded - HC
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• Court Affirms FIR for Tax Evasion with Bogus Firms; GST Code Doesn't Override IPC or CrPC Provisions.

  Case-Laws - HC : Registration of FIR without any specific order under GST - Tax evasion - bogus firms - preparing and issuing false documents / invoices - The submission of the learned counsel for the petitioners that there could be no registration of first information report without a specific order under the GST Code in respect of evasion of tax is not acceptable for the simple reason that the GST Code does not impliedly or explicitly repeals the provisions of Indian Penal Code or the Code of Criminal Procedure and therefore an offence punishable under the Indian Penal Code can very well be reported and investigated as per law. - HC
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• Buyer of 3BHK Flat Denied Tax Benefits as Seller Violates Section 171 of CGST Act, 2017 by Not Reducing Prices.

  Case-Laws - NAPA : Profiteering - purchase of a 3BHK Flat in “Aparna Serene Park” - the provisions of Section 171 of the CGST Act, 2017 have been contravened by the Respondent as he has not passed on the above benefit to his customers by commensurate reduction in the prices of the flats. - NAPA
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Income Tax

• Petitioner barred from contesting jurisdiction transfer due to delayed challenge; Section 127 and 153A involved.

  Case-Laws - HC : Transfer of case u/s 127 - centralization of case after search - delayed challenge to the order passed u/s 153A - the impugned order came to be passed on 19.02.2019 and till the issuance of the assessment notices dated 15.07.2019 under Section 153A of the Act, the petitioner did not challenge the order of transfer and there is no explanation for the delay in challenge. Hence, the petitioner is barred from challenging the same in exercise of jurisdiction by a new authority - HC
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• Interest on Share Application Money Deemed Capital Expenditure Due to Delayed Allotment, Aiding Capital Expansion and Profit Generation.

  Case-Laws - HC : Payment of interest on share application money - Nature of expenditure - the assessee with an object to increase share capital has incurred expenses in the form of payment of interest on account of delay in allotment of shares, yet the increase in capital results in expansion of the capital base of the company and may also help in profit making. Therefore, it retains it’s character as capital expenditure - HC
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• Income Tax Act: Penalties u/ss 271(1)(c) and 271AAA Are Mutually Exclusive, Cannot Be Applied Simultaneously.

  Case-Laws - AT : Penalty u/s 271AAA or 271(1)(c) - The penalties u/s 271(1)(c) and 271AAA are attracted in different situations and both are mutually exclusive. Having initiated the penalty u/s 271(1)(c), levy of penalty u/s 271AAA is not permissible. - AT
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• Surrendered Income from Unrecorded Sales Not Taxable u/s 115BBE Due to Accepted Explanation by Assessee.

  Case-Laws - AT : Taxation of surrendered income - taxability u/s 115BBE - the assessee had given complete explanation regarding the source of entries recorded in the diary, which were explained to be part of unrecorded sales and the AO also did not object to the said explanation. Therefore, addition cannot be made u/s 69A - and if the addition cannot be made u/s 69A, the provisions of section 115BBE will not be applicable. - AT
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• Government Companies Excluded from Transfer Pricing Comparables Due to Non-Profit Motive and Social Obligations Focus.

  Case-Laws - AT : TP Adjustment - comparable selection - Exclusion of government companies - Because of the absence of the profit motive and discharge of the social obligations, the Government companies stand on a different pedestal and are not good comparable to the entities like the assessee. - AT
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Customs

• Court Rules Ilmenite Freely Importable; First Respondent Overstepped Authority Under MMDR Act in Regulating Imports.

  Case-Laws - HC : Import of Ilmenite from other countries by the petitioner in any manner including discharge, transportation, storage and usage thereof - whether the MMDR Act applies to imports? - As the ilmenite is freely importable, the first respondent has no authority to interfere with the imports nor exercise the powers of Central Government and thus, exceeded its jurisdiction. - HC
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• Amendment to Shipping Bills Allows MEIS Benefits; Verification of 44 Shipping Bills Required for Incentive Claim.

  Case-Laws - HC : Amendment in shipping bills - inadvertant mistake made in the bills - Grant of Merchandise Exports from India Scheme (MEIS) benefit - Benefit allowed, subject to verification of the genuineness of the 44 shipping bills to enable them to claim the incentive under the Merchandise Exports from India Scheme. - HC
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• EOU Fails to Achieve Positive NFE, Must Pay Duty at Debonding Rate u/s 15 and Clauses 8(3A), 8(4A.

  Case-Laws - AT : 100% EOU - failure to achieve positive Net Foreign Earnings (NFE) - debonding of unit - in terms of Section 15 of the Act, the appellant is liable to pay duty at the rate prevailing at the time of debonding. This is also in consonance of Clause 8(3A)/ 8(4A) of the notification which provides that the appellant/ assessee is liable to pay duty at the rate in force on the date of debonding if unit failed to achieve said positive NFP. - AT
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• ASEAN Explorer Maintains Foreign-Going Vessel Status; Eligible for Duty-Free Supplies u/s 87, Despite Extended Berthing.

  Case-Laws - AT : Foreign Going vessel or not - benefit of duty free supply - The impugned vessel ASEAN Explorer is a foreign-going vessel, within the ambit of (ii) of Section 2(21) of the Customs Act, 1962, being engaged for performing repair/cable laying activities in the designated areas in terms of the Agreement with SEAIOCMA. The berthing of the vessel for long periods at Cochin Port does not alter this position and accordingly, the appellants are eligible to avail the exemption contained under Section 87 of the Customs Act, 1962 on the ship stores. - AT
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• Customs House Agent License Suspension Limited to 90 Days if Notice Not Issued per Regulation 17(1.

  Case-Laws - AT : Continuation of suspension of CHA license - time limitation for issuance of notice - if the time limit under regulation 17(1) for issuance of the notice has not been adhered to, the order dated 05 November, 2019 for continuing the suspension of license cannot survive after a period of 90 days from the date of receipt of the offence report - AT
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• Redemption Fine and Penalty on Marble Blocks Reduced Due to Non-Compliance with DGFT Authorization Policy.

  Case-Laws - AT : Confiscation and redemption fine - Policy conditions - Rough Marble Blocks - In case of declared value is less than the floor price, i.e USD 275, the appellant is required to obtain authorization from DGFT in terms of circular - However, the appellant have not obtained any authorization. - The redemption fine and penalty confirmed, however needs to be reduced. - AT
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• Adjudicating Authority Sets Aside Marble Import Valuation Increase Due to Deviation from Primary Objection.

  Case-Laws - AT : Valuation of imported goods - Rough Marble Blocks - the value was enhanced on the basis of policy circular taking the floor price is not sustainable. It is also observed that the Adjudicating Authority deviated from the basic objection and relied upon contemporaneous import wherein the import was made at the rate of USD 275. - the enhancement of the value set aside. - AT
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FEMA

• Regulation 4 outlines permissible foreign exchange derivative contracts, ensuring compliance and risk management under foreign exchange laws.

  Act-Rules : See Regulation 4 - Permissible foreign exchange derivative contract - - Schedule I of the FOREIGN EXCHANGE MANAGEMENT (FOREIGN EXCHANGE DERIVATIVE CONTRACTS) REGULATIONS, 2000 - As amended
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• Regulation 4: Guidelines for Entering Foreign Exchange Derivative Contracts, Ensuring Compliance with Management Laws and Economic Changes.

  Act-Rules : Permission to enter into a foreign exchange derivative contract - Regulation 4 of the FOREIGN EXCHANGE MANAGEMENT (FOREIGN EXCHANGE DERIVATIVE CONTRACTS) REGULATIONS, 2000 as amended
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• Regulation 2 Defines Key Terms for Foreign Exchange Derivative Contracts under FEMA, Aiding Compliance with Updated Rules.

  Act-Rules : Definitions - Regulation 2 of the FOREIGN EXCHANGE MANAGEMENT (FOREIGN EXCHANGE DERIVATIVE CONTRACTS) REGULATIONS, 2000 as amended
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Corporate Law

• Deadline Extended for Form NFRA-2 Submission Under Companies Law to Aid Regulatory Compliance and Avoid Penalties.

  Circulars : Extension of the last date of filing of Form NFRA-2 - Circular
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• Insolvency Professionals Must File Forms in MCA-21 Registry as Per Insolvency and Bankruptcy Code, 2016 Requirements.

  Circulars : Filing of forms in the Registry (MCA-21) by the Insolvency Professional (Interim Resolution Professional (IRP) or Resolution Professional (RP) or Liquidator) appointed under Insolvency Bankruptcy Code, 2016 (IBC, 2016) - Circular
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Indian Laws

• Court Rules on Motor Vehicle Tax Demand: Genuine Purchase Invoice Figures Accepted u/s 2(e) of Kerala Motor Vehicle Taxation Act.

  Case-Laws - HC : Demand of Motor Vehicle tax based on local price of similar vehicle - in a case where the figures shown in the purchase invoice are not in any manner manipulated, and is the genuine figures shown therein by the dealer in the purchase invoice, and the respondents do not have a case that the said purchase value is not inclusive of VAT, GST or other taxes, duties etc, as envisaged in the 2nd limb of the operative portion of Sec.2(e) of the Kerala Motor Vehicle Taxation Act, 1976 - HC
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• Court Grants Probation Relief for First-Time Offender u/s 12, Avoiding Disqualification for Cheque Dishonor Conviction.

  Case-Laws - HC : Dishonor of Cheque - etitioner has already undergone 23 days in judicial custody - Since the sentence awarded to the petitioner is less than two years and it is a first conviction against the petitioner, therefore, I hereby give him benefit of Section 12 of Probation of offenders Act. Thus, the petitioner shall not suffer disqualification, if any, attaching to the conviction for the above stated offence. - HC
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Service Tax

• Export Services Ruling: Indian Court Rejects Revenue's Argument on Service Location for Technical Testing and Analysis Services.

  Case-Laws - AT : Export of services - services of “Technical Testing and Analysis Services” - The contention of the Revenue is rejected that as the clinical tests were performed on persons in India, the services are performed in India. Further the appellant also has undisputedly satisfied the other conditions by receiving the service charges in convertible foreign exchange - AT
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• Section 35F and 35FF: No Refund Application Needed Post-Appeal; Section 11B Time Limit Not Applicable.

  Case-Laws - AT : Refund of pre-deposit - Section 35F read with Section 35FF does not provide for any refund application to be made by the assessee after being successful in appeal - the limitation prescribed under Section 11B is not applicable for refund claim under Section 35FF. - AT
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• CENVAT Credit Valid from Receipt of Goods/Services; Not Affected by Accounting Entries; Avail Within 6 Months/1 Year.

  Case-Laws - AT : CENVAT Credit - six months / one year from the date of issue of the invoices/ bills/ challans - The right to cenvat credit accrues on the date when the goods or service in question is received by an assessee, and such right cannot be modified just for making accounting entry in the other books or Part-II of the cenvat credit register (RG-23A) - Credit cannot be denied - AT
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• Service Tax Refund Cannot Be Denied for Minor Clerical Errors if Substantive Compliance with Rule 4A is Met.

  Case-Laws - AT : Refund of service tax - improper invoice/ draft invoice as all the details required under Rule 4A are not available in the invoices - It has been a settled law that so long there is a substantive compliance of the Notification the benefit cannot be denied and a mere clerical error should not be the ground of rejection of refund claim or the benefit. - AT
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Central Excise

• 'Shading Net' Classified Under CETH 6005 9000 for HDPE/PP Tapes and Fabrics in Central Excise Regulations.

  Case-Laws - AT : Classification of goods - HDPE/PP Tapes/fabrics - the ‘Shading Net’ manufactured by the appellant is rightly classifiable under CETH 6005 9000 - AT
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Case Laws:

• GST

• 2020 (3) TMI 297
  Permission for withdrawal of Advance Ruling application - input tax credit on works contract services - output service is not for the purpose of sale but leasing out - HELD THAT:- The applicant sought the permission of the Hon ble authority for Advance Ruling to withdraw her application. The application filed by the Applicant seeking Advance Ruling is disposed as withdrawn.

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• 2020 (3) TMI 296
  Admissibility of Advance Ruling application - Classification of services - services provided by Padmavathi Hospitality Facilities Management Services (PHFMS) to DME - whether classifiable as a function entrusted to a Panchayat or a Municipality under the constitution? - availability of exemption under Sl.No.3 of Notification 12/2017 Central Tax dated 28.06.2017 read along with amendment dated 25.01.2018 - Services provided by PHFMS to DME including institutions of Government Hospitals and colleges - levy of GST - Rate of GST - Pure services or Composite Supplies? HELD THAT:- It is seen from the writ petition filed by the applicant that the applicant has submitted before the Hon ble High Court that KRYSTAL, a bidder to the said tender has submitted their bid by stating GST as Zero and emerged as the successful bidder in respect of Zone 1 to Zone 4 and that the applicant would have been the successful bidder after including GST and that KRYSTAL had taken a calculated risk in submitting their bid without GST. The applicant had also made a representation to TNMSCL dt 11.7.2019 stating that price quoted by KRYSTAL without GST is to be disqualified as GST is applicable to the services involved in the tender. To this, TNMSCL vide letter dt 14.8.2019 had replied that GST is not applicable as per Notification No 12/2017 dt 28.6.2017 and hence, KRYSTAL is the LI for Zone 1 to 4 as they had the lowest bid with zero GST. In the writ petition, the applicant has repeatedly stressed that KRYSTAL has made the successful bid only because they quoted zero GST whereas in reality GST is chargeable for the services covered in the tender. With GST added, the applicant would have been the lowest bidder for zone 1 to 4 and they would not have been asked to lower their bid for zone 5 without including GST. The applicant himself has stated in the writ petition and in the communication with TNMSCL that the applicability of GST is essential to be decided before the tender is finalized. The stand of the applicant that the issue of applicability of GST is not the issue in the writ petition is not correct. The decision of the Hon ble High Court on the writ will be applicable on the GST authorities who are also the respondents in the writ. This Authority functions within the limitations prescribed under Section 97 and 98 of the GST Act 2017. In as much as the State/Center Jurisdiction authorities are respondents to the Petition before Hon ble High Court and the subject matter revolves on the leviability of GST, we find that the application cannot be admitted as per Proviso to Section 98(2), of the CGST /TNGST ACT as the question raised is already pending in the Hon ble Madras High Court. The application filed by M/s. Padmavathi Hospitality Facilities Management Service is rejected under Proviso to Section 98(2).

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• 2020 (3) TMI 295
  Levy of GST on Mobilization Advance received before GST era - Applicability of Transitional Provisions under Section 142(11)(c), (Chapter XX) of TNGST Act, 2017/CGST Act, 2017 - remaining installments of Mobilization Advance , which transitioned into the GST regime - adjustment of the same post GST regime - Levy of GST - input tax credit on Service Tax paid which was transferred from Pre-GST period through TRAN-1 Return filed in terms of the section 142(11)(c), under Transitional Provisions (Chapter XX) of both TNGST Act, 2017/CGST Act, 2017. HELD THAT:- The applicant has received the advance against the service to be provided and as per the explanation above, the supply is deemed to have been made to the extent it is covered by the invoice or of the payment and the date of payment is the date on which it is entered into the books of account of the supplier, i.e, the applicant. In the case at hand the applicant has raised the invoice to the full Mobilisation Advance received by them and is, therefore, deemed to have supplied works contract service to CMC prior to 1-7-2017 to the extent covered by the Mobilisation advance that stood credited to its account as per Section 13 of the GST Act. Whether GST is to be paid on the amount raised in the RA Bill periodically post implementation of GST, without deducting the part of mobilisation advance adjusted in the bills raised or the liability to GST is to be arrived at after deducting the part of Mobilisation advance being adjusted in the RA bill. The applicant has stated that their case is covered under the provisions of Section 142(11)(c) and accordingly, the liability to GST arises inclusive of that part of advance sought to be adjusted against the receivables in a particular RA Bill. It can be deduced that Section 142(11) (c) is applicable in cases with respect to transactions in which both VAT and Service Tax are paid in the Pre-GST regime and on which GST would be leviable to the extent supply is made after the appointed date for the recipient who has actually paid the tax. In the case at hand, the applicant has paid Service Tax on the advance received as per the said statute for which the applicant has raised invoice on their service receiver along with the component of service tax but no VAT has been paid/received from their customer on that part of the Mobilisation Advance pertaining to materials and therefore, this provision do not apply to the case at hand - the transitional provisions under Section 142(11)(c) is not applicable to the case of the applicant. Further Supply of Works Contract is deemed to be a service under GST. Under the pre-GST regime, service tax was leviable on the service portion of the Works Contract, which in the case at hand being original work, was levied on 40% of the value. The applicant on receipt of advance has paid the service tax on the 40% of the value as required under the provisions of Service Tax - GST is not payable on the Mobilisation advance which has been received prior to GST implementation as per Section 142(11)(b) of the Act. Eligibility of ITC as per Section 142(11)(c) - HELD THAT:- Section 142(11)(c ) will not be applicable on the Mobilisation Advance. However, the admissibility of transitional credit is not in the ambit of Advance Ruling and therefore not considered.

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• 2020 (3) TMI 294
  Classification of goods - Non-woven PP Rice Bags / Sacks - classified under the classification of HSN 63053300 or not? - rate of tax - HELD THAT:- It is clear from Chapter Note 1 to Chapter 39 that The expression, however, does not apply to materials regarded as textile materials of Section XI. Therefore, plastics under Chapter 39 does not cover Non woven textile materials of CTH 5603 of which the articles in hand are made of - Further, as per para 7.5 of the CBIC clarification above, Non-laminated woven bags are to be classified as per the constituting material. There is no dispute that the raw material used by the applicant is a textile material classified under CTH 5603 as seen from the Purchase Invoice furnished by the applicant. The applicant manufactures non-woven fabric bags from the fabric roles classified under 5603 and is used mainly for packing rice and food products for storage and sale. Thus applying the Explanation of HSN to Heading 6305, the product is classifiable under Chapter Heading 6305 3300. Applicable rate of tax - HELD THAT:- The applicable rate for the bag of value not exceeding Rs. 1000 per piece is 2.5% CGST as per SI.No. 224 of schedule I of Notification No 1/2017-C.T.(Rate) dated 28.06.2017 and 2.5% SGST as per S.No. 224 of Schedule-I of G.O.(Ms.) No. 62 dated 29.06.2017 No. II(2)/CTR/532(d-4)/2017 upto 30.09.2019 and thereupon upto 31.12.2019, the applicable rate is 6% CGST as per SI.No. 80AA of Schedule II of Notification no. 01/2017-C.T(Rate) dated 28.06.2017 as amended and 6% SGST as per S.No. 80AA of Schedule-II of G.O. (Ms.) No. 62 dated 29.06.2017 as amended and effective 01.01.2020, the applicable rate is 9% CGST as per SI.No. 163B of Schedule III of Notification no. 01/2017-C.T.(Rate) date 28.06.2017 as amended by Notification no.27/2019-C.T.(Rate) dated 30.12.2019 and 9% SGST as per S.No. 163B of Schedule-Ill of G.O. (M.S.) No. 62 dated 29.06.2017 as amended.

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• 2020 (3) TMI 293
  Exemption from GST - Pure services - selling of space/ time for advertisement in print media in case of advertising companies - advertising company/ agency sells unit of Space in print media to client and designing/ composing is being done by advertising company/agency without charging separately in the bill for designing, etc., to client - selling of space/ time for advertisement in print media by advertising companies. Applicability of GST rate on selling of space/ time for advertisement in print media in case of advertising companies - HELD THAT:- The selling of space/time for advertisement in print media is mentioned at Entry No. 21 under Heading 9983 of Notification No. 11/2017-Central Tax (Rate), dated 28-6 2017 which attract GST @ 5%. Applicability of GST rate if advertising company/agency sells unit of space in print media to client and designing/composing is being done by advertising company/ agency without charging separately in the bill for designing, etc., to client - HELD THAT:- The selling of space for advertisements in print media and other related services would attract 5 and 18 per cent. GST respectively, depending on the terms of the contract between the newspaper, advertisement agency and the client. GST rate on designing, etc., are integral part of supply in question i.e. selling of space in print media - HELD THAT:- There is involvement of two supply of services (i) selling of space in print media and (ii) designing/composing of the advertisement. Accordingly the same falls under the definition of composite supply inasmuch as two taxable supplies of services are naturally bundled and supplied in conjunction with each other in the ordinary course of business - composite supply comprises of selling of space in print media and designing/composing of the advertisement, will attract GST @ 5% inasmuch as selling of space in print media is a principal supply which attract GST @ 5%. Selling of space/time for advertisement in print media by advertising companies is a pure service or otherwise - whether said pure service is exempted from payment of GST vide Notification No. 12/2017-Central Tax (Rate), dated 28th June, 2017 when advertising agency is raising bill to Local Authority or otherwise? - HELD THAT:- The applicant argued that sale of space for advertisement in print media includes invariably includes supply of material in the form of newspaper and the material component forms a major part of the value of said supply. Thus said supply does not fall in the category of Pure Services - in terms of Section 7(1) of the Act, read with Schedule I appended to the Act, supply includes all forms of supply of goods and/or services such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. We observe that supply is the term replaced for the term sale; no scope has been left for any confusion and the definition includes every term which shall be coined as sale. Even the supply which is made or agreed to be made without a consideration will also amount to sale. The applicant in their submissions vehemently argued that the bills issued to the clients is invariably inclusive of cost of material as newspaper itself is a form of material and advertisement rates are based on circulation of newspapers. Thus if such is a case, then the service in question is not a pure service in terms of Notification No. 12/2017-CentraI Tax (Rate), dated 28-6-2017 (as amended from time to time) as it involves the supply of goods also, therefore in such circumstances the said supply is out of the ambit of said notification. If exemption is available in terms of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017, then said exemption is also available to advertising companies - The Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 (as amended from time to time) is not available to the service provider i.e. advertising agency.

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• 2020 (3) TMI 292
  Continuation of area Based Exemption under GST regime as granted under central excise - doctrine of promissory estoppel - benefit of N/N. 50/2003- C.E, dated 10.06.2003 - establishment of new industrial unit - complete exemption by way of reimbursement of the amount of Central Goods and Services Tax (CGST) and Integrated Goods and Services Tax (IGST) for the residual period of exemption notification. HELD THAT:- The Petitioners have acquired vested right in terms of the policy. The fiscal benefits promised in return for making investments in the State of Uttarakhand were privileges which were granted under law that no longer holds the field. The rights and the obligations that were flowing under the tax regime originated from the tax structure that existed when the policy was framed. Such obligations cannot stay alive, if the legislation itself has undergone a complete overhaul by advent of introduction of GST legislations. Therefore, the Budgetary Support Scheme cannot said to be in contravention of the fiscal incentive policies or promise made by Respondent No.1 at the time of introducing area-based exemptions - In the previous tax regime, taxes were being levied on different incidents, such as manufacturing in the case of the levy of excise duty. This is no longer a relevant consideration. GST is a destination based tax, the area based exemptions, under the GST regime have entirely different dimensions and therefore, for this reason, there are no area-based exemptions envisaged under the GST regime. Government has, instead, provided the necessary support to the industry for its economic development and has grandfathered the incentive Scheme. Whether the Budgetary Support Scheme reveals the half hearted approach of Respondent No.1, as has been sought to be projected by the Petitioner? - HELD THAT:- There are no irrational or arbitrary with respect to partial tax budgetary support. Firstly, the Budgetary Support is not an exemption under the Act. The rationale of providing support to the extent of Central Government s share of CGST and the IGST is also based on the reasoning which cannot be questioned by the Petitioner. Article 279A of the Constitution provides that the GST Council shall make recommendations to the Union and States, inter alia, on issues relating to special provision with respect to the States of Arunachal Pradesh, Assam, Jammu Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand. The GST Council in its meeting held on 30.09.2016, left it to the discretion of the Central Government and State Government to notify schemes of Budgetary Support to units where the erstwhile schemes were in operation on 18.07.2017 - Accordingly, the Central Government provided the Budgetary Support to eligible units for the residual period by way of part re-imbursement of goods and service tax paid by the unit, limited to Central Government s share of CGST and IGST retained after devolution of part of these taxes to the States. Whether the doctrine of promissory estoppel can be invoked against a legislative act, because in the present case, the government has clearly acted in accordance with the law laid down by the Parliament? - When the law itself has undergone a complete revision, can the doctrine of promissory estoppel still be invoked, in light of Section 174(2) (c) of the CGST Act? - HELD THAT:- The plea of promissory estoppel cannot be enforced against an act done in accordance with the statutory provisions of law. Under Section 174 (2) (c) of the CGST Act, express provision has been made by the Parliament to provide that any tax exemption granted as an incentive against investment through a notification under, inter alia, the erstwhile Central Excise Act, shall not continue as a privilege if the said notification is rescinded, and in the present case, the notification which granted 100% excise duty exemption was, in fact, rescinded. Thus, in the absence of any challenge by the Petitioner to the rescission of the said notification which granted exemption or to the vires of the proviso to Section 174 (2) (c) of the CGST Act, no plea of promissory estoppel is maintainable. The language used in the proviso to Section 174 (2) (c) is clear and unequivocal, and leaves no room for a different interpretation. Petition dismissed.

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• 2020 (3) TMI 291
  Award of Contract - Tender for outsourcing of house keeping and security services - Determination of GST liability - HELD THAT:- The bid offered by the 4th respondent need not be rejected. It has also been pointed out by the learned Senior Counsel for the 4th respondent that they would take up the burden of payment of GST. At this stage, this Court is not examining whether GST is applicable or not applicable for the Service for which the tender had been floated. This Court is not prepared to examine whether the prices offered by the 4th respondent and by the petitioner for Zone 1 to Zone 4 and Zone 5 respectively are competitive prices or not. They are to be decided only by the Tender Accepting Authority. This Court cannot substitute itself for the Tender Accepting Authority. Once the Tender Accepting Authority had decided not to reject the bid offered by the 4th respondent and had passed an order under Section 10 of the Tamil Nadu Transparency in Tenders Act, 1998, then, any aggrieved party can file an appeal as provided under Section 11 of the Tamil Nadu Transparency in Tenders Act, 1998. The scope of the Writ Petition cannot be expanded to determine whether the bid quoted by the 4th respondent is legal or illegal. The Writ Court while exercising its jurisdiction under Article 226 of the Constitution of India cannot venture into a roving examination of the facts and also cannot venture into applicability of certain provisions of law or not. The Writ Petitioners have embarked on a speculative journey to deliberately frustrate further progress in the tender process. Both the Writ Petitions have to suffer an order of dismissal and accordingly they are dismissed.

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• 2020 (3) TMI 290
  Condonation of delay in filing appeal - Cancellation of GST Registration - Section 29(2) of CGST Act - HELD THAT:- In the impugned order, there is no consideration to the grounds mentioned in the memo of appeal regarding non-communication of the order to the petitioner and start of period of limitation from the date of communication or knowledge of the order. The appellate authority has passed the said order without considering the aforesaid grounds. The matter is remanded back to the appellate authority to decide the question of delay afresh without being influenced by the previous order - Petition allowed by way of remand.

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• 2020 (3) TMI 289
  Registration of FIR without any specific order under GST - Tax evasion - bogus firms - preparing and issuing false documents / invoices - it was found that the registered place was not being used for any business but only for preparing documents - Section 67 of GST Act - allegations are in respect of getting bogus firms registered under the GST Code and of preparing bogus invoices for the purpose of evading tax - HELD THAT:- In the instant case, we find that the allegations are in respect of getting bogus firms registered under the GST Code and of preparing bogus invoices for the purpose of evading tax - The above allegations have been made on the basis of search and seizure operations and the enquiry that followed. As to how the bogus tax invoices were used or were to be used would be determined on the basis of material collected during the course of investigation. The submission of the learned counsel for the petitioners that there could be no registration of first information report without a specific order under the GST Code in respect of evasion of tax is not acceptable for the simple reason that the GST Code does not impliedly or explicitly repeals the provisions of Indian Penal Code or the Code of Criminal Procedure and therefore an offence punishable under the Indian Penal Code can very well be reported and investigated as per law. As the impugned first information report discloses commission of cognizable offence, the prayer to quash the first information report cannot be accepted - Petition dismissed.

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• 2020 (3) TMI 288
  Profiteering - purchase of a 3BHK Flat No. 806, H-Block, 8th Floor in Aparna Serene Park - benefit of Input Tax Credit (ITC) availed by him, by way of commensurate reduction in the price, not passed on - contravention of section 171 of CGST Act - Penalty - HELD THAT:- It is established from the perusal of the facts that the Respondent has benefited from the additional ITC to the extent of 4.04% of the turnover during the period from 01.07.2017 to 31.03.2019 and hence the provisions of Section 171 of the CGST Act, 2017 have been contravened by the Respondent as he has not passed on the above benefit to his customers by commensurate reduction in the prices of the flats. Accordingly, the profiteered amount is determined as Rs. 22,59,91,979/- inclusive of GST @ 12% on the base profiteered amount of Rs. 20,17,78,553/- in terms of Rule 133 (1) of the CGST Rules, 2017. Further, the Respondent has realized an additional amount of Rs. 4,74,865/- which includes both the profiteered amount @ 4.04% of the taxable amount (base price) and 12% GST on the said profiteered amount from the Applicant No. 1. This Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent shall reduce the prices to be realized from the buyers of the flats commensurate with the benefit of ITC received by him as has been detailed above. Since the present investigation is only up to 31.03.2019 any benefit of ITC which accrues subsequently shall also be passed on to the buyers by the Respondent. The concerned Commissioner CGST/SGST shall ensure that the above benefit is passed on to the eligible flat buyers. In case the above benefit is not passed on by the Respondent the Applicant No. 1 or any other buyer shall be at liberty to approach the Telangana State Screening Committee to initiate fresh proceedings against the Respondent as per the provisions of Section 171 of the CGST Act, 2017. Penalty - HELD THAT:- The Respondent has denied benefit of ITC to the buyers of the flats being constructed by him in his above project in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has thus resorted to profiteering. Hence, he has committed an offence under Section 171 (3A) of the CGST Act, 2017 and therefore, he is apparently liable for imposition of penalty under the provisions of the above Section - Accordingly, a SCN be issued to him directing him to explain why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him. Application disposed off.

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• Income Tax

• 2020 (3) TMI 287
  Transfer of case u/s 127 - centralization of case after search - delayed challenge to the order passed u/s 153A - transferring the cases to the Deputy Commissioner of Income Tax (DCIT), Central Circle-2, Madurai, as violative of the principles of natural justice - HELD THAT:- In the case on hand, the impugned order came to be passed on 19.02.2019 and till the issuance of the assessment notices dated 15.07.2019 under Section 153A of the Act, the petitioner did not challenge the order of transfer and there is no explanation for the delay in challenge. Hence, the petitioner is barred from challenging the same in exercise of jurisdiction by a new authority and this Court need not exercise the extraordinary jurisdiction under Article 226 of the Constitution to interfere with the impugned order. Though the other grounds raised by the petitioner have also no merit-acceptance, without delving further into those grounds, this Court is of the view that this writ petition is liable to be dismissed on these grounds. Writ petition is dismissed as devoid of merits.

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• 2020 (3) TMI 286
  Payment of interest on share application money - Nature of expenditure - Revenue or capital expenditure - HELD THAT:- The Supreme Court in BROOKE BOND INDIA LTD. [ 1997 (2) TMI 11 - SUPREME COURT] has held that all the expenses incurred for expansion of capital base of the company was directly related to the capital incidentally, that would help in profit making. When the object of the Assessee is to increase share capital, the expenses incurred in expanding share capital would be in capital field. In the instant case also the assessee with an object to increase share capital has incurred expenses in the form of payment of interest on account of delay in allotment of shares, yet the increase in capital results in expansion of the capital base of the company and may also help in profit making. Therefore, it retains it s character as capital expenditure as the expenditure is directly relatable to expansion of the capital base of the company. For the aforementioned reasons the first substantial question of law is answered in the affirmative and in favour of revenue. MAT - Addition made on account of prior period expenditure while computing book profits under Section 115JB - HELD THAT:- The Supreme Court in APOLLO TYRES [ 2002 (5) TMI 5 - SUPREME COURT] has held that there cannot be two incomes one for the purpose of Companies Act and another for the purpose of Income Tax Act. It has further been held that Assessing Officer while computing the income under Section 115J has power to examine whether books of accounts are certified by the authorities under the Companies Act and the Assessing Officer has limited power of making increase and deductions as provided in the explanation to Section 115J. It is pertinent to note that provisions of Section 115J or Section 115JB of the Act are pari-materia. It has further been held that Section 115J (1A) of the Act empowers the authority under the Income Tax Act, 1961 to probe into the accounts accepted by the authorities under the companies Act. In the instant case, deletion as sought for by the assessee does not fall within the purview of Section 115 JB of the Act. Therefore, the Commissioner of Income Tax (Appeals) and the tribunal were not justified in deducting the addition made on account of prior period expenditure while computing book profits under Section 115 JB of the Act. The second substantial question of law is therefore, answered in the negative and in favour of the revenue.

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• 2020 (3) TMI 285
  Validity of Tribunals order - Unexplained cash credit - Tribunal justification in not recording any finding on the evidence that were placed before it - Whether the order passed by the Tribunal is cryptic and suffers from the vice of non application of mind and therefore, the matter deserves to be remitted? - HELD THAT:- Tribunal has merely recorded the conclusions and has not assigned the reasons. From perusal of the order passed by the tribunal, it is evident that the order is cryptic and suffers from the vice of non application of mind. The tribunal has neither considered the material placed by the assessee before the Commissioner of Income Tax (Appeals) nor has considered the material placed before it and in a cryptic and cavalier manner has dismissed the appeal preferred by the assessee. Therefore, in the fact situation of the case, we have no option but to remit the matter. Since, we have arrived at the conclusion that the instant case is a fit case for remand. Therefore, it is not necessary for us to answer the substantial question of law which have been framed in this appeal. In the result, the order passed by the tribunal dated 26.02.2010 as well as the order passed by the Commissioner of Income Tax (Appeals) dated 22.04.2004 are hereby quashed. The matter is remitted to the tribunal to decide the matter afresh

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• 2020 (3) TMI 284
  Reopening of assessment u/s 147 - benefit under section 80IB(10) denied - HELD THAT:- In the present case, approval in respect of housing project is obtained for the first time on 06.02.2008 and hence, that is the relevant date for considering the eligibility for deduction under section 80IB(10) of the Act. It is an admitted position, as reflected in the reasons recorded for reopening the assessment, that the project was completed on 31.03.2012, which is well within the period prescribed for completion of the project for the purpose of availing the benefit of deduction under section 80IB(10) of the Act. Since the previous approval granted by the Kudasan Gram Panchayat was not for a housing project, the decision of this court in Radhe Developers case [ 2011 (12) TMI 248 - GUJARAT HIGH COURT ] would have no applicability to the facts of the present case. An assessment under section 143(3) came to be framed by AO allowing the deduction claimed under section 80IB(10) of the Act. The impugned notice has been issued on 13.03.2018, in respect of assessment year 2011-12, which is clearly beyond a period of four years from the end of the relevant assessment year. Therefore, the first proviso to section 147 of the Act would be attracted and for the purpose of assuming jurisdiction under section 147 of the Act by the Assessing Officer, there has to be failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment for the assessment year under consideration. The facts reveal that the petitioner had duly furnished the approval dated 06.02.2008 granted by the GUDA for the housing project; however, the Assessing Officer, in the reasons recorded has termed such approval as a fictitious document on the ground that the original approval was granted on 16.03.2005. Approval dated 16.03.2005 granted by the local authority was for an office building and not a housing project and hence, not submitting the same at the time of the scrutiny assessment cannot in any manner be termed as non-disclosure of relevant facts necessary for the assessment. Under the circumstances, in the absence of any failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment, the Assessing Officer has failed to cross the first threshold for assuming jurisdiction under section 147 of the Act, beyond a period of four years from the end of the relevant assessment year. Besides, even on merits, since the permission dated 06.02.2008 was the first approval granted for a housing project on the subject land, there is no material on the basis of which the Assessing Officer could have formed the belief that income chargeable to tax has escaped assessment. The impugned notice dated 13.03.2018 issued by the respondent under section 148 of the Act, therefore, cannot be sustained. - Decided in favour of assessee.

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• 2020 (3) TMI 283
  Penalty u/s 271AAA or 271(1)(c) - Levying penalty u/s 271AAA while initiating the penalty u/s 271(1)(c) at the time of conclusion of the assessment proceedings - HELD THAT:- For a query from the bench both the parties have replied that the AO has not dropped the penalty proceedings u/s 271(1)(c) before issue of show cause letter calling for explanation of assessee for levy of penalty u/s 271AAA. Therefore, we are of the considered opinion that the AO has applied his mind and initiated penalty u/s 271(1)(c) and conducted the proceedings u/s 271AAA. Having conducted the search and assessed the undisclosed income, the AO ought to have initiated the penalty proceedings u/s 271AAA instead of initiating the penalty u/s 271(1)(c). Hence, we are of the view that initiating the penalty u/s 271(1)(c) and conducting the proceedings u/s 271AAA is bad in law. The penalties u/s 271(1)(c) and 271AAA are attracted in different situations and both are mutually exclusive. Having initiated the penalty u/s 271(1)(c), levy of penalty u/s 271AAA is not permissible. See DM Corporation Pvt. Ltd., Vs. ACIT [ 2018 (9) TMI 1947 - ITAT PUNE] and ITAT Ahmedabad in the case of Dr. Naman A. Shastri [ 2015 (11) TMI 109 - ITAT AHMEDABAD] therefore, we set aside the orders of the lower authorities and cancel the penalty levied u/s 271AAA and allow the appeal of the assessee.

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• 2020 (3) TMI 282
  Revision u/s 263 - Estimation of profit - HELD THAT:- Since the income were assessed on estimated basis, separate additions of Rs. 20 Lacs over and above the assessed income was uncalled for. Both the lower authorities were bound to follow the same. We find that Ld.CIT(A), at para 4.1 of the impugned order, has correctly ascertained assessee s income at Rs. 1,87,524/- which was in consonance with the directions of Tribunal order [ 2015 (9) TMI 1680 - ITAT AHMEDABAD] . The said computation comprised-off of estimated income @3%, other income as per financial statements and disallowance u/s 40A(3). Against the same, deduction of interest and remuneration to partner s have been allowed. The same is in consonance with the case history. Therefore, on the facts and circumstances of the case, we direct Ld. AO to adopt the income at Rs. 1,87,524/- and recompute assessee s tax liability. The appeal stands partly allowed. For AY 2007-08 we find that the approach of Ld.CIT(A), in this year, was substantially correct. As per the Tribunal s order dated 18/09/2015, the income was to be reduced by Rs. 25 Lacs. However, the observation that deduction of interest of Rs. 5 Lacs was not claimed by the assessee is not correct since upon perusal of financial statements as placed on record, it is quite discernible that that assessee has claimed deduction of interest of Rs. 5 Lacs. Therefore, there would be no occasion to issue the stated directions to Ld. AO. In nutshell, the assessee s income would be taken as Rs. 7,11,694/- being differential of Rs. 32,11,694/- and Rs. 25,00,000/-. The appeal stands partly allowed.

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• 2020 (3) TMI 281
  Bogus purchases - AO received information from DGIT (Investigation), who in turn received information from Sales Tax Department, Mumbai that the assessee has made purchases from hawala parties, as listed in hawala dealers by the Maharashtra Sales Tax Department who are providing bogus bills of purchase - HELD THAT:- CIT(A) upheld the order of AO on the ground that the assessee could not substantiate the consumption of materials in manufacturing process. We also note that assessee has filed purchase bills, challan for receipt of goods, details of payment through cheque and bank statement etc. The notice 133(6) the Act was also issued but the supplier relied that due to raid by the department the information could not be furnished We cannot sustain the order of CIT(A) upholding the order of AO wherein 100% bogus purchases were added. In our opinion, a percentage can be applied to bring to tax the profit element in the said purchases. Accordingly we direct the AO to apply rate of 12.50% on the said purchases. - Appeal of the assessee is partly allowed.

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• 2020 (3) TMI 280
  Penalty u/s 271(1)(c) - Non specification of charge - whether it is for concealment of income or for furnishing of inaccurate particulars of income - HELD THAT:- The law mandates that the authority, who is proposing to impose penalty, shall be certain as to the basis on which the penalty is being levied and the notice must reflect that specific reason, so that the assessee, to whom such notice is given, can prepare himself regarding the defence, which he would like to take to support his case. This is even enshrined in the principles of natural justice and as has been upheld by Hon ble Apex Court and other High Courts. We hold that the show cause notice, which has not specified the charge and limb under which the penalty is proposed to be levied, is void ab initio and the consequent penalty imposed on the basis of such notice is, therefore, illegal and bad in law and liable to be deleted. - Decided in favour of assessee

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• 2020 (3) TMI 279
  Taxation of income - whether the surrendered amount can be taxable under section 115BBE read with section 69A of the Act or it was to be taxed as a regular business receipt - HELD THAT:- To decide this issue, it is important first to visit the statement of the director of the assessee which was recorded during the course of survey. We have particularly gone through the answer to question No. 35 wherein the director of the assessee has clearly stated that the figures noted in the diary represented sales unrecorded in the books of account and these figures related to the period April 2015 to August 2015 in the present case, the addition under section 69A could have been made only if no explanation, regarding source of such income, was offered or the expla nation offered by the assessee was not satisfactory in the opinion of the Assessing Officer. In the present case, as we have already noted that the assessee had given complete explanation regarding the source of entries recorded in the diary, which were explained to be part of unrecorded sales and the Assessing Officer also did not object to the said explanation. Therefore, addition cannot be made under section 69A of the Act and if the addition cannot be made under section 69A, the provisions of section 115BBE will not be applicable. In a similar situation in the case of Pr. CIT v. Bajargan Traders [ 2017 (11) TMI 388 - RAJASTHAN HIGH COURT] had dismissed the appeal of the Revenue. - Decided in favour of assessee

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• 2020 (3) TMI 278
  TP Adjustment - comparable selection - HELD THAT:- Assessee provided software development services ; information technology enabled services and marketing support services to its associated enterprises on cost plus mark-up basis and availed of the management support services in the nature of legal, finance, human resource, information technology support and other support services from Avaya Singapore, thus companies functionally dissimilar with that of assessee need to be deselected from final list. Exclusion of government companies - Because of the absence of the profit motive and discharge of the social obligations, the Government companies stand on a different pedestal and are not good comparable to the entities like the assessee.

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• 2020 (3) TMI 244
  Deduction of liability of education cess - HELD THAT:- Education Cess, which is not disallowable item, on its payment, the cess is an allowable expenditure as per provision of section 40(a)(ii) of the Act. See M/S. BAJAJ ALLIANZ GENERAL INSURANCE COMPANY LTD. [ 2019 (8) TMI 370 - ITAT PUNE] TP Adjustment - comparable selection - HELD THAT:- Assessee company is engaged in the business of Software Development, Consultancy Services, and Technical Support Services, thus companies functionally dissimilar with that of assessee need to be deselected from final list.

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• 2020 (3) TMI 243
  TP Adjustment - exclusion of comparables relying on the additional ground of appeal of Turnover Criteria - HELD THAT:- Companies functionally dissimilar with that of assessee company as engaged primarily in rendering Software Development Research and Development Services to its Associated Enterprise (AE) M.S.Corp need to be deselected from final list. Companies functionally not comparable as the turnover is more than 500 times of the assessee turnover. Direct the TPO to grant the Working Capital and risk profile Adjustment after examining the facts and profiles of comparables.

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• Customs

• 2020 (3) TMI 277
  Maintainability of appeal - non-compliance with the mandatory pre-deposit - Section 129E of the Customs Act, 1962 - Smuggling of Gold - HELD THAT:- As per amended provision of Section 129-E of the Customs Act, 1962, the petitioner was required to make a pre-deposit @ 7.5% of the penalty amount i.e. Rs. 5 lacs, which has not been deposited by the petitioner. Hence, Commissioner of Customs (Appeals) has dismissed the appeal preferred by the petitioner vide order dated 30th August, 2019. The petitioner is ready and willing to make pre-deposit @ 7.5% of the penalty amount i.e. Rs. 5 lacs within a period of two days - Petitioner is directed to deposit the penalty amount @ 7.5% of the penalty amount i.e. Rs. 5 lacs within a period of one week from today, which will be accepted by the Commissioner of Customs (Appeals). The appeal preferred by the petitioner is revived with its original number.

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• 2020 (3) TMI 276
  Import of Ilmenite from other countries by the petitioner in any manner including discharge, transportation, storage and usage thereof - whether the MMDR Act applies to imports? HELD THAT:- The MMDR Act itself is a legislation made for the purpose of granting prospecting or mining leases within the territory of India. When the ilmenite is imported, which is mined outside the territory of India, the said Act cannot be applicable. The Mineral Conservation and Development Rules 2017 traced their origins to the Sections 15, 18 and 23C of MMDR Act, 1957. When the Act itself does not apply to the imports, by no stretch of imagination it could be stated that the said rules applies to the imports. As the ilmenite is freely importable, the first respondent has no authority to interfere with the imports nor exercise the powers of Central Government and thus, exceeded its jurisdiction. As the prima facie case is made out by the petitioner, which is supported by Bill of Lading, Bill of Entry, customs assessments and consequential payment of custom duty, the petitioner is the owner of the minerals and it is entitled to use it in its factory. There is no prejudice caused to the respondents in allowing the writ petition forbearing the 1st respondent from interfering with the import of the ilmenite by the petitioner from other countries in any manner including discharge, transportation, storage and usage thereof. Petition dismissed.

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• 2020 (3) TMI 275
  Recovery of Duty Drawback - Section 75 of the Customs Act, 1962 - HELD THAT:- Show Cause Notice was adjudicated upon by the concerned authorities and Order-In-Original has already been passed by the respondent authorities dated 21st March, 2018. It appears that no proof of receipt of said proceeds have ever been supplied by this petitioner to the respondents and hence, the liability has been imposed vide Order-In-Original by this petitioner fixed at Rs.1,21,45,524/- and a penalty of Rs.1,00,000/- each, upon each petitioner. It appears that Order-In-Original is an appealable order before the CESTAT. Hence, we see no reason to entertain this writ petition as the Order-In-Original is an appealable order. As and when the appeal is preferred, the same will be decided by the appropriate forum in accordance with law, rules, regulations and Government policy applicable to the facts of the present case and without being influenced by the observations made by this Court in the present order. Petition disposed off.

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• 2020 (3) TMI 274
  Applications for obtaining Duty Credit Scrip concessions - time limit for availing such concession - HELD THAT:- The present petitioner is directly interested in the Focus Products Scheme for export of valves. It must be noticed that the petitioner is not in the manufacture of any item used in bicycles. They are involved with export of valves. Therefore, when under the Trade Notice No.11 of 2015, it had been stated that there are no merits in claiming exemption for any other items apart from items used on bicycle which Trade Notification had been clarified in Trade No 16 of 2018 dated 07.06.2018, the clarification actually clarifies the earlier stand that valves and such other items were not eligible for concession by Trade Notification No.11 of 2015. It is thus seen that there is an inclusion of valves and other items which have been directly exported by the petitioner. Therefore, the petitioner can take advantage of the Trade Notice No.16 of 2018 and their period of limitation would be within six months from 07.06.2018. These applications have been rejected by the respondents with a one line order i.e., it is time barred . Rejections have been placed before this Court. The learned Standing Counsel for the respondents justified the said rejection stating that a new starting period of limitation cannot be envisaged by the petitioner - respondents are directed to reconsider the application already filed and they are otherwise in order, consider the same by merits - petition allowed.

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• 2020 (3) TMI 273
  Amendment in shipping bills - inadvertant mistake made in the bills - Grant of Merchandise Exports from India Scheme (MEIS) benefit - HELD THAT:- Reliance can be placed in the case of M/S. GLOBAL CALCIUM PRIVATE LIMITED VERSUS THE ASSISTANT COMMISSIONER OF CUSTOMS (EDC) , THE COMMISSIONER OF CUSTOMS [ 2019 (6) TMI 811 - MADRAS HIGH COURT ] where it was held that Respondents are directed to permit the writ petitioner to make necessary amendments. In the case on hand also, it is the case of the petitioner that only due to inadvertence, Yes was not mentioned in the online platform while filing the shipping bills and the only reason for rejection of the petitioner s application is that no cogent reasons have been given by him for not mentioning Yes , while filing the shipping bills in the online platform - In view of the identical facts, this Court is of the considered view that the decision in Global Calcium are squarely applicable to the facts of the instant case also. However, since the details of the shipping bills filed by the petitioner have not been disclosed in the affidavit filed in support of this writ petition, it is made clear that the petitioner will have to satisfy the respondents with regard to the genuineness of the 44 shipping bills to enable them to claim the incentive under the Merchandise Exports from India Scheme. The third and fourth respondents are directed to issue no objection certificate to the fifth respondent within a period of three weeks from the date of receipt of a copy of this Order, to enable the petitioner to claim benefits under Merchandise Exports from India Scheme from DGFT, subject to the satisfaction of the third and fourth respondents with regard to the genuineness of the 44 shipping bills submitted by the petitioner - Petition disposed off.

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• 2020 (3) TMI 272
  100% EOU - export of any finished goods not made, thereby failed to achieve positive Net Foreign Earnings (NFE) - debonding of unit - Advance DTA Sale - benefit of N/N. 52/2003-CUS dated 31.03.2003 - on which date duty is payable by the appellant and at what rate? Whether appellant is liable to pay duty from the date of demanding of their unit on the rate of duty prevailing on such date or at the rate of duty prevailing at the time of import? - HELD THAT:- As per Section 15 (1)(b) of the act, the duty is payable at the time when goods were actually removed from warehouse under Section 68 of the Act. Admittedly, in the case in hand, the appellant is a 100% EOU and having letter of permission to work as 100% EOU. As the appellant could not achieve positive NEP, the appellant applied for demanding and at the time of demanding filed bills of entry which are not in dispute. Therefore, in terms of Section 15 of the Act, the appellant is liable to pay duty at the rate prevailing at the time of debonding. This is also in consonance of Clause 8(3A)/ 8(4A) of the notification which provides that the appellant/ assessee is liable to pay duty at the rate in force on the date of debonding if unit failed to achieve said positive NFP. Therefore, with regard to the demand of duty of Rs. 74,09,538/-, the appellant is liable to pay duty at the rate of duty prevailing at the time of debonding of the unit. Indigenously procured capital goods in terms of Notification No. 22/2003-CE dated 31.03.2003 - HELD THAT:- The clause 8(i) of the notification clearly specifies that the duty is payable at the rate in force on the date of debonding. As per the said notification, the appellant is liable to pay duty at the rate in force on the date of debonding. Therefore, with regard to the demand of differential duty of Rs. 21,03,122/-, we hold that appellant is liable to pay duty at the rate of prevailing on the date of debonding. The duty is to be calculated accordingly. Whether the appellant is liable to pay interest for the intervening period or not? - HELD THAT:- In terms of Notification No. 132/2004-Cus (NT) dated 25.11.2004 the appellant are not liable to pay interest as held by this Tribunal in the case of BUSINESS PROCESS TECHNOLOGIES (I) PVT. LTD. VERSUS COMMR. OF CUS., BANGALORE [ 2009 (9) TMI 351 - CESTAT, BANGALORE] where in this Tribunal held that the Central Govt. has exempted the interest accrued on the customs duty payable by an export oriented unit. We also find that provisions of Section 61 clearly exclude the liability to pay interest for a period of 5 years from the date of bonding. Thus, for imported capital goods, the appellant is liable to pay duty at the rate of duty prevailing on the date of debonding - the appellant is liable to pay duty for indigenously procured capital goods at the rate of duty prevailing on the date of debonding - no interest is payable by the appellant. Appeal disposed off.

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• 2020 (3) TMI 271
  Foreign Going vessel or not - benefit of duty free supply - time limitation - whether the vessel in question can be considered as a Foreign Going Vessel in terms of the Customs Act, 1962? - HELD THAT:- The impugned vessel is engaged for cable repair and cable-laying work in the areas specified therein; the ship requires to be in readiness to leave for repairs should an exigency arise and the vessel is paid both fixed charges as well as operational charges. Therefore, we find that the appellants have a strong case in their favour inasmuch as the (ii) inclusive definition is concerned. It is squarely covered by the terms any vessel engaged in fishing or any other operations outside the territorial waters of India . We find that the term engaged in has not been defined in the Customs Act - The vessel ASEAN Explorer was a foreign going vessel in terms of inclusive definition contained in Section 2(21)(ii) of the Customs Act, 1962. The crux of the argument of the department was that the Vessel was berthed in Cochin for most of the time during the disputed period and thus it ceases to be foreign going vessel. Moreover, we find that the vessel was anchored in Cochin Port and was under the watchful eyes of Customs and Port authorities. Many times, Customs authorities have boarded the Vessel as demonstrated by the counsel for the appellants. Customs officers were supervising the bonded stores of the vessel. It was well within the right and mandate of Customs authorities to advise the appellants to ensure that there were no procedural and other infractions. No proof of such efforts and correspondence, if any, has been placed on record before us. It can be seen that the arguments of adjudicating authority were controverted and we are inclined to hold that the impugned vessel is foreign going vessel and as such the exemption in terms of Section 87 of the Customs Act, 1962 is available to the appellants, despite the fact that it was lying berthed at Cochin for most part of the time. The impugned vessel ASEAN Explorer is a foreign-going vessel, within the ambit of (ii) of Section 2(21) of the Customs Act, 1962, being engaged for performing repair/cable laying activities in the designated areas in terms of the Agreement with SEAIOCMA. The berthing of the vessel for long periods at Cochin Port does not alter this position and accordingly, the appellants are eligible to avail the exemption contained under Section 87 of the Customs Act, 1962 on the ship stores. However, they are required to pay duty on the ship stores consumed only during the period the said vessel was performing its designated work in Indian territorial waters, for the normal period. As the vessel is held to be a foreign-going vessel and that the exemption under Section 87 of the Customs Act, 1962 is available, the seizure of the vessel and consequent imposition of redemption fine in lieu of confiscation need to be set aside along with penalties imposed on both the appellants. Appeal allowed by way of remand.

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• 2020 (3) TMI 270
  Continuation of suspension of CHA license - time limitation for issuance of notice - regulation 16(1) of the Customs Brokers Licensing Regulations, 2018 - whether the order dated 05 November, 2019 by which the suspension of the license has been continued under regulation 16(2) would continue to operate, even if a notice contemplated under regulation 17(1) is not issued within a period of 90 days from the date of receipt of the offence report? HELD THAT:- Regulation 16 deals with suspension of license. It provides that notwithstanding anything contained in regulation 14, the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the license of a Customs Broker where an enquiry against such Customs Broker is pending or contemplated. Thus, regulation 16(1) confers power on the Commissioner of Customs to suspend the license if immediate action is necessary, but this action can be taken either when an enquiry against the Customs Broker is pending or is contemplated. The suspension order dated 15 October, 2019 passed by the Commissioner of Customs does not mention that an enquiry against the Customs Broker is pending or is contemplated. To provide a safeguard to a license holder whose license has been suspended on account of necessity of immediate action, sub-regulation (2) of regulation 16 provides that the Commissioner of Customs shall within 15 days from the date of suspension of license under sub-regulation (1) give an opportunity of hearing to the Customs Broker and may pass such order as he deems fit either revoking the suspension or continuing the suspension. In the present case, after providing opportunity of hearing to the appellant, the Commissioner of Customs considered it appropriate to continue the suspension. The proviso to sub-regulation (2) of regulation 16 provides that the Commissioner of Customs shall thereafter follow the procedure as contemplated in regulation 17. The issue as to whether issuance of a notice within the stipulated period was mandatory or directory was examined by the Delhi High Court in Indair Carrier Pvt. Ltd. vs. Commissioner of Customs (General) and Ors. [ 2016 (5) TMI 775 - DELHI HIGH COURT ] where it was held that he time limits in the CHALR 2004 for issuance of the SCN to the CHA licence holder and completion of the inquiry within 90 days of issuance of such SCN are sacrosanct. The aforesaid time limits were engrafted into Regulation 22 of the CHALR, 2004 by a Notification No. 30/2010- Cus.(N.T.) dated 8th April, 2010. Simultaneously, the CBEC issued Circular No. 9/2010 dated 8th April 2010 clarifying the procedures governing the suspension and revocation of CHA licence. A perusal of the aforesaid judgment in Indair Carrier shows that the period of 90 days prescribed for issuance of a show cause notice under regulation 22(1), which provision is similar to the provisions of regulation 17(1) of the 2018 Regulations, was held to be mandatory in nature and, therefore, the directions issued by the Tribunal to complete the proceedings contemplated under regulation 22 within 60 days from the date of receipt of the order of the Tribunal was held not to be correct since the notice contemplated under article 17(1) had not been issued within a period of 90 days from the date of receipt of offence report. After considering the judgements of the Delhi High Court, the Bombay High Court in The Principal Commissioner of Customs (General) Mumbai vs. Unison Clearing Pvt. Ltd. [ 2018 (4) TMI 1053 - BOMBAY HIGH COURT ] expressed its inability to hold that time limit prescribed under the aforesaid regulations of the 2013 Regulations were mandatory in nature. There are two sets of decisions. The Delhi High Court have held that time limit prescribed for issuance of the notice within 90 days from the date of receipt of the offence report is mandatory in nature, whereas the Bombay High Court and the Calcutta High Court have held that the requirement of issuance of the notice within the stipulated period is not mandatory in nature - The issue, therefore, is which set of decisions should be followed. Fortunately, this issue has been examined by a Larger Bench (Five Member Bench) of the Tribunal in Collector of Central Excise, Chandigarh vs. Kashmir Conductors [ 1997 (7) TMI 186 - CEGAT, COURT NO. II, NEW DELHI ]. One issue that was addressed by the Larger Bench was what should be done when the Tribunal is faced with conflicting decisions of High Courts. The five member Larger Bench of the Tribunal held that if the jurisdictional High Court has taken a particular view on an interpretation or proposition of law, that view has to be followed, but if the jurisdictional High Court has not expressed any view in regard to the subject matter and there are conflicting views of other High Courts, then the Tribunal will be free to formulate its own view. In view of the aforesaid decision of the Larger Bench of the Tribunal, the judgements rendered by the Delhi High Court would have to be followed. The Delhi High Court has, in very clear terms, held that the time limit prescribed under the Regulations for issuance of the notice within 90 days from the date of receipt of the offence report is mandatory in nature. Such being the position of law, the Brokers Licence would automatically stand revived if a notice contemplated under regulation 17(1) of the 2018 Regulations is not issued within 90 days from the date of receipt of the offence report - In the present case, the notice contemplated under regulation 17(1) was not issued within 90 days from 27 September, 2019. The suspension order dated 15 October, 2019, as continued subsequently by order dated 5 November, 2019, cannot survive. The Brokers Licence of the Appellant shall, therefore, stand revived. The revocation of license is provided under regulation 14. Suspension can be ordered in the circumstances mentioned in regulation 16. The proviso to regulation 16(2) provides that after an order for continuation of suspension is passed, the procedure set out in regulation 17(1) has to be followed. Thus, if the time limit under regulation 17(1) for issuance of the notice has not been adhered to, the order dated 05 November, 2019 for continuing the suspension of license cannot survive after a period of 90 days from the date of receipt of the offence report - the suspension order dated 15 October, 2019, as continued by subsequent order dated 05 November, 2019, deserves to be set aside and is set aside - Appeal allowed - decided in favor of appellant.

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• 2020 (3) TMI 269
  Valuation of imported goods - Rough Marble Blocks - enhancement of declared value on the basis of contemporaneous import - basic objection of the Revenue is that the floor price of USD 275 per MT CIF of the goods-Rough Marble was fixed under policy circular no. 13 (RE- 08)/2004-09 dated 30/06/2008. HELD THAT:- In the identical issue, this Tribunal in the case of Siemens M/S SIEMENS GAMESHA RENEWABLE POWER PVT. LTD. VERSUS C.C. MUNDRA [ 2018 (8) TMI 371 - CESTAT AHMEDABAD] has taken a view that merely on the basis of minimum import price fixed by policy circular cannot be a reason for enhancement of the value. Therefore, the value was enhanced on the basis of policy circular taking the floor price is not sustainable. It is also observed that the Adjudicating Authority deviated from the basic objection and relied upon contemporaneous import wherein the import was made at the rate of USD 275. Even the price of USD275 per MT CIF is also keeping in view the policy circular. Secondly, the appellant were not provided the contemporaneous bills of entry. Therefore, if any new material was to be relied upon the appellant were to put to notice, which the Adjudicating Authority failed to do so. Therefore, in violation of principle of natural justice, the enhancement of value on the basis of contemporaneous import cannot be allowed - the enhancement of the value set aside. Violation of requirement of circular - HELD THAT:- In case of declared value is less than the floor price, i.e USD 275, the appellant is required to obtain authorization from DGFT in terms of circular no. 13 (RE- 08)/2004-09 dated 30/06/2008. However, the appellant have not obtained any authorization. Therefore, for violation of the condition of the circular the appellant s goods was rightly confiscated. However, considering the facts, the enhancement of the value is set aside - The redemption fine and penalty needs to be reduced. Appeal allowed in part.

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• 2020 (3) TMI 268
  Amendment in shipping bills - amendment sought in the said shipping bills by changing the mark from N to Y in these shipping bills which would entitle them to claim the benefit under the scheme - sole reason for denial of the amendment is that under section 149 of the Customs Act, amendment can only be allowed if it is based on documentary evidence which was in existence at the time when the goods were exported - HELD THAT:- The amendment claimed by the appellant is not in the nature of change in the shipping bills which may require evidence to prove. They are not intending to change description of goods or quantity of goods which would require any documentary evidence. The only thing they are requiring to amend their shipping bill is their intention of avail the benefit of a particular scheme. In these circumstances, the benefit of section 149 of the Customs Act cannot be denied. Appeal allowed - decided in favor of appellant.

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• Corporate Laws

• 2020 (3) TMI 267
  Territorial Jurisdiction - transfer of the case to Kochi Bench of NCLT - Oppression and Mismanagement. Whether the EGM purportedly held on 27.07.2015 is in accordance with the law and legally tenable? - HELD THAT:- Respondents R2 to R11 seems to have made efforts to usurp the office of the Directors and to gain the control over the Board of Directors of the 1st Respondent Company. Therefore, the removal of the Petitioner and Respondents R12 to R19 from the office of the Directors of the 1st Respondent Company in the EGM purportedly held on 27.07.2015 amounts to acts of oppression by the Respondents R2 to R5. Moreover, it is on record that the appointment of Respondents R6 to R11 as Directors of 1st Respondent Company was made by a single resolution which is also in violation of the provisions of Section 162 of the Companies Act,2013. Whether the forfeiture of one share of Rs. 1000/- fully paid-up and held by the petitioner in the 1st Respondent Company, on 27.07.2015 is in accordance with law and legally tenable? - HELD THAT:- The Respondents R2 to R11 being Directors at the time of forfeiture of the said shares on 27.07.2015, and assuming they were authorised to cancel the shares, we are of the view that legally the Directors of the Company cannot utilise their fiduciary powers over the shares purely for the purpose of cancellation of the shares of the minority shareholders to improve their voting power. The court cannot allow to exercise such powers which might have been delegated by the company to the Board. Therefore, we are of the opinion that there was no authority with Respondents R2 to R11 to forfeit the shares of the Petitioner. The whole action is patently illegal, perverse and is hereby declared as null and void. Whether the removal of petitioner and the Respondents R12 to R19 from the office of directors at the Extra Ordinary General Meeting purportedly held on 27.07.2015 is in accordance with law and legally tenable? - Whether the appointment/election of Respondents R6 to R11, as directors of the company, on 27.07.2015 is in accordance with law or legally tenable? - HELD THAT:- As the Extra ordinary General Meeting purportedly held on 27.07.2015 is declared as void, all the decisions taken in such meeting is considered to be void ab initio. Therefore, the removal of petitioners and R12 to 19 from directorship and appointment of respondents R6 to R11 as directors, dated 27.07.2015 per se are non-operable, null and void. Application disposed off.

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• 2020 (3) TMI 266
  Maintainability of Company Petition - attachment of shares - stay on the proceeding of the auction of the shares of the Petitioner - Company Petition is opposed by the Respondent Nos. l to 4 by filing Statement of Objections dated 26.06.2019, by inter alia raising the maintainability of the Company Petition on the ground that the Petitioner is not a shareholder/member in the 1st Respondent Company. HELD THAT:- It is not in dispute that the Petitioner has suffered different Awards passed by the Deputy Registrar of Co-operative Societies, South Zone, Bangalore City District and Nominee of the Registrar of Co-operative Societies at Bangalore in RCS/04/SOU/1029/2015-16 dated 06.06.2016, RCS/04/SOU/1030/2015-16 dated 06.06.2016, RCS/04/SOU/1031/2015-16 dated 06.06.2016, by directing the Respondent therein (Petitioner herein) to pay different amounts and also granting liberty to the Petitioner to recover the amount by Sale of immovable properties or movables properties attached by the Court. Accordingly, the shares of the Petitioner as mentioned below, are auctioned and transferred to the successive bidder. Therefore, the Petitioner admittedly ceased to be Member of the Company by virtue of auction of his shares. Therefore, until and unless, he get back his shares, after succeeding his legal battle he is prosecuting, as mentioned supra he cannot maintain Company Petition. Therefore, Petition can be disposed of by granting liberty to the Petitioner to approach the Tribunal, after becoming member of the Company. Petition disposed off.

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• Insolvency & Bankruptcy

• 2020 (3) TMI 265
  Liquidation Order - no resolution plan received - HELD THAT:- No Resolution Plan has been received by this Adjudicating Authority under sub-Section (6) of Section 30 of the Insolvency and Bankruptcy Code, 2016, the Corporate Debtor has to be ordered for Liquidation. This Adjudicating Authority orders for liquidation of the Corporate Debtor viz. M/s. BIW Fabricators Private Limited.

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• Service Tax

• 2020 (3) TMI 264
  Audit/verification of documents/records - Rule 5(A) of Service Tax Rules, 1994, read with Section 174(2)(e) of the Central Goods and Services Tax Act, 2017 - petitioner states that under Section 174 (2)(e) of the CGST Act, 2017, which is the repeal and saving clause, Rule 5A of the Service Tax Rules, 1994 has not been saved and having regard to the fact that the said provision only saves a proceeding that has already been instituted at the time of repeal or omission of the 1994 Act and not thereafter, the respondents cannot be permitted to conduct an audit/verification of the accounts of the petitioner for the relevant financial years. HELD THAT:- No interim relief of the nature as prayed for, can be granted without calling for a reply by the respondent. We are also not persuaded to come to the aid of the petitioner right away for the reason that it has taken almost three months reckoned from 01.11.2019, to approach the court for relief and that too at the nick of the time. Issue notice - List for consideration before the roster Bench on 04.03.2020.

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• 2020 (3) TMI 263
  Denial of benefit of export of services - services of Technical Testing and Analysis Services being rendered by the appellant for its clients, viz. M/s. Actavis Elizabeth LLC and M/s. Actavis Group HF, Iceland abroad - HELD THAT:- It is an admitted fact that the services have been performed from India. Further the principal or the service receiver is located outside India. Thus the technical testing and analysis service (reports by the appellant), have been delivered by the appellant outside India and have been used by the service receiver outside India. The contention of the Revenue is rejected that as the clinical tests were performed on persons in India, the services are performed in India. Further the appellant also has undisputedly satisfied the other conditions by receiving the service charges in convertible foreign exchange. CENVAT Credit - input services - catering services - period May 2006 to September 2009 - HELD THAT:- The issue stands settled in favour of the appellant by several precedent judgments of this Tribunal and High Courts viz. Resil Chemicals Pvt. Ltd. Vs.CCE Bangalore-I [2015 (1) TMI 948 - KARNATAKA HIGH COURT] - Credit allowed. CENVAT Credit - input services - rent paid for the premises acquired by them at Jakkur - period July 2007 to March 2009 - HELD THAT:- It is an admitted fact that such premises were taken for business purposes. We hold that rent paid even for the period, the premises were under repair/renovation to make them suitable for the use of the appellant/assessee, is also deemed to be used for business purposes. Appeal allowed - decided in favor of appellant.

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• 2020 (3) TMI 262
  CENVAT Credit - input services - input services utilized admittedly in construction of commercial complexes which have been let out and appellants have paid service tax under the head renting of immovable property service - HELD THAT:- The issue herein is no longer res integra and has been decided in favour of the appellants by a catena of judgments by this Tribunal and also by Hon ble Gujarat High Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS MUNDRA PORT SPECIAL ECONOMIC ZONE LTD. [ 2010 (5) TMI 483 - GUJARAT HIGH COURT] and this judgment has been followed by this Tribunal consistently. Accordingly, these appeals are allowed and the impugned orders set aside to the extent it disallowed the CENVAT credit for input services utilized in construction of immovable property which have been further let out for the period upto 31.03.2016.

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• 2020 (3) TMI 261
  GTA Service - reverse charge mechanism - exemption where transportation charges are less than Rs. 1500/- - Commissioner (Appeals) did not extend the benefit on the ground that no documentary evidences stand placed before him - extended period of limitation - revenue neutrality - HELD THAT:- Even if it is accepted that on account of lack of documentary evidence benefit of exemption of Rs. 1500/- charge is not to be extended to them, even then they are entitled to the abatement provided in terms of Notification No.12/2003 upto an extent of 75%. As such only 25% of service tax was payable by them, which also was available to them as credit. As such the entire exercise was Revenue neutral, in such case the extended period cannot be invoked. Reliance can be placed in the case of JET AIRWAYS (I) LTD. VERSUS COMMISSIONER OF SERVICE TAX MUMBAI [2016 (8) TMI 989 - CESTAT MUMBAI] as confirmed by JET AIRWAYS (INDIA) LTD. VERSUS COMMISSIONER [2018 (1) TMI 210 - SC ORDER]. Extended period of Limitation - HELD THAT:- Wherever an assessee was entitled to the credit of the tax/duty required to be paid by him, he is at no loss and there can be no mala fide on his part. In such a scenario the longer period will not be available to the revenue. Appeal allowed - decided in favor of appellant.

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• 2020 (3) TMI 260
  Refund of pre-deposit - period of limitation - unjust enrichment - dispute related to demand of service tax settled in favor of appellant / assessee - HELD THAT:- The amount was paid by way of pre-deposit subsequent to passing of the order-in-original pending disposal of appeal as required under Section 35F of the Central Excise Act. As per Section 35FF, an assessee is entitled to refund by way of consequential relief on being successful in appeal. Section 35FF provides (as amended / substituted w.e.f. 06.08.2014) Where any amount deposited by the appellant under Section 35F is required to be refunded consequent upon the order of the appellate authority, there shall be paid to the appellant interest at such rate, fixed by the Central Government, by notification in the Official Gazette, on such amount from the date of payment of the amount, till the date of refund of such amount. Thus, an assessee is ipso facto under the law, entitled to refund on being successful in appeal of the amount deposited under Section 35F of the Act read with Section 83 of the Finance Act, 1994. Further, Section 35F read with Section 35FF does not provide for any refund application to be made by the assessee after being successful in appeal - the limitation prescribed under Section 11B is not applicable for refund claim under Section 35FF. Appeal allowed - decided in favor of appellant.

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• 2020 (3) TMI 259
  CENVAT Credit - time limit for taking credit - Credit with regard to some invoices which was of more than six months / one year from the date of issue of the invoices/ bills/ challans - amendment in the Cenvat Credit Rules vide Notification No. 21/2014-CE (NT) dated 11.07.2014 w.e.f. 01.09.2014 - HELD THAT:- For availing the cenvat credit, the consequential accounting entries are to be made in the account of credit entries in RG-23A Part-I and Part-II. The Hon ble High Court found that all the requirements of this statutory rule are met by the assessee-company, but it is only with reference to accounting and entries in the cenvat register, that the dispute has arisen. Even though, in the entries made under Part-I with regard to account of inputs, the entries made showing the date is within six months, but in Part-II the entry number showing the date is beyond six months, and it is only because of this entry made in Part-II that modvat credit has been denied to assessee. The High Court further observed that in EICHER MOTORS LTD. VERSUS UNION OF INDIA [ 1999 (1) TMI 34 - SUPREME COURT] , the Hon ble Supreme Court has held that the provisions for facility of credit granted to an assessee is a right accrued to the assessee on the date when they paid the tax on the raw material or the inputs and this right would continue until the facility available thereto gets worked out or until those goods existed. The right to cenvat credit accrues on the date when the goods or service in question is received by an assessee, and such right cannot be modified just for making accounting entry in the other books or Part-II of the cenvat credit register (RG-23A) - Credit cannot be denied - appeal allowed - decided in favor of appellant.

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• 2020 (3) TMI 258
  Levy of Service tax - renting of immovable property - It is the claim of the appellant that by virtue of N/N. 1/2018 dated 30th November 2018, the appellant would not be required to discharge service tax during the said period - period 2012-13 to 2016-17. HELD THAT:- The Notification was issued after the impugned order was passed by the adjudicating authority. Therefore requires to examine its applicability to the facts and circumstances of the present case. Matter remanded to the adjudicating authority to examine the applicability of the aforesaid notification and pass an appropriate order after giving an opportunity of hearing to the appellant - appeal allowed by way of remand.

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• 2020 (3) TMI 257
  Refund of service tax - services used beyond the factory or any other place or premises of production or manufacture of the goods, for export of the said goods - refund rejected for want of improper invoice/ draft invoice as all the details required under Rule 4 A (Sub-rule 1) of Service Tax Rules, 1994 are not available in the invoices - period from October, 2016 to December, 2016 - N/N. 41/2012-ST dated 29.06.2012. HELD THAT:- The invoices in question are very much on record. Perusal thereof shows that all the above said details are very much available on the said invoices. The invoice is issued by the service provider. The name is very much apparent thereupon. Even appellant s name is also specifically mentioned on the invoices. The details of shipping bill, bill of lading No., invoice No. are mentioned. It has been a settled law that so long there is a substantive compliance of the Notification the benefit cannot be denied and a mere clerical error should not be the ground of rejection of refund claim or the benefit. In view thereof the allegation of invoice being a mere draft invoice is not sustainable, specially when there is no other documents in possession of the Department to falsify the invoices produced by the appellant on record. The C.A. Certificate is also produced by the appellant clarifying that all the three invoices, as have been objected by the Department are related to the appellant only. Above all, the show cause notice itself recites that the refund claim was filed alongwith the supporting documents. There is no other document of the Department to rebut the presumption of correctness attached to the C.A. Certificate furnished by the appellant. Thus, the rejection of refund claim of Rs. 8,320/- on the ground of inadmissible invoices is not sustainable. Refund claim - Banking and Financial Services for Rs. 17,430/- - HELD THAT:- The Banking services are related to collection of export proceeds. The Bank realization certificate had been furnished by the appellant to prove that the collection of export bill is made by the Banker after the export of goods. Thus, it cannot at all be denied that the banking and financial services are also received by the appellant beyond the place of removal that too, for export of goods. Therefore, these services are also held to fall within the category of specified service as mentioned in the impugned notification - The adjudicating authorities still have rejected the refund qua Banking and Financial services holding that the service is not used after the export is completed, rather it has been used along with the process of the export. The said observation is highly untenable is rather contrary to the above findings. Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2020 (3) TMI 256
  Application for withdrawal of appeal - monetary amount involved in the appeal - HELD THAT:- On instructions issued by the Department of Revenue, Ministry of Finance vide F.No.390/Misc./116/2017-JC dated 22.08.2019, seeks permission to withdraw this appeal along with pending applications therein due to low tax effect. The appeal and pending application are dismissed as withdrawn, leaving question of law open.

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• 2020 (3) TMI 255
  Benefit of exemption - intermediate product - Agarbathi Masala - final product exempt from duty - N/N. 67/95 dated 16.03.1995 (as amended) - Department after going through the entire process of obtaining agarbathis found that agarbathis masala manufactured by the appellant and captively consumed by them in the manufacture of agarbathis, was excisable as odoriferous compound and classifiable under Tariff Item No. 33029090 of the Central Excise Tariff - whether this intermediate product will enjoy benefit of exemption or not? HELD THAT:- The appellants are the manufacturers of Agarbathi by the process of mixing of odoriferous compound of various fragrances as per this proprietary formula and sprinkling the same on raw Agarbathis. Agarbathis classifiable under Tariff Item No. 33074900 of CETA and is chargeable to NIL duty. Agarbathi Masala is mixed and captively consumed by the appellant for applying on to Agarbathi and is prepared based on proprietary formula which is a trade secret - Further, the appellant does not market the Agarbathi Masala. Further, we find that in the CBEC Circular No. 495/61/99-CX-3 dated 22.11.99 which holds that odoriferous compound used for manufacture of Agarbathi is not excisable . Further, the said Circular referred to two processes of manufacture of Agarbathi (a) by mixing the Agarbathi Masala with dough and rolling it into Agarbathi, (b) by sprinkling on raw Agarbathi. In the present case, the Respondent has held that the Circular is inapplicable to the appellant s case as the Agarbathi Masala mixed by the appellant is marketable and hence excisable. Further, by this subsequent Circular No. 989/13/2014-CX.3, dated 7.11.2014, the Board clarified the marketability, if any, has to be determined based on evidence. In the impugned order, the Original Authority has held that the appellant is entitled to CENVAT credit of duty paid on the inputs used in the preparation of Agarbathi Masala but the said CENVAT credit has not been calculated and the benefit of the same has not been given while confirming the duty demand on the appellant. Further, the method of determination of value of Agarbathi Masala by the Department has not excluded the duty paid on the inputs used for the preparation of Agarbathi Masala which is contrary to CAS-4 standard. The cases needs to be remanded back to the Original Authority to decide de novo after affording an opportunity of cross-examination of the witnesses relied upon by the Respondent - appeal allowed by way of remand.

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• 2020 (3) TMI 254
  Classification of goods - HDPE/PP Tapes/fabrics - shading net fabric - whether classified under CETH 60069000 chargeable to duty @ 8% or classifiable under CETH 3926 9099 chargeable to duty @16%? - HELD THAT:- Tribunal has been consistently holding such material to be falling under Chapter 60 of CETA - In the case of Sunpack [ 2016 (1) TMI 919 - CESTAT CHENNAI ] Tribunal has elaborately discussed the issue and have come to the conclusion that the instant goods are classifiable under 6005 9000. The Tribunal was concerned with a knitted fabric made of synthetic yarn made of strips less than 5mm. Thus, the Shading Net manufactured by the appellant is rightly classifiable under CETH 6005 9000 - appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2020 (3) TMI 253
  Issuance of allotment to the petitioner s bunk towards supply of sales tax exempted diesel - validity of Government Order in G.O.(Ms).No.238 of 2017 and the Notification dated 19.02.2018 - HELD THAT:- It is only appropriate that they are granted exemption from sales tax. The Private Diesel Bunk operators have not offered to participate in such implementation of Government schemes. All that is said is, they would not sell diesel to private parties. However, it has been made very clear, in the Government order that there is no such restriction. The Government order impugned and the consequential Notification do not suffer from any infirmity. Petition dismissed.

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• 2020 (3) TMI 252
  Classification of goods - rate of tax - Digital Multimeter AV0410, Digital insulation resistance tester, Primary current injection set, Digital clamp meter, Tan delta kit - revisionist has claimed that the goods manufactured by him are liable to be taxed in the category of Gain Measuring Instrument at the rate of 5%, while the Assessing Authority rejecting the contention of the revisionist has taxed the said instrument at the rate of 14% being unclassified items - HELD THAT:- The revisionist has produced the certificate of Dean Research Development, Electronics Engineering Department, Institute of Engineering and Technology Uttar Pradesh University, Sitapur Road, Lucknow. In support of his contention and the said certificate having been issued by expert body was required to be given due weightage and due consideration by the authorities below. The Assessing Authority as well as Tribunal have without given any cogent explanation rejected the said report. It was clearly open for the Tribunal looking into the technical nature of the question involved to seek an expert opinion with regard to the exact nature and classification of the items prepared by the revisionist and thereby after due consideration return and finding in this regard and the Tribunal firstly having rejected the expert opinion and secondly did not further seek any expert opinion in this regard has committed material irregularity and therefore the judgment of the Tribunal cannot be sustained. The matter is remitted back to the Tribunal and it shall be open for the Tribunal to seek any expert opinion before forming an opinion regarding classification of the instrument manufactured by the revisionist - Revision allowed by way of remand.

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• 2020 (3) TMI 251
  Imposition of penalty - goods were traceable to bonafide dealer and entered in books of accounts - whether the goods were being carried with valid documents as prescribed under the Trade Tax Act and if not then whether the seizure/penalty proceedings are valid in the present set of circumstances or not? HELD THAT:- A perusal of Rule 83 (4) (a) gives the details of the documents which are mandatory during transportation of goods. In the present case undoubtedly it has nowhere been challenged that the petitioner was not carrying mentha oil. It has been submitted that he had purchased the said oil from three farmers from Fatehpur. To substantiate the said transaction three purchase vouchers were produced before the authorities which provides the quantum of the oil, name and address of seller and the date of sale. No other document was produced by him and at that stage no other document was existing. A fair reading of Rule 83 (4) (a) clearly indicates that in the present circumstances the vouchers were the only documents which could have indicated the transaction as stated by the revisionist - In view of the fact that it has been admitted that vouchers were duly presented before the mobile squad immediately on receipt of the show cause notice at the first instance, it cannot be said that the goods were being transported with intention to evade tax. Revision allowed.

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• 2020 (3) TMI 250
  Levy of Entry Tax on inter-state sale - Whether the respondents have failed to establish the liability of payment of entry tax from the dealer/purchaser and without proper consideration of the facts the same can be fastened on the manufacturer for that very transaction? - HELD THAT:- After going through the books of account and other material it was discovered that the consideration paid by the assessee to the purchaser found its way to the Banks in Bareilly and on the basis of the facts it is concluded that the sale of the sugar by the assessee was infact intrastate sale and not a interstate sale which was validly subject to the entry tax. The said transaction was shown to be interstate sale only with a view to avoid taxation in the State of U.P. and therefore imposed entry tax on the said transaction and levied penalty on the fact that the said transaction was deliberately and wrongly recorded as interstate sale - The said transaction is an interstate sale was not liable for being brought under the Entry Tax Act. The issue as to whether the transaction was an intrastate sale or interstate sale is no longer open for the determination. For the same transaction by means of the impugned order the Tribunal has upheld the findings recorded by the Assessing Authority without taking into consideration the fate of the transaction and the orders passed with regard to the M/s Shudhodhak Enterprises and therefore the Tribunal has committed manifest error in recording finding in favour of the revenue. Revision allowed.

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• Indian Laws

• 2020 (3) TMI 249
  Demand of Motor Vehicle tax based on local price of similar vehicle - HELD THAT:- This Court is not in a position to accept the contentions of the respondents that the figure shown by the manufacturer in the web portal, could be the legal basis to simply discard the actual figure that is based on the purchase invoice by the dealer, from where the owner of the car had purchased the car. In the instant case, the respondents do not have a case that Ext.P-1 invoice is in any manner manipulated or that the figures shown therein are not inclusive of the Value Added Tax or duties etc, or that the dealer has given by rebate to the petitioner, etc. This Court is of the considered view that the above said stand of the respondents that they can accept motor vehicle tax only at the rate of 21% of the figure shown by the manufacturer in the web portal, etc cannot be accepted. Of course, in a case where the respondents have a doubt about the genuineness of the figures shown in the purchase invoice, certainly they are entitled to conduct appropriate enquiry to find out whether there is manipulation, etc. But, in a case where the figures shown in the purchase invoice are not in any manner manipulated, and is the genuine figures shown therein by the dealer in the purchase invoice, and the respondents do not have a case that the said purchase value is not inclusive of VAT, GST or other taxes, duties etc, as envisaged in the 2nd limb of the operative portion of Sec.2(e) of the Kerala Motor Vehicle Taxation Act, 1976, or that the figure is on the basis of discount or rebate given by the dealer to the registered owner, etc, or that the car has been purchased from a foreign country, or that the car has been obtained not on the basis of purchase, and therefore it s purchase value is not known on account of non availability of the invoice. The competent authority among the respondents, more particularly the 1st respondent shall immediately accept motor vehicle tax of the petitioner s car at the rate of 21% of the purchase value as shown in the invoice, and thereafter, the 1st respondent shall forthwith grant permanent registration to the petitioner s vehicle - Petition disposed off.

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• 2020 (3) TMI 248
  Detention of goods - Smuggling - Detention Orders passed with a view to prevent the detenues from smuggling goods, abetting the smuggling of goods, and dealing in smuggled goods otherwise than by engaging in transporting or concealing or keeping smuggled goods - Whether the Detaining Authority was justified in deferring the consideration of the representation till the receipt of the opinion of the Central Advisory Board? - HELD THAT:- By virtue of Section 21 of 1897 Act, the authority making an order of detention would be entitled to revoke that order by rescinding it and that conferment of power under Section 11 of the COFEPOSA Act was done without affecting in any manner and expressly preserving the power under Section 21 of 1897 Act of the original authority making the order - It was thus held that the constitutional obligation of a specially empowered officer entitled to pass an order of detention would only be to communicate expeditiously to the detenue the grounds of detention and also to afford him opportunity to make representation to the appropriate Governments against his detention. With the judgment of the Constitution Bench of this Court in KAMLESHKUMAR ISHWARDAS PATEL VERSUS UOI [1995 (4) TMI 283 - SUPREME COURT ], the law on the first issue is well settled that where the detention order is made inter alia under Section 3 of the COFEPOSA Act by an officer specially empowered for that purpose either by the Central Government or the State Government, the person detained has a right to make a representation to the said officer; and the said officer is obliged to consider the said representation; and the failure on his part to do so would result in denial of the right conferred on the person detained to make a representation. Further, such right of the detenue has been taken to be in addition to the right to make the representation to the State Government and the Central Government. It must be stated that para 12 of the grounds of detention in the instant case, as quoted hereinabove, is in tune with the law so declared by this Court. The law on the first issue is well settled that where the detention order is made inter alia under Section 3 of the COFEPOSA Act by an officer specially empowered for that purpose either by the Central Government or the State Government, the person detained has a right to make a representation to the said officer; and the said officer is obliged to consider the said representation; and the failure on his part to do so would result in denial of the right conferred on the person detained to make a representation. Further, such right of the detenue has been taken to be in addition to the right to make the representation to the State Government and the Central Government. It must be stated that para 12 of the grounds of detention in the instant case, is in tune with the law so declared by this Court. Whether the Detaining Authority ought to have considered the representation independently and without waiting for the report of the Central Advisory Board? - HELD THAT:- If the representation is received before the matter is referred to the Advisory Board, the Detaining Authority ought to consider such representation; and if the representation is made after the matter is referred to the Advisory Board, the Detaining Authority would first consider it and then send the representation to the Advisory Board - In that case the detention orders were passed by the State Government under Section 3(1)(iv) of the COFEPOSA Act. The representations were made by the detenues on 17.04.1989 which, however, could not be considered immediately as certain information and comments were required. In the meantime, the case was referred to the Advisory Board which in its report dated 20.04.1989 found that there was sufficient cause for the detention. On 27.04.1989, the detention was confirmed by the State Government. Thus, failure on part of the appropriate Government to forward the representation to the Advisory Board and rejection thereof while the proceedings were pending before the Advisory Board, were the points on which the relief was granted to the detenue. In terms of Section 8, the report of the Advisory Board is meant only for the consumption of the appropriate Government and apart from the operative part of the report which is to be specified in a separate paragraph as per sub-section (c), the mandate in terms of sub-section (e) is to keep the report of the Advisory Board completely confidential. Thus, a specially empowered officer who may have passed the order of detention, by statutory intent is not to be privy to the report nor does the statute contemplate any role for such specially empowered officer at the stage of consideration of the opinion of the Advisory Board. The report of the Advisory Board may provide some qualitative inputs for the appropriate Government but none to the specially empowered officer who acted as the Detaining Authority. Once the detention order has been made by any of the authorities competent to detain in terms of Section 3 (1) of the COFEPOSA Act, the representation to seek revocation of the detention order can be considered and decided by the Detaining Authority dehors the decision of the Advisory Board and the acceptance of recommendation by the appropriate Government. The consideration for revocation of a detention order is limited to examining whether the order conforms with the provisions of law whereas the recommendation of the Advisory Board is on the sufficiency of material for detention, which alone is either confirmed or not accepted by the appropriate Government. Petition dismissed.

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• 2020 (3) TMI 247
  Dishonor of Cheque - insufficiency of funds - vicarious liability - Summon of an accused - Since no payment was made within the statutory period of 15 days, a complaint under Section 138 read with Sections 141/142 of NI Act was filed on 30.01.2017 - HELD THAT:- Admittedly, the petitioners are neither the Managing Directors nor the Authorized Signatories of the accused company. The accused company and the Managing Director are arrayed as accused No.1 and 2 along with others in the complaint pending before the concerned Metropolitan Magistrate. A perusal of the complaint filed under Section 138 r/w Sections 141/142 of NI Act filed by the complainant shows that except for the general allegation stating that the petitioners were responsible for control and management and day to day affairs of the accused company, no specific role has been attributed to the petitioners. To fasten the criminal liability under The Negotiable Instruments Act, 1881, the above generalised averment without any specific details as to how and in what manner, the petitioners were responsible for the control and management of affairs of the company, is not enough. In Pepsi Foods v. Special Judicial Magistrate and Ors. [1997 (11) TMI 518 - SUPREME COURT] , it was held that summoning an accused person cannot be resorted to as a matter of course and the order must show due application of mind. Petition allowed.

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• 2020 (3) TMI 246
  Dishonor of Cheque - insufficiency of funds - acquittal of the accused - Rebuttal of presumption. HELD THAT:- Presumption is rebuttable, but from the evidence of the appellant side it is not rebutted and no evidence is adduced by the respondent to rebut the same. The respondent refused to take the notice issued to him and did not reply the notice, therefore, it can be said that the respondent has not made any offer to rebut the presumption. It is not a case where the respondent has not signed the cheque. A meaningful reading of the provisions of the Act, 1881 makes it ample clear that the person signed the cheque over to a payee remains liable and he may adduce any evidence to rebut presumption. Presumption will live, exist and survive and shall end only when contrary is proved by the accused/respondent. In the present case the trial Court recorded finding that advancing loan for a sum of Rs. 2 lakh in cash is contrary to the provisions of Section 269 SS 271D of the Income Tax Act, 1981 and the appellant had lent a sum of Rs. 2 lakh without having licence under Money Lenders Act, 1934, therefore, presumption under Section 139 of the Act, 1881 is rebutted - When the respondent has not denied that he has not borrowed money from the appellant on oath, the statement made by the appellant on oath supported by documents is not rebutted. Presumption under Section 139 of the Act, 1881 will survive and no corroboration is required for the same, because corroboration is not a rule of law, but it is a rule of prudence and presumption under Section 139 of the Act 1881 is legal. Presumption has to be drawn by the court as per Section 139 of the Act, 1881. The matter related to income tax is an issue between the revenue and the assessee and same is not relevant in a matter of dishonour of cheque. Therefore, provisions of Income Tax Act is not relevant for deciding the issues. The amount was advanced on the basis of personal relation, therefore, other documents are not required and cheque issued by the respondent is the best document showing liability of the respondent. The respondent is convicted under Section 138 of the Act, 1881. The date of issuance of cheque is 02.4.2017. The appellant is entitled to interest 6% to the amount advanced by him - Appeal allowed.

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• 2020 (3) TMI 245
  Dishonor of Cheque - Case of petitioner is that complaint is not maintainable under section 138 and 141 of NI Act as complainant is neither proprietor of M/s Sunlight Aerosol, New Delhi nor Shri Zile Singh is authorized person to file the complaint, nor complainant filed any document on record in support thereof - HELD THAT:- Though the complaint is filed against company through petitioner being proprietor of the accused company, but fact remains that in a private limited company or limited company, there is no proprietorship. However, on this ground, the complaint cannot be rejected. With regard to notice under Section 251 Cr.P.C. which has not been framed against accused company and only against the petitioner who is an individual, there are force in the submission of learned counsel for petitioner that cheque in question is issued by him in the capacity of signatory of the company and not as an individual, however, without commenting much on the merits of the case, since compensation amount has already been paid and the fact that petitioner has already undergone 23 days in judicial custody, I hereby while maintaining the conviction, release the petitioner on sentence already undergone. Since the sentence awarded to the petitioner is less than two years and it is a first conviction against the petitioner, therefore, I hereby give him benefit of Section 12 of Probation of offenders Act. Thus, the petitioner shall not suffer disqualification, if any, attaching to the conviction for the above stated offence. Petition disposed off.

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