Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
March 7, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Refund of amount deposited during investigation proceedings - voluntary deposit or not - Recovery of wrongful input tax credit - The Court found that in the instant case, the deposit made by the Petitioner was at 3:10 and 3:18 AM during the search operation being carried out which continued till 5:00 AM The fact that Petitioner was made to deposit the amount at 3:10 and 3:18 AM before the search ended and the officers left at 5:00 AM, shows that the deposit was not voluntary and contrary to the CBIC Instruction No. 01/2022-2023 dated 25.05.2022. - The Court orders refund of the deposited amount with interest, and re-crediting of Electronic Credit Ledger.
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Refund of deposit - reversal of ITC - The amount was allegedly recovered from them during search proceedings - The High Court noted that the deposit in this case lacked voluntariness and contravened CBIC Instructions which prohibits coercive recovery during search proceedings. - Therefore, the court directed the respondents to refund the amount so recovered along with statutory interest @ 6% p.a. from the date of deposit till repayment, within four weeks.
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Transitional credit - TDS was transitioned under Section 140 of the TNGST Act, 2017, along with the “purchase tax” - The High court held that there is no scope for transitioning TDS credit under Section 140 of the TNGST Act, 2017, as it applies only to ITC. However, it noted that if TDS had remained unutilized for discharging tax liability under the TNVAT Act, there should be a fresh adjustment of the amount from VAT-TDS towards the petitioner's tax liability, and any remaining ITC should be transitioned under Section 140 of the TNGST Act, 2017, or refunded.
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Cancellation of GST registration of petitioner - appeal barred by limitation or not - appeal was filed after a period of four months - Noting the significance of proper service of notice, the High Court emphasized the mandatory prerequisites for triggering the limitation period, including a finding on the mode of service and recording satisfaction regarding communication to the concerned party. - The Court observed deficiencies in the impugned order, specifically its failure to address the mode of service of the order and lack of satisfaction. - Setting aside the impugned order, the Court remitted the matter to the appellate authority for fresh adjudication.
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Exemption from GST - Collection of tax at source u/s 52 - Electronic commerce operator - Exclusion of "Agent" - Exemption under Notification No. 52/2018 - The AAR determined that the applicant operates as an electronic commerce operator, not as an agent of DGIPL. Despite the applicant's contention of acting merely as a platform for transactions between DGIPL and customers, the agreement terms and the handling of transactions classify the applicant as an E-commerce operator responsible for tax collection at source under Section 52 of the CGST Act.
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Admissibility of input tax credit - inward supply of services by way of License Fee Recovery (LFR) on leasing of pumps along with the equipment - The AAR concluded that the applicant, engaged in both taxable and exempt supplies, could only claim proportionate ITC based on taxable supplies. - The Authority ruled that the applicant could claim only proportionate ITC for leasing services based on taxable supplies, as per CGST Act provisions and rules.
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Classification of service - The distinction between the activity of "renting" and "hiring" - service of providing passenger buses on rent/lease by the applicant to Kerala State Road Transport Corporation (KSRTC) - The AAR concluded that the expression "giving on hire" includes renting of vehicles, rendering the transaction exempt from GST under Notification No. 12/2017-CT(R).
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Classification of service - rate of tax applicable for works contract - construction of a structure meant predominantly for use as a cultural establishment - The Authority for Advance Ruling, Kerala, finds that the applicant is liable to pay GST at the rate of 12% [6% - CGST + 6% SGST] or 18% [9% CGST + 9% SGST], as per the entry at Item (vi) of SI No.3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017. This determination is contingent upon the time of supply as determined under Section 14 of the CGST Act, 2017, falling between 21.09.2017 and 31.12.2021, or on or after 01.01.2022, respectively. - Further, the AAR concluded that the recipient indeed fell within the definition of "Governmental Authority.
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Scope of advance ruling (AAR) - The ruling is sought on two questions: GST applicability on electricity produced from solar panels and on services provided by KSEB. - The admissibility of the second question is questioned as it pertains to the recipient of services (applicant) and not a transaction proposed by them, as required for an advance ruling. - It's established that electricity generated from solar panels falls under goods, specifically exempted from GST. However, the ruling cannot be given on the second question as it doesn't meet the criteria for advance rulings under the CGST Act.
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Rate of tax - Whether different rates of GST can be levied to affordable and non-affordable residential apartments in a single project/ building that is being developed as Residential Real Estate Project? - The AAR in this ruling clarifies that different GST rates for affordable and non-affordable residential apartments can indeed be applied within the same project. The applicable GST rates are 1.5% for affordable units and 7.5% for non-affordable units, as per the respective entries in Notification No. 11/2017-Central Tax (Rate).
Income Tax
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The CBDT has issued a circular which addresses conditions under which income from specific funds, trusts, institutions, universities, educational, or medical institutions can enjoy tax exemption under the Income-tax Act, 1961. It outlines that at least 85% of such entities' income must be used for charitable or religious purposes, directly or through donations to similar entities. Amendments by the Finance Act 2023 clarify that only 85% of eligible donations are considered for charitable or religious application, with the balance 15% not needing to be invested per section 11(5) for exemption eligibility.
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Allowable deduction of interest paid on the borrowings - Section 14A and Section 36(1)(iii) - Exempted dividend income - Based on the discussions and findings, the court dismissed the appeal, affirming the decision of the ITAT. It upheld the disallowance of the interest expense, considering the provisions of Section 14A and the principles established in the Maxopp Investment Ltd. case. The expenditure incurred on interest paid on borrowed funds for investment in shares of the two companies, from which dividend income does not form part of the total income, was held to be hit by Section 14A of the Act and not allowable as deduction.
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Reopening of assessment u/s 147 - Reasons to believe or suspect - huge share transaction - The court held that the reasons provided by the Assessing Officer for reopening the assessments did not meet the legal standards set forth in the Income Tax Act and relevant case law. The court found that there were only reasons to suspect, rather than reasons to believe, that income had escaped assessment. As a result, the court quashed the impugned notices and the order rejecting objections, ruling in favor of the petitioner.
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Offences punishable u/s 276C(1) & 277 - jewellery found during search - adjudication proceedings and criminal prosecution are inter-dependend or not - The High Court concluded that adjudication proceedings and criminal prosecution deemed independent by Supreme Court - The petition to quash proceedings dismissed, as adjudication proceedings and criminal prosecution can proceed independently.
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Addition of contract receipts - bogus activity - Estimation of income - The AO had made an addition to the assessee's income, alleging discrepancies in the contract receipts and estimating the profit at 8%. However, upon careful consideration, the Tribunal found inconsistencies in the assessment. It questioned the basis for estimating profit at 8% when the commission ranged from 0.25% to 1%, and the discrepancy regarding the actual contract receipts. The Tribunal concluded that the addition lacked demonstrative evidence and was based on surmise and conjecture.
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Addition on account of foreign currency found during the course of search - unaccounted income - The ITAT observed that no grounds to interfere with the CIT(A)'s findings. Despite acknowledging the possibility of the currency being remnants of business trips, the onus remained on the assessee to furnish conclusive evidence, which was not adequately provided. Consequently, the appeal of the assessee was dismissed.
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Unexplained creditor u/s. 68 - onus to prove - The ITAT ruled that once the identity of the creditor and the genuineness of the transaction are established, proving the creditor's capacity is not mandatory for the assessee. This is supported by the precedent set in "Labh Chand Bohra Vs. ITO" by the Rajasthan High Court, aligning with the doctrine that the onus shifts away from the assessee once the initial proof of transaction is provided.
Customs
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The JNCH issues Public Notice regarding the weighment of self-sealed export containers in the Central Parking Plaza (CPP). Effective from March 1, 2024, all non-AEO exporters claiming drawback amounts exceeding Rs. 1 Lakh or IGST refund amounts over Rs. 5 Lakhs must have their containers weighed at CPP before Customs registration. The containers must carry weighment slips from the CPP custodian for Shipping Bill registration. The custodian is responsible for ensuring smooth weighment processes to minimize exporter inconvenience.
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Confiscation of imported goods - multi-functional devices - requirement to meet the standards as 'printers / plotters' as per Electronics & Information Technology Goods - The Tribunal upheld the redemption for home consumption of the goods, rejecting the Revenue's contentions. The Andhra Pradesh High Court also addressed similar issues in previous cases, finding no reason to withhold later consignments after previous consignments had been released upon payment of penalties. - The High Court, in line with the Tribunal's findings and the precedent set by the Andhra Pradesh High Court, dismissed the batch of appeals filed by the Revenue, keeping the questions of law open.
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Demand duty - Imported one consignment of ‘Bed sheet’, declared as made of “100% Polyester” - mis-declaration the goods - The Tribunal observed that, the articles which have been imported by the respondent are woven fabric of synthetic filament yarn, but they are Bed spreads / Bed sheets and quantity of the goods in numbers has been described by the respondent. - The Tribunal held that the respondent's classification of the goods under CTH 6304 was correct, and they are not liable for confiscation. Additionally, it was determined that no penalty is imposable on the respondent, and no redemption fine is payable.
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Smuggling of Cattle Heads - confiscation - penalties imposed - corroborative evidence - fraudulently used the Challan belonging to the some other party - The Tribunal found that there was no conclusive evidence to support the allegation of smuggling to Bangladesh. It overturned the confiscation order but upheld the penalties imposed on the appellant for fraudulent documentation and actions leading to the seizure of the cattle heads and trucks.
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Imported Zinc Oxide (99% purity) - whether the imported Zinc Oxide has been used by the appellant in the manufacture of PCFP or not to avail the benefit of exemption - The CESTAT found evidence supporting the production of PCFP by the appellant during the material period, as confirmed by the Divisional Officer's report and amended registration certificates. - Based on the findings, the court concluded that the appellant is entitled to claim the benefit of the Customs duty exemption under Notification No.25/1999-Cus dated 28.02.1999 as amended.
FEMA
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The Reserve Bank of India has mandated that all Authorised Persons acting as Indian Agents under the Money Transfer Service Scheme (MTSS) submit quarterly statements through the Centralised Information Management System (CIMS) portal starting from the quarter-ending March 2024, replacing the previous requirement of submission through the eXtensible Business Reporting Language (XBRL) platform. - NIL return is also mandatory in case of no transaction.
Indian Laws
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Dishonour of Cheque - security cheque or not - lease deed has been obtained by misrepresentation or not - rebuttal of presumption u/s 139 of the NI Act - The High Court concluded that the liability for cheque encashment arose only if the petitioners failed to pay dues to specified parties as agreed, and the respondent had to make those payments. - As the complaint did not demonstrate that such payments were made by the respondent due to the petitioners' default, the court found the complaint unsustainable.
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Dishonour of Cheque - Rebuttal of presumption - Financial Capacity - misuse of Cheque by the complainant - The High Codurt noted that the Learned Trial Court rightly observed that no further question was asked from the complainant as to when the land was sold and for how much sale. Thus, the financial capacity of the complainant to lend the money is duly established. - The complainant is not obliged to prove the loan or the financial capacity. Once the presumption under Section 139 of the NI Act is available to the complainant, entire burden shifts upon the accused to rebut that presumption, which in the present case accused-petitioner has utterly failed
IBC
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CIRP Proceedings under IBC versus Tax Dues / Statutory Dues - The High court noted that NCLT should have been cautious before approving the Corporate Insolvency Resolution Plan and could have imposed penalties for the fraudulent initiation of proceedings. The court emphasized that statutory dues cannot be waived off merely by an insolvency resolution process and must be settled as per law.
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Validity of demand notice based on the order secured by the petitioner from NCLT - Corporate Insolvency Resolution Plan approved by the NCLT which proposed a NIL value against the sales tax dues - The court dismissed the writ petition, holding that the proceedings before NCLT appeared to be staged managed with the intent to defeat the rights of creditors, including the Commercial Tax Department. The court found the process initiated under the IBC to be potentially fraudulent, intended to secure an unjust concession without the actual participation of the affected creditors, notably the Commercial Tax Department.
Service Tax
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Exemption from service tax - ocean freight - Whether service tax and IGST on the transportation of goods in a vessel from a place outside India up to the customs station of clearance in India on the importer, on a reverse charge basis, are arbitrary and illegal. - The challenged notifications at Exhibits-A and F are declared illegal, aligning with the precedent set by the Gujarat High Court in SAL Steel Ltd., which quashed similar notifications. - While the petitioner is entitled to a refund of duty paid under these notifications, it is subject to the filing of a refund application by the petitioner, which must be decided based on its own merit and the principle of unjust enrichment.
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SVLDRS - Discharge Certificate - The adjudicating authority does not have the jurisdiction to proceed with the adjudication without revoking or cancelling the Discharge Certificate, which is solely within the purview of the Designated Committee under SVLDRS. - Only the Designated Committee has the authority to revoke or cancel the Discharge Certificate if it finds that the declaration contains false particulars.
VAT
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Condonation of delay in filing appeal - sufficient cause for condoning the delay or not - The petitioner contended that despite the delay, their case had merit, particularly concerning an amendment to Section 11(1)(i) of the Haryana Special Economic Zone Act, 2005 (HSEZ Act), which impacted the respondent's exemption claim. - The Supreme Court affirmed the High Court's dismissal of the appeals based on delay but refrained from delving into the merits. The Court noted that while the High Court correctly dismissed the appeals due to delay, it did not fully consider the merits, particularly concerning the amendment to the HSEZ Act.
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Rectification of error - Period of limitation - The High Court observed that, there is no limitation prescribed for passing order under Section 22(4) of the TNVAT Act, 2006. The language adopted in Section 22(4) of the TNVAT Act, 2006 merely indicates that the assessment order has to be passed after the completion of that year. It would imply that such assessment orders have to be passed within the reasonable period. - The court quashes the assessment orders for certain assessment years, allows the writ petitions for specific assessment years, dismisses one writ petition with the liberty to file an appeal.
Case Laws:
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GST
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2024 (3) TMI 272
Interpretation of statute - provisions of sub-section (7) of Section 140 of CGST Act - Transition of the Input Tax Credit - petitioners contend that such input tax credit was not permitted to be transitioned and / or to be taken in the electronic credit ledger, although it was statutorily entitled to them, and merely, because there is a defective electronic mechanism to give effect to such input tax credit - HELD THAT:- It would be appropriate that the GST Council considers the issues inter alia the effect that Sub-Section (7) of Section 140 would bring about, on the transition of the input tax credit, being permitted under such provision. More particularly, as it is urged on behalf of the Petitioners, that it is ill-conceivable that the input tax credit which was legitimately available with the petitioners before the appointed day, cannot be permanently lost or lapsed, merely because the GST, machinery does not create an effective procedural mechanism, for such credit to be transferred to the Electronic Credit Ledger (ECL) to be utilized, thereby, creating a situation of such credit being permanently lost. It is also their submission that this can never be the intention of the legislation even on a plain reading of sub-section (7) of Section 140. It is opined that, an appropriate examination of such issues by the GST Council shall assist the Court in taking an appropriate view of the matter. These proceedings adjourned to 9th August 2024.
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2024 (3) TMI 271
Maintainability of appeal - rejection solely on the ground of limitation - HELD THAT:- The appeals are restored on the file of the Appellate Authority. Liberty is granted to the petitioner to file an application seeking condonation of delay within a period of two weeks from today. On such an application being filed, the Appellate Authority shall consider the application seeking condonation of delay in accordance with law without being influenced by anything stated in this order. Petition disposed off.
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2024 (3) TMI 270
Refund of amount deposited during investigation proceedings - Recovery of wrongful input tax credit - alleged discrepancy noticed during the search operation - HELD THAT:- In the instant case, the deposit made by the Petitioner was at 3:10 and 3:18 AM during the search operation being carried out which continued till 5:00 AM The fact that Petitioner was made to deposit the amount at 3:10 and 3:18 AM before the search ended and the officers left at 5:00 AM, shows that the deposit was not voluntary and contrary to the CBIC Instruction No. 01/2022-2023 dated 25.05.2022. The contention of learned counsel for the respondent that the deposit was voluntary for the reason that there is no material placed on record by respondent to show as to why petitioner would voluntarily deposit the said amount when there was no claim made against the petitioner as on the date of deposit, cannot be accepted. There are merit in the said submission of learned counsel for the Respondent and hold that no interest would be liable to be paid on the amount deposited by way of an adjustment of the credit amount standing in the Electronic Credit Ledger, unless an appropriate application had already been made, prior to the alleged non-voluntary deposit, claiming refund or as an adjustment towards tax due - Respondents are directed to, within four weeks, refund the amount of Rs. 15,06,342/- to the Petitioner alongwith statutory interest @ 6% p.a. from date of deposit till repayment and the amount of Rs. 25,00,000/- by forthwith re-crediting the same to the Electronic Credit Ledger of the Petitioner. Petition disposed off.
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2024 (3) TMI 269
Refund of deposit - reversal of ITC - The amount was allegedly recovered from them during search proceedings - HELD THAT:- In in the instant case, the deposit made by the Petitioner before the search ended and the officers left, shows that the deposit was not voluntary and contrary to the CBIC Instruction No. 01/2022-2023 dated 25.05.2022. The contention of learned counsel for the respondent that the deposit was voluntary for the reason that there is no material placed on record by respondent to show as to why petitioner would voluntarily deposit the said amount when there was no claim made against the petitioner as on the date of deposit, cannot be accepted. Therefore, the amounts that were deposited on behalf of petitioner lacked voluntariness. Accordingly, said amount are liable to be returned with interest - Respondents are directed to, within four weeks, refund the amount of Rs. 35,00,000/- to the Petitioner alongwith statutory interest @ 6% p.a. from date of deposit till repayment. Petition disposed off.
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2024 (3) TMI 268
Transitional credit - Petition is a works contractor - TDS was transitioned under Section 140 of the TNGST Act, 2017, along with the purchase tax paid by the petitioner, which was availed as Input Tax Credit - Transition of Tax Deducted at Source (TDS) under Section 13 of the TNVAT Act, 2006, on Works Contract. Transition of ITC validly availed - HELD THAT:- On perusing the records, there is also no doubt that the petitioner was entitled to ITC on Section 12(2) of the TNVAT Act, 2006. To that extent, there is merits in the submission of the petitioner - If ITC was validly availed by the petitioner on purchase tax paid by the petitioner under Section 12(1) of the TNVAT Act, 2006 and same was remaining un-utilized, the petitioner was entitled to transition the same under Section 140 of the TNGST Act, 2017 as transitional credit - The petitioner is therefore justified in assailing the impugned Assessment Order although the limitation to file an appeal had expired long back. Transition of Tax Deducted at Source (TDS) under Section 13 of the TNVAT Act, 2006, on Works Contract - HELD THAT:- There is no scope for transmitting the credit under Section 140 of the TNGST Act, 2017. Section 140 of the TNGST Act, 2017 is applicable only to ITC - the provisions of the TNVAT Act, 2006 mandates adjustment of the amount so deducted at source and paid by the employer who engages the services of the works contractor. If indeed there was deduction of tax at source by the person who engaged the services of the petitioner, such amount was to be adjusted towards the tax liability of the petitioner. Thus, surplus ITC after adjustment of the tax liability is to be refunded to the petitioner after assessment under Rule 10(A) and 10(B) of TNVAT Rules, 2007. Excess of ITC remaining unutilized after such adjustment was to be refunded back to the petitioner if where there were no arrears of tax under the Act from the petitioner. If this was followed, there would have been surplus of ITC which was to be either refunded back to the petitioner or allowed to be transitioned under Section 140 of the TNGST Act, 2017. The petitioner therefore deserves a chance to defend the case as the impugned Assessment Order has been passed during the period when the country was under semi-lock down mode. If the VAT-TDS had indeed remained unutilized for discharging tax liability under TNVAT Act, 2006, there should be a fresh adjustment of the amount out of VAT-TDS towards tax liability of the petitioner and thereafter ITC which would have remained unutilized ought to have allowed to be transitioned under Section 140 of the Act or refunded to the petitioner under Section 54 of the TNGST Act, 2017 read with TNVAT Act, 2006. This issue would thereafter require a proper re-consideration. Therefore, these writ petitions are allowed by way of remand.
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2024 (3) TMI 267
Cancellation of GST registration of petitioner with retrospective effect - returns not filed for continuous period of more than six months - HELD THAT:- As per the petitioner a family member of the petitioner had seriously fallen ill during the period and thus returns could not be filed. He states that he is willing to file returns and pay the charges for delayed filing. The order of cancellation dated 07.03.2023 is accordingly set aside. GST registration of the petitioner is restored, subject to petitioner filing requisite returns up to date and complying with Rule 23 and its provisos of the Central Goods and Service Tax Rules, 2017 - Petition allowed.
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2024 (3) TMI 266
Wilful violation of the order - Petitioner submits that the present contempt case has been rendered infructuous in view of the fact that the respondent-authority has now passed the order - HELD THAT:- Contempt Case (Cvl.) No.663 of 2020 stands disposed of as such.
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2024 (3) TMI 264
Cancellation of GST registration of petitioner - appeal barred by limitation or not - appeal was filed after a period of four months - HELD THAT:- The mandatory prerequisites for reckoning the start point of period of limitation are these. The authority has to make a finding in regard to the mode of copy of the order and also whether service upon the concerned person is complete. Secondly the authority has to record its satisfaction that the order has been communicated to the assessee/person . The impugned order does not reference the mode of service of the order nor does it record its satisfaction of service in the order. The finding that the order was communicated to the assessee/person is also absent. Learned tribunal was misdirected in law, inasmuch as, it neglected to record its satisfaction of the mandatory prerequisites for triggering the clock of limitation. The impugned order dated 28.09.2022 passed by the respondent No.2/learned appellate authority is liable to be set aside and is set aside - matter is remitted to the learned appellate authority for fresh adjudication in accordance with law - Petition allowed.
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2024 (3) TMI 263
Maintainability of petition - availability of alternative remedy of appeal - non-constitution of Tribunal - HELD THAT:- Since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand within a period of fifteen days from today, the rest of the demand shall remain stayed during the pendency of the writ petition. Application disposed off.
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2024 (3) TMI 262
Scope of Advance Ruling application - Requirement to add the work sites as additional place of business in their GST registration certificate - address proof which will be required to be submitted by the applicant - If the work site is not required to be registered as additional place of business of the contractor then is it permissible for the contractor to procure the goods from his vendors (located within the state of Karnataka or outside) wherein the goods are directly delivered to the such work site? - instances where the Contractor is required to move the goods from one location of the work site to another location of the work site, especially in case of road construction / drinking water supply work contracts. HELD THAT:- The authority can't give any decision on the issues that are not covered under Section 97 (2) of the CGST Act 2017. In the instant case the applicant is already registered under GST and the questions on which advance ruling has been sought for are not covered under the issues mentioned under Section 97 (2) supra. Thus the instant application is liable for rejection in terms of Section 98(2) of the CGST/KGST Act 2017. The application filed by the Applicant for advance ruling is rejected, in terms of Section 98(2) of the CGST Act 2017.
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2024 (3) TMI 261
Collection of tax at source u/s 52 - Electronic commerce operator - Exclusion of Agent - Exemption under Notification No. 52/2018 - Whether applicant, who only collects a commission as a percentage of the value of digital gold sold through its platform and the entire sale proceeds are paid directly to seller of Digital gold through an Escrow account would qualify him as an 'Agent' for the purpose of GST law and is therefore not covered by applicability of Notification No. 52/2018 - Central Tax, read with Section 52 of Central Goods and Services Tax, 2017 and corresponding state Notification 20/2018 (Karnataka) read with Section 52 of Karnataka Goods and Services Tax, 2017? - HELD THAT:- The applicant, quoting Section 52 of the CGST Act 2017 that deals with collection of tax at source and Section 2(45) of the CGST Act 2017 which defines electronic commerce operator contends that Section 52 excludes the 'agent' from its purview; their obligation is only to provide platform between the customer and the seller DGIPL as per article 2.2.1 of the agreement; correlating e-commerce operator and an agent with that of the tour operator and travel agent respectively submits that e-commerce operator is comparable to tour operator and is referred to as Principal as they take responsibility of their service whereas the agent is comparable to the Travel agent and do not act as a Principal as they don't take responsibility of the service but mere provide intended / selected service and thereby claims that they qualify to be a Selling Agent ; quoting different clauses of the agreement, the applicant contends that they are merely acting as an agent for DGIPL, and the operation carried out by them is beyond the scope of Section 52. The applicant, in comparison with e-commerce operators such as amazon etc., contends that they do not assume any responsibility; they do not collect any platform fee from the seller DGIPL; they charge only commission at a rate percent of the value of digital gold sold; they transact only single product at present through the app and thus they claim that they are a selling agent but not an e-commerce operator therefore they are excluded from the purview of Section 52 of the CGST Act 2017. Whether applicant is required to obtain registration as an E-commerce operator as per provisions of Rule 12 of Central Goods and Services Tax Rules, 2017? - HELD THAT:- The applicant, being an electronic commerce operator, is required to collect tax at source under Section 52 of the CGST Act 2017 and thus is liable to be registered compulsorily under Section 24(x) of the CGST Act 2017 read with the provisions of the Rule 12 of CGST Rules 2017.
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2024 (3) TMI 260
Admissibility of input tax credit - inward supply of services by way of License Fee Recovery (LFR) on leasing of pumps along with the equipment - rate of tax applicable on the inward supply of services of leasing of pumps along with the equipment - HELD THAT:- The question regarding the rate of tax applicable on the service of leasing of pumps and equipment received by them. Though the question is on a matter covered under clause (a) of sub-section (2) of Section 97 of the CGST Act, 2017 the applicant is the recipient of the service. Therefore, the question do not pertain to a transaction that is being undertaken or proposed to be undertaken by the applicant and hence do not fall within the purview of the definition of advance ruling. Whether the provisions of sub-section (2) of Section 17 of the CGST Act, 2017 is attracted in the case of the applicant? - HELD THAT:- The applicant is engaged in both taxable as well as exempted supplies and hence the provisions of sub-section (2) of Section 17 which stipulates that where the goods or services or both are used by the registered person partially for effecting taxable supplies including zero-rated supplies and partially for exempt supplies, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies applies to the applicant. The service of leasing of pumps and equipment received by them are undoubtedly common input services that are used for taxable as well as the exempted supplies. Therefore, the applicant is not eligible for credit of the full amount of tax paid on the License Fee Recovery for the service of leasing of pumps and equipment received by them; but only eligible to avail the amount of input tax credit determined as per the provisions contained in Rule 42 of the CGST Rules, 2017.
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2024 (3) TMI 259
Classification of service - service of providing passenger buses on rent/lease by the applicant to Kerala State Road Transport Corporation (KSRTC) - chargeable to GST @ 18% under Tariff Heading 9966 i.e., 'Rental Services of Transport Vehicles' in terms of Entry No. 10(iii) of Notification No. 11/2017-CT Rate) dated 28.06.2017 or not - exemption from payment of GST under Tariff Heading 9966. i.e. 'Services by way of giving on hire to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers' in terms of Notification No. 12/2017-CT(R) dated 28.06.2017 or not - nature of services provided by the Applicant - rate of tax applicable on such services. HELD THAT:- As per the agreement, the applicant has to provide the required specification of the leased buses along with trained drivers for the operation of such buses. Further, the applicant is solely responsible for operation of the buses in compliance with the routes and timings provided by the KSRTC. The fuel cost of the buses shall be borne by the KSRTC. The applicant will receive service/rental charges daily on a kilometre basis and also additional consideration proportionate to the revenue earned by display of advertisement in the buses and also transportation of cargo/luggage in the buses - Kerala State Road Transport Corporation Ltd is established by the Government of Kerala by Notification dated 15.03.1965 under the Road Transport Corporations Act, 1950 for the operation and management of public transport in the State of Kerala and accordingly is a state transport undertaking under Section 2 (42) of the Motor Vehicles Act, 1988 and consequently a state transport undertaking as defined in Para 2 (zzk) of Notification No. 12/2017 CT (Rate) dated 28.06.2017. The distinction between the activity of renting and hiring and consequently the eligibility of exemption from GST for transactions in the nature of renting of motor vehicles to state transport undertakings in as much as the exemption entry at SI No. 22 of the said notification employs the words services by way of giving on hire became a subject matter of dispute in the wake of ruling issued by an Authority for Advance Ruling that the entry at SI. No. 22 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 exempts services by way of giving on hire vehicles to a State Transport Undertaking or a local authority and not renting of vehicles to them relying on certain case laws pertaining to the erstwhile service tax regime. In view of the clarification issued by CBIC in Para 8.4 of Circular No. 164/20/2021-GST dated 06.10.2021 that the expression giving on hire includes renting of vehicles the transaction of renting vehicles meant to carry more than twelve passengers to a State Transport Undertaking is eligible for the exemption at SI. No. 22 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. The services being provided by the applicant as per Agreement dated 15.09.2017 to KSRTC; a State Transport Undertaking by way of renting / lease of buses /motor vehicles meant to carry more than twelve passengers is exempted from GST as per entry at SI. No. 22 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.
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2024 (3) TMI 258
Classification of service - rate of tax applicable for works contract awarded by M/S. Kerala State Film Development Corporation Ltd. (promoted by Government of Kerala) for the development and construction of Sree Narayana Guru Cultural Complex at Kollam - Government Authority of Government Entity - HELD THAT:- From the description of the works submitted by the applicant it is revealed that the following works are awarded to the applicant; Supply of all labour, equipment, materials, plant and machinery, tools, transportation, form work, scaffolding and everything else necessary for the proper execution and construction of a complex predominantly for the use of cultural activities named Sree Narayana Guru Cultural Complex at Kollam - Therefore, the works rendered by the applicant to M/s. Kerala State Film Development Corporation Ltd squarely falls under the definition of works contract in Section 2 (119) of the CGST Act, 2017 and the same will be treated as supply of service. Whether the recipient of service i.e, the awarder M/s. Kerala State Film Development Corporation Ltd falls within the definition of 'Governmental Authority' in Para 2 (zf) or 'Government Entity* in Para 2 (zfa) of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017? - HELD THAT:- The works contract services performed by the applicant as per the above-mentioned contracts awarded by M/s. Kerala State Film Development Corporation, a Governmental Authority to construct Sree Narayana Guru Cultural Complex at Kollam is in the nature of construction of a structure meant predominantly for use as a cultural establishment and hence the same is liable to GST at the rate of 12% [6% CGST+6% SGST ] as per entry at SI No. 3 (vi)(b) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended from time to time. If the time of supply of the works contract services as determined in accordance with Section 14 of the CGST Act, 2017 falls on any date prior to 01.01.2022, the aforementioned service will be taxable at the rate of 12% and if the time of supply falls on any date on or after 01.01.2022, the said service will be taxable at the rate of 18%.
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2024 (3) TMI 257
Levy of GST - electricity produced from solar panels installed by the applicant when sold to customer - wheeling charges, transmission and distribution charges and carrying charges that will be billed to the applicant by it against providing the infrastructure of KSEB for delivering the electricity produced by the applicant to its sellers - Scope of Advance ruling application. Whether GST is payable on the electricity produced from solar panels installed by the applicant when sold to customers? - HELD THAT:- The electricity and electrical energy are one and the same. Electrical energy is classified under Heading 2716 00 00 of the Customs Tariff Act and is goods and not a service. Therefore, the supply of electricity generated from solar panels by the applicant is a supply of goods and the supply of electrical energy falling under Customs Tariff Heading 2716 00 00 is exempted from GST as per entry at SI No. 104 of Notification No. 02/2017 Central Tax (Rate) dated 28.06.2017. Whether KSEB is liable to levy GST on wheeling charges, transmission and distribution charges and carrying charges that will be billed to the applicant by it against providing the infrastructure of KSEB for delivering the electricity produced by the applicant to its sellers? - HELD THAT:- The applicant has sought the taxability of the services provided by Kerala State Electricity Board to the applicant and hence the applicant is the recipient of the services in the transaction. Therefore, the question do not pertain to a transaction that is being undertaken or proposed to be undertaken by the applicant and hence do not fall within the purview of the definition of advance ruling. Further, it is categorically stated in Section 103 of the CGST Act that the ruling pronounced is binding only on the applicant and the jurisdictional authority of the applicant. Hence, if a recipient obtains a ruling on the taxability of his inward supply of goods or services or both the supplier of such goods or services and their jurisdictional authority is not bound by that ruling and the supplier and their jurisdictional authority is free to assess the supply according to their own determination and the ruling has no relevance or applicability. Therefore, the question is not admissible.
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2024 (3) TMI 256
Rate of tax - Whether the rate mentioned Notification No. 3 of 2019 in Clause(ii) a(i) for affordable residential apartments and rate mentioned in Clause (iii) (a) (ia) for other than affordable residential apartments can be effectively levied in a single project/ building that is being developed as Residential Real Estate Project? - HELD THAT:- On a plain reading of the entries at Item (i) and (ia) of SI No. 3 of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, it is evident that the rate of GST prescribed under the entry at Item (i) applies to construction of affordable residential apartments and under the entry at Item (ia) applies to construction of residential apartments other than affordable residential apartments by a promoter in a residential real estate project intended for sale to a buyer except where the entire consideration is received after issuance of completion certificate. On a conjoint reading of the entries at Item (i) and (ia) of SI No. 3 of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017; the definition of the terms apartment ; residential apartment ; affordable residential apartment ; 'Teal estate project ; residential real estate project and promoter , it is clear that the rate of tax prescribed in Item (i) and (ia) of SI No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 is in respect of construction services supplied for affordable and other than affordable residential apartments respectively in a residential real estate project. Therefore, the services of construction of affordable residential apartments and the services of construction of other than affordable residential apartments in a residential real estate project attract GST at the rate of 1.5% [0.75% - CGST + 0.75% - SGST] and 7.5% [3.75% - CGST + 3.75% - SGST) respectively as per entries at Items (i) and (ia) of SI No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 subject to the conditions prescribed under the respective entries.
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Income Tax
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2024 (3) TMI 255
Reopening of assessment u/s 147 - Reason to believe - admissibility of deduction u/s 80IA - as decided by HC [ 2023 (8) TMI 724 - PUNJAB AND HARYANA HIGH COURT] jurisdictional condition precedent as laid down by the proviso to Section 147 i.e. failure to disclose material fact, which was proximate cause of escapement of income, has not been fulfilled at all in the present case - HELD THAT:- Though there are some revenue implications in the submissions made by the learned Additional Solicitor General with respect to the Financial Year 2011-2012, we are not inclined to interfere with the judgment of the High Court in the fact and circumstances of the present case, we keep the question of law open. The Special Leave Petition is dismissed.
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2024 (3) TMI 254
Allowable deduction of interest paid on the borrowings - Application of Section 14A and Section 36(1)(iii) - AO disallowed the interest holding that no deduction is to be allowed in respect of expenditure incurred in relation to income which does not form part of the total income under the Income Tax Act - Assessee argued that the expenditure claimed was not hit by Section 14A of the Act, on the ground that although borrowed funds were partly utilised for investment in shares held as trading assets, such investment was made with the intention to acquire and retain a controlling interest in the company and that the receipt of dividend thereon was merely incidental - Tribunal held that the interest paid on the borrowings was not allowable as deduction HELD THAT:- The fact remains that such dividend income is non taxable and in that scenario, if expenditure is incurred on earning the dividend income, that much of the expenditure which is attributable to the dividend income has to be disallowed and cannot be treated as business expenditure. As the dividend income from the two companies is not taxable and in that scenario the expenditure incurred on interest paid on funds borrowed in respect of investment in shares of two operating companies is hit by Section 14A of the Act inasmuch as the dividend received on such shares does not form part of the total income. We do not find any infirmity in the findings arrived at by the ITAT, the question of law is answered in affirmative.
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2024 (3) TMI 253
Reopening of assessment u/s 147 - Reasons to believe or suspect - huge share transaction - HELD THAT:- Since the admitted position is that the AO does not have reason to believe but only reason to suspect, as held by this Court in Darpan P. Chandaliya V/s. Income Tax Officer [ 2023 (9) TMI 1041 - BOMBAY HIGH COURT] reopening of assessment is not satisfactory. In the case at hand, the AO does not say that any income has escaped assessment. All that the AO desires is examination of certain details pertaining to the actual extent of escapement of income which can be established only after detailed investigation. Even in the reasons recorded, it says In this case as per the CIB information you have entered into huge share transaction and it is necessary to verify the above aspect, it is necessary to reopen the case . That cannot be stated to be founded on the belief that any income which is chargeable to tax has escaped assessment and hence, such verification is necessary. Just because some information has been received from CIB does not entitle the AO to reopen assessment. The reasons must be founded on the satisfaction of the AO that income chargeable to tax has escaped assessment. Once that is not to be found, then, the impugned notice cannot be sustained. As noted earlier, what we find is that there are no reasons to believe but only reasons to suspect. Hence, reopening of assessment is not satisfactory. Decided in favour of assessee.
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2024 (3) TMI 252
Offences punishable u/s 276C(1) 277 - jewellery found during search - adjudication proceedings and criminal prosecution are inter-dependend or not - petitioner submitted that the petitioner approached this Court who remanded the matter back to the Assessing Officer to carryout the reconciling of the quantum of jewellery of the petitioner to determine that the jewellery found during search in the year 2011, was part of the jewellery declared by the petitioner and thereafter, the entire penalty was deleted by allowing the reconciliation of the quantum of jewellery - HELD THAT:- It is seen that the Principal Commissioner of Income Tax on suo muto re-opened the proceedings by an order dated 23.02.2021, on the basis that no reconciliation was carried out. Though the said proceeding was challenged by the petitioner before this Court in [ 2023 (11) TMI 239 - MADRAS HIGH COURT] it was rejected by this Court. That apart, the petitioner already filed petition to discharge and the same was also dismissed by the trial Court. Now the re-assessment proceedings are pending with the AO. Therefore, the proceedings cannot be said that it attained finality. Hence, there is no exoneration of the petitioner from all the charges. Further the quantum of jewellery found during the search was not brought in the the earlier returns filed by the petitioner. Therefore, the reconciliation of jewellery has not attained finality, in view of the pendency of the proceeding u/s 263 of the Income Tax Act. The adjudication proceedings and the criminal prosecution are independent to each other and the pendency of any adjudication proceeding is not bar to proceed with the prosecution. Therefore, this Court finds no ground to quash the proceeding and the present petition cannot be sustained and liable to be dismissed.
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2024 (3) TMI 251
Addition of contract receipts - Estimation of Profit / Income - bogus activity as assessee despite repeated opportunity could not justify the transactions - as noticed that apparently the said concern was paying commission of about 1% to unidentified brokers for arranging such transactions - assessee denied the allegation of receiving a contract - AO received the information that the contract price was Rs. 16,93,71,626/-, but he accepted the contract receipts of Rs. 29,65,16,795/- and estimated profit at 8% and made addition - CIT(A) deleted the addition HELD THAT:- We fail to understand what was the contract receipts was it 29.65 crores or 16.93 crores? Further, when the MD of Totem Infrastructure Ltd. has stated that the commission ranges from 0.25% to 1%, then we fail to understand what is the basis for estimating the profit at 8%. In our considered view, the entire addition has been made on surmise and conjecture without there being any demonstrative evidence; therefore, the findings of the CIT(A) cannot be faulted with. Appeal of the Revenue is dismissed.
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2024 (3) TMI 250
Addition on account of foreign currency found during the course of search treating the same as unaccounted income in the hands of the assessee - HELD THAT:- There is no dispute that the foreign currencies were found from the possession of Vikram Bajaj, which is also not in dispute that in the proceedings of Vikram Bajaj, identical query was raised, wherein the explanation was furnished by the Vikram Bajaj and accepted by the AO. It is also true that small amount of foreign currency were found which appears to be remnants of foreign travel undertaken by the family members of the Group. The currencies are leftovers of the business trips. Even if we agree with these facts and explanations of remnants and leftovers, even then the onus is on the assessee to furnish evidences. Assessee has furnished before us, the evidence for the purchase of foreign currency from M/s Bakshi Forex Air Services (P) Ltd. The invoices pertain to the years 2012, 2013 and 2014 which are mainly for the US Dollar and Euro whereas the Panchnama shows currencies as Yuan, Hongkong Dollar, Rupaiya, Turkish Lira, Pound, Dinar and Bahat. The invoices produced before us would do no good to the assessee. We decline to interfere with the findings of the CIT(A). Appeal of the assessee is dismissed.
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2024 (3) TMI 249
Taxability of salary income in India for the services rendered in US - remuneration derived by resident of a contracting state in respect of an employment exercised in the other contracting state - period of stay in India - scope of Article 16(2) of the Indo-US DTAA - assessee had not shown salary income in his Income Tax Return filed in India - requisitioned tax resident certificate of USA from the assessee - whether the salary income of a resident is liable to be taxed in the state of which the assessee is the ordinary resident or in the other contracting state where he has exercised his employment? HELD THAT:- Though, the word and has not been mentioned between Clause (a) and (b), however, that does not make a difference until and unless Clause (a) is not separated from Clause (b) with the word or . Therefore, these clauses have to be read together. Therefore, the reasonable interpretation would be that all of the conditions mentioned in Clause (a), (b) (c) are to be satisfied simultaneously to attract the provisions of Article 16(2) of the Indo-US DTAA. In the case in hand, though provisions of Clause (a) are not attracted, however, the provisions of Clause (b) (c) are applicable to the case of the assessee for the purpose of deciding the State of taxation of assessee s income. When we read Article 16 of the DTAA as a whole, the reasonable interpretation which would come that the salary and other similar remuneration derived by resident of a contracting state in respect of an employment exercised in the other contracting state is liable to be taxed in that other state. However, if such resident has not stayed more than 183 days in that other state and the remuneration has not been paid by resident of that other state and even the remuneration is not borne by a permanent establishment or fixed base or a trade or business which the employer has in that other state, then the remuneration of the resident is liable for taxation in the state of which he is a resident. As observed in this case, the assessee is a resident of India, however, he has exercised employment and received remuneration in United States, therefore, at the first instance, as per the provisions of Article 16(1) of the Indo-US DTAA, such salary/remuneration of the assessee is liable to tax in the United States only. The exception clause as mentioned in Article 16(2) of the DTAA is not applicable in toto to the case of the assessee. The condition mentioned in clause (a) of Article 16(2) is satisfied but the conditions of Clause (b) and (c) to Article 16(2) of the DTAA have not been satisfied in this case. Since, we have held that the conditions mentioned in Clause (a), (b) (c) to Article 16(2) of the Indo-US DTAA have to be applicable together or to say simultaneously and since all the conditions mentioned in Article 16(2) of the DTAA are not attracted in the case of the assessee, therefore, the provisions of Article 16(1) of DTAA will be applicable and accordingly it is held that the income of the assessee is taxable in USA and not in India. Our above view is fortified by the decision of Rajat Dhara [ 2024 (3) TMI 197 - ITAT KOLKATA] - Decided in favour of assessee.
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2024 (3) TMI 248
Unexplained creditor u/s. 68 - onus to prove - AO based on the fact that the immediate source of the money advanced to the assessee was deposit of cash disbelieved the loan accepted by the assessee and has considered it as unexplained creditor and has added the same as income u/s. 68 - HELD THAT:- As per the provisions of section 68 when any sum found credited in the books maintained by the assessee, and the assessee offers no explanation about the nature and source of that sum then it may be treated as unexplained cash credit whereas in this case the assessee has established the identity of the creditor by giving the PAN card, affidavit and his presence was marked before the ld. AO and the same is not doubted. As regards the genuineness of the transaction the assessee has received the money by an account payee cheque and the same has been given back this itself shows that the transaction was short period loan and the same is established by filling the details of the cheque and the bank account number. As regards the capacity he has explained the nature and source of the money advanced to the assessee and the ld. AO has not doubted that the fact that the assessee is engaged in the producing the sarbat and the source of the cash deposit is the amount received as sales proceeds of the sarbat. Thus, based on the various case laws cited by the assessee wherein it is held that when the identity and genuineness of the transaction is established then capacity of the lender to advance the money to the assessee cannot be a matter which the assessee could be required to established [ Labh Chand Bohra Vs. ITO[ 2008 (4) TMI 731 - RAJASTHAN HIGH COURT] . The jurisdictional high court has also held that when the cash creditor have affirmed in their examination that they have advanced the money to the assessee from their own respective bank account. Therefore, when there is categorical finding even by the AO that the money came from the respective bank accounts of the creditors, which did not flow in the shape of the money, then such an addition cannot be sustained [ CIT Vs. Jai Kumar Bakiwal [ 2014 (8) TMI 685 - RAJASTHAN HIGH COURT] . The relevant finding of the jurisdictional high court is as under When we peruse the facts herein above, it is an admitted position that all the cash creditors have affirmed in their examination that they had advanced money to the assessee from their own respective bank accounts. Therefore, when there is categorical finding even by the AO that the money came from the respective bank accounts of the creditors, which did not flow in the shape of the money, then, in our view, such an addition cannot be sustained and has been rightly deleted by both the two appellate authorities. There is no clinching evidence in the present case nor the AO has been able to prove that the money actually belonged to none but the assessee himself. The action of the AO appears to be based on mere suspicion. We direct the ld. AO to delete the addition made in the hands of the assessee. Assessee appeal of Allowed.
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Customs
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2024 (3) TMI 247
Confiscation of imported goods - multi-functional devices - requirement to meet the standards as 'printers / plotters' as per Electronics Information Technology Goods (Requirements of Compulsory Registration) Order 2012 or not - value declared by the respondents in their Bill of Entry, correct or not - revaluation done by the Chartered Engineer correctly or not - levy of redemption fine and penalty - HELD THAT:- It is submitted by both the learned counsel for the appellant as well as the Respondent in all these cases that the goods have been released on payment of duty and other dues, as per the order of the Tribunal. Following the order of the Hon'ble Supreme Court in the case of UNION OF INDIA VERSUS R.R. MARKETING [ 2023 (9) TMI 1273 - SC ORDER] , we dismiss this batch of appeals keeping the questions of law open to be adjudicated in appropriate proceedings. No Costs. Consequently, connected miscellaneous petitions are closed.
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2024 (3) TMI 246
Demand duty - Imported one consignment of Bed sheet , declared as made of 100% Polyester - mis-declaration the goods - classifiable under CTH 5407 whereas the respondent had classified the goods under CTH 6304 - confiscation - redemption fine along with interest - penalty - HELD THAT:- We admit that the articles which have been imported by the respondent are woven fabric of synthetic filament yarn, but they are Bed spreads / Bed sheets and quantity of the goods in numbers has been described by the respondent. In the circumstances, the merit classification of the impugned goods is under CTH 6304 of the Customs Tariff Act. Therefore, we classify the impugned goods as Bed spreads (Bed sheets) classifiable under CTH 6304 of the Customs Tariff Act. In view of this, we hold that the impugned goods have been correctly classified by the respondent and the same are not liable for confiscation. We further hold that the respondent is liable to pay duty by classifying the impugned goods under CTH 6304 of the Customs Tariff Act and no penalty is imposable on the respondent. No redemption fine is payable by the respondent. Thus, we dismiss the appeal filed by the Revenue and accordingly dispose of the cross-objection filed by the respondent.
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2024 (3) TMI 245
Smuggling of Cattle Heads - confiscation - penalties imposed - corroborative evidence - fraudulently used the Challan belonging to the some other party - HELD THAT:- Neither the drivers nor Md. Mustafa Khan or any other person has stated that ultimately the Cattles were to be smuggled to Bangladesh. Even the purported buyer Shri K. P. Lalmunawna has told that he has proper license to deal with livestock and has been having regular business transaction with Md. Mustafa Khan. Therefore, it is not known as to how the Revenue would have directly come to a conclusion that the Cattle Heads were being smuggled to Bangladesh with no proper corroborative evidence whatsoever. Therefore, I find that the impugned orders are not sustainable in respect of the confiscation Order for the seized Cattles. Hence, I set aside the Confiscation Order in respect of the confiscated Cattle Heads. So far as the penalties imposed on Md. Mustafa Khan is concerned, I find that he has fraudulently used the Challan belonging to the some other party so as to conceal his own identity when the Cattle Heads were being transported. Because of his such an action, not only cattle were seized but also the transporting trucks have been seized and confiscated and penalties have been imposed on the truck owners and truck drivers. For the action taken in respect of the truck owners and drivers, the present Appellant should be held fully responsible. Therefore, I am not inclined to interfere with the penalties imposed in all the four Appeals. I dismiss the prayer to set aside the penalties imposed on them. Thus, the Appellant would be eligible to get the value of the confiscated Cattle and Department will recover the penalty amount from this amount and pay the balance amount to the Appellant. The Appeals are disposed of thus.
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2024 (3) TMI 244
Imported Zinc Oxide (99% purity) - whether the imported Zinc Oxide has been used by the appellant in the manufacture of PCFP or not to avail the benefit of exemption Notification No.25/1999-Cus as amended by Notification No.26/2002-Cus ? - HELD THAT:- As it is a fact that during the investigation, it was found that the imported Zinc Oxide has been used by the appellant to manufacture PCFP, and some has been further used to manufacture final product which suffered duty and some part has been sold in the open market, therefore, the appellant has established that the imported Zinc Oxide has been used in the manufacture of PCFP. Thus, we hold that the appellant is entitled to claim the benefit of Notification No.25/1999-Cus as amended by Notification No.26/2002-Cus, which exempts Basic Customs Duty on imported Zinc Oxide which has been used in the manufacture of PCFP. Therefore, we hold that that the impugned order does not deserve any merits - Accordingly, the same is set aside. In the result, the appeal is allowed with consequential relief, if any.
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Insolvency & Bankruptcy
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2024 (3) TMI 243
Validity of demand notice based on the order secured by the petitioner from NCLT - Corporate Insolvency Resolution Plan approved by the NCLT which proposed a NIL value against the sales tax dues - Revision of deemed assessment - failure on the part of the petitioner to submit necessary Form-C and Form-F - HELD THAT:- The proceeding that was initiated before the National Company Law Board (NCLT) with the presentation of a petition under Section 8 of the IBC, 2016 on 16.07.2018 appears to be staged managed with a view to defeat the rights of scores of creditors including operating creditors such as the respondent Commercial Tax Department - Mere paper publications of notice to the financial creditors and the operational creditors is not sufficient. Fixing 31.07.2018 as the last date for filing claim statement also shows undue alacrity is getting orders for NCLT to defeat the rights of creditors of the petitioner. The Order passed by the National Company Law Board (NCLT) on 01.02.2019 approving the Corporate Insolvency Resolution Plan filed by Mr.Mahavir Chand Bafna, promoter of the petitioner Company on 20.12.2018 as a resolution applicant before the National Company Law Board (NCLT) CP/682(IB)/CB/2017 has also not disclosed the names of any of the financial creditors and the operational creditors and the details of discussion of the Committee of the Creditors (COC) before the Corporate Insolvency submitted by Mr.Mahavir Chand Bafna, the promoter of the petitioner - It merely states that the meeting of the Committee of Creditors (COC) was held on 27.09.2018, 30.11.2018 and 20.12.2018. It further records that the Committee of Creditors (COC) after deliberation approved the Corporate Insolvency Resolution Plan submitted by the Corporate debtor i.e. the promoter of the petitioner Mr. Mahavir Chand Bafna by passing the Resolution on 04.01.2019. NCLT as the Adjudicating Authority ought to have been careful before approving the Corporate Insolvency Resolution Process initiated by the promoter of the petitioner company. NCLT ought to have imposed penalty on the petitioner instead of sanctioning the plan - Entire course of event before NCLT shows that the proceedings initiated before the NCLT under Section 8 of the Insolvency Bankruptcy Code, 2016 was intended to defeat the rights of the financial creditors and the operational creditors and at behest of the petitioner. It was stayed managed by the petitioner itself. The challenge to the impugned demand notice based on the order secured by the petitioner from NCLT on 01.02.2019 in C.P/682(IB)/CB/2017 is unsustainable. Therefore, this writ petition is liable to be dismissed - petition dismissed.
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Service Tax
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2024 (3) TMI 242
Classification of service - works are undertaken by them on Government Tenders and payments are received as per stage of completion of work - whether the services would be covered under Works contract service or under erection, commissioning and installation service? - it was held by CESTAT that the services of Works Contract rendered by the Appellant is in respect of Roads and thus not chargeable to service tax for the period after 01.06.2007. HELD THAT:- The appeal is dismissed.
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2024 (3) TMI 241
Exemption from service tax - ocean freight - Services by way of transportation of goods - reverse charge mechanism - It is the case of the Petitioner that transportation of goods in a vessel provided by a person located in non-taxable territory to the person located in non-taxable territory was exempted from service tax available vide Sl. No. 34 of the Notification No. 25/2012-ST and the same was made inapplicable w.e.f. 22nd January 2017, vide Notification No. 1/2017-ST dated 12.01.2017 - HELD THAT:- The division bench of the Gujarat High Court in SAL Steel Ltd. [ 2019 (9) TMI 1315 - GUJARAT HIGH COURT] had considered the challenge to the impugned notifications in the context of the service tax on transportation of goods by a vessel from a place outside India. The impugned provisions were held ultra vires of Section 64, 65(B), 44, 66(B), 67 and 68 and 94 of the Finance Act, 1994. It was held that importers in CIF contracts were neither service providers nor service receivers in respect of transport of goods by vessel from place outside India, and that service tax cannot be recovered from third party who is neither the service provider nor the service receiver. Similar issue as fell for consideration before the Madras High Court in the case of Chennai Ennore Ports Steamer Agents Association Vs. Union of India [ 2023 (5) TMI 899 - MADRAS HIGH COURT] , in such decision the Court had considered the decision of the Division Bench of the Gujarat High Court in SAL Steel Ltd. in considering the issue namely, whether the members of the Petitioner were liable to pay service tax on the service of ocean freight. Rejecting the case of the Revenue and accepting the case of the Assessee, the Madras High Court, making the following observations, allowed the Writ Petitions by setting aside the show cause notices issued to the respective Petitioners. The impugned Notifications at Exhibits-A and F are held to be illegal as held by the Gujarat High Court in SAL Steel Ltd - Petitioner would accordingly be entitled to the refund of duty, however, subject to the Petitioner filing the refund application which would be required to be decided in accordance with law including on the principles unjust enrichment - Petition disposed off.
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2024 (3) TMI 240
SVLDRS - Jurisdiction of adjudicating authority/Central Excise Officer - whether it is open to the adjudicating authority i.e., Central Excise Officer to proceed to adjudicate for the period and the subject in respect of which a Discharge Certificate has been issued in Form No.SVLDRS- 4 under the Sabka Viswas (Legacy Dispute Resolution) Scheme Rules, 2019 - impugned order proceeds on the basis that the Discharge Certificate is obtained on the basis of false particulars furnished by the Declarant inasmuch as an investigation was initiated on 18.06.2019 when a notice was issued on 18.06.2019. HELD THAT:- Once the Discharge Certificate is issued by the Designated Committee it is not open to proceed with adjudication. The authority / power to revoke or cancel the Discharge Certificate on the premise that the material particulars furnished in the Discharge Certificate is false, lies with the exclusive jurisdiction of the Designated Committee - To assume Adjudicating Authority / Central Excise Officers to have the power to revoke or cancel Discharge Certificate issued by the Designated Committee which may comprise of officers superior in rank to that of the Central Excise Officers carrying out adjudication would result in distortion of Administrative / Institutional Hierarchy. In the absence of the Discharge certificate being revoked / cancelled by the Designated Committee, adjudication by the Central Excise officers could result in plurality of orders on the same subject conflicting with each other, which ought to be avoided. The impugned order is set aside and the writ petition is disposed of.
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2024 (3) TMI 239
CENVAT Credit - input services, also utilized for trading (sale of cars) which is not a taxable output service - common input services - invocation of extended period of limitation - October 2007 to March 2011 - HELD THAT:- The issue in the present appeal is no more res integra and was considered by the Hon ble Telangana High Court in the case of M/S TIARA ADVERTISING VERSUS UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE [ 2019 (10) TMI 27 - TELANGANA AND ANDHRA PRADESH HIGH COURT] where it was held that the second respondent did not choose to exercise power under this Rule but relied upon Rule 6(3)(i) and made the choice of the option thereunder for the petitioner, viz., to pay 5%/6% of the value of the exempted services. The statutory scheme did not vest the second respondent with the power of making such a choice on behalf of the petitioner. The Order-in-Original, to the extent that it proceeded on these lines, therefore cannot be countenanced. The Tribunal in the case of M/S. INGERSOLL-RAND TECHNOLOGIES AND SERVICES PRIVATE LIMITED VERSUS COMMISSIONER, CENTRAL EXCISE, GHAZIABAD [ 2022 (8) TMI 877 - CESTAT ALLAHABAD] have held that for not exercising the option under Rule 6 of the Credit Rules, the option of payment of 5/6% of trading of goods ( exempted service ) cannot be thrust upon the appellant. It is not necessary to examine the contention advanced by the learned counsel for the Appellant regarding invocation of the extended period of limitation. The impugned order cannot be sustained and accordingly the same is set aside - Appeal allowed.
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2024 (3) TMI 238
Levy of service tax - Activity amounting to manufacture or not - activity of providing infrastructure support service to GCPL/GSLL for manufacturing - HELD THAT:- On going through some of the clauses of the agreement placed before us which indicate that the manufacturer is GCPL/GSLL, but the said activity has been undertaken by the appellant, as appellants are having factory premises to manufacture the goods in question and raw material and machinery being provided by GCPL/GSLL, but manufacturing activity was undertaken by the appellant by employing their own labour and the appellant is charging from the GCPL/GSLL the charges of their activity in terms of per piece basis - On going through the invoice issued by the appellant No.1, the appellant is charging price for goods manufactured by them in terms of quantity of goods manufactured. Moreover, labour has been employed by the appellant and by using their factory and manufactured the goods. These facts have not been examined by the Revenue, moreover, the demands sought to be raised only on the basis of the agreement entered by the appellants with GCPL/GSLL. As the activity undertaken by the appellant is identical which amounts to manufacture, in that circumstances, the appellants are not liable to pay Service Tax on their activity as the manufactured goods has suffered excise duty at the end of the principal - there are no merit in the impugned orders. The same are set aside. Appeal allowed.
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2024 (3) TMI 237
Recovery of service tax - activity of transportation of goods by road and in providing Business Support Service to various clients like, Vehicle Factory Jabalpur, Railway, Bharat Earth Movers Limited, Bharat Electronics Limited and Gun Carriage Factory Jabalpur - scope of definition of Business Entities and persons as defined under Section 65 (B) (17) and 65 (B) (37) respectively of the Finance Act - HELD THAT:- The appellant was taking trucks of individual owners, admittedly the appellant itself is not a goods transport agency and no consignment note was issued by the appellant. Facts on record also clarifies that the appellant is not engaged in door to door transportation, hence, is not a courier agency. Resultantly, it becomes clear that the service rendered by the appellant is simply the service by way of transportation of goods which is covered under Sub-clause B of Section 66D of Finance Act. Thus, the appellant is wrongly held liable for payment of service tax on the said activity. Coming to the tax liability with respect to legal consultancy services under reverse charge mechanism, it is observed that it is an admitted fact that the amount booked under the head legal expenses was not paid to any advocate and affidavit to this effect has also been submitted by the appellant. The adjudicating authority neither has considered the said affidavit nor has appreciated any other evidence on record which may show that the legal expenses were paid to the lawyer. The onus was definitely on Revenue to show that the appellant had received services of Advocate so as to make them liable to pay service tax under reverse charge. In absence thereof, the confirmation on this count is also not sustainable. Once the appellant is held to have no service tax liability, the question of having any intent to evade the same does not at all arise. Resultantly, even penalty has also wrongly imposed on the appellant. The appeal is allowed.
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2024 (3) TMI 236
Levy of service tax - appellant was performing statutory functions as mandated by the EPF MP Act, and the Constitution of India - HELD THAT:- The issue is no longer res-integra, as identical issue for the earlier periods in respect of the appellant has been decided by this Tribunal, in favour of the appellant in M/S EMPLOYEES PROVIDENT FUND ORGANIZATION VERSUS OFFICE OF COMMISSIONER OF SERVICE TAX, NEW DELHI [ 2023 (5) TMI 522 - CESTAT NEW DELHI] and M/S EMPLOYEE PROVIDENT FUND ORGANIZATION VERSUS CST, DELHI [ 2017 (4) TMI 902 - CESTAT NEW DELHI] where it was held that the appellants are not liable to pay service tax on their statutory activities performed in terms of EPM MP Act, 1952. The appellants are not providing any taxable service to the employers covered by the said Act. The relationship and transaction between the employers and the appellant is in discharge of statutory and compulsory obligations, coercively enforceable by the law. The impugned order set aside - appeal allowed.
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2024 (3) TMI 235
Classification of services - supplying, installing, testing and commissioning of DG sets in respect of work orders awarded by CPWD/PWD - work classifiable under the taxable category of Erection, Commissioning, or Installation Services, (ECIS) and Management, Maintenance or Repair Services, (MMR) - HELD THAT:- Reliance placed in the case of M/S. TWIN BROTHERS VERSUS COMMISSIONER OF SERVICE TAX [ 2019 (6) TMI 840 - CESTAT NEW DELHI] where it was held that w.e.f. 01 June, 2007 composite contract covering supply of goods and service would be under the category of WC service. There are no reason to differentiate the present appeal and hence the same is allowed.
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2024 (3) TMI 234
Classification of services - commercial or industrial construction service or works contract service? - appellant was awarded a work order by Orissa Power Generation Corporation Ltd., IB Thermal Power Station, Banharpali, Dist. Jharsuguda (ITPS) for the work of strengthening of peripheral bund of ash pond B and slope of the embankment of PST at ITPS - Extended period of Limitation - HELD THAT:- It is a fact borne on the record that the appellant has provided the service along with materials. Therefore, the said service merits classification under the category of works contract service , which came into the Service Tax net with effect from 01.06.2007. Admittedly, the demand has not been raised against the appellant under works contract service. The Hon ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT ] wherein the Hon ble Apex Court observed Works contract were not chargeable to service tax prior to 1.6.2007. The merit classification of the services rendered by the appellant is under works contract service. As no demand has been raised under the category of works contract service , therefore, no demand is sustainable against the appellant. Extended period of limitation - HELD THAT:- The whole of the demand has been raised against the appellant by invoking the extended period of limitation. In the facts and circumstances of the case, the extended period of limitation is not invokable. The appellant succeeds on merits as well as on limitation - Appeal allowed.
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2024 (3) TMI 233
CENVAT Credit - denial merely on the fact that the invoices were raised in the name of the registered office - HELD THAT:- The Commissioner (Appeals) Order makes it clear that Cenvat Credit is required to be allowed - However, it is found that he has still allowed the Department s Appeal on the ground that evidence was not brought in by the Appellant towards the premises in question. The Learned Chartered Accountant submits a copy of the Trade Licence issued by Kolkata Municipal Corporation showing the premises at 29, Ganesh Chandra Avenue, Kolkata-13 as the office of the present Appellant, M/s Shyam Sel And Power Ltd. Therefore, the impugned order is legally not sustainable and set aside the same. Appeal allowed.
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2024 (3) TMI 232
Refund claim - part rejection on the ground of time limitation - N/N. 41/2007-ST dated 06.10.2007 - HELD THAT:- The receipt of the relevant services, payment of service tax thereon by the appellant and usage of said services in relation to export goods are not in dispute. The refund was rejected on the procedural ground that the appellant had filed the refund claim for the quarter January 2008 to March 2008, but some bills/invoices were pertaining to the quarter ending December 2007, which were beyond the time limit of 60 days prescribed in the Notification No. 41/2007. On verification, it was found that in respect of many shipping bills, the exports had been made prior to December 2007 but the invoices had been received during the quarter January 2008 to March 2008. Accordingly, the ld. adjudicating authority considered that in respect of those shipping bills where the exports had been made prior to December 2007, the refund claim filed by the Appellant on 30.05.2008 was barred by limitation. The Government has realized the difficulty of the exporters and issued Notification No.32/2008-ST dated 18.11.2008 extending the time period for filing the refund claim from 60 days to six months . It is observed that this beneficial notification can be applied retrospectively so as to allow the refund applications filed within the period of six months from the quarter ending. It is also observed that the substantial benefit of refund cannot be denied on account of non-fulfilment of the procedural conditions prescribed in the notification. This view has been taken by this Tribunal vide the Final Order No.76710/2023 dated 20.09.2023 in the case of COMMISSIONER OF CGST CENTRAL EXCISE, JAMSHEDPUR VERSUS M/S RUNGTA MINES LTD. [ 2023 (9) TMI 1093 - CESTAT KOLKATA] wherein this Tribunal has held that the extension of the time limit for filing the refund claim from 60 days to six months being a piece of beneficial legislation, has to be considered as a retrospective amendment. The Appellant is eligible for the refund of Rs.12,14,012/- which was rejected on the ground of limitation - appeal disposed off.
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2024 (3) TMI 231
Levy of service tax - works contract service or not - Contract II involved provisions of services along with supply of goods - two SCN issued to the appellants demanding service tax from the appellant alleging that even if the appellant has entered into two separate contracts for sale of goods/supply and works contract services, the value of goods sold under Contract I would be required to be included in the gross amount charged under Contract II for the purposes of payment of service tax under the Composition Scheme - Extended period of limitation. HELD THAT:- The agreements were entered by the appellant and the service recipient prior to 07.07.2009 i.e. 19.02.2008 and 04.12.2008 and it is not in dispute that the appellant started execution of works prior to 07.07.2009 and raised invoices and also received payments thereof. In that circumstances, the CBEC Circular No.150/1/2012-ST dated 08.02.2012 is relevant to decide the present issue - As per the said Circular, the explanation has been appended to Rule 3 (1) of the Composition Scheme, which clearly shows that the contract entered prior to 07.07.2009, the value of cost of free supply will not be includible to determine the gross amount for the purposes of payment of service tax. As it is evident that all the contracts were entered by the appellants with the service recipient prior to 07.07.2009 and the invoice has been issued and the payment was also received. In that circumstances, in terms of CBEC Circular No.150/1/2012-ST dated 08.02.2012, the value of supply of goods contract, which were executed by the appellant and the same were given to the appellants for execution of Contract II, were the contract value, in that circumstances, the value of goods in Contract I cannot be included for determination of gross value for payment of service tax. Therefore, the appellant is correctly discharged their service tax liability on gross value of works contract i.e. Contract II. The impugned demand is set aside - the penalties imposed on all the appellants waived - appeal allowed.
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2024 (3) TMI 230
CENVAT Credit - common input services used for taxable as well as exempt services - appellant was discharging their service tax liability by availing the benefit of Notification No.1/2006-ST dated 01.03.2006 - industrial commercial construction service - erection, commissioning and installation service - HELD THAT:- It is not in dispute by the Revenue that the appellant has taken the activities of erection, commissioning and installation services along with materials. Therefore, the merits classification of the above services under Works Contract Service and no demand is raised against the appellant under Works Contract Service prior to 01.06.2007. Therefore, following the decision of the Hon ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] , wherein the Hon ble Apex Court has observed Section 67 of the Finance Act, which speaks of gross amount charged , only speaks of the gross amount charged for service provided and not the gross amount of the works contract as a whole from which various deductions have to be made to arrive at the service element in the said contract. Therefore, no demand is sustainable against the appellant as the demand has not been raised under Works Contract Service - the merits classification of the activity undertaken by the appellant falls under the category of Works Contract Service . Therefore, no demand is sustainable against the appellant as no show-cause notice has been issued to demand service tax from the appellant under Works Contract Service . Appeal disposed off.
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2024 (3) TMI 229
Classification of service - Works Contract Service or Industrial Construction Service - appellant undertook the works of water-proofing along with materials and the some portion of the service tax was collected by them from the service recipient - HELD THAT:- It is not in dispute that the appellant has taken the activity of water proofing along with materials. Therefore, the merits classification of the said activity is Works Contract Service as held by the decision of the Hon ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] wherein the Hon ble Apex Court has observed The High Court first correctly holds that in the case of composite works contracts, the service elements should be bifurcated, ascertained and then taxed. The finding that this has, in fact, been done by the Finance Act, 1994 Act is wholly incorrect as it ignores the second Gannon Dunkerley decision of this Court. Further, the finding that Section 67 of the Finance Act, which speaks of gross amount charged , only speaks of the gross amount charged for service provided and not the gross amount of the works contract as a whole from which various deductions have to be made to arrive at the service element in the said contract - no demand is sustainable against the appellant under the category of Industrial Construction Service - the impugned demand is set aside. As no demand is sustainable against the appellant, therefore, the impugned order is set aside and the appeal is disposed of.
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2024 (3) TMI 228
Benefit of N/N. 12/2003-S.T. dated 20.06.2003 - CENVAT Credit reversed - repair and maintenance of LPG Gas Cylinders during the period from July 2003 to March 2005 - HELD THAT:- In this case, the appellant has already reversed the CENVAT Credit attributable to inputs used for their activity of repair and maintenance, namely, paints, rings, etc., on 03rd October, 2006. In these circumstances, the Show Cause Notice was not required to be issued to the appellant, and by reversal of CENVAT Credit, the appellant is entitled to claim the benefit of Notification No. 12/2003-S.T. dated 20.06.2003. The impugned demands are not sustainable against the appellant. Accordingly, the same are set aside - the appeal is allowed.
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Central Excise
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2024 (3) TMI 227
CENVAT Credit - disallowance of credit on the service tax paid for warranty charges by the appellant is legal and proper or not - HELD THAT:- The issue stands covered by the decision in the appellant s own case ELGI EQUIPMENTS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, COIMBATORE [ 2016 (11) TMI 1644 - CESTAT CHENNAI] for the period October 2013 to October 2014 and November 2014 to January 2015, where it was held that when cost of warranty was part of the contract of sale, the Cenvat credit of the service tax paid on the servicing of vehicles by the dealers should not be disallowed in the hands of the appellant. In the case of M/S. LUCAS TVS LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI NORTH [ 2019 (9) TMI 1131 - CESTAT CHENNAI] , it was observed that the warranty service is eligible for credit though the same is provided after the clearance of the final products. The demand cannot sustain and requires to be set aside. The impugned orders are set aside - Appeal allowed.
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2024 (3) TMI 226
CENVAT Credit of CVD paid on the import of goods and using the same for discharging excise duty on the products cleared after undertaking the activity of packing/repacking, labeling/relabeling - process amounting to manufacture or not - HELD THAT:- The appellant has discharged Central Excise duty on the products during the disputed period. For this reason, the department cannot disallow credit alleging that the activity does not amount to manufacture - reliance placed in the decision of the Tribunal in the case of THE COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS AJINKYA ENTERPRISES [ 2012 (7) TMI 141 - BOMBAY HIGH COURT] and M/S. LUK INDIA PRIVATE LIMITED VERSUS THE COMMISSIONER OF GST CENTRAL EXCISE, SALEM [ 2024 (2) TMI 1018 - CESTAT CHENNAI] . Revenue has argued that the department has revoked Central Excise Registration issued to the appellant and therefore the activity has to be held as not amounting to manufacture . On perusal of the dates, it is seen that the registration has been revoked only after the disputed period. The appellant was holding Central Excise registration for the disputed period which is from 1.2.2013 to 1.1.2014. The disallowance of credit is not justified. The impugned order is set aside - Appeal is allowed.
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CST, VAT & Sales Tax
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2024 (3) TMI 225
Condonation of delay in filing appeal - sufficient cause for condoning the delay or not - HELD THAT:- The High Court has not been convinced by the reasons stated for seeking condonation of delay and hence has dismissed the appeals on that ground. The High Court has also considered the case of the appellants on merits and has simply extracted the findings of the Tribunal and has observed that there was no illegality or perversity in the said findings. Without going into the question as to whether the respondent was entitled to exemption under Section 11(1)(i) of Haryana Special Economic Zone Act, 2005 (HSEZ Act) and particularly after the amendment made to the said provision. These petitions disposed off by observing that the High Court was right in dismissing the applications seeking condonation of delay in filing the appeals and consequently the appeals on that ground only.
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2024 (3) TMI 224
Validity of orders of assessments under the Puducherry Value Added Tax Act, 2007 - challenge on the premise that the same has been completed without even issuing a show cause notice to the petitioner contrary to Section 24 of the Act which provides that no assessment shall be made without the grant of reasonable opportunity and thus a nullity - violation of principles of natural justice - HELD THAT:- This Court is conscious of the fact that writ petition under Article 226 of the Constitution of India would not be entertained normally if statutory remedy is available. However, existence of alternate remedy is not an embargo or an absolute bar to exercise power under Article 226 of the Constitution of India but a self-imposed restriction and the following circumstances viz., violation of principles of natural justice or lack of jurisdiction or error apparent on the face of the record are some of the exceptions carved out to the rule of alternate remedy for exercise of discretion under Article 226 of the Constitution of India. The impugned orders are made in violation of principles of natural justice and thus falls within the exceptions carved out to the rule of alternate remedy for entertaining writ petition under Article 226 of the Constitution of India. While this Court is conscious of the fact that though law of limitation does not strictly apply to the writ petitioner, nevertheless Courts would be loathe in permitting writ petitions after inordinate and unexplained delay or laches. Though the same by itself may not be an absolute impediment to exercise judicial discretion and rendering of substantial Justice. From a reading of the extract from the affidavit filed by the petitioner this Court is satisfied with the explanation for the delay in approaching this Court. Importantly, the orders having been made in complete disregard to the mandate contained in Section 24 of the Act, the impugned orders of assessment are a nullity and thus liable to be set aside. The petitioner would treat the impugned orders of assessment as show cause notice and submit its objections within a period of 4 weeks from the date of receipt of a copy of this order and the Respondents shall proceed to complete the assessment within a further period of 12 weeks from the date of receipt of objections. In the event the petitioner fails to submit its objections within the period stipulated herein i.e., 4 weeks from the date of receipt of a copy of this order, the orders of assessment will stand restored and it shall be open to the Respondents to proceed in accordance with law. The writ petition disposed off.
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2024 (3) TMI 223
Rectification of error - assessments deemed to have been completed in terms of Section 22(2) of the TNVAT Act, 2006 as amended vide Act No.23 of 2012 with effect from 19.06.2012 - It is the case of the petitioner that the impugned notices issued seeking to revise the assessment on 04.11.2020 for the respective assessment years were time-barred. HELD THAT:- Since the monthly returns filed by the petitioner under Section 21 of the TNVAT Act, 2006 read with Rule 7 of the TNVAT Rules, 2007 were incorrect, the respondent was entitled to pass orders dated 24.12.2020 to the best of his judgement after the completion of the year in terms of Section 22 (4) of the TNVAT Act, 2006 - There is no limitation prescribed for passing order under Section 22(4) of the TNVAT Act, 2006. The language adopted in Section 22(4) of the TNVAT Act, 2006 merely indicates that the assessment order has to be passed after the completion of that year. It would imply that such assessment orders have to be passed within the reasonable period. Assessment orders cannot be passed long after the expiry of the limitation prescribed under Section 27 of the TNVAT Act, 2006, had the petitioner filed proper monthly returns in time with all the particulars as was required for completing the assessment. The Impugned Assessment Orders dated 24.12.2020 and Impugned Notices dated 20.12.2021 for Assessment Year 2011-2012 and for Assessment Year 2012-2013 challenged in W.P.No.513 of 2022 and W.P.No. 516 of 2022 are liable to be quashed. There is no merits in challenge to Assessment Orders dated 24.12.2020 and Impugned Notices dated 20.12.2021 for the Assessment Year 2013-2014 - Petition disposed off.
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Indian Laws
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2024 (3) TMI 265
Application under Section 156(3) of the Code - misuse of digital signature of the petitioner, uploaded false returns by even including the names of clients whom the petitioner has never dealt with - non-submission of PF and ESI returns of the company - HELD THAT:- It appears that no report in final form has yet been submitted in respect of Jadavpur Police Station Case No.59 dated 07.04.2023 - Let the investigating agency conclude the investigation expeditiously and in accordance with law. The petition disposed off.
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2024 (3) TMI 222
Dishonour of Cheque - security cheque or not - lease deed has been obtained by misrepresentation or not - rebuttal of presumption u/s 139 of the NI Act - HELD THAT:- In the present case, as the debt or liability in terms of the Agreement to Sell and/or the Addendum itself had not arisen, Section 138 of the NI Act was not attracted and the ingredients of the offence were not satisfied - Though the power under Section 482 of the Cr.P.C. is to be exercised sparingly and in the rarest of rare cases, at the same time, where, from a bare reading of the complaint, the offence is not made out, the power must be exercised to quash such a complaint. In S.P. Mani Mohan Dairy v. Snehalatha Elangovan, [ 2022 (9) TMI 846 - SUPREME COURT ], the Supreme Court has held The Court concerned would owe a duty to discharge the accused if taking everything stated in the complaint is correct and construing the allegations made therein liberally in favour of the complainant, the ingredients of the offence are altogether lacking. Applying the abovementioned principles enunciated by the Supreme Court to the facts of the present case, as the Complaint filed by the respondent lacks the necessary averments that would give rise to the debt and/or liability of the petitioners for which the cheque had been issued, the complaint filed by the respondent deserves to be quashed. Complaint, being pending before the Court is hereby quashed - Petition allowed.
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2024 (3) TMI 221
Dishonour of Cheque - Rebuttal of presumption - Financial Capacity - misuse of Cheque by the complainant - The petitioner argued that the complainant did not have the financial capacity to lend the amount mentioned in the cheques, as it was not reflected in his income tax returns. - presumption of legal liability under Section 139 of the Negotiable Instruments Act to be read with Section 118 of the Act - rebuttal of presumption - HELD THAT:- Petitioner does not dispute his signature on any of the two cheques in question. His defence is that said cheques have been misused by the complainant. Once signature on the cheques are not in dispute, there is a presumption of legal liability under Section 139 of the Negotiable Instruments Act to be read with Section 118 of the Act, in favour of the complainant, though the said presumption is rebuttable. In Rangappa vs. Sri Mohan [ 2010 (5) TMI 391 - SUPREME COURT ], a three judge bench of the Hon ble Supreme Court held that Section 139 of the NI Act includes the presumption regarding the existence of a legally enforceable debt or liability and that the holder of a cheque is also presumed to have received the same in discharge of such debt or liability. It was clarified in the aforesaid decision that the presumption of the existence of a legally enforceable debt or liability is, of course, rebuttable and it is open to the accused to raise a defence, wherein the existence of a legally enforceable debt or liability can be contested. Without doubt, the initial presumption is in favour of the complainant - An accused may not be expected to discharge an unduly high standard of proof, reverse onus clause requires the accused to raise probable defence for creating doubt about the existence of a legally enforceable debt or liability for thwarting the prosecution. The standard of proof for doing so would necessarily be on the basis of preponderance of probabilities and not beyond shadow of any doubt. In present case, in order to rebut the presumption, petitioner contended that complainant did not have the financial capacity; that he did not show the amount allegedly lent to the complainant in his income tax returns; and that cheques were managed by the complainant, when he was working as accountant with the accused and which he later on misused - Learned Trial Court rightly observed that no further question was asked from the complainant as to when the land was sold and for how much sale. Thus, the financial capacity of the complainant to lend the money is duly established. The complainant is not obliged to prove the loan or the financial capacity. Once the presumption under Section 139 of the NI Act is available to the complainant, entire burden shifts upon the accused to rebut that presumption, which in the present case accused-petitioner has utterly failed - In Rohitbhai Jivanlal Patel v. State of Gujarat another [ 2019 (3) TMI 769 - SUPREME COURT ], it was held by the Hon ble Supreme Court that In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the Trial Court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing the loan to the accused and want of examination of the relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the Trial Court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the accused-appellant. The aspect relevant for consideration had been as to whether the accused-appellant has brought on record such facts/material/circumstances which could be of a reasonably probable defence. It is held that the learned Trial Court rightly concluded that the defence as pleaded by the accused was not probable and thus, he had failed to rebut the presumption under Section 139 of the Negotiable Instruments Act available to the complainant. Learned Appellate Court has also considered all the pleas as raised by the petitioner accused. This Court does not find any illegality in the impugned order. Present revision is hereby dismissed.
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