TMI Tax Updates - e-Newsletter
April 23, 2018

Case Laws in this Newsletter:

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

TMI SMS

• Levy of GST confirmed on entire consideration payable on construction services, even if sold after partial construction of unit - AAR

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Articles

1. An open letter to Honourable Prime Minister of India Why Frauds happen in Banks - Auditor Perspective

   By: CA.Mohammed Lakkadsha

2. WHETHER REGULATED SALES OF LIQUOR BY GOVERNMENT CORPORATIONS A SERVICE?

   By: Dr. Sanjiv Agarwal

News

1. Cabinet approves the restructured Centrally Sponsored Scheme of Rashtriya Gram Swaraj Abhiyan

2. Shri Subhash Chandra Garg, Secretary, Department of Economic Affairs: Digital Age Technologies have profound implications for policies concerning every aspects of the economy and for emerging markets and developing countries; Leads the Indian Delegation to the G-20 Finance Ministers and Central Bank Governors (FMCBG) Meeting held in Washington D.C. on 19th and 20th April 2018.

3. Shri Subhash Chandra Garg, Secretary, Department of Economic Affairs, Ministry of Finance: The Big Reforms undertaken by the Government of India for raising economic growth and maintaining macro-economic stability have made India one of the Fastest Growing Major Economies in the world

4. DRI busts Diesel Smuggling racket; 14 containers of diesel seized and 4 persons, including the Mastermind and one Hawala Operator, arrested under the Customs Act 1962.

Highlights / Catch Notes

GST

• GST Applies to Entire Construction Services Amount, Even if Agreement Finalized Post-Construction Start.

  Case-Laws - AAR : Levy of GST - construction services / superstructure - Even if agreement between the applicant and the buyer is entered after part of the construction is already completed, whole of the consideration would be added for payment of GST - AAR
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• GST on Construction Services: One-Third Land Value Exclusion Clarified by Authority for Advance Rulings (AAR.

  Case-Laws - AAR : Levy of GST - Valuation - construction services / superstructure - undivided and impartible share of land - the value of land, or the undivided share of land, as the case may be, would be deemed to be one-third of the total amount, which is excluded from the value for the purposes of payment of GST - AAR
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• Court Overturns Seizure of Goods; E-Way Bill Produced Promptly, No Fault Found in Dealer's Actions.

  Case-Laws - HC : Seizure of detained goods - Absence of E-Way bill - e-way bill-02 furnished immediately within 20 minutes from the time of the detention of the vehicle/goods - Since the petitioner is registered dealer, there is no error at the hands of the petitioner, and therefore, the order of seizure passed under Section 129(1) of the Act as well as the notice issued under Section 129(3) of the Act are hereby set aside. - HC
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• High Court Rules Seizure and Penalty Unsustainable for Missing Transit Declaration Form in Uttar Pradesh.

  Case-Laws - HC : Seizure of goods with vehicle - absence of Transit Declaration Form - interstate movement of goods through UP - There is no allegation or intention on the part of the assessee to unload the goods within the State of U.P. - seizure and penalty not sustainable - HC
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• High Court Requires Surrender of August GST Registration Before Correcting June Application Error Using Wrong PAN.

  Case-Laws - HC : Correction of registration - petitioner applied for registration under GST on 27.6.2017, but mistakenly provided the PAN number of one of the partner of the firm, instead of PAN number of the Firm - until and unless the petitioner surrenders the subsequent registration dated 14.8.2017, the earlier cannot be corrected or activated - HC
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Income Tax

• Sikkim State Lottery Income Exempt from Income Tax Act, 1961 if Tax Paid at Source in Sikkim.

  Case-Laws - SC : Income from Sikkim State Lottery - taxability under the Income Tax Act, 1961 - Once the assessee has paid the income tax at source in the State of Sikkim as per the law applicable at the relevant time in Sikkim, the same income was not taxable under the IT Act, 1961. - SC
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• Taxpayer Challenges Reopened Assessment, Claims Missing Prior Permission u/s 151 of Income Tax Act.

  Case-Laws - AT : Reopening of assessment - non obtaining of the requisite prior permission u/s 151 - The assessee is alleging that revenue has not obtained the necessary requisite permissions u/s 151 and onus is on the assessee to bring some evidence to justify its allegations. - AT
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• Trustee Must Assess Taxes Separately for Each Beneficiary's Income; Single Order Allowed But Must Detail Individual Taxes.

  Case-Laws - AT : Income of the trust - There has to be as many assessments on the trustee as there are beneficiaries with determinate and known shares, though for the sake of convenience, there may be only one assessment order specifying separately the tax due in respect of the income of each beneficiary. - AT
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• Weighted Deduction for R&D u/s 35(2AB) Not Denied Due to Missing Form 3CM; Considered Procedural Lapse.

  Case-Laws - AT : Disallowance of weighted deduction u/s 35(2AB) - non receipt of form No.3CM - expenditure incurred on Research & Development activity - The non receipt of form No.3CM for the intervening three years is at best a procedural lapse and is not fatal for denial of claim of deduction under section 35(2AB) of the Act. - AT
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Customs

• High Court rules CESTAT acted incorrectly in remanding case for DRI jurisdiction check on Show Cause Notice issuance.

  Case-Laws - HC : Jurisdiction - power of DRI to issue SCN - tribunal remanded back the case - Whether CESTAT was justified and correct in law in passing an order of remand to the original adjudicating authority to first decide the issue of jurisdiction, after decision of the Supreme court - Held NO - HC
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• Custodian Held Liable for Duty on Pilfered Goods; 'Short Shipment' Claim Rejected by Adjudicating Authority.

  Case-Laws - AT : Pilferage - there is no reason to accept the claim of 'short shipment' - the adjudicating authority has rightly fastened the liability for duty on the pilfered goods on the custodian, who is the appellant in the present proceedings. - AT
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Service Tax

• State Government Helicopter Services Classified as "Supply to Tangible Goods Service" for Service Tax Purposes.

  Case-Laws - AT : Supply to Tangible Goods Service - classification of services - the appellant were providing helicopter to the State Government for transportation of their personnel as and when required - the services will be rightly classifiable under the category of “Supply to Tangible Goods Service” - AT
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• Debate Over Service Classification: Distinguishing Goods Transport Agency from Cargo Handling Services in Long-Distance Transport.

  Case-Laws - AT : Classification of services - GTA Service or Cargo Handling service? - the definition cannot be interpreted to mean that if a transporter who transports goods for 460 KM does loading and unloading also, the service rendered by the transporter will no longer be transportation but cargo handling service - AT
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• Cleaning Services at Educational Institutions Not Commercial, Regardless of Management Entity's Status.

  Case-Laws - AT : Cleaning services - irrespective of the status of the entity managing such educational institutions, the nature of the building has to be considered. The building being used by a recognized educational institution cannot be considered as of commercial in nature. - AT
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• The work “widening and strengthening of link road with bituminous concrete” rendered by the respondents is not liable to service tax under “Maintenance or Repair Services” - AT

  Case-Laws - AT : The work “widening and strengthening of link road with bituminous concrete” rendered by the respondents is not liable to service tax under “Maintenance or Repair Services” - AT
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Central Excise

• Leasing Capital Goods Back to Factory Doesn't Trigger CENVAT Credit Reversal u/r 3(5) Interpretation.

  Case-Laws - HC : CENVAT credit - Reversal of credit on capital goods - whether the leasing back amounts to removal of capital goods from the factory premises of the petitioner or not? - Rule 3(5) of the CCR - the question of deemed removal of the goods will not even arise. - HC
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• Cenvat Credit Reversal Required for Stock as of March 31, 2006, Under SSI Exemption for February-March 2006 Credits.

  Case-Laws - HC : SSI exemption - The Cenvat credit availed by the assessee, even during the period from February to March 2006, insofar as the lying stock as on 31.03.2006 is concerned, shall be certainly reversable - HC
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• Legal Challenge Over Time-Barred AED Surcharge and Education Cess on EOU Clearances Under CT-3 Certificates.

  Case-Laws - AT : Clearance to 100% EOU - demand of AED (Surcharge) and Education Cess - in a situation which involved clearance of goods to EOU under CT-3 Certificates the demand hit by limitation - AT
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Case Laws:

• GST

• 2018 (4) TMI 1077
  Levy of GST - Valuation - construction services / superstructure - undivided and impartible share of land - Entry 5 of Schedule III of the CGST Act, 2017 - Whether GST will be applicable on the sale of undivided and impartible share of land represented by Agreement to sell the land? - Held that: - From a conjoint reading of Section 7 and Entry 5 of Schedule III of CGST Act, any activity/ transaction which is in the nature of ‘sale of land’ is not covered within the purview of GST. Consequently, no GST is payable on the transactions resulting in the sale of land. Composite supply - Whether GST shall be applicable on sale of superstructure (which is under construction)? - N/N. 11/2017- Central Tax (Rate) dated 28.06.2017 - Held that: - the measure of tax should be the value of goods and services supplied by excluding the value of land. However, since land cannot be separately sold, a deemed value of land need to be ascertained on which GST would not be payable. Under GST Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 - S. No. 3 r/w Paragraph 2, the deemed value of land or undivided share of land has been fixed at one-third of the total amount charged. Hence, in GST, the machinery provisions to ascertain the value of land is available in the notification which has been issued under Sub-Section (5) of Section 15 of the CGST Act, 2017 regarding value of taxable supply - The said Notification has been issued under Section 15(5) of the CGST Act, 2017 by the Government on the recommendation of the GST Council and hence, no separate Rule was required to be issued. Paragraph 2 of the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 is fully authorised by Section 15(5) of the CGST Act, 2017 to provide machinery provisions to ascertain the value of land for exclusion and to measures the value of supply of goods and services for levy of GST. The said machinery provisions cannot be equated with exemption Notification issued under Section 93(1) of the Finance Act, 1994 which were held to be insufficient by the Hon’ble High Court [2016 (6) TMI 192 - DELHI HIGH COURT]. Ruling:- the value of land, or the undivided share of land, as the case may be, would be deemed to be one-third of the total amount, which is excluded from the value for the purposes of payment of GST Even if agreement between the applicant and the buyer is entered after part of the construction is already completed, whole of the consideration would be added for payment of GST. The applicable rate of GST on the said two-third of total amount is 9% (CGST) and 9% SGST under S. No. 3(i) of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 and parallel SGST notification.

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• 2018 (4) TMI 1076
  Seizure of detained goods - Absence of E-Way bill - contention of petitioner is that without considering the e-way bill-02 which has been furnished immediately within 20 minutes from the time of the detention of the vehicle/goods, the respondent no.3 has illegally passed the seizure order after a gap of four days - Held that: - Rule 138 of the Rules framed under the Central GST provides that till such time e-way bill system is developed and approved by the Council, the Government by notification may specify the documents which are to be carried with the consignment of goods - even if the seizure is treated to be under Section 129(1) of the Central GST, as there was no provision of e-way bill on the relevant date under the Central GST, therefore, the seizure appears to be illegal. Since the petitioner is registered dealer, there is no error at the hands of the petitioner, and therefore, the order of seizure passed under Section 129(1) of the Act as well as the notice issued under Section 129(3) of the Act are hereby set aside. Petition disposed off.

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• 2018 (4) TMI 1075
  Extension of time period for filing of GST Tran-1 - despite making several efforts on the last date for filing of the application, the electronic system of the respondent no.2 did not respond - Held that: - the respondents are directed to reopen the portal within two weeks from today. In the event they do not do so, they will entertain the application of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner - petition disposed off.

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• 2018 (4) TMI 1074
  Seizure of goods with vehicle - absence of Transit Declaration Form - interstate movement of goods through UP - penalty - Held that: - It is clear that the goods have been detained, seized and penalty has been imposed merely because of TDF was absent and the proper officer was himself not satisfied as to the intention to evade tax being present in the facts of the case - There is nothing to dispute the claim made by the assessee that it was effecting the stock transfer of goods from Chennai to Dehradun and therefore, the goods were only passing through the State of U.P. - There is no allegation or intention on the part of the assessee to unload the goods within the State of U.P. - seizure and penalty not sustainable - petition allowed.

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• 2018 (4) TMI 1073
  Seizure of goods with vehicle - consignment of goods was not accompanied by downloaded E-Way Bill - Held that: - the interception was at 7.30 P.M. while E-Way Bill downloaded and produced before the authority on the same date at 10.05 P.M - since now the E-Way Bill has been downloaded and produced before the authority, the goods and vehicle should be released upon the petitioner furnishing security other than cash and bank guarantee to the satisfaction of the authority concerned - petition disposed off.

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• 2018 (4) TMI 1072
  Correction of registration - petitioner applied for registration under GST on 27.6.2017, but mistakenly provided the PAN number of one of the partner of the firm, instead of PAN number of the Firm - petitioner then again applied for registration on 14.8.2017 - registration could not be activated as two registration applications were filed - Held that: - until and unless the petitioner surrenders the subsequent registration dated 14.8.2017, the earlier cannot be corrected or activated - petition disposed off directing the petitioner to surrender the registration dated 14.8.2017 - petition disposed off.

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• Income Tax

• 2018 (4) TMI 1078
  Income from Sikkim State Lottery - taxability under the Income Tax Act, 1961 - deduction u/s 80TT is applicable on the net winning amount received by the assessee and not on the gross amount of the winning prize? - place of residence - taxability in India - income accrued in India - Held that:- The appellant, being a resident of Rajasthan, received the income arising from winning of lotteries from Sikkim during the Assessment Year in question was liable to be included in the hands of the Assessee as resident of India within the State of Rajasthan where IT Act was in force notwithstanding that the same had accrued or arisen to him at a place where the IT Act was not in force even in respect of income accruing to him without taxable territory A combined reading of both the clauses makes it clear that any income accrued or received in India would be included in his total income for taxing purposes under the IT Act. However, in the present case, we find that the amount has been earned by the appellant-assessee in the State of Sikkim and the amount of lottery prize was sent by the Government of Sikkim to Jaipur on the request made by the appellant. While Section 5 of the IT Act would not be applicable, the existing Sikkim State Income Tax Rules, 1948 would be applicable. Thus, on the income, it would appear that Income-tax would be payable, under Sikkim State Income Tax Rules, 1948 and not under the IT Act. Since Sikkim is a part of India for the accounting year, there would appear to be, on the same income, two types of income-taxes cannot be applied. Once the assessee has paid the income tax at source in the State of Sikkim as per the law applicable at the relevant time in Sikkim, the same income was not taxable under the IT Act, 1961. Having decided so, the other issue whether the income that is to be allowed deduction under section 80 TT of the IT Act is on ‘Net Income’ or ‘Gross Income’, becomes academic.

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• 2018 (4) TMI 1071
  Gain / loss in the foreign exchange fluctuation on loan liability - Disallowance of depreciation - assessee was liable to reduce due to exchange gain from the cost of machinery and subsequent depreciation on it - Section 43A applicability - Held that:- As no payment was made during the previous year relevant to the subject assessment year. The Apex Court in Woodward Governor India P. India, (2009 (4) TMI 4 - SUPREME COURT ) while dealing with the amended provisions of Section 43A of the Act has held that “with effect from 1st April, 2003 such actual payment of the decreased / enhanced liability is a condition precedent for making adjustment in the carrying amount of the fixed asset.” The aforesaid observation of the Apex Court apply to the facts of the present case.

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• 2018 (4) TMI 1070
  Stay petition - whether levies are not exclusive levies falling within the scope of Section 40(a)(iib) of the Act? - Held that:- A reading of Section 40(a)(iib) of the Act indicates that exclusivity in terms of the said provision is not to be determined with reference to the issue as to whether anybody else is also being levied the same fee or charge, but it has to be determined having regard to the object of the provision. Two views are possible in the matter and the appellate authority cannot therefore be found fault with for having imposed the impugned condition. The writ petition, is liable to be dismissed - having regard to the financial hardship pleaded by the petitioner, the time fixed for payment of 20% of the amount in terms of Ext.P9 order is enlarged for a further period of six weeks from today.

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• 2018 (4) TMI 1069
  Computing the value of Fringe benefit for the purpose of FBT - marketing and support service charges considered for FBT - Held that:- The intention of the FBT is to tax the collective benefits given to employees as a group where such benefits cannot be attributed to any single employee. Since such collective benefits, earlier, were neither taxed in the hands of employee nor in the hands of employer, the FBT was introduced. At the end it is to be summarized that the expenditure incurred is purely business expenditure and is not covered by any of the subsections of 115 WB. Accordingly the same is not liable to tax under FBT. This case is covered by the decision of the Division Bench in the case of Commissioner of Income Tax Vs. Tata Consultancy Limited. [2015 (5) TMI 518 - BOMBAY HIGH COURT]

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• 2018 (4) TMI 1068
  Penalty u/s 271(1)(c) - non specification of charge - defective notice - Held that:- Show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. Thus imposition of penalty cannot be sustained. See Jeetmal Choraria Versus A.C.I.T. [2017 (12) TMI 883 - ITAT, KOLKATA] - Decided in favour of assessee.

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• 2018 (4) TMI 1067
  Penalty u/s 271(1)(c) - non specification of charge - defective notice - Held that:- Show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. Thus imposition of penalty cannot be sustained. See Jeetmal Choraria Versus A.C.I.T. [2017 (12) TMI 883 - ITAT, KOLKATA] - Decided in favour of assessee.

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• 2018 (4) TMI 1066
  Reopening of assessment under Section 147 - Set off excess application brought forward - Held that:- Identical question was considered in TANMAC India v. DCIT [2017 (1) TMI 122 - MADRAS HIGH COURT] as held when the entire material was available before the Assessing Officer, in the absence of any new material, the Assessing Officer cannot reopen the assessment under Section 147 of the Act. Section 147 of the Act is not to extend the period of limitation provided for completing the assessment. Unless and until a new material was found on record by the Assessing Officer, the completed assessment cannot be reopened on the basis of very same material available on record. - Decided in favour of assessee Depreciation of certain assets the cost of which was allowed as application of income under Section 11 of the Act - Held that:- Apex Court in the case of CIT v. Rajasthan And Gujarati Charitable Foundation Poona [2017 (12) TMI 1067 - SUPREME COURT] found that the assessee is eligible for depreciation even though the cost of the asset was allowed as application of income under Section 11 of the Act. This Tribunal is unable to uphold the orders of the authorities below. Assessing Officer is directed to allow depreciation. Assessee is eligible for carry forward the excess application of income against the shortfall in the succeeding year. See case of Matriseva Trust (1999 (3) TMI 34 - MADRAS High Court) Eligible for exemption under Section 11 - Held that:- Charitable activity cannot be carried on without money. In other words, to carry out the object of the trust, the assessee needs money and income. Therefore, it is for the assessee to generate income from the property held under trust. When the assessee exploited the land by putting up a construction and letting out the same with an intention to generate income for the purpose of carrying on the object of the trust, this Tribunal is of the considered opinion that the construction of such building and letting out the same cannot be considered to be a commercial activity. Therefore, the CIT(Appeals) has rightly found that the assessee is eligible for exemption under Section 11 of the Act Validity of reopening of assessment - Held that:- AO found that the assessee applied the income out of donation. But the information regarding donation was not available before the Assessing Officer. Moreover, consequent to the order of the High Court, the Principal Commissioner revised the order of the Assessing Officer. In those circumstances, this Tribunal is of the considered opinion that the Assessing Officer has rightly reopened the assessment. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority for reopening the assessment under Section 147 Amount accumulated under Section 11(2) added back under Section 11(3) - Held that:- When the assessee accumulated income for specific purpose, and disclosing the same in Form 10B but such accumulated income was not used for the purpose for which the same was accumulated, this Tribunal is of the considered opinion that the assessee is not eligible for exemption in respect of such accumulated income Assessee made donation in respect of the trust which was granted approval under Section 80G from and out of current profit. When the assessee has advanced money to the trust which has similar object and approved under Section 80G of the Act, from and out of current profit, this Tribunal is of the considered opinion that the assessee is eligible for exemption under Section 11 of the Act. Assessee is eligible for depreciation even on the asset on which the cost was allowed as application of income under Section 11

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• 2018 (4) TMI 1065
  Disallowance out of depreciation on brands and trademark - Held that:- As in the Asstt.Year 2001-02 of assesse's own case held even after invoking this Exp.(3) to Section 43(1) rightly or wrongly, the A.O. has not worked out the value of the asset in question in the proper manner. He has ignored the valuation report of various technical experts such as RSML 500.00 crores which was reduced by the AO at 53 crores. This has given rise to different valuation for unabsorbed depreciation and unabsorbed loss. If this value has been accepted then again figure of unabsorbed depreciation and loss would change. CIT(A) has rightly directed the AO for re-computation of unabsorbed depreciation and loss for carry forward. It is pertinent to observe that as and when this figure and any other figure or other would change on the basis of order giving effect of higher authorities consequential effect would be given. Addition added by the AO on account of notional interest income considered as accrued from investment - Held that:- We find that the Tribunal in the assessee’s own case has followed the finding of the ITAT in the case of Kulgam Holdings P.Ltd.(2013 (7) TMI 31 - ITAT AHMEDABAD). The Tribunal in that case has observed that OFCPN have their maturity dates, and option as given to the assessee either to purchase shares by surrendering OFCPN or get maturity value. Tribunal was of the view that interest income has not materialized in the case of the assessee because if they are redeemed on maturity then gain accursed on such investment will be long term capital gain, and if they are converted into shares then nothing would come to the assessee. Disallowance claimed towards interest expenditure on Deep Discount Bonds Series A, B, C and Deep Discount Bonds vested into the assessee - company upon demerger of operating division of Nirma Industries Ltd. - Held that:- As followed order of the ITAT passed in earlier years and held that interest expenditure incurred by the assessee on Deep Discount Bonds is an allowable expenditure on accrual basis in this year also. Following the order of the ITAT in earlier years, and in view of the above discussion, we are of the view that the ld.CIT(A) has followed order of the ITAT and allowed prorata deduction of interest expenditure Disallowance of deduction under section 80IA - Held that:- CIT-A correctly held even for captive consumption, electricity produced by the assessee would be eligible for grant of deduction under section 80IA. Not to include “Inter Division Transfer” while computing total turnover for the purpose of 80HHC - Held that:- Considering order of the ITAT in the AY 1998-99 and 2002-03, we are of the view that inter-divisional transfer of goods cannot be considered as sale for the purpose of taking that component as a part of total turnover. CIT(A) has rightly excluded this component from the total turnover. We do not find any merit in this ground of appeal. Claim for unabsorbed depreciation of demerged company viz. Nirma Industries - Held that:- We do not find any error in this direction of the CIT(A) because once demerger has been approved by the Hon’ble High Court, then all assets and liabilities of demerged company would be taken into consideration in the new company. Carry forwarded unabsorbed depreciation and loss has to be given effect in the new company. The ld.CIT(A) has rightly directed the AO to give benefit of carry forwarded of unabsorbed loss and depreciation of Nirma Industries. Hence, this ground of appeal is rejected. MAT computation - Held that:- CIT(A) has recorded a categorical finding that the AO nowhere brought on record that accounts of the assessee were not drawn as per Part-II and Part-III of the Schedule-VI of the Companies Act; whereas the accounts are prepared accordingly and if profits are computed, the accounts are audited and approved in the Board of Directors’ meeting, then the AO has no power to make adjustment. Reducing eligible profit of Moraiya Division for grant of deduction under section 80IA - Held that:- The assessee has pointed out that its profit for the last two years was 2791.97 lakhs and 1779.89 lakhs. Fixed assets of this division is of 3195.28 lakhs, as against fixed assets of the company at 2125.30 crores. The DDBs were issued by the company for raising capital. It is to be seen whether this capital was being used for the purpose of acquiring assets in this division. Assessee pointed out that fixed assets of this division is of 3195.28 lakhs (roughly 31 crores), as against aggregated fixed assets of the company at 2125.30 lakhs. Similarly profit for the last two years in the Moraiya Division was 27.91 crores and 17.79 crores. These two years profit would easily take care of any fund required at this undertaking. Thus, the ld.Revenue authorities have failed to point out deployment of any interest bearing funds for which interest expenditure has been incurred at the corporate division of this unit. In that case, it is not advisable to reduce eligible profit in the ratio of turnover. We allow this ground of appeal and delete disallowance. Excluding 90% of the gross interest income from eligible profit for the purpose of deduction under section 80HHC - Held that:- We remit this issue to the file of AO for re-working of eligible profit for grant of deduction under section 80HHC. The ld.AO shall exclude net interest income from the eligible profit. This ground of appeal of the assessee is allowed. Deduction under section 80HHC - insurance claim - Held that:- On account of some mishaps, due to electricity failure, fishes got damaged/decayed in transit and the assessee received claim. This claim would be construed as derived from export activities. On the other hand, a claim has been received by an assessee on account of some damage to the plant & machinery, then that would not qualify for consideration for grant of deduction under section 80HHC. Neither the AO, nor the ld.CIT(A) has determined nature of insurance claim in the impugned order. Therefore, we deem it appropriate to set aside this limited issue to the file of AO. AO first determine the nature of insurance claim in the light of the above discussion, and then decide its inclusion or exclusion from eligible profit for grant of deduction under section 80HHC. As far as other items are concerned, we do not find any error in the order of the ld.CIT(A). This ground of appeal is partly allowed.

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• 2018 (4) TMI 1064
  TPA - Comparable selection criteria - Functional profile of the Assessee - Held that:- Assessee could be said to be engaged in the business of being a captive contracts services provider rendering services to its AE’s which are in the nature of providing back office support services which are low end in nature, thus companies functionally dissimilar with that of assessee need to be deselected from final list.

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• 2018 (4) TMI 1063
  Reopening of assessment - non obtaining of the requisite prior permission u/s 151 - donations as capital receipt - Held that:- Neither the orders of the authorities below had mentioned about the prior approval u/s 151 having been obtained or not before reopening of the concluded assessment u/s 147 nor the assessee could obtain the said information under RTI Act,2005 and it is quite strange that the assessee is making allegations against the Revenue without any evidence on record. It is not disclosed by the assessee from where the assessee got the information as to the non obtaining of the requisite prior permission u/s 151 by the AO from the relevant authority. The assessee is alleging that revenue has not obtained the necessary requisite permissions u/s 151 and onus is on the assessee to bring some evidence to justify its allegations. The assessee is also contemplating at this stage that its donations were capital receipt and hence could not be brought to tax. These contentions are raised for the first time before the tribunal. The details of the said donation as to its nature is not emanating from the records. The assessee has to bring on record sufficient evidences to prove that these receipts are capital donations and that the same is not chargeable to tax within the provisions of the 1961 Act. The assessee is not registered u/s 12A. The onus is on the assessee to prove its contentions. This matter is required to be set aside and restored to the file of learned CIT-A for re-determination of all the issues afresh on merits including additional grounds of appeal raised by the assessee before the tribunal. - Decided in favour of assessee for statistical purposes.

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• 2018 (4) TMI 1062
  Reopening of assessment - income assessable in the hands of trust - income of the trust liable for tax at the maximum marginal rate OR normal rate applicable to an AOP - apportionment and determination of proportionate tax attributable to the beneficiary - Held that:- The beneficiaries are the owners of the property of the trust and the trustees have only the duty and responsibility to manage the same in accordance with the power granted to the trustees by the Trust deed. When the beneficiaries become the joint owners' section 26 of the Income Tax Act, comes into play and mandates the assessment of the beneficiaries shares in their respective hands. In the instant case, admittedly, the only source of income of the assessee-trust is income of the house property, therefore, section 161(1A) of the I.T.Act and proviso to section 164(1) of the I.T.Act is not applicable. Since the beneficiaries are actual / real owners of the property, the share of the beneficiaries are also determined. There has to be as many assessments on the trustee as there are beneficiaries with determinate and known shares, though for the sake of convenience, there may be only one assessment order specifying separately the tax due in respect of the income of each beneficiary. Tax on the share of each beneficiary will have to be separately calculated as if it formed a part of the beneficiary’s income. Tax payable by the Trust will be the sum total of the tax calculated on the share of each beneficiary. With these directions, we set aside the reassessment order to the file of the Assessing Officer for reframing the assessment. - Decided in favour of assessee for statistical purposes..

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• 2018 (4) TMI 1061
  Exemption u/s 54F - separate and independent residential units having separate entrances and cannot be considered as one unit to enable the assessee to claim the deduction - Held that:- We find that the assessee purchased two units, property No. 1601 and 1602 by one sale agreement with the builder, which are situated opposite to each other on the same floor. As per submissions of the assessee, it is observed that the assessee had purchased properties according to his plans and requirements which were explained before the lower authorities. It is not disputed that the staircase and common passage was not exclusively used by the assessee. See CIT Versus Gita Duggal [2013 (3) TMI 101 - DELHI HIGH COURT] - the residential house consists of several independent units can be permitted to act as an impediment to the allowance of the deduction under Section 54/54F - Decided in favour of assessee.

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• 2018 (4) TMI 1060
  Addition being a loan claimed to have been received from one Mrs. Kamala N. Katri - undisclosed income - Held that:- It is an admitted position that Trial Balance as on 31.03.1982 of Mrs. Kamal N. Katri, available with the Department, clearly reflected assessee as a debtor for 35,000/-. Hence it is of the opinion that the addition that could have been made was no more than 55,000/-. Assessee had also filed a confirmation which was not found to be bogus. In such circumstances, direct AO to restrict the addition to 55,000/-. Ground of the assessee is partly allowed. Additions being credits in bank account - Held that:- It is of the opinion that presumption u/s.132(4A) of the Act could have been taken only against person who was searched. The bank account Nos. 578 and 490 with Canara Bank, Broadway Branch, Chennai were not impounded from the premises of the assessee. Assessee had along denied opening or operating these accounts. The additions if at all it could be made, was only in the hands of Shri. N.K. Mohnot and not the assessee. Additions for credits in these bank accounts could not have been made in the hands of the assessee. Such additions stands deleted. Ground of the assessee is allowed. Addition of repayment received from debtors - Held that:- It is not disputed by the Revenue that M/s. Balaji Plastic and Metal Enterprises had paid 10,000/- and Shri. R.N. Subramanian had paid 50,000/- to the assessee during the relevant previous year. These debtors were recorded in the books of the account of the assessee. Assessee had mentioned in a letter to the ld. Assessing Officer that the date of receipt was mistakenly recorded due to errors committed by its accountant. There is no case for the Revenue that the receipts if recorded on the correct dates would have resulted in any deficit cash in the preceding months. The addition ought not have been made just for an error committed in the date of recording the actual receipts from the debtors. The factum of receipts were not doubted, and the year of receipt was also the same. - Decided in favour of assessee. Addition being a credit standing in the name of one M/s. Hindusthan Electronics - Held that:- Books of accounts of a proprietory concern is different from the books of accounts maintained by the proprietor. Just because, the latter did not have the name of the concern would not mean that the concern as such did not exist. No cogent reason was given by the lower authorities for disbelieving the credit and confirmation. Addition stands deleted. Addition under the head “undisclosed income’’- Held that:- Trial Balance of the assessee as on 31.03.1982, filed alongwith its return for assessment year 1982-83 do show M/s. Prakash Textile as a debtor for 50,200/- and Rajlakshmi Paper Company as a debtor for 10,000/-. This has not been disputed by the Revenue. When a debtor repays the loan, it is not akin to a fresh credit. A person who is receiving, refund of debt cannot be fastened with an onus to prove the source of the debtor. Assessee had shown 60,200/- as opening debtors in the name of M/s. Prakash Textile and Rajlakshmi Paper Company. Repayment to this extent could not have been disbelieved. Therefore restrict the addition to a sum of 20,000/-. Addition to the extent of 60,200/- stands deleted. Addition for unexplained credits - Held that:- AO could not have considered the credits to be not genuine. However, in the case of Uma Enterprises and D.R. Enterprises confirmations filed by the assessee did not give any details regarding their assessment circle. Nor was their PAN were available. The confirmation letters in respect of Uma Enterprises and D.R. Enterprises were rightly rejected by the lower authorities. Therefore delete addition pertaining to Pradeep M. Shah, Kamal H. Shah and M. Gulab, while sustaining the balance addition. Grounds 2 & 3 of the assessee are partly allowed.

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• 2018 (4) TMI 1059
  Allowability of prior period expenses - Held that:- We hold that the allowability of prior period expenses had to be made based on the finding that no deduction was claimed in the earlier years after recording the finding that the said expenditure had indeed been crystallized during the year. However, the method of accounting followed by the assessee also needs to be taken into consideration for the same. These findings are conspicuously absent in the orders of the lower authorities and accordingly we deem it fit and appropriate ,in the interest of justice and fair play, to remand the issue of prior period expenses to the file of the ld AO, for denovo adjudication and decide the same in accordance with law. Long term capital gain - Held that:- We find that the assessee had filed details of computation of long term capital loss of 20,17,000/- in the memo of income and the same was also furnished before the ld AO in the course of assessment proceedings. There is absolutely no discussion made by the ld AO in his assessment order with regard to this issue - AO having added the long term capital loss of 20,17,000/- under the head ‘income from business’ had also proceeded to separately add the redemption value of bonds of 1,30,00,000/- without understanding the facts. The veracity of the computation of long term capital loss of 20,17,000/- was not verified by the ld AO. No finding is also given by the ld AO with regard to carry forward of long term capital loss of 20,17,000/- to subsequent years in the assessment order. Hence we deem it fit and appropriate, in the interest of justice and fairplay, to remand this issue to the file of the ld AO , for denovo adjudication Disallowing judicial expenses - Held that:- Whether the liability at all would arise or not on the assessee would depend on the final outcome of the appeals pending. Hence the liability is contingent upon happening of a future event. Hence it could be safely concluded that the assessee had made provision for contingent liability which is not allowable as deduction. Hence we hold that the same had been rightly disallowed by the ld AO with regard to M/s Jai Balaji Industries Ltd. With regard to refund of EMD to M/s N.R.Sponge Pvt Ltd CITA had categorically held that the assessee had not offered to tax the sum of 11,12,000/- by forfeiture of EMD by crediting the same to profit and loss account. This finding has not been controverted by the assessee before us. Hence we hold that there is no need for making a separate provision for a pre-existing liability in the books of assessee, eventhough the same has been stated to be paid by the assessee on 27.6.2012 , ie. during the financial year 2012-13 relevant to Asst Year 2013-14. Accordingly, no relief is granted to the assessee in this regard. Disallowance of depreciation on intangible asset - Held that:- The payments made to Government of Orissa for afforestation charges for obtaining the mining lease, would squarely fall under the category of ‘licences’ or even ‘any other business or commercial rights of similar nature’ as per the definition of ‘intangible assets’ u/s 32 of the Act, thereby eligible for claim of depreciation u/s 32 of the Act. It is not in dispute that pursuant to this payment, and pursuant to other plant and machineries kept ready for use, the assessee would start its mining operations, the moment the mining lease has been granted by the Government of Orissa, Accordingly , we hold that the assessee is eligible for depreciation

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• 2018 (4) TMI 1058
  Disallowance of weighted deduction u/s 35(2AB) - non receipt of form No.3CM - expenditure incurred on Research & Development activity - where facility has been approved by prescribed authority, but no form No.3CM issued, can the assessee be denied deduction? - Held that:- Recognition given by the prescribed authority which is mandate of section 35(2AB) is maintained and once the recognition is so maintained, the assessee has to be accorded deduction under section 35(2AB) of the Act. The non receipt of form No.3CM for the intervening three years is at best a procedural lapse and is not fatal for denial of claim of deduction under section 35(2AB) of the Act. Accordingly, we hold so. The prescribed authority in any case under the pre-amended provisions had no authority to look into the nature and quantum of expenditure except in the first year to see investment in land and building. After recognition of facility and approval by DSIR, the Assessing Officer is to allow the claim of assessee after verifying the same. Thus allow deduction claimed under section 35(2AB) of the Act to the facility for the year under appeal. - Decided in favour of assessee Disallowance u/s 43B on delayed payment of leave encashment - Held that:- Clause (f) to section 43B of the Act was inserted by the Finance Act w.e.f. 01.04.2002. However, the Hon’ble High Court of Calcutta in Exide Industries Ltd. Vs. Union of India (2007 (6) TMI 175 - CALCUTTA High Court) had struck down the said amendment being arbitrary and unconstitutional, applying the ratio laid down by the Hon’ble Apex Court in the case of Bharat Earth Movers Vs. CIT (2000 (8) TMI 4 - SUPREME Court). Once the said clause has been struck down, then the payment of leave encashment is a trade liability and not statutory liability, hence, the provisions of section 43B of the Act are not attracted. Direct the Assessing Officer to allow the aforesaid deduction to the assessee.

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• 2018 (4) TMI 1057
  Unexplained investment in property u/s 69 - Held that:- As per CIT(A) Assessee had not filed his return of income from A.Y 2007-08 - though Assessee has not filed return of income from A.Y 2007-08 onwards, yet his submission of maintaining books of accounts 90,000/- from his savings bank account and it was used for purchase of KVPs it has not been controverted by Revenue - we are of view that credit to the extent of 90,000/- be granted and the addition is, therefore, restricted to the balance amount of 80,000/-. - Decided partly in favour of assessee.

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• 2018 (4) TMI 1056
  Denial of exemption u/s 11 - payment made to the persons are related to the trustee or founder of the institution? - Held that:- No violation of Section 13(1) as in this case, it is not the case of the Revenue that the payment made to contractor was excessive and above market rate. Ms. Savitha and Ms. Swatika appear to be the daughters of the trustees. There was a payment said to be made to them. From the material available on record, it appears that the amounts were transferred to Ms. Savitha and Ms. Swatika and retransferred to the assessee-trust / educational institution on the same day. Therefore, it is obvious that the funds of the trust were not applied or used for the benefit of the above said Ms. Savitha and Ms. Swatika. The funds of the trust were applied for the benefit of the close relatives of the trustee or founder of the trust - no violation of Section 13 of the Act as contended by the Revenue. Since the amounts were transferred to the trust as disclosed in the accounts, copies of which are available in the paper-book, the CIT(Appeals) is not justified in disallowing the claim of the assessee. Loan taken for Lease of the computers - repayment of loan taken - Held that:- Admittedly, the loan was taken from M/s Hewlett Packard Financial Services (India) Pvt. Ltd. The funds were used by the assessee for the purpose of carrying on the activities of the trust. The repayment of loan either in the name of payment of rental or otherwise, has to be construed as application of income under Section 11 of the Act. The availability of computers in the premises of the assessee-trust or its institutions is not in dispute. No question of any disallowance for repayment of loan taken by the assessee-trust - the exemption claimed by the assessee is allowed. - Assessee appeal allowed.

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• 2018 (4) TMI 1055
  Treating the rental as business receipts - assessee has been showing income derived from the warehouse under the head of Income from Business & Profession - Held that:- The prime object in the case before us was to provide the commercial services as discussed. No reason to interfere in the judgment of CIT(A) and accordingly conclude that the rental income in the aforesaid facts and circumstances should be treated as business income. Hence, the ground of appeal of revenue is dismissed. Addition by estimating the profit after rejection of books of accounts of the assessee - Held that:- Once the books of accounts are rejected by the AO then the profit has to be determined on estimated basis. Hence, in our considered view the impugned issue needs to be re-examined by the Ld. CIT(A) de-novo and in accordance with provision of law. Thus, the ground of appeal filed by the Revenue is allowed for statistical purposes.

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• 2018 (4) TMI 1054
  Acquisition of foreign currency from undisclosed sources - addition u/s 69A - Held that:- The assessee has given an initial explanation and he himself abandoned this explanation later and came out with an altogether different theory. Applying the dictum ‘falsus in uno. Johns in omnibus’, even subsequent explanation does not have any credence. Thus the explanation of the assessee with respect to receipt of gifts of US $ 22,000 does not deserve to be accepted. Referring to assessee's contention that explanation has been accepted by the Dy Director in Enforcement Directorate, and accordingly, the said foreign exchange is treated as explained, we have very carefully perused the said order and we are not persuaded by the reasoning or approach adopted in the I said order. It is not and it cannot be, the case of the assessee that the said order constitutes a : binding judicial precedent. If at all it has any value, it can only be a persuasive value. At the cost of repetition, we may add that having perused the order, we are not at all persuaded. Nothing, therefore, turns on the order passed by the Enforcement Directorate accepting the plea of the assessee. We uphold the impugned addition to the extent the same is relatable to US $ 21,000, which, by adopting the conversion rate of 1 US $= 43.62- as adopted by the Assessing Officer, works out to 0,16.020. AO is directed to delete the balance amount out of the impugned addition. - Decided partly in favour of assessee

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• Customs

• 2018 (4) TMI 1053
  Suspension of CHA License - Time Limitation - Whether the CESTAT is right in law in setting aside the order or suspension of the Custom Broker Licence on the ground of delay between the suspension and the notice of deviation or omission, ignoring that DRI letter dated 24th July 2014 and the Custom Broker Licence was suspended on 8th August 2014? - Regulation 18, Regulation 19 and Regulation 20 of CBLR. Whether the time line as prescribed in Regulation 20 is directory in nature or is mandatory? Held that: - when a time limit is prescribed in Regulations, which empowers action in Regulation 18 and procedure in Regulation 20(1), the use of the term “shall” cannot be termed as “directory”. Adherence to the time schedule prescribed in the Regulation 20 in a rigid way would lead to a situation where non-­compliance with the time frame and even deviation by a single day would resultantly invalidate the entire action and the licence which is under suspension or which is revoked, is liable to be restored. The procedural formality as required to be complied within the time frame prescribed in the regulation, even if it is deviated for whatsoever reason beyond the control of the revenue or the custom house agent would result into consequences of declaring the entire action invalid if the provision is construed as mandatory. The time limit contained in Regulation 20 cannot be construed to be mandatory and is held to be directory - though the time line framed in the Regulation need to be rigidly applied, fairness would demand that when such time limit is crossed, the period subsequently consumed for completing the inquiry should be justified by giving reasons and the causes on account of which the time­ limit was not adhered to. CESTAT was not justified in setting aside the order or suspension of the Customs Brokers Licence on the ground of delay between suspension and the notice of deviation or omission and it cannot be laid down as an absolute proposition of law that delay in taking immediate action of suspension or initiation of inquiry within a period of 90 days would vitiate the action of the Commissioner. Matters are remanded to the CESTAT for fresh adjudication.

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• 2018 (4) TMI 1052
  Jurisdiction - power of DRI to issue SCN - tribunal remanded back the case - Whether CESTAT was justified and correct in law in passing an order of remand to the original adjudicating authority to first decide the issue of jurisdiction, after decision of the Supreme court in Civil Appeal preferred against the decision of Delhi High court in Mangli Impex Limited v. Union of India [2016 (5) TMI 225 - DELHI HIGH COURT]? - Held that: - The appeals preferred before the Tribunal are restored to their original position. The Tribunal would decide the appeals on merits, including the question of jurisdiction of the officer of the Directorate of Revenue Intelligence who had issued SCN, without being influenced by the decision of the Delhi High Court in the case of Mangali Impex Limited - appeal disposed off.

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• 2018 (4) TMI 1051
  Refund claim - unjust enrichment - whether the appellant had passed on the burden of refund amount of 40,36,127/- to others which was deposited with the department at the time of provisional assessment of the imported goods, during the period August 2010 to November 2010? Held that: - the appellant has not passed on the burden of the amount claimed as refund to others, as the refund amount shown as Provision in balance sheet of 2010-11, reversed in the subsequent Financial year 2011-12 - Also, based on the same balance sheet of 2010-11, the 1% RD made at other customs houses, have been refunded to the appellant without raising the issue of unjust enrichment. The appellants are eligible to the refund claim paid as RD at the time of provisional assessment of the goods - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1050
  Pilferage - Recovery of duty from custodian-appellant - Penalty u/s 117 of Customs Act, 1962 - confiscation - Held that: - Custodianship is institutionalized in the Customs Act, 1962 to ensure that there is no loss of revenue between the landing of a consignment and its clearance for home consumption. Inherent in such custodianship is the presumption of conformity with the declaration unless asserted otherwise at the time of taking over of custodianship of the cargo. In the absence of such assertion, there is no reason to accept the claim of 'short shipment' - the adjudicating authority has rightly fastened the liability for duty on the pilfered goods on the custodian, who is the appellant in the present proceedings. Confiscation - Held that: - The goods that were available are not offending goods. There is no allegation that these have been imported contrary to any prohibition under the Customs Act, 1962 or any other law in force - there is no ground for confiscation of these goods. Penalty - Held that: - Penalty has been imposed u/s 117 which is liable to be invoked for any contravention or abetting of any contravention or failure to comply with any provisions of the Act - There is no requirement under the Customs Act, 1962 for declaration of any pilferage nor there is any apparent act of omission or commission that warrants imposition of penalty under section 117 - penalty set aside. Appeal allowed in part.

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• 2018 (4) TMI 1049
  Classification of goods - sew on the metal button - difference in rate of additional duty - whether classifiable under heading 9606 2100 of the First Schedule to the Customs Tariff Act, 1975 with 'nil' rate of additional duty or under 9606 1010 and subjected them to appropriate rate of additional duty, i.e. 14% before 7th December 2008 and 10% after that date? Held that: - In the absence of such sampling, there is no justification for alteration of what is essentially a mechanism for fastening or bringing two ends of a garment together which could be buttons, fasteners or any other, as a 'fastener' instead of 'button' - the classification of goods in bill of entry no. 784321 dated 16th February 2009 under heading 9606 2100 of the First Schedule to the Customs Tariff Act, 1975 with 'nil' rate of additional duty upheld. The dispute is one of classification, both the fasteners and buttons find use in garments and it is only the policy framework of the Government of India that has assigned additional duty to one while exempting the other. Such outcome of policy framework are not permanent and a classification which chooses, in the absence of specific description, to suit commercial advantage does not necessarily imply a deliberate attempt to misdeclare. Confiscation of earlier as well as live consignments - Held that: - on the earlier consignments there is no ground for sustaining the confiscation of those - Insofar as the live consignments are concerned the outcome in classification of mechanism for joining two ends of a garment does not indicate that any material particular had been suppressed, confiscation of live consignment also do not sustain. Penalties also not justified. Appeal allowed in part.

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• 2018 (4) TMI 1048
  Duty Drawback - overvaluation of export goods - entire case was made out on the basis of market enquiry - Held that: - Since the market enquiry report is not on record, it cannot be found out whether the goods in respect of which market enquiry was conducted is identical goods to the export goods. Therefore, in absence of any such details, it was not correct on the part of the adjudicating authority to come to a conclusion that the appellant has done the overvaluation of the export goods. The goods were not available for confiscation. In such case, neither confiscation should have been ordered nor redemption fine be imposed - penalty have to be reconsidered. Appeal allowed by way of remand.

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• Corporate Laws

• 2018 (4) TMI 1047
  Non disclosure of cause of action for filing the suit and that the suit was also barred by limitation - Held that:- The cause of action was already pleaded when the suit was filed and that the trial Court has not relied upon averments in amended paragraph 21A, ratio of the decision in Patasibai and ors. (1990 (1) TMI 321 - SUPREME COURT) cannot be applied to the facts of the present case. The question whether the amendment could have been allowed especially when application for rejection of the plaint was pending is not required to be adjudicated in the present case especially when it is found that even the trial Court has not relied upon the amended plaint for rejecting the application under provisions of Order VII Rule 11 of the Code. In view of aforesaid I do not find any jurisdictional error committed by the trial Court while passing the impugned order

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• Service Tax

• 2018 (4) TMI 1045
  Supply to Tangible Goods Service - classification of services - the appellant were providing helicopter to the State Government for transportation of their personnel as and when required and for this purpose they were required to keep helicopter in readiness at particular places, maintain the same and also provide qualified and experience crew for their operation and maintenance - whether the service provided by the appellant is “Transportation of Passengers by Air within India” or “Supply to Tangible Goods Service”? Held that: - The expenses on fuel, maintenance, parking etc. are to be borne by the appellant in terms of the agreement - The appellant were to receive certain minimum fixed monthly charges on account of certain minimum flying hours per calendar month, in addition to this, they will also receive remuneration on per hour basis during the period when the helicopter had been operated for transportation. An identical issue regarding charter hire of helicopter to ONGC came up before the Tribunal in the case of Global Vectra Helicorp Ltd. vs. CC (Import) Mumbai [2015 (2) TMI 974 - CESTAT MUMBAI (LB)], in that case the appellant therein claimed the classification of their service as Transportation of Passengers by Air Service. But, the Tribunal after very detailed discussion of the facts and various case law on the subject as well as CBEC Circular No. 20/2009 dt. 09.02.2009 came to the conclusion that the services will be rightly classifiable under the category of “Supply to Tangible Goods Service”. Classification of the service rendered under the category of “Supply to Tangible Goods Service” upheld. Technical Inspection Certificate Service - reverse charge mechanism - Since the service received was from service providers situated abroad, the department has confirmed service tax demand against the appellant under Section 66A of the Finance Act - Held that: - the above payments were made by the appellant towards receipt of services from abroad - The service tax on such services is required to be paid by the recipient under the reverse charge basis in terms of Section 66A of the Act read with Rule 2(1)(d) of the Service Tax Rules, 1994 - demand upheld. Appeal dismissed - decided against appellant.

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• 2018 (4) TMI 1043
  CENVAT credit - appellant being a hotel - input services - 'construction service' which was used for constructing additional rooms and repairing of some hotel rooms - Rule 6(5) of CCR 2004 - Held that: - the overall hotel business is rendered within the common hotel building and the construction service received in respect of construction of any part of the hotel is a common input service which has nexus with overall hotel business - In appellant's own case, M/s. Lemon Tree Hotels Pvt. Ltd. Versus CST, Chennai [2018 (1) TMI 1215 - CESTAT CHENNAI], the Chennai bench of this Tribunal, observed that building constructed for the hotel is used for renting of the services of the hotel and accordingly CENVAT credit is admissible u/r 6(5). Credit allowed - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1042
  CENVAT credit - Renting of Immovable Property service - input/input services - Cement, Glass and Steel - Architect Services - Work Contract Service - Held that: - the issue is no more res-integra and the same has been settled through the ruling by Hon’ble High Court of Andhra Pradesh at Hyderabad in Commissioner of Central Excise, Visakhapatnam-II vs. Sai Sahmita Storages (P) Ltd. [2011 (2) TMI 400 - ANDHRA PRADESH HIGH COURT], wherein it was held that unless excluded, all goods used in relation to manufacture of final product and for any other purpose used by a provider of taxable service for providing an output service are eligible for Cenvat Credit. The appellant was entitled for Cenvat Credit - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1041
  Man Power Supply or Recruitment Agency service - employees of the appellant would be sent either to such software companies premises or to the premises of the ultimate clients for provision of software services at the client s premises - Department took the view that appellants are only supplying man power to TCS in Special Economic Zones and other similar organizations as per the requirements and that the appellants are not engaged in development of any software on their own but are only providing employees to TCS and other organizations. Held that: - the appellants were only providing manpower, albeit those having software technology skills, to organizations like TCS, Infosys etc. But the information technology development was not done by the appellant themselves nor was it contracted to them - the issue in the appellant own case Future Focus Infotech India (P.) Ltd. Versus Commissioner of Service Tax [2010 (3) TMI 190 - CESTAT, CHENNAI], applies, where it was held that the appellant was supplying skilled manpower for which it was liable to pay service tax for supply of manpower services. The facts in the case of Cognizant Tech. Solutions. [2010 (3) TMI 328 - CESTAT, CHENNAI] are different and will not apply to present case, as in that case Cognizant Tech. Solutions were themselves responsible for the development, information technology software etc., whereas in the present case appellants are only supplying man power to TCS in Special Economic Zones and other similar organizations as per the requirements and that the appellants are not engaged in development of any software on their own. The appellants are therefore liable for discharging tax liability on the value of taxable services in respect of these services. In respect of services provided to SEZ units - As per the overriding effect of Section 26 51 of the SEZ Act 2005 read with Rule 10 of SEZ Rules 2005, they would be eligible for exemption from payment of service tax and also for the exemption extended in Notification No.4/2004-ST dt.31.03.2004 - The adjudicating authority has not considered this claim of the appellant on the ground that sufficient documents have not been produced by the appellants - it is proper to remand the issue for reconsideration - matter on remand. Extended period of limitation - demand raised on TDS by way of a second SCN - Held that: - Nothing could have prevented the department from including the demand on the TDS portion in the earlier SCN dt. 26.9.2009. Hence that part of the impugned order confirming the service tax demand of 10,52,160/- with interest and imposition of penalties in respect of TDS portion, for the period April 2007 to March 2008, will require to be set aside. Penalties - Held that: - the issue in dispute is with regard to classification of the activities of the appellant and therefore an interpretational issue - all penalties set aside. Appeal disposed off.

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• 2018 (4) TMI 1040
  Classification of services - appellants were only loading timber logs from the port area and lift them into truck/trailers and transported it to area situated in the ranges of around 50 to 60 km - GTA Service or Cargo Handling service? - extended period of limitation - CBEC Circular No. 104/7/2008-ST dated 6.8.2008 - Held that: - appellant are primarily involved in loading/unloading of timber logs into the truck/trailer and transport of the same to the nearby location of the importer - they are issuing consignment note for these transportations and they are discharging duty liability under the category of GTA. Reliance also placed in the case of RK. TRANSPORT COMPANY Versus COMMISSIONER OF CENTRAL EXCISE, RAIPUR [2012 (3) TMI 271 - CESTAT, NEW DELHI], where it was held that The definition of cargo handling service includes cargo handling incidental to freight. The definition does not specifically include transportation. It specifically excludes mere transportation. So the definition cannot be interpreted to mean that if a transporter who transports goods for 460 KM does loading and unloading also, the service rendered by the transporter will no longer be transportation but cargo handling service. Appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1039
  Valuation - Construction of Commercial Building services - abatement under N/N. 15/2004-ST - Held that: - The appellants claimed that they have rendered a composite service with supply of materials as well as the provision of service during the material time and the tax liability will arise only w.e.f. 01.06.2007, in view of the decision of the Apex Court in the case of Larson & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT] - This aspect requires re-examination by the original authority. Consideration to be taxed - Held that: - The claim of the appellant is that they have been filing ST-3 returns and the same can be verified with supporting evidences - matter remanded for reconsideration. Appeal allowed by way of remand.

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• 2018 (4) TMI 1038
  Exemption under N/N. 24/2004 dated 10.09.2004 - Commercial Training and Coaching service - denial of exemption on the ground that courses conducted by them are not approved by the competent authorities like AICTE - Held that: - in similar set of facts the Tribunal in the case of Canan School of Catering and Hotel Management Vs. CST, Chennai [2018 (3) TMI 699 - CESTAT CHENNAI] has held that those courses which provide such skills to the trainee to seek employment directly after such training or coaching shall be excluded from tax liability - exemption allowed - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1037
  Liability of Differential Interest - delayed payment of tax liability - Advertising Agency Service - Held that: - Since we are not having the proceedings for tax dispute before us which is admitted atleast for a limited period, the interest liability has arrived at by the lower authorities cannot be disputed - appeal dismissed - decided against appellant.

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• 2018 (4) TMI 1036
  Reverse Charge Mechanism - GTA Services - extended period of limitation - Held that: - there is no sustainable ground for invoking extended period except the recording by the lower authority that neither ST-3 was filed nor the tax was paid in time - This cannot establish a case of willful mis-statement, suppression of facts with intend to evade payment of service tax. Since the appellant is called upon to pay service tax as a deemed service provider on reverse charge basis, the demand for extended period cannot be sustainable - appeal allowed.

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• 2018 (4) TMI 1035
  N/N. 12/2003 dated 01.07.2003 - Repair and Maintenance Service - exemption denied on the material part on the ground that no supporting evidence of sale of goods during the course of providing such repair service by the appellants - Held that: - Hon’ble Supreme Court in Jain Brothers [2012 (7) TMI 935 - SUPREME COURT], to state that the cost of goods supplied during repair cannot be added to the value of the taxable service in view of the said exemption - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1034
  Non-payment of service tax - cleaning services - extended period of limitation - Held that: - these requires closure examination with relevant basic documents to arrive at a finding whether or not the recipient of service who is owing and managing the said building are to be considered as commercial or a non-commercial entity. Admittedly the buildings are used for running educational institutions recognized by law - irrespective of the status of the entity managing such educational institutions, the nature of the building has to be considered. The building being used by a recognized educational institution cannot be considered as of commercial in nature. Demand restricted for normal period - appeal allowed in part.

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• 2018 (4) TMI 1033
  Liability of service tax - Maintenance or Repair Services - contract for widening and strengthening of the link road with bituminous concrete - Held that: - The work of widening of narrow road to broader road would be completed only after the strengthening of new existing road for keeping in good condition. Therefore, the work “widening and strengthening of link road with bituminous concrete” rendered by the respondents is not liable to service tax under “Maintenance or Repair Services” - appeal dismissed - decided against Revenue.

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• 2018 (4) TMI 1032
  Demand of service tax - CHA Services, Port Services and Steamer Agency Services - transition of Indirect tax to GST - Held that: - against the order passed by the Larger Bench of the Tribunal on the issue of taxability of Port Services, the assessee/appellants had approached the Hon'ble High Court of Madras by filing a Writ Petition, which was later converted by the Hon'ble High Court to a Civil Miscellaneous Appeal, which is still pending before the Hon'ble High Court. When the matter is likely to be disposed of by the Hon'ble High Court. The above appeals are pending before the Tribunal for more than a declade. Ahead of the transition of Indirect Tax to GST, this Tribunal has been given a mandate to dispose of all old cases at least prior to 2007. Appeal is disposed as filed closed.

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• Central Excise

• 2018 (4) TMI 2003
  CENVAT credit - inputs - Cement have been used in laying foundation of new machinery - Held that: - Hon'ble Madras High Court in the case of ‘India Cement Ltd’ [2015 (3) TMI 661 - MADRAS HIGH COURT] has held that staging and supporting structures are essential part of the machinery, so as to run the same for manufacture of dutiable finished products - credit allowed. Light fitting - Held that: - the same are also essential inputs for the purpose of manufacture of dutiable finished goods as no production can take place in darkness. Admittedly such light fitting are used in the factory of production - credit allowed. Appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1046
  CENVAT credit - Reversal of credit on capital goods - lease back of goods - contemporaneous leasing back through rental agreement - whether the leasing back amounts to removal of capital goods from the factory premises of the petitioner or not? - Rule 3(5) of the CCR - Held that: - In any adjudicatory process, the authority has a duty to deal with every material and relevant contention raised by the disputant. This alone will ensure that decision-making occurs thoroughly and lawfully and that the decision-maker's mind is focussed. The decision-maker needs to be disciplined in addressing questions, nor just arriving at answers. The stand of the writ petitioner is that the revenue has not questioned the legality of the sale dated 22.03.2013 and the rental agreement. In the counter affidavit it has been stated that the revenue has not accepted the transaction as genuine at any point of time. If according to the respondent, the sale dated 22.03.2013 is not genuine, the question of deemed removal of the goods will not even arise. The petitioner has made out a convincing case for bye-passing the statutory alternative remedy available to it and for directly invoking the jurisdiction of this Court - matter is remitted to the file of the respondent for fresh consideration in accordance with law - petition allowed by way of remand.

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• 2018 (4) TMI 1044
  SSI Exemption - case of the department is that though the appellant s factories are located in rural area but major process of manufacturing is carried out by the job workers who are not located in rural areas but in urban areas - Held that: - As per the activity the appellant is only carrying out affixation of brand on the tools i.e. spanner by embossing/ engraving. This process alone does not amount to manufacture - As regards other processes which are carried out by the job workers, it prima facie appears that the independent process of heat treatment, shot blasting and plating do not amount to manufacture - if at all there is a liability of duty arising, the same is recoverable from job worker. The appellant cannot be charged to duty even if the exemption notification no. 8/2000 is not admissible to them - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1031
  Refund of excess duty paid - duty paid under protest - time limitation - Section 11B of the Central Excise Act - whether the appellant was entitled to refund of excise duty paid from 1st April, 1989 to the end of February, 1994? Held that: - No doubt, if the appellant claims refund under Section 11B of the Central Excise Act, the burden to establish such claim shall be upon the appellant, who has to lead evidence to the satisfaction of the authorities concern for refund of the amount - However, If the authority feels that certain relevant material can be called from the assessee which shall have the bearing on the controversy involved, such an opportunity has to be provided to the assessee, otherwise the order may suffer from the breach of principles of natural justice The matter is required to be remanded to the Joint Commissioner, Central Excise to decide the controversy afresh by permitting the assessee to produce on record the other documents having bearing on the issue involved in the present case by setting aside the orders passed by the authorities below - appeal allowed by way of remand.

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• 2018 (4) TMI 1030
  Maintainability of application before Settlement Commission - Clandestine removal - parallel invoices - only contention of petitioner is that the Settlement Commission in this case completely bypassed the mandatory requirements stipulated in law and entertained the application - Principles of Natural Justice - Held that: - It is evident from the communication, copy of which is at Exhibit 'C' at page 80 dated 7th January, 2005 that this Commissionerate complies with section 32F(1). It is a report, which has to be forwarded to the Settlement Commission by the Principal Commissioner of Central Excise, where an application for settlement is allowed or deemed to have been allowed to be proceeded with under sub-section (1) of section 32F. The facts, as reflected from the records and to be found in the order of the Settlement Commission, therefore, do not permit the petitioner to raise any contention and of the nature that the impugned order contravenes the provisions of law or is in breach of the principles of natural justice - this argument is purely an afterthought. It is in the peculiar facts and circumstances of the case that the Commission proceeded with and decided the matter. There was never any objection raised, much less serious for all this was done in the presence of the Revenue officials. The whole matter was allowed to be proceeded with and was brought to an end with the consent of the Revenue officials. Petition dismissed.

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• 2018 (4) TMI 1029
  Reversal of CENVAT credit - Rule 11(2) of Cenvat Credit Rules, 2004 - Assessee availed SSI exemption under N/N. 8/2003-C.E., dated 01.03.2003 - case of Revenue is that though the assessee had availed the SSI exemption, it had failed to pay the amount of duty under Rule 11(2) of CCR, 2004, equivalent to Cenvat credit availed by them on inputs and finished goods lying in stock as on 31.03.2005 and 31.03.2006 - whether the demand of duty equivalent to the Cenvat credit availed by the assessee on the finished goods and inputs lying on stock as on 31.03.2006 was correct, as they have admittedly availed the SSI exemption Notification No.8 of 2003 dated 01.03.2003? Held that: - it is an admitted fact that from the inception, the assessee had been availing the SSI Unit exemption. The said exemption under N/N. 8 of 2003,-C.E., dated 01.03.2003 had been given based on the quantum, and once the Unit exceeds the quantum, it will automatically lose the exemption facility and again, if it comes back within the quantum, it can start seeking exemption - admittedly, in February and March 2006, the assessee was not in the zone of SSI exemption and therefore, it started to pay the excise duty. For the SSI Unit claiming exemption, if at all any Cenvat credit claimed, the same is reversable during the exemption period. The fact remains that as per the stock available based on the Stock Register and other documents, which were verified by the revenue that, on closing of stock of 400.85 MTS contains 72.46MTS of import scraps on which Cenvat credit was availed and therefore, from 01.04.2006, since the assessee has become once again eligible to get exemption under SSI exemption notification, naturally, the assessee has to be subjected to Cenvat credit reversal, as the stock lying as on 31.03.2006 unutilized, certainly, would go for manufacturing or utilisation beyond the date. The Cenvat credit availed by the assessee, even during the period from February to March 2006, insofar as the lying stock as on 31.03.2006 is concerned, shall be certainly reversable - the demand made by the revenue for duty to be payable is wholly justifiable in consonance with the relevant provisions of the Cenvat Credit Rule as well as the Central Excise Act. Appeal dismissed - decided against assessee.

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• 2018 (4) TMI 1028
  Extended period of limitation - Valuation - includibility of amortization of cost of dies/moulds/tools in assessable value - Held that: - there were conflicting judgments on the includability of cost of moulds supplied free of costs by the buyers in value of finished goods manufactured using such dies/tooling/moulds. The dispute was finally resolved by the Larger Bench judgment rendered in the case of Mutual Industries Ltd [2000 (3) TMI 74 - CEGAT, COURT NO. I, NEW DELHI]. This Tribunal in similar set of facts in the case of CCE, Hyderabad vs. ITW Signode [2004 (8) TMI 267 - CESTAT, BANGALORE] has taken the view that in such circumstances, the extended period is not invocable. The appeals are remanded back to the Adjudicating Authority to pass a fresh order by applying the normal period of limitation - appeal allowed by way of remand.

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• 2018 (4) TMI 1027
  Benefit of N/N. 6/2002-CE - Scouring Machine falling under Chapter 8451.10.10 or milling machine? - case of appellant is that the intention of the said notification is to grant exemption to both milling machine and to scouring machine and not to a combined milling and scouring machine - Held that: - The appellants have produced an expert opinion which clearly states that the scouring machine is significantly different from milling machine and he has opined that the scouring machines are used for fiber like, cotton yarn and polyester yarn, whereas the milling machine is used for processing of woolen yarn - the certificate produced by the appellants is at contrast with the findings of the Commissioner (Appeals). This finding of the fact goes to the root of the issue. In case no combined scouring and milling machine exists then the notification cannot be implemented in the manner in which Revenue seeks to interpret. Such interpretation in these circumstances will deter the purpose of the notification. Since the expert opinion was not produced before the Commissioner (Appeals) and it has the variance with the findings of the learned Commissioner (Appeals) on the basis of literature, it would be in the interest of justice to ascertain the correct position in fact before going further into the interpretation of notification - matter is remanded to Commissioner (Appeals) to first decide if a combined scouring and milling machines exist after comparing the evidence produced by the appellant. Appeal allowed by way of remand.

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• 2018 (4) TMI 1026
  100% EOU - Valuation - clearance of 765539.74 L. Mtrs of processed MMF without payment of duty - whether proviso to Section 3(1) of CEA, 1944 will be applicable or Section 3(1) of CEA 1944 would be applicable? - Held that: - Since the present case is for the period after 11.05.2001, the issue is settled against the assesee by the judgment of this Tribunal in the case of Maral Oveseas Ltd. [2016 (4) TMI 771 - CESTAT NEW DELHI], where it was held that it is not legally tenable to argue that the rate of duty applicable to a normal Central Excise Unit should be applicable to a E.O.U. even before the E.O.U. becomes a normal Central Excise Unit - demand set aside. Demand of duty on raw materials - Held that: - the issue is covered by the judgment of this Tribunal in the case of Aisa Metals vs CCE & ST Ahmedabad [2015 (4) TMI 69 - CESTAT AHMEDABAD], where the demand has been set aside - demand set aside. Appeal dismissed - decided against Revenue.

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• 2018 (4) TMI 1025
  Clandestine removal - shortage of finished goods and scrap - contention of appellant is that the documentary evidence submitted by them has not been considered by the first appellate authority and there is no finding on the documentary evidence produced before him - principles of natural justice - Held that: - there is no finding on documents submitted by the appellants in their defence - Besides, the documentation which has been submitted before this Tribunal requires to be examined by the Commissioner (Appeals). In the SCN itself, it is mentioned that the appellants were eligible for concessional rate of duty, as the aggregate value of their clearance was well within the limit of 3 crores in the financial year 2002-03. However, the same has not been taken into account by the first appellate authority. The matter requires re-examination - appeal allowed by way of remand.

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• 2018 (4) TMI 1024
  Scope of remand - Clandestine removal - branded bidis - Revenue went in appeal before this Tribunal, but, filed only one appeal against M/s. Vyas Shantilal Jethalal & Sons Co., Umeta. No appeal was filed against the dropping of demand issued to M/s Sanjay M Vyas and against Shri Mahendra S. Vyas - Held that: - It is clear from the remand order that no appeal was filed against the other appellants except for M/s Vyas S. J. & Sons Co., Umeta. While the remand was undoubtedly open, the remand direction was limited to the adjudication pertaining to M/s. Vyas S. J. & Sons Co., Umeta only - the adjudicating authority has indeed gone beyond the remand direction by adjudicating the matters pertaining to the other appellants in this appeal and has not adhered to the terms of the remand order. The matter requires to be remanded back to the adjudicating authority for fresh adjudication in compliance with the remand order dated 20.10.2005 of this Tribunal and to pass a fresh order after giving the appellant a fair opportunity to defend themselves - Appeal allowed by way of remand.

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• 2018 (4) TMI 1023
  Valuation - includibility - whether 50% advertisement expenses borne by dealer with reference to sale of the finished goods by the appellant should be included in the assessable value or otherwise? - Held that: - the 50% advertisement expenses are borne by the dealer. Since this amount is not flowing to the manufacturer, it cannot be said that there is an extra consideration - there is no question of inclusion of any amount, which is not flowing to the appellant. Hon'ble Supreme Court in the case of TVS Motors [2015 (12) TMI 874 - SUPREME COURT] held that 50% advertisement expenses borne by the dealer is not includible in the assessable value of the finished goods. Appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1022
  Refund of accumulated CENVAT credit - appellant-assessee had conceded not to claim this amount from the department - Held that: - dispute is 15 years old it would be better to close the issue - once having conceded that item N. 3 and 4 (of the table) needs decent burial, appellant should not have exhumed the issue by filing the refund claim before the authorities - refund rightly rejected. Secondly, it has to be noticed that before the Tribunal clearly stated that the issue involved in the amount of 42,01 lakhs (serial No. 3 and 4) is contentious one and would require detailed arguments and consideration of various issues, also in view of the time elapsed appellant's counsel has, conceded that the issue as being not pressed, rearguing the issue on the pretext of filing a refund claim would be incorrect on the part of the appellant. Thirdly, these findings of the Tribunal in paragraph 15 has also attained finality in the hands of the apex Court. Hence seeking indulgence of the Tribunal for revisiting the issue once again is not in consonance with the settled law. Refund rightly rejected - appeal dismissed - decided against appellant.

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• 2018 (4) TMI 1021
  Clandestine manufacture and removal - it was alleged that appellant were clandestinely receiving texturized yarn from M/s DPPL, and after dying the same and sent it back to M/s DPPL, Silvassa - allegation based on record of the Godown Keeper of M/S Purohit Clearing Agency - whether all goods cleared are recorded in register of Purohit Clearing Agency and are dyed yarn? - Held that: - unless Revenue is able to establish that the entire yarn listed in Register 28and 31 is dyed yarn no case can be made against the appellant. In this respect, the sole evidence relied upon by Revenue is statement of Birbal Singh. Thus, it is imperative that no reliance on the said statement can be placed as no cross-examination has been granted. Revenue has alleged that appellant have manufactured about 8.11 lakhs kgs. of dyed yarn - In the absence of cross-examination of the officer, it would be incorrect to rely on the said report to counter the claim of the appellant that their production capacity is much lower than the alleged production. It was also alleged that All these dyed yarn is manufactured by M/S DTPL, Tarapur and supplied to M/s. DPPL, Silvassa - Held that: - there is barely any evidence to support the allegation that M/s DPPL, Silvassa, had supplied this quantity of yarn to M/s DPPL, Tarapur, and received back the dyed yarn from DTPL, Tarapur - Revenue has relied upon the statement of Security Personnel who had joined barely 8 days before his statement was recorded. Revenue is seeking to rely on his statement for period long before he had joined the organization. In these circumstances the statement of the security supervisor cannot be relied. Revenue has failed to substantiate the allegations on numerous counts - Demand has to be set aside - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1020
  CENVAT credit - inputs/capital goods - MS. Angles, HR Coils, HR Plates, CI Casting etc - Held that: - the Chartered Engineer, who is expert in the field, has clearly stated that the items procured by appellant (in this appeal) were used for supporting structure of capital goods and also for pollution control equipment - The said Chartered Engineer's certificate being not controverted by any evidence - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1019
  CENVAT Credit - transportation of finished goods from the factory premises - Held that: - Tribunal in respondent own case Tatyasaheb Kore Warana S.S.K. Ltd. Versus C.E.E., Kolhapur [2015 (7) TMI 506 - CESTAT MUMBAI] has held that Appellant is entitled to take CENVAT credit on outward transportation service in the case of transportation of levy sugar upto the railway station and transportation of export sugar upto the port - credit allowed - decided against Revenue.

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• 2018 (4) TMI 1018
  Refund claim - duty paid under protest - Held that: - Protest in any form to the authorities is to be accepted unless until it is explicitly rejected - In the absence of any such correspondent from Revenue, the finding of the lower authorities that this matter cannot be considered as an intimation for payment of duty under protest seems to be belated and mis-directed, as during the relevant period duty liability on clearance of goods as per provisions of Central Excise Rules, 2002 for the month needs to be discharged within five days of succeeding month, In this case appellant had lodged protest of duty payment on 04.04.2016. Appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1017
  CENVAT credit - capital goods - modular partitions, flame proof partitions, Quartz plate, verticals panel, non-walkable ceiling, PCQI door etc. - Held that: - Similar issue came up before the Tribunal in the case of Commissioner of Central Excise v, Rane Brake Lining Ltd. [2011 (2) TMI 415 - CESTAT, CHENNAI], where Tribunal held in favor of the assessee therein where similar items of pre-fabricated structures were used for fabrication of cold room - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1016
  Refund of accumulated CENVAT credit - outward transportation of finished goods upto 31.03.2008 - rejection on the ground that the appellant being not able to produce sales invoice or purchase order - validity of SCN - Held that: - Revenue authorities were aware that the refund of 89,965/- is in respect of service tax paid on outward transportation charges. It is also on record that the appellant had produced the original GAR-7 challans under which service tax was paid by them before the Superintendent of Central Excise for verification. The finding recorded by the lower authorities that the appellant has not produced the sales invoice and purchase order to show that the service tax liability has been paid in respect of outward transportation does not hold good as the show-cause notice itself proceed on a premise that the appellant had availed ineligible CENVAT Credit on the service tax paid on GTA service. Appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1015
  Clandestine manufacture and removal - parallel invoices - demand based on electricity consumption - Held that: - the individual liability of duty alleged in the SCN and proposed to be recovered individually from M/s Super and M/s Omega has been arrived at on the basis of presumption that the clandestine activity was in the ratio of the consumption of electricity - Such a proposition is absurd and the quantification of individual liability is totally presumptive in nature. The SCN is totally presumptive - reliance placed on the ruling of Hon’ble Supreme Court in the case of Commissioner of Central Excise, Bangalore Vs. Brindavan Beverages Pvt. Ltd. [2007 (6) TMI 4 - SUPREME COURT OF INDIA], where it was held that As no sufficient material much less any material has been placed on record to substantiate the stand of the appellant, the conclusions of the Commissioner as affirmed by the CEGAT cannot be faulted. Appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1014
  CENVAT credit - Diesel Hydraulic Shunting Locomotive - time limitation - Held that: - The appellant have availed the credit in the month of June 2013 and thereafter they intimated to the department regarding the availment of credit on locomotive vide their letter dt. 6.8.2013 thereafter some correspondence were taken place between the department and the appellant - it is clear that they have not suppressed any fact as regard availment of credit of the locomotive therefore department should have issued the show cause notice within normal period of 1 year which the department failed to do so - extended period not invokable - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1013
  Clearance to 100% EOU - demand of AED (Surcharge) and Education Cess - clearance of waste under N/N. 22/2003-CE dated 31.03.2003 - time limitation - Held that: - appellants had cleared the goods to EOU with full knowledge of the department and they have intimated the facts of such clearances also - in a situation which involved clearance of goods to EOU under CT-3 Certificates, Hon’ble Supreme Court, in the Blue Star Ltd., [2015 (3) TMI 628 - SUPREME COURT], has upheld the Tribunal’s view that the demand hit by limitation - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1012
  Rectification of mistake - case of appellant is that there has been error apparent on the face of record in the Final Order, since the Tribunal has not considered the contentions of the appellant with regard to the necessity for re-quantification of the duty demand - Held that: - The appeal was of the year 2007 and the same was taken up for disposal only on 18.01.2017. The appellant had enough time to be ready with necessary documents and details. The Tribunal in the impugned order has considered the quantification of duty demand also. Further, the contentions put forward by the appellant in this ROM touches the main issue under consideration in the appeal - These are not errors apparent on the face of record. In order to find out what is the error that is being pointed out by the appellant requires long arguments and in fact, the appeal itself will have to be reheard as a whole. The application for ROM cannot be used as a guise for rehearing an appeal - ROM Application dismissed.

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• CST, VAT & Sales Tax

• 2018 (4) TMI 1011
  Revision of assessment order - whether the estimation of first sales made on the sales of cotton yarn is proper or not? - penalty u/s 12(3)(b) - Held that: - In Indira Industries Vs. State of Tamil Nadu, [2014 (5) TMI 305 - MADRAS HIGH COURT], this Court considered a question, as to whether, levy of penalty under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959, was justifiable, particularly, when there was no suppression pointed out by the Revenue, that the Claim of the assessee related only to concessional rate of tax - This Court held that When the turnover assessed under the assessment order is drawn from the books of accounts and no reference to any specific concealment of the turnover in the accounts made, the question of invoking Section 12(3)(b) would not arise. Tax case revision petition is dismissed.

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• 2018 (4) TMI 1010
  Permission to submit revised returns - grievance voiced by the petitioner in the writ petition concerns the inaction on the part of the first respondent in taking a decision on Exts.P2 and P8 applications - Held that: - in terms of Circular No.14 of 2017, the Commissioner of the State Goods and Services Taxes Department has clarified the issues relating to the right of the assessees under the Act to submit revised returns - petition is disposed of directing the first respondent to take a decision on Exts.P2 and P8 applications in the light of the Circular referred.

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