TMI Tax Updates - e-Newsletter
April 28, 2018

Case Laws in this Newsletter:

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

News

1. GST Revenue Collections for the Financial Year 2017-18

2. RBI Reference Rate for US $

3. Recording of Unique Identity Number of Foreign Diplomatic Missions / UN Organizations on invoices while making supplies

Notifications

Customs

1. 34/2018 - dated 27-4-2018 - Cus (NT)

Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Sliver- Reg.

GST - States

2. ERTS(T) 84/2017/20 - dated 20-4-2018 - Meghalaya SGST

Implement the e-waybill for intrastate movement of goods wef 25/04/2018

3. ERTS(T) 79/2017/563 - dated 28-3-2018 - Meghalaya SGST

Extension of date for submitting the statement in FORM GST TRAN-2 under rule 117(4)(b)(iii) of the Meghalaya Goods and Service Tax Rules, 2017

4. ERTS(T) 79/2017/562 - dated 28-3-2018 - Meghalaya SGST

Specify any specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations.

5. ERTS(T) 79/2017/561 - dated 28-3-2018 - Meghalaya SGST

Extends the time limit for furnishing the return by an Input Service Distributor in FORM GSTR-6

6. ERTS(T) 79/2017/560 - dated 28-3-2018 - Meghalaya SGST

Extends the time limit for furnishing the details of outward supplies in FORM GSTR-1

7. ERTS(T) 79/2017/559 - dated 28-3-2018 - Meghalaya SGST

To prescribe the due dates for furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover of more than ₹ 1.5 crores.

8. CT/LEG/GST-NT/12/17/153-006/2018 - dated 19-4-2018 - Nagaland SGST

Amend Notification on Intra-State e-waybill effective date.

9. CT/LEG/GST-NT/12/17/152-005/2018 - dated 28-3-2018 - Nagaland SGST

Extends the time limit for furnishing the return by an Input Service Distributor in FORM GSTR-6.

10. CT/LEG/GST-NT/12/17/151-004/2018 - dated 28-3-2018 - Nagaland SGST

Seeks to prescribe the due date for quarterly furnishing of FORM GSTR-1 for those taxpayers with aggrgate turnover more than 1.5 crore.

11. FIN/REV-3/GST/1/08(Pt-1)/098 - dated 23-3-2018 - Nagaland SGST

Notifies 1st April, 2018 as the date from which E-Way Bill Rules shall come into force.

12. FIN/REV-3/GST/1/08(Pt-1)/097 - dated 23-3-2018 - Nagaland SGST

Rescinds the Notification No. F.NO.FIN/REV-3/GST/1/08 (Pt-1)/46 dated the 25th January, 2018,

13. FIN/REV-3/GST/1/08(Pt-1)/096 - dated 23-3-2018 - Nagaland SGST

Amendment in the Notification of the Government of Nagaland, Finance Department (Revenue Branch), F.NO.FIN/REV-3/GST/1/08(Pt-1) “K”, dated the 30th June, 2017.

14. 13531-FIN-CT1-TAX-0034/2017-S.R.O. No. 149/2018 - dated 18-4-2018 - Orissa SGST

The Odisha Goods and Services Tax (Fourth Amendment) Rules, 2018.

15. 12982-FIN-CT2-ESTT-0003/2018/F - dated 12-4-2018 - Orissa SGST

New nomenclature for the offices of the State Commercial Tax (CT) Organization.

16. F.No. 3240/CTD/GST/2018/3 - dated 24-4-2018 - Puducherry SGST

Rescinds the Notification issued vide F. No.3240/CTD/GST/2018/2 dated the 29th March, 2018.

17. G.O. Ms. No. 26 - dated 23-4-2018 - Puducherry SGST

The Puducherry Goods and Services Tax (Fourth Amendment) Rules, 2018.

Circulars / Instructions / Orders

GST - States

1. 6509/CT., Pol-56/3/2018/Policy - dated 25-4-2018

Registration of Drawing & Disbursing Officers as TDS Authority under the GST Act

2. 6173/CT - dated 19-4-2018

Registration of TDS Authorities under GST Act

3. 6133/CT., Pol-56/4/2018/Policy - dated 18-4-2018

Procedure For Interception of Conveyances For inspection Of Goods In movement , and Detention , Release and Confiscation Of Such Goods And Conveyances.

DGFT

4. 01/2015-20 - dated 26-4-2018

Onetime condonation under the EPCG Scheme – Extension till 30.09.2018

Highlights / Catch Notes

GST

• GST Collections Surpass Expectations for 2017-18, Showcasing Strong Compliance and Boosting Economic Stability

  News : GST Revenue Collections for the Financial Year 2017-18
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Income Tax

• Depreciation Allowed on Agmark Charges as Intangible Asset for Tax Purposes.

  Case-Laws - AT : Depreciation on Agmark Charges [intangible asset] - Agmark is also a kind of brand recognition therefore the same is of the nature of intangible asset on which the depreciation is to be allowed. - AT
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• Indo-Mauritius DTAA: Article 8 Benefits Denied if Enterprise Managed from Third State, Affecting PE Status in India.

  Case-Laws - AT : Fixed place PE in India - Indo- Mauritius DTAA - if the effective management of an enterprise is not in one of the contracting state, but is situated in the third state, the benefit of article-8, cannot be extended. - AT
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• Tax Assessment Reopening Invalid: Unsigned Order Sheet Leads to Quashed Notice u/s 148, Annulled Assessment Order.

  Case-Laws - AT : Reopening of assessment - A.O. typed the reasons but not signed the order sheet - defective notice - the notice issued u/s 148 is bad in law accordingly same is quashed and the consequent assessment order made u/s 147 r.w.s. 143 (3) is annulled - AT
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• Leased Land Sale Income Classified as Long-Term Capital Gains, Subject to Section 45(1) Tax Provisions.

  Case-Laws - AT : Income from sale of leased out land - Long term capital gain or income from other sources - consideration received for relinquishing the rights in property attracted provisions of section 45(1) making it liable to capital gains tax. - AT
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Customs

• Court Denies Further Depreciation on Imported Hummer Under Transfer of Residence Rules, Citing 70% Maximum Limit.

  Case-Laws - AT : Valuation - import of used Hummer car under Transfer of Residence Rules - Valuation - import of used Hummer car under Transfer of Residence Rules - the plea is not acceptable as maximum allowable depreciation of 70% has been given, which is as per the Board Circular - AT
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• High Court Hasn't Stayed Tribunal's 2005 Refund Order; Revenue Must Comply After 13 Years.

  Case-Laws - AT : Refund - Implementation of final dated 3-6-2005 - even after lapse of 13 years from the date of this Tribunal order, High court has not granted any stay to the Revenue, therefore the order of this Tribunal is enforceable. - AT
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DGFT

• EPCG Scheme Condonation Extended to September 30, 2018, Allowing More Time for Compliance Without Penalties.

  Circulars : Onetime condonation under the EPCG Scheme – Extension till 30.09.2018 - Public Notice
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Corporate Law

• Only Registered Entities Can Use "Architect" Title, But Others May Offer Services Without It Under The Act.

  Case-Laws - HC : Scope of Practice of the Profession of Architecture - restriction on formation of ‘company’ or ‘Limited Liability Partnership’ (LLP) - the Act only prohibits the use of the title and style of 'architect' by unregistered natural persons or juristic entities. It does not prevent unregistered persons, including juristic entities, from rendering architectural services or mentioning the same as one of their objectives in their MOA. - HC
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Indian Laws

• Foreign Diplomatic Missions in India Must Use Unique Identity Number on Invoices for Compliance.

  News : Recording of Unique Identity Number of Foreign Diplomatic Missions / UN Organizations on invoices while making supplies
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PMLA

• Provisional attachment under PMLA may deter banks from reporting, as their securities could be seen as crime proceeds.

  Case-Laws - AT : Provisional attachment under PMLA Act - If the security of the Bank, is treated as proceeds of crime and is confiscated under the Act, in future, no Bank in such circumstances would make a complaint to the authorities. - AT
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• Section 160 exempts women from personal appearance in PMLA cases, but shouldn't hinder investigation effectiveness.

  Case-Laws - HC : Offence under PMLA Act - a woman is exempted from personal appearance u/s 160 of the Code of Criminal Procedure - the spirit of Section 160 cannot be interpreted so as to nullify or paralise an effective investigation process of cases under PMLA. - HC
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Service Tax

• ULIP Surrender Charges Exempt from Service Tax; Not Classified as Taxable Fund Management Service.

  Case-Laws - AT : Levy of service tax on surrender charges against ULIP - The surrender charges are not part of taxable service of management of funds. Rather it is in the nature of penalty or liquidated damages which is not a service and hence cannot be made liable for tax during the period involved - AT
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• Service tax demand based on TDS certificates deemed unsustainable; appellant exempt due to income below Rs. 10 lakhs threshold.

  Case-Laws - AT : Demand of service tax on the basis of TDS certificate/ return - Form No. 26AS - the demand of service tax is not sustainable against the appellant, as appellant falls within exemption limit of ₹ 10 lakhs - AT
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• Tribunal Rules No Service Tax on Advance Payments for Equipment Supply; Demand for Tax Set Aside.

  Case-Laws - AT : Service tax liability on amount received in advance - receipt of advance against the supply or goods or services - Tribunal found that advance is against the supply of various equipments and plant and machinery and not for rending services - Demand set aside.
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• Examining Service Tax Implications: Are These Agreements Consulting Engineering Services or Another Category?

  Case-Laws - AT : Classification of services - Consulting Engineering Service or otherwise - all these agreements talk about the foreign companies as “licensor” itself is revealing. In a typical agreement for consultancy service, there will be no licensor or licensee with transfer of licensed process technology or proprietary technical information. - AT
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• Transfer of Sugar Export Rights Classified as Goods Sale, Not Service; Service Tax Not Applicable.

  Case-Laws - AT : Nature of activity - Service or sale - transfer of "rights and privilege of export of sugar quota" - The transaction in question regarding sale of rights and privilege of export of sugar quota is sale of goods and no service is involved - AT
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Central Excise

• Sodium Di-chloroisocyanurate Tablets in Measured Doses Classified Under Heading 3808 for Retail Packaging.

  Case-Laws - AT : Classification of SDIC tablets (Sodium di-chloroisocynurate) - such packaging is meant for retail sale and individual tablets are in measured doses - the goods are packed in retail packing, and merits classification under heading 3808 - AT
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VAT

• Dealers Must Prove Stock Transfers Under CST Form F Are Genuine and Not Sales to Avoid Tax Liability.

  Case-Laws - HC : Genuineness of Stock transfer against Form F of CST - the initial burden of proof is on the dealer to show that the movement has occasioned by reason of transfer of such goods which is otherwise than by reason of sale. - HC
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Case Laws:

• Income Tax

• 2018 (4) TMI 1432
  Reopening assessment - validity of notice - formation of the belief by the Assessing Officer that income chargeable to tax had escaped assessment - Held that:- SLP dismissed. HC order confirmed [2017 (9) TMI 743 - GUJARAT HIGH COURT] HC has correctly held that Tribunal has evaluated the evidence on record in minutest detail as if each limb of the Assessing Officer's reasons recorded for issuing notice of reopening was in the nature of an addition made in the order of assessment which had either to be upheld or reversed, which was simply impermissible. - order of ITAT set aside. - Decided in favour of revenue

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• 2018 (4) TMI 1431
  Validity of re-assessment proceedings initiated against a dead person after his death - liability of the legal representative - Held that:- The petition was filed on 14.10.2015 against an interim order. Since then endeavours to call upon the petitioner directing to cure the defects have not been succeeded. The petition is dismissed for non-prosecution. HC order confirmed [2015 (10) TMI 749 - PUNJAB & HARYANA HIGH COURT] as held notice under Section 148 of the Act was issued to the petitioner as legal representative of her deceased husband Kulwinder Singh Johal and not as an assessee in her individual capacity for the assessment year 2008-09. It was not in controversy that Kulwinder Singh Johal had died on 25.7.2014. Thus, the notice issued to the petitioner as legal representative of her deceased husband, Kulwinder Singh Johal is legal and valid. - Decided against assessee.

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• 2018 (4) TMI 1430
  Penalty u/s 271(1)(c) - non specification of charge - defective notice - Held that:- AO is required to specify which limb of Section 271 (1)(c) of the Act, the penalty proceedings had been initiated, i.e., whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. From the perusal of the notice u/s.274 r.w.s. 271 of the Act in the present appeal, it is very much obvious that the Assessing Officer has not specified the same. The notice in fact is in standard pro forma without the irrelevant clauses therein being struck off. This indicates non application of mind on the part of the Assessing Officer while issuing the penalty notice. See CIT vs. Manjunatha Cotton & Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] - Decided in favour of assessee

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• 2018 (4) TMI 1429
  Penalty u/s 271(1)(c) - cash found during the search and additional income declared in the revised return - notice issued against deceased - defective notice - Held that:- The assessee has himself declared income into the return of income before issuing the notice u/s. 153A. Therefore, there is no concealment of any income. Even the Assessing Officer has not made addition on this score. Therefore, the penalty cannot be levied. In the penalty notice dated 29.12.2009, it has not been mentioned as to for which limb of section 271(1)(c), the notice was issued. The penalty order has been passed without assuming proper jurisdiction as per provisions of the Income-tax Act, in the name of legal heirs. All the notices were issued in the name of late MV Rao whereas the information regarding his death was submitted on 14.10.20111. No material on record before us to show that any notice for penalty was issued to the legal heir of late M.V. Rao before imposing penalty against such legal heir. On this aspect of the case also, we do not find any justification to sustain the penalty imposed against the legal heir of late M.V. Rao - Decided in favour of assessee.

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• 2018 (4) TMI 1428
  Revision 263 - deemed dividend addition u/s 2(22)(e) - Held that:- The assessee had furnished the information vide his replies dt. 25/03/2015, 22/01/2015, 11/02/2015. So the facts that SVPL is a related party and that it has given loans to the assessee was enquired into by the Assessing Officer. It cannot be said that there was no enquiries or verification made by the Assessing Officer on this issue of loan. Inadequate enquiries cannot be a basis for invoking powers u/s 263 of the Act, by the ld. Pr. CIT. At the same time, it is a fact that the ld. Assessing Officer has not recorded that he had examined the transaction from the angle of Section 2(22)(e) of the Act. When the assessee has submitted that what was given was an Inter Corporate Loan and that it carried interest and that it was not a gratuitous loan and SVPL is a NBFC and that substantial part of its business, in fact more than 90 per cent of its business is lending money i.e. giving loan and advances and when the judgement of the Hon’ble Jurisdictional High Court and the Tribunals which had laid down propositions of law on this issues are placed before the ld. Pr. CIT, to come to a conclusion, contrary to these judgments cannot be countenanced. The submissions made by the assessee either on facts or on law has not been controverted by the ld. Pr. CIT. The ld. Pr. CIT is bound by the proposition of law laid down by the Hon’ble Jurisdictional High Court. Ignoring the same makes the order bad in law.- CIT as bound to conduct enquiry and verification on its own and give his findings in facts and law. This was not done. - Decided in favour of assessee

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• 2018 (4) TMI 1427
  Deduction u/s 54F - denial of deduction for want of filing the revised return of income - Held that:- Neither the AO nor the ld. CIT (A) has examined the claim of the assessee on merits but rejected the same in limini for want of filing the revised return of income. It is pertinent to note that the claim under section 54F was not made by the assessee against the income which was offered to tax in the return of income so that the condition of filing the revised return can be attracted. There is no embargo in the jurisdiction and powers of the CIT (A) to entertain a fresh claim if the relevant facts for adjudication of the said claim are already on record. In the case in hand, there is no denial that the assessee filed all the relevant documents when the assessee has filed the revised computation of income claiming deduction under section 54F and the AO without considering the claim on merits has rejected on technical ground. Therefore, in the facts and circumstances of the case, we are of the considered view that the ld. CIT (A) is not justified in rejecting the claim of the assessee - set aside this issue to the record of ld. CIT (A) for re-considering the same on merits - Decided in favour of assessee for statistical purposes.

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• 2018 (4) TMI 1426
  Addition u/s 40(a)(ia) - delay in depositing the tds - assessee had made the payment between the period 01.04.2006 to 28.02.2007 and had also deducted TDS on this amount, however, the TDS so deducted had been deposited to the Government account on 05.04.2007 - Held that:- Amendment in section 40(a)(ia) by Finance Act, 2010 would apply retrospectivelyIn view of the above facts and judicial finding we observed that if tax deducted is deposited by assessee before due date of filing return of income, same is required to be given credit in very same assessment year. See case of Standard Buildcon [2014 (1) TMI 1488 - GUJARAT HIGH COURT] - Decided in favour of the assessee. Disallowance equivalent to 20% of amount paid in cash to the transporters u/s 40A(3) - Held that:- We find from the facts on record that the assessee has failed to establish any exceptional or unavoidable circumstances for making payment in cash instead cross cheque. The assessee is not covered by the exception provided under rule 6DD(j) of the act. The assessee has not placed any material which shows that there were any exigencies which warranted payment by non-account payee cheques. - Decided against assessee

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• 2018 (4) TMI 1425
  Nature of income - income from share transactions - capital gain or Business income - Held that:- Assessee cannot be perceived as a trader in shares per se, ostensibly when the Long Term Capital Gains declared by the assessee on purchase and sale of shares has been accepted as such. The assessee is not carrying out any other business activity so as to construe any business motive in carrying out the transactions of purchase and sale of shares. As before the Assessing Officer, assessee had filed written submissions, which have been reproduced in para 3 of the assessment order. In terms of submissions, assessee pointed out that she was a regular investor in shares and securities, and such investments were made out of her own funds with the intention of not only earning dividend, but also seeking capital appreciation in the long run. So far as the Short Term Capital Gains was concerned, assessee specifically pointed out that such transactions were undertaken keeping in view the market volatility and the specific situation of investee-companies, but otherwise the intention has been to make long term investments in shares and securities. All these aspects have been merely brushed aside by the Assessing Officer, an action which, in our view, has been rightly negated by the CIT(A). - Decided against revenue

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• 2018 (4) TMI 1424
  Validity of the impugned order u/s. 154 - AO power to make adjustment u/s.234E as per amended provisions of section 200A vide impugned Intimation u/s.154 - Held that:- High Court of Gujarat in the case of Rajesh Kourani vs. Union of India (2017 (7) TMI 458 - GUJARAT HIGH COURT) held that section 234E is a charging provision creating a charge for levy of fess for certain default in filing statements and also held that the fees prescribed u/s. 234E could be levied even without a regulatory provision being found in section 200A for computation of fees. The hon’ble jurisdictional high court of Gujarat in the case cited supra has held that when section 234E has already created a charge for levying fees, it would thereafter not have been necessary to have yet another provision creating the same charge. Even in absence of section 200A with introduction of section 234E, it was always open for the revenue to demand and collect the fees for late filing of the statement. The Hon’ble High Court has also held that section 234E is a charging provision and it was always open for the revenue to charge fees in terms of section 234E of the act even prior to 1st June, 2015. We are not inclined with the contention of the ld. counsel that CPC was not authorized to levy u/s. 234E of the act, we are also not affirmed with his view that the order passed u/s. 154 was bad in law. - Decided against assessee.

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• 2018 (4) TMI 1423
  Denial of exemption u/s 11 - activities of the appellant are commercial in nature - Held that:- As decided in assessee's own case for Assessment Year 2011-12 [2018 (4) TMI 1293 - ITAT MUMBAI] the holding of the seminar at Bangalore and the other activities of the assessee trust, viz. receipt of subscriptions from the members, sale of publications, Fafai Journal, holding of workshops & conferences, directory receipts were incidental to and in furtherance of the main object of securing the advancement and development of the Fragrance and Flavours industry in India No agreement with the view of the lower authorities that the assessee was involved in carrying of commercial activities. We thus being of the view that as the assessee is carrying on its charitable activities, which are in the nature of advancement of the object of general public utility and is not carrying on any commercial activity, therefore, uphold the entitlement of the assessee towards claim of exemption under Sec. 11 of the Act. - Decided in favour of assessee.

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• 2018 (4) TMI 1422
  Unabsorbed depreciation carry forward beyond eight years as per section 32(2) - Held that:- Carry forward of unabsorbed depreciation concerning impugned assessment years could be set off in subsequent years without any set time limit. See case of Gujarat Lease Finance Ltd.[2017 (5) TMI 1555 - ITAT AHMEDABAD] Depreciation on Agmark Charges [intangible asset] - Held that:- Agmark is a kind of brand which certify the quality benchmark for all agricultural products produced in India. Agmark certification process helps to make certified all the agricultural products to be available in the market. India exports its large number of agricultural products and commodities which are required to be certified under AGMARK Act as per the World Trade Organization (WTO). It is provided to those agricultural products that have passed through quality tests as mark of reliable products. Corporate intellectual property, including items such as patents, trademarks, copyrights and business methodologies, are intangible assets, as are goodwill and brand recognition. In view of the above we consider that Agmark is also a kind of brand recognition therefore the same is of the nature of intangible asset on which the depreciation is to be allowed. Reopening of assessment u/s 147 - Held that:- We are inclined with the findings of the Ld.CIT(A) that the assessing officer has carried out the fresh assessment as per the direction of Hon’ble High Court, therefore, we do not find any error in the decision of the Ld.CIT(A) on this issue. Accordingly, this ground of appeal of the assessee is dismissed.

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• 2018 (4) TMI 1421
  Fixed place PE in India - Effective management of the assessee - Penalty levied u/s 271(1)(c) - Article-8 of Indo- Mauritius DTAA non applicability - Whether Freight Connection (India) Pvt. Ltd. would constitute agency PE of the assessee? - Held that:- the effective management can be only in between two contracting state is not correct and as per the facts narrated above, we are of the considered view that the effective management of the assessee is neither in Mauritius nor in India and we are in agreement with the views of Mr. Klaus Vogel, who is an eminent authority of International Taxation, that if the effective management of an enterprise is not in one of the contracting state, but is situated in the third state, the benefit of article-8, cannot be extended. The facts, being identical, following the decision of the coordinate bench rendered in the case of Bay lines (Mauritius)(2018 (2) TMI 1524 - ITAT MUMBAI) we hold that the assessee does not have Fixed place PE in India. The assessee does not have PE in India and its income being business income, it cannot be brought to tax in India. Accordingly we set aside the orders passed by Ld CIT(A) on this issue in all the years under consideration. Penalty levied u/s 271(1)(c) - CIT(A) deleted the penalty holding that the issue relating to taxability of income is debatable in nature. Since we have held that the assessee is not liable for taxation in India for its business profits, the penalty orders passed by the AO in all the five years would not survive. Accordingly, we quash the impugned penalty orders passed by the tax authorities in all the five years.

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• 2018 (4) TMI 1420
  Penalty levied u/s. 271(1)(c) - defective notice - non specification of charge - non striking off one of the limbs - Held that:- The notice issued by the Assessing Officer u/s. 274 r.w.s. 271(1)(c) of the Act is on account of non-application of mind and therefore on this account itself the penalty imposed u/s.271(1)(c) is liable to be deleted. Thus, we direct the Assessing Officer to delete the penalty levied u/s.271(1)(c) of the Act. See Meherjee Cassinath Holdings v. ACIT [2017 (5) TMI 904 - ITAT MUMBAI] - Decided in favour of assessee

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• 2018 (4) TMI 1419
  Unexplained investment - Held that:- It is also accepted fact that when the assessee has obtained such a huge investments in the company and if the investors companies directors are not examined, it is apparent what kind of investment it is. We fully agree with the arguments of the DR. On production of all details of the investor companies, directors of the investor companies and thereafter examining them, AO will decide the issue afresh. AO is directed to minutely examine these investments in the assessee company in the light of our observations made earlier in this order. In case if after giving the notice to the assessee company, if assessee does not furnish the requisite details and fail to produce the directors of the investor companies along with the books of those companies, AO may take view in accordance with the law. In the result we do not agree with the order of the ld CIT (A) - In the result ground No. 1 – 4 of the appeal of the revenue is allowed accordingly. Addition u/s 68 - Held that:- We direct the assessee to produce relevant details with respect to the identity, creditworthiness of the investor companies as well as the genuineness of the transaction. In the peculiar circumstances and the facts, and where the post-search enquiries also prove otherwise, the higher onus is cast upon the assessee and therefore The assessee is directed to discharge its onus by producing the relevant details as well as the books of accounts of the investor companies along with the directors of those companies before the assessing officer for the examination. They need to explain that how despite making such a huge investments it is not shown in the balance sheet as investments. AO may examine the directors of the investor company along with the books of account and respective bank statements and balance sheets of the investor company and then decide the issue in accordance with the law

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• 2018 (4) TMI 1418
  Reopening of assessment - A.O. typed the reasons but not signed the order sheet - defective notice - Held that:- On verification of the assessment record, it is noticed that the A.O. typed the reasons but not signed the order sheet, thus there are no reasons recorded for reopening of assessment as required u/s 148 of the Act. The A.O. neither complied with the statutory requirement of recording the reasons for issue of notice nor complied with the law laid down in case of GKN Driveshafts (India) Limited Vs. ITO [2002 (11) TMI 7 - SUPREME Court]. Therefore, the notice issued u/s 148 is bad in law accordingly same is quashed and the consequent assessment order made u/s 147 r.w.s. 143 (3) is annulled and the appeal of the assessee is allowed.

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• 2018 (4) TMI 1417
  Additions made u/s 68 on account of share capital - Held that:- We find the Assessing Officer did not issue summons u/s 131 despite clearly being asked by the company at the very initial stage and only notices u/s 133(6) were issued to the investing companies which were complied by some of these companies. It is submitted by the assessee that mere non-production of the director could not be a ground for making addition when all the evidences were filed and if there is no allegation/adverse material brought on record contrary to evidences filed. Admittedly the AO has not conducted the preliminarily enquiry such as verification of the PAN Number from the data bank of the Department and not verified from the website of the Ministry of Corporate Affairs which he should have done in this case at the initial stage and since the CIT(A) has wrongly interpreted the financials of the investor companies, therefore, considering the totality of the facts of the case and in the interest of justice, we restore the issue to the file of the AO with a direction to verify the various documents filed before him and decide the issue in the light of our above observation. While doing so, he should keep in mind the decision of the Hon’ble Delhi High Court in the case of Victor Electrode (2010 (5) TMI 62 - DELHI HIGH COURT ). - Appeal filed by the assessee for statistical purposes

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• 2018 (4) TMI 1416
  Validity of assessment - no notice served u/s 143(2) within the period of limitation - Held that:- As theory of service through affixture was an afterthought and manipulated by the A.O. There was no evidence on record to prove that assessee has been served with the notice under section 143(2) within the period of limitation and the alleged service of the notice through affixture is invalid and void abinitio itself. Since no notice under section 143(2) have been served upon the assessee within the statutory period, therefore, the same is invalid, consequently, the assessment order gets vitiated and is null and void. - Decided in favour of assessee. Disallowance of deduction claimed u/s 10B - proof of manufacturing activities undertaken by assessee - Held that:- The assessee produced sufficient documentary evidences before Ld. CIT(A) to prove that it manufactures hot mix masala and exports them and claimed exemption under section 10B of the I.T. Act. The claim of assessee is supported by documentary evidences as well as excise records checked by the Excise Authorities. The A.O. in the remand report admitted that the documents submitted by the assessee before Ld. CIT(A) were evident that manufacturing was being done at the premises of the assessee. Admission of the A.O. that assessee is manufacturing hot mix masala and thereafter, it is exported by assessee, supported by documents, the Ld. CIT(A) correctly deleted the addition. - Decided in favour of assessee. Addition on waste of 46401 kg not proved - Held that:- The excise records have been checked and verified by the Excise Authorities. CIT(A) found that assessee has maintained the in-put stock register and stock register of the finished goods. Therefore, there were no justification to disbelieve the wastage claimed by the assessee. A.O. did not reject the books of account of the assessee and has not pointed out any of the specific defects in the books of account and records maintained by assessee. The assessee explained that there is a natural loss in the process of production of hot mix masala which is supported by laboratory report. Also there is no evidence on record to prove any sales made by assessee outside the books of account.- Decided in favour of assessee.

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• 2018 (4) TMI 1415
  Income from sale of land - Long term capital gain or income from other sources - land leased out - Held that:- By the lease deed dated 11.07.1972 lease of the land in question was granted to SSL. The contention of the A.O. that transfer of land for such a long period is nothing but actual transfer of the said land cannot be accepted because by giving of lease, the said plot of land, the assessee has not lost its ownership right over the said plot of land. In our considered opinion, the land which had been leased out to SSL did not seize to belong to the assessee. The ownership remained with the assessee. When the Official Liquidator appointed by the Hon’ble High Court of Gujarat sold the land held by SSL on lease, the assessee filed application before the Hon’ble High Court for recovery of possession of land in question. The Hon’ble High Court of Gujarat held that lease right are intangible asset and therefore what Official Liquidator has transferred was the lease right held by the lessee company. The Official Liquidator has sold the land on “ as is where is and whatever there is basis”. The law is very clear on this issue- “no one can transfer a better title then what it has”. The purchaser would have got a lease held right over the said plot of land and to get the ownership right 3.11 crores was paid to the assessee and vide agreement dated 04.09.2009 deed of confirmation and release was executed for release of ownership rights of the land under reference. J.K. Kashyap [2008 (3) TMI 10 - HIGH COURT OF DELHI] has decided a similar issue holding that consideration received for relinquishing the rights in property attracted provisions of section 45(1) making it liable to capital gains tax. Addition for scheme for gratuity - Held that:- From a bare reading of Section 36(1)(v) of the Act, it is manifest that the real intention behind the provision is that the employer should not have any control over the funds of the irrevocable trust created exclusively for the benefit of the employees – deduction allowed since the conditions stipulated in Section 36(1)(v) of the Act were satisfied. See Textool Company Ltd case [2009 (9) TMI 66 - SUPREME COURT]

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• 2018 (4) TMI 1414
  Reopening of assessment - Held that:- Before the CIT-A there was no representation or explanation on behalf of the assessee regarding the claim of the assessee and the grounds of appeal raised before him. There was no adequate opportunity of hearing to assessee to substantiate its claim properly. Therefore, taking into consideration the submissions of the assessee, facts and circumstances of the case and in the interest of natural justice, we deem it fit and proper to remand the matter to the file of the CIT-A to decide the issue in hand afresh by giving the assessee adequate opportunity of hearing. The assessee is also directed not to seek any adjournment. Appeal of the assessee is allowed for statistical purposes.

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• Customs

• 2018 (4) TMI 1438
  Maintainability of petition - it is submitted that the importer has not submitted his representation against the reassessment for enabling the proper officer to pass a speaking order - Held that: - a direction is issued to the petitioner to make a representation to the proper officer on the reassessment made along with the supporting documents and records, within a period of two weeks from the date of receipt of a copy of this order. On such receipt of such representation, the proper officer shall pass orders, within 15 days as specified under Section 17(5) of the Act recording reasons therefor. The order in appeal has not reached finality. It is under appeal before the CESTAT, Madras. In such circumstances, it is not proper to direct the authorities to follow the order, which is under challenge. Petition merits no consideration and is dismissed.

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• 2018 (4) TMI 1437
  Jurisdiction - validity of SCN - it was contended that petitioner was not at all involved in the alleged offence and therefore, the notice was issued on a wrong person - Confiscation - Held that: - whether a notice issued was on right person or wrong person, is a factual issue of the matter, which has to be necessarily considered and decided by the authority, who issued the said notice. Therefore, it does not mean that the Authority, who issued the notice is lacking jurisdiction. The petitioner is not disputing the power vested on the second respondent under the relevant statute. Therefore, he is not justified in his contention on the jurisdictional issue, since all those contentions raised are fully factual aspect of the matter, that too from the point of view of the petitioner, which cannot decide the jurisdiction of the second respondent. There is no jurisdictional error, warranting interference with the impugned show cause notice by entertaining this writ petition - petition dismissed.

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• 2018 (4) TMI 1436
  Valuation - import of used Hummer car under Transfer of Residence Rules - deduction of depreciation from the value - The appellant’s contention is that trade discount, allowance for VAT refund and for inland haulage charges should also be deducted from the price - Held that: - On reading of the Circular F.N. 3/23/62-Cus-VI dt. 21.01.1964, it is found that the trade discount is meant for the motor cars, which are directly imported from a foreign country by passengers, diplomats and foreign nations. It is evident that it is meant for direct shipment of new cars - As the appellant in this case has brought a used car, the Board Circular of 1964 is not applicable for such cars. VAT refund in the foreign country - Held that: - the plea is not acceptable as maximum allowable depreciation of 70% has been given, which is as per the Board Circular of 1993 - Besides, the VAT refund for a car more than 7 years old does not make sense. Miscellaneous charges - Held that: - those charges are meant for cost of transportation, loading/unloading and handling charges upto importation. Inland Haulage Charges within India of about 45000/- - Held that: - deduction not tenable because these charges have not been included in the charge. Dealer’s margin - Held that: - the question of considering such margin can be there for a new car and not for a used car. Deduction for parts/accessories fitted by dealer - Held that: - the vehicle was fitted with these and assessment has rightly done on basis of invoice submitted by the appellant declaring the price of US$ 52735.43 including these parts/accessories. Appeal dismissed - decided against appellant.

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• 2018 (4) TMI 1435
  Refund - Implementation of final order 835840/2005-cus dated 3-6-2005 - the order was not implemented by the Revenue even after lapse of 13 years - Confiscation of Gold Bars and Indian Currency - Rule 41 of the of Custom, Central Excise and Service Tax Appellate Tribunal(Procedure) Rule 1982 - Held that: - from rule 41, it is clear that Tribunal has power to give effect or in relation to its order or to prevent abuse of its process or to secure ends of justice. This Tribunal time and again passed the orders under Rule 41 of CESTAT (Procedure) Rules 1982 for implementation of its order. Though the Revenue has filed custom appeal before Hon’ble Bombay High Court against this Tribunal order dated 3-6-2005 but even after lapse of 13 years from the date of this Tribunal order, High court has not granted any stay to the Revenue, therefore the order of this Tribunal is enforceable. The Board has issued clarification vide Circular No.695/11/2003-CX dt.24.2.2003 that if the department is unable to obtain stay against Tribunal order, refund should be granted after 3 months of the order. This clearly shows that it is Board instruction to the field formation that order of the Tribunal should be implemented, if there is no stay against the said order. Since in the present case Revenue could not obtain any stay from the operation of this Tribunal order, there is no option left with them except the implementation of this Tribunal order dated 3-6-2005. Appeal allowed - Compliance of implementation of order be reported on 1.5.2018.

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• 2018 (4) TMI 1434
  Redemption fine - Duty Entitlement Pass Book Scheme - Held that: - There is nothing on record to indicate that the imports effected by the importer had been covered by a band. The non-availability of the confiscated goods is not in question. Therefore, even in the absence of a finding or any justification in the impugned order for non-imposition of fine, there is no scope for quantification of such fine without goods being available for redemption or a bond that covers recovery of fine - appeal dismissed - decided against Revenue.

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• 2018 (4) TMI 1433
  Penalty u/s 114(1) of Customs Act, 1962 - fraudulent export of pharmaceutical drugs through three front companies - Duty Entitlement Pass Book scheme - Held that: - It would appear that M/S Sitara Shipping Ltd had issued bill of lading and received freight charges only upto Dubai whereas the consignment was destined for St. Petersberg. Furthermore, it would appear that Capt. Sahi instructed that twelve of the export containers be diverted to Colombo. Penalties not sustainable - appeal allowed.

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• Corporate Laws

• 2018 (4) TMI 1413
  Scope of Practice of the Profession of Architecture - Restrict registration applications from any ‘company’ or ‘Limited Liability Partnership’ (hereinafter referred to as “LLP”) which states that it provides architectural services as of one of its objectives in its memorandum of association - whether the practice of the profession of architecture is the exclusive privilege of natural persons registered under the Act? - Held that:- Inevitable conclusion is that the Act only prohibits the use of the title and style of 'architect' by unregistered natural persons or juristic entities. It does not prevent unregistered persons, including juristic entities, from rendering architectural services or mentioning the same as one of their objectives in their MOA. Permitting a person/juristic entity, who is not registered under the Act to use the term 'architect' in their/its name, would amount to permitting something which the Act wanted to prohibit. Thus find that the intent of Section 37 is that the public should not be mislead to believe that persons/juristic entities that use the title/style of architect or its derivatives are registered architects, even when they are not. Therefore, persons/juristic entities cannot be allowed to use the style/title of architect or its derivatives in their names, unless they are registered as architects with the COA. When the FIPB approval was granted to RSP Singapore, there was admittedly no clarity on whether the use of the expression 'architect' in the title/style/name of a juristic entity was prohibited by the provisions of the Act. Further, RSP Singapore's subsidiary has now already changed its name to RSP Design Consultants India Pvt. Ltd., by removing the word architect from the same in conformity with the provisions of the Act. Therefore, find no reason to grant the prayer seeking cancellation of the FIPB approval granted to RSP Singapore. The first part of the Impugned Circular No. 1, entities/persons who are not registered as architects are prohibited from using the title/style of architect, is in consonance with the scheme of the Act and promotes the intent of the Act by ensuring the title of an architect is not misused by unregistered persons. No reason to interfere with the said part of the circular. However, when examine the second part of the Impugned Circular No. 1 and the Impugned Circular No. 2, it is find that they, instead of only prohibiting unregistered persons/entities from using the style and title of ‘architect’, also effectively prohibit the incorporation of companies/LLPs that include the rendering of architectural services as one of their objectives, even if such juristic persons do not use the title and style of ‘architect’. Furthermore, in the Impugned Circular No. 2, the Ministry of Corporate Affairs wrongly equates the provisions of the Architects Act with those of the CA Act, Cost and Works Accountants Act, 1959 and Company Secretariats Act, 1980, each of which specifically ban the practice of their respective professions by companies (whether incorporated in India or elsewhere) and provide punishment for contravention of the said provisions. No such provision can be found in the Architects Act. On the contrary, specific provisions can be found in the Architects Act, which allow for the employment of architects in companies, which would not be allowed if the legislative intent was to restrict the practice of architecture to private persons and partnerships. The second part of the Impugned Circular No. 1 dated 10.10.2011, Impugned Circular No. 2 dated 01.03.2012 and second part of the Impugned Notice dated 20.05.2013 in imposing the aforementioned restrictions, are contrary to the provisions of the Act, and are, therefore, quashed.

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• 2018 (4) TMI 1412
  Proceedings under Arbitration and Conciliation Act - arbitral award required the shares to be transmitted to the claimants - Held that:- The arbitral award, in essence, postulates the transmission of shares from the appellant to the claimant. The only remedy available for effectuating the transmission is that which was provided in Section 111 for seeking a rectification of the register. There is, therefore, no merit in the challenge addressed by the appellant The present case which arises under the Arbitration and Conciliation Act 1996 stands on even a higher pedestal. Under the provisions of Section 35, the award can be enforced in the same manner as if it were a decree of the Court. The award has attained finality. The transmission of shares as mandated by the award could be fully effectuated by obtaining a rectification of the register under Section 111 of the Companies Act. The remedy which was resorted to was competent. The view of the NCLT, which has been affirmed by the NCLAT does not warrant interference. Appeal dismissed.

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• Insolvency & Bankruptcy

• 2018 (4) TMI 1442
  Corporate insolvency process - application under 9 of I&B Code rejected as the certificate given by the Bank is not proper, the defects have not been removed within seven days and There is an ‘existence of dispute’- Held that:- We find that there is an ‘existence of dispute’ which has also been noticed by the Adjudicating Authority - The appellant has supplied the Microsoft software to the respondent – Corporate Debtor. The Corporate Debtor brought the matter to the notice of the Microsoft authorities that there is a defect, which suggests that the dispute is relating to the quality of the goods supplied and the services rendered by the appellant. Learned counsel for the appellant further submits that the respondent has accepted the liability but that cannot be a ground to admit the application filed under Section 9 there being an existence of dispute. For the aforesaid reason, we are not inclined to interfere with the impugned order. In absence of any merit, the appeal is dismissed.

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• 2018 (4) TMI 1441
  Corporate Insolvency Resolution Process - existence of dispute - Held that:- It is un disputably proved beyond doubt that there is no dispute about default in question. The contentions of the respondent with regard to other lenders are not substantiated by other Banks by filing any supporting affidavits except participating in JLF meetings as averred by the respondents. The respondent has a right to bring to the notice of Reserve Bank of India about the alleged violations of petitioner in not adhering to its guidelines. The respondent did not appear to have taken such course of action. On the contrary, the petitioner has time and again reiterated that it has every mandate to initiate the instant CIRP, and it has initiated the instant proceedings strictly in accordance with law. As several contentions raised by the respondent hardly have any relevance to the issue in question, they are not being adverted here, and they are deemed to have rejected. We are of considered view that default in question has occurred and the instant petition/application is complete as per sub-section 2 and there is no disciplinary proceedings pending against the proposed resolution professional so as to admit the case under section 7(5)(a) of IBC,2016. The proposed Interim professional has also filed Form No.2 on 16-09-2017. By invoking powers conferred on the Adjudicating Authority u/ss 7,10,12,13,14,15,16, 17, 18, 19, 20, 21, 22 and 25 and other applicable provisions of the Insolvency and Bankruptcy Code, 2016, the Company Petition is hereby admitted

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• 2018 (4) TMI 1440
  Corporate Insolvency Resolution Process - existence of dispute - Held that:- A corporate debtor is bound to accept the award as final in a proceedings initiated against it. Pendency of an arbitration proceeding amounts to ‘existence of a dispute’ under the provisions of the IB Code. As none of the contentions taken by the respondent in its reply seen sustainable under law. Thus, it is clear that petition filed by the operational creditor under section 9 of the Insolvency & Bankruptcy Code, 2016 deserves to be admitted

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• 2018 (4) TMI 1439
  Corporate insolvency process - Insolvency Professional appointment - Held that:- Given the responsibilities of an insolvency professional, it is necessary to take urgent action to contain further damage, pending completion of inspection. Therefore, in exercise of the powers conferred under section 220 (2) of the Code read with sub-regulation (4) of regulation (5) of the Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017, issue directions for Insolvency Professional as debarred from undertaking any new assignment, either as an Interim Resolution Professional, Resolution Professional, Liquidator or otherwise, under the Code; The direction as above shall come into force with immediate effect and shall cease to have effect on expiry of 90 days from the date of the order and the Inspecting Authority shall complete the inspection and submit inspection report by 15th April, 2018, as specified in the order dated 04.01.2018 of the Board.

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• PMLA

• 2018 (4) TMI 1411
  Provision under PMLA Act - the attached properties were purchased which are mortgaged properties much prior to the period when the facility of loan sanctioned to the borrowers - Held that:- The complainant in the criminal case is the Bank who is victim. Had the Bank not filed a criminal complaint. If the security of the Bank, is treated as proceeds of crime and is confiscated under the Act, in future, no Bank in such circumstances would make a complaint to the authorities. The trial in the prosecution complaint would take number of years. The victim cannot wait for such a long period of time, although after trial and final determination, the victim is entitled to recover the amount by selling immovable properties u/s 8(8) of the Act. Non performing assets (NPA), choking the banking system who is already struggling for same time and banks condition are being deteriorated day by day. Lac of crores of rupees worth loans are classified as non-performing loans in India. The crises of banks in India is become worse. The intention of the Act could not have been to block the loan amount against the mortgaged properties being innocent person as is sought to be done in the instant case. If the impugned order is taken as correct, it would be a patently absurd situation once substantial securities of the bank are not available for the benefit of Bank. Such a result does not advance the objects of the Act. For the above said reasons as mentioned above, the impugned order dated 24.10.2017 is set-aside, consequently the provisional attachment also does not survive and the same is quashed. This judgement & order is without prejudice to the matters pending against the borrowers before the Special Court. The attachment of mortgaged properties with the appellant bank is lifted.

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• 2018 (4) TMI 1410
  Offence under PMLA Act - writ petitioner is seeking exemption only on the ground that a woman is exempted from personal appearance under Section 160 of the Code of Criminal Procedure - Held that:- Except by claiming that women are exempted under Section 160 of the Code of Criminal Procedure, the facts regarding the position, status and capacity of the writ petitioner to travel and provide informations to the authorities are not denied. The writ petitioner, being a Senior Advocate and having active and lucrative practice in various High Courts and before the Supreme Court of India, cannot say that she is not capable of personally appearing before the authorities concerned for the purpose of investigation. More-so, this Court expect that the respected Senior Advocate like the writ petitioner, should not shy away from co-operating for an effective investigation of such offences committed under the provisions of the "PMLA". When such is the current position, the spirit of Section 160 cannot be interpreted so as to nullify or paralise an effective investigation process of cases under PMLA. No writ can be entertained against the summons issued for the personal appearance of a person in order to give evidence or statement. The writ petition against such summons issued under the provisions of the Special Act, namely, "PMLA" can be entertained only on exceptional circumstances. Judicial review in this regard are certainly limited. The statements/explanations and the documents submitted by the authorised representative of the writ petitioner Shri N.R.R.Arun Natarajan were not satisfactory and certain ingredients are to be ascertained only by getting a personal statement from the writ petitioner in relation to the financial transactions. Therefore, this Court is of an opinion that there is no irregularity or illegality in respect of insisting the writ petitioner for personal appearance for the purpose of seeking certain clarifications so as to cull out the truth in relation to the financial transactions and the documents filed by the writ petitioner before the Enforcement Directorate through her authorised Agent. this Court is of an opinion that the writ petitioner based on mere apprehension, cannot be permitted to move this writ petition that the respondents are having certain personal motive. Absolutely, there is no materials on record to show that there are personal motive against the writ petitioner. The personal motives or the mala fide intention are to be substantiated with sufficient materials. A mere statement made in an affidavit that the authorities are having certain personal motive or mala fide intention can never be accepted for the purpose of granting the relief in a writ petition, more specifically, in the nature of a case like on hand. The investigation process should not be hampered at this stage. The decisions in this regard are to be taken only after the completion of the investigation by the competent authorities by strictly following the provisions of law. The Courts cannot presume that what possible actions could be taken by the competent authorities at this stage, even before the completion of the investigation. Thus, this Court is of a strong opinion that interference at this stage in respect of the facts and the circumstances of the present case on hand, is certainly unwarranted - the respondents are directed to issue fresh summons, fixing a date for the purpose of continuing the investigation and proceed with the same in accordance with law. Accordingly, the writ petitions are devoid of merits and stand dismissed.

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• Service Tax

• 2018 (4) TMI 1408
  Doctrine of Merger - case of Revenue is that the petitioner cannot maintain the second round of litigation by challenging the impugned order-in-original - Held that: - the Commissioner (Appeals) as well as the CESTAT did not decide on the merits of the issue - considering the nature of activity done by the petitioner and the quantum of service tax demanded, this Court is of the considered view that the respondent should take a decision as regards the applicability of the exemption notification to the case of the petitioner. This Court is inclined to issue appropriate directions so as to enable the petitioner to go before the respondent and place the exemption notification for their consideration so that the respondent can pass reverse orders - petition disposed off.

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• 2018 (4) TMI 1407
  Management of Investment under Unit Linked Insurance Plan (ULIP) - surrender/ partial withdrawal charges - case of Revenue is that these charges are recovered to cover the past expenses incurred towards provision of services and hence liable to tax - Held that: - the ULIP is primarily a contract between the insurer and insured and thus when seen in the context of Section 73 and 74 of the Contract Act, 1872, what transpires is that surrender of policy is nothing but ending of contract for which compensation in the form of damages which cannot be termed as charges towards management. Reference made to Circular No. 94/5/2007 – ST dt. 15.05.2007, wherein the entry and exit load charges of the Mutual fund were held not to chargeable to tax as they are not towards fund management service. To retain the container beyond the pre-holding period is neither a service provided on behalf of the client(Business Auxiliary Service) nor is it an infrastructural support in the business of either the shipping lines or the customer (Business Support Service). Such charges can at best be called as ‘penal rent’ for retaining the containers beyond the pre-determined period. Therefore, the amount collected as ‘detention charges’ is not chargeable to service tax. The surrender charges are not part of taxable service of management of funds. Rather it is in the nature of penalty or liquidated damages which is not a service and hence cannot be made liable for tax during the period involved - demand cannot sustain. Time limitation - Held that: - the demand is also time barred as the issue involved is of interpretation and therefore no element of suppression, fraud or intention to evade taxes can be made against Appellant - information of surrender charges stands disclosed in books of accounts and also in Balance Sheet as per the directions of IRDA. Hence it is not a case of suppression - extended period not invoked. Appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1406
  Maintenance and Repair Services - re-conditioning of old and worn out Sugar Mill Rollers from other sugar mills - Held that: - an indentical issue was the subject matter of the said decision of the Tribunal in the case of Jagat Machinery Pvt. Ltd. vs. Commissioner [2012 (12) TMI 478 - CESTAT NEW DELHI], wherein it stands held that the activity of re-conditioning of old and worn out shells of Sugar Mills Rollers, shall be liable to service tax only with effect from 16.06.2005 - the activity of re-conditioning of old and worn out sugar mills rollers would not be taxable prior to 16.06.2005. Time limitation - Held that: - the department visited the factory on 28.10.2005 and all the details were submitted by the appellant to the department on 02.03.2006 and still the SCN was issued on 02.07.2007 - no malafide can be attributed to them so as to invoke the longer period of limitation. Appeal allowed on merits as well as limitation.

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• 2018 (4) TMI 1405
  Construction services - Demand of service tax on the basis of TDS deducted - Form No. 26AS - agreement with M/s Ansal Housing 10 lakhs - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1404
  CENVAT credit - capital goods - input services - penalty - Held that: - the appellant could not lead evidence before the court below in support of taking Cenvat Credit, as the purchases are made by the Circle Telecom Store Depot (CTSD) which are subsequently received by the appellant unit at Fatehpur, as there was lack of communication between the offices and also the concerned personnel being on leave for some reason or the other - matter is remanded to the Adjudicating Authority who shall hear the appellant denovo and pass a reasoned order in accordance with law - appeal allowed by way of remand.

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• 2018 (4) TMI 1403
  Refund claim - time limitation - whether the respondent have filed the refund claims under Rule 5 within the period of one year from the expiry of the quarter for which refund claim is preferred? - Held that: - The Larger Bench of the Tribunal in the case of Commissioner of Central Excise and Service Tax, Bangalore – I v. Span Infotech Pvt Ltd [2018 (2) TMI 946 - CESTAT BANGALORE] has held that in respect of export of services, the relevant date for purposes of deciding the time limit for consideration of refund claims under Rule 5 of the CCR may be taken as the end of the quarter in which the FIRC is received, in cases where the refund claims are filed on a quarterly basis - appeal dismissed - decided against Revenue.

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• 2018 (4) TMI 1402
  Penalty - Non-discharge of service tax liability on amount received in advance - design and supply of plant, machinery - receipt of advance against the supply or goods or services - Held that: - the adjudicating authority as well as learned DR were correct in stating that the appellant being in the organized sector, should have discharged the service tax liability on receipt of the amount as an advance from RINL - penalty upheld - also interest on tax liability confirmed. Amount received as advance for agreement - liability of service tax - Held that: - It is seen from the agreement that the said agreement is for sale of goods back-to-back, that the scope of work indicated in agreement No.2 is for supply of various equipments, plant and machinery for wire rod mill No.2 - agreement No.2 is for supply of materials and cannot, by any stretch of imagination, be considered as an agreement for rendering services and the amount of advance received against this agreement, cannot become part of the value for demand of service tax liability - demand set aside. Appeal allowed in part.

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• 2018 (4) TMI 1401
  Taxability - Commercial Training & Coaching Services - Business Auxiliary Service - input services - Held that: - The approved Courses and/or Degrees or Diplomas granted under various Government approved Institutes or Universities, courses are exempted from the levy of service tax where the institutes have granted degree or diploma recognized by law - the demand under the head Commercial Training & Coaching set aside. Business auxiliary service - Held that: - appellant have provided service to the educational Institutes/Universities which is not a commercial activity - no service tax is payable under the category of BAS as the service tax is dutiable on the person who provides such services to promote/support the business of another - demand set aside. Input tax credit - Rule 9 of Cenvat Credit Rules, 2004 - Held that: - the invoices in question do not confirm the requirements under Rule 4A of Service Tax Rules - appellant have demonstrated sample(s) copies of such invoices during the course of hearing, all the required information being-name, address, registration number, etc., type of the service tax is payable thereon, etc. are given - credit allowed. Appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1400
  CENVAT credit - Group Insurance - insurance policies were procured by the respondents between July, 2010 to December, 2010 for a period of one year and it was alleged that the respondents have willfully taken credit of the said input service and utilized the same wrongly, which came to the knowledge of the Department only in the course of audit conducted during August, 2011 - Held that: - on the date when the Cenvat credit was earned and eligible to be taken the same was legally taken by the appellant in terms of Rule 2(l) of Cenvat Credit Rules - There is no provision in the Cenvat Credit Rules that credit taken prior to 1st April, 2011, pursuant to amendment in Rule 2(l) shall become bad and or disallowed. Neither the said amendment have got any retrospective effect - appeal dismissed - decided against Revenue.

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• 2018 (4) TMI 1399
  Refund claim - export of service/goods - as per the Revenue, the appellant have not actually exported their services and/or products, but have given services and or sold their products to Jubilant Biosys Ltd., as a sub-contractor or agent of theirs - Whether the appellant-assessee M/s Jubilant Chemsys Ltd. have exported their service and received convertible foreign exchange as required under the Export of Service Rules? Held that: - identical issue decided in the case of Jubilant Chemsys Limited Versus C.C. & C.E. & S.T. - Noida And (Vice-Versa) [2017 (7) TMI 62 - CESTAT ALLAHABAD], where it was held that the appellant have been verified and examined the payments made by Jubilant Biosys Limited to Jubilant Chemsys Ltd for its share of activities under the work orders received from the parties located outside India. The appellant have satisfied both the conditions for export of service, namely rendering of service from India and receipt of the service by the client outside India of consideration in convertible foreign currency in India Applicability of proviso to Section 73(1) of the Finance Act, 1994 - Held that: - it is not a case of mis-declaration or suppression of facts but a case where there is a change of opinion on the manner of assessment by the Department - proviso to Section 73(1) and provisions of Section 78 of the Finance Act, 1994 are not applicable. Penalty u/s 76 - Held that: - there is no contumacious conduct on the part of the Assessee and the entire issue involves interpretation of the legal provisions. Moreover, the assessee has paid service tax to avoid any further dispute, in a revenue neutral situation - penalty set aside by invoking section 80. Demand of interest - Held that: - the issue is squarely covered by the decision in the case of Oil and Natural Gas Corporation Limited Vs CCE Surat [2015 (1) TMI 41 - CESTAT AHMEDABAD], where it was held that nterest is not payable with respect to duty required to be debited in the Cenvat Credit Account provided sufficient balance was available in the Cenvat Credit Account. Nothing has been brought on record that such a credit was not available in the Cenvat Account during the relevant period for debit - interest is not payable by the Appellant on the amount of duty paid through CENVAT account. Appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1398
  Nature of activity - Service or sale - transfer of "rights and privilege of export of sugar quota" - whether the transaction is service or in goods? - Held that: - reliance placed in decision of Hon'ble Supreme Court in the case of Vikas Sales Corporation [1996 (5) TMI 363 - SUPREME COURT OF INDIA], where it was held that DEPB has an intrinsic value that makes it a market commodity. Therefore, DEPB, like REP licence qualifies as “goods” within the meaning of the sales tax laws of Delhi, Kerala and Mumbai and its sale is exigible to tax. The transaction in question regarding sale of rights and privilege of export of sugar quota is sale of goods and no service is involved - appeal dismissed - decided against Revenue.

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• 2018 (4) TMI 1397
  Condonation of delay of 25 days in filing appeal - case of Revenue is that the revenue's authorization was given beyond four months and as such the Tribunal has no power to condone such delay - Held that: - The delay being nominal and satisfactorily explained can be condoned - The Tribunal is vested with powers to condone any delay beyond the period mentioned in the said sub-section and such powers are given under sub-section (5) of Section 86 of the Act - there is no split up time limit regarding authorization for filing of appeal. Delay condoned.

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• 2018 (4) TMI 1396
  Demand of service tax - the Department has confirmed the demand of Service Tax against the respondent viz., CPT, whereas the service rendering entity is Cochin Fisheries Harbour (CFH), who is a separate legal entity and which has been administratively constituted under Ministry of Agriculture - Held that: - if there is involvement at all of the CPT in rendering subject services, it is on behalf of the CFH, who is a separate legal entity - the demand of Service Tax has to be issued to CFH - appeal dismissed - decided against Revenue.

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• 2018 (4) TMI 1395
  Classification of services - appellant received magnesium sulphate from M/s. Annai Chemicals, Mettur and Calcined Magnesite from M/s. Ramakrishna Mines, Salem and sold the same to customers and received commission from their principals - whether classifiable under or under BAS? - Held that: - The appellants have been appointed as consignment commission sales agent on behalf of their principal. It is clearly mentioned as ‘Commission Sales Agent’ in the agreement and not as ‘Clearing and Forwarding Agent’ - on the commission received the appellant has been discharging Service Tax under BAS with effect from 9-7-2004 when such commission agent activities became taxable - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1394
  Deposit of deficit court fees with regard to the case Mewar Foods Versus Commissioner of Central Excise, Jaipur [2016 (12) TMI 1713 - CESTAT NEW DELHI] - Held that: - three weeks’ time granted to deposit the deficit court fees of 14000/- (Rupees Fourteen Thousand only) as a last opportunity, failing which the appeal shall stand dismissed for non-prosecution without further reference to the Court.

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• 2018 (4) TMI 1392
  Service tax liability - ex-parte order of the tribunal - the appellant at no material point of time received any notice of hearing from the Tribunal and in absence of the present appellant the Tribunal has decided the appeal - Held that: - Even the order of the Tribunal shows that the appellant was not before the Tribunal and considering the fact that the appellant has deposited the entire duty under question, we are inclined to grant one more opportunity to the appellant - The parties are relegated before the Tribunal - appeal allowed by way of remand.

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• 2018 (4) TMI 1387
  Classification of services - the appellant have entered into agreements with various foreign entities for obtaining licence to use technical know-how and technical information and also various engineering services, in connection with setting up of their manufacturing plant/refineries - whether the service to be classified as Consulting Engineering Service or otherwise? - Held that: - the Revenue sought to classify the service under the category of “Consulting Engineering Service”, however the service received by the appellant from various foreign based services provider is clearly in the nature of technical know-how and technical information and also various engineering services, in connection with setting up of their manufacturing plant/refineries - From the nature of service it is very clear that the said services cannot be covered under the “Consulting Engineering Service”. This issue has been considered in detail by coordinate Bench of this Tribunal in the case of Bharat Oman Refineries Ltd. Vs. CCE & SERVICE TAX, Bhopal [2017 (4) TMI 1129 - CESTAT NEW DELHI], where it was held that The very fact that all these agreements talk about the foreign companies as “licensor” itself is revealing. In a typical agreement for consultancy service, there will be no licensor or licensee with transfer of licensed process technology or proprietary technical information. Demand do not sustain - appeal allowed - decided in favor of appellant.

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• Central Excise

• 2018 (4) TMI 1393
  Utilization of CENVAT credit - Rule 8(3A) of Central excise Rules, 2002 - it was alleged that appellant have not produced GAR- 7 Challans as per the returns therefore, they mis-represented the facts to the authorities - Held that: - the provisions of Rule 8(3A) of Central Excise Rules, 2002 has been declared ultra virus by the Hon’ble Gujarat High Court in the case of Indsur Global Ltd. [2014 (12) TMI 585 - GUJARAT HIGH COURT] - the said decision is having binding force - demand against the appellant is not sustainable. Whether the penalty can be imposed on the appellant or not? - Held that: - the appellant has mis-represented the fact that the duty has been paid as per GAR-7 which was paid later on, in that circumstances, penalty u/r 27 of Central Excise Rules, 2002 is imposable therefore, a penalty of 5,000/- is imposed on the appellant. Appeal allowed in part.

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• 2018 (4) TMI 1391
  Whether the conditions prescribed for availing the benefits of N/N. 9/99 not being fulfilled can it be held that the appellant or the assessee was availing the benefit of the N/N. 9/99? - Held that: - there are findings of fact recorded against the assessee and even otherwise the assessee had availed benefits under the N/N. 9 of 1999 for a part of the year and it was not open to him to switch over to another notification - conclusion drawn by the Tribunal is right and justified - appeal dismissed.

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• 2018 (4) TMI 1390
  Classification of goods - SDIC tablets (Sodium di-chloroisocynurate) - assessee claimed classification of the product under CETH 29336910 but Revenue was of the view that such goods are to be classified as ‘disinfectant’ under CETH 38089400 - Revenue also held that the goods are required to be charged to excise duty on MRP based valuation. Held that: - Such goods are used for disinfectanting/ sanitizing of water and hence, are in the form of disinfectants. There is also no dispute on the fact that such goods are prepared in the form of tablets and are packed in unit containers with 10, 20, 50 and 100 tablets. Undoubtedly, such packaging is meant for retail sale and individual tablets are in measured doses - the goods are packed in retail packing, and merits classification under 3808 CETH the Central Excise Tariff. Valuation of goods for purpose of charging Excise duty - Held that: - it is evident that the goods are manufactured and packed for retail sale. Even if such goods packed in retail containers are further packed in bigger wholesale packages - the goods are liable to duty in terms of MRP based assessment under Section 4A. Appeal allowed - decided in favor of Revenue.

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• 2018 (4) TMI 1389
  CENVAT credit - input services - construction services - extended period of limitation - Held that: - the appellate authority has upheld the extended period on the short ground that the details of the services in respect of which the credit was availed has not been reflected in ER 1 return and no document/ invoices stand given by the assessee - as is seen from the above observations of the appellate authority himself, no documents are required to be submitted by the assessee after 1996. If there is no legal obligation on the part of the assessee to do a particular act, non observation of that procedure / act cannot be held to be violative of law - If the law does not require documents / invoices, non submission of the same by an assessee is in accordance with the law and cannot be held to be a suppression or mis-statement, with an intent to evade payment of duty, thus justifying the invocation of longer period of limitation. The appellant have admittedly filed ER 1 returns declaring the quantum of credit availed by them and the Revenue had not taken action for a period of more than 2 to 3 years and issued the show cause notice only subsequently in January,2016 - In the absence of any positive action on the part of the assessee to suppress the material facts from the Revenue, with a guilty mind, extended period cannot be held to be applicable. Appeal allowed on limitation.

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• 2018 (4) TMI 1388
  CENVAT credit - inputs - various structural items like plates, rounds etc, used in the fabrication of cooling bed - time limitation - Held that: - irrespective of the quantities mentioned in the Chartered Engineer certificate, the various structural items used in the manufacture of cooling bed have been held to be Cenvatable in the Tribunal’s decision in the case of Ramsons TMT Pvt. Ltd. Vs. CCE, Nagpur [2016 (5) TMI 1119 - CESTAT MUMBAI] - credit allowed. Time limitation - Held that: - entire credit was availed by the appellant by reflecting the same in Cenvat Credit Account and in absence of any positive evidence to show that there was any suppression or misstatement on the part of the appellant with a malafide, the extended period is not available - demand hit by limitation. Appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1386
  Method of valuation - section 4 or section 4A of CEA, 1944 - Baking powder - Vanila powder - Custard powder - bakery mixes and chocolate improver. Held that: - CBEC Circular dated 28.2.2002 held that since the concerned State Government authority had already held that the provisions of Standard of Weights & Measures Act, 1976 and the Rules made thereunder were inapplicable to the goods in dispute, there was no warrant or justification for valuing the goods under Section 4A of the Central Excise Act, 1944 The only basis on which Show Cause Notices were issued in the present case, insofar as the issue on valuation was that Section 4 of the Central Excise Act, 1944 did not apply and instead, Section 4A applies - since Section 4A is inapplicable and determination of value has to be done under Section 4, there is nothing in the matter which needs further examination. If the Revenue was aggrieved by the judgment of the Hon’ble Bombay High Court, it ought to have challenged the judgment before the Hon’ble Supreme Court, which it had not done. Appeal dismissed - decided against Revenue.

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• 2018 (4) TMI 1385
  CENVAT credit - input services - Event Management Service - Advertisement Service - Tour Operator Service - Coaching and Training Service - Legal Consultancy Service - Travel Agent Service - SIAM Statistical service - Held that: - From the nature of service and use thereof it can be seen that all the services are used in or in relation to the manufacture of the final product and/or sales promotion etc. - all the services are necessary for carrying out overall operation of the manufacturing and sales of the goods therefore all the services are clearly covered under the definition of input service as per rule 2(1), of CCR 2004 - credit allowed - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1384
  CENVAT credit - input services - operation, maintenance, repair and insurance charges of windmill installed out side the factory premises - tripartite ‘wheeling and banking agreement’ between the appellant company, ‘ Suzlon Energy Limited ’ and ‘ Jaipur Vidyut Vitran Nigam Limited - Held that: - the appellant is drawing the power in exchange at their factory in lieu of the power injected in the grid which is located at a distance and they are required to pay only the wheeling/grid charges - the appellant is indirectly receiving power in their factory which is one of the factors of production, without which they cannot manufacture their dutiable outputs. Issue squarely covered by the decision in the case of Parry Electronics and Engg. Pvt Ltd [2016 (1) TMI 546 - CESTAT AHMEDABAD] wherein it has been held that in case of Windmills located away from the factory and electricity generated is surrendered to the grid and the same is withdrawn in the factory from the grid, Cenvat credit is available for the services received and used at the windmills located away from the factory. Appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 1383
  Removal of goods at Nil rate / concessional rate to EOU in excess quantity then permitted - clearance of 247324 nos. of 14” size Electron guns in violation of certificate - Whether under the facts and circumstances M/s Samtel Color Ltd. have violated the provisions of N/N. 43/2001–CE(NT) read with Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001? - Held that: - it is an admitted fact that similar to the permission dated 08/07/2004 for procurement duty-free for the financial year 2004-05, further permission dated 18th July, 2005 was granted for the financial year 2005-06. In the show cause notice, there is no whisper regarding the details of similar permission for the financial year 2005-06 - In view of the permission granted, being permission dated 18/07/2005 for procurement of 05lakhs 14” size Electronic guns for the financial year 2005-06, apparently, there is no violation of any provisions or the condition of the certificate in question. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2018 (4) TMI 1382
  Revision of total turnover in assessment order - denial of revision of turnover on the ground that the petitioner has not surrendered the E-Transit pass - Held that: - the surrender of E-transit pass is not a sin qua non for establishing that the goods were sold within the State. Since there were several cases arising out of the non surrender of E-Transit pass, the Commissioner has given specific direction to the Assessing Officer. Therefore, the first respondent cannot merely go by the directives of his Superior Officer and ignore the circular, which is very specific - this Court is inclined to remit back the matter to the respondents to specifically consider all the documents and verify as to the correctness of the submissions made by the petitioner, without insisting upon the surrender of E-Transit pass. Petition allowed by way of remand.

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• 2018 (4) TMI 1381
  Revision of assessment order - stock transfer - suppression of facts - Whether the Tribunal has committed a manifest error of law and facts to uphold the evaded sales of 1524 grams 'Paclitaxel' @ 29,000/- per gram amounting to 4,41,96,000/- + excise duty 58,12,374/- = 5,00,08,374/- and to levy tax thereon @ 8% amounting to 40,00,699.92? At the time of original assessment proceedings, the assessee disclosed stock transfer of 178,56,45,444/- and also filed 254 Form 'F' to establish stock transfer. He had not disclosed the manufacture and sale or alleged stock transfer of 'Paclitaxel' during the course of original assessment proceedings. This Court specifically asked the learned counsel for the revisionist-assessee, yesterday and today also to point out from any evidence that the assessee has disclosed the manufacture and sale or the alleged stock transfer of 'Paclitaxel' during the course of original assessment proceedings - it is a clear case of suppression of manufacture and disposal of the goods in question i.e. 'Paclitaxel'. It appears that during the course of arguments before the Tribunal the assessee took the stand that the stock transferred quantity is 1050 grams instead of 1040 grams and the donated quantity is 31 grams instead of 25 grams. The Tribunal considered the entire facts and evidences on record and recorded a finding of fact that there was no stock transfer and Form F procured by the revisionist-assessee from its unit situate at Baddi, District - Solan on 24.11.2003 is merely to cover up the evasion - The Tribunal has given sufficient reasons to disbelieve the contention of the revisionist and to uphold the findings of the Assessing Authority and the 1st Appellate Authority - The assessee took a vague stand before the Tribunal merely in written argument that balance quantity of 443 grams 'Paclitaxel' has either been used in production or it is available in stock. The assessee could not substantiate his claim from the books of accounts. An analysis of the relevant provisions of the Section 6A of Central Sales Tax Act and the Rules framed thereunder shows that the initial burden of proof is on the dealer to show that the movement has occasioned by reason of transfer of such goods which is otherwise than by reason of sale. The explanation of the assessee with regard to non disclosure of the alleged stock transfer of 1040 grams or 1050 grams 'Paclitaxel' during the assessment proceedings that he was under impression that the goods which are being stock transferred are not necessary to be disclosed, was found to be groundless inasmuch as perusal of the assessment order shows that during the course of the assessment proceedings the assessee disclosed stock transfer of certain other goods amounting to 178.56 crores and also filed 254 Form - 'F' in original to claim stock transfer - No legally acceptable ground has been made out by the assessee to require this Court to interfere with the findings of fact for not accepting the alleged stock transfer of the goods in question. The impugned order of the Tribunal requires no interference by this Court in revisional jurisdiction under Section 11 of the U.P. Trade Tax Act 1948 - Revision dismissed - decided against assessee.

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• 2018 (4) TMI 1380
  Validity of assessment order - opportunity of personal hearing - principles of natural justice - Held that: - Perusal of the common order does not indicate that the writ Court has adverted to the mandatory requirement of personal hearing, contemplated under Section 22 (4) of Tamil Nadu Value Added Tax Act, 2006. But, having regard to the alternate remedy available under the statute, writ court has dismissed the writ petitions. Matter is remanded to the Assistant Commissioner (CT), (FAC), Mettupalayam Circle, Mettupalayam, assessing officer, who shall provide opportunity of personal hearing, to the appellant/writ petitioner, on the basis of the material available on record and pass orders in accordance with law - appeal allowed by way of remand.

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• Indian Laws

• 2018 (4) TMI 1409
  Failure to make payment - dishonor of cheques - respondent claimed that the cards, for which payment was sought, were not issued by respondent no. 1. - Held that: - the petitioner failed to prove that there was any legal liability of the respondents to pay the cheque amount and dismissed the complaint, thereby acquitting the respondents - Finding of the learned Trial Court is neither illegal nor perverse warranting interference - petition dismissed.

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