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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter May 1, 2023 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles INCOME DEEMED TO ACCRUE/ARISE IN INDIA FOR NON-RESIDENT LIMITATION FOR EXECUTION OF DECREE Benefit of tolerance limit of +/- 5% as contained in Section 92C (2) available even when one comparable remains in comparable set. News Auction for Sale (re-issue) of (i) ‘7.06% GS 2028’, (ii) ‘7.26% GS 2033’ and (iii) ‘7.36% GS 2052’ Finance and Corporate Affairs Minister Nirmala Sitharaman launches a book titled ‘Reflections’ authored by Shri Narayanan Vaghul in Mumbai Notifications Customs 32/2023 - dated 28-4-2023 - Cus (NT) Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver Circulars / Instructions / Orders DGFT 12/2023 - dated 28-4-2023 New TRQ Applications under tariff head 7108 under India-UAE CEPA for FY 2023-24 Highlights / Catch Notes Income Tax Stay of recovery of demand - application of 'Trinity' principles - first respondent is directed to pass fresh orders in the stay applications filed, keeping in mind the 'Trinity' principles laid down by this Court in the case of Queen Agencies and in the case of Kannammal. [2021 (4) TMI 609 - MADRAS HIGH COURT] - HC Visit to Get Source TDS u/s 194C - payments made to driver-partners under the Uber App - the assessee cannot be treated as a “person responsible for paying” for the purpose of section 194C r/w section 204 of the Act in respect of payment made to driver partners on behalf of the Uber BV for the transportation services - assessee cannot be treated as an “assessee in default” - AT Visit to Get Source Charging interest u/s 234A, 234B and 234C - late filing of return of income - CIT(A) was not right in levying interest under Section 234A of the Act when the return was filed under Section 148 itself and therefore, the interest should be charged from the date of notice under Section 148 of the Act itself and not from the date of return filed u/s 139 or it is due date u/s 139. - AT Visit to Get Source Unexplained investment u/s. 69B and levy of tax u/s 115BBE - income towards difference in stock - excess stock found during the course of survey - AO directed to assess additional income offered towards excess stock found during the course of survey under the head profits and gains of business and profession as considered by the assessee. - AT Visit to Get Source Chargeability of tax u/s 115BBE - Nature of income declared in survey proceedings u/s. 133A? - Undisclosed income u/s 69A and 69C or Business Income - when the contention of the assessee is that the assessee has no other business then the present business and the income declared is out of the business of the assessee, we are of view that the matter needs to be re-examined at the end of AO. - AT Visit to Get Source TDS u/s 195 - non-deduction of TDS u/s 40(a) (i) - assessee company is a subsidiary company of its parent company in Japan - the appellant is not the PE of Mitusi & Co. Ltd (Japan), hence in view of said findings of the Honorable ITAT there is no question of attribution of any profit of Mitusi & Co. Ltd (Japan) to the appellant company - No TDS liability - AT Visit to Get Source Customs Principles of natural justice - refund of SAD - The discrepancies in the refund claim were noticed by the Deficiency Memo dated 09.04.2018 itself. The said Memo has been mentioned in the Orders-in-Original which got merged with the Orders-in-Appeal as have been challenged before this Tribunal. It is the same Deficiency Memo which has been mentioned in the impugned Final Order dated 21.08.2021. Hence, there was no need of serving another notice to the appellants prior rejecting their appeals for want of removal of those deficiencies. - AT Visit to Get Source Indian Laws Auction - company declared as a sick company - HC has set aside the auction - The purpose of auction (open or close format) is to get the most remunerative price and giving opportunity to the intending bidders to participate and fetch higher realizable value of the property. If that path is cut down or closed, the possibility of fraud or to secure inadequate price or underbidding would loom large. - Order of HC sustained - SC Visit to Get Source Smuggling - Heroin - The case of the prosecution is not free from suspicion. The prosecution has not proved beyond a reasonable doubt that the appellants in these two appeals were in possession of the contraband or that they brought the contraband to the hotel room of the accused no.4 - the appellants are acquitted of the offences alleged against them - SC Visit to Get Source PMLA Money laundering - proceeds of crime - it is evident that upon closure of the criminal case and acquittal of appellant No. 1 on discharge, there is no scheduled offence against the appellants. In the absence of any crime, question of any proceeds of crime would not arise - learned Single Judge had erred in refusing to grant relief to the appellants by taking the view that acquittal of the appellants was on compromise and not on merit and relegating the appellants to the forum of the designated court. - HC Visit to Get Source Service Tax Refund of Service Tax - principles of unjust enrichment - Since the appellant have paid service tax in the routine course and subsequently when the service tax was made exempted retrospectively, the incidence of service tax stood passed on. Therefore, the lower authorities have rightly credited the refund amount in the Consumer Welfare Fund - AT Visit to Get Source Classification of services - business auxiliary service - commission paid to foreign agents - The liaising with customers and getting export orders is itself a ‘procurement of service’ within the meaning of (a) under Notification No. 14/2004 and the same would also amount to provision of service on behalf of the client as per (c) of the above Notification. - benefit of exemption under Notification No. 14/2004 allowed - AT Visit to Get Source Classification of Services - mandap keeper service or not - ppellant provides services in relation to birthday parties, kitty parties and marriage parties - The defence taken by the appellant that it was operating hotels/ restaurant and serving food on per plate basis was not accepted by the Commissioner in view of the categorical statement of the manager (operations) and the director of the appellant, as also the records resumed by the investigating officers - AT Visit to Get Source Central Excise Valuation of manufactured goods - Change in Retail Sale Price (RSP) - there is no doubt that the term ‘permanently’ ‘discontinuation’ or ‘commencement’ of retail sale price must be considered in a particular month and not otherwise - the terms ‘permanently’ in the 4th proviso to Rule 9 was not violated by the appellant. - The Revenue has not disputed the correctness of the stock in the appellant’s factory which was recorded in the records. Due to this procedural lapse, the benefit of pro-rata based duty in terms of 4th proviso read with 3rd proviso, cannot be denied. - AT Visit to Get Source Case Laws: GST 2023 (4) TMI 1219 Initiation of fresh proceedings - first respondent was seized of the matter and intimation in Form GSTDRC-01 dated 05.03.2021 was issued to which the appellants had submitted their reply dated 08.03.2021 - the said reply was neither considered nor rejected and the matter was kept pending - HELD THAT:- The option which was available to the first respondent was to consider the representation/reply and if not satisfied, could have proceeded to issue show cause notice under Section 74(1) of the Act which option the first respondent did not exercise and the matter was left to linger. Thus, the preliminary proceedings could not have been initiated by the second respondent when proceeding initiated by the first respondent for the very same amount on the very same allegation was not taken to the logical end. When the statutory appeal was pending before the appellate authority, the first respondent had dropped the proceedings. It is very crucial to note that from the final report of the first respondent it is seen that the proceedings was closed by the first respondent only on 24.01.2023. Thus, for all purposes, it is deemed that the first proceedings initiated by the first respondent pursuant to intimation dated 05.03.2021 had attained finality only on 23.01.2022 and on the said date, the appeal as against the second proceedings initiated by the second respondent was already pending before the appellate authority. The appeal should not be treated to be as time barred, more particularly, when the appellants had responded to the first intimation dated 05.03.2021 and submitted their reply on 08.03.2021, and it was not considered and disposed of. Therefore, the issue as to whether the appellants did not notice the uploading of the Form GST DRC-01 dated 16.09.2021 from the portal or not has become an academic issue and in the peculiar facts and circumstances of the case, the appeal should be decided on merits and in accordance with law. The appeal is restored to the file and number of the appellate authority with a direction to hear and dispose of the appeal on merits and in accordance with law - Petition allowed. Income Tax 2023 (4) TMI 1218 Sustainability of judgment of acquittal - Suppression of income - charge u/ss. 276(G)/277 of IT Act - accused had constructed a costly building at Modipara without disclosing the source of such investment and, thereby, the ITO reopened the assessment proceeding by doubting the correctness of the return so filed by the respondent-accused. HELD THAT:- Admittedly, this is an appeal against acquittal, which was recorded by the learned trial Court way back in the year 1993 and law is very well settled that in case of acquittal, the presumption of innocence of accused as provided under law, is reinforced and unless there appears miscarriage of justice and compelling reasons, no judgment of acquittal can be interfered with after near about 30 years, more particularly in a case of this nature, where the offences with which the respondent accused was charged. In this case, the appellant was charged for offence u/s 276(C)/277 but offence u/s 276(C) of IT Act can be established by way of evidence that such persons willfully attempted in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act. Similarly, offence U/S.277 of IT Act can be established by way of evidence that such persons made a statement in any verification under this Act or under any rule made there under or delivered an account of statement, which is false, and which he either knows or believes it to be false or does not believe it to be true. Penalty proceeding was initiated against the Respondent-accused for concealment of the income, but such penalty proceeding was, however, dropped by the Income Tax Authority vide order under Ext.B. This Court does not find any error with the finding of the learned trial Court with regard to the offence U/S. 276(C). Charge for offence u/s 277 of IT Act, it is alleged that the Respondent accused had furnished wrong and false information by verifying those returns as true knowing or having reason to believe that the information contained in her returns was false. There is no point by the Income Tax Authority to disbelieve the explanation offered by the respondent-accused for incurring loan which was in fact shown by the accused-respondent in her second return. Further, there is no evidence on record to show that the accused made deliberately or intentionally false statement. It is also found from the evidence on record that the accused-respondent had furnished first return by showing her income as Rs. 8,860/-, but when she was asked, she filed subsequent return showing a loan taken by her from one Mr. Gyan Singh Sandhu and in fact, when there is a provision for filing revised returns which was admitted by P.W. 1 in his evidence and, therefore, adding Rs. 25,000/- to Rs. 8,860/- in the second return would not certainly be considered as a false statement, which was verified by the respondent accused. On analysis of the evidence on record and scrutinizing the impugned order in this case, this Court does not find any error apparent with the impugned order directing acquittal of respondent-accused warranting any interference by this Court. 2023 (4) TMI 1217 Seeking for a direction to the respondents to grant ex-post facto approval to the Foreign Direct Investment (FDI) received by the petitioner from two foreign companies 2023 (4) TMI 1216 Commission of offence u/s 276B r.w.s 278B of Income Tax Act - Failure to pay tax to the credit of Central Government under Chapter XII-D or XVII-B - as alleged in the complaints that the petitioners had deducted tax from the payments made to various parties and failed to deposit the tax to the credit of the Central Government within the prescribed time - petitioners submitted that the assessing officer had not issued a notice under Section 2 (35) of the Income Tax Act to the Directors of the Company before the impugned prosecution was launched and hence the impugned complaint is liable to be quashed - HELD THAT:- This Court finds that the Company and its Directors have been prosecuted for the offence under Section 276 B of the Income Tax Act. The contention of the learned counsel for the petitioners that no notice was issued to the Directors as mandated under Section 2 (35) of the Income Tax cannot be accepted. The impugned complaints cannot be quashed on the ground that no notice under Section 2 (35) of the Income Act was issued to the Directors. Further, the question as to whether the Directors were in charge of and responsible to the Company for its business is factual and has to be agitated only before the trial Court. Ground raised by the petitioner that the sanction to prosecute was given belatedly in violation of the Standard Operating Procedure given by the Board which prescribed the time limit for granting sanction of prosecution for the offence under Section 276 B as sixty days. It is seen that the instructions further provide that the time taken for a reply by the Assessee has to be excluded. The question of whether the Assessee had taken time to give the reply or whether there was a delay by the sanctioning authority is again factual in nature. Hence, this Court is of the view that the points raised by the petitioners have to be adjudicated only before the trial Court, and this Court is not inclined to entertain this quash petition. 2023 (4) TMI 1215 Stay of demand - demand order demanding the payment of 20% of the disputed tax, interest and penalty immediately and to produce proof of payment - As submitted stay petition filed was rejected without even permitting the petitioner to make his submissions on the stay petition - HELD THAT:- Petitioner being an NRI was shuttling between India and Malaysia, he was not in a position to take immediate steps to challenge this demand. The respondent had, therefore, initiated garnishee proceedings and attached the Bank accounts of the petitioner with the Indian Bank and ICICI Bank . Admittedly, the appeal challenging the assessment is still pending disposal and in the earlier writ petitions [ 2022 (12) TMI 1400 - MADRAS HIGH COURT ] , [ 2022 (12) TMI 1401 - MADRAS HIGH COURT] this Court had quashed the demand and directed the respondent to reconsider and pass speaking orders. It is also seen that the entire amounts demanded, namely 20% of the disputed tax, interest and penalty has been withdrawn by the respondent from the bank accounts of the petitioner. This Court feels that the interest of justice would be met, if the respondent is directed to dispose of the statutory appeal filed by the petitioner under Section 246(A) of the Act and further since 20% of the disputed tax, interest and penalty has been recovered by the respondent from the banks, in which the petitioner had accounts, a direction is issued to the appellate authority to dispose of the appeal within a period of 12 weeks from the date of receipt of a copy of this order. Till then, there shall be a stay in respect of the remaining 80% of the demand and the attachment in respect thereto is raised. 2023 (4) TMI 1214 Stay of recovery of demand - application of 'Trinity' principles - whether the impugned orders of assessment passed u/s 220(6) during pendency of appeals, stand vitiated for passing non-speaking orders? - as submitted by petitioner that it has been consistently held by this Court that an application u/s 220(6) ought to be decided by applying 'Trinity' principles set out in the case of Kannammal vs. Income Tax Officer, Ward 1(1), Tirupur [ 2019 (3) TMI 1 - MADRAS HIGH COURT] and in the case of Queen Agencies Vs. The Assistant Commissioner of Income Tax, (Circle-1) [ 2021 (4) TMI 609 - MADRAS HIGH COURT] ? - HELD THAT:- The impugned orders in respect of Assessment Years 2014-2015, 2016-2017 and 2020-2021 respectively are set aside and first respondent is directed to pass fresh orders in the stay applications filed, keeping in mind the 'Trinity' principles laid down by this Court in the case of Queen Agencies and in the case of Kannammal. The stay applications shall be disposed of within a period of six weeks from the date of receipt of a copy of this order. Until the stay applications are disposed of, no further proceedings shall be taken against the petitioner. 2023 (4) TMI 1213 Application for condonation of delay in submitting the returns - condonation of delay u/s 119 (2) (b) of the Income Tax Act, 1961 was filed intimating respondent No.1 that the delay in submitting the returns was on account of him being illiterate and due to the intervening marriage of his daughter and as such, it was not possible for him to submit the returns within the stipulated period - grievance of the petitioner the respondent No.1 has proceeded to subsequently pass the impugned order rejecting the application / request for condonation of the delay without appreciating that returns had already been processed and as such, the delay in submitting the returns has stood condoned by the respondents HELD THAT:- As rightly contended by petitioner, despite noticing that the returns of the petitioner had already been processed and intimated to the petitioner on 09.05.2020 itself, the respondent No.1 clearly fell in error in rejecting the application for condonation of delay vide impugned order dated 28.07.2020, which is clearly unreasoned, non-speaking, laconic and cryptic order without any application of mind and without assigning valid or cogent reasons as to why application for condonation of delay, which had already stood condoned by the processing of the returns was liable to be rejected. At any rate, the reasoning contained in the impugned order for the purpose of rejecting the application for condonation of delay are without any application of mind and on this ground also, the impugned order deserves to be set aside and request / application for condonation of delay submitted by the petitioner deserves to be accepted.Petition is hereby allowed. 2023 (4) TMI 1212 Unexplained Investment made in cash - HELD THAT:- Assessee failed to establish the source of cash. Assessee did not file any representation before the Revenue authorities regarding typographical error. It is evident from the records that the CIT(Appeals) has given a finding about bank withdrawal and and deleted part of addition after considering the same. Thereby, he partly allowed the appeal of the assessee. It is not the case where the learned CIT(Appeals) sustained the addition without considering the material available on record. Therefore, looking to the facts of the present case at this stage the assessee has not made out any case for deletion of impugned addition, hence no interference is called for in the order of learned CIT ( Appeals ) . Grounds raised in this appeal are dismissed. 2023 (4) TMI 1211 Exemption u/s 11 - denial of registration to applicant u/s 12AA - as argued such trust is engaged in activities, which are within the meaning of Charitable purpose , as defined u/s 2(15) - HELD THAT:- We find that the said payment was related to the charitable activities of the trust. For registration u/s 12AA it is clearly stipulating that the CIT(E) shall satisfy himself about the objects and the genuineness of its activities. The assessee made the payments in relation to charitable activities of trust. The ld. DR had not made any strong objection related to submission of the assessee and the evidence which are filed before the bench. We set aside the order of the ld. CIT(E) and direct to allow the registration of the assessee. Appeal of assessee allowed. 2023 (4) TMI 1210 Addition u/s 68 and 69A - assessee failed to establish the creditworthiness of the M/s. Royal Home Constructions and the genuineness of transaction of the Refundable Fidelity Guarantee as per the development agreement - CIT-A deleted the addition - HELD THAT:- As it is well established and the fact of non-service of notice on M/s. Royal Home Constructions or M/s. Royal Home Constructions not filing the returns from assessment year 2013-14 is of no consequence on this issue. It was open for the learned Assessing Officer to inform the said fact to the learned Assessing Officer of M/s. Royal Home Constructions for further action on that aspect. But that cannot be a ground to penalise the assessee. Entries in the bank account of the assessee towards refundable fidelity guarantee amount received from M/s. Royal Home Constructions are well supported by the statement of the Managing Partner of M/s. Royal Home Constructions, his affidavit, his confirmation letter, bank statement and the abstract of withdrawals from the account. Revenue does not show any reason as to how the CIT(A) was wrong in holding that by producing the copy of the Development Agreement and Deed of Infrastructure Development Agreement Managing Partner of M/s. Royal Home Constructions, his affidavit, his confirmation letter, bank statement and the abstract of withdrawals from the account the assessee discharged the onus of establishing the creditworthiness of M/s. Royal Home Constructions or the genuineness of the transaction. We are in agreement with theCIT(A) that when once the Managing Partner of M/s. Royal Home Constructions was produced and he confirmed the agreements and the payments and such confirmation is well supported by the bank statement with Axis Bank where the funds available and the withdrawals were sufficient to meet the obligations under the Development Agreement the assessee stands discharged of his burden to establish the creditworthiness of M/s. Royal Home Constructions and the genuineness of transaction. The closure of office of M/s. Royal Home Constructions for any period or M/s. Royal Home Constructions not maintaining any accounts is of no consequence in this matter. There is nothing illegality or irregularity in the findings of the learned CIT(A) and accordingly we decline to interfere with his such findings. CIT(A) is right in deleting the addition u/s 69A and u/s 68 and such findings do not warrant any interference. Appeal is found to be devoid of merits. Addition of agricultural income - assessee made IDS declaration - HELD THAT:- Nothing contrary is brought to our notice on behalf of the Revenue and the IDS declaration and the declaration of agricultural income by the assessee in the return of income are all borne by record. It is also not in dispute that the case of the assessee falls within the permissible categories of un-disclosed income under IDS vide 183(1)(c) of the Finance Act, 2016. We, therefore, decline to interfere with the findings of the learned CIT(A) on this aspect and dismiss the relevant grounds of appeal and allow the ground in cross objection of the assessee. Addition u/s 69A - CIT(A) on a perusal of the bank statement of the assessee found that the deposited a sum of Rs. 5 lakhs on 23/09/2014, withdrew the same on the same day, again deposited it on 24/09/2014 and withdrew the same on the same day, which phenomenon recurred on 25/09/2014 and 26/09/2014 also - HELD THAT:- On this aspect also, there is no denial of the deposits and withdrawals. Further, such a fact was verified by the AO also and admitted in the remand report. Learned CIT(A) is, therefore, quite justified in accepting the same and deleting the addition. We confirm the same and dismiss the grounds of appeal and allow the ground in cross objection of the assessee. 2023 (4) TMI 1209 TDS u/s 194C - payments made to driver-partners under the Uber App and payments made to the restaurant and courier partners under the Uber EATS App - Meaning of person responsible for paying u/s 204 - primary services provided through this mobile App is the transportation services wherein the passenger looking for a ride on the App and the driver/vehicle owner willing to offer accepts the offer - HELD THAT:- As in assessee s own case in M/s Uber India Systems Private Ltd [ 2021 (3) TMI 326 - ITAT MUMBAI] held that the assessee cannot be treated as a person responsible for paying for the purpose of section 194C r/w section 204 of the Act in respect of payment made to driver partners on behalf of the Uber BV for the transportation services. Accordingly, the coordinate bench held that the assessee cannot be treated as an assessee in default under section 201(1)/201 (1A) We find that the coordinate bench of the Tribunal in assessee s own case in Uber India Systems Private Ltd [ 2023 (1) TMI 1243 - ITAT MUMBAI] rendered similar findings in respect of payment made to driver partners on behalf of the Uber BV for the transportation services. In the year under consideration, the assessee provided taxi services as well as food delivery services in India through its mobile application. However, it is an accepted position that Uber EATS is a food delivery App on a similar pattern as Uber App and is a Restaurant Aggregator platform akin to Uber App being a ride-sharing platform. We find that the AO-TDS also rendered similar findings in respect of payments made under the food delivery services. DR could not show us any reason to deviate from the aforesaid decisions rendered in assessee s own case and no change in law was alleged in the relevant assessment year. The issue arising in the present appeal is recurring in nature and has been decided by the coordinate bench of the Tribunal in the preceding assessment years. Decided against revenue. 2023 (4) TMI 1208 Charging interest u/s 234A, 234B and 234C - late filing of return of income - return of income u/s 139 was not filed for the relevant year under bonafide belief that since the assessee has not having any other income from business or profession the assessee does not require to file any return of income - HELD THAT:- It is pertinent to note that Section 234A is a mandatory provision as the wording used by the statute is when the assessee furnished return of income after the due date or is not furnished under sub-Section 1 or sub-Section 4 of Section 139 the assessee shall be liable to pay simple interest at the rate of 1% for every month or part of a month comprising in the period commencing on the date immediately following the due date. Section 234A(1) Explanation 3 categorically states that where in relation to an assessment year is made for the first time under Section 147 the assessment so made shall be regarded as a regular assessment for the purposes of this Section. Here in the Explanation the assessment for the first time under Section 147 is mandatory to be recorded as regular assessment under Section 139 itself. Hon ble Bombay High Court in case of Priti Pithawala [ 2003 (3) TMI 743 - ITAT MUMBAI ] has decided the issue and granted the relief to the assessee as appears that in that case the belated return which cannot be submitted after the expiry of one year than the assessment made for the first time u/s 147, the assessee cannot be made liable to pay interest for the period during which it was not possible on the part of the assessee to file return till issuance of notice u/s 148. CIT(A) was not right in levying interest under Section 234A of the Act when the return was filed under Section 148 itself and therefore, the interest should be charged from the date of notice under Section 148 of the Act itself and not from the date of return filed under Section 139 or it is due date under Section 139. Appeal of the assessee is partly allowed. 2023 (4) TMI 1207 Unexplained investment u/s. 69B - income towards difference in stock - excess stock found during the course of survey - AO levied tax u/s. 115BBE - HELD THAT:- We are of the considered view that when the assessee has explained source for excess stock found during the course of survey, is out of income generated from current year business and explanation offered by the assessee is plausible explanation, then income offered towards excess stock cannot be treated as unexplained investment u/s. 69B of the Act, and also provisions of section 115BBE. AO and the Ld. CIT(A) without appreciating relevant facts assessed additional income offered towards excess stock as unexplained investment u/s. 69B of the Act and levied tax u/s.115BBE - We set aside the order passed by the CIT(A) and direct the AO to assess additional income offered towards excess stock found during the course of survey under the head profits and gains of business and profession as considered by the assessee. Appeal filed by the assessee is allowed. 2023 (4) TMI 1206 Chargeability of tax u/s 115BBE - Nature of income declared in survey proceedings u/s. 133A? - Undisclosed income u/s 69A and 69C or Business Income - as per assessee since the amount that was surrendered was business income, the same was liable to be taxed u/s. 28 and therefore it should suffer normal tax rate of 30% and not the high tax rate as per section 115BBE - HELD THAT:- There is no finding of the lower authorities as to whether the income declared during the course of survey is arising out of business or it is from the income from other sources. In such a situation more so, when the contention of the assessee is that the assessee has no other business then the present business and the income declared is out of the business of the assessee, we are of view that the matter needs to be re-examined at the end of AO. We therefore restore the issue back to the file of AO, and direct him to give a categorical finding as to whether the income declared by the assessee is business income or income from other sources. Assessee is also directed to promptly furnish the details called for by the AO. Thus, this ground of assessee is allowed for statistical purposes. 2023 (4) TMI 1205 TDS u/s 195 - non-deduction of TDS u/s 40(a) (i) - assessee company is a subsidiary company of its parent company in Japan - whether assessee had a Dependent Agency Permanent Establishment (DAPE) in India? - HELD THAT:- CIT(A) correctly concluded Mitsui India Pvt. Ltd. (appellant company in the instant case) is a Dependent PE agent of Mitusi Co. Ltd (Japan) have now been decided by the ITAT. The ITAT has already held that the appellant is not the PE of Mitusi Co. Ltd (Japan), hence in view of said findings of the Honorable ITAT there is no question of attribution of any profit of Mitusi Co. Ltd (Japan) to the appellant company. Accordingly, there is no question of deduction of tax on the same. In view of the same, the disallowance made by the AO under section 40(a)(i) of the Act, is directed to be deleted. Decided in favour of assessee. 2023 (4) TMI 1185 Assessment u/s 153A - estimation of net profit, addition u/s 68 respect of the share application money and premium - As submitted all the persons responsible for the affairs of the company were in judicial custody and, therefore, the assessee could not produce all the relevant books, vouchers etc., before the authorities to prosecute the case diligently. HELD THAT:- As from 12/02/2016 to 23/10/2018 all the persons responsible for the affairs of the company were in custody and in their absence, as claimed by the learned AR, some part of the material was produced before the authorities. There is nothing contrary to disbelieve the statement of the learned AR that the assessee could not prosecute the proceedings before the authorities diligently due to the fact of non-availability of the persons responsible for the affairs of the company. In fact, this peculiar circumstance is taken note by the Co-ordinate Benches of this Tribunal in the cases of the group concerns on earlier occasions. Thus we are of the considered opinion that it would be in the interest of justice to set aside the impugned orders and to restore the matters to the file of AO to adjudicate the same afresh, after giving an opportunity of being heard to the assessee and also to produce all the relevant material at their custody. We hold and direct accordingly. Grounds of appeals of both the assessee and the Revenue treated as allowed for statistical purpose. Customs 2023 (4) TMI 1204 Refund of SAD - rejection on the ground that the respondent being eligible to claim benefit of exemption Notification No.29/2010 for goods, ought to have sought for reassessment and filed refund claim under Section 27 of Customs Act, 1962 instead of filing claim under notification 102/2007 - some part of Bill of Entry rejected on the ground that the goods imported and sold against the sale invoices were not tallying - denial of some part also on the ground that the goods were sold on the same date of import as per the sales invoices, while actually the goods were physically removed from Air Cargo Customs only on the next day. Rejection on the ground that Bill of Entry in regard to RSP based assessed goods has to be reassessed and refund claim has to be filed for the CVD paid by respondent under Section 27 of the Customs Act, 1962 - HELD THAT:- As per Notification No.102/2007 the scheme of exemption is by way of refund. The importer has to pay the duty (CVD) and then file refund claim when the goods have been sold in domestic market by paying VAT / Sales Tax. The scheme of exemption under notification No.102/2007 being in the nature of refund after payment of duty, it cannot be insisted that reassessment is required while filing refund. It may be true that respondent is eligible for benefit of Notification No.29/2010 by which they do not have to pay the CVD at the time of import. But however, the respondent has chosen not to avail this benefit and paid the duty (CVD). The respondent has then filed refund claim of the duty paid by them (CVD/SAD) in terms of notification no.102/2007 - The Department cannot insist that the importer should avail benefit of a particular notification when they are eligible for different notifications of the same duty of CVD / SAD. The case is a refund claim filed in terms of Notification No.102/2007 wherein the scheme is of refund only after payment of duty. In other words, one of the conditions that has to be fulfilled for claiming refund under Notification No.102/2007 is that the importer has to pay the CVD at the time of import of the goods. The assessment therefore is in order and does not require reassessment. There is no excess duty paid. For these reasons, the reliance placed by Ld A.R on the decisions is not applicable to the facts of the case. Though the respondent may be eligible for benefit of CVD in terms of Notification No.29/2010, it is their option to avail or not to avail the exemption. They have later claimed refund of the CVD paid by them. The original authority has rejected part of the refund claim in regard to some of the goods for which the benefit of notification 29/2010 would be applicable, and held that without reassessment refund claim cannot be sanctioned as they are eligible for benefit of notification No.29/2010. This view does not find favour in the present case. The view taken by the Commissioner (Appeals) is legal and proper - There are no grounds to interfere with the impugned order - Appeal filed by Revenue dismissed. 2023 (4) TMI 1203 Principles of natural justice - refund of SAD - alleged discrepancies noticed in the refund claim based whereupon the refund claim was rejected by this Tribunal - opportunity of hearing to be provided - doctrine of merger of orders - HELD THAT:- The Deficiency Memo was issued at the time of scrutiny of said refund claim on 09.04.2018 itself. But the appellants never replied to the said Deficiency Memo despite a subsequent Memo dated 03.07.2018 nor even after the issuance of the Show Cause Notice dated 27.07.2018 which proposed the rejection of refund claim for it to be incomplete and barred by time. Appellant even failed to appear before the respective Original Adjudicating Authorities when opportunities of personal hearings were given to them. The Original Adjudicating Authorities, accordingly, decided the matter ex-parte vide respective Orders-in-Original rejecting the refund claim not only for it to be barred by time but also for it to be incomplete. Though ld. Commissioner (Appeals) has discussed only one aspect of rejecting the claims i.e. time bar aspect. But it is observed that the orders of Original Authorities have been upheld by Commissioner (Appeals) resulting into merger of these orders. The perusal of Orders-in-Original is clear that those were passed ex-parte. The appellants, despite the opportunities given, never responded to Deficiency Memo nor to Show Cause Notice nor even to the notices of personal hearing. Resultantly, the deficiencies already observed at scrutiny level, continued and the refund claims were rejected on both the aspects i.e. for being incomplete and for being barred by time. Hence, the findings for refund claim to be incomplete stand confirmed by the Commissioner (Appeals) also. The discrepancies in the refund claim were noticed by the Deficiency Memo dated 09.04.2018 itself. The said Memo has been mentioned in the Orders-in-Original which got merged with the Orders-in-Appeal as have been challenged before this Tribunal. It is the same Deficiency Memo which has been mentioned in the impugned Final Order dated 21.08.2021. Hence, there was no need of serving another notice to the appellants prior rejecting their appeals for want of removal of those deficiencies. Since at the stage of fresh hearing also nothing new has been brought to this Tribunal, there is no reason to differ from the findings in the Final Order. Appeal dismissed. Corporate Laws 2023 (4) TMI 1202 Inspection of records on dates, time and venue to be decided by the Appellants under intimation to the Respondent within a week of pronouncement of said impugned order - Section 421 of the Companies Act, 2013 - Original petition pending adjudication before the Tribunal under Section 241 242 of the Companies Act, 2013 - Whether there was any error in the impugned order which allowed the Respondent to examine the statutory records of the Appellant No. 1 Company taking help of the Chartered Accountant/ Company Sectary, if so desired, and also directing the Appellants herein to provide conducive environment? - HELD THAT:- Since, the main petition is yet to be finally decided on merits, this Appellant Tribunal is not required to look into the various other issues raised by the Appellant herein. It is found that the Respondent has legal rights for inspections of documents as ordered by the Tribunal. This Appellate Tribunal do not find any error or infirmity in the impugned order dated 20.02.2019 - Appeal dismissed. 2023 (4) TMI 1201 Seeking issuance of contempt proceedings against the Respondents (the Appellants herein) for continuous noncompliance and wilful disobedience of the order - Section 425 of the Companies Act, 2013 read with the provisions of the Contempt of Courts Act, 1971 - HELD THAT:- The Appellant-M/s. Morepen Laboratories Ltd. as well as Union of India are aggrieved with the order of the Company Law Board dated 01.07.2005, filed separate company appeals before the Hon ble High Court of Himachal Pradesh at Shimla. The Hon ble High Court vide its common order dated 17.05.2007 dismissed both the appeals. Thereafter, the Appellant-M/s Morepen Laboratories Ltd. as well as Union of India again challenged the order of the Hon ble High Court before the Hon ble Supreme Court of India by filing two separate Special Leave Petitions and the Hon ble Supreme Court of India directed to maintain status quo by orders dated 16.07.2007 and 07.09.2007 respectively and the said status quo order continued till the disposal of the said SLPs. The NCLT has rightly considered the facts and circumstances of the case that the order in CP No. 4 of 2005 dated 01.07.2005 was upheld upto the Hon ble Supreme Court of India and hence the NCLT cannot modify or cancel the same. The observation of the Hon ble Supreme Court of India while dismissing the civil appeals to the extent that it would be open for the appellant to agitate the subsequent events before the concerned forum cannot empower to the Tribunal to modify the order which was upheld by the Hon ble Supreme Court of India. On the other hand, the observation let the proceedings be concluded as far as possible within one year amounts to a direction for proper compliance of the order dated 01.07.2005 passed in CP No. 4 of 2005. There are no merit in both these Appeals to interfere with the common order impugned dated 06.10.2021 passed by the National Company Law Tribunal, Chandigarh Bench, Chandigarh - impugned order is hereby affirmed - appeal dismissed. Insolvency & Bankruptcy 2023 (4) TMI 1200 Enforcement of Security Interest for recovery of its Outstanding Dues - Seeking to nullify the Security Interest created to and in favour of the Petitioner/ Appellant and L T Infra Investment - grievance of the Petitioner/ Appellant, is that the Adjudicating Authority (National Company Law Tribunal, Division Bench II, Chennai), without considering the Concept of Relief Period, mentioned under Section 46 (1) (i) and /or Section 46 (1) (ii) of IBC and without considering the Contentions/ Objections, raised by the Suspended Directors - HELD THAT:- In the instant case, the Petitioner/ Appellant, although, being a Secured Financial Creditor of the Respondent Nos. 1 4/ Corporate Debtors, and not arrayed as Party, in the Petition, in IA(IBC)/400(CHE)/2021 and that the Petitioner/ Appellant, has filed the instant Comp. App (AT) (CH) (INS.) No. 325 of 2022, as an Aggrieved Person, yet this Tribunal, is of the earnest opinion that the Resolution Applicant of RPPL, had taken over the Corporate Debtor (ofcourse with a clean slate), after Approval, of its Resolution Plan, by the Adjudicating Authority / Tribunal, and in that perspective, the Petitioner/ Appellant, has No Locus Standi, to challenge the said Plan, or Corporate Insolvency and Resolution Process Proceedings of the Corporate Debtor. As such, the filing of an IA No.696 of 2022 in Comp. App (AT) (CH) (INS.) No. 325 of 2022, seeking Leave, to prefer the instant Appeal, before this Tribunal, cannot be sought for, with an inordinate and inexplicable delay, in the considered opinion of this Tribunal. It must be borne in mind, that when RISPL, itself, had no Rights, in the Properties, the aspect of any Rights, having been vested on the same, to and in favour of the Petitioner/ Appellant, by the Security, created by RISPL, will not arise. In any event, the Impugned Order, dated 30/05/2022 in IA(IBC)/400(CHE)/2021 in IBA/1099/2019, passed by the Adjudicating Authority / National Company Law Tribunal, Division Bench II, Chennai, does not take away the Rights of Petitioner/ Appellant, in any manner. This Tribunal, on a careful consideration of the divergent contentions advanced on either side, all the more, when RISPL, itself , had no rights in the Properties in question, any Rights, having been vested on the same, to and in favour of the Petitioner / Appellant, by Security, created by RISPL, does not arise, bearing in mind, a crystalline fact that the Rights of the Petitioner / Appellant, are not taken away, by means of the Impugned Order, dated 30/05/2022, in IA(IBC)/400(CHE)/2021 in IBA/1099/2019 (on the File of the Adjudicating Authority / National Company Law Tribunal, Division Bench II, Chennai), comes to a consequent conclusion, that the IA No. 696 of 2022 in Comp. App (AT) (CH) (INS.) No. 325 of 2022, preferred by the Petitioner / Appellant, (seeking Leave to prefer the instant Appeal), is Ex facie, not maintainable, and it fails. Petition dismissed. PMLA 2023 (4) TMI 1199 Seeking release of attached property - Money laundering - proceeds of crime - acquittal in predicate offence - compounding of offences - closure of the criminal case involving the predicate offence - HELD THAT:- The appellant No. 1 was an accused in the criminal case for offences which are considered as predicate offences under PMLA. In view thereof, a case was registered under PMLA following which the properties mentioned above were provisionally attached. Subsequently, the provisional attachment was confirmed by the adjudicating authority whereafter complaint was lodged before the designated court based on which S.C.No. 342 of 2018 has been registered. From the scheme of Rule 3-A of the Prevention of Money Laundering (Restoration of Property) Rules, 2016, what is discernible is that this provision is primarily meant for a claimant to seek restoration of property which he had lost as a result of the predicate offence leading to proceeds of crime and consequently the offence of money laundering. This provision may not be applicable in a case where the predicate offence itself has been closed on being compounded under Section 320 Cr.P.C. The Supreme Court in Vijay Madanlal Choudhary [ 2022 (7) TMI 1316 - SUPREME COURT ] dealt with the expression proceeds of crime and observed that it is only such property which is derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence that can be regarded as proceeds of crime. Authorities under PMLA cannot resort to action against any person for money laundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed, unless the same is registered with the jurisdictional police or pending inquiry before the competent forum. This decision was examined in detail by a Single Bench of this Court in M/S. JAGATI PUBLICATION LTD VERSUS ENFORCEMENT DIRECTORATE [ 2022 (9) TMI 1448 - TELANGANA HIGH COURT] . After analysing the above decision of the Supreme Court, this Court held that the expression proceeds of crime which is the very essence of the offence of money laundering needs to be construed strictly. Only such property which is derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime - Single Bench of this Court held that existence of scheduled offence and proceeds of crime being the property derived or obtained as a result of criminal activity relating to the scheduled offence are sine qua non for not only initiating prosecution under PMLA, but also for continuation thereof. In the absence of these two conditions, the Special Court dealing with the offence under PMLA would not be competent to pronounce on the guilt or otherwise of the person concerned accused of money laundering. Adverting to the facts of the present case, it is evident that upon closure of the criminal case and acquittal of appellant No. 1 on discharge, there is no scheduled offence against the appellants. In the absence of any crime, question of any proceeds of crime would not arise - learned Single Judge had erred in refusing to grant relief to the appellants by taking the view that acquittal of the appellants was on compromise and not on merit and relegating the appellants to the forum of the designated court. When there is no crime because of closure of the criminal case involving the predicate offence, continuation of attachment of the properties of appellants would not be justified. The petition is allowed by directing the respondents to release the properties of the appellants from attachment - appeal allowed. Service Tax 2023 (4) TMI 1198 Taxability - business auxiliary service (bas) - amount received by the appellant from the customers who purchased vehicle for assisting the registration of the vehicles with the Regional Transport Office tax - period prior as well as to 01.07.2012 Period prior to 01.07.2012 - HELD THAT:- The issue for the period prior to 01.07.2012 is covered by the decision of the Tribunal in Arpanna Automotives [ 2016 (3) TMI 308 - CESTAT MUMBAI ] where it was held that In our considered view helping the purchaser with registration with the RTO, cannot be considered by Business Auxiliary Service, in view of the foregoing, we hold the Service Tax demand of the amount retained by the appellant in respect of RTO registration fees is not sustainable. The impugned order is set aside - thus, the Commissioner was not justified in confirming the demand of service tax under BAS for the period prior to 01.07.2012. Period post 01.07.2012 - HELD THAT:- The issue was decided in favour of the appellant by the Commissioner (Appeals) in the order dated 19.12.2018 where it was held that Further, for an activity to be considered a declared service as defined in clause (e) of the Section 66E of the Finance Act, 1994, the two parties must agree for the act or for refraining from an act, for a consideration. In the case of the appellant, though certain amounts, as mentioned above, were billed/ received, there was no such agreement for an act or refraining from an act between the appellant and any other person and no consideration was agreed upon. In view of the above, the amounts received/billed by the appellant neither constituted a consideration for providing a Business Auxiliary Service or Business Support Service prior to 1.7.2012 nor did the same fall within the ambit of a declared service with effect from 1.7.2012 - It would be seen from the aforesaid order passed by the Commissioner (Appeals) that even for the period post 01.07.2012 the activity could not have been considered as a declared service and, therefore, the demand could not have been confirmed. Even otherwise, the second and the third show cause notices do not propose to demand service tax under section 65B(44) of the Finance Act and merely refer to the first show cause notice which, as noticed above, proposed demand of service tax under BAS. Apart from the fact that the demand could not have been confirmed under section 65B(44) of the Finance Act for the reason that the activity cannot be considered as a declared service under section 66E(e) of the Finance Act, a demand cannot also be confirmed on an allegation other than an allegation contained in the show cause notice. Thus, the Commissioner was not justified in confirming the demand for the period post 01.07.2012. Appeal allowed. 2023 (4) TMI 1197 Refund of Service Tax - principles of unjust enrichment - refund was sanctioned but the same was credited in the Consumer Welfare Fund on the ground that appellant have recovered service tax from their customers and the same was shown as expenditure in the books of accounts - service tax on Tour Operator Service discontinued by Issuance of N/N. 20/2009-ST dated 07.07.2009 having retrospective effect. HELD THAT:- The very issue involved in the present case is no longer res-integra as the same has been decided against the assessee in CCE ST RAJKOT VERSUS M/S EAGLE CORPORATION PVT LTD. [ 2018 (7) TMI 855 - CESTAT AHMEDABAD] and M/S RAJDHANI TRAVELS, M/S RK TRAVELS, M/S NEW RAJDHANI TRAVELS, M/S TANNA TRAVELS AGENCY VERSUS COMMISSIONER (APPEALS) OF CENTRAL EXCISE [ 2018 (4) TMI 168 - CESTAT AHMEDABAD] - In the identical set of facts and legal issue involved in the present case as well in the cited decisions wherein it was held that refund of the appellant in the above cases is hit by unjust-enrichment. Since the appellant have paid service tax in the routine course and subsequently when the service tax was made exempted retrospectively, the incidence of service tax stood passed on. Therefore, the lower authorities have rightly credited the refund amount in the Consumer Welfare Fund - Appeal dismissed. 2023 (4) TMI 1196 Levy of Service tax - Liquidated damages received by the appellant for tolerating the delay - amounts to declared service within the meaning of Section 66E (e) of Finance Act or not - HELD THAT:- The assertion of the Learned Advocate for the appellant is found to be correct since a more or less similar issue has been considered and settled in favour of the assessee. In the order in the case of M/S SOUTH EASTERN COALFIELDS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR [ 2020 (12) TMI 912 - CESTAT NEW DELHI] , it is found that the Learned Delhi Bench has analysed the scope and ambit of Sections 65B (44), 66E (e) and 67 (1) of the Act and they have also analysed and applied various decisions of the Hon ble Apex Court in COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [ 2018 (2) TMI 1325 - SUPREME COURT] , UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [ 2018 (3) TMI 357 - SUPREME COURT] and FATEH CHAND VERSUS BALKISHAN DAS [ 1963 (1) TMI 46 - SUPREME COURT] and thereafter, has concluded that the view of the Principal Commissioner therein that the penalty amount, forfeiture of earnest money deposit and liquidated damages received by the appellant therein towards consideration for tolerating an act as being amenable to Service Tax under Section 66E (e) of the Finance Act, was not sustainable. The issue is required to be answered in favour of the assessee, for which reason the impugned order cannot sustain - Appeal allowed. 2023 (4) TMI 1195 Classification of services - business auxiliary service - commission paid to foreign agents - reverse charge mechanism - benefit of exemption under Notification No. 14/2004-S.T. dated 10.09.2004 - HELD THAT:- The assertion of the Learned Advocate for the appellant is found to be correct, as a more or less similar issue has been considered in the light of the very same Notification No. 14/2004-S.T. dated 10.09.2004 by this very Bench in the case of M/s. Texyard International [ 2015 (8) TMI 794 - CESTAT CHENNAI ] where it was held that The exemption of service tax under BAS was allowed in relation to four industries namely agriculture, printing, textile processing and education. Therefore, the appellant being textile industry, it is covered under the category textile processing in the notification. The liaising with customers and getting export orders is itself a procurement of service within the meaning of (a) under Notification No. 14/2004 and the same would also amount to provision of service on behalf of the client as per (c) of the above Notification. The findings arrived at by the lower authority that the activities of the foreign agents would not amount to any taxable service under Notification No. 14/2004, cannot be agreed upon. The denial of the benefit of exemption under Notification No. 14/2004 by the lower authority is not sustainable, for which reason the same is set aside - Appeal allowed. 2023 (4) TMI 1194 Classification of Services - mandap keeper service or not - appellant provides services in relation to birthday parties, kitty parties and marriage parties and has the ability to arrange parties for a group comprising between 700 to 800 people - period 2008-2009 to 2011-2012 - demand has been calculated on the basis of daily receipt and expenditure sheet for the disputed period even though the appellant had explained that all the entries did not relate to appellant company as some of the entry related to family members - misreading of statements - invocation of extended period of limitation - suppression of facts or not - HELD THAT:- A mandap keeper is a person who allows temporary occupation of a mandap for a consideration for organizing any official, social or business function. Mandap means any immovable property and includes any furniture, fixtures, light fittings and floor covering let out for a consideration for organizing any official, social or business function. Any service is provided or to be provided to any person by a mandap keeper in relation to the use of mandap in any manner would be taxable under section 65(105)(m) of the Finance Act. A Circular dated 23.08.2007 issued by the Central Board of Excise and Customs clarifies that halls or rooms let out by hotels/restaurant for a consideration for organizing any official, social or business function would be covered under the definition of mandap and such hotels and restaurant would be covered within the scope of mandap keeper. Accordingly, service tax would be leviable on services provided by hotels and restaurant in relation to letting out of halls or rooms for organizing any official, social or business function. The defence taken by the appellant that it was operating hotels/ restaurant and serving food on per plate basis was not accepted by the Commissioner in view of the categorical statement of the manager (operations) and the director of the appellant, as also the records resumed by the investigating officers under the panchnama dated 24.12.2011 containing bills relating to mandap keeper service. The contention of the appellant that the documents which formed the basis of the order passed by the Commissioner were not relied upon by the department cannot also be accepted for the reason that Annexure A to the panchnama clearly contains the description of the said documents. The finding recorded by the Commissioner in this regard, therefore, does not suffer for any infirmity. It is clearly a case where the appellant had suppressed material facts on the department in order to evade payment of service tax and, therefore, the extended period of limitation was correctly invoked under the proviso to section 73(1) of the Finance Act. The imposition of the penalty and interest by the Commissioner in the impugned order also does not suffer from any illegality. Appeal dismissed. Central Excise 2023 (4) TMI 1193 Valuation of manufactured goods - Change in Retail Sale Price (RSP) - existing retail sale price of Rs. 2.00 discontinued permanently and restored sales price of Rs. 1.50 with effect from 08.04.2012 - Revenue confirmed charges of the show cause notice and demanded Central Excise duty by considering that the said three machines operated for manufacture of goods having RSP of Rs. 1.00, Rs. 1.50 and Rs. 2.00 in the month of January 2012 and April 2012 - Revenue held that the appellant did not file declaration showing balance stock lying in the factory for the discontinued retail sale price hence, it was not considered as permanently discontinuation of existing retail sale price - penalty under Section 11AC of the Central Excise Act, 1944. HELD THAT:- The appellant proposed to avail the option of 4th proviso to Rule 9 of Pan Masala Packing Machines (Capacity Determination and Collection of duty) Rules 2008 - From 4th proviso to Rule 9, the manufacturer is allowed to permanently discontinue the goods of existing retail sale price or commence a new retail sale price during the month. In such case, monthly duty payable shall be re-calculated pro-rata on the basis of total number of days in that month and the number of days remaining in that month counting from the date of such discontinuation or commencement and the duty liability for the month shall not be discharged. The entire case of the department is that since the appellant have changed the retail sale price twice i.e. one in January, 2012 and second in April, 2012, the appellant has not permanently discontinued the manufacturing of goods of existing retail sale price. As per the Adjudicating Authority, only when the retail sale price is changed permanently, the appellant can be eligible for pro-rata duty on the reduced retail sale price whereas in the present case, since the retail sale price was reintroduced, the change in retail sale price was not permanently made. Hence, the 4th proviso to Rule 9 is not applicable in the appellant s case. From the careful reading of above 4th proviso to Rule 9 of Pan Masala Packing Machine Rules, it is observed that the term permanently discontinues or commences is in respect of a particular month wherein the new retail sale price is discontinued or commenced, from which it is clearly inferred that the term permanently does not mean that the discontinuation or commencement of new retail sale price should be once forever. It is clear that the discontinuation or commencement of new retail sale price should be once in a month and in the said month the retail sale price should not be changed again in the same month, connotes to the term permanently . In the present case either commencement or discontinuation of a particular retail sale price was made only once in particular month i.e. in the month of January, 2012 or in April 2012. The Adjudicating Authority has wrongly interpreted the 4th proviso to construe that permanently discontinuation or commencement of retail sale price means once a new retail sale price is commenced or discontinued the same cannot be re-introduced or discontinued ever in future - The proviso clearly suggests that the action of permanent discontinuation or commencement of new retail sale price during the month is for the purpose of calculation of pro-rata duty for that particular month. Therefore, the term permanently is clearly related to a particular month and not forever as contemplated by the Adjudicating Authority in his adjudication order. Therefore, we are of the clear view that since in the present case appellant have changed retail sale price either by commencement or discontinuation only once in the month of January, 2012 and April, 2012 it cannot be said that the appellant have not discontinued or commenced the new retail sale price permanently in the respective months. Therefore, on this count the Adjudicating Authority s contention is clearly not acceptable. Revenue also demanded duty in only one month i.e. January, 2012 and April, 2012 whereas if the Revenue stick to interpretation of term permanently then the differential duty for the months of February, 2012, March, 2012 and even for May, 2012 should have been demanded. This itself establish that permanent discontinuation or commencement of one retail sale price means permanent in a particular month, hence the same was not violated in the present case for the reason that in the month of January, 2012 or April, 2012 the retail sale price was changed only once in the respective month, hence the said change was permanent in that particular month. Accordingly, the condition of 4th proviso to Rule 9 of PMPM Rules was scrupulously complied with by the appellant - there is no doubt that the term permanently discontinuation or commencement of retail sale price must be considered in a particular month and not otherwise - the terms permanently in the 4th proviso to Rule 9 was not violated by the appellant. Third proviso to Rule 9 provides that a manufacturer permanently discontinue manufacturing of goods of existing retail sale price or commence manufacturing of goods of new retail sale price during the month. The appellant had discontinued retail sale price Rs. 1.50 since January 2012 which has been accepted by the Revenue for the month of February and March 2012 therefore, findings of the Revenue that no intimation for discontinuation permanently is factually incorrect - the double standard of the same authority cannot be accepted. It is also noted that the appellant permanently discontinued retail sale price Rs. 2 with effect from 08.04.2012 thereafter they did not manufacture the notified goods having retail sale price Rs. 2.00 in the same month which demonstrates that the appellant permanently discontinued the retail sale price Rs. 2.00. Therefore, the Revenue ought to have accepted the duty payment on pro-rata basis in terms of 3rd proviso read with 4th provisoto Rule 9. The appellant have not filed declaration under Rule 13(5) of Pan Masala Rules, 2008 inasmuch as the non-declaration of closing stock of notified goods, we find that merely by non-filing of declaration under Rule 13(5) the benefit of pro-rata duty on retail sale price as per 4th proviso to Rule 9 cannot be denied. It is not the case of the department that the appellant have manipulated the stock. The stock of the finished goods was very much recorded in the records of the appellant and the same was neither altered nor manipulated - The Revenue has not disputed the correctness of the stock in the appellant s factory which was recorded in the records. Due to this procedural lapse, the benefit of pro-rata based duty in terms of 4th proviso read with 3rd proviso, cannot be denied. The differential duty confirmed by the lower authority is not sustainable. As regards the Revenue s appeal which is seeking imposition of penalty under Section 11AC for confirmation of demand of duty, since the duty demand itself is not sustainable, there is no question of any penalty, hence the Revenue s appeal has no substance - Appeal of assessee allowed. 2023 (4) TMI 1192 Default in payment of duty - constitutional validity of Rule 8(3A) of CCR - Wilful mistake or not - HELD THAT:- The issue is no more res integra and is squarely covered by the judgement of the Hon ble Calcutta High Court in the case of M/S. GOYAL MG GASES PVT. LTD VERSUS UNION OF INDIA OTHERS [ 2017 (8) TMI 1515 - CALCUTTA HIGH COURT] , wherein it is categorically held that when Rule 8 (3A) is declared ultra vires by the different High Courts then the Revenue cannot take a different stand contrary to the said judgements. The Hon ble Court further declared Rule 8(3A) as invalid which is not stayed by the Hon ble Supreme Court. The Hon ble Gujarat High Court in the case of INDSUR GLOBAL LTD. VERSUS UNION OF INDIA 2 [ 2014 (12) TMI 585 - GUJARAT HIGH COURT] has declared the words without utilizing Cenvat Credit under Rule 8(3A) as ultra vires which means that the assessee can discharge duty by utilizing Cenvat Credit which is what exactly has been done in the instant case by the Appellant - the said judgment has been followed by the Hon ble Calcutta High Court in the case of Goyal MG Gases Pvt. Ltd. v. UOI which is not stayed by the Hon ble Supreme Court. The Hon ble Calcutta High Court in the said case, has declared the provisions of Rule 8(3A) ibid as invalid and further has held that the Revenue cannot take a different stand and parity has to be extended to the assessee. The demand in the instant case has been raised for contravention of Rule 8(3A) ibid restricting utilization of Cenvat credit during the period of default which provision has been declared ultra vires/invalid by Court, hence the demand cannot be sustained and the Appeal, thus, succeed on this count. Appeal allowed. CST, VAT & Sales Tax 2023 (4) TMI 1191 Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - HELD THAT:- The issue involved in this writ petition is squarely covered by a decision of this Court in M/S. DHANDAPANI CEMENT PRIVATE LTD., M/S. TERU MURUGAN BLUE METAL VERSUS THE STATE OF TAMIL NADU, THE PRINCIPAL COMMISSIONER COMMISSIONER OF COMMERCIAL TAXES, THE ASSISTANT COMMISSIONER (ST) , THE JOINT COMMISSIONER (ST) TERRITORIAL, THE DEPUTY COMMISSIONER (ST) [ 2019 (2) TMI 1850 - MADRAS HIGH COURT ] wherein the identical issue was considered and it was held that The Petitioner in these Writ Petitions has stated on affidavit that it is unable to download the C forms from the websites as the same stand blocked from use. Upon enquiry with the Assessing Authorities, they have been informed that the benefit of the decision in M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE ADDITIONAL COMMISSIONER (CT) [ 2018 (10) TMI 1529 - MADRAS HIGH COURT] Ltd can be extended only to those dealers in that are party to the decision. Petition allowed. 2023 (4) TMI 1190 Omission of the 2nd respondent-Tahsildar in entertaining Form A application submitted by the petitioners for re-assessment of rate of Basic Tax on land and for making necessary entries in the Basic Tax Register - HELD THAT:- This Court has considered the issue of reassessment of land tax on the basis of the orders obtained under the Kerala Land Utilisation Order, 1967 in the judgment in MARY ABRAHAM VERSUS STATE OF KERALA AND ORS. [ 2020 (3) TMI 1445 - KERALA HIGH COURT] ]. This Court held that once enabling order is passed under Rule 6(2) of the Kerala Land Utilisation Order, 1967 permitting conversion of the land, then the earlier entries in the BTR showing the land as Nilam, Paddy Land, etc. will become superfluous and redundant and the competent Revenue officials like the Tahsildar are obliged under law to make a fresh assessment of the property under Section 6A of the Kerala Land Tax Act, 1961. As the nature of the land of the petitioners has been permitted to be changed pursuant to passing of a statutory order under the Kerala Land Utilisation Order, 1967, the competent authority is bound to re-assess the rate of Basic Tax in respect of the land and to make necessary entries in the Basic Tax Register, if necessary, after verifying the veracity/genuineness of the permission obtained under the Kerala Land Utilisation Order, 1967 produced by the petitioners. There will be a direction to the 1st respondent-Revenue Divisional Officer to consider Ext.P6 Form-5 application submitted by the petitioners and take a decision thereon, within a period of one month - Application disposed off. Indian Laws 2023 (4) TMI 1189 Auction - company declared as a sick company - disposal of assets for recovery of dues - reserve price in the auction notice in terms of Section 21(c) of the Act, 1985 not indicated - absence of a competitive bidding - HELD THAT:- The process was initiated by the Operating Agency (IDBI) to sell the subject assets of the sick industrial company (BCI) in terms of the order passed by the BIFR in exercise of its power under Section 20(4) of the Act, 1985. Pursuant thereto, the Operating Agency was under an obligation to obtain the valuation report of the subject property and after due assessment has to arrive at the reserve price for the sale of the property in terms of Section 21(c) of the Act, 1985 and thereafter has to proceed with a procedure known to law while adopting a method for sale of the assets by public auction or by inviting tenders or in any other manner specified and for the manner of publicity therefor in terms of Section 18(2)(k) of the Act, 1985. Indisputedly, in the instant case, it has not been placed on record if there was any valuation report assessed by the Operating Agency from the approved valuer of the subject property and, at the same time, the reserve price of the subject property was never disclosed/indicated in the first place when the public notice came to be notified on 24th May, 2004 inviting offers from the interested parties for Block IV. Thus, the very procedure adopted by the Operating Agency appears to be defective at its very inception - The purpose of auction (open or close format) is to get the most remunerative price and giving opportunity to the intending bidders to participate and fetch higher realizable value of the property. If that path is cut down or closed, the possibility of fraud or to secure inadequate price or underbidding would loom large. In the given circumstances, it is the duty of the Court to exercise its discretion wisely and with circumspection and keeping in view the facts and circumstances in each case. The question of locus was never raised by the appellants before the High Court and once the subject issue has been looked into by the High Court on merits and we too are persuaded that order of the AAIFR confirming the bid pursuant to its order impugned dated 1st April, 2005 is not legally sustainable, we do not find any justification at this stage to non-suit the claim of the appellants prayed for in Civil Appeal No.10127 of 2011. The money deposited by the appellants in Civil Appeal No. 10128 of 2011 shall be refunded in terms of the order of the High Court impugned dated 5th February, 2010. Appeal dismissed. 2023 (4) TMI 1188 Smuggling - Heroin - reliance placed upon the confessional statement of the appellant recorded under Section 67 of the NDPS Act before the officers of the NCB who are invested with the powers under Section 53 of the NDPS Act - reliability of such statements - HELD THAT:- Admittedly, the confessional statements were made by the accused to an officer empowered under Section 53 of the NDPS Act and hence, in view of the bar of Section 25 of the Evidence Act, the confessional statements will have to be kept out of consideration. A finding was recorded by the High Court that the prosecution has not proved that the witnesses are dead or cannot be found or are incapable of giving evidence or kept out of the way of the accused or their presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable. These findings are based on the perusal of the entire record. There is no explanation offered by the prosecution about their failure to examine these two independent material witnesses. Hence, the statements of both witnesses are not admissible in evidence. Admittedly, PW2 drew two samples from each of the packets of the contraband found in the hotel room and kept them in two separate plastic covers. These covers were sealed and the remaining contraband was also sealed. Thus, the prosecution claims that the samples were prepared even before the packets were sent to the Station House Officer. The submission of the learned senior counsel appearing for the appellant in Criminal Appeal 451 of 2011 was that a grave suspicion is created about the prosecution s case as this action by the PW2, was contrary to Section 52A of NDPS Act - the act of PW2 of drawing samples from all the packets at the time of seizure is not in conformity with what is held by this Court in the case of Mohanlal2. This creates a serious doubt about the prosecution s case that the substance recovered was contraband. It cannot be said that the contraband was found in the custody of accused no.1. At the highest, it was found in the room occupied by accused no.4. It is noted here that accused no.4 has been convicted by the High Court only for the offence punishable under Section 30 of the NDPS Act which is for the offence of making preparation to do or omitting to do anything which constitutes an offence punishable under the provisions of Sections 19, 24 and 27A. The prosecution has not produced any evidence to show that the contraband was brought to the room of the accused no.4 by the other three accused persons or anyone of them. It is not the case that the room of accused no.4 was in possession of accused nos.1 to 3 who were staying in different hotels. The case of the prosecution is not free from suspicion. The prosecution has not proved beyond a reasonable doubt that the appellants in these two appeals were in possession of the contraband or that they brought the contraband to the hotel room of the accused no.4 - the appellants are acquitted of the offences alleged against them - Appeal allowed. 2023 (4) TMI 1187 Invocation of doctrine of necessity for initiating non-compliance proceedings against Google - non-effective compliance by Google of the CCI s final order - Section 42 of the Competition Act, 2002 - CCI is validly constituted presently with two members to continue its adjudicatory roles or not - effect of Section 15 of the Act - whether, in the present case, would there remain any requirement to apply the principles of doctrine of necessity at all? HELD THAT:- A plain reading of the provision of Section 15 brings to fore that it contemplates two different functions of CCI which would be governed by the said Section, namely an act or proceeding . It is manifest that the act contemplated, would obviously be distinguishable from the proceeding , in that, a proceeding would be relatable to adjudicatory powers exercised by the CCI and anything other than an adjudicatory process would be covered by the word act which could mean regulatory or administrative powers of the CCI. Moreover, it is trite that when an enactment uses the word or , it clearly indicates that the same ought to be read disjunctively, meaning thereby, that the saving clause of section 15 would equally apply to adjudicatory/judicial powers of the CCI. So read, the intention of the Legislature to ensure that the adjudicatory functions of the CCI does not get impeded for defect arising out of vacancy or constitution arising out of vacancy, becomes clear - any adjudicatory process wherein there is a vacancy or any defect in the constitution of the Commission would not invalidate the proceedings of CCI. It is trite that a statutory interpretation ought to be based on plain reading of the Section itself unless there is any ambiguity which would entail reliance upon extraneous materials. This Court is of the considered opinion that the aims and objects of a particular enactment ought to be interpreted in a manner so as to ensure that the object desired to be fulfilled by the legislature by such promulgation are taken to its logical conclusion. In other words, merely because of a defect or a vacancy in the constitution of the CCI, the CCI cannot be considered as a statutory authority not having jurisdiction to adjudicate the complaints or other proceedings pending before it. Any interpretation, other than the aforesaid, would render the provisions of Section 15 otiose and which could not possibly be the intention of the Legislature either. The arguments of Mr. Sandeep Sethi, learned senior counsel in respect of quorum being complete only if three members of the CCI, including the Chairperson, constitute the same, is untenable. For the same reason, the argument of Mr. Sethi, learned senior counsel that the word vacancy used in Section 15 read with sub-section 3 of Section 22 of the Act mean that the word vacancy would be applicable only and only if the vacancy is in respect of members more than three and less than seven, would also be untenable, considering the plain language of both the Sections. Though the argument, at the first blush, appears to be logical, however, in view of the fact that the provisions of Section 22 are not relatable to the adjudicatory process at all, the interpretation sought to be given to the word vacancy in Section 15, by reading the proviso to sub-section (3) to Section 22 of the Act into it, would also stand rejected. This Court is of the considered opinion that the provisions of Section 15 act as a saving clause in regard to a situation where a vacancy or a defect in constitution of the CCI would arise and any such vacancy or defect in the constitution would not invalidate any proceedings so far as the adjudicatory powers of the CCI is concerned. Doctrine of necessity - HELD THAT:- Having regard to the definition of what constitutes doctrine of necessity as rendered by the Hon ble Supreme Court in J. MOHAPATRA CO. VERSUS STATE OF ORISSA [ 1984 (8) TMI 350 - SUPREME COURT] , it is clear that it is only when an adjudicator who is subject to disqualification on the ground of bias or interest in the matter which he has to decide, may be required to adjudicate if there is no other person who is competent or authorized to adjudicate or if a quorum cannot be formed without him or if no other competent Tribunal can be constituted, that the doctrine of necessity may become applicable. The Hon ble Supreme Court has also held that in such cases, the principles of natural justice would have to give way to the necessity, for otherwise there would be no means of deciding the matter and the machinery of justice or administration would break down. In the present case, none of the learned senior counsel appearing on behalf of the respondents, at all submitted that the members who presently comprise the CCI are disqualified for any reason. Having regard thereto, the question of examining whether the doctrine of necessity is or is not applicable to the present case does not arise at all. There is no impediment, legal or otherwise, in directing the CCI to take up the applications under Section 42 of the Act, as filed by the petitioner, for hearing and considering the same in accordance with law on or before 26.04.2023 - petition disposed off. 2023 (4) TMI 1186 Alleged disobedience of the orders of this Court - non-party arrayed as contemnor? - Court ordered the third respondent to consider the petitioner's OTS offer/representation and to pass appropriate orders on merits and in accordance with law after issuing notice to the petitioner and the persons interested in this regard and by affording them an opportunity of personal hearing or virtual hearing within a period of four weeks from the date of receipt of a copy of this order. HELD THAT:- The learned counsel for the petitioner submitted that, at the time of passing the order by this Court on 21.04.2021 though a direction was given to the Deputy General Manager, Industrial Financial Corporation of India Ltd. at the time of filing the contempt petition, the name of Mr.Manoj Mittal, Managing Director Chief Executive Officer, Industrial Financial Corporation of India Ltd., has been arrayed as contemnor as if he has committed the contempt - When this Court specifically asked as to why a non-party has been impleaded as a party as if he has committed contempt, there was no specific answer from the learned counsel for the petitioner. The Supreme Court has repeatedly held that the higher level officials or officers, who are heading any institution need not be unnecessarily called for these kind of proceedings by summoning them to appear before the Court. By doing the same, their time, energy and also money would get wasted. That apart, the important work to be attended by the higher officials, especially the officials, who are heading any institution would be heavily affected. Therefore, unless, there is a dire need or necessity, such kind of higher officials need not be summoned to the Court. There are two violations on the part of the petitioner in this contempt petition. One is that, when the Managing Director Chief Executive Officer, Industrial Financial Corporation of India Ltd. is not a party in the writ petition and the direction was issued only to the Deputy General Manager, Industrial Financial Corporation of India Ltd, the name of the Deputy General Manager, Industrial Financial Corporation of India Ltd should have been mentioned in the contempt petition, instead, the Managing Director Chief Executive Officer, Industrial Financial Corporation of India Ltd. has been arrayed as a party unnecessarily without any plausible reason - Secondly, once a direction was issued by this Court to consider the representation dated 12.01.2021, the petitioner should have awaited for the orders to be passed by the respondent, thereafter only, he could have persuaded with the contempt petition. However, unmindful of the directions issued by this Court, it seems that the petitioner has given further improved offers to the respondent as one time settlement and that has also been considered and rejected by the respondent company. This is the second mistake committed by the petitioner. First of all, this Court feels that there has been no willful contempt on the part of the respondent. Secondly, the array of Managing Director Chief Executive Officer, Industrial Financial Corporation of India Ltd. as contemnor or alleged contemnor is a gross misuse of process of law by the petitioner and merely because the petitioner was able to get an order, that too, in the admission stage even without hearing the respondents, it will not give premium to the petitioner to array the head of the institution and in this case, the Managing Director Chief Executive Officer, Industrial Financial Corporation of India Ltd., thereby, unnecessarily is troubled as he had to travel all along from New Delhi to appear before this Court pursuant to the statutory notice issued to the respondent. This kind of practice is to be deprecated. In view of the order passed by the respondent where the subsequent applications submitted by the petitioner with improved offer as one time settlement having been considered and rejected by the respondent, absolutely, there is no contempt committed by the respondent company. The Contempt Petition is liable to be closed, accordingly, it is closed with the order imposing cost/compensation of Rs.25,000/- payable by the petitioner to the respondent officer.
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