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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter May 12, 2023 Case Laws in this Newsletter: GST Income Tax Benami Property Customs Corporate Laws Service Tax Central Excise CST, VAT & Sales Tax Articles JUDICIAL SCRUTINY UNDER SECTION 34 OF THE ARBITRATION AND CONCILIATION ACT, 1996 IS LIMITED 7 mistakes to avoid while filing GST returns Determining the ‘basis’ of share of revenue in a contracting state TRENDS IN GST COLLECTION- APRIL, 2023 DENIAL OF FOREIGN TAX CREDIT News 6th India-Canada Ministerial Dialogue on Trade and Investment concludes, Ministers Sh. Piyush Goyal and Ms. Mary Ng agree to enhance cooperation for coordinated investment promotion and information exchange Joint Statement of the 6th India-Canada Ministerial Dialogue on Trade & Investment Notifications GST 10/2023 - dated 10-5-2023 - CGST Seeks to implement e-invoicing for the taxpayers having aggregate turnover exceeding Rs. 5 Cr from 01st August 2023. 05/2023 - dated 9-5-2023 - CGST Rate Seeks to amend notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 so as to to extend last date for exercise of option by GTA to pay GST under forward charge. 05/2023 - dated 9-5-2023 - IGST Rate Seeks to amend notification No. 08/2017- Integrated Tax (Rate) dated 28.06.2017 so as to to extend last date for exercise of option by GTA to pay GST under forward charge. 05/2023 - dated 9-5-2023 - UTGST Rate Seeks to amend notification No. 11/2017- Union Territory Tax (Rate) dated 28.06.2017 so as to to extend last date for exercise of option by GTA to pay GST under forward charge. Money Laundering S.O. 2135 (E) - dated 9-5-2023 - PMLA Central Government notifies activities when carried out in the course of business on behalf of or for another person SEZ S.O. 2139 (E) - dated 8-5-2023 - SEZ Special Economic Zone - Central Government de-notifies an area of 20.36 hectares, thereby making resultant area as 77.425 hectares at SIPCOT, Industrial Area, Sriperumbudur Taluk, Kancheepuram District, in the State of Tamil Nadu S.O. 2138 (E) - dated 8-5-2023 - SEZ Special Economic Zone - Central Government de-notifies an area of 2.19 hectares, thereby making resultant area as 5.97 hectares at Sy. No. 1/1, Plot No. 6 IDA Uppal, Ranga Reddy District, in the State of Telangana S.O. 2137 (E) - dated 8-5-2023 - SEZ Seeks to rescind Notification Number S.O. 2706 (E) dated 27th October, 2009 Circulars / Instructions / Orders SEBI SEBI/HO/MRD/MRD-PoD-1/P/CIR/2023/68 - dated 10-5-2023 Direct Market Access (DMA) to SEBI registered Foreign Portfolio Investors (FPIs) for participating in Exchange Traded Commodity Derivatives (ETCDs) SEBI/HO/DDHS/DDHS-POD1/CIR/P/2023/67 - dated 9-5-2023 Registration with the FINNET 2.0 system of Financial Intelligence Unit – India (FIU-India) GST - States F.3/432/GST/Policy/2022/582-89 - dated 8-5-2023 Time barring of Scrutiny of GST Returns of Delhi taxpayers for the FY 2017-18, 2018-19 & 2019-20 Central Excise Order No. 08/2023 - dated 9-5-2023 Appointment of Common Adjudicating Authority in respect of SCNs issued to M/s Shell India Markets Pvt. Ltd. Highlights / Catch Notes GST Limit for GST e-invoicing modified - Now taxpayers having aggregate turnover exceeding Rs. 5 Crores shall prepare invoice and other prescribed documents, in terms of sub-rule (4) of rule 48 of the said rules in respect of supply of goods or services or both to a registered person or for exports, from 01st August 2023 Visit to Get Source Removal of provisional attachment of the bank accounts of the petitioner - return of the electronic devices seized - The inspection in this case is January, 2019 whereas the show-cause notice is issued only in October, 2022. This delay of nearly four years in issuing show-cause notice cannot be a reason to continue an attachment under Section 83 of the Act, which itself is provisional in nature - HC Visit to Get Source Income Tax Transfer of case u/s 127 - The obligation on the part of AO to record reasons before ordering the transfer of the case and the right of the assessee to be heard in the matter are not hollow slogans but prescribed to achieve a particular purpose and the purpose is to remove any element of arbitrariness while exercising powers u/s 127 - HC Visit to Get Source Long term capital gain - agricultural land - capital asset u/s 2(14) - land as situated within Municipal Limit or not?- it can be held that “Dharuhera” of District Rewari do not find place in the notification issued consequence to the provisions of Section 2(14) of the Income Tax Act, 1961. Hence, the land which is situated at Garhi Alawalpur cannot be treated as the capital asset, ergo the proceeds are not liable to tax under the head “Long Term Capital Gains - AT Visit to Get Source Unexplained closing cash balance - Additions u/s.68 - As per the assessee, the cash balance was arising to him out of the accumulated fund from the agricultural activities which has been disbelieved by the AO but without bringing any material on record that the cash was generated by the assessee from any other activity which was subject to tax. Thus revenue failed to discharge the onus imposed upon it to disprove the contention of the assessee. - AT Visit to Get Source Deduction u/s 10B - Interest income inclusion/exclusion - interest on bank deposits was eligible to be included in profits of hundred percent export oriented unit for purpose of claiming deduction under section 10B of the Act. - AT Visit to Get Source Capital gain on sale of land - transfer of stock in trade as capital contribution by the assessee in the AOP - the transaction of impugned land introduced by the assessee as his share of capital in the AOP is taxable u/s.45(3) of the Act. The AO shall consider the value which is credited in the books of accounts, as value of land shall be deemed to be the full value of consideration as a result of transfer of land as provided in Section 45(3) of the Act. - AT Visit to Get Source Addition u/s 68 - Unexplained share transactions - Consideration received other than cash - There are no details on facts as to what was the investment which was made by the assessee against which it has issued its share capital along with share premium - We do not disagree with the contention that provisions of Sec. 68 cannot be applied if no cash/money has been received by the assessee for issue /allotment of shares. - CIT(A) wrongly deleting the additions - AT Visit to Get Source Assessment u/s 144C - eligible assessee - neither of the conditions prescribed by section 144C (15) (b) stands fulfilled and as such, the Assessee is not an ‘eligible assessee’ within the meaning of section 144C (15). Hence, as correctly contended, there was no question of the AO passing a draft proposed assessment order under section 144C(1). - AT Visit to Get Source Customs Prayer for enhancement of sentence awarded vide the impugned judgment - recovery of 14 gold biscuits weighing 2.324 kgs. of foreign origin - The present petition has been filed against the sentence on the plea that a too lenient view was taken by the Ld. CJM but on plain reading of the impugned order dated 02.11.2020, the leniency was taken by the Ld. CJM, Chandel on the specific submission of the Ld. SPP for the custom. As such, the petitioner has no right to agitate the same before this Court. - Revenue petition dismissed with Cost of Rs. 10000/- for wasting valuable time of the Court and public money by filing frivolous petition - HC Visit to Get Source Classification of imported goods - Howaru probiotic culture - Recovery of differential duty - Though the adjudication orders appear to have suggested that the imported goods are not the final product for human consumption and, yet, as intermediary for manufacture of food supplements to be treated as food preparations, there is no finding that the goods are not ‘probiotic cultures’ or that, being ‘cultures’ and not ‘probiotics’ per se, are disentitled to the benefit of concessional rate of duty sought in the bills of entry. The issue of whether the goods are ‘probiotics’ or not is, thus, not relevant to the proceedings. - Demand set aside - AT Visit to Get Source Seeking refund of Excess Duty - Rejection of request for re-assessment of bills of entry - the failure on the part of the original authority to either refer the request to the authority vested with the power to grant amendments under section 149 of Customs Act, 1962 or to grant a hearing to the applicant on the issue of recall and reassessment of bills of entry relating to goods cleared under section 47 of Customs Act, 1962 - Matter restored back - AT Visit to Get Source Corporate Law Liability of Independent Director who was retired before the date of offence - the petitioner as seen from the documents was an Additional Director on the date the board report was filed. To counter the same evidence is required to be adduced during trial so also to decide as to whether the petitioner at the relevant time of filing the report was a Director, Additional Director or an Independent Director. The responsibility of an Additional Director being the same as that of a director (but difficult from an independent director) they remain responsible, as the statute provides for the same - Thus to quash the proceedings by exercising this Courts inherent powers would amount to an abuse of the process of Court and would also amount to serious miscarriage of justice. - HC Visit to Get Source Direct Taxes Constitutional validity - Amendment to Prohibition of Benami Property Transactions Act, 1988 - Concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, viz., 25.10.2016. As a consequence of the above declaration, all such prosecutions or confiscation proceedings shall stand quashed. - SC Visit to Get Source PMLA Reporting Entity - PMLA - List is getting bulky - More categories related to business included Visit to Get Source Service Tax Classification of services - Job work - where the contracts provide for payment of services on piece rate basis and where the supervision over the workmen employed remains with the contractors, where the employee-employer relationship exists between the contractor and his workmen supplied, the services are not classifiable under “Manpower recruitment or Supply Agency service”. - AT Visit to Get Source Valuation of taxable services - installation and commissioning and works contract services - the adjudicating authority has not recorded any specific finding as to what amount is to be considered for the purpose of determination of the service tax liability, there are no hesitation, but in accepting the commercial documents submitted by the appellants to conclude that there is proper bifurcation of the amount towards supply of equipment and towards the services for installation and commissioning of the same at the site of the customer. - demand set aside - AT Visit to Get Source Business Support service or not - privity of contract - doctors appointed on contractual basis - collection of consultation fees/charges from the patients it cannot be said that the appellants hospital is the recipient of service provided by the doctors inasmuch as the appellants actually availed the professional services of the doctors, for which they pay certain amount from the payment received from the patients. Hence, as a recipient of service, the liability to pay service tax cannot be fastened on the appellant. - AT Visit to Get Source Central Excise Rebate claim - Post GST era - Revenue proposes the re-crediting to the Cenvat Credit ledger instead of paid in Cash - Commissioner (Appeals) while considering the case also taken into consideration the provisions contained under Section 142 (3) of the CGST Act, 2017 and held that since the application for rebate was filed after the appointed date, i.e., 01.07.2017, the amount which earlier would have been allowed to be refunded by way of re-credit, should now be refunded in cash as per the provisions of said Section 142(3). - Order of revisional authority sanctioning the cash refund sustained - HC Visit to Get Source CENVAT Credit - CVD paid through DEPB Scrip - It is settled that even if the licences were issued under FTP 2000-07 then also the credit cannot be denied, so long the imports were made under notification no. 96/2004-Cus which is issued under FTP 2004-09. Moreover, in the present case, department could not establish that the licenses were issued under FTP 2000-07, for this reason also the proposal for denial of cenvat credit by the revenue is not sustainable. - AT Visit to Get Source Levy of penalty on Proprietor of the Firm under Rule 26(2) of Central Excise Rules, 2002 - fraudulent availment of CENVAT Credit - Taking note of the fact that penalty imposed on the appellant is above 50% of the credit taken by the set 2 units - the penalty imposed is excessively high. Hence for justice will be met if the set penalty is reduced to 10% of the penalty imposed on the appellant - AT Visit to Get Source VAT Jurisdiction of Intelligence Officer to levy penalty - penalty proceedings initiated under Section 67 of the KVAT, 2003 - On the basis of the extracted findings of the Intelligence officer it can irresistibly be concluded, it was not a case of estimation, but based on an actual calculation by reading the contents of the agreement and the invoices. - Petition dismissed - HC Visit to Get Source Case Laws: GST 2023 (5) TMI 423 Removal of provisional attachment of the bank accounts of the petitioner - return of the electronic devices seized - whether Section 83 contemplates a continued attachment of bank accounts for several years as has happened in the present case? - HELD THAT:- No doubt, the provisional attachment envisaged is for the protection of revenue and in light of the proceedings under Chapters XII, XIV and XV of the Act - The above chapters encompass all proceedings from inspection till assessment. However, the question that would arise is as to whether the proceedings may be kept pending endlessly such that attachments of bank accounts traverse three to four years seamlessly. It is the case of the respondents that the delay is on account of the non-response of the petitioner to show-cause notices. However, the respondents are well aware of the procedure set out under statute, and have to adhere to the same in a timely fashion, in accordance with law. In the present case, the show-cause notice has been issued only on 08.10.2022 in respect of an inspection that had transpired in January, 2019. The time lines as seen aforesaid would persuade me to arrive at a conclusion that the purpose of Section 83 which is stated to be provisional attachment to protect revenue in certain cases cannot be deployed so as to work against the assessee continuously for several years as has happened in the present case. The inspection in this case is January, 2019 whereas the show-cause notice is issued only in October, 2022. This delay of nearly four years in issuing show-cause notice cannot be a reason to continue an attachment under Section 83 of the Act, which itself is provisional in nature - Undeniably, Section 83 must be resorted to in appropriate cases, ensuring with equal vigour that the Department is proceeding in a timely manner, by issuing notice and finalizing proceedings in a time bound fashion. Petition allowed. Income Tax 2023 (5) TMI 422 Registration u/s 12A denied - requirement of issuance of any certificate of registration - Suo Motu revision by the Commissioner u/s 263 as set aside the assessment order on the ground that the AO mechanically granted the benefit of exemption u/s 12A without in fact verifying whether any registration in favour of the assessee was issued under Section 12A of the Act or not - HELD THAT:- As taking into consideration that since 1987 from the date on which the assessee applied for registration under Section 12A, the assessee continued to avail the benefit of exemption u/s 12A at least up to the assessment year 2007-2008. The aforesaid is not disputed by revenue. It is required to be noted that even post 1997 also the assessee continued to avail the exemption u/s 12A on the basis of its registration in the year 1987. AO was justified in granting the benefit of exemption u/s 12A for the assessment year 2010-2011. What was required to be considered was the relevant provision prevailing in the year 1987, namely, the day on which the assessee applied for the registration. At the relevant time there was no requirement of issuance of any certificate of registration. The fact remains that for all these years after 1997 till the year 2007-2008 when the assessee continued to avail the benefit of exemption solely on the basis of the registration in the year 1987 and it was never the case on behalf of the revenue and even the Commissioner that in the earlier years there was any certificate of registration or the registration was not granted. Even from the material on record, namely, a communication dated 03.6.2015 which was considered by the ITAT, it is apparent that the assessee was granted registration on 22.9.1987. Therefore it cannot be said that there was no registration at all. The impugned judgment and order passed by the High Court [ 2017 (1) TMI 1006 - ALLAHABAD HIGH COURT] is erroneous and is unsustainable. The order passed by the ITAT is hereby restored.[ 2015 (7) TMI 1181 - ITAT LUCKNOW] 2023 (5) TMI 421 Stay of demand - grant the deposit order of a lesser amount than 20% - high-pitch demand - HELD THAT:- The income of the petitioner as assessed by the Assessment Officer is more than the return income. It is also observed that the difference between the assessed income and the return income is ranging from 11% to 15%. As per the circulars and office memorandum issued by the respondent from time to time, particularly Instructions No.1914 dated 21.03.1996, 29.02.2016 and 31.07.2017, the demand raised by the revenue falls within the definition of high-pitch demand. As gone through the impugned order passed by the respondent No.1. It is revealed from the impugned order that the respondent No.1 quoted certain portions of the stay application filed on behalf of the petitioner and also the submissions filed on his behalf before it. After quoting certain portions of the stay application and submissions, the respondent No.1 has passed the impugned order without meeting out the contentions raised on behalf of the petitioner regarding undue hardships on account of his financial condition and the downfall in the export industries. As in LG Electronics India (P) Ltd. [ 2018 (7) TMI 1905 - SC ORDER] has also ruled that administrative circulars issued by the revenue department from time to time on the subject will not operate as a fetter and the authority being a quasi-judicial authority can always grant deposit order of lesser amount than 20%. Respondent No.1 is completely guided by the administrative circulars issued by the revenue department and has failed to give any finding about the hardships pointed out by the petitioner and has also not taken into consideration the factors such as prima facie case, balance of convenience and irreparable loss while passing the impugned order. We are of the opinion that the impugned order is not liable to be sustained as the same is a nonspeaking and non-reasoned order. The matter is remanded to the respondent No.1 to pass a fresh order keeping in view the fact that being a quasi-judicial authority, it is open to it to grant the deposit order of a lesser amount than 20% while taking into consideration the facts and circumstances of the case particularly the hardships pointed out by the petitioner in stay application. 2023 (5) TMI 420 Transfer of case u/s 127 - Transfer of the assessment jurisdiction of the Petitioner from DCIT- 19(3), Mumbai to the DCIT Central Circle-3, Jaipur - HELD THAT:- The Instructions make it clear that while sending a proposal for centralization, reasons had to be reflected including the relationship of the petitioner with the main persons of the group. No such sustainable reasons are forthcoming from the records except speculation connecting the Petitioner and the subject material and a request from the Principal Commissioner of Income Tax, Jaipur for centralization of the case From a reading of the Order impugned passed under Section 127(2) of the Act, it can be seen that the same does not at all reflect as to why it was necessary to transfer the jurisdiction from DCIT- 19(3), Mumbai to DCIT Central Circle-3, Jaipur. None of the issues raised by the Petitioner have been dealt with either in the Order dated 21 November 2022 disposing of the objections raised by the Petitioner much less have the same been reflected in the Order impugned u/s 127(2) - AO appears to have acted very mechanically treating the request from DCIT Central Circle-3, Jaipur, as if it was binding upon him. In our opinion, the said request was not at all binding inasmuch as if it was so, then the agreement envisaged under Section 127(1)(a) would be rendered superfluous. Section 127(1) (b) contemplates a situation where in the event of a disagreement, the matter is referred to an officer as the Board may, by notification in the Official Gazette, authorise in that behalf. Not only this, if a request for transfer of jurisdiction was to be treated as binding, then it would have rendered otiose Section 127 to the extent the same envisages an opportunity of being heard to be provided to the Petitioner. The obligation on the part of AO to record reasons before ordering the transfer of the case and the right of the assessee to be heard in the matter are not hollow slogans but prescribed to achieve a particular purpose and the purpose is to remove any element of arbitrariness while exercising powers u/s 127 - If the request for transfer of jurisdiction was so sacrosanct as could not be refused, then the opportunity of being heard would be nothing but illusory rendering the request a foregone conclusion regarding its acceptance. We, therefore, are not convinced at all that the moment a request was made by the concerned officer from Jaipur, the same had necessarily to be allowed as per the Instructions dated 17 September 2008. We hold that the Order impugned is unsustainable in law and is, accordingly, set aside. 2023 (5) TMI 419 Revision u/s 263 - assumption of jurisdiction by the PCIT - Tribunal has held the initiation of revisional proceedings against the assessee is bad - HELD THAT:- It is seen that PCIT has exercised jurisdiction u/s 263 of the Act on the very same information furnished by the DDIT (Investigation) Unit 2 (2) - On perusal of the order passed by the PCIT in which the show cause notice issued u/s 263 has been extracted, the PCIT has not recorded any finding that he has reason to believe that income that is assessable to tax has escaped assessment. Tribunal was right in coming to the conclusion that the PCIT erred in exercising its jurisdiction. Our view is supported by the decision in the case of PCIT Vs. ANINDITA STEELS LIMITED [ 2022 (2) TMI 397 - CALCUTTA HIGH COURT] Appellant relied upon the decision of MALABAR INDUSTRIAL CO. LTD. Vs. COMMISSIONER OF INCOME TAX, KERALA STATE [ 2000 (2) TMI 10 - SUPREME COURT] The said decision would support the case of the respondent assessee and would lead us to affirm such an order. Thus, in the light of the factual aspect brought out by the Tribunal while granting relief to the assessee, we find no substantial questions of law, much less substantial questions of law arising for consideration in this appeal. Appeal dismissed. 2023 (5) TMI 418 Revision u/s 263 by CIT - disallowance u/s 14A - Tribunal as analysed the factual position and found that the case of the assessee was selected for limited scrutiny under CASS and the issue which the Commissioner sought to reopen namely, the issue of disallowance u/s 14A read with Rule 8D in respect of the exempt income was not one of the issues which was selected for scrutiny - HELD THAT:- A bare reading of Instruction No.7 of 2014, dated 26th September, 2014 clearly shows that the PCIT cannot make a roving enquiry in the guise of a limited scrutiny and as such the instruction issued by the CBDT is binding on the Department. We find that on facts the Tribunal has granted relief in favour of the assessee. As appearing for the respondent points out that the PCIT in its order has relied upon a decision of Sunrise Academy of Medical Specialities (India) Pvt. Ltd. [ 2018 (5) TMI 1492 - KERALA HIGH COURT] but on a reading of the said order, we find that the said order supports the case of the assessee rather than the revenue. No substantial question of law 2023 (5) TMI 417 Deduction u/s 80P - Addition of interest received from Co-operative Bank to the extent the same was directly credited to the Reserves and Surplus in the balance sheet - assessing is a co-operative housing society, a non-profit making entity, formed with the objective of maintaining and protecting building occupied by its members - HELD THAT:- In the present case, the interest which was directly credited to the Reserve and Surplus in the balance sheet by the assessee, as per the statutory requirement, at the first instance is not only treated as income by the assessee. The question of claim of deduction against such income does not arise. In any case, from Schedule-7 forming part of the audited financials of the assessee, it has been duly substantiated that the interest income, which was transferred to the Reserves and Surplus in the balance sheet, is interest earned from Co-operative Bank which is of the same nature as has already been allowed u/s 80P(2)(d) of the Act. In the assessment year 2014-15, similar accounting treatment pursuant to the Maharashtra State Co-operative Societies Act, 1960 was made by the assessee, and part of the interest income received from Co-operative Bank was directly credited to the respective Repair Fund and Sinking Fund. CIT(A) while allowing the interest credited to the profit and loss account and claimed in the return of income under section 80P(2)(d) did not extend the similar relief in respect of interest credited to the balance sheet, which was added as income by the AO, but vide rectification order passed u/s 154 of the Act, forming part of the paper book from pages 41-42, the learned CIT(A) granted the relief to the assessee allowing deduction under section 80P(2)(d) of the Act on the entire interest income received by the assessee from the Co-operative Bank, including the amount credited to the balance sheet. There is no material available on record to show that the aforesaid findings of the learned CIT(A) have been overruled. Therefore assessee is entitled to deduction under section 80P(2)(d)on the entire amount of interest income received from the Co-operative Bank - Appeal by the assessee is allowed. 2023 (5) TMI 416 Deduction u/s 80IA - Income derived on FDRs - According to the AO this interest on FDRs is not in the nature of profit and gain from business and it has to be assessed to tax as income from other sources. HELD THAT:- As respectfully following the decision in the case of CIT vs. Jagdishprasad M. Joshi [ 2008 (11) TMI 326 - BOMBAY HIGH COURT ], CIT vs. Eltek Sgs (P) Ltd. [ 2008 (2) TMI 17 - DELHI HIGH COURT ] and M/s. Tema Exchangers Manufactures Pvt. Ltd. [ 2018 (7) TMI 1627 - BOMBAY HIGH COURT ] hold that interest earned by the assessee on the FDRs is an allowable deduction under section 80-IA of the Act. Ground No. 3 of the appeal is accordingly allowed. Disallowance of expenditure u/s 37 and 40(a)(ia) - submission on assessee that insofar as the property tax is concerned, the assessee is filing the property tax receipts for the relevant assessment year and submitted now, whereas the proof of remittance of TDS by way of challan - HELD THAT:- We admit the additional evidence in the shape of property tax receipts. In view of the fact that the relevant material is now available on record in respect of the property tax and also the TDS, it would be just and proper, AO to verify the same and take a view. With this view of the matter, restore the issue relating to disallowance under section 37 and 40(a)(ia) to the file of the learned AO to verify the material and take a view. Grounds are accordingly treated as allowed for statistical purposes. 2023 (5) TMI 415 Registration u/s 12AA denied - Non verifying the documents submitted by the assessee - HELD THAT:- CIT(E) erred in not considering the submissions, documents and details furnished by the assessee trust. Therefore to meet the ends of justice and also in the Principle of Natural Justice, we deem it fit to set aside impugned order and remit the matter back to the file of Ld. CIT(E) with a direction to reconsider the application filed by the assessee in Form No. 10A alongwith all the documents and evidences filed by the assessee trust by giving one more opportunity to the assessee to submit its case - Appeal filed by the Assessee is allowed for statistical purpose 2023 (5) TMI 414 Rejecting application in form 10AB u/s 12AB - non satisfaction of genuineness of the activities of the trust - assessee submitted that if given an opportunity of hearing, he shall diligently comply with the same and produce all required documents to the satisfaction of Ld. CIT(Exemption) in support of the eligibility of the applicant s application for grant of registration of the Trust under Section 12AB - HELD THAT:- As in the interest of justice, the case is being set-aside to the file of Ld. CIT(Exemption) for denovo consideration of the application of the assessee Trust for registration under Section 12AB of the Act and to pass appropriate orders after considering the documents filed by the applicant / assessee in accordance with law. Appeal of the assessee is allowed for statistical purposes. 2023 (5) TMI 413 Long term capital gain - nature of land sold - capital asset u/s 2(14) - land as situated within Municipal Limit or not?- Disallowance of deduction u/s 54B/54F - assessee had not been able to substantiate the purchase of agricultural land subsequent to the said sale - Whether the land sold is a capital asset as per the provisions of the Act applicable to the A.Y. 2013-14? - HELD THAT:- The land in question is undisputedly situated in the village Garhi Alawalpur situated in the District Rewari which is within 5 KMs of the present Municipality Dharuhera . This Municipality has not been mentioned in the said notification. The Revenue could not bring to our notice any other notification issued wherein the Municipality Dharuhera situated in District Rewari is mentioned for the purpose of provisions of Section 2(14) of the Income Tax Act, 1961. As gone through the entire list of Municipal Committees/Municipal Counsel in the State of Haryana and we could not find Daruhera as notified Municipal Committee in the District Mahendragarh (Annexure-C). We have gone further to verify whether there is any village/municipality by name Daruhera in the entire district of Mahendragarh from the Government of Haryana public document (Annexure-D). We could find none. We have also gone through the list of PIOs as per the Directorate of Urban Local Bodies to verify whether any local body in the name of Daruhera (Annexure-E). We could find none. Hence, we apprehend that an error might have crept in the notification dated 06.01.1994. The concerned authorities may look into this issue. Since, the Tribunal cannot venture to alter/modify the notification, the issue is being adjudicated as per the notification in force. On going through the entire facts, it can be held that Dharuhera of District Rewari do not find place in the notification issued consequence to the provisions of Section 2(14) of the Income Tax Act, 1961. Hence, the land which is situated at Garhi Alawalpur cannot be treated as the capital asset, ergo the proceeds are not liable to tax under the head Long Term Capital Gains . We are conscious of the fact that the amendment in the said Section has been brought w.e.f. 01.04.2014 and the land in question before us was sold on 21.03.2013 pertaining to A.Y. 2013-14. Hence, the provisions applicable to that period has been taken into consideration. Since, the proceeds cannot be treated as taxable in the hands of assessee any adjudication on the issue of deduction u/s 54F and u/s 54B becomes only academic in nature and hence not resorted to. 2023 (5) TMI 412 Revision u/s 263 - assessment was framed based on survey findings - appeal is pending before Ld. CIT(A) - discrepancy in stock and disallowance u/s 40A(3) for jewellery acquired in cash - HELD THAT:- The discrepancy in stock was added under the head business income whereas disallowance u/s 40A(3) for jewellery acquired in cash through exchange was estimated at 10%. It is quite clear that there was clear application of mind on the issues as flagged in the revisionary order. Proceeding further, it could also be seen that the assessee preferred further appeal against both the issues which was pending for adjudication at the time of revision. This being so, the case of the assessee would be covered under Clause (c) of Sec.263(1) which puts a bar on initiation of revision u/s 263 when an appeal is pending before Ld. CIT(A). As relying on Smt. Renuka Philip case [ 2018 (12) TMI 129 - MADRAS HIGH COURT ] and similar ratio has been laid down in CIT vs. VAM Resorts and Hotels Pvt. Ltd. [ 2019 (8) TMI 1418 - ALLAHABAD HIGH COURT ] we would hold that the revision u/s 263 was bad-in-law and the same is therefore, liable to the quashed. Decided in favour of assessee. 2023 (5) TMI 411 Levy of interest on delay in deposit of TDS - HELD THAT:- When the payments have been electronically made on 07.07.2020 which is the due dates and the money has flown from the bank account of the assessee it should not make any difference when the same has been shown to be credited to the Governments account. This is evident from the bank statement. We are of the view that the assessee has deposited tax on or before the due date, therefore, the AO is directed to delete the impugned addition. Decided in favour of assessee. 2023 (5) TMI 410 Capital Gain computation - Addition towards indexed cost of improvement - HELD THAT:- The sale deed refers only to some Kutcha construction, that is a part of the sale deed to this effect. This shows that, firstly, the assessee did not adduce any evidence of having done any development work on the property by furnishing the direct invoices for the development work. Secondly, even if it is presumed that the development work was actually carried out as claimed through the estimate/Bill of the developer, it is hard to accept that the development of the property was got done by the assessee before the date of its purchase itself. Thirdly, even if we go with the hypothesis that the assessee actually got the development work, then such development work should have been reflected in the description of the property in the sale deed, which is absent. In view of the foregoing reasons, we are satisfied that the AO was justified in not accepting the claim of indexed cost of development by the assessee. This ground is not allowed. Increase in the proportionate deduction u/s.54F because of the resultant increase in the amount of capital gain for the disallowance of the claim for indexed cost of improvement - AO is directed to verify such claim and allow the same as per law. Needless to say, the assessee will be allowed an opportunity of hearing. 2023 (5) TMI 409 Unexplained closing cash balance - Additions u/s.68 - mandation to disclose the cash balance - Whether assessee is covered under the provisions of section 44AD ? - HELD THAT:- Assessee claimed to be an agriculturist and in support of his contention has filed the landholding certificates in form 7A/12 and Talati certificate showing the agricultural produce. But the assessee fairly admitted that the accountant has wrongly declared the income under the provisions of section 44AD of the Act wherein it was mandatory to disclose the cash balance. As per the assessee, being an agriculturist, he was not supposed to disclose any cash balance in the return filed under section 44AD of the Act. Accordingly, it was contended that the assessee should not be punished for the mistake committed by the accountant of the assessee. The provisions of section 44AD are applicable to such resident assessee who is an Individual, Hindu Undivided Family and Partnership Firm but not Limited Liability Partnership Firm. The presumptive taxation scheme under these provisions can be opted for by the eligible assessee who is engaged in any business (except the business of plying, hiring or leasing goods carriages referred to in section 44AE), whose turnover or gross receipts from such business do not exceed the limit of audit prescribed under section 44AB of the Act. There is no evidence available on record to indicate that the case of the assessee is covered under the provisions of section 44AD of the Act except the income tax return i.e. the income was disclosed under the provisions of section 44AD of the Act. However, the assessee during the assessment proceedings has countered that he is not covered under the provisions of section 44AD of the Act by furnishing the landholding and Talalti certificates as discussed above. AO, without disposing of the objections raised by the assessee has assumed that the assessee has not furnished the necessary details in support of agricultural activity. But at the same time the AO has also not brought anything on record suggesting that the assessee is engaged in the activity which is subject to the provisions of section 44AD of the Act. As such, the assessee shifted the onus upon the revenue by submitting the details of the landholding and thereafter it was the onus upon the revenue to disprove the contention of the assessee based on the documentary evidence but it has not been done so. As per the assessee, the cash balance was arising to him out of the accumulated fund from the agricultural activities which has been disbelieved by the AO but without bringing any material on record that the cash was generated by the assessee from any other activity which was subject to tax. Thus revenue failed to discharge the onus imposed upon it to disprove the contention of the assessee. As transpired that whatever cash was available with the assessee was out of the agricultural activity of the earlier years carried out by him. Accordingly, we are not inclined to uphold the finding of the authorities below. Hence the ground of appeal of the assessee is hereby allowed. 2023 (5) TMI 408 Deduction u/s 10B - Interest income inclusion/exclusion - HELD THAT:- Full Bench decision of Hon ble Karnataka High Court in Hewlett Packard Global Soft Ltd. [ 2017 (11) TMI 205 - KARNATAKA HIGH COURT ] may also be relied on for the proposition that all profits and gains of hundred percent EOU including incidental income by way of interest on bank deposits or staff loans would be entitled to hundred percent exemption or deduction under section 10B of the Act. In recent decision in CIT vs. Sankhya Technologies (P) Ltd. [ 2020 (8) TMI 618 - MADRAS HIGH COURT ] held that interest on bank deposits was eligible to be included in profits of hundred percent export oriented unit for purpose of claiming deduction under section 10B of the Act. Thus Interest income would be entitled to claim exemption under section 10B of the Act. AO is directed to modify the assessment accordingly. Exclusion of other incomes, namely, receipt of subsidy and insurance claim from the profits for computing deduction under section 10B is also not sustainable in view of the decision of Riviera Home Furnishing [ 2015 (11) TMI 1139 - DELHI HIGH COURT ] and Moser Baer India Ltd. [ 2018 (5) TMI 581 - ITAT DELHI ] wherein it is held that the above receipts form part of the profit of business of the undertaking and thus eligible for deduction under section 10B of the Act. We set aside the orders of the Ld. CIT(A)/AO and direct the Ld. AO to amend the assessment order suitably. Decided in favour of the assessee. Contention of the assessee that the amount as realized on transfer of DEPB represents gross realization and the issue of deduction of the said benefit under DEPB needs to be decided in the light of the judgment of the Hon ble Supreme Court in Topman Exports [ 2012 (2) TMI 100 - SUPREME COURT ] We agree with the above contention of the assessee and restore the matter back to the file of the Ld. AO to decide the issue afresh keeping in view the judgment of the Hon ble Supreme Court in Topman Exports (supra) after allowing opportunity of hearing to the assessee. 2023 (5) TMI 407 Capital gain on sale of land - transfer of stock in trade as capital contribution by the assessee - assessee (HUF) had introduced his share of land as capital contribution in the AOP - capital asset u/s 2(14) - AO stated that the land was not transferred and it was merely given for development, hence, there was no transfer as envisaged in section 2(47) - HELD THAT:- In the case under consideration, the assessee contributed his land as Capital in the AOP. The assessee is liable to receive share of profit of AOP as mentioned in the Article 11 of the Articles of Agreement vide which the AOP was formed. Therefore, the facts of the present case are identical to the facts of the case of DLF Universal Ltd [ 2010 (1) TMI 54 - ITAT DELHI-B] . Therefore, as held that the land which was introduced as Capital by the assessee in the AOP and has been duly credited to his capital account of AOP, partakes the character of Capital Assets. Thus provisions of Section 45(3) are applicable in the case of the assessee. Section 45(3) is a deeming provision. As relying on case of DLF Universal Ltd.[supra] we hold that the transaction of impugned land introduced by the assessee as his share of capital in the AOP is taxable u/s.45(3) of the Act. The AO shall consider the value of Rs.5,00,00,000/- which is credited in the books of accounts, as value of land shall be deemed to be the full value of consideration as a result of transfer of land as provided in Section 45(3) of the Act. The AO shall accordingly calculate the Capital gain. 2023 (5) TMI 406 Levy of fees u/s 234E - default in furnishing statement u/s 200(3) - HELD THAT:- As in respect of any assessment year the levy of fees for delayed filing of TDS statement can only be permissible where such statement is filed after 31st May, 2015. Undisputedly, in the present case, the regular TDS statement was first filed much before aforestated deadline of 31st May 2015, however the AO processed the statement and unlawfully levied the fees u/s 234E for delayed furnishing in the absence of enabling provision of section 200A(1)(c) - Such levy in the light of aforestated discussion suffers from infirmity and bad in law in the light of decision in Fatheraj Singhvi Ors Vs UOI [ 2016 (9) TMI 964 - KARNATAKA HIGH COURT] ergo we delete the levy - Decided in favour of assessee. 2023 (5) TMI 405 Addition u/s 68 - Unexplained share transactions - CIT(A) allowed the appeal of the assessee by noting that there was no infusion of cash for issue of shares and that the shares were issued by the assessee company for consideration other than cash in lieu of assessee making investment in shares in some other companies - HELD THAT:- From observations of CIT(A) it is difficult to decipher the details of the transaction which transpired leading to relief granted to the assessee. There are no details on facts as to what was the investment which was made by the assessee against which it has issued its share capital along with share premium by merely stating that shares were issued for consideration other than cash for making investment in some other companies and drawing a conclusion that u/s. 68 this addition cannot be sustained, if cash has not been received, is incomprehensible. We do not disagree with the contention that provisions of Sec. 68 cannot be applied if no cash/money has been received by the assessee for issue /allotment of shares. We do not find any material on record which demonstrates such a claim made by the assessee and accepted by the Ld. CIT(A) while granting relief to the assessee. There is neither a paper book nor any written submission to look at for substantiating the claim made by the assessee. We are not in agreement with the conclusion drawn by the Ld. CIT(A) on the facts of the present case, because it is devoid of due examination of the factual matrix on the claim of the assessee that shares were issued for consideration other than cash in lieu of assessee company making investment in some other companies - Decided in favour of revenue. 2023 (5) TMI 404 Validity of assessment order passed u/s 147 r.w.s. 144C - transferring the case of the Assessee without serving any notice u/s 127 - case of the Assessee was stated to have been transferred by ACIT, Circle-1, Moradabad to DDIT / ADIT (International Tax), Lucknow, considering the NRI status of the Assessee - HELD THAT:- The mandate of section 127 of the Act is that before transferring the jurisdiction from one Assessing Officer to another, who is not subordinate to the same Commissioner, it needs must be ensured (i) that the Commissioners to whom the respective Assessing Officers are subordinate are in agreement inter se regarding the transfer, (ii) that reasons are recorded for transferring the jurisdiction, (iii) that a reasonable opportunity of hearing is provided to the affected Assessee, and (iv) that an order is passed u/s 127 of the Act . In the present case, as per the jurisdiction order No. 3/2020 dated 22.12.2020, passed by the Pr . CCIT and furnished on record by the Revenue, the superior head of the ACIT / DCIT (International Tax), Lucknow is the Commissioner of Income Tax (International Taxation), Delhi, whereas, vide Corrigendum dated 27.08.2020 [Sr. No. (viii) of Notification No. S.O. 2755(E), dated 13.8.2020], it was clarified that the PCIT, Bareilly exercised jurisdiction over the Assessee who was assessed / assessable with the jurisdiction of the Pr. CIT / CIT, Moradabad - Ground Nos.1 and 2 raised by the Assessee are accepted. Assessment u/s 144C - Whether AO erred in passing a draft assessment order u/s 144C (1) without appreciating that the Assessee did not qualify as an eligible assessee u/s 144C(13), where no variation had been proposed by the AO and the Assessee was not a foreign company? - HELD THAT:- As per section 144(15)(b), eligible assessee means any person in whose case a variation prejudicial to the interest of such person is proposed to be made by the AO, which variation arises in consequence of the TPO s order, and any foreign company. Section 144(1) requires a draft of the proposed assessment order to be forwarded by the AO to such eligible assessee. In the present case, vide the assessment order dated 28.6.2022, the Assessee has been held to be a resident in India, as a consequence whereof, salary income earned by the Assessee in Singapore has been taxed in India. Then, in the Assessee s case, no variation prejudicial to his interest, at the hands of the AO, has arisen as a consequence of the order passed by the TPO under section 92CA(2) of the Act , nor is the Assessee a foreign company. Therefore, neither of the conditions prescribed by section 144C (15) (b) stands fulfilled and as such, the Assessee is not an eligible assessee within the meaning of section 144C (15). Hence, as correctly contended, there was no question of the AO passing a draft proposed assessment order under section 144C(1). Further still, the Assessee being an individual , even in case he were to be held to be a non-resident , he would not fall within the definition of eligible assessee , as prescribed by section 144C(15). Assessment barred by limitation - Assessee was not an eligible assessee and no draft order was to be forwarded to him, as observed by us herein-before. Therefore also, the requirement of section 144C (12) could not have been complied with. Once this is so, the limitation to pass the assessment order would be one provided under section 153(2) of the Act, prescribes for the proviso to section 153(2) provides that the time limit to pass an assessment order u/s 147 is twelve months from the end of the financial year in which notice u/s 148 was served. Herein, the notice u/s 148 was issued on 3.7.2019. Thus, the limitation would have been 31.3.2021. This stood extended up to 30.09.2021, by virtue of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act , 2020 , read with Notification S.O. 2580(E) [No. 74/2020/F.No.370142/35/2020-TPL], dated 25.6.2021. The assessment order, however, was passed on 28.06.2022. The same is, hence, clearly barred by the limitation provided u/s 153(2) of the Act. The same is, accordingly, held to be void ab initio for this reason also. Assessee appeal allowed. Benami Property 2023 (5) TMI 402 Constitutional validity - Amendment to Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 - retrospective or prospective effect - Attachment of property - Punishment of impresonment for offence - HELD THAT:- The issue is covered in the decision rendered by a 3-Judge Bench of this Court in UNION OF INDIA ANR. VERSUS M/S. GANPATI DEALCOM PVT. LTD. [ 2022 (8) TMI 1047 - SUPREME COURT] where it was held as under: a) Section 3(2) of the unamended 1988 Act is declared as unconstitutional for being manifestly arbitrary. Accordingly, Section 3(2) of the 2016 Act is also unconstitutional as it is violative of Article 20(1) of the Constitution. b) In rem forfeiture provision under Section 5 of the unamended Act of 1988, prior to the 2016 Amendment Act, was unconstitutional for being manifestly arbitrary. c) The 2016 Amendment Act was not merely procedural, rather, prescribed substantive provisions. d) In rem forfeiture provision under Section 5 of the 2016 Act, being punitive in nature, can only be applied prospectively and not retroactively. e) Concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, viz., 25.10.2016. As a consequence of the above declaration, all such prosecutions or confiscation proceedings shall stand quashed. f) As this Court is not concerned with the constitutionality of such independent forfeiture proceedings contemplated under the 2016 Amendment Act on the other grounds, the aforesaid questions are left open to be adjudicated in appropriate proceedings. Petition disposed off. Customs 2023 (5) TMI 401 Prayer for enhancement of sentence awarded vide the impugned judgment - recovery of 14 gold biscuits weighing 2.324 kgs. of foreign origin - main ground of revision is that the sentence imposed by the Ld. CJM, Chandel is too lenient and without considering all the facts and circumstances of the case and will serve a bad precedent - Section 135 (1)(b)(ii) of the Customs Act, 1962 - HELD THAT:- On mere perusal of the cause title in the first page of the revision petition, the same is filed under Section 130D of the Customs Act, 1962 read with Section 377(1) of Cr.PC. In the first para of the revision petition, it is filed under Section 130 of the Customs Act, 1962 read with Section 377(1) of the Cr.PC. In the additional affidavit dated 11.04.2023, the petition was stated to be filed under Section 130A of the Customs Act, 1962 read with Section 377 of Cr.PC. Further, on mere perusal of letters dated 16.09.2021 and 08.12.2021 sent by the Superintendent, Customs Division, Imphal to Mr. Th. Sanachouba, learned standing counsel for the customs, the instruction was for filing the appeal. There is total non-application of mind in filing the present revision petition/appeal before this Court. It may be noted that Section 130, 130A and 130D of the Customs Act were repealed with effect from 28.12.2005 by Act 49 of 2005. The present revision/appeal has been filed under the provisions which are no longer in the statute book as on the date of filing, i.e. 29.07.2022. The present petition has been filed against the sentence on the plea that a too lenient view was taken by the Ld. CJM but on plain reading of the impugned order dated 02.11.2020, the leniency was taken by the Ld. CJM, Chandel on the specific submission of the Ld. SPP for the custom. As such, the petitioner has no right to agitate the same before this Court. In the order dated 18.10.2022, this Court specially directed the petitioner to file an affidavit as to whether the Ld. SPP of custom was instructed to make a suggestion to the Ld. CJM for taking a lenient view in sentencing and if not, any action was taken - Since no specific denial is made in additional affidavit by the Customs, this Court is bound to presume that an instruction was given to the Ld. SPP by the custom officials to take a lenient view, if any, while considering of sentencing to the respondents/convicts. This Court is of the opinion that there is no error in the order of sentence passed by the Ld. CJM, Chandel in the impugned order dated 02.11.2020. It may be noted that Section 135 (1)(b)(ii) of Customs Act, 1962 prescribes imprisonment for a term which may extend to 3 years or with fine or with both - the revision petition is dismissed with cost of Rs. 10,000/- for wasting valuable time of this Court and public money by filing frivolous petition. 2023 (5) TMI 400 Classification of imported gas - calcined anthracite coal - electrically calcined anthracite coal - to be classified under CTH 27011100 or under 38249090 of the Customs Tariff Act, 1975? - speaking assessment order under Section 17 (5) of the Customs Act, 1962 not received - HELD THAT:- In the respondent s own case COMMISSIONER OF CUSTOMS (PORT) , KOLKATA VERSUS CARBON RESOURCES PVT. LTD. [ 2017 (11) TMI 1951 - CESTAT KOLKATA] , the issue has been settled by this Tribunal, wherein the Tribunal has held that the coal has undergone the process of calcinations does not alter the nature of the product as anthracite coal. The process of calcinations itself is a common treatment process applied to many solid materials. It is commonly used in Metallurgy to concentrate ore and remove hydrates and carbonates as per the ratio laid down in the case of 20 MICRONS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, RAJKOT [ 2005 (11) TMI 144 - CESTAT, MUMBAI] . he said view has been further affirmed by the Tribunal in the respondent s own case COMMISSIONER OF CUSTOMS (PORT) , KOLKATA VERSUS M/S CARBON RESOURCES PVT. LTD. [ 2019 (1) TMI 1891 - CESTAT KOLKATA] . As the issue has already been settled in favour of the respondent in their own case earlier, therefore, there are no infirmity in the impugned order and the same is upheld - appeal of Revenue dismissed. 2023 (5) TMI 399 Refund of Special Additional Duty (SAD) under Notification No.102 of 2007-Customs dated 14.09.2007, as amended by Notification No.93/2000-Customs - rejection on the ground of time limitation - HELD THAT:- The issue herein is squarely covered by the rulings of the Hon ble Delhi High Courts SONY INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS [ 2014 (4) TMI 870 - DELHI HIGH COURT] , in favour of appellant holding that refund claim of SAD is not time barred as no such limitation is prescribed under the original notification no. 102/2007-Customs. Further, the ruling of the Hon ble Bombay High Court in M/S. CMS INFO SYSTEMS LIMITED VERSUS THE UNION OF INDIA OTHERS [ 2017 (1) TMI 786 - BOMBAY HIGH COURT] has been distinguished by this Tribunal in COMMISSIONER OF CUSTOMS, NEW DELHI VERSUS S.R. TRADERS [ 2020 (12) TMI 503 - CESTAT NEW DELHI] , which judgement has been upheld by the Hon ble Delhi High Court in COMMISSIONER OF CUSTOMS VERSUS S.R. TRADERS [ 2022 (4) TMI 1167 - DELHI HIGH COURT] . The Adjudicating Authority is directed to grant refund along with interest @ 12% p.a., starting from the end of 3 months from the date of filing of refund application. The appeal is allowed. 2023 (5) TMI 398 Classification of imported goods - Howaru probiotic culture - Recovery of differential duty - denial of benefit of the concessional rate of duty - imported goods are probiotics or not - HELD THAT:- It is seen from the show cause notices that there is no allegation that the impugned goods are not probiotic cultures as claimed in the bills of entry. Nor is there any technical ascertainment that could lend support to any suggestion that the goods are not in accordance with the declaration. The notices have alleged misdeclaration of the goods which, having been permitted clearance, without the intervention that places onus on customs authorities to alter the classification in accordance with section 17 of Customs Act, 1962, owing to special status assigned to the importer, should also be properly classified in the bill of entry to pass muster even if the particulars relating to the goods are not, of itself, misdeclared. The purport of the proceedings initiated by the two notices leading to the impugned orders are clear: re-determination of classification. Though the adjudication orders appear to have suggested that the imported goods are not the final product for human consumption and, yet, as intermediary for manufacture of food supplements to be treated as food preparations, there is no finding that the goods are not probiotic cultures or that, being cultures and not probiotics per se, are disentitled to the benefit of concessional rate of duty sought in the bills of entry. The issue of whether the goods are probiotics or not is, thus, not relevant to the proceedings. In the normal course, such deficiency in adjudication proceedings would be remedied by remand for fresh determination. That, however, would be mere academic exercise, in circumstances of the claim that impugned goods are probotic cultures , for not having been disputed in the show cause notices and the appropriate tariff item within which probiotic falls having been established by the exemption notification issued under Customs Act, 1962 - Though Learned Authorized Representative did try to fill the gaps by conjecturing upon the description in the invoice and by relying upon technical material to urge that the impugned goods do not conform to probiotics , acceptance of such argument would be tantamount to re-investigation and issue of fresh notice with new grounds, allegations and proposals which cannot be countenanced at the appellate stage. The impugned order is beyond remedy and must be set aside - Appeal allowed. 2023 (5) TMI 397 Seeking refund of Excess Duty - Rejection of request for re-assessment of 39 nos. bills of entry - import of diesel engine and module - absence of the bills of entry evidencing the extent to which assessment was undertaken by the proper officer at the time of clearance of the goods as well as the manner in which section 149 of Customs Act, 1962 - HELD THAT:- Though both the lower authorities have forayed into the zone of invoking of section 27 of Customs Act, 1962, it must be noted that such application for refund was not before the original authority and the observations thereof in the communication rejecting the request for recall and reassessment of the bills of entry appear to be related to the consequence of acceding to the request of the appellant herein and the judicial rulings impeding such consequence. Therefore, for want of jurisdiction, that observation, though insinuated as ground for rejection, is merely peripheral and incidental in the absence of disposal of the claim for refund. Bearing that in mind and the failure on the part of the original authority to either refer the request to the authority vested with the power to grant amendments under section 149 of Customs Act, 1962 or to grant a hearing to the applicant on the issue of recall and reassessment of bills of entry relating to goods cleared under section 47 of Customs Act, 1962, it would be appropriate for such lacuna to be remedied and the full facts and circumstances to be brought on record. Matter remanded back to the assessing authority for disposal of their application dated 23rd December 2019 after granting an opportunity to the appellant herein to be heard in person on the grounds, if any, on which such authority is unable to process such request - appeal allowed by way of remand. Corporate Laws 2023 (5) TMI 396 Supplementary investigation under Section 212 of Companies Act - Summons issued to petitioner but the petitioner failed to appear - case of petitioner is that the supplementary order for investigation has been made without reference to Section 212 (16) of the Act and without jurisdiction; as per the proviso to Section 212 (16) of the Act. The only case of petitioner is that the notice has been issued and investigation is ordered to be done only under Section 235 of the Companies Act, 1956 and not under Section 212 of the Act. HELD THAT:- Admittedly, the Companies Act, 1956 was in force during the year 2010. The corresponding provision that was incorporated in the new Act for Section 235 of the old Act is Section 210. Section 210 of the Act speaks about the investigation into the affairs of the Company on receipt of the report from the Registrar / Inspector under Section 208 of the Act. Section 208 of the old Act states that the Central Government may at the expense of the Company appoint a person to inquire into and report to the Central Government for sanctioning any payment of interest on so much of that share capital as is for the time being paid up, for the period and subject to the conditions and restrictions. But under Section 212 of the Act, it is stated that the investigation into affairs of the Company should be done by SFIO, whenever the Central Government is of the opinion without prejudice to the provisions of Section 212, it is necessary to investigate into the affairs of the Company by SFIO. But in both the cases, action will be taken on the report of the Registrar / Inspector. The petitioners without opting to abide the summons issued under Section 212(4), continues to claim that the correct provision applicable to their case is old Section 235 which is equivalent to Section 210 of the new Act. Such technicalities need not be adverted into at this stage of the proceedings. Since the petitioners have been called upon to give statement in view of the further investigation that has been ordered by the Central Government, it will be appreciable if they could cooperate with the investigation. However, the third respondent can also consider furnishing the copies of essential documents to the petitioners, if they are not secret documents and the interest of justice requires the copies to be furnished upon the petitioners. Since the investigation has already been completed and the complaint has been given and on which, a case is also pending on the file of the Special Court in E.O.C.C.No.2/2018 and for certain reasons, further investigation has also been ordered, it is natural on the part of the petitioners to know the reasons on which further investigation has been ordered. After all they are informations need to be given to the petitioners at any time during the proceedings. If the informations are furnished, no harm will be caused to the proceedings of the Central Government which directed the SFIO to conduct further investigation. The petitioners firmly believe that the action has to be taken only in accordance with Section 210 of the new Act which corresponds to the Section 235 of the old Act and not under Section 212 of the New Act, it is always open to them to appear before the third respondent in compliance of the summons issued to them without prejudice to their above contention. The Criminal Original Petitions disposed off. 2023 (5) TMI 395 Liability of Independent Director who was retired before the date of offence - additional director regularized as a director in the Company - Post being held by the petitioner on the date of filing the report - petitioner is responsible/liable for the offence alleged or not. What post was being held by the petitioner on the date of filing the report? - HELD THAT:- Form No. DIR 11 clearly shows that on the date of resignation (30.12.2016) the petitioner was the Director of the Company. As seen from the portal, the petitioner was an Additional Director from 02.06.2014 to 30.09.2014. Inspite of being shown on the portal as Additional Director /Director the petitioner did not lodge any complaint with the Ministry about the alleged wrong information. There is no case that the petitioner had filed any objection to the said wrong information (as alleged) on the portal. Whether the petitioner is responsible/liable for the offence alleged? - HELD THAT:- Many people claim that the ROC knows about this director, as the company had already filed DIR 12 at the time of his appointment as additional director. So, following regularization DIR 12 is not required to be filed, which is absolutely a wrong understanding. Since he is now a director, and not an additional director. Therefore, ROC must be informed by filing a new DIR 12 that the additional director has been regularized as a director in the Company - Moreover, additional directors are on equal footing, in terms of, of power, rights, duties, and responsibilities, as other directors are. Yet, tenure of additional director is up to the date of forthcoming AGM unlike directors which are duly appointed by shareholders in the general meeting. If the company wishes to continue with an additional director beyond the AGM, then it will have to go for his/her regularization. In the present case the petitioner as seen from the documents was an Additional Director on the date the board report was filed. To counter the same evidence is required to be adduced during trial so also to decide as to whether the petitioner at the relevant time of filing the report was a Director, Additional Director or an Independent Director. The responsibility of an Additional Director being the same as that of a director (but difficult from an independent director) they remain responsible, as the statute provides for the same - Thus to quash the proceedings by exercising this Courts inherent powers would amount to an abuse of the process of Court and would also amount to serious miscarriage of justice. Revision dismissed. Service Tax 2023 (5) TMI 394 Classification of services - supplying aircraft/helicopter owned by it to various entities for their use - transportation of passengers by air service or supply of tangible goods service? - HELD THAT:- This issue has been considered and decided by a Division Bench of this Tribunal in CHIMES AVIATION P LTD. VERSUS COMMISSIONER, SERVICE TAX NEW DELHI II [ 2022 (1) TMI 1016 - CESTAT NEW DELHI] and it has been held that the appellant therein had provided STG services which became taxable w.e.f. 01.07.2010 - The Tribunal also held that penalties had been validly imposed upon the appellant. There is no error in the order passed by the Principal Commissioner - Appeal dismissed. 2023 (5) TMI 393 Classification of services - Manpower Recruitment or Supply Agency service or not - providing specified jobs such as packing, loading and unloading, cleaning etc. at the premises of M/s. Livia - privity of contract - employee-employer relationship - HELD THAT:- A perusal of the labour contract entered into between the appellants and M/s. Livia indicate that M/s. Livia has agreed to pay the contractor on rate contract basis which will be determined from time to time on the basis of the nature of the work executed. Supervision and control over the work of the personnel employed by the contractor shall be with the contractor himself or his representatives, M/s. Livia will not in any manner supervise the work of the employees of the appellants, and the appellants are responsible for all the acts and conduct of the workmen and if any loss, costs should be reimbursed to M/s. Livia - The principal will have the privity of contract with the appellants and he would be giving instructions to the contractor only and would not have anything concerned with the workmen of the appellants and the appellants are free to work anywhere else and also undertake any work provided he remains responsible for execution of the specified jobs entrusted. A plethora of decisions by various benches of the Tribunal holding that where the contracts provide for payment of services on piece rate basis and where the supervision over the workmen employed remains with the contractors, where the employee-employer relationship exists between the contractor and his workmen supplied, the services are not classifiable under Manpower recruitment or Supply Agency service . Regarding Revenue's reliance on the decision rendered in ADIRAJ MANPOWER SERVICES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE PUNE II [ 2022 (2) TMI 858 - SUPREME COURT] is not applicable since the same is distinguishable, as the facts involved are different and the issue involved therein was the appropriate classification of the services of the appellant whether under Job work or under Manpower Recruitment or Supply Agency service. The issue before the Court was whether the appellant is a Job Worker within the meaning of the exemption Notification dated 20.06.2012 or is merely a supplier of contract labour for work of the establishment. On the basis of a detailed analysis of the contracts entered into and other connected records in these appeals, the tax demands raised under 'Manpower Recruitment or Supply Agency' service cannot sustain and hence, the impugned orders are liable to be set aside - No findings are required to be recorded on the issues of invoking extended period and imposition of penalty - Appeal allowed. 2023 (5) TMI 392 Disallowance of CENVAT credit - misconception of law - Disallowance of claim of export of service - scope of Explanation 3 of Section 65B (44) of the Act - Extended period of limitation - penalty - HELD THAT:- The show cause notice is wholly misconceived. None of the three conditions prescribed for disallowance of Cenvat credit have been alleged nor found by the court below. For appellant have reflected the amount of credit in ST-3 returns, for the apparent difference in amount of Cenvat credit as per ledger (financial record), no disallowance can be made. Admittedly, the amount of Cenvat credit claimed matches with the amount of credit taken by the appellant in their Cenvat credit Register (statutory document) - the disallowance of Cenvat credit of Rs. 4,01,676/- is set aside. Disallowance of claim of export of service - HELD THAT:- The appellant have provided service of market research agency service. Further, admittedly appellant have performed their work in India by collection of data and subsequent preparation of report. Such report have been sent or communicated to the principal located at Singapore via email, for use and reference of the receiver only. Further Admittedly, the principal located at Singapore have made the payment of service, which is received in convertible foreign exchange in India - the appellant and their principal do not fall under definition of distinct person as defined in Clause (f) of Rule 6A of service tax Rule r/w Section 65B (44), explanation 3 thereunder - appellant have exported the service and hence entitled to exemption from levy of service tax. Extended period of Limitation - HELD THAT:- The appellant had taken registration before the start of their activity with the service tax department, and have filed periodical returns. Appellant have also maintained proper records of their transactions - the issue is wholly interpretational in nature and there is no element of fraud or misrepresentation on the part of the appellant - the extended period of limitation is not invokable. Appeal allowed. 2023 (5) TMI 391 Valuation of taxable services - installation and commissioning and works contract services - two business models for manufacturing as well as for installation of the elevators - cost of material and the element of service for both supply as well as installation of the equipment clearly declared - Section 67 of the Finance Act, 1994 and Rule 2A of the Service Tax (Determination of Value) Rules, 2006 - HELD THAT:- The provisions for valuation of taxable services for the purpose of charging service tax is contained in Section 67 ibid. Determination of the value and manner of payment and collection of tax has been provided in Rule 2A ibid - On a conjoint reading of both Section 67 and Rule 2A ibid, it reveals that wherever Value Added Tax (VAT) or Sales Tax has been paid on the supply of goods, such value should be deducted for the purpose of determination of the service component, on which service tax is liable to be paid by the assessee. On perusal of the contract and other documents available in the case file, it is found that the appellants had clearly demonstrated the cost of material and the element of service for both supply as well as installation of the equipment. On the basis of VAT amount paid on the supply component, the jurisdictional VAT authorities have assessed the appellant-assessee on the basis of the declarations made by them. Since, one statutory competent authority is accepting the modus operandi adopted by the appellants, considering the transaction as sale of goods, for the same set of transaction, different view cannot be expressed by the other government department namely, the service tax department in claiming that the supply amount has not been properly reflected in the books of accounts by the appellants. Since, the adjudicating authority has not recorded any specific finding as to what amount is to be considered for the purpose of determination of the service tax liability, there are no hesitation, but in accepting the commercial documents submitted by the appellants to conclude that there is proper bifurcation of the amount towards supply of equipment and towards the services for installation and commissioning of the same at the site of the customer. In the case of Lumino Industries Ltd. [ 2022 (1) TMI 509 - CESTAT KOLKATA ], it has been held that when the contract provides for separate values for supply of materials and provision of services and that such value is also clearly determinable from the invoice, only the contracted value for rendition of service is liable for payment of service tax. In the present case since, the appellants are maintaining proper and adequate accounting records to demonstrate that there is segregation of the price towards supply of material and for installation and commissioning of equipment, denial of the value declared by the appellants without proper substantiation by the adjudicating authority, cannot also stand judicial scrutiny - thus, based on records maintained, the appellants appropriately discharged the VAT amount and the liability has never been questioned or objected to by the authorities under the respective statute. Thus, under such circumstances, the learned Adjudicating Authority cannot fasten the impugned demands confirmed in the impugned order on the appellants. There are no merits in the impugned orders, insofar as the adjudged demands were confirmed therein on the appellants - appeal allowed. 2023 (5) TMI 390 Taxability - Site formation and clearance, Excavation and Earth moving and demolition Service or not - short payment of service tax - irregular availment of CENVAT Credit - HELD THAT:- The learned adjudicating authority has only referred to the definition of the impugned service as defined in the Finance Act, 1994 and also relied upon the Board s Circular to conclude that the activities undertaken by the appellant should fall under the taxable service of Site Formation and Excavation Service . The service tax liability is fastened under the statute, if the assessee is performing any service, which is in conformity with the definition of taxable services itemized in the Finance Act, 1994. It is not the case that the appellants themselves voluntarily obtained the service tax registration under the taxable category of Site Formation and Excavation Service . The show cause notice in these cases have proposed for recovery of the service tax under such taxable entry and the same was subsequently confirmed by the original authority in the impugned orders passed by him. In order to tax under the particular category of service, it is incumbent upon the adjudicating authority to discuss the scope/nature of work undertaken pursuant to the agreement vis- -vis the true scope and meaning of the definition of that particular taxable service, in order to categorized under the appropriate levy of tax under that particulars heads of service. Since, levy of tax is dependent upon the scope of work, proper analysis is required to be done for ascertaining the correct classification of service for the purpose of levy and collection of the service tax. Since, this particular aspect has to be dealt with at original stage, which as admittedly has not been done, the matter should be go back to the original authority for a proper fact finding as to whether the activities under taken by the appellants should be classifiable under the taxable entry of Site Formation Excavation and Clearance Service under Section 65 (97a) of the Finance Act, 1994. Irregular availment of Cenvat credit etc. - HELD THAT:- Since, the issue of availment of Cenvat credit is dependent upon the nature of services provided by the appellants and their appropriate classification under the definition provided in this statute, we are also of the view that without determination of the correct applicability of the taxable entry, cenvat issue cannot be raised and the same in that case will be considered as premature. Short payment of service tax - HELD THAT:- The same is also determinable upon proper classification of the service which is yet to be done by the original authority as per present order. Thus, under such circumstances that particular issue of short payment of tax cannot also be addressed at this juncture. Appeal allowed by way of remand. 2023 (5) TMI 389 Short collection of tax - cum-tax benefit - expenditure out of provisional outgoing for deposit and advance are not backed by actual billings - liability arising on corpus fund for club house and corpus fund for complex and apex body - HELD THAT:- Even if the computation in the notice was incorrect as claimed by the assessee, the negative balance for 2010-11 in both have not been substantiated by the adjudicating authority - We must confess to some difficulty in comprehending the intent of the said ground as the reviewing authority has not countered the findings in the impugned order on the basis of fund position as it should have been. Review is a process culminating in serious contentions to be made before the appellate authority and is not half-baked perception analysis. Neither is it an audit of adjudication order for compliance with some norms real or imagined. In the absence of cogent deduction from ascertained figures, this ground does not merit further consideration. The performance of service devolving on cooperative societies must, necessarily, attach to the same activity undertaken by preceding developer; the adjudicating authority has rendered clear findings on that which have not been specifically discountenanced in the review. The manner in which statutorily assigned duties and obligations is in consonance with the transactional schema of section 65(105)(zzg) of Finance Act, 1994 is sorely lacking in the grounds to merit serious consideration in appeal. Cum tax benefit - HELD THAT:- The claim of Revenue that cum tax computation is not admissible fails and, more particularly, as the decision of the Hon ble Supreme Court in AMRIT AGRO INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., GHAZIABAD [ 2007 (3) TMI 14 - SUPREME COURT] arose from a dispute over exclusion of central excise duty in computation of assessable value and the difference between a levy at the stage of manufacture and a levy that is destination-based precludes that as precedent. This issue is, therefore, no longer res integra and the adjudication order passes muster on this score. Exclusion of ₹ 2,48,85,135, claimed to have been paid for electrical energy and water consumption on behalf of the owners by the respondent, from tax liability on provisional outgoing paid in deposit and advance - appellant is aggrieved by the failure on the part of the adjudicating authority to verify actual disbursement under those heads - HELD THAT:- There is nothing on record to indicate that evidence of such was placed before the adjudicating authority. The appellant cannot be faulted for surmising that the impugned order has proceeded by accepting the summary furnished by assessee - such verification should have been done or got done for reinforcing the conclusion of non-taxability. To that extent, the impugned order requires remedying. The appeal of Revenue of not sustaining the exclusion of ₹ 2,48,85,135 on account of electrical energy and water consumption from assessable value, for the nonce are allowed - the issue regarding ascertainment of claim that this amount represents actual billings is remanded back - appeal disposed off. 2023 (5) TMI 388 Classification of services - Business Support service or not - privity of contract - doctors appointed on contractual basis, - collection of consultation fees/charges from the patients (out of the income so generated from that account, certain amount is retained by the appellants) - period from 01.10.2006 to 31.03.2014 - HELD THAT:- The arrangements made are for joint benefit of both the parties with shared obligations, responsibilities etc. The agreements between the parties do not specify the nature or list of facilities, which can be categorized as provision of infrastructural support imparted by the appellants to the contractual doctors. Further, the revenue model, as agreed upon between the contracting parties also, did not refer to any consideration attributable to such infrastructural support service as alleged by the department. Further, there is no privity of contract between the doctors and the patients and that the later is contractually obliged to settle the bills raised by the appellants hospital towards provision of the medical services - the service tax demand cannot be fastened on the appellants. On looking at another angle, it cannot be said that the appellants hospital is the recipient of service provided by the doctors inasmuch as the appellants actually availed the professional services of the doctors, for which they pay certain amount from the payment received from the patients. Hence, as a recipient of service, the liability to pay service tax cannot be fastened on the appellant. Furthermore, it is not the case of Revenue that the patients treated in the appellants hospital are having contractual relationship with the doctors and that the doctors raised the professional bills on them - the appellants are providing business support service to the doctors. There are no merits in the impugned orders, insofar as the activities of the appellants were treated as taxable service and consequently, the adjudged demands were confirmed. Further, there was no scope or occasion on the part of the adjudicating authority to rely upon or interpret the ratio of the judgments relied upon by the appellants in this case inasmuch as the impugned order was passed in the month of June 2016 - appeal allowed. 2023 (5) TMI 387 Interest on late payment of service tax - rate of Interest and relevant date as per N/N. 13/2016-ST dated 01.03.2016 - benefit of the notification denied - HELD THAT:- In the instant case, the benefit of serial number 2 of the Notification in the cases where the payment was received late, cannot be denied to the appellant. The appeal to that extent is allowed. The original adjudicating authority can waive of the amount and issue the final order - Appeal allowed. Central Excise 2023 (5) TMI 403 Clandestine removal - denial of benefit of concessional rate afforded to small scale industry (SSI) units by N/N. 8/2003-CE dated 1st March 2003 - shortages ascertained by physical inspection - demands based on energy consumption - Evasion of duty - HELD THAT:- The issue of clandestine clearances allegedly prevalent in the steel sector had been in controversy for long and, as pointed by the Learned Counsel, the Tribunal, in several decisions, has held that the deriving of presumed production with reference to electricity consumption is not sufficient for recovery by recourse to section 11A of Central Excise Act, 1944. From the decision of the Tribunal in RA CASTINGS PVT. LTD. VERSUS COMMISSIONER OF C. EX., MEERUT-I [ 2008 (6) TMI 197 - CESTAT NEW DELHI ] holding that he Central Excise authorities have no jurisdiction to examine or determine whether the share transactions of the assessee-company are genuine or not and whether the income from share trading duly verified, accepted, and assessed to the income-tax authorities could be disregarded by them to treat the same as proceeds of ingots alleged to have been clandestinely produced and sold by the appellants. The entire action of the Revenue in this regard is without jurisdiction. Thus, it is clear that the law does not permit detriment of duty liability, and other consequences, solely on the ground that energy consumption is not reflective of actual production. The lack of legal sanction for determination of clandestine removal merely from unexplained energy consumption is now too well settled to be disturbed. As no evidence, other than the outcome of the test of 2008 and that too for two hours, been employed for determination of production for a five year period commencing in 2004, the conclusion of goods having been clandestinely produced and cleared is clearly unacceptable. As it is by addition of allegedly clandestinely removed production that exemption extended to small scale industry (SSI) has been denied, recovery of ₹ 78,99,000/- is also without legal sanction. Determination of duty liability on shortage of stock - HELD THAT:- Reliance placed by Learned Counsel on the decision of the Tribunal in CHANDPUR ENTERPRISES LTD. VERSUS COMMR. OF C. EX. SERVICE TAX, MEERUT-I [ 2014 (8) TMI 970 - CESTAT NEW DELHI ] and in VEHALANA STEEL ALLOYS PVT. LTD. VERSUS COMMR. OF C. EX., MEERUT-I [ 2016 (2) TMI 450 - CESTAT NEW DELHI ] holding that estimate of shortages does not suffice for recovery of duties clearly comes to their assistance. It is seen from the records of the present dispute that the alleged shortages are outcome of estimate without proper weighment. Accordingly, demand of ₹23,645/- on shortage of 7.546 metric tons valued at ₹2,29,557 also fails. Appeal allowed. 2023 (5) TMI 386 Rebate claim - erroneous sanction in favour of the opposite party, for which the petitioner has approached this Court claiming for re-crediting it in the Cenvat Credit ledger - Section 142 (3) of the CGST Act, 2017 - HELD THAT:- The Revision application was filed on the grounds that it is settled law that the rebate of duty was available only in respect of duty paid on FOB value and not any value over and above the FOB value and that additional amount of Rs. 4,23,89,327/- sanctioned erroneously by the Original Authority was to be allowed not as a amount of refund but as a reversal entry because refund/rebate is not admissible and that as per Section 142 (3) of the CGST Act, 2017, every claim for refund filed after the appointed date, i.e. 01.07.2017, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to the Applicant shall be paid in cash and that Commissioner (Appeals) has erred in applying the aforesaid Section 142 (3) since the disputed amount involved herein relates to the re-credit and not to refund in cash and, as such, the same has to lapse. Needless to say, the Commissioner (Appeals) while considering the case also taken into consideration the provisions contained under Section 142 (3) of the CGST Act, 2017 and held that since the application for rebate was filed after the appointed date, i.e., 01.07.2017, the amount which earlier would have been allowed to be refunded by way of re-credit, should now be refunded in cash as per the provisions of said Section 142(3). This Court finds that there is no infirmity in the order impugned, which requires interference by this Court - Petition dismissed. 2023 (5) TMI 385 Method of Valuation - sugar confectionary weighing less than 10 grams individually wrapped and sold in poly bag/pet jars of 500 grams/1kg - to be assessed for excise duty on MRP basis under Section 4A as contended by the department or to be assessed on transaction value under Section 4 of Central Excise Act, 1944 as claimed by the assessee? - invocation of Section 11D of Central Excise Act, 1944 where the duty charged under Section 4A in the invoice is returned to the customer by way of issuing credit notes upon payment of excise duty under Section 4 shown in the ER-1 return - applicability of amendment dated 13.01.2007 in Rule 2(j) of the SWM (PC) Rules, 1977 - HELD THAT:- The issue is squarely covered by the decision of the tribunal in their own case in SWAN SWEETS PVT. LTD. VERSUS COMMISSIONER OF C. EX., RAJKOT [ 2006 (1) TMI 269 - CESTAT, MUMBAI ] which was upheld by the Hon ble Supreme Court reported at COMMISSIONER OF CENTRAL EXCISE, RAJKOT VERSUS M/S MAKSON CONFECTIONERY PVT. LTD. [ 2010 (9) TMI 10 - SUPREME COURT ]. As per the said judgment, the wholesale pack of 500 gm or 1 kg is not a retail pack therefore, the MRP of wholesale pack cannot be taken for the valuation in terms of Section 4A whereas, the individual confectionary which is less than 10 gm should be considered and as per Rule 34 of Standards of Weights Measures (Packaged Commodities) Rules, 1977 (SWM Rules) i.e. exemption from affixing the retail sale price on the goods of less than 10 gms, the valuation under Section 4A is not correct. In view of the Rule 34 (b), which was prevailing throughout the period involved in the present case, there is a clear provision that in case of the product of less than 10 grams, there is no requirement for affixing retail sale price - Since in the earlier decision of the Hon ble Supreme Court it was categorically held that for the purpose of assessment, individual confectionary has to be taken and not the wholesale pack. The individual confectionary is undisputedly below the weight of less than 10 gram and in terms of Rule 34(b) of SWM (PC) Rules, 1977 there is no requirement for affixing the retail sale price. The said product cannot be taken under the ambit of Section 4A of Central Excise Act, 1944. Confirmation of demand by the adjudicating authority under Section 11D - HELD THAT:- From the plain reading of the above Section 11D, it is clear that the provision of section 11D shall apply only in case where the assessee collects the duty and does not deposit to the government - In the present case, though the appellant have shown the duty in the invoice but at the same time by issuance of the credit note to the customer, said amount was not collected. Moreover, the duty was paid under protest and thereafter credit note was issued. With this fact, it cannot be said that the assessee has collected any duty and the same was not deposited to the government exchequer. In view of this fact only, it is viewed that there is no application of Section 11D in the facts of the present case therefore, the demand confirmed under Section 11D cannot be sustained. Appeal of assessee allowed. 2023 (5) TMI 384 CENVAT Credit - CVD paid through DEPB Scrip under custom Notification No. 96/2004 dated 17.05.2004 - case of the department is that as per para 4.3.5 of Exim Policy where CVD is paid through DEPB Scrip no benefit of Cenvat Credit shall be admissible - period involved in the present case is January 2005 to December 2011 during such period notification no. 96/2004-Cus dated 17.09.2004 was prevailing - HELD THAT:- The relevant para (vi) of the notification makes it clear that the importer shall be entitled to avail cenvat credit of additional duty against the amount debited in DEPB. It is undisputed that all the bills of entry have been assessed under Notification No. 96/2004-Cus dated 17.09.2004 therefore, CVD debited in the DEPB under the said notification is available for cenvat credit to the importer - from para 4.3.5 of FTP 2004-09 which was in force during the relevant period of this case i.e. January 2005 to December 2011. The importer is eligible for cenvat credit in respect of additional customs duty paid either in cash or through debit under DEPB therefore, in view of the statutory provision the appellant are entitled for the cenvat credit. It is settled that even if the licences were issued under FTP 2000-07 then also the credit cannot be denied, so long the imports were made under notification no. 96/2004-Cus which is issued under FTP 2004-09. Moreover, in the present case, department could not establish that the licenses were issued under FTP 2000-07, for this reason also the proposal for denial of cenvat credit by the revenue is not sustainable. The appellant is entitled for cenvat credit - Appeal of assessee allowed. 2023 (5) TMI 383 Demand of short paid duty - Levy of penalty under Rule 209 A of erstwhile Central Excise Act, 1944 - non-inclusion of cost of Royalty towards technical knowhow borne by M/s Wintac is includible in the assessable value of medicament viz. Reclavin Injection - HELD THAT:- There is no dispute that the buyer of the medicament M/s Wintac has purchased technical knowhow on payment of consideration and the said technical know how was allowed to be used for manufacture of Recalvin Injection by M/s Norris. Therefore, the goods Reclavin Injection was manufactured with the technical knowhow which was provided by Wintac for which substantial cost was borne. Since the Wintac is the buyer of the goods and the goods has been manufactured by use of technical knowhow by Norris and such technical knowhow involves a cost such cost should be included in the assessable value of overall manufacturing of medicament. It is admitted fact that the value of technical knowhow was escaped while arriving at the transaction value, there is under valuation of medicament Recalvin Injection - there is short payment of duty in respect of medicament Recalvin Injection . Hence, the demand was rightly confirmed. Penalty under Rule 209 A of erstwhile Central Excise Rules, 1944 imposed on Wintac Ltd - HELD THAT:- The penalty under rule 209 A can be imposed only on natural person for the reason that all the activities for which the penalty is imposable can be carried out by a natural person and not by the company - issue covered by the decision in the case of STEEL TUBES OF INDIA LTD. VERSUS COMMISSIONER OF C. EX., INDORE [ 2006 (10) TMI 146 - CESTAT, NEW DELHI [LB] where it was held that penalty can not imposed on corporates under rule 209 / Rule 26 of the Central Excise Rules, 2002. The appeal filed by M/s Norris Ltd is dismissed and appeal filed by M/s Wintac is allowed. 2023 (5) TMI 382 CENVAT Credit - duty paying documents - credit on the basis of courier bill of entry for import of their inputs, spare parts, is valid or not - HELD THAT:- It is not in dispute that the appellant /assessee have imported spare parts, which are inputs used in the factory for production of excisable goods. The appellant have led sufficient evidence by way of purchase invoices, entry of the spare parts received through courier in the statutory records and utilization of the same. It is further found that under the similar disputes, this Tribunal have allowed the benefit of cenvat credit on the basis of photocopies of the bill of entries. The Board have also appreciated the difficulty in case of imports of inputs through courier in availing cenvat credit, and have given directions that the importer may request courier agency to file separate bill of entry instead of consolidated courier bill of entry, for many importers - Further, admittedly, under the Courier Import Export Regulations, the filing of bill of entry is the work of Courier Agency. Accordingly, as per the procedures, the Courier Agency files consolidated bills of entry in respect of several import parcels, belonging to several importers. Accordingly, there is no malafide on the part of the appellant in taking cenvat credit on the basis of photocopy of the courier bill of entry. Appeal allowed. 2023 (5) TMI 381 Disallowance of availment of cenvat credit of service tax - Corporate Insolvency Resolution Process (CIRP) was initiated in respect of the appellant under the provisions of the Insolvency and Bankruptcy Code, 2016 - It is submitted by the Ld. Counsel that in view of the order passed by the NCLT, the Resolution Plan may be taken into consideration and the appeal may be disposed accordingly. HELD THAT:- NCLT passed the following order: (i) Maximum of Rs.25 crores or the liquidation value allocable towards the statutory dues, whichever is higher, is proposed to be made towards claims by Government Authorities. (ii) All claims or liabilities etc owed to any Government Authority by the Corporate Debtor, in relation to any period prior to the Effective Date or on acquisition of control of the Corporate Debtor by the Resolution Applicant through the SPV proposed to stand extinguished upon the receipt of the said amount towards statutory dues pursuant to the approval of the resolution plan by the Hon ble NCLT. In view of the order passed by the NCLT, the appeal filed by the appellant viz. Ruchi Soya Industries Limited is disposed of accordingly. 2023 (5) TMI 380 Clandestine removal of goods - electricity consumption - minor shortages in stock of finish goods ascertained through eye estimation - existence of corroborative evidences - suppression of production - period from 2003 to 2007, 2007 to 2009 and Sept. 2009 to July, 2010 - HELD THAT:- It is to be noted here that basing on circumstantial evidence alone duty demand is confirmed since no evidence concerning clandestine removal of goods from the factory of the appellant without payment of duty in unaccounted manner is noticed by the Department during the investigation and minor shortages available in output record was on eye estimation alone which appellants claim to be either erroneous or process loss since input are clearly accounted for and input stock matching with the stock register. Further it has been consistently held by this Tribunal ever since pronouncement of the judgment in R.A. Casting Pvt. Ltd. [ 2008 (6) TMI 197 - CESTAT NEW DELHI ] that excess electricity consumption cannot be a parameter to establish clandestine removal and with reference to other ancillary factors, which respondent Department attributes to be of corroborative evidence, it can be stated that loss or marginal profit noted in the accounting statements none reflection of runners and risers factor in the register that accounted only 3 to 4% of ingots, commission income or weighment income etc. would in no way establish higher production in the factory that would only lead to the possibility of clandestine removal. On suspicion alone, no liability can be fastened on any individual and we reiterated the observation made by this Tribunal in Shri Mithunlal Gupta case [ 2019 (6) TMI 190 - CESTAT MUMBAI ] that Article 265 of the Constitution of India dictates that no tax shall be levied or collected except by authority of law. Unless the manufacturing of the steel ingots is proved to the hilt by authentic, reliable and credible evidence, duty cannot be demanded on the basis of hypothesis and theoretical calculation, without taking into consideration the ground realities of the functioning of the factories. It is a settled principal of law that suspicion how so ever strong cannot take place of proof - Appeal allowed. 2023 (5) TMI 379 CENVAT Credit of Service Tax - input services - Outdoor Catering Service - Rent-a-Cab Service - Club or Association Service - services availed to provide food coupons to the employees which is described by appellant as Hospitality Service - extended period of limitation - HELD THAT:- Insofar as the proceedings initiated through show cause notice dated 07.01.2010 are concerned, the show cause was issued beyond normal period of limitation and there are no reason justifying invocation of extended period. All the proceedings initiated through show cause notice dated 07.01.2010 dropped as time barred. Issues involved in show cause notice dated 17.09.2010 - HELD THAT:- Hon ble High Court of Karnataka in the case COMMISSIONER OF CENTRAL EXCISE, BANGALORE-I VERSUS BELL CERAMICS LTD. [ 2011 (9) TMI 792 - KARNATAKA HIGH COURT] has held that the Service Tax paid by the assesses under Rent-A-Cab Service and Outdoor Catering Service provided to its employees to transport them to the factory and back and to provide food to employees fall under input services and are entitled for CENVAT Credit. Following the said ruling of Hon ble Karnataka High Court, CENVAT Credit of Service Tax paid on Outdoor Catering Service and Rent-a-Cab Service are allowed in the present appeal. Club Services - HELD THAT:- The issue is no more res integra and this Tribunal has decided it in the case of M/S VINAYAK STEELS LTD. VERSUS CCE, C ST, HYDERABAD [ 2017 (7) TMI 346 - CESTAT HYDERABAD] , wherein it was decided that corporate membership of the club is utilized for business meetings and sales meetings and therefore, for the period prior to 01.04.2011, Service Tax paid on corporate membership of club was admissible for availment of CENVAT Credit - CENVAT Credit of Service Tax paid on corporate membership of club to the appellant stands allowed. Appeal allowed. 2023 (5) TMI 378 Valuation - inclusion of notion interest on the advances taken from the customer in the assessable value of the goods or not - HELD THAT:- Issue has been considered by the tribunal and various courts time and again. It is settled principle that unless and until the revenue shows that advances have earned interest on such advances and the prices to final buyer has been depressed they could not have been added this notional interest to the assessable value - Reliance can be placed in the case of COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III VERSUS PAPER PRODUCTS LTD. [ 2009 (4) TMI 187 - CESTAT, MUMBAI ]. Valuation rule also provide that notional interest on advances could have been added to the assessable value only if the same depresses the value of the goods. There are no merits in the impugned order same is set aside - appeal allowed. 2023 (5) TMI 377 Penalty u/r 26 of CER, 2002 - Applicability of Rule 10A on goods were manufactured on job work basis on the material supplied by the principal manufacturer - existence of mens rea - HELD THAT:- On perusal of the Commissioner (Appeals) order, it is noticed that allegations of knowledge concerning existence of legal provision namely the applicability of Rule, 10A of the Central Excise Valuation Rules, 2000 and the provision of penalty for its britches is made against these Appellants while confirming penalty under Section 26 of the Central Excise Rules, 2002. This being the only allegation available against the Appellants and having regard to the fact that the present Appellants, if applied under the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019, would have paid nil liability in view of the relief available to them under Section 124(i)(b) of the Finance Act, 1994 dealing with Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules 2019, vis-a-vis the clarificatory Circular No. 1071/4/2019-CX.8 dated 27.08.2019. Appeal allowed. 2023 (5) TMI 376 Levy of penalty on Proprietor of the Firm under Rule 26(2) of Central Excise Rules, 2002 - fraudulent availment of CENVAT Credit on the basis of Central excise invoices issued by the registered dealer namely M/s. Ganesh Metals, Propriety concern of the appellant, without actually receiving the goods - HELD THAT:- The appellant has in fact contravene the provisions of the Central Excise Rules, 2002, by providing the invoices without actually supplying the goods to the said two units. Hence, liable for final action under Rule 26(2) of Central Excise Rules, 2002. The total CENVAT credit that has been availed by the 2 units in contravention against the invoices of the appellant is amounting to [Rs.46,83,774/-(BED-Rs.39,76,774/- plus ED Cess Rs. 78,622/- plus SHE Rs. 39,689/- plus AED-Rs. 5,88,689/-] + [Rs. 6,76,868/- (BED-Rs. 4,78,010/- plus ED.Cess-Rs- Rs. 9,570/- plus SHE-Rs. 4,787/- plus AED-Rs. 1,84,501/-]=53,60,642/-. Taking note of the fact that penalty imposed on the appellant is above 50% of the credit taken by the set 2 units - the penalty imposed is excessively high. Hence for justice will be met if the set penalty is reduced to 10% of the penalty imposed on the appellant - Impugned order in respect of the appellant is thus modified holding the penalty of Rs. 2.5 Lakhs against the appellant. Appeal allowed in part. CST, VAT & Sales Tax 2023 (5) TMI 375 Jurisdiction of Intelligence Officer to levy penalty - penalty proceedings initiated under Section 67 of the KVAT, 2003 - Intelligence Officer in penalty proceedings initiated under Section 67 of the KVAT, 2003 can assume the role of Assessing Officer in imposing penalty on estimation or on the basis of correct figures or not - HELD THAT:- On verification of available books, it was convincingly found that BPCL did not effect any payment other than that of Fixed Monthly Charge towards the works executed by the petitioner for setting up production plant exclusively for BPCL and beyond doubt that BOO Operator had not received any consideration for setting up the new plant and machinery exclusively for BPCL until the supply of industrial gases started. BOO operator began to issue two type invoices one for FMC for BPCL on account of Hydrogen and Nitrogen without affecting any such supply, but, for actual supply effected invoice for VC by reading the metering equipment - No doubt, the Division Bench of this Court had culled out a ratio decidendi by holding that Intelligence Officer is not empowered while initiating the proceedings under Section 61 of KVAT Act and 45A of KGST Act 1963 on the basis of guess work and estimation. It is not the case where the petitioner failed to supply the documents in response to the notices reflecting the imposition of the penalty impelling the Intelligence Officer to arrive at a proceedings on estimation. The dictum laid down in M.K.Markar and others' case [ 2018 (12) TMI 481 - KERALA HIGH COURT ] would definitely come into play, wherein it has been held that the role of Intelligence Officer is only to impose penalty prescribed in the Act and the matter was referred to the Assessing Officer, who would not be precluded from proceeding to arrive at best judgment on the basis of factors relevant to the activity of the dealer. On the basis of the extracted findings of the Intelligence officer it can irresistibly be concluded, it was not a case of estimation, but based on an actual calculation by reading the contents of the agreement and the invoices. That could not be a case falling in the ratio culled out in Markar's Case where Intelligence Officer was required to refer the matter to the Assessing Officer, nor would be any force in the argument that unless and until the Assessing officer embarks upon proceedings under Section 25 b penalty proceedings cannot be initiated. There are no force in the writ petition warranting interference under Article 226 of the Constitution of India. The petitioner, if so advised, is at liberty to assail the order impugned by filing appeal. The writ petition is accordingly dismissed.
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