TMI Tax Updates - e-Newsletter
May 22, 2018

Case Laws in this Newsletter:

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

TMI Short Notes

1. Whether deduction u/s 80D is allowed if expenditure is made in cash?

  Income Tax:

2. Can an individual pay medical insurance premium for spouse and claim deduction u/s 80D?

  Income Tax:

3. Can a Guardian claim tax benefit u/s 80CCG if investment is done in the name of Minor?

  Income Tax:

4. Can a non resident individual join NPS u/s 80CCD?

  Income Tax:

5. Whether deduction u/s 80CCC is allowed only to the resident individuals?

  Income Tax:

6. Whether education fees can be claimed as deduction u/s 80E and 80C both?

  Income Tax:

7. Whether the post office savings scheme is eligible for deduction u/s 80C?

  Income Tax:

8. Whether the repayment of loan taken for renovation/repair of house property is eligible for deduction u/s 80C?

  Income Tax:

9. Whether section 80C allows deduction on re payment of housing loan?

  Income Tax:

10. What kind of deduction is available for deduction u/s 80C?

  Income Tax:

11. Who can take the benefit u/s 80C?

  Income Tax:

Articles

1. EXEMPTION OF SKILL DEVELOPMENT TO COMPANY , SEC 35CCD An Analysis of Rules 6AAH, 6AAF,6AAG

   By: CFAShobhit SRIVASTAVA

2. GIST OF RECENT PRONOUNCEMENTS ON GST (PART-XI)

   By: Dr. Sanjiv Agarwal

News

1. GST Council asks Centre, states to quickly set up appellate authorities

2. Auction for Sale (Re-issue) of ‘6.84% Government Stock 2022; Auction’ for Sale (Re-issue) of ‘7.17% Government Stock 2028’, Auction for Sale (Re-issue) of ‘7.40% Government Stock 2035’, and Auction for Sale of (Re-issue) of ‘7.06% Government Stock 2046’

3. RBI Reference Rate for US $

4. CAG Rajiv Mehrishi calls for a market regulator in event of market failure while delivering 9th Annual Day lecture of CCI

Circulars / Instructions / Orders

VAT - Delhi

1. 02/2018 - dated 11-5-2018

Filing of online return for the fourth quarter of 2017-18 -extension of period thereof

Highlights / Catch Notes

Income Tax

• Section 80IC Deductions: Past Deductions u/ss 80-IA, 80-IB Excluded for Non-North-Eastern Industries' Eligibility.

  Case-Laws - SC : Entitlement to deduction u/s 80IC - Legislature has shown its intent, namely, where the industry is not located in North- Eastern State, the period for which deduction is availed earlier by an assessee u/s 80-IA and Section 80-IB will not be reckoned for the purpose of availing benefit of deduction u/s 80-IC - SC
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• Court Rules Forward Contracts Loss as Business Loss, Not Speculative, u/s 43(5) for Export Hedging.

  Case-Laws - HC : Loss in connection with the hedging contract - business loss or speculative loss - For the purpose of hedging the loss due to fluctuation in foreign exchange while implementing the export contracts, the assessee had entered into forward contract with the banks - the transaction cannot be stated to be in speculation as to cover under subsection (5) of section 43 - HC
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• High Court Rules Show-Cause Notice by Excise Department Insufficient for Income Addition Without Further Evidence.

  Case-Laws - HC : Addition of suppressed sale - additions of income made on the basis of SCN issued under the Central Excise - In addition to confronting the assessee with the contents of the show-cause notice issued by the Excise department, the Assessing Officer has done little else. - No additions - HC dismissed the revenue appeals.
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• High Court Rules on Section 80IA: Income Division Between Units Based on Ahmedabad Edition's Publication and Circulation Proportion.

  Case-Laws - HC : Deduction u/s 80IA - the most fair and equitable means of dividing the income between the two units would be in the proportion of their internal publication and circulation of Ahmedabad edition - HC
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• High Court Dismisses Revenue's Appeal on ITAT's Land Valuation for Capital Gain; Factors Beyond Cost Considered.

  Case-Laws - HC : Capital gain computation - ITAT not accepting cost of acquisition as on 01.04.1981 of the land sold - While adopting valuation of immovable properties, several factors need to be kept in mind. Situational advantages and disadvantages are important factors - Revenue appeal dismissed on the ground of Pure question of facts - HC
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• Court Allows Trust to Claim Tax Exemptions u/ss 11 & 12; Rent Paid Not Deemed Excessive.

  Case-Laws - HC : Allowability to exemption u/s. 11 & 12 - rent paid by the assessee to the trustees or to the HUF where the karta was the trustee of the respondent-trust - rent paid was much less then 10% of the investment - cannot be held as excessive - exemption allowed - HC
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• Authority Must Wait for Appeal Period to End Before Issuing Section 226(3) Notice for Dues Recovery.

  Case-Laws - HC : Recovery of dues - Justification issuing notice u/s 226(3) - the Authority has to necessarily wait till the the expiry of appeal time - HC
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• Safe Harbour Rules Valid: Assessing Officer Didn't Invalidate Petitioner's Option u/r 10THC, Deemed Valid Per Rules 10THD(7)-(8).

  Case-Laws - HC : After the petitioner exercised option for application of safe harbour rules in accordance with the provisions of rule 10THC the Assessing Officer passed no order under subrule (4) of rule 10THD declaring that the exercising of option was invalid. In terms of subrule (7) and subrule(8) of the said rule, therefore, the option exercised by the assessee would be treated as valid. - HC
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• Individuals with income tax deducted at source exempt from advance tax and interest u/ss 208 and 234B(1).

  Case-Laws - HC : Assessee, whose income tax is liable to be deducted at source, is not liable to pay advance tax under Section 208 of the Act and consequently, he is not liable to pay interest under Section 234B(1) thereof. - HC
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• Income from Franchise Fees and Consultancy Services Not Considered Royalty Under India-USA DTAA Article 5.4.

  Case-Laws - AT : Income from franchise fee and consultancy services - Nature of Royalty - whether taxable @ 10% as per India-USA DTAA - No activities are carried out by the by Jubilant on behalf of the assessee. In our view, none of the clause either (a), (b) or (c) of Article-5.4 are applicable on the assessee. - AT
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• Unabsorbed depreciation can offset "Income from Other Sources" per Section 68, but loss deduction disallowed from 2017-18 onward.

  Case-Laws - AT : Unabsorbed depreciation of current year and earlier year as allowable against income under the Head “Income from other sources” being disclosed/assessed u/s 68 - w.e.f. A.Y. 2017- 2018 any type of loss will not be allowed deduction and this Amendment is not retrospective in nature. - AT
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• No Penalty for Failure to Collect TCS: Reasonable Cause Accepted u/s 273B, Supported by Legal Opinion.

  Case-Laws - AT : Penalty u/s 271C - failure to collect TCS - reasonable cause - "assessee in default” - assessee has submitted the extant legal opinion of an Advocate of Hon’ble Supreme Court who had opined that the assessee was not liable to collect the TCS on the items it dealt with - the assessee’s case falls under the ambit of section 273B - No penalty - AT
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Customs

• MMRDA Ineligible for Exemption: Not a Road Construction Corporation Per Notification No. 21/2002-Cus, Sr. No. 230, Condition 40(a).

  Case-Laws - AT : Exemption to goods imported under N/N. 21/2002-Cus. Sr. No. 230 - MMRDA is not a road construction corporation within the scope and context of condition NO. 40(a) - the appellant was not entitled ab initio for the benefit of exemption - AT
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• Imported Hoverboards Classified as Motor Vehicles under CTH 8711, Not Toys under CTH 9506, Due to Size and Functionality.

  Case-Laws - AT : Classification of imported goods - Hover Board - whether classified under CTH 9506 or under CTH 8711? - As such from the size of the item, it is evident that it is more appropriate to be considered as ‘Motor vehicle’ rather than a toy - AT
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• Refund Rejection Overturned: Direct Claim Allowed Without Contesting Assessment Order or Bill of Entry.

  Case-Laws - AT : Refund claim - rejected on the ground that the appellant cannot claim the refund directly without challenging the assessment order (bill of entry) - refund cannot be denied - AT
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PMLA

• Provisional Attachment Orders Under PMLA Not Applicable: Properties Not Acquired with Alleged Crime Proceeds, Exempt from Section 5.

  Case-Laws - AT : Offence under PMLA - Provisional Attachment Orders - The properties attached cannot be attached under Section 5 of the PML Act because the properties are not purchased from the alleged proceeds of crime. - AT
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Service Tax

• VCES Declaration Stands: Dues Paid Before 2013 Scheme Start Not Grounds for Rejection.

  Case-Laws - AT : Voluntary Compliance Encouragement Scheme (VCES) - case of Revenue is that since the dues were paid prior to operationalization of the VCES 2013, the VCES declaration needs to be rejected - VCES cannot be rejection on this ground - AT
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• Service Tax Exemption Granted for Dried Flower Production Using Customer-Supplied Agricultural Produce.

  Case-Laws - AT : Liability of service tax - service of picking and choosing flowers supplied by the customers, for enabling further production of dried flowers - the flowers are agricultural produce, resulting from cultivation - benefit of exemption allowed - AT
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• Service Tax Calculation Excludes Turnover Charges and Transaction Fees; Complies with SEBI Guidelines for Investors.

  Case-Laws - AT : Valuation - Includibility of turn over charges / transaction fee in the gross value for the purpose of payment of Service Tax - turn over charges etc. cannot be included in assessable value for the purpose of taxation inasmuch as, the same are recovered from investors to make payment as per the SEBI guide lines. - AT
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• Appellant's Relationship with Deployed Manpower is Employer/Employee, Not Taxable as Manpower Supply Service.

  Case-Laws - AT : Classification of services - the relationship between the appellant and the manpower deployed by the parent company is of employer/employee, and as such, it cannot be considered as the taxable service under the category of manpower recruitment or supply agency service - AT
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• No Penalties for Public Authority Lacking Service Tax Registration Without Malicious Intent u/ss 77 and 78.

  Case-Laws - AT : Penalty u/s 77 and 78 - Respondent, a public authority, have not obtained service tax registration and have not paid the service tax - no penalty can be imposed in the case of such statutory or government body as there could not be any mala fide intention to evade payment of duty - AT
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• VCES Declaration Rejection Cannot Rely Solely on Limitation; Broader Factors Must Be Considered for Validity.

  Case-Laws - AT : Rejection of declaration under the Voluntary Compliance Entitlement Scheme (VCES) - Proceedings initiated by the department for rejection of the VCES declaration cannot be sustained on the ground of limitation alone - AT
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• Appellants to Receive Cum Tax Benefit Despite Unregistered Status; No Service Tax Collected from Recipients.

  Case-Laws - AT : The appellants, though not registered with the department for the services rendered by them, had also not collected any amount representing service tax from the service recipients. In these circumstances, it is only fair that appellants be extended cum tax benefit - AT
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Central Excise

• Court Rules Bolts and Nuts Excluded from Excise Duty When Used On-Site for Tower Construction.

  Case-Laws - AT : Valuation - erection of towers - The value of bolts and nuts is not required to be included for the payment of excise duty especially when such bought out items were used at the site for creating immovable property. - AT
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• Goods with 2.5% Customs Duty Not Exempt; CENVAT Credit Reversal Required u/r 6(3) of CENVAT Credit Rules.

  Case-Laws - AT : CENVAT credit - What is the meaning of expression “which are exempt from the duties of customs” under rule 6(6)(vii) of CENVAT Credit Rules, 2004 - even 2.5% duty of customs will not make the goods “which are exempted from duty’ - the appellant is not exempted from reversing the credit as per Rule 6(3) of CENVAT Credit Rules. - AT
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• High Court Rules Re-credit of CENVAT Amount Not Fraudulent or Illegal After Revenue Rejection.

  Case-Laws - HC : Re-credit of CENVAT amount - Whether the action of the assessee in taking re-credit of CENVAT amount after the Revenue had already rejected his claim can be termed as a fraudulent or other illegal activity done with an intention of defrauding the Government Officials? - Held No - HC
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Case Laws:

• GST

• 2018 (5) TMI 1282
  Recovery of arrears of Land Revenue - Who is liable to discharge the GST laibility - Scope of mutual contract - Challenge raised is that it is not the liability of the petitioner and rather it is the Nagar Nigam that has benefited from the contract and therefore it is the Nagar Nigam which is liable to pay the G.S.T. realisable under the Act, 2017 - whether recovery could have proceeded against the petitioner or not? Held that: - recovery of GST can be make as arrears of land revenue by the Collector of the District on a requisition by the "Proper Officer" - Section 79(2) of Act, 2017 further clarifies that where there are terms of agreement under any instrument for recovery of the tax under Section 79(1) of the Act, 2017, the same may, without prejudice to any other mode of recovery, be recovered in accordance with the provisions of that sub-section. It is therefore, undisputed that there is a provision of recovery, provided there is an agreement between the parties. In the present case also there is no dispute that such an agreement exists - In the present case it is undisputed that the procedure for deducting the amount has not been followed by the Nagar Nigam in terms of Rule 143 of Rules, 2017. In such circumstances, proceedings for recovery had to be undertaken inasmuch as the Nagar Nigam as well as the petitioner both have defaulted simultaneously, the former by not making deductions and the latter by not paying the GST which is a liability on him under the terms of the agreement. Since the petitioner himself has given an undertaking for depositing the entire amount of G.S.T., the recovery certificate stands modified to the aforesaid extent and it shall be enforced only to the extent of 3,24,000/- subject to payment by the petitioner as undertaken before us - petition disposed off.

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• 2018 (5) TMI 1281
  Extension of time period for revising of GST Tran-1 - application of petitioner was not entertained on the last date i.e. 27.12.2017 - Held that: - the respondents are directed to reopen the portal within two weeks from today. In the event they do not do so, they will entertain the application of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner - petition allowed.

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• 2018 (5) TMI 1280
  Constitution of authority for advance ruling - It is the case of the petitioner that the portal of the taxing authority does not presently provide for a method of filing applications before the authority for advance ruling - Held that: - It is pointed out that the Joint Commissioner of Central Tax, Central Excise and Customs, Thiruvananthapuram as also the Joint Commissioner (General) State Tax, Thiruvananthapuram have been constituted as the members of the forum, which is the authority for advance ruling in the State - it is clarified that till such time as the electronic filing system is put in place on the portal, the assessees would be permitted to file their application manually before the said authority - petition closed.

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• Income Tax

• 2018 (5) TMI 1278
  Entitlement to deduction u/s 80IC - industrial undertakings or enterprises which are set-up in the North-Eastern Region - determination of period of ten years - Held that:- The assessee in the instant case has not got deduction under Section 80-IC for a period of ten years as he started claiming deduction under this provision w.e.f. Assessment Year 2006-07. Situation Nos. (b) and (c) mentioned above would not apply to the assessee as it’s undertaking/enterprise is not established in North-Eastern Region. It is, thus, clear that the High Court has failed to appreciate that the provisions of Section 80-IC(6) of the Act state that the total period of deduction under Section 80-IC and Section 80-IB cannot exceed ten assessment years only if the manufacturing unit was claiming deduction under second proviso to Section 80-IB(4) of the Act i.e. units located in the North-Eastern State. The inclusion of period for the deduction is availed under Section 80-IA and Section 80-IB, for the purpose of counting ten years, is provided in sub-section (6) of Section 80-IC and it is limited to those industrial undertakings or enterprises which are set-up in the North-Eastern Region. By making specific provision of this kind, the Legislature has shown its intent, namely, where the industry is not located in North- Eastern State, the period for which deduction is availed earlier by an assessee under Section 80-IA and Section 80-IB will not be reckoned for the purpose of availing benefit of deduction under Section 80-IC of the Act. Thus, it was wrong on the part of the AO not to allow deduction to the assessee under Section 80-IC for the Assessment Years 2008-09 and 2009-2010. - Decided in favour of assessee.

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• 2018 (5) TMI 1277
  Exemption u/s 11 - income of the assessee trust being diverted for non-charitable purposes - Held that:- Appellate Tribunal interpreted the relevant provisions to imply that it is only if a person contributes more than 50,000/- to the assessee charitable trust and the trust makes some payment to such person, would the transaction fall within the mischief of the relevant provisions. Appellate Tribunal found, as a matter of fact, that the Revenue had not questioned the propriety of the donation or even asserted that the funds of the trust had been diverted by such process. Appellate Tribunal appropriately held that the true intention of Section 13(1)(c) of the Act was to ensure that the funds of an entity granted a special exemption are not misapplied or diverted for use as income. Tribunal’s treatment of the facts, no real legal issue arises since the Tribunal interpreted the appropriate provisions and applied the same in the context of the facts. As to whether the Tribunal was right or wrong is not really a question of law. As to the interpretation of Section 13(1)(c), it does not appear that the view expressed by the Appellate Tribunal is inappropriate. For the reasons indicated above and, particularly, since there was no allegation of the income of the assessee trust being diverted for non-charitable purposes, the Appellate Tribunal’s order does not warrant any interference. No substantial question of law has arisen on the facts.

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• 2018 (5) TMI 1276
  Loss in connection with the hedging contract - business loss or speculative loss - Held that:- Similar issue was considered by this Court in case of this very assessee for earlier years [2018 (5) TMI 1240 - GUJARAT HIGH COURT] as held admittedly, the assessee is not a dealer in foreign exchange. For the purpose of hedging the loss due to fluctuation in foreign exchange while implementing the export contracts, the assessee had entered into forward contract with the banks. In some cases, the export could not be executed and the assessee had to pay certain charges to the Bank and thereby incurred certain expenses. These expenses the assessee claimed by way of expenditure towards business. We do not find that the transaction can be stated to be in speculation as to cover under subsection (5) of section 43 of the Act. - Decided against revenue

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• 2018 (5) TMI 1275
  Entitlement to benefit of deduction u/s 54F - construction of the flats for personal use was completed before the sale of the capital asset - Held that:- The assessee’s claim for deduction u/s.54F of the Act cannot succeed except in relation to the transfer of a flat in favour of Kankuben Mansingbhai Patel, which had happened before the completion of construction. In such a case, since construction can be stated to have been carried out after the transfer of the original capital asset, the claim of deduction u/s.54F of the Act cannot be denied. To this limited extent, the appeal succeeds. The Assessing Officer to recompute the deduction accordingly.

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• 2018 (5) TMI 1274
  Addition of suppressed sale - additions of income made on the basis of SCN issued under the Central Excise - assessee contended that - Proceedings under cental excise could not be finalized - Held that:- Assessing Officer cannot be expected to defer completion of assessment awaiting final order of adjudication in excise proceedings at the risk of his assessment getting time barred. Even otherwise, in a given case, the material that may be brought on record in excise proceedings may be different from that which may form part of the assessment proceedings though the both may, to some extent, be common. In addition to confronting the assessee with the contents of the show-cause notice issued by the Excise department, the Assessing Officer has done little else. By merely producing the copies of the statements of the witnesses accompanying the show-cause notices, such statements and the veracity thereof does not get automatically established. AO merely cosmetically gave an opportunity to the assessee to meet with such allegations, virtually, shifting the burden of proving the evasion of duty that had taken place on the assessee. We have perused the entire order of assessment. There is no independent material brought on record by the Assessing Officer other than those which were already collected by the Excise department and which, as noted earlier, are yet to be verified. The assessee drew our attention to a judgement of Customs, Excise and Service Tax Appellate Tribunal in which, the order of adjudication passed in case of one of the ceramic units (not an assessee before us) by the Adjudicating authority came to be set aside. However, for the following reasons we do not wish to place any reliance on this judgement : Firstly, the excise show-cause notices in case of the present assessee are yet to be adjudicated. What would be the material on record during such proceedings is not possible for us to foresee. Secondly, the Tribunal has mainly proceeded on the basis of absence of section 4A of the Central Excise Act at the relevant time which, in the opinion of the Tribunal, alone could have permitted the department to substitute the sale price by the transaction value of the goods. Such is not the case in the present group of cases. We would, therefore, be well advised to clear such controversy. Decided against revenue

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• 2018 (5) TMI 1273
  Contributions towards Provident Fund made beyond the due date specified in section 36(1)(va) - whether no disallowance u/s. 43B can be made if the same is made before due date of filing of return? - Held that:- Since the question, whether such disallowance should be sustained or not depends on this crucial fact, we would place the matter before the Assessing Officer for giving effect to this order after ascertaining such fact. We make it clear that such disallowance would be made only if the same pertains to the employees' contribution to the said funds and not otherwise. While doing so, the Assessing Officer will also examine whether the delayed payment was within the grace period, as discussed in Commissioner of Income Tax v. Amoli Organics (P) Ltd. [2013 (11) TMI 971 - GUJARAT HIGH COURT ]. This question thus stands disposed of. Deduction u/s 80IA - entitled to deduction on Weighted Average while allocating the advertisement expenses for the purpose of calculation of deduction - Held that:- The news papers remained the same. The news, the articles, the advertisements, the quality of paper and the printing quality were the same. The cost of the news paper also remained the same. Merely because greater number of news papers printed at Nilgiri unit were diverted for circulation in Ahmedabad would not, in our opinion, make any material difference insofar as income allocation is concerned. When we find that the formula devised by the CIT(A) and approved by the Tribunal lacks scientific basis, the same must be discarded. The question is of its substitution. As noted, the assessee had not maintained separate accounts for its two units of Ahmedabad one being eligible for deduction under section 80-I, the other not so eligible. Both printing units printed and published news papers which were marked as Ahmedabad edition. Such news papers were circulated in and around the city of Ahmedabad including North Gujarat. The news papers, in all respects, were identical. The quality of paper used, the printing material and the cost of each such news paper sold in Ahmedabad as well as outside Ahmedabad were the same. Under the circumstances, the most fair and equitable means of dividing the income between the two units would be in the proportion of their internal publication and circulation of Ahmedabad edition. That is what the Assessing Officer has done. We restore the formula. In the result, the question is answered in favour of the Revenue subject to the observations made in the judgement

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• 2018 (5) TMI 1272
  Claim of deduction u/s 35(1) - expenditure of capital nature on scientific research related to the business carried on by the assessee - Tribunal remanded the proceedings for fresh disposal in view of the fact that the opinion of the prescribed authority under the said section was not still available - Held that:- It can be seen from the record that over 10 years since the completion of the assessment year and the filing of the return, the report of the prescribed authority is not yet available. As noted, it is not even clear that whether the Revenue has sought such report. In a given case, mere delay and the prescribed authority giving its opinion, may not be fatal to the interest of the Revenue. However, in facts of the case, we have no difficulty in accepting the Tribunal's approach.

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• 2018 (5) TMI 1271
  Addition u/s 69 - unexplained investment in the property - difference in purchase consideration as per the banakhat and the final Conveyance Deed found during the course of search - Held that:- Only component principally missing was the furniture and fixtures which the owners were themselves allowed to sale which fetched a sum of 90 lakhs. There still remained a shortfall of 2.20 crores which had to be explained by the assessee. His only explanation was, after executing the agreement to sale, the property was revalued and assessee realized that the building was not suitable for running a hotel and furniture was too old. Though no breakup of valuation of the property was given in the agreement to sale, in the affidavit dated 26.05.2006, such breakup was given. Pre and post agreement to sale in which the valuation of building and furniture was drastically reduced, the Assessing Officer and higher authorities correctly noted that the valuation of 80 lakhs for the land defies logic where merely 6 years earlier the Government Approved Valuer valued the land at 1.17 crores. It is not as if the fact that such omitted land was new tenure land, was not noticed by the purchasers. In the banakhat itself, there is a reference to this parcel of land. The assessee's oral assertion that the valuation report of the year 2000 was not accurate and that the valuation was inflated only in order to obtain higher loan from the bank, cannot be accepted for the mere asking. There was no material in support of such assertion. Secondly, this would also cast serious aspersions on the Government Approved Valuer. Once agreement to sale was executed for price of 4.25 crores, it is difficult to comprehend why the sellers would agree to execute the sale deed at half the agreed consideration. No material was brought on record to show the reason for the sellers to act in such fashion, against their own interests. Disputes are purely factual in nature. No question of law arises - Decided against assessee.

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• 2018 (5) TMI 1270
  Capital gain computation - ITAT not accepting cost of acquisition as on 01.04.1981 of the land sold - in the present case as per the certificate of the Mamlatdar (S), Diu 50/per sq. mtrs.- Held that:- AO has without any other reference, compared the sale instance of another village and arrived at the valuation of 10 per sq.mtr. As recorded by the Tribunal, the assessee's lands were situated on BhiladNaroli road which connected NH8 and Silvassa city. Thus, the lands of the assessee were situated abutting on a highway. The assessee therefore had been contending that it had greater potential and therefore market value. We have no data on the situation of the land, sale of which was referred to by the Assessing Officer. While adopting valuation of immovable properties, several factors need to be kept in mind. Situational advantages and disadvantages are important factors. We do not even know how far the two pieces of lands i.e. assessee's land and the nearby land with which the Assessing Officer carried out the comparison. All in all, it is a pure question of fact. Tax Appeal is dismissed.

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• 2018 (5) TMI 1269
  Allowability to exemption u/s. 11 25.66 crores. It was pointed out that the current fair market value of the property would come to 36.28 crores and the rent had been valued as per the prevailing rate fixed for the purpose of stamp duty. The assessee also pointed out that if 10% fair return on the investment was considered, the rent would come to 3.60 crores per annum as against which, rent of 1.98 crores was paid. The CIT (Appeals) was also influenced by the fact that the lease had a locking period of 30 years. It can be seen that the entire issue is in the realm of appreciation of materials on record. CIT (Appeals) and the Tribunal concurrently came to the conclusion that the rent was not excessive. The application under section 13(1)(c) of the Income Tax Act therefore would be ruled out. - Decided in favour of assessee.

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• 2018 (5) TMI 1268
  Tax liability arising due to MAT provisions - Levy of interest u/s 234B and 234C, while computing the MAT under the deeming provisions of Section 115J - Held that:- The Hon'ble Supreme Court, in the case of Rolta India Ltd., (2011 (1) TMI 5 - SUPREME COURT OF INDIA) considered the correctness of an order passed by the Karnakata High Court in the case of Kwality Biscuits (supra) and took into consideration various decisions of the other High Courts and held that the decision of the Karnataka High Court in the case of Kwality Biscuits Ltd. (1999 (11) TMI 48 - KARNATAKA High Court) stood affirmed by the intra Court [2006 (4) TMI 121 - SUPREME Court] and held that interest under Sections 234 B and 234 C shall be payable on failure to pay advance tax in respect of tax payable under Section 115 JA/115 JB In the light of the law laid down by the Hon'ble Supreme Court in the case of Rolta India Ltd., (2011 (1) TMI 5 - SUPREME COURT OF INDIA) we have to necessarily hold that the Division Bench of this Court in the case of Geetha Ramakrishna Mills Pvt. Ltd. (2006 (8) TMI 112 - MADRAS HIGH COURT), does not lay down the correct legal principle that that, interest under Sections 234 A, 234 B and 234 C can be levied even if income is computed under Section 115 J. We may hasten to add that the Division Bench in Geetha Ramakrishna Mills Pvt. Ltd's case (supra), opined that the Appeal filed by the Revenue against the judgement of the Karnataka High Court in the case of Kwality Biscuits Ltd., (1999 (11) TMI 48 - KARNATAKA High Court) was dismissal simpliciter (2006 (4) TMI 121 - SUPREME Court) and would not be a declaration of the law. However, as pointed out by us earlier, it were the Civil Appeals, which were dismissed by the Hon'ble Supreme Court and not the Special Leave Petitions. Decided in favor of assessee.

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• 2018 (5) TMI 1267
  Recovery of dues - Justification issuing notice u/s 226(3) - Held that:- The appeal time for preferring an appeal against the order passed by the CIT (A) dated 15.03.2018 expires only on 18.05.2018, if in the meantime, the demand is enforced and the tax is recovered then the very purpose of filing an appeal will be negated and such an appeal is liable to become infractuous. Therefore, the Authority has to necessarily wait till the the expiry of appeal time, which in the instant case stated to be expired on 18.05.2018. Therefore, till then the impugned notice should be kept in abeyance. Thus, for the above reasons, the writ petitions are disposed of by directing the respondent to keep the impugned notice dated 28.03.2018 in abeyance till 25.05.2018. Within such time, it is open to the assessee to approach the ITAT and secure appropriate orders.

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• 2018 (5) TMI 1266
  Validity of reference made by AO to the TPO of the petitioner s specified domestic transactions - safe harbour rule application - Held that:- In the present case, admittedly, after the petitioner exercised option for application of safe harbour rules in accordance with the provisions of rule 10THC the Assessing Officer passed no order under subrule( 4) of rule 10THD declaring that the exercising of option was invalid. In terms of subrule( 7) and subrule( 8) of the said rule, therefore, the option exercised by the assessee would be treated as valid. Once this conclusion is reached, it follows as a natural and necessary corollary that the Transfer Pricing regime would not apply. That being the case, the Assessing Officer had no authority to make any reference to the TPO to ascertain the arm s length price of the petitioner s specified domestic transactions. Reference itself was therefore, invalid. CBDT s circular dated 10.3.2006 could not have and does not lay down anything to the contrary. - Petition is allowed. Reference made by the Assessing Officer to the TPO in the present case is quashed

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• 2018 (5) TMI 1265
  Reopening of assessment - Jurisdiction of the Assessing Officer at Mumbai to initiate proceedings under Sections 147 and 148 - Held that:- Plea of assessee that jurisdiction of the Assessing Officer at Mumbai was that as he has not filed returns and was not assessed at Mumbai, the Assessing Officer concerned at Mumbai had no jurisdiction is wholly without any merit. The jurisdiction of an Assessing Officer does not depend upon the fact whether a person had filed his returns or not. It depends upon the territorial area, the person or classes of persons, income or classes of income and cases or classes of cases, with reference to which the jurisdiction is conferred on the Competent Authority concerned as per Section 120(3) read with Section 124 of the Act. In this view of the matter, we do not find any merit in this submission of the assessee. Whether transfer of the case on the ground of purported non-compliance of Section 127(2)(a) of the Act, is bad? - Held that:- Both the requirements of prior notice and recording of the reasons before passing the order of transfer were envisaged to enable the party likely to be affected by such transfer to submit his objections. If the assessee had any such sustainable objection, he is expected to have raised the same before the Assessing Officer at Hyderabad after the transfer of the case. From the fact that the assessee has not raised any such objection would clearly show that he had no grievance against the transfer as such. Indeed, the assessee objected to the jurisdiction exercised by the Assessing Officer at Mumbai on the ground that he was being assessed at Hyderabad. Transfer of the case to Hyderabad is obviously in tune with his objection, which appears to be the reason why the assessee has not raised any objection on the transfer. The assessee has also not pleaded any prejudice on account of transfer or purported absence of reasons for such transfer. For the aforementioned reasons, we reject this submission of the assessee as well. Levy of interest under Section 234B(1) - Held that:- Assessee, whose income tax is liable to be deducted at source, is not liable to pay advance tax under Section 208 of the Act and consequently, he is not liable to pay interest under Section 234B(1) thereof. See Maersk Co.Ltd [2011 (4) TMI 886 - UTTARKHAND HIGH COURT]

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• 2018 (5) TMI 1264
  Revision u/s 263 - not giving the assessee proper and sufficient opportunity of being heard - denial of natural justice - Held that:- The assessing officer has not given adequate opportunity to the assessee and has passed an order u/s 144 without adequate enquiry. The directions given by the CIT in the Sec 263 order have not been followed by the AO. The Ld. CIT(A) has passed an ex parte order and has not dealt with the issue on merit. We set aside this assessment to the file of the assessing officer for fresh adjudication, with the direction that an adequate opportunity should be provided to the assessee and that the direction given by the Ld. CIT in the order passed u/s 263 be followed. The assessee is directed to appear before the assessing officer within 30 days of receipt of this order take notice and thereafter cooperate in completion of the assessment. See M/S. SRIRAM TIE UP PVT. LTD. VERSUS ITO [2018 (3) TMI 1403 - ITAT KOLKATA] - Decided in favour of assessee for statistical purposes.

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• 2018 (5) TMI 1263
  Income from franchise fee and consultancy services - Nature of Royalty - whether taxable @ 10% as per India-USA Double Taxation Avoidance Agreement (DTAA) - P.E. in India - physical control on the business of franchise and sub-franchise - taxability as royalty income or income u/s 44DA - Held that:- the Jubilant or sub-franchise are not storing any goods on behalf of assessee. From the sub-franchise, the assessee is entitled only royalty and store opening fees. The assessee has no authority to maintain in the first mentioned state its stock or goods or merchandise from which he regularly deliver goods or merchandise on behalf of the assessee. No activities are carried out by the by Jubilant on behalf of the assessee. In our view, none of the clause either (a), (b) or (c) of Article-5.4 are applicable on the assessee. Considering the contents of the MFA and SFA, the Master franchise are independent business entity, the restriction provided in MFA and SFA are only to safeguard the brand value and to ensure the correct receipt of royalty income as concluded by DRP. Hence, we do not find any infirmity or illegality in the assessment order passed in pursuance of direction of DRP. The case law relied by DR in Formula One World Championship Ltd. [2017 (4) TMI 1109 - SUPREME COURT OF INDIA] is not helpful to the Revenue. As the fact of the said case are at variance. In the said case physical control of the circuit was with Formula One World Championship Ltd. (FOWC) and its affiliates from the inception. However, in the present case, there is no physical control on the business of franchise and sub-franchise by the assessee. - Decided against revenue

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• 2018 (5) TMI 1262
  Penalty u/s 271(1)(c) - whether the notice issued by the Assessing Officer dated 26/12/2011 is valid or not? - non striking irrelevant portion of notice - Held that:- The assessing officer did not strike off the irrelevant column in the notice and made known the assessee whether the penalty was initiated for the concealment of income or for furnishing the inaccurate particulars. In the assessment order also the AO simply recorded that the penalty proceedings u/s 271(1)(c) are initiated separately. Neither in the assessment order nor in the penalty notice, the assessing officer has put the assessee on notice for which offence, the penalty u/s 271 was initiated. See CIT Vs. SSA’s Emerald Meadows [2016 (8) TMI 1145 - SUPREME COURT]- Decided in favour of assessee.

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• 2018 (5) TMI 1261
  Disallowance of estimated expenditure - Held that:- The revenue’s case is not with regard to genuineness of expenditure. Business requirements and planning for future has to be decided by the assessee but not by the Department. It is the assessee who has to run the business. The revenue has not proved that the assessee has made any bogus claim or incurred personal expenditure in the guise of marketing, godown and plant and maintenance expenses. In the absence of specific evidence to establish that the expenditure claimed by the assessee is bogus or unsubstantiated with relevant evidences we hold that the CIT(A) has rightly deleted the addition. Introduction of share capital - Unconfirmed identity of the shareholder, address and sources of income of the contributor to the share capital - Held that:- The assessee has furnished the confirmation letters explaining the identity of the shareholder, address and sources of income of the contributor to the share capital along with the evidence for land holdings and copies of IT returns in 4 cases before the AO. The assessee has discharged its burden with regard to the identity, genuineness of share capital and also explained the source of share capital. The AO did not make any enquiry to verify the correctness of the information furnished by the assessee and bring any evidence to establish that the contributors to share capital does not have sufficient source or the source explained by the share holders is bogus. The CIT(A) also observed that the shares were allotted in favour of the contributors. It is evident from the above that the revenue has not discharged it’s burden to prove that the shareholders did not have credit worthiness. - Decided in favour of assessee.

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• 2018 (5) TMI 1260
  Revision u/s 263 - non discussion on computation of dividend distribution tax by AO - Held that:- The assessing officer has not discussed this issue of computation of dividend distribution tax in his assessment order. The assessee could not demonstrate that this was an issue enquired into by the AO. Hence there is no application of mind by the assessing officer on this issue during the course of assessment or in the assessment order. Hence the argument of the assessee, that the assessing officer has applied the proposition of law laid down by the Hon’ble High Court in the case of Jayshree Tea & Industries Ltd. to the [ 2001 (9) TMI 74 - CALCUTTA High Court] facts of this case is factually incorrect. Nonapplication of mind by the AO to an issue makes the order of assessment erroneous. This error is prejudicial to revenue. - Decided against assessee.

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• 2018 (5) TMI 1259
  Assessment u/s 153A - Assessment barred by limitation - Held that:- The search in this case was conducted on 05.01.2005 and as per the provisions of section 153B(b) of the Act , the order of assessment u/s. 153A should have been framed on or before 31.03.2007 whereas, as a matter of fact, the same was framed vide order dated 31.12.2007. Assessment of the Assessing Officer is invalid and void ab-initio as the same was barred by limitation as provided u/s. 153B(b) of the I.T.Act. - Decided in favour of assessee.

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• 2018 (5) TMI 1258
  Revision u/s 263 - reopening of assessment initiated - Commissioner wanted to revise the order passed by the A.O. u/s 143(3) r.w.s. 147 on the ground that there are certain omissions and commissions in the order passed u/s 143(3) - Held that:- In this case, the A.O. has reopened the assessment for the escapement of income and the same is offered for taxation and assessment is completed. We find that the order passed by the A.O. u/s 143(3) r.w.s. 147 of the Act dated 31.12.2010 is neither erroneous nor prejudicial to the interest of the revenue. Therefore, on this count, the order passed by the Ld. Commissioner u/s 263 of the Act dated 22.3.2013 is quashed. Period of limitation - Held that:- In this case, the assessing officer passed an order u/s 143(3) of the Act on 31.12.2009. If at all, the Ld.Commissioner wanted to exercise power u/s 263 of the Act, he has to issue a notice on or before 31.12.2011. In this case, he has issued notice on 04.03.2013 and the order was passed on 22.3.2013, which is time barred. Therefore, on this count, the order passed by the Ld. Commissioner cannot survive - Decided in favour of assessee.

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• 2018 (5) TMI 1257
  Calculation of capital gain - determination of value - SRO’s value has to be adopted as per the registered sale agreement or finally sold the property as on 07/02/2008 -Held that:- We find that there is no merit in the arguments advanced by the ld. counsel for the assessee for the reason that the date of registration is only valid for one month and the property was sold altogether to a new vendee i.e. M/s. Sri Ramdas Paper Boards (Pvt.) Ltd., near about two years. Therefore, in the eye of law, the agreement is not in force on the date of sale. Therefore, the Assessing Officer has rightly adopted the SRO’s value as on the date of sale of 57,47,000/-, which was confirmed by the ld.CIT(A). We find no infirmity in the order passed by the ld.CIT(A). - Decided against assessee. Negative balance in the cash book - unexplained expenditure - Held that:- We find that ld. CIT(A) gave a categorical finding that the assessee has not filed any evidence to show that the impugned expenditure was incurred from the cash available of the assessee’s son & daughter-in-law and no entry is made in their books of account. Therefore, we find no reason to interfere with the order of the ld. CIT(A). Thus, this ground of appeal raised by the assessee is dismissed.

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• 2018 (5) TMI 1256
  Transfer pricing adjustment - ALP determination - corporate guarantee commission charged by the assessee company - Held that:- The assessee’s case the corporate guarantee commission charged by the assessee was 0.90% which is more than the corporate guarantee commission of 0.25% to 0.53% approved by various judicial forums. Therefore, respectfully following the view taken by the coordinate benches, we hold that the corporate guarantee commission charged by the assessee company is at ALP and no adjustment is required. Accordingly, we delete the addition made by the A.O. and allow the appeal of the assessee. TPA imputing notional interest on outstanding amounts from A.E. - Held that:- Since the invoices were raised on 31.3.2013 and credit period allowed was 60 days, we agree with the Ld. A.R’s argument that the notional interest does not accrue or arise in the year under consideration, therefore, the addition made by the A.O. on account of notional interest is unsustainable as per the system of accounting followed by the assessee. The assessee is following the mercantile system of accounting and the interest accrues only when the debt falls due and the same is remained unpaid. Since the debt do not fall due in the impugned Assessment year, we hold that the interest is neither accrued nor crystalised in the year under consideration. Accordingly, the same is deleted - The department has not made out case of systematic planning of allowing the undue credit to the AE - the revenue has not made out case of disallowance of notional interest on delayed payments and accordingly, we set aside the orders of the authorities below and delete the addition - Decided in favour of assessee Sponsorship expenses - allowable business expenses - Held that:- There is no need to have direct nexus of the assessee’s business with the sponsorship linked events. Even indirect benefit is sufficient to sponsor the sports or social or economic events. We are of the considered view that the social events, sports events and the business events which involves the participation of various institutions would have direct or indirect impact on the assessee’s business and the expenditure incurred on such events is business expenditure.Therefore, we hold that the sponsorship amount is a business expenditure, which required to be allowed as deduction - Case of JCIT Vs. ITC Limited followed [2007 (9) TMI 295 - ITAT CALCUTTA] - Decided in favour of assessee Legal and professional charges allowability - Held that:- We hold that the expenditure incurred for the purpose of Okha Project in connection with the field study as discussed is a business expenditure and allowable u/s 37(1). Accordingly, we set aside the orders of the authorities below and allow the appeal of the assessee. Disallowance is called for u/s 14A - Held that:- A.O. is not permitted to entertain the additional claim of the assessee without the revised return of income, the appellate authorities are not barred to entertain the additional claim of the assessee during the appellate proceedings. This view is supported by the case laws relied upon by the assessee as well as the decision in the case of Goetz India Ltd. Vs. CIT [2006 (3) TMI 75 - SUPREME Court]. In the assessee’s case the assessee has made disallowance of expenditure u/s 14A of the Act, but there was no exempt income as claimed by the assessee. Therefore, we are of the view that the issue required to be remitted back to the file of the A.O. to consider the disallowance u/s 14A of the Act on the facts and merits of the case. Remit the matter back to the file of the A.O. to consider the issue afresh on merits.

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• 2018 (5) TMI 1255
  Unabsorbed depreciation of current year and earlier year as allowable against income under the Head “Income from other sources” being disclosed/assessed under section 68 - Held that:- As per Section 72, carried forward of business loss is not to be allowed to be set-off against any other head of income other than income from business. Inter Head set-off of business loss is allowed under section 71 against all other income except income from salary. Same head adjustment of business loss against other business income is allowed under section 70 of the Act. As such, provisions of law on unabsorbed deprecation which is allowed as depreciation of current year under section 32(2) fall in Section 71 and not under section 72, as such, allowable as ‘business expenditure’. Therefore, findings of the A.O. is not correct that surrendered income cannot be assessed even under the Head “Income from other sources”. It may also be noted here that after insertion of Section 115BBE, any income assessed under sections 68 to 69D will be taxed under section 115BBE and not under regular provisions w.e.f. A.Y. 2013-2014. Further, Section 115BBE has got amended w.e.f. A.Y. 2017-2018 that loss will not be allowed against such income. Therefore, it is clear that w.e.f. A.Y. 2017- 2018 any type of loss will not be allowed deduction and this Amendment is not retrospective in nature. Therefore, claim of assessee-company shall have to be allowed by authorities below. The issue is covered in favour of the assessee-company

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• 2018 (5) TMI 1254
  Levy of penalty u/s 271(1)(c) - unexplained income on account of corpus fund - Held that:- Return for the assessment year 2007-08 was filed on 31.10.2007 declaring loss of 5,31,945/-. Search was conducted on 23.7.2009 i.e. after the first day of June, 2007. The assessee accepted the unexplained income on account of corpus fund relating to its source. The alleged undisclosed income was not offered to tax in the regular return of income and was finally admitted for paying tax in the course of assessment proceedings. The assessee is directly hit by the provisions of Explanation 5A to section 271(1)(c) of the Act(1)(c) of the Act. Therefore, in our considered view, the learned Commissioner of Income Tax (Appeals) has rightly confirmed the penalty - Decided against assessee Levy of penalty u/s 271AAA - whether the assessee has admitted the undisclosed income during the course of search with specific manner in which it has been derived - Held that:- The search was conducted on 23.7.2009. The assessee did not make any disclosure during the course of search. It was two months thereafter on 23.11.2209 that the assessee submitted a letter before the ITO, Investigation, Bhopal. In our view, the statement given on 23.11.2009 cannot be considered as a statement given during the course of search because it was an afterthought and given two months after the date of search. The assessee has duly substantiated the manner in which the undisclosed income was taxed. As far as the third condition as to whether the assessee has paid the taxes together with interest, we find that the assessee has not offered the undisclosed income voluntarily in the return of income filed in compliance with the notice u/s 153A of the Act and it was only during the course of assessment proceedings that when it was confronted with the seized material as well as the disclosure made on 23.11.2009 then it accepted to pay taxes. Therefore, the assessee has not paid the taxes voluntarily on the income surrendered. The assessee has been unable to fulfill two out of the three conditions provided in section 271AAA of the Act for getting immunity from paying penalty @ 10% of the undisclosed amount. We, therefore, find no reason to interfere with the findings of the learned Commissioner of Income Tax (Appeals) and confirm the penalty imposed u/s 271AAA of the Act. - Decided against assessee.

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• 2018 (5) TMI 1253
  Addition under the head income from other sources - transfer of immovable property without consideration - Held that:- Provisions of section 56(2)(vii)(b) of the Act bring into the ambit of income from other sources, of an immovable property to the transferee, which is received without consideration. This was brought into statute book by Finance Act, 2010, w.e.f. 1st October 2009. The above said provisions of the Act are applicable to transactions which are entered into after 1st October 2009. In this regard, assessee’s Counsel has also placed reliance upon Circular no.5/2010 issued by the CBDT wherein it has been clearly mentioned that “these amendments have been made applicable w.e.f. 1st October 2009 and will accordingly apply for transaction undertaken on/or after such date”. Hence, from the above provisions of law and CBDT circular, it is clear that transfer of immovable property without consideration will be taxable in the hands of transferee if the transaction took place after 1st October 2009. There was no provision of law to tax such transaction prior to 1st October 2009. The impugned transaction was entered into on 6th June 2009, as per registered sale deed. Hence, there is no dispute that the impugned transaction is not hit by the provisions of section 52(6)(vii)(b) of the Act.- Decided in favour of assessee.

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• 2018 (5) TMI 1252
  Penalty u/s 271C - failure to collect TCS - reasonable cause - "assessee in default” in respect of sale only within the meaning of section 201(1) and has not treated the assessee as “assessee in default” for collection of TCS in respect of sale - Held that:- The assessee has satisfied the Assessing Officer that tax have been paid by the deducted / assessee in respect of sale of 12,40,93,199. It is only in respect of balance amount of sale of 54,83,410, the assessee could not satisfy the Assessing Officer and the assessee has been treated as “assessee in default” under section 201(1) of the Act. In these circumstances, we agree with the learned Commissioner (Appeals) that once the assessee has been held to be not an assessee in default with reference to sale amount of 12,40,93,199, there is no justification of levying penalty in respect of sale amounting to 12,40,93,199 and only the levy of penalty in respect of an amount of 54,83,410 remains. The assessee has submitted the extant legal opinion of an Advocate of Hon’ble Supreme Court who had opined that the assessee was not liable to collect the TCS on the items it dealt with. Similarly, the assessee has referred to the correspondence with the Assessing Officer seeking clarification from time to time. Hence, it can be reasonably construed that the assessee’s case falls under the ambit of section 273B of the Act which is attributable for non–collection of TCS by the assessee due to his bonafide belief that the cut to size planks of timber logs are not liable to TCS. Furthermore, we find that the decision referred to by the learned Counsel for assessee in support of his case are germane and support the case of the assessee - Decided in favour of assessee

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• 2018 (5) TMI 1251
  Reopening of assessment - unexplained cash deposits - Held that:- We find that in this case the assessee has given detail basis of deposit of Rs. 10,45,500 in the bank account. The detailed source has been claimed to be out of the business income as well as agricultural income of the assessee and his family members. Deposit to the extent of Rs. 3,62,000 has been accepted by the Assessing Officer. Assessee has given detailed submissions as above. Furthermore, we note that the detailed source of the cash deposit transaction–wise was also submitted. We further find that the above explanation cogently proves the entire source of deposits. The authorities below, in our considered opinion, have erred in party accepting the submissions of the assessee and partly rejecting the same - Decided in favour of assessee.

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• 2018 (5) TMI 1250
  Waiver of principal amount of term loan - taxability as capital asset - addition invoking section 41 - Held that:- Revenue has not placed any material suggesting that the loan was for the purpose of working capital, but on the contrary, CIT(A) has given a finding that the principal amount related to term loan. Under these facts, we do not see any reason to interfere with the finding of the decision arrived by the CIT(A) and the same is hereby affirmed. The ground raised by the Revenue is dismissed. Addition on account of stores & spare parts - assessee has not maintained proper record of this expense not established co-relation with production - Held that:- There is no dispute with regard to the fact that the disallowances are made on estimation basis. The AO has not given any basis for arriving at such estimation. Therefore, the finding of the ld. CIT(A) is not interfered with. - Decided in favour of assessee

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• 2018 (5) TMI 1240
  Loss in connection with the hedging contract - business loss or speculative loss - Held that:- Admittedly, the assessee is not a dealer in foreign exchange. For the purpose of hedging the loss due to fluctuation in foreign exchange while implementing the export contracts, the assessee had entered into forward contract with the banks. In some cases, the export could not be executed and the assessee had to pay certain charges to the Bank and thereby incurred certain expenses. These expenses the assessee claimed by way of expenditure towards business. We do not find that the transaction can be stated to be in speculation as to cover under sub-section (5) of section 43 of the Act. TDS u/s 195 - addition u/s 40(a)(ia) - assessee had not deducted tax at source on foreign commission payments - income accrued in India - whether the non-resident agent of the assessee was operating at his own level and no part of the income arose or accrued in India? - Held that:- As decided in NOVA TECHNOCAST PVT LTD case [2018 (5) TMI 1182 - GUJARAT HIGH COURT] Explanation inserted with retrospective effect provides that obligation to comply with subsection [1] of Section 195 would extend to any person resident or non-resident, whether or not non-resident person has a residence or place of business or business connections in India or any other persons in any manner whatsoever in India - once the conclusion is arrived that such payment did not entail tax liability of the payee under the Act, as held in the case of GE India Technology Centre P. Limited [2010 (9) TMI 7 - SUPREME COURT OF INDIA], sub-section [1] of Section 195 of the Act would not apply. The fundamental principle of deducting tax at source in connection with payment only, where the sum is chargeable to tax under the Act, still continues to hold the field. In the present case, the Revenue has not seven seriously contended that the payment to foreign commission agent was not taxable in India. - Decided against revenue

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• Customs

• 2018 (5) TMI 1248
  Exemption from SAD - N/N. 53/2003-Cus. - Duty Free Credit Entitlement scheme - contention of the Department is that during the period of import i.e. from 01.03.2006 to 18.12.2006 the SAD was not exempted under N/N. 53/2003-Cus. therefore debited in respect of SAD (Special Additional Duty of Customs) made by the appellant is incorrect to that extent the appellant is liable to pay the Customs duty. Held that: - there is alternative exemption notification in respect of special additional duty leviable under Section 3(5) of Customs Tariff Act, 1975 under N/N. 20/2006-Cus. As per said notification all goods are exempted from payment of special additional duty, if the goods are exempted from payment of whole of Customs duty and whole of additional duty leviable under Section 3(1) of Customs Tariff Act, 1975 - In the present case the goods imported are admittedly exempted from whole of the Customs duty and additional duty under Section 3(1) of the said Act, therefore special additional duty is exempted under N/N. 20/2006-Cus. From the judgment Gujarat Ambuja Exports Ltd. Vs. Union of India [2013 (6) TMI 536 - GUJARAT HIGH COURT], it can be seen that though in the case of DEPB scheme exemption is provided by debiting the duty in DEPB scrip, it is considered as exempted. The similar procedure is available in the Notification No. 53/2003-Cus, therefore the ratio is squarely covered in the present case for the purpose under Notification No. 20/2006-Cus. Accordingly the condition of the Notification No. 20/2006-Cus is fully complied with, therefore the special additional duty cannot be demanded from the appellant. Since we decide the exemption of special additional duty leviable under Section 3(5) of Customs Tariff Act only on the basis of N/N. 20/2006-Cus. We need not to address the exemption of such duty under N/N. 53/2003-Cus. - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1247
  Exemption to goods imported under N/N. 21/2002-Cus. Sr. No. 230 - Interpretation of statute - case of Revenue is that Commissioner (Appeals) has wrongly interpreted Notification No. 21/2002 by construing that “Mumbai Metropolitan Regional Development Authority” (MMRDA) is a road construction corporation under the control of the State Government. Held that: - the contracts awarded by MMRDA do not qualify for the exemption. In the case of Rajhoo Barot Vs. Commissioner of Customs (Mumbai) [2015 (2) TMI 375 - CESTAT MUMBAI], the Larger Bench of the Tribunal considered the case of Shreeji Construction [2013 (4) TMI 654 - CESTAT MUMBAI] and held that the decision of Tribunal in the case of Shreeji Construction is directly dealing with the dispute in the present proceeding. It was held that MMRDA is not a road construction corporation within the scope and context of condition NO. 40(a). This conclusion was arrived at after careful and detailed analysis of the constitutional and organizational architecture of MMRDA and on a critical analysis of the constitutional and generic statutory functions entrusted to MMRDA. Therefore, the appellant was not entitled ab initio for the benefit of the Notification 21/2002-Cus. Appeal allowed - decided in favor of Revenue.

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• 2018 (5) TMI 1246
  SAD Refund - N/N. 102/97-Cus. - Jurisdiction - refund applied before wrong officer - Held that: - Special Additional Duty (SAD) @ 4% was introduced to provide a level playing field to the domestic manufacturers who suffer VAT (which is not leviable on the imports). If the imported goods are further sold on payment of VAT, the SAD is refunded as per the notification 102/97-Cus. The technical fault of the assessee in applying for the refund to the wrong officer and the fault of the departmental officers in sanctioning the refund are both Revenue neutral. Appeal dismissed - decided against Revenue.

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• 2018 (5) TMI 1245
  Penalty u/s 114AA of the Customs Act, 1962 - Smuggling of Gold - Baggage Rules - Jurisdiction - Held that: - the present case related to baggage and therefore the Tribunal does not have jurisdiction to entertain such cases. The Revisionary Authority at Delhi has got the power to decide such cases - the appeal is dismissed being not maintainable.

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• 2018 (5) TMI 1244
  Classification of imported goods - Hover Board - whether classified under CTH 9506 or under CTH 8711? - Held that: - Chapter 95 covers toys whereas chapter 87 deals with all kinds of motor vehicles other than Railway or tramway and rolling stock - as regards the disputed item, it is an electrically powered two wheeled transportation device designed to be used at low speed, for transportation of one person. As such from the size of the item, it is evident that it is more appropriate to be considered as Motor vehicle rather than a toy - The W.C.O. has recommended classification of the item as 8711 - appeal allowed - decided in favor of Revenue.

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• 2018 (5) TMI 1243
  Refund claim - rejected on the ground that the appellant cannot claim the refund directly without challenging the assessment order (bill of entry), in view of the Apex Court decision in the case of Priya Blue Industries ltd. vs. Commissioner [2004 (9) TMI 105 - SUPREME COURT OF INDIA]? - Held that: - in the present case, there is no lis between the Department and the appellant in claiming the benefit of N/N. 52/2011 - the impugned order denying the refund on the ground that the assessee has not challenged the assessment order which is final is not sustainable in law. The authorities below rejected the refund claim relying upon the decision of Priya Blue and have failed to distinguish the issue involved in the Priya Blue and Flock (India) case and in the present case - In an identical issue, the Division Bench of this Tribunal in the case of Bennet Colman and Co. [2008 (7) TMI 204 - CESTAT Bangalore] has considered both the decisions of the apex court in the case of Priya Blue and had distinguished the same and has relied upon the decision of the apex court in the case of Shree Hari Chemicals vs. UOI [2005 (12) TMI 95 - SUPREME COURT OF INDIA], where it was held that refund cannot be denied on ground of non-challenge to assessment order. Case remanded back to the original authority to consider the refund claim after considering the law declared by the Tribunal and the High Court - appeal allowed by way of remand.

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• Corporate Laws

• 2018 (5) TMI 1249
  Non filing Appeal within the time granted - extend the time granted for compliance given under sub-rule (2) to rule 26 of the NCLAT Rules, 2016 seeked - delay of one day - Held that:- In the case on hand, the initial presentation of the appeal under Rule 22 on 02.04.2018 and the subsequent presentation after curing the defects on 11.04.2018 are well within the period of limitation of 45 days, even if the limitation is computed on the basis of the allegation in para-2 of the Appeal memorandum or on the basis of the date of issue of the free certified copy of the impugned order. Therefore, exercising the power conferred under sub-rule (3) to rule 26, the time granted under sub-rule (2) to rule 26 for curing the defects is extended. Point answered accordingly.

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• Insolvency & Bankruptcy

• 2018 (5) TMI 1279
  Corporate Insolvency resolution process - Proof of Operational debt - Held that:- In the case on hand the amount due from the respondent to the petitioner is an operational debt. Therefore, petitioner is an operational creditor. The amount is due from the respondent Company and therefore respondent is the corporate debtor. The material on record establish that operational debt is due from the corporate debtor to the operational creditor and in respect of the same a default has been committed. Corporate debtor did not raise a plea that there exist a dispute in respect of the operational debt claimed or exist a suit or pendency of other proceeding in respect of the operational debt. The petition is complete in all respects. This application deserves to be admitted and it is accordingly admitted.

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• PMLA

• 2018 (5) TMI 1242
  Offence under PMLA - Provisional Attachment Orders - proof of property purchased from the alleged proceeds of crime - as by way of the SARFAESI provisions the properties are being taken in possession by the Appellant Bank - Held that:- That the definition of “proceeds of crime” as per Section 2(u) of the PML Act comprises of the property which is derived or obtained as a result of criminal activity. In the present case, all the properties have been mortgaged with the Appellant Bank much prior to the date of alleged offence which shows that no “proceeds of crime” are involved in acquiring of these properties and hence the same cannot be attached. The evidence on record suggests that the properties were acquired by the borrower/guarantors much before the alleged date of crime. No money disbursed by the Bank from its loan account, has been invested in acquiring these properties. Furthermore, the Appellant Bank had created charge over the property prior to the date of the crime. The properties attached cannot be attached under Section 5 of the PML Act because the properties are not purchased from the alleged proceeds of crime. As per the provisions of Section 5(1) (c) the primary requirement for the attachment is that the proceeds of crime are likely to be concealed, transferred or dealt with in any manner. In this case there was absence of such requirement. The said properties are already in the symbolic possession of the Appellant Bank under the SARFAESI Act. The property of the Appellant Bank cannot be attached or confiscated when there is no illegality or unlawfulness in the title of the Appellant Bank and there is no charge of money laundering against the Bank. Thus the allegation of money laundering, prima facie, so far as present appellant & properties involved in this appeal are concerned, found to be unsustainable for the purpose of attachment under the PMLA, 2002.

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• Service Tax

• 2018 (5) TMI 1239
  Demand of service tax - proceeds from sale of food and beverages at the premises of the hotel of the petitioner on which value added tax liability has been discharged - validity of SCN - Held that: - as it is made clear in the notice itself that further proceedings pursuant to the show cause notice will be subject to the outcome of the decision of the Apex Court in the matter pending before it as referred to in the notice, fairness demands that the petitioner be given a further notice before action is initiated against them in the event of the Apex Court taking a decision favourable to the Department - petition disposed off.

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• 2018 (5) TMI 1238
  Renting of Immovable Property Services - it was alleged that appellants had not registered with the service tax department and have also not discharged the said service tax liability on the services so rendered - Held that: - the appellants, though not registered with the department for the services rendered by them, had also not collected any amount representing service tax from the service recipients. In these circumstances, it is only fair that appellants be extended cum tax benefit - the matter should be remanded to the original adjudicating authority to rework the tax liability after extending cum-tax benefit to the appellants - appeal allowed by way of remand.

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• 2018 (5) TMI 1237
  Penalties - non-submission of the said ST-3 Returns - applicability of section 70 of FA - Held that: - the appellant though was registered under taxable service provider but for the year 2005-08, he had not rendered any taxable service. Though, this fact was not known to the Department till they served the letter, upon the appellant as are mentioned in the show cause notice. But in view of Show Cause Notice being silent about any tax liability of appellant during the relevant period, it stands clear that the appellant was not liable to pay tax - since for the period 2005 to the period 2008 the appellant was not liable to pay tax, he is out of the ambit of Section 70 of Finance Act, 1944 Any penalty imposed upon him under Section 7C of Service Tax Rules is not applicable as the word used in the said Section is also assessee and the appellant in the given circumstances does not fall under that category for that particular period. Appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1236
  Voluntary Compliance Entitlement Scheme (VCES) - time limitation - proceedings rejecting VCES application barred by limitation of time - Held that: - the CBEC vide circular dated 8.8.2013 has mandated that the show cause notice shall be given within 30 days of the date of filing of the said declaration or date of said circular whichever is later - In this case, admittedly, the show cause notice was handed over by the Service Tax department to the postal authorities on 9.9.2013 for delivery to the appellant. Thus, it is evident that the show cause notice has not been issued within 30 days from the date of issuance of the circular by CBEC. Proceedings initiated by the department for rejection of the VCES declaration cannot be sustained on the ground of limitation alone - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1235
  Short payment of service tax - adjustment between excess and short payment cannot be done denied on the ground that the procedure prescribed in this regard in the Service Tax Rules has not been complied with - Held that: - It is settled position of law that substantial benefit cannot be denied for failure to comply with certain procedural conditions. In principle there can be no objection to the adjustment of Service Tax short paid and excess paid. However, the same needs to be supported by a verification of the relevant records regarding payment of Service Tax - matter remanded to the Adjudicating Authority for allowing such adjustment and finalize the matter of demand, if any - appeal allowed by way of remand.

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• 2018 (5) TMI 1234
  Business Auxiliary Services - appellant had entered into the General Sales Agreement (GSA) dated 04/12/2013 with M/s Thai Airways International, for providing a bouquet of services related to reservation, ticketing, infrastructural support, liaising with the authorities, make sales, appoint passenger and cargo sales agents etc. - whether taxable under Business Auxiliary services or not? - Held that: - In view of the fact that the period of dispute in the case of the appellant is from 01/07/2003 to 09/09/2004, which is prior to the date of amendment of the definition of business auxiliary service, the explanation inserted in such definition subsequently, cannot have the retrospective application - demand set aside - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1233
  Liability of service tax - inclusion of reimbursable expenses - Held that: - Reimbursable expenses cannot be considered as amount charged by service provider, ‘for providing the taxable service’. Since, the appellant was entitled for receiving the actual expenses incurred by it, the same should not be included in the gross value for the purpose of payment of service tax, inasmuch as, such amount is not towards the consideration received for providing the taxable service - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1232
  Penalty u/s 77 and 78 - Respondent, a public authority, have not obtained service tax registration and have not paid the service tax - Held that: - the respondent being a public authority has no special interest or benefit in concealing the facts from the department and as soon as they were told by the Department that they are liable to pay duty, they have paid the duty along with interest - in the case of Punjab Ex-Servicemen Corporation Versus Commissioner of Central Excise, Chandigarh [2008 (11) TMI 87 - CESTAT, NEW DELHI], it was held that no penalty can be imposed in the case of such statutory or government body as there could not be any mala fide intention to evade payment of duty - penalty set aside - appeal dismissed - decided against Revenue.

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• 2018 (5) TMI 1231
  Valuation - management and maintenance or repair work - benefit of abatement under N/N. 12/2003-ST dated 20.06.2003 - benefit of the abatement stands denied for the non-compliance of the second condition of the Notification that there should be documentary proof specifically indicating the value of the said goods and materials sold during the course of service by the service provider to the recipient of the service. Held that: - reliance placed in the case of Safety Retreading Company (P) Ltd. vs. Commissioner of C. Ex., Salem [2017 (1) TMI 1110 - SUPREME COURT], where Apex Court has considered the practice in the industry of retreading of tyres wherein out of the total consideration charged for the retreading activity, the value added tax is normally charged on the component of 70% of the consideration by the State Authorities. The Apex Court has held that similar dispensation can be given for the purpose of levy of Service Tax also and that such Service Tax be charged on 30% of the retreading charges. The claim of abatement in terms of the Notification 12/2003 is required to be re-considered in the light of the pronouncement of law on the subject by the Hon’ble Supreme Court in the case of Safety Retreading - appeal allowed by way of remand.

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• 2018 (5) TMI 1230
  Manpower recruitment agency services - For undertaking the said job work, the appellant had deployed the manpower within the factory premises of M/s. Shivam Structurals - Held that: - the appellant’s scope of work was confined to the job work activity on behalf of Shivam Structural and the appellant did not deploy the manpower to work under the control and supervision of Shivam Enterprise. Thus, the activities undertaken by the appellant should not fall under the taxable category of manpower recruitment or supply agency service - Appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1229
  Condonation of delay of long 6 years in filing appeal - It is the claim of the appellant that the impugned order was received on 25/02/2013. Soon after receiving the order the appellant has filed the appeal on 24/05/2013 before the Tribunal - Held that: - the appellant has failed to explain the satisfactory reason for the long delay of 6 years - there is no reason to condone the delay - COD Application dismissed.

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• 2018 (5) TMI 1228
  Liability of service tax - sub-broker - receipt of Commission form main broker - Held that: - the identical issue has come up in the case of Vijay Sharma & Company V/s Commissioner, Chandigarh [2010 (4) TMI 570 - CESTAT NEW DELHI] where the matter was remanded to the Original Authority - matter remanded to the Original Authority with the similar direction as mentioned in the above mentioned case - appeal allowed by way of remand.

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• 2018 (5) TMI 1227
  Demand of Service Tax on the consumable and part support agreements - Held that: - it appears that on the consumable and spare parts appellant is paying the VAT and discharging the liability under the Act. On the Service Level appellant is paying Service Tax. In the case of Commissioner of Customs V/s J.P. Transformers, [2014 (9) TMI 307 - ALLAHABAD HIGH COURT] Allahabad it was observed that when the VAT has been paid on the goods and material utilized for repair of transformers and separately disclosed in agreements and mentioned in invoices of the assessee then Service Tax cannot be demanded on the component representing the value of goods and material used for carrying out repairs. In the instant case, the appellant is not charging any money on the components which is replaced by the appellant during the annual maintenance contract - when it is so, demand do not sustain - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1226
  Valuation - Business Auxiliary services - recovered losses - appellants have recovered huge quantities of iron ore fines and shown it as 'self-generated' - Department contended that these iron ore fines arising out of crushing operations are having market value and such value should be added in the consideration for tax purposes - Held that: - identical issue has came up before the Tribunal in assessee’s own case M/s Godawari Power & Ispat Ltd. (formerly known as Hira Industries Ltd.] Versus CCE, Raipur [2017 (5) TMI 704 - CESTAT NEW DELHI] where it was observed that the contingency of emergence of iron ore fines having some value, is not determinable at the time of fixing of crushing charges. Hence, it is not tenable to hold that the crushing charges are influenced by the possible emergence of iron ore fines and its additional value to the appellant - demand cannot sustain - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1225
  Non-payment of service tax - tax collected but not paid - demand with interest and penalty - Held that: - the appellant has collected the service tax but the same has not been paid in the Government treasury. The reasons given by the appellant for not depositing the same is not very convincing. Further, the appellant has paid the entire service tax along with 15% of the service tax as penalty as against 25% of the penalty. Therefore I direct the appellant to pay the 10% of the remaining service tax as penalty as directed by the original authority. Liability of interest - Held that: - the appellants are liable to pay the interest because there is a delay in the payment of service tax and the interest liability is automatically attracted. Appeal disposed off.

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• 2018 (5) TMI 1224
  CENVAT credit - duty paying documents - denial of credit on the ground that receipt is not proper documents to avail credit - Held that: - the Commissioner(Appeals) has denied the CENVAT credit by merely holding that receipt is not a proper document under Rule 9(1) (a) to (g) of CCR. Since the appellant has produced all the documents justifying the availment of the CENVAT credit of 5,624/-, the denial of credit is not justified - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1223
  Classification of services - manpower recruitment or supply agency service - reverse charge mechanism - Held that: - it cannot be said that there is any agency and client relationship between the parent company and the appellant. Rather, the terms of the agreement makes the position clear that the relationship between the appellant and the manpower deployed by the parent company is of employer/employee, and as such, it cannot be considered as the taxable service under the category of manpower recruitment or supply agency service - demand do not sustain - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1222
  Valuation - Includibility of turn over charges / transaction fee in the gross value for the purpose of payment of Service Tax - Held that: - the appellants had recovered the actual turn over charges / transaction fee from their customers and paid the same to the respective Stock Exchanges as per the SEBI Regulations and that the appellants did not retain any amount on account of such charges with them - the issue is no more res-integra in view of the decision of this Tribunal in the case of LSE Securities Ltd. vs. Commissioner of C. EX., Ludhiana [2012 (6) TMI 364 - CESTAT, New Delhi], wherein it has been held that turn over charges etc. cannot be included in assessable value for the purpose of taxation inasmuch as, the same are recovered from investors to make payment as per the SEBI guide lines. While interpreting the phrase “for such service” used in Section 67 of the Act, the Hon’ble Supreme Court, in the case of Union of India and Anr. vs. Intercontinental Consultants & Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT OF INDIA], have held that the said phrase to be strictly construed, to include only the amount of consideration paid for providing the taxable service and all expenses to be excluded for consideration of the gross value. Appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1221
  Refund claim - rejection on the ground that the claim amount is not debited from the CENVAT Credit and one of the refund claim is filed beyond the period of one year - Held that: - matter needs reconsideration by adjudicating authority as it is the claim of the appellant that they had debited the CENVAT Credit subsequently - the matter is remanded back to the adjudicating authority to reconsider the issue after following principles of natural justice - appeal allowed by way of remand.

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• 2018 (5) TMI 1220
  Business Auxiliary Service - as per the understanding made between the appellant and M/s. Amadeus India Pvt. Ltd., the said company has provided Central Reservation System (CRS) to book air tickets of various Airlines, with which they had business tie-ups - extended period of limitation - Held that: - The law is well settled that incentives/commission received from the CRS Companies is taxable under the category of “Business Auxiliary Service”. Extended period of limitation - Held that: - The extended period of limitation as per the proviso to Section 73 (1) of the Act is invokable, only in the situation, where there is involvement of suppression, fraud, mis-statement etc., with the intent to evade payment of service tax - in this case, it is an accepted fact that the said ingredients are absent. Thus, in absence of proper substantiation regarding involvement of the appellant in the fraudulent activities, extended period of limitation cannot be invoked The appellant is liable to pay service tax under the normal period of limitation along with interest - penalty set aside - appeal allowed in part.

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• 2018 (5) TMI 1219
  Refund claim - time limitation - unjust enrichment - Held that: - the duty incidence was not passed on to anybody else, but was passed to self is tenable in law therefore the order under challenge needs to be modified to that extent that the amount of refund allowed of 317031/- shall be refunded to the appellant. Time limitation - Held that: - the said amount did not constitute service tax and therefore was not liable to be subjected to the provisions of section 11B in so far as limitation is concerned and therefore the said amount needs to be refunded to the appellant. Appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1218
  Reversal of CENVAT credit - amounts received by the appellant were more than the amount on which service tax was paid. Revenue entertained a view that the balance amount was also a service and it was an exempted service - invocation of Sub Rule (3) of Rule 6 of Cenvat Credit Rules, 2004 - Held that: - the value on which Revenue has demanded amount under Sub Rule (3) of Rule 6 of CCR 2004 does not represent value of exempted services - demand set aside - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1217
  Chargeability of service tax - Policy Administration Charges for the period prior to 1st May, 2011 - Held that: - such levy have been introduced with effect from 1st May, 2011, when the definition in Section 65(105)(zx) was amended, and for the words "in relation to the risk cover in the life insurance" the words “by an insurer, including re-insurer carrying on life insurance business” where substituted. Thus evidently administrative charges also became taxable (being part of the insurance premium) with effect from 01/05/2011 - The period of dispute in the present appeal is July, 2010 to 31st March, 2011, which is prior to the amendment with effect from 01/05/2011 - administration charges are not subject to service tax prior to 01/05/2011 and accordingly the demand of 48,74,108/- set aside. Levy of service tax - notional 'fund management charges' - Held that: - no service tax can be demanded on such notional value which have not been collected and not charged by the service provider. Whether the appellants have provided exempted service, that is, the difference between the gross premium collected minus mortality charges, whether the same is in the nature of exempt service and is liable to reversal of input credit under the provisions of Rule, 6(1) of CCR, 2004? - Held that: - the value on which Revenue has demanded amount (by reversal) under Sub Rule (3) of Rule 6 of Cenvat Credit Rules, 2004, does not represent value of exempted services. Appeal disposed off.

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• 2018 (5) TMI 1216
  Penalty u/s 78 - demand with interest paid before issuance of SCN - Held that: - revenue did not have authority to issue show cause notice dated 25.03.2013 in terms of provisions of Sub-section (3) of Section 73 of Finance Act, 1994. Therefore, the question of proposal of imposition of penalty under Section 78 does not arise - penalty u/s 78 set aside - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1215
  Extended period of limitation - it was contended that for the period from January, 2005 to March, 2008 appellant did not pay Service Tax on outward freight where gross amount charged was between 750/- and 1500/- by availing benefit under Notification No.34/2004-ST dated 03/12/2004 to which they were not eligible - invocation of Sub-section 1 of Section 73 of Finance Act - Held that: - ST-3 returns requires declaration of only the taxable value and also the value on which tax is not being paid and obviously the value on which tax was not paid, was declared by them in their ST-3 returns and therefore, suppression is not established - extended period not invocable - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1214
  Penalty u/s 78 - invocation of section 80 - case of assessee is that during the relevant time there was a confusion regarding the taxability on Renting of Immovable Property Service - case of Revenue is that Section 80 has been omitted w.e.f. 14/05/2015 without any supporting clause to apply Section 80 and hence cannot be invocable in the present case - Held that: - there is no infirmity in the impugned order whereby the Commissioner (Appeals) has dropped the penalty under Section 78 by invoking Section 80 which was available during the relevant time - penalty set aside - appeal dismissed - decided against Revenue.

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• 2018 (5) TMI 1213
  CENVAT credit - input services - Guest House Maintenance - Colony upkeeping expenses - period from July 2010 to December 2010 - Held that: - the issue is squarely covered in favor of the appellant by the decision given by the Tribunal in the appellant's own case Ultra Tech Cement Ltd. Versus Commissioner of Central Excise, Nagpur [2015 (3) TMI 1123 - CESTAT MUMBAI] wherein the Tribunal has held that the assessee is entitled to cenvat credit in respect of the services used or utilized in the Residential Colony and the Guest House which are situated at a place away from the factory - credit cannot be denied - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1212
  Business Auxiliary Services - appellant is engaged in providing the service of Authorized Service Station in respect of two wheelers of TVS Motors Ltd - Department was of the view that the commission amounts received are by way of provision of Business Auxiliary Service and hence, service tax is liable to be paid on such commission amounts received - Benefit of N/N.25/2003 dated 01.07.2003 and N/N. 14/2004 dated 10.09.2004 - Held that: - the activity undertaken by the appellant is in addition to the service of provision of Authorized Service Station. The act of receiving commission for facilitating loans for various financial institutions will be covered within the category of Business Auxiliary Service since such service has been provided by the appellant on behalf of financial institutions. Benefit of N/N. 25/2003 dated 01.07.2003 for the period 01.07.2003 to 09.09.2004 - Held that: - the services provided by the appellant can be covered under services provided by a commercial concern on behalf of the client . It may also be covered under (e) which refers to services provided by anybody corporate other than a financial company or institution. In any case for the period 01.07.2003 to 09.09.2004, the appellant will be entitled to the benefit of the N/N. 25/2003 dated 01.07.2003 - benefit allowed. Benefit of N/N. 14/2004 dated 10.09.2004 for the period from 10.09.2004 till 31.03.2005 - Held that: - Since the appeHant does not fall in any of the exclusion categories specified in the Notification, the appellant will be entitled to the benefit of the Notification 14/2004 for the period from 10.09.2004 till 31.03.2005. Appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1211
  Liability of service tax - service of picking and choosing flowers supplied by the customers, for enabling further production of dried flowers - N/N. 14/2004 ST dt.10.9.2004 - Held that: - the Revenue did not advert any sustainable ground in the appeal. As selecting suitable flowers is post-cultivation activity the exemption is sought to be denied. Such submission will not even stand preliminary scrutiny - appeal dismissed - decided against Revenue.

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• 2018 (5) TMI 1210
  Voluntary Compliance Encouragement Scheme (VCES) - case of Revenue is that since the dues were paid prior to operationalization of the VCES 2013, the VCES declaration needs to be rejected, relying upon the Board's clarification No. 174/9/2013-ST dated 25/11/2013 - Held that: - Similar issue came up for consideration before the Hon'ble High Court of Gujarat in the case of Sadguru Construction Company v. Union of India [2014 (5) TMI 219 - GUJARAT HIGH COURT], where even the CBEC clarification dated 08/08/2013 on the issue was also considered by the Hon'ble High Court and in paragraph 31, quashed and set aside the communication which rejected the VCES declaration - appeal allowed - decided in favor of appellant.

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• Central Excise

• 2018 (5) TMI 1209
  Re-credit of CENVAT amount - Whether the action of the assessee in taking re-credit of CENVAT amount after the Revenue had already rejected his claim can be termed as a fraudulent or other illegal activity done with an intention of defrauding the Government Officials? - Held that: - The assessee has not taken the re-credit of its own, but the same was done on the basis of its Auditor's objection. It amounted to an account entry reversal without there being any revenue impact, as the issue concerning Cenvat credit on the amount of 49,62,640/- is already under adjudication pursuant to the first show cause notice. There appears no mala fide or fraudulent act on the part of the assessee, more so, when the first proceedings are pending - appeal dismissed - decided against Revenue.

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• 2018 (5) TMI 1208
  Tax Appeal admitted to consider the question:- Whether the CESTAT is right in law not to decide on merits though there a Jurisdictional High Court decision in case of Commissioner of C. Ex., AhmedabadII Versus Cadila Healthcare Ltd. [2013 (1) TMI 304 - GUJARAT HIGH COURT] And Astik Dyestuff Pvt. Ltd. Versus Commissioner of C. Ex. & Customs [2014 (1) TMI 776 - GUJARAT HIGH COURT]?

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• 2018 (5) TMI 1207
  Whether the Hon'ble Tribunal was justified in sustaining the order of imposition of penalty when the duty demand does not survive as the same stands deposited much prior to the issuance of the show cause notice? Held that: - The reduction of penalty even to rupees one lac is not justified as it is a matter of record that the excise duties have been paid along with interest even before issuance of show-cause notice for the penalty. Even the bare minimum penalty was not justified - decided in favor of assessee.

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• 2018 (5) TMI 1206
  Clandestine removal - Revenue’s entire case is based upon the rough slip pads recovered during the course of visit of the officers as also on the statement of Shri Ankit Chabbra - Held that: - apart from the said statements which the appellants have challenged, there is nothing on record to show the clandestine activities of the appellant - Revenue has not made any further investigations as regards the procurement of the raw material and has not approached the raw material suppliers. The allegations of clandestine removal are serious allegations and are required to be proved by the Revenue, by raising sufficient positive evidence. The same cannot be upheld merely on the basis of rough sheets and the uncorroborative statements. There being no corroboration by any acceptable evidence in the present case, impugned order cannot be upheld. Appeal dismissed - decided against Revenue.

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• 2018 (5) TMI 1205
  CENVAT credit - it was found that the appellant had not reversed the CENVAT credit under Rule 6(3) on the exempted goods - What is the meaning of expression “which are exempt from the duties of customs” under rule 6(6)(vii) of CENVAT Credit Rules, 2004 – does it include only goods which are fully exempted or it also includes the goods which are partially exempted from the customs duty? - is the appellant required to reverse the credit as per Rule 6(3) of CENVAT credit Rules? Held that: - The harmonious interpretation of the expression “goods which are exempted from duties” with the remaining part of the scheme of CENVAT credit rules would require one to interpret as the goods which are fully exempted from duty. Hence, even 2.5% duty of customs will not make the goods “which are exempted from duty’ - the appellant is not exempted from reversing the credit as per Rule 6(3) of CENVAT Credit Rules. Whether the assessee has resorted to fraud, wilful misstatement, suppression of facts or violation of any condition of the Act or Rules, with an intent to avoid payment of duty? - Held that: - it is evident that the assessee had declared both the fact that they have availed the exemption notification and also that they have not reversed any CENVAT credit, in their ER-I returns filed with the department. I do not find that they have suppressed any facts or misstatement or violated any act of Rules with an intent to evade payment of duty. It appears that the Officer who scrutinised the returns, has not pointed out that they have not reversed the credit and only audit discovered and pointed it out - the extended period limitation is not invokable in this case - the penalty u/r 15(2) of CENVAT Credit Rules 2004 read with Section 11 AC does not survive. The amount of interest under rule 14 of CENVAT Credit Rules 11AA also gets reduced correspondingly. Appeal allowed in part.

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• 2018 (5) TMI 1204
  Valuation - it appeared that the appellant had failed to discharge excise duty on the goods manufactured and cleared during the period March 2011 to July 2012 - Held that: - Since there is a dispute with regard to the material fact as to when the goods were returned to the appellant. This material fact can only be resolved if the matter is remanded back to the original authority to verify this material fact as to whether the goods were returned in the same month as claimed by the assessee or returned back in the different months as noted by the Commissioner(Appeals) - appeal allowed by way of remand.

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• 2018 (5) TMI 1203
  Demand of excise duty - sludge and residues - manufacture of Refined oil which attracts nil rate of duty under N/N. 3/2006 dated 01.03.2006 - Held that: - Similar issues have also came up in the case of M/s. Ruchi Soya Industries Ltd. [2017 (3) TMI 1663 - CESTAT NEW DELHI], where it was held that item has not been found excisable and it has been held that the same is not covered under Chapter 15.07 (presently it is Chapter Heading 15.22) under Central Excise Tariff - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1202
  Valuation - erection of towers - The department opined that the value of the bolts and nuts, mild steel, washers etc. have to be included in the assessable value for the purpose of determining duty - Held that: - the identical issue has come up before the Tribunal in the case of Himalaya Asbestos Cement Products P. Ltd. Vs. CCE, Jaipur [2018 (3) TMI 97 - CESTAT NEW DELHI], where it was held that Since this material is not manufactured by the appellant but only supplied alongwith pipes, we are of the view that there is no mandate for including the value of such joining material. The value of bolts and nuts is not required to be included for the payment of excise duty especially when such bought out items were used at the site for creating immovable property. Appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1201
  Benefit of N/N. 67/1995 dated 01.03.1995 - After exhausting the useful life, such moulds and dies were cleared to the customer (M/s Parryware) on payment of VAT /CST - Held that: - moulds and dies will enjoy such exemption only as long as such goods remain within the factory of the appellant - In the present case, such moulds and dies after they become obsolete were cleared for home consumption. The monetary consideration has also been received by the appellant on which VAT stands paid - benefit of notification not allowed - appeal dismissed - decided against appellant.

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• 2018 (5) TMI 1200
  Classification of goods - trims for refrigerators - whether classifiable under CTH 39 as plastic articles or under heading 8418 as parts of refrigerators - Held that: - the appellant has originally claimed under Chapter 39 and suddenly, reverse the stand and now claiming under heading 8418 by average rate of duty which is not permissible in law - It is a case of blow hot blow cold - appeal dismissed - decided against appellant.

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• 2018 (5) TMI 1199
  Refund u/r 10 of the CTD Rules - manufacture of branded chewing tobacco - interpretation of statute - case of appellant is that Revenue has mis-interpreted the 4th Proviso to Rule 9 inasmuch as the word “permanently” was interpreted to hold that either the manufacturing activity is discontinued or the product will never be manufactured in future - Held that: - it cannot be said that the appellant is not entitled for the refund/abatement under 4th Proviso to Rule 9 of the CTD Rules. In context with the expression “new retail sale price”, this Tribunal in the case of SA Freshners Pvt. Ltd. [2018 (3) TMI 18 - CESTAT NEW DELHI], has held that the benefit of the fourth proviso to Rule 9 is applicable, in cases, where the production of goods of a new RSP, which has not been earlier manufactured during the month, is commenced by the manufacturer, even if the goods bearing such RSP were being manufactured in the earlier months - benefit allowed - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1198
  CENVAT credit - input service distribution - Department has alleged that the assessee-Appellants have wrongly availed the Cenvat Credit of Service Tax paid in respect of advertisements published through the service provider, namely, M/s Crayons Advertising Limited. - Held that: - there is no dispute that Cenvat Credit has been paid by M/s Crayons Advertising Limited and the same has been availed as Cenvat Credit by the ISD challans. Since there is no dispute about the availment of Cenvat Credit by the unit of the assesee-Appellants, there is no objection to the distribution of the Cenvat Credit to the assessee-Appellants’ Unit. It has been contended that the Department has proceeded to disallow the entire Cenvat Credit and such amount includes the credit availed under ISD invoices on various other services. This contention has not been raised before the lower authorities and has also not been discussed by the adjudicating authority in the impugned order - matter remanded to the adjudicating authority for consideration of the submissions made by the assessee-Appellants and to pass de novo orders - appeal allowed by way of remand.

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• 2018 (5) TMI 1197
  Levy of duty - spend earth sludge, arising as a waste - manufacture of Edible Oil, Refined oil and Vanaspati Oil which are exempted goods - Held that: - the identical case has come up before the Tribunal in a number of cases including the case of Larger Bench in M/s Ricela Health Foods Ltd & others V/s CCE, Chandigarh [2018 (2) TMI 1395 - CESTAT NEW DELHI], where it was held that these incidental products are nothing but waste arising during course of refining of rice bran oil and these cannot be considered as manufactured excisable goods - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1196
  Demand of duty - installation and commissioning charges of machines - machines were permanently embedded to earth - Held that: - the identical issue has come up before the Tribunal in the case of Autopack Machines Pvt. Ltd. vs. CCE, Thane-I [2016 (12) TMI 653 - CESTAT MUMBAI], where it was held that goods cleared at the factory gate, assessable value will not include payment made for any activities thereafter - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1195
  Extended period of limitation - CENVAT credit - common input services both for manufacturing of dutiable goods and the traded goods - non-maintenance of separate records - Held that: - the judgment of the Hon'ble High Court of Madras in the case of Ruchika Global Interlinks [2017 (6) TMI 635 - MADRAS HIGH COURT] has held justifying the invocation of extended period of limitation on the ground that the assessee has not disclosed the availment of input service credit in respect of trading activities - appeal dismissed - decided against appellant.

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• 2018 (5) TMI 1194
  CENVAT credit - common input services for exempt services as well as taxable services - It appeared that the activity of trading was an exempted service, whereas, the appellant was availing cenvat credit of service tax paid on input services received by them which was common to both the manufacturing as well as trading activity - Held that: - the Department has miserably failed to find out the common input services on which the appellant has taken the CENVAT credit - It is also a fact that the Department on the basis of the first audit conducted on 18/02/2010 issued a SCN for irregular availment of CENVAT credit of service tax paid on service relating to trading activity and thereafter no show-cause notice was issued except impugned SCN whereas the audit was conducted from time-to-time in between - the appellant is not required to follow Rule 6 - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1193
  CENVAT credit - Supplies made to SEZ - Rule 3(5) of the CCR 2004 - Penalty - Held that: - as per Rule 3(5) of the CCR, 2004, which provides that when inputs are removed from factory, the manufacturer has to pay an amount equal to credit availed whereas in the present case, the appellant has availed credit of 8,15,185/- but has paid the duty of 6,10,728/-. Therefore the appellant is liable to pay the differential amount of 2,04,457/- short paid along with interest - for violation of the Rule, the appellant is liable to pay a penalty of 5000/- under Rule 15 - appeal allowed in part.

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• 2018 (5) TMI 1192
  Levy of duty - spend earth sludge, arising as a waste - manufacture of Edible Oil, Refined oil and Vanaspati Oil which are exempted goods - Held that: - the identical case has come up before the Tribunal in a number of cases including the case of Larger Bench in M/s Ricela Health Foods Ltd & others V/s CCE, Chandigarh [2018 (2) TMI 1395 - CESTAT NEW DELHI], where it was held that these incidental products are nothing but waste arising during course of refining of rice bran oil and these cannot be considered as manufactured excisable goods - appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1191
  Classification of various types of pre-printed forms which were supplied in the form of booklets - whether classifiable under 4911 or under 4820 especially in view of Chapter Note 12 to Chapter 48 - Held that: - the pre-printed account opening forms are similar in nature to the goods which are ordered for classification under 4911 in the case of Data Processing Forms [2011 (9) TMI 921 - CESTAT AHMEDABAD]. By following the said decision we approve the classification of such product under 4911 as ordered by the lower Authority - appeal dismissed - decided against Revenue.

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• 2018 (5) TMI 1190
  Valuation - P&P Ayurvedic medicines - Revenue was of the view that such Proprietory medicines, sold with brand names by the manufacturers were liable to payment of Excise duty on MRP basis under Section 4A of the Central Excise Act read with N/N. 49/2008-CE (NT) dt. 24.12.2008 (as amended) - Held that: - The original entry (w.e.f. 24.12.2008) (Sl. No. 30) has brought only medicaments other than Ayurvedic etc. medicines within the purview of MRP assessment. The amendment carried out w.e.f. 24.03.2011 further brings only the classical Ayurvedic medicines within the clutches of MRP assessment. This amendment is silent about the P&P Ayurvedic medicines sold with the brand name and there will be no justification to include such medicines for assessment under Section 4A, w.e.f. 24.03.2011. Finally, w.e.f. 01.03.2013, Ayurvedic medicines not only classical medicines but also P&P medicines with the brand name have been included in the Notification for charge of duty under Section 4A. With effect from 01.03.2013, there is no dispute since duty is being paid under Section 4A. In the absence of specific entry in the Notification, there is no justification prior to 01.03.2013 in charging Excise duty on the basis of Section 4A for P&P Ayurvedic medicines. Hence, all demands prior to 01.03.2013 are set aside. Appeal disposed off.

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• 2018 (5) TMI 1189
  Extended period of limitation - CENVAT credit - common input services both for manufacturing of dutiable goods and the traded goods - non-maintenance of separate records - Held that: - the judgment of the Hon'ble High Court of Madras in the case of Ruchika Global Interlinks [2017 (6) TMI 635 - MADRAS HIGH COURT] has held justifying the invocation of extended period of limitation on the ground that the assessee has not disclosed the availment of input service credit in respect of trading activities. The appellant for the period from 01/04/2011 has already reversed the proportionate credit and now the dispute is relating to the period up to 01/04/2011 - further, for the purpose of denying the CENVAT credit, the Revenue has considered the entire value of the turnover and has demanded an amount of 15,13,218/equal to 8% / 6% / 5% of the value of exempted services as applicable for the relevant period. The Revenue cannot demand CENVAT credit on entire turnover of trading and has to follow the procedure for determining the value of the trading goods for the purpose of Rule 6 of CCR. There is no infirmity in the impugned order which is upheld subject to the quantification of CENVAT credit to be disallowed on the basis of the formula prescribed under Rule 6(3), after that, interest and penalty should be accordingly quantified - Appeal allowed in part.

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• 2018 (5) TMI 1188
  CENVAT credit - clearances by utilizing the cenvat credit instead of paying in cash - Rule 8(3A) of Central Excise Rules, 2002 - Held that: - the Division Bench of Delhi Tribunal in the case of GEI Industrial System Ltd. [2016 (11) TMI 227 - CESTAT NEW DELHI] after considering the various decisions of the High Courts and also the fact that the Supreme Court has granted a Stay Order in the case of Indsur Global Ltd. [2014 (12) TMI 585 - GUJARAT HIGH COURT] has come to the conclusion that the ratio adopted by the various High Courts and by the Tribunal in similar set of facts is still binding and has allowed the appeal of the assessee. The penalty imposed under Section 11AC of the Central Excise Act read with Rule 25 of the Central Excise Rules, 2002 on the assessee set aside - penalty of 5,000/- under Rule 27 is imposed. Appeal allowed in part.

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• 2018 (5) TMI 1187
  CENVAT credit - capital goods - denial on the ground that Depreciation availed - Department alleged that the appellant had neither disclosed/intimated the said fact of claiming depreciation under Income Tax Act nor reversed the 50% of cenvat credit irregularly availed by them, till the internal audit party noticed the same - Held that: - reliance placed in the case of CCE & ST, Bangalore Vs. Suprajit Engineering Ltd. [2010 (3) TMI 414 - KARNATAKA HIGH COURT] wherein the Hon'ble Karnataka High Court had held that assessee cannot simultaneously avail cenvat credit and depreciation under the Income Tax Act 1961. Time Limitation - Held that: - the methodology followed by the assessee was in the knowledge of the Department but in spite of that Department did not issue the show-cause notice which was finally issued on 04.11.2010 for the period 2004 to 2007 - the entire demand is barred by limitation. Appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1186
  CENVAT credit - The allegation of the Department is that the raw material for manufacture of cigarette has not been purchased in the books of accounts - Held that: - the original purchase was duty paid in a different unit and used for final product in another unit. When it is so, then the respondent is entitled to avail the cenvat credit. When it is so, there are no reason to interfere with the impugned order - appeal dismissed - decided against Revenue.

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• 2018 (5) TMI 1185
  Refund claim - duty paid under protest - refund was sought on the ground that the Department did not issue any show cause notice to the Appellant for demanding the duty even after the passage of a period of 4 years from the date of deposit, which shows that there was no case against the Appellant - section 11B of CEA - Held that: - the Assistant Commissioner vide his order dated 09/04/2009 was pleased to disburse the refund of the principal amount, but as regards interest, it was observed that the CBEC vide Circular No.802/35/2004-CX dated 08/12/2004, has clarified that the interest in case of pre-deposit has to be refunded within 3 months from the date of the order passed by the Appellate Tribunals/Court or other Authority, unless there is any stay on the order of the Appeal Authority/CESTAT/Court (by a Superior Court). In the facts of the present case, it was not pre-deposit within the terms of Section 35F of the Act rather the Department had got the amount deposited during investigation, being out of pocket of the Appellant. But later on failed to establish the duty liability against the appellant and even failed to issue show cause notice. The amount was lying with the Department for more than 4 years without any reason and thus the assessee was entitled for compensation in the shape of interest which was granted to them by the Appellate order dated 13/01/2009. Also, observing that the directions of CBEC vide the aforementioned Circular is not applicable in the facts and circumstances. Appeal dismissed as not maintainable.

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• CST, VAT & Sales Tax

• 2018 (5) TMI 1184
  Stay on recovery proceedings - sales tax appeal has been preferred and is pending before this Court - Held that: - In the light of the limited prayer sought by the petitioner herein, I am inclined to direct the petitioner to seek his relief before this Court in the proceedings reported to be pending within a period of one month from today - further proceedings to be kept in abeyance.

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• 2018 (5) TMI 1183
  Compounding of offences - legality of Ext.P15 order that cancelled Ext.P6 order, by which, the petitioners in these writ petitions were permitted to compound an offence that was alleged against them under Section 67 of the KVAT Act - Section 74 of the KVAT Act - Held that: - upon an option being exercised by an assessee, to compound an offence, the assessing authority or other officer authorised by the Government under the said Section, has a discretion to accept the offer of compounding from an assessee. On the offer of the assessee being accepted, a binding contract comes into existence between the assessee on the one hand and Department on the other, by which, the assessee is obliged to pay an amount by way of compounding fee over and in addition to the tax payable under the Act. Once the said amounts are paid, no further penal or prosecution proceedings can be taken against the assessee in respect of the offence. The tenor of the aforesaid provision, therefore, is that once an offer is made by an assessee for compounding an offence, and the assessee satisfies the pre-requisites for compounding the offence by paying the tax amount determined as payable together with the applicable compounding fee, the acceptance of the offer of the assessee, by the Department, brings into existence a binding contract, closing the penalty proceedings by accepting the amounts due from the assessee, and from the said binding contract, neither party is permitted to resile. On a perusal of Section 56 of the KVAT Act, it is clear that the exercise of suo motu power of revision by the Deputy Commissioner, is expressly made subject to the provisions of the Act. This would mean that the Deputy Commissioner, in the exercise of his power under Section 56 of the KVAT Act, would necessarily be bound by the statutory scheme of finality envisaged in respect of orders passed under Section 74 of the KVAT Act. Petition allowed.

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• Indian Laws

• 2018 (5) TMI 1241
  Validity of E-auction Sale - validity of Notice issued under Rule 8 (6) of the Rules, 2002 dated 23-09-2016 and 03-11-2016 issued by the Respondent Bank against the alleged secured assets - petitioners argue that the writ petition is maintainable as the statutory alternative remedy proved to be ineffective and that pendency of the same would not bar his clients from invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution - SARFAESI Act. Held that: - the sale held by the bank on 30-11-2016 pursuant to the notice dated 23-09-2016 under Rule 8(6) of the Rules of 2002 followed by the sale notice dated 21-10-2016, published in newspapers on 23-10-2016 under Rule 9(1) of the Rules of 2002, fell foul of the statutory mandate at its very inception, as the petitioners were not afforded the required 30 days clear notice to exercise their right of redemption, as the requisite gap was not maintained between the date of receipt of the Rule 8(6) notice dated 23-09-2016 and the publication of the Rule 9(1) sale notice on 23-10-2016, whereupon their right of redemption under the amended Section 13(8) of the SARFAESI Act stood prematurely extinguished. The writ petition is accordingly allowed holding that the sale held by the bank on 30-11-2016 stands vitiated on grounds more than one. Consequently, the sale certificate dated 13-01-2017 shall also stand cancelled - petition allowed.

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