Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
May 28, 2018
Case Laws in this Newsletter:
GST
Income Tax
Insolvency & Bankruptcy
FEMA
Service Tax
Central Excise
Wealth tax
Articles
News
Notifications
Highlights / Catch Notes
Income Tax
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Settlement of a case - assessment proceedings were pending or not - assessment order was passed but not served - Commission has given no finding. We cannot leave the assessee without remedy merely because the Commission chose not to examine such an issue though raised by the assessee.
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Reassessment - validity of the reasons recorded by the AO - at the stage when the notice for reopening is under challenge, if it is not possible without further detailed inquiry to arrive at a final conclusion, the Court would be well advised in keeping such a question open and permitting further proceedings in connection with the notice of reopening. - HC
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Reassessment - validity of fresh notice - withdrawal of earlier notice - Mere intention, a stated intention or even an intention which is otherwise put in practice cannot be equated with withdrawal of the notice - The law does not recognize two parallel assessments.
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MAT computation - reduction of least of cash loss or depreciation loss as per books of accounts while computing the book profits u/s 115JB - The assessee has rightly deducted unabsorbed depreciation loss as per books of accounts
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Bogus purchases - Disallowance of expenditure regarding sundry creditors - AO was adding amounts on the basis of then un-reconciled differences which is violation of the principles of natural justice.
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TDS u/s 194C - reimbursement of postage expense on actual basis - there is no case for invoking the provisions u/s 194C which only mandates for effecting TDS as per the contract norm - AT
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Reopening of assessment - belief of escapement of income - reopening merely on the information received from the Investigation Wing of the Department, i.e., just on borrowed satisfaction - reassessment cancelled.
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Revision u/s 263 - Period of limitation - if the issue on which the proceedings u/s 263 is initiated is not a subject matter of the assessment order passed u/s 143(3) r/w 147, then the limitation period has to be reckoned from the original assessment order passed u/s 143(3) or if the return of income was processed u/s 143(1), then from the date of intimation u/s 143(1)
FEMA
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Violation of Section 3(a), FEMA - onus to prove - It is settled legal principle that onus of proof, in both civil and criminal law, is on the person who wishes to prove a particular fact - There is no statutory provision in FEMA imposing reverse evidentiary burden upon an accused person, as is the case under PMLA. - AT
IBC
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Insolvency resolution process - exclusion of period of litigation - This is a unique case in which CIRP could not completed with in 270 days. The exceptional circumstances occasioned beyond the control of the resolution applicant in the case in hand upon the reasons already led in prompt us to exclude the period of litigation and thereby we also found the plan came up for approval with in time. - Tri
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Insolvency Resolution Process - there are serious doubt with regard to the locus standi of Bhushan Employees as the application has been filed only by Mr. Rahul Sengupta who has been the Executive Director of the Corporate Debtor since 2005. The application has not been filed by the Bhushan Employees authorizing anybody. The allegation even otherwise on facts is not sustainable. - Tri
Service Tax
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Valuation - an assessee is liable to pay tax only on the service component - the value of the raw material used in retreading of the tyres need not be included in assessable value - AT
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Where mere space is provided along with furniture for facilitating accommodation of representatives of financial institutions in the premises of an automobile dealer and consideration is received for that singular activity, such consideration may perhaps constitute a rent for the provision of space and associated amenities. Such restricted relationship/transaction may not amount to BAS. - AT
Case Laws:
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GST
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2018 (5) TMI 1555
Release of detained goods - Section 129 of the Central Goods and Services Tax Act - Held that: - this Court in the case of THE COMMERCIAL TAX OFFICER AND THE INTELLIGENCE INSPECTOR VERSUS MADHU. M.B. [2017 (9) TMI 1044 - KERALA HIGH COURT] directing expeditious completion of the adjudication of the matter and permitting release of the goods detained pending adjudication, in terms of Rule 140(1) of the Kerala Goods and Services Tax Rules, 2017 - It is also directed that if the petitioner complies with Rule 140(1) of the Kerala Goods and Services Tax Rules, 2017, the goods detained shall be released to him forthwith - petition allowed.
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2018 (5) TMI 1554
Release of detained goods - Section 129 of the Central Goods and Services Tax Act - Held that: - this Court in the case of THE COMMERCIAL TAX OFFICER AND THE INTELLIGENCE INSPECTOR VERSUS MADHU. M.B. [2017 (9) TMI 1044 - KERALA HIGH COURT] directing expeditious completion of the adjudication of the matter and permitting release of the goods detained pending adjudication, in terms of Rule 140(1) of the Kerala Goods and Services Tax Rules, 2017 - It is also directed that if the petitioner complies with Rule 140(1) of the Kerala Goods and Services Tax Rules, 2017, the goods detained shall be released to him forthwith - petition allowed.
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2018 (5) TMI 1553
Release of seized goods - seizure has been made on the ground that there was some discrepancy in the documents available with the driver - Held that: - petitioners say that they are willing to file a bond along with the security to the satisfaction of the Proper Officer, but, they are unable to pay the security in cash - the request of petitioner appears to be reasonable - the writ petition disposed off with the direction to the opposite parties to release the goods in accordance with law
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Income Tax
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2018 (5) TMI 1552
Whether the application for condonation of delay is required - date of service or order to the appellant - Held that:- it is the duty on the Tribunal to communicate the order to the person, who is entitled to lodge the appeal - the issue is to be dealt with reference to the facts in this case - the appeal is lodged within 120 days - thus the appeal cannot be treated as barred by limitation - hence the application for condonation of delay is closed as unnecessary
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2018 (5) TMI 1551
Survey u/s 133A - reopening the assessment u/s 147 - during survey certain diaries and loose papers were found by the AO - loose papers are related to the land transactions and receipts of cash received from other persons and the cash payments made - Held that:- reasons recorded were placed before the Assistant Commissioner along with other details - AC agreed that it was a fit case for issuing notice u/s 148 - it is not a case where it can be stated that permission have been granted without application of mind - petition is dismissed - decided against the assessee.
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2018 (5) TMI 1550
Notice of re-assessment u/s 148 - purchase of immovable property by the assessee without furnising the source of investment - purchase in the name of self or in the name of trust - Held that:- the documents which are enclosed by the assessee clearly discloses that the property has been purchased solely by the assessee himself in his name and no documentary evidence has been produced which establishes that the assessee has purchased the property on behalf of the trust - also the trust has not disclosed the purchase of the property in its return - thus the income had escaped assessment u/s 147 - decided against the assessee.
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2018 (5) TMI 1549
Maintainability of the application for settlement of a case - assessment proceedings were pending or not - assessment order was passed but not served - Held that:- we record our displeasure about the manner in which, the Settlement Commission has disregarded a binding judgement of the High Court seeking to distinguish when facts simply did not permit any such distinction. As an authority subordinate to the High Court the duty of the Commission would always be to apply the law as is laid down by the High Court. We expect that the Commission in future would bear in mind these words. Coming to the factual dispute about the orders of assessment being actually passed on 26.12.2017 itself or not, the Commission has given no finding. We cannot leave the assessee without remedy merely because the Commission chose not to examine such an issue though raised by the assessee. Order of settlement set aside - matter restored before the Settlement Commission - Commission directed to follow the the observations and declaration of law by the High Court in case of Shalibhadra Developers (2016 (10) TMI 778 - GUJARAT HIGH COURT). Decided in favor of revenue.
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2018 (5) TMI 1548
Reopening of assessment u/s 147 - allotment of shares at premium - assessee had not filed return for the relevant assessment year - allegation that assessee has alloted the share to bogus companies - these were shell companies engaged in providing accommodation entries having dummy directors - Held that:- the reasons recorded by the AO can be challenged on the ground of their validity - thus it is open for the Court to strike down the notice based on such reasons. However, at the stage when the notice for reopening is under challenge, if it is not possible without further detailed inquiry to arrive at a final conclusion, the Court would be well advised in keeping such a question open and permitting further proceedings in connection with the notice of reopening. Petition dismissed - Decided against the assessee.
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2018 (5) TMI 1547
Re-assessment proceedings - validity of fresh notice issued u/s 148 after 4 years when original notice was withdrawn during the judicial proceedings - no clear evidence of withdrawal of earlier notice - original notice was issued within the time limit - should the reassessment process be allowed to continue? - Held that:- The Revenue desired that in view of the special events, the fresh notice may be treated as an extension of the original notice and deemed to have been issued within four years from the end of the relevant assessment year. The Court while rejecting such a prayer did make a passing remark and perhaps inadvertent reference if we may say so, that the Assessing Officer had consciously withdrawn the notice of reopening. When the prayer to treat the fresh notice as continuous of the original, this passing remark would not change the factual position. An admitted factual position is that the first notice of reopening was not withdrawn when the earlier writ petition was disposed of by the High Court, when the department filed an Misc. Civil Application for review or recall or even when Assessing Officer issued a fresh notice dated 29.03.2017 which is impugned in this petition. Fact of the matter is there is no formal withdrawal of notice till date. A notice of reopening which is once issued would remain in operation unless it is specifically withdrawn, quashed or gets time barred. First instance would be at the volition of the Assessing Officer as the person who had issued the notice. He can recall the notice for valid reasons and may even issue a fresh notice which is not impermissible in law. Nevertheless, there has to be an action of withdrawal. Mere intention, a stated intention or even an intention which is otherwise put in practice cannot be equated with withdrawal of the notice. The conclusion that we have reached would invariably result in frustrating the Revenue's attempt to reopen the assessment and may have been seen to be based on somewhat technical reasons. Having succeeded on all other grounds, the Revenue may legitimately feel somewhat disappointed. Nevertheless, our duty is to give effect to the legal principles. The law does not recognize two parallel assessments. - petition is allowed - decided in favor of assessee.
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2018 (5) TMI 1546
Disallowance u/s 14A r.w.r. 8D - administrative expenses towards exempted dividend income - Held that:- The assessee had received dividend income only from Mcleod Russel India Ltd. and accordingly any disallowance of expenses u/s 14A of the Act towards administrative expenses could be made only with respect to such investments. Respectfully following the co-ordinate Bench decision of this Tribunal rendered in the case of REI Agro Ltd. [2013 (9) TMI 156 - ITAT KOLKATA], we direct the AO to make disallowance under third limb of Rule 8D(2) of the Rules by considering only dividend bearing investment subject to maximum of dividend income. MAT computation - reduction of least of cash loss or depreciation loss as per books of accounts while computing the book profits u/s 115JB - Held that:- It is not in dispute that the least of cash loss or depreciation loss as per books of accounts is to be reduced while computing the book profits u/s 115JB - There is absolutely no logic in the ld. AO reducing ₹ 5,94,38,000/-taking figure of accumulated depreciation from the fixed assets schedule and reducing the same while completing the books profit u/s 115JB of the Act. The assessee has rightly deducted unabsorbed depreciation loss as per books of accounts. We hold that this figure requires factual verification by the AO. Hence remand this issue to the file of ld AO for factual verification of the aforesaid figures and determine the amount of unabsorbed depreciation loss as per books of accounts to be reduced while computing the book profits u/s 115JB
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2018 (5) TMI 1545
Deduction u/s 80P(2)(d) - interest received on investments with sub-treasuries and co-operative banks - Held that:- deduction of interest receipts from the total income that are received on investment made with co-operative societies and not to co-operative banks - thus interest cannot be allowed as a deduction u/s 80P(2)(d) - decided against the assessee. Deduction u/s 80P(2)(a)(i) - Held that: - In order to get the benefit of section 80P(2)(a)(i), the assessee has to prove that the investments with sub treasuries and co-operative banks are done in the normal course of its business of providing credit facilities to its members - in the interest of justice and equity, the matter is restored to the A.O. for fresh consideration - appeal allowed for statistical purposes.
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2018 (5) TMI 1544
Whether the capital gain account of sale of agriculture land is taxable in the hands of the assessee - Held that:- the amount of capital gain income has been duly reflected in his return of income - also assessee has invested his sale proceeds in another agriculture land and the deduction u/s 54B of the Act was also claimed - thus AO is directed to delete the addition made by him - decided in favor of assessee.
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2018 (5) TMI 1543
Disallowance of expenditure regarding sundry creditors - bogus purchases - Held that:- assessee has duly purchased goods from the two parties involved, who are very old and reputed suppliers of publicity - accounts of the assessee are subjected to Statutory Audit under the Companies Act 1956, Statutory Tax Audit u/s 44B of the IT Act - no discrepancies have found in creditors in these audits - AO was adding amounts on the basis of then un-reconciled differences which is violation of the principles of natural justice - thus additions is directed to be deleted - decided in favor of assessee. Taxability of dividend - Held that:- dividend is exempt u/s 10(34) of the Act - assessee is entitled for a claim of deduction under Act if it is eligible for the same, even if the said amounts have not been claimed in the return of Income filed by the assessee - thus AO is therefore directed to verify the claim of this deduction - decided in favor of assessee.
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2018 (5) TMI 1542
Claim of loss due to theft of goods - Held that:- CIT-A after relying on various judicial pronouncements has recorded a finding to the effect that the sufficient evidences were placed on record by the assessee that there was loss due to theft of goods. The findings so recorded by the ld. CIT(A) has not been controverted by the DR by bringing any positive material on record. No reason to interfere in the findings of the ld. CIT(A) regarding deleting the disallowance made on account of loss due to theft of goods. - Decided in favour of assessee.
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2018 (5) TMI 1541
Whether TDS u/s 194C is required to be deducted on reimbursement of postage expense - Held that:- there is no requirement of making TDS made by the Company - also reimbursement nature of the bill-wise was also clearly indicated on the face of cash invoice - reimbursements are on accounts of postage expenses on actual usage - thus there is no case for invoking the provisions u/s 194C which only mandates for effecting TDS as per the contract norm - decided in favor of assessee.
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2018 (5) TMI 1540
Reopening of assessment - reasonable belief - reopening merely on the information received from the Investigation Wing of the Department - differential judgments on issue - Held that:- Where there is a cleavage of opinion between different High Courts on an issue and none of the decisions has been rendered by the jurisdictional High Court, the view in favour of the assessee needs to be followed. Hence, in deferential keeping with ‘Meenakshi Overseas’ (2017 (5) TMI 1428 - DELHI HIGH COURT), the reasons recorded by the AO to form belief of escapement of income are found to be no reasons in the eye of the law. The nature of the transactions allegedly entered into by the assessee have not been specified and that the reasons were recorded without any application of mind, merely on the basis of information received from the Investigation Wing of the Department, i.e., just on borrowed satisfaction. - Decided in favour of assessee.
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2018 (5) TMI 1539
Penalty levied u/s 271(1)(c) - addition on account of Income added during the course of survey as regards difference in Stock valuation - Held that:- Unless it is found that there is actually a concealment or non-disclosure of the particulars of income penalty cannot be imposed. There is no such concealment or non-disclosure as the assessee had made a complete disclosure in the income-tax return and offered the surrendered amount for the purposes of tax. In absence of any satisfaction recorded by AO while passing the assessment order that there was non-disclosure of income offered during the survey proceeding, no penalty for concealed income is leviable. The income was included in the return of income by increasing the closing stock, which resulted, increased of GP to 14%. Decision in case of MAK Data (2013 (11) TMI 14 - SUPREME COURT) relied by ld CIT(A) is not applicable on the facts of the present case - Decided in favour of assessee.
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2018 (5) TMI 1538
Revision u/s 263 - Period of limitation - Period to be computed from the date of original assessment or from the date of order of re-assessment - Disallowance of depreciation on a building which is let out - Held that:- it is clear from the facts on record that the issue of claim of depreciation on the building was never an issue in the re–assessment proceedings.Rather, the issue of claim of depreciation, if at all, arises out of the original assessment order passed under section 143(3). The Hon'ble Jurisdictional High Court in Lark Chemicals Ltd. (2013 (9) TMI 959 - BOMBAY HIGH COURT) while dealing with identical issue has held that if the issue on which the proceedings under section 263 of the Act is initiated is not a subject matter of the assessment order passed under section 143(3) r/w 147 of the Act, then the limitation period has to be reckoned from the original assessment order passed under section 143(3) of the Act or if the return of income was processed under section 143(1) of the Act, then from the date of intimation under section 143(1) of the Act. The impugned order passed under section 263 of the Act is barred by limitation prescribed under section 263 of the Act, since, it was passed more than two years after the end of the financial year in which the original assessment order - Decided against the revenue.
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2018 (5) TMI 1537
Disallowance of deduction claimed u/s 54 - assessee eligibility to claim deduction in respect of one residential flat - Held that:- All the three flats into one residential unit having a single kitchen and private staircase. In our considered opinion, the additional evidence filed by the assessee, since, is crucial for deciding the issue in dispute, needs to be admitted. However, since, the Departmental authorities did not have the opportunity to examine the aforesaid evidence, the same requires to be looked into by them. Moreover, assessee’s claim that the three residential units haves been converted into a single unit having common kitchen, common entrance, etc. not only has to be proved through documentary evidence but an enquiry is also required to be made to find out the veracity of assessee’s claim.
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2018 (5) TMI 1536
Determination of Arm’s Length Price in respect of international transaction of rendering of Software Development Services - comparability selection criteria - Held that:- Assessee is a company engaged in the business of providing contract Software Development Services (SWD Services) to its AE. The transaction of rendering software development services to its AE was an international transaction, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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2018 (5) TMI 1535
Validity of reopening of assessment - pendency of proceedings u/s 153A - Held that:- As per the statutory scheme and provisions of the Act, during the pendency of proceedings u/s 153A of the Act, the AO is not empowered to issue notice u/s 147/148 of the Act. Therefore, we hold that the reassessment proceedings for assessment year 2003-04 suffer from basic defect of the re-assessment notice being illegal and, therefore, the re-assessment proceedings cannot be sustained. Case of Nilofer Hameed vs. ITO [1998 (8) TMI 75 - KERALA HIGH COURT] to be followed. - Decided in favour of assessee
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2018 (5) TMI 1534
Disallowance of foreign exchange loss - whether the loss is speculative loss or normal business loss - loss due to forward contract cancellation - Held that:- assessee has given bill wise detail of the exchange loss suffered by it due to forward contract cancellation - since foreign exchange gains has taxed, the loss shall also be allowed - they are the part of the chain of similar transactions - activity of entering into forward contract was in the regular course of its business only to safeguard against the loss on account of foreign exchange variation - thus the transactions entered were only in regular course of business and not speculative - Decided in favor of assessee Disallowance of discount given to sister concern - Held that:- there is no bar in the Act which prohibits giving discount to sister concerns - the genuineness of the payment has not been doubted - the business need of an assessee has to be decided by him and not by the departmental officers - just because payment has been made to sister-entity, it cannot be disallowed - Decided in favor of assessee
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2018 (5) TMI 1533
Transfer pricing addition - comparable selection criteria - functional similarity - Held that:- The assessee is engaged in rendering research, management consultancy and advisory services to clients interested in investing in India, thus companies functionally dissimilar with that of assessee need to be deselected from final list. Treatment of certain expenses not related to the transaction with AE as part of the operating cost - Held that:- DRP while rejecting the objections raised by the assessee in this regard has only noted that it has duly considered the arguments of the assessee and in view of the fact that the assessee was earning only service income and that too from one AE, it cannot be said that these expenses did not have any nexus with earning of service income. It is our considered opinion that this conclusion by DRP has been reached without any sound reasoning and without appreciating and duly considering the submissions made by the assessee in this regard. It will be in the fitness of things that the DRP should reconsider and re-adjudicate this issue relating to sponsorship and brokerage expenses after taking into account the settled judicial precedents as well as the evidences in this regard. Incorrect computation of operating margins of certain comparable companies - Held that:- As held by the ITAT Mumbai Bench in the case of DHL Express (India) Private Limited [2011 (4) TMI 856 - ITAT MUMBAI] wherein miscellaneous income like interest income, rent received, dividend received, penalty collected, rent deposits written back, foreign exchange fluctuation and profit on sale of assets were held to be not forming part of operational income. Therefore, keeping in mind, the judicial precedents as well as the submissions of the assessee in this regard, we restore ground to the file of the AO/TPO for re-computing the operating profit margin of the remaining comparable companies after giving due opportunity to the assessee to present its case.
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2018 (5) TMI 1532
Levy of penalty u/s 271D and 271E - violation of provisions of section 269SS and 269T - grant of stay - Held that:- The payer has issued cheque to the bank clearly mentioning the cheque no. and cheque amount and thereafter transaction happened between payer banker and the payee banker. Advancement in the banking system these type of RTGS payments are done electronically in order to get instant realization of the amount from the account of the payer to the account of the payee. This, in our considered opinion, is mere carrying on transactions in electronic mode through regular banking channel. Assessee has made out a prima facie case in its favour. AR also placed on record the present financial position wherein the assessee has got net overdraft limit as on 08.03.2018 to the tune of ₹ 18.34 crores. He also argued that the genuineness of the loans taken and loans repaid are not disputed by the revenue. We are inclined to grant stay of demand for a period of six months from today or till the disposal of the appeals by this Tribunal whichever is earlier.
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Insolvency & Bankruptcy
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2018 (5) TMI 1558
Initiation of Corporate Insolvency Resolution Process for the Corporate Debtor - appointment of Interim Resolution Professional (IRP) under the Insolvency and Bankruptcy Code, 2016 - Held that: - Mr. S. R. Krishnan is appointed as IRP and is directed to take charge of the Corporate Debtor’s assets and management immediately. The supply of essential goods or services of the Corporate Debtor shall not be terminated or suspended or interrupted during moratorium period. The provisions of Sub-section (1) of Section 14 shall not apply to such transactions, as notified by the Central Government - The IRP shall comply with the provisions of Sections 13(2), 15, 17 & 18 of the Code. The directors of the Corporate Debtor, its promoters or any person associated with the Management of the Corporate Debtor are/is directed to extend all assistance and cooperation to the IRP as stipulated under Section 19 and for discharging his functions under Section 20 of the I&B Code, 2016. Registry is directed to issue the copy of this Order informing the IRP to make compliance with this Order as per the provisions of I&B Code, 2016.
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2018 (5) TMI 1557
Initiation of corporate insolvency resolution process - expiry of initiation of CIR process - Resolution Plan which has been originally failed for want of requisite voting percentage as required under Sub-Section (4) of Section 30 of the Code when put up for reconsideration obtained the required voting share so as to approve the resolution plan by the CoC - The last CoC meeting as per records available seems to have held on 21st December 2017. The extended period of CIR process of 270 days here in the case in hand expired on 25-12-2017. Whether this Adjudicating Authority has empowered to extend the time limit prescribed under section 12 of the Code?. If not whether this Adjudicating Authority has power to exclude the duration of continuation of stay order of Hon’ble Appellate Tribunal and the period rendered for the disposal of interim applications by this Bench during the CIRP? - Held that: - a Tribunal in its discretion from time to time in the interest of justice and for reasons to be recorded, enlarge such period, even though the period fixed by or under these rules or granted by the Tribunal may have expired. This is a case in which so many issues came up for consideration before us during the period of CIRP. The CoC has changed the IRP thereby there is change of IRP. During the consideration of the only one plan of the resolution applicant an amended Ordinance was notified laying down certain disqualification to promoter directors of a company like the promoter in the case in hand Extension of time limit - Held that: - In Surendra Trading Company Vs. Juggilal Kamlapat Jute Mills Co. Ltd. [2017 (9) TMI 1566 - SUPREME COURT OF INDIA], the Hon’ble Supreme Court in answering a question as to whether the time limit prescribed in Insolvency and Bankruptcy Code for admitting and rejecting a petition for initiating insolvency resolution process is mandatory. It has been held that Extension of time may be allowed if it is needed to be given for circumstances which are exceptional occasioned by reasons beyond the control of the defendant and grave injustice would be occasioned if the time was not extended - The period of CIRP as prescribed under section 12 of the Code cannot be extended in the facts of the case. Whether reconsideration of vote in respect of approval of the resolution plan already finalised on 22-12-2017 is permissible under law? - Held that: - the basic premises on which l&B code is built is that on failure of the Company in discharging its dues, its debt is to be restructured, for continuing the Company as a going concern, by giving the Company to any person who is found financially and technically capable to take over the Company. No challenge from any corner raised before us regarding the technical and economical viability of the resolution applicant in taking over the company by him. This is a unique case in which CIRP could not completed with in 270 days. The exceptional circumstances occasioned beyond the control of the resolution applicant in the case in hand upon the reasons already led in prompt us to exclude the period of litigation and thereby we also found the plan came up for approval with in time. Application disposed off.
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2018 (5) TMI 1556
Insolvency Resolution Process - Acceptance of resolution plan approved by the Committee of Creditors submitted by HI Resolution Applicant - treatment of applicant as secured creditor as against their assigned status of unsecured/operational creditor - appeal filed by the Bhushan Employees seeking direction to the RP to decide the objection raised by them - RP under Section 19(2) of the Code. Held that: - all the requirements of Section 30(2) are fulfilled and no provision of the law for the time being in force has been contravened - A perusal of Regulation 38 would clearly show that by virtue of mandatory contents of the resolution plan discussed under Sections 30 and 31 of the Code the requirement of Regulation 38 stand fulfilled - Even the requirement of Regulation 39 stand fulfilled as the RP has submitted the resolution plan of HI resolution applicant as approved by the CoC to this Tribunal with the certification that the contents of the resolution plan meet all requirements of the Code and the CIRP Regulations and that the resolution plan has been duly approved by the CoC. There is no scope for argument left that shareholder, or parties to joint venture agreement or anyone holding similar document need to accord sanction in view of the provisions of Regulation 39(6) of the CIRP Regulations. The Resolution Applicant-TSL merely sought to purchase the shares which were in the nature of pre-emptory rights. Even that undertaking had lapsed nine years ago as it ceased to operate in March 2009 and has not been acted upon by Standard Chartered Bank. In any case the order of Bankruptcy issued by Supreme Court of Seychelles has been subsequently revoked in 2016. Therefore, it cannot be concluded firstly that Sterling Infotech Private Limited qualifies as a ‘connected person’ or ‘related party’ or ‘associated company’ - there are serious doubt with regard to the locus standi of Bhushan Employees as the application has been filed only by Mr. Rahul Sengupta who has been the Executive Director of the Corporate Debtor since 2005. The application has not been filed by the Bhushan Employees authorizing anybody. The allegation even otherwise on facts is not sustainable. Accordingly, it is held that the objection is frivolous and the same is hereby rejected. Prosecution and conviction of Tata Steel UK which is a 100% subsidiary of HI Resolution Applicant-TSL and obviously is a ‘connected person’ under Section 29-A(d) of the Code and explanation (iii) - Held that: - The provisions of Section 29-A(d) of the Code would not be applicable to cover a juristic person and could be applied only to a natural person because it contemplates visiting the convict with imprisonment for two years or more. As there is no provision for imposition of fine and a corporate body like a company cannot be visited with imprisonment/custodial sentence - Section 29-A(d) does not provide for imposition of fine and therefore, it would not be applicable to the facts in the present case because a Corporate Entity cannot be subjected to any custodial sentence which is the only provision made by sub-section (d) of Section 29-A of the Code. When a resolution plan is submitted and the rights of employees are protected by such a plan then raising objections by the Employees is a self-defeating proposition. The resolution plan retrieves about 67% of the NPA’s and takes care of the existing employees by continuing their employment and also provide for payment of their back wages. The claim made on behalf of L&T on the face of it appears to be wholly unsustainable. There is no document placed on record showing any creation of charge or security warranting a view that the L&T should be regarded as a secured creditor and not as the operational creditor. The charge is created by execution of a document as per the requirements of S. 132 of the Companies Act, 2013. In the absence answering the basic description of S. 55(4)(b) of Transfer of Property Act no benefit could be gained by L&T. It is well settled that any supplier of goods and services would fall within the meaning of expression ‘operational creditor’ and the claim made by L&T would amount to rewriting the provisions of the statute which is an impossible proposition. Therefore, we do not find any substance in the aforesaid argument and same is hereby rejected. Application disposed off.
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FEMA
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2018 (5) TMI 1531
Violation of Section 3(a), FEMA - Penalty - Burden of Proof - Prevention of Money Laundering Act, 2002 - amount received in foreign currency from unknown persons and same was spent when in India - Held that: - It is settled legal principle that onus of proof, in both civil and criminal law, is on the person who wishes to prove a particular fact - There is no statutory provision in FEMA imposing reverse evidentiary burden upon an accused person, as is the case under PMLA. The Special Director, ED failed to appreciate the fact that with respect to the Appellant‟s travel to Middle-East, the major expenses were for Air Travel which was purchased in Indian Rupees and other expenses were taken care of by his friends - The Special Director, ED has erroneously held that the aforesaid Affidavits cannot be considered as the Appellant did not mention the names of these persons and the respective countries in his written submissions - The Special Director, ED has incorrectly ignored the affidavit of Mr. Saikumar by holding that the Consulate General of India, Dubai takes “No responsibility” for the correctness of the statements made in the above affidavit and has thus proceeded on an incorrect understanding of law. Penalty - Held that: - the present case is not fit for imposition of Penalty because liability to pay penalty does not arise merely upon the proof of contravention of a provision. Being an quasi-criminal proceeding, imposing penalty for contravention of a statutory obligation ought not ordinarily be imposed unless the accused/ defendant acted deliberately in defence of law or was guilty of contumacious or dishonest conduct or acted in conscious disregard of the obligation. Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1530
Identity of the offender - appeal filed mainly on the ground that ED had booked a case against them on a wrong presumption and was a case of mistaken identity - Held that: - it is clear that ED has not been able to prove that the appellant and Shri Farooque Memon, who seems to be the offender, are one and the same person. This is strengthened by the order of the Additional Chief Metropolitan Magistrate at Ahmedabad in the bail application. All evidences on record point that Shri Farooque Mithawala and Shri Farooque Memon are two different people - Shri Farooque Mithawala the appellant has been wrongly implicated. Appeal allowed.
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Service Tax
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2018 (5) TMI 1529
Refund of unutilised CENVAT credit - input services - amendment in definition of input services - architectural consultancy services - denial on the ground that the said service falls under Exclusion clause - Held that: - the services being architect services does not fall under exclusion to the definition of input service as per rule 2 (l) of CENVAT Credit Rules 2004, as the said exclusion is in respect of execution of works contract. The period involved in this case is January 2015 to March 2015 and the definition has undergone a change on 01.04.2011 and subsequently again on 01.07.2012 wherein the specific exclusion is only for the service portion in execution of works contract and construction services listed under Clause B of Section 66E of the Finance Act which does not include the architectural services. Refund allowed - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1528
Penalty - assessee collected service tax on them from their customers but failed to deposit the same with the Government - Held that: - the appellant cannot claim ignorance that they are liable to pay service tax on the services rendered by them. They have collected service tax wilfully and not paid the same to the Government, hence the demand of service tax as confirmed is sustainable. Penalty under section 77(2) of Finance Act 1944 is imposable on the appellant due to failure to submit ST-3 returns. Penalty u/s 76 and 78 - Held that: - the proviso of sub section 2 of Section 78 was introduced on 10.05.2008 stating that no penalty is imposable under section 76, when a penalty is imposed under section 78 - As it is now settled law, penalty cannot be imposed under section 76 of Finance Act, 1944 if it is imposed under section 78. The Order-in-Appeal is upheld with the modification that the service tax liability with interest and penalty under sections 77 & 78 is also upheld while the penalty under section 76 is set aside - appeal disposed off.
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2018 (5) TMI 1527
Time limitation - Pandal or Shamiana Service - Organization of Garba for cultural function - Circular of the Board dated 10.09.2004 - Held that: - Admittedly, the question involved is very much a matter of interpretation of Board Circular and the appellants were under bonafide impression that they were not liable to pay tax as their activity was closely associated with religious functions as well - extended period cannot be applied to the present demand. Since the entire period of the demand is beyond the period of limitation, the SCN is therefore, liable to be set aside - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1526
Valuation - inclusion of value of the raw material used in retrading of the tyres - whether the appellant are required to discharge service tax on the value of the raw material used in retrading of the tyres in addition to the service tax collected on service of retrading of Tyres? - Held that: - the issue is covered by the judgment of the Hon’ble Supreme Court in the case of Safety Retrading Co. (P) Ltd. [2017 (1) TMI 1110 - SUPREME COURT], where it was held that an assessee is liable to pay tax only on the service component - the value of the raw material used in retreading of the tyres need not be included in assessable value - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1525
Business Auxiliary Services - appellant provided table space to various financial institutions, in their premises for processing/preparation of loan documents and received commission/charges for providing such table space from the financial companies - Held that: - The issue of leviability of Service Tax on such commission/charges for providing table space is no more res-Integra being settled by the Larger Bench of this Tribunal, in the case of Pagariya Auto Center’s case [2014 (2) TMI 98 - CESTAT NEW DELHI (LB)], where it was held that Where mere space is provided along with furniture for facilitating accommodation of representatives of financial institutions in the premises of an automobile dealer and consideration is received for that singular activity, such consideration may perhaps constitute a rent for the provision of space and associated amenities. Such restricted relationship/transaction may not amount to BAS. There is no contrary evidence produced by the Revenue to show that the appellant had acted as Direct Selling Agent (DSA) for the banks, instead of providing table space to the executive of the respective banks - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1524
Short payment of service tax - whether the appellant had short paid service tax of ₹ 2,44,017/- during the period 2011-12? - Held that: - appellant had categorically claimed that out of the total short payment of ₹ 2,44,017/- an amount of ₹ 1,86,262/- has been paid in the Financial Year 2012-13, as provision was only made in the year 2011-12, whereas bills were raised subsequent year 2012-13 - This fact needs to be verified by the Adjudicating Authority and the re-determination of the liability be carried out accordingly - appeal allowed by way of remand.
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2018 (5) TMI 1523
CENVAT credit - input - MS Angles, MS Channels, MS plates and MS Pipes etc. used in repair and maintenance of plant and machinery in their factory - Held that: - This Tribunal consistently held that MS Angles, Channels, Beams etc., used in Repair and Maintenance of Plant and Machinery in the factory is admissible to credit - credit allowed - appeal dismissed - decided against Revenue.
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2018 (5) TMI 1522
CENVAT credit - provision of service to SEZ - it was alleged that the appellant irregularly availed CENVAT credit on input service - time limitation - Held that: - the entire demand in the present case is time barred. The demand has been confirmed by invoking the extended period. Penalty imposed under Section 78 of the Finance Act was set aside after observing that there is no finding by the original authority that there was any intent to evade payment of service tax by the appellant. In view of this clear cut finding of the Commissioner(Appeals), the extended period cannot be invoked in the present case. Demand barred by limitation - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1521
Refund of unutilized CENVAT credit - rejection on the ground of time limitation - Section 11B of the CEA as made applicable to Finance Act, 1994 - Held that: - Larger Bench in the case of CCE&CST, Bangalore Vs. Span Infotech (India) Pvt. Ltd. [2018 (2) TMI 946 - CESTAT BANGALORE], after hearing of the party, has unanimously held that the relevant date for the purposes of deciding the time limit for consideration of refund claim under Rule 5 of CENVAT Credit Rules may be taken as the end of the quarter in which the FIRCs are received in cases where refund claims are filed on a quarterly basis - these appeals needs to be remanded back to the original authority to dispose of the refund claims as per the decision of the Larger Bench - appeal allowed by way of remand.
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2018 (5) TMI 1520
CENVAT credit - fake invoices - credit availed prior to registration - the appellant had registered themselves on 02.05.2013 but availed service tax credit on an invoice issued earlier - Held that: - the service tax registration No, mentioned in the invoice belongs to M/s Swaraj Construction, who has provided the service - On the issue of service tax registration obtained subsequently by the appellant, eligibility to credit on the invoices issued earlier, it is no more res-integra being covered by the aforesaid decisions of the Tribunal, wherein it has been held that non possession of service tax registration at the time of receipt of services would not debar from availing the credit after obtaining the service tax registration. There is no dispute that the services were received and utilized by the Appellant. Further, because the detailed description of service rendered being not mentioned in the input service, it cannot become a sale transaction - credit cannot be denied. Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1519
Penalty u/s 77 and 78 - amount received but not remitted any service tax - Held that: - the appellant is a Government body and dredging service was made taxable w.e.f. 16/06/2005 and they had a bona fide belief that being Government department, they are not liable to pay service tax. Subsequently, when they came to know that they are liable to pay service tax and got the show-cause notice, they paid the service tax and subsequently the interest also at the direction of the Tribunal - the Revenue has not brought any material on record to show that appellants have suppressed the material facts from the Department in order to evade the tax. It is a case of omission on the part of the appellant as they were under bona fide belief that they are not liable to pay service tax being a statutory Government body - penalty set aside by invoking section 80. Appeal allowed.
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2018 (5) TMI 1518
Penalty u/s 78 - the service tax along with interest has been paid by the appellant before the issue of SCN - non-filing of ST-3 returns within due date - Held that: - It is a fact that the appellant has collected the service tax but not paid the same into the Government account and the same has been done when Audit pointed out, which clearly shows that they have suppressed the facts - though the appellant had shown the service tax liability in their balance sheet for the relevant period which is placed on record also but they have not shown the service tax liability in their returns filed with the Department. In fact, the appellant during those two years have not filed returns, which clearly shows that they are liable to penalty. The penalty imposed u/s 78 but giving an option of penalty of 25% to the appellant if the same is paid within one month from the date of receipt of this order - appeal allowed in part.
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2018 (5) TMI 1517
Refund of service tax paid erroneously - rejection on the ground of Time Bar - Section 11B of CEA, 1944 - Held that: - It is not in dispute that the said amount has been paid between 18.3.2015 and 8.3.2015 and the refund claim was filed by the appellant on 24.5.2016 ie., beyond one year from the date of payment of Service Tax - Hon'ble Gujarat High Court in IOCL Case [2011 (12) TMI 540 - GUJARAT HIGH COURT] has held that the period of limitation prescribed under Section 11B of CEA, 1994 is not a procedural requirement and the delay in filing the claim cannot be condoned - refund rightly rejected - appeal dismissed - decided against appellant.
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2018 (5) TMI 1516
Refund claim - excess service tax was paid by the appellant in June 2010 which they were not required to pay as no GTA service was received by them - Adjustment of excess service tax paid against future liability - Held that: - The excess service tax was adjusted to the extent of ₹ 15,35,692/-in discharging their service tax liability during the period July 2010 to December 2010, and balance amount of ₹ 39,47,223/- claimed as refund. The argument of the Revenue that the appellant has not followed procedure and conditions laid down under Rule 6(4a) and (4b) of Service Tax Rules, 1994, is incorrect inasmuch as this Tribunal has already analyzing the relevant rules held that under sub rule (3) of Rule 6 of Service Tax Rules, there is no embargo in adjusting the excess service tax paid against future liability. Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1515
CENVAT credit - duty paying invoices - whether the appellant are entitled to avail CENVAT credit of duty paid on capital goods, namely, Forklift Trucks on the strength of Xerox/Photocopies of the invoices? - Held that: - it is not in dispute that the original and duplicate copy of the invoices were lost and necessary complaint has been filed with the Police and notices placed in the newspaper. Besides, the Forklift trucks are duly registered with RTO and bear machine number and chasis number. The Revenue does not dispute the receipt and utilization of these capital goods by the appellant in providing the output service - credit allowed - appeal allowed - decided in favor of appellant.
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Central Excise
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2018 (5) TMI 1514
CENVAT credit - input services - denial on account of nexus - Held that: - there is no clarity as to whether what was sent through courier were only samplers or the manufactured goods under the guise of samples; and in any case, if the dispatch was of the goods then, it will have a different consequence - there is no clarity as to whether what was sent through courier were only samplers or the manufactured goods under the guise of samples; and in any case, if the dispatch was of the goods then, it will have a different consequence - it is proper to remit this issue back to the file of the adjudicating authority with a further direction to the appellant to clarify its stand ie., what was sent was courier were samples or manufactured goods and then it is for the adjudicating authority to give a finding after considering the same in accordance with law - appeal allowed by way of remand.
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2018 (5) TMI 1513
Remission of duty - Rule 21 of Central Excise Rules 2002 - denial on the ground that the goods were neither been lost/stolen nor destroyed due to natural cause or by unavoidable accident nor the claim has been filed before removal of goods but actually goods were damaged in an accidents after removal of goods form the factory - Held that: - the issue is covered by the Larger Bench decision of this Tribunal in the matter of Honest Bio-Vet Pvt. Ltd [2014 (11) TMI 579 - CESTAT AHMEDABAD], in which the Larger Bench of this Tribunal, held that in cases where goods removed from factory for export under bond are destroyed before export, due to unavoidable accidents then in such situation the goods destroyed are to be treated as having being destroyed before involve in terms of Rule 21 of CER, 2002 - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1512
Recovery of erroneous refund made - Area Based Exemption - N/N. 56/02-CE - allegation of non-supply of copper scrap by M/s Vikash Traders - issuance of bogus invoices - Held that: - A perusal of chart obtained by VKM through RTI from Punjab Sales Tax Department issued by ICC, Madhopur, reveals that it contains the details of the consignments of copper scrap transported from Delhi to VKM Jammu which passed through the state of Punjab and entered the state of J&K. It also contains the name of the suppliers, date of entry at ICC, Madhopur, bill number and data commodity code, value of the consignment and number of the vehicle. Therefore, merely on the basis of the statements of Shri DK Jain of M/s Vikash Traders, it cannot be inferred that this firm had issued bogus invoices for scrap without any supply - There is no evidence that the TIN Numbers were falsely obtained by the respective suppliers. Moreover, the Department’s allegation that no copper scrap was being received in the factory of VKM is also not compatible with the statement of Shri Shankar Lal Gupta dated 21.01.2009 wherein he had stated that copper scrap received was being returned back under the invoice of copper ingots. Whether the Department’s allegation that there was no manufacturing activity in the factory of VKM is not sustainable or not? - Held that: - the Department does not dispute that there were other machinery also, namely, two hydraulic cylinders, one each blower and chimney, one pusher machine, one EOT Crane, Rails, one air compressor, 26 moulds rails fixed on the ground for movement of moulds, one electronic weighing machine, two winch machines, two hydraulic oil tanks of 12000 Ltr. Capacity and one DG Set of 62.5 KVA capacity. There is no evidence that these machines were not in working order. Moreover, it is seen that while during the period of dispute, there was no power connection, the power requirement was being met by 62.5 KVA DG Set. At the time of officers’ visit to the factory, the total working hours DG Set were 8066.Since the unit had started functioning; sometime in December 2004 it would amount to working of about 12 hours per day. Therefore, the working of the DG Set also is not compatible with the Department’s allegation that there was no manufacturing activity. No inquiry has been conducted with the adjoining units of other manufacturers to prove that the power generated by the DG Set in VKM was being sold to other manufacturers. It is also seen that for running of the DG Set HSD, was being used and there is record of purchase of HSD also which also stands verified by the Department. The allegation against VKM is showing bogus receipt of copper scrap and bogus manufacture and clearances of copper ingots without manufacturing and clearing any goods. This is the allegation which has been upheld against VKM in the impugned order. If this is so, there would be no duty liability against VKM and since VKM have paid the duty and have taken its refund under N/N. 56/02- CE, it amounts to non-payment of duty. Hence, there cannot be any further recovery of duty from there, as refund under N/N. 56/02-CE given to VKM is of the duty which was paid by them, while the same were not required to be paid. Penalty u/r 26 of CER - Held that: - This penalty has been imposed mainly on the ground that these appellants colluded with VKM in helping them either in issuing the bogus invoices, or issuing bogus GRs or actively conniving with VKM in the availment of erroneous refund under Notification No. 56/02-CE. Since we have already held that VKM had duly received copper scrap in their factory and manufactured copper ingots question of grant of erroneous refund does not arise - penalties set aside. Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1511
Penalty - CENVAT credit - input service distribution - It was detected during the audit that the ISD i.e. Head Office of the assessee has distributed the input service credit wrongly between the units inasmuch as they should have distributed it proportionate to the turnover of different units but they transferred excess transfer on common services to the appellant based in Hyderabad - appellant reversed the credit alongwith applicable interest on being pointed out - Held that: - It is beyond comprehension that the recipient of the invoice or even the departmental officers can be reasonably expected to know the turnover of different units and calculate the percentage of the credit to be distributed to them. This can only come up either through audit or investigation - The only person who should knowing this and distribute the credit appropriately is the ISD and they have violated the rules. As far as the appellant is concerned, he has taken credit on the basis of the invoice wrongly and when pointed out by the audit, reversed the credit and also paid interest thereon. The violation of Rule 7 (d) is on the part of ISD who is the registrant unit in Kolkata. Penalty - Held that: - there is no evidence in the records of fraud, collusion, wilful misstatement or suppression of facts or contravention of any provisions of the Act or Rules with the intent to evade payment of duty on behalf of the appellant which would have rendered him to penalty under Rule 15 (2) read with Section 11 AC of Central Excise Act - penalty set aside. Appeal allowed in part.
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2018 (5) TMI 1510
Method of Valuation - Section 4 or 4A of CEA, 1944? - whether the Odomos Repellant Cream supplied by the appellant to Armed Forces/ Para Military Forces for their use is subject to assessment under Section 4 or 4A of CEA, 1944? - Held that: - Tribunal in the case of M/s Wipro Ltd. vs CCE ST Cus. Bangalore-II [2018 (3) TMI 981 - CESTAT Bangalore], considering the supply of Toilet Soaps to Canteen Stores Department of Ministry of Defence (CSD) has held that the assessment of such supply fall under the scope of Secton 4A of CEA, 1944. In the present case the entire supply are made to Armed Forces and Para Military Forces for their use only and there is no sale - valuation to be done u/s 4A of CEA - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1509
Cash Refund - whether the appellant are entitled to cash refund of ₹ 4,00,000/-, which was allowed by the adjudicating authority in the form of CENVAT Credit? - Held that: - Larger Bench of this Tribunal in the case of Steel Strips vs CCE, Ludhiana [2011 (5) TMI 111 - CESTAT, NEW DELHI], submits that CENVAT Credit in cash cannot be allowed except the circumstances laid down under the CENVAT Credit Rules, 2004 - cash refund cannot be allowed - appeal dismissed - decided against appellant.
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2018 (5) TMI 1508
CENVAT credit - input - Angles, Channels, Beams, Plates etc. which were alleged to have been used in the fabrication of factory shed, building, laying foundation or making structure for support of capital goods - Held that: - the credit availed on inputs, namely, angles, channels, beams etc. are admissible provided the same are used in the fabrication of Rotary Kiln as claimed by the appellant before this forum - From the records, it is not clear whether these items have been used in the fabrication of Rotary Kiln as claimed by the appellant. Assessee fairly submits that they could produce a Chartered Engineer’s Certificate and other evidencea which had not been produced earlier justifying the use of these items in its factory premises in fabrication of Rotary Kiln. The matter is remanded to the adjudicating authority to verify the claim of the appellant on the basis of evidences that are on record and that will be produced by the appellant during the do novo proceeding - appeal allowed by way of remand.
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2018 (5) TMI 1507
CENVAT credit - input services - MS Angles, MS Channels, MS plates and MS PIPES etc. used in repair and maintenance of plant and machinery in their factory - Held that: - This Tribunal consistently held that MS Angles, Channels, Beams etc., used in Repair and Maintenance of Plant and Machinery in the factory is admissible to credit - appeal dismissed - decided against appellant-Revenue.
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2018 (5) TMI 1506
CENVAT credit - input service distribution - common input services for manufacturing and trading activity - non-maintenance of separate records - Extended period of limitation - Held that: - Hon'ble Madras High Court in the case of FL Smidth Pvt. Ltd. [2014 (12) TMI 699 - MADRAS HIGH COURT] has also upheld the decision of the Tribunal invoking the extended period of limitation on the ground that the assessee has not disclosed the availment of input service credit in respect of trading activities. Hon'ble Madras High Court in the case of Ruchika Global Interlinks [2017 (6) TMI 635 - MADRAS HIGH COURT] has held that inclusion in explanation to Rule 2(e) viz. trading was without doubt only clarificatory but the same is applicable retrospectively. Appeal dismissed - decided against appellant.
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2018 (5) TMI 1505
Valuation - Price Variation Clause - suppression of facts - demand of Interest and penalty - Held that: - the impugned order alleging suppression by the appellant is not tenable in the facts and circumstances of the case. It was a case of provisional assessment because there was a variation clause in the purchase order and on finalization of the price, the appellant paid the differential duty immediately - the assessee is liable to pay interest on delayed payment of differential duty. Penalty - Held that: - since there was no suppression on the part of the appellant and the appellant paid the duty after finalization of price, penalty not warranted. Appeal allowed in part.
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2018 (5) TMI 1504
CENVAT credit - duty paying documents - it was alleged that appellants have irregularly availed input cenvat credit on invoices / Bills of Entry not addressed to them or consigned to them - Held that: - the invoices have been addressed to their old address but the appellant has submitted that they have shifted the factory from the old address to the new address and some of the inputs were sent to the job worker which is a separate legal entity - further, the documents which have been produced by the appellants have not been considered by both the authorities below and the appellant submits that they do not have any objection in submitting their records for verification once again to ascertain the veracity of their claim that the inputs were duly received and accounted in their books of accounts - appeal allowed by way of remand.
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2018 (5) TMI 1503
CENVAT credit - input services - GTA Services - Held that: - the services are definitely used in bringing of the raw-material directly from the seller to the factory premises of M/s Nirma Limited and used in the manufacture of finished goods, later cleared on payment of duty by the appellant to M/s Nirma Limited. - denial of credit of service tax paid of GTA Service by the appellant - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1502
Clandestine removal - excess stock of MS Sheets, Scrap and MS Pipes - confiscation - Held that: - Even though the appellant has vehemently argued that the said stock was due to non-writing of the RG-I register for two days however, the same theory seems to be non-workable in the face of other evidences - The department visited their buyer's premises, namely, Super Traders and found approximately 8.953 MT of MS Pipes cleared from the appellant's premises without payment of duty - confiscation upheld - quantum of redemption fine reduced - appeal allowed in part.
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2018 (5) TMI 1501
Cash Refund - closure of unit - whether the appellants are entitled to cash refund of accumulated Cenvat Credit lying in their Books of Accounts on the date of closure of their unit? - Held that: - the issue of admissibility of cash refund of accumulated credit u/r 5 of CCR, 2004 has been settled by the by the Larger Bench of this Tribunal in Steel Strips case [2011 (5) TMI 111 - CESTAT, NEW DELHI] - out of the total cash refund amount of ₹ 5.54,318/-, it is claimed that certain amount of credit claimed to be attributable to export of the goods, hence eligible to refund. To ascertain the quantum of cash refund due to export of goods, the matter needs to be remanded to the Adjudicating Authority and also to examine the eligibility of the said refund - appeal allowed by way of remand.
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2018 (5) TMI 1500
Condonation of delay in filing appeal - the appellant had neither appeared before the aadjudicating authority nor filed any reply to the SCN - Held that: - the appeal itself could be disposed, Accordingly, after condoning the delay with the consent of both sides, the appeal is taken up for hearing and disposal - the appellant had neither filed any reply to the SCN before the adjudicating authority nor appeared before the Cd. Commissioner (Appeals) - In the interest of justice, to allow a last opportunity it is prudent to remand the matter to the adjudicating authority to consider their defence - appeal allowed by way of remand.
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2018 (5) TMI 1499
CENVAT credit - input services - Manpower Supply by service provider, namely, S. B Sharma & Co. in relation to shifting of finished goods loading of Trucks, Trailors etc., within the factory premises - Held that: - undisputedly the appellant had received the services relating to Manpower Supply from the service provider and used the said service in or in relation to the manufacturing of finished goods, that is, shifting the raw-material finished goods from one godown to another godown, hence, definitely has nexus with the manufacturing activity - credit allowed - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1498
CENVAT credit - input services - various insurance policies, namely, Medical Insurance, Accidental insurance and Group insurance Policy relating to Group Gratuity and Motor Vehicle Insurance - services relating to Staff Welfare Expenses, Food and Beverages etc. - Held that: - the Hon'ble Karnataka High Court in Micro Labs Ltd's case [2011 (6) TMI 115 - KARNATAKA HIGH COURT] has held that the credit of service tax paid on the premium of various insurance policies taken for employees under the Labor Laws, is admissible to credit. Therefore, the credit availed on the service tax paid on the premiums of insurance policies for the employees, in the course of discharging their duty as required under the provisions of Labor Laws are admissible to credit. Admittedly the credit on staff welfare expenses, food and beverages and on motor vehicle insurance, is not admissible. Appeal allowed in part.
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2018 (5) TMI 1497
Refund Claim - whether the appellant are entitled to refund of duty paid under the area based exemption N/N. 39/2001 dated 31.07.2001? - Held that: - Challenging the impugned order relating to refund claim, the Revenue has come in appeal when the show cause notice for recovery is pending adjudication - it is found from the record that the refund claim has already been sanctioned and paid to the respondent - the matter is remanded to the adjudicating authority to re-consider the issues afresh - appeal allowed by way of remand.
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2018 (5) TMI 1496
Clandestine removal - failure to discharge duty/reverse credit on clearance of 390M T of PP granules involving a total credit of ₹ 29,32,800/- - clearance of finished goods from the job worker premises, without being returned to the factory of the appellant - cross-examination of witnesses - Held that: - we find from the order of the Ld. Commissioner that even though under the defence submission, he has recorded that appellants have requested cross examination of the witnesses, however, while denying the cross examination observed that on the scheduled date of hearing, the appellants had not requested cross examination - there is no merit in the said observation in denying the cross examination of the witnesses, whose statements have been relied upon in confirming the demand. The adjudicating authority is directed to allow cross examination of the witnesses - Appeal allowed by way of remand.
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Wealth tax
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2018 (5) TMI 1495
Deletion of addition made by AO - the land being chargeable to Wealth Tax was added in the total wealth of the assessee - Held that: - the AO has treated the land shown by the assessee in its balance sheet as taxable wealth, whereas, the assessee claimed that the building was under construction on such land therefore, the same cannot be treated as taxable wealth under the Wealth Tax Act. In the case on hand, the building under construction has been shown on such land as capital work-in-progress and this fact has not been disputed by the lower authorities. Therefore, the land on which building is under construction seized from the chargeability of Wealth Tax under the Wealth Tax Law. When divergent views are expressed by different judicial forums, we prefer to follow the views expressed by the Courts which are in favor of the assessee - Hon'ble Supreme Court, in the case of CIT v. Vegetables Products Ltd. [1973 (1) TMI 1 - SUPREME COURT], wherein the Hon'ble Supreme Court held that if two reasonable constructions of a taxing provision are possible then that construction which favors the assessee must be adopted. Appeal dismissed - decided against Revenue.
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