Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
May 5, 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 SMS
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Rate of GST - The works contract service of maintaining railway track as per the above LOA is taxable @ 18% under the Serial no. 3 (ii) of the Rate Notification - AAR
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27th GST council meeting discusses change in GST rate for digital transactions and imposition of Sugar Cess
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Change in the shareholding pattern of GSTN
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GST Council approves principles for filing of new return design based on the recommendations of the Group of Ministers on IT simplification
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GST e-way bill-01 - non furnishing of the details of conveyance in 'Part B' of GST e-way bill-01 - once the Government itself has clarified the situation by allowing the transporter/dealer to fill up 'Part B' of the e-way bill when the goods are reloaded in a vehicle which is meant for delivery to the consignee, there remain no reasons to seized the goods and the vehicle. - HC
Income Tax
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Entitlement to claim the benefit of Section 80-IA - whether the Inland Container Depots (ICDs) under the control of the Respondent, during the relevant period, qualified for deduction u/s 80-IA(4)? - Held Yes - SC
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Taxability of income as a perquisite - waiver of loan by creditor - Section 28(iv) of the IT Act does not apply on the present case since the receipts are in the nature of cash or money AND Section 41(1) of the IT Act does not apply since waiver of loan does not amount to cessation of trading liability. - SC
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Deduction u/s 10A - what is excluded from ‘export turnover’ must also be excluded from ‘total turnover’, since one of the components of ‘total turnover’ is export turnover. Any other interpretation would run counter to the legislative intent and would be impermissible. - SC
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Disallowance made u/s. 37(1) on account of penal excise duty debited in P & L Account - when the amount is not penalty in nature, explanation of Section 37 will not come into play - HC
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Claim of exempt profit from SNA RCC (JV) - The assessee’s name does not figure as a member of the AOP in the Audit Report. The action of the authorities below in disallowing the share of the profit of the AOP claimed by the assessee is correct. - AT
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Valuation of closing stock - As the assessee had loaded custom duty and the clearing charges to the P&L account, it was his duty to include the same while valuing the closing stock for the year under consideration. - AT
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Levy of penalty u/s 272A(2)(k)/ 274 r.w.s. 200(3) - late filing of TDS statements / returns - reasonable cause - assessee is not liable to levy of penalty under section 272A(2)(k) of the Act. AO is directed to delete the same - AT
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TDS Liability - where in addition to the transport charges, the assessee had reimbursed octroi charges, then it is not the requirement of law to deduct tax at source out of reimbursement of expenses of octroi charges. - AT
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E-commerce business - Selling at a price lower (predatory pricing) than the cost price - the loss as declared by the Assessee in the return of income should be accepted by the AO - AO should not treat such loss as capital in nature - AT
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TDS u/s 194H - disallowance of collection charges retained by the airlines u/s 40(a)(ia) - if the respondent has paid the tax on the receipt and filed the return before the due date of filing the return, the assessee cannot be deemed to be in default. - AT
Customs
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Continuation of prohibition of CHA licence - The Regulation however allows the competent authority to prohibit the customs broker to function only at one or more sections of the customs station. Surely, this prohibition cannot be extended to all the sections and all the Customs Commissionerates in the Customs station, as has been done in the present case. - AT
FEMA
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Data Sharing with Directorate of Revenue Intelligence - All AD Category I banks are advised to ensure compliance with the same with immediate effect.
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Monitoring of foreign investment limits in listed Indian companies
Indian Laws
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Manner of determination of fair market value of the inventory for the purpose of 28(via) of the Income-tax Act, 1961 - Draft notification
Service Tax
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Levy of Penalty u/s 78 - correct value was declared in the ST-3 return but service tax was not paid - The appellant have not suppressed any fact by declaring the correct value in the ST-3 return, their case is covered by Section 73(3). - No penalty - AT
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Rebate/ refund claim - case of appellant is that rebate claim cannot be rejected on the ground of procedural lapses such as non-payment under correct category, filing of ST-3 return under another category and not mentioning export under claim for rebate as there is substitution complied and the procedural lapses are condonable - rebate allowed - AT
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Valuation - Sale of Pre-paid Vouchers/ Recharge Vouchers (RCVs) at discounted rates to the distributors - even though the subscriber get the full value credit, service tax is liable to be paid on the the amount charged by the assessee from dealers/distributors - AT
Central Excise
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Effect of amendment to Cenvat Credit Rules - retrospective or prospective - inputs used in capital goods embedded to earth - the amendment/ Provisions dated 7-7-2009, under consideration is neither made retrospective nor could it be treated as one - HC
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Valuation - inclusion of bought out items - The show cause does not specify as to what are the bought out goods and how they have been considered as critical goods and what is the basis of arriving at assessable value - when the bought out goods are not being part of any excisable goods at the time of their clearances in that case no duty can be demanded. - AT
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CENVAT credit - input services - insurance services of employees - if the appellants have availed credit on service tax paid in respect of employees of other units, they are not eligible for credit - AT
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The issue of reversal of credit arises only when the final product destroyed in fire and not in case of semi finished goods - demands raised against the appellant for destruction of semi-finished goods and capital goods cannot be sustained. - AT
VAT
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Supply in the nature of sales or works contract - Merely because in the contract for laying down pipelines, a particular quality and / or thickness of the steel plates were agreed to be used and / or even the steel plates were required to be purchased from the particular manufacturer, it cannot be said that there was a contract for supply / sale of steel plates as contended on behalf of the petitioner. - HC
Case Laws:
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GST
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2018 (5) TMI 370
Works contract service - maintaining railway track - rate of tax - N/N. 12/2017-CT (Rate) dated 28/06/2017 under the CGST Act, 2017 (1136-FT dated 28/06/2017 under the WBGST Act, 2017) - Held that: - the condition for being exempted from GST under this amendment requires the composite supply (wherein the value of the goods supplied is not more than 25% of the total value of the supply) to be provided, inter alia, to Central Government by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. The works contract service of maintaining railway track as per the above LOA is, therefore, taxable @ 18% under the Serial no. 3 (ii) of the Rate Notification. Ruling:- The Applicant supplies works contract service, as defined under Section 2 (119) of the GST Act, of maintaining existing railway tracks, which is taxable @ 18% under serial no. 3(ii) of Notification No. 11/2017-CT (Rate) dated 28/06/2017 under the CGST Act, 2017 (1135-FT dated 28/06/2017 under the WBGST Act, 2017). The appropriate SAC (Service Code Tariff) is as follows: Heading 9954, Group 99542, Sub-group 995429.
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2018 (5) TMI 368
Detention of vehicle - consignment was not supported by e-way bill - Held that: - the vehicle can be released on the petitioner furnishing a bank guarantee for the entire amount as shown in Ext.P2 as well as after executing a bond under the Rule 140(1) of the Central Goods and Services Tax Rules - petition disposed off.
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2018 (5) TMI 367
Seizure of goods - penalty u/s 129(1) and 129(3) of GST Act - GST e-way bill-01 - petitioner claim is that the distance was much below within the prescribed limit of 50 km in between the consignors place of business and transport company from where the goods were required to be reloaded in different transport vehicles for their onward journey and so they are not required to furnish the details of conveyance in 'Part B' of GST e-way bill-01. Held that: - since the consignor and consignee both are registered dealers as well as the present petitioner who is a transport company, there is no basis or reason not to accept the contention of the learned counsel for the petitioner and further once the Government itself has clarified the situation by allowing the transporter/dealer to fill up 'Part B' of the e-way bill when the goods are reloaded in a vehicle which is meant for delivery to the consignee, there remain no reasons to seized the goods and the vehicle. Seizure order and penalty set aside - petition allowed.
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2018 (5) TMI 366
Revenue wishes to bring on record copies of Circular No.39/13/2018-GST dated 03.04.2018 setting up an IT Grievance Redressal Mechanism in the form of a Committee - the Court is of the opinion that the petitioners should approach the concerned Nodal Officers with brief representations outlining their grievances; the Nodal Officer or the Redressal Committee shall appropriately deal with them, in accordance with the circular.
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2018 (5) TMI 365
Supply of 8M and 9M Pre Stressed Concrete Poles (PSC Poles) to the Electrical Circles - submission of tenders - it was the case of petitioner that the 3rd respondent has blatantly violated the conditions stipulated in the tender document - adjustment of the GST incurred by the petitioner at the time of purchase of the raw-materials towards GST payable at the time of sale of Poles - as per the petitioner, the 3rd respondent has violated the conditions, by submitting a certificate along with pre-qualification documents, stating that the effect of GST credit to be availed has been taken into account in the quoted price. Held that: - even if Ext.P7 is issued by the 3rd respondent, that will not have any bearing or implication with respect to the terms and conditions of the contract, and respondents 1 and 2 are entitled to overlook the same and consider the bid submitted by the respective parties. Clause 14 of Section-A stipulated that: “The indication of price anywhere else other than in the price bid (BOQ) will render the bid invalid and will be liable to be rejected”. Therefore, the said stipulations are also specific and clear to the effect that, what is prohibited is indication of price anywhere else other than in the price bid. Therefore, merely Ext.P7 communication is issued by the 3rd respondent, “that the effect of GST credit to be availed has been taken in account in the quoted price” will not in any manner interferes with clauses 14 and 15 of Section-A. Clause 21 stipulates that: “No deviations will be accepted”. There is no case for the petitioners that there is any deviation on the part of the 3rd respondent from the Instructions to Bidders, special conditions of contract or general conditions of contract. So far as Clause B.04 is concerned, it is a flexible condition. Even assuming that petitioner is not having a location within the Electrical Circle, that will not in any manner interferes with the conditions incorporated thereunder. The impracticability of Clause B.20 regarding tax, put forth by the petitioners cannot be legally sustained since a clear method is worked out in the special conditions of contract. The petitioners could not make out any case of arbitrariness, illegality, malafides or unfairness so blatant and patent, so as to interfere with the evaluation made by the 1st and 2nd respondents with respect to the successful bidder, under Article 226 of the Constitution of India - Moreover, it is a commercial contract and the master of the contract is at liberty to enjoy reasonable flexibility in choosing its partner, taking also into account the price bid in the larger public interest, which may not in any manner interferes with the fundamental rights guaranteed under Part III of the Constitution. Petition dismissed - decided against petitioner.
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Income Tax
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2018 (5) TMI 359
Entitlement to claim the benefit of Section 80-IA - whether the Inland Container Depots (ICDs) under the control of the Respondent, during the relevant period, qualified for deduction under Section 80-IA(4)? - whether the activities undertaken by the assessee cannot be said to fall within Explanation (d) of Section 80-IA(4) defining the term infrastructure facility? - Held that:- Considering the nature of work that is performed at ICDs, they cannot be termed as Ports. However, taking into consideration the fact that a part of activities that are carried out at ports such as custom clearance are also carried out at these ICDs, the claim of the respondent herein can be considered within the term ‘Inland port’ as is used in the Explanation. It is significant to note that the word ‘Inland Container Depots’ was first introduced in the definition of ‘Customs Port’ as is given in Section 2(12) of the Customs Act, 1962, through amendment made by the Finance Act, 1983 with effect from 13.05.1983. The term ‘Inland Port’ has been defined nowhere. But the Notification that has been issued by the Central Board of Excise & Customs (CBEC) dated 24.04.2007 in terms holds that considering the nature of work carried out at these ICDs they can be termed as Inland Ports- The communication dated 25.05.2009 issued on behalf of the Ministry of Commerce and Industry confirming that the ICDs are Inland Ports, fortifies the claim of the respondent herein. Though both the Notification and communication are not binding on CBDT to decide whether ICDs can be termed as Inland Ports within the meaning of Section 80-IA the appellant herein is unable to put forward any reasonable explanation as to why these notifications and communication should not be relied to hold ICDs as Inland Ports. Unless shown otherwise, it cannot be held that the term ‘Inland Ports’ is used differently under Section 80-IA of the IT Act. All these facts taken together clear the position beyond any doubt that the ICDs are Inland Ports and subject to the provisions of the Section and deduction can be claimed for the income earned out of these Depots. The actual computation is to be made in accordance with the different Notifications issued by the Customs department with regard to different ICDs located at different places.
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2018 (5) TMI 358
Taxability of income as a perquisite - waiver of loan by creditor - deemed income u/s 41(1) - sum due by the Respondent to Kaiser Jeep Corporation which later on waived off by the lender - applicability of Section 28 (iv) of the IT Act - whether waiver of loan by the creditor is taxable as a perquisite under Section 28 (iv) or taxable as a remission of liability under Section 41(1)? - Held that:- The very first condition of Section 28 (iv) which says any benefit or perquisite arising from the business shall be in the form of benefit or perquisite other than in the shape of money, is not satisfied in the present case. Hence, in our view, in no circumstances, it can be said that the amount of ₹ 57,74,064/- can be taxed under the provisions of Section 28 (iv) of the IT Act. There is difference between ‘trading liability’ and ‘other liability’. Section 41 (1) of the IT Act particularly deals with the remission of trading liability. Whereas in the instant case, waiver of loan amounts to cessation of liability other than trading liability. Hence, we find no force in the argument of the Revenue that the case of the Respondent would fall under Section 41 (1) of the IT Act. Section 28(iv) of the IT Act does not apply on the present case since the receipts are in the nature of cash or money AND Section 41(1) of the IT Act does not apply since waiver of loan does not amount to cessation of trading liability. It is a matter of record that the Respondent has not claimed any deduction under Section 36 (1) (iii) of the IT Act qua the payment of interest in any previous year.
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2018 (5) TMI 357
Computation of Deduction u/s 10A - Software development charges to be excluded while working out the deduction admissible u/s 10A - claim of certain expenses attributable to the delivery of software outside India or in providing technical services from total turnover - whether such charges are relatable towards expenses incurred on providing technical services outside India? - Held that:- As relying on CIT vs. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] when a particular word is not defined by the legislature and an ordinary meaning is to be attributed to it, the said ordinary meaning is to be in conformity with the context in which it is used. Hence, what is excluded from export turnover must also be excluded from total turnover , since one of the components of total turnover is export turnover. Any other interpretation would run counter to the legislative intent and would be impermissible. In the instant case, if the deductions on freight, telecommunication and insurance attributable to the delivery of computer software under Section 10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the Respondent which could have never been the intention of the legislature.
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2018 (5) TMI 356
Retrospective effect of amendment made by the Finance Act, 2010 in Section 40(a)(ia) - whether the amendment being curative in nature should be applied retrospectively i.e., from the date of insertion of the provisions of Section 40(a)(ia) or to be applicable from the date of enforcement - deduction for the tax deducted and paid to the government - Held that:- Referring to the binding effect of the judgment given in Allied Moters (1997 (3) TMI 9 - SUPREME Court) we are of the view that the amended provision of Sec 40(a)(ia) of the IT Act should be interpreted liberally and equitable and applies retrospectively from the date when Section 40(a)(ia) was inserted i.e., with effect from the Assessment Year 2005-2006 so that an assessee should not suffer unintended and deleterious consequences beyond what the object and purpose of the provision mandates. As the developments with regard to the Section recorded above shows that the amendment was curative in nature, it should be given retrospective operation as if the amended provision existed even at the time of its insertion. Since the assessee has filed its returns on 01.08.2005 i.e., in accordance with the due date under the provisions of Section 139 IT Act, hence, is allowed to claim the benefit of the amendment made by Finance Act, 2010 to the provisions of Section 40(a)(ia) of the IT Act.
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2018 (5) TMI 355
Interpretation of Section 32(1)(iia) - Revised return - assessee withdrew the claim of additional depreciation - deduction claim under Section 80IB from ₹2042.81 crore shot up to ₹2579.07 crore - Held that:- Plain text of the explanation leaves no room for admitting the interpretive gloss that the assessee wishes to place over it. There can be a multitude of circumstances where, but for the provision, the incentive, available to all those for whom the benefit of additional depreciation was intended, could have been deprived of it. Undoubtedly, the amount of the assessee’s claim for Section 80IB deduction increased, when it sought to withdraw the additional depreciation claim. However, that single circumstance should not influence this court to ignore the plain intendment of the statute, since Parliament clearly stated that the provisions of “this sub-section” would apply, “whether or not the assessee has claimed the deduction in respect of depreciation in computing his total income”. This court cannot re-write the statute, as is sought to be urged. For these reasons, the Court is of the opinion that no question of law arises on this aspect. Investment in redeemable preference shares as treated as international transaction and subjected to adjustment - Held that:- Tribunal need not have felt constrained by the pendency of appeal (for another year before the CIT (A)) and could have proceeded to decide the issue on merits since it did not involve elaborate fact finding. As the highest appellate authority, it has jurisdiction in its own right to decide such question. Accordingly, the direction of remand is hereby modified; the Tribunal shall decide this issue in accordance with law, after hearing parties afresh. It is clarified that the Tribunal does not need to await the decision of CIT(A) in regard to AY 2010-11 on this issue. The parties are directed to be present before the Tribunal further to the limited remand on 09.05.2018 for decision on the last question.
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2018 (5) TMI 354
Transfer of a capital asset - Applicability of section 50C - transfer of lease rights (in the case of lease for 99 years, relating to agricultural land) - Held that:- There is no merit in the appellant/assessee’s contentions that the occupancy rights are not in the nature of capital assets, the transfer of which do not attract capital gains, as to exclude application of Section 50C. The rights (towards occupancy) are nearly permanent, having regard to the nature of holding. The issue of transfer of lease rights (in the case of lease for 99 years, relating to agricultural land) was considered in R.K. Palshikar (HUF) v. Commissioner of Income Tax [1988 (5) TMI 3 - SUPREME Court] as held the lease is for a long period, namely, 99 years, hence it would appear held that under the leases in question the assessee has parted with an asset of an enduring nature, namely, the rights to possession and enjoyment to the properties leased for a period of 99 years subject to certain conditions on which the respective leases could be terminated. A premium has been charged by the assessee in all the leases. We fail to see how it could be said that the provisions of Section 12-B of the said Act cannot be brought into play. The grant of the leases in question, in our view, amounts to a transfer of capital assets as contemplated under Section 12-B of the said Act. Also see A.R. Krishnamoorthy v. Commissioner of Income Tax, (1989 (2) TMI 2 - SUPREME Court) confirming decision in Palshikar (supra) - Decided against assessee
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2018 (5) TMI 353
Disallowance made u/s. 37(1) on account of penal excise duty debited in P & L Account - whether ITAT was justified in holding that alleged excise demand notice are not penal in nature without appreciating the fact that the same are for penalty demand levied by the Excise Department raised on account of fake export permit? - Held that:- Apart from penal expenses which has been done for the business activity, while considering the matter, CIT (A) has gone into the observations made by the competent authority and has come to the conclusion that it was not penal in nature. In that view of the matter explanation of Section 37 will not come into play. In that view of the matter that was business expenses and has been rightly upheld by both the authorities.
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2018 (5) TMI 352
Disallowance of commission expenses u/s 40A(2)(b) - related party payments - reasonable percentage of commission that can be treated as genuine business expenses - as per AO fair market value of the services as required u/s.40A(2)(b) for computing the disallowance - Held that:- We note that the assessee has paid commission to the Daga Life Sciences DMCC, Dubai, which is controlled and managed by brother in law of the Managing Director of the assessee company. The nature of relationship between the assessee company and the payee and a very short contract for agreement of commission and lack of necessary details of rate of commission, the authorities below have concluded that the excessive commission payment was not justified. A.O. has held that 1% commission was justified. CIT(A) has held that 2.5% commission was justified. Such subjective decision of the authorities below is not correct.In this regard, the assessee’s submission that the authorities below cannot sit in judgment on the length of the contract, is sustainable. Since on the basis of the same contract, earlier assessments were completed. However, it is certainly necessary to examine whether the payments are in accordance with the contract. The actual commission paid if the same is in accordance with the terms of the contract has to be allowed. However, in the present case, it is not established that the rate of commission paid is as per the contract. The main contract shows a range of commission and it mentions that the individual rates will be fixed as per the mutual consent. No detail whatsoever as to how the mutual consent have been arrived at for a particular rate in a particular invoice has been submitted before the authorities below. In the absence of necessary details, adverse inference drawn cannot be said to be devoid of cogency. Thus the interest of justice will be served if the issue is remitted to the file of the A.O. The A.O. is directed to examine the documents by which the mutual consent was arrived at for individual invoices of commission. Disallowance of commission expenditure u/s.40(a)(i) - Assessee submitted that the agent has no business connection in India and the commission paid for the services rendered by the foreign agent outside India and further as per India- UAE treaty, foreign Agent has no permanent establishment - Held that:- The assessee has not provided the details, rather it has been contended that the Assessing Officer has not called for communication between the assessee and the agent as emanating out of the ground raised before the CIT(A). The position taken by the AO and the assessee are contradictory. In our considered opinion, the interest of justice will be served if the issue is remitted to the file of the AO. AO shall examine the correspondence between the assessee and the Agent and thereafter decide the issue regarding the nature of the services rendered. Furthermore, the claim that the payee is a resident of UAE also needs to be established by reference to the relevant documents, regulations and treaty. Needless to add, the assessee should be granted adequate opportunity of being heard. Disallowance of service tax - Held that- This ground is not emanating out of the orders of the authorities below. However, since we have already remitted the issue of examination of commission paid to the file of the Assessing Officer, the Assessing Officer shall examine this issue also. Furthermore, it is noted here that the said service tax has been paid by the assessee on the services rendered by the Dubai based agent. Firstly, how can the service tax arises when the services has been rendered outside India and secondly, under what limb of contract the assessee was to incur the said expenses instead of the agent, also needs to be examined. Allowing of carry forward of long term capital loss - Held that:- Here as clearly brought out by the Assessing Officer, the loss has not been incurred on any transfer of capital asset; hence, there is no question of any long term capital loss arising to be carried forward. Furthermore, the wholly own subsidiary of the assessee was the investment in the capital field and hence there is no provision in Income Tax law regarding the carry forward of losses in capital field. Hence, we set aside the order of the ld. CIT(A) and restore that of the Assessing Officer.
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2018 (5) TMI 351
Bogus purchases - disallowance of 25% out of hawala purchases should be done said by CIT-A - Held that:- Assessee has engaged into dealings in the grey market. Dealings in the grey market give the assessee various savings at the expense of the Exchequer. Hence, on the overall consideration of facts and circumstances and following the decision in the case of CIT vs Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] we hold that a disallowance of 12.5% of the bogus purchase would meet the end of justice - Decided partly in favour of assessee
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2018 (5) TMI 350
Depreciation on tangibles - Held that:- As it has not been established that the assets in the form of goodwill and commercial right claimed which has been taken over were in existence in the books of the predecessors firm. We concur with the Assessing Officer that these assets were artificially created subsequent to the succession of the firm in the books of the assessee company. The only purpose of this action is to claim huge deprecation in hands of the assessee company. Claim of exempt profit from SNA RCC (JV) - share of the profit of the AOP claimed by the assessee - Held that:- When the balance sheet of the M/s. SNBL & RCC JV does not show the assessee company as a partner, despite the said balance sheet of AOP being certified by a Chartered Accountant, how the assessee company’s balance sheet shows the existence thereof as sundry debtor is not understandable. CIT(Appeals) has given a finding that in the Audit Report of AOP in Form No. 3CD, the profit sharing ratios of the members are shown at 97% and 3% for M/s Shyam Narayan & Bros and M/s Rajesh Construction Co. respectively. The assessee’s name does not figure as a member of the AOP in the Audit Report. The action of the authorities below in disallowing the share of the profit of the AOP claimed by the assessee is correct. Hence, we affirm the order of the authorities below.
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2018 (5) TMI 349
Bogus purchases - CIT-A granting 100% relief to the assessee - Held that:- Assessee has engaged into dealings in the grey market. Dealings in the grey market give the assessee various savings at the expense of the Exchequer. Hence, on the overall consideration of facts and circumstances and following the decision of Hon’ble Gujarat High Court in the case of CIT vs Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] we hold that a disallowance of 12.5% of the bogus purchase would meet the end of justice - Decided partly in favour of revenue
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2018 (5) TMI 348
Addition to the closing stock by way of inputting proportionate expenses towards custom duty and clearing charges - Held that:- As assessee was given ample opportunities by the departmental authorities to explain as to why proportionate charges should not be loaded to the closing stock, that he did not file any explanation in that regard, that the FAA had restricted the addition to the custom duty and clearing charges only, that he had given relief to the assessee about the indirect expenses. As the assessee had loaded custom duty and the clearing charges to the P&L account, it was his duty to include the same while valuing the closing stock for the year under consideration. Failure on part of the assessee resulted in addition made by the AO and partly sustained by the FAA. No legal infirmity in the order of the FAA, as the assessee has not followed the provisions of the Act as well as the accounting standards. - Decided against the assessee. TDS u/s 194C - Addition u/s. 40(a)(ia) - no tax was deducted from clearing and forwarding charges - Held that:- FAA has not considered the argument of double disallowance, as the assessee had not argued the same before him. We are of the opinion that double taxation/double deductions are not to be allowed/made while determining the income of an assessee for a particular year. We would direct the AO to make verification in that regard and restrict the disallowance at one place only, as submitted by the assessee for verification purposes we restore that the issue to the file of the AO Addition made under section 68 - Held that:- Assessee did not file the most crucial document i. e. the bank statement of the NRI creditors, though he had been asked to do so on more than one occasions. As he could not prove the genuineness of the transaction and the creditworthiness of the NRI. s, so, the departmental authorities were left with no option but to make/confirm the additions of the disputed amount to the total income of the assessee. - Decided against assessee.
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2018 (5) TMI 347
Addition under the head rent received from leave and licence fees and maintenance charges - Held that:- We are aware that principles of res judicata do not apply to the income tax proceedings. But, the AO's are required to explain as to why they were compelled to deviate from the path followed by their predecessor, if they want to take a new course of action for assessing the same income. Without bringing the distinguishing features that justifies taxing a particular item/head of the income or changing the heads of income in the subsequent years, as compared with the earlier year, the AO's cannot question the income shown by the assessee. Consistency is also one of the recognised rule of tax proceedings like the principle of res judicata. Secondly, the AO while assessing the income of the group concerns in the hands of the assessee had not given discount for maintenance charges. The FAA has rightly pointed out the maintenance charges have to considered as per the established principles of accountancy. AO's of the group entities have not doubted about their existence or genuineness of the income shown by them in their returns of income. Considering these facts cumulatively, we hold that the order of the FAA does not suffer from any legal or factual infirmity. - Decided against revenue
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2018 (5) TMI 346
Addition on account of transfer pricing adjustment - deductibility of such payment in terms of section 37(1) - Held that:- AO in his order has taken the ALP of the international transaction at Nil on the basis of such recommendation of the TPO without carrying out any independent investigation for the deductibility or otherwise of such payment in terms of section 37(1) of the Act. This addition has been made by the AO in his order without invoking section 37(1) of the Act. As the TPO in the instant case initially determined Nil ALP by holding that no benefit accrued to the assessee etc. and the AO made the addition without examining the applicability of section 37(1) of the Act, we find the actions of the AO/TPO running in contradiction with the ratio laid down in Cushman & Wakefield (2014 (5) TMI 897 - DELHI HIGH COURT). In these circumstances, we set aside the impugned order on this score and send the matter to the file of AO/TPO for deciding it. Disallowance u/s 14A - Held that:- We find that investments in the Units at the end of the year stood at ₹ 18.59 crore with the corresponding opening figure at ₹ 3.84 crore as against the amount of shareholders’ fund at ₹ 399.71 crore at the close of the year and ₹ 161.91 crore at the beginning of the year. This proves that the amount of investment in the Units etc., yielding exempt income, is much less than the amount of shareholders’ funds. We uphold the impugned order in deleting the disallowance of interest u/s 14A at ₹ 45,86,464/-, against which the Revenue has preferred this grievance before the Tribunal. This ground is not allowed. Disallowance of claim of depreciation @ 60% on UPS as against 15% - Held that:- We find that the issue of allowing depreciation at higher rate on computer peripherals is no more res integra in view of the judgment of the Hon'ble Delhi High Court in CIT vs. BSES Yamuna Powers Ltd. [2010 (8) TMI 58 - DELHI HIGH COURT] wherein the entitlement to the higher rate of depreciation on computer peripherals has been laid down by deciding the issue in favour of the assessee.
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2018 (5) TMI 345
Disallowance under Section 14A - CIT(A) upheld the contention of the assessee that the disallowance under Section 14A cannot exceed the dividend earned - Held that:- The issue stands covered in favour of the assessee by case law Cheminvest Ltd. vs. CIT [2015 (9) TMI 238 - DELHI HIGH COURT] as held that disallowance under Section 14A cannot exceed the dividend income earned. Accordingly in the background of aforesaid precedents we do not find any infirmity in the order of the learned CIT(A) Nature of income - income arising from “the investment portfolio” - Short Term Capital Gain OR Business Income - Held that:- In the present case no where the assessee has claimed that these transactions are delivery based.Only the aspect that assessee can maintain an investment and trading portfolio. CIT(A) has totally erred in not examining the facts of the case in the entirety as to whether they were in accordance with the facts operating in the aforesaid decision of the Hon’ble Bombay High Court. Moreover learned CIT(A) has not given any finding as to whether the transaction in the present case are delivery based on not. Furthermore the observation of the AO that assessee has obtained huge amount of loan to make these investments has also not been considered by the learned CIT(A). CIT(A)is directed to consider the issue afresh and give proper finding as to whether the issue can be said to be decided in favour of the assessee on the basis of the ratio emanating from the Hon’ble Bombay High Court decision in the case of Gopal Purohit (2009 (2) TMI 233 - ITAT BOMBAY-G) - Decided in favour of revenue for statistical purposes.
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2018 (5) TMI 344
PE - taxability of income earned in India - transactions entered in to by the German Bank with the Indian borrowers - whether the functions performed by the DZ India Bank were of preparatory /auxiliary nature or it was working as an agent of the German Entity? - Held that:- We nowhere find any reference to the contracts entered in to by the German bank with its borrowers and the terms and conditions of such transactions. The assessee claims that Indian Bank was performing certain function that were auxiliary or preparatory. The claim has not been tested with reference to the loan transactions for the year under consideration. Tax has to be determined on the basis of peculiar facts of a year. General observations/general submissions about the theory is not sufficient to levy taxes or claim a particular deduction. Thus, in our opinion both of them have not done their job satisfactorily. The matter needs further verification of facts. It becomes more important, when we find that assessments of earlier three years have been re-opened. So, we hold that in the interest of justice matter should be restored back to the file of the AO for fresh adjudication. Direct the AO to go through the various transactions entered in to by the German Bank with the Indian borrowers and find out as to whether the functions performed by the DZ India Bank were of preparatory /auxiliary nature or it was working as an agent of the German Entity. The correspondence between the borrowers, the lender and the Indian Bank as well as the documents related with money lending transactions should to examined to arrive at a definite conclusion
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2018 (5) TMI 343
TPA - margin adopted for US transactions - mark-up applied in the MAP Resolution for USA transactions - Held that:- Following the decision in the case of J P Morgn Services Pvt. Ltd. (2015 (12) TMI 296 - ITAT MUMBAI) we hold that the margin adopted for US transactions, in ITES Segment, as was decided in the MAP Resolution, shall be adopted for non-US transactions as well. The TPO/A.O. is directed accordingly. Deduction u/s.10A - Held that:- The issue is squarely covered by the judgment of the Hon'ble jurisdictional High Court in the case of Tata Elxsi Ltd. (2011 (8) TMI 782 - KARNATAKA HIGH COURT ) in which it has been held that if certain expenses are excluded from export turnover, then the same should also be excluded from the total turnover.
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2018 (5) TMI 342
Levy of penalty u/s 272A(2)(k)/ 274 r.w.s. 200(3) - late filing of TDS statements / returns - eligible reasons for delay - Held that:- As the case of the assessee before us is that because of the requirement of e-TDS furnishing of TDS statement arising for the first time in assessment year 2011-12, there were problems faced by the assessee and hence, the delay in filing quarterly TDS return late and though the assessee had deposited tax at source in time, we hold that the assessee had reasonable cause in not furnishing the same in time and in view of the provisions of section 273B we hold that the assessee is not liable to levy of penalty under section 272A(2)(k) of the Act. AO is directed to delete the same. - Decided in favour of assessee.
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2018 (5) TMI 341
Non-deduction of TDS on reimbursement of octroi expenses - Held that:- The assessee before us has filed necessary evidence in this regard that in each of the bills raised by the said concern Saraswati Transport Company, separately the octroi charges and transport charges were shown; in addition the assessee has filed supporting evidence, receipt of octroi charges paid by the assessee. In the totality of the above said facts and circumstances, where in addition to the transport charges, the assessee had reimbursed octroi charges, then it is not the requirement of law to deduct tax at source out of reimbursement of expenses of octroi charges. The assessee having not deducted the same, cannot be held to be in default. We find no merit in the aforesaid disallowance made by invoking provisions of section 40(a)(ia) of the Act - Decided in favour of assessee Disallowance of expenses incurred on account of increase in share capital of the assessee company - Held that:- The said expenses are capital in nature and hence, are not to be allowed in the hands of assessee. The ground of appeal No.3 raised by the assessee is dismissed. Taxation of “Industrial Promotion Subsidy” - capital receipt OR revenue receipt - Held that:- The issue arising before us is identical to the issue before the Tribunal in Innoventive Industries Ltd. Vs. DCIT (2017 (4) TMI 44 - ITAT PUNE) and the assessee had received incentive / subsidy from the State Government for setting up the project in the classified area. We hold that subsidy received by the assessee under PSI, 2007 is capital receipt in the hands of assessee. Accordingly, we delete the addition. The grounds of appeal raised by the assessee are thus, allowed.
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2018 (5) TMI 340
TDS u/s 194C OR 194J - addition u/s 40(a)(ia) - Held that:- As in S.K. Tekriwal (2012 (12) TMI 873 - CALCUTTA HIGH COURT) noticed that the conditions prescribed u/s 40(a)(ia) for making the disallowance envisaged that tax was deductible at source, but such tax had not been deducted. As per the Hon'ble High Court, where tax has been deducted by the assessee, even under a bona fide wrong impression, under wrong provisions of the TDS, the disallowance envisaged u/s 40(a)(ia) of the Act is not triggered. - Decided in favour of assessee.
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2018 (5) TMI 339
Income chargeable to tax in India - Income accrued in India - Royalty receipt - India Thailand DTAA - Held that:- As decided in assessee's own case [2017 (10) TMI 827 - ITAT DELHI] Income received by the assessee is not a royalty as per Article 12 of the DTAA between India and Thailand, therefore, the same is not chargeable to tax, despite the amendment in the Income Tax Act with retrospective effect by Finance Act, 2012. In the result, the common ground raised in both the appeals i.e. whether income received by the assessee is chargeable to tax according to the Indian Income Tax Act as royalty u/s. 9(1)(vi) of the Act as well as under Article 12 of the DTAA between India and Thailand are allowed.
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2018 (5) TMI 338
Addition of 25% of the total amount of bogus purchases - Held that:- Assessee has engaged into dealings in the grey market. Dealings in the grey market give the assessee various savings at the expense of the Exchequer. Hence, on the overall consideration of facts and circumstances and following the decision in the case of CIT vs Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] we hold that a disallowance of 12.5% of the bogus purchase would meet the end of justice - Decided partly in favour of assessee Addition on account of excess interest paid to the related parties on the borrowings - Held that:- AO has not pointed out any evidence to establish that the interest rate paid was excessive, there is no justification of reducing the interest to 12%. CIT (A) ought to have deleted the addition. We, therefore, find merit in the argument of the Ld. counsel that the Ld. CIT (A) has wrongly confirmed the addition made by the AO. In our considered opinion, the finding of the Ld. CIT (A) is not based on any evidence on record. We therefore, set aside the findings of the Ld. CIT (A) and delete the addition and direct the AO to delete the addition of ₹ 54,000/- made on account of interest expenses. Addition of 20% of the total amount of expenses claimed by the assessee - Held that:- AO has pointed out that entries in the ledger are not supported by any bills or vouchers. The assessee had even not maintained the log book for the vehicles. The AO has further pointed out that in all these expenses personal element involved cannot be ruled out. Since, the assessee has failed to substantiate its claim by adducing corroborative evidence, the Ld. CIT (A) has rightly confirmed the disallowance to the extent of 20% on the expenses claimed. Hence, we do not find any infirmity in the findings of the Ld. CIT (A). We therefore uphold the findings of the Ld. CIT (A) and dismiss this ground of appeal of the assessee.
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2018 (5) TMI 337
E-commerce business - Selling at a price lower (predatory pricing) than the cost price - disallowance of loss - business model of creating marketing intangible assets for long-term benefits - expenditure of a capital nature - Held that:- The action of the AO in disregarding the books results cannot be sustained and the further conclusion that the action of the AO in presuming that the Assessee had incurred expenditure for creating intangible assets/brand or goodwill is without any basis, we do not think it necessary to deal with the arguments that even assuming that expenditure was incurred by the Assessee the expenditure for building brand or creating intangible or goodwill is revenue expenditure and allowable as deduction. It is also not necessary for us to go into the question of estimation of quantum of expenditure on creating intangibles, in view of the above conclusions. Thus we hold that the loss as declared by the Assessee in the return of income should be accepted by the AO and his action in disallowing expenses and arriving at a positive total income by assuming that there was an expenditure of a capital nature incurred by the Assessee in arriving at a loss as declared in the return of income and further disallowing such expenditure and consequently arriving at a positive total income chargeable to tax is without any basis and not in accordance with law and the said manner of determination of total income is hereby deleted. - Decided in favour of assessee
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2018 (5) TMI 336
Books of accounts rejected u/s 145(3) - disallowance of deduction u/s 80IC made holding that assessee was having machinery of ₹ 78758/- only and assessee has employed only 31 laborers but did not produce wages register. AO has to point out latent, patent and glaring defects in the books of accounts to invoke the provisions of section 145(3) of the Act. AO has further to show his satisfaction that the books of accounts are incorrect or incomplete. Each infirmity in the books of accounts does not empower the AO to invoke the provisions of section 145(3) of the Act. CIT(A) has also given valid reasons for allowing the claim of the assessee u/s 80IC of the Act. The ld Departmental Representative could not controvert the fact pointed by the ld AR that on similar facts the assessee was allowed deduction for Assessment Year 2008-09 and Assessment Year 2010-11. - Decided against revenue Addition on account of suppression of profits made through transaction with M/s. Trimurti Petro Chemicals and Allied services ltd. - Held that:- DR could not point out that if the deduction u/s 80IC of the Act is allowed to the assessee whether this addition would be tax neutral or not. Furthermore, in fact the other party would be chargeable to tax at a higher rate than whatever tax payable by the assessee on profits of her Dehradun unit. CIT(A) has given a reason that there is no loss to the revenue and there is no direct benefit to the assessee with respect to this addition. We also find that if any addition is made in the profit of taxfree units same will increase the reduction under respective section applicable to that unit. In view of this we do not find any infirmity in the order of ld CIT(A) in deleting the above addition wholly. Disallowance u/s 40a(ia) -non deduction of tds on job work charges - Held that:- The assessee has deposited the tax deducted at source on the full amount to M/s. KB Singh Enterprise in the month of June, 2009 i.e. before the due date of filing of the return of income for Assessment Year 2009-10. In view of this decision of the Hon'ble Delhi High Court in CIT Vs. Rajinder Kumar (2013 (7) TMI 454 - DELHI HIGH COURT) the ground No. 1 of the cross objection is allowed and AO is directed to delete the disallowance of ₹ 1185685/- u/s 40a(ia) of the Act. Disallowance u/s 14A - Held that:- CIT-A has restricted the disallowance of ₹ 305117/- as administrative expenses for earning exempt income and further ₹ 10000/- on account of donation expenditure which is not allowable. AR could not show us any infirmity in the order of the ld CIT(A) in restricting the above disallowance - Decided against assessee
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2018 (5) TMI 335
Denying exemption u/s 11 & 12 - object of trust - Trust’s activities not charitable in nature - Held that:- As decided in assessee's own case [2013 (10) TMI 211 - ITAT DELHI] the authorities below have failed to appreciate that the business set up and held by the appellant under trust is to sub serve the predominant charitable objects of providing medical relief education and relief to poor. Furthermore, since separate books of accounts were maintained and the entire profits are for charitable objects, the conditions prescribed in section 11(4A) of the Act, too were fulfilled. The authorities below have also failed to appreciate that out of total sales.of ₹ 168.12 crores of Divya Pharmacy medicines of ₹ 4.2 crores only were sold from the hospital sales counter (sic) - Decided in favour of assessee.
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2018 (5) TMI 334
TDS u/s 194H - disallowance of collection charges retained by the airlines u/s 40(a)(ia)- Held that:- Once it has been held in the case of assessee that they were collecting the PSF on behalf of the Airport Authorities/Airlines Operators, the collection charges or the commission, whatever nomenclature is given, retained by them assumes the character of commission paid by the Principal to its agents and the Principal is required to deduct the TDS on such payments to its agent under section 194H of the IT Act. The assessee is required to deduct the TDS on the amount retained by the Airlines while making the payment to the assessee. Referring to the proviso to section 40(a)(ia) of the Act, according to which if the respondent has paid the tax on the receipt and filed the return before the due date of filing the return, the assessee cannot be deemed to be in default. The scope of proviso was examined at number of occasions by the Tribunal and various High Courts. The Hon’ble Delhi High Court in in the case of CIT Vs. Ansal Landmark Counsel Pvt. Ltd., (2015 (9) TMI 79 - DELHI HIGH COURT) examined this aspect and has held that though the proviso was inserted w.e.f. 01.07.2012, but it was declaratory and curative in nature and has retrospective effect from 01.04.2005 being the date from 40(a)(ia) inserted by the Finance Act, 2004. But this aspect was not examined by the CIT(A). Since it requires verification of facts, we feel it proper to set aside the order of the CIT(A) and restore the matter to the file of the AO and if it is established that the respondent has paid the tax and filed the return in time, the assessee should not be held in default for the purpose of making disallowance under section 40(a)(ia) of the Act. Addition by treating the duty credit entitlement under SFIS - Held that:- CIT(A) has not properly adjudicated the character of receipts and the year of taxability. If itis held to be the capital receipt, it may reduce the value of the capital assets but it cannot be taxed as a revenue receipt. In any case, this issue was not properly examined by the CIT(A). We therefore set aside his order and restore the matter to his file with a direction to readjudicate this issue afresh in the light of assessee’s contentions and also in the light of the judgment of the Apex Court in the case of Ponni Sugars Ltd., (2008 (9) TMI 14 - SUPREME COURT ). Disallowance under section 14A - Held that:- In the absence of exempted income, disallowance under section 14A cannot be made and we accordingly set aside the order of the CIT(A) and delete the additionmade by the AO. Non-allowance of deduction for 1/30th of upfront fee and repair and maintenance for assessment year 2007-08 and depreciation under section 32 on repairs and maintenance - Held that:- CIT(A) rejected the grounds of the assessee being infructuous relying upon its order dated 20.08.2011 in which he has allowed the upfront, repairs and maintenance expenditure as revenue expenditure and directed the AO to allow depreciation on capital work in progress. Now the assessee is before us but could not make out his case. No merit in this ground and we reject the same and confirm the order of the CIT(A). Addition on account of inclusion of revenue from National Aviation Company India Ltd., (NACIL) on accrual basis - Held that:- Assessee was dealing with the public sectors and that too with the essential services providers. Despite of non receipt from the NACIL and its affiliates, the assessee was contributing the revenue shares @ 45.99% to Airport Authority of India of the projected pre-tax Gross Revenue for each year in 12 equal monthly instalments. He has explained as to what efforts he has made to get the recovery of the outstanding dues and after the meeting the Chairman and Managing Director and senior officers of the MOCA a decision was taken to change the mode of recognition of revenue. Since the assessee has satisfactorily explained the circumstances under which he was forced to change the mode of revenue recognition from mercantile to cash basis, we are of the view that he should be allowed as there is no loss to the revenue. Assessee was dealing with the public sectors which are engaged in essential services. Therefore, we do not find anything wrong in conversion of mode of recognition of revenue from mercantile to cash basis only with regard to receipt from M/s. NACIL and its affiliates. Set aside the order of the CIT(A) and direct the AO to accept the mode of recognition of revenue by the AO.
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2018 (5) TMI 333
Arm s length price adjustment in respect of interest free loan - Held that:- The relevant details in support of the Euro PLR being taken at 4.11% are not before us. Therefore, unable to uphold or approve the rate as canvassed by the assessee, even though we accept the plea of the assessee in principle and remit the matter to the file of the Assessing Officer for recomputing the ALP adjustment on the basis of Euro PLR and in the light of our observations as above. Assessee is directed to place all the material in support of its stand, on the quantification part only, before the Assessing Officer, and the Assessing Officer shall decide the matter taking into account the same and in the light of such material, as he may be available to him in respect of Euro PLR- though after confronting the assessee with the same, in accordance with the law and after giving a reasonable of hearing to the assessee. Disallowance u/s 14A - Held that:- As in the case of CIT Vs Corrtech Energy Pvt Ltd [2014 (3) TMI 856 - GUJARAT HIGH COURT] have adopted the same approach and held that when there is no tax exempt earnings, there cannot be any occasion for disallowance under section 14A. Clearly, therefore, the very foundation of the impugned disallowance under section 14A is devoid of legally sustainable substance. For this short reason alone dealing with the basic stand of the Assessing Officer, and without dealing with the merits any further, we uphold the plea of the assessee and delete the impugned disallowance. Disallowance being delayed payments of PF/ESI dues - Held that:- This issue is concluded against the assessee by Hon ble jurisdictional High Court s judgment in the case of CIT Vs Gujarat State Road Transport Corporation Ltd [2014 (1) TMI 502 - GUJARAT HIGH COURT]. We, therefore, uphold the disallowance and decline to interfere in the matter. Exclusion of foreign exchange gain for the purpose of computing deduction u/s 80IB - Held that:- Admittedly there is no bar on this Tribunal to admit the claim and, as the matter has not been examined on merits at any stage, in remitting the matter to the file of the Assessing Officer for adjudication on merits. That is, by and large, the normal practice being adopted by the coordinate benches as well. Consistent with the stand of the coordinate benches, while we admit the claim of the assessee for consideration, we remit this issue also to the file of the Assessing Officer for fresh adjudication on merits after giving a reasonable opportunity of hearing to the assessee, in accordance with the law and by way of a speaking order.
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2018 (5) TMI 332
Reopening of assessment - Held that:- CIT (A) has quashed the assessment order passed by the Assessing Officer on account of assumption of jurisdiction without issue of notice u/s. 143 (2). Therefore, the assessee should not have any grievance. Since the Ld. CIT (A) has directed the Assessing Officer to reframe the assessment order after adhering to the correct prescribed procedure in terms of provisions u/s 150 therefore, find no infirmity in the same. The order of the Ld. CIT (A) is accordingly upheld and the grounds raised by the assessee are dismissed.
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2018 (5) TMI 277
Method of accounting followed - income recognization - accrual of income - Held that:- Upon perusal of order of this Tribunal for AY 2009-10 [2017 (4) TMI 764 - ITAT MUMBAI] representing various invoices raised by the assessee on his clients in the month of April 2009. These receipts were accounted for in the relevant previous years of A.Y.2010-11, meaning thereby the income has already accounted for in the subsequent assessment year. The claim of the assessee is that the Revenue is recognized only at a stage where there is certainty of realization of income. It is noted that there is no undue benefit derived by the assessee in accounting for certain invoices in subsequent year. Our view finds support from the decision from Hon'ble Apex Court in CIT vs. Excel Industries Ltd.[2013 (10) TMI 324 - SUPREME COURT] The tax rate in both the years is same - Thus adjustment of ₹ 1.01 crores made by Ld. AO by enhancing the returned loss is not warranted and therefore, the total loss of the assessee stands determined at Rs.(-)9,79,91,325/-.- Decided against revenue
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Customs
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2018 (5) TMI 364
Whether when jurisdictional Customs Commissionerate of another Customs station has issued an order of prohibition under Regulation 23, whether a parallel action of suspension of licence under Regulation 19 can be done by the parent Customs Commissionerate in respect of an act or omission involving the Customs broker at the other Customs station? Held that: - if the jurisdictional Commissionerate of Customs at the other Customs station finds that the infraction by the branch of the Customs broker is serious enough requiring further punitive action, he could very well write to the parent Customs Commissionerate conveying the facts of the matter and recommending further action under Regulation 19 or Regulation 18. Discernably, if the appellants had committed any breach of the CBLR Regulations in the “jurisdiction of the parent Customs Commissionerate”, the competent authority would have been well within his rights to take stock of the situation and if found appropriate and necessitating immediate action, to order suspension of the licence of the appellant. This is certainly not the case here. Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 363
Smuggling - red sanders - It appeared to the department that Senthil Murugan @ City Raja and Vasudevan @ Ravi had engaged themselves in the act of attempting export of Red Sanders in the guise of granite slabs - absolute confiscation - penalty - Held that: - it appears the main perpetrators of the foiled attempted export of red sanders had gone to great lengths to plan and execute the modus operandi. It also appears to reason that the consignment of granite slabs might have been camouflage cargo to be presented for Customs examination to be possibly substituting later within the consignment of red sanders in another identical container on which the same container number and other markings had been got done. Penalty u/s 114 (i) of the Customs Act, 1962 - Held that: - while there is nothing on record to allege that Shri Kothari had conspired or connived with the main protagonist in the attempted export of red sanders, he will definitely have to take the blame for having facilitated the entire modus operandi by allowing use of his IEC and also allowing bank account to be used by Shri S. Vasudevan - penalty is very much imposable on Shri Kothari. However, taking note of the fact that no active abetment, connivance or conspiracy with the main perpetrator has been alleged or brought out in the SCN, penalty of ₹ 10 lakhs is certainly on the higher side and therefore reduce the same to ₹ 3,00,000/- Appeal allowed in part.
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2018 (5) TMI 362
Confiscation of 3950 Cell Phones - retail packages had been imported without mandatory labelling requirement as required under Legal Metrology (Packaged Commodities) Rules, 2011 - Held that: - the imported goods had obtained customs clearance and out of charge order, however they had been intercepted before they had been removed for home consumption. From this crucial fact, it well-nigh appears to reason that had the DRI officers not accepted the consignment, the impugned cell phones would have been removed as such including the 3950 cell phones without, any labelling as required under Legal Metrology Rules - the averment of the appellants that they were ready with the MRP stickers to be affixed after examination does not wash. Confiscation of the 3950 cell phones upheld - main infraction related to only because of affixation of M.R.P stickers, the interest of justice would be served by causing reduction of the redemption fine imposed under Section 125 of the Act from ₹ 12,75,000/- to ₹ 6,00,000/-. Penalty u/s 112 (a) ibid on Quick Systems - Held that: - penalty reduced from ₹ 7 lakhs to ₹ 3,00,000/-. Penalty on CHA, Masha Allah Agencies - Held that: - there is no evidence has been brought forth to substantiate any wilful abetment or causing of any act or omission on the part of the CHA so as to have rendered the goods liable for confiscation - penalty on CHA set aside. Appeal allowed in part.
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2018 (5) TMI 361
Time Limitation in filing appeal - appellant has stated that they were not served with the copy of the order in original and only after receiving the detention notice dated 22.5.2012, they came to know that such an order has been passed - Held that: - The appeal has been filed within 60 days from 6.7.2012, when the appellant received the copy of the order in original subsequently. Thus, appeal has been filed within the time - Taking into consideration the peculiar facts of the case as well as the admitted fact that the copy of the order in original was returned undelivered, we are of the view that the appellant has to be given a further chance to contest the issue on merits - appeal allowed by way of remand.
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2018 (5) TMI 360
Continuation of prohibition of CHA licence - impugned order prohibited the appellants under Regulations of CBLR, 2013 from working in any sections of the Chennai Customs station under the jurisdiction of Chennai Customs Zone - Shipping Bills filed in respect of goods which were found to be sub-standard/inferior quality/rags allegedly with an intention to claim undue drawback. Held that: - since the personal hearing itself was given in the first order, they were awaiting the results of the personal hearing and only when the prohibition order was continued, they have come in appeal. In any case, we find even if the appellants had filed an appeal only against the first order dated 26.09.2017, it could even be done so at this stage with an application for condonation of delay which would have been considered as per the procedure. Regulation 23 is a provision to take immediate action against a Customs Broker on whom there is a reasonable belief of having fallen foul of the CBLR Regulations. The Regulation however allows the competent authority to prohibit the customs broker to function only at one or more sections of the customs station. Surely, this prohibition cannot be extended to all the sections and all the Customs Commissionerates in the Customs station, as has been done in the present case. Continuation of prohibition under Regulation 23 is not an alternative to following the procedure laid down in the CBLR 2013 - we are not able to support or sustain the impugned order which we find is nothing but a travesty of justice - appeal allowed.
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Corporate Laws
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2018 (5) TMI 331
Disqualification as Director u/s 164(2)(a) of the Companies Act, 2013 - entitlement to avail the CODS-2018 Scheme enabling such defaulters to seek removal of the disqualification - Held that:- So far as the deposits under the CODS- 2018 Scheme are concerned, the same have to be made by and on behalf of the Company concerned. As such, the payment or deposit by any one director shall be treated to have been made for and on behalf of the company. Other directors would not be required to duplicate the payments even though they may have filed separate writ petitions. In case any of the petitioners have made deposits of any amount, in any form, i.e. say by demand drafts or otherwise, with the Registrar of Companies, in purported compliance of the requirements of the CODS-2018 Scheme, such petitioners are not required to duplicate the payment or make deposits in this court. In case such payments have not been accepted by the by the Registrar of Companies so far, appropriate orders regarding revalidation/substitution of the drafts/instruments can be made at the time of final disposal. We, therefore, direct that an individual counter affidavits dealing with the factual averments in this writ petition shall be filed separately within a period of six weeks as prayed. The full details of the issuance and service of the notice(s) shall be placed on record with copies of the supporting documents
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2018 (5) TMI 330
Seeking vacation of restraint order passed against these Respondents not to remove, transfer or dispose funds, assets and properties of the entities and individuals until further orders - Held that:- It is the duty of this Court to see that innocent people are not burdened by this restraint order therefore as and when any innocent comes before this Bench saying that he has no involvement in the fraud spiraling from day-to-day, this Bench has to diligently respond to the reliefs sought by such people. Of course, it is true that this Bench cannot decide who is innocent and who is culprit, but to the extent order passed by this Bench, it should not become helpless to vacate that order if no material is found against whom this order is in force. For there being neither an averment nor any incriminating material placed against this applicant, this applicant deserves vacation of the restraint order in force against him, accordingly this MA is disposed of vacating the restraint order dated 23.02.2018 against this applicant. Need of an Independent Director in Gitanjali Group companies - Held that:- For this Respondent being suspected to be involved in this fraud, this Bench is of the view that modification of order to the extent that is required is be-fitting relief in the light of the discussion made in other applications. Henceforth, the restraint order dated 23.2.2018 is hereby modified permitting this applicant to withdraw ₹ 2,00,000 per month from his Bank accounts, as to other assets of this Respondent is concerned, the order dated 23.2.2018, except to the extent of exemption given above, will continue as before until further orders. Accordingly, his application is hereby disposed of.
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Insolvency & Bankruptcy
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2018 (5) TMI 369
Application filed by the Resolution Professional through Corporate Debtor - entitled to the exclusive possession of the property despite no right has been accrued to this Corporate Debtor - sought the reliefs as to direct this respondent to refrain from taking over the possession of the said land till the completion of corporate insolvency resolution process subject to the proviso u/s 14(1)(d) of the Code - Held that:- Since NCLT has been dealing with IB Code over an year, we hardly come across any case wherein corporate debtor denying the claims filed by a Financial Creditor, likewise in the case u/s 9 as well whenever Operational Creditor makes a claim, for the legislature is conscious of the fact that there could be a possibility of dispute in respect to the items mentioned in the definition of dispute, an additional caveat has been introduced in the cases of Operational Debts stating that wherever a dispute as stated in the definition is in existence before receipt of section 8 notice, such claims shall not be entertained by this Adjudicating Authority. The impediment that comes to this Bench for deciding such claim is, some other creditor may say that it has filed case before some other court, another creditor may say it has filed case before DRT under SARFAESI, which normally causes delay either for resolution or for liquidation of the corporate debtor, to avoid such kind of defences and to bring all creditors under one umbrella, an overriding provision has been set out u/s 238 of the Code which can never be construed that it is a provision come into existence to bulldoze the rights of the parties. It is understandable those creditors who are prevented to go before various forums are entitled to come before this Bench. Their right of remedy will not get extinguished by the overriding effect given under section 238, but what will happen to other persons having some other rights against this company because they may not fall under the category of creditors so by showing 238 if their rights are denied it will become nothing but extinguishment of rights of the parties, which is not permissible under any law. Whether this Bench can ignore such situation saying that since it is Section 7 or 9 petition, it will pass an admission order thereafter to proceed with CIRP ignoring the fraud manipulated by the company through its management. There can be myriad situations such as above causing uncertainty to the rights of the parties, if section 238 is applied without taking the context involved in the case into consideration. In view of the reasons above mentioned, this Bench has not found any merit in the application moved by the Resolution Professional/Petitioner is hereby dismissed
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PMLA
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2018 (5) TMI 329
Offence under PMLA - Attachment orders of mortgaged properties with the Appellant Bank - Held that:- The Borrower i.e. M/s. PRP Granites was repaying the loan amount to the Appellant Bank till 31.03.2013 whereafter in pursuance of frozen orders of the Deputy Superintendent of Police, Prohibition Enforcement Wing doing vide letter dated 31.08.2012, the loan account became NPA and the total outstanding demand was quantified ₹ 135.08 Crores on the date of NPA. Since the account of the respondent no.2 became NPA, the Appellant Bank had initiated recovery proceedings under the SARFAESI Act and issued Demand Notice under Section 13(2) of the Act, including the hypothecated goods. The Appellant Bank took possession of the charged immovable properties under Section 13(4) of the Act and thereafter, the same was also put on auction and the sale notice was issued on 06.01.2014. The action of the Bank was challenged by the respondent no.2 in S.A. No.39 of 2014 filed before DRT, Madurai. One Time Settlement was also proposed by the respondent no.2 but the respondent no.2 did not remit the OTS amount as per the terms and conditions. Since the OTS conditions were not fulfilled by the respondent no.2, the Appellant Bank cancelled the OTS. The Appellant Bank also filed an Original Application in O.A. No.456 of 2016 against the respondent no.2 and others before the DRT, Madurai and the same is pending adjudication. In the instant case also it is a matter of record that the attached properties as per Annexure R-1 and the list of hypothecated goods enclosed as Annexure R-2 of the appellant’s letter dated 03.11.2017 have also been attached. Following the decision of the case of “State Bank of India Versus The Joint Director, Directorate of Enforcement, Kolkata” [2018 (4) TMI 1411 - ATPMLA, NEW DELHI ] and subsequent similar decisions in various cases, the Impugned Order dated 26.04.2017 and the Provisional Attachment Order dated 09.12.2016 in respect of the mortgaged properties with the Appellant Bank as per Annexure R-1 & the hypothecated goods as per Annexure R-2 of Appellant’s letter dated 03.11.2017 is set aside.
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Service Tax
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2018 (5) TMI 324
Valuation - Renting of immovable property service - inclusion of amount towards Repair and Maintenance services - Held that: - the appellants in collecting the impugned amounts are only getting themselves reimbursed for the expenses incurred by them for maintenance and repair and upkeep of the mall, that too on a proportionate and equitable basis, without any profit element for themselves - reliance placed in the case of Union of India And Anr. Versus M/s. Intercontinental Consultants And Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT OF INDIA], where it was held that only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax - amount need not be included - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 323
Levy of Penalty u/s 78 - correct value was declared in the ST-3 return but service tax was not paid - short paid service tax with interest paid before issuance of SCN - invocation of Section 73(3) of FA - whether the penalty imposed under Section 78 upon the appellant is legal and correct? - Held that: - From the facts available on record and submissions by both sides, it is found that though the appellant have not paid the Service Tax in time but they have correctly declared the value of the service provided including those value which was escaped from payment of Service Tax. Therefore when the correct value was declared, intention to evade Service Tax is not established against the appellant. Accordingly the ingredients available for imposing penalty under Section 78 do not exist. If these be so the appellant was clearly entitled for none issuance of show-cause notice by the Revenue in terms of Section 73(3) of the Finance Act, 1994. The appellant have not suppressed any fact by declaring the correct value in the ST-3 return, their case is covered by Section 73(3). In the present case, the appellant though collected the Service Tax from their client but they have clear intention to pay the Service Tax as correct value declared in the ST-3 return. Therefore merely because the Service Tax was collected the ingredient available under Section 78 does not get attracted. Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 322
Rebate claim - Site Transfer Activity - due to an inadvertent error the service tax registration was taken under the category of "Technical Testing and Analysis Service" and service tax liability was also discharged under the said category - case of appellant is that rebate claim cannot be rejected on the ground of procedural lapses such as non-payment under correct category, filing of ST-3 return under another category and not mentioning export under claim for rebate as there is substitution complied and the procedural lapses are condonable - Held that: - the activity of Site Transfer involves production or processing of goods not amounting to manufacture and therefore the same were taxable under the category of "Business Auxiliary Service" - the appellants have paid the service tax including the education cess vide TR-6 challan dated 29.03.2007. Since we have considered that the activity of the appellant does not fall in the category of Technical Testing and Analysis Service, the service is appropriately classifiable under "Business Auxiliary Service". In view of the definition of ‘Export of Service’ and the fact that Site Transfer activity fall in the definition of "Business Auxiliary Service", we are of the considered opinion that the impugned order rejecting the rebate claim on the ground of technical violation is not sustainable in law - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 321
Penalty u/s 78 - case of appellant is that the adjudicating authority has applied the higher rate of service tax whereas the lower rate of service tax was prevailing for certain period - Held that: - there is a plausible reason shown by the appellant for non-payment of service tax. Therefore prima facie it is the case wherein the penalty under Section 78 should not be imposed - also, all the aspects have not been considered by the adjudicating authority while imposing the penalty under Section 78 of the Finance Act - It is also observed that the adjudicating authority has also not extended the option of reduced penalty of 25% in terms of proviso to Section 78 of the Act. The matter needs to be reconsidered - appeal allowed by way of remand.
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2018 (5) TMI 320
Service tax collected but not deposited to the exchequer - Manpower Recruitment and Security Services - principles of natural justice - Held that: - the appellant by numerous letters requested for documents and time for filing further replies but the adjudicating authority passed the order paying no need to the request made by the appellants which is in the violation of principles of natural justice - matters need to be reconsidered in detail and fresh order is required to be passed after providing all the documents to the appellant - appeal allowed by way of remand.
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2018 (5) TMI 319
100% EOU - Refund claim - time limitation - whether the time limit period of 1 year for filing the refund should be reckoned from the date of FIRC as claimed by the revenue or from quarter ending for which the refund is due? - Held that: - the appellant have not opted filing of refund claim on monthly basis whereas they admittedly filed refund on quarterly basis, therefore the time period of 1 year should be reckoned from the end of the quarter. If it is so, the refund claim of the appellant were filed well within the stipulated time period of l year. The period of 1 year cannot be reckoned from the date of FIRC. The same should be reckoned from the end of the quarter. The issue has been considered in the case of CCE & CST, Bengaluru Service Tax-I Versus M/s. Span Infotech (India) Pvt. Ltd. [2018 (2) TMI 946 - CESTAT BANGALORE], where it was held that In respect of export of services, the relevant date for purposes of deciding the time limit for consideration of refund claims under Rule 5 of the CCR may be taken as the end of the quarter in which the FIRC is received, in cases where the refund claims are filed on a quarterly basis. Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 318
Validity of SCN - Section 73(3) of the Act - Benefit of N/N. 1/2006-ST dated 1.3.2006 denied on the ground that the value of free supplied material was not included in gross amount charged to customer - Held that: - the payment of service tax along with interest attained finality and the same has been concluded in such case. Neither assessee can raise issue on merits nor the department could have issued any show cause notice - the entire case has been concluded with the payment of service tax along with interest, therefore the show cause notice itself is not maintainable - appeal disposed off.
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2018 (5) TMI 317
Penalty u/s 77 and 78 - levy of service tax on construction of residential complex - Held that: - entertaining the bona fide belief found to be reasonable, considering the fact that the issue of levy of service tax were also under litigation across the country, the appellant has made out a fit case for waiver of penalty under Section 77 and 78 by invoking Section 80 - demand of service tax and interest confirmed and paid by the appellant stand maintained - appeal allowed in part.
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2018 (5) TMI 316
Principles of natural justice - the appellant was supplying tangible goods, namely, bulldozers to various persons but not paying service tax on the amounts received - Held that: - it is evident that the principles of natural justice was not followed as the valuation of the service was taken on hypothetical basis and not attributed to the actual service - the appellant’s request for further submission was also not considered - the matter needs to be remanded - appeal allowed by way of remand.
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2018 (5) TMI 315
Valuation - Sale of Pre-paid Vouchers/ Recharge Vouchers (RCVs) at discounted rates to the distributors - Section 67 of the Finance Act, 1994 - Held that: - According to the amended provisions of Section 67, the value of any taxable service shall be the gross amount charged by the service provider for such service rendered by him - In instant case, the amount charged by the assessee (service-provider) is the amount received by them from dealers/distributors and nothing extra was charged by the appellants. Admittedly, Service tax was paid on this amount. It is true that the service rendered by the appellants by way of sale of pre-paid SIM cards was ultimately received by the subscribers. However, where the law prescribes the value of taxable service to be the gross amount charged by the service-provider, Service tax can be levied on that amount only. In the result, the assessee’s appeal succeeds and the same is allowed. Appeal dismissed - decided against Revenue.
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2018 (5) TMI 314
Valuation - calculation error in the order of learned Commissioner (Appeals) - Held that: - after calculation of value and Service Tax by the learned Commissioner (Appeals), the department has scrutinized the evidences and found that the learned Commissioner (Appeals) has erred in arriving at the taxable value received by the assessee and accordingly the Service Tax amount confirmed is erroenous - the facts needs to be scrutinized by the adjudicating authority - appeal allowed by way of remand.
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2018 (5) TMI 313
Commercial construction service - non-payment of service tax - Held that: - the appellant had claimed that the services rendered by them are ‘works contract service’. It is difficult to accept the appellant’s claim at this stage and apply the principles laid down by the Hon'ble Apex Court in the case of Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT]. It is prudent to remand the matter to the adjudicating authority to ascertain as to whether the appellant’s claim is right or otherwise - appeal allowed by way of remand.
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2018 (5) TMI 312
CENVAT credit - input service used in providing output service, manufacture of excisable goods and also in trading activity - non-speaking order - Held that: - Ld. Commissioner (Appeals) even though narrated the facts from the stage of issuance of SCN, however, has not dealt with any of the arguments advanced by the appellant and correspondingly recorded findings on each aspect of the case relating to denial of credit alleged to have availed wrongly - the order is cryptic and non-speaking order and hence it is prudent to remand the matter to the Ld. Commissioner (Appeals) to deal with each and every aspect of the case - appeal allowed by way of remand.
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2018 (5) TMI 311
Business Auxiliary Service - direct selling agent of M/s ICICI Bank for marketing of Car Loan etc. - extended period of limitation - penalty - Held that: - issue covered by the case of Masicon Financial Services Pvt. Ltd. Vs CCE Meerut-I [2014 (6) TMI 729 - CESTAT NEW DELHI] - demand upheld. Time limitation - penalty - Held that: - the appellant is not registered with the department, accordingly, the authority below has rightly invoked extended period of limitation and imposed penalty while confirming the demand of service tax. Appeal dismissed - decided against appellant.
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2018 (5) TMI 310
CENVAT credit - input service - rent-a-cab service - Held that: - rent-a-cab service has been placed under exclusion category at clause (B) of the above definition, where there is no condition like clause(C) for personal use or otherwise, hence, credit of the service tax paid on said service not admissible after 01.04.2011. Time limitation - Held that: - the demand is barred by limitation as the authorities below have not discussed nor justified with reason, the circumstances for invoking extended period of limitation, when the issue after amendment became an issue of interpretation of law. Appeal allowed on the ground of limitation.
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Central Excise
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2018 (5) TMI 309
Refund - finalization of provisional assessments - unjust enrichment - Whether the Honble CESTATs decision is correct in holding that refund arising out of the finalization of provisional assessments during the period February 1985 to April 1995 need not pass the test of unjust enrichment as the amendment to sub-rule (5) of Rule 9B came into force only w.e.f. 25.06.1999? - Held that: - refund arising out of the finalization of provisional assessments during the period February 1985 to April 1995 need not pass the test of unjust enrichment as the amendment to sub-rule 5 of Rule 9B came into force only w.e.f. 25.06.1999. Reliance placed in the case of TVS Suzuki Ltd. and also Sinkhai Synthetics & Chemicals v. Collector Of Central Excise [2002 (4) TMI 65 - SUPREME COURT OF INDIA], wherein the applicability of amended Rule 9B, in particular sub-rule (5) was discussed, and the specific plea that sub-rule (5) of Rule 9B would be applicable to the refund claims made even prior to the amended provision came into existence, was rejected holding that the operation of sub-rule (5) of Rule 9B was not retrospective. Appeal dismissed - decided against appellant-Revenue.
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2018 (5) TMI 308
Penalty u/s 11AC - case of appellant is that because the appellant assessee had deposited the entire duty with interest even before receipt of SCN, Section 11AC of the Act would not be attracted - Held that: - it is evident that the appellant assessee had entered fake Challan nos. in the ER-1 return which could be noticed by the department and only thereafter when a telephonic message was received by the department assessee, he deposited the entire amount of duty with interest, etc. The Tribunal, which is the apex fact finding body, has recorded this finding, based on the materials which were available on the record, and this is a pure question of fact and we cannot go into the question of facts at this stage in this appeal - appeal dismissed.
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2018 (5) TMI 307
Refund claim - duty paid by appellant twice - absence of documentary evidence - Held that: - Without any documentary evidence the appellant is not entitled for the refund claim - The amount is open in financial records as a wrong debit to be received from Excise Department. After entry of this document the assessee has not produced any valid document that bars any unjust enrichment - refund cannot be allowed - appeal dismissed - decided against Revenue.
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2018 (5) TMI 306
Whether the CESTAT committed error in non-considering that the Respondents deliberately cleared goods under Rule 4(5) of CENVAT rules as if cleared for repairing/reconditioning i.e. Job work with intention to avoid payment of amount equal to CENVAT Credit as required under Rule 3(5) of CENVAT Rules and therefore contravened Rule 4(5) and Rule 3(5) of CENVAT Rules 2004? Held that: - It is not disputed that, before the amended Rule 3(5) came into force, the goods have been removed by the respondent. The word as such has been interpreted by this court and also by the Delhi High Court in case of Harsh International Pvt. Ltd. [2012 (6) TMI 340 - DELHI HIGH COURT] and it has been held that, after retaining the goods for more than two years, the same have been sent back to the parent unit - Tribunal has rightly decided the issue. Appeal dismissed - decided against Revenue.
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2018 (5) TMI 305
Effect of amendment to Cenvat Credit Rules - retrospective or prospective - inputs used in capital goods embedded to earth - as the amendment brought in CENVAT Credit Rules 2004 as per Rule 2 of the CENVAT (Amendment) Rules 2009 retrospective in nature considering is it clarificatory to be applied to all matters which arise before 07.07.2009, the date of commencement of the CENVAT (Amendment) Rules 2009? - Held that: - Section 37 of the Central Excise Act, 1944 is a rule making power. Section 37(2)(xvia) provide for the credit of duty paid or deemed to have been paid on the goods used in, or in relation to, the manufacture of excisable goods - Though the power to make rules include the power to give retrospective effect, while doing so the provision under consideration is neither made retrospective nor could it be treated as one. The Gujarat High Court in Mundra Ports & Special Economic Zone Ltd. [2015 (5) TMI 663 - GUJARAT HIGH COURT] referred to the contents of the amendment and held that Wherever the Legislature wants to clarify the provision, it clearly mentions intention in the notification itself and seeks to clarify existing provision. Even, if the new provision is added then it will be new amendment and cannot be treated to be clarification on particular thing or goods and/or input and as such, the amendment could operate only prospectively. Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 304
CENVAT credit - input services - credit service tax paid Land Development Charges - duty paying document - registration of services supplier - Held that: - the Land Development Charges is collected on cum tax value basis as provided in the agreements entered into between the parties. The appellant has paid the Land Development charges including service tax he would be eligible for credit - quantum of service tax pertaining to the Land Development Charges has to be determined for which reason, matter is remanded - appeal allowed by way of remand.
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2018 (5) TMI 303
Valuation - inclusion of bought out items supplied by the Appellant in the assessable value - some of the show cause notices were issued on the ground that the value of bought out items supplied by the Appellant is includible in the value of the contract price and duty was demanded on said contract/ agreement value after deducting the value of the Appellant’s own manufactured goods as appearing in ER-1 Returns. In another set of show cause notices it was alleged that the Appellant have produced the excisable goods during installation of plants and the same were installed in sugar plants and therefore liable for duty on goods. Held that: - We are unable to comprehend as to what is the basis of such demands. The show cause does not specify as to what are the bought out goods and how they have been considered as critical goods and what is the basis of arriving at assessable value. Even in case of show cause notices wherein it was alleged that the goods manufactured on location were excisable, it is not forthcoming from the show cause notice as to how the duty computation was made on whole contract price. Notably many of the contracts entered into by the Appellant in this appeal are only for supply of goods and supervision of erection and commissioning and thus stands of different footing from the agreements where the Appellant themselves undertook the erection activity. The demand has been made considering the contract price as value of goods. We find from the agreement that the said agreement is for supply of goods for the 80 TPH Boiler and supervision of erection and commissioning. The Appellant themselves did not carry out erection or commissioning of the said Boiler but after supply of goods only supervised the erection. In such case no duty can be demanded from the Appellant as they are only supplier of goods. It is not the allegation of the department that the Appellant’s own manufactured goods and the bought out goods when put together would result into emergence of new product i.e Boiler. What has come into existence at site are huge boiler systems which were part of power systems or whole sugar manufacturing sections or plants. Undoubtedly the whole property which came into existence are immovable property. Without dismantling these systems they cannot be shifted. Thus there is no reason to demand duty on the contracts undertaken by the Appellant. Further as far as demand of duty under the guise of bought out goods is concerned we find that when the bought out goods are not being part of any excisable goods at the time of their clearances in that case no duty can be demanded. There is no reason to demand duty on the bought out goods as the Appellant has not manufactured any goods which are recognizable as excisable goods. CENVAT credit on bought out items - Held that: - when revenue seeks to demand duty on the value of bought out goods the appellant shall be entitled for cenvat credit of duty paid on such bought out goods - credit allowed. N/N. 67/95-CE dt. 16.3.1995 - Held that: - capital goods manufactured and used within the factory of production shall be exempted - As per the facts of the case the machines which undoubtedly capital goods falling under Chapter 84/85 erected and installed within the Sugar Mills product of which i.e. Sugar/Molasses etc. is liable to duty. Thus all the conditions of N/N. 67/95-CE stands fulfilled - benefit of notification allowed. Time limitation - penalty - Held that: - the facts were in the knowledge of the revenue since very beginning and even earlier to the demand confirmed against the Appellant which was eventually set aside by the Tribunal - extended period and penalty cannot be invoked. Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 302
CENVAT credit - input services - insurance services of employees - Man Power Recruitment Services for Assistant Pharmacist / Nursing Assistant - Held that: - The period involved is prior to 1.4.2011. The services of general insurance have been excluded from input services after 1.4.2011. The same would be eligible, in case the appellant is able to establish that these services availed for the employees of the factory - Further, if the appellants have availed credit on service tax paid in respect of employees of other units, they are not eligible for credit - These aspects have to be examined - matter remanded to the adjudicating authority for verification and reconsideration whether the appellant is eligible for credit on the said services. CENVAT credit - Man Power Recruitment Services - Held that: - Section 45 of the Factories Act, 1948 mandates for employing a person holding a certificate in the first aid treatment and for providing necessary medical facilities in the factory. Therefore, the said services are integrally connected to the manufacturing activity of the appellant and qualifies as ‘input service’ - services eligible for credit. Appeal allowed in part and part matter on remand.
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2018 (5) TMI 301
Benefit of N/N. 64/95-C.E. dt. 16.3.1995 - supplies to Indian Navy - batteries - supply of 4 additional cells to be used for “life cycle test” - Held that: - there is no dispute that though the 4 cells are treated as test cells by the Quality Assurance Officer in the factory premises of the appellant but the entire 248 cells were supplied to Indian Navy - the 8 cells which were treated as testing cells were also supplied to Indian Navy and the certificate for duty exemption was issued for the total quantity under N/N. 64/95-CE dt. 16.3.95. The test cells are also used by the India Navy. Therefore the fact is not under dispute that even though the 4 number of cells in 1 set of 244 are meant for quantity test in the factory of the appellant but it is established that these test cells were also supplied to Indian Navy. Therefore the exemption N/N. 64/95-CE cannot be denied. Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 300
Valuation - inclusion of differential insurance charges - whether the differential insurance charges charged from the customers on the basis of equalized insurance premium is includible in the assessable value? - Held that: - the insurance charges collected from the Customer over and above the actual, on the basis of equalized insurance, shall not be includible in the assessable value - issue covered by the decision in the case of MERCEDES BENZ INDIA PVT. LTD. Versus COMMR. OF C. EX., PUNE-I [2009 (11) TMI 303 - CESTAT, MUMBAI], where it was held that We do not think that the proposal to include the excess freight in the assessable value is corollary to exclusion of the actual cost of transportation from the assessable value - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 299
SSI Exemption - crossing of threshold limit - denial on the premises that during the period 2008-2009, the total value of clearances was ₹ 4,96,68,852/- - extended period of limitation - Held that: - with regard to Appeal No.E/1080/2011, the total value of the clearance for the period 2007-2008was known to the department. In that circumstances, the extended period of limitation is not invocable - the appellant has claimed that gross value of clearances includes the value of traded goods and the same is required to be deducted from the total clearances. This fact was also not examined by the authorities below - appeal allowed on the ground of limitation. With regard to the Appeal No.E/1075/2011, we find that the claim of the appellant is that the total clearances include the value of the traded goods or not? The said aspect is required to be examined by the adjudicating authority whether the total clearances include the value of the traded goods - matter requires reconsideration. Appeal disposed off.
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2018 (5) TMI 298
Benefit of N/N. 108/95 dated 28/08/1995 - goods manufacture for supply to projects financed by the Asian Development Bank - denial of benefit on the ground that the goods manufactured by the appellant have not supplied to the project but to the contractors - Held that: - the goods had admittedly been used in the project and after the completion of the projects, the goods supplied to the various sub contractors were entrusted to retain the goods supplied could not stand in the way of granting, the exemption under the Notification - benefit allowed - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 297
Demand of tax with interest and penalty - case of Revenue is that the goods were not entered in their daily stock account register and the assessee failed to prove the re-entry of the said exported goods and also the assessee had delayed the D-3 intimation - Held that: - It is not disputed that the goods were indeed cleared much later in the month of September-October 2010, and since there was delay in D-3 intimation, it would have been proper for the officers to verify the goods, which is mandated for only 5% of the intimations, but the officers never went to verify the goods in the intervening period - the bonafide of the appellants cannot be doubted and a demand cannot be fastened to them merely on the basis of presumptions - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 296
Penalty u/r 26(2) of Central Excise Rules, 2002 - fraudulent availment of CENVAT credit - bogus invoices without receipt of goods - benefit of reduced penalty - Held that: - The fact that the appellant had been wantonly issuing bogus invoices to 14 manufacturers without supply of any goods shows systematic and flagrant violation of Cenvat Credit Rules, 2004. Such brazen violation of law in a well-planned fashion deserves no sympathy - reduction of penalty to 25% on dealers does not have the legal backing as there is no provision in Central Excise Act or Central Excise Rules to reduce the penalty on the dealers to 25% Considering the admitted fraud by the appellant and its systematic nature involving 14 manufacturers over a period of time, I find that the quantum of penalty under Rule 26(2) of Central Excise Rules, 2002 is fully justified and needs no interference. Appeal dismissed - decided against appellant.
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2018 (5) TMI 295
Clandestine manufacture and removal - POY - evidences in the form of documents seized from the respondents - cross-examination of witnesses - Held that: - neither the examination in chief was done nor cross-examination of witness could be granted to the assessee. Therefore, the statements recorded during the investigation cannot be the basis for adjudication - in the absence of documents available on record, which are the basis for issuance of show cause notice, the proceedings against the respondent are not sustainable - appeal dismissed - decided against Revenue.
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2018 (5) TMI 294
Penalty u/r 25 read with Section 11AC of the Act - short payment of duty as they were not having sufficient balance in their account current as well as in their Cenvat credit account - intent to evade not present - Held that: - the appellant had correctly declared the clearances made by them during respective months and their liability of duty in their ER-1 returns, which were filed on time. Due to admitted financial difficulties and labour trouble in their factory, the appellants could not pay the admitted duty liability - in the show cause notice, there is no express allegation of fraud, suppression or mis-declaration or deliberate attempt to evade the duty. In identical situation, where the assessee had declared their clearances and liability of duty clearly, this Tribunal in the case of Saurashtra Cement Ltd [2008 (1) TMI 595 - CESTAT, AHMEDABAD] has held that penalty under Rule 25 read with Section 11AC of the Act is not invocable and also held that such contravention would attract penal provisions of Rule 27 of the Central Excise Rules, 2002 which provides for maximum penalty of ₹ 5000/-. Penalty is reduced to ₹ 5000/- for each of the default - confirmation of demand of duty and interest thereon is upheld - appeal allowed in part.
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2018 (5) TMI 293
CENVAT credit - input services - outward freight for transportation of gases from factory gate to buyers' premises - whether the appellant is eligible for input service credit on outward transportation of their final product from their factory to buyers' premises? - Held that: - Since the period in the present case is prior to 11.07.2014, the definition of ‘place of removal' inserted in the Cenvat Credit Rules, 2004 and the circulars issued in the specific context of the newly introduced definition cannot be applied because during the period prior to 11.07.2014, the definition of ‘place of removal’ mentioned in Section 4 of the Central Excise Act, 1944 was applicable. The above arrangement is purely provisional arrangement considering special nature of goods and finalization of Daily Stock Account at the point of clearance from the factory itself indicates that the place of removal is the factory gate. As the Cenvat credit is allowed upto the factory gate, after 2008 amendment made effective from 1.3.2008, hence, the amended rule is applicable in the present case - demand of service tax with interest upheld. Penalty - Held that: - the penalty under Section 11AC is not justified as the elements of Section 11AC do not exist in the present case - penalty set aside. Appeal allowed in part.
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2018 (5) TMI 292
CENVAT credit - input services - Out Door Catering Service (Canteen Service) during the period from April 2014 to August 2014 - Held that: - The Ld. Chartered Accountant submits that after computing the actual liability taking into consideration the contribution collected from the employees for providing the canteen service they have reversed a total credit of ₹ 83,056/- being inadmissible, but they are eligible to the credit of ₹ 85,734/-. This aspect needs to be verified - appeal allowed by way of remand.
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2018 (5) TMI 291
Re-credit of the amount paid through cenvat account - case of the department is that the appellant should have taken re-credit with reference to the debit made through cash in the month of August 2010 against the wrong availment of credit - Held that: - The only lapse on the part of the appellant is that instead of giving reference of the debit entries in the cenvat account, they have given reference to the TR6 challan through which payment was made in cash towards duty liability in October 2010. This is only a procedural lapse and there is no excess availments of credit, therefore the appellant have re-credited the amount whatever was eligible to them - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 290
Time limitation - CENVAT credit - 1st stage dealer found to be non-existent - case of the department is that since M/s. Ganapati Udyog (1st stage dealer) was non-existent therefore the goods were not supplied by M/s. SGR Steels Pvt. Ltd. Consequently the said goods were also not supplied to the appellant, accordingly the cenvat credit was denied. Held that: - From the facts, it is cleared that the appellant was absolutely unaware about any fraud or non-existent of M/s. Ganapati, Udyog the 1st stage dealer. Therefore the appellant have made a purchase of inputs which was found to be bonafide transaction - The supplier of the appellant was very much existent and the sale of the goods by the 2nd stage dealer to the appellant was neither disputed on the part of the appellant nor on the part of M/s. SGR Steels Pvt. Ltd. It cannot not be alleged that the appellant was indulged into fraud, collusion, willful misstatement, mis-declaration, suppression of etc. - demand is barred by limitation. The appeal is allowed on limitation without going into the aspect of issue.
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2018 (5) TMI 289
CENVAT credit - sales commission paid to agents - Held that: - Considering the number of appeals on the same issue and categorical observation of the Hon’ble High Court Gujarat High Court in Astik Dyestuff Pvt. Ltd.’s case [2014 (1) TMI 776 - GUJARAT HIGH COURT] that the judgment is binding on all situated within the territorial jurisdiction of High Court, in my opinion, it would be inappropriate, to decide the issue following the Division Bench judgment in Essar Steel India Ltd. vs. C.C.E. & S.T., Surat I [2016 (4) TMI 232 - CESTAT AHMEDABAD] when the matter is on Board of the High Court. The present appeals are also disposed of with the liberty to both sides to approach the Tribunal soon after the verdict of the Hon’ble High Court in the pending Appeal against the Division Bench judgment of this Tribunal in Essar Steel India Ltd.’s case filed by the Revenue.
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2018 (5) TMI 288
Levy of duty - quantity of open well pumps - appellants argued that quantity of open well pumps, which were not manufactured by them but got it manufactured from some other manufacturer - Held that: - this issue has not been argued by the appellant that these goods were not manufactured by them but got it manufactured at another unit by using their brand name. Therefore, for ascertaining the correctness of the facts, we remand the matter to ascertain that whether these goods are traded or otherwise as claimed - appeal allowed by way of remand.
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2018 (5) TMI 287
Benefit of N/N. 12/2012-CE dated 17.03.2012 and N/N. 89/95-CE dated 18.05.1995 - duty on waste of partially oriental yarn (POY) Polyster Staple Fibre (PSF) - Held that: - this Tribunal following its earlier order in the case of M/s. Khodiar Fibrefill and others [2015 (6) TMI 44 - CESTAT AHMEDABAD], allowed the benefit of Notification in respect of POY and remanded the matter to the adjudicating authority to examine the demand of duty on waste of POY and PSF vide M/s Alliance Fibres Ltd Versus Commissioner of C. Ex. & Service Tax, Surat-II [2016 (3) TMI 564 - CESTAT AHMEDABAD] - appeal allowed by way of remand.
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2018 (5) TMI 286
Time limitation - Penalty - N/N. 22/2003-CE dated 31.03.2003 and N/N. 52/2003-Cus dated 31.03.2003 - goods imported and procured locally free of duty and cleared to DTA - Held that: - the appellant are not eligible to the benefit of Notification No .22/2003-CE dated 31.03.2003 and 52/2003-Cus dated 31.03.2003 - extended period of limitation cannot be made applicable to the facts of the present case as the issue itself is marred with conflicting views and the matter referred to the Larger Bench for resolution - also on similar grounds penalty on the appellant cannot be imposed - appeal allowed in part.
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2018 (5) TMI 285
Demand of duty on semi-finished goods destroyed by fire - CENVAT credit on capital goods destroyed - case of appellant is that semi finished goods or work in progress goods, since not attained the RG-1 stage and ready for dispatch, therefore, duty cannot be demanded; also credit availed on capital goods on destruction in the incident of fire cannot be demanded - Held that: - the issue covered by the decision in the case of URMI CHEMICALS Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III [2014 (6) TMI 785 - CESTAT MUMBAI], where it was held that issue of reversal of credit arises only when the final product destroyed in fire and not in case of semi finished goods - demands raised against the appellant for destruction of semi-finished goods and capital goods cannot be sustained. Penalty - Held that: - major portion of the liability has been discharged within one month and the present demand notice is issued for normal period of limitation - penalty not imposable. Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 284
Clandestine removal - voluntary winding up of the assessee - Held that: - once the entire amount stands discharged prior to the issuance of Show Cause Notice (Amount has been debited by the said Kiritida Silk Mills on 31.03.2005) no demand survives against the appellant Anjani Dying & Printing Mills as the said company is liquidated and wound up - the question of confirming demand again from the appellant herein does not arise. Penalty on M/s Kiritida Silk Mills (to whom assets were sold subsequent to winding up) u/r 26 of CER - Held that: - the said penalty is imposed under Rule 26 of the Central Excise Rules, 2002 and to uphold to such penalty, the 1st Appellate Authority has not even recorded a single line finding as to how penalty imposed on M/s Kiritida Silk Mills is sustainable the facts of this case - penalty set aside. Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 283
CENVAT credit - common inputs were used for both dutiable as well as exempted goods - non-maintenance of separate records - Held that: - there was retrospective amendment to the Rules by Finance Act, 2010 whereby proportionate credit availed on inputs attributable to exempted products had been allowed to be reversed - matter is remanded to the adjudicating authority for ascertaining the amount of credit availed on inputs attributable to the exempted products - appeal allowed by way of remand.
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2018 (5) TMI 282
Demand of interest - Section 11AB of the Central Excise Act, 1944 - time limitation - Held that: - there is no allegation of suppression of facts and the show-cause notice was issued after a period of 4 years, therefore, the interest should be limited to the normal period of limitation without invoking the extended period - appeal allowed in part.
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CST, VAT & Sales Tax
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2018 (5) TMI 281
Whether the statement recorded by the officials of the Enforcement Wing can be put against the petitioner while the Assessing Officer is completing the assessment? - Held that: - it is settled that the Assessing Officer is a Quasi Judicial Officer and in exercising his quasi judicial function of completing the assessment, he is not bound by the instructions or directions of the higher authorities namely the officials of the Enforcement Wing - Since, in the instant case, the Assessing Officer acted on the basis of the directions of the higher authorities while completing the assessments, the impugned assessment orders are to be quashed. Circular No.29/2015 - Held that: - Hon'ble Division Bench of this Court in the case of K. Arumuga Mudaliar Vs. Registrar, Tamil Nadu Taxation Special Tribunal [2002 (8) TMI 824 - MADRAS HIGH COURT] held that clarifications and orders issued by the Commissioner in terms of the power vested in him under the Statute are binding on his subordinates especially where the orders or instructions are favourable to the assessee - in the present case, the said circular, having been issued after coming into force the Tamil Nadu Value Added Tax Act, 2006, is binding on the Assessing Officer especially when it gives the manner, in which, the assessments are to be made. The matters are remanded to the respondent for a fresh consideration - appeal allowed by way of remand.
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2018 (5) TMI 280
Rate of tax on turnover - Section 16(1)(b) of TNGST Act - Held that: - the issue is squarely covered by the decision in the case of Madras Electrical Conductors (P) Ltd. Versus State of Tamil Nadu [1995 (10) TMI 216 - MADRAS HIGH COURT] - the Assessing Authority is directed to refix the levy of tax at 3% on the disputed turnover - tax case revision dismissed.
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2018 (5) TMI 279
Denial of exemption - penalty u/s 9(2A) of the Central Sales Tax Act, 1956 read with Section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 - whether the Tribunal is legally correct in not affirming the order of the first appellate authority even while the goods sent to outside the state had not been sold by the agent in the order state in the same form in which they were received but manufactured into entirely new goods and then sold? - Whether the order of the Tribunal in deleting the consequential penalty is legally sustainable? - Tax Case Revision is dismissed.
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2018 (5) TMI 278
Works contract - Deduction of resale - it was alleged that the petitioner had sold the pipes and not plates and since pipe is a commodity different from plate, the petitioner is not entitled to deduction of resale as was allowed in the assessment proceedings - whether was there any contract for supply / sale of steel plates between the petitioner contractor and the Board and / or whether transaction of supply and sale of steel pipes used in execution of work contracts can be said to be sale within the definition of Section 2(28) of the Act or whether the same can be said to be resale as contended on behalf of the petitioner-contractor? Held that: - it cannot be said that there was any contract between the petitioner contractor and the Board for supply of steel plates. From the material on record, it appears that the petitioner had purchased the steel plates from M/s. Essar Steel Limited and M/s. Essar Steel Limited did not required tax from the petitioner as M/s. Essar Steel Limited was enjoying exemption under Section 49(2) of the Act. The steel plates converted into steel pipes after undergoing process by the job worker / third parties certainly results in emergence of a new and distinct commodity viz. steel pipes. The original plates does not remain the original plates. It becomes a steel pipes. Thus, in the circumstances, not only there is manufacture but also an activity which is something beyond manufacture and which brings a new product into existence and thereafter steel pipes are supplied, it amounts to "sale" within the definition of Section 2(28) of the Act. Merely because in the contract for laying down pipelines, a particular quality and / or thickness of the steel plates were agreed to be used and / or even the steel plates were required to be purchased from the particular manufacturer, it cannot be said that there was a contract for supply / sale of steel plates as contended on behalf of the petitioner. As such there is no contract at all for sale / supply of steel plates by the petitioner contractor and the Board. Tribunal has not committed any error in confirming the order passed by the Revisional Authority and holding that the petitioner company contractor is liable to pay tax under the Act on manufacture and supply of steel pipes. Petition dismissed - decided against petitioner.
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Indian Laws
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2018 (5) TMI 328
Rejection of arbitration application - Section 8 of the Arbitration and Conciliation Act, 1996 - Trial Court rejected said application holding that there was no reference as to who should be the arbitrator, that there was no mention about selection of the arbitrator and that the dispute did not form subject matter of agreement within the meaning of Section 8 of 1996 Act. Held that: - In the present case though the Partnership Agreement was entered into after 1996 Act had come into force, the relevant clause made reference to “arbitration in accordance with the provisions of Indian Arbitration Act, 1940”. It is not the case of the respondent that the agreement between the parties suffered from any infirmity on account of fraud, coercion, undue influence or misrepresentation. What is however projected is that the reference to arbitration in terms of 1940 Act was such a fundamental mistake that it would invalidate the entire arbitration clause and as such there could not be any reference to arbitration at all. In a given case, reference to arbitration in the agreement entered into before 1996 Act came into force was in terms of 1940 Act and if the arbitral proceedings had not commenced before 1996 Act came into force, the provisions of 1996 Act alone would govern the situation. The reference to “Indian Arbitration Act” or to “arbitration under 1940 Act” in such cases would be of no consequence and the matter would still be governed under 1996 Act. Would it then make any difference if in an agreement entered into after 1996 Act, the reference made by the parties in the agreement was to arbitration in terms of 1940 Act. The High Court was not right in observing that there could be no arbitration at all in the present case - even if an arbitration agreement entered into after 1996 Act had come into force were to make a reference to the applicable provisions of those under Indian Arbitration Act or 1940 Act, such stipulation would be of no consequence and the matter must be governed under provisions of 1996 Act. An incorrect reference or recital regarding applicability of 1940 Act would not render the entire arbitration agreement invalid. The matter will have to be dealt with by the trial court in terms of Section 8 of 1996 Act - appeal allowed.
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2018 (5) TMI 327
Compensation of damages occurred due to Cyclone - appellant failed to settle the claim of respondent (insured) - case referred to the arbitrator - Held that: - In the instant case, Clause 13 categorically lays the postulate that if the insurer has disputed or not accepted the liability, no difference or dispute shall be referred to arbitration. The thrust of the matter is whether the insurer has disputed or not accepted the liability under or in respect of the policy. The disputation squarely comes within Part II of Clause 13. The said Part of the Clause clearly spells out that the parties have agreed and understood that no differences and disputes shall be referable to arbitration if the company has disputed or not accepted the liability. The communication ascribes reasons for not accepting the claim at all. It is nothing else but denial of liability by the insurer in toto. It is not a disputation pertaining to quantum. In the present case, we are not concerned with regard to whether the policy was void or not as the same was not raised by the insurer. The insurance-company has, on facts, repudiated the claim by denying to accept the liability on the basis of the aforesaid reasons. No inference can be drawn that there is some kind of dispute with regard to quantification. It is a denial to indemnify the loss as claimed by the respondent. Such a situation, according to us, falls on all fours within the concept of denial of disputes and non-acceptance of liability. It is not a situation where a stand is taken that certain claims pertain to excepted matters and are, hence, not arbitrable. The language used in the second part is absolutely categorical and unequivocal inasmuch as it stipulates that it is clearly agreed and understood that no difference or disputes shall be referable to arbitration if the company has disputed or not accepted the liability - the High Court has fallen into grave error by expressing the opinion that there is incongruity between Part II and Part III. Appeal allowed.
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2018 (5) TMI 326
Jurisdiction - International commercial arbitration proceeding - According to the respondent, the Indian Courts have no jurisdiction to entertain the appellant's application filed under Section 34 of the Act to challenge the legality and correctness of an award - Held that: - this is a fit case to exercise our power under Order VI Rule 2 of the Supreme Court Rules, 2013 and refer this case (appeal ) to be dealt with by the larger Bench of this Court for its hearing - Registry directed to place the matter before the Hon'ble the Chief Justice of India for constituting the appropriate Bench for hearing and disposal of this appeal.
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2018 (5) TMI 325
Maintainability of appeal - time limitation - whether the Tribunal was justified in dismissing the appellants’ appeals as being barred by time and was justified in holding that there was no sufficient cause for condoning the delay in filing the appeals? - Held that: - The limitation to file an appeal before the Tribunal is 45 days from the date of the service of the order as prescribed under SAFEMA. However, if the appeal is filed beyond the period of 45 days then on sufficient cause being shown, the Appellate Authority is empowered to condone the delay in filing the appeal only up to 60 days but not beyond the period of 60 days - In this case, the appeals were filed beyond the period of 60 days, i.e., the appeals were filed on 81st day after the service of the order. The Tribunal, Single Judge and Division Bench of the High Court were right in dismissing the appeals as being barred by limitation holding that there was no sufficient cause in filing the appeals beyond the period of limitation and that the Tribunal did not have power to condone the delay beyond 60 days - appeal dismissed - decided against appellant.
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