TMI Tax Updates - e-Newsletter
June 18, 2019

Case Laws in this Newsletter:

GST Income Tax Customs Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. CONFISCATION OF GOODS WITHOUT GIVING OPPORTUNITY TO THE OWNER OF GOODS

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Commerce & Industry Minister Meets Industry Stakeholders on E-Commerce & Data Localization

2. Auction for Sale (Re-issue) of Government Stocks

3. Evolving Role of Central Banks (Shri Shaktikanta Das, Governor, Reserve Bank of India - June 17, 2019 - Delivered at the Lal Bahadur Shastri National Academy of Administration (LBSNAA), Mussoorie)

4. Text of PM's Media Statement at the Start of the 17th Lok Sabha

Circulars / Instructions / Orders

Customs

1. 16/2019 - dated 17-6-2019

IGST refunds- mechanism to verify the IGST payments for goods exported out of India in certain cases

Highlights / Catch Notes

GST

• Input tax credit not applicable for Tie-in pipeline construction for LNG delivery; classified as "pipeline outside the factory.

  Case-Laws - AAR : Input tax credit - goods and services used for construction of Tie-in pipeline, for delivery of re-gasified LNG from FSR U to the National Grid - the said pipeline is a “pipeline outside the factory”, hence does not qualify to be an ‘equipment, apparatus or machinery’ for the purpose of claiming ITC.
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Income Tax

• Revision u/s 263 Dismissed: AO Drops Penalty Proceedings After Voluntary Disclosure of Income by Assessee.

  Case-Laws - AT : Revision u/s 263 - Penalty u/s 271(1)(c) dropped - voluntarily offer certain income in the form of cash deposits/FDRs - a perusal of the ‘order sheet’ noting of the A.O reveals that he had only after being satisfied with the reply filed by the assessee, therein concluded that the penalty proceedings initiated u/s 271(1)(c) were to be dropped - a plausible view of AO - revision quashed
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• No Penalty for Late TDS Filing: Reasonable Cause Accepted u/s 273B Due to Missing PAN Details.

  Case-Laws - AT : Penalty u/s 272A(2)(k) - filing of TDS return beyond time prescribed u/s 206 - assessee was not having PAN number of the deductee and he has entertained a bonafide belief that the TDS return cannot be filed without PAN number - reasonable cause U/s 273B - no penalty
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• Section 263 Revision Set Aside: AO Correctly Followed High Court Ruling on Doubtful Debts Provision u/s 115JB.

  Case-Laws - AT : Revision u/s 263 - allowability of Provision for doubtful debts u/s 115JB - AO not added the same on view of binding decision of jurisdictional High Court which is binding on the authorities below it - the view taken by the AO cannot be termed as erroneous and prejudicial to the interests of revenue - revision set aside
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• Interest Deduction Denied: Unused Properties Acquired with Borrowed Capital u/s 36(1)(iii) Not Eligible for Tax Relief.

  Case-Laws - AT : Disallowance u/s 36(1)(iii) - interest paid in respect of capital borrowed for acquisition of asset - assessee has invested borrowed money along with his own funds in various office properties in order to extend its business but the same was never put to use during the year under assessment, no deduction is allowable
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• Loan Interest Allowed u/s 57 Due to Clear Nexus Between Borrowed Funds and Their Use by Assessee.

  Case-Laws - AT : Allowability of interest on loan u/s 57 - as soon as the assessee received the funds from HDFC Ltd, BHW Home Finance and Religare Finvest Ltd., the same were transferred to MIPL, thus clearly establishing the direct link/nexus between the borrowings and lending - No disallowance
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• ITAT upholds reassessment u/s 147 for unexplained funds; disallowance u/s 36(1)(iii) confirmed, no substantial law question.

  Case-Laws - HC : Re-assessment u/s 147 - unexplained borrowal of funds as well as deployment of such funds - disallowance u/s 36(1)(iii) - no original assessment u/s 143(3) hence the restriction imposed by the proviso to Section 147 will not come to the rescue - ITAT after considering financial statements, the concept of same management and chain holding of shares and tax adjustments, agreed with the CIT(A)'s findings - no substantial question of law arises - reassessment upheld
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• No Penalty Imposed: Requirements Met u/s 271AAA(2) of Income Tax Act; Query Absence Noted During Statement Recording.

  Case-Laws - HC : Penalty u/s 271AAA(2) - specification the manner of undisclosed income and substantiated the manner in which the income was derived - no such query at the time of recording statement u/s 132(4) - concurrent findings that all the three as stipulated in sub-section (2) of Section 271AAA are fulfilled - no penalty
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• Court Upholds Disallowance of Late PF and ESI Deposits Under IT Act Section 36(1)(va) and Section 2(24)(x.

  Case-Laws - HC : Delayed deposit of PF/ESI - disallowance u/s 36(1)(va) r.w.s 2(24) (x) - same has to be deposited with the Government within fifteen days of the close of every month and period must be interpreted as having reference to the close of the month, for which, the wages are required to be paid with corresponding duty to deduct employee's contribution - disallowance of PF/ESI confirmed
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• Petitioner Must File Claim with Tax Recovery Officer u/r 11, Not Maintainable via Writ Petition, for Property Attachment.

  Case-Laws - HC : Recovery proceedings u/s 222 - petitioner is purchaser of properties who is not an assessee in default - If the petitioner's claim is that the property is not liable for such attachment, then he has to make a claim before the TRO under Rule 11 under the 2nd Schedule - writ is not maintainable
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• Entity Qualifies for Income Tax Exemption u/s 10(23C) After Objective Amendments; Fresh Application Allowed.

  Case-Laws - AT : Exemption u/s 10(23C) - fresh application after rejection of the original application - there is no specific bar for making fresh application as per Rule 2CA or the Board Circular No.7/2010 dated 27.10.2010 - Having amended the objects, the assessee is qualified for exemption and would be entitled for the grant of approval and treating the application as non-est is unjustifiable
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• Amendment to Section 153C doesn't apply to searches before June 1, 2005; affects substantive rights and jurisdiction.

  Case-Laws - HC : Effect of amendment in Section 153C w.e.f .1st June, 2005 - law applicability on search prior to amendment and notice u/s 153C issued after amendment - amendment brings into its fold persons who are otherwise not covered by the said provisions and therefore, affects the substantive rights of such person - it was not permissible for the AO to assume jurisdiction u/s 153C amended w.e.f.01.06.2015 on searches carried out till 31st May 2015
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• Writ Petition Under Article 226 Allowed Despite Statutory Appeal Remedy for Jurisdictional Issues in Income Tax Act Section 153C Cases.

  Case-Laws - HC : Assessment u/s 153C - maintainability of writ petition - While against the assessment order, there is a remedy of statutory appeal under the provisions of the Income Tax Act , however when the proceedings are wholly without jurisdiction, the alternative remedy does not operate as a bar to a writ petition under article 226 of the Constitution of India
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• Court Quashes Section 148 Notice: Proper Disclosure Found, No Grounds for Reassessment Due to Change of Opinion.

  Case-Laws - HC : Reassessment u/s 147 - record clearly shows that amount deposited with the Dhule PS has been duly disclosed in the books of account - AO had applied his mind in original assessment to this very aspect and had called for details and after considering the explanation tendered by the petitioner did not make any addition in that regard - proper disclosure as well as change of opinion - notice u/s 148 quashed
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Customs

• New Circular Details IGST Verification Process for Exported Goods to Ensure Accurate Refunds and Compliance.

  Circulars : IGST refunds- mechanism to verify the IGST payments for goods exported out of India in certain cases
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Indian Laws

• Cheque Dishonor: Claim of Issuing to Another Party Insufficient to Rebut Presumption of Liability Under Law.

  Case-Laws - HC : Dishonor of Cheque - the mere fact that the respondent had stated that he had given a cheque to another person and not to the complainant could not have been acted upon much less formed the basis or drew inference that the presumption attached by virtue of the aforesaid Sections had been rebutted.
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Central Excise

• Section 11D Demand Challenged: No Duty Collected on Exempt Goods, Section 11D Inapplicable for Nil Duty Items.

  Case-Laws - AT : Demand u/s 11D - Collection of duty on exempted goods - price not reduced - Section 11D did not cover those goods where the goods were wholly exempted or were chargeable to Nil rate of duty as in the present case.
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• Job Work Fabrication Classified as Works Contract; No Excise Duty on On-Site Fabrication Charges and VAT Applied.

  Case-Laws - AT : Manufacture - fabrication of structures on Job work - By discharging the tax liability on the job work charges as well as by discharge of VAT liability on ‘brought out’ items used for fabrication at site, the scope for considering the activity as manufacture is eclipsed entirely - the activity is works contract - No duty of excise is leviable.
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VAT

• Interest on Tax Delays Not Waivable for Assessee's Legal Misunderstanding; No Statutory Provision for Waiver.

  Case-Laws - HC : Interest on delayed payment of tax - There is no provision in the statute which permits waiver of interest on account of misunderstanding of the position in law on the part of an Assessee.
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Case Laws:

• GST

• 2019 (6) TMI 761
  Input tax credit - existence of pipeline within factory or outside factory premises - goods and services used for construction of Tie-in pipeline, for delivery of re-gasified LNG from FSR U to the National Grid - whether they are eligible to avail ITC of GST paid on goods and services used for the construction of the pipelines? - HELD THAT:- The eligibility for taking input tax credit is dealt in the Sections 16 and 17 of the CGST Act. Section 16 states that a registered person shall be entitled to take ITC on goods and services used or intended used in the course or furtherance of his business and Section 17(5) of the CGST Act provides that in certain cases, input tax credit will not be available even if the goods or services are used in the course or furtherance of business. It is very clear from clause no. (iii) of the Explanation that credit is not available in respect of pipelines laid outside the factory premises. However, the applicant contended that, the pipelines that willbe constructed should not be seen as pipelines outside the factory , since the FSRU cannot be considered as a factory. To support their contention that the FSRU is not a factory, the applicant stating that the term factory is not defined under the CGST Act, has relied on dictionary meanings and brought out that it is essential to have building for anything to be called a factory and since there is no building in place there, the FRSU cannot be called a factory. In the subject case the FSRU is a place where there are workers who are working and the process that takes place there, is one of conversion of LNG to gaseous form. A pipeline cannot exist in vacuum without a factory. The expression pipelines outside the factory signifies that the pipeline is to transport some product from the factory to the end user. In the instant case the LNG, re-gasified in the ship, is transported through the pipeline which is outside the factory ship. Hence, we are of the view that the said pipeline is a pipeline outside the factory . Having found that the FRSU is a factory and that the pipeline to be laid is outside the factory and that the said pipeline does not qualify to be an equipment, apparatus or machinery for the purpose of claiming ITC, the restriction on availment of ITC under Section and 17(5)(d) is applicable in the present case. The applicants are not eligible to avail ITC of GST paid on goods and services used for construction of Tie-in pipeline, for delivery of re-gasified LNG from FSRU to the National Grid.

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• Income Tax

• 2019 (6) TMI 760
  Recovery proceedings - attachment orders - arrears of tax by attachment and sale of the defaulter s movable or immovable properties - existence of alternate remedy - attaching the property of the petitioner u/s 222 who is is not declared nor is deemed to be an assessee in default - petitioner has purchased the impugned property much before passing of the assessment order and raising of demand - HELD THAT:- The respondent has issued the impugned notice in the form of an order of attachment of immovable property and the writ-applicant has straightway approached this Court and filed this writ-application. In our considered view, this writ-application is not the proper remedy which the writ-applicant should have availed. In this regard, Rule 11 referred to above is very clear. In terms of Rule 11 if any claim is preferred to, or any objection is made to the attachment or sale of, any property in execution of a certificate, on the ground that such property is not liable to such attachment or sale, the Tax Recovery Officer shall proceed to investigate the claim or objection. The procedure for such investigation and the manner in which the proceedings to be conducted are enumerated under Rule 11 of the said Rules. If the petitioner s claim is that the property is not liable for such attachment, then the petitioner has to make a claim before the Tax Recovery Officer, and for such reason, the petitioner could not have approached this Court invoking the jurisdiction under Article 226 of the Constitution of India. Therefore, the Court holds that the petition is not maintainable. However, considering the fact that the Income Tax Act and Rules framed thereunder, especially Rule 11 under the 2nd Schedule, provides for a remedy to the assessee, the petitioner is at liberty to avail such a remedy. We are fortified by a decision of the Supreme Court in the case of Isha Beevi and others v. Tax Recovery Officer, Quilon and others [ 1975 (9) TMI 2 - SUPREME COURT] In the result, all the three writ-applications fail and are hereby rejected as not maintainable with a direction to the writ-applicants to file a claim before the respondent in terms of Rule 11(1) of the Second Schedule to the Income Tax Act, 1961, within a period of four weeks from the date of receipt of copy of this order.

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• 2019 (6) TMI 759
  Delayed deposit of PF/ESI - Addition u/s 36(1)(va) r.w.s 2(24) (x) - whether due date for the payment of such contribution arose in the month subsequent to the month in which wages/salary actually disbursed and therefore the liability to deduct employees contribution arises only on paying salary to employees ? - HELD THAT:- Question proposed decided against assessee in M/S CHECKMATE FACILITY AND ELECTRONIC SOLUTIONS PVT LTD. [ 2018 (10) TMI 994 - GUJARAT HIGH COURT] as held after deducting the employee s contribution towards the funds, the same has to be deposited with the Government within fifteen days of the close of every month. Reference to fifteen days of the close of the month must be in relation to the month during which the payment of wages is to be made and corresponding liability to deduct employee s contribution to the fund arises. Appellant is therefore not correct in contending that if such wages are paid in the following month, the liability to deposit the employee s contribution to the fund gets differed by another month. - Decided against assessee

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• 2019 (6) TMI 758
  Attachment of the property the TRO - bonafide purchaser - prohibited and restrained the defaulter assessee from transferring or charging the property in any way - claimed that petitioner has no idea that the property was already attached by the department - HELD THAT:- We inquired with Mr. Mirza, the learned counsel appearing for the writ applicant whether his client has responded to such communication or not. Mr. Mirza, the learned counsel pointed out that his client has not so far responded in any manner to the said communication. We are of the view that if the writ applicant is seeking to rely upon the proviso (i) to Section 281 of the Act, 1961, he needs to point out to the authority concerned that the purchase of the attached property was for adequate consideration and without notice of the pendency of any proceedings against the defaulter assessee under the Act and that too the transfer was before the service of notice under Rule 2 of the second schedule. The writ applicant shall appear before the Tax Recovery Officer, Valsad at the earliest and adduce necessary evidence and also make good his case for discharging the notice/communication dated 27.03.2019 Annexure-D to this petition. The authority concerned shall hear the writ applicant and pass appropriate order in accordance with law. It is expected by the authority concerned not to take any coercive steps against the writ applicant till the completion of this exercise as directed by this Court.

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• 2019 (6) TMI 757
  Deduction u/s. 80IB(10) - project as a whole was not primarily developed and built by the assessee itself - assessee is a contractors executing works contract - HELD THAT:- The order passed by the coordinate bench in [ 2018 (10) TMI 508 - GUJARAT HIGH COURT ] is in connection with the very same assessee and the issue was also with regard to deduction under Section 80IB(10) and court has held that the assessee had undertaken the development of housing project at their own risk and cost. The owner of the land had accepted the full price of the land. He was therefore not concerned with the successor or failure of the housing project. In such background, reference was made to the definition of term transfer under section 2(47) of the Act and held that merely because the land was held by the original owner when the housing development project was executed, would not be detrimental to the assessee s claim of deduction u/s 80IB(10). Decided against the Revenue

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• 2019 (6) TMI 756
  Penalty u/s 271AAA(2) - alleged that the assessee neither specified the manner of undisclosed income nor substantiated the manner in which the income was derived - assessee is not subjected to the question by the manner of earning and substantiating thereon, then and the AO did not raise such query at the time recording his statement u/s 132(4) - HELD THAT:- Clause 2 of Section 271AAA makes it very clear that if the three conditions stipulated therein are fulfilled then nothing contained in sub-section (1) would apply. We take notice of the fact that the CIT appeals as well as the Appellate Tribunal has recorded the concurrent findings that all the three conditions as stipulated in sub-section (2) of Section 271AAA are fulfilled. Having heard Ms. Kalpanak Raval, the learned senior standing counsel appearing for the Revenue and having gone through the materials on record, we are of the view that the issue is squarely covered by the decision of this Court in the case of Mahendra C. Shah [ 2008 (2) TMI 32 - GUJARAT HIGH COURT] . In such circumstances referred to above, this appeal fails and is hereby dismissed. - Decided in favour of assessee.

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• 2019 (6) TMI 755
  Disallowance of Foreign Exchange Fluctuations Gain - HELD THAT:- No substance in the second proposed question as the same is squarely covered by the decision in the case of Priyanka Gems [2014 (3) TMI 938 - GUJARAT HIGH COURT ] . Present appeal stands dismissed qua second question Depreciation u/s. 32(1) on addition of software - HELD THAT:- APPEAL is ADMITTED so far as first question is concerned - Whether the Appellate Tribunal has erred in law and on facts in upholding the decision of the CIT(A) on Dis-allowance of Depreciation u/s. 32(1) on addition of software?

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• 2019 (6) TMI 753
  Re-assessment proceedings u/s 147 - unexplained borrowal of funds as well as deployment of such funds - interest free loans to its group companies - disallowance u/s 36(1)(iii) - ITAT confirmed reopening proceedings as agreeing with the CIT(A) s findings - HELD THAT:- With regard to the allegation that there was change of opinion, the CIT(A) rightly held that there is no original assessment under Section 143(3) of the Act and therefore, the restriction imposed by the proviso to Section 147 will not come to the rescue of the assessee. The factual findings recorded by the assessing officer and the CIT(A) could not be dislodged by the assessee before the Tribunal, which is the last forum, which can re-appreciate the factual matrix. The Tribunal, after considering the assessee s case and the materials placed before it, took out the apparent facts, the financial statements, the concept of same management and chain holding of shares and tax adjustments, agreed with the CIT(A) s findings and held that there was no reason to interfere with the order of the CIT(A). The pattern of management of the three companies was also examined by the Tribunal as well as the contention advanced by the assessee that the assessment proceedings u/s 147 was a change of opinion. This point was also rejected by the Tribunal on a perusal of the facts. Further, the Tribunal held that the increase in unsecured loans and assessee s company income was not from business activity but only out of redemption of mutual funds. No question of law - Decided against assessee.

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• 2019 (6) TMI 750
  Claim for deduction u/s 80IB - as alleged petitioner/appellant is not engaged in any manufacturing activity and instead, it was only doing trading of mushroom powders in capsules - HELD THAT:- As decided in assessee s own case [2018 (7) TMI 1733 - MADRAS HIGH COURT] what has been done by the assessee is manufacture. In the assessee s case, the product which emerges after the process of manufacture is commercially a distinct commodity, can be of consumption as such containing a requisite amount of ingredients in the appropriate percentage, preserved in proper form as contained in the licence issued under the authorised enactments as well as the technical logo shared by the foreign company. - decided in favour of assessee Denying the claim u/s 43B - HELD THAT:- Admitted facts recorded by the Assessing Officer, which clearly shows the assessee has availed the CENVAT credit and paid the excise duty. That apart, the assessee won the case for the subsequent year 2009-2010 - Decided in favour of assessee Violation of principles of the natural justice by the lower authorities has not resulted an injury to the appellant - The settled legal position is that every lack of opportunity cannot be construed as to be a violation of principle of natural justice - though the assessee took a stand that its former employee should be made available for cross-examination,he contested the matter before the Assessing Officer by placing facts to substantiate their case that they are engaged in the process of manufacturing and excise duty has been paid. Thus, in the absence of any proof produced to show that the statement obtained from the employee has caused prejudice to the assessee, the Tribunal has to only justify the decision taken by the Assessing Officer and CIT(A). This appeal filed by the Revenue is dismissed as being covered by the earlier decision and the substantial question of law is answered against the Revenue.

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• 2019 (6) TMI 747
  Reopening of assessment u/s 147 - assessee has failed to disclose the unaccounted cash - Reopening beyond a period of four years - HELD THAT:- In this case, earlier an assessment had been framed u/s 143(3) for assessment year 2011-12. The impugned notice u/s 148 has been issued on 28.3.2018, which is clearly beyond a period of four years from the end of the relevant assessment year, and therefore, the first proviso to section 147 would be attracted, consequently, the assessment can be reopened only if there is any failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment for the year under consideration. It would therefore, be necessary to refer to the reasons recorded to ascertain as to whether the AO has recorded any such satisfaction therein. From the facts recorded it is manifest that what is recorded in the reasons for reopening the assessment is contrary to the record of the case, inasmuch as the record clearly shows that amount of 46,00,000/- has been duly disclosed by the petitioner in the books of account. Therefore, there is no failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment. It follows as a natural corollary that in the absence of any failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment for the assessment year under consideration, the assumption of jurisdiction on the part of the AO beyond a period of four years from the end of the relevant assessment year is invalid and without authority of law. As during the course of scrutiny assessment AO had applied his mind to this very aspect and had called for details from the petitioner in respect of the amount deposited with the Dhule Police Station and after considering the explanation tendered by the petitioner did not make any addition in that regard. Evidently, therefore, the AO seeks to reopen the assessment on a mere change of opinion and hence, even on this count the assumption of jurisdiction on the part of the AO is bad in law. - Decided in favour of assessee.

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• 2019 (6) TMI 746
  Assessment u/s 153C - maintainability of petition - whether proceedings initiated by issuance of notice u/s 153C are wholly without jurisdiction? - effective and efficacious appeal remedy - HELD THAT:- This case clearly falls within the exceptions carved out in the case of Whirlpool Corporation v. Registrar of Trade Marks, Mumbai [ 1998 (10) TMI 510 - SUPREME COURT] and hence, the contention that these petitions under article 226 of the Constitution of India are not maintainable, cannot be accepted. Moreover, as noticed earlier, there are a few petitions in which the assessment orders have already been passed. In those cases also, the petitioners have challenged the notices u/s 153C on the ground of lack of jurisdiction. While against the assessment order, there is a remedy of statutory appeal under the provisions of the Income Tax Act, however, in the light of the above decision of the Supreme Court wherein it has been held that when the proceedings are wholly without jurisdiction, the alternative remedy does not operate as a bar to a writ petition under article 226 of the Constitution of India, it is not possible to non suit the petitioners on the ground of maintainability. Effect of amendment in Section 153C w.e.f .1st June, 2015 - law applicability on search prior to amendment and notice u/s 153C issued after amendment - HELD THAT:- While it is true that sections 153A and 153C are machinery provisions, but the same cannot be made applicable retrospectively, when the amendment has expressly been given prospective effect. Besides, though such provisions are machinery provisions, the amendment brings into its fold persons who are otherwise not covered by the said provisions and therefore, affects the substantive rights of such person. The test would be whether at the first point of time when satisfaction could have been recorded by the AO of the person searched, could he have recorded the satisfaction as envisaged under the amended provision. Section 153C has also been amended to provide a reference to the relevant assessment year or years as referred to in section 153A. It is also stated therein that thus, the amendment will take effect from 1st April, 2017. Therefore, even the CBDT, in the context of the amended provisions of section 153A, has clarified that it would apply when search or requisition is made after the date of the amendment. Evidently, therefore, even the amended provisions of section 153C would apply when search or requisition is made after the amendment. when the amended provisions of section 153C (1) have been brought into force with effect from 1st June, 2015, it has to be construed that such amended provisions would apply to a search initiated u/s 132 or in relation to books of account, other documents or any assets requisitioned u/s 132A after 31st May, 2015. Consequently, in relation to searches carried out till 31st May 2015, it was not permissible for the AO to assume jurisdiction u/s 153C as amended with effect from 1st June, 2015. Notices u/s 153C as barred by limitation - twenty one months from the end of the FY in which the search was conducted or nine months from the end of the FY in which the books of account or documents or assets seized or requisitioned are handed over - HELD THAT:- Thus while computing the period of limitation one has to consider the period of limitation provided under clause (a) or clause (b) of sub-section (1) of section 153B of the Act, as well as the alternative limitation of nine months from the end of the financial year in which the books of account or documents or assets seized or requisitioned are handed over u/s 153C to the AO having jurisdiction over such other person, whichever is later. Therefore, when the statute itself provides for an alternative period of limitation, merely because the period of limitation is provided under the first part has elapsed; it cannot be said that the notices are barred by limitation on this ground. Since on the main issue, viz. on the question of assumption of jurisdiction of the AO u/s 153C, this court has held in favour of the petitioners, it is not necessary to dwell on the issue any further. Similarly, this court also refrains from entering into the larger controversy as to whether the proceedings before the Settlement Commission could be said to be assessment proceedings and whether the AO of the searched person was justified in waiting for the conclusion of the said proceedings before recording the requisite satisfaction u/s 153C Relevant assessment years contemplated u/s 153A - HELD THAT:- On a plain reading of section 153A, it is evident that the trigger point for issuance of notice under that section is a search u/s 132 or a requisition u/s 132A. Notice is required to be issued to the searched person calling upon him to file return of income for six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Thus, insofar as computation of the six assessment years in respect of which notice is required to be issued is concerned, the relevant date is the immediately preceding assessment year relevant to the previous year in which such search is conducted or requisition is made. Accordingly, in terms of clause (b) of sub-section (1) of section 153A, in case of HN Safal Group, since the search is conducted on 4.9.2013 the previous year in which such search is conducted or requisition made is 1.4.2013 to 31.3.2014 and the assessment year relevant to such previous year would be 2014-15; therefore, the six years assessment years would be the six assessment years preceding assessment year 2014-15 which would be 2013-14, 2012-13, 2011-12, 2010-11, 2009-10 and 2008-09. In case of Barter Group and Venus Group, since the search is conducted on 4.12.2014 and 13.3.2015 respectively, the previous year in which such search is conducted or requisition made is 2014-15 and the assessment year relevant to such previous year would be 2015-16 and therefore, the six assessment years preceding 2015-16 would be 2014-15, 2013-14, 2012-13, 2011-12, 2010- 11 and 2009-10. Therefore, in case any notices u/s 153C which have been issued for assessment years beyond the six assessment years referred to herein above, such notices would be beyond jurisdiction as the same do not fall within the six assessment years as contemplated u/s 153A - The impugned notices issued u/s 153C in each of the petitions are hereby quashed and set aside. In cases where the assessment orders are subject matter of challenge, the impugned assessment orders are hereby quashed and set aside on the ground that the very initiation of proceedings u/s 153C was without jurisdiction. . - Decided in favour of assessee.

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• 2019 (6) TMI 745
  Penalty u/s 271(1)(c) - non specification of charge - defective notice - HELD THAT:- Notice issued u/s 271(1)(c) without specifying which of the two contraventions, the assessee is guilty of was defective and the penalty imposed in pursuance of such defective notice was not sustainable. See Amrit Foods vs Commissioner of Central Excise UP [ 2005 (10) TMI 96 - SUPREME COURT as well as DR. MURARI MOHAN KOLEY [ 2018 (9) TMI 1 - CALCUTTA HIGH COURT] - Decided in favour of assessee.

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• 2019 (6) TMI 744
  Addition u/s 14A r.w.r. 8D(2) - voluntary disallowance of administrative expenses already made by the appellant - own interest free fund available - HELD THAT:- We find no infirmity in the order of the CIT(A) and it is justified - Decided against revenue Addition made on account of Employees Contribution towards provident fund - HELD THAT:- As placing reliance in the case of CIT vs. M/s. Vijay Shree Limited [ 2011 (9) TMI 30 - CALCUTTA HIGH COURT] CIT-A correctly deleted the addition by observing that the disallowance made by the Assessing Officer is not maintainable as the assessee deposited the said contribution before due date of filing return of income - Decided against revenue Disallowance on account of foreign tour allowance and foreign tour expenses - CIT(A) held that in absence of any specific findings or rejection of books of accounts, disallowance made thereon is not in accordance with law - HELD THAT:- The facts remain admitted that there was no evidence before the CIT(A) which clearly shows that no reference whatsoever made by him in the impugned order regarding any specific evidence showing details of foreign tour allowance and identity and purpose of visits relating to foreign tour expenditure. Therefore when there is no evidence relating to the issue on hand before all the authorities including this Tribunal, we find the impugned order passed by the CIT(A) is not justified and it is set aside. Therefore, we restore the order of Assessing Officer in disallowing the expenses under the head foreign tour allowance and foreign tour expenses - Decided in favour of revenue.

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• 2019 (6) TMI 743
  Deemed dividend u/s 2(22)(e) - receipt of loan from company holding more than 10% shares in the said company - HELD THAT:- As gone through the ledger extract of loan given to MIPL. A perusal of the said account reveals that the assessee had given loan to MIPL and the opening balance as on 1.4.2010 was 40.55 crores. Thereafter, during the year, the assessee has further given loans of 2 crores on various dates totalling to 6.33 crores. The said company MIPL has refunded the loans to the extent of 3.68 crores and closing debit balance was 2.61 crores. The said ledger account is self-explanatory and clearly shows that the loan was given by the assessee to MIPL and not vice versa. Since this ledger account was before the AO who had examined the same before making the addition, we do not find it necessary to restore this issue to the file of the AO for verification of the same facts. Allowability of interest on loan u/s 57 - loss under the head Income from other sources - nexus between the income earned u/s 56 and expenses claimed u/s 57 - HELD THAT:- There is no dispute that the assessee has raised secured loans from HDFC Ltd, BHW Home Finance and Religare Finvest Ltd. It is also not in dispute that the assessee has transferred these borrowings as loan to MIPL. It is also not in dispute that the loans have been raised in F.Ys 2007-08, 2008-09 and 2009-10. The assessee has charged interest from MIPL @ 15% whereas the assessee is paying interest on borrowed funds ranging from 12.94% to 18.5%. We have also examined the bank statement of Canara bank exhibited at pages 28 to 31 of the paper. A perusal of the same shows that as soon as the assessee received the funds from HDFC Ltd, BHW Home Finance and Religare Finvest Ltd., the same were transferred to MIPL, thus clearly establishing the direct link/nexus between the borrowings and lending. No disallowance on this count. We, accordingly, direct the Assessing Officer to delete the entire disallowance Deduction u/s 80C OR u/s 80G - HELD THAT:- As perused the computation of taxable income we find force in the contention of the ld. AR. In the inner column, deduction u/s 80C has been shown at 25,08,938/- and in the outer column, only eligible deduction of 1 lakh has been shown. Though there is a mention of deduction u/s 80G, but nothing has been claimed under this section. It appears that the AO has wrongly taken the claim of deduction u/s 80C as claim of deduction u/s 80G. Facts are in favour of the assessee and, therefore, no interference is called for.

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• 2019 (6) TMI 742
  Disallowance u/s 36(1)(iii) - assessee has claimed interest expenditure on account of interest paid to bank on loan taken from Citi Bank, which was utilized for booking of several office spaces shown in his investment details - HELD THAT:- When we examine the proviso to section 36(1)(iii), its opening lines are any amount of interest paid in respect of capital borrowed for acquisition of asset shall not be allowed as deduction . In this case, first of all, assessee has failed to explain the purpose for availing the loan from the Citi Bank. Secondly, though the assessee has booked various spaces for office use but he has never taken possession thereof and as such proviso to section 36(1)(iii) is attracted. Moreover, when it is undisputed fact that the assessee has invested borrowed money along with his own funds in various office properties in order to extend its business but the same was never put to use during the year under assessment, no deduction is allowable. Assessee that section 36(1)(iii) does not speak about immovable properties rather speaks of assets only is also not sustainable because assessee cannot be allowed to blow hot and cold in the same breath as the assessee has tried to prove on record that he has invested the borrowed money for extension of the office i.e. office space which are certainly an immovable property/asset but the same has never been put to use for business purpose. In these circumstances, assessee are not applicable to the facts and circumstances of the case. Interest bearing and interest free funds available at the disposal of the assessee which are far more than amount of loan availed of is concerned, we are of the considered view that the CIT (A) has validly and legally dealt with by extending the part relief to the assessee by way of disallowance of interest on pro-rata basis and has reached the conclusion that the remaining amount is required to be disallowed under the proviso to section 36(1)(iii) - Decided against assessee.

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• 2019 (6) TMI 741
  Revision u/s 263 - as per CIT order passed by the AO in not adding Provision for doubtful debts debited to the profit and loss account to the Net profit while computing book profit u/s 115JB is erroneous and prejudicial to the interests of revenue - CIT took the view that the provision for doubtful debts is only a prudential write off and the same cannot be equated with irrevocable write off as envisaged in sec. 36(1)(vii) - HELD THAT:- As in the case of Grasim Industries Ltd. V CIT [ 2010 (2) TMI 4 - BOMBAY HIGH COURT] by taking into account the law laid down in Malabar Industrial Co Ltd [ 2000 (2) TMI 10 - SUPREME COURT] existence of twin conditions, viz., the assessment order should be erroneous and it should be prejudicial to the interests of revenue, should be shown in the revision order passed u/s 263 - when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income-tax Officer is unsustainable in law. In the instant case, the view taken by the AO in not adding the Provision for doubtful debts is supported by the binding decision rendered by Hon ble Karnataka High Court in the case of Kirloskar Systems Ltd [ 2013 (12) TMI 9 - KARNATAKA HIGH COURT] . The order passed by Hon ble Karnataka High Court is binding on the authorities below it. Accordingly, the view taken by the AO cannot be termed as erroneous and prejudicial to the interests of revenue. We are unable to sustain the revision order passed by Ld CIT. Accordingly we set aside the same. - Decided in favour of assessee.

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• 2019 (6) TMI 740
  Disallowance u/s 14A r.w. rule 8D(2)(iii) - AR argued that the assessee has not incurred any expenditure for earning dividend income - HELD THAT:- As rightly pointed out by the learned AR that the AO has considered the value of all investments as on 1/4/2008 and as on 31/3/2009 and calculated. In the Special Bench decision of Tribunal rendered in the case of Vireet Investments [ 2017 (6) TMI 1124 - ITAT DELHI] it has been held that where for the purpose of calculation of disallowance under rule 8D, only those investments which yielded exempt income have to be considered. Considering the above facts and circumstances, we restore this disputed issue to the file of the AO to recompute the disallowance where only dividend yielding investment has to be considered for the purpose of calculation of average value of investments under rule 8D(2)(iii). Accordingly, the ground of appeal of the assessee are allowed for statistical purposes. Disallowance of long-term retention bonus - AR contention that bonus paid to employees has to be allowed - HELD THAT:- AO has considered the provision of long-term retention bonus as an ascertained liability and it was not paid before due date of filing of Return of income u/s 139(1) and disallowed apparently u/s 43B which the learned AR concedes. The claim shall not be allowable for the assessment year 2009- 10. But if the assessee has paid in subsequent year, the claim has to be allowed on payment basis and ground of appeal is dismissed. Rent equalization provision - HELD THAT:- The assessee-company has claimed rent equalization provision as it was provided in the earlier year. But we find that these facts are not emerging from the order of the AO or from the order of the appellate authority. Therefore, we restore this disputed issue to the file of the AO to verify the material and evidence in respect of claim made in the earlier years and allow the deduction and this ground of appeal is allowed for statistical purposes. Deduction u/s 10A - AO has restricted the claim of expenses towards telecommunication expenditure, insurance incurred in foreign currency for providing technical services outside India, by allowing the deduction only from export turnover - HELD THAT:- As in the case of Tata Elxsi [ 2011 (8) TMI 782 - KARNATAKA HIGH COURT] held that for the purpose of computing exemption u/s 10A, when the export turnover in the numerator is to be arrived at after excluding communication expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the donominator. We, relying on the decision above direct the AO to reduce the expenses incurred in foreign exchange from the export turnover as well as total turnover and allow the claim u/s 10A and the ground of appeal of the assessee is allowed.

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• 2019 (6) TMI 739
  Deduction u/s. 80IB - disallowance of a deduction claimed by the assessee being loss incurred on assignment of advances - Admission of additional ground - Whether it enhances the profits of the appellant and consequently on the enhanced income the appellant is entitled for deduction under section 80-IB of the Act as per the Circular issued by the Central Board of Direct Taxes in Circular No. 37/2016, dated 02/11/2016? - HELD THAT:- Prima facie the claim made by the assessee in the additional ground of appeal deserves to be accepted. However, it requires to be verified whether the impugned disallowance would go to enhance the profits on which the assessee had claimed deduction u/s. 80IB of the Act. We therefore set aside the order of CIT(Appeals) on this issue and restore the same to the file of AO to examine this aspect and if the claim made by the assessee is found to be correct, then assessee should be allowed deduction u/s. 80IB on the enhanced profit and consequently the disallowance made by the AO will have no effect. Therefore, the question whether the disallowance is justified or not is left open MAT computation - addition on account of provision for bad and doubtful advances while computing book profits u/s. 115JB - HELD THAT:- As relying on M/S KIRLOSKAR SYSTEMS LTD [ 2013 (12) TMI 9 - KARNATAKA HIGH COURT] provision for bad and doubtful advances debited in the P L account and its simultaneous reduction in the loans advances in the balance sheet will not only mean that there was an actual write off of bad and doubtful advances in the P L account, but also that there was no deduction claimed on account of provision by the assessee. Consequently, the addition made by the AO in determining the book profits of the assessee is not warranted and the said addition directed to be deleted. Consequently, the second issue is decided in favour of assessee.

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• 2019 (6) TMI 733
  Denial of claim of deduction u/s 35(1)(iii) - Donation to School of Human Genetics and Population Health - A.O. declined the claim of deduction on the plea that the institution is not genuine - HELD THAT:- As the facts and circumstances during the year under consideration are exactly similar wherein donation given to School of Human Genetics and Population Health was declined by the A.O. Discussing the very same factual position as discussed in the instant case, the disallowance was deleted by the Tribunal after having a detailed observation as stated above. Respectfully M/S P.R. ROLLING MILLS PVT. LTD. VERSUS D.C.I.T., CIRCLE-3, JAIPUR [ 2018 (7) TMI 737 - ITAT JAIPUR] and M/S MACO CORPORATION (INDIA) PVT. LTD. [ 2018 (3) TMI 811 - ITAT KOLKATA] we do not find any merit in the disallowance so made by the A.O. Hence, we direct the A.O. to delete the same. - Appeal of the assessee is allowed.

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• 2019 (6) TMI 732
  Revision u/s 263 - Penalty u/s 271(1)(c) dropped - voluntarily disclosure of the income that was on account of bonafide reasons understated by him in his return of income - HELD THAT:- AO s finding favour with the claim of the assessee that there was a bonafide mistake on his part in understating the income which thereafter, in the course of the assessment proceedings was voluntarily offered by him for tax, had thus, dropped the penalty proceedings which were initiated by him u/s 271(1)(c) while framing the assessment. We are of the considered view that the A.O in totality of the facts of the case, had in all fairness, by adopting a plausible view dropped the penalty proceedings which were initiated by him u/s 271(1)(c). As such, we are of a strong conviction that though the Pr. CIT might not have been persuaded to subscribe to the aforesaid view so taken by the A.O, however, we are afraid that the same at least would not have justified exercise of the revisional jurisdiction by him u/s 263 for the sake of substituting his view as against that of the A.O. Insofar the Explanation 2 of Sec.263 relied upon by the Pr. CIT is concerned, we are unable to comprehend as to how the same could have been put into service for dislodging the plausible view arrived at by the A.O. Admittedly, the dropping of the penalty proceedings u/s 271(1)(c) by the A.O on the basis of an order sheet noting is not found to be happily worded, however, the same cannot lead to an inference that there was no application of mind by the A.O while so concluding. At this stage, it would be relevant to point out that the Pr. CIT while rushing to the view that there was no proper application of mind by the A.O while dropping the penalty proceedings, had however, failed to consider the reply of the assessee that was filed by him in the course of the penalty proceedings. Perusal of the order sheet noting dated 28.04.2016 of the A.O reveals that he had only after being satisfied with the reply dated 01.04.2016 filed by the assessee, therein concluded that the penalty proceedings initiated u/s 271(1)(c) were to be dropped. Our aforesaid view that merely because the A.O had remained silent on a point would not mean that there was no application of mind on his part is fortified by the judgment of CIT Vs. Fine Jewellery (India) Ltd. [ 2015 (2) TMI 732 - BOMBAY HIGH COURT] A.O in the totality of the facts of the case had arrived at a plausible view that no penalty u/s 271(1)(c) was liable to be imposed on the assessee, and therein dropped the penalty proceedings, therefore, merely because the Pr. CIT was not satisfied with the said view of the A.O would not justify revision of his said order. - Decided in favour of assessee.

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• 2019 (6) TMI 731
  Rectification of mistake u/s 154 - assessee was allowed set off of unabsorbed depreciation for A.Y 2001-02 which was not allowable as the time limit of 8 years for set off has lapsed as per the provision of section 32(2)(iii) - HELD THAT:- The issue is therefore no more res integra and following the legal proposition so laid down, in the instant case, unabsorbed depreciation for AY 2001-02 and earlier years got carried forward to AY 2002-03 and becomes part thereof and will be governed by the provisions of section 32(2) as amended by the Finance Act, 2001 and will be available for carry forward and set off against the profits and gains of subsequent years including the impunged assessement year 2015-16. See M/S EMGEE CABLES COMMUNICATIONS LTD.[ 2017 (5) TMI 716 - ITAT JAIPUR] , M/S. GINNI INTERNATIONAL LTD. [ 2018 (1) TMI 246 - RAJASTHAN HIGH COURT] , GENERAL MOTORS INDIA PVT. LTD [ 2012 (8) TMI 714 - GUJARAT HIGH COURT] and BRITISH MOTOR CAR CO. (1934) LTD. [ 2018 (1) TMI 547 - DELHI HIGH COURT] - Decided in favour of assessee.

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• 2019 (6) TMI 730
  Penalty u/s 272A(2)(k) - furnishing of quarterly statement of the TDS in the prescribed form beyond time prescribed u/s 206 - reasonable cause U/s 273B - bonafide belief - HELD THAT:- As found from the record that the assessee has deposited due taxes collected and also interest thereon till date of payment. Immediately, after payment of TDS, the assessee has also filed TDS returns. As the assessee was not having PAN number of the deductee, therefore, he has entertained a bonafide belief that the TDS return cannot be filed without PAN number. Accordingly, we found that there was a reasonable cause u/s 273B . See CIT VERSUS SUPERINTENDING ENGINEER, PWD., UDAIPUR. [ 2002 (5) TMI 13 - RAJASTHAN HIGH COURT], BRANCH MANAGER, PUNJAB NATIONAL BANK VERSUS ACIT [ 2011 (5) TMI 831 - ITAT LUCKNOW] and THE ORIENTAL INSURANCE COMPANY LTD. [ 2011 (9) TMI 1184 - ITAT AHMEDABAD ] - Decided in favour of assessee.

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• 2019 (6) TMI 729
  Exemption u/s 10(23C) - CIT(E) rejected the application of the assessee in Form No.56D ex-parte treating the application as non-est - whether the assessee is permitted to make a fresh application, once the original application was rejected? - HELD THAT:- There is no specific bar for making fresh application as per Rule 2CA or the Board Circular No.7/2010 dated 27.10.2010, on which the CIT(E) has placed heavy reliance. It is unjustified and unreasonable to hold that the assessee is barred from making fresh application, if it is qualified for exemption subsequent to rejection of original application. The assessee is an educational institution which is rendering the educational services to the society and should be given proper support for betterment of services. Therefore, we are of the considered opinion that there is no reason for placing bar on the assessee for no fault of the assessee. Having amended the objects, the assessee is qualified for exemption and would be entitled for the grant of approval and treating the application of the assessee as non-est is unjustifiable. Hence, we hold that the application of the assessee is valid and the CIT(E) must consider the grant of exemption u/s 10(23C) on merits. Accordingly, we set aside the order of the CIT(E) and remit the matter back to the file of the CIT(E) with a direction to consider the application of the assessee on merits and decide the issue afresh - Appeal of the assessee is allowed for statistical purpose

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• 2019 (6) TMI 721
  Penalty u/s 271(1)(c) - non specifying which of the two contraventions, the assessee is guilty of - HELD THAT:- The notice issued u/s 271(1)(c) without specifying which of the two contraventions, the assessee is guilty of was defective and the penalty imposed in pursuance of such defective notice was not sustainable. See Amrit Foods vs Commissioner of Central Excise UP [ 2005 (10) TMI 96 - SUPREME COURT as well as DR. MURARI MOHAN KOLEY [ 2018 (9) TMI 1 - CALCUTTA HIGH COURT] and M/S. SRMB SRIJAN LTD [ 2019 (4) TMI 1502 - CALCUTTA HIGH COURT] - Decided in favour of assessee.

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• Customs

• 2019 (6) TMI 754
  Benefit of exemption from basic customs duty - Sl.No.408A PF N/N.12/2012 -Customs dated 17.03.2012 - HELD THAT:- The refund application is in the prescribed form and there is no dispute or disagreement before this Court on this aspect of the matter. From the refund application which is in prescribed form, it comes to light that there is a provision of personal hearing and the writ petitioner has opted for personal hearing or in other words, the writ petitioner sought for personal hearing by answering in the affirmative to the query (vide column 12 in the prescribed form) as to whether personal hearing is required. Notwithstanding the aforesaid position, there is no mention about the personal hearing in the impugned order. There is nothing before this Court to demonstrate that an opportunity of personal hearing was afforded to the writ petitioner. Learned counsel for writ petitioner, on instructions, asserts that no personal hearing can be granted to the petitioner. This is recorded - Therefore, this case falls under the category of violation of Natural Justice Principles (NJP). Petition disposed off.

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• 2019 (6) TMI 752
  Interest on delayed refund - Section 27A of the Customs Act - HELD THAT:- A First Bench of the Delhi High Court in Hewlett Packard India Limited V. Union of India [ 2006 (3) TMI 160 - HIGH COURT OF DELHI] dealing with the claim of interest on the belated refund directed the concerned custom authorities to compute the amount of interest and pay the same to the petitioner. The petitioner is entitled for interest not only on the amount already refunded, but also on the amount of 53,583/- qua which note was not drawn and was omitted from refund - Petition allowed.

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• 2019 (6) TMI 736
  100% EOU - Clearance of capital goods imported earlier without payment of Customs duty to DTA - benefits of N/N. 53/97-Cus. dated 03.06.1997 - HELD THAT:- A bare reading of the said communication would reveal that the Development Commissioner was authorised to grant permission for conversion of EOU under EPCG scheme as one time option for which the request to sell one machine could not be considered at their end but appellant may sell the same in the DTA after payment of applicable duties subject to compliance of Customs Procedures. Therefore, the finding in Order-in-Original and Order-in-Appeal passed stating Development Commissioner had refused permission for clearance of goods to DTA is erroneous. Extended period of limitation - HELD THAT:- No mis-declaration or suppression of the fact can be attributed to the conduct of appellant to invoke extended period also - Extended period cannot be invoked. Appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 728
  Maintainable of appeal - importation of goods through baggage - HELD THAT:- In terms of Section 129A (1) proviso (a), the appeal is not maintainable before this Tribunal, therefore, we dismiss the appeal as not maintainable - The appellant is at the liberty to take their own recourse as prescribed in the law.

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• Service Tax

• 2019 (6) TMI 737
  Valuation - inclusion of value of the materials consumed by the appellant while providing the services in the assessable value - N/N. 12/2003 - Time limitation - HELD THAT:- The Hon ble Apex Court in the case of SAFETY RETREADING COMPANY (P) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, SALEM, M/S TYRESOLES INDIA PRIVATE LMITED VERSUS THE COMMISSIONER OF CENTRAL EXCISE, GOA AND M/S LAXMI TYRES VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE [ 2017 (1) TMI 1110 - SUPREME COURT] has held that value of materials cannot be included for arriving at the total taxable value on which VAT has been discharged. Following the said decision, we are of the view that the demand raised including value of materials cannot sustain. The learned counsel has submitted that if the value of materials is excluded from the total taxable value as raised in the show-cause notice, the appellant would fall within the threshold limit for the disputed period. However, this fact requires to be verified. For the limited purpose of verifying as to whether the appellant falls within the threshold limit, the matter is remanded to the adjudicating authority. Time Limitation - HELD THAT:- The appellant has not taken any Service Tax or Central Excise registration. The Board by its Circular dated 27.02.2012 has only clarified that the tyre retreading activity is subject to levy of service tax. The said Circular does not give any confirmation that the Board was having any doubt as to whether it would be manufacture. The evasion of tax would not have come to light but for interference by department - the contentions raised by the appellant that the extended period is not invocable cannot sustain. The appeal is partly allowed and remanded for the limited purpose of verification and reqantification by excluding the material consumed for providing the services from the total quantity of taxable value and if so to verify whether the appellant would be eligible for threshold limit exemption.

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• 2019 (6) TMI 727
  Valuation - inclusion of certain charges recovered by them for issue of Air way bills - demand alongwith penalty - HELD THAT:- The liability for differential service tax has not been challenged, hence the differential service tax already paid with interest is not to be interfered with. In the circumstances of the case, in which the entire differential service tax arising on account of inadvertent omission on the part of the appellant, has already been paid, we waive the penalties imposed under Section 80 of the Finance Act, 1994. Appeal disposed off.

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• 2019 (6) TMI 726
  Refund claim - refund rejected on the ground of time bar - HELD THAT:- It is observed that the appellant before filing formal refund claim, they had written a letter to the department for adjustment of the cenvat credit. Therefore, the said letter should be considered as refund claim only and the period of limitation should be reckoned considering the letter dated 22.10.2014 as a claim for refund. Adjustment of cenvat credit - HELD THAT:- This is cenvat credit which was already accrued to the appellant, before 01.09.2014 there was no time limit for which adjustment was sought for all the invoices were issued prior to 01.09.2014, therefore, cenvat credit on the said invoices cannot be denied on the ground of time bar - the demand of 1,85,149/- is not sustainable and the same is set aside. Appeal allowed in part.

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• 2019 (6) TMI 724
  Request for adjournment - non-prosecution of the case - HELD THAT:- It was with great difficulty and by observing that the matter has regularly been coming up on board from 2014 onwards. In fact, it was once dismissed for non-prosecution and stands subsequently restored and as the appeal is of 2009, the matter was adjourned in the interest of natural justice. It was made clear that no further adjournment would be granted and in the absence of the appellant s representative, the same would be dismissed without any further notice to them. In such a scenario, the presence of the advocate cannot be recognized - the appellants are not serious in pursuing the appeal - Appeal dismissed.

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• 2019 (6) TMI 723
  Request for adjournment - Scope of SCN - Intellectual property rights - demand of Interest and penalty - HELD THAT:- The appellant s plea related to Intellectual property rights is not a new one and that he has been given a copy of the above synopsis in the earlier hearing itself and he may therefore argue the matter. It was also pointed out that Ld. AR could very well have sought adjournment in the morning session itself if he was not ready with his arguments.

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• Central Excise

• 2019 (6) TMI 748
  Whether the CESTAT is correct in closing this case for the purpose of Statistics holding that both sides are at liberty to file application before the Tribunal to re-open the matter as and when the case is disposed of by the High Court or in case of any change of circumstance? - Whether the CESTAT is correct in passing an order that is not in consonance/conformity with the provision of Section 35G of the Central Excise Act, 1944? HELD THAT:- The matter is remanded to the Tribunal with a direction to the Tribunal to await the decision, which is now pending before the High Court at Ahmedabad in the case of Housing and Urban Development Corporation Ltd. [2012 (7) TMI 1072 - GUJARAT HIGH COURT]. Matter remanded remanded to the Tribunal - appeal allowed by way of remand.

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• 2019 (6) TMI 738
  Manufacture - fabrication of structures, such as silos, pressure vessels, bridges etc., out of the principal raw material i.e. mild steel plates occurring on site - HELD THAT:- The respondent had been discharging service tax liability on job work and had been paying VAT on the material component is not in doubt. The original authority has placed reliance on the decision of the Tribunal in OSNAR CHEMICAL PVT. LTD. VERSUS COMMISSIONER OF C. EX., BANGALORE-II [ 2008 (9) TMI 344 - CESTAT, BANGALORE] to hold that discharge of tax liability under one law precludes the invoking of another law merely for garnering revenue that has thereby escaped one of the jurisdictions. By discharging the tax liability on the job work charges as well as by discharge of VAT liability on brought out items used for fabrication at site, the scope for considering the activity as manufacture is eclipsed entirely. In this context of mutually exclusive levies under the scheme of taxation in the Constitution, the activity of the respondent is works contract and hence not leviable to duty under Central Excise Act, 1944. Appeal dismissed - decided against Revenue.

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• 2019 (6) TMI 735
  Demand u/s 11D - Collection of duty on exempted goods - price not reduced - Exemption from N/N. 60/91-CE as amended from time to time - Fly Ash - It is the case of the department that as the price charged for the exempted products (UT products) was the same as that of the other products on which excise duty was paid, an amount by way of excise duty was indirectly collected by the assessee from their customers and such amount needs to be deposited in the Government exchequer under Section 11D of the Central Excise Act, 1944. HELD THAT:- Section 11D of the Central Excise Act required during the relevant period of every person who is liable to pay duty under this Act or Rules and has collected any amount in excess of the duty assessed or determined and paid on any excisable goods in any manner as representing duty of excise to forthwith pay such amount to the Central Government. Evidently, it did not cover the goods which are only wholly exempt from duty but on which manufacturer collects some amount as representing Central Excise duty. This lacuna was corrected by introduction of Section 11D (1A) in 2008. The Budget speech of the Hon ble Finance Minister for the year referred to above clarifies that prior to 2008 this Section 11D did not cover those goods where the goods were wholly exempted or were chargeable to Nil rate of duty as in the present case. The liability to Section 11D does not apply to the appellant s goods because undisputedly, the products were fully exempted from payment of duty. A plain reading of Section 11D also shows that what is required to be deposited in the Government exchequer is any amount collected as representing excise duty. In this case there is nothing on record that they have collected any amount as representing excise duty. Such passing of incidence can be direct or indirect. Section 11D cover only cases where any amount is collected as representing excise duty. In this case, none of documents presented before us show any amount was collected as representing excise duty - Appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 734
  Extended period of limitation - recovery of wrongly availed credit of duty on capital goods, inputs and input services - Classification of goods - Streptokinase - HELD THAT:- The department was fully aware that the appellant was classifying the goods under 35079061. While issuing the letter dated 7.1.2010 also, the department did not doubt the classification adopted by the appellant. Only later when the appellant issued a letter dated 22.1.2010 explaining that there is no liability to pay duty on the said product, since they would be eligible for the notification benefit, as the goods are correctly classified under Chapter Heading 30049084, the demands have been made to deny the credit availed. After receiving letter dated 22.1.2010, the department has accepted the said classification of the goods under Heading 30049084 and the exemption from payment of duty. Much later, on 18.7.2012, the department has issued the present Show Cause Notice alleging that the appellant has willfully misstated the facts with intention to evade payment of duty. We do not find that the appellant has suppressed or willfully misstated any facts. The documents show that the appellants have informed all the details with regard to classification and the rate of duty adopted by them in the letters issued by them to the department - We do not find any iota of evidence to establish the ingredients under section 11AC of the Central Excise Act, 1944. The Show Cause Notice therefore is time-barred and cannot sustain. The appeal is allowed on the ground of limitation.

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• 2019 (6) TMI 725
  Clandestine removal - Gutkha - appellant directed to approach the Commissioner for adjudication - HELD THAT:- The Adjudicating Authority has not referred to any of the evidence on record and inasmuch as there was no defence reply, he has simplicitorily observed that the appellant was indulged in illegal manufacturing and clandestine removal. Inasmuch as admittedly the impugned order is an ex partee order, we deem it fit to set aside the same and remand the matter to Commissioner for fresh decision - appeal allowed by way of remand.

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• 2019 (6) TMI 722
  Manufacture - marketability and excisibility - cream mix - HELD THAT:- The said issue stands decided by the Tribunal in M/S BHAGWATI FOODS PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE, LUCKNOW [ 2018 (5) TMI 664 - CESTAT ALLAHABAD] it stands concluded that cream mix is not marketable and hence not excisable - appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2019 (6) TMI 751
  Interest on delayed payment of tax - construction of flats as works contract - Section 30(2) of Maharashtra Value Added Tax Act, 2002 - HELD THAT:- The Appellant is not disputing its liability to pay tax. It also does not dispute that, there has been admittedly a delay in making payment of its tax. In this circumstances, provisions of Section 30(2) of the Act ispo facto, becomes applicable and the Appellant is liable to pay interest. No provision in the statute has been shown to us which permits waiver of interest on account of misunderstanding of the position in law on the part of an Assessee. The question as proposed does not give rise to any substantial question of law. Thus, not entertained - Appeal dismissed.

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• Indian Laws

• 2019 (6) TMI 749
  Dishonor of Cheque - presumption under Section 139 of the Act - rebuttal was preponderance of probability - proof beyond reasonable doubt - HELD THAT:- Noticeably, the only basis on which the learned trial Court drew the conclusion that the complainant being successful in rebutting the presumption attached to Negotiable Instrument by virtue of Sections 118 (a) and Section 139 of the Act, was the statement of the respondent recorded under Section 313 of the Code of Criminal Procedure. Admittedly, the respondent did not enter into the witness box by examining himself as a witness and thereafter affording an opportunity to the petitioner-complainant to cross-examine him. In the given facts and circumstances of the case, the mere fact that the respondent had in his statement under Section 313 of the Code of Criminal Procedure stated that he had given a cheque to one Rasal Singh and not to the complainant could not have been acted upon much less formed the basis or drew inference that the presumption attached by virtue of the aforesaid Sections had been rebutted. This Court need not express any opinion on the merits of the case or the same may prejudice any of the parties. Therefore, in the given circumstances, this Court has no other option but to set-aside the order of acquittal passed by learned trial Magistrate and direct it to re-hear the matter bearing in mind the provisions, more particularly, those contained in Sections 118 and 139 of the Act.

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