Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
June 2, 2021
Case Laws in this Newsletter:
GST
Income Tax
Benami Property
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
Indian Laws
Articles
News
Notifications
Customs
-
Ad hoc Exemption ORDER No. 5/2021 - dated
31-5-2021
-
Cus
Seeks to amend Ad hoc Exemption Order No. 4/2021-Customs dated the 3rd May, 2021, to extend the exemption from IGST on imports of specified COVID-19 relief material donated from abroad, up to 31st August, 2021.
-
32/2021 - dated
31-5-2021
-
Cus
Seeks to exempt IGST on imports of specified COVID-19 relief material subject to specified conditions, up to 31st August, 2021
-
31/2021 - dated
31-5-2021
-
Cus
Seeks to amend Notification No. 28/2021-Customs, dated the 24th April, 2021
-
50/2021 - dated
31-5-2021
-
Cus (NT)
Sea Cargo Manifest and Transhipment (Third Amendment) Regulations, 2021
-
49/2021 - dated
31-5-2021
-
Cus (NT)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver
DGFT
-
07/2015-2020 - dated
1-6-2021
-
FTP
Amendment in Export Policy of Amphotericin-B Injections
GST - States
-
Corrigendum to Notification No.13/2021 - dated
24-5-2021
-
Maharashtra SGST
Corrigendum to Notification No. 13/2021 (Third Amendment to Rule)
-
15/2021 – State Tax - dated
24-5-2021
-
Maharashtra SGST
Maharashtra Goods and Services Tax (Fourth Amendment) Rules, 2021.
-
13/2021-State Tax - dated
7-5-2021
-
Maharashtra SGST
Maharashtra Goods and Services Tax (Second Amendment) Rules, 2021
-
07/2021 - State Tax - dated
7-5-2021
-
Maharashtra SGST
Maharashtra Goods and Services Tax (Second Amendment) Rules, 2021.
Income Tax
-
69/2021 - dated
31-5-2021
-
IT
U/s 138(1) of IT Act 1961 - Central Government specifies Nodal officers of the State Police Agencies
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
-
Directions to keep in abeyance the summons issued - There is no certainty that the pandemic will abate by 15.07.2021, we are of the view that, for the moment, the summons issued should be kept in abeyance till the next date of hearing, i.e., 09.08.2021. Quite obviously, the petitioner cannot plead defence of limitation, by including the period for which the summons are kept in abeyance, as the leeway is given, inter alia, for the benefit of its authorised representatives and employees. - HC
-
Refund of CGST, IGST and TNGST - renting of the shops from the third and fourth respondents - there is no useful purpose in directing the third and fourth respondents Airport Authority to pay the tax for the past period and thereafter, it is for the petitioner to file refund claims in Form GST RFD-01A as the incidence of tax that has to be passed on the petitioner is refundable to the petitioner. - HC
-
Transitional credit of CENVAT credit - On 4th January, 2018, when the Petitioner attempted to load TRAN-2 Form, no time had been specified under the Rules, which could be deemed to be mandatory. The time period was introduced on 7th March, 2018 through Notification No. 12/2018-CT. By virtue of this notification, in terms of Rule 117(4)(iii)(b), the time period was specified to be up to 31st March, 2018. Thus, even if the retrospective amendment to Section 140, (introduced through Section 128 of the Finance Act, 2020) is taken into consideration, there cannot be any denying the fact that on the date when the Petitioner made an attempt, no time period had been specified. - Directions issued to reopen the portal - HC
Income Tax
-
Faceless assessment u/s 144B - Since the statute itself makes the provision for grant of personal hearing, the respondents/revenue cannot veer away from the same. - Accordingly, the impugned assessment order as well as the impugned notice of demand and notice for initiating penalty proceedings, of even date, i.e., 29.04.2021, are set aside. - HC
-
Income deemed to accrue or arise in India - Collection of membership fees - We are in agreement with the claim of the assessee that amount of profit that would be attributable to a PE would be on the basis of the extent appropriate to the role played by the PE in those transactions. In a case where the transactions had taken place outside India, the same cannot be attributed to the PE, because the PE had no role to play in such transactions. As such, only the portion of profits which are attributable to the PE in India are taxable in India, and the revenue from functions/activities carried outside India cannot be taxed in India. - AT
-
Income deemed to accrue or arise in India - income attributable to India - As we have held that the ATC’s are not the DAPE of the assessee, therefore, the addition i.e 40% of the revenue generated from sale of distance learning material, attributed to them in their status as that of DAPE of the assessee corporation, viz. IATA, Canada, and assessed as the business income of the assessee in India under Article 7 of the India-Canada tax treaty cannot be sustained and is therefore vacated. - AT
-
Faceless assessment u/s 144B - Validity of assessment order passed u/s 143(3) r.w.s. 143(3A) & 143(3B) - principal grievance of the petitioner that the impugned assessment order was passed without issuance of a show cause notice-cum draft-assessment order - the impugned assessment order and the notice issued under Section 156 and Section 270A read with Section 274 of the Act are set aside. Liberty is, however, given to the respondent/revenue to pass a fresh assessment order, albeit, as per law. - HC
Customs
-
Levy of IGST or Customs Duty - Classification of goods - Bronze Cladding Panel for Statue of Unity Project - irrespective whether the classification claimed by the appellant is correct or not since the classification proposed by the Revenue is absolutely incorrect, the entire case of the Revenue will not sustain. Therefore, we are not addressing the issue that whether the appellant’s classification was correct or otherwise. - AT
-
Import duty on Amphotericin B (used for treatment of Mucormycosis (Black Fungus) - petitioner states that the import duty is 70% whereas respondents claims it to be 27%? - the Central Government shall look to waive the Import and other duties on all imports of the said medicine. - HC
Direct Taxes
-
Benami transaction - orders barred by limitation - The provision imposes a ban upon the passing of an order beyond the period stipulated, a prohibition. It is a burden cast upon the respondent and one that the respondent must comply with, and prove that it has satisfied, within the statutory timeframe provided. In this case, it is of the view that this burden has not been discharged. In fact, the attempt to establish compliance is also lukewarm. - the prohibition imposed by the provisions of Section 26(7) will apply squarely in this case and the impugned orders cannot be said to have been passed within the period of limitation, as provided. Writ Petitions are allowed and the impugned orders quashed. - HC
Indian Laws
-
Dishonor of cheque - Offences punishable under Sections 415 and 420 of IPC - sub-standard black pepper supplied - In the case on hand, though the cheque was bounced, no case is filed under Section 138 of the NI Act. The allegation is made against the petitioner that with dishonest intention, a transaction was entered into and at the inception of the transaction itself there was an intention to cheat the complainant. When such being the facts and circumstances of the case, the very contention of the learned counsel for the petitioner that only on abuse of process, a false proceedings is initiated against the petitioner cannot be accepted at this juncture. - HC
IBC
-
Initiation of CIRP - To attract the provision of IB Code under Section 9, there must be 'due' and 'default' which is found absent in the instant application - application is also not complete as the due date and default date is not provided, even no invoices are annexed or ever raised upon corporate debtor. In absence of such primary information, it is difficult to come to the conclusion that the amount claimed is operational debt - Application dismissed - Tri
Service Tax
-
Nature of activity - Manufacture or service - Process amounting to manufacture or not - activity of crushing, pulverizing, converting and packing of spices into powder form - taxability under business auxiliary service? - Difference of opinion - Matter referred to larger bench - AT
-
Reverse charge mechanism - Levy of service tax - Banking and Financial Services - service provider located outside India - time limitation - penalty - revenue neutrality - various service provider viz. Merchant Bankers, Lead Managers, Advisors, Financial Advisors, Principal Agents, Legal Advisors, Management Consultants, Under writers, etc. - Demand of service tax confirmed - Regarding period of limitation, matter remanded back - AT
Central Excise
-
CENVAT Credit - input services - the Cenvat credit on the service used for removal of goods up to the place of removal is admissible. The CHA service is also used from removal of goods up to place of removal - credit allowed - AT
Case Laws:
-
GST
-
2021 (6) TMI 39
Directions to keep in abeyance the summons issued - exclusion from calculation of the limitation, the period for which summon was kept in abeyance - second wave of COVID-19 situation - HELD THAT:- There is no certainty that the pandemic will abate by 15.07.2021, we are of the view that, for the moment, the summons issued should be kept in abeyance till the next date of hearing, i.e., 09.08.2021. Quite obviously, the petitioner cannot plead defence of limitation, by including the period for which the summons are kept in abeyance, as the leeway is given, inter alia, for the benefit of its authorised representatives and employees. Application disposed off.
-
2021 (6) TMI 38
Profiteering - Seeking exemption from filing the requisite court-fee and sworn affidavits along with the present petition - HELD THAT:- The captioned application is disposed of with a direction to the petitioner to place on record the duly sworn affidavits and deposit the requisite court-fee, within three days of the resumption of the normal and usual work pattern by this court. Exclusion of summons from time limitation - pandemic covid-19 situation - HELD THAT:- It is held that there is no certainty that the pandemic will abate by 15.07.2021, we are of the view that, for the moment, the summons should be kept in abeyance till the next date of hearing, i.e., 09.08.2021. Application disposed off.
-
2021 (6) TMI 37
Seeking extension of time to the petitioner from filing attested affidavits along with the present petition - HELD THAT:- The captioned application is disposed of with a direction to the petitioner to file duly attested affidavits, within three days of the resumption of the normal and usual work pattern by this court. Since Ms. Joshi has taken the stand that, the delay in processing the refund of Integrated Goods and Services Tax, and duty drawback has occurred, as the petitioner has been categorized as a risky exporter , the enquiry, if any, with regard to the same, shall be completed, at the earliest, though not later than a week before the next date of hearing. Result of the enquiry will be placed before the Court on the next date of hearing. List the matter on 24.08.2021.
-
2021 (6) TMI 36
Furnishing of solvent security against the release of 90% of IGST claimed by the petitioner by way of refund - HELD THAT:- It is pertinent to note that the amount of refund involved in this case is ₹ 59,91,865/-. In addition, thereto, the petitioner also seeks release of duty draw back amounting to ₹ 4,10,616/- - Mr. Harpreet Singh is directed to take instructions as to whether the respondents would accept the title deed of the said property as security. List the matter on 04.06.2021.
-
2021 (6) TMI 34
Seeking extension of time to the petitioner from filing attested affidavits along with the instant writ petition - HELD THAT:- The captioned application is disposed of with a direction to the petitioner to file duly attested affidavits, within three days of the resumption of normal and usual work pattern by this court. List the matter on 16.08.2021.
-
2021 (6) TMI 33
Classification of Job-work activities - rate of tax - job work activities undertaken by the contract bottlers concerning bottling of alcoholic beverages - HELD THAT:- Since this matter involves revenue, the GST Council is requested to take up the matter, at the earliest, and to reach a decision, one way or the other, qua the issue at hand. Counsel for the respondents will inform us as to the decision taken by the GST Council on the next date of hearing.
-
2021 (6) TMI 32
Refund of CGST, IGST and TNGST - renting of the shops from the third and fourth respondents - passing of incidence of tax - HELD THAT:- Refunds were sanctioned on the order passed by the Authority for Advance Ruling, Delhi in the case of M/s.Rod Retail Private Ltd. which was circulated by Central Board of Indirect Taxes and Customs vide a Communication dated 29.05.2018. Thus, the tax liability on account of supply of goods and service at the Airport Authority of India is revenue neutral issue in the hands of the petitioner having no implication on over all collection of tax as the petitioner is entitled for refund of input tax borne on various input / input services utilised at its Duty Free Shop located inside the Airports. Therefore, there is no useful purpose in directing the third and fourth respondents Airport Authority to pay the tax for the past period and thereafter, it is for the petitioner to file refund claims in Form GST RFD-01A as the incidence of tax that has to be passed on the petitioner is refundable to the petitioner. Since the issue is revenue neutral, there are no merits in directing the third and fourth respondents to charge the GST on the petitioner for the period between July 2019 and March 2021 and to remit the same as whatever tax is payable and chargeable and the incidence of such tax which is to be passed on the petitioner is liable to be refunded back to the petitioner. Petition disposed off.
-
2021 (6) TMI 20
Refund of accumulated ITC on account of Inverted Tax Structure - refund claim rejected on the ground of time bar issue as the appellant has filed refund application beyond two years from the relevant date - HELD THAT:- The provisions of Section 54 of the CGST Act, 2017 have been introduced w.e.f. 1-2-2019 and the question arises is whether the same have got retrospectively effect or prospective effect. The said provisions have been introduced w.e.f. 1-2-2019 vide the CGST (Amendment) Act, 2018 and there is no stipulation in the CGST (Amendment) Act, 2018 that the same shall apply retrospectively. However, Rules of interpretation provide that whenever any statute is newly added the same has got only prospective effect unless it is specifically provided in the amending statute or the amendment is by way of substitution of an existing provision mainly by way of clarification or removal of defects. Accordingly, the said provisions has got only prospective effect. Thus with effect from 1st February, 2019, the meaning of relevant date may be reckoned within 2 years from the due date of furnishing of return under Section 39 of the CGST Act, 2017 relating to the period in which such claim for refund arises. The amended provisions under sub-section (14) of Section 54 of the CGST Act, 2017 for relevant date was made effective from 1-2-2019, while the fresh refund application was filed by the appellant on 25-1-2020 which absolutely beyond the two years from the relevant date - the appellant s contention is not acceptable that their refund application in respect of inverted duty structure should be processed as per un-amended provisions of sub-section (14) of Section 54 of the CGST Act, 2017 since the tax period of refund claim in this case pertains to December, 2017. The appeal is dismissed.
-
2021 (6) TMI 19
100% EOU - Refund of unutilized Input Tax Credit - denial on the ground that the claimant has failed to give prior intimation in a prescribed proforma in Form A i.e. bearing a running serial number - procurement of Goods and Services, which were used for export of goods/services without payment of Tax - HELD THAT:- The question of deemed export arises as the appellant is 100% EOU and supplies of goods received by them is treated as deemed export. The deemed export refer to supplies of goods manufactured in India, which are notified as deemed export under Section 147 of the CGST Act, 2017. Certain supplies of goods by a registered person to export oriented unit have been notified as deemed export supplies vide Notification No. 48/2017-Central Tax, dated 18-10-2017 - Rule 89 of the CGST Rules, 2017 as amended vide Notification No. 47/2017-Central Tax, dated 18-10-2017 allow either the recipient or supplier of deemed export supplies to claim the refund of tax paid thereon, where the recipient does not avail of Input Tax Credit on such supplies and furnishes an undertaking to the effect that the supplier may claim the refund. Para 41 of Circular No. 125/44/2019-GST, dated 18-11-2019 it is also clarified that the procedure regarding procurement of supplies of goods from DTA by Export Oriented Unit (EOU)/Electronic Hardware Technology Park (EHTP) Unit/Software Technology Park (STP) Unit/Bio- Technology Parks (BTP) Unit under deemed export as laid down in Circular No. 14/14/2017- GST, dated 6-11-2017 needs to be complied with. Thus, the appellant was required to follow the procedure as prescribed under Circular No. 14/14/2017- GST, dated 6-11-2017 but they failed to do so. Since, the appellant has failed to follow the procedure and not complied the conditions as prescribed under the said circular, they are not eligible for refund. Appeal dismissed - decided against appellant.
-
2021 (6) TMI 16
Seeking exemption from filing sworn/notarised affidavits - HELD THAT:- The captioned application is disposed of with a direction to the petitioner to place on record duly sworn/notarised affidavits, within three days of the resumption of the normal and usual work pattern by this Court. Mr. Aggarwal will revert with instructions as to whether it would be possible for the respondent no. 3/GNCTD, to issue a notification, on the same lines, as has been done by the State of Haryana and State of Gujarat. List the matter on 28.05.2021 at 2.30 P.M.
-
2021 (6) TMI 13
Filing of form GST TRAN-1 - Credit was not claimed - HELD THAT:- From the documents placed on record, it emerges that although the Petitioner is entitled to distribute the input tax credit available with it as on 1st July, 2017 amongst its branches/locations, however, the same has not been possible on account of technical problems on the GST network. The input tax credit is lying deposited, and the Petitioner has already manually filed the TRAN-1 Form, which has not been processed effectively. The present factual scenario is similar to that which came up before this Court in THE TYRE PLAZA VERSUS UNION OF INDIA ORS. [ 2019 (8) TMI 1080 - DELHI HIGH COURT] . The Petitioner therein was also unable to file its TRAN-1 Form electronically and ultimately resorted to sending a manual copy of its TRAN-1 Form and the Court directed the Respondents to either open the GST portal or to accept the TRAN-1 Form filed manually by the Petitioner. The present petition deserves to be allowed and accordingly the Respondents are directed to process the TRAN-1 Form filed by the Petitioner manually in accordance with law on or before 30th June, 2021 - Petition allowed.
-
2021 (6) TMI 12
Filing of form GST TRAN-1 - HELD THAT:- Despite providing copies of proof of having filed the TRAN-1 Form, the Respondents have not taken any action. Emails written by the Petitioner to the help desk of the Respondents and to the Nodal Officer have also not yielded any favourable outcome. There is no counter affidavit filed by the Respondents and therefore we are unable to understand the reason for denial of the credit to the Petitioner. The present petition are allowed and Respondents are directed to immediately process the TRAN-1 Form filed by the Petitioner in accordance with law and reflect the credit in the electronic credit ledger under the GST regime - petition allowed.
-
2021 (6) TMI 11
Carry forward of transitional input tax credit - filing of form GST TRAN-1 either online or manually - HELD THAT:- The relief as sought for by the Petitioner already stands granted to the Petitioner in terms of the judgment of this Court in BRAND EQUITY TREATIES LIMITED, MICROMAX INFORMATICS LTD., DEVELOPER GROUP INDIA PRIVATE LIMITED, RELIANCE ELEKTRIK WORKS VERSUS THE UNION OF INDIA AND ORS. [ 2020 (5) TMI 171 - DELHI HIGH COURT] whereby a batch of petitions including a writ petition filed by the present Petitioner (being W.P.(C.) 8496/2019) had been allowed. Since the relief has already been granted in Brand Equity, no further orders are required to be passed in the present petition - Petition disposed off.
-
2021 (6) TMI 10
Filing form GST TRAN-1 - transitional credit of CENVAT credit - HELD THAT:- Situation similar to the one faced by the present Petitioner has already been considered by this Court in the case of M/S. BLUE BIRD PURE PVT. LTD. VERSUS UNION OF INDIA ORS. [ 2019 (7) TMI 1102 - DELHI HIGH COURT] . In the said case as well, the Petitioner had committed an inadvertent error in showing available stock of goods as on 30th June, 2017 in Column 7(d) instead of 7(a) of the TRAN-1 Form. Noting and relying upon the judgments of this Court in BHARGAVA MOTORS VERSUS UNION OF INDIA ORS. [ 2019 (5) TMI 899 - DELHI HIGH COURT] and KUSUM ENTERPRISES PVT. LTD., SANKO GOSEI TECHNOLOGY INDIA PVT. LTD. VERSUS UNION OF INDIA ORS. [ 2019 (7) TMI 945 - DELHI HIGH COURT] , the Court had directed the Respondents to enable the Petitioner to rectify TRAN-1 Form. On 4th January, 2018, when the Petitioner attempted to load TRAN-2 Form, no time had been specified under the Rules, which could be deemed to be mandatory. The time period was introduced on 7th March, 2018 through Notification No. 12/2018-CT. By virtue of this notification, in terms of Rule 117(4)(iii)(b), the time period was specified to be up to 31st March, 2018. Thus, even if the retrospective amendment to Section 140, (introduced through Section 128 of the Finance Act, 2020) is taken into consideration, there cannot be any denying the fact that on the date when the Petitioner made an attempt, no time period had been specified. The Respondents are directed to either open the online portal so as to enable the Petitioner to file the rectified TRAN-1 Form electronically, or accept the same manually with necessary corrections, on or before 30th June, 2021 - petition allowed.
-
2021 (6) TMI 7
Carry forward of Transitional Credit - submission of TRAN-1 form - HELD THAT:- Co-ordinate Bench of this Court, in UNION OF INDIA MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, THROUGH ITS SECRETARY (REVENUE) VERSUS M/S ASAID PAINTS LIMITED [ 2021 (3) TMI 953 - KARNATAKA HIGH COURT] , has already decided the similar controversy involved in the present appeal. Time was also granted to the assesses in the aforesaid cases upto 31.3.2021 to submit TRAN-1 form. No further orders are required to be passed in the present appeal - thirty days time from today is granted to the respondents-assessees to submit TRAN-1 form - Appeal disposed off.
-
Income Tax
-
2021 (6) TMI 18
Rectification u/s 154 - grant of refund and consequential interest under Section 244A - HELD THAT:- The concerned officer will consider the pending applications filed by the petitioner under Section 154 of the Act. Furthermore, after according a personal hearing to the authorized representative of the petitioner, the concerned officer will dispose of the same, at the earliest, though, not later than four weeks from the date of receipt of a copy of the order. In case the concerned officer were to agree with the petitioner, he will take consequential steps, albeit, as per law. The concerned officer will also consider the petitioner s prayer for grant of refund and consequential interest under Section 244A of the Act.
-
2021 (6) TMI 17
Faceless assessment u/s 144B - Whether any standards, procedures and processes have been framed by revenue in terms of sub-clause (h) of clause (xii) of Section 144B(7)? - HELD THAT:- Ms. Malhotra had informed us that, in this regard, she had no instructions. We have queried Ms. Malhotra, once again today. Ms. Malhotra says that she has, still, not received any instructions in that regard. Therefore, we have to presume that, no standards, procedures and processes have been framed in terms of clause (xii) Section 144B(7) of the Act. These standards, procedures and processes are required to be framed, to guide the assessing officer as to whether or not personal hearing in a given matter should be granted. Since the statute itself makes the provision for grant of personal hearing, the respondents/revenue cannot veer away from the same. Accordingly, the impugned assessment order as well as the impugned notice of demand and notice for initiating penalty proceedings, of even date, i.e., 29.04.2021, are set aside. Liberty is, however, given to the respondents/revenue to proceed from the stage of the show cause notice-cum-draft assessment order. The respondents/revenue will grant a personal hearing to the authorized representative of the petitioner. The concerned officer will conduct the hearing via video-conferencing mechanism. For this purpose, prior notice, indicating the date and time, will be served on the petitioner, through its registered e-mail. Respondent no. 2 will, after hearing the authorized representative of the petitioner, pass a fresh order, albeit, as per law.
-
2021 (6) TMI 15
Faceless assessment u/s 144B - Validity of assessment order passed u/s 143(3) r.w.s. 143(3A) 143(3B) - consequential notice of demand issued under Section 156 of the Act, and notice for initiation of penalty proceedings issued under Section 274 read with Section 270A of the Act - principal grievance of the petitioner that the impugned assessment order was passed without issuance of a show cause notice-cum draft-assessment order - HELD THAT:- Since there was a variation in the declared income, the respondent was required to issue a show cause notice-cum-draft assessment order, in consonance with the provisions of Section 144B of the Act and the Faceless Assessment Scheme, 2019. Accordingly, the impugned assessment order, and the consequential notices issued, i.e., notice of demand issued under Section 156 of the Act, and notice for initiation of penalty proceedings issued under Section 274 read with Section 270A of the Act, are set aside
-
2021 (6) TMI 5
TP Adjustment - DRP fixing the assessee s arms length margin at 42.40% for its international transactions - Comparable selection - Exclusion of Motilal Oswal Private Equity Advisory Private Limited - HELD THAT:- We find that the assessee company before us, provides non-binding and non discretionary investment advisory and other related services to its AEs and the Funds in relation to investments made by the Funds situated in overseas location. From the perusal of various functions performed by the assessee company which are detailed hereinabove, we find that the functions performed by the aforesaid comparable company is functionally dissimilar with that of the assessee company. Hence in view of the same and also by respectfully following the said decision of this tribunal in the case of Bain Capital Advisors(India) Ltd [ 2019 (6) TMI 1622 - ITAT MUMBAI] we direct the ld. TPO / ld AO to exclude Motilal Oswal Private Equity Advisory Private Limited in the final list of comparables for working out the arithmetic mean margin of the comparables. Exclusion of Ladderup Corporate Advisory Pvt Ltd - We find that the assessee company before us, provides non-binding and non discretionary investment advisory and other related services to its AEs and the Funds in relation to investments made by the Funds situated in overseas location. From the perusal of various functions performed by the assessee company which are detailed hereinabove, we find that the functions performed by the aforesaid comparable company is functionally dissimilar with that of the assessee company. Hence direct the ld TPO / ld AO to exclude Ladderup Corporate Advisory Pvt Ltd in the final list of comparables for working out the arithmetic mean margin of the comparables. Inclusion of Cyber Media Research Limited - AR before us submitted that the same rate may be applied for other two AEs also. We find that the ld DR vehemently raised objection to this argment advanced by the ld AR by stating that APA rate could be adopted only when mechanism provided in Rule 10B of the Rules fails. We find that this aspect of the issue need not be gone into by us at this stage in view of our aforesaid decision taken on the exclusion of 2 comparables and inclusion of 1 comparable supra. Accordingly, the issue raised by the assessee with regard to APA rates and objection raised by the ld DR are left open and we refrain to give any opinion in that regard. Accordingly, we direct the ld TPO / ld AO to recompute the arithmetic mean margin of the comparable companies after excluding Motilal Oswal Private Equity Advisory Private Limited and Ladderup Corporate Advisory Pvt Ltd and after including Cyber Media Research Limited from the final list of comparables retained after directions of ld DRP. Accordingly, the Ground No. 1.3. with regard to these comparables alone, raised by the assessee is allowed.
-
2021 (6) TMI 3
Accrual of income in India - Taxability of SAP License Charges as Royalty - Sale of software or mere reimbursement of expenses - Indo Swedish tax treaty - HELD THAT:- The Tribunal in assessee's appeal [ 2021 (1) TMI 323 - ITAT MUMBAI ] after examining the facts of the case concluded that the receipts of SAP Licence by the assessee from Indian subsidiary is reimbursement and is not taxable as royalty either under domestic tax laws or under the provisions of Indo-Swedish Tax Treaty. Taxability of consultancy services as FTS - HELD THAT:- The Tribunal in assessee's appeal [ 2021 (1) TMI 323 - ITAT MUMBAI ] held that , just because the Indian entity is interacting with the project leader and getting inputs from him does not mean that the Indian entity is transferred the technology of being a project leader of this type and next time Indian entity can perform similar services without recourse to the same-which is the core test for the fulfillment of 'make available' clause. We are unable to approve the stand of the authorities below on this point. In our considered view, in the light of the discussions above, the make available clause is not satisfied, in the course of rendition of services by the assessee, and, as such, the consultancy fees nnot be brought to tax, in the hands of the assessee, under article 12 of Indo Swedish tax treaty. Taxability of IT Support services as FTS/Royalty - HELD THAT:- Indo-Swedish Tax Treaty and the terms of agreement held that the payments received on account of IT Support services are neither taxable as FTS nor Royalty - As decided in own case [ 2021 (1) TMI 323 - ITAT MUMBAI ] the person selling the SAP software is Be One Solution, Switzerland, whereas the person providing the services in question is the assessee. Article 12(4)(a) will not, therefore, come into play at all - therefore, the taxation under article 12 in the present case can come into play only when the make available clause is satisfied, but then the AO's justification for the satisfaction of 'make available' clause, for the detailed reasons set out earlier in this paragraph, does not meet our judicial approval. In view of these discussions, as also bearing in mind the entirety of the case, we uphold the plea of the assessee on this point as well. Accordingly, we hold that the income on account of Information Technology Services is also not taxable under article 12. - Decided in favour of assessee.
-
2021 (6) TMI 2
Income deemed to accrue or arise in India - income a ttributable to India - Provision of distance learning courses - revenues received by the Appellant on account of sale of distance learning courses - PE in India - treating the Authorized Training Centers ('ATCs') to be the dependent agent permanent establishment ('PE') of the Appellant in India under Article 5(4) of the India - Canada tax treaty - taxing the revenues received by the Appellant on account of sale of distance learning courses as being in the nature of 'business profits' under Article 7 of the India - Canada tax treaty - DRP directing the A.O to restrict 40% of the entire revenue received by the assessee from the sale of the training materials as income attributable to the PE - HELD THAT:- Authorized Training Centers - ATC s are the agents of independent status of the assessee viz. IATA, Canada, within the meaning of Article 5(5) of the India-Canada tax treaty. Accordingly, without adverting to the other contentions advanced by the ld. A.R in order to impress upon us that the ATC s cannot be held to be the DAPE of the assessee viz. IATA, Canada, we vacate the view taken by the A.O/DRP holding to the contrary. As we have held that the ATC s are not the DAPE of the assessee, therefore, the addition i.e 40% of the revenue generated from sale of distance learning material, attributed to them in their status as that of DAPE of the assessee corporation, viz. IATA, Canada, and assessed as the business income of the assessee in India under Article 7 of the India-Canada tax treaty cannot be sustained and is therefore vacated. Whether DRP had erred in concluding that the income received by the assessee on sale of distance learning courses is alternatively taxable as royalty, both under the Act and the India-Canada tax treaty? - The assessee pursuant to the request from the student s/ATC s despatches the course material i.e the learning kit in the form of books or CD s directly to the students or ATC s. Although, the course material providing knowledge, information and training about the aviation and travel and tourism industry in general is sold to the students/ATC s, but no use or right to use any copyright in relation to such study material is granted to them. In fact, the student s/ATC s do not have any right to reproduce/sell the contents of the study material in any form or media. As the course material providing knowledge, information and training about the aviation and tourism industry in general is merely a sale of book/CD, which does not involve transfer of intellectual property, and also does not contain any undivulged technical information which is not available in the public domain and/or knowhow, therefore, it falls outside the scope of the term information concerning technical, industrial, commercial or scientific experience under Article 12(3) of the India-Canada tax treaty. In sum and substance, as the consideration received by the assessee is towards a simplicitor sale of training material/books, thus, the same cannot be brought within the definition of royalty under Article 12(3) of the India-Canada tax treaty. Our aforesaid view that the consideration received for providing the study material to the students in distance learning courses cannot be held as royalty is fortified by the order of Hughes Escort Communication Ltd. [ 2012 (5) TMI 175 - ITAT DELHI] Accordingly, not finding favour with the alternative observation of the DRP that the consideration received by the assessee for providing course material to the students/ATC s was liable to be assessed as royalty, we vacate the same. The Ground of appeal No. 2 raised by the assessee is allowed. Sale consideration of DGR manuals/publications as royalty - DRP taxing the income from sale of physical publications (i.e DGR manuals) as royalty income under Article 12(3) of the India-Canada tax treaty - HELD THAT:- As the sale of the DGR manuals tantamount to a simplicitor sale of a copyrighted article with no vesting of any copyright of the same with the customer, the consideration therein received by the assessee cannot be attributed to the use or the right to use the copyright itself, and thus, on the said count also cannot be brought within the realm of the definition of royalty as provided in Article 12(3) of the India-Canada tax treaty. Our aforesaid view is fortified by the judgment of the Hon ble High Court of Delhi in the case of DIT Vs. Infrasoft Ltd. [ 2013 (11) TMI 1382 - DELHI HIGH COURT] In the backdrop of our aforesaid observations we vacate the view taken by the lower authorities that the consideration received by the assessee from sale of DGR manuals was to be treated as royalty and brought to tax in its hands. The Ground of appeal No. 3 is allowed in terms of our aforesaid observations. Treating the application fees received by the assessee for DGR manuals/publications that was wrongly offered to tax as Collection of royalties from ATS , as royalty income under Article 12 of the India-Canada tax treaty - HELD THAT:- As the consideration received by the assessee on sale of DGR manuals cannot be held as royalty within the meaning of Article 12(3) of the India-Canada tax treaty. Accordingly, on the basis of the said observations, the amount received by the assessee as application fees for DGR manuals/publications (claimed to have been wrongly offered to tax as Collection of royalties from ATS ) cannot be treated as royalty in the hands of the assessee. But then, as the facts substantiating the said claim of the assessee are not there before us, we therefore restore the matter to the file of the A.O for necessary verification. In case the aforesaid claim of the assessee is found to be in order, then the consequential addition made in the hands of the assessee shall be vacated. The Ground of appeal No. 4 is allowed for statistical purposes in terms of our aforesaid observations. Taxing the receipts from provision of advertising space by the assessee on its website and publications as royalty income within the meaning of Article 12(3) of the India-Canada tax treaty, for the reason, that by so advertising the customers use the logo, brand and goodwill of the assessee - HELD THAT:- Providing of advertising space by the assessee to its customers, either on its website or publications/manuals, did not result to vesting of any right to use, display, exploit or modification of the assessee s brand or logo, in any manner. As such, the consideration received by the assessee from provision of advertisement space in its publications /manuals or website would not fall within the realm of the definition of royalty as provided in Article 12(3) of the India-Canada tax treaty - as no use or right to use any copyright, patent, trademark, design or model, plan was granted to the customers by the assessee in the course of providing of advertising space to them in its publications/manuals or website, the consideration received in lieu thereof cannot be brought within the meaning of the definition of the term royalty as provided in Article 12(3) of the India-Canada tax treaty. As the customers by obtaining an advertising space in the website or publications/manuals of the assessee in no way get vested with any right to commercially exploit the brand or logo of the assessee, therefore, the consideration therein received by the assessee for providing such advertising space would fall beyond the meaning of the term royalty as defined in Article 12(3) of the India-Canada tax treaty. Our view that consideration received by an assessee for providing advertising space cannot be held as royalty in its hands is fortified by the order of Yahoo India (P) Ltd. Vs. DCIT [ 2011 (6) TMI 162 - ITAT, MUMBAI] we are unable to persuade ourselves to subscribe to the characterisation of the consideration received by the assessee for providing advertising space to its customers, as royalty, by the A.O/DRP. As such, the view taken by the lower authorities wherein they had taxed the receipts from provision of advertising space as royalty income in the hands of the assessee is vacated.Ground of appeal No. 5 is allowed. Taxing certain receipts collection of membership fees, BSP link charges and fees for clearing house facility ( ICH facility ) as business profits under Article 7 of the India-Canada tax treaty - HELD THAT:- BSP Link charges were collected by the assessee for onward remittance to Accelya World SLU, Spain, without any mark-up, the same would thus not constitute income in the hands of the assessee. Accordingly, the DRP had directed the A.O to delete the addition of BSP charges in the hands of the assessee. In the backdrop of our aforesaid observations, we are of the considered view that collection of the BSP charges by the assessee from the airlines and agents for onward remittance to Accelya World SLU, Spain, without any mark-up, cannot be held to be its business income . But then, as the said aspect had not been looked into by the A.O/DRP, we therefore in all fairness restore the matter to the file of the A.O for the limited purpose of verifying the same. In case the claim of the assessee that the BSP Link charges were collected by it for onward remittance to Accelya World SLU, Spain, without any mark-up, is found to be in order, then the addition made by the A.O to the said extent shall stand deleted. Fees for clearing house facility ( ICH facility ) - We are unable to subscribe to the manner in which the A.O/DRP had summarily rejected the claim of the assessee that as the ICH services were provided by the assessee, viz. IATA, Canada directly outside India, and the fees in respect of the said services was also received by the assessee in its bank account maintained outside India, therefore, the revenue pertaining to the said ICH services could not have been attributed to the IATAIndia branch. In our considered view, the matter in all fairness requires to be restored to the file of the A.O. The A.O shall in the course of the set aside proceedings verify the veracity of the claim of the assessee that the ICH services were provided by the assessee, viz. IATA, Canada directly outside India. In case, the claim of the assessee is found to be in order, then the addition of fees received from providing ICH services made in its hands would stand vacated. Needless to say, the assessee shall be afforded a reasonable opportunity of being heard during the course of the set aside proceedings and shall remain at a liberty to substantiate its aforesaid claim on the basis of fresh documentary evidence. Collection of membership fees - We are in agreement with the claim of the assessee that amount of profit that would be attributable to a PE would be on the basis of the extent appropriate to the role played by the PE in those transactions. In a case where the transactions had taken place outside India, the same cannot be attributed to the PE, because the PE had no role to play in such transactions. As such, only the portion of profits which are attributable to the PE in India are taxable in India, and the revenue from functions/activities carried outside India cannot be taxed in India. Thus the matter in all fairness requires to be revisited by the A.O. The A.O shall in the course of the set aside proceedings verify the veracity of the claim of the assessee that the collection of membership dues was carried out by it directly outside India. In case the claim of the assessee is found to be in order, then, the addition made by the A.O on the said count would stand vacated. Short credit for self-assessment taxes paid - HELD THAT:- As the said issue would require verification of records, we therefore restore the matter to the file of the A.O. The A.O is directed to verify the factual position, and in case the claim of the assessee is found to be in order, then the credit for the amount deposited by it by way of self-assessment tax be allowed to it. Interest u/s 234B and u/s 234C - HELD THAT:- A.O had erred in failing to appreciate that interest u/ss. 234B and 234C is not leviable in case of a foreign company and interests u/ss. 234B and 234C had wrongly been computed without taking into consideration the respective amounts of self-assessment tax deposited by the assessee, and also the amount of TDS. As the second limb on the basis of which the charging of interest u/ss. 234B and 234C has been assailed before us would require verification of records, we thus restore the matter to the file of the A.O for necessary verifications. At the same time, as the assessee has assailed the very validity of levy of interest u/ss. 234B and 234C of the Act, on the ground that the same are not leviable in the case of a foreign company, we thus in the absence of any contention advanced by the ld. A.R before us on the said count restore the matter to the file of the A.O. The assessee shall remain at a liberty to substantiate its claim as regards nonlevy of interest u/ss. 234B and 234C.
-
2021 (6) TMI 1
Faceless assessment u/s 144B - Validity of assessment order passed u/s 143(3) r.w.s. 143(3A) 143(3B) - principal grievance of the petitioner that the impugned assessment order was passed without issuance of a show cause notice-cum draft-assessment order - HELD THAT:- The statute [i.e., Section 144B(1)(xiv), (xv), (xvi)(b) and (xxii)] provides for issuance of a show cause notice-cum-draft assessment order, and an opportunity to the petitioner/assessee to respond to the same where income of the assessee is varied by the respondent/revenue. Admittedly, the petitioner s income was varied to its prejudice with the addition of ₹ 90,25,535/-. As a matter of fact, had the show cause notice cum draft assessment been served on the petitioner, its authorised representative could have requested for a personal hearing in the matter. The respondent/ revenue, to our minds, could not have side-stepped such safeguards put in place by the legislature. The justification proffered by Mr. Bhatia that notices were issued prior to the passing of the impugned assessment order, does not impress us. This submission flies in the face of the schematic design of the statute. Accordingly, the impugned assessment order and the notice issued under Section 156 and Section 270A read with Section 274 of the Act are set aside. Liberty is, however, given to the respondent/revenue to pass a fresh assessment order, albeit, as per law.
-
Benami Property
-
2021 (6) TMI 6
Benami transaction - orders barred by limitation - SCN alleging that the petitioner is a benamidhar for Marg, its parent company, which beneficially owns the property - whether the impugned orders dated 26.08.2019, 27.08.2019 and 28.08.2019 are barred by limitation - HELD THAT:- In this case, the records are lacking to prove that after the matters were reserved for orders on 17.07.19, the orders were, in fact, passed prior to 31.08.19. The matters were not listed for pronouncement. The despatch of the orders to the petitioners was only on 04 and 11.09.19 and there is no record to establish transfer of files to the registry/office of the authority in the interim before 31.08.2019. The provision imposes a ban upon the passing of an order beyond the period stipulated, a prohibition. It is a burden cast upon the respondent and one that the respondent must comply with, and prove that it has satisfied, within the statutory timeframe provided. In this case, it is of the view that this burden has not been discharged. In fact, the attempt to establish compliance is also lukewarm. R1 the Adjudicating Authority, has chosen not to file a counter and the only counter filed is by the Deputy Commissioner of Income Tax, Chennai, on his and on behalf of R1. Being a matter involving the internal records of R1, particularly one that has serious repercussions and ramifications on the veracity of the orders passed, it would have been appropriate for R1 to explain the exact position. The object and purpose of the enactment as well as the rigour it imposes, and the serious civil consequences that it carries require that the procedure and times lines set out there, are followed scrupulously. There must be no shadow cast upon the processes followed in decision making and rendition, that must be unimpeachable and cast-iron. In the paragraphs leading to this conclusion, I have set out the narrative in regard to the decision making process as well as the gaps, lapses as well as mismatch in the dates of the intervening events, prior to dispatch of the orders. We are of the view that the prohibition imposed by the provisions of Section 26(7) will apply squarely in this case and the impugned orders cannot be said to have been passed within the period of limitation, as provided. Writ Petitions are allowed and the impugned orders quashed.
-
Customs
-
2021 (6) TMI 14
Import duty on Amphotericin B (used for treatment of Mucormycosis (Black Fungus) - petitioner states that the import duty is 70% whereas respondents claims it to be 27%? - HELD THAT:- Considering the fact that the said drug is required to save lives of the people suffering from the disease which is inflicting thousands of people all over the country, and there is acute shortage of the same in the country, the Central Government should seriously consider waiver of complete Customs and other duties levies on the import of the said drug by all, at least, for the period that the same is in short supply in India and is required to treat the disease, namely Mucormycosis (Black Fungus) - the Central Government shall look to waive the Import and other duties on all imports of the said medicine. List on 01.06.2021.
-
2021 (6) TMI 4
Levy of IGST or Customs Duty - Classification of goods - Bronze Cladding Panel for Statue of Unity Project - whether classifiable under Customs Tariff Act (CTEH 83119000) as 'other for kind use for soldering, brazing, welding' which is subject to IGST @ 18% or the same was classifiable under CTH 8306 2110 as 'statuettes', which is subject to IGST @ 12%? HELD THAT:- Undisputedly the goods imported by the appellant are parts of statue of Sardar Vallabhbhai Patel which was installed andnamed as Statue of Unity , therefore, there is no doubt that the goods imported by the appellant have been used as part of entire Statue of Unity - If the contention of revenue is by any imagination is accepted then the stated statue should also be called as welding material because the statue is nothing but the assembled form of the same imported parts i.e. Bronze cladding panels, which is obviously a weird imagination. In the present case the goods imported by the appellant are not used for any of the said process described in CTH 8311. The goods itself is a part of bronze metal which are piece by piece joined by welding, soldering process achieved the form of Statue of Unity. Therefore, it is clear that the goods imported were not used as a welding material but the goods itself is a end product that is part of statue. As submitted by the appellant for the purpose of joining piece by piece the part of the statue, they have imported separately the welding material. Those welding material are in fact classifiable under CTH 8311 and not the present goods imported by the appellant. The revenue either in the Show cause notice or in the impugned order did not give a plausible reasoning why the imported goods i.e. parts of statue are classifiable as welding material under CTH 8311 9000 - It is admitted fact that the part of the statue imported by the appellant is complete part and it does not have any coating or cored with flux material, therefore, it is clear that that parts / components of statue imported by the appellant by any stretch of imagination cannot be brought into the tariff entry of CTH 8311 9000fpr the simple reason that the same is not a welding material. Thus, irrespective whether the classification claimed by the appellant is correct or not since the classification proposed by the Revenue is absolutely incorrect, the entire case of the Revenue will not sustain. Therefore, we are not addressing the issue that whether the appellant s classification was correct or otherwise. The appellant also made an alternate submission that even if the classification declared by them under CTH 8306 2110 is incorrect the goods are otherwise classifiable under CTH 9703 in such tariff entry also the IGST Rate is 12% and therefore, there will be no revenue implication. However, since the Revenue s claim of classification is held to be incorrect the entire proceeding of the Revenue is quashed. The impugned order is set aside - appeal allowed - decided in favor of appellant.
-
Corporate Laws
-
2021 (6) TMI 31
Vacation/removal of the respective second respondent and his family members as directors in the group companies - Summons issued directing the respective petitioners to appear on a specified date and submit all the registers/documents before the 1st respondent - HELD THAT:- It is settled law that a summon issued under a statutory provision can be challenged only, if it has been issued without jurisdiction and without authority under law. Under the impugned summons, the Registrar of Companies has observed that it is not clear as to whether the respective petitioners have complied with the provisions of Section 167 and Section 169 of the Companies Act, 2013, as the case may be, for vacating/removal of the directors or not and only for the said purpose, as contemplated under section 206(4) of the companies Act, the impugned summons have been sent to the respective petitioners for further clarification/enquiry. Admittedly, no final orders have been passed on the respective second respondents' complaints under section 206 (7) which empowers the Registrar of Companies to punish the company and every officer of the company in the event of the company failing to furnish any information or explanation or produce any document required under section 206 of the Act. In the case on hand, the impugned summons have been issued by the Registrar of Companies only in accordance with the procedure contemplated under Section 206(4) of the Companies Act. The Registrar of Companies has also given reasons for seeking further explanation from the directors of the respective companies. He has observed that the respective directors of the respective companies have not produced the dispatch proof and the acknowledgement proof for having sent the notices to all the directors for conducting Board Meeting from 01.04.2019 to 10.07.2020 - this Court is of the considered view that these writ petitions have been filed prematurely, even before passing of any adverse orders by the Registrar of Companies against the respective petitioners. Petition disposed off.
-
2021 (6) TMI 30
Dissolution of company which underwent voluntary liquidation - HELD THAT:- The conditions are satisfied that the necessary compliance of Section 497 and other relevant provisions of the Act have been made and the affairs of the said company have not been conducted in a manner prejudicial to the interest of its members or to the public interest and the said company may be dissolved. In view of the satisfaction accorded by the Official Liquidator by way of the present petition, the said company is hereby wound up and shall be deemed to be dissolved with effect from the date of the filing of the present petition i.e. 15th December, 2020 - Petition disposed off.
-
Insolvency & Bankruptcy
-
2021 (6) TMI 24
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors or not - only agreement entered and no further goods/ services in respect to agreement provided by Operational Creditors - existence of debt and dispute or not - HELD THAT:- Applicant has totally failed to prove that he falls under the category of operational creditor. It is to be mention herein that to fall under the definition of operational creditor, the claim must be in respect of the provision of goods or services including employment or debt in respect of the dues arising under any law for the time being in force. On perusal of the record it is found that, no service has been provided to the corporate debtor at any point of time by the operational creditor save and except an agreement entered between both sides, as claimed. To attract the provision of IB Code under Section 9, there must be 'due' and 'default' which is found absent in the instant application - application is also not complete as the due date and default date is not provided, even no invoices are annexed or ever raised upon corporate debtor. In absence of such primary information, it is difficult to come to the conclusion that the amount claimed is operational debt - Application dismissed.
-
2021 (6) TMI 23
Maintainability of application - initiation of CIRP - Corporate Debtor defaulted in repayment of its dues - Operational Creditor - no pre-existing dispute - time limitation - HELD THAT:- The instant petition was filed on 29.08.2019. The outstanding invoices were raised from 09.12.2014 to 24.12.2014 and the email was sent by the respondent regarding admission/acknowledgement of debt on 03rd June, 2017. The demand notice was issued by the applicant under section 8 of the Code on 20.08.2018. The petition filed by the applicant is within the limitation period. The corporate debtor has admitted the debt and not raised a pre-existing dispute and has not paid the amount due. The application is complete. The corporate debtor has committed default in payment of operational debt and, therefore, it is a fit case to initiate the Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code - Application admitted - moratorium declared.
-
2021 (6) TMI 22
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors or not - existence of debt and dispute or not - HELD THAT:- It is clear that the dispute must exist before the receipt of demand notice - Be that as it may, on appraisal of the arguments advanced by the Ld. Counsels, it emerges that there were disputes existing prior to the issuance of the Demand Notice. Since there is a preexisting dispute between the parties, there are no option but to reject the prayer of the Operational Creditor to initiate proceedings under Section 9 of IBC, 2016 - application dismissed.
-
2021 (6) TMI 21
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- Mere plain reading of the provision under section 7 of IBC, shows that in order to initiate CIRP Under Section 7 the applicant is required to establish that there is a financial debt and that a default has been committed in respect of that financial debt. That while dealing with an application under section 7 the Adjudicating Authority is not required to consider the question of dispute between the parties as long as the 'debt' and 'default' is proved. Corporate Debtor submitted that the terms of the loan Agreement could not be honoured by the Corporate Debtor as defaults were committed in making the payment of interest amount to the Financial Creditor owing to the financial crisis and a difficult financial position of the corporate debtor due to unforeseen circumstances - the documents submitted by the Financial Creditor and the Corporate Debtor clearly substantiate the Financial Creditor's claim that the Corporate Debtor has defaulted on repayment of loan amount. Application admitted - CIRP is initiated - moratorium declared.
-
Service Tax
-
2021 (6) TMI 26
Nature of activity - Manufacture or service - Process amounting to manufacture or not - activity of crushing, pulverizing, converting and packing of spices into powder form - taxability under business auxiliary service? - coverage by decisions of co-ordinate benches of the Tribunal in M/S. JAYAKRISHNA FLOUR MILLS (P) LTD. VERSUS CCE, MADURAI [ 2014 (12) TMI 547 - CESTAT CHENNAI] and in SARA SPICES VERSUS COMMISSIONER OF C. EX., CUS. S.T., COCHIN [ 2018 (2) TMI 1794 - CESTAT BANGALORE] - HELD THAT:- The constitutionally enshrined demarcation even among the several taxable events assigned to the Union by the Seventh Schedule for imposing of levies is mirrored, for the period preceding the introduction of negative list regime, by the taxing of contract manufacture as business auxiliary service while keeping activities that are taxed by Central Excise Act, 1944 out of its ambit. The nub of the controversy, as eloquently asserted by Learned Counsel, is the zero rating of the impugned goods owing to which the jurisdictional tax officials were afforded the luxury of contemplating the non-exigibility of the impugned activity to tax as manufacture. On perusal of the germane provisions of Central Excise Act, 1944, viz., definitions, of excisable goods and manufacture , in section 2 in conjunction with section 3, it is clear that the authority to assign rates of duty is restricted to the excisable goods enumerated in the tariff schedule while the levy, and assessment thereof, is conjoined with activity of manufacture that produces those goods. The foundation of the decision in Jayakrishna Flour Mills (P) Ltd , even if not about production of powdered spice is, yet, on taxability under section 65(105)(zzb) of Finance Act, 1994, as provider of business auxiliary services and, though in relation to processing of wheat into wheat powder to which the relied upon clarification of Central Board of Excise Customs pertained, the influence therein of the test prescribed in the several judgments supra is evident. The acceptance of subsequent orders, discarding, in identical circumstances, the proposal to levy service tax, of the original and appellate authority that followed the clarification of Central Board of Excise Customs on manufacture of wheat products, places a severe restriction on continuation of the controversy vis- -vis levy of service tax. The decision in Jayakrishna Flour Mills (P) Ltd is, unlike the decision in Sara Spices , not deprived of its authority as binding precedent. The manufacturing as held by the Tribunal in Jayakrishna Flour Rolling Mills (P) Ltd has relevance to the present dispute that is wanting in the decision in Sara Spices which resolved an entirely different dispute - Registry is directed to place this response of the Larger Bench before the Division Bench, along with the records, for disposal of the appeal.
-
2021 (6) TMI 25
Reverse charge mechanism - Levy of service tax - Banking and Financial Services - service provider located outside India - time limitation - penalty - revenue neutrality - various service provider viz. Merchant Bankers, Lead Managers, Advisors, Financial Advisors, Principal Agents, Legal Advisors, Management Consultants, Under writers, etc. who are based outside India and have charged fees for their services in Foreign Currency for raising funds through ECB FCCB. - HELD THAT:- The appellant has neither raised the issue of taxability seriously before the adjudicating authority nor even in the appeal memo filed before us. It is also observed that the appellant have vehemently argued that their case is covered under Section 73(3) Finance Act, 1994. Section 73(3) applies only in such case where the assessee undisputedly accepting the liability discharged the service tax and interest before issuance of Show Cause Notice subject to some other conditions as laid down in Section 73(3) therefore, since the appellant having not contested the issue of taxability of service at any point of time before the adjudicating authority as well as in this appeal, we hold that that the service received by the appellant is liable to service tax. Time Limitation - Penalty - HELD THAT:- The adjudicating authority has not verified any fact related to revenue neutrality - the appellant have submitted certain documents before us showing that they were eligible for Cenvat Credit which they have already availed in respect of Service tax paid by them and during the relevant period they have discharged the excise duty of a substantial amount from their PLA account - the limitation as well as imposition of penalty needs to be reconsidered on the point of the revenue neutrality particularly on the document submitted by the appellant. Appeal allowed by way of remand.
-
Central Excise
-
2021 (6) TMI 28
CENVAT Credit - returned goods under Rule 16(1) of Central Excise Rules, 2002 - denied on the ground that the credit has been taken by the appellant on fake letter issued by the recipient of the goods - HELD THAT:- In the statement of M/s. Adarsh Enterprises and M/s Gandhi Springs, it is clearly mentioned that they have not returned the goods but produced the ledger account. The ledger accounts are with the department, the department could have verified their statement is correct or not? By producing the ledger account. The said documents have been hidden by the department and not brought on record, therefore, the allegation without evidence is not acceptable in the law. Further, the appellant sold the goods to M/s Sikkim Ferro Alloy but neither any investigation nor statement ever recorded during investigation of M/s Sikkim Ferro Alloy. In the circumstance, investigation conducted by the department is faulty, therefore, on the basis of faulty investigation, credit of ₹ 6,75,872/- cannot be denied to the appellant. Appeal allowed - decided in favor of appellant.
-
2021 (6) TMI 27
CENVAT Credit - input services - Goods Transport Agency Service - Custom House Agent Service - place of removal - credit denied on the ground that the transportation service used from the factory gate to the buyers place is beyond the factory gate - HELD THAT:- It is admitted fact that appellant have delivered the goods to the buyer s place on FOR basis, the freight element was not charged separately, it is included in the assessable value on which excise duty was paid. In this regard the learned adjudicating authority also considered the CA certificate showing that the freight charges is integral part of the assessable value of the finished goods - It was held in the case of THE COMMISSIONER, CENRTAL GOODS AND SERVICE TAX VERSUS M/S. ULTRATECH CEMENT LTD. [ 2020 (3) TMI 1206 - GUJARAT HIGH COURT] that Appellants are eligible for the cenvat credit of service tax paid on outward freight. CHA service used for export of goods manufactured by the appellant - HELD THAT:- It has been consistently held that in case of export the place of removal stands shifted to the port of export therefore all the services which are used beyond the factory gate but up to the port of export falls within the term place of removal hence the Cenvat credit on the service used for removal of goods up to the place of removal is admissible. The CHA service is also used from removal of goods up to place of removal - This issue has been considered by the Hon ble Gujarat High Court in the case of COMMISSIONER VERSUS DYNAMIC INDUSTRIES LTD. [ 2014 (8) TMI 713 - GUJARAT HIGH COURT] wherein CHA service was up held as input services and credit was allowed. Considering the cited judgment, the appellant is entitled for Cenvat credit on CHA service. The appellants are entitled for the Cenvat credit on GTA as well as on CHA service - Appeal allowed - decided in favor of appellant.
-
Indian Laws
-
2021 (6) TMI 35
Seeking grant of Regular Bail - case of petitioner is that prayer for interim bail is a typographical error and the petition be treated as one for regular bail for which notice was issued by this Court - Smuggling - dealing in Contraband or not - HELD THAT:- In the present case, accepting the statement of the public witness and the witnesses of NCB the petitioner only gave money from his pocket. The petitioner neither received the contraband nor was the contraband handed over to him. On the contraband being handed over to the co-accused Sukhwinder Singh he directed the petitioner to pay the money which he paid. At no point of time was the petitioner in the conscious possession of the contraband. Even as regards the charge of conspiracy the prosecution is required to show that the petitioner had knowledge that the money was being handed over for the purpose of purchasing the contraband. Further it is not even the case of the prosecution that the money belonged to the petitioner and the case of the prosecution is also that the petitioner was merely the driver of the car owned by Sukhwinder Singh. Considering the role assigned to the petitioner and the fact that the petitioner has no previous involvements and the trial is likely to take some time, this Court deems it fit to grant regular bail to the petitioner. It is, therefore, directed that the petitioner be released on bail, subject to conditions imposed - petition allowed.
-
2021 (6) TMI 29
Dishonor of Cheque - prohibition on account of non-payment of interim concession - HELD THAT:- The learned Sessions Judge was pleased to hold that the order passed by the learned Trial Court to the extent of prohibiting the accused to produce his defence in the event of non-payment of interim compensation as per Para-5 of the order dated 27.08.2019 was not legal and proper, and therefore, it was quashed and set aside. Remaining order passed by the learned Trial Court of interim compensation was not disturbed by the Revisional Court for getting the interim compensation as prayed under Section 143(A)(1) of the N.I. Act. It is worried by the applicant that if the interim compensation would not be paid by the accused, he would suffer great loss and therefore, order passed by the learned Trial Court was legal and valid. Under section 143A(5), interim compensation payable under this section may be recovered as if it were a fine under Section 421 of the Code of Criminal Procedure, 1973. The applicant would be entitled to get the remedy available under the Act and approached the Competent Authority to recover the amount of interim compensation awarded to him as per the order passed by the Court-below by availing remedy provided under Section 421 of the Code of Criminal Procedure, 1973 - Appeal disposed off.
-
2021 (6) TMI 9
Grant of Bail - Smuggling - contraband 20 grams of Narcotic drugs - HELD THAT:- Taking note of the fact that the other co-accused persons namely Adnan Khan, Hannan Khan and Dheeraj have already been granted bail for 6 months by this Court in ADNAN KHAN, ABDUL HANNAN KHAN, DHEERAJ VERSUS THE STATE OF MADHYA PRADESH [ 2021 (5) TMI 673 - MADHYA PRADESH HIGH COURT ], it is found that there are no reason to dismiss the present bail application and deny the ground of parity to the applicant, accordingly maintaining the parity, the application is allowed. This Court finds it expedient at present to allow the present bail application for a temporary period of six months. Accordingly, the application is allowed partially and the applicant ,is released on bail for a period of six months from the date of his release.
-
2021 (6) TMI 8
Dishonor of cheque - Offences punishable under Sections 415 and 420 of IPC - sub-standard black pepper supplied - dishonest intent - specific allegation is made in the complaint that with the dishonest intention even though the materials are received, a false legal notice was issued stating that black pepper which was supplied is of sub standard and the same clearly discloses the dishonest intention of the complainant - HELD THAT:- The Apex Court in the judgment in the case of DINESHBHAI CHANDUBHAI PATEL v. THE STATE OF GUJARAT [ 2018 (1) TMI 1624 - SUPREME COURT] has held that while exercising the power under Section 482 of Cr.P.C., the High Court should not venture to interfere in the domain of the investigation unless there is any prima facie case. It is also observed and summarized the principles in context of the FIR that High Court should not venture to collect the material evidence sitting as Appellate Court and only to look into the contents of the complaint and when the complaint discloses prima facie committing of cognizable offence, it should stay its hands in interfering with the domain of the investigation. The learned counsel for respondent No. 2 brought to the notice of this Court the whatsapp messages exchanged between the parties and that respondent No. 2 had been to Delhi and this petitioner did not meet him and also not made any payment. The correspondence made between them clearly discloses taking of time for presentation of cheques and issuance of cheques and hence it is clear that it is a business transaction, but the Court has to look into the contents of the complaint where specific allegations are made against the petitioner that with dishonest intention at the inception of the transaction he made the assurance and cheated the complainant and the very complaint allegation discloses prima facie committing of the offence of Section 420 of IPC. When such being the factual aspects of the case, it is rightly pointed out by the learned counsel for respondent No. 2 that it is a criminal case registered against the petitioner invoking Section 420 of IPC. In the case on hand, though the cheque was bounced, no case is filed under Section 138 of the NI Act. The allegation is made against the petitioner that with dishonest intention, a transaction was entered into and at the inception of the transaction itself there was an intention to cheat the complainant. When such being the facts and circumstances of the case, the very contention of the learned counsel for the petitioner that only on abuse of process, a false proceedings is initiated against the petitioner cannot be accepted at this juncture. The matter requires to be investigated when the cognizable offence has been made out in the complaint. Petition dismissed.
|
9911796707
