Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
June 2, 2023
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Refund / Return money deposited during investigation - petitioner claims that he was forced to make a deposit under threat and coercion - Admittedly, the petitioner did not take any steps thereafter for one year. However, he sent a letter dated 12.04.2023, which was one year thereafter under legal advice - The petitioner is to respond to the said Show Cause Notice by 05.06.2023. - HC
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Cancellation of GST registration of petitioner - appeal rejected as time barred under section 107(1) and (4) of the CGST Act - scope of the beneficial notification dated 30-3-2023 - since the provision is beneficial in nature and appears to ameliorate the difficulty faced by such registered persons whose GST registration stood cancelled, the writ petition is disposed of with a direction to the petitioner to approach the proper officer with an application for revocation of cancellation of registration by 30th June 2023 - HC
Income Tax
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Section 194S : TDS on payment on transfer of virtual digital asset - Deduction of Tax at Source (TDS), Collection of Tax at Source (TCS) / Withholding Tax
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Reopening of assessment - determination of the 'income chargeable to tax' - The amount of “capital gain” is to be considered or the “entire sale consideration” to be considered - In the present case, the words found in Section 149 which is 'income chargeable to tax' must be read in terms of 'income' as arising out of the 'Capital Gains' as provided under Section 48 and this is the only manner of understanding the words, 'income chargeable to tax under Section 149(1)(b) of I.T. Act. - HC
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Set off and withholding of refunds u/s 245 - Adjustment of refund amount with the demand of tax for the subsequent years - petitioner has agreed that, against the refund due qua AY 2021-2022 & 2022-23, adjustment is made to the extent of 20% of the demand raised for AY 2017-18. - directions issued for refund of the balance amount accordingly - HC
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Addition u/s 69A - loan transaction treated as an income unexplained - the assessee has recorded the impugned transactions in the books of accounts and has also provided explanations/evidences explaining the source of the loan transaction. - the AO is not correct in treating the loan transaction as an income u/s.69A - AT
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Addition of On-money receipts - addition based on the documents impounded during the survey proceedings - The ld CIT(A) concluded that the documents are dumb documents so far as assessee is concern. - CIT(A) categorically held that assessee sold the unit / shops to Mahotsav group about 28% higher that the prevailing jantri rate and there is no concrete evidence against the assessee either on writing or oral which establish that the assessee received alleged on money. - The order of CIT (A), deleting the additions confirmed - AT
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Taxability of interest income - appropriate head of income - to be taxed as business income or income from other sources - Once the assessee itself admits that the amounts received by it on the FCCDs were in the nature of “Interest income”, then the same cannot be converted into “income from business” - AT
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TP Adjustment - determination of arm’s length price, ALP - Transactions with the local vendors the terms of which are not influenced by Comer SpA cannot be treated as deemed international transaction and accordingly cannot be included for the purpose of ALP adjustment. TPO is directed accordingly to consider only the transaction with AE for the purpose of determination ALP - AT
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Addition towards undisclosed foreign assets under the provisions of Black Money (UFIA) And Imposition of Tax Act, 2015 for the alleged investment in life insurance policies in the name of the assessee - There is no iota of evidence bring forth by the Revenue authorities which could indicate that any element of the alleged investment in foreign asset is from so-called black money earned in India. - AT
Customs
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Refund of the IGST paid with regard to the goods exported - zero rated supplies - drawback claimed by the petitioner - the present petition is disposed of by giving direction to the respondents to adjust the amount already availed by the petitioner on account of higher rate of duty drawback and pay the balance of IGST payable to the petitioner - HC
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Valuation of imported goods - mis-declaration of goods - burden to prove - the burden which was on the respondent was never discharged and hence, there is no question of onus shifting on to the Revenue, to prove, what the learned Commissioner (Appeals) wanted or as desired by the respondent, that there was no ‘wrong supply’ - The requirements under the burden of proof are covered in Chapter VII of the Indian Evidence Act. - AT
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Valuation of imported goods - inter-se relation having any influence on the transaction value of imports, or not - If the price declared was at arm’s length, then perhaps there would not be any such long drawn dispute at all - Moreover, from the claim of the appellant that the deductive method of valuation is appropriate, itself suggests that the prices declared were certainly not at arm’s length - the declared value was not at arm’s length. - AT
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Classification of imported goods - change in the stand of revenue during the appellate proceedings - The approach of the Revenue who have chosen to file the present appeal for the reasons that as and when the Order-in-Original was received, they slept over the matter and thus missed the bus. Secondly, having not exhausted the available opportunity, they have contended that the Commissioner (Appeals) should have, on his own, exercised power under Section 128A (3) which, according to us, does not stand - AT
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Seeking amendment in the shipping bill - whether the documents based on which the amendment is sought for by the appellants were present at the time of exportation of the subject goods or arranged subsequently by them for obtaining the benefit of Drawback - the lower authority should properly examine the documentary evidence submitted by the appellants for proper appreciation of the fact regarding amendment of the shipping bill. - AT
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Levy of Anti-Dumping Duty - when the domestic industry does not manufacture/produce lithograde aluminium coils above 1150 mm on a commercial basis, this product would have to be excluded from scope of the product on which anti-dumping duty has been imposed under the customs notification dated 06.12.2021 issued by the Central Government on the basis of the final findings dated 07.09.2021 issued by the designated authority. - AT
IBC
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Maintainability of application - permission sought to intervene in Section 7 application against Ascot Projects - When an allegation of fraud being played on the financial creditors and unit buyers of Intellicity Business Park was brought to the notice of the Adjudicating Authority when it was considering section 7 application, the intervention application should have been considered by the adjudicating authority - directions issued - AT
Service Tax
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Sabka Vishwas (Legacy Dispute Resolution) (SVLDR) Scheme - classification of “tax dues” under the “arrears category” - once the pending litigation had been withdrawn, the demand of duty raised by the tax authorities attained “finality” and a fortiori fell under the definition of “amount in arrears” and the declaration was rightly considered under the “arrears” category. - HC
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Claim of interest on the amount already debited from the CENVAT credit register - refund was not sanctioned and credit was taken back - The procedure prescribed for filing refund claims for unutilized CENVAT Credit in case of export of services under Rule 5 of the CENVAT Credit Rules, 2004 clearly lays down that the assessee is free to take back the credit of not sanctioned / partially sanctioned refunds. As such, payment of interest in the circumstances of these appeals is not provided for. - AT
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Refund against export of services - Time limitation - relevant date - date of the export invoice or the date of receipt of consideration in convertible foreign currency i.e., the date of FIRCs? - ‘relevant date’ for refund of unutilized CENVAT Credit in case of export of services to be taken as the end of the quarter in which the FIRC is received since the prescribed procedure states that the refund claims are to be filed for every quarter. - AT
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Non-payment of Service Tax - Mentioning of wrong service tax registration in the payment challan for two months - Mentioning of wrong location code - in view of the circular issued by the CBEC, allowing the service tax paid under the wrong registration number or wrong location code, the demand set aside- AT
Central Excise
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SVLDRS - rejection on the ground that the demand was not finally quantified nor communicated to the party on or before 30.06.2019 - The Scheme covers not only cases where show cause notice has been issued and disputes are pending before various authorities but also cases where enquiry, investigation or audit is pending against an assessee. In addition, it also covers cases where there was no dispute as to the arears as well as cases where tax payers had come forward to voluntarily disclose their tax liability - petitioner had applied in the category where enquiry, investigation or audit is pending. - The order of rejection of application set aside - HC
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Clandestine Removal - allegation of removal of goods in the guys of job work - Even if it is to be held that appellant was clearing his finished goods in the garb of job worked goods without payment of duty then also the case of revenue will fail in absence of any additional consideration received by the appellant against such clearances. - AT
Case Laws:
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GST
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2023 (6) TMI 53
Seeking release of IGST and Duty Drawback - respondent submits that in compliance with the order dated 02.05.2023, the amount of Duty Drawback has been remitted to the petitioner s bank account - non furnishing of documents as required and as directed by the order dated 02.05.2023 for IGST refund - HELD THAT:- Petitioner requires further time to furnish the documents as required by the respondent. She states that endeavours were made to contact the petitioner (her client) but he is currently not reachable - It is considered apposite to dispose of this petition by directing that if the petitioner furnishes the requisite documents within a period of further four weeks from today, the refund of IGST would be processed. Respondent further states that in the event the documents are not provided, the respondent shall consider the petitioner s application in accordance with law and pass an appropriate order. Petition disposed off.
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2023 (6) TMI 52
Refund / Return money deposited during investigation - petitioner claims that he was forced to make a deposit under threat and coercion - HELD THAT:- It is seen that there is an inordinate delay on the part of the petitioner. The search was conducted on 16.02.2022 and the amount deposited, the refund of which the petitioner now claims, was made on 17.02.2022 - This Court is also unable to accept that the petitioner had retracted the statement by letters dated 12.04.2022 and 26.04.2022. The copy of a hand-written letter dated 12.04.2022 filed along with this petition indicates that it does not bear any acknowledgement. It is also significant to note that no letter dated 26.04.2022 is placed on record. Admittedly, the petitioner did not take any steps thereafter for one year. However, he sent a letter dated 12.04.2023, which was one year thereafter under legal advice - The petitioner is to respond to the said Show Cause Notice by 05.06.2023. However, the learned counsel for the petitioner submits that he would require an extension of further ten days. The Adjudicating Officer is requested to adjudicate the same as expeditiously as possible and preferably within a period of eight weeks from 15.06.2023 - petition disposed off.
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2023 (6) TMI 51
Cancellation of GST registration of petitioner - appeal rejected as time barred under section 107(1) and (4) of the CGST Act - failure to comply with the provisions of Section 29 (2) (b) (c) of the CGST Act - HELD THAT:- Apparently, N/N. appears to be beneficial in nature as it provides a window of opportunity to all such registered persons whose registration were cancelled for non-compliance of the provisions of Section 29(2) (b) and (c) of CGST Act, 2017. Such registered persons may apply for revocation of cancellation of registration up to 30th June 2023, subject to filing of returns due upto the effective date of cancellation of registration and payment of any amount due as tax along with interest, penalty and late fee in respect of such returns. It is also made clear that no further window or extension of time period for filing application for revocation of cancellation of registration shall be available in such cases. The Explanation to the notification also indicates that the notification shall cover not only those persons who failed to apply for revocation of cancellation of registration within the time specified in Section 30 of the Act, but also those whose appeal against the order of cancellation of registration under Section 107 of the Act stood rejected or they failed to adhere to the time limit specified under sub-section (1) of Section 30 of the said Act to approach the Appellate Authority against the order rejecting application for revocation of cancellation of registration under section 107 of the Act. The petitioner falls in the category of cases where the appeal preferred against the cancellation of GST registration has been rejected under Section 107(1) and (4) of CGST Act as time barred. However, since the provision is beneficial in nature and appears to ameliorate the difficulty faced by such registered persons whose GST registration stood cancelled, the writ petition is disposed of with a direction to the petitioner to approach the proper officer with an application for revocation of cancellation of registration by 30th June 2023, as per the Notification dated 31.03.2023 after complying with the conditions prescribed thereunder. Petition disposed off.
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Income Tax
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2023 (6) TMI 50
Validity of approval u/s 153D - sanctity of the approval obtained by the AO from Additional Commissioner under Section 153D - As argued approval sought by AO in almost 35 cases (including that of the Petitioner) was granted instantaneously without following the rules - as per HC petitioner has an alternative and effective remedy by way of an appeal before the ITAT, thus writ petition is disposed of with liberty to the petitioner to urge all his contentions and submissions before the ITAT. HELD THAT:- Against the order passed by the Commissioner of Appeals, the petitioner has a remedy available to approach the ITAT. The High Court has rightly relegated the petitioner to avail such remedy. No interference of this Court is called for. The Special Leave Petition stands dismissed. Pending application(s) shall stand disposed of.
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2023 (6) TMI 49
Reopening of assessment - validity of order passed u/s 148A(d) - Time limit for issuing notice u/s 149 - determination of the 'income chargeable to tax' - The amount of capital gain is to be considered or the entire sale consideration to be considered - HELD THAT:- The words used in Section 149(1)(b) is that the 'income chargeable to tax' which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year. The income chargeable under the head of 'capital gains' which would arise in case of sale transaction is as provided under Section 48, which provides that income chargeable under the head of 'capital gains' shall be computed by deducting from the full value of the consideration, the cost of acquisition and in the event, the property purchased has been held for a period beyond three years in terms of second proviso to Section 48, the words, 'cost of acquisition' is to be substituted by the words, 'indexed cost of acquisition'. This material is pointed out in the reply at Annexure-'F1' furnished to the show cause notice, which ought to be taken note of prior to the issuance of notice under Section 148A of I.T. Act. Clearly when the procedure is followed culminating in an order passed under Section 148(A)(d), the Authority is required to apply its mind and consider the reply of the assessee and pass a considered order. In the present case, the respondent Authority has not applied its mind to the reply filed, nor noticed the legal position while deciding as to the application of the extended period under Section 149(1)(b) of the I.T. Act. In the present case, the words found in Section 149 which is 'income chargeable to tax' must be read in terms of 'income' as arising out of the 'Capital Gains' as provided under Section 48 and this is the only manner of understanding the words, 'income chargeable to tax under Section 149(1)(b) of I.T. Act. The contention of the Revenue that under Section 149 what is required to be taken note of, is the 'income that has escaped assessment' being the entirety of sale consideration of Rs.55,77,700/- cannot be accepted, in light of the express words in the statutory provision ' income chargeable to tax which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more'. The words used under Section 149 for the purpose of extended time limit is to be interpreted in terms of the plain wordings of Section 149 and cannot be construed differently while relying on any executive instruction. Thus order passed u/s 148A(d) set aside - Decided in favour of assessee.
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2023 (6) TMI 48
Set off and withholding of refunds u/s 245 - adjustment of the refund available u/s 2021-22 2022-23 against demand raised for AY 2017-18 - HELD THAT:- We are told, that this appeal was filed on 20.01.2020. Also the submission of petitioner, that an application for staying the demand concerning AY 2017-18 has been lodged with respondent no. 1, which is also not being dealt with. As averred, that the said application, which is dated 29.01.2020, was lodged with the respondent no. 1 on 03.02.2020. Given this position, we have queried the counsel for the petitioner, whether he would have objection, if, for the moment, against the refund due qua AY 2021-2022 2022-23, adjustment is made to the extent of 20% of the demand raised for AY 2017-18. Petitioner says, he will have no objection if such a direction is issued by the concerned authority.It is ordered accordingly.The concerned authority will bear this in mind, and pass an appropriate order. In case the petitioner is aggrieved by the outcome i.e., the decision rendered on the application for stay, it will have liberty to take recourse to an appropriate remedy, albeit, as per law.
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2023 (6) TMI 47
Addition on account of discrepancy in stock - Whether the CIT(Appeals) was right in ignoring the remand report furnished by the AO? - Whether closing stock was duly established during the assessment proceedings? - HELD THAT:- As could be seen from the remand report nine copies of stock statement filed by the assessee as forwarded by the bank were enclosed. Copy of the said internal inspection report of the bank has been annexed in the paper book from which it is seen that the stock statement as on 31st October, 2004 valued at Rs.23.37 lacs was also noted in the said report. When we perused the order passed by the CIT(A) dated 15th October, 2007 we find that there is absolutely no reference to the remand report. Whether the assessee could be taxed based upon the inflated stock shown in the stock statement submitted to the bank? - This issue is no longer res integra and has been decided in the Commissioner of Income Tax vs. N. [ 1998 (9) TMI 27 - MADRAS HIGH COURT] as held that the assessee s income is to be assessed by the income tax officer on the basis of the material which was required to be considered for the purpose of assessment and ordinarily not on the basis of the statement which the assessee may have given to a third party unless there is material to corroborate that statement of the assessee given to a third party, even if it be a bank. Mere fact that the assessee had made such a statement by itself cannot be treated as having resulted in an irrebuttable presumption against the assessee. The burden of showing that the assessee had undisclosed income is on the revenue. That burden cannot be said to be discharged by merely referring to the statement given by the assessee to a third party in connection with the transaction which was not directly related to the assessment and making that the sole foundation for a finding that the assessee had deliberately suppressed his income. Law on the subject having been well-settled, it is the burden upon the Assessing Officer to show that the assessee had undisclosed income and merely by referring to a bank statement the assessment could not have been completed. However, on facts, the assessee s case, is better placed. We say so because that the CIT(A) had called for a remand report and the remand report clearly brings out all the facts and also encloses the inspection report submitted by the bank which reflects the correct details. CIT(A) and the learned Tribunal had committed an error in not accepting the case of the assessee. Decided in favour of assessee.
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2023 (6) TMI 46
Ad hoc disallowance related to pilferage expenses, some expenses on transport vehicle hire charges and repair and maintenance and addition was made on rent received by IOC - HELD THAT:- After considering orders, it is very much clear that there is a lack of representation by the representative of the assessee. The assessment was completed during insurgency in the Kashmir Valley. Same is not applicable for the appeal order. We consider the hardship of the assessee for representation the matter before the ld. assessing authority. We accept the ground of the assessee and set aside the matter to the ld. AO for further adjudication afresh on the expenses, disallowed.
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2023 (6) TMI 45
Rectification u/s 154 - during processing the return u/s 143(1) the provision for payment of gratuity, u/s 40A(7) was rejected - CPC has rejected the rectification petition u/s 154 - HELD THAT:- During processing of return u/s 143(1) the provision for payment of gratuity is added back with total income by contravening section 40A(7). As per the revenue the CPC has a power to disallow the amount on basis of the tax audit report, sated in Col. 21(e) of Form No. 3CD which is not come under purview of mistake apparent from the record, u/s 154. So, section 154 will not be applicable in this case. But the assessee prayed that a reasonable opportunity was denied by the revenue authorities. So,before going for addition u/s 40A(7) the assessee should get a reasonable opportunity before the revenue authority for processing of rectification u/s 154. Accordingly, we remit back the matter to the ld. AO for further adjudication related to the addition made by the CPC. Appeal of assessee allowed for statistical purposes.
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2023 (6) TMI 44
Dismissal of the appeal by the CIT(Appeals) for non-prosecution - assessee was selected for scrutiny assessment u/s. 143(2) - HELD THAT:- Once an appeal is preferred before the CIT(Appeals), it becomes obligatory on his part to dispose off the same on merit and it is not open for him to summarily dismiss the appeal on account of non-prosecution of the same by the assessee. As per mandate of law the CIT(Appeals) is not vested with any power to summarily dismiss the appeal for non-prosecution. See case of CIT Vs. Premkumar Arjundas Luthra (HUF) [ 2016 (5) TMI 290 - BOMBAY HIGH COURT] Unable to persuade to subscribe to the dismissal of the appeal by the CIT(Appeals) for non-prosecution. As is discernible from the order of the CIT(Appeals), he had not uttered a word about the merits of the case and had summarily dismissed the appeal holding a conviction that as the assessee appellant had failed to participate in the proceedings before him, therefore, it could be inferred that it was not interested in pursuing the appeal. Unable to fathom the approach adopted by the CIT(Appeals) for disposing off the assessee s appeal. Accordingly,set-aside the order of the CIT(Appeals), and restore the matter to his file for disposing off the same on merits - Appeal filed by the assessee is allowed for statistical purposes.
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2023 (6) TMI 43
Addition u/s 69A - loan transaction treated as an income unexplained - unaccounted cash transactions and accommodation entries and the loan transaction of the assessee is one such accommodation entry - statement recorded from Shri Jagdish B Ahuja, where he had confirmed maintenance of parallel books of account and giving the accommodation entries - HELD THAT:- Specific finding from the statement recorded which the Assessing Officer has linked the impugned loan transaction with the statement recorded. We also notice that while making the addition under section 69A, AO has emphatically concluded that during the year, assessee has returned the loan and has received cash against the same without bringing any concrete evidence except the modus operandi of the transaction as has been explained in the statement given by Shri Jagdish Ahuja. It is also noticed that the factual finding given by the AO that the assessee has repaid the loan during the year is not correct since from the perusal of records we notice that the assessee has taken the loan on 19/11/2008 through cheque In assessee's case here, the documents evidencing the impugned transactions have been submitted before the lower authorities, which fact has not been analysed by the lower authorities and that nothing has been brought on record by the Revenue to controvert the contentions of the assessee. When the assessee is found to be the owner of money bullion etc., that is not recorded in books and that the assessee offers no explanation about the nature and source then the said money bullion etc., may be deemed to be the income of the assessee u/s.69A. In the case under consideration we notice that the assessee has recorded the impugned transactions in the books of accounts and has also provided explanations/evidences explaining the source of the loan transaction. Given this and considering other facts and evidences we are of the considered view that the AO is not correct in treating the loan transaction as an income u/s.69A - Appeal is allowed in favour of the assessee.
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2023 (6) TMI 42
Addition u/s 56(2)(vii)(b) - difference between the stamp value and declared consideration in sale (Sathekhat) executed through registered deed - assessee submitted that the purchase was not complete - AO observed that after the purchase of land, the assessee entered into an agreement to sell the same and hence the assessee s claim that the purchase was not complete, was wrong - HELD THAT:- The third proviso to section 56(2)(vii)(b) provides that where the stamp value of the immovable property is disputed by the assessee on the ground mentioned in section 50C(2), AO may refer the valuation of such property to the Valuation Officer. The word `may in such provision has been interpreted as `shall in many cases, making it mandatory on the part of the AO to make a reference to the DVO, where the assessee asserts that the stamp value is excessive. Additional ground raised before the ld. CIT(A) in this regard has remained undisposed off, which in our considered opinion, is not correct. Going with the mandate of the third proviso to section 56(2)(vii)(b), we are of the considered opinion that it would be in the fitness of things if the impugned order on this score is set aside and the matter is remitted to the file of the AO for making a reference to the DVO for determining the value of the property afresh - Computation of capital gain will be done by the AO after allowing a reasonable opportunity of hearing to the assessee. Additional alternative ground of assessee contending that deduction of cost of acquisition should be given in the computation of the capital gain - As seen that the AO computed capital gain at the gross value of stamp value without allowing any deduction towards cost of acquisition and cost of improvement etc. It is axiomatic that capital gain does not refer to taxing the gross receipt. Section 48 of the Act clearly provides the mechanism for computation of capital gain by stating that cost of acquisition of the asset and cost of any improvement should be reduced from the full value of consideration, in addition to the expenditure incurred wholly and exclusively in relation to the transfer. It is, therefore, directed that while computing the capital gain in the hue of the above observations, the AO shall also grant deduction towards cost of acquisition etc. of the asset. Appeal is allowed for statistical purposes.
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2023 (6) TMI 41
Addition on account of excess consumption of Raw Material - CIT-A deleted the addition - HELD THAT:- Assessee was subject to VAT and Excise and both departments has accepted the financial result of the assessee. AO was not justified in making addition by rejecting of books of accounts u/s 145(3) of the Act. CIT(A) has noted that in the remand proceedings, no adverse comments were offered by AO. Before us, no fallacy in the findings of CIT(A) has been pointed out by Revenue. Thus no reason to interfere with the order of CIT(A) on this issue and thus the ground of Revenue is dismissed. Addition on account of foreign exchange fluctuation - aggregate foreign exchange loss to be without any basis and accordingly, disallowed the same - CIT-A deleted the addition - HELD THAT:- CIT(A) while deciding the issue has given a categorical finding that with respect to the loss it was on account of capital goods and the assessee had made the adjustment to the cost of assets and had not claimed any expense on account of foreign exchange fluctuation on capital goods - as noted that in the remand report, AO has not given any adverse finding on the submissions made by assessee. Find force in the conclusion of CIT(A) that since assessee has not claimed any expenses the disallowance by AO was not sustainable, Before us, Revenue has not pointed to any fallacy in the findings of CIT(A) and thus the ground of Revenue is dismissed. Disallowance of Guest House Expenses - Addition partly deleted by CIT(A) - HELD THAT:- As per CIT-A disallowance made at 50% by AO to be on higher side and restricted the disallowance to 20%, no fallacy in the findings of CIT(A) has been pointed out by Revenue nor is the assessee aggrieved by partial relief granted by CIT(A). No reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed. Disallowance of repair and maintenance expenses - AO noted that assessee has failed to produce the copies of the bills to substantiate its claim of expenses - As possibility of debiting expenses of capital nature cannot be ruled out considered 25% of Repair and maintenance not allowable - CIT-A allowed claim - HELD THAT:- CIT(A) while deleting the addition has given a finding that AO has made the disallowance without pointing out any defects in the books of accounts of the assessee and that the expenses were incurred for the purpose of business and allowable u/s 37(1) - He therefore deleted the addition made by AO. No fallacy in the findings of CIT(A) has been pointed out by Revenue. No reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed. Addition made on account of royalty payment - AO noted that the agreement filed by the assessee was not made on stamp paper and therefore according to AO it had no legal sanctity - As noted agreement entered by assessee was for Technical Support Agreement and not for the Royalty or for the technical know-how for which royalty was paid, therefore held the payment of royalty to be without any cogent basis, thus disallowed 10% of the royalty payment - HELD THAT:- CIT(A) while deleting the addition has noted that AO had allowed royalty expenditure to 90% and disallowed 10%. He noted that the royalty payment made by assessee was not found to be bogus and since the assessee had furnished necessary evidence for making royalty payment, the adhoc disallowance could not be made. He thus deleted the addition made by AO. Before us, no fallacy in the findings of CIT(A) has been pointed out by Revenue. We find no reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed. Addition on account of Job work expenses - AO noted that assessee did not file any deposits of expenses nor produced copy of the bills and vouchers - Addition deleted by CIT(A) - HELD THAT:- CIT(A) after considering the details and remand report furnished by assessee has given a finding that during the course of remand proceedings, AO had verified the details of expenses that were filed by assessee and he has accepted the payments made and had also given a finding that assessee had deducted TDS on contractual payment. Considering the totality of the facts, CIT(A) directed that the addition be deleted. Before us, no fallacy in the findings of CIT(A) has been pointed out by Revenue. In such a situation, we find no reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed.
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2023 (6) TMI 40
Revision u/s 263 - PCIT noted AO has not made any effective enquiry at all before accepting the long term capital gain and deduction claimed u/s. 54F - HELD THAT:- Allegation of the Revisionary Authority remains uncontroverted before us, as the assessee has neither appeared nor filed any submission to demonstrate that the assessment order is neither erroneous nor prejudicial to the interest of revenue in terms of section 263. Assessee s case was selected for limited scrutiny only for the purpose of examining large deductions/exemption claimed under various provisions including section 54F - There is nothing either in the body of assessment order or any other material available on record to suggest that the AO has enquired into the issues, for which, the case was selected for limited scrutiny. NO infirmity in the order passed u/s. 263 - Decided against assessee.
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2023 (6) TMI 39
Levy of interest u/s. 234B - cash found in the locker was seized by the Department - cash seized was in the possession of the department from the date of search itself - HELD THAT:- On a reading of section 132B of the Act, though it transpires that the assets seized can be adjusted against any existing liability under the Act and advance tax may not be an existing liability, however, in our view, self assessment tax is certainly an existing liability created on 1st April once the financial year ends. AO should have adjusted the tax liability relating to the undisclosed income declared by the assessee by way of self assessment tax on 1st April, 2019. In that eventuality, there could not have been levy of interest u/s. 234B of the Act, as interest u/s. 234B has to be computed from first day of April following the financial year, for which, advance tax was required to be paid. We must observe, in a dispute of identical nature arising in case of assessee s brother, the Tribunal while deciding the issue in [ 2023 (1) TMI 522 - ITAT DELHI ] has deleted levy of interest u/s. 234B of the Act by observing that the cash seized should have been adjusted against self assessment tax payable with the return of income. We hold that interest charged u/s. 234B of the Act in the peculiar facts and circumstances of the present case, deserves to be deleted. Appeal of assessee allowed.
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2023 (6) TMI 38
Non-grant of TDS credit - CIT- A has denied the credit for the reason as receipt received from Bangalore Metrorail Corporation Ltd on which tax deduction at source credit has been claimed is not offered for taxation - HELD THAT:- As in the interest of justice we set-aside the issue back to the file of the learned assessing officer with a direction to examine, whether the income is taxable in India or not, if the same is taxable in India, for which year the same income is offered, the tax credit is required to be granted for that year. If the above amount is not chargeable to tax in India at all, then, the refund is required to be issued in favour of the assessee. Therefore, AO may proceed in accordance with the provisions of section 4, 5, 9 and 199 of The Act and rule 37BA of the I T Rules. Needless to say, the assessee may be granted an opportunity of hearing before deciding the issue. Appeal of the assessee is allowed for statistical purposes.
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2023 (6) TMI 37
Rectification of mistake u/s 254 - coordinate bench dismissed ground no.8 raised by the assessee as not pressed - HELD THAT:- From the perusal of the record that the issue of the applicability of the rate of tax provided in the DTAA on dividend declared by the assessee was also raised before the learned CIT(A) by way of an application seeking admission of additional ground. CIT(A) though rejected the prayer of admission of additional ground, however, on a without prejudice basis decided this issue against the assessee on merits. Therefore, we find merits in the submissions of the assessee that this issue was specifically raised before the Tribunal and was also pressed in its appeal for the assessment year 2010-11. There is a mistake apparent from the record, which constitutes a rectifiable mistake u/s 254(2) - Accordingly, the order passed by the coordinate bench of the Tribunal in assessee s appeal for assessment year 2010-11 is hereby recalled limited to the extent of adjudication of ground no.8 on merits. Corresponding appeal was taken up for hearing limited to the extent of adjudication of ground no.8 raised by the assessee. Appearing for the parties fairly agreed that the issue arising in ground no.8 is covered in favour of the Revenue by the recent decision of Total Oil India Private Ltd [ 2023 (4) TMI 988 - ITAT MUMBAI (SB) ]. Accordingly, respectfully following the aforesaid decision of the Special Bench of the Tribunal, ground no.8 is dismissed.
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2023 (6) TMI 36
Rejection of books of accounts - Assessment of income u/s 144 - HELD THAT:- AO having rejected the books of accounts of the assessee firm under sub-section (3) of Sec. 145 thereafter, could not have relied upon the said books of accounts, and the proper recourse available with him was to judicially determine its business profits in the manner provided in Sec. 144 of the Act. Our view that once the books of account of an assessee are rejected as unreliable then it is open to the A.O to estimate the assessee s profits considering the profit which was earned in similar business by other similarly placed merchants is supported by the judgment of CIT Vs. K.Y Pilliah Sons [ 1966 (10) TMI 35 - SUPREME COURT] AO after rejecting the books of accounts of the assessee could not have based his assessment on the said books of accounts and should have judicially determined the business profits in the manner provided in Sec. 144 of the Act. Thus though approve the rejection of the books of accounts of the assessee firm u/s 145(3) by the A.O, but direct him to determine its business profits in the alike manner as was adopted by him while framing the respective assessments u/ss. 143(3)/147 in the case of the assessee firm for the preceding years, i.e A.Y 2010-11 to A.Y 2013-14, i.e @ 8% of its for the year under consideration. Addition u/s 68 and 69C - The maintainability of the additions made by the A.O u/s 68 and u/s 69C would not be telescoped in the business profits of the assessee firm and are required to be considered separately. Addition u/s 68 - As the ld. A.R had neither come forth with any explanation to rebut the observations of the lower authorities nor led any material which would prove otherwise, therefore, we are constrained to sustain the addition made by the A.O u/s 68 of the Act. Addition u/s 69C - debit entry against the name of Partner which was apparently spent towards purchase of a gold biscuit, but the same was not found recorded in the regular books of accounts of the assessee - claim of the assessee that the same pertained to the Vishwakarma expenses that were incurred by its partners. The A.O observing that the aforesaid expenditure was not record in the books of account of the assessee firm thus made an addition of the same u/s 69C - CIT(Appeals) being of the view that the pooja expenses were not allowable as a deduction u/s 37 disallowed the same - HELD THAT:- Ostensibly, the aforesaid expenditure of Rs. 1.60 lac is not recorded in the regular books of accounts of the assessee firm. Considering the aforesaid facts, we are of the considered view that the A.O had rightly made an addition u/s 69C of the Act. Once the A.O had made an addition of the aforesaid expenditure of Rs. 1.60 lac as an unexplained expenditure u/s 69C of the Act, then there was no occasion for the CIT(Appeals) to have looked into its allowability as a deduction u/s 37 of the Act. We, thus, finding no infirmity in the addition of Rs. 1.60 lac made by the A.O u/s 69C of the Act, uphold the same.
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2023 (6) TMI 35
Addition u/s 56(2)(x) - Availability of section 56(2)(x) in the statute book - information received that the assessee has purchased property for a consideration less that the stamp valuation of the property - CIT(A) sustaining addition to the extent of 50% of difference in stamp duty value of the flat as per SRO and purchase consideration as per agreement - HELD THAT:- Assessee has purchased the flat vide agreement dated 13.07.2009 and the section 56(2)(x) was not in the statute book, and also it is well settled principle of Law that a charging section cannot be pressed into service retrospectively unless it is specifically provided for by the legislature. The provisions of Sec. 56(2)(x) of the Act are incorporated in the Finance Act 2017 with the prospective applicability from A.Y. 2017-18 and the transactions entered into prior to 1.04.2017 would not suffer any implications of the section. In the present case, the transaction of purchase of flat is vide agreement dated 13.07.2009 and it was registered on 14-7-2017 in the F.Y. 2018-19. Merely because the first payment of Rs.2 lakhs was made on 8-10-2009 subsequently after date of agreement, the revenue cannot rely on the second proviso to section 56(2)(x) of the Act and tax the difference in stamp duty value of flat as per SRO and purchase consideration as per agreement. Since the section 56(2)(x) of the Act is not applicable to the assessee, as the agreement was entered prior to 104-2017, hence the second proviso cannot be made applicable and the assessee cannot be fastened the liability in the light of second proviso to section 56(2)(x) - Direct the AO to delete the addition and allow the grounds of appeal in favour of the assessee.
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2023 (6) TMI 34
Reopening of assessment u/s 147 - addition on account of sale of property as unexplained cash credit u/s. 68 - assessee has not offered the sale consideration of Thane flat sold and the assessee has claimed exemption u/s 54 of the Act in respect of Long Term Capital Gain ( LTCG ) arising from the sale of flat at Thane which is not tenable - AO observed that since the assessee has not claimed the exemption of long term capital gains in the return of income filed and therefore the claim of the assessee in the revised computation income is denied - HELD THAT:- When a query was raised to assessee, to explain the reasons for not filing the return of income and the documentary evidences of property purchased and sold before the lower authorities. AR mentioned that the details were not available during that period and demonstrated the sale agreement of the flat at Thane of the paper book and the purchase agreement of new house property - evidence play important role in decision making in the adjudicating proceedings. Therefore assessee should not suffer for non filing of material information, as the evidences played vital role in decision making Accordingly, to meet the ends of justice, we set aside the order of the A.O. and restore the entire disputed issues along with the evidences and the revised computation of income claiming exemption of Long term capital gains on sale of flats to the file of the assessing officer to decide afresh on merits - Appeal of the assessee for statistical purposes.
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2023 (6) TMI 33
Addition of On-money receipts - addition based on the documents impounded during the survey proceedings - plea of the assessee that the addition could not be made as income from the project had been declared under IDS-2016 - CIT(A) categorically held that assessee sold the unit / shops to Mahotsav group about 28% higher that the prevailing jantri rate and there is no concrete evidence against the assessee either on writing or oral which establish that the assessee received alleged on money - HELD THAT:- As decided in CIT Vs Sunita Dandda [ 2017 (7) TMI 1164 - RAJASTHAN HIGH COURT] held that where the assessing officer made addition on account of on money on sale of land to a builder group relied on the statement of director and not allowed cross examination of the said director, there being violation of natural justice and the impugned addition is liable to be deleted. The Special Leave Petition of revenue is dismissed by Hon ble Supreme Court [ 2018 (3) TMI 1610 - SC ORDER] . Apex Court in Common cause Vs Union of India [ 2017 (1) TMI 1164 - SUPREME COURT] held that there must be some relevant and admissible evidence and some cogent reason which is prima facia reliable and that too, supported with some other circumstances pointing out that in particular third person against whom the allegation is made was involved in the matter or has done something during that period. In Dhakeswari Cotton Mills Vs CIT [ 1954 (10) TMI 12 - SUPREME COURT] as held by Hon ble Apex Court that though, the assessing officer is not fettered with technical rules of evidence and pleadings and he is entitled to act on material which may not be accepted as evidence on account of law, but in making assessment he is not entitled to make a pure guess and make assessment without reference to any material at all. In CIT Vs Lavanya Land (P) Ltd [ 2017 (7) TMI 141 - BOMBAY HIGH COURT] held that when entire decision was based on seized documents and there was no material to conclusively show that huge amounts revealed from seized documents were actually transferred from one side to another, additions u/s 69C were not sustainable. Thus we find that the finding of the ld CIT(A) is based on sound legal reasoning, which we affirm. In the result, the grounds of appeal raised by the revenue are dismissed.
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2023 (6) TMI 32
Deduction u/s 80P(2)(a)(i) - interest income on deposits made out of the surplus funds in cooperative bank and scheduled bank - HELD THAT:- There is a cleavage of judicial opinion among several High Courts on the issue of eligibility of this kind of income for exemption u/s. 80P(2)(a)(i). The Coordinate Bench of Pune Benches in the case of M/s. Ratnatray Gramin Bigar Sheti Sah. Pat Sanstha Maryadit [ 2018 (12) TMI 1926 - ITAT PUNE] taken view in favour of the assessee following the judgment of Tumkur Merchants Souharda Credit Cooperative Ltd [ 2015 (2) TMI 995 - KARNATAKA HIGH COURT] Respectfully following the decision of the Coordinate Bench of the Tribunal, interest income earned on fixed deposits with cooperative/scheduled banks partakes the character of the business income, which is eligible for deduction u/s 80P(2)(a)(i) of the Act. Thus, the grounds of appeal filed by the assessee stand allowed.
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2023 (6) TMI 31
Revision u/s 263 - as per CIT AO has not made the relevant enquiry regarding identity, creditworthiness and genuineness of the transaction of unsecured loan taken by the assessee - HELD THAT:- The findings of the ld PCIT that cash payment is not accounted for in books of account is not borne out of records. We find that the assessee would still be eligible to claim availability of funds to the extent of intangible additions which has suffered taxation and also attained finality given that the assessee s application under the VSV scheme has been accepted by the Competent authority on payment of due taxes. Apparently, the said fact which is clearly emerging from the records has not been considered by the ld PCIT and in our overall analysis, his findings in this regard therefore need to be set-aside. We are of the considered view that the matter has been duly enquired into by the AO, specific queries has been raised from time to time and after taking into consideration the submissions of the assessee, the explanation of the assessee which is duly corroborated by documentation has been accepted by the AO and in view of the same, the findings of ld PCIT that proper and complete enquiry has not been conducted by the AO and the latter has erroneously accepted the version of the assessee without relevant documentation is not borne out of records and the same is set-aside and therefore, the order so passed by the AO cannot be held as erroneous in so far as prejudicial to the interest of the Revenue - Decided in favour of assessee.
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2023 (6) TMI 30
Deduction u/s 80IC - substantial expansion - period of deduction limited to 10 years - 9th year of claim of tax holiday - AO for disallowing the benefit of substantial expansion u/s 80IC(2) and confirming the deduction u/s 80IC only to the extent of 25% - HELD THAT:- Following the decision in case of Pr. CIT Vs. M/s Aarham Softronics [ 2019 (2) TMI 1285 - SUPREME COURT] and which has been followed in case of CIT Vs. Classic Binding Industries [ 2022 (6) TMI 1399 - ITAT CHANDIGARH] , in the instant case, the assessee has started its business activity during financial year 2007-08 relevant to assessment year 2008-09 and has carried out substantial expansion in the financial year 2011-12 relevant to assessment year 2012-13 and the year under consideration being the 9th year of claim of tax holiday, it shall be eligible for claim of deduction @ 100% and not 25% of profits and gains from its business and matter is accordingly decided in favour of the assessee and the ground of appeal is allowed.
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2023 (6) TMI 29
TP Adjustment - TPO / AO in proposing the interest rate on fully compulsory convertible debentures at LIBOR+200 basis points - HELD THAT:- As already held that the currency involved herein is not Euro only. The alleged safe harbor rules also do not pertain to these four assessment years. We thus affirm the TPO s identical action in all these four assessment years adopting LIBOR + 200 interest rate coming to 2.9% as against that claimed @ 11% at assessee s behest. Ground no. 2 dismissed. Benefit of section 11(7) of India Cyprus DTAA - whether only 10% of the gross amount of the interest is required to be taxed in the hands of the assessee and the remaining interest amount cannot be taxed as per clause 7 of Article 11 of the DTAA or not ? - HELD THAT:- In our view, the conjoint reading of Clauses 2 and 7 of Article 11 of DTAA made it abundantly clear that interest paid over and above the interest mentioned in clause 7 of Article 11 of DTAA, shall be chargeable at Income Tax rate as applicable in Contracting State namely, India, as mentioned in Article 11(7) of DTAA. No error in the order passed by the lower authorities. AR argued that excess amount of the interest paid / received by the assessee shall be chargeable under the head Income from business and thereafter, it may be taxed under the other provisions of DTAA - AO/CIT(A) cannot be changed the characteristics of head of income when the assessee itself has admitted that the amount received by it was in the nature of interest only and hence, it would be improper either on the part of the AO or the assessee to change or recharacterize the amount received by it as business income within the meaning of DTAA. Once the assessee itself admits that the amounts received by it on the FCCDs were in the nature of Interest income , then the same cannot be converted into income from business and therefore, the submissions of the ld. AR are without any basis and hence, the same are rejected. Accordingly, the appeal of the assessee is dismissed.
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2023 (6) TMI 28
Disallowance of deduction on investment written off - capital loss or revenue loss - HELD THAT:- We find identical issue had come up before the Tribunal in assessee s own case for the A.Y 2009-10 restored the issue to the file of the AO. We deem it proper to restore the issue to the file of the AO with a direction to decide the issue for the present year in the light of the direction of the Tribunal for A.Y 2009-10 at the earliest. While doing so, AO shall keep in mind the various decisions relied on by assessee including that of the in the case of Patnaik Co. [ 1986 (7) TMI 6 - SUPREME COURT] AO shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. First issue raised by the assessee in the ground of appeal is treated as allowed for statistical purposes. Disallowance of purchase of software - revenue or capital expenditure - assessee submitted that the software purchases debited to P L A/c pertain to license fee for the year only and hence cannot be disallowed treating it as a capital expenditure - AO did not accept the contention of the assessee on the ground that the assessee had not produced the bills/invoices for the items it pertains - HELD THAT:- Since the assessee in the instant case has filed all the relevant details along with supporting bills/invoices, during the assessment proceedings itself, therefore, respectfully following the decision of Danfos Industries (P) Ltd ( 2021 (9) TMI 1151 - MADRAS HIGH COURT ), we hold that the CIT (A) NFAC is not justified in confirming the disallowance treating the software expenditure as capital in nature. The order of the CIT (A) NFAC is set aside and the AO is directed to allow the expenditure debited in the P L A/c under the head software purchases. Decided in favour of assessee.
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2023 (6) TMI 27
Reopening of assessment - Lack of jurisdiction u/s 147 - Reasons cited were that the assessee did not file return and the capital gain on sale consideration was not brought to tax - HELD THAT:- The assessee had duly filed return of income on 31.03.2009 thereby the most basic reason itself is wholly incorrect and not existed and noticeably PAN of the assessee was duly mentioned in sale deed. Secondly, the sale consideration of Rs.98,76,000/- was giving rise to allegation of escapement towards the sale consideration for the purposes of escapement of capital gain whereas actual share of sale consideration relatable to the assessee stands at Rs.24,69,000/- only and therefore, the basic information is yet again wrong and mentioned in reasons without application of mind. We find that the issue is squarely covered in favour of the assessee by the judgments rendered in the case of Mumtaz Hazi Mohmad Menon [ 2018 (10) TMI 366 - GUJARAT HIGH COURT] as held that the assumption of jurisdiction on the basis of wholly incorrect facts cannot be conferred in law. In this case also, the reasons cited were that the assessee did not file return and the capital gain on sale consideration was not brought to tax which reasons were found to be factually incorrect. The assessee had return of income which was not noticed by the AO. Assessee appeal allowed.
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2023 (6) TMI 26
Late fees levied u/s 234E - intimation issued U/s. 200A - whether TDS returns pertaining to the period prior to 01/06/2015, if filed after 01/06/2015 and processed after 01/06/2015 whether they attract the amended provisions of Finance Act, 2012 and the specific provision for levy of fee under section 234E of the Act which was inserted w.e.f 1/6/2015? - HELD THAT:- There is no dispute that the issues involved in these appeals are squarely covered in favour of the assessee by Fatheraj Singhvi vs. Union of India [ 2016 (9) TMI 964 - KARNATAKA HIGH COURT ] wherein as held the impugned notices under Section 200A of the Act for computation and intimation for payment of fee under Section 234E as they relate to for the period of the tax deducted prior to 1.6.2015 are set aside. Thus, in the instant case since the period of default was before the said date i.e., 01/06/2015, there is no merit in charging late filing fee U/s. 234E of the Act. Accordingly the Ld. AO is directed to delete the fee levied U/s. 234E of the Act in the order passed U/s. 200A - Decided in favour of assessee.
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2023 (6) TMI 25
Computing profits and gains from transfer of asset / immovable property- value determined by the DVO - difference between stamp value and sale consideration - HELD THAT:- AO himself has referred the property under consideration to the DVO for valuation who assessed the value of property at Rs.2,01,33,600/- as against the sale consideration of Rs.1,66,15,200/- and circle rate of Rs.3,35,22,444/-. Though AO himself has referred the property to the DVO for valuation, however, by filling remand report dated 27.02.2019 before the ld. Commissioner raised the question over the method of valuation used by the DVO who has used the rent capitalization method for valuation of the property as a prescribed method for valuation. Commissioner by considering the peculiar facts that AO has failed to point out any lacunae or fallacies in respect of the DVO report to substantiate his claim that the valuation report was not reliable and in the remand report, the AO did not cite any comparable evidence of sale of property at the value adopted by the AO in the assessment order, ultimately accepted the value determined by the DVO, as the fair market value of the property sold and therefore, considering the peculiar facts and circumstances of the case restricted the addition to the difference of Rs.35,18,400/- (Rs.2,01,33,600 - Rs. 1,66,15,200). Considering the decision of the ld. Commissioner in totality, we do not find any reason and/or material to contradict the findings of the ld. Commissioner in coming to the said decision. - additions confirmed.
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2023 (6) TMI 24
TP adjustment - assessee has made a payment as interest on CCD @ 15% - Assessee has benchmarked the interest rate using LPC Loan Connector Blumberg Bond and Bombay Stock Exchange, the mean interest of which was arrived at 14.56% - TPO held the CCD to be not a debt but in the nature of equity capital. Accordingly the TPO arrived at the ALP as NIL using CUP as the most appropriate method which resulted in the TP adjustment of entire payment of interest made by the assessee - HELD THAT:- Tribunal in earlier years i.e., AYs 2009-10 to 2013-14 [ 2019 (8) TMI 554 - ITAT BANGALORE] has held that until the date of conversion, the interest paid on CCD cannot be treated as interest on equity and that interest paid on debentures are allowable as expenditure u/s. 36(1)(iii). Determination of ALP, AR brought to our attention the order giving effect passed by the DCIT, TP 1(1)(2), Bangalore for AY 2010-11 dated 24.12.2020 pursuant to the directions of the Tribunal where the TPO has applied the SBI PLR for the purpose of determining the ALP of the interest rate. We remit the issue back to the TPO with a direction to apply appropriate SBI PLR rate to determine the ALP of the interest on CCD. Set off of brought forward business loss and unabsorbed depreciation - We in this regard issue direction to the AO to consider the brought forward losses and unabsorbed depreciation and allow the set off in accordance with law.
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2023 (6) TMI 23
TP Adjustment - comparable selection - AR submitted that the turnover of the assessee is Rs.52 crores and the TPO while applying the turnover filter did not apply the upper turnover filter of Rs.200 crores - HELD THAT:- The Tribunal in the case of Autodesk India Pvt.Ltd. [ 2018 (7) TMI 1862 - ITAT BANGALORE] took note of all the conflicting decision on the issue and rendered its decision held as that high turnover is a ground for excluding companies as not comparable with a company that has low turnover. Thus we hold that companies whose turnover in the current year is more than Rs.200 Crores should be excluded from the list of comparable companies. Working capital adjustment - As decided in Huawei Technologies India P. Ltd. [ 2018 (10) TMI 1796 - ITAT BANGALORE] there would remain no comparable uncontrolled transactions for the purpose of comparison. The transfer pricing exercise would therefore fail. Therefore, in keeping with the OECD guidelines, endeavor should be made to bring in comparable companies for the purpose of broad comparison. Therefore, the working capital adjustment as claimed by the Assessee should be allowed. We remit the issue of TP adjustment made back to TPO for a denovo consideration with a direction to keep in mind the above decisions of the coordinate bench with regard to application of turnover filter and working capital adjustment for determination of ALP, taking into account the details submitted by the assessee after allowing an opportunity of hearing to the assessee. Inclusion of non-AE transactions for the purpose of ALP - contention of the revenue is that the terms of transaction between the assessee and the other person is influenced by the AE and accordingly the transactions with local vendors is a deemed international transaction - HELD THAT:- DRP has upheld that decision of the TPO without analysing the provisions under which the transaction is deemed as international transaction and without calling for any relevant documents in this regard. As further notice that the DRP has stated that no segregation of accounts for AEs and Non-AEs was available and segment-based information pertaining to AE and Non-AE sales and purchases was to be provided. As submitted by the ld AR we see no merit in this contention since the raw materials procured from AEs and non-AEs have been consumed in making sale of finished goods to only one customer who is not an AE u/s 92 and accordingly the question of providing a break-up of revenue and cost pertaining to AEs and Non- AEs segments does not arise. Transactions with the local vendors the terms of which are not influenced by Comer SpA cannot be treated as deemed international transaction and accordingly cannot be included for the purpose of ALP adjustment. TPO is directed accordingly to consider only the transaction with AE for the purpose of determination ALP in accordance with the directions given in this order. Appeal of the assessee is partly allowed.
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2023 (6) TMI 22
Addition towards undisclosed foreign assets under the provisions of Black Money (UFIA) And Imposition of Tax Act, 2015 for the alleged investment in life insurance policies in the name of the assessee - whether the alleged investment in insurance policies comes under the category of undisclosed foreign income and assets as per Section 2(11) 2(12) of the Black Money Act, 2015? - HELD THAT:- Provision of Section 2(11) of the Black Money Act, 2015 provides for the definition of undisclosed asset located outside India and following two conditions need to be fulfilled by the Revenue authorities to bring a particular foreign asset under the category of undisclosed asset located outside India held by the assessee in his name or in respect of which he is a beneficial owner. First condition is that such asset is not disclosed by the assessee in the return of income or any other place of disclosure as provided under the Black Money Act, 2015 and secondly, the assessee is unable to offer any explanation about the source of investment in such asset or the explanation given by him is unsatisfactory in the opinion of ld. AO. So far as explanation about the source of alleged investment, in the case under consideration is concerned, we find that the assessee has successfully explained the source of investment which is undoubtedly from the income earned outside India, part of which was paid by the assessee in the capacity of a non-resident Indian and the remaining part being paid by assessee s father who is also a non-resident Indian from his sources of income/asset located outside India. There is no iota of evidence bring forth by the Revenue authorities which could indicate that any element of the alleged investment in foreign asset is from so-called black money earned in India. Complete details of the bank account along with date of payment of the premium of the insurance policy supports this fact that the assessee has successfully explained the source of investment in the alleged foreign asset in the form of investment in insurance policy. For the other limb of Section 2(11) of Black Money Act, 2015 is concerned about the disclosure of the said asset, we find that the premium payment to the two life insurance policies was discontinued from 2010 onwards. These policies commenced in the year 2000 and they were for a period of 21 years. In the middle of the term of the policy, the premium payment was discontinued. As stated by ld. Counsel for the assessee, the assessee was of bona fide belief that the policies have been discontinued and the amount so invested have been forfeited. It was only during the FY 2018-19 that the assessee came across the information of being eligible to lodge the claim for refund of surrender value which was followed by the necessary process and the surrender value was finally received in the bank account of the assessee held in India. Assessee duly disclosed the amount so received in his income tax return and paid the taxes to the tune of Rs. 39,00,000/- thereon and based on such disclosure by the assessee, the alleged proceedings were carried out under Black Money Act, 2015. So, this fact also remains uncontroverted that the value of the alleged investments received by the assessee in India has already been subjected to Income tax and taxing the same amount under the Black Money Act, 2015 will tantamount to double taxation. We are of the considered view that since the necessary condition to hold a particular foreign asset as undisclosed foreign asset located outside India as provided u/s 2(11) of Black Money Act, 2015 remained to be fulfilled, ld. AO was not justified in invoking the provisions of Black Money (UFIA) And Imposition of Tax Act, 2015 to make an addition in the hands of the assessee - reverse the finding of ld. CIT(A) and delete the addition made in the hands of the assessee
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Customs
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2023 (6) TMI 21
Validity of restraint order - imposition of conditions for provisional release of the seized goods - reasons to believe - only grievance of the petitioner is that the petitioner has already paid a substantial amount towards the differential duty and hence it is unfair to impose such conditions - HELD THAT:- A reading of Section 111 shows that it applies to goods brought from outside India. Since seizure under Section 110 relates to articles liable for confiscation, necessarily articles procured locally fall out of the ambit to Sections 110 and 111. It is evident that there is a factual dispute regarding the payment of Rs. 78 lakhs and it is this demand which is stated as a reason for reconsidering the direction to furnish bank guarantee. In the light of the specific appellate remedy available to the petitioner and the factual dispute which would go to the root of the order which is impugned, it is not proper for this Court to consider the said issue on merits in a proceeding under Article 226 of the Constitution. The writ petition is hence disposed of directing the competent authority to examine whether any of the articles seized are articles that were procured locally. If the competent authority finds that any of the seized articles are articles procured locally, steps shall be taken to release such articles.
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2023 (6) TMI 20
Refund of the IGST paid with regard to the goods exported - zero rated supplies - rejection due to drawback claimed by the petitioner - HELD THAT:- As per Rule 96 of the CGST Rules, 2017, shipping bill filed by an exporter of goods shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India, once Export General Manifest (EGM) and valid GSTR-1 and GSTR-3B for the relevant period has been filed. It was further stated that the petitioner had declared the IGST amount of Rs. 1667/- and Rs. 6363/- in the shipping bills (refund application) and accordingly, IGST refund was processed automatically in the Customs EDI System. The said amount was credited in the designated bank account of the petitioner on 09.06.2018. If, the petitioner would have not made any mistake in filing of IGST amount in shipping bills, he might get the total refund automatically on 09.06.2018. The present one is the second petition filed by the same petitioner seeking the similar benefit. In the present case, IGST paid by the petitioner was corrected as Rs. 2,01,423.31/- for shipping bill No. 7229240 dated 08.07.2017 and Rs. 2,47,486/- for shipping bill No. 7451382 dated 19.07.2017. However, the refund of IGST paid was rejected due to drawback in Part A taken by the petitioner. This prayer of the petitioner for refund is governed by circular dated 30.06.2017 (Annexure R-1) and circular bearing No.37/2018-Customs dated 09.10.2018 (Annexure R-2) - a perusal of circular No. 37/2018-Customs dated 09.10.2018 (Annexure R-2) issued by the Board makes is clear that for exports affected during the transition period by declaring drawback serial number suffixed with A or C, the exporters have consciously relinquished their IGST/ITC claims. Reference, at this stage, can be made to a judgment passed by the High Court of Kerala in G NXT POWER CORP. VERSUS UNION OF INDIA, REPRESENTED BY ITS SECRETARY, GOVERNMENT OF INDIA, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE (CENTRAL BOARD OF EXCISE AND CUSTOMS) , NEW DELHI, CENTRAL BOARD OF INDIRECT TAXES AND CUSTIOMS, NEW DELHI, COMMISSIONER OF CUSTOMS, COCHIN AND DEPUTY COMMISSIONER OF CUSTOMS (REFUNDS AND DRAWBACK) , COCHIN [ 2019 (9) TMI 515 - KERALA HIGH COURT] wherein the revenue was alleging that the petitioner had already availed/drawn higher rate of duty drawback, therefore, while ordering refund of IGST, the petitioner was required to refund higher rate of duty drawback with interest. On the other hand, claim of the petitioner-assessee was that the respondent-revenue was liable to pay interest on IGST paid from the date on which request for refund was made. While deciding the matter, the respondents were directed to adjust amount already availed by the petitioner on account of higher rate of duty drawback and pay balance of IGST payable to petitioner within six weeks. Keeping in view the judgment passed in G.NXT Power Corp. s case, the present petition is disposed of by giving direction to the respondents to adjust the amount already availed by the petitioner on account of higher rate of duty drawback and pay the balance of IGST payable to the petitioner within a period of six weeks from the date of receipt of certified copy of this order, failing which the respondents will pay interest @ 7% together with the balance amount payable from the date on which, a request for refund was made by the petitioner till the date of payment.
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2023 (6) TMI 19
Valuation of imported goods - Polyethylene Laminated in Rolls - PVC Flex Fabrics - rejection of declared value - rejection of request for re-export of the goods - burden to prove - demand of differential duty on enhanced value - confiscation - redemption fine - penalty - wrong supply made by the supplier or not - HELD THAT:- When irregularity was pointed out by the Revenue to the importer, the importer immediately waived issuance of Show Cause Notice, thereby preventing the Revenue from highlighting the case against them, for which they had to answer, in writing. That situation was very decisively/conveniently avoided by the importer! During personal hearing also, they appear to have made only formal representation, again perhaps trying to avoid the possible further probing/digging by the Adjudicating Authority, except requesting for permission to re-export. There are no reference to the e-mail sent by the supplier admitting wrong supply anywhere in the order of the Adjudicating Authority, though we are not suspecting the very existence of such e-mail from supplier at that stage. We do not want to guess here, that it was because they were not filed since the only ground urged was for re-export - That makes it clear that their claim of wrong supply could possibly be an after-thought, which gave birth to the e-mail from supplier! It is thus clear that the Department or at least the Adjudicating Authority never had any chance to address/examine this issue of wrong supply and hence, there was nothing for the Adjudicating Authority to prove or disprove on this, at the time of adjudication. When an irregularity was pointed out, instead of discharging the same, the respondent simply evaded by requesting for re-export. So, if we go by the findings of the Commissioner (Appeals), then it was for the Adjudicating Authority to even explain the irregularity, not just wrong supply . Thus, the burden which was on the respondent was never discharged and hence, there is no question of onus shifting on to the Revenue, to prove, what the learned Commissioner (Appeals) wanted or as desired by the respondent, that there was no wrong supply - The requirements under the burden of proof are covered in Chapter VII of the Indian Evidence Act. Section 123 of the Customs Act requires burden of proof in certain cases and in the light of our above discussion, the burden of proof which has not been defined under the Customs Act, therefore, has to be looked into from the point of the Indian Evidence Act. When a statutory authority entertains a doubt, a Show Cause Notice will be naturally issued based on certain observations and it is for the noticee to satisfy and to prove that the observations / allegations of the statutory authority issuing such Show Cause Notice is wrong. The burden of proof, therefore, is always there on the noticee initially, which has to be discharged in the first place - the fact as to the wrong supply was advanced by the importer and hence, the burden of proof is always on the importer to prove the wrong supply to the satisfaction of the authority. The Commissioner (Appeals) was clearly in error to observe that the Department did not bring on record any material to contradict the contention of wrong supply which, is not the intention or spirit of law - there are no attempt being made by the importer to furnish any other piece of evidence to justify its claim as to the wrong supply. The Commissioner (Appeals) committed an error in allowing the appeal of the importer without there being any evidence in support of the importer s claim and hence, the impugned order cannot sustain - appeal of Revenue allowed.
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2023 (6) TMI 18
Valuation of imported goods - various types of Pigments - foreign entity as well as the importer/appellant were related in terms of Rule 2(2)(i), (iv) and (v) of the Customs Valuation Rules, 1988 or not - inter-se relation having any influence on the transaction value of imports, or not - whether the declared transaction price was acceptable, or did it require loading, as proposed, for the reasons discussed in the orders of lower authorities? HELD THAT:- The appellant nowhere denied, and rightly so, that its imports were sourced from its relative entity and accordingly hit by Rule 2(2)(i), (iv) and (v) ibid. wherein related is defined. It is most relevant here to ascertain if the value so declared is at arm s length. Burden is therefore on the appellant to establish that the transaction value declared by it was not influenced by the relationship with its supplier. Though the Learned Advocate contended that the declared value was at arm s length, we find from the orders of the lower authorities that they have disputed the same. Even before us, other than arguing that their value declared was at arm s length, no supporting material is placed to dislodge the findings of the lower authorities. If the price declared was at arm s length, then perhaps there would not be any such long drawn dispute at all - Moreover, from the claim of the appellant that the deductive method of valuation is appropriate, itself suggests that the prices declared were certainly not at arm s length - the declared value was not at arm s length. Whether the value was influenced by the relative party transaction, in terms of Rule 4(3)(a) ibid? - HELD THAT:- When such a doubt is expressed by the authority, then the burden is on the appellant to discharge the same, to establish that the transaction value was at arm s length - there is no dispute as regards the relationship between the appellant and the foreign supplier and hence, we have to read second proviso to sub-section (1) carefully. This is because, it is only provided here, under the second proviso, as to the determination of import value in respect of related party transaction. It also provides, inter alia, power to the Adjudicating Authority to reject the declared value where the proper officer has reasons to doubt the truth or accuracy of the declared value. Rule 4(3)(b) could be invoked only when the importer demonstrates as to meeting three requirements thereunder. But it is to be noted here that Rule 4(3)(b) does not talk anything when the value is held to be at arm s length. The Adjudicating Authority has adopted Rule 5 as against which, the appellant urges for the adaptation of Rule 7. It is thus urged by the appellant to violate the sequential Rule and choose the one which perhaps suits it, for which no justifiable reason is advanced. It is not only for jumping the sequence, but also for choosing Rule 7 that proper case has to be made out otherwise, the Adjudicating Authority has to follow the mandate of the Rule 3(ii) ibid, which according to us is perfectly in order. Thus, necessary opportunities were given to the appellant for producing all the evidence based on which the Adjudicating Authority passed a detailed speaking order and consequently, the appellant cannot be heard to say it was not given sufficient opportunities and nor is there any such ground to that effect urged before us. Hence, the impugned order does not call for any interference. Appeal dismissed.
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2023 (6) TMI 17
Classification of imported goods - change in the stand of revenue during the appellate proceedings - Aluminium Tube for condenser - to be classified under CTH 7610 9030 or under CTH 7604? - whether the order of the First Appellate Authority is correct? - HELD THAT:- From the definitions of adjudicating authority given in the statute, it is clear as to the role of an Adjudicating Authority, which term cannot include a Commissioner (Appeals). Rightly so, because the jurisdiction and scope of adjudication proceedings before an Adjudicating Authority is vast as compared to that of a Commissioner (Appeals). When an Adjudicating Authority issues Show Cause Notice after gathering information, from whatever sources, that becomes the foundation and the burden would lie on the noticee to whom such Show Cause Notice is issued, to reply to the Show Cause Notice. That is to say, such noticee becomes aware of the allegations against him and hence, noticee would reply by meeting all the points/allegations in the Show Cause Notice and if he so desires, he could even furnish all necessary supporting evidences. Then the case is adjudicated wherein the Adjudicating Authority would examine the merits in the response to the Show Cause Notice and the noticee could also have the benefit of personal hearing. After weighing and balancing the merits in the contentions of the noticee, the Adjudicating Authority proceeds to pass the Order-in-Original. After this, Section 128 of the Customs Act, 1962 could be pressed into service by any person who is aggrieved by the Order-in-Original. Here, in the case on hand, the respondent filed appeal feeling aggrieved, before the Commissioner (Appeals) against the Order-in-Original, but the Revenue did not prefer any appeal, which means that the order of classification passed by the Adjudicating Authority was accepted by the Revenue, or rather, the Revenue was not at all aggrieved by the Order-in-Original or even the classification - there are no grounds taken by the Revenue against the impugned order, as to there being any error of law committed by the First Appellate Authority. In effect, Revenue wants reversal of classification and Order-in-Original. The approach of the Revenue who have chosen to file the present appeal for the reasons that as and when the Order-in-Original was received, they slept over the matter and thus missed the bus. Secondly, having not exhausted the available opportunity, they have contended that the Commissioner (Appeals) should have, on his own, exercised power under Section 128A (3) which, according to us, does not stand - This is for the reason that there is no allegation against the Commissioner (Appeals) that he has not followed the procedure as prescribed under statute, nor has the Revenue found fault with the same. There are no reason to interfere with the order of the First Appellate Authority - appeal dismissed.
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2023 (6) TMI 16
Seeking amendment in the shipping bill - In the Shipping Bill, the appellant had initially mentioned the code 9801 , instead of the applicable code for Brand rate fixation as 980788411B - amendment was sought on the ground that the appellant was intending to claim brand rate of drawback in terms of Circular No. 29/2015-Customs dated 16.11.2015 - Section 149 of the Customs Act, 1962. HELD THAT:- The appellants wanted to impress upon the fact that the Brand Rate Fixation claim was existed at the time of export and thus, the application was appropriately made for amendment of the Shipping Bill in terms of Section 149 and Section 154 of the Customs Act, 1962. However, on examination of the orders passed by the lower authorities, it is found that the reference of documents relied upon by the appellants in this appeal were not at all considered by them and the claim of the appellants for amendment of the shipping bill was denied solely on the ground that the appellants did not submit any documentary evidence available at the time of export to substantiate their claim for amendment of the shipping bill. The provisions for amendment of documents are contained in Section 149 ibid. It has been mandated that the proper officer may, in his discretion, authorize any document, after it has been presented in the Customs House to be amended. The proviso clause appended to Section 149 ibid provides that no amendment of a shipping bill shall be authorized to be amended after the goods have been exported, except on the basis of documentary evidence which was in existence at the time the goods were cleared - In the present case, though the appellants have claimed that the provisions of Section 149 ibid have been duly complied by them, but the request letter for amendment of the shipping bill was turned down by the authorities on the ground that no documents were submitted to demonstrate that such amendment merits consideration in respect of the exports already made. Thus, under such circumstances, the lower authority should properly examine the documentary evidence submitted by the appellants for proper appreciation of the fact regarding amendment of the shipping bill. Further, Section 154 ibid provides for the mechanism of correction of clerical errors, etc. in any decision or order passed by the officer of customs. In the case in hand, though the appellants had claimed that due to typographical error, the shipping bill has wrongly claimed the duty Drawback under Sr. No. 98.01, but the available documents, including the email correspondences proved the fact that the correct classification reference should be under Entry 84.11.82.20. However, with regard to the prayer made for correction of such error or mistake had not been addressed by the authorities below. The matter should go back to the original authority to properly examine the issue, whether the documents based on which the amendment is sought for by the appellants were present at the time of exportation of the subject goods or arranged subsequently by them for obtaining the benefit of Drawback - the appeal is allowed by way of remand to the original authority for de novo adjudication of the matter. Appeal allowed by way of remand.
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2023 (6) TMI 15
Levy of Anti-Dumping Duty - certain flat rolled products of aluminium - grant of exclusion to higher width Lithograde Aluminium coils above 1150 mm width, which are not commercially manufactured and supplied by the domestic industry i.e., Hindalco Industries Ltd. - HELD THAT:- It is seen that for the period from Financial Year 2019-2020 to 2022-2023 Hindalco only supplied miniscule quantities, on trial basis to the appellant during the period of investigation but no supply of higher width coils was to the appellant made either pre or post period of investigation. In fact, only 2% of the requirement of the appellant of higher width coils were supplied on trial basis during the period of investigation and 25% of the supplies were rejected because they did not meet the technical manufacturing requirements. Even according to the Hindalco, only 74% of the supply of lithograde aluminium coils between 1150 mm to 1600 mm met the requirements. It is, therefore, clear that Hindalco does not produce lithograde aluminium coils above 1150 mm on a commercial basis and it was only on a trial basis that this product was supplied to the appellant which also could not meet the technical requirements. The designated authority, therefore, committed an error in observing that Hindalco had supplied lithograde aluminium coils beyond 1150 mm and up to 1600 mm to the appellant when only miniscule supply had been made. In such a situation when commercial production had not been undertaken by Hindalco of this product, the issue of demand-supply gap would not arise. At its plant, the appellant subjects the lithographic coils to the electro-chemical graining process for conversion into offset printing plates. Electro-chemical graining is a process by which the surface of the coil is evenly roughened to improve the adhesion of the coating layer to the coils which improves the water/ink balance of the printing by the printers through exposure and developing. Technically the electro graining can only be done in the direction in which the coil has been rolled by Hindalco. After undergoing graining, the coils then undergo, inter-alia, the processes of anodizing and coating to become lithographic plates. When the manufactured plates are installed into the printing press, they get bent at their gripper ends of the printing rollers. In such a situation, bending of the plates takes place perpendicular to the graining direction of the plates. If they are bent parallel to the graining direction of the plates, they will crack during the high-speed printing causing serious accidents. The web printing presses are high speed machines with 40,000 to 80,000 impressions per hour speeds. The printing machine rollers exert high pressure on the plate cylinders and tension/stress on the plate edge which is bent for lockup in the gripper at both ends. Due to this reason, the length of the coated coil cannot be transposed as width of the plate while mounting in the press. In the material injury analysis, the anti-dumping law requires consideration of period of investigation data and not future commitments which is entirely subjective. The future expansion of scope of product is to be considered under a new investigation or a mid-term review provision under the 1995 Rules, once facts of manufacture and supply in commercial quantities are established. In any view of the matter, this submission was not raised by Hindalco before the designated authority. The inevitable conclusion that follows from the aforesaid discussion is that Hindalco does not manufacture/produce lithograde aluminium coils above 1150 mm on a commercial basis. Thus, when the domestic industry does not manufacture/produce lithograde aluminium coils above 1150 mm on a commercial basis, this product would have to be excluded from scope of the product on which anti-dumping duty has been imposed under the customs notification dated 06.12.2021 issued by the Central Government on the basis of the final findings dated 07.09.2021 issued by the designated authority. The customs notification dated 06.12.2021 is, accordingly, modified by excluding the lithograde aluminium coils above 1150 mm from imposition of anti-dumping duty - Appeal allowed.
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Insolvency & Bankruptcy
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2023 (6) TMI 14
Maintainability of application - permission sought to intervene in Section 7 application against Ascot Projects - Adjudicating Authority merely on the ground that a third person is not a necessary party in Section 7 proceedings, rejected the application - HELD THAT:- It is noted that the CIRP of Intellicity Business Park as corporate debtor was initiated on 27.05.2019 after admission of a section 7 application of the IBC. It is also noted that the proposed resolution plan in respect of Intellicity Business Park has been filed by Respondent No.4 - M/s SSR Townships Private Limited, which is pending approval of the Adjudicating Authority after being approved by the CoC. It is also noted that the land obtained on lease by M/s Ascot Projects Pvt. Ltd. from GNIDA is the land on which the project Intellicity Business Park is being developed and which is included in the proposed resolution plan filed by Respondent No.4 for insolvency resolution of M/s Intellicity Business Park Ltd. It is also noted that the proposed resolution plan of Intellicity Business Park includes merger of Ascot Projects Pvt. Ltd. with its holding company Intellicity Business Park. It stands to reason that admission of Section 7 application against M/s Ascot Projects Pvt. Ltd. and initiation of a separate CIRP would create hurdle in the full and proper implementation of the proposed resolution plan of Intellicity Business Park filed by the Respondent No.4 once it is approved by the Adjudicating Authority. It also cannot be denied that the interest of the unit buyers and creditors of Intellicity Business Park is intricately and closely linked with the land which is held in lease by company M/s Ascot Projects Pvt. Ltd. Therefore the continuation of Ascot Projects Pvt. Ltd. as a financially healthy and viable company is a necessity for successful insolvency resolution of Intellicity Business Park. It is noted that issue of alleged fraud in the filing of Section 7 application against Ascot Projects was brought to the notice of the Adjudicating Authority, which was filed under Sections 60(5) and 65 of the IBC. A perusal of the application makes it clear that the Appellant Airwil Intellicity Social Welfare Society had pleaded the matter relating to alleged fraud being played by Airwil Infra Ltd. on the unit holders and creditors of M/s Intellicity Business Park Ltd. and also the collusion of its ex-directors Mr. Sanjay Kumar, Mr. Manoj Kumar Chaudhary and Mr. Kamal Aggarwal (who are the current directors of M/s Airwil Infra Ltd.) in this regard. When an allegation of fraud being played on the financial creditors and unit buyers of Intellicity Business Park was brought to the notice of the Adjudicating Authority when it was considering section 7 application CP (IB) No. 2356(ND)/2019 with regard to corporate debtor Ascot Projects it ought to have been taken note of by the Adjudicating Authority and the Appellant should have been provided an opportunity to present its case in the Section 7 proceedings of M/s Ascot Projects Pvt. Ltd. in view of the requirement of natural justice and to avoid miscarriage of justice to the Appellant who could have been adversely affected by the admission of section 7 application. The Adjudicating Authority should have allowed application and permitted the Appellant to intervene and participate in the Section 7 proceedings with relation to the corporate debtor M/s Ascot Projects Pvt. Ltd. This was necessary to avoid miscarriage of justice and would have allowed the Appellant to substantiate its allegation. The impugned order is set aside permitting the Appellant to intervene and participate in the proceedings under consideration of the Adjudicating Authority - appeal allowed.
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Service Tax
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2023 (6) TMI 13
Sabka Vishwas (Legacy Dispute Resolution) (SVLDR) Scheme - cut-off date for availing the benefit of the scheme - Circular No. 1071/4/2019-CX.8 dated 27.08.2019 - HELD THAT:- A careful perusal of the section 124(1) (a) (c) of the scheme would show that the reliefs under the Scheme is broadly classified as those falling under litigation category and the other falling under the arrears category. In the former category the amount of duty is disputed or is capable of being disputed and yet to be finalized, while in the latter category, amount of duty is not in dispute or has become final. On a conjoint reading of the aforesaid provisions, it is manifest that the SVLDR Scheme was extended to cover those category of cases where there was existing some degree of finality with regard to imposition of duty/tax dues as on the cut off date . Reverting to the instant matter, the SVLDR Scheme was notified on 21.08.2019 and brought into effect from 01.09.2019 did not per se apply to the petitioner who filed an appeal against the imposition of duty/tax subsequent to the cut off date . The plea of the petitioner that such cut off date had placed it in no man s land and it was deprived of the benefit of the Scheme was addressed on interim orders passed in the earlier writ petition bearing W.P.(C) 11001/19 CM Application 4505/19 which led to the respondent No. 2 issuing the aforementioned Circular No. 1073/06/19-CX dated 29.10.2019. Consequent to which, the petitioner submitted a declaration SVLDRS-1 on 30.12.2019 with an undertaking to withdraw the appeal, which was eventually withdrawn on 27.01.2020. A comprehensive and harmonious interpretation of Section 123 (a) (1) read with Section 124(1) (a) of the Scheme leaves no scope for doubt that on withdrawal of the appeal filed post 01.07.2019 and on filing of declaration, its case was to be considered under the arrears category so much so that the petitioner even accepted the calculation computed by the Department and paid the payable amount as mentioned in the SVLDRS-3 without any demur or protest on the basis of which Discharge Certificate was issued on 03.07.2020. At the cost of repetition, once the pending litigation had been withdrawn, the demand of duty raised by the tax authorities attained finality and a fortiori fell under the definition of amount in arrears and the declaration was rightly considered under the arrears category. Before finally drawing the curtains down on this petition, it would be pertinent to mention that this Court in the case of Nidhi Gupta v. Union of India [ 2019 (12) TMI 1012 - DELHI HIGH COURT] , had an occasion to examine the SVLDR Scheme, 2019 and in reference to Section 121(C) (i) (ii) that defines the term amount in arrears as also the amount of duty which is recoverable, it was observed that the position has been explained vide Circular No. 1072/05/2019.CX dated 25.09.2019 vide clause (viii) that categorically enabled the tax payers to file declaration under the Scheme on giving an undertaking in writing to the Department that he would not file appeal, and suffice to state that the said Circular was held to be in consonance with Rule 3 of the Scheme-2019 floated under the Finance Act, 2019. There are no merit in the present writ petition. The same is dismissed.
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2023 (6) TMI 12
Levy of Service Tax - Cargo Handling Service - appellant submitted that they did not provide Cargo Handling Service as is ascertainable from the contract with M/s. J.K. White Cement Works, which was enclosed to the synopsis filed during the hearing - HELD THAT:- The clarification issued by the Board in the C.B.E.C. Circular No. 104/7/2008-S.T. dated 06.08.2008 mainly addresses the issue in respect of a GTA who also incidentally and by virtue of a single composite contract, undertakes activities like loading/unloading, packing/unpacking, transshipment, temporary warehousing, etc., for which the GTA issues a consignment note - It is thus clarified that transportation is not the essential character of Cargo Handling Service, but only incidental to the same. It also clarifies that where the service provider is registered under GTA and issues consignment note for transportation of goods by road, then the service is to be treated as GTA and not Cargo Handling Service. It is found from the activities of the appellant, as forthcoming from the orders of the lower authorities as well as the Show Cause Notice, as reproduced at paragraph 4.1 of this order, that they clearly fall under the definition of cargo handling service and therefore, there are no fault with the impugned demand. The evasion of tax is blatant, that is to say, the appellant though got itself registered under GTA and promptly collected the service charges as well, but however, it did not bother to remit at least the tax collected and hence, the same cannot be anything short of evasion. Over and above this, it is also a fact borne on record that the appellant did not even file ST-3 returns within the prescribed time. Thus, even this contention of the appellant as to the invoking of extended period of limitation lacks merit. There are no merits in the appeal and consequently, the same is dismissed.
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2023 (6) TMI 11
Partial rejection of claim of refund of unutilized input service tax credit - export of services - Time limitation - relevant date - date of the export invoice or the date of receipt of consideration in convertible foreign currency i.e., the date of FIRCs? - rejection on the ground of being time-barred in terms of Section 11B of the Central Excise Act, 1944 - quarter April 2012 to June 2012 on 27.03.2013. Whether the value of export for which invoices have been raised prior to the period of one year but in respect of which consideration has been realized during the relevant quarter within the period of one year, can be added to the export turnover for computation of the eligible refund under Rule 5 of the CENVAT Credit Rules, 2004? - HELD THAT:- Section 11B of the Central Excise Act, 1944 has been drafted to prescribe a procedure for claiming of refund of Central Excise Duty under various circumstances within one year from the relevant date. The relevant date has been defined in the explanation to this Section for various purposes. As far as the export of services is concerned, no relevant date was prescribed in this Section because this was meant for refund of duty of excise and not for export of services. Since the Notification No. 27/2012-C.E.(N.T.) dated 18.06.2012 required the claim to be made before the expiry of a period specified under Section 11B and this Section does not specify what is the relevant date in case of export of services, the Tribunal has, in a series of decisions, held that relevant date in case of export of services is the date of realization of the foreign exchange. The reason for this is the export of services is not complete unless the foreign exchange is realized as per Rule 3(2)(b) of Export of Services Rules, 2005. Therefore, unless the foreign exchange is realized, the export is not complete and therefore the relevant date must be the date of realization of foreign exchange. In the present case, the exports were made and refund claims were filed before the issuance of the above notification. The lower adjudicating authority, reckoning the date of export invoice as the relevant date, rejected these refund claims as time barred. There is no ground that Section 11B mandates that the date of invoice must be considered as the relevant date. The residual category under Section 11B is the date of payment of duty. In case of export of services, as in these appeals, there is no payment of duty. As such, in various cases, the Tribunal has considered as to what constitutes an export of service under the Export of Service Rules and concluded that the date of realization of foreign exchange is the relevant date. If the export is not complete, the exporter of services is not entitled to claim refund under Rule 5 of the CENVAT Credit Rules, 2004. Therefore, harmoniously reading the Export of Service Rules and Section 11B of Central Excise Act, 1944, the Tribunal has taken a view that in case of export of services, the relevant date must be the date of realization of foreign exchange. For this reason only, an amending Notification No. 14/2016-C.E.(N.T.) dated 01.03.2016 was issued to remove the lacuna in the initial Notification No.27/2012-C.E.(N.T.) dated 18.06.2012. The issue is resolved by the Larger Bench decision of the CESTAT in the case of Commissioner of Central Excise, Customs Service Tax, Bengaluru v. CCE CST, BENGALURU SERVICE TAX-I VERSUS M/S. SPAN INFOTECH (INDIA) PVT. LTD. [ 2018 (2) TMI 946 - CESTAT BANGALORE] wherein it was held that relevant date for refund of unutilized CENVAT Credit in case of export of services to be taken as the end of the quarter in which the FIRC is received since the prescribed procedure states that the refund claims are to be filed for every quarter. Claim of interest on the amount already debited from the CENVAT credit register - refund was not sanctioned and credit was taken back - HELD THAT:- The procedure prescribes debiting the CENVAT Credit account before filing the refund claim and it also provides for taking back of the credit into their CENVAT Credit account of the amount not considered for sanction or where the refund claims are partially sanctioned - the provisions are very clear as to debiting or crediting of the CENVAT Credit maintained by an assessee prior to applying for refund or its sanction or otherwise. It has to be noted that accumulated CENVAT Credit lying unutilized does not carry any interest. The procedure prescribed for filing refund claims for unutilized CENVAT Credit in case of export of services under Rule 5 of the CENVAT Credit Rules, 2004 clearly lays down that the assessee is free to take back the credit of not sanctioned / partially sanctioned refunds. As such, payment of interest in the circumstances of these appeals is not provided for. The impugned order set aside - appeal allowed.
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2023 (6) TMI 10
Non-payment of Service Tax - Mentioning of wrong service tax registration in the payment challan for two months - Mentioning of wrong location code [i.e. Kolkata Commissionerate code (SB0302) instead of Haldia Commissionerate Code (700602)] in the payment challan from May, 2007 to February, 2008 - HELD THAT:- The Appellant has discharged their Service Tax liability under RCM on GTA services. They have deposited the service tax in the account of Kolkata Commissionerate (AABCT1389BST002) instead of Haldia Commissionerate (AABCT1389BST001). The mistake in remittance of service tax in a difference service tax registration of the same assesse is a matter of internal adjustment at department s end and the assesse cannot be saddled with the demand of service tax again. This clarification has been issued by Board in Circular No 58/07/2003 dated 20/05/2003 and communicated to the trade vide Trade Notice No 03/2014 dated 10/07/2014 by Cochin Commissionerate - From the circular it is clear that the discrepancy such as payment of service tax under wrong registration can be adjusted against the correct registration for which the service tax is actually due. Accordingly, in the light of the above circular, the department could have made the necessary adjustment instead of raising the demand on the appellant. In the case of AURO PUMPS PVT. LTD. VERSUS UNION OF INDIA [ 2017 (7) TMI 24 - GUJARAT HIGH COURT ], the duty is said to have been paid under incorrect assessee code i.e. Code no. 001 instead of Code No. 002. The Hon ble High Court held that when authorities stand became very clear no demand of duty or any sum payable from the petitioners so far as assessee code No. 001 is concerned and when the authority has also knowledge that there was a mistaken payment made under challan, which contained incorrect code i.e. Code no. 001, though it belonged to present assessee, who also has Code No. 002 also and two unequivocally intended to make payment demand, which was payable to him and which was paid, though mistakenly under wrong code i.e. Code no. 001, could not have been subjected to technical defect on the part of authority, so as to saddle with liability. The demand was set aside and the appeal was allowed. In view of the above cited decisions, Board Circular and Trade Notice issued by Cochin Commissionerate, we hold that the demand of service tax, Education Cess, etc along with interest under section 75 of the Finance Act 1994, confirmed in the impugned order is not sustainable and accordingly set aside - Penalty under Section 76 of the Finance Act, 1994 is not imposable in this case, since service tax has already been paid to the government account. Penalty under Section 76 of the Finance Act 1994 is imposable only when service tax has not been paid to the Government Account - Penalty under Section 77 of the Finance Act, 1994 is not imposable in this case, since non mentioning of GTA services in the service tax registration is a merely procedural lapse. Hence Department s appeal is not sustainable. Appeal of Revenue dismissed.
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2023 (6) TMI 9
CENVAT Credit - input services or not - denial on the ground of lack of nexus with the output services provided by the appellants - appellants submitted that the learned Adjudicating Authority has not examined the invoices properly in respect of which the Cenvat credit was availed by the appellant - non-application of mind - violation of principles of natural justice - HELD THAT:- Insofar as the nexus aspect is concerned, it is incumbent upon the original authority to examine not only the invoices, but also the nature of services and their participation or use in the provision of the output service. The original authority has not thoroughly examined the documentary evidences and other aspects in support of denial of the benefit of Cenvat credit to the appellants. Further, we also find that the disputed services involved in this case were also involved in the subsequent period 2015-17 and upon proper analysis of the documentary evidences, the original authority vide order dated 06.05.2022 has allowed the Cenvat benefit to the appellants. On minute study of both the orders, there are no justification found as to how and under what circumstances the Cenvat credit on the disputed services were allowed by the adjudicating authority for the subsequent period, which were denied for the previous period. Furthermore, it has also been noticed that the judgments relied upon by the appellants have also not been considered in their proper perspective for arriving at a conclusion whether the appellants should be entitled for the credit or otherwise. Therefore, this matter is required to be re-examined at the original stage. The original authority should properly examine the actual use/utilization of the disputed services in the provision of the output service and also the duty paying documents for a conclusion regarding lawful entitlement to the Cenvat credit by the appellants - appeal allowed by way of remand.
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Central Excise
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2023 (6) TMI 8
Rejection of application filed under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - rejection on the ground that the demand was not finally quantified nor communicated to the party on or before 30.06.2019 - HELD THAT:- Admittedly, there is no difference between the tax dues as quantified in the show cause notice dated 09.08.2019 and the tax dues as quantified in the communications sent by the petitioner. However, in the show cause notice, a three-month period, which was prior to five years from the date of the show cause notice, has not been considered, apparently, for the reason that it was beyond limitation. The petitioner in its calculation had included the said amount as well - This Court had also called upon the respondents to produce the original files, which also indicate that at no stage, the quantification of the tax dues submitted by the petitioner was challenged, doubted or disputed. On the contrary, it is apparent that the respondents had accepted the quantification of the excise duty as disclosed by the petitioner and had proceeded on that basis. It is contended on behalf of the respondents that tax dues quantified by the petitioner in its communication cannot be considered as quantified tax dues for the purposes of the Scheme because the investigations continued till the issuance of the show cause notice dated 09.08.2019. According to the respondents, the tax dues could be considered as quantified only on completion of the investigation and on the concerned officer, issuing the show cause notice or any communication quantifying the amount due - The contentions advanced by the respondent are not merited. Tax dues as quantified in any communication emanating from the the tax payer, would qualify as tax dues if there is no dispute regarding the same. The Scheme also covers cases where investigations, enquiries and audit are pending. The Scheme was introduced by the enactment of the Finance Act No. 2 of 2019. Chapter V of the Act (Sections 120 to 135) provided the statutory framework for the Scheme. Section 122 of the Act specified various enactments, which were covered under the Scheme. There are two components of the Scheme. One is dispute resolution and one is amnesty. The dispute resolution component is intended to put an end to disputes that are pending in various forums. The amnesty component is intended to give tax payers, who have not correctly discharged their liability, to come clean and pay their tax dues. The Scheme covers not only cases where show cause notice has been issued and disputes are pending before various authorities but also cases where enquiry, investigation or audit is pending against an assessee. In addition, it also covers cases where there was no dispute as to the arears as well as cases where tax payers had come forward to voluntarily disclose their tax liability - petitioner had applied in the category where enquiry, investigation or audit is pending. The controversy involved in the present petition is squarely covered by the recent decision of this Court in Hans Uttam Finance Limited v. Principal Commissioner of Central Excise, Goods and Service Tax, Delhi South Commissionerate Ors. [ 2023 (5) TMI 812 - DELHI HIGH COURT] . In the said case, this Court had examined various provisions of Chapter V of the Act and the legislative scheme, and had held that Clearly, in cases where the Department is proceeding on the basis of certain quantification, although not mentioned in any written communication issued by the Department but admitted by the taxpayer in writing; the same would satisfy the definition of the term quantified under Section 121(r) of the Finance Act (No.2), 2019. In the present case, there is no controversy as to the amount of central excise payable in respect of goods cleared from the Delhi Warehouse. The petitioner had admitted its liability in the initial stages and had voluntarily disclosed the same in its communications. The respondents have proceeded and accepted the quantification. However, the respondents had not accepted payments in discharge of the liability on the ground that the same had been filed under their code pertaining to the petitioner s place of business in Coimbatore. The impugned decision of the Designated Committee rejecting the petitioner s declaration on the ground that tax dues are not quantified, is rejected - petition allowed.
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2023 (6) TMI 7
Reversal of CENVAT credit for payment of duty in terms of the provisions of Rule 8 (3A) of the Central Excise Rules, 1944 - failure to deposit the duty on due date, therefore, in terms of the provisions of Rule 8 (3A) of the Central Excise Rules, 1944 - debarred from utilizing the cenvat credit towards payment of duty - HELD THAT:- The impugned issue has already been settled by various judicial pronouncement latest by this Tribunal in the case of COMMR. OF CENTRAL EXCISE-KOLKATA-IV VERSUS M/S. STAR BATTERY LTD. VICE-VERSA [ 2019 (4) TMI 1254 - CESTAT KOLKATA ], wherein the provisions of Rule 8 (3A) of the Central Excise Rules, 1944, was declared as ultra vires. The observation of this Tribunal held that There is no bar in making use of Cenvat Credit in making payment of Central Excise Duty even during default period, in view of the fact that the Rule 8 (3A) ibid which steps otherwise, has been struck down as ultra vires. As the issue has already been settled, therefore, we hold that the provisions of Rule 8 (3A) of the Central Excise Rules, 1944, are ultra vires. Therefore, the impugned demand is not sustainable against the appellant. Accordingly, the same is set aside - appeal allowed.
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2023 (6) TMI 6
Refund of duty paid under protest - unjust enrichment - non consideration of cost accountant certificate - denial of the refund claims filed by the appellant on the ground that appellant has not been able to establish that they have not passed on the burden of duty claimed as refund on the consumer of goods. HELD THAT:- The issue involved in matter is no longer res-integra. Tribunal has in case of COMMISSIONER OF C. EX., COIMBATORE VERSUS FLOW TECH POWER [ 2006 (1) TMI 37 - HIGH COURT OF JUDICATURE (MADRAS) ] held that There was a factual finding by the authorities below that the duty had been paid under protest and the question of time bar would not arise. Hence, the argument that the petitioner paid the duty without protest is rejected. In respect of unjust enrichment, the facts reveal that the price was a composite one fixed by the Ministry of Agriculture. The factual position is that the duty had been absorbed by the assessee and it was submitted that the Chartered Accountant's Certificate dated 08.07.2002 and the profit and loss account, also confirm that the duty paid on the impugned goods had been absorbed by the assessee and had been shown as expenditure in profit and loss account and had not been passed on to the customer. The issue involved in the present case is squarely covered by the above referred decision of Hon ble Madras High Court. Following the above decision there are no merits in the impugned order - appeal allowed.
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2023 (6) TMI 5
CENVAT Credit - input services - expenditure incurred in constructing and maintaining Fly Ash Handling Plant facility at the supplier s premises to meet its requirement of manufacture of cement - sole ground of denial of such Cenvat Credit was that such Fly Ash plant is situated outside the factory of the Respondent - HELD THAT:- In the cases of COMMISSIONER OF CENTRAL EXCISE, NAGPUR VERSUS M/S AMBUJA CEMENT LTD [ 2015 (1) TMI 543 - CESTAT MUMBAI] , AMBUJA CEMENTS LIMITED VERSUS C.C.E. S.T. -SURAT-I [ 2022 (6) TMI 819 - CESTAT AHMEDABAD] and M/S AMBUJA CEMENT LTD. VERSUS CCE, NAGPUR [ 2019 (9) TMI 1194 - CESTAT MUMBAI] consistently this Tribunal has allowed benefits of availment of input services to the present Respondent in respect of Service Tax paid towards handling charges of Fly Ash facilities. There are force in the argument led on behalf of the Respondent Company since the same is solely based on the judicial precedent and guidelines issued by the Government of India. Further there is nothing mentioned in the Cenvat Credit Rules that credits on inputs or input services are allowed only when it is received within the factory premises. Appeal dismissed.
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2023 (6) TMI 4
Recovery of Central Excise Duty alongwith interest and penalty - manufacturing waste arising during the course of manufacture even if the same is cleared for certain consideration - HELD THAT:- The issue is no longer res-integra and have been considered by this Tribunal time again - reliance can be placed in the case of HINDALCO INDUSTRIES LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, NAVI MUMBAI AND NAGPUR [ 2022 (12) TMI 1295 - CESTAT MUMBAI ] where it was held that It is seen from the decision of the Hon ble High Court of Bombay in HINDALCO INDUSTRIES LIMITED VERSUS THE UNION OF INDIA, CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, THE COMMISSIONER OF CENTRAL EXCISE [ 2014 (12) TMI 657 - BOMBAY HIGH COURT] that dutiability of the impugned goods, which had been held by the Tribunal to be excisable even after the amendment inserting Explanation in section 2(d) of Central Excise Act, 1944 with effect from 10th May 2008, did not find favour in the light of several decisions. There are no merits in the impugned order and the same is set aside - appeal allowed.
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2023 (6) TMI 3
Method of Valuation of Excisable goods - clearance of goods for captive consumption on the basis of stock transfer - determination of value as per Section 4(1)(b) of the Central Excise Act, 1944 read Rule 8 of the Central Excise Valuation Rules, 2000 - HELD THAT:- During the course of adjudication the appellants have supplied the cost data supported by Chartered Accountant s Certificate for the period 2004- 05 and 2005-06. The adjudication order as well as the appellate authority s order also examined, there is no whisper about the certificates and cost data supplied by the appellants for these periods. Therefore, the matter needs examination at the end of the adjudicating authority to consider the cost data supplied by the appellants during adjudication. On the same issue Larger Bench of Tribunal in the case of ISPAT INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., RAIGAD [ 2007 (2) TMI 5 - CESTAT, MUMBAI] observed that The provisions of Rule 8 of the Valuation Rules will not apply in a case where some part of the production is cleared to independent buyers - The provisions of Rule 4 are in any case to be preferred over the provisions of Rule not only for the reason that they occur first in the sequential order of the Valuation Rules but also for the reason that in a case where both the rules are applicable, the application of Rule 4 will lead to a determination of a value which will be more consistent and in accordance with the parent statutory provisions of Section 4 of the Central Excise Act, 1944. There are no merits in grounds taken by the Revenue for filing this appeal - Appeal filed by the Revenue is dismissed.
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2023 (6) TMI 2
Refund of pre-deposit - refund claim filed is sought to be rejected by application of the principles of unjust enrichment - H ELD THAT:- It is settled principles of law that pre-deposit is excluded from the said principles as it is made against an order issued by the appellate authority under Section 35F of the central Excise Act, 1944. Tribunal has in the case of NATIONAL ORGANIC CHEMICAL INDUSTRIES LTD VERSUS COMMISSIONER OF CUSTOMS (IMPORT) MUMBAI - 400001 [ 2021 (6) TMI 713 - CESTAT MUMBAI] held that that In view of the specific provision of Section 129E of Customs Act, 1962, as elaborated by us, and the several decisions cited supra, the position adopted in the impugned order that the original authority was, in discarding the claim of the appellant that the payment of differential duty was pre-deposit, is not incorrect cannot be affirmed by us as legal and proper. Further, in the case of THE COMMISSIONER OF CENTRAL EXCISE, PUNE 1 COMMISSIONERATE VERSUS M/S SANDVIK ASIA LTD. [ 2015 (10) TMI 719 - BOMBAY HIGH COURT] , Hon ble Bombay High Court has held that Tribunal was not concerned with the treatment given to the amount and as deposited in the Assessee's profit and loss account. It is immaterial and irrelevant for the Tribunal and equally for us as to what the Assessee terms this amount in his Books of Account. Even if it is shown on the 'expense side' that does not mean that the presumption that the burden has been passed to the consumer can be raised. The order seeking to deny refund of pre-deposit by applying the principles of unjust enrichment cannot be sustained - Appeal allowed.
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2023 (6) TMI 1
Clandestine Removal - additional consideration has flown from the appellant to their customer or not - Processing loss - rule 4(5) of the CENVAT Credit Rules, 2004 - HELD THAT:- The entire case of clandestine clearance has been made against the appellant in respect of the goods cleared by the appellant on the proper documents as per rule 4(5) of the CENVAT Credit Rules, 2004 or duty paying documents without establishing flow of any additional consideration. In the present case it appears the additional consideration has flown from the appellant to their customer in form the material used by the job worker to compensate for the processing loss. In case of STERLITE INDUSTRIES (I) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE [ 2004 (12) TMI 108 - CESTAT, MUMBAI] , a larger bench of tribunal has held that Modvat credit of duty paid on the inputs used in the manufacture of final product cleared without payment of duty for further utilisation in the manufacture of final product, which are cleared on payment of duty by the principal manufacturer, would not be hit by provision of Rule 57C. In case of WELSPUN INDIA LTD. VERSUS COMMISSIONER OF C. EX., DAMAN [ 2009 (2) TMI 690 - CESTAT, AHMEDABAD] where the issue was held in favour of assessee. Circular No 54/88-CX dated 01.10.1988 relied in the impugned order, was in context of the rule 173H/173L of the erstwhile Central excise Rules, 1944 and has no application to the facts of the present case. Even if it is to be held that appellant was clearing his finished goods in the garb of job worked goods without payment of duty then also the case of revenue will fail in absence of any additional consideration received by the appellant against such clearances. Demand do not sustain - As the demand for duty cannot be upheld, so the demand for interest and penalties imposed cannot be sustained - appeal allowed.
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