TMI Tax Updates - e-Newsletter
June 20, 2017

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Service Tax Central Excise

Articles

1. GST-Get Set Go!!!!

   By: CA Akash Phophalia

2. WHAT DOES IT MEAN FOR LIQUOR TO BE OUT OF GST

   By: Dr. Sanjiv Agarwal

3. Circular of CBDT on trade advances not to be deemed dividend under s. 2.22.e. Clear and mandatory instructions to withdraw appeals, not to file appeals, not to make addition, and to rectify orders in accordance with accepted legal position will go a long way in reducing litigation

   By: DEVKUMAR KOTHARI

News

1. Workshop on GST to The Sensitize Maritime Fraternity

2. Need to firewall systems to counter cyber risks around GST

3. Decisions taken by the GST Council in respect of GST rates on Certain Services and GST rates on supply of lottery

4. RECOMMENDATIONS REGARDING THE COMPOSITION LEVY AND GST RATE ON CERTAIN GOODS [As per discussions in the 17th GST Council Meeting held on 18th June, 2017]

5. Auction for Sale (Re-issue) of Government Stock

6. Cairn tax dispute: I-T dept orders recovery of ₹ 10K cr

7. RBI Reference Rate for US $

8. CBDT Notifies Rule 10CB for Secondary Adjustments under Section 92CE of IT Act, 1961

Notifications

Income Tax

1. 53/2017 - dated 16-6-2017 - IT

Income-tax (16th Amendment) Rules, 2017

Highlights / Catch Notes

GST

• Proposed Changes to GST Rates and Composition Levy to Align with Current Economic Conditions and Market Demands.

  News : RECOMMENDATIONS REGARDING THE COMPOSITION LEVY AND GST RATE ON CERTAIN GOODS
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• GST Council Adjusts Tax Rates for Services and Lottery Supplies to Enhance Clarity and Efficiency in Taxation Framework.

  News : Decisions taken by the GST Council in respect of GST rates on Certain Services and GST rates on supply of lottery
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Income Tax

• High Court Upholds Settlement Commission's Order u/s 245D; Validates Additional Income Disclosures in Settlement Applications.

  Case-Laws - HC : Validity of order passed by the Settlement Commission u/s 245D - additional disclosure of income subsequent to initial disclosure - Settlement Commission committed no error in accepting them and in proceeding to pass final order on such settlement applications. - HC
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• Special Audit Order Valid Even if Statutory and Tax Audit Reports Submitted with Income Return u/s 142(2B.

  Case-Laws - HC : Special Audit - Merely because the assessee along with the return of income submitted a Statutory Audit Report and Tax Audit Report, considering section 142(2B), the order of Special Audit under Section 142(2A) of the IT Act cannot be said to be invalid.
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• Trust Income for Minor Beneficiaries Disallowed Due to Lack of Evidence in Interest Computation by Assessee.

  Case-Laws - AT : Income relating to minor beneficiaries of the trust. - Since the assessee could not place any relevant evidence with regard to taking into account the interest received by the trust from the assessee while computing its income, the AO has rightly disallowed the claim of the assessee
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• Tax Deduction Denied for Housing Flood Victims: No Proven Business Connection in Social Welfare Spending.

  Case-Laws - AT : Disallowance of expenditure incurred in construction of house meant for flood victims called 'Social Welfare Expenditure' - Mere bald assertion that the expenditure was incurred for promoting business cannot be accepted without establishing the nexus between expenditure and business. Therefore, it amounts to application of income voluntarily towards charity which cannot be allowed as a deduction.
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• Omitting capital gains in tax filings isn't automatically concealment or false reporting u/s 271(1)(c) of the Income Tax Act.

  Case-Laws - AT : A mere omission in offering the capital gains to tax would not ipso facto reflect concealment of income or furnishing of inaccurate particulars of income in terms of Section 271(1)(c) of the Act
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• Notice u/s 143(2) Valid: Department's Sincere Efforts and Afixure Service Upheld by CPC.

  Case-Laws - AT : Legality of notice issued u/s 143(2) - When the Department made sincere steps to serve notice and when it was not possible, the notice was served through affixture, which is one of the modes of service of notice as defined in the provisions of CPC
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• Late Deposits in Capital Gain Account Ineligible for Section 54 Deduction if Made After Section 139(1) Deadline.

  Case-Laws - AT : Disallowance of exemption u/s 54 - The assessee shall not be entitled for deduction u/s 54 on the amount, which has been deposited in capital gain account maintained with the bank beyond the due date of furnishing of return of income u/s 139(1) of the Act
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Customs

• Penalty Overturned for Customs House Agent Partner and Employee; Failure to Perform Duties Not Enough for Sanction.

  Case-Laws - AT : Penalty on partner and employee of CHA - Export of prohibited goods - Mere failure in carrying out duties in accordance with law cannot be held to be a sufficient ground for imposition of penalty upon him
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Service Tax

• Can Service Tax Excess Payments Be Adjusted Against Future Liabilities? Rule 6 Interpretation in Focus.

  Case-Laws - AT : Adjustment of excess and short paid amounts - whether the adjustment made by the appellant on the excess payments made by them under the provisions of Rule 6 of the Service Tax Rules for payments of service tax, a liability that arose subsequently? - Adjustments to be allowed
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• Service Tax Demand on Invoices Overturned for Event Management Provider; Tax to Be Paid on Receipt Basis.

  Case-Laws - AT : Event Management Service - non-payment of tax - during the impugned period, the service tax was payable on receipt basis and in this case demand has been confirmed on the basis of invoices issued by the appellant - demand set aside
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Central Excise

• Fire Destroys Goods; Assessee Can Request Duty Remission During Defense Without Filing Separate Application.

  Case-Laws - AT : Goods destroyed by fire - demand of duty on the finished goods destroyed in the fire - Filing of a remission application is only a procedural aspect and the prayer to remit the duty can be made by an assessee even while defending himself in the demand proceedings.
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• Trademark Holders Cleared of Violating SSI Exemption Rules; Demand Dismissed Due to Legitimate Trademark Rights.

  Case-Laws - AT : SSI exemption - use of brand name of others - the appellants have obtained the right over the trademark and therefore the allegation that they are clearing the goods in the name of another person will not sustain - demand set aside
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• Rules 16B and 16C allow duty-free clearance of goods to sister concerns for further activity, promoting operational efficiency.

  Case-Laws - AT : Applicability of provision of Rule 16B and 16C of CER, 2002 - permission to clear the goods under provisions of Rule 16B without payment of duty to their sister concern - The provision of rule 16-B of Central Excise Rules are in the nature of facilitation for movement of further activity, which should not be denied for technicalities
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Case Laws:

• Income Tax

• 2017 (6) TMI 787
  Settlement commission order - Is the impugned order of the Settlement Commission vitiated due to jurisdictional errors in conduct of the proceedings before the Settlement Commission? - Held that:- In the present case, the assessee did not made a full and true disclosure of its income before the Settlement Commission. Such is the finding of the Settlement Commission. Such finding has not been substantiated to be perverse or to be suffering from such a legal infirmity so as to warrant an interference by a Writ Count. It is not for the Writ Court to exercise appellate jurisdiction over an order passed by the Settlement Commission. The Writ Court is not called upon to reappraise the evidence placed before the Settlement Commission. It is also not called upon to enlarge its jurisdiction under Article 226 to have a more detailed scrutiny of the order of the Settlement Commission in view of the nonavailability of an appellate forum. The order of the Settlement Commission has not been established to be contrary to the provisions of the Income Tax Act, 1961. In the present case, the impugned order is well-reasoned. It is not alleged that, the impugned order suffers from the vice of bias or is vitiated by fraud or is actuated by malice. No part of the impugned order has been substantiated to be perverse. The Settlement Commission has noted three instances where the petitioner did not make full and true disclosures of its income. Even before the High Court, the petitioners have not come clean with regard to the three issues noted by the Settlement Commission. - Decided against petitioner.

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• 2017 (6) TMI 786
  Validity of order passed by the Settlement Commission u/s 245D - additional disclosure of income - Held that:- It is true that before the Settlement Commission, the assessees indicated that the additional disclosure of 50 lakhs each may be accounted for the assessment year 2014-15. However, we cannot lose sight of the fact that such disclosures were, as noted above, in the spirit of settlement and to put an end to the controversy. The assessees therefore cannot be pinned down to the effect of such disclosures in the year 2014-15 alone. We cannot fragment a larger picture and telescope the additional disclosures for a particular year and taking into account the comparable figures for that year decide whether such disclosures would shake the initial disclosures as to apply the ratio laid down by the Supreme Court in case of Ajmera Housing (2010 (8) TMI 35 - SUPREME COURT OF INDIA ) and to hold that the initial disclosures themselves were untrue projecting the additional disclosures for all years the assessees had sought settlement, we find the Commission committed no error in accepting them and in proceeding to pass final order on such settlement applications.

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• 2017 (6) TMI 785
  Reopening of assessment - reference to DVO - determination of value of property - Held that:- . Since the Assessing Officer relies only on the DVO's report it is difficult to appreciate how he contends that the present petitioner had made any unaccounted investment in construction. If we peruse the reasons recorded by him more minutely, we find that a rather unconventional approach was adopted by the Assessing Officer to project the cost of construction over the entire span of financial year 2005-06. AO had to have tangible material at his command to enable him to form a belief that income chargeable to tax had escaped assessment. His belief is based on presumption of extrapolation even otherwise wholly impermissible on the basis of materials on record. To reiterate, according to the report of the DVO, the entire investment of 1.82 crores in construction was made before 01.07.2005. There was thereafter, no question of apportioning any portion thereof during the period after 20.09.2005. In any case, the same could not have been done without basis or further opinion available with the Assessing Officer. Only in the present case, we are concerned with the reopening of an assessment which was previously framed after scrutiny and whet her such notice is issued beyond a period of four years from the end of the relevant assessment year. - Decided in favour of assessee.

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• 2017 (6) TMI 784
  Validity of Special audit u/s 142(2A) - multiplicity of transactions in the account or specialized nature of the business activities of the assessee - introduction of land and revaluation of the same - successions/ conversion of firms to a company, treatment of capital account of partners as loan - Held that:- After giving fullest opportunity to the petitioner and after dealing with the objections raised by the petitioner and thereafter having obtained the approval from the Principal Commissioner who has granted the approval after considering the material on record and thereafter when the Assessing Officer has passed the order of Special Audit considering the specialised nature of the business activities of the assessee and the multiplicity of transactions, it cannot be said that the Assessing Officer has committed any error. Merely because the assessee along with the return of income submitted a Statutory Audit Report and Tax Audit Report, considering section 142(2B) of the IT Act, the order of Special Audit under Section 142(2A) of the IT Act cannot be said to be invalid. Thus considering the scope and ambit of Section 142(2A) of the IT Act, it cannot be said that in the facts and circumstances of the case, the respondent has committed any error and/or any illegality while passing the order under Section 142(2A) of the IT Act. - Decided against assessee.

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• 2017 (6) TMI 783
  Disallowance of provident fund contribution made on behalf of the sub contractors claimed as expenditure - expenditure incurred is "wholly and exclusively" for the purpose of business - Held that:- Assessing Officer cannot question the reasonableness by putting himself in the arm-chair of the businessman and assume status or character of the assessee and that it is for the assessee to decide whether the expenses should be incurred in the course of his business or profession or not. Courts have also held that if the expenditure is incurred for the purposes of the business, incidental benefit to some other person would not take the expenditure outside the scope of Section 37(1) of the Act. Further, it is settled law that the commercial expediency of a businessman’s decision to incur a particular expenditure cannot be tested on the touchstone of strict legal liability to incur such expenditure. We are of the view that in the present case, the disallowance of employees contribution of Provident Fund (as made by AO) & that of employers contribution of Provident Fund (as enhanced by CIT (A)] was uncalled for and therefore set aside. Thus the grounds of Assessee are allowed.

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• 2017 (6) TMI 782
  Levy of penalty u/s 271(1)(c) - Withdrawal of claim of deduction under section 24(a) - Held that:- In this case the assessee has filed revised return of income withdrawing the deduction claimed under section 24(a). No case has been made out that this revision was done on account of any query on the impugned subject. Furthermore we note that when assessing officer in the assessment order is finding the assessee guilty for furnishing of inaccurate particulars of income the assessing officer in the penalty order is holding that assessee has concealed income. In our considered opinion assessee has sought to revise the computation and withdrawn the claim of deduction under section 24(a). In our considered opinion the assessee's conduct was bonafide and it was not contumacious to warrant levy of penalty under section 271(1)(c). - Decided in favour of assessee.

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• 2017 (6) TMI 781
  Income relating to minor beneficiaries of the trust.- Addition to the total income of the parents of minor beneficiaries u/s 64(1)(a) - interest claimed by the co-owners of the property - Held that:- The assessee has preferred appeals before the Tribunal and during the course of hearing, he could not establish that the recipient i.e., trust has ever offered the receipt of interest to tax. This issue was thoroughly examined by the Tribunal and the Hon’ble High Court and the Hon’ble High Court has remanded the matter back to the AO with a direction that if the assessee has made provision for payment of interest in the return filed by her and if the interest paid by the assessee is taken into account of the trust in the next assessment year or in subsequent years, it is for the revenue to compare both the accounts and pass appropriate order in order to find out whether the interest shown in the return of income is reflected in the accounts of the trust. Despite clear directions of the Hon’ble High Court, the assessee could not place the relevant evidence in this regard. The scope of enquiry was limited as it has to be done as per the directions of the Hon’ble High Court. Since the assessee could not place any relevant evidence with regard to taking into account the interest received by the trust from the assessee while computing its income, the AO has rightly disallowed the claim of the assessee and the CIT(Appeals) confirmed the same. Thus additions confirmed - Decided against assessee.

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• 2017 (6) TMI 780
  Levy of penalty u/s 271(1)(c) - addition of interest on compensation received as exempt u/s 10(37) not offered to tax - Held that:- As at the time of filing of return of income since the interest received by it pertained to section 28 of the Land Acquisition Act, as claimed by the assessee all along and not disputed by the Revenue, he was of the belief that the interest was a capital receipt to be treated as compensation. Though section 145A(b) and Section 56(viii) do categorically state that interest on enhanced compensation is to be taxed on receipt but the said sections do not clarify that interest for the purposes of the said sections includes interest under section 28 of the Land Acquisition Act alongwith interest under section 34 of the Land Acquisition Act. The assessee therefore, we hold, had under a bonafide belief treated the interest on enhanced compensation as being in the nature of compensation, and thus exempt u/s 10(37) of the Act. The assessee having disclosed all particulars of his income pertaining to interest on enhanced compensation and having claimed the same as exempt under a bonafide belief, we hold that the assessee’s case is squarely covered by case of Reliance Petroproducts (P.)ltd. [2010 (3) TMI 80 - SUPREME COURT] which states that merely making an incorrect claim in law would not tantamount to furnishing of inaccurate particulars of income when admittedly information given in the return is not found to be incorrect or inaccurate. Further it cannot be said that the claim of the assessee was false and therefore the decision in the case of Zoom Communication (2010 (5) TMI 34 - DELHI HIGH COURT ) would not apply in the present case. - Decided in favour of assessee.

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• 2017 (6) TMI 779
  Disallowance of expenditure incurred in construction of house meant for flood victims called 'Social Welfare Expenditure' - Held that:- Once the assessee discharges this onus, assessee would be entitled to deduction u/s 37(1). In the present case, no factual condition was laid by the assessee to establish that this expenditure was incurred for business purpose nor any attempt is discernible before the lower authorities. Mere bald assertion that the expenditure was incurred for promoting business cannot be accepted without establishing the nexus between expenditure and business. Therefore, it amounts to application of income voluntarily towards charity which cannot be allowed as a deduction. Further an important aspect to be noted here is that the assessee has handed over constructed houses to the Government of Karnataka in terms of MoU. It is not the case of the assessee that the assessee was granted mining license in consideration of expenditure incurred by the assessee. Needless to mention, these kind of contracts are opposed to public policy and void under the provisions of section 23 of the Contract Act. Therefore, it cannot be said that the appellant had incurred this expenditure wholly and exclusively for the purpose of business. - Decided against assessee.

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• 2017 (6) TMI 778
  Addition on account of alleged ‘on money’ given for purchase of flats - Held that:- The Department merely relied upon the statement of two person who were employees of a different group and there was no evidence with the Assessing Officer that in fact any ‘on money’ was paid in cash. Even in the statement tendered by these two employees, it has not been mentioned that in fact any cash was received by the group from the assessee over and above the payments made through banking channel. Even if the other group has made any disclosure before the Settlement Commission does not prove that any cash was received from the present assessee. Thus, considering the totality of facts we direct the Ld. Assessing Officer to delete the addition, which has been made purely on suspicion. Thus, the appeal of the assessee is allowed.

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• 2017 (6) TMI 777
  Disallowance u/s 14A r.w.r. 8D - Held that:- In the instant case, the assessment year is 2007- 08. We find that the AO has worked out the disallowance u/s 14A r.w.r. 8D. The same rule is not retrospective as it was notified on 24/03/2008 and would be applicable only from AY 2008-09. In Godrej & Boyce Mfg. Co. Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT) it has been held that Rule 8 D is not retrospective. The Hon’ble Bombay High Court in CIT vs. M/s. Godrej Agrovet Ltd vide [2014 (8) TMI 457 - BOMBAY HIGH COURT] has held that percentage of the exempt income can constitute a reasonable estimate for making disallowance in the years earlier to the assessment year 2008-09. In the above case it upheld the disallowance to the extent to 2% of the total exempt income. Respectfully following the above decision, we direct the AO to restrict the disallowance to 2% of the total exempt income. Disallowance of interest - Assessee had paid interest @ 13% to the Directors - Held that:- A perusal of the ‘Party Advice’ given by Union Bank of India, Mumbai indicates that the terms and conditions state that ‘profits should be ploughed back so as to strengthen equity base and improve debt equity ratio’. It has been held that the disallowance of interest is justified when the amount borrowed had not been used for the purpose of business but for advancing money to Managing Director without interest. The contention of the assessee that the total rate of interest including exchange fluctuations comes to 13% is to be verified. In view of CIT(A) on the above issue is set aside and the same is restored to the file of the A.O. to make a fresh assessment after verification of the rate of interest calculated by the assessee at 13% as delineated at para 5.2 and following the ratio of the decisions mentioned here-in-above, after giving a reasonable opportunity of being heard to the assessee. The assessee is directed to file the relevant details before the AO.

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• 2017 (6) TMI 776
  Eligibility to deduction u/s. 80IA - assessee is a AOP [Joint Venture] - whether assessee was not a works contractor as treated by the AO or a a developer as per CIT-A - Held that:- We find that the assessee stood successful in getting the bid for engineering, procurement and construction of elevated corridor project at Hyderabad awarded for such construction of elevated corridor project in Hyderabad by the HUDA. Thereby the assessee is a developer for the reason that the assessee involved in preparation of design, superintending the labour and technical assistance and responsible for safety and security of the project site. The assessee is also responsible in all respect for the care and risk of the works, materials, goods, equipments (heavy & light ) and labour etc. and also for procurement of licenses, promotion and execution of project work. The assessee is also responsible for the payment of supply of labour, water and electric charges for the project. The assess was responsible and was to pay the cost of strengthening any bridge or altering or improving any road communication necessary for smooth execution of works. The assessee is responsible for making all arrangements for and paying all charges in connection with supply of electricity and water. The assessee was to carry out tests in accordance with law. On perusal of the terms and conditions in the agreement, it is clear that the assessee was not a works contractor and was a developer and hence Explanation to section 80IA(13) does not apply. CIT-A was justified in directing the AO to allow the deduction u/s. 80IA of the Act as claimed by it. - Decided against revenue.

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• 2017 (6) TMI 775
  Penalty u/s 271(1)(c) - Omission in offering the capital gains to tax - Held that:- The penalty order is woefully silent on the issue as to how this satisfaction of concealment/furnishing of inaccurate particulars was arrived at. The Ld. CIT (A) has also not examined the issue in detail but has simply confirmed the penalty by relying on the findings of the AO. It is undisputed that the assessee is an old lady who was recently widowed and it was for the very first time that she was filing her return of income without being assisted by her husband. It is equally undisputed that it was not mandatory for her to maintain regular books of accounts. It is equally undisputed that the assessee had accepted the mistake and had provided an explanation which appears plausible but the AO has not recorded a finding that the explanation furnished by the assessee was a false explanation. Thus, the explanation of the assessee, under the circumstances, cannot be said to be not bona fide. A mere omission in offering the capital gains to tax would not ipso facto reflect concealment of income or furnishing of inaccurate particulars of income in terms of Section 271(1)(c) of the Act - Decided in favour of assessee.

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• 2017 (6) TMI 774
  Assessment u/s 153A - unexplained share applications - reference to incriminating material - Held that:- Perusal of the assessment order reveals that the AO has not referred to any incriminating material while making the additions but has rather relied on the statement of Mr SK Gupta and has doubted the genuineness of the transaction as well as the creditworthiness of the share applicants. CIT (appeals) has also not made any linkage of the impugned addition to any incriminating material found during the course of search but has rather confirmed the addition relying on preponderance of probabilities as espoused in the case of Sumati Dayal(1995 (3) TMI 3 - SUPREME Court). This action could have been upheld if it was a regular assessment under section 143 (3) of the Act but provisions of section 153A, restrict the ambit of assessment to incriminating material unearthed during the course of search. Thus, respectfully following case CIT Central –III vs. Kabul Chawla ( 2015 (9) TMI 80 - DELHI HIGH COURT) we find that the addition has been wrongly added to the income of the assessee. - Decided in favour of assessee.

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• 2017 (6) TMI 773
  Legality of notice issued under section 143(2) - non proper serving of notice - Held that:- The assessee has not furnished any second address for communication when the assessee was out of station; since the assessee is suppose to do so. When the Department made sincere steps to serve notice and when it was not possible, the notice was served through affixture, which is one of the modes of service of notice as defined in the provisions of CPC. Therefore, we are of the considered opinion that the notice has been served properly and legally. - Decided against assessee Denial of exemption under section 54 - sale proceeds of the old house (sold) are not invested in acquiring the new residential property within the stipulated time limits - Held that:- Admittedly, the assessee has entered into an agreement with the builder on 18.11.2004. The land (UDS) relating to the said flat (new property) was registered on 18.05.2005. Further, possession of the new property was taken by the assessee in October, 2006. All these dates are far before the stipulated period of one year prior to the date of sale of the old property on 26.09.2008. Otherwise also, anything that was purchased or constructed prior to 26.09.2007 was not eligible for deduction under section 54 of the Act. Thus, the assessee is not eligible for deduction under section 54 of the Act. The ld. CIT(A) has passed well reasoned detailed speaking order after analysing the documents and submissions made before him.- Decided against assessee

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• 2017 (6) TMI 772
  Levy of penalty u/s. 271AAA - whether the manner in which such income has been derived and whether it has been substantiated was explained by the assessee - Held that:- Wherever and whenever there is a voluntary offer of undisclosed income during the course of the search operation, the same should have a nexus with the unaccounted wealth unearthed. In the case in hand, the declaration of the undisclosed income is far more in excess of the undisclosed and unexplained wealth found during the course of the search operation. The voluntary offer of the assessee is not in consonance with the meaning of undisclosed income given under the explanation to Section 271AAA of the Act as mentioned elsewhere. There should be some nexus between the unaccounted wealth and the undisclosed income. According to us, the penalty should be levied only to the extent of the unexplained investment found at the time of search. Therefore, modifying the findings of the ld. CIT(A), we direct the A.O. to restrict the penalty to the extent of 7,22,967/- being 10% of 72,29,667/-. Assessee will get a relief of 35, 10,172/-. Appeal filed by the Assessee is partly allowed.

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• 2017 (6) TMI 771
  Disallowance of exemption u/s 54 - non deposit unutilized amount in the capital gain account before the due date of furnishing of return u/s 139(1) - Held that:- The assessee shall be entitled for deduction u/s 54 to the extent the amount is invested by the assessee in purchase/construction of the new asset till the date of furnishing of return by the assessee on 31/03/2009, for which the Assessing Officer is directed to allow the deduction in accordance with our aforesaid directions. The assessee shall not be entitled for deduction u/s 54 on the amount, which has been deposited in capital gain account maintained with the bank beyond the due date of furnishing of return of income u/s 139(1) of the Act. As in the instant case assessee has not deposited the unutilized amount in the capital gain account before the due date of furnishing of return u/s 139(1) and hence as per section 54(2), no deduction shall be allowed to the assessee with respect to the deposits of 60 lakhs made with the capital gain account with the bank. See Humayun Suleman Merchant (2016 (9) TMI 70 - BOMBAY HIGH COURT) - Decided against assessee.

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• 2017 (6) TMI 770
  Addition on account of difference/mismatch of the figures in the accounts of the assessee and the payee of the amount paid by the assessee to Architect Mr. Ajay Wade - Held that:- We have gone through the copy of the confirmations filed but we note that the same were not enough and sufficient evidence to prove the actual payment of the said amount by the assessee to Mr. Ajay Wade. However, considering the interest of justice, we restore this issue to the file of the AO to decide it afresh. The AO will verify the accounts of the assessee as well as of Mr. Ajay Wade and thereafter to decide the issue afresh in accordance with law. Ground Nos.3 & 4 are therefore treated as allowed for statistical purposes. Additional depreciation on wind mill - Held that:- “NTPC Ltd. vs. DCIT” [2012 (5) TMI 127 - ITAT DELHI] wherein held that the process of generation of electricity is akin to manufacture or production of article or thing and that an assessee engaged in the activity of generation of electricity would be entitled to additional depreciation under section 32(1). Disallowance made by the AO under section 80IB(10) - Held that:- A perusal of the above part of the impugned order reveals that the Ld. CIT(A) has allowed the claim of the assessee following the decision of the Tribunal in the own case of the assessee for A.Y. 2004-05, 2005-06 & 2006- 07. Since the issue is squarely covered by the decision of the Tribunal in the own case of the assessee and no differentiating fact has been brought into our knowledge for the year under consideration. Disallowance of bogus purchases - Held that:- CIT vs. Nikunj Enterprises (P.) Ltd.” (2013 (1) TMI 88 - BOMBAY HIGH COURT) wherein held the findings of the tribunal that where the assessee filed letters of confirmation of suppliers, copies of bank statement showing entries of payment through account payee cheques to suppliers and stock reconciliation statements, sale of purchased goods was not doubted, the transactions were supported with evidences and confirmations, in such an event merely because the suppliers have not appeared before the AO or the Ld. CIT(A), one can not conclude that the purchases were not genuine.

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• Customs

• 2017 (6) TMI 747
  Non-production of end-use certificate - import of melting scrap - demand - Held that: - the appellants have recorded the receipt of the melting scrap in raw material account (Form IV register); RG23A Part I (quantity records maintained for .the receipt of inputs), RG23A Part Il (maintained for the amounts of duties paid on such inputs) and the heat register and the RT12 returns were categorically stating that they had received the melting scrap imported by them and consumed them in the manufacturing process - In the absence of any contradiction of the said records as produced by the appellant before the lower authorities, the impugned orders rejecting the said records as not sufficient and only the end use is required to justify the consumption of the melting scrap is not a correct appreciation of the fact - appeal allowed - decided in favor of appellant.

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• 2017 (6) TMI 746
  Jurisdiction of Directorate of Revenue Intelligence (DRI) - power to issue SCN - Held that: - sub-section 11 was inserted under section 28 of the Customs (Amendment and Validation) Act, 2011 dated 16.09.2011, assigning the functions of proper officers to various DRI officers with retrospective effect - Later on, i.e. for the period subsequent to the amendment, the matter i.e. the DRI officers having the proper jurisdiction to issue the SCN or not had come up before the Hon’ble Delhi High Court in the case of Mangali Impex vs. Union of India [2016 (5) TMI 225 - DELHI HIGH COURT], and the High Court inter alia, held that even the new inserted section 28(11) does not empower either the officers of DRI or the DGCEI to issue the SCN for the period prior to 8.4.11. Matter remanded to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Hon’ble Supreme Court decision in the case of Mangli Impex and then on merits of the case but by providing an opportunity to the assessee of being heard - appeal allowed by way of remand.

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• 2017 (6) TMI 745
  Entitlement of interest - refund was denied on the ground that provisional assessment was still pending - Held that: - the claim for interest is the question of equity which cannot be decided by this Tribunal - This Tribunal, as already noted herein, cannot decide the issue of equity and therefore granting of interest based on equity at this stage is beyond the powers of this Tribunal - impugned order is correct and legal - appeal rejected - decided against appellant.

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• 2017 (6) TMI 744
  Valuation of imported goods - printer processor - rejection of Foreign Chartered Engineer's Certificate - Held that: - the model of the goods on which the department has placed reliance to arrive at the assessable value is QSS1702 V and not QSS1702, which is the model that has been imported by the appellants. Therefore, the enhancement done on the basis of this letter does not find favor with us. The appellant has produced enough materials to establish the value declared by him is right and proper. Further, his request to conduct inspection by a local Chartered Engineer was not acceded to by the department. From the totality of facts, we therefore, are of the considered view that the rejection of the declared value is without basis. Appeal allowed - decided in favor of appellant.

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• 2017 (6) TMI 743
  Penalty on partner and employee of CHA - Export of prohibited goods - invocation of section 114 (i), 114AA, 117 of the CA, 1962 - Held that: - Tribunal in the case of Syndicate Shipping Services Pvt. Ltd. Vs. CC, Chennai [2003 (3) TMI 158 - CEGAT, CHENNAI] has held, in identical circumstances, that the CHA cannot be penalized under the Customs Act, in the absence of any positive evidence on record to show any malafide intention on his part or to establish him as an abettor. Mere failure in carrying out duties in accordance with law cannot be held to be a sufficient ground for imposition of penalty upon him - appeal rejected - decided against Revenue.

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• 2017 (6) TMI 742
  Interest on refund of sale proceeds of confiscated Gold bars - case of appellant is that while refunding the sale proceeds, they should have also been given interest from the date of sale of the goods till the date of refund of the amount - Held that: - Hon’ble High Court of Madras in the case of Collector of Customs, Madras Vs. Meena A. Bharwani [2001 (9) TMI 126 - HIGH COURT OF JUDICATURE AT MADRAS], wherein it was held that whenever Revenue disposes of the confiscated goods during the pendency of the legal proceedings, the litigant is entitled to the refund of the sale proceeds along with payment of interest - matter remanded to the original adjudicating authority to quantify the interest amount at the prescribed rates - appeal allowed by way of remand.

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• 2017 (6) TMI 741
  Revocation of CHA licence - forfeiture of security deposit - time limit for issuance of SCN - Department took more than 90 days time, which is not in conformity with Regulation 20 (5) of the CPLR 2013 - Held that: - Condition No.(5) in Regulation 20 of CBLR, 2013 has not been followed by the Department for revoking the licence - the Hon’ble Delhi High Court in the case of Impexnet Logistic Vs. CC (General) [2016 (6) TMI 348 - DELHI HIGH COURT] held that the time limits prescribed in CBLR, 2013 are sacrosanct and mandatory, which and to be strictly followed - revocation of licence and forfeiture of security deposit are not proper and justified - appeal allowed - decided in favor of appellant.

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• Corporate Laws

• 2017 (6) TMI 740
  Conversion of the status of the Company from a Public to a Private Limited Company - alteration of AOA - Special Resolution passed at the Extra-ordinary General Meeting - change of status of the Company - Held that:- Since all the requisite statutory compliances having been fulfilled, the conversion of the status of the Company from “Public Limited” to “Private Limited” as per Special Resolution passed at the EOGM on 14.06.2016 is hereby approved in the interest of the Company and such change of status of the Company shall not cause any prejudice either to the Members or the Creditors of the petitioner Company. C.P. No. 47/2017 is accordingly allowed as disposed of. The Petitioner Company shall comply with the conditions as mentioned in the communication dated 22.03.2017 from RBI, DNBS, Kolkata. The petitioner is hereby directed to file with the Registrar of Companies, West Bengal, a certified copy of the order of this Bench in the prescribed e-form together with a printed copy of the altered Articles of Association as also with requisite fee within a period of 15 days in terms of the provision of section (2) of section 14 of the Companies Act, 2013 read with Rule 161 of NCLT Rules, 2016

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• Insolvency & Bankruptcy

• 2017 (6) TMI 739
  Initiation of insolvency resolution process - Held that:- A perusal of the objections and upon hearing of the representations made by the Learned Counsel for Punjab National Bank demonstrated before us that the petitioners have not come with disclosure of full facts before this Tribunal as they have not furnished full particulars in relation to the assets mortgaged or the securities furnished to above financial creditors and the legal web in which it has been entangled by the owners themselves of the above said properties who are none other than the directors of the petitioner and a case in point is that in relation to the Khari Baoli property. Once the petition as titled by the Corporate Debtor is admitted, then following consequences by way of moratorium under Section 14 automatically arises, namely, a. institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any count of law, tribunal, arbitration panel or other authority; b. transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; c. any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; d. the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. The admission goes without saying will have a serious impact in relation to the objectors, namely, the financial creditors as whatever action which has culminated into taking physical possession of the secured assets will be automatically 'stayed' for a period of atleast six months or even more depending upon the circumstances of the process and seems to be the motivation for the petitioner to approach this Tribunal under IBC, 2016 rather than put into to effect the avowed objects for which IBC, 2016 has been enacted as given in the preface of this order. We cannot be a party to such mala fide actions on the part of the corporate debtor and this is a clear case of abuse of process of law which should be discouraged at the threshold. As the petitioners have not come with clean hands before this Tribunal in bringing out the necessary facts, we are constrained to dismiss this petition. With a view to discourage the parties from abusing the process of IBC, 2016 and this Tribunal, we deem it as a fit case to impose costs as contemplated under Section 65 of IBC, 2016.

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• 2017 (6) TMI 738
  Petition under Section 9 of the Insolvency and Bankruptcy Code - Held that:- A dispute which is covered by sub-section (6) of Section 5 of the Code has been raised by the Respondent even before the Demand Notice was issued, and notice of dispute has been given by the Respondent to the Petitioner. Sub-section (5) of Section 8 of the Code says that Adjudicating Authority shall by an order admit the Application if no notice of dispute is received by the Operational Creditor or there is no record of dispute in the information utility. This Adjudicating Authority can only admit the Application filed under sub-section (2) of Section 9 when there is no dispute regarding the amount claimed in the Demand Notice. This Adjudicating Authority has no jurisdiction to decide whether the claim of the Petitioner is proved or not. It is for the other Forums to decide the said aspect. In fact, a Suit has already been filed by the GUJCOT in the year 2003 for the amount claimed in the Demand Notice and it is still pending. The provisions that govern the admission of a Petition for triggering the Insolvency Resolution Process by an Operational Creditor are contemplated in Section 9. Therefore, what is stated in Section 9 cannot be ignored on the ground that NCLT is given jurisdiction to decide the claims against the Corporate Debtor. Therefore, there is no merit in this argument of the learned Counsel for the Petitioner. The jurisdiction conferred on the Tribunal can be exercised only if the Petition filed by the Petitioner is admitted. There is an express provision in Section 9(5) of the Code, which says that the Adjudicating Authority shall reject the Application in case of notice of dispute received by the Operational Creditor. Therefore, it cannot be said that Section 280 of the Companies Act, 2013, which deals with jurisdiction of the Tribunal, cannot override the effect of sub-section (5) of Section 9 in respect of admission of a Petition filed by an Operational Creditor. In view of the above discussion, this Petition is liable to be rejected and it is rejected under Section 9(5)(ii)(d) of the Code.

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• PMLA

• 2017 (6) TMI 737
  Bail application - Prevention of Money Laundering Act - Held that:- It may not be out of place to emphasize that even the investigation is not over and even if the investigation is required to be made or is made by the other authority under the other Act like Income Tax Act, by itself would not lead to a conclusion that the investigation under the PML Act is concluded. In fact the authority like Directorate of Enforcement under the PML Act would be justified in proceeding with the investigation on the basis of the revelations and the material found in the inquiry or the investigation under the other statute like Income Tax Act. Therefore, when the investigation by the Enforcement Authority under the PML Act has not yet been over, it may not be possible to arrive at the satisfaction as provided in Section 45(1)(ii) of the PML Act. The submissions which have been made by learned Senior Counsel Shri Vikram Chaudhary that the issue is not settled and therefore when there are divergent views under consideration and where the reference is also made and it has been remanded, it is a case for grant of bail, is thoroughly misconceived. The emphasis made by learned Senior Counsel Shri Vikram Chaudhary that the foundation has to be laid is also misconceived as it is only at the conclusion of the investigation, the picture may emerge with regard to the nature of offence or the class of offence as provided in the schedule. Therefore, in light of the discussion made herein above, the present Criminal Application cannot be entertained and deserve to be dismissed and accordingly stands dismissed

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• Service Tax

• 2017 (6) TMI 769
  Adjustment of excess and short paid amounts - whether the adjustment made by the appellant on the excess payments made by them under the provisions of Rule 6 of the Service Tax Rules for payments of service tax, a liability that arose subsequently? - Held that: - the appellant had taken centralized registration and have been paying service tax every month on the basis of provisional determination of liability. Subsequently, the correct liability has been reflected in the relevant ST 3 returns. If the excess amounts of service tax are taken into account, there may not be any demand for service tax - reliance placed in the case of CCE, Bhopal vs. Telecom District Manager, BSNL [2017 (4) TMI 386 - CESTAT NEW DELHI], where on similar issue it was held that the adjustment of the excess credit paid during the previous period is allowed as was also allowed in the appellant's own case during the previous period - appellant will be entitled to adjustment of excess and short paid cenvat credit and will be liable to pay the service tax only to the extent of net demand if any - For the purpose of verification and determining the net service tax payable, if any, the matter is remanded to the original adjudicating authority. CENVAT credit - disallowance of CENVAT credit on the ground that the credits have been availed in the absence of details of inputs service providers as well as the number and date of the document - scope of SCN - Held that: - it was not open to the adjudicating authority to travel beyond the allegations made in the show-cause notice to deny the credit based on an altogether new ground. As such the impugned order was held to be liable to be set aside on this ground itself. The impugned orders are set aside and matter remanded to the adjudicating authority for denovo decision - appeal allowed by way of remand.

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• 2017 (6) TMI 768
  Penalty - assessee discharged service tax liability prior to issue of SCN and interest liability after issuing SCN - Held that: - Section 73(3) of FA, 1994 very clearly mandates for discharge of service tax liability on his own ascertain or on the basis of tax ascertainment by Central Excise Officers before issuance of SCN, under sub section 1 of Section 73 of FA 1994, no SCN be issued - Further, on careful reading of Section 73(3) of the FA, 1994, it is seen that it only talks about discharge of service tax liability by assessee before issuance of SCN - penalties unjustified - appeal allowed - decided in favor of appellant.

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• 2017 (6) TMI 767
  CENVAT credit - input services - Management or Business Consultant's Service - Management, Maintenance or Repair Service - Commercial Training or Coaching Service - Custom House Agent's service - Security Agency's service - Held that: - all these services are in relation to the services provided by the appellant who are service providers of ITSS for export - There is no denial as to the fact that appellant had exported ITSS services by using these services in the premises as also that the service providers have paid the tax on the services - refund allowed - appeal allowed - decided in favor of appellant.

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• 2017 (6) TMI 766
  Reverse charge mechanism - benefit of N/N. 18/2009-ST dated 07.07.2009 - denial on the ground that during the period 2012-2013 although the appellant has filed EXP-1 for the period 2012-13 but the EXP-2 has not been filed - Held that: - similar issue decided in the case of Malwa Industries Ltd. [2009 (2) TMI 41 - SUPREME COURT], wherein the Hon’ble Apex Court held that the substantial benefit of notification cannot be denied for merely procedural lapse - the appellant is entitled for benefit of N/N. 18/2009-ST dated 07.07.2009 - appeal allowed - decided in favor of appellant.

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• 2017 (6) TMI 765
  Event Management Service - non-payment of tax - appellant submits that during the impugned period, the service tax is payable on receipt basis not on the basis of invoices issued by the appellant and on the basis of the demand, the invoices issued by the appellant - Held that: - during the impugned period, the service tax was payable on receipt basis and in this case demand has been confirmed on the basis of invoices issued by the appellant - It is not the case of the Revenue that the invoices have been issued and not recorded in the records and received the amount of service provider without showing in the books of accounts - appeal allowed - decided in favor of appellant.

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• Central Excise

• 2017 (6) TMI 764
  Remission of duty - loss due to fire - It is the claim of the appellant that on 17/12/2011, they had a closing balance of 1026.360 MTs of sponge iron, out of which, they cleared 226.36 MTs of sponge iron on payment of appropriate duties. Hence they should get remission of 800 MTs which was destroyed during the fire incident - Held that: - there was a arson and miscreants set fire to the appellant's factory premises. It is also undisputed that the appellant is discharging the Central Excise duty paid on the sponge iron which is manufactured by them and the records maintained by the appellant indicated the closing stock of the sponge iron as on the date of the arson taken place. In my considered view, if the lower authorities are accepting the closing stock on a particular date when the factory is functioning, I do not find any reason to not to accept the closing stock mentioned in the books on the date when the arson took place. Reliance placed in the case of YASH PAPERS LIMITED Versus COMMISSIONER OF CENTRAL EXCISE, ALLAHABAD [2001 (11) TMI 852 - CEGAT, NEW DELHI], where it was held that even if there is a difference in quantity between the remission application and insurance claim, remission application should be granted for the quantities sought for which remission is sought. The rejection of the remission application in respect of 455.75 MTs of sponge iron lost in fire is incorrect - appeal allowed - decided in favor of appellant.

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• 2017 (6) TMI 763
  Shortage of finished goods and raw material - clandestine removal - Held that: - the appellant has not been able to prove that there was no shortage of finished goods and they did not clear the said goods clandestinely without payment of duty - Once the Chief Executive officer of the appellant assessee viz. Shri D.G.K. Nair admitted the shortage and appellant assessee paid the duty for the goods found short voluntarily, the plea of the appellant now that there was no shortage does not have sound footing. The Hon’ble Supreme Court in the case of CCE Vs. Systems & Components Pvt. Ltd. [2004 (2) TMI 65 - SUPREME COURT OF INDIA] observed that it is basic and settled law that what is admitted need not be proved. Appeal dismissed - decided against assessee.

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• 2017 (6) TMI 762
  Interest on delayed cash refund - relevant date for calculation of interest - Section 11BB of the CEA, 1944 - Held that: - the issue is no more res integra as decided in the case of COMMISSIONER OF CENTRAL EXCISE Versus RELIANCE INDUSTRIES LTD. [2010 (10) TMI 190 - GUJARAT HIGH COURT], where it was held that as per the instructions issued by the Central Government refunds under Rule 57F of the erstwhile Central Excise Rules, 1944 would be governed by the provisions of Section 11BB of the Act. Rule 57F of the said Rules made provision for the manner of utilisation of inputs and credit allowed in respect of duty paid thereon. Sub-rule (13) of rule 57F made provision for refund of accumulated credit in case where for any reason it was not possible to adjust the same in the manner provided under the said sub-rule - the Appellant are eligible to interest on the refund amount of 54,38,980/- from the date of expiry of three months of filing the respective claim - appeal allowed - decided in favor of appellant.

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• 2017 (6) TMI 761
  Goods destroyed by fire - demand of duty on the finished goods destroyed in the fire, and in respect of which the appellants had received the insurance compensation - remission of duty - Held that: - In the absence of any dispute that there was damage and loss of the finished products or in the absence of any dispute of the fact that the appellants have paid back the CENVAT credit availed on the inputs and have paid duty in respect of salvaged waste and scrap, confirmation of demand of duty on the lost final products cannot be upheld. Filing of a remission application is only a procedural aspect and the prayer to remit the duty can be made by an assessee even while defending himself in the demand proceedings. Extended period of limitation - Held that: - the entire facts were in the knowledge of the Revenue. The reasoning of Commissioner (Appeals) that the appellant had not given the estimate of the goods lost in the fire cannot be equated with any suppression or mis-statement with malafide intention so as to justifiably invoke the larger period of limitation - demand beyond normal period not sustainable. Appeal allowed - decided in favor of appellant.

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• 2017 (6) TMI 760
  Valuation - RSP valuation - whether the Talcum Powder in 25 gram packages cleared by the appellants which are meant for free distribution along with Santoor Bathing Bars are liable to be assessed under Section 4 or 4A of the CEA, 1944? - Held that: - the goods are supplied though not intended for retail sale - Rule 3 of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 states that the rules do not apply to goods not intended for retail sale - Since the talcum powder packages / sachets supplied by the appellants were not intended for retail sale, the valuation has to be made under Section 4 and not under Section 4A - reliance placed in the case of GS. ENTERPRISES Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR [2004 (4) TMI 191 - CESTAT, NEW DELHI] - the valuation adopted by the appellants is legal and proper and the demand is unsustainable - appeal allowed - decided in favor of appellant.

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• 2017 (6) TMI 759
  SSI exemption - use of brand name of others - Revenue was of the view that trademark AJI-NO-MOTO is exclusive property of M/s. AJI-NO-MOTO Co. Inc. Japan, and as appellant used the said trade name, they are not eligible for exemption - whether as per the Trademark License Agreement, the appellants have become the owner of the trademark? - Held that: - the appellants have been given license to use the trademark on payment of royalty which is fixed at 1% of the net sale of the product cleared bearing the trademark and sold by the appellant. This clearly indicates that the appellants have obtained the right over the trademark and therefore the allegation that they are clearing the goods in the name of another person will not sustain - demand set aside - appeal allowed - decided in favor of appellant.

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• 2017 (6) TMI 758
  CENVAT credit - welding electrodes - wash oil used within the factory - Held that: - the subject items viz. welding electrodes and wash oil have been used in the process of manufacturing iron and steel items by the appellant assessee - In the case of welding electrodes, the benefit of Cenvat credit has been allowed to the appellant in their own case M/s Steel Authority of India Ltd. Versus CCE, Raipur [2017 (5) TMI 1134 - CESTAT NEW DELHI]. Wash oil is used for removing the impurities of the coal, which is used as fuel during the manufacturing of steel items by the appellant. There is no dispute of the fact that such use of wash oil is within the factory premises and is being used in relation to manufacturing only by the appellant - credit allowed. Appeal allowed - decided in favor of appellant.

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• 2017 (6) TMI 757
  Increase in installed capacity - benefit of N/N. 56/2002-CE dated 14.11.2002 - denial on the ground that the installed capacity has been increased more than 25%, therefore, they are entitled for benefit of exemption N/N. 56/2002-CE dated 14.11.2002, as the respondent is located in the state of Jammu & Kashmir - Held that: - Board's Circular No. 772/5/2004-CX dated 21.01.2014 states that as substantial expansion is defined in terms of increase in installed capacity by 25% or more, value of investment in plant and machinery is not the criteria to define substantial expansion - the respondents have undertaken substantial expansion that resulted in the increase in installed capacity by more than 25% - benefit allowed - appeal dismissed - decided against Revenue.

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• 2017 (6) TMI 756
  Substantial expansion of installed capacity - benefit of N/N. 56/2002-CE dated 14.11.2002 - The sole allegation of the Revenue is that as the said Village Tehrara is not mentioned in the Annexure-II of the N/N. 56/2002 ibid, the respondent is not entitled to the benefit of said notification - denial also on the ground that the date of employment increased is not mentioned in the certificate - Held that: - We have gone through the certificate issued by GM, DIC which clearly shows the date of expansion as 15.05.2007. Therefore, the understanding of the Revenue is misplaced that there is no expansion. Accordingly, this observation of the revenue is held as not sustainable. Regarding the location, it is found that there is no village in the name of Trehara and it is Tarore and if falls in Khasra No. 48min, Tehsil and District Kathua, which is entitled to the benefit of notification. The respondent is entitled for exemption - appeal dismissed - decided against Revenue.

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• 2017 (6) TMI 755
  Refund of excess excise duty paid on account of addition of margin of notional profit @ 10% - rejection on the ground of limitation as the appellant did not file letter of protest under Rule 233B of CER, 1944 - Held that: - when the duty was paid, the proceedings were still going on. Even though, they had filed RT-12 returns, gate passes and invoices by affixing the stamp ED paid under protest, the claim was rejected on the ground that the specific procedure was not followed - There are conflicting judgements of this Tribunal on the admissibility of such marking on the documents. However, the fact remains that litigation proceedings for the period 1991-92 were going on. Similar issue covered by the decision in the case of CCE, Chennai-II vs. Electro Steel Castings Limited [2013 (8) TMI 199 - MADRAS HIGH COURT] that payment of duty made only during the pendency of appeal against very levy of duty for the earlier period is deemed to be under protest and no limitation is applicable. Refund not hit by limitation bar - appeal allowed - decided in favor of appellant.

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• 2017 (6) TMI 754
  CENVAT credit - workmen compensation insurance paid by the assessee to their labour contractors - Held that: - reliance placed in the case of M/s Hydus Technologies India Pvt Ltd. Versus CCE, C & ST, Hyderabad-II [2017 (2) TMI 538 - CESTAT HYDERABAD], where it was held that in the definition of input services it is mentioned that life insurance, health insurance etc., are excluded it is subject to the condition that such services are primarily for personal use or consumption of employee - credit allowed. Manpower recruitment and supply agency services - statutory benefits extended by the service provider to his employees and the said amounts reimbursed by the assessee - Held that: - An identical issue came up before this Bench in the case of Ultratech Cement Ltd. Vs. CC, CE&ST, Hyderabad-IV [2016 (12) TMI 381 - CESTAT HYDERABAD], where it was held that It has to be stated that such contributions are mandatory and the appellant can avail the services only by making payment of such mandatory obligations - credit allowed. Appeal allowed - decided in favor of assessee.

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• 2017 (6) TMI 753
  Rectification of Mistake - setting aside of interest - Held that: - this Court finds that the application filed by appellant needs to be accepted for more than one reason. Firstly it is correctly pointed out by revenue that appellant had admitted and accepted the interest payment and specifically mentioned in the grounds of appeal that they are not contesting the interest. Secondly, the appeal memo specifically indicates that appellant had prayed for setting aside the penalties imposed - the final order No. A/30988/2016, dt. 18.10.16 needs correction to the extent that in the said order interest claim has been held unsustainable, needs to be set aside - ROM application allowed.

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• 2017 (6) TMI 752
  Applicability of provision of Rule 16B and 16C of CER, 2002 - permission to clear the goods under provisions of Rule 16B without payment of duty to their sister concern - Held that: - If there is no dispute that conversion of reels to reems is amounting to manufacture, then transfer or clearance of reels by the appellant to their own sister concern is not clearance of finished excisable goods and the rule 16B would be directly applicable. The provision of rule 16-B of Central Excise Rules are in the nature of facilitation for movement of further activity, which should not be denied for technicalities - The provision of rule 16-B of Central Excise Rules are in the nature of facilitation for movement of further activity, which should not be denied for technicalities - appeal allowed - decided in favor of appellant.

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• 2017 (6) TMI 751
  Intermediate goods - N/N. 6/2002-CE dated 01.03.2002 - Held that: - In case of tax liability of intermediate products in a continuous product, it is for the Revenue to establish the marketability of such product. Though the product may not have been marketed by the appellant, the said product should be known in the market as capable of being bought and sold - matter remanded to the original authority to categorically give his finding regarding marketability of the impugned goods on which Central Excise duty is sought to be levied and collected - appeal allowed by way of remand.

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• 2017 (6) TMI 750
  Valuation - It appeared that the appellants were adopting lesser price than the price at which goods were cleared to consignment agents - Held that: - Admittedly, no documents are available with the assessee - due to insufficiency of the documents, the appellants have not been able to properly defend their case. The differential duty is raised solely only on these documents - it is fit to grant an opportunity to the assessee to establish their contention basing upon the documents and therefore the matter requires to be remanded - appeal allowed by way of remand.

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• 2017 (6) TMI 749
  CENVAT credit - duty paying invoices - whether the cenvat credits availed by the appellant in respect of service tax paid on goods transport services on the basis of TR-6 challans is valid? - Held that: - the issue has come up before the Hon’ble High Court of Bombay in the case of Essel Propack Ltd. [2015 (5) TMI 529 - BOMBAY HIGH COURT], where it was held that credit in respect of service tax paid on goods transport agency availed on the basis of TR-6 challans is valid for the prior period - credit allowed - appeal allowed - decided in favor of appellant.

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• 2017 (6) TMI 748
  Default in payment of duty for the quarter ending of March, 2013 - constitutional validity of Rule 8 (3A) of Central Excise Rules, 2002 - Held that: - The Hon’ble High Court of Gujarat in the case of Indsur Global Ltd., Vs. Union of India [2014 (12) TMI 585 - GUJARAT HIGH COURT], examined the constitutionality of Rule 8(3A) of Central Excise Rules, 2002 and held that Rule 8 (3A) imposes wholly unreasonable restriction, violative of Article 14 of Constitution of India and it also is a serious affront to his right to carry on his trade or business guaranteed under Article 19 (1) (g) of the Constitution. Therefore, the portion “without utilizing the CENVAT credit” of sub-rule (3A) of Rule 8 of the CER, 2002, shall be invalid - since the provision of Rule 8 (3A) of the Central Excise Rules, 2002 are struck down as unconstitutional nothing survives in this appeal - appeal rejected - decided against appellant.

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