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TMI Tax Updates - e-Newsletter June 22, 2023 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles Calcutta High Court's Landmark Judgment Safeguards GST Claimants' Rights: A Milestone for Honest Taxpayers GIST OF RECENT SUPREME COURT JUDGMENTS ON GST Set aside the order passed without providing opportunity of hearing and directed Revenue to conduct afresh proceeding AN ACT WITHOUT A CAUSE AO cannot take the position of business man to ascertain GP ratio News “Black Cocaine” worth Rs 32 crore seized at Ahmedabad International Airport CCI approves acquisition by HDFC Limited of certain additional shareholding of HDFC ERGO General Insurance Company Limited (HDFC ERGO) CCI approves acquisition of additional shareholding of HDFC Life Insurance Company Limited by Housing Development Finance Corporation Limited Circulars / Instructions / Orders SEBI SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/95 - dated 21-6-2023 Trading Preferences by Clients IBC IBBI/IU/59/2023 - dated 16-6-2023 Application to initiate corporate insolvency resolution process under sections 7 or 9 of the Insolvency and Bankruptcy Code, 2016, along with record of the default issued by the Information Utility DGFT 16/2023 - dated 21-6-2023 Modification of SION E-121 Customs PUBLIC NOTICE NO - 19/2023 - dated 7-6-2023 Amnesty Scheme for one-time settlement of default in export obligation by Advance and EPCG authorization holders - Notification No. 32/2023-Customs dated 26.04.2023. PUBLIC NOTICE NO. 28/2023 - dated 25-5-2023 Launch of ‘Manage CB Profile’ functionality of CBLMS to add OPS details by Nodal officers in wrongly filed and validated CB profiles — Reg. Highlights / Catch Notes GST Cancelation of GST registration - Service of SCN - It is the case of the petitioner that no document either in the form of notice or any other document has been received by the petitioner at his registered place of his business - the concerned respondent has failed to provide specific reasons for cancellation of registration under Section 29(2) of the GST Act - both the show cause notice as well as the order dated 15.07.2022 deserve to be quashed and set aside - HC Visit to Get Source Input Tax Credit - Restriction on availed ITC beyond the prescribed time limit u/s 16(4) - As the vires of the provisions of Section 16(4) of the CGST Act has been challenged by the Petitioners, on the earlier occasion a coordinate Bench by this Court had issued notice to the Attorney General of India. However, it prima facie appears that the adjudication on such prayers itself is academic in the present Petition. - HC Visit to Get Source Cancellation of GST registration of petitioner - By saying that the registration has been obtained by fraud/wilful misstatement/suppression of facts, is not sufficient. Such terms need to be supported by reasons as to why, how and under what circumstances the registration was obtained by fraud/wilful misstatement/ suppression of facts. More so, such reasons ought to be supported by at least some fundamental supporting material, which, in the instant case is conspicuously missing - HC Visit to Get Source Income Tax Complaint u/s 276C (2) r.w.s. 278B - Allegation of willful evasion of tax - Liability of Directors / ex-directors of company u/s 179 - Company is under liquidation process - Everything related to the company is now in the custody of the official liquidator and as such the petitioners have no liability nor responsibility in respect of the affairs of the company. The proceedings against them should thus be quashed. - HC Visit to Get Source Liability of directors u/s 179 - Recovery of dues of company - Onus to prove the gross neglect or misfeasance or breach of duty on his part - No material is highlighted by the ITO contrary to material placed on record by Petitioner, based on which he can be held to be guilty of gross neglect or misfeasance or breach of duty in the context of nonrecovery of tax dues. - He is having lack of decision making power and having very limited role in the assessee company even as director - The order against the Director quashed - HC Visit to Get Source Expenses of Group Companies - Can a deduction be allowed for the expenditure incurred by appellant to meet the liability of the another company and for the debts written off in the books? - Bad debts - These expenditure/debts should be treated as having been incurred for the purpose of business and directly relatable to the business of the assessee and thus eligible for deduction as business expenditure/loss - HC Visit to Get Source Nature of receipt - Entertainment tax exemption in respect of Multiplexes - whether capital or revenue receipts? - where object of respective subsidy schemes of State Governments was to encourage development of Multiple Theatre Complexes, incentives has been held to be capital in nature and not revenue receipts. - AT Visit to Get Source Short deduction of TDS - Disallowance u/s 40(a)(ia) - payment to sub-contractors - default u/s. 201 - where tax was deductable u/s. 194J but was actually deducted u/s. 194C, such a short deduction would not meet requirements of section 40(a)(ia) of the Act as assessee could not be held as defaulter when there was only shortfall in deduction of TDS - AT Visit to Get Source Grant received under Sampoorna Gramin Swarojgar Yogna (‘SGSY’) from Government - Nature of receipt - revenue or capital receipt - the sum receipt on account of grant under SGSY as not revenue receipt - Not taxable - AT Visit to Get Source Grant of approval u/s 80G (5) - Donations - scope of amended provisions of section 2(15) - The amended definition of section 2(15) states that in course of achieving objects of general public utility, the concerned trust, society or other such organization carry on trade, commerce or business or provide service and relation thereto for consideration provided that firstly the activities of trade, commerce, or business, or connected to achievement of its object of general public utility in relation thereto, does not exceed the quantified limits that is 20% of total receipts of the previous year. - Assessee directed to file fresh application for de-nove consideration by PCIT - AT Visit to Get Source TP Adjustment - determination of Arm's Length Price - intra group services transactions as Cross-charges - Documents submitted by the assessee do not conclusively fulfill (1) need test, (2) rendition test, (3) benefit test, (4) duplicative test and (5) shareholders activity test. On looking at the services it is apparent that some of the services have overlapped these tests. It cannot be said that even the IT network services should have a nil arm's-length price. - AO/TPO is directed to verify the claim of the assessee - AT Visit to Get Source Customs Revocation of cancellation of the Customs House Agency (CHA) of the respondent - High Court confirmed the order of tribunal, taking a lenient view that violation of the CHALR is not very serious in nature and borders on to procedural irregularities - Apex Court dismissed the appeal of the revenue. - SC Visit to Get Source Territorial Jurisdiction of Court - Seizure of goods - shawls contained hair of Tibetan Antelope (Pantholopes Hodgsoni) - prohibited goods or not - the act of respondents in seizing consignment/goods took place in Delhi, followed by other events including issuance of show cause notice etc., so it is the courts/forums at Delhi where the petitioner can lay his claim or raise his grievances. - HC Visit to Get Source Benefit of under the Merchandise Export from India Scheme (MEIS) - export of Steel Plates - at the time of filing of the EDI shipping bills, there was a problem of “YES/NO clicking” and the petitioner was not able to avail for the benefits under MEIS because of the said problem. - the petitioner has specifically stated (in wordings) the intention to claim the ‘Reward’ for MEIS. - Benefit under MEIS directed to be granted to the petitioner - HC Visit to Get Source Registration of vehicle purchased by the petitioner in the auction - Customs department auctioned the vehicle since the importer did not clear the vehicle and it was lying in the customs warehouse. - there is no reason as to why the RTO is delaying the registration of the vehicle in the name of the petitioner - Directions issued - HC Visit to Get Source Levy of anti-dumping duty - imports of Styrene Butadiene Rubber originating in or exported from European Union, Korea RP and Thailand - Central Government did not issue the notification for imposition of anti-dumping duty - The matter would have to be remitted to the Central Government for taking a fresh decision on the recommendation made by the designated authority for imposition of anti-dumping duty on the import of the subject goods from the subject countries. - AT Visit to Get Source Classification of goods proposed to be imported - Mobileye 8 Connect - It is found that two eight-digit tariff entries are applicable to the impugned goods namely 8512 20 90 and 8512 30 90. However, due to application of General Rule of Interpretation 3(b) it is held that the Customs Tariff Heading 8512 and more specifically tariff entry 8512 30 90: Sound signalling equipment in the first schedule to the Customs Tariff Act, 1975, notwithstanding performance of signalling function in both ways i.e. by visual mode as well as by sound mode, are the most appropriate classification heading & tariff entry - AAR Visit to Get Source Classification of goods proposed to be imported - VIEWSONIC Brand LCD Monitors - Computer monitors or not - by virtue of terms of the headings, relative Chapter Notes and HSN Explanatory notes, the subject goods satisfy all essential conditions to merit classification under Chapter sub heading 8528 52 00 as, "Monitors capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471". - AAR Visit to Get Source Seeking Advance Ruling on the basis of incomplete details - Valuation of imported goods for trading activity - Hence accumulation of IGST credit (ITC) is not a correct legal ground for seeking an advance ruling. - the applicant has not submitted requisite information sought by the advance ruling authority. This is a clear case of data insufficiency. - AAR Visit to Get Source Corporate Law Prosecution proceedings against the petitioners / accused - Allegation of illegal removal complainant from Directorship - Using forged signatures and uploading DIR-12 with resignation letter - The matter at hand is not a rare case that justifies the Court's interference at the investigation stage. The allegation in the FIR makes out a prima facie case against the accused - Petition dismissed - HC Visit to Get Source Jurisdiction of Court to entertain the suit - doctrine of forum conveniens - Invoice is raised from Delhi for the work performed within the State of Maharashtra - Seeking a decree alongwith interest compounded annually - Challenge to the Jurisdiction Bombay High Court rejected - HC Visit to Get Source Punishable offence u/s 148 - Failure to appoint cost auditor within the time limit prescribed under Section 148(3) and Rule 6(2) - The persons/accused of an offence cannot be based on the date on which the complaint is filed. The accused would and should remain the same whenever the complaint is filed since the offence is committed on a particular date. Persons who came to know of the offence subsequently cannot be made liable merely because the offence is continuing. - the petitioner joined on 02.05.2016 and resigned on 01.08.2016, and the offence was committed on 01.10.2015, he cannot be held liable for the alleged violation - HC Visit to Get Source Indian Laws Continuation of present proceedings under the NI Act simultaneously, during the pendency of the proceedings under the IBC - Dishonour of cheque - The recovery proceedings barred u/s 14 of the IBC are primarily civil in nature, the proceedings u/s 138 of the NI Act are criminal in nature, and both have a different set of purpose. - By operation of the provisions of the IBC, the criminal prosecution initiated against the natural persons under Section 138 read with 141 of the NI Act would not stand terminated. - HC Visit to Get Source IBC CIRP - NCLT admitted the application - pre-existing dispute - disputes were not raised prior to the issuance of the Demand Notice - The fact remains that the spare parts were supplied way back on 25/10/2018 and the first issue was raised almost 11 months thereafter. There is nothing on record to establish that 11 months’ time is required to ascertain the efficiency of an engine - this Tribunal is of the considered opinion that the dispute raised by the Corporate Debtor is only illusionary and moonshine. - AT Visit to Get Source Case Laws: GST 2023 (6) TMI 891 Cancelation of GST registration - Service of SCN - It is the case of the petitioner that no document either in the form of notice or any other document has been received by the petitioner at his registered place of his business - Principles of Natural Justice - HELD THAT:- In similar type of cases, this Court has considered such type of show cause notice, which was issued for cancellation of registration and this Court, after considering the decision rendered in case of Aggrawal Dyeing [ 2022 (4) TMI 864 - GUJARAT HIGH COURT] , has allowed the writ petition being Special Civil Application No.903/2022 by an order dated 07.06.2023. The show cause notice dated 01.07.2022 issued by the respondent to the petitioner is very vague and cryptic. Therefore, it was difficult for the petitioner to give any reply to the said show cause notice - However, it is the case of the respondent that prior to issuance of the show cause notice dated 01.07.2022, in fact, the respondent issued notice on 30.06.2022, copy of which is placed on record at Page No. 48 of the compilation. It is contended by learned AGP that in the said notice, specific details are provided to the petitioner so that the petitioner can give reply. However, it is not in dispute that the said show cause notice was not served by RPAD and it is the specific case of the petitioner that the notice dated 30.06.2022 has not been received by the petitioner. Thus, it is clear that the concerned respondent has failed to provide specific reasons for cancellation of registration under Section 29(2) of the GST Act - both the show cause notice as well as the order dated 15.07.2022 deserve to be quashed and set aside - petition allowed. 2023 (6) TMI 890 Input Tax Credit - Restriction on availed ITC beyond the prescribed time limit u/s 16(4) - GST Audit u/s 65 - Maintainability of petition merely on apprehension - invocation of jurisdiction of this Court under Article 226 of the Constitution of India - Reversal of input tax credit - HELD THAT:- In any event merely on apprehension and on any proposed action the Petition would certainly not maintainable, when the provisions of Central Goods and Services Tax Act, 2017 (CGST Act) categorically provides for a procedure for assessment. It is for the Assessing Officer that considering the facts and circumstances of the case that appropriate action has to be taken including issuance of Show Cause Notice. It is quite clear that the Petitioners are avoiding GST audit and have not responded to the request of the Department to submit the accounts and have filed the present Petition. Admittedly, no Show Cause Notice also been issued. In the facts and circumstances of the present case, Petitioners does not warrant any interim order to be passed. Prayer for interim relief accordingly cannot be entertained - As the vires of the provisions of Section 16(4) of the CGST Act has been challenged by the Petitioners, on the earlier occasion a coordinate Bench by this Court had issued notice to the Attorney General of India. However, it prima facie appears that the adjudication on such prayers itself is academic in the present Petition. Accordingly, list the Petition to be heard on 21st July, 2023. 2023 (6) TMI 889 Cancellation of GST registration of petitioner - seeking unblocking of blocked input tax credit - HELD THAT:- As regards the blocking of the Input Tax Credit, the same has now been unblocked by the respondents and stands acknowledged by its Counsel before the Court. Cancellation of the GST registration - HELD THAT:- The learned counsel for the petitioner has placed on record a copy of communication dated 17.05.2023, which goes to indicate that the South Enforcement Zone, Parwanoo, has already taken up the issue with the Commissioner, State Tax Excise. It is deemed appropriate to dispose of this petition by directing the 2nd Respondent-Commissioner of State Tax Excise, to consider the case of the petitioner regarding revocation of the GST number of the petitioner, as expeditiously as possible and in no event later than 15.07.2023 - petition disposed off. 2023 (6) TMI 888 Cancellation of GST registration of petitioner - allegation of vague SCN for not supplying the relevant reasons and material while proposing cancellation of registration - denial of reasonable opportunity of defending himself and replying to the show cause notice - violation of principles of natural justice (audi alteram partem). HELD THAT:- It is evident as day-light that the principle of natural justice (audi alteram partem) has been given a go-bye by the Revenue at the very initial stage of issuance of show cause notice - affording of opportunity of being heard is a precondition for exercising the power of cancellation of registration. In the present case, the show cause notice did not contain sufficient reasons to enable the assessee-petitioner to file a reply and, therefore, reasonable opportunity of being heard was denied to the petitioner. By saying that the registration has been obtained by fraud/wilful misstatement/suppression of facts, is not sufficient. Such terms need to be supported by reasons as to why, how and under what circumstances the registration was obtained by fraud/wilful misstatement/ suppression of facts. More so, such reasons ought to be supported by at least some fundamental supporting material, which, in the instant case is conspicuously missing - More so, the order of cancellation of registration is also bereft of any reason whatsoever and thus disables the petitioner-assessee from effectively availing the remedy of statutory appeal u/S.107. This Court profitably refers to the Division Bench decision of Delhi High Court in the case of Balaji Enterprises [ 2022 (9) TMI 1107 - DELHI HIGH COURT ] where the facts and circumstances especially the text of the show cause notice impugned therein were almost similar to the text of the impugned show cause notice herein - it was held in the said case that a plain reading of the order would show, that the petitioner s registration was cancelled on account of an enquiry pending against the petitioner, which evidently is being carried out by DGGI, Chennai concerning supply of spurious goods. In the conspectus of aforesaid discussion, this Court has no manner of doubt that the impugned show cause notice dated 28.01.2022 (Annexure P/2) and the consequential order of cancellation of registration dated 11.02.2022 (Annexure P/4), rejection of application for revocation of cancellation of registration dated 30.03.2022 and the appellate order dated 13.06.2022 (Annexure P/9) are vitiated in law for being vague and having been issued in violation of principles of natural justice (audi alteram partem). Petition allowed. Income Tax 2023 (6) TMI 887 Complaint u/s 276C (2) r.w.s. 278B - Allegation of willful evasion of tax - Liability of Directors / ex-directors of company u/s 179 - Company is under liqudiation process - Vikash Metal and Power Limited (under liquidation) is a Public Limited Company - whether demand against a Public Limited Company shall not be recovered against its Directors. HELD THAT:- Hon ble Court has directed the winding up of the company on 08.09.2015, everything related to the company is now in the custody of the official liquidator and as such the petitioners have no liability nor responsibility in respect of the affairs of the company. The proceedings against them should thus be quashed. The Income Tax Authorities admitted before this Court that they did not have knowledge of the winding up order dated 08.09.2015 and filed this case on 02.08.2019. Admittedly, considering the present situation, the official liquidator is a necessary party before the trial court. Though the official liquidator is now in-charge of the affairs of the company, the petitioners being the erstwhile directors are to assist the official liquidator in affairs of the company even after winding up. Petitioners relief on grounds stated thus lies in praying for discharge before the trial court, which the Court is to consider in accordance with law, on adding the official liquidator as a party to the case, first and then consider the prayer for discharge if any. Accused Kailash Chand Jain s petition praying for discharge is still pending before the Metropolitan Magistrate, Calcutta. The revisional application is accordingly dismissed. Ld' Magistrate to proceed expeditiously with the case as per observation in the body of this judgment, but not being influenced by them. 2023 (6) TMI 886 Reopening of assessment u/s 147 - Non disposing of objections - reopen the assessment after scrutiny assessment, after a period of more than four years - HELD THAT:- As without disposing of the objections filed by the petitioner, yet, another notice came to be issued to the petitioner, which also contained the reasons for reopening. Once again, the petitioner submitted its objections to the aforesaid notice. Respondent No.2 has recorded reasons only on the basis of the information or the material, which was already available on the record, and not from any other source or the material, so as to state that the petitioner had withheld or did not disclose something at the time of original scrutiny. It is an undisputed fact that the Respondents sought to re-open a completed assessment, beyond the period of four years from the end of the relevant assessment year. Attempt on the part of the revenue to reopen the assessment after scrutiny assessment, after a period of more than four years, especially, in absence of any circumstances about non-disclosure of true and full material on the part of the assessee, is not permitted. Decided in favour of assessee. 2023 (6) TMI 885 Liability of directors u/s 179 - Recovery of dues of company - Onus to prove the gross neglect or misfeasance or breach of duty on his part - HELD THAT:- Where a Director proves that non recovery of tax dues cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the Company, he shall not be liable for payment of tax dues. Of course, the responsibility of establishing such fact is upon the Director. Once the Director places before the authority his material and reasons why it should be held that non-recovery cannot be attributed to any of the three factors on his part, the Authority is bound to examine such grounds and come to a reasoned conclusion in this respect. We are alive to the fact that the legislature in its wisdom has used the words gross neglect and not mere neglect on the part of the Director. This view finds support in the judgment of Maganbhai Hansrajbhai Patel [ 2012 (11) TMI 189 - GUJARAT HIGH COURT ] where the said High Court has dealt with the same present provision of Section 179 - In the said judgment it is further held that gross negligence etc is to be viewed in the context of non recovery of tax dues of the Company and not with respect to general functioning of the company. Perusal of the documents produced on record shows that after Petitioner s removal from the directorship which has taken place in the year 2009 itself, Petitioner had no connection with the said company or any access to its affairs. Perusal of the impugned Orders further show that both the ITO as well as revisional Authority have mainly proceeded on the basis that the Petitioner was director during the assessment years and do not really consider whether there was any gross neglect or misfeasance for breach of duty on his part in relation to affairs of the company in the context of non recovery of tax dues . In such situation it is difficult to sustain the impugned Orders, which without any basis, simply says that Petitioner (Director) has failed to prove that nonrecovery cannot be attributed to any gross neglect or misfeasance or breach of duty on his part. No material is highlighted by the ITO contrary to material placed on record by Petitioner, based on which he can be held to be guilty of gross neglect or misfeasance or breach of duty in the context of nonrecovery of tax dues. Having brought on record material to show lack of financial control, lack of decision making power and having very limited role in the assessee company even as director and entire decision making process being with the directors appointed by KFI (Being single largest share holder of the assessee company), in our opinion, Petitioner has sufficiently discharged the burden cast upon him in terms of section 179(1) of the Act to absolve him from the liability thereunder. Order passed in Petitioner s revision, by Chief Commissioner of Income Tax(OSD) holding charge of Pr. Commissioner of Income Tax-10, Mumbai is quashed and set aside. Decided in favour of assessee. 2023 (6) TMI 884 Expenses of Group Companies - Can a deduction be allowed for the expenditure incurred by appellant to meet the liability of the another company and for the debts written off in the books? - Bad debts - Write off of advances given for purchase of Machinery - Computing the income under the head Profits and gains of business or profession - deductible expenditure u/s 28 - Deduction not claimed u/s Section 36(1)(vii) - HELD THAT:- Expenditure incurred were wholly incurred for the purpose of commercial expediency because MMC was a group company of appellant and appellant was, as could be seen from the orders passed by BIFR, keen in the preservation of MMC and to keep it as a going concern. The nexus between appellant and MMC is also not disputed. The Assessing Officer failed to appreciate the claim in the proper perspective. Appellant participated in the rehabilitation scheme of MMC and lent rehabilitation assistance by paying amounts to MMC as well as by converting its existing ICDs with MMC into rehabilitation assistance. Appellant also provided a guarantee of Rs. 200 lakhs to IDBI for the rehabilitation assistance disbursed by IDBI to MMC. If there was no commercial expediency, there was no reason for appellant to incur these amounts or participate in the rehabilitation scheme of MMC. Appellant was also the managing agents of MMC and MMC was also a Mahindra Group Company. It is certainly not necessary for the name of Mahindra and Mahindra to be used in the name of MMC to prove it was a group company. These expenditure/debts should be treated as having been incurred for the purpose of business and directly relatable to the business of the assessee and thus eligible for deduction as business expenditure/loss in assessee s return of business income. The expenditure incurred by appellant or the debts that were recoverable from MMC, in our view, therefore, would certainly be deductible expenditure u/s 28 - ITAT was not right in not allowing the claims of assessee. Appeal is allowed and accordingly disposed. 2023 (6) TMI 883 Validity of reopening of assessment u/s 147 - notice issued to entity not in existence having merged along with the petitioner company - HELD THAT:- In light of the judgment of the Apex Court in the case of Maruti Suzuki India Ltd [ 2019 (7) TMI 1449 - SUPREME COURT] it is clear that notice and assessment order passed in the name of non-existing company is a substantive illegality and is an order passed without jurisdiction. Decided in favour of assessee. 2023 (6) TMI 882 Validity of the assessment order u/s 143 (3) r/w 144B - notices u/s 142 (1) by Income Tax Department have been addressed not to the Email ID which is registered with the Income Tax Department by the assessee - HELD THAT:- The contention raised on behalf of the petitioner deserves acceptance to the extent that notice ought to have been issued to the Email ID furnished at Annexure-'D' and not otherwise. The notices sent to the Email ID which is not that declared by the assessee has justifiably resulted in the assessee not having had an opportunity to respond to the notices. Thus in light of lack of opportunity to the assessee to submit its reply to the notice issued u/s 142 (1), Assessment Order as well as notice of computation sheet, Consequential Demand Notice and Penalty Notices are set aside. 2023 (6) TMI 881 Entertainment tax exemption in respect of Multiplexes - Nature of receipt - whether capital or revenue receipts? - object of respective subsidy schemes of State Governments - HELD THAT:- As gone through the judgment passed by the Hon ble Apex Court Chaphalkar Brothers Pune [ 2017 (12) TMI 816 - SUPREME COURT] wherein issue has been decided in favour of the assessee by upholding the order passed by the Hon ble Bombay High Court [ 2013 (6) TMI 73 - BOMBAY HIGH COURT] to this effect that where object of respective subsidy schemes of State Governments was to encourage development of Multiple Theatre Complexes, incentives has been held to be capital in nature and not revenue receipts. Thus, CIT(A) has rightly held in favour of the assessee. 2023 (6) TMI 880 Delayed Employees' contribution to Provident Fund - payment was made after the due date prescribed under relevant Act, even though the payment was made within the time prescribed under section 139(1) of the IT. Act, 1961 for filing the return of income - adjustment is beyond the scope of section 143(1) - HELD THAT:- The issue is now covered against the assessee in the case of Checkmate Services Pvt. Ltd. [ 2022 (10) TMI 617 - SUPREME COURT ] held that for assessment years prior to AY 2021-22, non obstante clause under section 43B could not apply in case of amounts which were held in trust as was case of employee's contribution which were deducted from their income and was held in trust by assessee-employer as per section 2(24)(x), thus, said clause would not absolve assessee-employer from its liability to deposit employee's contribution on or before due date as a condition for deduction. The non obstante clause under section 43B could not apply in case of amounts which were held in trust as was case of employee's contribution which were deducted from their income and was not part of assessee-employer's income, thus, said clause would not absolve assessee-employer from its liability to deposit employee's contribution on or before due date as a condition for deduction. Also see Harrisons Malayalam Ltd. [ 2023 (1) TMI 137 - SC ORDER ] Recently in the case of Cemetile Industries [ 2022 (12) TMI 354 - ITAT PUNE ] held that where assessee-employer deposited amount of employees contribution towards employees' provident fund and employees' state insurance corporation beyond due date stipulated in respective Acts, disallowance made under section 36(1)(va) was justified. The ITAT further held that adjustment u/s 143(1)(a) by means of disallowance made for late deposit of employees' share to relevant funds beyond date prescribed under respective Acts was proper. Decided against assessee. 2023 (6) TMI 879 Short deduction of TDS - Disallowance u/s 40(a)(ia) - payment to sub-contractors - default u/s. 201 - assessee while making payments exceeding Rs. 10 lakhs at the time of deducting TDS on such amounts, surcharge was not levied on the tax amount, thereby leading to short deduction of TDS - HELD THAT:- In the case of CIT vs. S.K. Tekriwwal [ 2012 (12) TMI 873 - CALCUTTA HIGH COURT] the Kolkata High Court held that if there is any shortfall due to any difference of opinion as to taxability of any item or nature of payments falling under various TDS provisions, assessee can be declared to be an assessee in default u/s. 201, but no disallowance can be made by invoking provisions of section 40(a)(ia). In the case of Dish T.V. India Ltd. [ 2017 (10) TMI 539 - ITAT MUMBAI ] held that where tax was deductable u/s. 194J but was actually deducted u/s. 194C, such a short deduction would not meet requirements of section 40(a)(ia) of the Act as assessee could not be held as defaulter when there was only shortfall in deduction of TDS - Decided against revenue. 2023 (6) TMI 878 Validity of Revision u/s 263 - proceedings initiated in the name of assessee who had passed away as on the date of initiation of 263 - order passed u/s 143(3) as erroneous and prejudicial to the interest of revenue - Gain on sale of shares - capital gain v/s business income - HELD THAT:- It is a well-settled principle of law that no order can be passed in the name of a deceased person, and various Courts, including the Hon'ble Supreme Court and jurisdictional Gujarat High Court, have consistently taken a view that such order passed in the name of the deceased person, is not valid in the eyes of law. See LATE BHUPENDRA BHIKHALAL DESAI (SINCE DECD.) [ 2021 (9) TMI 431 - SC ORDER] , DURLABHBHAI KANUBHAI RAJPARA [ 2019 (10) TMI 933 - SC ORDER] , CHANDRESHBHAI JAYANTIBHAI PATEL [ 2019 (1) TMI 353 - GUJARAT HIGH COURT] , URMILABEN ANIRUDHHASINHJI JADEJA [ 2019 (9) TMI 356 - GUJARAT HIGH COURT] , LATE BHARTI HARENDRA MODI BY HER LEGAL HEIR NIKHIL HARENDR MODI [ 2019 (7) TMI 544 - GUJARAT HIGH COURT] . Thus as observed that at the time when the notice u/s 263 was issued by the Principal CIT, the assessee had already expired (on 23-02- 2018), order passed under section 263 of the Act is not valid in the eyes of law,having been passed on a deceased person - Decided against revenue. 2023 (6) TMI 877 Grant received under Sampoorna Gramin Swarojgar Yogna ( SGSY ) from Government - Nature of receipt - revenue or capital receipt - HELD THAT:- This issue is covered in favour of the assessee in assessee s own case by the Co-ordinate Bench of this Tribunal [ 2016 (11) TMI 526 - ITAT AHMEDABAD ] held that the sum receipt on account of grant under SGSY as not revenue receipt. Depreciation claimed on the portion of plant and machinery acquired through grant/subsidy received from NDDB under 70% loan and 30% grant scheme - HELD THAT:- This issue is also covered in favour of the assessee in assessee s own case [ 2015 (6) TMI 517 - ITAT AHMEDABAD ] for the Assessment Years 2002-03 to 2007-08 relying upon the judgment of the Kerala High Court in the case of Sun fiber Optics (P.) Ltd. [ 2012 (6) TMI 502 - KERALA HIGH COURT ] and also assessee s own case for the AY 2010-11 - Decided in favour of assessee. Disallowance u/s. 80P(2)(d) - interest paid by the assessee to various co-operative banks/ Societies/Bodies exceeded the income earned from its investment with Bank/Co-operative Societies - HELD THAT:- In the present case, own funds to the tune of Rs. 332.41 crores available as per the balance sheet as against, this the investments by way of fixed deposits with Cooperative Banks and Societies was Rs. 68.50 crores only. Thus the said deposits is made out of own non-interest bearing funds. Therefore the disallowance u/s. 80P(2)(d) is unwarranted and liable to be allowed. 2023 (6) TMI 876 Addition u/s 56(2)(vii)(b) - addition made since the assessee declared less purchase value than the value adopted by the Stamp Valuation authority - CIT-A deleted the addition - HELD THAT:- CIT(A) observed that out of the total plot land area of 11951 sq. mtr. mentioned in the Sale Deed, the actual plot area comes to 7171 sq. meter, since 40% had to be deducted on account of implementation of TP Scheme as per the Surat Urban Development Authority orders. Assessee had also paid an amount as a premium to the State Government for the said property. Both these issues were specifically mentioned in the Sale Deed. All relevant details had already been filed before the assessing officer as is evident from the assessment order. Taking these factors into account, the actual stamp duty value of the property comes to Rs. 4,48,18,750/- only and not Rs. 5,37,79,500/- as assumed by the assessing officer. Against this, the assessee had made total payment of Rs. 3,15,97,475/- plus Rs. 1,79,27,500/- amounting to Rs. 4,95,24,975/-. Hence, CIT(A) correctly noted that there was no under valuation - Appeal of the Revenue are dismissed. 2023 (6) TMI 875 Unexplained cash credits - onus to prove creditworthiness of creditors - HELD THAT:- Since, the identity of loan creditor stands established as he attended proceedings before the AO and the appeal proceedings as well and the genuineness of transaction is established as the loan was given through banking channel and that credit worthiness to pay advance to the appellant is established as discussed above and hence the addition has been rightly deleted by the Ld. CIT(A). Disallowance of interest paid to the two loan creditors on account of unexplained credits - HELD THAT:- It is evident from the record that the appellant was paying interest to the loan creditors @ 12% PA on the borrowings and since the interest amount was paid to them after deducting TDS, therefore the addition on account of interest paid/payable to the said creditors is also required to be deleted. Since, the interest expenses paid to the loan creditors are subject to TDS and hence, interest paid/payable to the said creditors is genuine and stands explained accordingly. CIT(A) was justified in deleting the addition on account of interest paid by the assessee to the loan creditors. Decided against revenue. 2023 (6) TMI 874 TP Adjustment - Comparable selection - RPT Filter - HELD THAT:- As in the case of M/s.Toyota Kirloskar Motors Private Limited [ 2021 (9) TMI 12 - ITAT BANGALORE] has held that the RPT ratio has to be consistently calculated on an aggregate basis taking the ratio of RPT income plus RPT expenses by sales - we direct the AO to calculate RPT ratio on aggregate basis considering the RPT income plus RPT expenses by sales for all the comparable companies. Adoption of 15% RPT filter - HELD THAT:- As tribunal in the case of Barracuda Networks India Pvt Ltd. [ 2022 (5) TMI 322 - ITAT BANGALORE] wherein it was noted that Karnataka in PCIT v. Yodlee Infotech P. Ltd [ 2018 (6) TMI 1783 - KARNATAKA HIGH COURT] had upheld the application of 15% RPT filter. Similarly, 15% RPT filter was upheld in the decision cited by the ld. AR in the case of Autodesk India (P) Ltd [ 2018 (7) TMI 1862 - ITAT BANGALORE] . Exclusion of companies on different parameters - Sagarsoft India Limited - AR submitted that, the company is engaged in the business of software development service segment along with system administration and that this fact has been not considered by the Ld.TPO 0- we remit this issue to the TPO/AO for fresh verification and decision in accordance with law, after providing assessee opportunity of hearing. Evoke Technologies Private Limited - In the absence of the correct reporting of the financial data by the comparable company, even if it satisfies the FAR filters applied by the TPO, this company cannot be considered as comparable company. Sasken Communication Technologies Limited - DRP in Appellant s own case for AY 2018-19 has held Sasken to be functionally similar - we remit the issue to the AO/TPO for verification of the facts in AY 2018-19 and present year and for fresh decision in accordance with law. Sankhya Infotech Limited - TPO DRP held that the company is functionally different as it is engaged in diversified activities and segmental data is not available - AR submitted that the company is functionally similar as it provides solutions and services in relation to software development and it passes all filters applied by the TPO - Considering the arguments from both the sides and findings recorded by the lower authorities, we remit this issue to the AO/TPO for fresh consideration. E-Zest Solutions Limited - In the present case the assessee is engaged in the business of software development services whereas E-Zest Solutions Ltd. is ITeS company. The software development service business company cannot be compared with the ITeS company. We reject the contention of the assessee and uphold the orders of lower authorities. Isummation Technologies Private Limited - We direct the AO/TPO to include this company in the list of comparables. Nitor Infotech Private Limited - During the course of hearing, the ld. AR submitted that the data is available in public domain and it is functionally comparable, but during the course of search process by the ld. TPO, it was not appearing in the search process. Assessee has filed paperbook in which the financial statement of this company is placed - We remit this issue to the AO/TPO for examination whether this company passes the FAR and decide the issue afresh as per law. Incorrect computation of margin of Harbinger Systems Pvt Ltd. - AR submitted that the TPO has taken margin at 11.16% whereas the correct margin of this company comes to 8.12% - We remit this issue to the AO/TPO for verification of the correct margin of Harbinger Systems Pvt Ltd. and accordingly adopt the same for margin computation as per law. Grant of working capital adjustment in the SWD and MSS segments - The coordinate Bench of the Tribunal in the case of Airlinq Technology Pvt. Ltd [ 2022 (8) TMI 1283 - ITAT BANGALORE] held that in keeping with the OECD guidelines, endeavour 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. 2023 (6) TMI 873 Addition u/s 14A r.w.r. 8D - assessee failed to reconcile the bank statement and some of the expenses claimed in P L were attributable to the exempt income - CIT-A deleted the addition - HELD THAT:- Undisputedly rather admittedly the assessee has not earned and claimed any exempt income therefore in view of prepositions rendered in the case of Cheminvest Ltd. [ 2015 (9) TMI 238 - DELHI HIGH COURT ] no disallowance u/s. 14A of the Act, r.w.r. 8D of the Rules is called for. Hence we are inclined to hold that the ld. CIT(A) was right and justified in deleting the entire addition and therefore no interference is called for. Accordingly, ground no. 1 of revenue is dismissed. Addition of credit card expenses - assessee failed to reconcile the credit card payment with the information available in AIR for the year under consideration even during the remand proceedings - CIT-A deleted the addition partly - HELD THAT:- CIT(A) noted that the appellant has filed additional evidence proving that the credit card payments mostly related to travelling expenses account but the amount mentioned in the credit card payment details did not tally with the travelling expenses detail. In such a situation of mismatch the CIT(A) rightly held that the credit card payment relate to travelling expenses as well as other expenses also and hence the entire credit card expenses claim by the appellant cannot be allowed fully as the appellant has failed to substantiate an establish that the entire expenses and payment made through America Express bank credit card were incurred wholly and exclusively for the purpose of business of assessee. CIT(A) was rightly adjudicate the issue by considering additional evidence and calling remand report from the AO and he was quite correct and justified in restricting the disallowance to 20% of total claim of assessee and granting relief pertaining to the remaining 80% claim made by the assessee. We are unable to see any valid reason to interfere with the conclusion arrived by the ld. CIT(A). Addition of interest income not offered to tax - assessee failed to reconcile the same with the information available in AIR for the year under consideration even during the remand proceedings - CIT-A deleted the addition - HELD THAT:- CIT(A) has given liberty and direction to the Assessing Officer to verify that as to whether the assessee has offered the interest on refund for taxation for AY 2011-12 and 2012-13. In such a situation no prejudice has been caused to the revenue and there was no leakage of revenue as the interest on refund received by the assessee was offered for taxation by the assessee as per requirement of the Act. CIT(A) was quite correct and justified in confirming the addition as the assessee could not explain the difference of said amount. Therefore, we are constraint to hold that no interference is called for in the first appellate order on this issue as the ld. CIT(A) has noted correct. Decided against revenue. 2023 (6) TMI 872 Grant of approval u/s 80G (5) - Donations - scope of amended provisions of section 2(15) - claim denied as trust had utilised the public money raised through collection of fee from the students; donations from public, School bus fee etc., for the purpose of creating its own fixed assets or cash balances by way of earning profit in manner of carrying out commercial activity - as per CIT(E) real purpose of the trust is altogether different from the stated object in the memorandum of the society filed along with the statement of accounts in compliance to notice issued subsequent to the show cause notice to the assessee. HELD THAT:- The Honorable Apex Court in the case of SERVANTS OF PEOPLE SOCIETY [ 2023 (2) TMI 535 - SUPREME COURT] has observed that interpretation of section 2(15) had undergone a change, due to the decision of AHMEDABAD URBAN DEVELOPMENT AUTHORITY [ 2022 (11) TMI 255 - SUPREME COURT] The amended definition of section 2(15) states that in course of achieving objects of general public utility, the concerned trust, society or other such organization carry on trade, commerce or business or provide service and relation thereto for consideration provided that firstly the activities of trade, commerce, or business, or connected to achievement of its object of general public utility in relation thereto, does not exceed the quantified limits that is 20% of total receipts of the previous year. Appellant trust is required to file fresh application for grant of registration u/s 2(15) and consequently, the application for approval under section 80G(5). 2023 (6) TMI 871 Deduction u/s 80P(2)(a)(i) - net interest earned from two Cooperative Banks - HELD THAT:- As considering of the case of Totagars Cooperative Sales Society Ltd. [ 2010 (2) TMI 3 - SUPREME COURT] which was relied by the ld. DR and find that the Hon ble Apex Court has dilapidated on the issue of deduction u/s 80P(2)(a)(i) but not on section 80P(2)(d). We also observed that in the case of Totagars Cooperative Sales Society Ltd, [ 2017 (1) TMI 1100 - KARNATAKA HIGH COURT ] itself the Hon ble High Court of Karnataka has allowed the claim of deduction u/s 80P(2)(d). The investment of assessee in cooperative bank is eligible investment u/s 80P(2)(d) of the Act. The interest of the said investment related to Cooperative Society; the assessee is eligible for deduction u/s 80P(2)(a)(i) - Decided in favour of assessee. 2023 (6) TMI 870 Unexplained cash deposits - Unverifiable and unexplained Transactions - accommodation entries - Assessee company failed to discharge its onus - CIT-A deleted the addition - HELD THAT:- CIT(A) deleted the additions on appreciation of the evidences furnished by the assessee, considering the remand report as well as the rejoinder of the assessee and, therefore, we do not see any valid reason to interfere with the findings of the Ld.CIT(A) in deleting the above additions. Thus, we sustain the order of the Ld.CIT(A) and reject the grounds raised by the Revenue. 2023 (6) TMI 869 Validity of re-assessment - original assessment order as passed u/s 143(3) r.w.s. 144C - reason to believe - HELD THAT:- The reasons that re-assessment notice was issued on the basis of the same set of facts/materials which was already available and considered at the time of original assessment. Additions have been made on the basis of documents filed by the assessee i.e. audited financial statement and computation of income. A.O. in the reasons recorded in respect of each of the items/issues relied on information filed by the Assessee. In so far donation is concerned, A.O. referred to Schedule-18 Other operating expenses of the profit and loss account, in so far as provision for compensated absences , A.O. referred to the assessment records and in so far as provision for litigation and claims , A.O. has also referred to the assessment records. Thus, there it cannot be said that there was a failure on the part of the assessee to disclose fully and truly of material facts and it is found that no new tangible material came to be existence post completion of original assessment. Reopening beyond period of four years - In terms of Proviso to Section 147 of the Act, once the assessment had been completed u/s 143(3) reopening is not permissible beyond four years from the end of relevant assessment year, unless income has escaped assessment by reason of failure of the assessee to disclose fully and truly all material/primary facts necessary for the assessment. There is no material facts brought on record by the A.O. to show that the assessee had failed to disclose fully and truly all material/primary facts necessary for assessment, on the contrary, additions have been made based on the revisit of the documents filed by the assessee himself i.e. audited financial statement and computation of income. Thus, the reassessment proceedings are barred by limitation. Decided in favour of assessee. 2023 (6) TMI 868 Levy of late fee u/s 234E - delayed filing of quarterly statements of TDS - period prior to 01.6.2015 - HELD THAT:- We note that only after 1st June, 2015 while processing of a TDS/TCS statement and issuance of intimation u/s 200A/206CB of the Act in respect thereof, an adjustment could have been made in respect of fee , if any shall be computed in accordance with the provisions of section 234E of the Act. Prior to 1st June, 2015, there was no enabling provision therein for raising a demand in respect of levy of fees u/s 234E of the Act. Therefore, no such levy could have been effected. See Olari Little Flower Kuries Pvt. Ltd. Vs. Union of India [ 2022 (2) TMI 1061 - KERALAHIGH COURT ], M/s. Sarala Memorial Hospital [ 2018 (12) TMI 1818 - KERALA HIGH COURT ],.M/s. Mayi Industries Vs. Union of India and M/s. Anadiyil Hospital [ 2022 (2) TMI 1061 - KERALAHIGH COURT ] Ergo, we hold that the order levying late fee u/s 234E of the Act is bad in law and therefore, cancelled. Appeals of the assessee are allowed. 2023 (6) TMI 867 Estimation of income - Bogus purchase expenses - CIT(A) directed the AO to restrict disallowance of purchases to 5% of the total purchases made from seven (7) parties - HELD THAT:- Even though, we uphold the action of the Ld. CIT(A), it is not on the reason given by the Ld. CIT(A) but on the ground that since the sale figure have not been disturbed by the AO, and CIT(A) has given a finding of the fact that the assessee was Government contractor and has completed the projects namely undertaken by it for BMC MCGM and on successful completion of work/contract has received the payments from them, the presumption drawn is that the assessee might have procured the material [for execution of work] from the grey market and have approached these accommodation entry providers-(seven parties) for accommodation bills by giving commission to them, for saving some money. Therefore, the gross profit (GP) only need to be added (profit embedded in the bills procured from entry providers which is prevalent in the line of business). Therefore, we uphold the action of the Ld. CIT(A) and dismiss the appeal of the revenue. Addition u/s 68 - bogus unsecured loans - unsecured loan payment from Late Shri Lavji N. Shah - CIT-A deleted the addition - HELD THAT:- CIT(A) gave finding of fact that after perusal of the bank statement of Late Lavji, that there was sufficient balances in his bank accounts before giving loan to the assessee firm. CIT(A) also found that there was no cash deposit in the bank account before advancing the loan to the assessee firm. And that the loan transaction was through the regular banking channel. CIT(A) was of the view that the creditworthiness of the Late Shri Lavji N. Shah also stands proved. And therefore according to him section 68 of the Act cannot be invoked against the assesse and was pleased to hold that the assessee has brought on record necessary evidences to prove genuineness of the unsecured loan payment from Late Shri Lavji N. Shah and therefore deleted the addition made u/s 68 of the Act, which action of the Ld. CIT(A) is sustained because the Ld. CIT(A) has taken the decision on the basis of facts which could not be assailed before us. Since no perversity can be attributed to the action of Ld. CIT(A), we uphold the action of Ld. CIT(A) deleting the addition. And therefore, we dismiss this ground of appeal of the revenue. 2023 (6) TMI 866 TP Adjustment - determination of Arm's Length Price - intra group services transactions as Cross-charges - payment made for corporate services such as illegal, advisory, technical and financial direction and support - HELD THAT:- We find that the nature of the services rendered to the assessee are with respect to IT network, legal services and risk management, planning and development and certain cost locations. As based on email submitted before the lower authorities, it cannot be said that the arm's-length price of the services is nil. It is not the case of the TPO that the values of the services provided by the associated enterprises to the assessee are Nil. Documents submitted by the assessee also do not conclusively fulfill (1) need test, (2) rendition test, (3) benefit test, (4) duplicative test and (5) shareholders activity test. On looking at the services it is apparent that some of the services have overlapped these tests. It cannot be said that even the IT network services should have a nil arm's-length price. As looking at most of the services it is found that they are low value adding services and therefore the focus should be more to the process adopted by the assessee and associated enterprises then evaluation of evidences such as email, reports as well as other correspondences. But that does not mean that even in absence of such details the low value adding services cannot be tested with respect to its arm's-length price. It is the duty of the assessee to substantiate that international transaction entered into is at arm's-length. In view of this we set-aside this issue back to the file of the learned transfer pricing officer/AO with a direction to the assessee to substantiate all the above five tests before the learned assessing officer/TPO and justify that they are at arm's-length. AO/TPO is directed to verify the claim of the assessee and then determine the arm's-length price of such transaction.Ground number one of the appeal is allowed for statistical purposes. Accrual of income - Addition on account of on unbilled receivable shown by the assessee - double addition - HELD THAT:- Before us the annual accounts are placed in the paper book. According to schedule P (A) (VI) clearly shows that unbilled receivable consisting of work in progress in respect of unfinished contracts are valued on the basis of percentage of the completion method, whereby the revenue is realized by reference to the stage of completion of the contract activity at the end of the accounting year. Provisions are made for anticipated losses for contracts to be completed in future. Revenue recognition is shown that it is recognized as per percentage of completion method on looking at the income from services rendered shown in the profit and loss account it is apparent that assessee has credited the same amount to the income and expenditure account. Therefore it is clear that, in addition once again by the learned assessing officer will result into double addition. Accordingly we direct the learned AO to delete the addition after the verification to ascertain whether the amount of unbilled services have been included in the gross income of the assessee or not.Ground number two is allowed for statistical purposes. Addition on account of difference between the financial statements of the assessee and form number 26AS with respect to the interest income - HELD THAT:- We find that assessee has placed before us complete details of the reconciliation - Merely because the reference between the income shown in financial statement and income shown in tax deduction at source statement (26AS) should not arise generally as an addition unless it is found that assessee has failed to account for certain income which are reflected in tax deduction at source statement. There is a difference between these two statements, it is also the duty of the assessee to show reconciliation before the assessing officer and demonstrate that no income accrued during the year has not been shown in the profit and loss account/offered for income. This ground number three is set-aside to the file of AO with a direction to the assessee to produce the reconciliation statement. Customs 2023 (6) TMI 865 Revocation of cancellation of the Customs House Agency (CHA) of the respondent - High Court confirmed the order of tribunal, taking a lenient view that violation of the CHALR is not very serious in nature and borders on to procedural irregularities - HELD THAT:- Having regard to the proportionality of the penalty, the Court is of the opinion that no question of law arises. The impugned order is obviously confined to the facts of the case. The appeal is, therefore, dismissed. 2023 (6) TMI 864 Maintainability of appeal - monetary amount involved in the appeal - HELD THAT:- It is stated that the tax amount involved in the present case is Rs. 22.5 lakhs, below the limit of Rs. 25 lakhs indicated by the concerned notification, for the Revenue to appeal. The appeals are dismissed for low tax effect, leaving the question of law open. 2023 (6) TMI 863 Territorial Jurisdiction of Court - Seizure of goods - shawls contained hair of Tibetan Antelope (Pantholopes Hodgsoni) - prohibited goods or not - jurisdiction lies before the forum/courts at New Delhi or before the courts/forum in State/U.T. of J K. HELD THAT:- There is force in the submission of respondents 1 to 4 that cause of action has arisen within the territorial jurisdiction of Delhi and not State/UT of J K, so it is the courts at Delhi where the petitioner can approach with his plea. If petitioner has any grievance vis- -vis show cause notice, he has a right to contest impugned show cause notice before Commissioner of Customs (Export) New Delhi at the time of its adjudication and that apart petitioner has also an opportunity to file an appeal against the order of Commissioner of Customs under Section 129 of the Customs Act 1962 before the Appellate Tribunal - it would have been apt for petitioner to, instead of filing the instant writ petition under Article 226 of the Constitution of India before this Court, approach appropriate Court/forum, in whose jurisdiction consignment/goods have been seized at New Delhi, show cause notice issued at New Delhi and remedy is available under Customs Act, 1962. It may be mentioned here that the act of respondents in seizing consignment/goods took place in Delhi, followed by other events including issuance of show cause notice etc., so it is the courts/forums at Delhi where the petitioner can lay his claim or raise his grievances. The instant writ petition is without any merit and is, accordingly, dismissed. 2023 (6) TMI 862 Benefit of under the Merchandise Export from India Scheme (MEIS) - export of Steel Plates - Section 5 of the Foreign Trade (Development Regulation) Act, 1992 - HELD THAT:- It emerges from the record that the petitioner exported Steel Plates under the MEIS notified by the respondents under the Act, 1992. Upon successful completion of the process of export, the petitioner submitted shipping bills and claimed duly drawback contending that the petitioner is entitled to the benefit of MEIS. It is also the case of the petitioner that at the time of filing of the EDI shipping bills, there was a problem of YES/NO clicking and the petitioner was not able to avail for the benefits under MEIS because of the said problem. This Court has recorded similar type of contentions which is taken in the present case in the Affidavit-in-reply filed by the respondents, more particularly, paras 11(b) as well as 12(a) of the Affidavit-in-reply. In the present case, the concerned respondent himself issued Trade Notice dated 21.02.20218 in pursuance of the representations received from the various exporters, who have faced similar type of difficulty while submitting the shipping bills, who have specifically declared the intent in the affirmative (in wordings) on the shipping bills. In the present case, the petitioner has specifically stated (in wordings) the intention to claim the Reward for MEIS. The concerned respondents are hereby directed to grant the benefit under MEIS to the petitioner within a period of six weeks from the date of receipt of this order - Petition allowed. 2023 (6) TMI 861 Registration of vehicle purchased by the petitioner in the auction - Customs department auctioned the vehicle since the importer did not clear the vehicle and it was lying in the customs warehouse. - grievance of the petitioner is that in spite of the clarification given by the Customs Department and also the concerned Ministry, the first respondent was dragging his feet and was not registering the vehicle - HELD THAT:- The first respondent entertained certain doubts with regard to registration of the vehicle in the name of the petitioner. In the first instance, the second respondent had clarified the doubts raised by the first respondent and through communication dated 15.07.2022 had made it clear that the auctioned vehicle can be registered in the name of the petitioner. Even thereafter, the first respondent sought for a clarification from the Director General of Foreign Trade. The Joint Director General of Foreign Trade had clarified through communication dated 15.02.2023 that the DGFT has no role in the matter and the customs has already clarified the same. In view of this communication, there is no reason as to why the first respondent is delaying the registration of the vehicle in the name of the petitioner. If the petitioner has satisfied all the other requirements, there shall be a direction to the first respondent to receive the application from the petitioner and to act upon the same and register the vehicle in the name of the petitioner - Petition disposed off. 2023 (6) TMI 860 Refund of SAD - rejection of refund claim on the ground of limitation pertaining to 9 Bills of Entry - HELD THAT:- The rejection of the refund claim on the ground of limitation is totally perverse as the Adjudicating Authority has already decided the issue by holding the same within time prescribed and the Revenue is not aggrieved with the said finding as no appeal has been filed by them. The appellant by merely filing an appeal against the order of the Adjudicating Authority cannot be worse off than what he was. 1st Appeal against any order passed by any officer below the rank of Commissioner of Customs lies with the Commissioner of Customs (Appeals) in terms of Section 128 (if the appeal has been preferred by assessee) or Section 129(D)(4) (Department s appeal on review of order] as the case may be. Legislature has very carefully worded the provision regarding filing of appeal by the Revenue as the said appeal lies only upon after the review of the order by the Commissioner of Customs. When without review by proper authority the department can t file any appeal before the Commissioner (Appeals) then where is the question of the Commissioner (Appeal) suo motu taking up any issue from the adjudication order which has been decided in favour of the assessee, to decide the same against the assessee that too in the appeal filed by the assessee. The Adjudication Order i.e. Order-in-Original has been passed on 23.2.2016 and the limitation of filing appeal against that order has expired 7-8 years back, therefore now the department can t file any appeal before the 1st Appellate Authority and in that scenario the findings recorded by the adjudicating authority in favour of the appellant have attained finality. Matter remanded back to the Commissioner (Appeals) with a direction to decide the appeal filed by the appellant afresh confining to the issue raised by the appellant before the said appellate authority - appeal allowed by way of remand. 2023 (6) TMI 859 Levy of anti-dumping duty - imports of Styrene Butadiene Rubber originating in or exported from European Union, Korea RP and Thailand - Central Government did not issue the notification for imposition of anti-dumping duty - likelihood of continuation/recurrence of dumping and injury to the domestic industry in the event of cessation of duties - HELD THAT:- Anti-dumping duty is imposed by the Central Government under section 9A of the Tariff Act. It provides that where any article is exported by an exporter or producer from any country to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article. The margin of dumping, the export price and the normal price have all been defined in Section 9A(1) of the Tariff Act. The Bench also examined whether the determination by the Central Government was legislative in character or quasi-judicial in nature and after examining the relevant provisions of the Tariff Act, the 1995 Anti-Dumping Rules and the decisions of the Supreme Court and the High Courts observed that the function performed by the Central Government would be quasi-judicial in nature. The Bench also, in the alternative, held that even if the function performed by the Central Government was legislative, then too the principles of natural justice and the requirement of a reasoned order have to be compiled with since the Central Government would be performing the third category of conditional legislation contemplated in the judgment of the Supreme Court in STATE OF T.N. SECRETARY HOUSING DEPTT. MADRAS VERSUS K. SABANAYAGAM ANR. [ 1997 (11) TMI 520 - SUPREME COURT] . The inevitable conclusion, therefore, that follows is that the decision taken by the Central Government not to impose anti-dumping duty despite a recommendation having been made by the designated authority for imposition of anti-dumping duty, cannot be sustained as it does not contain reasons nor the principles of natural justice have been complied with. The matter, therefore, would have to be remitted to the Central Government for taking a fresh decision on the recommendation made by the designated authority for imposition of anti-dumping duty on the import of the subject goods from the subject countries. Seeking extension of anti-dumping duty for a period of three years as recommended by the designated authority in terms of the first proviso to Section 9A(5) of the Tariff Act - HELD THAT:- It will not be appropriate for the Tribunal, at this stage, to extend the anti-dumping duty on the basis of the final findings of the designated authority in terms of the first proviso to Section 9A(5) of the Tariff Act. The matter is being remitted to the Central Government to take a considered decision on the recommendation made by the designated authority and it will be for the Central Government to take an appropriate decision in this regard. However, as sufficient time has lapsed since recommendation was made by the designated authority it is expected that the Central Government will take a decision at an early date. Seeking direction that anti-dumping duty may continue to remain in force pending the outcome of such a review for a further period not exceeding one year in terms of the second proviso to Section 9A(5) of the Tariff Act - HELD THAT:- The stand of the Central Government is based only on the office memorandum dated 28-10-2022 wherein the Under Secretary has informed that the Central Government, after considering the final findings of the designated authority, has decided not to accept the aforesaid recommendation. This is the only communication that has been relied upon by the learned authorized representative for the Central Government to defend the order. In any case, the matter is being remitted to the Central Government to reconsider the recommendation made by the designated authority in the light of the observations made in the order. The Tribunal had in JUBILANT INGREVIA LIMITED VERSUS UNION OF INDIA, DESIGNATED AUTHORITY, DIRECTORATE GENERAL OF TRADE REMEDIES, GHW (VIETNAM) CO. LTD., M/S. GHW HOLDING COMPANY HONG KONG, SHENG LONG BIO-TEC INDIA PVT. LTD. AND UTTARA IMPEX PRIVATE LIMITED PUNE [ 2021 (11) TMI 200 - CESTAT NEW DELHI] also set aside a similar office memorandum issued by the Under Secretary conveying the decision of the Central Government not to impose anti-dumping duty despite a recommendation made by the designated authority for imposition of anti-dumping duty. Thus, the office memorandum dated 28-10-2022 is set aside and the matter is remitted to the Central Government to reconsider the recommendation made by the designated authority in the final findings - appeal allowed by way of remand. 2023 (6) TMI 858 Classification of goods proposed to be imported - Mobileye 8 Connect - to be classified under CTH 8512, Chapter 87 or CTH 9015? - HELD THAT:- The functionality of the Mobileye 8 Connect has to be defined from the user's perspective. Here the output generated by the impugned goods is far more important from functionality perspective rather than the technology employed in gathering the inputs. User of the impugned goods has nothing to do with technical mechanism employed for gathering the inputs. The applicant has tried to base their argument on the basis of input mechanism i.e. photogrammetrical surveying for classifying the goods which are essentially an alert system for vehicle drivers. Chapter heading 8531 of CTA excludes from its purview Electric sound or visual signalling apparatus of Chapter heading 8512 or 8530. CTH 8531 clearly provides that this heading provides for classification of all products of electrical apparatus used for signalling purposes, whether using sound for the transmission of the signal (bells, buzzers, hooters, etc. or using visual indication (lamps, flaps, illuminated numbers, etc.), and whether operated by hand (e.g.; door bells) or automatically (e.g., burglar alarms) with the exception of signalling apparatus used on cycles or motor vehicles (heading 85.12). And precisely due to this exclusion, it is found that the impugned goods do not merit classification under CTH 8531. Impugned good covered under present CAAR-1 application perform signalling function in both ways i.e. by visual mode and also by sound mode. There is no single eight-digit classification which can accommodate an apparatus or an equipment performing both visual as well as sound signalling function under the first schedule of the Customs Tariff Act, 1975 - Rule 3(b) of the GRI comes in to operation only if Rule 3(a) thereof fail and if both Rule 3(a) and Rule 3(b) fail, Rule 3(c) thereof will apply. Thus, the order of priority for deciding the classification under the Customs Tariff Act, 1975 is Rule 3(a) specific description; Rule 3(b) essential character; Rule 3(c) Heading which occurs last in numerical order amongst those entries which equally merit classification. It is found that two eight-digit tariff entries are applicable to the impugned goods namely 8512 20 90 and 8512 30 90. However, due to application of General Rule of Interpretation 3(b) it is held that the Customs Tariff Heading 8512 and more specifically tariff entry 8512 30 90: Sound signalling equipment in the first schedule to the Customs Tariff Act, 1975, notwithstanding performance of signalling function in both ways i.e. by visual mode as well as by sound mode, are the most appropriate classification heading tariff entry for the Mobileye 8 Connect proposed to be imported by the applicant. 2023 (6) TMI 857 Classification of goods proposed to be imported - VIEWSONIC Brand LCD Monitors - to be classified under sub-heading 8528 52 00 of Customs Tariff Act, 1975 or not - benefit of exemption under Sr. No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended - HELD THAT:- The subject goods have graphic ports from Advanced Micro Devices, INC, and have built-in VGA and HDMI connectors. The viewable image size of the subject goods are 30 inches except for VX3276-MHD-3 model which is 32 inches. Similarly, to ensure suitability for close proximity viewing, the display pitch size of subject goods is set below 0.3 mm, except for VX3276-MHD3 model which is at 0.364 MM and VA 2732 MH - IN 1 model at 0.31 mm. The emission standards for the subject goods is low, as they are designed for close proximity over a prolonged period of time like desktop monitors, while monitors designed for other uses have a high emission standard as they are to be viewed at a distance. While models VA 2732 MH - IN 1, VX3276-MHD-3 and VA 2432-MH-IN-1 have a built in speaker of 2 x 2 watts, the other models do not have built in speaker. The subject goods have physical control buttons on front panel in all the models and have various ergonomic features such as tilt, swivel, height adjusting mechanism, glare free surfaces and flicker free display. The subject goods can be regarded as being part of an automatic data processing system as it meets all of the conditions specified in Chapter notes 6(C) of Chapter 84. Further, the absence of built in USB driver, SD card external storage connectivity and touch screen capability ensures that the principal function of the subject goods is connecting to an ADPS. However as per paragraph 6(D) 6(E), monitors, not incorporating television reception apparatus when presented separately, cannot be classified under Chapter heading 8471 and have to be classified in the headings appropriate to their respective functions. Accordingly, by virtue of terms of the headings, relative Chapter Notes and HSN Explanatory notes, I find that the subject goods satisfy all essential conditions to merit classification under Chapter sub heading 8528 52 00 as, Monitors capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471 . Thus, all the models of 'VIEWSONIC Brand LCD Monitors' covered under present application are classifiable under sub-heading 8528 52 00 of the first schedule to the Customs Tariff Act, 1975 and would be eligible to avail benefit of duty exemption under sr. no. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended. 2023 (6) TMI 856 Seeking Advance Ruling on the basis of incomplete details - Valuation of imported goods for trading activity - applicant can be considered as Trader or Commission Agent? - trading margin of 3% earned by the applicant upon import of the subject goods is required to be added in the assessable for customs purposes? - Section 14 of the Customs Act, 1962 read with Customs Valuation (Determination of value of imported goods) Rules, 2007 (CVR, 2007), interpretative notes to the CVR, 2007 and the Special Valuation Branch related CBIC circular of February 2016. HELD THAT:- The assessable value for payment of customs duties has been determined by the applicant as the sum of price at which the goods are sold by Ingrasys Singapore to the applicant and freight charges. It is noted that freight is directly met by ADSPL, a third party. In the value chain the price offered to the third party subsequent to import should have been higher than the assessable value declared but for direct freight payment by the third party to the supplier- exporter even if there is no value addition on account of manufacturing or processing - there are no role of the department or a legal framework under the Customs Act, 1962 in it. As stated earlier this accumulation is entirely attributable to the way the transaction is organized among the three transacting entities. Hence accumulation of IGST credit (ITC) is not a correct legal ground for seeking an advance ruling. Addition or otherwise of 3% amount earned by the applicant to the declared import transaction value - HELD THAT:- It is on record that the applicant company is a subsidiary of Ingrasys (Singapore) PTE Ltd. which holds 99% of the share capital of the applicant company. They are related parties in terms of Rule 2(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. In such a situation the import transactions will be subjected to the rigor of procedure laid down under the CBIC circular no. 5/2016-Customs dated 9.2.2016 related to the procedure to be followed in related party import cases and other cases by the Special Valuation Branch. It is found that here the questions remain as to: (1) why the price agreement is entered into between the exporter supplier M/s Ingrasys, Singapore a third party buyer M/s ADSPL leaving aside the importer-applicant (claimed to be principal to the transaction), who claims to be an independent business entity. The copy of price agreement is necessary to examine the role of the applicant in the transaction, (2) why the principal (importer) in this transaction has not borne the burden of the freight that would have resolved the issue of accumulation of ITC, (3) whether 3% amount earned by the applicant is a profit margin or a business revenue' of the applicant. It is important to note that the business profit and business income are not same and interchangeable terms, (4) why there is no statement/submission on the grounds for payment of Customs duty and interest subsequent to DRI investigation when the applicant is of firm belief that the 3% margin earned by them is not a commission and hence not includible in transaction value of imported goods under section 14 of the Customs Act, 1962. Investigation closure report of the DRI, if any, is also not submitted by the applicant, (5) why the data sought from the applicant including the profit and loss account of the applicant, referred in para 5.1 earlier, was not submitted by the applicant. This data was essential to understand exact role of the applicant in the transaction, (6) Rule 10(1)(e) provides for inclusion of all other payments which are a condition of sale. In the absence of sufficient data this factor also cannot be conclusively verified. On the background of foregoing discussion, the applicant has not submitted requisite information sought by the advance ruling authority. This is a clear case of data insufficiency. Corporate Laws 2023 (6) TMI 855 Prosecution proceedings against the petitioners / accused - Allegation of illegal removal complainant from Directorship - Using forged signatures and uploading DIR-12 with resignation letter - Allegation of mismanagement and oppression - authority to convene any extraordinary general meeting of the Company - whether the criminal proceeding instituted against the petitioners is liable to be quashed under Section 482 of the Cr.P.C.? HELD THAT:- With extensive scope and ramification, inherent powers under Section 482 of the Criminal Procedure Code include the power to stop any criminal case pending before any court subordinate to the High Court. Depending on the specifics of a case, these powers may be used to secure the ends of justice, prevent abuse of any court's process, and issue any orders as may be necessary to give effect to any order under the Code. The court can always take note of any injustice and stop a criminal proceeding by using its authority under Section 482 of the Criminal Procedure Code. No other clause of the Code restricts or limits their capabilities. Such natural powers should only be used sparingly and with caution. In State of Haryana v. Bhajan Lal [ 1990 (11) TMI 386 - SUPREME COURT] , a two-Judges Bench of the Supreme Court of India considered in detail the provisions of Section 482 and the power of the High Court to quash criminal proceedings or FIR where it was held that The Government order authorised the Inspector General of Police to investigate only the offences failing under Section 5 of the Act. Therefore, the SHO who has taken up the investigation of the offences inclusive of those under Section 161 and 165 IPC is not at all clothed with any authority to investigate these two offences, registered under the IPC, apart from the offence under Section 5(2) of the Act. The matter at hand is not a rare case that justifies the Court's interference at the investigation stage. The allegation in the FIR makes out a prima facie case against the accused, and for this reason, the FIR registered in the Hare Street Police Station under Sections 120B/406/465/467/468/471/420 of the Indian Penal Code, 1860 should not be quashed. There are no reason to interfere with the investigational process of the investigating agency in the instant case. Criminal proceeding shall continue - the instant revision is dismissed on contest. 2023 (6) TMI 854 Jurisdiction of Court to entertain the suit - doctrine of forum conveniens - Invoice is raised from Delhi for the work performed within the State of Maharashtra - Seeking a decree alongwith interest compounded annually - rejection of Plaint on the ground of jurisdiction - seeking deletion of names from the array of Defendants - HELD THAT:- The essential prerequisite for invoking clause 8 is the existence of a dispute. In the facts of the present case, the record bares out that infact the Defendants had at no point of time, prior to the filing of the Affidavit in Reply to the Summons for Judgment never raised any dispute whatsoever qua any of the said invoices - the Defendants have also received the Plaintiffs letter dated 8th April, 2020 and legal notice dated 14th August, 2020 both of which have remained unanswered and undisputed. Thus, in the facts of the present case, there infact exists no dispute and hence the Defendants reliance upon clause 8 is not only entirely misconceived but also malafide. The invoices do not either expressly or by implication provide that the moneys are payable in Delhi. The invoices infact set out the modes of payment acceptable to the Plaintiff, i.e., either by account payee cheque, demand draft or NEFT/RTGS - Merely because the details of the receiving bank are within the jurisdiction of another city, this fact alone would not mean (a) that the amounts are payable in that city and (b) that part of the cause of action had arisen in that city. Additionally, even assuming that the only mode for payment under the said invoices was via RTGS/NEFT, the same would not by itself amount to monies being payable in Delhi under the contract. The details of the Plaintiff s bank are set out only to facilitate the payment by electronic mode and nothing else. This by no stretch of imagination can be construed to mean that the amounts due under the said invoices were payable in Delhi. The common law proposition is undoubtedly based on the doctrine of forum conveniens, it is basis this that the Plaintiff has filed the present suit in this Court only to be told by the Defendant who neither disputes nor denies the Plaintiffs claim that Suit must necessarily be instituted in a Court which for the Plaintiff is clearly not forum conveniens and within which, no part of the cause of action has arisen. Such a contention must only be stated to be rejected. Challenge to the Jurisdiction Bombay High Court rejected. 2023 (6) TMI 853 Violation of Section 148(6) of the Companies Act punishable under Section 148(8) of the Companies Act - failure to appoint cost auditor within the time limit prescribed under Section 148(3) and Rule 6(2) of Companies (Cost Records and Audit) Rules, 2014 - HELD THAT:- This Court finds that admittedly, the petitioner was the Chief Financial Officer of the Company from 02.05.2016 to 01.08.2016. The company ought to have appointed the cost auditor for the financial year 2015-2016 within 180 days from 01.04.2015 i.e. on or before 01.10.2015. The case of the respondent, therefore, is that the company committed the offence on 01.10.2015. The offence under Section 148(8) of the Companies Act may be a continuing offence. However, it cannot be said that the petitioner, who was not in the company when the offence was first committed, is liable merely because he did not rectify the alleged violation during the period when he held the office. The company and the officers, who are in default at the time when the offence was committed, could only be made liable. The persons/accused of an offence cannot be based on the date on which the complaint is filed. The accused would and should remain the same whenever the complaint is filed since the offence is committed on a particular date. Persons who came to know of the offence subsequently cannot be made liable merely because the offence is continuing. Any interpretation to the contrary as submitted by the respondent, would lead to an illogical and absurd situation. Whether an offence is continuing or not is relevant only for the purpose of determining as to whether the complaint is barred by limitation. In this case, the company had already committed the offence and the persons who ceased to be the Directors before the alleged offence or had joined the company after the alleged offence cannot be held liable for the said offence. In view of the admitted fact that the petitioner joined on 02.05.2016 and resigned on 01.08.2016, and the offence was committed on 01.10.2015, he cannot be held liable for the alleged violation. Hence, the impugned complaint against the petitioner is liable to be quashed. Petition allowed. Insolvency & Bankruptcy 2023 (6) TMI 852 CIRP - Admissibility of application - pre-existing dispute - disputes were not raised prior to the issuance of the Demand Notice - disputes regarding the performance of the Engine and the quality of the spares that were supplied - HELD THAT:- It is clear that the service recipient agrees to make payment irrespective of the fact whether the said engine is in operation or not at the time of the payment dates as above. This term categorically binds the Corporate Debtor to the payment of instalments. It is found that no dispute regarding the quality of the spares was raised as on 11/09/2019. The MoU is dated 11/07/2018, the first supply of spare parts was made on 23/10/2018 and this email is dated 11/09/2019, from which it can be noted that a period of more than 13 months has lapsed. So, the contention of the Learned Counsel that it is only after the lapse of some time that the Engine efficiency can be ascertained and therefore, the lapse of 13 months from the date of supply of spare parts and 7 months of the Engine being made operational on 03/04/2019 for raising any dispute is justified, cannot be accepted. In the instant case, the material on record evidences that the dispute raised is spurious, hypothetical and illusory as it was raised only after several months of supply and further there was also a Meeting, whereby there was an attempt to make a part payment. At this juncture, this Tribunal pertinently points out that although the reply of the Corporate Debtor was not taken on record by the Adjudicating Authority , all the issues raised by the Appellant have been addressed. The case of the Appellant that it was only after a lapse of some time that the engine efficiency can be ascertained and therefore, the lapse of 13 months in raising the dispute of the spare parts is justified cannot be sustained as there is no specific time frame which is established by way of technical specifications to be guided by / or which were mentioned in the MoU with respect to this issue. The fact remains that the spare parts were supplied way back on 25/10/2018 and the first issue was raised almost 11 months thereafter. There is nothing on record to establish that 11 months time is required to ascertain the efficiency of an engine - this Tribunal is of the considered opinion that the dispute raised by the Corporate Debtor is only illusionary and moonshine. There are no substantial grounds to interfere with the Order of the Adjudicating Authority and hence this Appeal fails - appeal dismissed. 2023 (6) TMI 851 Seeking directions to vacate the interim order dated 12.02.2021 passed in the present appeal - to allow the corporate insolvency resolution process of the Corporate Debtor - HELD THAT:- Since the main petition is pending before the Adjudicating Authority, we dispose of both the Appeals i.e. Company Appeal (AT) (Insolvency) No. 79 of 2021 and Company Appeal (AT) (Insolvency) No. 1095 of 2021 with a request to the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench) to decide the main petition on merit at an early date. The Appellant and Respondents are being given liberty to raise all issues, both about fact and law before the Adjudicating Authority. These Appeals i.e. Company Appeal (AT) (Insolvency) No. 79 of 2021 and Company Appeal (AT) (Insolvency) No. 1095 of 2021 stand disposed of. The interim order dated 12.02.2021 passed by this Tribunal is hereby vacated. Accordingly, Contempt Case (AT) No. 10 of 2021 is also disposed of. Service Tax 2023 (6) TMI 850 Seeking release of bank attachment - default in payment of service tax - violative of Articles 14 and 19(1)(g) of the Constitution of India - HELD THAT:- There is no doubt that the petitioner is ailing from cancer. It is also seen that due to the default in paying the service tax, the respondents have attached the bank account of the petitioner and recovery notice has also been issued vide impugned order dated 24.04.2023, challenging which, the petitioner is before this Court. This Court, considering the ailment of the petitioner, permits him to approach the statutory authority by way of an appeal within a period of eight weeks from the date of receipt of a copy of this order. However, it is made clear that the request made by the petitioner to release the bank attachment may be raised before the appellate authority. Petition disposed off. 2023 (6) TMI 849 Supply of tangible goods service - Fixed Facility Charges collected by the appellant for supply of tanks for storing the liquid gases - period of dispute is from 16.05.2008 to March 2009 - HELD THAT:- The appellant entertained doubts as to whether FFC has to be included in assessable value for discharging excise duty and also whether credit can be availed of such duty. Though letters were issued to department seeking clarifications, there was no response. The appellant then filed W.P before Hon ble High Court of Bombay in INOX AIR PRODUCTS LTD. VERSUS UNION OF INDIA [ 2014 (9) TMI 529 - BOMBAY HIGH COURT ], the Hon ble High Court directed the Board to issue clarification. Pursuant to this, the Board vide circular dt. 10.11.2014 has clarified that FFC charges has to be included in the assessable value for discharging cenvat credit. It can be seen that ownership of the tanks remains with the appellant and the possession and effective control of the tanks is with the customers during full term of the agreement. The definition of supply of tangible goods as per section 65 (zzzzj) defines as any service provided or to be provided to any person, by any other person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right of possession and effective control of such machinery, equipment and appliances . In the peculiar nature of the products, the appellant has to supply tanks before supply of liquid gases to the customers. Thus the assessee is required to include the value of FFC and MOTP in the transaction value of the gases for discharging the Central Excise duty. There are no reason to hold that FFC charges are in the nature of consideration received by appellant for providing supply of tangible goods. Appeal allowed. 2023 (6) TMI 848 Rate of tax - offering various slimming and beauty packages to their clients and such packages are priced on the basis of sessions / sittings required by the respective clients - taxable at the revised rate of 12.24% for the period prior to 18.04.2006 or not - CBEC vide Circular No.65/14/2003-ST dated 05.11.2003 - HELD THAT:- On perusal of the circular, it is indeed clarified the situation of payment of service tax when the service becomes taxable subsequently. It does not talk about situation of enhancement or revision of service tax. The Tribunal in the case of M/S VIGYAN GURUKUL VERSUS CCE, JAIPUR [ 2011 (8) TMI 401 - CESTAT, DELHI ] had analysed the very same issue and observed during the relevant time the rate that was applicable at the time of receipt of value of service will apply in a case where the assessee chose to pay tax on the advance amount received. The demand cannot sustain and requires to be set aside - Appeal allowed. 2023 (6) TMI 847 Levy of Service Tax - liability of sub-contractor when the main contractor discharged the liability on the full contract value - invocation of extended period of limitation - revenue neutrality - HELD THAT:- There cannot be any malafide in the facts of the present case for the reason that the main contractor discharged the entire service tax liability on the total value of the contract which includes the value of the service provided by the sub-contractor also. If the appellant being a sub-contractor would have discharged the service tax liability, then to that extent the liability of service tax on the main contractor would have reduced therefore, it is clearly a case of Revenue neutral. Moreover, on this issue the board had issued Circular No. 23/3/97-ST dated 13.10.1997, TRU letter F.No. 341/18/2004-TRU (Pt.) dated 17.12.2004 whereby the Board had clarified that when the main contractor has discharged the service tax on the total value of the contract, the sub-contractor need not to pay service tax. However, subsequently the board has reversed their view and by Circular No. 96/7/2007-ST dated 23.08.2007 clarified that sub-contractor is required to pay service tax. Besides this contradictory Circular, the matter was also under litigation before various forums and finally the Larger Bench of the Tribunal in the case of Melange Developers Pvt. Limited [ 2019 (6) TMI 518 - CESTAT NEW DELHI] held that sub-contractor is required to pay service tax. The said judgment was delivered in 2020. Accordingly, the appellant had bonafide belief that there is no liability to pay service tax being a sub-contractor. The demand though on merit is sustainable but it is clearly hit by limitation and hence not sustainable - Appeal allowed. 2023 (6) TMI 846 Levy of Service Tax - Renting of Immovable Property Service - rental income received by the appellant from the property - HELD THAT:- In the case of the co-owner Smt. Akila, the Tribunal has set aside the demand observing that income received as rent separately by each co-owner is much below the threshold limit to subject to levy of service tax. Thus, the income falls within the threshold limit for payment of service tax. Vide A. AKILA VERSUS COMMISSIONER OF CENTRAL EXCISE, TRICHY COMMISSIONERATE TRICHY [ 2018 (10) TMI 559 - CESTAT CHENNAI ] the Tribunal has relied upon the decision of ANIL SAINI, KABAL SINGH, NEELAM SAINI, SURINDER KAUR, JASWINDER SINGH, PARMOD KUMAR CHAUDHARY, SUKHJEET JODHA VERSUS CCE, CHANDIGARH-I [ 2017 (1) TMI 101 - CESTAT CHANDIGARH] where it was held that The service Tax Registration of individual assessees for collection of service tax is PAN based, hence, collection of service tax from one of the co-owners, against his individual Registration for the total rent received by all co-owners separately, is neither supported by law nor by laid down procedure. The demand do not sustain - appeal allowed. 2023 (6) TMI 845 Benefit of abatement under N/N. 01/2006 dated 01.03.2006 on Commercial Construction Service - benefit denied on the ground that assessee had taken cenvat credit of service tax on input services used for providing commercial or industrial construction service (CICS) - HELD THAT:- To check that whether the respondent assessee has availed cenvat credit on input or input services or capital goods used in providing Commercial Construction Service, it is a matter of fact which needs to be verified from the statutory record of the service tax as well as the Financial Accounts of the respondent assessee. The Adjudicating Authority has physically verified the ST-3 return for the relevant period. He has also taken a chartered accountant certificate in lieu of the verification wherein whether the cenvat credit on the input and input service and capital goods is availed by the respondent assessee or not for basically making them enable to avail the benefit of abatement under Notification No. 01/2006 dated 01.03.2006. The department in its appeal memo has not mentioned anything to disprove the decision reached by the adjudicating authority of dropping the demand as the basic allegations in the show cause notice were not supported by any evidences. It is a matter of record that the adjudicating authority has verified statutory return like ST 3 return as well as qualified Chartered Accountant has verified and given certificate to the Adjudicating Authority. The adjudicating authority has correctly reached at the conclusion that input or input services cenvat credit has not been availed by the respondent assessee while performing the Commercial and Industrial Construction Service - the appeal is without any merit and therefore, deserves to be dismissed. Central Excise 2023 (6) TMI 844 Classification of goods - aluminum casseroles manufactured with the aid of aluminum foils - to be classified as containers , falling in Chapter Heading 76.12 or as classifiable as aluminum trays - HELD THAT:- Having considered the orders of the CESTAT, this Court is of the opinion that the view expressed by the Tribunal is correct. On an application of the common parlance test also having regard to the use of the products, (i.e. storing articles of food) and the explanatory note to the HSN, there can be no conclusion other than that arrived at by the CESTAT i.e. the goods are classifiable under Heading 76.15. The appeals are, therefore, dismissed. 2023 (6) TMI 843 Time Limitation - Suppression of facts or not - Method of Valuation - price variation clause - clearance of excisable goods to depot - to be valued as per Section 4(1)(b) of the Central Excise Act, 1944 read with Rule 7 of the Valuation Rules 2000 or not - HELD THAT:- The Appellant has not suppressed any information from the department. They have filed ER-1 returns regularly intimating the duty paid by them for clearances made to their depot(s). They have also paid differential duty of Rs 2,28,137/- under price variation clause for the clearances made to the Delhi and Mumbai Depot(s). These details furnished by them in the ER-1 returns indicate that there is no suppression of fact involved in this case. The Appellant cited the receipt of a letter dated 17.09.2007 from the Range Superintendent on alleged short payment of duty due to under valuation wherein the he had asked them to pay an amount of Rs.3,59,269/- as duty on account of short payment of duty. This indicates that the Range Officer has verified the Returns submitted by them and demanded differential duty vide letter dated 17.09.2017. Therefore, demands raised by invoking extended period is not sustainable. The Appellant have paid differential duty for the normal period from December 2006 to November 2007. Since the Appellant have already paid the differential duty for the normal period from December 2006 to November 2007, no other demand in the impugned order survives - Appeal allowed. CST, VAT & Sales Tax 2023 (6) TMI 842 Calculation of VAT - expenses charged are separate than the food charges despite only one coupon of composite amount issued at the entry by the respondent or not - penalty imposed under Section 61 of RVAT Act - HELD THAT:- The assessee cannot split up the amount charged for the sale of food, even if assessee provides certain services in addition to the food, and VAT has to be paid on the entire consideration charged for the food. The assessee, undisputedly, issued coupons that were adjustable against food only and therefore the assessee is liable to pay VAT on the entire consideration charged from its customers for supply of food. This position of law is well settled now and explained in great detail by the Hon ble Apex Court in the case of K. Damodarasamy Naidu and Bros. [ 1999 (10) TMI 598 - SUPREME COURT] , holding that the price that the customer pays for the supply of food in a restaurant cannot be split up as suggested by learned Counsel. The contention of the assessee that as per aspect theory, the dominant supply was of supply of entertainment/service is also untenable - the questions of law framed hereinabove have to be answered in favour of the revenue and against the assessee - Accordingly, the impugned order of the Tax Board is quashed and set aside and the levy of penalty is maintained. 2023 (6) TMI 841 Classification of goods - rate of tax - stainless steel scrap - to be taxable at the rate of 2% under the Himachal Pradesh Tax on Entry of Goods into Local Area Act, 2010 or taxable at the rate of 0.25% under Entry No. 9 of Schedule-II appended to the Entry Tax Act? - HELD THAT:- The clear mandate of law is that this Court can exercise revisional jurisdiction under Section 48 of the Act only against the orders passed by Tax Tribunal either under Section 45(2) or Section 46(3) of the VAT Act. Such jurisdiction can be exercised if the person aggrieved applies to this Court within 90 days of the communication of the order and also if the involvement of any question of law arising out of erroneous decision of law or failure to decide a question of law is found to exist. The impugned order passed by the Tax Tribunal in rectification application filed by the petitioners under Section 47 of the VAT Act is not open to challenge by the petitioners before this Court under Section 48 of the VAT Act. Petitioners can also not be allowed to assail the order dated 20.06.2017, passed by the Tax Tribunal being clearly beyond the period of limitation, as prescribed under Section 48 of the Act - There is no denial to the fact that no distinction has been made in the Entry Tax Act between ferrous metal and alloys and non ferrous metal and alloys. The Tax Tribunal has rightly interpreted the terms of the Entry Tax Act as decipherable from its provision and entries in the Schedule appended thereto. The alloys have been included in Entry 19(b) of Schedule-II to the Entry Tax Act, which has been declared to be taxed at the rate of 0.25%. The Tax Tribunal had rightly interpreted the terms of Schedule-II appended to Entry Tax Act by holding that the tax statutes have to be read as it is without inferring anything extra. There are no erroneous decision of law or failure to decide a question of law in the impugned order dated 20.06.2017 passed by the Tax Tribunal, therefore, no question of law has arisen for consideration of this Court - petition dismissed. Indian Laws 2023 (6) TMI 840 Dishonour of Cheque - Rebuttal of presumption - discharge of burden to prove - main crux of argument is that once issuance of cheques are admitted, the presumption will come into picture and rebuttal evidence given by the accused in present case is insufficient - service of notice on proper address and drawing of presumption under Section 27 of the General Clauses Act - HELD THAT:- It is true that all these presumptions are not conclusive presumptions but they are rebuttal presumptions. When we have considered the evidence given by the complainant in both the cases and common evidence given by the accused in both complaints, it is found that both the parties have taken upon themselves the burden to prove the fact pleaded by them. No doubt the complainant in this case can certainly rely upon the presumption under sections 118 and 139 of N.I. Act. The signature on both cheques is not disputed by the accused. What is disputed is the contents of cheques. When the accused has admitted his signature, he has given authority to the complainant to make cheques complete in all respect. It is true that if there is material alteration that is to say any alteration carried out without consent of the parties, it affects the validity of negotiable instrument as contemplated under section 87 of the N.I. Act - the signatures and amount in figures are of accused. So filling other details cannot be said to be material alteration. The burden on accused is not heavy as that of the complainant. The Court has to see whether probable case so as to create dent in case of the complainant has been made out or not. The law does not provides for contingency of adducing evidence by the complainant, after accused has adduced evidence. From the cross examination, the complainant has to forsee what type of case is pleaded by the accused. The complainant has failed to anticipate that contingency. So the beneficiary is none other than accused. Service of Notice - HELD THAT:- The issue of service of notice is only of academic importance. It is true that the complainant could not state that the signature on acknowledgment belongs to accused. If the accused is available at the time of delivery and if she has signed, the complainant/sender of notice will be in position to identify the signature and not otherwise. But the address on the envelope is not disputed by the accused. So the presumption under section 27 of the General Clauses Act will certainly help the complainant. Both the sides have relied upon certain judgments on the point of manner of discharge of burden to prove service of notice - the complainant has not satisfied the material ingredients for the offence under section 138 of the N.I. Act. Appeal dismissed. 2023 (6) TMI 839 Rejection of application filed by the petitioner by Respondent for allocation of quota to the Haj Group Organizers (HGOs) for Haj 2023 in contravention of the Policy - Compliance with GST law and submission of proof of payment of GSt - violation of the Principles of Natural Justice, equity and good conscience - violation of Article 14 and Article 19(1)(g) of the Constitution of India - HELD THAT:- As is evident, the Registration and allocation of Haj Quota to private tour operators is subject to certain terms and conditions for registration as HGOs. The registration of HGOs not found to be complying with the HGO Policy is liable to be cancelled. In the instant petition, it has been alleged that the registration of the petitioner has been suspended due to their wilful misrepresentation and misreporting of facts to the Ministry, based on which they were registered as HGOs in the first place. The attention of this Court has also been drawn to the conditions as applicable to the registration certificate. The registration of the HGOs is an absolute right rather than a privileged right that is bestowed upon the concerned HGO based on the fulfilment of certain conditions as laid out under the Policy. Therefore, the offer made by the HGOs to the pilgrims is subject to certain pre-conditions for the grant of registration and is amenable to the fulfilment of the requisite conditions, the non-compliance of which empowers the Ministry to suspend/cancel the registration as well as for blacklisting the company - The conditions inter alia provide that the HGOs will abide by the policy for HGOs for Haj-2023 read with Circular No .15/28/20022-Haj- MoMA dated 14th March 2023 and will be held responsible for noncompliance with any of the terms and conditions of registration with MoMA at any stage. It is also stated therein that the Ministry shall have the right to suspend/ cancel the registration in case of non-compliance with any of the terms and conditions. In the instant case, it has been alleged that there has been a gross misrepresentation of facts by the petitioner HGOs, which has come to light during the visit of a team of officials from the respondent to the office premises of the petitioner HGO - As per the bilateral agreement entered into between the Government of India and the KSA, for Haj 2023, a total quota of 1,75,025 pilgrims (1,40,000 pilgrims for HCoI and 35,025 pilgrims for the HGOs) has been allocated by the KSA to India. This Court is of the prima facie opinion that although restrictions and conditions to the issuance of the Registration Certificate as well as to the Quota allotted to the petitioners/HGOs may be imposed, the same should not be held against the pilgrims who, in good faith, registered with the petitioners/HGOs to undertake the pilgrimage. This Court is of the view that such an action would defeat the purpose of the current Haj Policy and is in derogation of Article 25 of the Constitution of India. Article 25 of the Constitution of India guarantees the freedom of conscience and the freedom to profess, practice and propagate religion to all citizens. Haj Pilgrimage and the ceremonies involved therein fall within the ambit of a religious practice, which is protected by the Constitution of India. Religious freedoms are one of the most cherished rights guaranteed and enshrined under the Constitution in line with the vision of the founding fathers of the Modern Indian Republic. The Haj pilgrimage is undertaken by thousands of pilgrims from India annually. In order to enable the Indian Muslims willing to undertake the Haj pilgrimage, every year a bilateral treaty is executed between India and the Kingdom of Saudi Arabia. In terms of the said agreement, a quota of some pilgrims is allotted to India. The pilgrimage can be undertaken from India only either through the Haj Committee of India (the Haj Committee) or the HGOs - The majority of Haj pilgrims are taken care of by the Haj Committee, and only a limited number of pilgrims can undertake the Haj pilgrimage through HGOs as per the quota of the respective HGO. This Court refers to the judgment of Union of India and Others v. Rafique Shaikh Bhikan and Another [ 2012 (5) TMI 858 - SUPREME COURT] wherein this Court emphasized that the main purpose of the Haj Policy was to ensure that pilgrims must be able to perform their pilgrimage duty without undertaking any difficulty, harassment or suffering. In the present petition, the Court is at this stage is primarily concerned with the pilgrims who intend to travel on Haj Pilgrimage and have paid in advance to the petitioners for the same. Travelling to Haj is not merely a holiday but is a medium of practicing their religion and faith which is a fundamental right. This Court being the protector of the right of the pilgrims shall take the necessary steps in this regard - Accordingly, to ensure that the pilgrims are not obstructed from completing their journey and undertake Haj, the comments in the consolidated list of allocation of Haj Quota for HAJ-2023 issued on 25th May, 2023 by the respondent which reads as Registration Certificate Quota Kept in abeyance till finalization of proceedings in complaint related matter is stayed. Petition disposed off. 2023 (6) TMI 838 Continuation of present proceedings under the NI Act simultaneously, during the pendency of the proceedings under the IBC - Dishonour of cheque - HELD THAT:- While dealing with a similar question, a Three Judge Bench of the Hon ble Supreme Court in Ajay Kumar Radheyshyam Goenka vs. Tourism Finance Corporation Of India Ltd [ 2023 (3) TMI 686 - SUPREME COURT ], has held To say that under a scheme which may be approved, a part amount will be recovered or if there is no scheme a person may stand in a queue to recover debt would absolve the consequences under Section 138 of the N.I. Act, is unacceptable. Thus, what flows from the above law laid down by the Hon'ble Supreme Court is that whereas recovery proceedings barred under Section 14 of the IBC are primarily civil in nature, the proceedings under Section 138 of the NI Act are criminal in nature, and both have a different set of purpose. Furthermore, the complainant approaches the Criminal Court not only for recovery of the legally enforceable debt but also for taking penal action under Section 138 of the NI Act for the offence already committed by the accused by not making the payment of the cheque amount despite the receipt of the statutory notice. Therefore, by operation of the provisions of the IBC, the criminal prosecution initiated against the natural persons under Section 138 read with 141 of the NI Act would not stand terminated. This Court does not find any merit in the instant petition, which is accordingly dismissed.
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