TMI Tax Updates - e-Newsletter
June 24, 2019

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Securities / SEBI Insolvency & Bankruptcy FEMA PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Notifications

GST

• 25/2019 - dated 21-6-2019 - CGST
  Seeks to amend Notification No. 22/2019- Central Tax, dated the 23rd April, 2019

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Income Tax

• 47/2019 - dated 20-6-2019 - IT
  Under Section 80-IA, Sub-clause (iii) of sub-section (4) of the Income-tax Act, 1961 Central Government notifies M/s. Magrath Properties Pvt. Ltd., as an industrial park with terms and condition

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Circulars / Instructions / Orders

DGFT

• TRADE NOTICE NO. 19/2019-2020 - dated 21-6-2019
  Response to various representations against Allocation of Quota for Pulses/Peas

Highlights / Catch Notes

GST

• Classification of goods - rate of tax - The packaging materials viz. cut to size blanks manufactured by TCPL with corrugation and having requisite creases at designated places, supplied in flat form with folding, can be categorized under Tariff Item Code no 4819 and subject to GST @ 12%.
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• Classification of supply - supply of goods or services for ‘setting up of network’ for BSNL - Works Contract or composite supply - The work to be undertaken by the applicant is a composite supply of works contract, since it includes supply of both, goods and services and does not fall in any of the clauses (i) to (xii) except clause (ii) of Section 5 of Notification No 11/2017 - CT (Rate) as amended - GST@18%
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• Registration of firm - manufacture of animal feed (exempt) - requirement of registration u/s 24 if exempted from registration u/s 23 - section 23 is not contrary to section 22 but is clear expression of the intent of Section 23 - applicant would go out of the scope of Section 23 of the GST Act because he is making certain quantity of taxable supply of GTA by way of RCM and would fall within the scope of section 24 - liable to take registration
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Income Tax

• Reopening of assessment - unexplained cash deposits - claimed that deposit made after closure of business, from the sale of small grocery shop and also from sundry debtors, besides capital from the closed business - the issues, as to whether the income is exempt from tax and as to whether he had earned it in one assessment year, have to be gone into - remanded for this purpose only
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• Assessment of trust - Tax rate - provisions of Sec.167B applies to an AOP or BOI where its income is indeterminate or unknown then the tax shall be charged at the maximum marginal rate - it is a fact that the Deity is the sole beneficiary in present case, the tax rates and the slabs as applicable to an individual would apply
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• Penalty u/s 271D - assessee is a small trader - household expenses incurred and paid from firm have been entered in cash book debited to assessee's a/c and crediting the A/c of firm M/s Rambilas Shiv Kumar, hence no 'money' passed from firm to the assessee - the transaction between the assessee and firm was current account in nature and was not a loan or deposit and hence there is no violation of section 269SS - no penalty
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• Registration u/s 12A - CIT(E) has not disputed that the nature of the aims and objects of the society are covered under the definition of charitable purposes u/s 2(15) - in facts of appellant, it cannot be said that the society is not doing the activities in pursuance of its main objects or that the aims and objects of the society are not genuine - directed to grant registration
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• Reopening of assessment u/s 147 - Non–disposal of objections challenging the validity of re–opening of assessment u/s 147 is not a mere procedural lapse but effects the jurisdiction of the AO to pass the assessment order u/s 143(3) r/w section 147 - impugned orders is void ab-initio and there is no reason to restore the issue to the AO to pass a fresh assessment order
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• Exemption u/s 10(26AAB) - to Agricultural Produce Marketing Committee (APMC) or Board constituted under the law - assessee appointed u/s 35 of the DAPM Act for marketing of fish, poultry and eggs - no definition of ‘agricultural produce’ under the IT Act - the term ‘agricultural produce’ is given a wider meaning in section 2(a) of the DAPM Act which includes fish, poultry and eggs also - exemption allowable
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• Exemption u/s 54F - assessee hold the the asset for more than 36 months from the date of allotment of the property - no justification to treat capital gain as STCG by considering the holding period from the date of registration of the property instead of date of allotment - LTCG - exemption allowable
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Customs

• Diversion of goods imported for exhibition instead of re-export - import through ATA Carnet route - In case of any violations, by M/s Billiards Tulsa Inc USA, like selling the goods to M/s J.K. International Revenue was free to take action as per law to recover duty and other dues if any as per the law laid down therein - Recovery of duty from the JK International is not valid.
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• FIA - import of Ascorbic Acid as ‘Corrosion Inhibitor’ - Since the respondents have not violated any provisions of Customs Act, 1962 or the Foreign Trade Policy, in as much as import of Ascorbic Acid under transferred DFIA , benefit cannot be denied.
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• Validity of Public notice - Protocol of Treaty of Transit between the India and Nepal - manner of transfer/transhipment, of all goods that are imported via India to Nepal - Commission has no power to amend the procedure - operation of public notice stayed.
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• penalties u/s 112(a)/114AA of the Customs Act - duty free import of the raw Lead Ingots for manufacturing diverted to local market - goods were transported from ICD, Loni to Kathua via New Delhi with proper documents issued by the transporters - no investigation to transporters, no other evidence, even the revenue is not disputing export of lead alloys by appellant - Admittedly, lead alloys cannot be manufactured from Vacuum - demand not sustainable
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• Refund of SAD - N/N. 102/2007 - entity who had paid VAT were different from the importer - certificate issued by the VAT clearly certifies that Mr. Ahmed Hajee Mohiudeen is the proprietor of M/s. Mohiudeen Saw Mills and M/s. Hajee Timber Complex and they have been registered dealer under the Karnataka VAT - the objection of the Department that these two concerns are separate entities is not justified - refund allowable
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FEMA

• Offence under FEMA - unauthorized foreign exchange recovered from a person who named appellant - It is not in dispute that the department has allowed to cross examination of main witness (accused) Shri Thlabikhe who was not produced as he was absconding - It was the duty of the respondent to trace him out for cross-examination - Thus, merely on the basis of presumption, the inference can be drawn against the appellant without clinching evidence - appeal allowed
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Corporate Law

• Oppression and Mismanagement - removal of director for not attending three consecutive meetings - extract of meeting dated 20.5.2010 has been signed by the appellant, it also establishes that impliedly the leave of absence in defacto is given - respondents were very well aware that the appellant is in U.K. despite notice issued to Visakhapatnam address and despite corresponding with the appellant via emails, no notice via mail was given - filing Form No.32 with ROC for vacation of office by the appellant is not legal
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• Oppression and Mismanagement - allotment of shares - continuation as additional (3rd) director after 26.9.2010 is not as per law as was not regularised in AGM - Board Meeting held on 27th October, 2011 and thereafter in which the decision was taken to allot shares to Respondents is not as per law as for conducting the Board Meeting the quorum should be complete and one Director cannot hold the Board Meeting - all allotments are illegal
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IBC

• Enforceability of Foreign Award - GoI can recover Petroleum due when the Corporate Debtor is already under Insolvency - once order has been pronounced u/s. 7 of the I&B Code and declared “Moratorium”, there is prohibition to enforced for recovery against the said Corporate Debtor as well as institution of any suit or execution of any Judgment, Decree or Order of any Court of Law, Tribunal, Arbitration Panel - action on the part of the GoI, Ministry of Petroleum, is not legal
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PMLA

• Offence under PMLA - challenge of attachment orders - Appellants have nothing to do and has no connection with the allegation of crime committed by the borrowers and the mortgage properties are admittedly not derived from criminal activities or proceed of crime - The bank and financial institution are entitled to take the remedy before the Special Court after the decision of appeal or during the pendency of appeals - attachment quashed
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SEBI

• Ex-parte ad-interim order - Passing a confirmatory order virtually puts a stoppage on the appellant’s right to trade which in the instant case is based on non-consideration of evidence and is harsh and unwarranted.
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Service Tax

• Levy of penalty - Since there had been regular amendments and changes in Rules during the period and since the appellant have paid the tax alongwith applicable interest, which is also almost equal to the amount of demand - Penalty waived.
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• Condonation of delay - There is no prohibition for this Court under Articles 226 and 227 of the Constitution in exercising the extraordinary jurisdiction to condone the said delay of 64 days accepting the satisfactory explanation offered by the petitioner.
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• Imposition of penalty - service tax paid on Manpower supply services under RCM - being pointed out the audit party, without waiting, the Appellant immediately deposited the entire service tax amount along with interest much before the issuance of SCN - when credit is available to an assesee itself it cannot be said that there is any intention to evade payment of duty - payment o tax is revenue neutral - no penalty
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Central Excise

• Adjustment of short paid duty against the refund claimed by the appellant for excess amount of duty paid - The right to refund of eligibility amount is vested in the hands of the individual/entity who has borne the duties and it cannot be retained by the exchequer.
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• Classification of goods - clearances of printed base papers/printed decorative paper in rolls - the most appropriate Central Excise Tariff Heading shall be 49119990
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VAT

• Condonation of delay in filing appeal - When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for, the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.
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Case Laws:

• GST

• 2019 (6) TMI 1064
  Classification of goods - rate of tax - packaging materials viz cut to size blanks manufactured by TCPL with corrugation and having requisite creases at designated places, supplied to the Customers in flat form with folding - classified under Tariff Item Code no 4819 and subject to GST@ 12% or not? - HELD THAT:- T he samples in respect of packaging materials viz. cut to size blanks with corrugation and having requisite creases at designated places and we find that the said products are with corrugations/ perforations and therefore foldable on three sides and glued on the fourth side. These blanks can be folded into cartons at the requisite creases manually or mechanically without any further processes. We also find that the said blanks can be used by their customers only as cartons/ boxes, after the folding takes place, without the use of technical expertise. We further find that the said products are dispatched by the applicant to their customers only when they receive orders for cartons/ boxes for packing in DVD players belonging to their customer. Hence at the time of receiving the order and dispatching of the said products both, the applicant and their customer are aware that what will be sent by the applicant and received by the customers are cartons/ boxes. We agree with the contention of the applicant that the essential character of such items remains as cartons or boxes to hold goods, though certain manual or mechanical activity has to be carried out on the same to achieve the required objective. We also agree the said packaging materials supplied to their customers in flat form cannot be used by the customers in any form other than as cartons or boxes to hold goods. The case laws cited by the applicant in respect of ATUL GLASS INDUSTRIES LTD. VERSUS COLLECTOR OF CENTRAL EXCISE [ 1986 (7) TMI 90 - SUPREME COURT] support their contention that the packaging materials viz cut to size blanks and supplied in flat form manufactured by TCPL with corrugation and having requisite creases at designated places, supplied in flat form shall be classifiable under Tariff Item Code 4819 chargeable to GST at 12% and we agree with the same. The packaging materials viz. cut to size blanks manufactured by TCPL with corrugation and having requisite creases at designated places, supplied to the Customers in flat form with folding, can be categorized under Tariff Item Code no 4819 and subject to GST @ 12%. Classification of goods - rate of tax - printed materials which are in flat form, e.g. hanging cards, without creases having corrugation and supplied to customer in flat form - HELD THAT:- No doubt that they are clearly covered under Chapter Heading 4823 and chargeable to GST @ 18%.

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• 2019 (6) TMI 1063
  Registration of firm - manufacture of animal feed - exemption from tax vide entry no. 102 of the Notification No. 2/2017 Central Tax (Rate) dated 28.06.2017 - Whether the firm is liable to take registration u/s 24 or is exempted from registration u/s 23? - principles of jurisprudence - HELD THAT:- Scheme GST being a tax on the event of supply every supplier needs to get registered. However, as per the scheme of the Act, not every supplier is required to get registered. Only those suppliers, whose aggregate turnover of all supplies exceeds the threshold limit as prescribed under Section 22 (including exempted and taxable supplies). Thus to be registered a person satisfies two conditions namely, supply of taxable goods or services or both and aggregate turnover in a financial year exceeds threshold limit - Section 23, provide exemption to certain category/ class of person from obtaining registration under the Act. Such category consist of persons who are engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax or an agriculturist, to the extent of supply of produce out of cultivation of land. Thus section 23 is not contrary to section 22 but is clear expression of the intent of Section 23. From conjoint reading of Section 9 and section 24 of the Act, since the applicant is required to pay tax under reverse charge, they have to compulsorily register under GST and the requirements of Section 22(1) pertaining to taxable supply and the threshold limit are not applicable to them. The principles of jurisprudence namely the rule of harmonious construction and the rule against redundancy, the applicant would go out of the scope of Section 23 of the GST Act because he is making certain quantity of taxable supply of goods transport service by way of reverse charge mechanism and would fall within the scope of section 24 of the GST Act for the purpose of registration and hence he would be required to obtain registration under the Act in order to discharge his duty liability under reverse charge, notwithstanding the turnover limits specified in sub-section (1) of Section 22 of the GST Act. Applicant is liable to take registration in view of provisions of section 24 of the GST Act, 2017.

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• 2019 (6) TMI 1062
  Classification of supply - Works Contract or not - supply of goods or services for setting up of network - composite supply or not - rate of tax applicable to the supplies made under the contract. Whether the supply of goods or services for setting up of network would qualify as works contract as defined in Section 2(119) of the CGST Act? - HELD THAT:- Since the network which comes into existence only when the data centers, nearline. data centers, disaster recovery station, etc. are set up as firmly attached to the ground, it comes into existence in the form of an immovable property - the network to be set up in accordance with the contract partakes the character of an immovable property inasmuch as the network as it comes into existence is firmly attached underground and cannot be moved in as is from one place to the other - The network to be set up by the Applicant in accordance of its contract with BSNL results in creation of an immovable property and thus qualifies as a works contract as per Section 2(119) of the CGST Act and attract the assessment of GST liability accordingly. Composite supply of services - naturally bundled services - If supplies contemplated as per the contract with BSNL are not treated as works contract, can these continue to qualify as composite supply? if yes what is the principle supply? - HELD THAT:- In the present facts, supply of material and services for setting up of network, supply of training services and supply of satellite connectivity vehicles amongst all the other ancillary activities required under the contract are aimed at creation of a network and operations - in such a case, if the activity of setting up of network per se qualifies as works contract ; then such works contract constitutes the pre-dominant element of the entire contract and partakes the character of a principal supply . What is the rate of tax applicable to the supplies made under the contract? - HELD THAT:- The present contract in our view is a works contract as it involves provision of services and goods, but it is for us to decide whether it is works contract as defined under the GST Act - It is evident from above that they are constructing civil structure to house various equipment, electrical installation, infrastructure, etc. We further find from the Project Schedule submitted by the applicant that their work involves Construction buildings for housing the equipment room, Data centers, Nearline data centers, Disaster Recovery Center, Training of Project Management Team, Supply of Equipment at a central site of bidder and segregrated as per, site; Staging of Equipment, Joint Testing, Delivery of Equipment to sites, Installation of equipment, Certification of Network by a Certifying Authority, Commissioning of the Network, Training for trainers and Completion of Warranty. Thus from a reading of the terms of the contract is for a surveillance system to be put into place for which the most important items are the equipments which are requires for the system to function. This is the principal requirement and after supply of these equiments the same are required to be put to use. Hence the equipments have to be installed, connected with wires to various components etc, as submitted by the applicant and since the same cannot be kept in the open they are to be housed in buildings consisting of operational areas, etc. The subject work to be undertaken by the applicant is a composite supply of works contract, since it includes supply of both, goods and services and does not fall in any of the clauses (i) to (xii) except clause (ii) of Section 5 of Notification No 11/2017 - CT (Rate) as amended - the subject contract is taxable and the tax rate to be applied is 18% GST.

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• Income Tax

• 2019 (6) TMI 1061
  Reopening of assessment - writ petitioner had not filed returns or paid tax at any point of time - unexplained cash deposits - AO issued notice u/s 142(1) seeking production of evidences relating to the deposits made with the banks, but the same was unserved and returned with postal endorsement 'door locked' - HELD THAT:- As already mentioned supra, the cash deposits made by the writ petitioner is not in dispute. Therefore, all that the writ petitioner can now explain to the respondent is that either his income is exempt from tax or that it was not the income received in one assessment year. The issues, as to whether the income is exempt from tax and as to whether he had earned it in one assessment year, have to be gone into. The predicament which the writ petitioner has undergone has been articulated in paragraph-3 of the writ affidavit and the same is not disputed. Court is of the view that as an exceptional case, one opportunity can be given to the writ petitioner - impugned assessment order made by the sole respondent dated 22.12.2018 is set aside without expressing any opinion on merits. It is also made clear that the order is being set aside only for the purpose of giving an opportunity to the writ petitioner to give his explanation

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• 2019 (6) TMI 1060
  Estimated average sale of Poultry Droppings / Manure - rejecting the average stock of birds held during the years as determined by the assessing officer - AO calculated the average sales by adopting the quantity of 19.10 Kgs of estimated bird dropping per bird - AO referred to an expert opinion rendered by Professor D.Narahari, Senior Vice President of Indian Poultry Science Association. The assessee had adopted the value of 14 Kg per bird - HELD THAT:- The assessee had adopted the value of 14 Kg per bird. The tribunal took note of the fact that the expert who rendered opinion had ultimately stated that the practical recoverability of manure may not exceed 10 Kgs per bird. Thus, the tribunal found fault with the manner in which the assessing officer completed the assessment, by referring that the assessing officer cannot consider the expert opinion in one part and reject the remaining part. The findings rendered by the tribunal in paragraph 9 of the impugned order is perfectly right and valid. Further more, we find that the CIT(A) had done an elaborate exercise and there is also specific mention made in the order by the CIT(A) that he has gathered information from the market as to, on what rate the poultry manure is sold. Thus, the factual position has been thoroughly gone into and re-examined by the tribunal for its correctness and this Court, sitting on appeal under Section 260A cannot re-assess the factual aspects , as if we are the second appellate authority over the tribunal. Therefore, the substantial question of law No.1 that arises for consideration, as framed by the Revenue, is rejected. Unaccounted money of cash accruals to offset against the purchase of property - assessee has not maintained books of account on the sale of poultry droppings / manure - CIT(A) allowing the unaccounted money of cash accruals to offset against the purchase of property. - HELD THAT:- Factual finding was tested for correctness by the tribunal and it had independently gone into the factual position, analysed the records viz., the note book which was seized during its search and upheld the telescoping done by the CIT(A). CIT(A) as well as the tribunal had examined the factual position and rendered a finding, which cannot be upset in an appeal under Section 260A of the Act, in the absence of any perversity established by the Revenue against the finding of the CIT (A) or that of the tribunal. No question of law, much less substantial question law as framed by the Revenue arises for our consideration. In the result, the appeals are dismissed

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• 2019 (6) TMI 1059
  Low tax effect - maintainability of appeal - HELD THAT:- The tax effect in this appeal is lesser than the threshold limit mentioned in Circular No.3 of 2018, dated 11.07.2018, issued by the Central Board of Direct Taxes, which fixes the monetary limit as ₹ 50,00,000/- for the Department to pursue the matter. Furthermore, the Revenue has not been able to point out any distinguishing features, by which the Circular No.3 of 2018, dated 11.07.2018, cannot be applied. Thus Revenue cannot pursue this Appeal in view of the low tax effect. Hence, the Appeal is dismissed and the Substantial Questions of Law, framed for consideration, are left open.

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• 2019 (6) TMI 1058
  Penalty u/s 271FA - non filing of Annual Information Return - HELD THAT:- As decided in SUB REGISTRAR JAORA VERSUS DIRECTOR OF INCOME TAX (I CI) , BHOPAL [ 2019 (5) TMI 1059 - ITAT INDORE] Section 273B provides for not levying penalty in certain cases if the assessee proves that there was a reasonable cause for the failure. This section also refers to the penalty of Section 271FA of the Act. Reference was made to various correspondences with the Chief Secretary, Govt. of Madhya Pradesh, Department of Commercial Taxes and Chief Commissioner of Income Tax as well as Secretary, Finance Department of Revenue which talks about the technical problem due to which non integration of the departments portal with the Income Tax Departmental portal for PAN authentication was not achieved. This problem was solved at later stage and finally assessee filed Annual Information Report for financial year 2014-15 on 14.12.2017. Certainly there was a delay but there was reasonable cause for such delay. On examining the facts of the instant appeal in the light of the above decision we find that the issue is squarely covered by this decision and Ld. Departmental Representative failed to bring any contrary material. We therefore sustain the penalty of ₹ 9,700/- u/s 271FA of the Act and delete the remaining amount of penalty of Rs,3,41,800/- and partly allow the assessee s appeal - Appeal of the assessee is partly allowed.

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• 2019 (6) TMI 1057
  Deduction u/s 80P - assessee is registered as co-operative societies under the Kerala State Co-operative Societies Act, 1969 - AO treated the assessee as co-operative bank and not co-operative society - HELD THAT:- The Larger Bench in the case of The Mavilayi Service Co-operative Bank Ltd. [ 2019 (3) TMI 1580 - KERALA HIGH COURT] held that the Assessing Officer has to conduct an inquiry into the factual situation as to the activities of the assessee society to determine the eligibility of deduction u/s 80P of the I.T.Act. It was held by the Hon ble High Court that the Assessing Officer is not bound by the registration certificate issued by the Registrar of Kerala Co-operative Society classifying the assessee-society as a cooperative society. The Hon ble High Court held that each assessment year is separate and eligibility shall be verified by the Assessing Officer for each of the assessment years. The issue of deduction u/s 80P(2)(a)(i) is restored to the Assessing Officer. The Assessing Officer shall examine the activities of the assessee and determine whether their activities are in compliance with the activities of a cooperative society functioning under the Kerala Co-operative Societies Act, 1969 and grant deduction u/s 80P(2) in accordance with law. Appeals filed by the Revenue are allowed for statistical purposes.

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• 2019 (6) TMI 1056
  Eligibility to deduction u/s 80P - assessee are registered as cooperative societies under the Kerala State Co-operative Societies Act, 1969 - HELD THAT:- The Larger Bench of the Hon ble jurisdictional High Court in the case of The Mavilayi Service Co-operative Bank Ltd. [ 2019 (3) TMI 1580 - KERALA HIGH COURT] held that AO has to conduct an inquiry into the factual situation as to the activities of the assessee society to determine the eligibility of deduction u/s 80P. As held that the Assessing Officer is not bound by the registration certificate issued by the Registrar of Kerala Cooperative Society classifying the assessee-society as a cooperative society. The Hon ble High Court held that each assessment year is separate and eligibility shall be verified by the Assessing Officer for each of the assessment years. The issue of deduction u/s 80P(2)(a)(i) is restored to the Assessing Officer. The Assessing Officer shall examine the activities of the assessees and determine whether their activities are in compliance with the activities of a cooperative society functioning under the Kerala Co-operative Societies Act, 1969 and grant deduction u/s 80P(2) in accordance with law. - Appeals filed by the Revenue are allowed for statistical purposes.

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• 2019 (6) TMI 1055
  Penalty u/s 271D - payment made by sister concern on behalf of the assessee - HELD THAT:- Since the assessee is a small trader and not maintaining journal, he has entered the transaction in cash book. The entry is in both side of cash book which means assessee has not received cash. Household expenses incurred and paid from firm have been debited to assessee's a/c and accordingly journal entry has been passed in cash book crediting the A/c of firm M/s Rambilas Shiv Kumar (Sister concern) and debiting the capital a/c of Subash Chand Nyati in which narration is given as credited to M/s Rambilas Shivkumar and debited to household expenses as such no 'money' passed from firm to the assessee. ITAT Ahemdabad in the case of ACTT vs Gujarat Ambuja Proteins Ltd. [ 2003 (10) TMI 248 - ITAT AHMEDABAD-B] has held that where account of sister concern was credited by the assessee by journal entries on account of payment made by sister concern on behalf of the assessee, there was no no violation of the provisions of Section 269SS. The transaction between the assessee and sister concern M/s Ram Bilas Shiv Kumar was current account in nature and was not a loan or deposit and hence there is no violation of section 269SS as in the case of CIT vs ldhayam Publication Ltd. [ 2006 (1) TMI 97 - MADRAS HIGH COURT] . Copy of account of the assessee in the books of sister concern M/s Rambilas Shivkumar clear indicate that it is a current account and as such provisions of Section 269SS/ 271D are not applicable. - Decided in favour of assessee

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• 2019 (6) TMI 1054
  TP Adjustment - comparable selection - HELD THAT:- TCS E-serve Ltd. - As decided in ACTIS GLOBAL SERVICE PVT. LTD. [ 2017 (5) TMI 849 - DELHI HIGH COURT] upheld the order of ITAT Delhi Bench in directing the exclusion of this comparable on the ground that TCS E-serve Ltd. was involved both in the transaction processing and technical services and was not therefore a comparable with respect to a company engaged only in BPO activities. Admittedly, the assessee is also a BPO company and the finding to this effect has been recorded by the ITAT in assessee s own case for assessment year 2009-10 wherein it has been mentioned that this company is into providing low-end BPO services. I-Services India Pvt. Ltd. - The assessee is praying for inclusion of this company on the ground that it is functionally similar. We note that the DRP has also directed this company to be included in the list of comparables if it passes all the filters as applied by the TPO. We also note that this direction of the Ld. DRP has not been implemented in so far as the TPO has excluded this company without recording any finding. Therefore, we deem it appropriate to restore this comparable to the file of the TPO with the direction to implement the direction of the DRP and pass a speaking order on this comparable. Savi Inforservice (India) Pvt. Ltd. - The assessee is praying for inclusion of this company on the ground that it is functionally similar and the DRP has directed that the same be included if it passes all the filters as applied by the TPO but again this company has not been included without any reason being assigned by the TPO. We direct that the TPO/AO should give effect to the directions of the DRP in respect of this comparable also and decide on its inclusion/exclusion by passing a speaking order. Microgenetics Systems Ltd. - TPO has excluded this company on the ground that the related party transaction filter was not met. On the other hand, it is the contention of the assessee that data with respect to the related party transaction was duly filed before the TPO. In view of the contradictory stand by the assessee and the department, we deem it appropriate to restore this comparable also to the file of the TPO with the direction to re-examine the inclusion of this comparable after duly considering the data with respect to related party transactions.

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• 2019 (6) TMI 1053
  Penalty 271(1) (c) - assessment order was ex parte - AO has made addition on 4% of the total turnover on an estimate basis which has been reduced to 2% by the ITAT - HELD THAT:- Material exhibiting non-disclosure of profit on turnover unearthed during the search. The assessee has not offered any explanation about the income for which it has furnished inaccurate particulars. Estimation of income is by compulsion at the end of the AO and not by choice. It is not case that the AO was not satisfied with the details maintained by the assessee or explanation given by the assessee. Thereafter, he estimated profit at a different rate. Here estimation of profit is a mode of computation of income under compelling circumstance, when the assessee failed to give requite details. Considering concurrent finding of the both the authorities we do not find any merit in this appeal. - Decided against assessee.

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• 2019 (6) TMI 1052
  Exemption u/s 54F - AO treated the capital gain on sale of the said plot of land as Short Term Capital Gain on the premise that such property was held by the assessee for less than 36 months - whether holding period of a capital asset is to be reckoned from the date of allotment or from the date of possession ? - HELD THAT:- As relying on ANILABEN UPENDRA SHAH. [ 2001 (10) TMI 13 - GUJARAT HIGH COURT] issue decided in favour of the assessee for the asset for more than 36 months from the date of allotment of the property, we find no justification in the order passed by the authorities below in such capital gain as short term capital gain by considering the holding period from the date of registration of the property as on 30.09.2009 instead of date of allotment on 15.02.2007. In our considered opinion the assessee held the property for more than three year w.e.f 15.02.2007 when the allotment letter was issued in the name of the assessee till the date of subsequent sale of the said property on 04.08.2010. In that view of the matter, the capital gain is to be treated as long term capital gain arising out of the sale of the said long term capital asset and the assessee is entitled to the exemption u/s 54F as claimed in her return. We, therefore, find no merit in such addition made by the authorities below. The addition is therefore, deleted. - Decided in favour of assessee.

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• 2019 (6) TMI 1051
  Deduction u/s 80IB(10) - built up area of a flat in the housing project should not exceed 1500 sq.ft. - CIT(A) granted proportionate deduction to the units/flats which were having area less than 1500 sq. ft. - HELD THAT:- As decided in assessee's own case the findings namely that the projections are external projections, it is for the purpose of aesthetic beauty of the building, are not habitable and not utilizable from inside and all allowed by the Corporation and not considered by them for the purpose of calculating the area of the flat, has not been controverted by the Revenue. In such a situation, we are of the view that the deduction u/s 80IB(10) cannot be denied to the assessee. We therefore direct the AO to allow the deduction on the entire project. Thus the grounds of the assessee are allowed. Revenue has not pointed out any distinguishing feature in the facts of the present case and to that of assessee s own case in A.Y. 2010-11 nor has placed any material on record to demonstrate that the decision of Pune Tribunal in assessee s own case in A.Y. 2010-11 [ 2017 (11) TMI 116 - ITAT PUNE] which has been relied upon by Ld.CIT(A) has been set aside / overturned or stayed by Higher Judicial Forum. In view of the aforesaid facts, we find no reason to interfere with the order of Ld.CIT(A) and thus the grounds of Revenue are dismissed.

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• 2019 (6) TMI 1050
  Addition of non-genuine purchases - assessee has declared GP @ 5.02% - assessee is dealing in ferrous and non ferrous steel - HELD THAT:- It is settled position that no sale is possible in absence of purchases. The total turnover of assessee during the year was of ₹ 2.56 Crore. The assessee has shown the purchase of ₹ 2.29 Crore and has declared the income of ₹ 94,741/-. The assessee has already declared GP @ 5.09%. Therefore, after considering the facts and the nature of business of the assessee, particularly, when the sales of the impugned purchases were not disputed, and that the assessee has already shown GP of 5.09%% on such purchases, we are of the considered opinion that under Income Tax Act only real income can be taxed by the Revenue. Even if the transaction is not verifiable, the only taxable is the taxable income component and not the entire transaction - in order to fulfill the gap of revenue leakage the disallowance of reasonable percentage of such purchases would meet the end of justice. Hence, the addition is restricted to 12.5% of the total impugned (disputed) purchases. See SHRI HARIRAM BHAMBHANI [ 2015 (2) TMI 907 - BOMBAY HIGH COURT] - Decided partly in favour of assessee.

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• 2019 (6) TMI 1049
  Levy of penalty u/s.271(1)(c) - disallowance of expenses incurred for appellant's own education at Harward business School - HELD THAT:- The assessing officer while making disallowance concluded that the expenses claimed by the assessee are personal in nature and cannot be linked to the income earned. There is no finding of the assessing officer that the particulars of expenses claimed by the assessee are inaccurate. As relying on RELIANCE PETROPRODUCTS PVT. LTD. [ 2010 (3) TMI 80 - SUPREME COURT] mere disallowance of the expenses claimed by the assessee would not lead to levy of the penalty. In the result the grounds of appeal raised by the assessee are allowed.

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• 2019 (6) TMI 1048
  Disallowance of deduction u/s 35(1)(ii) - assessee claimed 175% of total donation - approval of Institution namely SHG PH has been withdrawn by CBDT w.e.f. 01.04.2007 vide notification dated SO 2961(E) 82 of 2016 dated 15.09.2016 - AO disallowed weighted deduction holding that the CBDT has withdrawn the notification dated 4/2010 dated 28.01.2010 - HELD THAT:- As decided in M/S. MOTILAL DAHYABHAI JHAVERI AND SONS VERSUS ASSISTANT COMMISSIONER OF INCOME TAX 19 (2) , MUMBAI [ 2019 (4) TMI 1615 - ITAT MUMBAI] withdrawal of deduction u/s 35(1)(ii) of the Act due to withdrawal of recognition with retrospective effect . In any case, we find that the provisions of section 35(1)(ii) of the Act vide its Explanation reproduced hereinabove clearly proves that the donor (i.e assessee herein) cannot be affected due to subsequent withdrawal of recognition with retrospective effect. We direct the ld AO to grant deduction u/s 35(1)(ii) - Decided in favour of assessee.

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• 2019 (6) TMI 1047
  Assessment of trust - applicability of provisions of Sec.167B - applicability of tax rates applicable to an individual - entire income belonged to only one person, i.e. the Deity - HELD THAT:- The perusal of Sec.167B reveals that the provision applies to an association or persons or body of individuals where its income is indeterminate or unknown then the tax shall be charged at the maximum marginal rate. In the present case, it is a fact that the Deity is the sole beneficiary and it is not a case where the share of its income is unknown or indeterminate. In such a situation provisions of Sec.167B would not be applicable and since the Deity is a juristic person and having the status of an individual, as held in the case of Official Trustee of West Bengal [ 1973 (12) TMI 1 - SUPREME COURT] the tax rates and the slabs as applicable to an individual would apply. I therefore hold so. Direct that the tax slab as applicable to individual be applied to the assessee. Thus, the grounds of assessee are allowed.

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• 2019 (6) TMI 1046
  Denial of exemption claimed u/s 54F - assessee has not produced any construction agreement with the builder - HELD THAT:- The payment through three cheques for a total amount before due date of filing of return of income u/s 139 was not in dispute. When there was no clarity on the purpose for which the assessee made payment with the builder, u/s 133, AO would have called for details/explanation from the builder, which was not done by the AO. Since the assessee has paid sizeable amount towards purchase of new flat out of the sale consideration, the Department cannot deny the claim of deduction u/s 54F. However, the reason for not filing copy of the purchase agreement with the builder against which the payment was made by the assessee was not explained. The assessee is liable to file complete details for claiming any deduction under Income Tax Act, otherwise, such deduction is not allowable. Since there was long delay in construction of property, the assessee made a request dated 18.08.2014 for withdrawal of the amount paid and the entire was refunded to the assessee on 06.02.2015. However, the assessee has not furnished any evidence of payment with the builder with whom the assessee has entered into an agreement for purchase of new flat. Without furnishing payment details, the assessee s claim cannot be entertained. We direct the assessee to furnish complete evidence towards payment of the above amount before the AO for verification and the details are found to be correct, the assessee can be allowed to claim deduction u/s 54F and otherwise not. AO is also directed to call for explanation from the builder to verify as to what purpose the assessee made payment on 07.07.2012 and subsequently, it was refunded to the assessee on 06.02.2015. Levy of interest u/s 234B and 234C is consequential to the tax liability. - Appeal filed by the assessee is allowed for statistical purposes

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• 2019 (6) TMI 1045
  Disallowance u/s 80IC - delay of 01 day in filing the return of income beyond the prescribed period - assessee had not filed the return of income within the stipulated period as provided u/s 139(1) - HELD THAT:- Considering the rival contentions and also considering the decision of the Coordinate Bench of the Tribunal in the case of Symbiosis Pharmaceuticals (P) Ltd. Vs DCIT [ 2017 (11) TMI 1361 - ITAT CHANDIGARH] the delay of 01 day in on-line filing of the return occurred not due to any negligence of the assessee, rather, the reason for the same was beyond the control of the assessee. Even otherwise, the return has been filed within extended period as provided u/s 139(4) of the Act. The matter is restored to the file of the AO to examine the limited aspect as to whether the assessee, otherwise, is entitled to claim deduction us 80IC of the Act and if so found eligible, the Assessing Officer will allow the claim accordingly irrespective of the fact that there was a delay of 01 day in filing the return of income beyond the prescribed period under the provisions of section 139(1) - Appeal of the assessee is treated as allowed for statistical purposes.

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• 2019 (6) TMI 1044
  Exemption u/s 10(26AAB) - AO held that marketing of fish, poultry and eggs should not be termed as marketing of agricultural products and that it was rather a trading venture of certain non agricultural goods - HELD THAT:- The main function of the marketing committee is to facilitate free and fair trade of the agricultural produce and not to undertake trading on this own behalf. It has to provide a place where the producer and the consumers can meet and trade freely. The committee is entitled to a fee for the service rendered. It is recovered from the commission agents who undertake the trading on behalf of the purchaser and the seller. The assessee has been appointed u/s 35 of the DAPM Act to facilitate trading in fish poultry, eggs etc. The composition of committee is approved by the Lt. Governor of Delhi has been notified in the Delhi Gazette, NCTD No. 200 dated 31.08.2001. The word agricultural produce has not been defined under the Income Tax Act. The AO held that since fish, poultry and eggs did not constitute agricultural commodity it could not fall under the term of agricultural produce. However, at this juncture, it is important to note the context in which the term agricultural produce has been used. It has been used in the context of the activities of APMC (from which it derives income) constituted under the DAPM for the purpose of regulating and marketing. It is therefore, incumbent to see the relevant Act which empowers the committee to undertaken the regulating and marketing of commodities. In view of the expanded meaning given to the term agricultural produce by the DAPM Act, it is our considered opinion that the word agricultural produce , used in connection with APMC connotes a very wide meaning bringing within its preview a large gamut of commodities besides agricultural products. Since the income accrues to the APMCs from pursuing these activities, the Income Tax Act, also perceives a wider meaning by referring to the DAPM. If the term agricultural produce is given a wider meaning in terms of the definition of agriculture produce as defined in section 2 (a) of the DAPM Act and as specified in the Schedule of the said Act, fish, poultry and eggs would also be covered under the definition of agriculture produce as they have been specified in the Schedule to the DAPM Act. On reaching such conclusion, the benefit of exemption u/s 10(26AAB) will automatically follow. CIT (A) has also reached a similar conclusion by importing the definition of agriculture produce from the DAPM Act and we find his reasoning and logic to be perfectly in order. Therefore, we find no reason to differ with the findings of the CIT (A). - Decided against revenue.

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• 2019 (6) TMI 1043
  Reopening of assessment u/s 147 - lack of proper approval u/s 151 and due to non disposal of the objections raised during the assessment proceedings - HELD THAT:- Hon'ble Jurisdictional High Court in case of KSS Petron Pvt. Ltd. [ 2016 (10) TMI 1112 - BOMBAY HIGH COURT] has held that if the Assessing Officer passes the re assessment order without disposing of the objections raised by the assessee, such assessment order will be without jurisdiction and only consequence which can follow is to declare the assessment order null and void, hence, there is no reason to restore the issue to the Assessing Officer to pass a fresh assessment order. Non disposal of objections challenging the validity of re opening of assessment u/s 147 of the Act is not a mere procedural lapse but effects the jurisdiction of the Assessing Officer to pass the assessment order u/s 143(3) r/w section 147 of the Act. See GKN DRIVESHAFTS (INDIA) LTD. VERSUS ITO [ 2002 (11) TMI 7 - SUPREME COURT] . Therefore, we have no hesitation in holding the impugned assessment orders passed under section 143(3) r/w section 147 of the Act as void ab initio. Accordingly, we quash the assessment orders impugned in the present appeal. - Decided in favour of assessee.

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• 2019 (6) TMI 1042
  Rectification u/s 254(2) - HELD THAT:- It is an admitted fact that the Tribunal has decided the appeal of the Revenue ex-parte qua non-appearance of the assessee. The assessee has explained reasons for non- appearance for hearing on [ 2017 (11) TMI 1135 - ITAT MUMBAI] along with affidavit as per which the assessee was on the bona-fide belief that when the adjournment was sought in earlier occasion, the Tribunal will intimate next date of hearing through a proper notice. But, the date of further adjournment has been given without issuing any notice. Accordingly, the assessee could not appear for hearing as on the date fixed for hearing of the appeal. Even tax consultant who attend the tax matters did not attend hearing on 17/05/2017 as they were of the belief that, copy of memorandum of appeal and grounds of appeal along with fresh notice, fixing the date of hearing would be provided. The assessee could not attend for hearing, therefore, we are of the considered view that there is reasonable cause for not appearing on date of hearing and accordingly to give one more opportunity of hearing to the assessee, we deem it appropriate to recall ex-parte order passed by the Tribunal. Hence, the Tribunal order in M/S. THAKKER CO. LTD. [ 2017 (11) TMI 1135 - ITAT MUMBAI] is recalled and the Registry is directed to fix the appeal for hearing in due course with intimation to both parties - Miscellaneous application filed by the assessee is allowed.

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• 2019 (6) TMI 1041
  MAT computation - double addition - capital gain already credited to the profit and loss account - AO included in the computation of the book profit u/s 115JB - HELD THAT:- D/R requested that the issue may be restored to the file of the AO for fresh verification as to whether it is a double addition. Mr. J. P. Khaitan, the ld. Sr. Advocate had no objections. As agreed by both the parties, we set aside this issue to the file of the AO with a specific direction to examine the claim of the assessee that, the addition made in the determination of book profit u/s 115JB, of the profit on sale of pledged securities is nothing but double addition, as the assessee has already included this profit in its profit and loss account for the year ended 31/03/2014 drawn up under the Companies Act, 1956. If the assessee had already included this profit from long term capital gain in the profit and loss account for the year ended 31/03/2014, drawn up under the Companies Act, 1956, no separate addition can be made, once again under Explanation (1) of Section 115JB. With these directions we set aside this issue to the file of the AO. Hence this ground is allowed for statistical purposes. Whether section 115JB authorises AO to add back to the book profit the sum written off as irrecoverable by the debit of the profit and loss account? - HELD THAT:- As assessee, submitted that there was discussion on this issue in the body of the assessment order but while making the computation of book profit u/s 115 JB, there is no addition/deletion of this amount of bad debts written off by the AO. When there is no addition, then there is no grievance for the assessee. Thus, this ground raised by the assessee is dismissed as not arising out of the assessment order.

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• 2019 (6) TMI 1040
  Registration u/s 12A - holding of conferences which was not covered by the definition of charitable purposes as defined in section 2(15) - HELD THAT:- A perusal of the name as well as of the objects of the appellant society reveals that its main object is not only to hold treatment of patients with liver diseases but also to disseminate and spread the knowledge to the treating doctors, experts in relation to the advancements in treatment of liver diseases. At the time of registration u/s 12A of the Act, what is to be seen is the nature of the aims and objects of the society and genuineness of the activities of such trust or society, if such trust / institution or society has already commenced its operations. From the perusal of the documents placed on the file reveal that none of the members of the appellant society is receiving salary and that proper documentation regarding the income donations received and expenditure incurred is maintained. CIT(E) has not disputed in the impugned order as to the nature of the aims and objects of the society which are covered under the definition of charitable purposes as defined u/s 2(15) of the Income Tax Act. Further as discussed above, it cannot be said that the appellant society is not doing the activities in pursuance of its main objects or that the aims and objects of the society are not genuine. no justification on the part of the Ld. CIT (E) for rejecting the application of the appellant society for registration u/s 12A - Decided in favour of assessee.

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• 2019 (6) TMI 1039
  Disallowance of labour charges - addition on account of sundry creditor Sri SN Gupta - HELD THAT:- The fact remains the same that assessee did not produce any documentary evidences in respect of the claim of labour charges. No evidence adduced before assessing officer or the Learned CIT(A). Same is the position before the Tribunal. Therefore, in the absence of any supporting documents, the claim of assessee cannot be accepted. The burden is upon assessee to prove the claim of labour expenses because assessee claimed deduction. The onus upon assessee has not been discharged. Thus, the Orders of the authorities below were justified in disallowing the labour expenses. This Ground of appeal of assessee is dismissed. Addition u/s 68 - unexplained cash credit - HELD THAT:- It is clear that assessee failed to prove identity of the creditor, his creditworthiness and genuineness of the transaction in the matter before the authorities below because the assessee did not produce any documentary evidences to prove all the three conditions of Section 68. Though the assessee filed affidavit, confirmation and bank statement of the creditor before the Tribunal, but, no steps have been taken by the assessee to make prayer for admission of the additional evidences. No reasons have been given as to why the same were not filed before the authorities below. Therefore, such documents which were not filed before the authorities below, could not be entertained at this stage. - Decided against assessee.

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• Customs

• 2019 (6) TMI 1038
  Provisional valuation of imported goods - HELD THAT:- Ext.P8 can't be treated as a final decision on the request of petitioner for provisional release. The 2nd respondent merely desired the presence of one of the partners of petitionerfirm while undertaking the determination, may be to confront the absentee partner on the information gathered by the intelligence wing of the respondents. Be that as it may, now the alternate prayer of petitioner is to provisionally determine the valuation of the goods from the details or materials available or gathered in this behalf. The respondents collect duty on the value determined and thereafter release the goods. It appears from the stand taken by the Standing Counsel that the respondents do not have objection for such course. The provisional determination and release of goods is subject to final order in the pending enquiry in the matter and during such pendency of enquiry the presence of Sri. Mohammad Iqubal can be summoned only in accordance with law - petition disposed off.

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• 2019 (6) TMI 1037
  Validity of Public notice - Protocol of Treaty of Transit between the India and Nepal - by the public notice issued by the Commissioner of Customs (Port), Kolkata and under the pilot project a Managed Service Provider (MSP) selected by the Asian Development Bank was given the exclusive right to provide Electronic Cargo Tracking System (ECTS) for facilitating the transit of cargo to Nepal. - Delegation of power - Public notice No.08/2019 dated 25.01.2019 HELD THAT:- Section 54 and specifically the proviso to Section 54 of the Customs Act is applicable in the present case. It is to be noted that the Treaty between India and Nepal categorically provides for the manner of transfer/transhipment, of all goods that are imported via India to Nepal. The Memorandum of Intent dated June 6, 2017 referred to a Pilot project being started for such transhipment. Even if Section 143AA was to be applied in this particular case, the action taken under this Section shall have to be done by way of a notification by the Board of Central Excise and Customs. There is no provision in Section 143AA allowing the Board to delegate this power to the Commissioner of Customs (Port). As no proper documents have been placed by the Union of India with regard to the basis and jurisdiction under which the Commissioner of Customs (Port) has passed this public notice, the same is required to be partly stayed for the time being. Accordingly, the operation of the impugned notice and the e-mail dated March 22, 2019 are stayed with regard to the complete stoppage of the old procedure that was followed prior to the pilot project. Application disposed off.

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• 2019 (6) TMI 1036
  Refund of SAD - N/N. 102/2007 - objection of the department was that entity who had paid VAT were different and therefore, the importer had failed to satisfy the conditions of the Notification - HELD THAT:- The respondent is a proprietor of both the organization and he has been allotted one TIN number for both the concerns under VAT Act. Further, I find that the certificate issued by the VAT clearly certifies that Mr. Ahmed Hajee Mohiudeen is the proprietor of M/s. Mohiudeen Saw Mills and M/s. Hajee Timber Complex and they have been registered dealer under the Karnataka VAT. Therefore, the objection of the Department that these two concerns are separate entities is not justified. Moreover, the Commissioner (A) has dealt with this issue at length and has rejected the objection of the department. Appeal dismissed - decided against Revenue.

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• 2019 (6) TMI 1035
  FIA - import of Ascorbic Acid as Corrosion Inhibitor - Benefit under N/N. 40/2006-Cus - Whether the learned Commissioner is justified in granting the benefit, under Notification No.40/2006-Cus, to the respondents, in respect of import of Ascorbic Acid as Corrosion Inhibitor under Duty Free Import Authorisation (DFIA)? - HELD THAT:- The apprehension of the Revenue about misuse of DFIA scheme or material is also misplaced in view of the specific directions issued by the learned Commissioner to the Deputy Commissioner to release the goods only under customs/central excise escort to the factory of use of the respondent and that non-pharmaceutical use should be monitored by the jurisdictional central excise authorities and that any violation to this condition should be brought to the notice of the customs authorities for initiating appropriate action under the Customs Act or any other law for the time being in force. The respondents have not violated any provisions of Customs Act, 1962 or the Foreign Trade Policy, in as much as import of Ascorbic Acid under transferred DFIA. Appeal dismissed - decided against Revenue.

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• 2019 (6) TMI 1034
  Diversion of goods imported for exhibition instead of re-export - appellant have used ATA Carnet route by importing, under the guise of exhibitions at Delhi and Mumbai, and diverting the same without payment of duty instead of re-exporting - HELD THAT:- In the instant case, it is clear that M/s Billiards Tulsa Inc USA have the Carnets No.US 5/97 09282 and US 5/97 09296; a Guarantee was given by the FICCI for the importation of the same in terms of the Notification No 157/90-Cus dated 28-3-1990 and agreeably M/s Billiards Tulsa Inc USA have applied to Ministry of Finance, seeking permission to sell the goods in domestic market on finding unable to export. In case of any violations, by M/s Billiards Tulsa Inc USA, like selling the goods to M/s J.K. International Revenue was free to take action as per law to recover duty and other dues if any as per the law laid down therein. If M/s J.K. International have sold the goods in domestic market and realized Customs duty, Revenue could invoke suitable provisions of Law to recover that amount from M/s J.K. International. It is not open to department to recover the duty from M/s JK International in terms of proviso to Section 28 of Customs, Act, 1962. Therefore, to that extent, the show cause notice and the order is not maintainable. As the demand made on M/s J.K. International is not sustainable under Section 28 of Customs Act, 1962, we are not going in to the merits of valuation of the goods. Imposition of penalties - HELD THAT:- There is force in the submissions made by the Learned AR that Shri Jeetendra Shah, in his statement recorded during investigation, stated that he along with Shri Mukesh J. Shah and Shri R. D. Mehta had supervised the imports under ATA Carnet; all the imports were at the behest and directions of Shri Mukesh J. Shah and he acted as per directions of Shri Mukesh J. Shah; Billiards of Tulsa sold all the machines to M/s. J. K. International, which were subsequently sold to M/s. Galaxy Fun world Pvt. Ltd. It is pertinent to note that the statement was not retracted and therefore, has evidentiary value - both M/s J.K. International and Shri Jeetendra H Shah have rendered themselves liable for penalty under Section 112 of the Customs, Act, 1962, however quantum is reduced. As it is held that duty cannot be recovered from M/s J. K. International under the provisions of Section 28 of Customs Act, 1962, consequentially question of penalty under Section 114 A doesn t arise. Appeal allowed in part.

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• 2019 (6) TMI 1033
  Imposition of penalties u/s 112(a) as also under Section 114AA of the Customs Act - advance license for duty free import of the raw materials i.e. Remelted Lead Ingots - the revenue s allegations and findings are to the effect that entire imported lead ingots, which were meant for utilization in the manufacture of lead alloys at the appellants factory located at Kathua, stand diverted by them in the local market - HELD THAT:- Such findings are primarily based upon the statement of one Shri Ved Nath Tripathi of M/s Grape Marketing Pvt. Ltd. Even that statement is not specific but a general statement of clearance of the lead alloys ingots from the godown of M/s Grape Marketing Pvt. Ltd. The said deponent was neither examined by the adjudicating authority nor by the appellant during the course of adjudication and as such the reliance on the said sole statement of Shri Ved Nath Tripathi is neither justified nor warranted. Revenue has not been able to bring on record any other evidence to establish its case. On the contrary, the goods were transported from ICD, Loni to New Delhi and from New Delhi to Kathua under the cover of proper documents issued by the transporters. Revenue has not bothered to investigate the transporters and record the statements of their representative so as to establish beyond doubt that the GRs issued by them were not proper and were fake - the appellant had produced on record the toll receipts issued by to toll check post located at Lakhnpura, thus indicating and establishing beyond doubt that the goods passed through the said check post. The Original Adjudicating Authority has neither referred to nor discussed the said plea of the assessee. The revenue is not disputing the fact that the appellant had exported 103.76 MT of lead alloys. Admittedly, the lead alloys can be manufactured by using the raw material. If the said imported lead ingots have not reached the appellant s factory at Kathua as alleged by revenue, we fail to understand as to how the appellant could have manufactured and exported the said quantity of lead alloys. Admittedly, lead alloys cannot be manufactured from Vacuum and the revenue has not even alleged that they have procured the lead ingots from the other source. In the absence of any evidence to show alternate source of procurement of lead ingots and in the absence of any dispute of export of the final product lead alloys, the revenues case is on weak legs and cannot be sustained. Inasmuch as, the appellant has accepted their liability in respect of that quantum of imported lead ingots which could not been utilized by them for export of the goods and had already discharged duty liability to the tune of ₹ 40 lakhs approximately, we are of the view that the balance confirmation of demand would not sustain - Appeal allowed in part.

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• Corporate Laws

• 2019 (6) TMI 1032
  Appointment of Respondent Nos.3, 6, 7 and 8 as Directors in the first meeting - transfer of shares - HELD THAT:- If illegal transfer of 9040 shares to Respondent No.2 to 6 had been set aside, the privilege shares could not have been issued to them. We discard this argument. The reason for this is that although the NCLT while dealing alleged transfer of 9040 shares stated that the transfer of 9040 shares cannot be held to be valid and was liable to be set aside, what NCLT actually was doing was to direct following of procedure for rectification of register of members by omitting entry made without following proper procedure for making the entry. It is quite apparent and clear that the NCL was accepting that there has been a transfer with regard to ownership of these shares in 1998 itself. As such only the following of procedure for making entry in the register of members was the requirement which was to be duly conducted. The transferees had paid in 1998 will not lose right or title to the shares only because proper procedure was not followed by the company while taking note of the transfer. Consequently, there would be no justification to deprive them of subsequent rights issue. Appeal dismissed.

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• 2019 (6) TMI 1031
  Oppression and Mismanagement - allotment of shares - Appellant has argued that 3rd respondent is invalidly continuing as an additional director or alternate director - HELD THAT:- 3rd respondent was appointed as an additional director on 20.2.2010 under an arrangement as per Article 30 of the Articles of Association of 1st respondent (Page No.269 of Vol.II). Further as per Section 260 of Companies Act, 1956, the Act applicable at that time, 3rd respondent shall hold office only up to the date of the next AGM of the 1st respondent. After the appointment of 3rd respondent as additional director on 20.2.2010, the AGM of 1st Respondent was held on 26th September, 2010. Notice for the AGM was issued on 27.8.2010 (Page 296). We have observed from the said Notice dated 27.8.2010 that there is no agenda item for appointing 3rd respondent as a regular director - the continuation of 3rd respondent as additional director after 26th September, 2010, the date of Annual General Meeting, is not as per law. The action of the Respondent for filing Form No.32 with ROC regarding vacation of office by the appellant is not legal. Appellant s allegation is also that the notice of meetings were not received by him - HELD THAT:- The respondents were very well aware that the appellant is in U.K. and the respondents themselves or through their subordinates are corresponding with the appellant via emails, as is evident from the various emails which have been annexed in the appeal. Therefore, the propriety demands that the appellant should have been intimated notices of meetings also via emails and the appellant being the first founder/promoter of the company should have been asked his availability in India so that the meetings can be conducted while he was in India. Other issue raised by the appellant is that the allotment of 40000 shares to 2nd, 3rd and 4th respondent is illegal and invalid - HELD THAT:- As we have already held that the continuation of 3rd director is not as per law after 26.9.2010, therefore, the Board Meeting held on 27th October, 2011 in which the decision was taken to allot 40000 shares to 2nd, 3rd and 4th Respondent is not as per law as for conducting the Board Meeting the quorum should be complete and one Director cannot hold the Board Meeting. Similarly the subsequent decisions to allot 268834, 168448 and 330000 shares to 5th Respondent on 20.12.2011, 16.1.2012 and 3.8.2012 were taken. It is noted that on removal of appellant on 20.01.2011 and filing the same with ROC on 17.10.2011 ( almost 9 months after removal) (Page 374), immediately allotment of shares has been made in a very short period thereafter. In fact, allotment of shares has taken place on 27.10.2011, merely 10 days after filing with ROC on 17.10.2011. Even subsequent two allotment of shares on 20.12.2011 and 16.1.2012 seems to be as if allotment of shares are being hurriedly done to completely reduce the shareholding of the appellant to hopeless minority. Therefore, the subsequent actions/decisions such as allotment of 268834, 168448 and 330000 shares to 5th Respondent on 20.12.2011, 16.1.2012 and 3.8.2012 and induction of two other directors etc are also held illegal. Respondents have alleged that the appellant has obtained the HMSP Visa with the fake educational documents and his conduct is not up to the mark - respondent further argued that the appellant is a person with a fraudulent track record and he is trying to convince the Tribunal that is a post graduate in Commerce and master decree holder in Business Administration with fake education certificates to obtain a work visa - HELD THAT:- We are of the opinion that NCLT or this Appellate Tribunal is not proper forum to deal with such matters. Respondents have argued that the company was in need of funds, therefore, the above shares were allotted to other respondents - HELD THAT:- Three meetings in which appellant is not alleged to have been attended, we observe that impliedly leave of absence for meeting dated 20.5.2010 was there. It is in fairness that the counting of meeting dated 20.5.2010 as having not attended would not be fair. We also note that it would be desirable that the special audit of the company may be conducted to see if funds were brought in the company and if they have been properly used. The appellant has been oppressed - also the company is employing more than 100 employees and is a running concern. It would not be in the interest of the company or other stake holders to wind up the company - appeal allowed in part.

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• Securities / SEBI

• 2019 (6) TMI 1030
  Ex-parte ad-interim order - Appellant has been prohibited from buying, selling or dealing in securities, directly or indirectly - seeing vacation of the ex-parte order - HELD THAT:- When an ex-parte interim order is passed and a party approaches the authority for vacation of the ex-parte order, the authority is required to act prudently especially when the party approaches the authority immediately for its vacation which in the instant case was done within three days from the passing of the exparte order. The appellant filed its reply as early as on November 3, 2017. Ex-parte interim order continued till the confirmatory order was passed on October 30, 2018. In our opinion, apart from the delay in disposal of the matter, the ex-parte order was confirmed mechanically without any application of mind and without considering the relevant documents. In our opinion, there was no shred of evidence to come to a prima-facie conclusion that the appellant was indulging in unfair trade practices with a manipulative intent to manipulate the price. The appellant has stated on affidavit before SEBI on December 23, 2017 that he has no other source of income except trading in shares and that as a result of the ex-pate order, his broker prematurely closed his trading positions which the appellant had taken in F O segment resulting in a loss of ₹ 50 lacs. This aspect has not been considered by the WTM. Whenever an ex-parte order is granted, an endevour should also be made to dispose of the matter as expeditiously as possible no sooner when the party appears. In the instant case, the ex-parte order was passed on November 1, 2017 and the appellant filed his replies on November 3, 2017, November 28, 2017 and December 23, 2017. WTM almost a year to dispose of the application. We find that at this late stage there was no real urgency to continue with the restraint order. Passing a confirmatory order virtually puts a stoppage on the appellant s right to trade which in the instant case is based on non-consideration of evidence and, in our opinion, is harsh and unwarranted. In our opinion, for the aforesaid reasons, the appellant is, thus entitled to get costs from the respondent. Ex-parte ad-interim order as confirmed by the confirmatory order cannot be sustained and are quashed in so far as it relates to the appellant. It would be open to SEBI to pass a fresh order in accordance with the principles of natural justice if and when fresh evidence comes before it. In the circumstances of the case, the appellant is entitled to get costs and is computed at ₹ 50,000/- (Rupees Fifty Thousand Only) which shall be paid by the respondent to the appellant within four weeks from today. Proof of compliance will be intimated to the Registrar of this Tribunal.

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• Insolvency & Bankruptcy

• 2019 (6) TMI 1029
  Liquidation of Global Houseware Limited - non-consideration of Resolution plan - grievance of the Appellant(s) are that their Resolution Plan was not considered by the Committee of Creditors on the ground that they are related party - HELD THAT:- We uphold the decision of liquidation as more than 270 days have passed. Appeal disposed off.

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• 2019 (6) TMI 1028
  Enforceability of Foreign Award - Deductibility of ONGC Participating Interest - computation of Post-Tax Rate of Return‟ (PTRR) and Cost Petroleum‟ (ONGC Carry Issue) - HELD THAT:- The scope of this Miscellaneous Application is very limited that whether the GoI can recover Petroleum due at this stage when the Corporate Debtor is already under Insolvency. The scope of this Miscellaneous Application is not towards a request of enforcement of Foreign Award. Because of this reason, since this Bench is not adjudicating upon Enforcement of Foreign Award, therefore, not inclined to answer the legal question raised about the applicability of Section 47, 48 and 49 of the Arbitration and Conciliation Act, 1996. This Bench is only concerned about the enforcement of the provisions of Insolvency Code. This Code is introduced with the objective as per its Preamble, to reorganize a corporate person in a time bound manner for maximization of value of assets as well as to promote entrepreneurship along with the motive to balance the interest of all the stakeholders, notwithstanding alteration in the Order of priority of payment of Government dues. All attempts are to be made to procure the value of the Debtor Company as also to procure the assets of the Debtor Company. Already an Order has been pronounced on 06.06.2018 by this Bench u/s. 7 of the Insolvency Code, thereupon, implementation of Section 14 of IBC by declaring commencement of Moratorium . The effect of declaration of Moratorium is that prohibition is enforced for recovery against the said Corporate Debtor. Prohibition is also towards institution of any suit or execution of any Judgment, Decree or Order of any Court of Law, Tribunal, Arbitration Panel, etc. Once the Moratorium is declared such an action on the part of the GoI, Ministry of Petroleum, is not legal as far as the Insolvency Code is concerned now fully applicable on this Corporate Debtor. It is judicious to direct the concerned Government authority not to press or implement the impugned Notice dated 22.10.2018 during the commencement of Insolvency proceeding and as long as the Moratorium is applicable on this Corporate Debtor. Application disposed off.

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• FEMA

• 2019 (6) TMI 1027
  Offence under FEMA - unauthorized dealing of foreign exchange - recovery of US $ 3,30,400 at Aizwal Airport on 27.10.2006 from a person by name Shri Thlabik and subsequent recording of statement of Shri Thlabik, who had taken the name of the appellant in his statement - HELD THAT:- From the record, it is evident that there is no clear and cogent evidence against the appellant that he had been dealing in illegal foreign exchange trade or if he had dealt with foreign exchange without the permission of the RBI. No doubt, there are allegation against him that he had received a sum of ₹ 35,00,000/- (Rupee Thirty five lakhs only) from Shri Thlabik (the amount recovered at the time of search of the premises). His case is that it was the money representing the payment was owned by two purchasers of Jewellery at Mizoram. It is not in dispute that the department has allowed him to cross examination of main witness (accused) Shri Thlabik, however, the said witness was not produced for the said purpose. When verified, it was informed that he was absconding, therefore, could not be produced for cross-examination. In the present case, the main accused as per respondent is Thlabik who is absconding. It was the duty of the respondent to trace him out. Despite of prayer of the appellant for cross-examination allowed, the witness was not produced for cross examination. Thus, merely on the basis of presumption, the inference can be drawn against the appellant without clinching evidence. The benefit of doubt under these circumstances goes in his favour. The submission of the respondent does not help the case in view of peculiar facts and circumstances of the matter. In the light of the above, the appeal is allowed. The impugned order against the appellant is set aside.

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• PMLA

• 2019 (6) TMI 1026
  Offence under PMLA - provisional attachment orders - whether no nexus whatsoever between the alleged crime and the PNB Consortium who is the mortgagee of the properties in question and purchased prior to the sanctioning of the loan and bank is a victim of fraud and it is an innocent bonafide claimant and not involved in the money laundering activity and bank is at liberty to move its claim before the Special Court for disposal of the properties in order to recover its dues pending in the loan accounts? - HELD THAT:- Admittedly, the mortgaged properties in question were purchased much prior to the commission of Offence of Money Laundering as they were purchased in the years 1994, 1997, 1998, 1999, 2000, 2002, 2003, 2005 when the Borrowers had not been sanctioned any credit limits, therefore, the same do not come within the scope of Proceeds of crime in terms of Section 2(u) of PMLA, 2002. There is no denial that the commencement of alleged commission of offence of Money Laundering was started by the Company and its promoters from the end of the year 2011 and 2012 onwards which is much later to the acquisition of the mortgaged properties in question. Prior mortgage charge of secured creditors have also been registered qua the mortgaged immovable properties stating that these are under the mortgage charge of the Bank since 2005. SARFAESI Act measures under Section 13(2) and Section 13(4) were initiated in the year 2013 and Bank s OA for recovery of dues under RDB, Act was filed in the year 2014 and DRT order dated 20.01.2014 restraining the Borrowers and Guarantors to deal with the mortgaged properties are much prior to the passing of the PAO order 31.03.2016 by the ED. Bank s OA for recovery. The appellant is always at liberty to approach the Special Court to initiate the proceeding for disposal of mortgaged property, if so desired, who is agreeable to deposit the excess amount if such situation will arise. Counsel for appellants after taking the instructions from his clients stated that his clients are duty bound to deposit the excess amount with the respondent. Appellants have nothing to do and has no connection with the allegation of crime committed by the borrowers. They are not involved for the offences of money-laundering. The mortgage properties are admittedly not derived from criminal activities or proceed of crime. The scope of the PMLA is to punish the accused person and not to punish the innocent person who is not involved in the crime within the meaning of Section 2 (v) read with Section 3 of the Act. The appellants are not charge sheeted nor any prosecution complaint has been filed against the appellants. There is no nexus whatsoever, between the alleged crime and the appellants who are mortgagee of the properties and is a victim of the fraud and is innocent party. The definition of proceed of crime as per Section (u) of the Act comprises of the property which is derived or obtained as a result of criminal activities. The mortgaged properties are not acquired from proceed of crime. This Tribunal possesses the requisite jurisdiction in terms with the Act as the court of first appeal, to adjudicate upon the pleas of the Appellant and determine the bonafides and legitimacy of its claims as well as the legality of the Provisional Attachment Order. No doubt the bank and financial institutions are always at liberty to approach the Special Court (if so desired) in order to invoke the amended provision of sub section 8 of Section 8, however, it is wrong to suggest that the bank and financial institutions are not entitled to challenged the order of attachment because this tribunal is only exclusively having jurisdiction to examine the validity of attachment and to decide the same under section 26 of the Act as to whether attachment was valid or not. The bank and financial institution are entitled to take the remedy before the Special Court after the decision of appeal or during the pendency of appeals. Provisional Attachment Order passed by ED and impugned order passed by the Adjudicating Authority, PMLA, confirming the Provisional Attachment Order are to be quashed and set aside.

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• Service Tax

• 2019 (6) TMI 1025
  Condonation of delay of 124 days in filing appeal - time limitation - HELD THAT:- This Court is of the considered view that the reasons assigned by the petitioner in condoning the delay of 64 days calculated as 124 days by the Appellate Authority has to be construed as the sufficient cause shown and deserves to be condoned. However, in view of the statutory limitation on the powers, the Appellate Authority has declined to condone the said delay. There is no prohibition for this Court under Articles 226 and 227 of the Constitution in exercising the extraordinary jurisdiction to condone the said delay of 64 days accepting the satisfactory explanation offered by the petitioner in view of the merits found in the appeal preferred by the Assessee subject to costs of ₹ 10,000/- which otherwise would result in failure of justice. The delay in preferring the appeal is condoned and the appeal is restored to the file of the respondent Commissioner (Appeals) with a direction to decide the appeal on merits in accordance with law in an expedite manner, in any event, not later than three months from the date of receipt of certified copy of the order subject to compliance of pre-deposit and cost of ₹ 10,000/- to be deposited with the respondent Commissioner (Appeals) - petition disposed off.

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• 2019 (6) TMI 1024
  Short payment of service tax - it was alleged that the appellant had not declared actual amount realized under the category of Business Auxiliary Service in their ST-3 returns in comparison with Balance Sheet for the period 2009-10 to 2011-12 - Section 84(1) of Finance said Act - HELD THAT:- The amended Rule 9 of Point of Taxation Rules, 2011 as amended on 01.04.2011 overrules the other Rules and specifically applies to the case in hand and as per the said Rule, taxpayer has given an option to pay tax on receipt basis where provision of services is completed on or before 30th day of June, 2011 or where the invoices issued upto 30.06.2011. Admittedly, in this case, the appellant has paid service tax on receipt basis for invoice issued upto 30.06.2011, which is in compliance with Rule 9 of Point of Taxation Rules, 2011 and on billing basis for the bill raised on or after 01.07.2011 as per Rule 3 of Point of Taxation Rules, 2011. Thus, the appellant has correctly discharged its service tax liability of ₹ 2,66,601/-. Penalty u/s 78 of FA - HELD THAT:- Since there had been regular amendments and changes in Rules during the period and since the appellant have paid the tax alongwith applicable interest, which is also almost equal to the amount of demand, it is my considered view that no penalties should be imposed and accordingly, the penalty is set aside. Appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 1023
  Imposition of penalty - service tax paid on being pointed out - Manpower supply services - reverse charge mechanism - suppression of facts or not - invocation of extended period of limitation - Revenue neutrality - HELD THAT:- Appellant was liable to pay tax which they failed to pay. But on being pointed out the audit party, without waiting for any notice from the department, the Appellant immediately deposited the entire service tax amount along with interest much before the issuance of show cause notice. This shows that there was no intention to evade payment of duty. A perusal of the impugned order would show that there is no discussion or finding about the issue of revenue neutrality raised by the Appellants. It is settled law that where credit is available to an assesee itself it cannot be said that there is any intention to evade payment of duty. From the records, it is found that although the issue of revenue neutral was raised by the Appellant before both the authorities below, but none of the authority have either discussed or disputed or rejected the same - thus the transaction is revenue neutral. Also mens rea is not established for imposition of penalties since here also it is revenue neutral. Admittedly the Appellants have paid the service tax amount with interest much before the issuance of show cause notice. Penalties cannot be imposed - other demand upheld - appeal allowed in part.

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• 2019 (6) TMI 1022
  Business Auxiliary Services - discount received from main IATA agent by the appellant as a sub-agent - taxability - HELD THAT:- The Ld. Commissioner (Appeals) while dropping the demand held that purchasing a ticket on discounted price and selling them to customer is a trading activity hence the trade margin will not be taxable. In the fact that the appellant is purchasing the ticket on discounted price and selling the same at higher price to the customer, the difference, in our view, is a trade margin during the process of sale and purchase of the tickets. The demand raised on trade margin of purchase and sale of the tickets shall not be taxable - appeal dismissed - decided against Revenue.

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• 2019 (6) TMI 1021
  Business Auxiliary services - recipient of consideration as commission agent - benefit of N/N. 13/2003-ST dated 20th June 2003 - HELD THAT:- The appellant had been promoting the sale of products manufactured by another entity; it was also not a mandatory function required to be performed by the appellant as manager of retail outlet. They have also chosen to remit the entire duty, tax, interest and penalty without demur. Appeal dismissed.

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• 2019 (6) TMI 1020
  Business Auxiliary Service - amount received as commission towards sale of the goods - HELD THAT:- There is no transaction of commission between the seller of the goods and the appellant. The appellant is financing the sale value on behalf of the buyer of the goods and making payments to the sellers of the goods. It is absolutely clear that the amount received by the appellant is not commission but only the charges towards financing the fund to the buyer. Therefore, the same does not qualify as commission particularly under Business Auxiliary Service. Hence, the demand confirmed under the head of Business Auxiliary Service is not sustainable. Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2019 (6) TMI 1019
  Classification of goods - clearances of printed base papers/printed decorative paper in rolls - to be classified under CETH 4811 9099 or not? - Department is of the view that after receipt of base paper, since the appellant prints the same and returns to the principals, the said goods may be classified under CETH 4811 9099 and not under CETH 4911 9990 - HELD THAT:- The department has demanded duty with a view that the appellant have manufactured printed paper, however appellant have not manufactured paper, they have only carried out the process of printing. We find that the nature of printing carried out by the appellant does not alter the identity of the product as the paper remains as a paper only and mere printing does not amount to manufacture. In the present case also applying the ratio of Hon ble Supreme Court judgment in M/S. SERVO-MED INDUSTRIES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI [ 2015 (5) TMI 292 - SUPREME COURT] , the paper remained as paper, the printing process carried out only for use in the decorative laminate sheets/MDF Boards etc. However, after process of printing, the first product i.e. paper continue to be same as paper only, therefore, no manufacturing has taken place in the present case. Even if there is change in tariff heading, but there is significant change in the process and the said process does not amount to manufacture, merely change of tariff heading does not make product dutiable once again. This issue has been considered in the various judgments. Any printed paper if amount to manufacture, the same is correctly classifiable under chapter note 49 and the most appropriate Central Excise Tariff Heading shall be 49119990 which attracts nil rate of duty. On this plea of the appellant also, the demand is not sustainable. Thus whether the product is classifiable under chapter 48119099 or under 49119990 appellant is not liable to pay duty - appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 1018
  Adjustment of short paid duty against the refund claimed by the appellant for excess amount of duty paid - contention of the Revenue is that since the assessment was not provisional in accordance with Rule 7 of the Central Excise Rules, 2002, therefore, the appellant is precluded from adjusting the excess/shortage of duty against their liability - HELD THAT:- A number of disputes on setting off of excess duty paid against short payment has withstood the test of law. In terms of the decision in MY CAR PUNE PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [ 2015 (10) TMI 457 - CESTAT MUMBAI] such adjustments are possible but only upon sanction of the refund claims. The appellant herein has furnished the refund claims and we find that there has been no proper disposal of those claims. Such disposal would require an ascertainment of eligibility for refund at the threshold and, upon it being shown the incidence of duty has not been passed on, to be allowed as refund. The right to refund of eligibility amount is vested in the hands of the individual/entity who has borne the duties and it cannot be retained by the exchequer. In order to ensure that there is a proper compliance with the settled law on sanction, as well as adjustment, of refund, the impugned order is set aside and matter remanded back to the adjudicating authority to decide the claim afresh - appeal allowed by way of remand.

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• 2019 (6) TMI 1017
  CENVAT Credit - input services - courier services - credit denied on the ground that the appellant is selling the goods at their factory gate, therefore, for the courier service, they are not entitled to avail the Cenvat credit - HELD THAT:- In fact, for any inter state sale, C.S.T. is required to be charged by any seller of the goods. By charging C.S.T. does not make the goods are sold at the factory gate. In fact, we have to see that in terms of the CBCE Circular No. 10654/4/2018 dt. 08.06.2018, what is the place of removal. In this case, the goods were sold through courier and till the goods are delivered to the buyer, the appellant is the owner of the goods, as in case, buyers refuse to take the delivery of the goods, it is the duty of the courier to return back the goods to the appellant - the goods have been delivered by the appellant at buyer s place and the place of buyer is the place of removal in facts and circumstances of the case - the appellant is entitled to avail the Cenvat credit on courier service. Credit allowed - appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2019 (6) TMI 1016
  Condonation of delay in filing appeal - time limitation for admitting of appeal - Section 62(2) of KVAT Act - Validity of reassessment order - HELD THAT: The provisions of Section 62 of the KVAT Act clearly defines that an appeal may be filed before the Appellate Authority in respect of an order of assessment, within thirty days from the date on which the notice of assessment was served on the appellant, and in respect of any other order or proceedings, within thirty days from the date on which the order was communicated to the appellant. The appellate authority may admit an appeal preferred after the period as aforesaid but within a further period of one hundred and eighty days, if it is satisfied that the appellant had sufficient cause for not preferring the appeal, within that period. Therefore, Appellate Authority has got power to admit the appeal within 30days +180 days = 210 days. In the present case even assuming the appeal is filed beyond the limitation i.e., 2 days later, the Appellate Authority cannot dismiss the appeal mainly on the ground of technicality since the amount involved in respect of the tax, penalty and interest is about ₹ 1,90,07,280/- and the rights of the parties cannot be deprived on mere technicality. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for, the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. It must be grasped that judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so. The matter is remanded to Appellate Authority, Joint Commissioner of Commercial Taxes (Appeals)-2, Shanthi Nagar, Bengaluru for consideration of appeal on merits without reference to limitation and to pass orders strictly in accordance with law - Petition allowed by way of remand.

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• 2019 (6) TMI 1015
  Time Limitation - grant of time and adjournment - HELD THAT:- Ext.P6 is set aside and the matter is remitted to respondent for consideration and disposal in accordance with law, within six weeks from today. The petitioner is directed to appear before the respondent on 24.04.2019.

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• Indian Laws

• 2019 (6) TMI 1014
  Eviction of a lessee of the first respondent from a property belonging to the first respondent - HELD THAT:- The lease dated August 9, 2006 was granted by the first respondent to the fourth respondent on various terms and conditions. Apparently, the fourth respondent failed to honour its obligations under the deed of lease dated August 9, 2006. Apparently, the first respondent obtained a non-functioning report on March 27, 2014. It issued a showcause notice dated January 11, 2017 to the fourth respondent and a hearing notice dated May 11, 2017. It also obtained a further nonfunctioning report on June 21, 2017. The prescribed authority issued an order terminating the lease on November 14, 2017. The prescribed authority also passed an order requiring possession on January 19, 2018. The first respondent obtained possession of the immovable property on February 16, 2018. The proceedings undertaken by the first respondent was under the provisions of the Act of 1976. Although, the first respondent is entitled to prefer an appeal from an order passed by the prescribed authority, the first respondent did not do so. There are no ground to interfere with the decision of the first respondent to terminate the lease and take over possession thereof - petition dismissed.

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