TMI Tax Updates - e-Newsletter
June 6, 2019

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. GST implication on reimbursement of expenses

   By: MEHAK GOEL

2. DUTY OF LAWYERS AS OFFICER OF COURT NOT SIMPLY MOUTHPIECE OR SPOKEPERSON OF HIS CLIENT – court and counsel are two wheels of the chariot of justice- counsels need to be more care full and duty full in system of delivery of justice.

   By: DEVKUMAR KOTHARI

3. GST @ June, 2019

   By: Dr. Sanjiv Agarwal

News

1. Work on Economic Census -2019 gathers momentum

2. Government of India, Government of Tamil Nadu and World Bank sign $287 million loan agreement for the Tamil Nadu Health System Reform Programme

3. Increase in detection and reporting of bank frauds due to Government’s proactive measures

Notifications

GST - States

1. G.O.Ms.No. 278 - dated 15-4-2019 - Andhra Pradesh SGST

Andhra Pradesh Goods and Services Tax (Removal of Difficulties) Order No. 7 of 2019.

2. 62/GST-2 - dated 3-6-2019 - Haryana SGST

Notification regarding Appointment/Authorization of Revisional Authority under section 108 of the HGST Act, 2017.

3. 07/2019-TNGST-Rc. No. 14696/Q1/2019 - dated 31-5-2019 - Tamil Nadu SGST

Proper officers to exercise the powers and perform the functions conferred on them.

4. 06/2019-TNGST-Rc. No.17/2019/A1/Taxation - dated 31-5-2019 - Tamil Nadu SGST

Proper officers to exercise the powers and perform the functions conferred on them.

5. 05/2019-TNGST-Rc. No.17/2019/Taxation/A1 - dated 31-5-2019 - Tamil Nadu SGST

Erratum to the CCT's Notification No.3/2019, dated.30th April, 2019

SEBI

6. SEBI/LAD-NRO/GN/2019/21 - dated 4-6-2019 - SEBI

Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Amendment) Regulations, 2019

7. SEBI/LAD-NRO/GN/2019/20 - dated 4-6-2019 - SEBI

Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2019.

Circulars / Instructions / Orders

IBC

1. IBBI/IP/021/2019 - dated 2-5-2019

Temporary Surrender and Revival of Professional Membership of an Insolvency Professional

GST - States

2. 72/2019-TNGST - dated 31-5-2019

Proper officer-Adjudication in respect of cases inspected by the officers from Intelligence Wing- Certain instructions.

3. 10/2019 - dated 31-5-2019

Intelligence wing - Power, Roles and Responsibilities.

4. ADDENDUM to Circular No.9 of 2019 - dated 29-5-2019

Intelligence wing - structure.

5. 09/2019 - dated 24-5-2019

Intelligence wing - Structure.

GST

6. Trade Notice No. 11/2019-GST - dated 17-5-2019

GST — Refunds — Clarification on refund related issues

Highlights / Catch Notes

GST

• Appeal Maintainability u/s 107 of CGST Act: Budgetary Support Order Challenge and Legal Remedies Explained.

  Case-Laws - HC : Maintainability of appeal - 107 of the CGST Act - order regarding Scheme of Budgetary Support under GST - appealable or not - if no appeal is maintainable, the Appellate Authority shall be at liberty to hold so, in accordance with law, after hearing the parties and in that event the petitioner will be at liberty to avail the remedy, as may be available in law
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• Detention Order under CGST Act: Goods Released in 12 Hours with Bank Guarantee; Inquiry and Order Due in 4 Weeks.

  Case-Laws - HC : Detention Order - Section 129 (1) of CGST Act, 2017 - release the goods detained within twelve hours from the date and time of receipt of bank guarantee valid for six weeks - The respondent shall complete the enquiry, afford fair and reasonable opportunity, pass and communicate the order within four weeks, if fails,the petitioner is not under obligation to keep the bank guarantee alive beyond six weeks
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Income Tax

• Reopening of Assessment u/s 147 Challenged Due to Incorrect Facts and Flawed Jurisdiction by Assessing Officer.

  Case-Laws - AT : Reopening of assessment u/s 147 - wrong facts in reasons recorded - AO completely ignored the fact that the return was already filed on 18.01.2010 and vide letter dated 24.02.2012 the assessee has explained that he is a regular assessee and produced the copy of Income-tax return filed - assumption of jurisdiction by the AO is bad in law
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• CIT's Order u/s 263 Overturned: Misinterpretation of Sections 194C(2) and 40(a)(ia) Cited.

  Case-Laws - AT : Revision u/s 263 - disallowance u/s 40(a)(ia) - CIT has not correctly interpreted the provisions of sec.194C(2) nor consider the law amended in sec.40(a)(ia) held to be applicable retrospectively - CIT also failed to verify and conduct the minimal enquiry about non-deduction of TDS and deposit of TDS before the due date for filing the return of income - Revision order set aside.
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• Fines for TCS Statement Defaults Require Processing u/s 200A Before Assessing Officer Can Act u/s 234E.

  Case-Laws - AT : Default in furnishing TCS statements - statement submitted u/s 200(3) are to be processed u/s 200A and then AO can levy fine u/s 234E - once a procedure has been provided by the legislature, then it does not give discretion to the AO to levy fine without processing the statements - Merely mentioning S. 234E would not become an order u/s 234E in isolation - appeal maintainable
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• Taxpayer Denied Section 54F Deduction for Missing Deadline to Purchase New Home After Asset Transfer. Renovation Not Accepted.

  Case-Laws - AT : Disallowance of claim u/s 54F - assessee did not purchase new house within the stipulated time of one year prior to the date of transfer of original asset - renovation to old house which was purchased before the date of transfer of original asset will not entitle the assessee to claim deduction u/s 54F
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• Income Tax Act Section 40A(2) case: No additional tax liability due to agreed adjustments in sports board match revenue.

  Case-Laws - HC : Addition u/s 40A(2) - expenditure is excessive or unreasonable having regard to the FMV of the goods, services or facilities - the assessee and Nimbus in negotiations with BCCI agreed neither to refund for the cancelled match nor to charge for the additional match - difference in fee did not prevent the parties from agreeing to fresh contract as to how to adjust the revenue proceeds - no addition
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• Petition to Examine Source of Funds Denied Due to Expired Timeframe for Reopening Tax Assessments.

  Case-Laws - HC : Direction to IT department to examine source of fund - petitioner made a complaint with the Income Tax Authorities - the assessment for the relevant period are already over as well as the stipulated period during which the assessments could be reopened has also expired - petition is highly belated and no direction can be granted
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• Assessment Quashed Due to Improper Service of Section 143(2) Notice; Section 292BB Inapplicable to Procedural Errors. (2.

  Case-Laws - AT : Validity of assessment - Once the notice u/s 143(2) was not served on the assessee through proper channel, even though such notice has been served through a person, who is not authorised to receive notice, it is a case that the notice was not served - when objection was filed before AO, the provisions of section 292BB has no application - assessment quashed
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• Utility Bills Don't Prove Property Ownership; Sale Deeds Required for Capital Gain Cases with Co-ownership at 50.

  Case-Laws - AT : Capital gain computation - co-ownership at 50% - electivity bills or the society maintenance receipt tax does not prove the title of the property - the transfer documents such as sale deeds etc are proof of the title over the property - Sub-registrar, where the sale agreement was registered has accepted the mother as joint owner and paid the half of the consideration - the AO in absence of adverse evidence should have accepted the joint ownership
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• Section 14A & Rule 8D: Mutual Fund Expenses Shouldn't Face Double Disallowance; Market Practices Affirm Assessee's Explanation.

  Case-Laws - AT : Disallowance u/s 14A r.w.r. 8D - in the case of mutual funds, administrative and managerial expenses are factored in the investments itself - the explanation offered by the assessee for non applicability of rule 8D(2)(iii) for rigid disallowance appears to be in congruity with market practice - not a fit case for resorting to double disallowance of similar expenditure
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• Appeal Filed Against Penalty Orders u/ss 271AAA and 271(1)(c); Delay Deemed a Corrected Technical Mistake.

  Case-Laws - AT : Condonation of delay - against two order for penalty U/s. 271AAA and u/s 271(l)(c) joint one appeal was filed - subsequently after decision of CIT(A) separate appeal was filed - no undue advantage has been derived by the assessee by filing the appeal late and no vested right of the Revenue can be said to have been disturbed in case the delay is condoned - the mistake at best can be said to be a technical mistake which stands corrected
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• Income Tax Appellate Tribunal Remands Case After Assessment Issued to Deceased, Ensures Proper Handling by Assessing Officer.

  Case-Laws - HC : Assessment order in the name of a dead person - there is an obligation on the LR to bring such fact to the notice of the AO - this fact was brought to the notice of the CIT (A) for the first time, he should have taken the said fact on record, which he has done, but he should either have passed the Assessment Orders on merits while exercising his appellate powers or remanded the same - ITAT correctly remanded to AO
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• CIT(E) Must Assess Section 80G(5)(i)-(v) Conditions Without Assuming Future Ineligibility for Other Exemptions.

  Case-Laws - HC : Approval u/s 80(G)(5) - for the purpose of deciding as to whether or not to grant approval u/s 80G, a CIT (Exemptions) has to only examine whether or not the conditions set out in Section 80G(5)(i) to (v) are satisfied - It cannot be open to the CIT(E) to reject on the ground that it is not conclusively established now that the assessee will be finally eligible in future for exemption u/ss 11, 12 and 10(23AA) or 10(23C)
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• Court Upholds AO's Income Estimation u/s 263; No Substantial Legal Questions Found; Investments Explained.

  Case-Laws - HC : Revision u/s 263 - estimation of income - when the income assessed by the AO was far more than the income returned by the assessee and all the investments made by the assessee stood explained - estimation of income adopted by the AO, being one of the recognized methods of determination of income, could not be found fault - not find any perversity in the finding - no substantial questions of law
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• No Penalty u/s 271(1)(c) as Tax Claim Genuineness Accepted; Disallowance Due to TDS Non-Deduction.

  Case-Laws - AT : Penalty u/s 271(1)(c) - genuineness of the claim has neither been disputed by the department nor the claimed expenses are false - the assessee has furnished all the relevant facts concerning the claim made by it in the return filed and disallowance u/s.40(a) was made for the reasons that assessee failed to deduct TDS thereon - no penalty
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• TDS Not Applicable for Lorry Booking Agents u/s 194C; No Disallowance u/s 40(a)(ia) for Minor Freight Difference.

  Case-Laws - AT : TDS u/s 194C - disallowance u/s 40(a)(ia) - freight received and freight paid difference is only 1.15% - assessee actually engaged not in the transportation business,but only facilitating or arranging transportation for various parties and he is a mere lorry booking agent - cannot be held as the “person responsible” for deduction of TDS - no disallowance
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Customs

• Duty-Free Inshell Walnuts: Eligibility Based on SION and DFIA Criteria, Not ITC (HS) Number.

  Case-Laws - AT : Benefit of duty free import - inshell walnut - Once the imported goods satisfy the description given in the SION and reproduced in the DFIA, they are clearly entitled to claim benefit without payment of duty on the strength of the valid DFIA irrespective of ITC (HS) No. mentioned in the DFIA.
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• Customs Can't Deny DEEC License Exemption Due to Misrepresentation; Licensing Authority Handles Allegations.

  Case-Laws - AT : Advance licence of DEEC Scheme - once advance licence is issued, the Customs authority cannot refuse exemption on an allegation that there was misrepresentation and therefore, it was the licencing authority who can take steps on that behalf and not the Customs authority.
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• Mis-declaration of Imported Fabric: No Verified Evidence from DRI Samples, No Additional Duty Imposed.

  Case-Laws - AT : Mis-declaration of import goods - woven fabric - at the instance of the appellant goods were put to test for ascertainment of its description and classification before clearance - there is nothing on record that the samples drawn by DRI Officials were the representative samples of the consignment cleared in the disputed Bill of entry except the statement of Shri Rajbir Singh whose veracity is not tested through cross-examination - no additional duty/penalty
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• Section 110(2) Violation: Show Cause Notice Not Issued in Time, Department Lacks Authority, Order Unsustainable.

  Case-Laws - AT : Extension of time limit for issuance of SCN - amended provision of Section 110 (2) - SCN was not issued within the period 6 months - there is no legal authority with the department for dispensing with the issuance of SCN to the appellant - the impugned order passed without issuance of any SCN will not sustain
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• Importers Can Appoint Their Own Chartered Engineer for Machine Verification, Says CBEC Circular.

  Case-Laws - HC : Re-examination and verification of machine - a used/repaired one - para 11 of circular dated 15.10.2015 issued by the CBEC permits the importer to select any Chartered Engineer(CE) empanelled by the Customs House for such inspection and report - Department action is not in consonance with above circular to itself appointed a CE - permitted to new appointment
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Corporate Law

• Company's Property Attachment Before July 19, 2007, Winding-Up Order Does Not Alter Unsecured Creditor Status.

  Case-Laws - HC : Secured creditors or not - mere fact that the Company’s properties have been attached, not even sold, prior to the winding-­up order dated 19th July 2007 does not have any consequence on its status as an unsecured creditor at all.
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IBC

• Court Oversteps by Extending Insolvency Process 90 Days Beyond Limit, Misapplies Section 55 of Insolvency Code.

  Case-Laws - AT : conversion of CIRP u/ss 7 or 9 or 10 to Fast Track Corporate Insolvency Resolution Process’ u/s 55 of the I&B Code after 270 days - Adjudicating Authority exceeded its jurisdiction by extending the period of 90 days after completion of 270 days of the CIRP wrongly exercising its power u/s 55(2) which is not applicable
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Service Tax

• Court Evaluates if Services Fall Under Manpower Recruitment and Supply Agency Based on Employee Provident Fund Payments.

  Case-Laws - AT : Classification off services - Manpower Recruitment and Supply Agency Services or otherwise? - the appellant is receiving a separate amount towards the provident fund of the employees deputed by the appellant. In such a case, it is a clear case of supplies of manpower.
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• Mandap Keeper Services Must Include Additional Charges in Valuation for Service Tax, Confirms Demand.

  Case-Laws - AT : Valuation - Mandap Keeper Services - inclusion of various amounts collected i.e. generator charges, electricity, cleaning and maintenance in the assessable value - demand confirmed.
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• Service Tax on "Renting of Immovable Property" May Be Adjusted as "Port Service" Payment by Department.

  Case-Laws - AT : Whether the service tax paid under the head of “Renting of immovable property” can be considered as payment of service tax under “Port Service” on the same service? - Yes - The department is free to make their internal adjustment in the account.
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• Slump Sale of Marketing Business Not a Franchise; No Service Tax Applicable Due to Lack of Control or Ownership Retained.

  Case-Laws - AT : Classification of services - Franchise services or not - slump sale of business of marketing - None of the ingredients of franchisee service or the Board Circular are present in the BPA between the Appellant and M/s Aventis - the Appellants do not qualify as Franchisor as the trademarks have been permanently assigned to M/s Aventis and they have become absolute owner with no control of the Appellant - no service tax
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Central Excise

• CENVAT Credit Claims Invalidated Due to Fraudulent Invoices from Non-Existent Firms; Revenue Authorities to Prevent Losses.

  Case-Laws - AT : CENVAT Credit - non-existent firms - credit was availed on the invoices issued by all fradulent firms who were found to be non-existent and such fraud vitiates the transaction. The invoice cannot be held valid for availing credit. The revenue should not suffer on account of such mass fraud.
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• CENVAT Credit Refunds for DFIA Scheme Exports: Claim Not Time-Barred, Appellant Entitled to Refund.

  Case-Laws - AT : Refund of CENVAT Credit - there is an ongoing controversy that credit in respect of inputs used in manufacture of goods exported under DFIA Scheme is not available - The claim of the Appellant is not time barred and they are entitled for the refund
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• Duty Not Payable on Destroyed Goods in Manufacturing; No Remission Needed; No Payment Date Specified.

  Case-Laws - AT : Duty liability on goods destroyed in the factory of manufacture - duty cannot be demanded - It does not matter whether the assessee has sought remission or not. The duty, though leviable, does not become payable in such cases and there is no date by which the said duty has to be paid
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• High Electricity Use Not Sufficient Evidence for Steel Ingot Production Suppression, Court Rules.

  Case-Laws - AT : Clandestine removal - M.S. Ingots - process loss of Ingots - High consumption of electricity by itself cannot be the ground to infer that the factories were engaged in suppression of production of steel ingots.
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• Tribunal's Reversal of CENVAT Credit Denial Raises Substantial Question of Law Due to Insufficient Reasoning.

  Case-Laws - HC : CENVAT Credit - when two lower adjudicating authorities had come to a finding on facts that the assessee was not entitled to Cenvat Credit on inputs, there was a higher burden on the Tribunal to consider all the facts and evidence in the records and come to a reasonable finding - reversal of the said findings without more reasons gives rise to a substantial question of law
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Case Laws:

• GST

• 2019 (6) TMI 257
  Detention Order - Section 129 (1) of CGST Act, 2017 - bank guarantee for the tax and penalty amount - release of goods - HELD THAT:- The petitioner submits to respondents bank guarantee for the tax and penalty amount payable as per Ext.P2 and applies for release of goods by enclosing a copy of this order within two days from today. The respondent shall release the goods detained under Ext.P1 and subjected to detention in Ext.P2, within twelve hours from the date and time of receipt of bank guarantee. The bank guarantee shall be kept valid for six weeks from today. The respondent shall complete the enquiry, afford fair and reasonable opportunity as envisaged under the Act to petitioner, pass and communicate the order within four weeks from today. The respondent, if fails to pass the order as directed, i.e. within four weeks from today, by this Court; the petitioner is not under obligation to keep the bank guarantee alive beyond six weeks.

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• 2019 (6) TMI 256
  Maintainability of appeal - Order u/s 107 of the Central Goods and Service Tax Act, 2017 - appealable order or not - HELD THAT:- There is no necessity of any review or recall of the order dated 31st December, 2018, as suffice it would be to observe that if no appeal is maintainable, the Appellate Authority shall be at liberty to hold so, in accordance with law, after hearing the parties and in that event the non-applicant (writ petitioner) will be at liberty to avail the remedy, as may be available in law. Application disposed off.

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• 2019 (6) TMI 255
  Difficulty in uploading of GST Forms - technical difficulties - Notification dated 10.09.2018 (No.48/2018) issued by the GST Council - HELD THAT:- Since the time for filing the relevant form is likely to expire on 31.03.2019, the court is of the opinion that the concerned officials of the GST Council shall enable the petitioner to fill the form online. In case it is not possible to do so within the time prescribed i.e. by 31.03.2019, the respondents are hereby directed to entertain the concerned Forms under Rule 97A, manually and process it in accordance with law. Petition disposed off.

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• Income Tax

• 2019 (6) TMI 254
  Approval u/s 80(G)(5) - ITAT Lucknow remanded the instant matter to CIT (E) Lucknow - main contention raised by the assessee in this appeal is, the matter could not have been remanded back as the entire material was available before the ITAT to come to subjective satisfaction as to whether in the given circumstances the assessee was eligible for being granted a certificate u/s 80(G)(5), or not? - HELD THAT:- For the purpose of deciding as to whether or not to grant approval u/s 80G, a CIT (Exemptions) has to only examine whether or not the conditions set out in Section 80G(5)(i) to (v) are satisfied. The first and foremost thing to be seen is whether or not any income earned by the assessee is not being liable to inclusion in its total income under any of the provisions of Sections 11and 12 or Clause (23AA) or Clause (23C) of Section 10 of the Act, 1961. Since the assessee is granted approval for the future years, and since there is no way that anyone can have the clairvoyance of knowing whether or not the assessee will eventually be able to comply with the conditions, if any, attached to the exemptions, as long as the exemption is available in principle and as long as the assessee can reasonably claim to be able to satisfy the conditions attached to such exemption, one has to proceed on the basis that the condition laid down u/s 80G(5)(i) is satisfied. Before the ITAT it seems, the appellant was able to point out the relevant documents from which charitable nature of the society could be deciphered. The ITAT therefore in the facts and circumstances of the case observed that the CIT (E) has not examined the entire documents placed before him, and these are matters which require factual verification of the CIT (E) who has the requisite machinery to undertake such an exercise. The appellate Court certainly have the power of remand, and the ITAT has rightly remanded the matter back to the CIT (E) for fresh decision, and sufficient reasons have been stated by the ITAT in support of its decision to remand the case which cannot be found wanting. ITAT rightly remanded the matter back to the CIT (E) for fresh consideration and decision on the basis of the evidence available on record regarding genuineness of the documents and to pass a speaking order. The questions are answered accordingly.

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• 2019 (6) TMI 253
  Direction to department to examine source of fund - petitioner made a complaint with the Income Tax Authorities calling upon them to inquire into the source of funds of respondent no.2 and to initiate action for evasion of taxes - HELD THAT:- It is seen that the aforesaid payments were claimed to have been made on 30.04.2012. The assessment for the relevant period are already over. The stipulated period during which the assessments could be reopened has also expired. In this view, the present petition is highly belated and no direction can be granted to the respondents to examine the income tax assessments of respondent no.2 at this stage. Petition dismissed.

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• 2019 (6) TMI 252
  Stay of demand - direction to the petitioner to make the payment of 20% of demand - HELD THAT:- As submitted that the petitioner is passing through a very bad phase, which has resulted into financial crises and it is not possible for the petitioner to discharge the demand of Rs. 34, 65, 832/- at one go i. e. 20% of the outstanding demand of Rs. 1, 73, 29, 162/-. As directed by the Income Tax Officer, Nadiad vide its order dated 10. 05. 2019, the petitioner has deposited first installment of Rs. 5, 00, 000/-. He further submitted that the second installment of the same amount is falling due on 10. 06. 2019. Issue notice, returnable on 10th June, 2019. Direct service is permitted.

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• 2019 (6) TMI 251
  Proportionate deduction during the year on account of premium payable on debentures - deferred revenue expenses - HELD THAT:- The questions of law involved in UNIVERSAL CABLES LTD. VERSUS CIT [ 2000 (3) TMI 50 - CALCUTTA HIGH COURT] were identical to those involved here. The Division The Division Bench relying on the Supreme Court decision in the case of Madras Industrial Investment Corporation Ltd. Versus CIT [ 1997 (4) TMI 5 - SUPREME COURT] answered the question in favour of the assessee. Cash subsidy received in earlier year on generator - whether deductible from its cost for the purpose of computing depreciation allowable to the assessee company during the year? - HELD THAT:- Issue answered in favour of the assessee by relying on another Supreme Court decision in the case of CIT Versus P. J. Chemicals Ltd. [ 1994 (9) TMI 1 - SUPREME COURT] Both the questions are answered in the negative in favour of the assessee.

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• 2019 (6) TMI 250
  Addition towards Satellite Space Fees/transponder charges - royalty payments - capital expenditure OR revenue expenditure - whether the payments made to the non-resident were in the nature of royalty and therefore come within the scope of section 9(1) - HELD THAT:- Identical issue came up for consideration ASIA SATELLITE TELECOMMUNICATIONS CO. LTD. VERSUS DIRECTOR OF INCOME-TAX [ 2011 (1) TMI 47 - DELHI HIGH COURT] wherein as held that the payments were not in the nature of royalty charges. The Court made a distinction between transfer of rights in respect of property and transfer of rights in the property. Also see NEW SKIES SATELLITE BV, SHIN SATELLITE PUBLIC CO. LTD. [ 2016 (2) TMI 415 - DELHI HIGH COURT] held that the explanations added below section 9(1) of the Act were not merely clarificatory in nature. Respectfully agreeing with the said decisions of the Delhi High Court, this question is not considered. Addition u/s 40A(2) - amount receivable considering the expost facto agreement between the assessee and the Nimbus - HELD THAT:- It is undisputed that the assessee and Nimbus are persons referred to in clause (b) of subsection (2) of Section 40A. However, in order to invoke subsection (2) of Section 40A, the Assessing Officer has to come to the conclusion that such expenditure incurred by the assessee being a payment to a person referred to in clause (b), the expenditure is excessive or unreasonable having regard to the fair market value of the goods, services or facilities, for which the payment is made or the legitimate needs of business or profession of the assessee or the benefit delivered by or accruing to him. In the present case, the Tribunal records that the AO did not doubt the existence of agreement between the assessee and BCCI. Even independently we find that the entire transaction was in the nature of fresh business transaction under revised circumstances. On one hand, one of the matches which, the assessee had right to exhibit was cancelled. As against this, additional match of another series was played. The assessee and Nimbus in negotiations with BCCI agreed neither to refund the amount for the cancelled match nor to charge for the additional match. It may be that the match which was cancelled was priced higher than the match which was added. That still did not prevent the parties from agreeing to fresh contract as to how to adjust the revenue proceeds. - Decided against revenue

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• 2019 (6) TMI 249
  Assessment order in the name of a dead person - death of the assessee during proceedings was not updated to Assessing Authority - the proceedings against the dead person can continue in the name of the LR u/s 159 - Tribunal remanding the matter back to the Assessing Authority for passing fresh Assessments in the name of the LR - HELD THAT:- Admittedly, the fact of death of the Assessee S.Vellamuthusamy Naidu who died on 25.01.2006 was not brought to the notice or record of the Assessing Authority before 23.03.2006 when the Assessment Orders were passed. The main Appeal was filed by the son Mr.V.Srinivasan himself. Therefore, the appellant has not disputed that the son Mr.V.Srinivasan was legal representative and was very much aware of the facts of the assessments against the deceased man S.Vellamuthusamy Naidu, his own father. The Assessing Authority is not expected to have knowledge of the fact of the death of Assessee when he passed the orders and therefore, there is an obligation on the legal representative to bring such fact to the notice of the Assessing Authority. When this fact was brought to the notice of the CIT (Appeals) for the first time, the said authority should have taken the said fact on record, which he has done, but he should either have passed the Assessment Orders on merits while exercising his appellate powers or should have remand the case back to the Assessing Authority for framing Assessments again in the name of the legal representative in accordance with law. Having not done that, the Revenue was justified in approaching the learned Tribunal and we do not find any error in the orders passed by the learned Tribunal remanding the matter back to the Assessing Authority for passing fresh Assessments in the name of the legal representative Mr.V.Srinivasan. - Decided against the Assessee and in favour of the Revenue.

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• 2019 (6) TMI 248
  Stay of demand exceeding 365 days - HELD THAT:- It was not disputed by the learned counsel for the appellant revenue that the matter in issue is no longer res integra and stands concluded by the decision of this Court in M/S CARRIER AIR CONDITIONING AND REFRIGERATION LIMITED [ 2016 (5) TMI 396 - PUNJAB AND HARYANA HIGH COURT] wherever the appeal could not be decided by the Tribunal due to pressure of pendency of cases and the delay in disposal of the appeal is not attributable to the assessee in any manner, the interim protection can continue beyond 365 days in deserving cases.

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• 2019 (6) TMI 247
  Revision u/s 263 - estimation of income - rejection of books of accounts - HELD THAT:- Tribunal found that when the income assessed by the Assessing Officer was far more than the income returned by the assessee, all the investments made by the assessee stood explained. In such an event, the question of estimation of income adopted by the Assessing Officer, being one of the recognized methods of determination of income, could not be found fault as rightly observed by the Tribunal. Therefore, we do not find any perversity in the finding of the Tribunal, so as to answer the first question of law in favour of the Revenue. The second question of law is also only on facts. Therefore, we find no substantial questions of law raising for determination in the appeal. Hence, the appeal is dismissed.

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• 2019 (6) TMI 246
  Adhoc disallowance on travelling, car running/maintenance and direct expenses - HELD THAT:- Addition is excessive in nature. It is a fact that assessee produced the books of account and ledger account before A.O. in respect of the above expenditure. The accounts of the assessee are also audited and Auditor has given unqualified certificate in favour of the assessee. Still assessee shall have to produce some of the vouchers and bills before A.O. when called for by the A.O. at assessment stage. A.O. also did not give any specific details in the assessment order, as to which of the expenses are not admissible in nature. Therefore, returned income declared by the assessee in the light of nature of business of assessee, we are of the view that addition is excessive. The interest of justice requires that addition may be restricted to Rs. 6 lakhs only as against Rs. 12 lakhs. This would meet the ends of justice in the facts and circumstances of the case. Ground No.1 of appeal of Assessee is partly allowed. Disallowance u/s 14Ar.w.r. 8D - HELD THAT:- Addition is wholly unjustified. The Hon ble Delhi High Court in the case of Cheminvest Limited vs. CIT [ 2015 (9) TMI 238 - DELHI HIGH COURT] held that no exempted income was earned by the assessee in the relevant assessment year and since genuineness of the expenditure incurred by the assessee was not in doubt, no disallowance could be made under section 14A. In the present case, assessee specifically submitted before the authorities below that investment was made in shares and agricultural land and in both the cases there were no intention to earn any exempt income and in fact, no dividend exempt from tax have been earned by the assessee. It is, therefore, clear that assessee did not earn any exempt dividend income in assessment year under appeal. Therefore, no disallowance u/s 14A could be made. Learned Counsel for the Assessee rightly relied upon decision in the case of CIT (Central)-1 vs. Chettinad Logistics (P.) Ltd. [ 2018 (7) TMI 567 - SC ORDER] . We set aside the Orders of the authorities below and delete the addition. In the result, Ground No.2 of appeal of assessee is allowed.

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• 2019 (6) TMI 245
  Reopening of assessment u/s 147 - wrong facts in reasons recorded - validity of reasons to believe - Addition u/s 68 - HELD THAT:- A perusal of the quoted reasons show that there is a reference of query letter dated 11.01.2012 and 25.01.2012. There is also a reference that no reply has been received from the assessee till date. Thereafter, the AO observed that since cash was found to be deposited in the savings bank account. He had reasons to believe that the source of the above cash deposits is income from undisclosed sources and, accordingly, reassessment proceedings were initiated. In our considered view, the aforementioned reasons are devoid of any application of mind since the AO completely ignored the fact that the return for the year under consideration was already filed on 18.01.2010. AO further ignored the fact that vide letter dated 24.02.2012 the assessee has explained that he is a regular assessee and produced the copy of Income-tax return filed in the office of ITO, Ward 39(2). These facts can be gathered from the body of the assessment order itself in the first para on page 1 of the assessment order. See SUNRISE EDUCATION TRUST VERSUS INCOME TAX OFFICER (EXEMPTION) [ 2018 (2) TMI 1471 - GUJARAT HIGH COURT] , SH. ASHWANI KUMAR, VERSUS INCOME TAX OFFICER, [ 2016 (2) TMI 1159 - ITAT AMRITSAR (SMC).] and BIR BAHADUR SINGH SIJWALI VERSUS INCOME TAX OFFICER WARD 1, HALDWANI [ 2015 (2) TMI 60 - ITAT DELHI] Assumption of jurisdiction by the AO by issuing notice u/s 148 of the Act is bad in law. We, accordingly, quash the notice issued u/s 148, thereby, quashing the assessment order. - Decided in favour of assessee.

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• 2019 (6) TMI 244
  Disallowance of claim u/s 54F - assessee did not purchase new house within the stipulated time of one year prior to the date of transfer of original asset - HELD THAT:- It can be seen that the assessee did not purchase new house within the stipulated time of one year prior to the date of transfer of original asset as per the requirement while claiming deduction u/s 54F. Besides this renovation to old house which was purchased before the date of transfer of original asset will not entitle the assessee to claim deduction u/s 54F. It is pertinent to note that the decisions relied upon by the Ld. AR will also not support the case of the assessee as in assessee s case the purchase of new house was on 10.10.2013 while sale deed of Okhla Property was executed on 26.03.2015. - Decided against assessee.

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• 2019 (6) TMI 243
  Levy of penalty u/s 271(1)(c) - non specification of charge - HELD THAT:- Notice issued by the A.O. for levy of penalty u/s 271(1)(c) to be bad in law as it did not specify in which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing inaccurate particulars of income. The entire penalty proceedings are, therefore, vitiated and no penalty is leviable. See M/S SSA S EMERALD MEADOWS [ 2016 (8) TMI 1145 - SC ORDER] Levy of penalty is invalid. Since the show cause notice is invalid due to the above reason and as such the entire penalty proceedings are vitiated. No penalty is leviable against the assessee. The decisions relied upon by the D.R. would not support the case of the Revenue, in view of the above, I set aside the Orders of the authorities below and cancel the penalty. - Decided in favour of assessee.

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• 2019 (6) TMI 242
  Levy of the penalty u/s 271(1)(c) - HELD THAT:- Levy of penalty u/s 271(1)(c) to be bad in law as it did not specify in which limb of Section 271(1)(c) the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing inaccurate particulars of income. The entire penalty proceedings are, therefore, vitiated and no penalty is leviable. On this score itself, similar view is taken by Hon ble Karnataka High Court in the case of CIT vs. M/s. SSAs Emerald Meadows [ 2015 (11) TMI 1620 - KARNATAKA HIGH COURT] and confirmed by [ 2016 (8) TMI 1145 - SC ORDER] . On similar set of facts, the ITAT, Delhi Benches are taking a consistent view that in such circumstances, levy of penalty is invalid. Since the show cause notice is invalid due to the above reason and as such the entire penalty proceedings are vitiated. Thus, no penalty is leviable against the assessee. The decisions relied upon by the D.R. would not support the case of the Revenue, in view of the above, set aside the Orders of the authorities below and cancel the penalty. - Decided in favour of assessee.

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• 2019 (6) TMI 241
  Fee for default in furnishing statements - fine levied u/s 234E - whether no appeal is maintainable against an order passed under section 234E? - HELD THAT:- The learned CIT(A), while holding that these orders were passed independently u/s 234E and therefore no appeal is maintainable, failed to take note the amendment carried out in Section 200A(1) with effect from 1st June 2015. It is pertinent to note that Section 200 casts a duty upon the person deducting tax to deposit the same with the Central Government. Sub-section (3) requires to submit statement of such deduction in prescribed form within prescribed time limit as provided under Rule 31AA of the Income-tax Rules, 1962. Such statements are to be processed u/s 200A and, while carrying out this exercise of processing, the Assessing Officer can levy fine as per Section 234E . A procedure has been provided for processing the statement of deduction of tax u/s 200A. It is a machinery provision and the Assessing Officer is required to follow the procedure contemplated under this section. In the absence of this procedure, a fine could be levied u/s 234E because it was a charging section; but, once a procedure has been provided by the legislature, then it does not give discretion to the Assessing Officer whether he is exercising such powers u/s 234E or he is exercising the powers while processing the statements. It is true that in the present case statements were not filed, but this fact came to the notice of the Assessing Officer while passing the order u/s 206C(6)/206C(7). He processed that fact from the date on which statements ought to be filed by the assessee. Once a procedure has been provided, then it is to be construed that the order has been passed by the Assessing Officer after following the procedures. Merely by mentioning Section 234E in the title of the order, it would not become an order passed u/s 234E in isolation - more particularly when subsequent development shows that these orders are patently invalid and not sustainable, because their foundation holding the assessee in-default and calculating fine from the date of default has been extinguished after the orders of the CIT(A) passed against the orders passed u/s 206C(6)/206C(7). CIT(A) has held that the assessees were not liable to collect TCS. In that situation, subsequent orders passed u/s 234E r.w.s. 200A would become without any jurisdiction and invalid. Orders of the CIT(A) against the orders of the Assessing Officer u/s 206C(6)/206C(7) have been placed in the cases of Rakesh B. Laddha, Jayesh K. Dangariya and Parag M. Parsana. In the case of Vishal Enterprise, no such order has been placed. Therefore, taking cognizance of the orders of the CIT(A) in these three cases, we quash the impugned order passed by the Assessing Officer in their cases on 17.03.2007. So far as the order passed in the case of Vishal Enterprise is concerned, we remit this issue to the file of the Assessing Officer. In case the assessee produces the order of higher appellate authority holding that no tax was required to be collected, then learned Assessing Officer shall rectify his order.

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• 2019 (6) TMI 240
  Validity of assessment proceedings - non service of notice u/s 143(2) within the prescribed time OR served through a person, who is not authorised - objection filed before AO - HELD THAT:- CIT(A) has also dismissed legal ground taken by the assessee challenging validity of assessment proceedings consequent to non service of notice u/s 143(2) only on the ground that the assessee has participated in assessment proceedings and also filed various details in respect of issues involved in assessment. There is no grievance caused to the assessee by non service of notice required to be served u/s 143(2) without appreciating the fact that, when objection was filed before AO, the provisions of section 292BB has no application. Therefore, we are of the considered view that there is merit in the argument of the assessee that the notice required to be served u/s 143(2) which had not been served on the assessee within the time prescribed under the Act. Once the notice required to be served u/s 143(2) was not served on the assessee through proper channel, even though such notice has been served through a person, who is not authorised to receive notice, it is a case that the notice required to be served was not served on the assessee. Consequently, the whole assessment proceedings become vicious. In this case, on perusal of facts available on record, it is abundantly clear that notice u/s 143(2) has been served on the person, who is not authorised to receive notice or attend any proceedings before the AO. Therefore, assessment order passed by the AO, consequent to invalid service of notice / non service of notice to the assessee is bad in law and liable to be quashed. Accordingly, we quashed the assessment order passed u/s 143(3). - Decided in favour of assessee.

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• 2019 (6) TMI 239
  Penalty u/s 271(1)(c) - disallowance u/s.40(a)(ia) as assessee failed to deduct TDS - addition of undisclosed sales as reflected in 26AS statement - HELD THAT:- In this case, the tax was paid in the year 2012-13 and was claimed as expenses in that year only. We observe that the genuineness of the claim of the assessee has not been disputed by the department. Therefore, it cannot be said that assessee has claimed expenses which are false or not genuine. The assessee has furnished all the relevant facts concerning the claim made by it in the return filed. The AO has levied penalty in respect of said amount merely because said claim of the assessee was disallowed u/s.40(a)(ia) as assessee failed to deduct TDS thereon. Undisclosed sales as reflected in Form 26AS - in the case of Berger Paints ltd., said income was accounted for in financial year 2003-04 and in the case of Hindustan Unilever Ltd., the amount was written off as discount and tax was deducted on such amount erroneously. Therefore, in our view, the assessee has explained the above difference in the receipts as per the details submitted before the authorities below and the details noted in 26AS. It is well settled law that quantum and penalty proceedings are independent and distinct proceedings. Even if the addition is agreed by the assessee and if the assessee is able to explain the addition, then, penalty may not be leviable in the facts and circumstances of the case. The explanation of assessee at the penalty stage was factually correct based on the material on record and assessee successfully explained the addition so made which is the basis for levy of the penalty. Since the difference is reconciled and claim of assessee have not been doubted or rejected, therefore, Ld. CIT(A) was not justified in confirming the levy of penalty. We are of the view that since the assessee explained the above addition, therefore, penalty need not be imposed in the facts and circumstances of the case. - Decided in favour of assessee.

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• 2019 (6) TMI 238
  TP Adjustment - arm s length price of international transaction by applying CUP as MAM - HELD THAT:- Respectfully following assessee own case in [ 2018 (5) TMI 848 - ITAT DELHI] , we also set aside this issue back to TPO/AO for fresh determination of the arm s length price of international transaction by applying CUP as most appropriate method. It is also directed that in case TPO finds that identical/similar comparables are not available under CUP, then he is free to apply any other appropriate method for determination of arm s length price of international transaction of management group cost. Addition on account of imputing interest on outstanding receivables - HELD THAT:- It is observed that this Tribunal for assessment year 2011-12 has directed AO to adjudicate afresh considering agreed credit period allowable to Associated Enterprise by assessee. Respectfully following same, we direct AO to adjudicate this issue afresh on basis of documents/evidences filed by assessee. Assessee is directed to file agreement under which payment has to be received from AE against services provided by assessee. Upon analysis of such agreement, assessee shall submit evidences in respect of agreed allowable credit period for making payments by AE to assessee based upon which interest shall be computed.

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• 2019 (6) TMI 237
  Capital gain computation - co-ownership - Treating the entire sale proceeds on sale of flat as accruing and arising to the appellant - appellant was only 50% owner of the flat and the balance 50% share belonged to his mother, Malati Apte - HELD THAT:- All documentary evidence clearly shows that the mother of assessee was having equal right, title and interest in the said flat. Moreover, the Collector of Stamp/Registrar also accepted the mother of assessee as one of the co-owner while registered the sale agreement in favour of purchaser. The electivity bills or the society maintenance receipt tax does not prove the title of the property, rather the transfer documents such as sale deeds etc are the only documents to prove the title over the property. However, in the present case, the assessee has shown agreement to sale, power of attorney and payment of consideration, which through the light on the right, title and ownership of the flat. At the cost of repetition, we may refer that the Sub-registrar, under the jurisdiction of which the sale agreement was registered has accepted the mother of the assessee as joint owner and paid the half of the consideration; the assessing officer in absence of adverse evidence should have accepted the joint ownership of the assessee. The assessee has clearly discharged his onus by proving the fact that assessee was joint owner of the flat along with his mother, therefore, in our view, the assessee is entitled for the benefit of LTCG. In the result, the grounds of appeal raised by assessee are allowed.

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• 2019 (6) TMI 236
  Disallowance u/s 14A r.w.r. 8D - suo motu disallowance made by the assessee itself - HELD THAT:- In the case of mutual funds, administrative and managerial expenses are factored in the investments itself. In such a scenario, the explanation offered by the assessee for non applicability of rule 8D(2)(iii) for rigid disallowance appears to be in congruity with market practice. Accordingly, we do not find it a fit case for resorting to double disallowance of similar expenditure taking shelter of Rule 8D(2)(iii) of the IT Rules. It will be pertinent here to note that a bare reading of Section 14A of the Act suggests that its applicability is not automatic. It is hedged by conditions prescribed therein. Section 14A inheres in it the concept of reasonableness. The formidable amount of expenditure as computed by the AO cannot be said to be attributable to tax free income generated from separately administered mutual funds by applying a straight jacket formula embodied in Rule 8D(2)(iii) of the IT Rules. Thus, we find considerable merit in the plea of the assessee for no additional disallowance over and above suo motu disallowance made by the assessee itself in this regard. Hence, we are disposed to adjudicate the issue in favour of the assessee. Thus, the order of the CIT(A) sustaining the disallowance u/s 14A deserves to be vacated. - Decided in favour of assessee.

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• 2019 (6) TMI 235
  Addition for bogus agriculture income - proof of agriculture activities in the farmland - CIT(A) estimated the agriculture income @ 40,000/- per acre and assessed the total agriculture income of Rs. 20,00,000/- - assessee being 50% share holder, therefore, the assessee was allowed relief of Rs. 10,00,000/- and remaining amount was confirmed - HELD THAT:- The assessee brought on record that during the relevant period more than 3600 fruit bearing trees were in the farmland. The assessee also furnished the photographs of farmland along with the survey report showing various type of trees, details of which were furnished by CIT(A). No comment on those documentary evidence were made in the impugned order. Moreover, in the report of Inspector dated 05.12.2016 agriculture activities in the farmland was accepted. The ld. CIT(A) not accepted the agriculture income of Rs. 77,347/- per acre per annum by holding it on higher side. CIT(A) estimated agriculture income @ Rs. 40,000/- per acre p.a. CIT(A) has not given any basis for estimating such agriculture income. The estimation made by ld. CIT(A) is on the lower side. The assessee has claimed yield of cash crop. In our view the estimation of agriculture income @ Rs. 50,000/- per acre per annum would meet the end of justice. Thus, the assessee s share being 50% would be Rs. 12,50,000/-. Therefore, the assessee is granted a partial relief of Rs. 2,50,000/-, in addition to the relief granted by ld. CIT(A). In the result, the grounds of appeal raised by assessee are partly allowed.

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• 2019 (6) TMI 234
  Computation of Long Term Capital Gain u/s 50B - Total Consideration for transfer of undertaking - HELD THAT:- When the Agreement itself provides for the manner of computing Total Consideration for transfer of undertaking, the same should govern the manner of adopting Total Consideration and no other method should be substituted for the same. The consideration is the amount that is determined to be payable by the buyer to the seller and is agreed upon by the seller, as such. The manner of determination of the consideration is mutually decided by the buyer and seller and stated in the Agreement and once it is adopted by the assessee, the same cannot be faulted by the income tax authorities. It is not the case of the AO that assessee has made adjustments to Total Consideration over and above what is provided for in the Agreement. The observation of the CIT(A) that no adjustment to Total Consideration is permissible in terms of section 50B of the Act is not relevant in deciding the present controversy. Assessee furnished documents in the form of Master Agreement dated 31.07.2010, financial statements of the assessee for Financial Year 2010-11 and Financial Year 2011-12, Bank guarantee, letter for invocation of bank guarantee, etc. to support the claim of adjustments stipulated in the Master Agreement. Assessee has correctly reduced the secured liabilities and bank guarantee, which was invoked by the purchaser, while arriving at total consideration for the purpose of computation of capital gains in terms of section 50B Disallowance of repairs and maintenance expenses - HELD THAT:- Admittedly, it is not the case of the Assessing Officer that the impugned expenditure has resulted into creation of a new asset. The quantum of expenditure cannot be the guiding factor to decide whether the expenditure is in the nature of capital expenditure or revenue expenditure. The expenditure incurred by the assessee is towards maintenance of the existing godown and was thus in the nature of current repair. Further more, the benefit to the assessee is in the revenue field in as much as assessee is earning income which is being assessed as business income. We, thus, set-aside the order of the CIT(A) and allow the assessee s claim of repairs and maintenance expenses. In result, this Ground of the appeal is allowed. Disallowance of depreciation on motor car - purchased in the name of Director and expenses incurred by the assessee - HELD THAT:- It is a well settled proposition that merely because the asset is purchased in the name of director, the company cannot be denied depreciation on the same, if the asset is otherwise found to be used for the purpose of business. The decision relied upon by the assessee in the case of CIT vs. Dilip Singh Sardarsingh Bagga [ 1992 (9) TMI 74 - BOMBAY HIGH COURT] clearly supports the stand of the assessee. We, thus, set aside the order of CIT(A) and direct the AO to allow depreciation on the motor vehicle and related expenses on motor vehicle. Accordingly, this Ground of appeal is also treated as allowed.

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• 2019 (6) TMI 233
  TDS u/s 194C - non deduction of tds - disallowance u/s 40(a)(ia) - commission agent or lorry booking agent - only arranges the vehicles for the people who transport the goods - Expenditure relating to transportation of goods such as loading, unloading charge etc - HELD THAT:- The matching of the freight received and freight paid but for the difference of 1.15% which accounts for the commission of the assessee, indicates that the assessee is nothing but an intermediary between the clients and the vehicle owners/operators and mainly facilitates the contract for carrying goods. Having regard to the volumes of the freight received and paid in contrast to the earnings of the assessee, analyzed in the background of the observations of CIT(A) that the assessee had incurred only office expenditure and no expenditure relating to transportation of goods such as loading, unloading charge etc has been debited, we are of the considered opinion that the assessee actually engaged himself not in the transportation business,but only facilitating or arranging transportation for various parties and he is a mere lorry booking agent. The assessee cannot be held as the person responsible for deduction of tax at source and to the facts of the case the provisions u/s 194C have no application. No coming to the contention of the assessee that the ad hoc addition on estimate basis is non-sustainable, insofar as the provisions under Chapter XVII-b in general and to section 194C in particular, disallowance on estimate basis cannot be sustained. Viewing from any angle, we find it difficult to sustain the disallowance made by the learned Assessing Officer and, therefore, direct the same to be deleted. - Appeal of the assessee is allowed.

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• 2019 (6) TMI 232
  Condonation of delay - against two order for penalty U/s. 271AAA and u/s 271(l)(c) joint one appeal was filed - subsequently after decision of CIT(A) separate appeal was filed with delay - bonafide mistake in giving the wrong advice - HELD THAT:- We find that the occasion for the ld. Commissioner to dismiss the appeal holding that ignorance of law cannot be a justifiable reason the order cannot be upheld. We find ourselves unable to concur with the conclusion drawn. In the facts of the present case Shri Dinesh Kumar Sood, C.A. as per the copy of his affidavit filed on record has pleaded a bonafide mistake in giving the wrong advice. In the circumstances, we are, even otherwise unable to hold how the assessee can be penalized for no fault of its own. The assessee having engaged a counsel admittedly has acted duly, diligently and responsibly. In the facts of the present case, we have seen that no undue advantage has been derived by the assessee by filing the appeal late and no vested right of the Revenue can be said to have been disturbed in case the delay is condoned. Accordingly, with the aforesaid observations and directions in terms of the pronouncement made in the Open Court, we set aside the impugned order back to the file of the CIT(A) to verify the facts whether the assessee in the year under consideration had challenged the penalty imposed u/s 271(1)(c) and 271AAA by filing a single appeal. In case, on facts the pleadings of the assessee are found to be correct, the mistake at best, we hold, can be said to be a technical mistake which stands corrected. The ld. CIT(A) in the circumstances subject to verification is directed to condone the delay and proceed to pass the order on merits in accordance with law. - Appeal of the assessee is allowed for statistical purposes.

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• 2019 (6) TMI 231
  Exemption u/s 11 - Registration u/s 12AA denied - trust deed had not provided for dissolution clause for use of net assets of the trust for its objects in case of dissolution and bar on reversion of net assets to founder, members, directors etc.- the School is run by one family headed by father as Settlor -cum-President and two sons as trustees - the assessee trust was not registered under the New Haryana Registration Regulation of Societies Registration Act, 2012 and the Right to Education Act, 2010 was not implemented by the School - HELD THAT:- The Tribunal while dealing with objection (a) put by the CIT, had noticed that as per clause 14 of the Trust Deed, the mandate of the said clause was to transfer the remaining assets and liabilities of the assessee to a similar trust at the time of dissolution. There was no intention of giving benefit to a specific person out of whatever remains in the hands of the assessee Regarding objection (b), the Tribunal had recorded that even if a trust was run by only one family, there was no bar on such trust to be registered under Section 12AA of the Act. The CIT had only to see that the objects of the trust were charitable in nature and the activities of the same were genuine at the time of granting registration. Regarding the fact that the benefit directly or indirectly diverted to one family, can be taken care of by the Assessing Officer at the time of making the assessment and granting exemption under Section 11 of the Act. While dealing with objection (c), the Tribunal had observed that the assessee is a trust formed under the Indian Trust Act, 1882 and had been duly registered with the Sub Registrar, Bilaspur. There was no bar under the Act to give registration under Section 12AA of the Act to a trust and that no provision provided that only societies can be registered under Section 12AA of the Act. The Tribunal while meeting out objection (d) regarding Right to Education Act, 2010 (in short 2010 Act ) had concluded that the issue was covered in the case of Kids-R-Kids International Educational Social Welfare Trust [ 2018 (7) TMI 1516 - SC ORDER] wherein it was held that the issue of school complying with the provisions of 2010 Act was not a relevant consideration to be taken care of by the CIT at the time of granting registration under Section 12AA of the Act. The Tribunal while holding that the CIT had not doubted about the charitable nature of the objects of the Trust as well as the genuineness of the activity, directed the CIT to grant registration to the assessee under Section 12AA of the Act. No error could be pointed out by learned counsel for the revenue in the findings recorded by the Tribunal warranting interference by this Court. - Decided against revenue

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• 2019 (6) TMI 230
  Rectification u/s. 154 - as per AO addition made u/s 68 has to be taxed at a flat rate of 30% and no deduction and allowance can be set off there with u/s. 115 BBE - Scope of amendment - HELD THAT:-The amendment is applicable from 01.04.2017. In our considered view whether the amendment is prospective or retrospective is a highly debatable issue and, therefore, cannot be a subject matter of rectification u/s. 154 of the Act. Considering the facts of the case and the law we set aside the findings of the CIT(A) and quash the rectification order dated 05.05.2016 framed u/s.154 of the Act. - Decided in favour of assessee.

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• 2019 (6) TMI 229
  Stay of demand exceeding 365 days - HELD THAT:- Special Leave Petition has since been rendered infructuous since the main appeal has been disposed of by the Income Tax Appellate Tribunal. The Special Leave Petition is dismissed as infructuous.

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• 2019 (6) TMI 228
  Validity of provisions of Section 115JB 80IC - whether ultravires inasmuch as the benefits granted under Section 80IC cannot be withdrawn by introduction of provisions of Section 115JB - petitioners has contended that in view of the various decisions of the Supreme Court, the provisions which has been introduced by the legislation by amendment of Section 115JB is discriminatory - deduction in respect of unit situated in Uttarakhand and Himachal Pradesh (special category states) - HC held the provisions are in accordance with law and the Government has power to introduce such provisions. Apart from that 80IC deduction which is made is from the gross profit and will apply only on the book profit therefore, Section 115 JB 80 IC both run in different fields - HELD THAT:- Leave granted. Hearing expedited.

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• Customs

• 2019 (6) TMI 227
  Classification of imported goods - medical diagnostic equipment used in the health care industry - classified under CTH 90189099 or CTH 84433290? - HELD THAT:- The Court is unable to view the impugned letter dated 3rd May, 2019 as an order of provisional assessment. Such an order would have to actually deal with the request made by the Petitioner and give reasons as to why such a request has not been acceded to, if at all, and pass an order setting out the terms on which provisional release of the goods will be permitted. While setting aside the impugned letter dated 3rd May, 2019, this Court directs the authorised representative of the Petitioner to appear before the concerned authority (Assistant or Deputy Commissioner of Customs), ICD, Patparganj, Delhi on 4th June, 2019 at 10.30 am - Petition disposed off.

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• 2019 (6) TMI 226
  Release of confiscated goods - LED battern fixture - LED panel light - LED flood light - HELD THAT:- In the light of the admitted position by the respondent that there is no embargo in releasing all goods except drivers, the petitioner is directed to approach the respondent seeking release of the remaining goods upon which the respondent will release the remaining goods forthwith. As far as the confiscated goods are concerned, the respondent is at liberty to finalise the proceedings after hearing the petitioner. As far as the issue of demurrage and detention waiver certificate is concerned, the petitioner is directed to seek waiver of demurrage charges before the concerned authority, who shall consider the same in accordance with law after affording an opportunity of personal hearing to the petitioner. Petition disposed off.

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• 2019 (6) TMI 225
  Benefit of duty free import - inshell walnut - against the DFIA issued for export of biscuit - Denial of benefit on the ground that CTH mentioned in the Annexure A to DFIA are different from the CTH mentioned in the BE - HELD THAT:- The issue raised in the above appeal is also covered by the order by the Hon ble Bombay High Court in the case of USMS SAFFRON CO. INC. VERSUS COMMISSIONER OF CUSTOMS (ACC EXPORT) MUMBAI [ 2015 (11) TMI 820 - CESTAT MUMBAI] . The appellate tribunal held that ITC (HS) mentioned in the DFIA is not a criterion to get the benefit under FTP and Custom provisions as long as the items imported falls under the description of the goods mentioned in the DFIA. In that case, the appellate tribunal held that the imported saffron is covered by the description food flavour mentioned in the DFIA irrespective of ITC (HS) mentioned in the DFIA. We also find that Hon ble Bombay High Court in the case of USMS Saffron upheld the order of the appellate tribunal holding saffron can be imported as food flavour without payment of duty against DFIA issued for export of biscuits. We find considerable force in the submission of the appellant that the term generic input and alternative input are not defined under FTP (2009-14) and 2015-2020 and the relevant Public Notice No. 93 dated 01.02.2012 for export of biscuits under DFIA covered by SION E-5 and SION E-5 mentions that the description of import item in very specific details and rationalised quantities. Once the imported goods satisfy the description given in the SION and reproduced in the DFIA, they are clearly entitled to claim benefit without payment of duty on the strength of the valid DFIA irrespective of ITC (HS) No. mentioned in the DFIA. Interestingly, SION does not refer to ITC (HS) Codes and only the description and quantity of the goods allowed to be imported are mentioned - also no actual user condition is specifically mentioned in the SION E-5. In a post export entitlement scheme like DFIA, in our view once the endorsement of transferability is made in the DFIA, the imported goods only requires to be covered by the description, quantity mentioned in the DFIA within the overall CIF Value as specified therein. Thus, the appellant is entitled to clear the imported Inshell Walnut against the DFIA License obtained against export of Biscuits and produced before the Customs authority. Appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 224
  Refund claim for the excess paid CVD - rejection on the ground of unjust enrichment and time limitation - HELD THAT:- As regard the time bar the refund will not arise as from the date of Hon ble Supreme Court judgment in the case of M/S SRF LTD., M/S ITC LTD VERSUS COMMISSIONER OF CUSTOMS, CHENNAI, COMMISSIONER OF CUSTOMS (IMPORT AND GENERAL) , NEW DELHI [ 2015 (4) TMI 561 - SUPREME COURT] , the appellant was not the litigant, however the law applies to the appellant case also subject to refund is filed within one year from the relevant date. In the present case, the relevant date will be a date of payment of duty - However, the appellant initially the filed the refund claim which was returned and then they resubmitted subsequently. In this case the initial filing of refund claim shall be considered as date of filing of refund claim and if it is within one year from the date of payment of duty then the same cannot be rejected on time bar. Unjust enrichment - HELD THAT:- The appellant have submitted only Chartered Accountant Certificate however they have not submitted any documentary evidence in support of their claim such as the price structure of the mobile, pre and post payment of excess custom duty they also not submitted their books of accounts in this regard - the matter needs to be remitted back to the adjudicating authority for passing a fresh order. Appeal allowed by way of remand.

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• 2019 (6) TMI 223
  Advance licence of DEEC Scheme - duty exemption on import of goods - export obligation was met on the ground of mismatch between input and output of goods - HELD THAT:- Hon ble Apex court in TITAN MEDICAL SYSTEMS PVT. LTD. VERSUS COLLECTOR OF CUSTOMS, NEW DELHI [ 2002 (11) TMI 108 - SUPREME COURT] while extending benefit of duty exemption, had held that objective of Duty Exemption Scheme and eligibility was for the advancement of export and once advance licence is issued, the Customs authority cannot refuse exemption on an allegation that there was misrepresentation and therefore, it was the licencing authority who can take steps on that behalf and not the Customs authority. In the instant case, it is the Commissioner of Customs who hold a finding that benefit of duty exemption cannot be granted to the whole lot of products as exemption notification was not applicable to the imported goods despite the fact that benefit of licence was supposed to be extended as per clarification issued by Commerce Ministry and Export Commissioner concerning interchangeability of both the raw materials and Appellant was issued inspection certificate by the Central Silk Board that goods exported were 100% natural silk fabrics. Appellant is entitled to duty exemption in full for the whole lot of inputs - Appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 222
  Exemption from Customs Duty - benefit of N/N. 63/88-Cus - purchase of hospital equipment (C.T. Scanner) - Double Jeopardy - HELD THAT:- Going by N/N. 63/88-Cus dated 1st march 1988, it can be seen that exemption is provided to the hospital equipment when imported by Central, State Government hospitals etc. or society registered under any law for the time being relating to registration of societies, which are being controlled by any of the authorities of the Central Government, State government, Union Territory Administration or local authorities. The meaning of word control is the power to influence or direct or supervise the behaviour and conduct of people or organization in the course of event and government control signifies the control exercised over the action or affairs by the State. The Commissioner of Customs (Import) had given his views that such control by Government authorities requires managerial control on day to day functioning of such society, which is admittedly found absent in the case of the appellant. Apparently therefore, he had given his finding that requirements of exemption notification was not fulfilled in that aspect. Furthermore another condition available in notification 63/88 that the hospital, which includes expression like trust or society, had to produce a certificate from the Director of Health Services of the Government of India or the Ministry of Health and Family welfare in the Government of India to the effect that the said hospital falls in either of the categories specified in the table (which includes registered society). Such certificate was not produced by the appellant to make it eligible for exemption under notification no. 63/88-Cus. Appellant failed to substantiate that Commissioner s finding was wrong in respect of production of such certificate and in respect of exercise of Government control over its functioning that would necessitate interference of the Tribunal in the order passed by the Commissioner (Appeals). Moreover double jeopardy is a protection against punishment for more than one occasion and not against repeated intimation for action/proceedings. Appeal dismissed - decided against appellant.

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• 2019 (6) TMI 221
  Valuation of imported goods - Toyota Land Cruiser Prado - rejection of value under Rule 12 of Customs Valuation Rules, 2007 - Confiscation of imported vehicle - HELD THAT:- The original adjudicating authority has simply rejected the value under Rule 12 of Customs Valuation Rules, 2007 but have not given any reasons for not proceeding sequentially as per Customs Valuation Rules, 2007 and particularly as to why the contemporaneous values as submitted by the appellants was rejected - Commissioner (A) has found that the invoice mentions the vehicle name, chassis number, engine number, model number etc. Therefore, the rejection of the invoice without proper basis is incorrect - the value arrived at by the authorities is not justified. Violation of the condition that the vehicle was to be in the possession of importer for a period of one year - HELD THAT:- The importer has accepted that he has violated the provisions. For the same reason, the vehicle was seized and confiscated and however, the same was realized on payment of fine in lieu of confiscation. Once, the vehicle is allowed to be released on payment of fine in lieu of confiscation, the violations, if any, has been atoned. Appeal dismissed - decided against Revenue.

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• 2019 (6) TMI 220
  It seems that the appeal was wrongly filed by the Revenue. We also note that M/s Sanjivani Non-Ferrous Trading Ltd. also challenged said order and the same stands set aside by the Tribunal. Revenue s appeal is disposed of as infructuous.

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• 2019 (6) TMI 171
  Re-examination and verification of machine by another approved Chartered Engineer - valuation of importation of second hand machinery - HELD THAT:- In the present case, the admitted position is that the Department has itself appointed a Chartered Engineer who has given a report to the effect that the machine imported by the Petitioner is a used/repaired one. Clearly, this is not in consonance with para 11 of circular dated 15th October, 2015 issued by the Central Board of Excise and Customs which permits the importer to select any Chartered Engineer empanelled by the Customs House for such inspection and report. The Petitioner will appear before Dy. Commissioner Customs, Group-5, New Customs House on 3rd June, 2019 at 11 am - The Petitioner will furnish to the said officer the name of the Chartered Engineer selected by the Petitioner from the panel prepared by the Customs House - The report of the Chartered Engineer after inspection of the machine in question will be made available both to the Department as well as to the Petitioner not later than 10th June, 2019. Petition disposed off.

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• 2019 (6) TMI 170
  Extension of time limit for issuance of SCN - whether the Commissioner is required to issue notice to the importer proposing extension of time limit for issuance of SCN or he may extend the time limit without putting the importer to the notice? - HELD THAT:- The same issue for the period even after the amendment in Section 110 has come up before the Tribunal-Delhi in the case of M/s Swees Gems Jewellery. [ 2019 (2) TMI 1375 - CESTAT NEW DELHI] , the Tribunal after interpreting and discussing the difference in the provision of Section 110(2) before and after amendment came to the conclusion that the amendment is not such that the department is not required to issue SCN. There is no legal authority with the department for dispensing with the issuance of SCN to the appellant, therefore, the impugned order passed without issuance of any SCN will not sustain - Appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 169
  Extension of time limit for issuance of SCN - whether the Commissioner is required to issue notice to the importer proposing extension of time limit for issuance of SCN or he may extend the time limit without putting the importer to the notice? - HELD THAT:- The same issue for the period after the amendment in Section 110 has come up before the Tribunal-Delhi in the case of M/S SWEES GEMS JEWELLERY, M/S AARADHYA IMPEX VERSUS CGST CE, JAIPUR-I [ 2019 (2) TMI 1375 - CESTAT NEW DELHI] , the Tribunal after interpreting and discussing the difference in the provision of Section 110(2) before and after amendment came to the conclusion that the amendment is not such that the department is not required to issue SCN. There is no legal authority with the department for dispensing with the issuance of SCN to the appellant, therefore, the impugned order passed without issuance of any SCN will not sustain - Appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 168
  Mis-declaration of import goods - woven fabric - cross-examination of employees - suppression of facts or not - entire case of the respondent Department is based on collection of samples from the appellant s Warehouse on the basis of identification made by one employee Shri Rajbir Singh, who was not subjected to cross examination by the appellant despite it s request for such cross examination - HELD THAT:- It is an admitted fact on record that goods were originally imported by another concern and the description of goods were mixed fabrics and it is at the instance of the appellant that goods were put to test for ascertainment of its description and classification, that was done before the goods were cleared for own consumption - No other relationship was established by the respondent Department to substantiate that the goods seized by the DRI was in fact related to the goods cleared to the appellant through the disputed Bill of Entry. Show cause notice reveals that DRI Officials made visual examination of goods and ascertained that they comprised of 7 different verities/types of fabrics. It is not understood as to why after such discovery, Customs Officials who drew the samples for first check examination were not examined and why reliance is placed on only examination if the appellant s staff to find out the error in the First Examination Report - It is a settled principle of law that even in such situation, when two different opinions can be formed from contradictory evidence, the opinion that is favourable to the offender is to be accepted. There is nothing available on record to substantiate that the samples drawn by DRI Officials were the representative samples of the consignment cleared in the disputed Bill of entry except the statement of that Shri Rajbir Singh whose veracity is not tested through cross-examination nor any opportunity was provided to the appellant to falsify such statement - Under the circumstances, no credence can be attributed to such a statement to penalise the appellant with additional burden of duty liability penalty etc. Appeal allowed - decided in favor of appellant.

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• Corporate Laws

• 2019 (6) TMI 219
  Secured credit or not - properties of the petitioner attached before the order of liquidation - Whether Applicant is an unsecured creditor or a secured creditor? - HELD THAT:- It is only if a creditor has realized the proceeds of sale of an asset of the Company prior to the winding- up order can such creditor claim to have prior rights over such asset/its sale proceeds. In the present case, the mere fact that the Company s properties have been attached, not even sold, prior to the winding- up order dated 19th July 2007 does not have any consequence on its status as an unsecured creditor at all. In the absence of a charge having been registered by applicant prior to the winding up order dated 19th July 2007, applicant cannot be considered as a secured creditor - application disposed off.

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• 2019 (6) TMI 218
  Winding up of the respondent company - HELD THAT:- Merely because there was same problem in 2010 regarding the technical staff that was deployed cannot ipso facto mean that it led to an explosion of the DG Set in 2011. There can be various reasons as to why there was a problem with the DG Set. In any case immediately after the explosion there has been no communication with the petitioner pointing out to the petitioner that its staff was negligent and was the cause of the said explosion in the DG Set. In the absence of any contemporaneous communication in this regard the plea of the respondent can only said to be an afterthought. Petition admitted.

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• 2019 (6) TMI 217
  Exit to the petitioner as director - the functioning of the company was totally in mess because of the distrust between the petitioner on the one hand and the Respondents on the other - HELD THAT:- The Appellant cannot ask for any interest, in absence of any direction given by this Appellate Tribunal and the said matter cannot be re-agitated for deciding the issue afresh by this Appellate Tribunal which was decided on 21st July, 2017. The Tribunal was required to decide the matter within the four corners of the direction of this Appellate Tribunal given on 21st July, 2017 and not beyond the same. In absence of any merit, the appeal is dismissed.

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• Insolvency & Bankruptcy

• 2019 (6) TMI 167
  Whether in a Corporate Insolvency Resolution Process triggered u/ss 7 or 9 or 10 of the I B Code , the Adjudicating Authority has power to convert the Corporate Insolvency Resolution Process as a Fast Track Corporate Insolvency Resolution Process u/s 55 of the I B Code ? - HELD THAT:- In the present case, the application was not filed under Section 55 but u/s 9 of the I B Code . In terms of Section 12 Corporate Insolvency Resolution Process was required to be completed within 180 days from the date of admission. Sub-section (3) of Section 12 empowers the Adjudicating Authority to extend the period beyond 180 days but it cannot exceed 90 days - the Adjudicating Authority has no jurisdiction to proceed with the Corporate Insolvency Resolution Process beyond the period of 270 days having not empowered under the provisions of the I B Code . Sub-section (2) of Section 55 of the I B Code stipulates that an application for Fast Track Corporate Insolvency Resolution Process can be made against (i) the Corporate Debtor whose assets and income is below a level, as may be notified by the Central Government or (ii) the Corporate Debtor with such class of creditors or (iii) such other category of corporate persons as may be notified by the Central Government - the Fast Track Corporate Insolvency Resolution Process is different from Corporate Insolvency Resolution Process against such Corporate Debtor(s) as may be notified by the Central Government in terms of clauses (a), (b) (c) of sub-section (2) of Section 55. The Adjudicating Authority exceeded its jurisdiction by extending the period of 90 days after completion of 270 days of the Corporate Insolvency Resolution Process wrongly exercising its power under sub-section (2) of Section 55 which is not applicable - answered in negative. Whether Committee of Creditors had jurisdiction to replace the Resolution Professional after completion of 270 days? - HELD THAT:- After completion of 270 days, the Committee of Creditors ceased to exist and thereby they have no jurisdiction to replace a Resolution Professional u/s 22 of the I B Code . Even if the decision to replace the Resolution Professional is taken prior to 270 days, in absence of any order passed by the Adjudicating Authority, such decision cannot be entertained on completion of 270 days. However, the ground taken by the Committee of Creditors can be looked into by the Adjudicating Authority to decide whether the same Resolution Professional should be allowed to continue as liquidator of the Corporate Debtor - answered in negative. Whether Adjudicating Authority is empowered to decide the resolution cost, including the resolution fee payable to the Resolution Professional ? - HELD THAT:- In case Corporate Insolvency Resolution Process fails and order of liquidation is passed u/s 33 in such case, the Resolution Professional can be removed if it is found that he has violated Section 30(2) or otherwise he is to be allowed to function as liquidator - In the present case, as no order has been passed under Section 31, nor any order has been passed by the Adjudicating Authority u/s 33, we hold that the Adjudicating Authority had no jurisdiction to decide the resolution cost including the fee of the Resolution Professional . The impugned order dated 25th July, 2018 is set aside - The Adjudicating Authority is directed to pass order u/s 31 but if no Resolution Plan has been approved, the Adjudicating Authority will pass order u/s 33 of the I B Code , more than 270 days having expired - Appeal allowed.

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• Service Tax

• 2019 (6) TMI 216
  Exemption from Service tax - Operation and Maintenance Services rendered to CETPs - validity of assessment - HELD THAT:- An assessment has to be framed in accordance with law and application of all relevant notifications/circulars/ clarifications issued by the Board/Government. In this case, the eligibility to the exemption sought has not been denied by the department and rightly so. Thus, the defence that the assessment is correct in the light of the assessee non co-operation is not a defence at all, and is rejected. The assessee is engaged in the operation and maintenance of CETPs that are not part of a factory, and in the light of Notifications 25/2012 (20.06.2012), 6/2015 (01.03.2015) and 8/2017 (20.02.2017), the petitioner is entitled to the exemption claimed. The impugned order of assessment in so far as it relates to the issue of service tax on operation and maintenance of CETPs is quashed. Now coming to the assessment itself, since there appear to be other issues that have arisen in the assessment that are not covered by the writ petition, the respondent/department is directed to give effect to the present order by deleting the demand in relation to the activity of operation and maintenance of CETP alone as well as giving credit to any amounts been paid by the assessee, in relation to the aforesaid demand, after due verification of the same and after hearing the petitioner. The aforesaid exercise will be completed within a period of four weeks from date of receipt of a copy of this order. Petition allowed.

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• 2019 (6) TMI 215
  Liability of service tax - import of certain machinery from various suppliers situated at China, Hongkong, and European countries, who provided the Erection, Commissioning and Installation Services to the appellant free of cost - Works contract service or not - Reverse Charge Mechanism - HELD THAT:- Both the lower authorities have concurrently held that the services of Erection, Commissioning and Installation is a composite contract of works contract. Even though if it is accepted the contention of both the lower authorities, then there is no dispute by the Revenue that the service falls under the Works Contract. The period involved is August, 2006- January 2007. During this period the Works Contract Service was not liable to payment of Service tax as held by Hon ble Supreme Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] . Demand not sustainable - appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 214
  Classification off services - Manpower Recruitment and Supply Agency Services or otherwise? - non-payment of Service Tax liability from 16/06/2005 i.e. the date on which the services became taxable to 28/02/2007 - penalty - HELD THAT:- Though the work assigned by the recipient of service is of handling of various goods in their factory premises. However, as per the rate chart, it is seen that though the rates are per metric tonne, but it is also on the basis of per person employed for such work. It can be seen that there is a heading loading guarantee and stacking guarantee which is on the basis of 4 mt, per person per gang, 6 mt per person per gang and 6.85 mt per person per gang respectively. This clearly shows that the payment is towards the supply of manpower for the various jobs as described in the above agreement. Moreover, the service recipient is making a separate payment towards the provident fund of the workers deputed by the service provider. It is evident from the debit note. From the debit note, it can be seen that the service recipient are obliged to pay a separate amount of provident fund to the appellant. If the contention of the appellant is considered, that the rate is as per tonne basis, but in such case, the recipient should not be responsible for any other payment except the actual rate given in the contract. However, from the above debit note, the appellant is receiving a separate amount towards the provident fund of the employees deputed by the appellant. In such a case, it is a clear case of supplies of manpower. Penalty u/s 76 and 78 of FA - HELD THAT:- Once the penalty under section 78 is imposed, no separate penalty under section 76 should be imposed - the penalty imposed under section 76 is set aside. Remaining portion of the order is upheld. Appeal allowed in part.

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• 2019 (6) TMI 213
  Classification of services - construction services or works contract services - benefit of N/NN. 1/2006-ST denied - benefit denied on the ground that they have utilised cenvat credit of GTA services for payment of Service tax on Commercial and Industrial Construction Service for March 2006 - HELD THAT:- Admittedly the Appellant were registered under the category of construction service and no dispute was raised by them regarding classification of service. Even though the category of Works Contract came into effect from 01.06.2007, they applied for said category only in January,2008. They never contested their classification of services before authorities. They had paid service tax on GTA Services under reverse charge mechanism and also availed credit of same - Whatever services of GTA were availed by them was in respect of Construction service and the exemption on value which is in excess of 33% was availed by them continuously. Obviously the tax on construction services paid by them was in respect of continuous service of Construction activity. The construction activity was not initiated and completed in March 2006, therefore the GTA services before March 06 has clear linkage for the service tax paid on construction service in March 06. Appellant did not contest the levy of service tax on construction services, but classified their services into Works Contract Service only w.e.f. Jan 2008. Hence prior to such period the services would remain classified under Construction Services . In case of reversal of the credit utilised by them they are eligible for benefit of exemption Notification - matter remanded to the adjudicating authority to ensure that the credit is reversed along with interest within four weeks of the passing of this order subject to which the Appellant shall be eligible for the benefit of impugned subject notification. Appeal allowed by way of remand.

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• 2019 (6) TMI 212
  Benefit of N/N. 15/2004 dated 10.09.2004 and N/N. 01.2006 dated 01.03.2006 - benefit denied on the ground that the appellant has not included the value of the pipe supplied by service recipient - HELD THAT:- From the computation chart of the demand, we find that for the demand shown in Annexure A to SCN, the total value was taken from the balance sheet after excluding the value of coating, from this it is not revealed that whether the value of pipe was included in the gross taxable value or otherwise. It is obvious that once the pipe is supplied by the recipient of the service, the value of the said pipe will not reflect in the balance sheet, therefore, there appears to be some error in computation of duty, therefore, the same needs to be reexamined - matter on remand. Demand of service tax - coating work of pipe carried out on the pipe supplied by the service recipient - sub-contract - time limitation - HELD THAT:- The authority below denied the benefit of sub-contractor only on the ground that during the relevant time, the cenvat scheme was operated, accordingly, the appellant was entitled to avail the cenvat credit and discharge the service tax. However, whether the circular is applicable and consequently whether the demand is hit by limitation or otherwise has not been dealt with properly by the lower authority, therefore, this issue also needs to be reconsidered - matter on remand. Appeal allowed by way of remand.

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• 2019 (6) TMI 211
  Maintenance, Management and Repair service - pure operation contract - demand of service tax - levy of interest - imposition of penalty under Section 76 and 78 of the Finance Act, 1994 - extended period of limitation - HELD THAT:- The appellants are engaged in the Operation of plant and Maintenance and Repair is part of the said contract. The primary nature of the service is of Operation, and Maintenance and Repair is incidental to the provision of the service of Operation. Tribunal in the case of GENTING LANCO (INDIA) PVT LTD VERSUS CCT, GUNTUR GST (VICE-VERSA) [ 2018 (11) TMI 167 - CESTAT HYDERABAD] has held that the main activity relates to Operation, and Maintenance and Repair in process of Operation, demand cannot be sustained under the category of Maintenance, Management and Repair service. Moreover, the appellant has also claimed benefit of limitation - Tribunal has also held that in the peculiar facts and circumstances of the case, the view harbored by the appellant may be bonafide. Thus extended period of limitation cannot be invoked. Appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 210
  Consulting Engineer Service - liability of sub-contractor to pay tax when the prime/main consultant has already paid the tax - double taxation - suppression of facts or not - HELD THAT:- From the very beginning the stand of the appellant is that they are rendering the services of soil testing, survey and map making services, site formation and clearance excavation, earth moving and demolition services to the prime consultant who has paid the service tax and therefore, the appellant cannot be asked to pay the service tax once again on the same service. This contention of the appellant is backed by the Trade Notice dated 4.7.1997. Tribunal in a catena of decisions, has consistently held that once the contractor pays the service tax then subcontractor need not pay the service tax as it will amount to double taxation - the ratio of these decisions has not been considered by the Commissioner who only relied upon the Circular issued on 23.8.2007 which is much after the period in dispute. Further, in the facts and circumstances of this case alleging suppression with an intent to evade payment of tax is not justified in view of the Trade Circular as well as various decisions of the Tribunal - further since the Commissioner has not considered various certificates/letters filed by the appellant from various prime consultants, this case needs to be remanded back to the adjudicating authority with a direction to pass a de novo order after considering all the documentary evidence which may be produced by the appellant in support of their claim. Appeal allowed by way of remand.

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• 2019 (6) TMI 209
  Refund of accumulated and unutilized CENVAT credit - export of output services - Rule 5 of CENVAT Credit Rules, 2004 (CCR) and N/N. 27/2012 dt. 18/06/2012 - HELD THAT:- While filing the refund claim, the appellant was required to debit the CENVAT amount claimed as refund from his CENVAT Credit account and the said amount should also be reflected in their ST-3 return but the same was not done in the present case - as per the said Notification, it is the mandatory condition. Further the reasons for not debiting and not showing the same in their ST-3 return, are not very convincing. In the case of APEX CO VANTAGE INDIA PVT. LTD. VERSUS CCT, RANGAREDDY- GST [ 2018 (6) TMI 814 - CESTAT HYDERABAD] , identical question was involved and the CESTAT, Hyderabad Bench, after detailed analysis of the Notification and the various case law, has held that It is clear that N/N. 05/2006 CE (NT) lays down that the amount claimed as refund of CENVAT amount should be debited before applying for the Refund and the appellant had not done so. They have debited the amount, but much later and thereby they violated the condition 2(h) of the notification. Appeal dismissed - decided against appellant.

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• 2019 (6) TMI 208
  Classification of services - Construction services or works contract services? - HELD THAT:- In the present case, the activities undertaken by the appellant involves the transfer of goods and thus falls in the definition of works contract which was made taxable from 01/06/2007 - this issue is no more res integra and has been settled by Apex Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] - Further the entire period involved in the present case is prior to 01/06/2007. Therefore the decision of the Apex Court in the case of Larsen and Toubro Ltd. is squarely applicable in the present case. Service tax liability on a sub-contractor - HELD THAT:- Where the main contractor pays the service tax, we find that in the present case, the appellant in certain cases has acted as a sub-contractor to the main contractor and the main contractor has paid the service tax and in view of the various decisions, it is held that the sub-contractor is not liable to pay service tax where the main contractor had paid the service tax. Extended period of limitation - second SCN - HELD THAT:- For the subsequent show-cause notice, there cannot be any suppression of facts in view of the decision in the case of NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP [ 2006 (4) TMI 127 - SUPREME COURT] - extended period not invokable. Appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 207
  100% EOU - Rebate claim/Refund of service tax paid - service tax paid on input services used in export of output services under N/N. 12/2005-ST dt. 19/04/2005 - HELD THAT:- The requisite declaration as required under condition of Notification has been filed on 31/05/2005 and revised on 16/06/2005 on account of some inadvertent error and the same has been placed on record. In the impugned order, the Commissioner(Appeals) has laid importance on procedural requirements without appreciating the fact that the input services have been received by the appellant and used for providing output services, which were exported out of India and thus fulfilling the substantive requirement under Export of Service Rule and the Notification. Time limitation - period October 2005 to March 2006 - HELD THAT:- Rebate claim was rejected on time bar as the same has been filed beyond one year as prescribed under Section 11B of Central Excise Act, 1944; but this time limit of Section 11B is not applicable in the present case because the said notification does not provide for any time limit within which the rebate claim should have been filed and the same. The rejection of rebate claims is not sustainable in law - appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 206
  Levy of service tax - inputs on which transportation charges were paid - reverse charge mechanism - HELD THAT:- The appellant has been issued the SCN for short payment of service tax under reverse charge basis. They had received inputs for being used in the manufacture of their final products. For such inward transportation of goods, they are liable to pay service tax under reverse charge basis - demand of service tax alongwith interest upheld. Penalty - HELD THAT:- The appellant has submitted that the appellants were not aware of the fact that they are liable to pay service tax on such freight charges under reverse charge basis. On perusal of the records, it is seen that the appellant has raised this plea from the very beginning itself - also appellant have paid up the entire service tax along with interest on being pointed out by the Department much before the issuance of the Show Cause Notice - penalty set aside by invoking section 80. Appeal allowed in part.

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• 2019 (6) TMI 205
  Interest on delayed refund - Section 11 BB of CEA - HELD THAT:- Supreme Court in the case of RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. [ 2011 (10) TMI 16 - SUPREME COURT] held that Even where the refund is granted by the appellate authority, interest under Section 11 BB shall be payable with effect from the expiry of three months from the date of original application. Accordingly, this ground is allowed in favour of the appellant. The adjudicating Authority is directed to pay interest w.e.f. three months from the date of expiry of the date of original refund application, being 29.01.2007 - Interest allowed. Suo moto adjustment made out of sanctioned refund - HELD THAT:- The adjudicated dues have not been stayed by the appellate court before which the appeal is pending. Further, the Adjudicating Authority is empowered under Section 11 of the Act read with Section 142 of the Customs Act, to make adjustment of the outstanding adjudicated dues, out of any refund payable to an assessee, where such adjudicated dues have not been stayed by the appellate court - However, it is desirable on the part of the adjudicating authority granting refund, to give an opportunity of hearing, before making such adjustment. Appeal allowed in part and part matter on remand.

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• 2019 (6) TMI 204
  Demand of service tax - Erection, Commissioning or Installation Service - Transport of Goods by Road Service - demand of interest and penalty as well - HELD THAT:- The Appellant had undertaken the activity under a composite and indivisible works contract and by no means can it be said that it was a contract for Service simplicitor. In our opinion partial supply of material will not change the nature of the service provided by the appellant and it would still fall under the definition of Works Contract Service . The show cause notice was, however, issued to the Appellant alleging that the Appellant is providing ECIS. The position that comes out very clearly, therefore, is that even prior to 01 June, 2007 and post 01 June, 2007, the nature of service rendered by the Appellant was WCS and not ECIS. The show cause notice alleged that the Appellant was providing ECIS and the demand has also been confirmed under this category by the adjudicating authority. The impugned order, therefore, deserves to be set aside for this reason alone since the demand made under a particular category of service found to be incorrect in a subsequent proceeding, cannot be sustained. The issue that needs to be examined now is that though the Adjudicating Authority was not justified in confirming the demand under ECIS, but the appellant had admittedly collected Service Tax. The appellant is also not contesting that it is not required to deposit the Service Tax collected with the Department but what is sought to be contented is that the appellant had in addition to the amount that has been appropriated in the impugned order, deposited an amount of Rs. 16,614,934/- with the Department, (details of which have been mentioned at page 262 of the appeal memo.), which amount has not been considered by the Adjudicating Authority and, therefore, not appropriated. The confirmation of demand under heading ECIS with interest and penalty is set aside - The demand made under Goods and Transport Agency Service is maintained. So far as the appropriation of the amount is concerned, the matter is remanded to the Adjudicating Authority for passing a afresh order. Appeal allowed in part.

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• 2019 (6) TMI 203
  Refund of CENVAT Credit - output services are exported prior to registration - period January, 2009 to March,2009 - HELD THAT:- In a recent decision in B THE COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI VERSUS BNP PARIBAS SUNDARAM GLOBAL SECURITIES OPERATIONS PVT LTD. [ 2018 (6) TMI 676 - MADRAS HIGH COURT] , the Hon ble High Court of Madras, has interalia held that Rule 5 of CCR,2004, does not stipulate registration of premises as a necessary pre-requisite for claiming a refund. Refund allowed - appeal dismissed - decided against Revenue.

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• 2019 (6) TMI 202
  Valuation - Mandap Keeper Services - inclusion of various amounts collected i.e. generator charges, electricity, cleaning and maintenance in the assessable value - HELD THAT:- As the appellant is not able to produce any documents indicating that they are reimbursement charges; in the absence of such documents, we uphold the demands raised on these charges received by the appellant. Time Limitation - HELD THAT:- In the absence of any documents that appellant had declared these amounts to be reimbursement charges, the claim of limitation by the learned counsel also fails. Penalty u/s 78 of FA - HELD THAT:- The Commissioner (Appeals) in the impugned order has explicitly recorded that appellant are of high social status and render philanthropic services without profit motive. He also records that they have not collected the service tax on disputed charges and could have entertained a bonafide belief that no tax is payable. Coming to such a conclusion he set aside the penalty imposed under Section 76 of the Finance Act 1994 - same findings will also apply for the penalty imposed under Section 78 of the Finance Act 1998. Appeal disposed off.

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• 2019 (6) TMI 201
  Refund claim - amount was paid under mistake of Law - HELD THAT:- By the time the appellants pay the service tax for the period April 2005 to September 2005 i.e. 29.05.2006, notification No. 6/2005-ST came into existence and the appellants could have avoided the payment by saying that they are eligible for the benefit of notification. Or else, the appellants could have filed refund claim within a period of one year i.e. on or before 29.05.2007 on the ground that they have paid the service tax by mistake. Instead of these two options, filing of refund claim on 29.12.2007 on the ground that the amount was paid by mistake of law is not correct. The said findings of first appellate authority are correct and legal and does not require any interference - refund cannot be allowed - appeal dismissed - decided against appellant.

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• 2019 (6) TMI 200
  Whether the service tax paid under the head of Renting of immovable property can be considered as payment of service tax under Port Service on the same service? - Imposition of penalty. HELD THAT:- In view of Circular dated 20.11.2012 even if the service tax was paid under renting of immovable property service which is otherwise a port service, the separate demand once again under port service cannot be made, therefore, the service tax paid for an amount of Rs. 43,60,638/- under renting of immovable property service may be considered as payment of service tax against port service - The department is free to make their internal adjustment in the account, for that purpose, the appellant cannot be made suffered with charge of non payment of service tax. Penalty - HELD THAT:- The appellant have paid entire service tax along with interest. This is also fact that the appellant is Government of India enterprise, therefore, malafide intention to evade the payment of duty cannot be charged against the appellant. Appeal allowed in part.

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• 2019 (6) TMI 166
  Classification of services - Franchise services or not - slump sale - demand on the ground that the purchaser has placed several restrictions on Appellants under the agreement and therefore the transaction was in nature of providing Franchise services as defined under Section 65 (105) (zze) of Finance Act, 1994 - Board Circular No. B1/6/2005 TRU DT. 27.07.2005 - extended period of limitation - HELD THAT:- The Appellant decided to exit the business of marketing the nutraceuticial products and they sold the marketing business of nutraceutical as a slump sale on going concern basis - the consideration of sale of marketing business was valued on the basis of value of assets and liabilities. In pursuance of such agreement the trademarks related to all products developed by Appellant were transferred legally and absolutely to M/s Aventis permanently. None of the ingredients of franchisee service or the Board Circular are present in the BPA between the Appellant and M/s Aventis. The transaction is of sale of business marketing division. The Appellants do not qualify as Franchisor as the trademarks have been permanently assigned to M/s Aventis and they have become absolute owner with no control of the Appellant - The trademarks and the IPR sold by the Appellant stands transferred to M/s Aventis. The consideration received by the Appellant is not towards any service. In Franchisee agreement, the Franchisee charges are computed with reference to quantum of sale and the charges are not collected before hand. The franchisee pays the amount for a pre-determined period or on the basis of quantum of service as per the terms and it is never a one time payment. M/s Avantis are not representing themselves as part of Appellant whereas in the franchisee agreement, the franchise represents himself associated with the Franchisor which is not the case here. Assuming it to be franchisee agreement it would be illogical to conclude that the huge amount has been paid by M/s Avantis to the Appellant as one time alleged franchise fee. Thus the whole notion of terming such sale of brand name as franchisee fee is illogical and perverse. No such agreement for ranting a mere franchisee has been ever entered into Commerce or Industry. It is wholly natural and logical in commercial terms that amount of Rs. 567 Crores is given by M/s Avantis only for sale/ transfer of brand name in Indian Market - There has been plethora of judgments of the Tribunal and the Hon ble Court wherein the brand name purchased by an Indian company from a foreign concern only for use in India has been held to be transfer of ownership of brand name to Indian company. There is no representational right with M/s Aventis but they are absolute owner of the trademark. The Adjudicating authority has contended that no VAT has been paid. We find that it is not a sale of goods but a business slump and hence in absence of any such goods the same is not liable for VAT. None of the employee has stated that there is a franchise agreement. Even if the statements are to be interpreted in the way the adjudicating authority has interpreted, the same has to be corroborated with the nature and intention of the BPA which is not the case here. Even the statements only state the fact that marketing business have been transferred. Thus the interpretation advanced by the adjudicating authority is not sustainable. It is also a fact that except interpreting the clause of the agreement, the revenue has not brought any evidence to show that the BPA was not followed or the transaction were executed otherwise. Extended period of Limitation - HELD THAT:- There is no instance which can show that there has been suppression or mis-statement of facts by the Appellant with intention to evade service tax, if otherwise would have been payable. Such transaction first of all is not liable for service tax and was publicized in media. The transactions were reported to various regulatory authorities viz. FDA, Ministry of Corporate Affairs, SEBI etc. and also disclosed in books of accounts and balance sheet. In such case when there is no evidence of suppression or intention to evade service tax, the demand cannot be made by invoking extended period of limitation - apart from merits the demand is not sustainable as being hit by limitation of time. Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2019 (6) TMI 199
  CENVAT Credit - inputs/capital goods - Shapes Sections, MS Plates, HR Coils, MS Angles, Iron and Steel Bars, HR Sheets, Mill Plates MS Channel, Hot Strip Mill Plate, Joist, Thermo Mill Tractcet, Section etc. - denial of credit on the ground that these items had been used either for repair and maintenance of plant and machinery or modification of their existing plant and machinery - year 2004-05 and 2005-06 - Circulars dated 2.4.2012 and 18.5.2012 - HELD THAT:- Since items used by the respondent-assessee were used as structure to hold the capital goods, hence, it is wrong to say that respondents are not eligible to CENVAT credit. Therefore, in our considered opinion, the Tribunal has rightly allowed the appeal and the reasoning given by the Tribunal cannot be said to be not cogent or correct appreciation of evidence on record. Tribunal has rightly held respondent-assessee is entitled to Cenvat Credit in respect of items used as structural support for capital goods. Appeal dismissed - decided against Revenue.

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• 2019 (6) TMI 198
  Whether on the facts and in the circumstances of the case and in law, the Tribunal committed an error by not even considering the argument specifically made in written submissions that extended the period of limitation cannot be invoked in view of the decision of the Gujarat High Court in the case of Prayagraj Dyeing Printing Mills Pvt. Ltd., v/s. Union of India [2013 (5) TMI 705 - GUJARAT HIGH COURT] ? HELD THAT:- Perusal of the impugned judgment and order dated 19th January, 2018, and a copy of the written submissions annexed as Exh. H to the appeal shows that the Tribunal has not even adverted to the contentions raised in the written submissions. Once the written submissions are taken on record by the Tribunal, it was the duty of the Tribunal to deal with the contentions raised in the written submissions. The question of law as framed will have to be answered in favour of the Appellant and against the Respondent.

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• 2019 (6) TMI 197
  CENVAT Credit - manufacture of dutiable and exempted dairy products - entire quantity of Furnace oil received in their factory which was used for producing steam and the steam in turn was used for various process of manufacture of dutiable and exempted goods - period July 2001 to May 2005 - HELD THAT:- The Appellants are not entitled to the credit of Furnace oil which is used in manufacture of exempted goods. Reliance placed in the case of COMMNR. OF CENTRAL EXCISE VERSUS M/S. GUJARAT NARMADA FERTILIZERS CO. LTD. [ 2009 (8) TMI 15 - SUPREME COURT] . Case remanded back to the adjudicating authority to ascertain the quantum of credit to be reversed / paid based upon the actual use of quantity of such input in exempted goods - appeal allowed by way of remand.

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• 2019 (6) TMI 196
  CENVAT Credit - non-existent firms - firms were declared as fake/ non-existent/ bogus/ fictitious - HELD THAT:- When all the invoices that too issued by 22 firms were given to the Appellant after endorsement, he should have verified the fact. In the light of bunch of Alert Circular issued by the department it is thus just obvious that the non-existent firms were issuing invoices in bulk to the persons just to avail fraudulent credit. It is not disputed that the credit was availed on the invoices issued by all fradulent firms who were found to be non-existent and such fraud vitiates the transaction. The invoice cannot be held valid for availing credit. The revenue should not suffer on account of such mass fraud. None of the above steps to ensure legal payment of duty by the person issuing invoice were taken by the Appellant and hence they are liable for consequence of the same. The credit is thus not available to them. Moreover looking to the aspect that in all the invoices were received from 22 firms were found to be non-existent, which came to notice of the department only after investigation and this cannot be a mere co-incidence. This means that it was modus operandi for passing and receiving fraudulent credit by issuing invoices to cause massive loss to the exchequer. The Appellant did not fulfill the obligation cast upon them and the fraud came to the knowledge only after investigation which means that the situation of passing of and availing fraudulent credit was so grave that it led to issue of number of Alert Circulars by the department. Appeal dismissed - decided against appellant.

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• 2019 (6) TMI 195
  Refund of CENVAT Credit - there is an ongoing controversy that credit in respect of inputs used in manufacture of goods exported under DFIA Scheme is not available - time limitation - HELD THAT:- In the present case the Appellant had reversed credit as the similar asessees were facing issues from the department and therefore even though not agreeing to such view taken by the revenue, being law abiding assessee, the reversal was made. Hence it is not the case that the Appellant without any reason debited the credit amount. Further only when the position became clear they applied for refund. The claim of the Appellant is not time barred and they are entitled for the refund. However as the Appellate Commissioner has not given his findings on eligibility of refund on merits i.e whether the Appellant are otherwise eligible for the credit in the light of the FTP Scheme, we consider it appropriate to remand back the matter to the Appellate authority for deciding this limited aspect. Appeal allowed by way of remand.

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• 2019 (6) TMI 194
  CENVAT Credit - input services - insurance related services - HELD THAT:- The services of insurance as found from the list are integral to the safety. The value of plant and machinery running into thousands of crores are required to be safeguarded against various risks. Without such insurance services in case of any mis -happening, the enterprise would be at great loss and can never re-start its operations. We also find that the cost of such services stands included in the cost of production/ value of goods as certified by the Cost Accountant. There are no doubt that the services are integral part of cost of goods manufactured and would merit classification as Input Service . Unless and until a business is safeguarded against risk and losses it cannot work continuously. The Appellant are eligible to avail credit of service tax paid on Insurance Services as all are related to secure the plant and machinery and thus merit consideration as Input Services - appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 193
  Clandestine removal - Pan Masala, Mouth Freshner and Chewing Tobacco - Compounded Levy Scheme - case of appellant is that SCN is issued on the basis of assumptions and surmises - HELD THAT:- The goods found in possession of the Appellant were manufactured by the said company and even if the Appellant had obtained the goods from somewhere else and not from the company, the duty on the said goods had been received by the Revenue under the compounded levy scheme. In any case, Central Excise duty is required to be paid by the manufacturer and since the Appellant is not the manufacturer of the said goods, duty cannot be recovered from the Appellant. Further, it has been recorded by the Commissioner (Appeals) that there is no evidence on record to show that the Appellant had manufactured the said goods. Department is of the view that the Appellant had gotten the impugned goods manufactured from somewhere else and was operating under the guise of being a simple trader. However, since the Department has failed to bring any evidence on record to establish that the Appellant was indeed manufacturing the said goods or getting the same manufactured from some other manufacturing unit, the burden of discharging Central Excise duty cannot be harnessed on the Appellant - I disagree with the findings of the Commissioner (Appeals) that since the Appellant (not being the manufacturer) was unable to submit documentary evidence of purchase of the impugned goods, the onus of proving the duty payment of the said goods shifted onto the Appellant. The investigating authority has neither proven that the goods were being manufactured by the Appellant nor established that the goods could not have been procured from the open market. Since, there is no evidence to the contrary, I accept the contention of the Appellant that the goods had been procured before the ban on sale of Chewing Tobacco and since the Appellant could not trade in the impugned goods pursuant to the ban, the goods were simply lying at the Appellant s premises. Appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 192
  CENVAT Credit - clearance of Dissolved Acetylene Gas cleared by them from their factory under N/N. 82/84-CE, dated 31.03.1984 (as amended) without payment of duty - It is the case of the Revenue that since the appellant cleared these products without payment of duty, claiming exemption under notification No. 82/84-CE, they have to pay an amount as per Rule 6(6) of CCR 2004 - HELD THAT:- In the present system, the Central Excise duty is leviable on all excisable goods which are manufactured or produced at the rates set out in the schedule to Section in Central Excise Tariff Act 1985 read with any exemption notification. The exemption notifications provide for either full exemption or partial exemption. Further, they can provide for either conditional exemption or unconditional exemption. If the exemption notification is an unconditional one, it applies to all persons and all clearances. If it is a conditional one, it applies to such persons and clearances as may meet the conditions. A person who is entitled to the exemption may chose not to fulfil the conditions and not to claim the exemption notification also. Further, it is also possible that the same person may clear the same goods, some claiming a conditional exemption and others without conditional exemption and paying duty. In the present case, the condition of the exemption notification 82/84-CE as amended is that the assessee has to get a certificate from the jurisdictional Asst. Commissioner or Dy. Commissioner and that they have to follow the procedure set out in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001. To the extent the goods are cleared availing the benefit of this exemption, they are fully exempted and not otherwise. Where there is an exemption notification, exempting the goods from payment of Central Excise duty, the Hon ble High Court of Gujarat in the case of MICRO MELT (P) LTD. VERSUS CCE AND CUSTOMS [ 2011 (7) TMI 853 - GUJARAT HIGH COURT] held that the question of remission does not arise. In the present case, anyway, the provisions for remission themselves do not exist. The appellant, having cleared the goods on claiming full exemption from payment of duty, are not entitled to CENVAT Credit to that extent and are required to reverse CENVAT Credit or pay an amount as per Rule 6 of CCR 2004 - appeal dismissed - decided against appellant.

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• 2019 (6) TMI 191
  Incidence of Central Excise Duty - goods manufactured but not cleared as they were destroyed - Whether the appellants were liable to pay duty on the goods which they had manufactured but had not cleared as they were destroyed during the Hudhud cyclone or whether it is sufficient that the appellant had reversed the CENVAT Credit taken on the inputs which have gone into the manufacture of such products? - HELD THAT:- Central Excise duty is a tax levied on the manufacture of goods. Section 3 of Central Excise Act is the charging section which states that there shall be levied and collected a duty of excise to be called CENVAT on all excisable goods which are produced and manufactured in India. Therefore, the levy of Central Excise Duty comes from the manufacture itself. Once the goods are manufactured, levy applies. When it is the duty become payable? - Rule 4 of Central Excise Rules, 2002 - HELD THAT:- While the duty becomes leviable, as soon as the goods are manufactured or produced, it becomes payable when they are removed from the place where they are produced or manufactured. When should be duty which is payable, to be paid? - Rule 8 of the Central Excise Rules 2002 - HELD THAT:- The levy of duty would be as soon as the goods are manufactured or produced. But the duty becomes payable only if the goods are removed from the factory and the duty so payable has to be paid only by 5th to 6th of next month. In the absence of any specific legal provision, duty cannot be demanded on the goods which are lost or destroyed in the factory. It does not matter whether the assessee has sought remission or not. The duty, though leviable, does not become payable in such cases and there is no date by which the said duty has to be paid - the demand of CENVAT Credit on the lost/destroyed goods treating them as final products, is not sustainable. As far as CENVAT on the inputs contained in the final products is concerned, the same has already been reversed by the appellant and he is not contesting the same. Demand set aside - appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 190
  Clandestine removal - M.S. Ingots - process loss of Ingots - demand based on consumption of electricity - HELD THAT:- No experiment had been conducted in the factory of the appellant for arriving at the consumption norm of electricity in the factory of the appellant, it can only be stated that strong suspicion exist against the appellant concerning clandestine removal on the same but the same could not be substantiated. As has been held in the case of COMMISSIONER OF C. EX., MEERUT-I VERSUS RA CASTINGS PVT. LTD. [ 2010 (9) TMI 669 - ALLAHABAD HIGH COURT] , the entire case appears to have been based on assumption presumption and it is a settled principle of law that suspicion howsoever strong cannot take place of proof - Further as has been held in COMMISSIONER OF C. EX., MEERUT-I VERSUS RA CASTINGS PVT. LTD. [ 2010 (9) TMI 669 - ALLAHABAD HIGH COURT] , tax is on manufacture and it is to be proved beyond doubt that the goods have been actually manufactured, which are subjected to excise duty. Unfortunately, no positive evidence is coming on record to that effect. Unfortunately, no positive evidence is coming on record to that effect. Article 265 of the Constitution of India says that no tax shall be levied or collected except by authority of law. Unless the manufacture of the steel ingots is proved to the hilt by authentic, reliable and credible evidence, duty cannot be demanded on the basis of hypothesis and theoretical calculations, without taking into consideration the ground realities of the functioning of the factories. High consumption of electricity by itself cannot be the ground to infer that the factories were engaged in suppression of production of steel ingots. Appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 189
  Refund of excess duty paid - rejection on the ground of time bar - HELD THAT:- The appellant had initially filed the refund claims on 15.12.2016. Undisputedly, he has filed the refund claims within the limitation period of one year. The said refund claims were returned by the refund sanctioning authority on 06.01.2017 - On perusal of this letter dated 06.01.2017, it is seen that the refund claim is returned as the same cannot be processed due to lack of documents. The said letter does not mention the date by which the appellant can resubmit the refund claims along with necessary documents. Further, it has to be stated that the said letter dated 06.01.2017 does not reject the refund claims on any ground. It is not an order in which the refund sanctioning authority has applied his mind for reaching a decision. The refund claims have been merely returned to the appellant. When the refund claims have been returned and not rejected and when they have been filed again, such filing has to be considered as resubmission of the refund claims and not as fresh refund claims. The refund claims in these appeals, which are resubmitted by the appellant, are not barred by limitation. Hence, the matter is remanded to the refund sanctioning authority who shall decide these claims on merits - Appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 188
  Imposition of penalty u/s 11AC of the Central Excise Act, 1944 - violation of valuation rules - intent to evade present or not - for removal of semi finished goods to the sister units, the appellant did not follow the procedures/guidelines laid down under Section 4(1)(b) of the Act read with Rule 8 of the Valuation Rules, 2000 - HELD THAT:- D uring the Financial Years 2008-09 to 2010-11, the appellant had paid duty on higher side initially as compared to CAS-4 certificates prepared after finalization of the accounts. Thus, it is not the case of revenue that the appellant is a wilful defaulter and non-payment of duty within the stipulated time for the disputed period can be owing to the reason of fraud, collusion, wilful mis-statement etc., with intent to evade the Government Revenue. The differential amount was deposited by the appellant much prior to the date of issue of the show cause notice. In context with finalization of CAS-4, the CBEC issued instructions from file F.No. 206/10/2017-CX.6 dated 16.12.2017, clarifying that the certificate of cost data can be prepared based on actual data by 31st of December next year. In this case, since the CAS-4 certificate was prepared based on actual cost data for the period 2011-12 and 2012-13 on 18.12.2012, the said clarification of the CBEC covers the case of the appellant. Penalty set aside - appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 187
  Fraudulent availing and transfer of CENVAT credit - personal penalty on appellant - HELD THAT:- The allegation against the Appellant Pankaj Bansal, Director of M/s Shivangi Rolling Mills Pvt. Ltd has been established after detailed analysis of evidence on record by the authorities below. No contrary evidence has been placed by the Appellant to absolve himself from the allegation of his involvement in the fraudulent transfer and availing of CENVAT Credit. The imposition of personal penalty on the Appellant is justified - penalty reduced to Rs. 1,50,000/- - appeal allowed in part.

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• 2019 (6) TMI 186
  CENVAT Credit - Bagasse Press-mud - Rule 6(3) of the Cenvat Credit Rules, 2004 - period covered is from 01st March, 2015 to July, 2015 - HELD THAT:- It was held in appellant s own case in Hon ble Supreme Court s decision in the case of UNION OF INDIA VERSUS DSCL SUGAR LTD. [ 2015 (10) TMI 566 - SUPREME COURT] that Press-mud Bagasse are not arising out of manufacturing activity and the same are agriculture Waste Residue. Appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 185
  CENVAT credit - input services - Air Travel Agent Service - Courier Service - Outdoor Caterer s Service - HELD THAT:- The admissibility of cenvat credit on Courier services and Air Travel services has been allowed - Credit allowed. Outdoor Caterer s Service - HELD THAT:- For the limited purpose of verification of the fact whether the appellant had collected any charges from their employees in providing Canteen Service, the matter is remanded to the adjudicating authority - matter on remand. Appeal allowed in part and part matter on remand.

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• 2019 (6) TMI 184
  Penalty u/r 209A of the erstwhile Central Excise Rules, 1944 on appellant who died - Clandestine removal by the proprietorship firm M/s. Suraj Machine Tools - HELD THAT:- Hon ble Apex Court in the case of SHABINA ABRAHAM AND OTHERS VERSUS COLLECTOR OF CENTRAL EXCISE CUSTOMS [ 2015 (7) TMI 1036 - SUPREME COURT] wherein it has been held that no proceedings can be initiated against the dead person as it amounts to violation of principles of natural justice inasmuch as the dead person who is proceeded against is not alive to defend himself. Further as per Rule 22 of CESTAT (Procedure) Rules, the appeal shall abate on the death of the appellant unless an application is made for continuation of such proceedings by or against the successor in interest, executor, administrator, receiver, liquidator or other legal representatives of the appellant or applicant or respondent, as the case may be. The present appeal abates on the death of the appellant on whom only penalty was imposed under Rule 209A of the erstwhile Central Excise Rules, 1944 - appeal disposed off.

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• 2019 (6) TMI 183
  Refund of excess excise duty - period October, 2002 to March, 2003 - unjust enrichment - HELD THAT:- The appellant has not been able to prove that the burden of said duty has not been passed on to the ultimate customers leading to the establishment of unjust enrichment to the appellant. The same is considered as the sufficient ground to hold the appellant to not to be eligible for the refund. The matter may be remanded back again to the original adjudicating authority to take into consideration the relevant evidence including C.A. Certificate - appeal allowed by way of remand.

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• 2019 (6) TMI 182
  CENVAT Credit - capital goods sold as scrap and waste - Rule 3 (5A) of the CCR, 2004 - time limitation - suppression of facts or not - HELD THAT:- As per the stand of Revenue, the capital goods have been sold as scrap and waste and that is why they have invoked Rule 3(5A) of the CCR, 2004 to demand duty on transaction value. Further, perusal of the invoices on record show that the appellants have not sold capital goods as waste and scrap, in fact, the capital goods have been sold after use. Further, it has not been established by the Revenue that the appellants have availed CENVAT credit on these capital goods which needs to be reversed on its sale unless it is established that the appellants have availed CENVAT credit, the demand for reversal of CENVAT credit does not arise. Time limitation - suppression of facts or not - HELD THAT:- There is no suppression on the part of the appellant with intent to evade payment of duty because the entire demand has been raised based on the documents furnished voluntarily by the appellant during the course of enquiry - extended period cannot be invoked. The impugned order is not sustainable on merit as well as on limitation - appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 181
  Refund of CENVAT credit unutilized and accumulated credit - input services - C F charges for export of goods - place of removal - HELD THAT:- The CENVAT credit is denied on C F charges for export of goods up to Chennai Port on the ground that port of export is Bangalore ICD and not the Chennai Port by relying upon the Board s Circular No.999/6/2015-CX dt. 28/02/2015 - in the present case, as per the Bill of Lading, the port of loading is the Chennai Port and not the ICD Bangalore. It has been consistently held by the Tribunal that in the case of export of goods, port is the place of removal where the actual loading of goods happens and till that place, all the services fall in the definition of input services and are eligible for cenvat credit. Refund allowed - appeal allowed - decided in favor of appellant.

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• 2019 (6) TMI 180
  Refund claim - duty paid under protest - whether Chambal Fertilizers have to discharge duty liability on the MRP fixed by the Government for Urea for the period March, 2011 to October, 2012 and November, 2012 to April, 2013 or it should discharge duty liability on the transaction value which is the difference arrived at by deducting the commission of the dealer from the MRP? HELD THAT:- The Central Government regulates the price at which Urea is sold and as the policy of the Government is to provide fertilizers to farmers at an affordable price for sustained agricultural growth, the MRP fixed by the Government is lesser than the cost of production. The Government, therefore, reimburses the value between the cost of production and the notified price in the form of a subsidy. Urea is sold to the farmers through a network of dealers. The dealers pay an amount to the Appellant after deducting their commission from the MRP fixed by the Government. Chambal Fertilizers has been discharging its Service Tax liability on the amount arrived at after deducting the commission of the dealer from the MRP. The case of the Department is that Chambal Fertilizers should discharge its Service Tax liability on the MRP fixed by the Government and not on the value it sells Urea to the dealers. Thus, what is required to be examined is whether the Chambal Fertilizers should pay Service Tax on the transaction value as contemplated under section 4 of the Act or on MRP as contemplated under section 4A of the Act. It is not in dispute that Urea was sold by Chambal Fertilizers at a price arrived at after deducting the commission of the dealer from the MRP. It would be this price on which Urea was actually sold to the dealer. This would, therefore, be the transaction value under section 4 of the Act on which value Chambal Fertilizers would be liable to pay Excise Duty. M/s. Chambal Fertilizers was required to pay Excise Duty only on Transaction Value and not on MRP . Such being the position, the refund claim filed by M/s Chambal Fertilizers could not have been rejected. This refund claim is, therefore, required to be examined afresh after considering the issue of unjust enrichment which was not considered by the Assistant Commissioner for the reason that the amount of Excise Duty was found to be correctly deposited. The matter needs to be remitted to the Assistant Commissioner for passing a fresh order on the refund claim after examining whether there has been unjust enrichment - appeal allowed by way of remand.

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• 2019 (6) TMI 165
  CENVAT Credit - inputs - denial of credit on the ground that they were unable to prove any manufacturing activity - HELD THAT:- When two lower adjudicating authorities had come to a finding on facts that the respondent assessee was not entitled to Cenvat Credit on inputs, there was a higher burden on the Tribunal to consider all the facts and evidence in the records and come to a reasonable finding. We feel that more reasons were required to be advanced by the Tribunal to reverse the said findings of the adjudicating authorities. This itself gives rise to a substantial question of law. Matter remanded back to the Tribunal to decide the case afresh after hearing the parties and by a reasoned order within six months from the date of communication of this order.

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• CST, VAT & Sales Tax

• 2019 (6) TMI 179
  Alternative statutory remedy of appeal - Punjab Value Added Tax Act, 2005 - HELD THAT:- The disputed questions of fact have been sought to be raised in the writ petition. Further, the petitioner has an alternative efficacious remedy of appeal against the impugned order(s). The Apex Court in COMMISSIONER OF INCOME TAX OTHERS VERSUS CHHABIL DASS AGARWAL [ 2013 (8) TMI 458 - SUPREME COURT] , elaborately considered the question of entertaining writ petition where alternative statutory remedy was available. Keeping in view the availability of alternative remedy of appeal against the impugned order and the law laid down by the Apex Court on the issue, there are no ground to interfere in exercise of writ jurisdiction under Articles 226/227 of the Constitution of India - petition disposed off.

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• 2019 (6) TMI 178
  Tax liability - Jute Sutli imported by the applicant from Nepal - Enhancement of tax liability - rejection of books of accounts and disclosed turnover - HELD THAT:- This Court has considered the meaning of word Yarn . Word Yarn has not been defined either in the Act or Rules or in the notifications. Yarn means Sute. A fibre in order to answer the description of the yarn in the ordinary commercial sense must have two characteristics: Firstly it should be spun strand. Secondly such strand should be primarily meant for use in weaving, knitting or rope making. Whether the Jute Sutli is Yarn or not? - HELD THAT:- In common parlance Jute Sutli as is found is used mainly for the purpose of Tat, Patti or Bags etc. It is not disputed that the Sutli is made of Jute and is Yarn. In this connection it may also be mentioned here that subsequently the State Government has issued a notification dated 7th October 2002 imposing the tax on Tat, Patti or Bags made from Jute, Sutli or Jute Yarn at the rate of 5% - The notification dated 7th October 2002 is clarificatory in nature. In the notification dated 15th January 2000 the word Sutli or Jute Yarn are missing however, in the subsequent notification dated 7th October 2002 the words Sutli or Jute Yarn are included. Revision petition allowed.

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• 2019 (6) TMI 177
  Recall of assessment/demand - Section 38(5)(b) of the Karnataka Value Added Tax Act, 2003 - petitions was opposed mainly contending that the conduct of the petitioner disentitles him to the discretionary remedy in extraordinary jurisdiction - HELD THAT:- The reliance placed by the petitioner on the decisions enlisted in the writ petitions do not come to his aid in the absence of any explanation having been offered for not putting the order dated 03.05.2013 in challenge. He has rushed to the Writ Court only after the Magistrate Court has issued the Accused Summons on 16.01.2018 at Annexure-K. Even there he has brooked delay in as much as the petition is filed on 27.07.2018. Prima facie, petitioner does not appear to be a scrupulous tax payer. No other ground having been urged, these writ petitions being devoid of merit fail. Petition dismissed.

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• 2019 (6) TMI 176
  Rectification of errors - Section 66 of the Kerala Value Added Tax Act, 2003 - error apparent on the face of record or not - HELD THAT:- This Court has no difficulty in appreciating the submissions made by the Government Pleader. The merit in these submissions is dependent on the objections raised by a party and how they are dealt with by the authority. The order of the authority ought to reflect how it is considered the errors pointed out - It is sufficient to hold that the orders now impugned in these two writ petitions suffer from too much of brevity and the orders do not attempt to refer to any of the errors pointed out by the petitioner/assessee. Exts.P5 and P6 orders made under Section 66 are set aside. The matter remitted to first respondent for fresh consideration in accordance with law. Petition allowed by way of remand.

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• 2019 (6) TMI 175
  Time Limitation - relevant date - starting point of limitation is from the date of detection of fraud or not - HELD THAT:- The counsel for the petitioner does not object to availing the remedy under Section 59 of the Act but contends that having regarded to a question of importance by way of limitation is raised by the petitioner, the interest of the petitioner is reasonably protected keeping in view the swift decision taken through Ext.P7. The petitioner can be relegated to work out the relief available under Section 59 within four weeks from today by enclosing a copy of this order and this Court directs that no coercive step is taken by the respondents pursuant to Ext.P7 till the revision is disposed of and order communicated to the petitioner. Petition disposed off.

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• 2019 (6) TMI 174
  Recovery of the tax assessed with respect to the year 2000-2001 - KGST Act - HELD THAT:- The assessment finalized with respect to the year 2000-2001 is within time. We take note of the fact that, Ext.P13 is a composite notice with respect to the year 1999-2000 also. There is no challenge raised with respect to the said assessment contending question of limitation. The only contention raised against the demand for the said year is that the amounts already paid was not given credit. The appellant had raised a contention that, the appeal referred to in Ext.P3 judgment has not been disposed of and no order in that respect has been communicated to him. There is no merit in the contention that the revenue recovery steps cannot be pursued with respect to the said year. However, if due credit has not been given to the interim payments made, it will be left open to the appellant to point out the same before the recovery authorities and to seek set off. Appeal dismissed.

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• Indian Laws

• 2019 (6) TMI 173
  Waiver of the condition of deposit - Negotiable Instruments Act - SARFAESI Act - HELD THAT:- Petitioner at no point of time had made any grievance that the trial in this case was not conducted in a summary way. So, there is no basis to urge that fine of more than Rs.5000/- cannot be imposed - The direction issued by the Appellate Court to make pre-deposit of 20% of fine amount is justified. However, the consequence of non-deposit of fine, entailing cancellation of petitioner s bail is onerous one. Instead thereof, it is directed that if pre- deposit of 20% fine amount is not made by petitioner within six weeks from today, then petitioner s appeal be not entertained. This petition and applications are dismissed with cost of Rs.25000/- to be paid by petitioner to respondent at the time of hearing of the appeal, if the pre-deposit is made by petitioner within the above stipulated time.

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• 2019 (6) TMI 172
  Dishonor of Cheque - admissibility of evidence - Section 65B of the Indian Evidence Act - HELD THAT:- Legal position on the point is thus well settled that is if the document is otherwise inadmissible for want of a certificate or any other requirement of law, it being exhibited in the course of trial does not make the document admissible in law and though an objection as to the mode of proof can be waived off and should be taken at the first instance, however the objection as to the admissibility of a document which goes to the root of the matter can be taken at any stage. Considering the facts noted particularly because the petitioner has not been able to prove the legal liability findings of the learned Metropolitan Magistrate cannot be said to be perverse warranting interference of this Court. Leave to appeal petition is dismissed.

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