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TMI Tax Updates - e-Newsletter
July 10, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
FEMA
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Levy of GST - job-work - Whether the processing of goods belonging to another person qualifies as job work even if it amounts to manufacture? - Held Yes
Income Tax
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Estimation of income of the assessee who was working as Priest - mere retraction of statement without explaining circumstances as well as corroborating evidence, it cannot be accepted being an after thought.
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Reopening of assessment - validity of reasons to believe - Just by stating 'absence of information', the Respondent revenue cannot get over the jurisdiction bar. - notice u/s 148 is without jurisdiction.
Service Tax
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Refund of unutilized Cenvat credit - intermediary services in terms of Rule 2(f) of Place of Provision of Rules, 2012 - POPOS Rules - location of service provider - since the appellant is not intermediary service provider, service tax was not payable on reverse charge basis - refund allowed.
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Penalty u/s 78 - suppression of facts - when mandatory penalty is imposable, whether the duty is paid before issue of show cause notice or after notice cannot alter the penalty.
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Liability of Service tax - the words used were the ‘laundry services’ and there is no evidence or investigation report to show that under the garb of laundry services dry cleaning services were provided by the appellant and hence they are chargeable to service tax - demand set aside.
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Valuation - re-trading charges - Section 67 does not include the cost of parts or other material, if any, sold to the customer during the course of providing maintenance or repair service.
Central Excise
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Refund of duty paid in cash - appellant not in the position to utilize the Credit as the factory was closed - Refund allowed to the extend of credit that could have been utilized.
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Cenvat Credit - The denial of the facility of reversal of proportionate credit is not consistent with law. The appellant is entitled to such reversal as an alternative to payment of 6% of the value of exempted goods.
VAT
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Denial of input tax credit - the registrations of the dealers from whom the assessee had made purchases, were cancelled with retrospective effect - when the purchases made by the appellant from such dealers themselves were found to be nongenuine, credit cannot be allowed.
Case Laws:
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GST
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2018 (7) TMI 511
Levy of GST - job-work - Supply of coal or any other inputs on a job work basis by JSL to JEL - Supply of power by JEL to JSL - Job work charges payable to JEL by JSL - whether the transaction between Appellant and JSL qualifies as 'Job Work'?. Whether the processing of goods belonging to another person qualifies as job work even if it amounts to manufacture? Held that:- Since M/s JSL are not the applicant in the proceedings, the ruling sought by M/s JEL on behalf of M/s JSL was not entertained. In respect of ruling sought by the applicant i.e. M/s JEL regarding conversion of coal (to be supplied by M/s JSL) into electricity, the Authority decided the same as supply of goods and not as job work. The main ground for decision of the Authority lies in the fact that definition of Job Work covers 'process and Treatment' on goods, whereas in the instant case the operations carried out by M/s JEL are beyond the process and treatment, and thus not covered under the definition of Job Work. Whether, given the preposition that the definition of job work under the GST law may include even manufacture, the process of conversion of Coal into electricity by M/s JEL on behalf of M/s JSL is job work by M/s JEL or not? - Held that:- On a harmonious reading of the definition of Job Work and the procedure for the same, it is construed that the principal will send the inputs to the job worker for conducting any treatment/process/ which may, or may not amount to manufacture) and shall bring back the same after completion of job work or otherwise Therefore the goods sent to the job worker should be the Inputs of the Principal here. M/s JSL are proposing to be the Principal, so the Inputs should belong to them. The inputs being utilized by M/s JSL for the manufacture of their final product i.e. Steel are not the same which they intend to send to M/s JEL for undertaking process on the same. Rather they are proposing to procure the steam coal which are inputs for the power plant of M/s JEL, the job worker and Intend to avail the credit of duty on the same which is otherwise not available to M/s JEL as their final product, i.e. electricity, does not fall in the ambit of the GST law - Assuming that the steam coal is also an input for M/s JSL as the same is utilized in the manufacture of Electricity which is finally used In the manufacture of final products of M/s JSL, the question arises how the requirements of Section 143 are met with regard to bringing back the Inputs after process/treatment on the inputs, as the inputs in this case are consumed in making electricity. The activity undertaken by M/s JEL to convert Coal, to be supplied by M/s JSL, in electricity is not covered under the definition of Job work in terms of the CGST Act. Since goods supplied by M/s JSL will be utilized by M/s JEL in manufacture of new commodity i.e. electricity (though attracting NIL rate of duty), the process is manufacture and the same will be considered as supply of goods and not service. Ruling:- The processing undertaken by a person on the goods belonging to another registered person qualifies as job work even if it amounts to manufacture provided all the requirements under the CGST/MGST Act in this behalf, are met with. The Transaction between Appellant and M/s JSL does not qualify for job work under Section 2(68) and section 143 of the said Acts.
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Income Tax
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2018 (7) TMI 510
Claim as interest expenditure as business expenditure - allowable deduction u/s 36(1)(iii) - interest on funds borrowed to purchase land which is part of inventory of the assessee company - Held that:- No merit in this petition. The Special Leave Petition is accordingly dismissed.
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2018 (7) TMI 509
Deduction u/s 10AA - activity which has been carried out by the assessee was not manufacturing activities and rather it was trading - Not only profits and gains of manufactured goods but also trading of goods are allowed for getting the exemption u/s 10AA - Held that:- No merit in these petitions. The Special Leave Petitions are, accordingly, dismissed. However, the question of law as to Section 10 AA of the Income-Tax Act not referring to trading but only manufacture as a service is left open.
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2018 (7) TMI 508
Deductions u/s.80IB(10) - income computed as income from other sources - Held that:- We are not inclined to entertain this special leave petition in exercise of our jurisdiction under Article 136 of the Constitution of India. The special leave petition is accordingly dismissed.
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2018 (7) TMI 507
Addition u/s 68 - unexplained cash credit - assessee had failed to establish the creditworthiness of the subscribers and even genuineness of the transactions - Held that:- The Special Leave Petition is dismissed.
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2018 (7) TMI 506
Provisions regarding payment of gratuity - Held that:- Special Leave Petition is dismissed on the ground of delay as well as on merits.
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2018 (7) TMI 505
Reopening of assessment - reasons to believe - questions as examined by the Assessing Officer in original assessment - Held that:- SLP dismissed.
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2018 (7) TMI 504
Disallowance of interest - advances to sister concerns - business income - Held that:- No ground to interfere with the impugned order(s) - Special leave petitions are accordingly dismissed.
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2018 (7) TMI 503
Exclusion of comparables on the grounds of functional dissimilarity - method for comparables analysis was the Transaction Net Margin Method - substantial question of law - Held that:- SLP dismissed.
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2018 (7) TMI 502
Addition u/s 68 - burden of proving the identity and creditworthiness of the creditors and the genuineness of the transactions - Held that:- SLP dismissed.
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2018 (7) TMI 501
Application of income for non-charitable purposes - Shares held by the Assessee in the Delhi Guest House Pvt. Ltd. (‘DGHPL’) - conversion of the property from lease hold to free hold, of the entity whose shares were held by the Assessee - Held that:- SLP dismissed.
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2018 (7) TMI 500
Reopening of assessment - accrual of income - unexplained cash received - difference between sale deed and sauda chitthi as received by the assessee in cash - Held that:- The special leave petition is dismissed on the ground of delay as well as on merits. HC case confirmed [2017 (3) TMI 114 - GUJARAT HIGH COURT]
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2018 (7) TMI 499
Addition u/s 68 - notices never came to be issued to 11 creditors - Held that:- From the impugned order of the High Court, we find that the High Court has remitted the case to the Assessing Officer to examine and decide the matter afresh on the basis of the material adduced on record by the respective parties, so that it is confirmed that they had advanced loan to the assessee against interest through bank channel or not. In view of this stand taken by the High Court, we are not inclined to entertain this special leave petition which is, accordingly, dismissed. As made clear that the Assessing Officer shall examine the issue afresh on the basis of material produced before it and in accordance with law notwithstanding the observations of the High Court in [2017 (5) TMI 1584 - HIMACHAL PRADESH HIGH COURT]
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2018 (7) TMI 498
Penalty u/s 271D and 271E - whether Section 245H of the Act excludes Sections 271D and 271E of the Act from the benefit of immunity by the Commission - Power of Settlement Commission to grant immunity from prosecution and penalty - Held that:- No reason to entertain this special leave petition, which is, accordingly, dismissed. Pending application(s), if any, shall stand disposed of.
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2018 (7) TMI 497
Addition u/s 68 - assessee had sold certain shares, the very purchasers were found to be bogus - Held that:- Special Leave Petitions are dismissed.
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2018 (7) TMI 496
Addition u/s 68 - notices never came to be issued to 11 creditors - Held that:- From the impugned order of the High Court, we find that the High Court has remitted the case back to the assessing officer to examine and decide the matter afresh on the basis of the material adduced on record by the respective parties, so that it is confirmed that they had advanced loan to the assessee against interest through bank channel or not. In view of this stand taken by the High Court, we are not inclined to entertain this special leave petition which is accordingly dismissed. Pending application(s), if any, shall stand disposed of. As made clear that the assessing officer shall examine the issue afresh on the basis of material produced before it and in accordance with law, independently,
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2018 (7) TMI 495
Economic Offences Court - Court at Visakhapatnam constituted as the Economic Offences Court is now functioning and taking up the matters under the Income Tax Act besides other special constituents mentioned in the notification filed by the petitioners - case pending on the file of the Special Judge of Economic Offences Court at Hyderabad stands transferred to the Economic Offences Court at Visakhapatnam - Held that:- SLP dismissed.
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2018 (7) TMI 494
Addition of excess payment of interest expenditure - making payment of interest at @ 15% instead of 12.50%? - commercial expediency - Held that:- SLP dismissed.
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2018 (7) TMI 493
Penalty u/s 271 (1)(c) - computing the revenue neutral income by the assessee as per provisions of Section 10(38) for the Long Term capital gain - carried forward as per Section 74 - bonafide belief - Held that:- SLP dismissed.
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2018 (7) TMI 492
Reopening of assessment - AO reopen the concluded scrutiny assessment based upon a satisfaction that income has escaped assessment - addition on basis of audit report - Held that:- Even if we accept the argument of the petitioner/Revenue that audit objections on the point of income can be valid to reopen the assessment, in the facts of the present case we do not find it to be a fit case for interference. The Special Leave Petition is dismissed.
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2018 (7) TMI 491
Allowable busniss expense - son of one of the directors was sent abroad for acquiring degree in 'Business Administration' and expenditure incurred for higher education was claimed as deduction which was sought to be supported by contract/agreement - direct nexus with the business activities of the Appellant-Assessee - Held that:- Amount which is claimed by the Appellants-Assessee as deductible allowance was not incurred wholly and exclusively for the purpose of business of the Appellants-Assessee. - Decided against assessee.
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2018 (7) TMI 490
Transfer pricing - cost of funds appraoch- No interest charged by the respondent for delayed payments universally i.e. from AEs and non AEs - Held that:- In cases where any business enterprise is required to pay interest on delayed payment, it would examine the cost of interest and if the same is higher then the amount of interest payable on funds obtained locally, it would take a loan from local sources and pay the amounts payable for exports and expenses within time. Therefore, extending of credit beyond the normal period of 60 days is in substance a granting of loan to an AE so as to enjoy the funds, which the AE would othewise have to repay within the perod of 60 days. The aforesaid finding of ours also finds support from the question of law at Sr. No.2 as proposed by the Revenue. Thus, in these circumstances, in the facts of this case order of the Tribunal computing interest at LIBOR rates as the rate prevailing in country where the loan is received / consumed by the AE cannot in these facts be faulted as it is in line with the decision of this Court in Tata Autocomp Systems Ltd. (2015 (4) TMI 681 - BOMBAY HIGH COURT).
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2018 (7) TMI 489
Entitled to deduction u/s 80IA without setting off the losses/unabsorbed depreciation pertaining to the windmill, which were set off in the earlier year against other business income of the assessee - Held that:- A Hon'ble Division Bench of this Court in Velayudhaswamy Spinning Mills Pvt. Ltd's case (2010 (3) TMI 860 - MADRAS HIGH COURT), held that once the losses and other deductions are set off against the income of the assessee in the previous year, it should not be re-opened again, for the purpose of computation of current year income, under Section 80-I and 80-IA of the Act. - Decided in favour of assessee.
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2018 (7) TMI 488
Addition u/s 43B - appellant was admittedly accounting for the expenditure on a cash basis - second proviso to Section 43B - P.F. contribution by employer - Held that:- The issue of the deletion of the second proviso to Section 43B now stands concluded in favour of the appellant – assessee by the decision in the case of Commissioner of Income Tax Vs. Alom Extrusions Limited (2009 (11) TMI 27 - SUPREME COURT) as held that the omission made by the Finance Act, 2003 by deletion of second proviso to section 43B would operate retrospectively from 1st April 1988 from the time it was first introduced. Thus, in the absence of the second proviso to Section 43B of the Act, the only requirement of the statute is that the payment to the various funds should be made before the filing of the return of income under Section 139(1) as required by the first proviso thereof. It is an undisputed position before us that this condition is satisfied in this case. So far as the payment of the employees' contribution to P.F. is concerned, it would also be covered by the first proviso to Section 43B of the Act. It has been so held by this Court in the case of CIT Vs. Ghatge Patil Transport Limited [2014 (10) TMI 402 - BOMBAY HIGH COURT] wherein this Court held that the Apex Court decision in the case of Alom Extrusions (2009 (11) TMI 27 - SUPREME COURT) would apply. - Decided in favour of assessee.
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2018 (7) TMI 487
Entitlement to grant of registration and to be assessed as a registered firm - change in the share of the partners in as much as the provision for salary and interest was made for the partners as required in terms of Section 40(b) - Held that:- Payment of salary and / or interest paid to a partner on account of the work he does or further amount contributed for running of the firm. It does not change the share of profits as indicated in the partnership deed. The execution of an instrument laying down the salary to be paid to the partner and / or interest to be paid to the partners for the amount contributed by them had become necessary only for the purposes of claiming benefit of Section 40(b) of the Act. It has no relevance to decide whether or not there has been a change in the constitution of the firm or share in the partners for the purposes of being assessed as a partnership firm. As the appellant firm was already assessed as a partnership firm for the earlier assessment i.e. for Assessment Year 1992-93, by virtue of subsection 3 of Section 184 of the Act, the appellant firm would continue to be assessed as a partnership firm. This is so as there is no change either in the constitution or in the share of the partners. Whether the amended section would require the assessee to file a certified copy of the partnership deed along with the return of income? - Held that:- requirement of a certified copy of the instrument of the partnership deed being filed along with the return of income for assessment years commencing from 1st April, 1993, only applies to firms which seek to be assessed as a partnership firm under the Act for the first time after 1st April, 1993. There is no warrant to restrict the meaning and the scope of subsection 3 of Section 184 of the Act. Accepting the submission on behalf of the Revenue would necessarily require reading words into subsection 3 of Section 184 of the Act to the effect that it would apply in respect of the assessment as a firm was first sought “after 1st day of April, 1993”. It is a settled position in law that fiscal statute is to be strictly construed As the appellant firm was assessed as a partnership firm prior to Assessment Year 1993-94 and as there has been no change in share of the partners, the appellant assessee would continue to be assessed as a partnership firm in the subject assessment year. Decided in favour of the appellant assessee and against the respondent revenue.
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2018 (7) TMI 486
Deduction u/s 10A - computation of claim - Held that:- Issue regarding deduction of expenditure incurred for ‘Export Turn Over’ is also required to be deducted from ‘Total Turn Over’ for the purpose of computing the deduction u/s.10A of the Act, the controversy is no longer resintegra and is covered by the decision of the Division Bench of this Court in the case of M/s.Tata Elxsi Ltd., vs. Asst. Commissioner of Income Tax, [2015 (10) TMI 634 - KARNATAKA HIGH COUR] which has been affirmed by the Hon’ble Supreme Court in the case of Commissioner of Income-tax, Central – III vs. HCL Technologies Ltd., [2018 (5) TMI 357 - SUPREME COURT].
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2018 (7) TMI 485
TPA - comparable selection - ALP - substantial question of law or fact - Held that:- The controversy involved herein is no more res integra in view of the decision of this Court in M/S. SOFTBRANDS INDIA P. LTD. [2018 (6) TMI 1327 - KARNATAKA HIGH COURT], wherein it has been observed that unless the finding of the Tribunal is found ex facie perverse, the Appeal u/s. 260-A of the Act, is not maintainable
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2018 (7) TMI 484
Deduction u/s 10A - Held that:- What is excluded from ‘export turnover’ must also be excluded from ‘total turnover’, since one of the components of ‘total turnover’ is export turnover. Any other interpretation would run counter to the legislative intent and would be impermissible. In the instant case, if the deductions on freight, telecommunication and insurance attributable to the delivery of computer software under Section 10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the Respondent which could have never been the intention of the legislature. Comparable selection criteria - Held that:- This Court in Prl.Commissioner of Income Tax & Anr. Vs. M/s.Softbrands India Pvt. Ltd. (2018 (6) TMI 1327 - KARNATAKA HIGH COURT ) has held that in these type of findings of the learned Tribunal remained final fact findings of the learned Tribunal and are binding on the lower authorities of the Department as well as this Court and unless an established ex-facie perversity is found in the findings of the learned Tribunal, the appeal u/s.260A of the Act is not maintainable.
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2018 (7) TMI 483
TPA - comparable selection - ALP - substantial question of law or fact - Held that:- The controversy involved herein is no more res integra in view of the decision of this Court in M/S. SOFTBRANDS INDIA P. LTD. [2018 (6) TMI 1327 - KARNATAKA HIGH COURT], wherein it has been observed that unless the finding of the Tribunal is found ex facie perverse, the Appeal u/s. 260-A of the Act, is not maintainable
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2018 (7) TMI 482
TPA - comparable companies Selection - substantial question of law - Held that:- This Court in Prl.Commissioner of Income Tax Anr. Vs. M/s.Softbrands India Pvt. Ltd. (2018 (6) TMI 1327 - KARNATAKA HIGH COURT ) has held that in these type of findings of the learned Tribunal remained final fact findings of the learned Tribunal and are binding on the lower authorities of the Department as well as this Court and unless an established ex-facie perversity is found in the findings of the learned Tribunal, the appeal u/s.260A of the Act is not maintainable.
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2018 (7) TMI 481
TPA - Comparable selection - substantial question of law - Held that:- This Court in Prl.Commissioner of Income Tax & Anr. Vs. M/s.Softbrands India Pvt. Ltd. (2018 (6) TMI 1327 - KARNATAKA HIGH COURT ) has held that in these type of findings of the learned Tribunal remained final fact findings of the learned Tribunal and are binding on the lower authorities of the Department as well as this Court and unless an established ex-facie perversity is found in the findings of the learned Tribunal, the appeal u/s.260A of the Act is not maintainable.
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2018 (7) TMI 480
PAN and Aadhar linking - Seeking to set aside Rule 12(3) of the Income Tax Rules 1961 - No Discretion to the Authorities under the Income Tax Act 1961(Act) to accept Income Tax returns other than electronically - Held that:- In case the system does not accept the petitioner’s return of income then in that event the petitioners are permitted to file their return of income in physical form with the Assessing officer on or before 30 June 2018. The respondents State is directed to accept the return of income for the Assessment Year 201819 by the petitioners herein if uploaded on or before 30th June, 2018 without Aadhar number, Aadhar Enrollment or any linkage with the PAN details. This is without prejudice to the rights and contentions of the state that such Returns of Income are contrary to the provisions of the Act. In case the system does not accept the Returns of Income filed by the petitioners in the absence of it quoting the Aadhar number or Aadhar Enrollment number or Linking with PAN details, then in that event the petitioners herein are at liberty to file their return of income in physical form with the jurisdictional Assessing Officer on or before 2nd July, 2018, who would accept the same. This has become necessary as we are informed that the Income Tax Office is closed on 30th June, 2018 and 1st July, 2018. The directions made in this order are restricted only to the petitioners before us. This is an interim order, without prejudice to the rights and contentions of the parties. Petition to be on board on 17th July, 2018 at 3.00 p.m. Parties to act on copy of this order duly authenticated by the Associate of this Court.
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2018 (7) TMI 479
Allowable business expenses u/s 37 - expenditure claimed against professional income disallowed - following the rule of consistency - Held that:- The principle accepted by the Revenue for 10 earlier years and 4 subsequent years to the Assessment Years 2007-08 and 2008-09 was that the entire expenditure is to be allowed against business income and no expenditure is to be allocated to capital gains. Once this principle was accepted and consistently applied and followed, the Revenue was bound by it. Unless of course it wanted to change the practice without any change in law or change in facts therein, the basis for the change in practice should have been mentioned either in the assessment order or atleast pointed out to the Tribunal when it passed the impugned order. None of this has happened. In fact, all have proceeded on the basis that there is no change in the principle which has been consistently applied for the earlier assessment years and also for the subsequent assessment years. Therefore, the view of the Tribunal in allowing the respondent's appeal on the principle of consistency cannot in the present facts be faulted with, as it is in accord with the Apex Court decision in Bharat Sanchar Nigam Ltd. (2006 (3) TMI 1 - SUPREME COURT). No substantial question of law
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2018 (7) TMI 478
Comparable selection - substantial question of law - Held that:- This Court in Prl.Commissioner of Income Tax & Anr. Vs. M/s.Softbrands India Pvt. Ltd. (2018 (6) TMI 1327 - KARNATAKA HIGH COURT ) has held that in these type of findings of the learned Tribunal remained final fact findings of the learned Tribunal and are binding on the lower authorities of the Department as well as this Court and unless an established ex-facie perversity is found in the findings of the learned Tribunal, the appeal u/s.260A of the Act is not maintainable.
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2018 (7) TMI 477
TPA - Comparable selection - substantial question of law - Held that:- This Court in Prl.Commissioner of Income Tax & Anr. Vs. M/s.Softbrands India Pvt. Ltd. (2018 (6) TMI 1327 - KARNATAKA HIGH COURT ) has held that in these type of findings of the learned Tribunal remained final fact findings of the learned Tribunal and are binding on the lower authorities of the Department as well as this Court and unless an established ex-facie perversity is found in the findings of the learned Tribunal, the appeal u/s.260A of the Act is not maintainable.
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2018 (7) TMI 476
TPA - Comparable selection - substantial question of law - Held that:- This Court in Prl.Commissioner of Income Tax & Anr. Vs. M/s.Softbrands India Pvt. Ltd. (2018 (6) TMI 1327 - KARNATAKA HIGH COURT ) has held that in these type of findings of the learned Tribunal remained final fact findings of the learned Tribunal and are binding on the lower authorities of the Department as well as this Court and unless an established ex-facie perversity is found in the findings of the learned Tribunal, the appeal u/s.260A of the Act is not maintainable.
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2018 (7) TMI 475
TPA - comparable companies selection - substantial question of law - Held that:- This Court in Prl.Commissioner of Income Tax & Anr. Vs. M/s.Softbrands India Pvt. Ltd. (2018 (6) TMI 1327 - KARNATAKA HIGH COURT ) has held that in these type of findings of the learned Tribunal remained final fact findings of the learned Tribunal and are binding on the lower authorities of the Department as well as this Court and unless an established ex-facie perversity is found in the findings of the learned Tribunal, the appeal u/s.260A of the Act is not maintainable.
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2018 (7) TMI 474
TPA - Comparable selection - substantial question of law - Held that:- This Court in Prl.Commissioner of Income Tax & Anr. Vs. M/s.Softbrands India Pvt. Ltd. (2018 (6) TMI 1327 - KARNATAKA HIGH COURT ) has held that in these type of findings of the learned Tribunal remained final fact findings of the learned Tribunal and are binding on the lower authorities of the Department as well as this Court and unless an established ex-facie perversity is found in the findings of the learned Tribunal, the appeal u/s.260A of the Act is not maintainable.
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2018 (7) TMI 473
TPA - exclude the expenditure in foreign currency from the export turnover and the total turnover for provision in section 10A - searching for comparable companies - substantial question of law - Held that:- This Court in Prl.Commissioner of Income Tax & Anr. Vs. M/s.Softbrands India Pvt. Ltd. (2018 (6) TMI 1327 - KARNATAKA HIGH COURT ) has held that in these type of findings of the learned Tribunal remained final fact findings of the learned Tribunal and are binding on the lower authorities of the Department as well as this Court and unless an established ex-facie perversity is found in the findings of the learned Tribunal, the appeal u/s.260A of the Act is not maintainable.
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2018 (7) TMI 472
TPA - exclude the expenditure in foreign currency from the export turnover and the total turnover for provision in section 10A - searching for comparable companies of the assessee under TNMM - substantial question of law - Held that:- This Court in Prl.Commissioner of Income Tax & Anr. Vs. M/s.Softbrands India Pvt. Ltd. (2018 (6) TMI 1327 - KARNATAKA HIGH COURT ) has held that in these type of findings of the learned Tribunal remained final fact findings of the learned Tribunal and are binding on the lower authorities of the Department as well as this Court and unless an established ex-facie perversity is found in the findings of the learned Tribunal, the appeal u/s.260A of the Act is not maintainable.
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2018 (7) TMI 471
TPA - Comparable selection - substantial question of law - Held that:- This Court in Prl.Commissioner of Income Tax & Anr. Vs. M/s.Softbrands India Pvt. Ltd. (2018 (6) TMI 1327 - KARNATAKA HIGH COURT ) has held that in these type of findings of the learned Tribunal remained final fact findings of the learned Tribunal and are binding on the lower authorities of the Department as well as this Court and unless an established ex-facie perversity is found in the findings of the learned Tribunal, the appeal u/s.260A of the Act is not maintainable.
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2018 (7) TMI 470
TPA - exclude the expenditure in foreign currency from the export turnover and the total turnover for provision in section 10A - searching for comparable companies of the assessee under TNMM - substantial question of law - Held that:- This Court in Prl.Commissioner of Income Tax & Anr. Vs. M/s.Softbrands India Pvt. Ltd. (2018 (6) TMI 1327 - KARNATAKA HIGH COURT ) has held that in these type of findings of the learned Tribunal remained final fact findings of the learned Tribunal and are binding on the lower authorities of the Department as well as this Court and unless an established ex-facie perversity is found in the findings of the learned Tribunal, the appeal u/s.260A of the Act is not maintainable.
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2018 (7) TMI 469
Deduction u/s.10A - directing the Assessing Officer include traveling expenses incurred in foreign currency in export turnover as well as in total turnover - Held that:- The issue raised in the present appeal with regard to the deduction of expenditure incurred for ‘Export Turn Over’ is also required to be deducted from ‘Total Turn Over’ for the purpose of computing the deduction u/s.10A of the Act, the controversy is no longer res integra and is covered by the decision of the Division Bench of this Court in the case of M/s.Tata Elxsi Ltd., vs. Asst.Commissioner of Income Tax [2015 (10) TMI 634 - KARNATAKA HIGH COURT] which has been affirmed by the Hon’ble Supreme Court in the case of Commissioner of Income-tax, Central – III vs. HCL Technologies Ltd., [2018 (5) TMI 357 - SUPREME COURT]. - Decided against revenue
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2018 (7) TMI 468
Seized material corroborates the income fixed under the head “Pooja” though seized material - whether does not disclose such income from “Pooja” - Held that:- As far as the question raised before us is concerned, we have already in the case of GOPAL S. PANDIT PROP. PANDIT DEVELOPERS VERSUS THE COMMISSIONER OF INCOME TAX [2018 (7) TMI 51 - KARNATAKA HIGH COURT] the Commissioner of Income Tax & Another’, that we are of the opinion that the same does not give rise to any substantial question of law as it is a matter of estimate based on the relevant material seized during the course of search and the statement recorded of the Assessee u/s. 132[4] of the Act as to what was the income of the Assessee who was working as Priest during the relevant period.
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2018 (7) TMI 467
TPA - include forex gain/loss as operating in nature - deduction u/s 10A - substantial question of law - Held that:- In the instant case, if the deductions on freight, telecommunication and insurance attributable to the delivery of computer software under Section 10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the Respondent which could have never been the intention of the legislature. We direct the AO/TPO to recomputed the operating margin of the assessee by considering the foreign exchange fluctuations (gain/loss) arising from export as operating in nature. Similarly, the foreign exchange fluctuations (gain/loss) on sales shall be considered as part of operating margins of comparables for the purpose of determining arm’s length price In these type of findings of the learned Tribunal remained final fact findings of the learned Tribunal and are binding on the lower authorities of the Department as well as this Court and unless an established ex-facie perversity is found in the findings of the learned Tribunal, the appeal u/s.260A of the Act is not maintainable. See M/S. SOFTBRANDS INDIA P. LTD. [2018 (6) TMI 1327 - KARNATAKA HIGH COURT]
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2018 (7) TMI 466
Assessment u/s 153A - whether Addl./Joint Commissioner while granting an approval u/s.153D to an order to be passed u/s.153A no opportunity need to be provided to the Appellant? - Held that:-Merely because, Section 153D of the Act requires a prior approval of the Draft Assessment Order by the higher Authority, namely, the Joint Commissioner in the present case, because the Assessment Order was passed by the Authority below the rank of the Joint Commissioner, the provisions of the Act do not mandate that a fresh round of opportunity of hearing should be given to the Assessee by such Authority, namely, Joint Commissioner also even for approving Draft Assessment Order. It is not a case where the Assessee did not have any opportunity of hearing before any of the Authorities to defend his case and some assessment of tax has been made against him fastening the liability of tax against the Assessee. The Assessing Authority as well as the two Appellate Authorities who have concurrent powers of assessment as are available with the Assessing Authority, have admittedly heard the Assessee on the merits of the case. No substantial question of law in this regard can be said to be arising on the basis of the office guidelines which are for internal purposes of the Department. Estimation of income of the assessee who was working as Priest - estimate based on the relevant material seized during the course of search and the statement recorded of the Assessee u/s. 132[4] - Held that:- Assessee in the statement had estimated the undisclosed income of ₹ 75 lakhs for 3 assessment years under consideration which matches the figures and amounts shown in the seized document relating to Pooja income of ₹ 35 lakhs, ₹ 20 lakhs and ₹ 20 lakhs for the Assessment Year 2006-07 to 2008-09 respectively - No ambiguity in the statement of assessee regarding the Pooja income which has been clearly corroborated by the seized material. Thus when there is a sufficient evidence seized material which corroborates the statement of the assessee recorded under Section 132(4) on 23.2.2009 then the subsequent retraction of the statement by the assessee without any corroborating evidence cannot be accepted as the assessee has not explained the statement and how the income shown in the seized material is not correct. Therefore mere retraction of statement without explaining circumstances as well as corroborating evidence, it cannot be accepted being an after thought. Undisclosed investment in Flat - Held that:- As admitted by the Assessee under Section 132 [4] proceedings, that unaccounted income of ₹ 15 lakhs was invested for the flat, pure questions of facts being analyzed by the fact finding authority, in our opinion, the same does not give rise to any substantial question of law. - Decided against assessee
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2018 (7) TMI 465
Applying Section 11 in determining the surplus income which would be subject to tax - assessment under Section 143(3) - Held that:- These issues were not a subject matter of consideration by the Assessing Officer in the earlier Assessment order dated 16th March, 1988 under Section 143(3) of the Act. Therefore, the issues now raised by the appellant-Assessee before the CIT (Appeals) could never have been raised by the appellant while challenging the earlier order. No wrong with a remedy. The purpose and object of the orders passed under the Act is to ensure that the Act is properly implemented and the Assessee is not burdened with tax which under the law, it is not obliged to pay. Thus, the finding in the impugned order dated 2nd September, 2004 in the peculiar facts of this case, that an appeal from an order giving effect to the grounds which were not raised in the earlier Appeal filed from the order dated 16th March, 1988 of the Assessing Officer under Section 143(3) of the Act is not correct. Substantial question of law is answered in the Affirmative i.e. in favour of the appellant-assesee and against the respondent-Revenue.
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2018 (7) TMI 464
Reopening of assessment - validity of reasons to believe - Held that:- Petitioner had produced all the necessary documents before the Assessing Officer. The fresh exercise is only a change of opinion. Just by stating `absence of information', the Respondent cannot get over the jurisdiction bar. The Petitioner in their reply had pointed out that all the necessary documents were produced, but that explanation was not considered. Such course of action is not permitted, in view of the language of Sections 147 and 148 of the Income Tax Act. The Respondent Commissioner thus has no jurisdiction to proceed. While passing the impugned order, the Assistant Commissioner of Income Tax has made some observations for which we have already commented upon the other decisions and copy of the decision is sent to the Principal Chief Commissioner of Income Tax. - Decided in favour of assessee
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2018 (7) TMI 463
Settlement Commission disposing of the proceedings as having abated - petitioners had taken a stand that the abatement proceedings are not valid and cannot apply so harshly as to terminate their proceedings for no fault of theirs - Held that:- By the time the commission took up the applications for settlement for further hearing, the law was made sufficiently clear by virtue of declaration by Bombay High Court in case of Star Television (2009 (8) TMI 86 - BOMBAY HIGH COURT) and approval of such view of Bombay High Court by the Supreme Court.[2015 (4) TMI 19 - SUPREME COURT] When the Settlement Commission was therefore taking up the applications for settlement for further hearing, it was obliged to apply such law. If the proceedings were delayed due to the reasons attributable to the applicants, the provision for abatement would apply but not otherwise. The Settlement Commission has not recorded any such finding. The department has not brought any facts to our notice to permit any further inquiry in this respect by the Settlement Commission. In plain terms therefore there is no material before us to hold that the application for settlement of the present petitioners were belated due to the reasons attributable to the petitioners. The impugned order of the Settlement Commission is set aside. The proceedings are revived
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2018 (7) TMI 462
Levy of penalty u/s. 271(1)(c) - huge cash deposited in bank account - as per CIT-A concrete information procured from Enforcement Directorate and CBI wing of the Department was available with Assessing Officer regarding routing of money - Held that:- Addition sustained by the CIT(A) is merely by estimation of income made by the Assessing Officer. Assessing Officer proceeded to levy penalty u/s. 271(1)(c) on the basis of the findings under the quantum proceedings and had not independently examined the matter in the penal proceedings for levy of penalty u/s. 271(1)(c). Even on this procedural count, the penalty levied cannot be sustained. Though the CIT(A) had sustained the addition, the assessee had not filed any appeal against that order, that by itself does not prove that there is any conclusive material to suggest that the assessee has earned additional income determined by the Assessing Officer. Penalty cannot be levied in this kind of situation. The addition was only on account of assessment of income on the deposits made into the account of the assessee’s bank. The assessee could not prove that there was willful or gross negligence on the part of the assessee, resulting thereby the assessee concealed the income to that extent. There was no deliberate concealment on the part of the assessee. - No penalty levy - Allahabad High Court in the case of CIT vs. Raj Bans Singh (2004 (8) TMI 73 - ALLAHABAD HIGH COURT), that when income is estimated by different authorities right from Assessing Officer to Tribunal and it was a simple case of one estimate against another estimate, and therefore, penalty cannot be levied. - Decided in favour of assessee.
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Customs
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2018 (7) TMI 458
Withdrawal of SLP - petitioner submits that he will be filing a Review Petition before the High Court as the High ourt has committed an error on facts - Held that:- Permission granted - SLP is dismissed as withdrawn with the aforesaid liberty.
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2018 (7) TMI 457
Valuation - export of goods - Section 14 of the Customs Act, 1962 - the decision in the case of HIRA - Held that:- We see no merit in this appeal and the same is, accordingly, dismissed with no order as to costs.
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2018 (7) TMI 456
Principles of Natural Justice - Detention of Mushtaq Abubakar Sayed - Smuggling - Gold - Section 3(1) of the COFEPOSA Act - non-application of mind - it is the case of petitioner that the detaining authority has not considered the documents in piecemeal and has issued the order of detention on the basis of the material on record and on the basis of the documents placed before him which were relied upon for issuing the order of detention. Held that:- It was expected from the detaining authority to come out with the clear explanation and details as to which documents were forwarded and in what number to the detaining authority from time to time. It is pertinent to note that the affidavit is silent in that regard. The entire approach of the detaining authority shows total non-application of mind and it is apparent that the orders of detention were issued against 4 detenus in most casual and cavalier manner. The exercise of powers under the law of preventive detention cannot be exercised in such manner. The Petitioners had submitted that the detaining authority could not have applied its mind to the documents due to paucity of time as the volume of material was sent from time to time by the sponsoring authority in Mumbai to its head office in Delhi from where it was forwarded to the detaining authority. It was observed that the movement of documents from one office to another and to the detaining authority would clearly show that the authority had ample time to apply its mind to the question of expediency of making an order of detention. It's a settled law that liberty of citizen cannot be dealt with casually by clamping order of detention and the powers of preventive detention are to be exercised cautiously and without violating the freedom of the citizen and personal liberty guaranteed under the constitution - the issuance of the order of detention against the detenu suffers from nonapplication of mind, which is required to be set aside. Petition allowed.
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2018 (7) TMI 455
Principles of Natural Justice - Detention of Mushtaq Abubakar Sayed - Smuggling - Gold - Section 3(1) of the COFEPOSA Act - non-application of mind - it is the case of petitioner that the detaining authority has not considered the documents in piecemeal and has issued the order of detention on the basis of the material on record and on the basis of the documents placed before him which were relied upon for issuing the order of detention. Held that:- It was expected from the detaining authority to come out with the clear explanation and details as to which documents were forwarded and in what number to the detaining authority from time to time. It is pertinent to note that the affidavit is silent in that regard. The entire approach of the detaining authority shows total non-application of mind and it is apparent that the orders of detention were issued against 4 detenus in most casual and cavalier manner. The exercise of powers under the law of preventive detention cannot be exercised in such manner. The Petitioners had submitted that the detaining authority could not have applied its mind to the documents due to paucity of time as the volume of material was sent from time to time by the sponsoring authority in Mumbai to its head office in Delhi from where it was forwarded to the detaining authority. It was observed that the movement of documents from one office to another and to the detaining authority would clearly show that the authority had ample time to apply its mind to the question of expediency of making an order of detention. It's a settled law that liberty of citizen cannot be dealt with casually by clamping order of detention and the powers of preventive detention are to be exercised cautiously and without violating the freedom of the citizen and personal liberty guaranteed under the constitution - the issuance of the order of detention against the detenu suffers from nonapplication of mind, which is required to be set aside. Petition allowed.
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2018 (7) TMI 454
Release of twenty one FM gold biscuits seized - the biscuits were not released even after the order of CEGAT - Held that:- Learned counsel for the petitioner is fair enough to state that a registered letter was sent to his client to find out as to whether the biscuits have been released or not but no response has been received. In view of the above, presumption goes about release of the biscuits in the intervening period of fifteen years otherwise the petitioner would have responded to the Advocate. This writ petition is disposed of with liberty to the petitioner to seek revival of the petition if the biscuits have not been released or the order of the CEGAT has not been given effect to otherwise presumption goes about its implementation.
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2018 (7) TMI 453
Imposition of penalties - undervaluation of imported goods - enhancement of value not based on contemporaneous imports - no evidence for enhancement of value - Held that:- It is well settled law that such transaction value has to be first rejected as incorrect value before the Revenue proceeds to enhance the value of the imported goods in the light of the valuation rules, which have to be followed sequentially. The said rejection of the transaction value has to be on the basis of sufficient, positive & tangible evidences - In the present case, no efforts on the part of the Revenue to first reject the transaction value and then proceed to enhance the value by referring to any contemporaneous imports. There is virtually no evidence for establishing the value of the goods on the lower side so as to enhance their value - there is no justification for enhancement, which has led the revenue to impose penalties upon the appellants - penalties set aside - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 452
Project Import - benefit of N/N. 21/2002-Cus dated 01-03-2002 as amended by N/N. 07/2004-Cus dated 08-01-2004 - delay in production of Essentiality Certificate - Import prior to application for registration made - appellant submitted that the order of clearance was passed only after submission of application for registration - Held that:- The appellant filed the Essentiality Certificate for availing project rate of customs duty as applicable for setting up a new industrial unit under the said notification issued by the Ministry of Petroleum and Natural Gas - there is no reason to deny the benefit of the exemption notification. The Hon'ble Supreme Court in the case of Commissioner of Customs (Import), Mumbai vs. TULLOW India Operations Ltd. [2005 (10) TMI 502 - SUPREME COURT OF INDIA] observed that exemption benefit cannot be denied on the ground of delay in production of Essentiality Certificate. In so far as the competent authority issued the Essentiality Certificate in respect of the instant project imports, there is no reason to deny the benefit of the exemption notification - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 451
Duty Drawback - N/N. 68/2011-Cus (NT) dt. 22.09.2011 - appellant contended that no test was conducted on the samples drawn from the exported goods - Held that:- The goods were finally assessed as Mild Steel Stranded wire as declared by the exporter. It is noted that the assessment orders were not challenged by the dept. - The Tribunal in the case of TVS Motor Co. Ltd. v. CCE & ST, Mysore [2017 (6) TMI 163 - CESTAT BANGALORE] allowed the refund in an identical situation - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 450
Penalty u/s 117 of CA, 1962 - export of onion to Bangladesh under valid Bill of Export - N/N. 82(RE-2013)/2009-14 dated 17.06.2014 - Held that:- The penalty is imposable for attempt to export improperly. Since the amended notification had come only on 17.6.2014 there has been a violation of the provisions of the Customs Act and maximum penalty has been imposed under Section 117 - the penalty imposed is quite excessive and the same is reduced to ₹ 10,000/- in each case to meet the ends of justice - appeal disposed off.
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2018 (7) TMI 449
Rectification of Mistake - Jurisdiction of the Additional Director General of D.R.I to issue the SCN - Held that:- The assessee herein is the co-noticee before the Adjudicating Authority. The main noticee had already settled the case before the Ld. Settlement Commission and had not disputed the validity of the show cause notice. Therefore, the demand of duty alongwith interest and penalty as raised in the show cause notice has already been merged with the order of the Ld. Settlement Commission in the case of main noticee. The issue of jurisdiction for issue of show cause notice by the D.R.I officer in the present case, cannot be sustained in view of the order of the Settlement Commission. ROM Application dismissed.
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2018 (7) TMI 448
Absolute Confiscation - penalty - Smuggling - Red Sanders - the case of the Revenue is that the appellant is the mastermind of the smuggling of Red Sanders wood - Held that:- The appellant did not appear before the DRI Officer during the investigation. The Learned Counsel did not dispute the recovery of the telephone from the possession of the co-accused who was directly involved with the alleged smuggling - The appellant supplied the sanitary items to the co-accused. It is a case of a syndicate of smuggling of the Red Sanders in violation of the provisions of law where the appellant was involved and therefore, imposition of penalty is warranted - however, the quantum of penalty is reduced. Appeal disposed off.
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Corporate Laws
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2018 (7) TMI 461
Petition for winding up - Circumstances in which company may be wound up by Tribunal - Held that:- The provisions of Section 433(b), (c), (d) and (g) of the Act of 1956 would be attracted in this case and thus, it would be just and proper that the Company is wound up. The fact that the Company has not commenced and has failed to hold the statutory meetings and to deliver statutory reports, is explicit from the record, including the letter dated 18/09/2009 from Eric Sequeira. As noticed earlier, there were only two shareholders/ directors of the Company namely, the petitioner and Shri Eric Sequeira and on the death of Mr. Secqueira, the number of members is reduced below two. Thus, the Company, which is a private limited Company, is liable to be wound up also under Section 433(d) of the Act of 1956. Petition allowed.
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2018 (7) TMI 460
Compounding of offence allegedly committed under section 203(1)(iii) of the Act - Held that:- It is not in dispute that the Applicants have violated the provisions of section 203(1)(iii) of the Act as noticed by the Inspecting Officer in course of inspection of books of accounts and our records of the Company carried out under Section 206(5) of the Companies Act, 2013. Subsequently, the Company appointed Chief Financial Officer, Manager and Company Secretary on 23.08.2016 and it has also filed Form DIR-12 as confirmed by RoC, WB in his report dated 18.10.2017 and thus, the offence has been made good on 23.08.2016. So far as the company is concerned, the offence under section 203(1)(iii) of the Companies Act, 2013 has already been compounded under section 441 of the Companies Act, 2013 by this Tribunal, vide its orders dated 09.02.2018 and 05.04.2018 We are inclined to compound the violation under section 203(1)(iii) of the Companies Act, 2013 in terms of the provisions of section 441 of the Act. Accordingly, we do hereby compound the aforesaid offence against the Applicants subject to depositing the compounding fees by each of the applicants within 15 days hereof
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2018 (7) TMI 459
Oppression and mismanagement - ineligible allotment of shares - invalid BOD meetings - proof of service of Notice of Board Meeting - Held that:- On the basis of a letter of 2009 from the Bank, suddenly on 28th February, 2011 large numbers of equity shares were issued and convertible debentures were issued without there being material to show that majority shareholders, i.e. the Appellants were involved in the decision making. The Appellants 2 and 3 were Directors and proof of service of Notice of Board Meeting to them was necessary. What is shown by the Respondents, we find as not reliable. If things were in order, Respondents would have referred in correspondence to the change of shareholding. NCLT accepted defence on this count of need of funds without seeking documents. Merely showing terms laid by bank for credit limit or loan is not enough. For such reasons, we find that the reasonings recorded by the learned NCLT in upholding allotment of 95,500 equity shares to Respondents 4 and 5 cannot be upheld by us. NCLT did not also look into the correctness of issue of convertible debentures on 28.02.2011. The debentures issued were soon converted into shares by the Respondents 2 and 3, to the extent of 80010 equity shares which was done on 19.04.2011 in Board Meeting. We find that the NCLT wrongly held POD 9 in favour of the Respondents. The EOGM called suffered from sufficient Notice to the Appellants, who are majority shareholders and thus, the decisions taken for increase in authorised share capital cannot be upheld and deserve to be set aside. Respondents 2 and 3 are guilty of oppression and mismanagement. Winding up of the Company, however, we find will not be in interest of Members. We agree with NCLT on this count. To conclude:- We note NCLT has already set aside 80010 equity shares by conversion in Meeting dated 19.04.2011 and 80010 shares issued on 25.07.2012. a) We set aside the allotment of 95,500 equity shares to Respondents 4 and 5 and the decision to issue convertible debentures as taken by Respondents 2 and 3 on 28.02.2011. b) We set aside the Resolutions taken in Board Meeting dated 18.05.2011 and E Form 32 dated 18.05.2011 submitted to the ROC and removal of Appellants 2 and 3 as Director in Board Meeting dated 02.07.2011. Appellants 2 and 3 shall be treated to have been Directors. c) We set aside Resolution and increase of Authorized Share Capital as done in EOGM dated 18.06.2011. d) We set aside the Resolutions taken in Board Meeting dated 02.07.2011 and 3,83,334 equity shares allotted to Respondent No.4 regarding which Respondents 2 and 3 took decision on 02.07.2011 and which were issued on 07.07.2011. e) We set aside the Resolution dated 18.09.2011 and the 3,87,066 equity shares allotted to Respondents 4 and 6 on 18.09.2011. We hold that decisions taken in the Board Meetings, EOGMs and AGM discussed in this Judgement regarding which there was no Notice or short Notice to the Appellants, are not binding on the Appellants. We restore shareholding as it stood ante 28.02.2011. The parties between themselves were also of the view that first option should be for the Respondents 2 and 3 to buy out the shares of the Cima Group. Reading the Judgement of NCLT with the findings recorded by us, all the shares issued to Respondents 4 to 7 stand set aside. We hold that there appears to be no scope for the groups of Appellants on one side and Respondents 2 and 3 on the other to work together and run the Company. We further direct:- It is just and expedient, as directed by the learned NCLT, to direct that the accounts of first Respondent Company be audited by a Chartered Accountant from the date of incorporation of the Company till the date of Order passed by NCLT taking into consideration the cancellation of all shares allotted to Respondents 4 to 7 and fix the shareholding of Petitioners and Respondents 2 and 3 which shall be one of the basis for determining the fair value of shares for Respondent No.1 Company. After the Report of the Chartered Accountant is finalized, the fair value of equity shares of the 1st Respondent Company shall be assessed by an Independent Valuer. As directed by the NCLT, the date of valuation is the date of filing of the Company Petition in NCLT. 4\ M/s. A.R. Gaudana & Associates, at 502-D, Shaily Complex, B/h. Old Gujarat High Court, Opp: Loha Bhavan, Navrangpura, Ahmedabad – 380009 is appointed as “Independent Valuer” to value the shares of the 1st Respondent Company as on the date of filing of petition. The Respondents 2 and 3 will have the first right to purchase the shares of the Appellants – original Petitioners in 1st Respondent Company, but not below the fair value fixed by Valuer, and in case Respondents 2 and 3 fail to purchase the shares of the Petitioners – Appellants at the value fixed by the NCLT, the Respondents 2 and 3 must sell their shares at the fair value determined by the Independent Valuer to the Petitioners – Appellants. After filing of the Report by the Independent Valuer, the Appellants and Respondents 2 and 3 would be at liberty to file application before the NCLT within two weeks from the date of service of the Valuer Report on them, to determine the mode and manner in which the transfer of shares shall take place. NCLT may, if necessary, extend the above date fixed for Audit Report and date fixed for Report of Independent Valuer, if necessary. NCLT will ensure carrying out of these Orders and if Auditor/Valuer have any difficulties, or for any other reasons it becomes necessary, may pass such further and other Orders deemed fit in the interest of justice to both sides. The appeal is allowed in terms of above directions and orders with costs quantified at ₹ 1 lakh to be paid by Respondent No.2 – Mr. Jaimin Girish Patel and ₹ 1 lakh by Respondent No.3 - Mr. Hemal Patel from their personal accounts, to the Appellants.
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Insolvency & Bankruptcy
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2018 (7) TMI 512
Corporate insolvency procedure - Held that:- All the allegations levelled against the proceeding u/s 7 of the Code could cause no serious impediment in the way of acceptance of such an application. Consequently, all those allegations are rejected. As on 31.10.2017, the CD owed an amount to the tune of ₹ 53,87,09,011.75 to the FC and that there was a clear default in repayment of such debt. The various materials on record, the financial statements annexed with the application as well as the averments made in the letter dated 14.03.2016 in particular make such conclusion inevitable. There cannot be any escape that this proceeding finds cause of action as contemplated in Section 7(5)(a) of the Code of 2016 and therefore, same needs to be accepted. The order of moratorium u/s .14 made effective
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FEMA
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2018 (7) TMI 447
Arguable case - Deposit 10% of the penalty amount imposed by the Adjudicating Authority alongwith reliable guarantee for balance 90% for the purposes of entertaining Appellant's appeals on merits - Held that:- In the facts of this case after having come to conclusion that the Appellants have an arguable case, the deposit of 10% of the penalty amount in each of the Appeals would meet the ends of justice. This further requirement of furnishing reliable guarantee for balance 90% is not called for in the facts of the present case. This is particularly so as the impugned order finds that the affidavit filed pleading financial hardship was uncontroverted. We vary the impugned order dated 25.6.2015 and direct the Appellants to deposit 10% of the penalty amount as directed by the Tribunal within a period of four weeks from today, with the Tribunal. The requirement of providing reliable guarantee is done away with. In case the Appellants fail to deposit 10% of the penalty amount as directed by the impugned order of the Tribunal within a period of four weeks from today, the Tribunal would be at liberty to dismiss the appeals for non-deposit of penalty amount (excluding the reliable guarantee) as directed by impugned order dated 29.6.2015.
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2018 (7) TMI 446
Validity of show cause notice - Held that:- It appears from the provisions of the Act of 1999 that, the authorities can invoke the provisions of Section 16 for contravention of Section 13 of the Act of 1999, independent of exercise of powers under Section 37 of such Act. Apparently, the authorities have invoked Section 16 for the alleged contravention of Section 13 of the Act of 1999. At this stage, it would be premature for the writ Court to arrive at a finding that, the authorities have no material before it to invoke such provisions assuming that, the exercise of powers under Section 37 of the Act of 1999 remains inconclusive and that, such exercise did not bring forth any materials in support of the case of the authorities. It is for the adjudicating authority envisaged under Section 16 of the Act of 1999 to arrive at such a finding. The petitioners have replied to the impugned show cause notice. It has dealt with the show cause notice in detail. Therefore, it would be premature on my part to arrive at a finding that, the petitioners are not aware of the charges made against it. In any event, it would be open for the petitioners to contend such ground before the adjudicating authority.
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PMLA
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2018 (7) TMI 445
Offence under PMLA - Provisional Attachment - properties purchased from the proceed of crime - Held that:- It is admitted position that the loan was given by the banks in good faith who has suffered a loss because of non-return of money by the borrowers i.e. serial no. 11 (as a appellant). The borrower is also arrayed as one of the respondent in the appeal filed by the banks. It is evident from the said proviso that in case the claimant would be able to satisfy the Special Court that it has acted in good faith and suffered the loss despite of having taken all the reasonable precautions and is also not involved in the offence of money laundering then the Special Court is empowered to restored such property during the trial of the case. In the facts of the present case, the mortgaged properties are not purchased from the proceed of crime. Those were purchased prior to FIR against borrower/accused and even prior to execution of mortgaged deed agreement. The question of proceed of crime qua those properties does not arise. Even the stand of the respondent in almost in all the cases where it was found that the attached properties are mortgaged properties which were not purchased from proceeds of crime, the Bank are victim parties and are innocent parties who are entitled to recover the loan amount from the said mortgaged properties, but the banks be allowed to dispose the properties after the trial and final out-come of criminal complaints filed against the borrowers under schedule offence and prosecution complaint. The said argument cannot be accepted in view of settled law and new amendment in sub-section 8 of section 8 of the Act. Thus, the stand earlier taken by the respondent no. 1 is wholly vague and without any substance. The provisional attachment order thus apparently bad and against the scheme of the Act. In view of the reasons amendment in the PMLA and once the provisional attachment order is set aside, the property is released the borrower/accused and the banks can only dispose of the said property after passing the order by the special court in favour of the complaint. In case the provisional attachment order and impugned orders are set-aside, the complainant may not be able to dispose of the property in order recover the loan amount even if the special court restore such properties during the trial. The allegation of money laundering, prima facie, so far as present appellant & properties involved in this appeal are concerned, found to be unsustainable for the purpose of attachment under the PMLA, 2002. Both set of appeals are allowed. Thus, for reasons recorded above, set aside the Impugned Order dated22.09.2016 and the Provisional Attachment Order dated31.03.2016. In view of the amendment of sub section 8 of Section 8 proviso (1) and (2), the bank is at liberty to move its claim before the Special Court for disposing of the said property in accordance with the law. The present appeals are accordingly disposed of in view of aforesaid directions. Till that time, all parties to the appeals shall not sell and dispose of the property in any manner directly or indirectly which can only to be disposed in order to recover the amount due once the Special Court will pass the appropriate orders .
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2018 (7) TMI 444
Offence under PMLA - provisional attachment order - product of ‘proceeds of crime‘ allegedly generated in the instant case - Held that:- There is no nexus whatsoever between the alleged crime and the Appellant Bank who is the mortgagee of the properties in question which were purchased before sanctioning the loan. Thus, no case of money-laundering is made out against Appellant Bank who has sanctioned the amount which is untainted and pure money. They have priority right to recover the loan amount/debts by sale of assets over which security interest is created, which remains unpaid. The Adjudicating Authority has not appreciated the facts and law involved in the matter. The primary objective of section 8 of PMLA is that the Adjudicating Authority to take a prima facie view on available material and facts produced. The contentions raised by the Respondent's Advocate have no substance. The provisional attachment in the present matter is bad in law hence liable to be set aside. Even the stand of the respondent in almost in all the cases where it was found that the attached properties are mortgaged properties which were not purchased from proceeds of crime, the Bank are victim parties and are innocent parties who are entitled to recover the loan amount from the said mortgaged properties, but the banks be allowed to dispose the properties after the trial and final out-come of criminal complaints filed against the borrowers under schedule offence and prosecution complaint. The said argument cannot be accepted in view of settled law and new amendment in sub-section 8 of section 8 of the Act. Thus, the stand earlier taken by the respondent no. 1 is wholly vague and without any substance. The provisional attachment order thus apparently bad and against the scheme of the Act. once it was found that the appellant is a innocent party who is not involved in the money laundering directly or indirectly or assist any party and the mortgaged property is also not purchased from the proceeds of crime then the question of provisional attachment order and confirmation thereof does not arise and the victims/innocent party i.e. innocent party would be entitled to disposed of the said property. In the fact and circumstances and material available in the present case, the allegation of money laundering, prima facie, so far as present appellant & properties involved in this appeal are concerned, found to be unsustainable for the purpose of attachment under the PMLA, 2002.
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Service Tax
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2018 (7) TMI 513
Reverse Charge Mechanism - Banking and Financial Services - the appellants are maintaining Nostro and Vostro Accounts with foreign banks to help their customers dealing in export and import business and for paying/collecting bank charges for such services - penalty imposed in relation to Nostro accounts - also appellants are utilising the services of SWIFT, Belgium, for securely and reliably exchanging financial information relating to banking transactions. Penalty imposed on Nostro Accounts - Held that:- The appellant has discharged the service tax along with interest on being pointed out by the department - The issue whether assesse is liable to pay service tax under reverse charge mechanism was contentious for a long time - the penalty imposed in regard to Nostro transactions is unwarranted and requires to be set aside. Demand of service tax on SWIFT transactions - Held that:- he service rendered under SWIFT would very well get covered under sub-clause (vii) of the definition of Banking and other Financial services as provided under 65 (12). Though in the SCN, sub-clause (vii) and (ix) has been mentioned, we find that the allegation as well as activity of transfer of information and data processing which is rendered has been clearly mentioned in the SCN. Therefore, the mere mentioning of the sub-clause wrongly in our view would not make the SCN vitiated or invalid - argument of appellant fails - taking note of the fact that the demand has been made under reverse charge mechanism, we consider that the period prior to 18.04.2006 requires to be set aside - also, the penalty for the period after 18.04.2006 is unwarranted and requires to be set aside - thus, the demand for the period after 18.04.2006 is upheld whereas the penalty on this issue is set aside. Demand of service tax on Vostro transactions - case of appellant is that the service qualifies as export of service - Held that:- From the manner of operation and working of Vostro we are able to see that the appellant retains the charges for providing the service. The account is maintained in Indian Rupees, but the inward remittances are in foreign convertible currency received from the Bank located outside India; the appellant retains the charges in Indian currency out of the inward remittance received from Bank located outside India - the condition that receipt in foreign currency in effect satisfied - thus, being export of services, the demand made on Vostro transactions cannot sustain and requires to be set aside. Appeal allowed in part.
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2018 (7) TMI 442
Valuation of taxable service - works Contract - inclusion of FOC material - Section 67 of Finance Act - Held that:- The issue is squarely covered by the decision in the case of COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT OF INDIA], where it was held that The value of the goods/materials cannot be added for the purpose of aforesaid notification dated September 10, 2004, as amended by notification dated March 01, 2005 - appeal dismissed - decided against Revenue.
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2018 (7) TMI 441
Validity of second SCN - demand on same issue and period but under different head - Held that:- The demand involved in the SCN in the present case already stand dropped by the Commissioner in order dated 15.10.07, therefore, the demand in the present case even though under the different head would not survive - In the case of Siddharth Tubes Ltd. [2004 (3) TMI 199 - CESTAT, NEW DELHI], this Tribunal held that second SCN on the same issue and period after gathering additional/information/material fresh notice on different norms cannot be issued, when one has already been issued earlier - demand not sustainable. Tour operator service - scope of definition - inclusion of amount related to hotel booking charges in the definition - Held that:- The arrangement for accommodation was incorporated in the definition of ‘Tours Operator’ from 10.09.04, therefore, the demand for the period prior to 10.09.04 on the hotel booking charges is not sustainable - the demand for the period prior to 10.09.04 set aside - However demand pertaining to the period from 10.09.04 is upheld. Appeal allowed in part.
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2018 (7) TMI 440
Commercial or Industrial Construction Service - non-filing of returns - non-payment of Service Tax - allowance of cum-tax benefit - Held that:- The benefit of calculation of Service Tax payable with the cum tax benefit is allowable to the Appellant - Once the cum tax benefit is extended, the total demand for Service Tax works out to ₹ 26.17 lakhs. It is seen that the Appellant has already deposited Service Tax amounting to ₹ 27.53 lakhs along with applicable interest even before the issuance of Show Cause Notice. Once the entire Service Tax dues are paid with interest, the Revenue need not have issued the Show Cause Notice. There is no justification for levy of penalty under the circumstances, which is set aside via 80 ibid. Appeal allowed in part.
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2018 (7) TMI 439
Business Auxiliary Services - The investigation conducted sought to establish that Shri Mahender Jain was the de-facto owner of all the five firms, and hence, all five units are to be considered to be one unit being run by Shri Mahender Jain - Benefit of N/N. 06/2005-ST dated 01.03.2005 - Held that:- The benefit of N/N. 6/2005 is available to small service providers whose turnover is within the threshold specified in the Notification. In the present case, all the five firms have their independent existence in the eyes of laws. The commissions received from various manufacturers have been accounted in their respective books independently. Consequently, the benefit of the threshold exemption cannot be denied to any of the five firms and turnover over and above the exemption is liable for payment of Service Tax under the category of “Business Auxiliary Services”. The ends of justice will be met if the Service Tax as requantified is paid along with applicable interest - appeal disposed off.
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2018 (7) TMI 438
CENVAT credit - inputs/capital goods - tippers and dumpers used for removing over-burden while preparing the mines for extraction of coal - time limitation - Held that:- The issue of eligibility of Cenvat credit on tippers and dumpers already stand decided on merit in favour of the respondent by this Tribunal in the case of Soumya Mining Ltd. [2017 (6) TMI 1071 - CESTAT NEW DELHI], where it was held that Dumpers/Tippers are vehicles which are specially designed for earth moving purposes and are meant to be used in the mining area, consequently, the appellant would be eligible for cenvat credit on dumpers / tippers as inputs which are used for providing the output service - credit allowed. Time limitation - Held that:- As the Cenvat credit is allowable on merit, we do not propose to discuss the issue on time bar. Appeal dismissed - decided against Revenue.
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2018 (7) TMI 437
Penalty - failure to pay service tax - Airport Services as well as various other services - Service tax with interest and penalty was paid before issuance of SCN - Held that:- It is not in dispute that the entire amount of Service Tax for the disputed period stands paid by the assessee along with the full interest liability, even before the issue of Show Cause Notice - penalty not warranted. Business support services - commission allegedly received by the assessee on top of electricity charges recovered from the concessionaire - Held that:- No documentary evidence stands submitted regarding the claim that no service charge has been recovered during the period 2012-13. However, an affidavit stands filed by the authorized signatory of Airport Authority of India to the effect that no such service charges have been recovered - matter remanded to the adjudicating authority for a de-novo decision on the subject. Appeal allowed by way of remand.
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2018 (7) TMI 436
Refund of unutilized Cenvat credit - intermediary services in terms of Rule 2(f) of Place of Provision of Rules, 2012 - POPOS Rules - location of service provider - reverse charge mechanism - Held that:- Identical issue decided in appellant own case M/S. EVALUESERVE. COM PVT. LTD. VERSUS CST, GURGAON [2018 (3) TMI 1430 - CESTAT CHANDIGARH], where it was held that The appellant are not intermediaries in terms of Rule 2(f) of the Place of Provision of Service Rules, 2012. Therefore, the appellants are not liable to pay service tax being provider of service in India in terms of Rule 9 of the Place of Provision of Service Rules, 2012. Following the judgement, the refund is allowed - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 435
Penalty u/s 78 - suppression of facts - the allegation in the present case is the suppression of the fact inasmuch as the appellant suppressed the true value of the services rendered by them and declared a lower value in ST-3 returns - appellant paid the service tax along with applicable interest as pointed out by the audit even before show cause notice was issued - Held that:- In an identical case in respect of the Cholamandalam MS General Insurance Company Ld., and CESTAT Chennai, [2018 (2) TMI 287 - CESTAT CHENNAI], had held that not reflecting the true value of services rendered in the ST-3 returns accounts to suppression of facts and therefore penalty under Section 78 is imposable - penalty upheld. Payment of the differential service tax along with interest before issuance of show cause notice - Held that:- It is now being settled by the Hon’ble Supreme Court in the case of Rajasthan Spinning & Weaving Mills [2009 (5) TMI 15 - SUPREME COURT OF INDIA], that when mandatory penalty is imposable, whether the duty is paid before issue of show cause notice or after notice cannot alter the penalty. Appeal dismissed - decided against appellant.
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2018 (7) TMI 434
Construction services - Construction of residential Complexes - flats constructed for own units - scope of the term 'Personal use' - Suppression of facts or not? - invocation of proviso to Section 73(1) of Finance Act, 1994 - demand of duty with interest and penalty - applicability of CBEC Circular. No. 332/35/2006-TRU, Circular No. 80/10/2004 and CBEC Circular No. 108/02/2009 - extended period of limitation. Held that:- What is sought to be excluded by Section 65(91a) of the Finance Act, 1984 is only a person who directly engages any other person, far from the construction of such complex, which is intended for his personal use as residence. This, read with the explanation provided for “personal use” coupled with the facts of the case on hand for construction of 106 units, makes it abundantly clear that the residential complex so constructed, was not for the personal use as residence of the appellant. Applicability of decision in the case of Magus Construction Pvt.Ltd. [2008 (5) TMI 18 - HIGH COURT OF GAUHATI] to the acts of present case - Held that:- The issue involved in the case of Magus Construction Pvt.Ltd. is clearly in the context of builders who construct flats and then effect sale of the same, as contrary to the sale of UDS alone in the case on hand - the case do not apply to the facts of present case. It is also equally relevant to refer to another decision/order of this very Bench, in the case of CCE .Vs. M/s. Lancy Tanjore Power Co. Ltd.[2018 (3) TMI 1010 - CESTAT CHENNAI], wherein, the court has concluded that since the definition provided under Section 65(91a) specifically excluded construction undertaken for personal use including permitting the complex use as residence by another person, that exclusion covered the construction activity of the assesse and thus the service tax liability would not sustain. There will be no service tax liability on the appellant - appeal allowed.
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2018 (7) TMI 433
Non-payment of Service Tax within due date - invocation of Section 73(1) of the Finance Act, 1994 - intent to evade present or not? - Whether the appellants can be extended the beneficial provision of Section 80 of the Act so as to waive the penalties imposed on them under Section 76 and 77 ibid? - Held that:- Once it has been held that service tax has not been paid on account of fraud or collusion or wilful misstatement or suppression of facts, etc., with intention to evade payment of service tax, the provisions of Section 73(3) of the Act would hold sway - in the case of the appellant and, in fact, as per the provisions of that Section, on the basis of tax ascertained by the Department Officer, if the amount is paid up by the appellant before service of a notice on him, there shall not be served any notice under Sub-section 1 of Section 73 ibid. The appellant has paid up the service tax belatedly before issuance of SCN. The interest which is in the nature of compensation for the delay in payment, was also paid after issuance of SCN and much before issuing the Order-in-Original - The conduct of the appellant in paying up service tax and interest, and the categoric finding of the Commissioner that there is no intention to evade tax, persuades us to hold that appellant has established reasonable cause for invoking Section 80 of the Act ibid - penalty u/s 76 set aside. Appeal allowed in part.
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2018 (7) TMI 432
Valuation - benefit of abatement - hotel and accomodation services from 1st May, 2011 - N/N. 1/2006-ST - CENVAT credit on inputs/input services and common input services availed - Held that:- There is no dispute that the appellant has not availed CENVAT Credit on any inputs or input services specifically towards provision of accommodation services. They had availed credit on common input services used for accommodation services (when it was not taxable) and other services - The utilization of common input services by the appellant does not disentitle them to the benefit of abatement under N/N. 1/2006-ST. - benefit of abatement allowed. Liability of Service tax - Laundry services - Held that:- When any show cause notice is issued, the burden of alleging and proving the allegations in the show cause notice that a taxable service has been rendered is on the revenue and it is not on the assessee to prove otherwise - In this case, the words used were the ‘laundry services’ and there is no evidence or investigation report to show that under the garb of laundry services dry cleaning services were provided by the appellant and hence they are chargeable to service tax - demand withheld. Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 431
Advertising Agency Services - non-payment of service tax - Board’s Circular dated 01.11.1996 - Held that:- These services cannot be made exigible to service tax - The matter is well settled in favor of the appellants in the case of Zee Telefilms Ltd. [2006 (2) TMI 50 - CESTAT, MUMBAI] - demand do not sustain. Business Auxiliary services - door to door sales - Held that:- From the facts on record we are not convinced that ingredients of Section 65 (19) (1a) of the Finance Act, 1994 are satisfied and that the appellants have provided BAS to their clients - demand do not sustain. Valuation - printing of materials - inclusion of reimbursable expenses - Held that:- The matter remanded to the adjudicating authority to provide who shall provide an opportunity to the appellant to produce necessary evidence in the form of purchase bills, sales invoice and purchase orders etc., to justify the nature of the work undertaken by them and take a decision accordingly - matter on remand. Valuation - painting of van & vinyl software etc. - inclusion of reimbursable expenses - Held that:- The matter is fully covered by the law laid down by the Apex Court in Intercontinental Consultants and Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT OF INDIA], where it was held that such expenses cannot be brought within the fold of taxability - demand do not sustain. Penalty - Held that:- The matter was interpretational in nature, and some of the issues were also mired in litigation - penalties do not sustain. Appeal allowed in part and part matter on remand.
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2018 (7) TMI 430
Abatement on GTA Services - N/N. 32/2004-ST dated-3.12.2004 - it was alleged that the Respondent assessee has not fulfilled the mandatory condition by proviso (i) & (ii) of N/N. 32/2004-ST, while availing the benefit - Held that:- While issuing the Certificate, the Respondent has copied the wordings of the notification, on the letter head. But facts remain that they have not availed the benefit of Cenvat Credit on inputs or capital goods also the benefit under N/N. 12/2003 (ST). The issue is no longer res integra in view of decision of this Hon’ble Tribunal in the case of Indian Oil Corpn. Ltd. Vs. Commr. of Central Excise, Patna [2013 (6) TMI 201 - CESTAT KOLKATA] wherein it is held that in absence of any particular format, declaration under subject notification, the Department cannot insist for declaration on each consignment note for allowing the abatement - The declaration in letter head and payment bill would be sufficient enough for availing the benefit of Notification. Benefit cannot be denied - appeal dismissed - decided against Revenue.
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2018 (7) TMI 429
Valuation - re-trading charges fixed in terms of the contract were cumulative values i.e. towards the total of material costs and the service costs - Held that:- The respondent was maintaining sales tax assessment order, purchase orders, stock registers, sellers’ invoices etc. for retrading and the said material costs normally worked out to 70% of the total retreading charges on which the respondent has paid VAT/CST under the said law - It is undisputed fact that the materials consumed were treated as sale/deemed sale in terms of the local sales tax/Central Sales Tax Act, 1956 which is reflected in the sales tax returns. For the remaining 30% the appellant already paid the service tax. Similar views were expressed by the Hon’ble Supreme Court in the case of Safety Retreading Co.(P) Ltd. vs. Commissioner of C.Ex., Salem [2017 (1) TMI 1110 - SUPREME COURT], where it was held that Section 67 of the aforesaid Act deals with valuation of taxable services and specifically mentions that the same does not include the cost of parts or other material, if any, sold to the customer during the course of providing maintenance or repair service. Appeal dismissed - decided against Revenue.
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2018 (7) TMI 428
CENVAT Credit - input services - GTA Services for outward transportation of goods - place of removal - period prior to 01.04.2008 - Held that:- There is no dispute with regard to place of removal - the decision in the case of COMMISSIONER OF CUSTOMS CENTRAL EXCISE AND SERVICE TAX, GUNTUR VERSUS M/S. THE ANDHRA SUGARS LTD. [2018 (2) TMI 285 - SUPREME COURT OF INDIA] is squarely applicable to the facts of present case, where it was held that Once it is accepted that place of removal is the factory premises of the assessee, outward transportation ‘from the said place’ would clearly amount to input service - credit allowed - appeal dismissed - decided against Revenue.
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2018 (7) TMI 427
Rent-a-cab scheme operator service - supply of vehicles for hire to service receivers such as NEEPCO on periodic contract/agreement basis - the Comm(A) proceeded on the basis of the letter dated 16 March 2004 of the assessee - suppression of facts - Held that:- The Commissioner (Appeals) while passing the impugned order had not considered the reply of the Respondent in response to the letter dated 16 March 2004 of the dept - It is perceived from the said letter that the Respondent has not disclosed the service rendered by him to the department. Therefore, the finding of the Commissioner (Appeal) cannot be sustained. The impugned order of the Commissioner (Appeals) is set aside - service taxable under the head Rent-a-cab scheme operator service - appeal allowed - decided in favor of Revenue.
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2018 (7) TMI 426
CENVAT Credit - input services - Rent-a-cab service - Repair and Maintenance of vehicle and machineries - Insurance for vehicle and machineries - Irregular utilisation of Input Service Credit - manpower supply services - GTA Service abatement - Held that:- The Commissioner (Appeals) has given a detailed finding on various input services and their eligibility for credit - the decisions in the case of CCEx. & ST, LTU, Bangalore Vs. Micro Labs Ltd. [2011 (6) TMI 115 - KARNATAKA HIGH COURT], Infosys Ltd. Vs. CST, Bangalore [2014 (3) TMI 695 - CESTAT BANGALORE], and Tiger Security Services Vs. CCEx, Madurai [2009 (3) TMI 42 - CESTAT, CHENNAI] were relied. There is no reason for interference with the order of the Commissioner (Appeals) - appeal dismissed - decided against Revenue.
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2018 (7) TMI 401
Refund of Service Tax erroneously paid - rejection on the ground of time limitation - Section 11B of CEA - Held that:- Admittedly Section 11 B lays down time within which refund claim can be made by an assessee. The fact that an assessee who claims the refund leads to an inevitable conclusion that such tax/duty was not required to be paid, thus making them to claim the refund of the same - Tribunal being creator of the Act cannot go beyond the provisions of the Act and cannot adopt general limits under the limitation Act, especially when limitation stands provided under the Section 11 B of the Act - appeal dismissed - decided against appellant.
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Central Excise
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2018 (7) TMI 425
Maintainability of Appeal - alternative remedy - despite the presence of the Counsel for the appellant and the matter not being heard, the same was disposed of by Exhibit P7 - Held that:- There is no cause for the appellant to have not argued this specific matter when the same was posted and the Counsel were also present - since the contention raised by the appellant has not been controverted, the matter has to be re-done - The appellant or the authorized representative shall appear before the officer on 28.03.2018 - writ appeal disposed off.
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2018 (7) TMI 424
Refund of duty paid in cash - appellant not in the position to utilize the Credit as the factory was closed - rejection of refund on the ground of non-availability of TR-6 challan - threshold limit of SSI exemption crossed and the duty was paid - Held that:- It is not disputed that the duty was paid by TR-6 Challan in cash and as such even if the original copy of the same is not available with the appellant, the said fact cannot be adopted as a reason for denial of refund to the assessee. The refund of excess accumulated credit, at the time of closure of the factory, is not permissible under any rule or section of the Rules or the Act, but the appellant had been contesting about the availability of the credit right from the beginning, when they discharged their duty liability in cash. As such, instead of paying duty in cash, the same was payable by way of utilization of credit and would have been paid by using such credit. In such a scenario duty already paid in cash is required to be returned back to the appellant and the same is required to be neutralized against the credit made available to the appellant. Refund allowed to the extend of credit that could have been utilized.
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2018 (7) TMI 423
Liability of duty on Glass tubes - captive consumption - case of appellant is that Glass Tubes were being manufactured by them by Mouth Blowing process, which was exempted under N/N. 6/2002-CE dated 01.03.2002 - Statement of employee of the appellant, is to the effect that the manufacturing unit has started using the compressor from 01.04.2007 and prior to the said date, Glass Tubes were being manufactured by Mouth Blowing process. Held that:- Admittedly, the appellant has produced a bill dated 31.03.2007 issued by Rathi Industries, showing the sale purchase of the compressor. The adjudicating authority has simpliciter dismissed the same on the ground that the same was purchased on the last date of the financial year and as such, was manipulated - Revenue has not bothered to investigate at the end of the seller of the compressor so as to find out the fact as to whether the compressor was actually sold on the said date or not. There is also no restriction on sale purchase activities on the last date of financial year. No investigation was made by revenue, in which case the bill produced by the appellant has to be accepted as the correct reflection of facts. The manufacturing process in their unit have been done with the help of the compressor only with the effect from 01.04.2007, inasmuch as there is no other contrary evidence reflecting on the fact that compressor was being used in the factory prior to the said date - prior to 01.04.2007 the appellant was using Mouth Blowing process for the manufacture of the Glass Tubes, which process granted them exemption in terms of N/N. 06/2002. Manufacture of the Glass Tubes with effect from 01.04.2007 with the help of the compressor - the appellant claims that he would be entitled to SSI Exemption in which case no duty liability would arise on them - Held that:- For verification of the appellants said claim, which is dependent upon the computation of the clearances in a financial year, the matter remanded to the adjudicating authority to examine these facts - matter on remand. The penalty imposed on both the appellants set aside. Appeal disposed off.
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2018 (7) TMI 422
CENVAT Credit - input services - advertisement and publicity service - panmasala in retail pouches of various MRPs as also in 100 gram tin packs - whether the advertisement and sales promotion service, received by the appellant for advertisement of 100 gram tin pack of Rajnigandha panmasala, has also promoted the sales of Rajnigandha pan,masala sold in retail packs in respect of which duty is required to be paid under PMPM Rules, 2008 and whether the Cenvat credit in respect of this service is to be disallowed in proportion to the sale of Rajnigandha panmasala in retail pouche?. Held that:- Rule 15 of PMPM Rules, 2008 is a non-obstante provision prohibiting taking of Cenvat credit of any Central Excise Duty paid on any input and capital goods or service tax paid on any input service used for manufacture of notified goods and also requiring that the duty on notified goods shall be paid in cash. Thus, while the prohibition in this Rule is only is respect of the input services inputs or capital goods which have been used for manufacture of the notified goods, the definition of input service given in Rule 2 (l) of Cenvat Credit Rules, 2004 not only covers the services used in or in relation to manufacture of final product, upto the place of removal, but also includes the service mentioned in the inclusive portion of the definition, most of which are not the services used in relation to manufacture of final product but are used in relation to business of manufacture. The advertisement and sales promotion services cannot be said to have been used for manufacture of the panmasala. The sales promotion and advertisement services are obviously used in relation to manufacturing business and not directly in manufacture - The prohibition in Rule 15 of PMPM Rules is not in respect of input service as defined in Rule 2 (l) of Cenvat Credit Rules, 2004, but is in respect of input services used for manufacture of the notified goods. The Appellant s plea that advertisement services not being used directly in the manufacture of MRP pouches prohibition of Rule 15 is not applicable in respect of the same, is acceptable. Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 421
CENVAT Credit - capital goods installed in the factory of the appellant and used in the R&D section - Held that:- The issue has came up before this Tribunal in the case of Maruti Suzuki India Ltd. vs. CCE, Delhi-III [2016 (9) TMI 627 - CESTAT CHANDIGARH], where it was held that there is no bar in using the capital goods in the buildings earmarked for R&D activities as long as it is situated within the factory premises registered with the Central Excise Department. The facts are not in dispute that these capital goods are installed in the factory premises of the appellant and used in Research & Development section for testing and development - CENVAT Credit allowed - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 420
Valuation - job-worker or not? - appellant entered into agreement with M/s.Honeywell Electrical Devices and Systems India Ltd. on manufacture on contract basis - Department took the view that Sujhan had simply been acting as job worker for Honeywell; that the entire manufacturing activities were controller by Honeywell as principal manufacturer; that Honeywell fixed ordinary sale price of the impugned goods; Hence value adopted for payment of duty by Sujhan is not the sole consideration for sale as per Section 4 (1) (a) of the Central Excise Act, 1944 - whether the activities of M/s.Sujhan Instruments are to be treated as those of a job worker on behalf of M/s.Honeywell i.e. job worker to principal ? Held that:- A perusal of the SCN No. 104/2009 dt. 23.10.2009 reveals that department is inclined to treat Sujhan as a job worker of Honeywell primarily on the grounds that supplies of raw materials that required to be approved by the latter, quality control exercised by Honeywell, 99% of the finished goods are sold to the latter and that Honeywell s brand name and MRP stickers are used on the packing. The Rule 10A has been inserted in the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, w.e.f. 1.4.2007. As per this rule, the value at which principal manufacturer sells his goods will be the basis for determining the transaction value for payment of Central Excise duty by the job worker - Sujhan does not appear to qualify to be a job worker for the purpose of Rule 10A ibid. The inputs or goods are not supplied free by Honeywell, or other persons authorized by Honeywell. Just because the goods manufactured or produced by Sujhan are purchased by Honeywell on contract that should detract from acceptance of the transaction between Sujhan and Honeywell to be one of principal to principal basis. The arrangement between Sujhan and Honeywell, in our view, is on the lines of contract manufacturing as distinguished from job worker . The contract manufacturers are not supplied with the raw material from principal manufacturers, like job workers , butthey are required to purchase them from the market, very often from vendors who are approved by the principal manufacturer for quality point of view - there is no reason on account of invoice value between Sujhan and Honeywell should not be treated as the transaction value under Section 4 (1) (a) of the Central Excise Act, 1944. We draw sustenance from the ratio of the Tribunal s decision in Coromandal Paints [2010 (9) TMI 315 - CESTAT, BANGALORE], where it was held that by merely indicating vendors of raw materials or by giving advance for procuring raw material or even installing equipment given by SIPL would not render Coromandal as a job worker. Appeal allowed.
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2018 (7) TMI 419
MODVAT credit - scope of remand order - Revenue neutrality - whether the de novo order has been passed as per the direction of this Hon’ble Tribunal regarding availability of Modvat credit during the disputed period, or not? - Held that:- The respondent assessee had produced the relevant records which substantiate beyond the doubt that modvat credit is available to them. Therefore whatever demand had been raised would be set off against the available Modvat credit. The benefit of modvat credit is available to the respondent assessee against demand raised against them in the aforesaid period and therefore, whole exercise will be Revenue neutral. Appeal dismissed - decided against Revenue.
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2018 (7) TMI 418
Benefit of N/N. 06/2002-CE as amended vide N/N. 47/2002-CE - MS Pipes supplied to various local Government Authorities - it was alleged that pipes were not used for delivery of water for use at Palla to water treatment plant and instead those were used to delivery water for the use of Sewage Treatment Plant at Narela - Held that:- The Ld. Commissioner has not substantiated with any valid reasons as to how he has come to the conclusion that the location of reservoir being at Narela STP would fall outside the purview of exemption. In respect of goods supplied to the Kolkata Municipal Corporation for various water supply projects and in view of various certificates issued by the District Magistrate North 24 Parganas, it is observed that the pipes were laid up to the point of proposed new Pressure Station. In case of Kalighat Booster Pumping Station the pipe lines were laid along Rasbehari Avenue – Doverlane junction and there after Satish Mukherjee road and finally to Andul Raj road. It is the settled principle of law that a notification cannot be read in a narrow manner so as to defeat the object of the notification. It has to be considered reasonably and rationally - It is now settled by various decisions of the Hon’ble Apex Court that if any certificate is required to be issued, as a condition for availing the benefit under said notification and once such certificate is issued by the competent authority, the Revenue cannot go beyond such certificate and deny the benefit of exemption under the notification. The pipelines cleared by the appellant are covered under the Clause -1 of the relevant entry of the Notification - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 417
Reversal of CENVAT Credit - inputs and capital goods destroyed by fire - case of appellant is that since the capital goods had been purchased prior to the implementation of the Modvat scheme, i.e. prior to 01.03.1994, no credit of duty was availed at the time of procurement of such capital goods - Held that:- The appellant has relied upon the Block Addition register and Chartered Accountant's certificate which was issued based on the Block Addition register to convince the Bench that the capital goods in question were procured prior to 01.03.1994 - the contention of the appellant cannot be accepted based on this evidence alone, and that the appellant has failed to produce any further evidence in this regard. The Hon'ble Supreme Court in the case of Auto Ignition Ltd. [2008 (4) TMI 43 - SUPREME COURT] has held that the onus of proof of availment of credit by the assessee is on the Revenue - With regard to the ratio of this judgment, the Revenue has failed to produce any evidence to show that the appellant had availed credit pertaining to the disputed capital goods. Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 416
Refund claim - Valuation - inclusion of discount amount in assessable value - Held that:- The appellant had allowed performance based discounts to its buyers by way of cash discount, Turn over discount, special discount, etc. as per their sales policy. The appellant had extended such discounts vide cheques which established that the duty against which the refund applications had been filed had been paid by the appellant and had not been passed on to any other person under Rule 12B read with Section 11B of the Central Excise Act, 1944 - the concerned Range Officers had certified the discount amounts that had been passed to the buyers vide their verification reports. The appellate authority had observed on the earlier occasion that the discount has been passed on to the dealers which were not challenged by the Revenue in the earlier occasion. So, the Adjudicating Authority had rightly sanctioned the refund on the basis of the findings of the Commissioner (Appeals) in earlier Order-in-Appeal. Appeal allowed - decided in favor of appellant
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2018 (7) TMI 415
Concessional rate of duty - free sale sugar / normal sale sugar - benefit of incentive scheme - recovery u/s 11D of Central Excise Act - Held that:- From the report, it is brought out that the appellants have not collected any amount representing excise duty, other than the excise duty which they have already paid to the Government. The demand has been raised alleging that the appellants have collected the amount representing excise duty - When the appellants have not collected any amount representing excise duty, the demand invoking Section 11D cannot sustain. The Tribunal in the case of Shakthi Sugars Ltd. as well as Kisan Sahkari Chini Mills Ltd. [2011 (5) TMI 430 - CESTAT, NEW DELHI] has held that the amount collected as incentive cannot be recovered u/s 11D of Central Excise Act. Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 414
Clandestine removal - clearance of finished goods on various occasions without issuance of invoices and under-invoicing the value of the goods - Principles of Natural Justice - Held that:- The appellant had made the averments without any reconciliation statement. In such situation, the findings of the lower authorities would be accepted - It is seen from the orders of the lower authorities that the adjudicating authority had examined the issues at length. In any event, the plea of the appellant that there was a delay in refund of duty in terms of the exemption Notification and therefore they cleared the goods without payment of duty, cannot be accepted - the demand of duty along with interest and penalty against the appellant company is sustainable. Penalty on Managing Director of the Appellant Company - Held that:- Appellant contended that he had no knowledge of the alleged irregularity - In any event, the appellant No. 2 had deposited the duty partly during the investigation - imposition of penalty not justified. Appeal allowed in part.
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2018 (7) TMI 413
Reversal of CENVAT Credit - inputs removed as such - reversal of lesser amount than that of the actual amount availed on the inputs - Held that:- he Commissioner (Appeals) had given details of Purchase and Sale of the inputs during the relevant period. The Commissioner (Appeals) had merely proceeded on the basis of the statements/documents filed by the assessee and no verification was conducted - the case should be remanded to the Adjudicating Authority for the purpose of verification - appeal allowed by way of remand.
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2018 (7) TMI 412
Waiver of Penalties - the Commissioner (Appeals) set aside the penalties on the Respondents as there is no material available of the act of abetting on the part of the Respondents - Held that:- In the present appeals, it has already been observed that there are materials against the Respondents for involvement in the fake transactions - After considering the facts and circumstances of the case in totality, the quantum of penalties imposed on the Respondents are excessive. The orders of the Adjudicating Authority are restored subject to that the penalties imposed on the Respondents are reduced to ₹ 2,50,000/- each - appeal allowed - decided in favor of Revenue.
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2018 (7) TMI 411
CENVAT Credit - capital goods utilized in the railway factory - Sleepers - Rail Tracks - Held that:- An identical issue has come in the assessee’s case in M/s. Steel Authority of India vs. CCE & Customs, Raipur [2016 (12) TMI 840 - CESTAT NEW DELHI], where the disputes pertains to cenvat credit available on the Sleepers, railway construction materials like fish plates, elastic rail clips, fish plates, fish bolts, nuts, lighting structures etc. and it was held that The railway track is part and parcel of material handling system integrally connected with the production on movement of dutiable goods and credit is allowed - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 410
Benefit of N/N. 49/86-CE dated 10.02.1986 as amended by N/N. 128/86-CE dated 01.03.1986 - manufacture of Footwear - period 01.03.1987 to 23.04.1987 - Held that:- On close reading of the legislative history of the Exemption Notification of the parts of footwear used in the factory of production in the manufacture of footwear falling under sub-heading NO. 6401.11 is exempted from payment of Excise duty, except for the disputed period of 01.03.1987 to 23.04.1987 - In the present case, after considering the legislative history of the exemption Notifications on parts of footwear since 1967, which was continued except for the disputed period of four days. The N/N. 119/87-CE, would be treated as clarificatory in nature in the fine of Government Policy as the legislature had given the exemption to the final product on footwear even during the disputed period. The issue is covered by the decision in the case of WPIL. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MEERUT, UP. [2005 (2) TMI 137 - SUPREME COURT OF INDIA], where it was held that In view of the consistent policy of the Government of exempting parts of power driven pumps utilized by the factory within the factory promises, it could not be said that while issuing Notification No. 46/94 of March 1, 1994, the exemption in respect of said item which was operative was either withdrawn or revoked. Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 409
Eligibility for recourse to payment of such amount as is prescribed in rule 6(3)(ii) of CENVAT Credit Rules, 2004 - noncompliance with the conditions in rule 6(3A) of the said Rules - Held that:- There can be no doubt that the scheme of provisional payment of tax at the end of each month with adjustment for actuals at the end of the year attaches significance to the proportion that the credit of inputs/input services bears to that the exempted output/output services has with that of the total output/output services. While the provisional tax is to be based on the data of the previous financial year, the final adjustment is based on data for the relevant financial year. Accordingly, rule 6(3A) of Cenvat Credit Rules, 2004, while assuming that inputs used exclusively for manufacturing of exempt goods, can be isolated, acknowledges that inputs utilised for rendering of exempt services and input services used for provision of exempt services and exempted of input goods are not easily segregated. To the extent that input services have been used in common for dutiable and exempted goods, option of recourse to rule 6(3A) of CENVAT Credit Rules, 2004 cannot be denied - It is obvious that the adjudication order is based on the incorrect appreciation of the reasoning for such apportionment in the rules and the principle underlying the formula. The denial of the facility of reversal of proportionate credit is not consistent with law. The appellant is entitled to such reversal as an alternative to payment of 6% of the value of exempted goods. Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 408
CENVAT Credit - Angle, Channel, CTB Bars, Cement, Welding Electrode etc. - Held that:- In the case of the Commissioner of Central Excise and Customs Vs. SMC Power Generation Limited, the appellant’s own case, [2017 (8) TMI 1402 - CESTAT KOLKATA], the Tribunal dismissed the appeal filed by the Revenue by holding that The credit stands allowed in the light of Rule 57Q of the erstwhile Central Excise Rules, 1944 - credit allowed - appeal dismissed - decided against Revenue.
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2018 (7) TMI 407
Penalty u/s 11AC and u/r 173Q of CER - non-payment of duty - intent to evade not present - Interpretation of Statute - N/N. 67/95 - Held that:- The contention of the Learned Counsel that the Adjudicating authority had not given any finding in respect of imposition of penalty cannot be sustained. In any event, the appellant had disputed the fact of clearance of the goods without payment of duty in respect of 445.370 M.T. as alleged in the Show Cause Notice. So, the imposition of penalty is warranted. The appellant had already paid 25% of duty as penalty. The goods are cleared without payment of duty, the imposition of penalty under Section 11AC is justified - The imposition of penalty under Rule 173Q is not proper. Appeal allowed in part.
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2018 (7) TMI 406
Rectification of mistake - the Revenue in the grounds of appeal had prayed for remanding the matter to the Commissioner (Appeals) - Held that:- Paragraph number 5 of the Final Order dated 03.08.2017 is hereby rectified/modified as: “The appeal filed by the Revenue is allowed by way of remand to the Commissioner (Appeals)" - ROM application allowed. Recall of Order No. FO/76460/2017 dated 03.08.2017 - recall on the sole ground that the appeal was required to be disposed of by the Division Bench of this Tribunal - Held that:- The Misc. Application (ROA) No. 76111/2017 received by the Registry on 31.10.2017 has not been signed and verified by the respondent assessee and the Registry should not have received the unsigned application and accordingly in all fairness, the application become infractuous and is accordingly dismissed being defective by all means - there is no substance in the application for recalling of the order filed by the respondent assessee - Misc. Application for (ROA) is accordingly dismissed.
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2018 (7) TMI 405
Rectification of Mistake application - case of applicant is that the Tribunal while passing the order failed to consider the High Court and Tribunal decisions as referred to by them - Held that:- The facts and circumstances of the present case are totally different from the case laws relied upon by the Ld. Counsel for the assessee - It is well settled law that the preceding value of the case law would be adjudicated on the facts of the said case. There is no substance in the ROM Application filed by the assessee - ROM Application dismissed.
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2018 (7) TMI 404
100% EOU - Penalty - Clandestine removal - duty alongwith interest paid before issuance of SCN - Held that:- The appellant had already paid the duty along with interest and therefore there is no requirement of issuance of Show Cause Notice. Consequently, the imposition of penalty is not warranted - there is no requirement of issuance of Show Cause Notice for imposition of penalty - penalty set aside - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 403
Principles of Natural Justice - no proper inquiry made by the Department - Held that:- It is clear from the findings of the Commissioner (Appeal) that the Department failed to make any inquiry of actual payment of duty by the manufacturer/producer. Hence, the confiscation of goods and imposition of fine and penalty is not justified - Further, the demand of Service Tax is without examining the records and documents - demand cannot sustain - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 402
Adjustment of amount due from abatement claim / adjustment of demand with refund - Abatement of duty - Rule 10 of Pan Masala Packing Machine (Capacity Determination and Collection of Duty) Rules, 2008 - Held that:- There is no dispute that the appellant is entitled to claim of abatement of ₹ 37,33,333/- - Hon'ble Karnataka High Court in the case of Commissioner of Central Excise, Bangalore -III Vs. Stella Rubber Works (Units)-II [2013 (3) TMI 299 - KARNATAKA HIGH COURT] observed that once the Adjudicating Authority has held that the assessee is entitled to refund of the amount which was paid to the department, in absence of the specific provisions authorizing the Revenue adjusting the said amount towards due to them, it is improper for them to make such adjustment. In the present case, the Adjudicating Authority adjusted the duty by invoking Section 11 of the Act, 1944. Apparently, there is no confirmed demand against the appellant and therefore the action of the lower authorities cannot be sustained in the eye of law. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2018 (7) TMI 400
Concessional rate of duty - Declared Goods -iron and steel goods used in works contracts of fabrication and creation of doors, window frames, grills etc. - Section 15 of the Central Sales Tax Act - Held that:- The issue is covered by the decision in the case of Smt B. Narasamma V/s. Deputy Commissioner, Commercial Taxes, Karnataka & Another [2016 (8) TMI 636 - SUPREME COURT], where it was held that the Assessee engaged in the works contracts of fabrication and creation of doors, window frames, grills etc., in which they claimed exemption for iron and steel goods that went into the creation of these items, after which the said doors, window frames, grills etc., were fitted into buildings and other structures and therefore the declared goods of iron and steel would not lose their character as declared goods and were taxable at the concessional rate only. The Learned Counsels at the Bar also agreed that the facts in the present case that the iron and steel goods produced by the petitioner were used in the reinforcement work of the RCC by the Assessee and therefore taxability of iron and steel goods would be subject to the restrictions under Section 15 of the CST Act. Petition disposed off.
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2018 (7) TMI 399
Whether the Value Added Tax Tribunal was correct in confirming the order of the Adjudicating Authority raising tax, interest and penalty demands against the assessee? Whether such tax, interest and penalty demands could have been raised on the ground that the registrations of the dealers from whom the assessee had made purchases, were cancelled with retrospective effect ignoring the evidence produced by the assessee to contend that there was actual movement of goods? Held that:- It is not in dispute that when the appellant claimed to have purchased the goods from the said two dealers, their registrations were in force. The registrations were cancelled later on abinitio on the ground that they were found indulging in bogus billing activities. The Appellate Commissioner in his detailed order has noted that the said two agencies Shrinathji Industries and Umiya Industries were found to be not only dealing in bogus billing activities, but existed solely for such purpose. They claimed to be the manufacturers but had no manufacturing activity. The spot visits showed no equipments or machinery for such purpose - All in all, the Tax Authorities had concurrently found that the sole activity of the said two agencies was of giving bogus bills of purchases. They were not genuinely dealing in the goods. The case of the appellant that the agencies may be dealing in some bogus billing activities but his purchases from the said dealers were genuine was therefore not believed. These findings were accepted by the Tribunal by giving brief but independent reasons. We do not find that the Tribunal committed any error in this respect - The disentitlement of input tax credit and consequent demand of tax and interest was not on the ground that the registrations of the selling dealers which were valid when the purchases were made, were cancelled later on with retrospective effect. It was on the basis that the purchases made by the appellant from such dealers themselves were found to be nongenuine. Appeal dismissed - decided against appellant-assessee.
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2018 (7) TMI 398
Validity of Revision of assessment order - Amnesty Scheme 2004 - Works contract - Whether on the facts and in the circumstances of the case, the Tribunal is justified in upholding 'the order of revision of assessment order', though it is passed, after the assessment order reached to finality, in view of the 'order passed under the Amnesty Scheme 2004'? - Held that:- The Amnesty Scheme, 2004 was itself subject to the department having right to pass further statutory orders for enhancement of tax, penalty or interest even in respect of the orders for which Amnesty is granted. This of course is subject to the benefit under the Scheme not being disturbed. It is not the case of the Applicant that benefit availed/granted under the Scheme is being disturbed. Therefore, Applicant was aware of the assessment order being subject to further proceedings while seeking to avail the benefit of the Amnesty Scheme. It is undisputed position before us that benefit which was granted under the Amnesty Scheme continues to be in favour of the Applicant. There is no variation in the same - In view of self evident position of law, the question as proposed does not give rise to any question of law which would warrant disturbing the order dated 27.4.2017, rejecting the application to refer the question of law to this Court. Whether on the facts and in the circumstances of the case, the Tribunal is justified in holding that “we are of the view, that 'tax' is assessed properly @4% instead of 2%, though 'composition' and not the 'tax' has been levied by the revising authority? - Held that:- No fault can be found with the order dated 27.4.2014 of the Tribunal holding that proposed question does not arise from the order dated 7.7.2016 of the Tribunal - the question does not give rise to any question of law which would warrant directing the Tribunal to refer this question for our consideration. Application dismissed.
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Indian Laws
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2018 (7) TMI 443
Suit for recovery of loan amount - Dishonor of Cheque due to insufficiency of funds - repayment of money lent by the applicant to his neighbor - Section 138 of the NI Act - the complaint filed by the present appellant under Section 138 of the NI Act was dismissed by the learned trial Court on the ground that as on the date when the cheque in issue i.e. cheque which was dishonoured by the bank concerned, was issued by the accused in favour of the complainant, there was no legally enforceable debt. Held that:- In the present case, undoubtedly the alleged loan was lent to the accused on 31.08.1999 but it is a matter of record that in lieu of discharge of the said debt, accused had handed over a cheque to the complainant on 28.02.2006. In fact, in my considered view, when in lieu of the loan which was so advanced by the complainant to the accused in the year 1999, as cheque was issued by the accused to the complainant in the year 2006, the same amounted to the accused having acknowledged the said debt and in fact, a fresh cause of action accrued from that particular date in favour of the complainant to recover the said amount from the accused - This very important aspect of the matter has not been correctly appreciated by the learned trial Court because it is not understandable as to how issuance of cheque in lieu of that debt was not to be construed as acknowledgment of debt. It is evident and apparent from the material on record that there was a legal and enforceable debt or liability in favour of the complainant, in lieu of which, the cheque in question was issued by the accused to the complainant, dishonouring of which led to filing of the complaint under Section 138 of the Negotiable Instruments Act. Findings to the contrary returned by learned trial Court are perverse being contrary to the records and further being based on conjectures and surmises. The case is remanded back to the learned trial Court with a direction that the same be adjudicated afresh on merit - appeal allowed.
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