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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter July 15, 2023 Case Laws in this Newsletter: GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles The Process to Prepare the GST Audit MODES OF RECOVERY UNDER GST LAW (PART-2) No Reversal of ITC on financial credit note in relation to post sale discount Taxpayer made to suffer due to a supplier’s error in GSTIN reporting News Webinar on ‘DRC-01B online functionality for liability mismatch’ Tariff Notification No. 53 /2023- Customs (N.T.) in respect of Fixation of Tariff Value for Edible Oils, Brass Scrap, Areca Nut, Gold and Silver India’s overall exports in June 2023 estimated at US$ 60.09 Billion Notifications GST - States G.O. Ms. No. 11 - dated 5-7-2023 - Puducherry SGST Seeks to amend Notification No. G.O. Ms. No. 9, dated 1st April, 2020 Highlights / Catch Notes GST Input tax Credit - capital goods - The infrastructure is used for making outward supply of services; that the transformers, Network Grid, Cables etc. shall qualify as an equipment/apparatus/machinery which has been fixed to earth by structural support; that various infrastructure created by the applicant is for a particular purpose or function; that the said infrastructure is deployed for provisioning of infrastructure support services and is ultimately used for distribution of electricity; that equipment such as Transformer, RMU etc., shall qualify as plant and machinery - the immovable property created by the applicant does not fall under the category of plant and machinery""- Not eligible of ITC - AAR Visit to Get Source Deemed supply - book adjustments of amount payable by one GSTIN by another GSTIN - The arrangement of settlement of dues / payment of consideration for the goods and / or services received by one GSTIN by another GSTIN or payment of consideration by the Head Office in respect of goods and / or services received by different branches having different GSTINS as detailed do not come within the meaning and scope of supply as defined in Section 7 of the CGST Act, 2017 - AAR Visit to Get Source Input Tax Credit (ITC) - Condition of actual payment within stipulated time period - Section 16(4) of CGST Act, 2017 - net off of receivables of one GSTIN by another GSTIN of the same company, or net-off of receivables with payables of supplier of goods/ service - net off of receivables with payables of supplier of goods/service is a valid mode of payment of consideration for the receipt of goods and / or services and it satisfies the requirement of the second proviso to sub-section (2) of Section 16 of the CGST Act, 2017. - AAR Visit to Get Source Receipt of Rent a Cab - GST under reverse charge - the applicant is liable to pay GST as the recipient of services in respect of the services of renting of any motor vehicle designed to carry passengers deceived from any person other than a body corporate not issuing invoice charging central tax at the rate of 2.5% / 6% as the case may be; during the respective periods irrespective of the status of registration of the supplier. - AAR Visit to Get Source Levy of GST on amount which would be paid by the students to the educational institution proposed to be jointly operated by the applicant and Choice Estates and Constructions Pvt Ltd by way of the proposed joint venture - Levy of GST on applicant’s share in revenue from the educational institution - The activity constitute supply and liable to GST - AAR Visit to Get Source Income Tax Revision u/s 264 - validity of Reopening of assessment u/s 147 - notice u/s 148 was validly served or not? - As per the High Court judgment, the argument raised by the petitioner has no legs to stand as the findings recorded by the Assessing Authority was not put to challenge by the Assessee before any Forum - Apex Court dismissed the SLP filed by the assessee - SC Visit to Get Source Taxation u/s 44BB - Existence of PE - contractual income from GSPC under the contract - drilling services were continued only for a period of 119 days - When the rig had entered Indian waters and it was undergoing fabrication, upgradation and positioning for the drilling activity for GSPC it can be said that the PE was there in connection with the exploration, exploitation or extraction of mineral oils. - Order of ITAT confirming the additions sustained - HC Visit to Get Source Nature of expenses - Expenditure on fencing on compound wall - capital or revenue expenses - This fencing done on the boundary wall is open to the perils of nature and definitely does not have a permanent enduring effect and, therefore, cannot be termed as a capital expenditure. - Additions directed to be deleted - AT Visit to Get Source Penalty u/s 271(1)(b) - non-compliance of notices issued during assessment proceedings - The assessee surely was deeply embroiled in litigations and, therefore, had plausible reasons for not complying with the notices, since there were criminal proceedings initiated against the directors of the assessee company who were trying to escape from being put behind the bars on account of the same - Thus sufficient cause has been adduced by the assessee for non-compliance to the notices - No penalty - AT Visit to Get Source Deduction u/s 80IA in respect of profits from Rail System, Raipur, and Hotgi - No material has been brought on record to show that such an agreement does not exist in the present case and the only plea raised by the learned DR is that such an agreement is post the commencement of operation and, therefore, the assessee does not satisfy the conditions as provided in section 80IA(4) of the Act for availing the benefit of the said section. - However, there is no specific requirement in the section that such an agreement should be prior to the operation - Benefit of exemption / deduction cannot be denied. - AT Visit to Get Source Addition u/s 68 - Unsecured Loans - onus to proof - Assessee had also paid interest on the unsecured loan after deducting TDS @20% which reveals that during subsequent assessment year 2012-13 (A.Y. 2013- 14) the assessee had squared up the account by repaying entire loan amount along with due interest after deducting TDS @ 20% - assessee has successfully discharges its onus lend on his shoulders - Additions deleted - AT Visit to Get Source Income taxable in India - Treating the remittance as fees for technical services - supervision installation and commissioning services - CBDT Circular No. 3/2022 is not applicable to the present appeal, therefore, assessee is entitled to claim the benefit of the restricted definition under India-Portugal DTAA. Since, the assessee have been found not to have made available any technical knowledge experience or skill or knowhow, therefore, the impugned services received by the assessee cannot be taxed under the provision. - AT Visit to Get Source Customs Validity of SCN - time limitation - The Court then takes note of Section 28(9A)(c) and which is the principal provision which is sought to be invoked by the respondents in order to save the SCNs’ which have been impugned. Clause (c) speaks of SCN proceedings being kept pending in light of directions that may be issued by the Board. It significantly employs the phrases “similar matter”, “specific direction” and “such matter”. - The proceedings initiated against the present petitioners cannot be said to be covered under the directives of the Board. Those SCNs’ would also not fall within the ambit of Section 28(9A)(c). - SCN quashed as period of limitation expired - HC Visit to Get Source Indian Laws Applicability of principles of natural justice on the proceedings of the NGT - alleged violators were not given an opportunity to object to the report with regard to alleged violations - Issue related to storing, handling, management and utilization of fly ash and consequential continuing damage to the environment and public health - The NGT though is a special adjudicatory body constituted by an Act of Parliament, nevertheless, the discharge of its function must be in accordance with law which would also include compliance with the principles of natural justice as envisaged in Section 19(1) of the Act. - Matter restored back to NGT for fresh consideration - SC Visit to Get Source IBC Seeking Condonation of Delay of 14 days in filing of the Appeal - It is really strange that the agency of the Government failed to seek the required information within the period of 30 days which is otherwise available now on the website of each Department but the Appellant has shown total laxity in pursuing this matter in time and had allowed the statutory period of 30 days to expire and filed the Application for Condonation of Delay along with the Appeal on the 15th day which is the last day provided in terms of Section 61(2) proviso - Delay not condoned - AT Visit to Get Source Service Tax Extended period of limitation - demand of service tax with penalty - The provisions of section 73(4) of the Finance Act are not applicable because intention of the appellant is not established - penalty under section 78 of the Finance Act is set aside as suppression is not proved - penalty under sections 77(1) and 77(2) of the Finance Act are set aside by invoking the provision of section 80 of the Finance Act - AT Visit to Get Source Validity of adjustment of pre-deposit with Cenvat Credit - Amount adjusted through debit of DRC-03 account maintained in the present GST regime - CENVAT Credit that was available with Appellant on 01.07.2017 would be treated to have been in existence during filing of the appeal as if no transition to TRAN-1 had taken place. - Pre-deposit made by the Appellants from electronic credit ledgers are in compliance to Section 35F of the Central Excise Act and the registration of appeals made by the Registry is valid. - AT Visit to Get Source Collection of Service tax from clients - appellant acting as an agent - service tax so collected not deposited to Revenue - Service Tax collected on behalf of Principals - Steamer Agency Commission - the practice adopted by the appellant is erroneous and contravenes the provisions of Section 73A(2) & (3). - Demand confirmed - AT Visit to Get Source VAT Recovery of sales tax dues - encumbered property or not - liability of auction purchasers - this is a clear case in which the Sales Tax Department had a charge on the said property as purchased by petitioner Nos. 1 and 2, in view of attachment order dated 11 August 2017, which has remained to be valid and subsisting. Further the position in law is also clear that after the recognition of the first charge of petitioner No. 3 as a secured creditor, the charge of the Sales Tax Department to recover the sales tax dues would be valid and subsisting, which would empower the Sales Tax Department to enforce the same. - HC Visit to Get Source Case Laws: GST 2023 (7) TMI 576 Validity of Garnishee Notice - before the expiry of three months of filing the appeal such harsh steps for recovery of interest has been taken under Section 78 of the WBGST Act, 2017 - HELD THAT:- Without going into the merits and legality of the recorded reasons for taking recourse to proviso to Section 78 of the Act during the pendency of the appeal, the impugned garnishee order is stayed, if the petitioner pays 20% of the interest due amounting to Rs. 31,58,936/- within seven days from date and further the Appellate Authority concerned is directed to dispose of the appeal in question expeditiously and preferably within six weeks from the date of communication of this order and further recovery of the due in question will depend upon the final outcome of the appeal and in the mode and manner as prescribed under the law. Petition disposed off. 2023 (7) TMI 575 Seeking grant of pre-arrest bail to the accused/petitioner - common criminal conspiracy with mala fide intent to defraud and deprive both the Center and the State of its legitimate revenue - H ELD THAT:- On perusal of Case Record as well as the Case Diary, it is revealed that sufficient incriminating materials have already been collected by the I.O. against the present accused/petitioner and the investigation is still in progress. But, it cannot be denied that the accused/petitioner appeared before the I.O. on 3-4 occasions and co-operated in the investigation of this case and he also produced the documents which was asked to produce before the I.O. under Section 91 Cr.P.C. The entire case is mainly based on documentary evidence. This is a fit case to extend the privilege of pre-arrest bail to the accused/ petitioner and accordingly, the interim pre-arrest bail granted to the present accused/petitioner subject to conditions imposed - this anticipatory bail application stands disposed of. 2023 (7) TMI 574 Input tax Credit - capital goods, input and input services - undertaking consumer funded jobs i.e. creating infrastructure for electricity distribution - requirement of reversal under Section 17(2) of the CGST Act read with Rule 42 of the CGST Rules - HELD THAT:- The list of services as stated at para 9 of the Annexure-I of the Application Form for advance Ruling are services other than the services of Electricity Transmission and Distribution provided by the applicant to its customers in addition to the principal supply of Electricity Transmission and Distribution . The inputs as stated at para 4 of the Annexure-I of the application form for advance ruling appears to be the expenses incurred for creation infrastructure for electricity transmission. Hence, the inputs used for creating infrastructure for electricity transmission cannot be held to be used in the Business of taxable supplies stated at para 9 of the Annexure-1. The applicant in the present case has submitted that the infrastructure is used for making outward supply of services; that the transformers, Network Grid, Cables etc. shall qualify as an equipment/apparatus/machinery which has been fixed to earth by structural support; that various infrastructure created by the applicant is for a particular purpose or function; that the said infrastructure is deployed for provisioning of infrastructure support services and is ultimately used for distribution of electricity; that equipment such as Transformer, RMU etc., shall qualify as plant and machinery - the immovable property created by the applicant does not fall under the category of plant and machinery therefore they are not eligible to claim Input Tax Credit. Thus, as input tax credit is not available, it is not necessary to go into other issues. 2023 (7) TMI 573 Input Tax Credit (ITC) - Condition of actual payment within stipulated time period - Section 16(4) of CGST Act, 2017 - net off of receivables of one GSTIN by another GSTIN of the same company, or net-off of receivables with payables of supplier of goods/ service - Whether such adjustments wouId trigger any nature of supply between the two GSTINs? HELD THAT:- The second proviso to subsection (2) of Section 16 specifies that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services with tax payable thereon. The provision clearly limits the entitlement of the recipient to input tax credit only to transactions where he has paid the consideration for the supply received, along with the tax payable thereon. Such input tax may be provisionally credited to the recipient s electronic credit ledger, but the same will be reversed in terms of the second proviso to section 16(2) by an equivalent amount being added to his output tax liability unless he makes the payment within one hundred and eighty days from the date of issue of the invoice. It is, therefore, clear that no input tax credit is admissible unless the recipient pays the supplier the consideration for the supply received - Accordingly, from the definition it is revealed that the term consideration includes, in relation to the supply of goods or services, any payment, made or to be made, whether in money or otherwise, and also the monetary value of any act or forbearance. Thus, definition of consideration is an inclusive definition which covers in its ambit any form of payment. Therefore, if the payee owes the payer a debt, and accepts a reduction in such a debt liability as a valid form of payment, that should also be regarded as a valid consideration for a supply. On a combined reading of various provisions and the definition of consideration in Section 2 (31) of the CGST Act, 2017 it is evident that the settlement of the mutual debts through book adjustment by netting off of receivables of one GSTIN by another GSTIN of the same company, or net off of receivables with payables of supplier of goods/service is a valid mode of payment of consideration for the receipt of goods and / or services and it satisfies the requirement of the second proviso to sub-section (2) of Section 16 of the CGST Act, 2017. Whether such book adjustments of amount payable by one GSTIN by another GSTIN would amount to supply between the two GSTINs? - HELD THAT:- The arrangement of settlement of dues / payment of consideration for the goods and / or services received by one GSTIN by another GSTIN or payment of consideration by the Head Office in respect of goods and / or services received by different branches having different GSTINS as detailed do not come within the meaning and scope of supply as defined in Section 7 of the CGST Act, 2017 Liability of GST in different scenario - HELD THAT:- In the scenario where the franchisee supplies old gold to the applicant and a distinct person supplies new gold ornaments of equal value as consideration to the franchisee of the applicant on behalf of the applicant and the applicant reimburses the consideration to the distinct person by book adjustment; there are in effect two supplies. The first supply is the supply of old gold by the franchisee to the applicant and the second supply is the supply of new gold ornaments of equal value made by the distinct person, to the franchisee on the direction of the applicant. It is pertinent to refer to the provisions of Section 10 of the IGST Act, 2017 that prescribes the place of supply of goods other than the supply of goods imported into or exported from India and also the provisions of Section 7 of the IGST Act, 2017 that defines inter-state supply. As per Clause (b) of subsection (1) of section 10 ibid; where the goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person . Thus, in cases where the franchisee supplies old gold to the applicant and a distinct person supplies new gold ornaments of equal value as consideration to the franchisee of the applicant on behalf of the applicant, there is a supply of gold ornaments from the distinct person to the applicant, and further, another distinct supply of such ornaments from the applicant to the franchisee; attracting goods and services tax in terms of Section 7 of the CGST Act read with Section 10 of the IGST Act in respect of each such supply, and the nature of tax applicable has to be determined in accordance with the provisions of Section 7 and 8 of the IGST Act, 2017. 2023 (7) TMI 572 Classification of supply - Works contract or composite supply of services or mixed supply - Deposit work contained in the MoU entered into between CoPT and IN - scope of Government Entity - contractors engaged by COPT to execute works and subcontractors engaged by the main contractor also would be eligible to avail the benefits of exemption on Notification No 12/2017-Central Tax (Rate) dated 28.06.2017 or not - benefits of reduced rate of 12% GST as per Notification No 24/2017-Central Tax (Rate) dated 21,09.2017, in respect of the services provided by them to CoPT - entitlement to claim the full amount of tax (if exemption notification is applicable) or to claim a refund of the excess remittance of GST (6% if 12 % is the rate applicable) as the case may be, from the date of inception of the project work? Nature of the services provided as per the MoU As per the MOU dated 22.02.2019 - HELD THAT:- As per Section 2 (119) of the CGST Act, 2017; works contract means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. From the terms and conditions of the MoU dated 22.02.2019; it is evident that the activity undertaken by the applicant for the Construction of Jetty for Indian Navy squarely falls within the ambit of Works Contract as defined in Section 2 (119) of the CGST Act, 2017. As per S. No. 6 (a) of Schedule II of the CGST Act, 2017; the composite supply of works contracts as defined in clause (119) of Section 2 shall be treated as a supply of services. Exemption as per Notification No. 12/2017 Central Tax (Rate] dated 28.06.2017 as amended by Notification No. 32/2017- Central Tax (Rate) dated 13.10.2017 - HELD THAT:- The conditions to be satisfied for exemption under the above entry are; a) The supply should be a supply of service; b) The supplier should be a government Entity. c) The recipient must be Central Government, State Government, Union territory, local authority or any -person specified by Central Government,; State Government, Union territory or local authority; and d) The consideration must be received in the form of grants from Central Government, State Government Union territory or local authority. The subject supply is Work Contract as defined in Section 2 (119) of the CGST Act, 2017 and as per SI. No. 6 (a) of Schedule II of the CGST Act; it is treated as a supply of services. Hence the first condition is satisfied - as per Section 3 of the Major Port Trusts Act, 1963 which governs the constitution of board of trustees it is seen that 100% control of applicant is with the Central Government. Hence the applicant falls within the definition of Government Entity and accordingly the second condition is satisfied - recipient of the services is the Indian Navy, which is the Central Government and hence the third condition is also satisfied. However, there is nothing in the MOU dated 22.02.2019 or in any other document submitted with the application to show that the consideration for the services are received by the applicant in the form of grants from the Central Government - the 4th condition is not satisfied and accordingly the service provided by the applicant to the Indian Navy as per MoU dated 22.02.2019 is not eligible for exemption under the entry at Si No. 9C of Notification No. 12/2017 CT (Rate) dated 28.06.2017 as inserted by Notification No. 32/2017-CT (Rate) dated 13.10.2017. Eligibility to take the benefit of the reduced rate of 12% GST as per Notification No 24/2017-Central Tax (Rate) dated 21.09.2017, in respect of the services provided by it to Indian Navy under the MoU - HELD THAT:- The services provided by the applicant is works contract services as defined in section 2 (119) of the CGST Act, 2017 and it is provided to the Indian Navy, the Central Government for the purpose of reconstruction of North Jetty after demolition of existing Jetty at Naval Base, Kochi. Therefore, the works contract services are provided to the Central Government for construction and commissioning of jetty meant for use for undertaking activities of the Indian Navy as a public authority. Hence the services provided by the applicant as per the MoU dated 22.02.2019 are eligible for the concessional rate of GST of 12 % as per the entry at Item (vi) of SI No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended - it is seen that the entry at Item (vi) of SI No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28,06.2017 as amended has been omitted by Notification No, 03/2022 Central Tax (Rate) dated 13.07.2022 with effect from 18,07,2022. Therefore, the concessional rate of GST of 12% is applicable only in respect of the services supplied as per the said MoU for which the time of supply as determined in terms of Sections 13 and 14 of the CGST Act, 2017 falls between 21.09.2017 and 17.07.2022. The services supplied as per the said MoU for which the time of supply as determined in terms of Sections 13 and 14 of the CGST Act, 2017 falls on or after 18.07,2022 will be liable to GST at the rate of 18% as per entry at Item No. (xii) of SL No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 25.06.2017. 2023 (7) TMI 571 Exemption from GST - Pure Services or composite supply? - services with a material value less than 25% of the total value provided by the contractors to KSEBL (being a Government Entity) - whether the taxes already collected by the contractor from KSEBL and remitted to the department can be refunded to KSEBL - input tax credit on Deposit works - Availability of proportionate credit by KSEBL for the quantum of taxable services provided based on the data available in GSTR-2A of KSEBL - applicability of reverse charge mechanism on Rent a Cab from Unregistered Suppliers - refund of GST (RCM) paid on the services received from unregistered rent a cab service provider - whether the practice of raising GST Invoice for Deposit works, after the completion of service and settlement of dues is in the line with the legal interpretations of the Law or not. Whether Pure Services or composite supply services with a material value less than 25% of the total value provided by the contractors to KSEBL (being a Government Entity) are exempt from GST [Notification No.: 12/2017-Central Tax (Rate) - SI. No 3,3A]? - If the answer to the above is Yes, whether the taxes already collected by the contractor from KSEBL and remitted to the department can be refunded to KSEBL? - HELD THAT:- The applicant has sought the taxability of the services provided by the contractors to the applicant and hence the applicant is the recipient of the services. Therefore, the questions do not pertain to a transaction that is being undertaken or proposed to be undertaken by the applicant and hence do not fall within the purview of the definition of advance ruling. Further, it is categorically stated in Section 103 of the GGST Act that the ruling pronounced is binding only on the applicant and the jurisdictional authority of the applicant. Hence, if a recipient obtains a ruling on the taxability of his inward supply of goods or services or both the supplier of such goods or services and their jurisdictional authority is not bound by that ruling and the supplier and their jurisdictional authority is free to assess the supply according to their own. determination and the ruling has no relevance or applicability. Whether KSEBL can avail direct input tax credit on Deposit works? - If direct credit cannot be availed by KSEBL, whether proportionate credit can be availed by KSEBL for the quantum of taxable services provided based on the data available in GSTR-2A of KSEBL? - HELD THAT:- The issue in the notice is not with respect to the eligibility of input tax credit as such but regarding the difference in the ITC claimed in GSTR-3B and the ITG available in GSTR-2A for the period. Hence, it can be considered that there are no pending proceedings within the meaning of first proviso to sub-section (2) of Section 98 of the CGST Act regarding this question raised in the application. Therefore, the question is admissible. Section 17 of CGST Act pertains to apportionment of credit and blocked credits. Sub-section (1) of Section 17 provides that where the goods or services or both are utilized by the registered person partially for the purpose of any business and partially for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business - Rule 42 and 43 of the Central Goods and Services Tax Rules, 2017, provides the manner of determination of input tax credit in respect of inputs and input services and in respect of capital goods respectively and its reversal thereof in cases where the provisions of sub-section (1) or sub-section (2) of Section 17 are attracted. These rules provide a formula restricting the input tax credit in respect of inputs, input services and capital goods which attract sub-section (1) and subsection (2) of Section 17 being partially used for making taxable supplies and partially for making exempt supplies. Thus, the outward supply of service by the applicant is subjected to applicable GST and hence the applicant is eligible for availing credit of tax paid on the inward supply of inputs, input services and capital goods used or intended to be used for the purpose of the outward supply of services, namely; Deposit Works, subject to the conditions and restrictions prescribed in Sections 16 and 17 of the CGST Ach 2017 read with Rules 42 and 43 of the CGST Rules, 2017. Liability of the applicant to pay GST under reverse charge on the rent a cab service received by them - HELD THAT:- It is an admitted fact that the applicant is a body corporate as defined in clause (11) of Section 2 of the Companies Act, 2013. Since the Notification No, 13/2017 CT (Rate) dated 28.06.2017 as amended is issued under sub-section (3) of Section 9 of the CGST Act, 2017 the applicant is liable to pay GST as the recipient of services in respect of the services of renting of any motor vehicle designed to carry passengers deceived from any person other than a body corporate not issuing invoice charging central tax at the rate of 2.5% / 6% as the case may be; during the respective periods irrespective of the status of registration of the supplier. Time of supply of the services, namely; Deposit Works supplied by the applicant - Applicability of clause (c) of sub-section (2) of Section 97 of the CGST Act - HELD THAT:- In terms of provisions of sub-section (2) of Section 31 of the CGST Act, 2017 read with Rule 47 of the CGST Rules, 2017 the applicant shall issue tax invoice in respect of the supply of services namely; Deposit Works within 30 days from the date of supply of the service. However, as the applicant is collecting the consideration as per the estimate prepared in advance from, the consumers, in view of the provisions contained in clause (a) of sub-section (2) and clause (i) of explanation to sub-section (2) of Section 13, the supply is deemed to have been made to the extent covered by the payment received and hence the time of supply of services to the extent of the payment received shall be the month in which the payment is received - the applicant shall issue a Receipt Voucher for the payment received in terms of clause (d) of sub-section (3) of Section 31 of the CGST Act read with Rule 50 of the CGST Rules and pay the applicable tax in respect of the same through the returns in Form GSTR-3B furnished for the month in terms of Section 39 of the CGST Act read with Rule 61 of the CGST Rules and also report the details of the payment of tax in Table 11 of the return in Form GSTR-1 furnished for the month in terms of Section 37 of the CGST Act read with Rule 59 of the CGST Rules for adjustment of the tax paid on the advance at the time of issue of tax invoice. 2023 (7) TMI 570 Scope of Advance Ruling application - Running and operation of the educational institution by way of joint venture - Recipient of service in the proposed joint venture - Levy of GST on amount which would be paid by the students to the educational institution proposed to be jointly operated by the applicant and Choice Estates and Constructions Pvt Ltd by way of the proposed joint venture - Levy of GST on applicant s share in revenue from the educational institution - levy of GST on Choice Estates and Constructions Pvt Ltd. s share in revenue from the educational institution - levy of GST on interest free refundable deposit proposed to be made by the applicant with Choice Estates and Constructions Private Ltd (CECPL). Who would be the recipient of service in the proposed joint venture? - Vis-a-viz Choice Estates and Constructions Private Limited, who would be the recipient of service in the proposed joint venture? - HELD THAT:- The question do not fall under the purview of any of the clauses of section 97 (2) of the CGST/KSGST Act, 2017. Moreover, in case of second question, the applicant is neither a supplied nor a recipient. Whether the amount which would be paid by the students to the educational institution proposed to be jointly operated by the applicant and Choice Estates and Constructions Pvt Ltd by way of the proposed joint venture would be liable to GST? - Whether Choice Estates and Constructions Pvt Ltd. s share in revenue from the educational institution would be liable to GST? - HELD THAT:- These questions are not at all in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. Hence as per the definition of Advance Ruling, these questions are not qualified to be included in the application for Advance Ruling. Whether the applicant s share in revenue from the educational institution would be liable to GST? - HELD THAT:- The person supplying the goods or services or both is the supplier and supply is a broader term which inter alia includes the transaction by a constituent to the person termed by such constituents. And also, as per the explanation to the clause (aa) of Section 7 (1), such person and its constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another - The students enrolled in the educational institution pays fees as consideration to the educational institution for the educational services provided to them. As per the applicant, this revenue is shared between him and CECPL, who being the providers of input services to the educational institution which being a separate person as discussed supra. Hence that part of the total revenue received by the educational institution, which is paid to the applicant is the consideration received by the applicant for the service they provide to the educational institution. Hence this transaction is taking place from one such person to another and hence it constitutes a supply under the CGST/KSGST Act, 2017. This service falls under the Heading 9983 Other professional, technical and business service - of scheme of classification of services and is taxable @ 18% as per SI. No. 21 (ii) of the Notification No. 11/2017-Central Tax (Rate) dated 28 /06/ 2017 and S.R.O 370/2017 dated 30/06/2017 of Government of Kerala. Whether the interest free refundable deposit proposed to be made by the applicant with Choice Estates and Constructions Private Ltd (CECPL) would be liable to GST? - HELD THAT:- As per Rule 28 of the CGST/KSGST Rules, 2017, Value of supply of goods or services or both between distinct or related persons other than through an agent, be the open market value of such supply. In the open market, the consideration for services of extending deposits is normally Interest . Hence the exemption under the above entry in SI.No. 27 is pertinent to the supply made by the applicant also - Thus, it constitutes a supply under the CGST/KSGST Act, 2017 but exempted from GST as per Notification No. 12/2017 - Central Tax (Rate) dated 28/06/2017 and S. R. O. No. 371/2017 dated 30/06/2017. Income Tax 2023 (7) TMI 577 Benefit of the provision of Section 10(46) - Yamuna Expressway Industrial Development Authority - notification dated 24.12.2020, which was issued qua the petitioner/assessee, with regard to AYs 2014-15 to 2018-19 should be extended to the AYs which are subject matter of its application dated 06.04.2021 - petitioner/assessee has filed an application, followed by multiple reminders for disposal of the same application - HELD THAT:- To be noted, the AYs which are subject matter of the same application are 2019-20 to 2023-24. It appears that the aforementioned notification was issued via judgment passed by a coordinate bench in Yamuna Expressway Industrial Development Authority v. Union of India Ors [ 2020 (8) TMI 903 - DELHI HIGH COURT] . So far as this court is concerned, in respect of Greater Noida Industrial Development Authority a similar approach has been adopted [ 2022 (12) TMI 1421 - DELHI HIGH COURT ] Order: (i) The concerned authority will dispose of the application filed by the petitioner/assessee within six weeks of receipt of a copy of the judgment. (ii) The concerned authority will accord a personal hearing to the authorised representative of the petitioner/assessee. For this purpose, notice will be served on the petitioner/assessee, indicating the date, time and venue fixed for the hearing. The concerned authority will have liberty to conduct the hearing via video conferencing. (iii) The concerned authority will pass a speaking order, bearing in mind the judgments referred to hereinabove, and the notification dated 24.12.2020. 2023 (7) TMI 569 Revision u/s 264 - validity of Reopening of assessment u/s 147 - notice u/s 148 was validly served - As per the High Court judgment, the argument raised by the petitioner has no legs to stand as the findings recorded by the Assessing Authority was not put to challenge by the Assessee before any Forum and raising of plea before this Court u/a 226 of the Constitution of India is not maintainable as the findings recorded by the Assessing Authority was never challenged before the Appellate/Revisional Forum - HELD THAT:- This Court is of the opinion that the impugned order does not call for interference. Special leave petition is accordingly dismissed. All pending applications are disposed of. 2023 (7) TMI 568 Income Tax Settlement Commission rejecting petitioner s application for rectification u/s 245D(6B) - Period of limitation - petitioner s case that the settlement recorded by the Commission on the consent of the parties is to be ignored because that did not reflect the correct position - case of Revenue that it had consistently opposed the application of respondent no. 1 for settlement in view of the alleged failure to make full and true disclosure of income - HELD THAT:- Commission came to the conclusion that even if it excluded the time spent pursuing the writ petition from 10th February 2017 to 21st June 2018, still the rectification application had been filed beyond the six months period stipulated in Section 245D(6B) and was thus barred by limitation. We find no error in finding of the Commission. Thus whether the grievance raised by petitioner before the Commission and in the said Writ Petition that the consent as recorded was not given would qualify to be a mistake apparent from the record which is the only thing the Commission may rectify. Petition dismissed. 2023 (7) TMI 567 Interest paid to the bank - disallowance made as funds/loan received from the bank had been diverted as interest-free advances to the partners - disallowance was mandated as assessee had not been able to demonstrate commercial expediency - does the respondent/assessee need to demonstrate commercial expediency in each year concerning a loan transaction which took place in and about AY 2005-06? - HELD THAT:- If the loan availed on account of stated commercial expediency, which has, in a sense, received the imprimatur of the appellant/revenue when the loan was first taken and several years thereafter, surely, the respondent/assessee is not required, once again, to demonstrate commercial expediency in each year. The AO seems to have disregarded this aspect in the AY in issue. Whether revenue incur any loss of revenue whether interest is allowed in the hands of the respondent/assessee i.e., the partnership firm or its partner? - The revenue cannot but accept that the interest expenditure is revenue neutral. In case this was to be disallowed in the hands of respondent/assessee i.e., the partnership firm, it would have to be allowed in the hands of the partners. 2023 (7) TMI 566 Taxation u/s 44BB - Existence of PE - contractual income from GSPC under the contract - drilling services were continued only for a period of 119 days - whether would not be covered under Article 5(5) of the India Singapore DTAA which requires provision of service or facility for a period of more than 183 days in the fiscal year? time of 183 days will begin when the actual services under the contract begins or from the moment the rig enters Indian territory? - when should an enterprise be considered to have rendered services or facilities? HELD THAT:- It is settled law that the use of the expression in connection with in Section 44BB expands the horizon of the services or facilities, provided by a non-resident assessee provided they have connection with the exploration, extraction or production of mineral oils. Mr. Agarwal, as noted earlier, in all fairness stated that service or facility provided would be covered by section 44BB. If we have to accept Appellant stand that the date on which the count of 183 days will begin is only when the rig actually begins to perform under the contract, i.e. 3rd December 2010, then (a) there was no need to bring rig into the country in April 2010, (b) there was no need to hold meetings with GSPC in April 2010, (c) the fittings could have been made outside the country and the rig could have been brought into India later, and (d) it will not stop an assessee from saying that in the middle of the contract of drilling the rig broke down, she was off hire and, therefore, those days should not be added in counting 183 days. Theoretically, it is possible that on 30th March the rig may have a sudden break down and on 2nd April the rig may start working again to escape the requirement of Thus even though the actual contract was entered into with GSPC only on 18th June 2010, and accepting what Appellant states that the drilling work actually commenced on 03rd December 2010, still the fact that as on 27th April 2010 the rig was undergoing necessary upgrades / repairs to meet the GSPC requirements, in our view the rig was already in the contracting state for providing the services or facilities in connection with the exploitation, exploration or extraction of mineral oil as early as on 27th April 2010. Thus when the rig had entered Indian waters and it was undergoing fabrication, upgradation and positioning for the drilling activity for GSPC it can be said that the PE was there in connection with the exploration, exploitation or extraction of mineral oils. No substantial question of law arises 2023 (7) TMI 565 Reopening of assessment u/s 147 - notice issued u/s 148A(b) - Unexplained foreign remittances and time deposits - petitioner is a resident of Canada, and was in India consecutively for 31 days - HELD THAT:- As petitioner has attempted to explain the remittance by alluding to the fact that this was nothing but interest earned by him against savings account FDR-NRO maintained with ICICI Bank. For time deposit petitioner has indicated that the amount was deposited in FDR-NRE account on 05.10.2017, which matured on 05.10.2018. It is the petitioner s assertion that the interest earned and the matured amount was re-invested on 08.10.2018 in the FDR-NRE account, once again with ICICI Bank. Petitioner also takes stand that he had no other source of income, apart from interest earned from bank interest. As the third transaction is concerned, the petitioner/assessee appears to take the position that he would want the AO to give detailed break-up of the amount involved. It concerns high value (specified) transactions which are required to be reported by the concerned person in terms of the provisions of Section 285BA(1) of the Act. AO, however, has given short shift to the reply filed by the petitioner. This aspect of the matter has been put to Mr Sunil Agarwal. As the best course forward would be that the AO be directed to reexamine the matter in the light of the reply filed by the petitioner and material placed by him, accordingly, the impugned order u/s 148A(d) and the consequential notice issued u/s 148 of the Act are set aside. AO is directed to carry out a de novo exercise. As before AO proceeds further, he will furnish a break-up of the high value (specified) transactions which, according to him, the petitioner was required to report under Section 285BA(1) of the Act. 2023 (7) TMI 564 Under invoicing of the export sales - AO based on the report of the Hon ble Justice, Enquiry Commission, found that the assessee has exported iron ore which were under invoiced - HELD THAT:- We note that the in the case of DCIT vs. Raw Mining and Industries Pvt. Ltd. [ 2020 (1) TMI 1115 - GUJARAT HIGH COURT] has decided the issue in favour of the assessee stating AO has miserably failed to collect any evidence against the assessee demonstrating the fact that it has under-invoiced its export and therefore, received unaccounted sale proceeds. The undisclosed sales cannot be worked out on the basis of this report, and no addition required to be made in the absence of any evidence Admittedly, the assessee is the trader of Mineral Ores and not engaged in mining activities. Hence, grounds of appeal of the revenue are hereby dismissed. 2023 (7) TMI 563 On-money receipts - undisclosed receipts - Net profit estimation - HELD THAT:- As relying on Jay Builder [ 2012 (12) TMI 1194 - GUJARAT HIGH COURT] we decide the issue directing the AO to estimate the addition to 15% of on-money receipt as upon quashing the order passed by the CIT(A). Appeal of the assessee is partly allowed. 2023 (7) TMI 562 Deduction u/s. 80-IA - assessee filed Form 10CCB beyond the prescribed date - CIT(A) held that filing of report of audit in form 10CCB within due prescribed time is a mandatory requirement, and since the assessee failed to do so confirmed disallowance made by AO - HELD THAT:- Recently, in the case of DCIT vs. Croygas Equipments Pvt. Ltd. [ 2023 (7) TMI 166 - ITAT AHMEDABAD] have dealt aspect of whether benefit u/s. 10AA of the Act could be denied to the assessee if the assessee failed to fill Form 56F along with return of income, which however was subsequently filed by the assessee before the Assessing Officer, before the conclusion of assessment. Further, in this case, also distinguished the decision of Wipro Ltd. supra [ 2022 (7) TMI 560 - SUPREME COURT] which was rendered by the Hon ble Supreme Court on a different set of facts. As relying on S.A. Himnani Distributors (P.) Ltd. [ 2014 (7) TMI 783 - GUJARAT HIGH COURT] held such deduction cannot be denied on account of a procedural/technical default by the assessee CIT(A) has erred in facts and in law in not allowing the claim of the assessee on the ground that benefit of section 80-IA of the Act is not available to the assessee if the assessee does not e-file Form 10CCB along with return of income when the assessee admittedly furnished From 10CCB, prior the return of income filed by the assessee being processed by the Department u/s. 143(1) - Decided in favour of assessee. 2023 (7) TMI 561 TDS u/s 195 - foreign commission paid to foreign agents without deducting TDS u/s 40(a)(i) - scope of operation carried out by the non-resident commission agent in India - HELD THAT:- As in the case of CIT vs. Toshoku Ltd. [ 1980 (8) TMI 2 - SUPREME COURT] commission agent who does not carry out any business operation in India and acts as a selling agent outside India is not chargeable to tax in India and that the receipt in India of the sale proceeds remitted by the purchasers from abroad did not amount to an operation carried out by the non-resident commission agent in India as contemplated by clause (a) of the Explanation to Section 9(1)(i) - commission amounts which were earned by the non-resident for services rendered outside India could not be deemed to be income which had either accrued or arisen in India. Thus no reason to deviate from the stand taken by the Coordinate Bench which was passed in favour of the assessee by confirming the order passed by the Revenue in assessee s own case for A.Ys. 2010-11 2011-12 [ 2021 (5) TMI 479 - ITAT AHMEDABAD] - Decided against revenue. 2023 (7) TMI 560 Nature of expenses - Expenditure on fencing on compound wall - capital or revenue expenses - assessee is a co-operative housing society - HELD THAT:- The expenditure that has been debited for fencing wall is for fencing the boundary wall which does not have a permanent enduring effect and it is definitely perishable and subject to natural wear and tear, therefore it cannot be said that it is a capital expenditure. DR supported the findings of the revenue authorities. We are of the considered view that this fencing done on the boundary wall is open to the perils of nature and definitely does not have a permanent enduring effect and, therefore, cannot be termed as a capital expenditure. The assessee is doing no business activities and it is a co-operative housing society where principle of mutuality would apply. We direct the AO to delete this addition from the hands of the assessee. Ground No.1 of the assessee s appeal is allowed. Deduction u/s 80P(2)(d) - funds were invested in nationalized banks i.e. Bank of Maharashtra Oriental Bank of Commerce and not in co-operative bank - HELD THAT:- We have perused the return of income filed by the assessee for the relevant year and it is observed that the claim of deduction u/sec. 80P(2)(d) is not emanating from the return of income, meaning thereby, the assessee has never claimed any deduction u/sec. 80P(2)(d) - As earlier observed, CIT(A) has not dealt with on the merits of both the additions made by the AO and had simply said that since the issues were debatable, it was not a subject matter of rectification u/sec. 154 and had thus dismissed the appeal of the assessee. But here we find that since the assessee has never claimed deduction u/sec. 80P(2)(d) it was beyond the jurisdiction of the AO to travel beyond the scope of return of income filed by the assessee and in the first place since deduction u/sec. 80P(2)(d) was never claimed in the return of income, the AO necessarily cannot make addition implying the applicability of sec. 80P(2)(d) - We, therefore, direct the AO to delete this addition from the hands of the assessee. Appeal of the assessee is allowed. 2023 (7) TMI 559 Payment of interest u/sec. 234C - Non payment of advance tax instalment on time as per sec. 208 which he is required to pay - accrual of income - As per AO though the agreement was dated 19/12/2013, the pay order for payment of sale consideration was dated 14/12/2013 and that day, since the pay order was purchased, the capital gain had accrued on that date and liability to pay advance tax had arisen on 14/12/2013 itself and no advance tax was paid on or before 15/12/2013 HELD THAT:- Admittedly, the factual position is that the pay order was purchased on 14/12/2013 which was cleared on 16/12/2013, but the registration of sale took place only on 19/12/2013. That, as per the provisions of Transfer of Property Act, 1882, the ownership of an immovable property gets transferred from one party to another only through valid registration before the Registrar of Assurances. Till the time, the ownership is transferred whatever advance, party receives is a liability in his hand and it does not take the character of income accrued. We are in conformity with the findings of the ld. CIT(A) that such liability to pay advance tax arises only on the accrual of income in the hands of the assessee and not prior to that. When the pay order was purchased and it was cleared on 16/12/2013 such amount received was only a liability in the hands of the assessee and was not an income accrued . Thus no liability arises to pay advance tax on or before 15/12/2013. Since, the sale registration was completed on 19/12/2013, the liability to pay advance tax on the sale transaction can only be said to have arisen on 19/12/2013. Therefore, we do not find any infirmity with the findings of the ld. CIT(A), which is upheld. The grounds of appeal of the Revenue are dismissed. 2023 (7) TMI 558 Revision u/s 263 - period of limitation - order u/s. 153A/143(3) held by the Pr. CIT to be erroneous - HELD THAT:- No addition in absence of any incriminating material can be made in respect of unabated assessment of the assessee, we are of a strong conviction that now when the A.O could not have made an addition on the basis of which his order u/s. 153A/143(3) of the Act had been held by the Pr. CIT to be erroneous, therefore, the very assumption of jurisdiction by the Pr. CIT u/s. 263 of the Act, on the said count, being bad in law is liable to be vitiated. As relying on Alagendran Finance Ltd. [ 007 (7) TMI 304 - SUPREME COURT ] Pr. CIT in the case of the present assessee before us was only vested with the jurisdiction to have revised the reassessment order that was passed by the A.O u/s. 143(3)/147 of the Act dated 23.12.2018. As the aforesaid order u/s. 143(3)/147 dated 23.12.2018 could have been revised u/s. 263 latest by 31.03.2021, which had lapsed way back, therefore, even the said remedy would not be available with the Pr. CIT. Pr. CIT had clearly exceeded his jurisdiction u/s. 263 of the Act and had wrongly revised the order passed by the A.O u/s. 153A/143(3) - Decided in favour of assessee. 2023 (7) TMI 557 Disallowance u/s 14A - As per assessee no exempted income earned by the assessee during the relevant assessment year - HELD THAT:- Respectfully following the ratio of law as laid down in the case South Indian Bank Ld. [ 2021 (9) TMI 566 - SUPREME COURT] we are of the view that if there is no exempt income, no disallowance can be made u/s. 14A r.w.r.8D, however, as fairly admitted by the ld. AR that there was a disclosure of exempt income therefore, the disallowance should be restricted to the said amount. Consequently, the order of the CIT(A) and ld. AO are set aside on this issue and it is directed to restrict the disallowance made u/s. 14A r.w.r.8D to the amount of actual exempt income earned by the assessee during the year. Appeal of the assessee is partly allowed. 2023 (7) TMI 556 Penalty u/s 271(1)(b) - non-compliance of notices issued during assessment proceedings - HELD THAT:- The assessee has adduced evidences before us showing that during this period there were FIRs lodged against the Directors of the company and they had moved anticipatory bail application before the Sessions Court which was rejected and the assessee had moved to the High Court both Hon ble Bombay High Court and Hon ble High Court of Gujarat. The assessee surely was deeply embroiled in litigations and, therefore, had plausible reasons for not complying with the notices, since there were criminal proceedings initiated against the directors of the assessee company who were trying to escape from being put behind the bars on account of the same Thus sufficient cause has been adduced by the assessee for non-compliance to the notices, we hold that there is no case for levying penalty u/s 271(1)(b) - The penalty levied u/s 271(1)(b) of the Act is, therefore, directed to be deleted. Decided in favour of assessee. 2023 (7) TMI 555 Amount paid or written back during the year under consideration which has already been disallowed in the earlier years u/s 43B - HELD THAT:- As decided in assessee own case [ 2023 (6) TMI 665 - ITAT MUMBAI ] for the assessment year 2003 04, dismissed similar issue while following the decision rendered in assessee s own case in preceding years. - Decided against assessee. Disallowance on account of Club Membership fees - HELD THAT:- As decided in assessee own case [ 2023 (6) TMI 665 - ITAT MUMBAI ] issue is covered in favour of the assessee by the decision of Otis Elevator CO. (India) Ltd. [ 1991 (4) TMI 53 - BOMBAY HIGH COURT ] Taxability of interest received from the Income Tax Department - HELD THAT:- As far as the taxability of interest is concerned, granted alongwith interest. However, if in the subsequent year refund of interest is withdrawn, then the same should be reduced from the total income of the assessee. Accordingly, we direct the A.O. to tax interest income in terms of the order of the tribunal for A.Y. 1993-94. Reduction of interest income while calculating deduction under section 80HHC - HELD THAT:-we find that the coordinate bench of the Tribunal, vide order dated [ 2023 (6) TMI 665 - ITAT MUMBAI ] , passed in assessee s own case for the assessment year 2003 04 in view of the decision of honourable Supreme Court in case of ACG Associated Capsules [ 2012 (2) TMI 101 - SUPREME COURT ] the Explanation to section 80 HHC to be applied on net interest and not on gross interest. Accordingly, we direct the AO to apply clause (baa) in respect of interest receipt by following the decision of honourable Supreme Court (supra). We accordingly direct the A.O. to exclude the excess of interest income over interest expenditure from the eligible profit of the company while computing deduction u/s 80HHC Reduction of 90% of the profit on sale of DEPB credits from the profit of the business for calculation of deduction u/s 80HHC - HELD THAT:- As we find that in Topman Exports [ 2012 (2) TMI 100 - SUPREME COURT ] held that profit on transfer of DEPB is covered under clause (iiid) of section 28 and 90% of such profit on transfer of DEPB certificate will get excluded from profits of the business , while calculating the deduction under section 80HHC of the Act. Since the learned CIT(A) has already directed the AO to reduce only 90% of such income for calculating the deduction under section 80HHC of the Act, therefore, in view of the aforesaid decision we find no infirmity in the aforesaid direction of the learned CIT(A). Allocation of Head Office expenses and reducing the same from deduction under section 80-O - HELD THAT:- We find that the coordinate bench of the Tribunal [ 2023 (6) TMI 665 - ITAT MUMBAI ] passed in assessee s own case for the assessment year 2003 04 while deciding similar issue in favour of the assessee as held there is no need for allocation of any expenses when the expenses are directly connected with periods - we are of the considered opinion that there is no necessity for allocating the head office expenses to the units claiming deduction u/s. 8OHH, 80I, 80M and 80-0. Computation of deduction u/s 80 IA - miscellaneous receipts include interest, excess/short provision, prior period adjustments, rent, miscellaneous receipts, job charges, exchange rate difference, export incentive, profit on the sale of DEPB license, notice pay and sludge sales and all these receipts are directly connected with and derived from the eligible business, and therefore, should be considered for computation of deduction under section 80-IA - HELD THAT:- As is evident from the record, the learned CIT(A) only examined the receipts from job charges and excess provisions written back and considered the same to be business profits for computing deduction under section 80-IA of the Act. While, the other receipts, as noted above, under the broad category of miscellaneous receipts were not examined by any of the lower authorities to determine whether they are derived by the undertaking or the enterprise from the eligible business, as per the provisions of section 80-IA of the Act. Therefore, in view of the above, we deem it appropriate to restore this issue to the file of the AO for de novo adjudication as per law, after examining each and every receipt under the category of miscellaneous receipts , which were excluded from the business profits by the learned CIT(A) for computing the deduction under section 80IA of the Act. Thus, to this extent, the impugned order on this issue is set aside. Nature of receipt - sales tax exemptions received by the assessee under all the schemes of various State Governments - Capital or revenue receipt - HELD THAT:- From the perusal of the eligibility certificate issued under the New Incentive Policy-Capital Investment Incentive (General) Scheme (1995-2000) we find that the same also mentions the total investment in fixed assets by the assessee. Therefore, we find that the sales tax exemption scheme of the Government of Gujarat is of the nature similar to the schemes considered by the coordinate bench in the earlier years, and thus, sales tax exemption received under this scheme is in the nature of capital receipt. Punjab Industrial Incentive Code under the Industrial Policy, 1996,we find that the said scheme was formulated with a view to promote growth of the industry in the State and for that purpose it provides various incentives for new industrial units that come into production or undertake expansion on or after 01/04/1996. We find that in the scheme, inter-alia, the capital subsidy is provided to the new large and medium units set up in the notified area as mentioned in Annexure-I of the scheme. We find that under the said scheme certificate of eligibility was also issued to the assessee in respect of Vikram Bathinda Cement Grinding Unit. Thus, the dominant purpose for which this incentive scheme was introduced is also for setting up the industry in the notified area to promote industrial growth in the State. Therefore, we are of the considered view that the sales tax exemption received by the assessee under the scheme is also in the nature of capital receipt. Taxability of dividend received from Egyptian company - HELD THAT:- We find that a similar issue came up for consideration before the coordinate bench of the Tribunal in assessee s own case in assessment year 2003-04. [ 2023 (6) TMI 665 - ITAT MUMBAI ] since the amendment vide Finance Act, 2003 to section 90 was held to be effective from 01/04/2004 and thus applicable from the assessment year 2004-05, therefore the year under consideration will be governed by the aforesaid amended provisions and Notification no. 91 of 2008 dated 28/08/2008 issued under section 90(3) of the Act is also applicable. As decided in Kulandagan Chettiar's case [ 2004 (5) TMI 8 - SUPREME COURT ] mere fact of taxability in the treaty partner jurisdiction will not take it out of the ambit of taxable income of an assessee in India and that such income shall be included in his total income chargeable to tax in India in accordance with the provisions of the Income-tax Act, 1961 (43 of 1961), and relief shall be granted in accordance with the method for elimination or avoidance of double taxation provided in such agreement . Decided against assessee. Disallowance made on account of expenses incurred for making advertisement films - HELD THAT:- This issue is recurring in nature and has been decided in favour of the assessee in the preceding years. Disallowance u/s 14A - disallowance incurred towards earning exempt income - assessee's own funds more than the investment in tax-free securities - HELD THAT:- As sufficiently evident that during the year under consideration, the assessee's own funds are more than investments, including the investments for earning exempt income. We including the investments find that in CIT vs HDFC Bank Ltd. [ 2014 (8) TMI 119 - BOMBAY HIGH COURT ] held that where assessee's own funds and other non-interest bearing funds were more than the investment in tax-free securities, no disallowance under section 14A of the Act can be made. As in South Indian Bank Ltd. [ 2021 (9) TMI 566 - SUPREME COURT ] held that disallowance under section 14A of the Act would not be warranted where interest-free own funds exceed the investment in tax-free securities and in such a case the investment would be presumed to be made out of assessee's own funds. Therefore, no infirmity in the impugned order in deleting the disallowance made under section 14A Exclusion of sales tax and excise duty from the total turnover - HELD THAT:- We find that this issue is no longer res integra and has been decided in favour of the assessee in CIT v/s Lakshmi Machine Works [ 2007 (4) TMI 202 - SUPREME COURT ] wherein held that excise duty and sales tax component cannot form part of the total turnover for computation of deduction under section 80HHC of the Act. Thus, respectfully following the aforesaid decision, ground raised in Revenue s appeal is dismissed. Reduction of 90% of DEPB income from business profit for computing deduction under section 80HHC - HELD THAT:- We find that this issue is no longer res integra and has been decided in Topman Exports Ltd. [ 2012 (2) TMI 100 - SUPREME COURT ] wherein the Hon'ble Supreme Court held that 90% of the DEPB income is to be reduced from the business profit for computing deduction under section 80HHC of the Act. Thus, no infirmity in the impugned order passed by the learned CIT(A) on this issue. Deduction u/s 80IA in respect of profits from Rail System, Raipur, and Hotgi - Mandation of agreement entered with the other Statutory Body for developing or operating and maintaining or developing, operating and maintaining a new infrastructure facilities - HELD THAT:- As per section 80IA(4) one of the conditions for applicability of the section is that there has to be an agreement entered with the other Statutory Body for developing or operating and maintaining or developing, operating and maintaining a new infrastructure facilities. No material has been brought on record to show that such an agreement does not exist in the present case and the only plea raised by the learned DR is that such an agreement is post the commencement of operation and, therefore, the assessee does not satisfy the conditions as provided in section 80IA(4) of the Act for availing the benefit of the said section. We find that the language of the section does not support the submissions so made by the learned DR, as there is no specific requirement in the section that such an agreement should be prior to the operation. We find that the said section only requires that there has to be an agreement, which condition as noted by the coordinate bench of the Tribunal in the preceding year is duly satisfied. In the absence of any allegation of change in facts and law as compared to the preceding year, we find no reason to deviate from the view so taken by the coordinate bench in the preceding year. No infirmity in the impugned order in allowing deduction under section 80IA 2023 (7) TMI 554 Addition u/s 68 - Unsecured Loans - onus to proof - treating as share application money an accommodation entry - reliance on information from ADIT (Investigation) - HELD THAT:- As assessee has successfully demonstrated the factum of identity, capacity and creditworthiness of the creditors who gave loan of Rs. 25 lakhs to the assessee - there is no IOTA of doubt regarding this transaction which was rooted through banking channels the assessee has also paid interest thereon after deducting the TDS with the department. Assessee had also paid interest on the unsecured loan after deducting TDS @20% which reveals that during subsequent assessment year 2012-13 (A.Y. 2013- 14) the assessee had squared up the account by repaying entire loan amount along with due interest after deducting TDS @ 20%. Thus assessee during the proceeding before the AO as well as before the ld CIT(A) successfully discharges its onus lend on his shoulders as per requirement of section 68 of the Act and submitted all documentary evidences under his command - Decided in favour of assessee. 2023 (7) TMI 553 Income taxable in India - Treating the remittance as fees for technical services - supervision installation and commissioning services - whether activity/services performed by CBV did not impart or transfer any technical knowledge/knowhow skills to the services recipient? - DTAA between India and Belgium - Restrictive definition of FTS as in the India-Portugal DTAA cannot be extended into the India-Belgium DTAA - HELD THAT:- Coordinate bench of the ITAT in the case of M/s Essity Hygiene Health [ 2022 (6) TMI 1411 - ITAT MUMBAI] wherein after following the decision of ITAT Pune [ 2022 (2) TMI 769 - ITAT PUNE] it is held that there is no requirement of separate notification for importing the beneficial treatment from the agreement. Therefore, respectfully following the aforesaid decisions we are of the considered view that CBDT Circular No. 3/2022 dated 03.02.2022 is not applicable to the present appeal, therefore, assessee is entitled to claim the benefit of the restricted definition under India-Portugal DTAA. Since, the assessee have been found not to have made available any technical knowledge experience or skill or knowhow, therefore, the impugned services received by the assessee cannot be taxed under the provision. Accordingly, appeal of the assessee is allowed. Customs 2023 (7) TMI 552 Seeking direction to the Respondents to permit the petitioners interrogation and recording of statements under Section 108 of the Customs Act, 1962 in presence of their advocate at a visible distance, may be beyond audibility - HELD THAT:- The relief sought in the writ petition itself was granted by the interim order. As such nothing further survives in this matter. The writ petition is accordingly disposed of. 2023 (7) TMI 551 Over-valuation of the goods that were imported for the purpose of setting up Transmission Line and Substation in the State of Maharashtra - Confiscation - Penalty - Tribunal dismissed [ 2022 (8) TMI 1408 - CESTAT MUMBAI] the revenue appeal - HELD THAT:- The dispute herein is concluded by the findings of fact recorded by the authorities below and the impugned order does not require any interference at our behest. Appeal dismissed. 2023 (7) TMI 550 Validity of SCN - time limitation - period for completion of proceedings as prescribed in Section 28(9) of the Act has expired, the authorities would retain no jurisdiction to adjudicate upon the same - HELD THAT:- It is pertinent to note that the SCN against Gautam Spinners had been issued in purported exercise of powers conferred by Section 28(4) of Customs Act, and which enables the Customs authority to initiate proceedings where duty has either not been levied, not paid, short levied, short paid or erroneously refunded on account of collusion, wilful misstatement or suppression of facts by the importer or the exporter as the case may be. Since the question which stands raised would have to be examined in the backdrop of Section 28 of the Act. As would be evident from a reading of provision of section 28, sub-section (4) provides a window of five years from the relevant date within which proceedings under the said provision may be initiated. The proceedings so initiated are liable to be brought to a close in accordance with the statutory timelines which stand set out in subsection (9). In terms of sub-section (9) and since the notice had been issued with reference to Section 28(4), the proceedings were liable to be brought to a close within one year from the date of the notice and in the facts of the present case, the same being computed from 05 August 2021. Of equal significance is the amendment which came to be introduced in Section 28(9)(b) in terms of Finance Act, 2018 and pursuant to which the words where it is possible to do so came to be deleted. The statutory amendment as introduced in terms of the aforenoted Act 13 of 2018 thus clearly lends credence to the submission of learned counsel for the petitioner that the period of one year as prescribed in clause (b) was legislatively conferred a mandatory flavour - The Court then takes note of Section 28(9A)(c) and which is the principal provision which is sought to be invoked by the respondents in order to save the SCNs which have been impugned. Clause (c) speaks of SCN proceedings being kept pending in light of directions that may be issued by the Board. It significantly employs the phrases similar matter , specific direction and such matter . Undisputedly, the SCNs which had been issued against Anil Aggarwal and 11 other individuals did not stand on the same pedestal as the SCNs impugned here since the former, undisputedly, had been issued by the officials of the DRI. In fact, it was those SCNs which formed the primary subject matter of the Board s directives dated 17 March 2021 and 16 April 2021. As was noticed hereinbefore, the SCNs which stand impugned in these petitions had admittedly been issued post the promulgation of those directives by the Board and admittedly by the competent jurisdictional Commissionerates. The proceedings initiated against the present petitioners cannot be said to be covered under the directives of the Board. Those SCNs would also not fall within the ambit of Section 28(9A)(c). Since admittedly, the maximum period as prescribed under Section 28(9) has expired, those proceedings would not survive in law. Petition allowed. 2023 (7) TMI 549 Refund of SAD - rejection on the ground that Chartered Accountant s Certificate submitted by the respondent did not clearly state as to whether the duty burden was passed on to another - N/N. 102/2007-Cus. dated 14.09.2007, as amended by N/N. 93/2008 dated 01.08.2008. HELD THAT:- The objection raised by the Department is that the certificate pertains to the period from April to June 2011 and hence, the Bills-of-Entry pertaining to the period from February to March 2011 are not covered by the certificate. It is not understanding as to how such a contention is raised by the Department. Apart from stating that the Chartered Accountant has not verified the duty paid for the period from February to March 2011, there is no evidence put forth by the Department to disprove the credence of the Chartered Accountant certificate. There are no merits in the appeal filed by the Department. The same is dismissed. 2023 (7) TMI 548 Valuation of imported goods - 118 used cranes and 04 consignments of accessories - rejection of declared value - redetermination of value - entire facts not considered at the time of redetermination of value - opportunity of hearing not provided to appellant - Confiscation - redemption fine - penalty - violation of principles of natural justice - HELD THAT:- The entire case made out against the appellants is based on the statements recorded. Further it is observed that the impugned goods were assessed to duty by the Custom authorities acting as per the provision of law. The investigations have been undertaken much later on and in some case the duty has been sought to be recovered much after the expiry of 5 years from the appellant stating the same to be voluntary payment of duty. Was the payment voluntary or not need to be established. Where the statements recorded voluntary or not is not forthcoming. The decisions relied upon by the Commissioner for not allowing the cross examination are not in cases where person comes forth after the expiry of period limitation and deposits the duty suo motto. The appellants should be allowed an opportunity to defend their case in the manner they deem best. They should have been heard at least. That being so the appeals in respect of these three appellants need to be allowed and matter remanded to original authority for de novo consideration after allowing the opportunity of hearing to the appellant and also to cross examine the person whose statement revenue intend to rely upon against them. It is evident that actual amount paid by him against the purchase of the two cranes was not Rs 2,00,00,000/- but the actual amount paid by him was only Rs 1,25,00,000/-. That being so accepting the same as transaction value in the course of High Sea Sales, the transaction value by applying the principles laid down, as have been applied by the show cause notice and in the impugned order, the transaction value should have been determined at Rs 1,25,00,000/- which is less than the actual transaction value declared on the Bill of Entries at the time of clearance of goods - It is settled principle in law the entire fact stated in the statement about the transaction should have been taken into account while determining the correctness of transaction - the appeal filed by the appellant 2 will have to be allowed in his favour setting aside the impugned order in his respect. Appeal disposed off. Insolvency & Bankruptcy 2023 (7) TMI 547 Seeking Condonation of Delay of 14 days in filing of the Appeal - It is also averred in the Application that the delay has been caused as the Applicant had to collect relevant papers from various Regional Offices - HELD THAT:- In the present case, the Appellant, a Government agency, allegedly not a party to the litigation, came to know about the Impugned Order on the very next date i.e., 04.02.2023 and was having about 28 days for the purpose of collecting the relevant information to file the Appeal in terms of Section 61(2) but the Appeal was not filed within that statutory period rather 14 more days were spent in filing the Appeal and the same has been filed on the last day provided in the proviso to Section 61(2) and a request thus has been made for Condonation of Delay - No doubt, that this Tribunal has the jurisdiction to Condone the Delay but the said jurisdiction has to be exercised only if it is satisfied that there was a sufficient cause for not filing the Appeal in time. It is really strange that the agency of the Government failed to seek the required information within the period of 30 days which is otherwise available now on the website of each Department but the Appellant has shown total laxity in pursuing this matter in time and had allowed the statutory period of 30 days to expire and filed the Application for Condonation of Delay along with the Appeal on the 15th day which is the last day provided in terms of Section 61(2) proviso - There are no sufficient cause for the purpose of Condonation of Delay of 14 days in filing the Appeal and hence the Application is hereby dismissed. Service Tax 2023 (7) TMI 546 Levy of Service Tax - Mark Up/Differential Ocean Freight - Container Detention Charges - Toll Tax, Brokerage - Forklift Charges - Fumigation Charges - Sundry Charges - HELD THAT:- In MARINETRANS INDIA PVT. LTD. VERSUS CST, HYDERABAD - ST [ 2019 (4) TMI 534 - CESTAT HYDERABAD ], the Division Bench held after considering the Circular dated 12.08.2016 issued by the Central Board of Excise and Customs that buying and selling space on ships does not amount to rendering a service and any profit or income earned through such transactions would not be leviable to service tax. The demand of service tax on mark up on ocean freight, container detention charges and toll taxes is set aside - The plea of the appellant that service tax to the extent not disputed and paid with interest and covered by section 73(3) of the Finance Act is accepted and the demand raised in the show cause notice to that extent is set aside. The provisions of section 73(4) of the Finance Act are not applicable because intention of the appellant is not established - penalty under section 78 of the Finance Act is set aside as suppression is not proved - penalty under sections 77(1) and 77(2) of the Finance Act are set aside by invoking the provision of section 80 of the Finance Act - plea of the appellant for refund of the service tax already paid is rejected. Appeal allowed in part. 2023 (7) TMI 545 Levy of Service Tax - Erection, Commissioning and Installation services (ECIS) - small contractor undertaking various works in the nature of erection and commissioning, repair jobs of transformers, cables, etc., providing services to Andhra Pradesh State Power Distribution Company Ltd (APSPDCL) - HELD THAT:- The issue is no longer res integra and the same has been decided in favour of the Appellant by the Coordinate Bench of this Tribunal in the case of SHRI GANESH ENTERPRISES VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX [ 2014 (2) TMI 436 - CESTAT BANGALORE ] wherein, this Tribunal was considering similar issue of services having been provided to the same principal APSPDCL under the heads Management, Maintenance Repair service, ECIS and others. This Tribunal held that the services provided to transmission and distribution company are exempt under Notification No. 45/2010-ST dated 20.07.2010. Thus, the issue is wholly covered by the judgment of the Coordinate Bench in the case of Shri Ganesh Enterprises - impugned order set aside - appeal allowed. 2023 (7) TMI 544 Validity of adjustment of pre-deposit with Cenvat Credit - Amount adjusted through debit of DRC-03 account maintained in the present GST regime - non-compliance of Section 83 of the Finance Act, 1994 read with Section 35F of the Central Excise Act, 1944 - HELD THAT:- The basic main objective of pre-deposit being prevention of filing of frivolous appeals by putting financial burden on the Appellant and the same being deposited in the Government account, we find no reason to dispute it on the ground that the same is taken out from the cash balance or credit balance (which was accrued through payment of cash only) and it is questioned so seriously. In the instant case what is observed is that in two appeals pre-deposits were adjusted against payment made during investigation and in two other appeals it is made from the credit ledger, to which Appellants surplus CENVAT Credit were transited into. Now going by the close reading of the Section 174 sub-Section 1(f) repeal of Central Excise Act or amendment of Finance Act, 1994 would not affect any proceeding relating to an appeal instituted after the commencement of GST Act and a deeming friction is brought into service by stating that to continue such proceedings under the Amended Act (Finance Act) or Repealed Act (Central Excise Act), it would be taken as if the CGST Act had not come into force and such amendment or repeal had not taken place. This being the dictate of the Statute, CENVAT Credit that was available with Appellant on 01.07.2017 would be treated to have been in existence during filing of the appeal as if no transition to TRAN-1 had taken place. Reliance placed in the judicial precedent set by the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Bangalore Vs. M/s. Mysore Electricals Industries Ltd. [ 2006 (11) TMI 202 - SUPREME COURT ] wherein it has been clearly mentioned that a beneficial Circular has to be applied retrospectively while oppresive circular has to be applied prospectively. This Circular/Instruction being issued after filing of the appeals by these Appellants, enforcement of the same can only have prospective effect. Pre-deposit made by the Appellants from electronic credit ledgers are in compliance to Section 35F of the Central Excise Act and the registration of appeals made by the Registry is valid. The appeals are admitted for hearing and early hearing applications be listed on 30.08.2023 for a decision on out of turn hearing. 2023 (7) TMI 543 Collection of Service tax from clients - appellant acting as an agent - service tax so collected not deposited to Revenue - Service Tax collected on behalf of Principals - Steamer Agency Commission - HELD THAT:- The Tribunal finds that the appellant was acting as an agent and once he charged the Service Tax and collected the same from their clients, such amount should have been properly remitted to the exchequer. Instead they claim that they have given back the Service Tax so collected to the Principal, which is not backed by any evidence. The fact of retaining Rs 15,75,182/- till 2014, goes against their submission. Even otherwise, the practice adopted by the appellant is erroneous and contravenes the provisions of Section 73A(2) (3). Therefore, the appeal is liable to be dismissed in respect of confirmed demand of Rs 38,53,951/-. The Appeal stands dismissed to this extent. Levy of Service Tax - Business Auxiliary Service - demand of tax on trading profit - it is claimed that out of the total amount of Rs 2,59,25,007/- being shown as commission, the actual commission amount is only Rs 15,75,182/- and the balance amount of Rs 2,70,46,820/- is on account of trading profits made by them - Steamer Agent Services or not - HELD THAT:- The issue should be remanded to the Adjudicating Authority to enable the appellant to file their documentary evidence on both the above issues. The Adjudicating Authority will follow the principles of natural justice and take in to account all the documentary evidence provided by the appellant. Since the matter pertains to 2004-05 to 2009-10, the Adjudicating Authority is directed to complete the proceedings within four months from the date of communication of this order. Appeal disposed off. Central Excise 2023 (7) TMI 542 Exemption from payment of education cess and secondary education cess, when exemption from payment of excise duty under a notification was granted - HELD THAT:- In SRD Nutrients (P) Limited [ 2017 (11) TMI 655 - SUPREME COURT] it was held that when payment of Excise Duty is exempt under the Central Excise Act, then the 2% Education Cess and Secondary and Higher Education Cess payable on the aggregate duties of excise will also be exempted. However, later in the case of M/s Unicorn Industries Vs. Union of India reported in [ 2019 (12) TMI 286 - SUPREME COURT] , the aforesaid judgment in SRD Nutrients (P) Limited vs. CCE was overruled and it was held that although the exemption from payment of excise duty under a notification is granted, there is no exemption from payment of education cess. Therefore, the assessee who had paid the excise duty and education cess was not entitled to a refund of the education cess which had been paid. Also where refund had been made pursuant to the judgment in M/s SRD Nutrients (P) Limited, was no longer valid. The explanation to Order XLVII Rule 1 which is a wholesome provision has been inserted to the Code of Civil Procedure. It states that once there is a subsequent judgment overruling an earlier judgment on a point of law, the earlier judgment cannot be reopened or reviewed on the basis of a subsequent judgment. In substance, the High Court in SRD Nutrients (P) Limited has stated that the decision in SRD Nutrients (P) Limited had attained finality and was binding on the parties thereto. Therefore, the subsequent decision of this Court overruling SRD Nutrients (P) Limited in the case of M/s Unicorn Industries cannot have a bearing on past decisions which had attained finality although they had followed SRD Nutrients (P) Limited, which was subsequently overruled in M/s Unicorn Industries. Otherwise a pandora s box would be opened and there would be no end to litigation, which is against public policy. The Special Leave Petitions are dismissed. 2023 (7) TMI 541 CENVAT Credit - capital goods or not - Welding Electrodes used for repair and maintenance of plant and machinery as well as other welding work in building area - Whether the Tribunal is correct in deciding the issue which is sub-judice before the Hon ble Supreme Court as the SLP filed by the department against the relied upon judgment of the Hon ble Rajasthan High Court is pending for decision? HELD THAT:- This Court, in Hindustan Zinc Ltd. s case [ 2008 (7) TMI 55 - RAJASTHAN HIGH COURT] , while considering the question of law, whether welding electrodes used for repairing and maintenance of plant machinery both as capital goods as well as inputs, has answered the same in favour of the assessee and against the revenue. Since the controversy raised in these appeals has been set at rest by the Division Bench of this Court by judgment passed in Hindustan Zinc Ltd. s case, while answering the question framed in these appeals in favour of the assessee, it is deemed appropriate to allow these appeals in terms of the judgment passed by the Division Bench of this Court in Hindustan Zinc Ltd. s case. Application disposed off. 2023 (7) TMI 540 Denial of the benefit of the Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 - rejection on the ground of ineligibility observing that in terms of Section 125(1)(h) of the Finance Act, 2019, the product falling under the Fourth Schedule to the CE Act is not eligible for this Scheme - Section 125(1)(h) of the Finance Act (No.2) Act of 2019. HELD THAT:- The interpretation placed by the Department on Section 125(1)(h) of the Finance Act, 2019 appears not to be correct. No doubt that the Petitioner s product (Process Oil) falls under the Fourth Schedule to the CE Act but as far as the rate of duty is concerned, what is indicated is, excise duty is not leviable at all - Therefore, there is no question of the Petitioner s product being outside the purview of the SVLDR Scheme read with the Fourth Schedule to the CE Act. The Court, therefore, rejects the plea of the Department that the Petitioner would be ineligible for the benefit of the SVLDR Scheme. The Court quashes the order dated 26th December, 2019 and other similar orders issued by the Department (all of which have been assailed by the Petitioner in the writ petitions) rejecting the SVLDR applications of the Petitioner since they are based on an erroneous interpretation of not only the SVLDR Scheme but also Section 125(1)(h) of the Finance Act - Petition disposed off. 2023 (7) TMI 539 CENVAT Credit - denial on the ground that the transport vehicles had not entered at Information Collection Centres (ICCs) - ICC records can be termed as corroborative evidence or conclusive evidence to prove non entry of goods in the State of Punjab? - denial also on the basis of statement made by Kamal Gupta son of the owner of M/s Gupta Transporter Company, who had stated that he had never transported any material for LOTC. HELD THAT:- The assessee had sought cross-examination of Kamal Gupta, but the same was not granted to the assessee. In that circumstance, the statement made by Kamal Gupta was inconclusive and it could not be relied upon. So far as the demand of Rs. 1,75,350/- is concerned, it has been observed that the said demand had been confirmed on the basis of statement made by G.C. Arya of M/s APPL. However, no cross-examination of G.C. Arya was granted to the assessee. Therefore, statement made by G.C. Arya had no relevance to deny Cenvat credit to the assessee. With these observations, demand of Rs. 1,75,350/- was set aside. However, demand of Rs. 1,01,048/- was confirmed on the ground that the vehicle, which had been mentioned in the invoices were not capable of transportation of goods in question, as the same were not tankers - Learned counsel for the appellant has not been able to dispute the fact that the certificate was issued by the Excise and Taxation Officer, certifying that the assessee had received the material on each and every one of the disputed invoices. Once, such certificate had been issued, the benefit of Cenvat Credit cannot be denied to the assessee-respondent. The observations made by the adjudicating authority establishes that as per the investigation carried out by the CBI, the respondent had actually manufactured the goods and their export was genuine. Therefore, the respondent-assessee was entitled to claim Cenvat credit on the inputs of goods. Thus, no ground is made out to interfere in the impugned order as the same has been passed after appreciating the evidence in the right perspective. No substantial question of law arises for consideration in this appeal - appeal dismissed. 2023 (7) TMI 538 Method of Valuation - Section 4A or Section 4 of Central Excise Act, 1944? - sugar confectionery falling under chapter heading under 1704.90 and 1804.90 being manufactured by the appellant - the individual piece weighing less than 10 grams per piece and the same are packed in 500 grams pack - requirement of MRP based valuation or not. HELD THAT:- In the identical facts in the appellant s own case SWAN SWEETS PVT. LTD. VERSUS COMMISSIONER OF C. EX., RAJKOT [ 2006 (1) TMI 269 - CESTAT, MUMBAI ] it was held that wholesale pack of 500 grams to 1 kg is not retail pack and therefore taking the weight of individual piece of confectionery which is less than 10 grams will not be governed under Section 4A - The said decision of the Tribunal was approved by the Hon ble Supreme Court COMMISSIONER OF CENTRAL EXCISE, RAJKOT VERSUS M/S MAKSON CONFECTIONERY PVT. LTD. [ 2010 (9) TMI 10 - SUPREME COURT ]. This Tribunal considering the decision in the case of Makson Pharmaceuticals India Pvt. Ltd taking the same view decided the matter in the favour of the assessee in MAKSON PHARMACEUTICALS (I) PVT LTD VERSUS C.C.E. S.T. -BHAVNAGAR (VICE-VERSA) [ 2023 (5) TMI 385 - CESTAT AHMEDABAD ]. The issue is no longer res- integra, therefore, the impugned order is not sustainable - Appeal allowed. 2023 (7) TMI 537 Liability of appellant to pay Excise duty - stock of 130.82 metric tonnes of finished goods lying at a place outside the factory of the appellant. According to the appellant, the goods were lying in a godown of the appellant but according to the Department it was lying in a warehouse belonging to the appellant. HELD THAT:- It is difficult to accept the finding recorded by the Commissioner (Appeals) that the goods should be treated as lying in the warehouse. In the first instance, the show cause notice does not even allege that the goods were lying in the warehouse and secondly, the godown could not have been treated as a warehouse. A warehouse has been defined under rule 2(H) of the 2002 Rules to mean any place or premises registered under Rule 9. It is the specific case of the appellant that the premises were not registered as a warehouse. This apart, the show cause notice does not even allege that the premises which the appellant alleges is a godown is a warehouse. The Commissioner has merely drawn a presumption that the premises should be treated as a warehouse. The observations made by the Commissioner that the appellant had not submitted anything to substantiate the date and time when the goods were transferred from the factory to outside godown is also not justified as the show cause notice proceeds on the footing that the goods had been transferred to the godown prior to November 02, 2006. Such being the position, it is not possible to sustain the order dated July 30, 2020 passed by the Commissioner (Appeals) - Appeal allowed. 2023 (7) TMI 536 Exemption for setting up of water supply plant under N/N. 3/2004-CE dated 08.01.2004 - Clearance of transmission line stringing accessories by the appellant for supply to M/s Neyveli Lignite Corporation Ltd., Barsingsar Thermal Power Project for utilization of the same for setting up of 2 X 125 MW Power Plant at Barsingsar RA-8 Water Carrier System from IGNP Canal RD 800.6 to Thermal Power Plant, Barsingsar. Denial of benefit on the ground that the exemption is available for setting up of water supply plant not for power plant. HELD THAT:- On going through the Certificates, it is observed that the said goods were sold by the appellants, which are to be used for demineralization of water and thereafter, to be used for Thermal Power Plant for generation of electricity, which clearly shows that the said goods cleared by the appellants are for treatment of water. In that circumstances, the benefit of Notification No. 3/2004-CE dated 08.01.2004 cannot be denied - the appellant has rightly cleared the goods without payment of duty by way of availing the benefit of Notification No. 3/2004-CE dated 08.01.2004. Therefore, no duty is sustainable against the appellant. There are no merit in the impugned order and the same is set aside - appeal allowed. CST, VAT & Sales Tax 2023 (7) TMI 535 Recovery of sales tax dues - encumbered property or not - liability of auction purchasers - liability of petitioners nos. 1 and 2 who are auction purchasers in a securitization auction held by petitioner no. 3, to discharge the sales tax dues, for the recovery of which, the property as purchased by them, was attached by the Sales Tax Department prior to the auction. Whether the Sales Tax Department is correct in asserting that it has a charge on the property in question as purchased by petitioner Nos. 1 and 2 from petitioner No. 3? - HELD THAT:- Section 37 of the MVAT Act clearly provides that for the liability under the MVAT Act, to be the first charge, is itself, subject to any provision regarding creation of first charge in any Central Act for the time being in force. This pre-supposes that when under a Central enactment there is a provision creating first charge, then in such case, the Sales Tax Department for the purpose of Section 37 shall not have the first charge - Rule 11 of the Maharashtra Realisation of Land Revenue Rules, 1967 provides for the manner of attachment of immovable property which provides that the order shall take effect as against purchasers for value in good faith and against all other transferees from the defaulter from the date the said order is made as provided in sub-rule (3). On a perusal of the order of attachment of the said property dated 11 August, 2017, it is seen that the attachment is made in pursuance of the demand notice issued under Section 178 read with Section 267 of the Maharashtra Land Revenue Code, 1966 read with Section 34 of the MVAT Act and referring to Rule 11 of the Maharashtra Realisation of Land Revenue Rules, 1967. The attachment is for recovery of an amount of Rs. 10,31,38,003/- being the sales tax dues payable by the dealers/borrowers M/s. Taurus Autodeal Pvt. Ltd.. The attachment notice was never challenged by the said dealers and its directors. For such reason in the hands of petitioner no. 3, the property stood as a property as attached by the Sales tax department, however, subject to the first charge of petitioner no. 3 to realise its dues as a secured creditor - The grievance of petitioner no. 3 in the said writ petition was to the effect that the Deputy Commissioner was legally not correct to assert that petitioner no. 3 did not have the first charge on the property, while claiming unpaid sales tax dues of the dealer, in asserting that there was a charge on the said property. It is crystal clear that there is nothing in the sale certificate to indicate that petitioner Nos. 1 and 2 have purchased the said property from petitioner No. 3 free from encumbrances, which is a specific requirement of Appendix V as extracted above. In fact, it is definite from what has been observed by us above that petitioner No. 3 had taken all the precautions to secure its own interest, to recover the amounts payable by the borrowers, by sale / auction of the said property, hence, certainly petitioner Nos. 1 and 2 have not purchased the said property free from any charge or encumbrance of the Sales tax department. Thus, it is more than clear that at all material times, that is with effect from 11 August, 2017, there was a charge and/or an encumbrance on the property of the Sales Tax Department and further petitioner nos. 1 and 2 had purchased the property along with such charge/ encumbrance. The word encumbrance would mean a burden or charge upon property or a claim or lien upon an estate or on the land. It also means a burden of legal liability on property. When there is an encumbrance on a land, it constitutes burden on the title which diminishes the value of the land. It may be observed that once the question arises as to whether there is a charge on a property and in the present case a charge which has arisen by operation of law, Section 100 of the Transfer of Property Act, 1882 would become relevant in the context of the legal status of such property - Applying Section 100 of the TP Act to the facts of the present case, legal consequences emanate, firstly that by operation of the provisions of Section 37 of the MVAT Act there was undoubtedly a charge on the said property, when the property stood in the hands of petitioner No. 3 being the secured creditor. The charge of petitioner no. 3 as the secured creditor was the first charge and not that of the Sales Tax Department, as held by the Division Bench, interpreting Section 37 of the MVAT Act, in the order dated 10 January 2020 passed on the writ petition filed by respondent no. 3. The Full Bench considering the provisions of Rule 8 of the Security Interest (Enforcement) Rules, 2002 read with the provisions of Section 13(4) of the SARFAESI Act and the decision of the Supreme Court in AI CHAMPDANY INDUSTRIES LIMITED VERSUS THE OFFICIAL LIQUIDATOR ANR. [ 2009 (2) TMI 921 - SUPREME COURT ], held that in terms of the provisions of the SARFAESI Act read with 2011 Rules, the secured creditor is expected to know the encumbrances. It was observed that once a statutory mechanism noting the encumbrances in respect of the immovable property being put up for sale by auction not being available before 24 January 2020, the authorized officers were found to play it safe by inserting the as is where is, whatever there is basis clause in the sale advertisement. The Court observed that once such clause is inserted in the advertisement and the prospective purchaser, upon bidding in the auction emerges as the highest bidder, normally such purchaser cannot insist upon issuance of sale certificate without clearing the liability of meeting other dues in relation to such property, and this is because he participates in the auction and bids, with his eyes open, that the sale would be on as is where is, whatever there is basis , and that the prospective purchaser cannot wriggle out of the consequences and claim that the other dues are not payable by him, if he cannot disprove constructive notice of the charge created on the property put up for auction sale. Analyzing the provisions of the SARFAESI Act as also the MVAT Act, the Full Bench has held that the attachment orders issued post 24 January 2020 if not filed with the Central Registry, any department of the Government to whom a person owes money on account of unpaid tax has to wait till the secured creditor by sale of the immovable property being the secured asset mops up its secured dues. Insofar as the attachment orders which were issued prior to coming into force the 2011 Rules as amended, the Court observed that insofar as recovery as initiated under the MLRC is concerned, not only the provisions contained therein but also the provisions contained in the 1967 Rules were required to be complied with, and the proclamation has to be made in the required form and must be as specified in the 1967 Rules. Thus, this is a clear case in which the Sales Tax Department had a charge on the said property as purchased by petitioner Nos. 1 and 2, in view of attachment order dated 11 August 2017, which has remained to be valid and subsisting. Further the position in law is also clear that after the recognition of the first charge of petitioner No. 3 as a secured creditor, the charge of the Sales Tax Department to recover the sales tax dues would be valid and subsisting, which would empower the Sales Tax Department to enforce the same. Petition dismissed. Indian Laws 2023 (7) TMI 534 Applicability of principles of natural justice on the proceedings of the NGT - alleged violators were not given an opportunity to object to the report with regard to alleged violations - no consideration by the NGT of the pros and cons vis-a-vis the recommendations made by the expert Committee and as to whether the directions issued were appropriate to the case of each of the appellant(s) herein or not. - Issue related to storing, handling, management and utilization of fly ash and consequential continuing damage to the environment and public health HELD THAT:- The NGT has simply accepted the recommendations as remedial action suggested by the Committee but the same is in the absence of there being objections filed by the appellants herein who were the respondents before the NGT and without giving any hearing to them and against whom directions impugned in these cases have been passed by the NGT. The procedure adopted by the NGT is an instance of violation of the principles of natural justice. At this stage, it was also observe dthat the recommendations made by an expert Committee are not binding on the NGT, they are only by way of assistance to enable the NGT to arrive at a correct decision in the matter. It is first important to differentiate expert committees which are set by the courts/tribunals from those set up by the Government in exercise of executive powers or under a particular statute. The latter are set up due to their technical expertise in a given area, and their reports are, subject to judicially observed restraints, open to judicial review before courts when decisions are taken solely based upon them. The precedents of this court unanimously note that courts should be circumspect in rejecting the opinion of these committees, unless they find their decision to be manifestly arbitrary or mala fide - The role of an expert committee appointed by an adjudicatory forum is only to assist it in the exercise of adjudicatory functions by providing them better data and factual clarity, which is also open to challenge by all concerned parties. Allowing for objections to be raised and considered makes the process fair and participatory for all stakeholders. The NGT is a judicial body and therefore exercises adjudicatory function. The very nature of an adjudicatory function would carry with it the requirement that principles of natural justice are complied with, particularly when there is an adversarial system of hearing of the cases before the Tribunal or for that matter before the Courts in India. The NGT though is a special adjudicatory body constituted by an Act of Parliament, nevertheless, the discharge of its function must be in accordance with law which would also include compliance with the principles of natural justice as envisaged in Section 19(1) of the Act. It is apparent that the appellant(s) herein who were respondents before the NGT were not given an opportunity to file their objections to the recommendations made by the Committee constituted by the NGT which is apparent by the fact that the recommendations were uploaded on 15.01.2022 and the final order of the NGT was passed three days later on, i.e. 18.01.2022. Thus, this is a clear case of there being non compliance with the principles of natural justice. On the said ground alone the impugned order is set aside, the matter is remanded to the NGT for re-consideration from the stage of the recommendations filed by the expert Committee constituted by the NGT. Appeal allowed.
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