TMI Tax Updates - e-Newsletter
July 17, 2017

Case Laws in this Newsletter:

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

Articles

• CUSTOMS (IMPORT OF GOODS AT CONCESSIONAL RATE OF DUTY) RULES, 2017
• SCOPE AND MEANING OF SUPPLY IN GST
• GST IMPACT ON LIQUOR INDUSTRY

News

• Provisions related to registration in GST regime

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• Govt asks businesses to register under GST by July 30

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• Position regarding applicability of the Margin Scheme under GST for dealers in second hand goods in general and for dealers in old and used empty bottles in particular

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• Provisions related to registration under GST regime; Traders are requested to register now without waiting for the last date i.e. 30th July, 2017

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Notifications

Customs

• 67/2017 - dated 14-7-2017 - Cus
  Seeks to further amend notification no. 25/2005-customs dated 01.03.2005

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GST - States

• G.O.Ms. No. 291 - dated 14-7-2017 - Andhra Pradesh SGST
  NOTIFICATION ISSUED IN G.O.Ms.No.276, REVENUE (CT-II) DEPARTMENT, DATED : 30-06-2017 - KEPT IN ABEYANCE.

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• Memo No. 35033/9/2017/CT-II - dated 3-7-2017 - Andhra Pradesh SGST
  NOTIFICATION OF CORRIGENDUM ISSUED BY THE CHIEF COMMISSIONER OF STATE TAX AS PER THE APGST ACT, 2017. PROCEEDINGS OF THE CHIEF COMMISSIONER OF STATE TAX.

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• S.O. 111-224/2014-2212 - dated 29-6-2017 - Bihar SGST
  HSN Code Notification

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• S.O. 109-11/2017-2210 - dated 29-6-2017 - Bihar SGST
  Bihar E-Way bill

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• S.O. 107-13/2017-2209 - dated 29-6-2017 - Bihar SGST
  Bihar hereby appoints the 1st day of July, 2017, as the date on which the provisions of sections 6 to 9, 11 to 21, 31 to 41, 42 except the proviso to sub-section (9) of section 42, 43 except the proviso to sub-section (9) of section 43, 44 to 50, 53 to 138, 140 to 145, 147 to 163, 165 to 174 of the said Act

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• S.O. 105-13/2017-2208 - dated 29-6-2017 - Bihar SGST
  Notification Composition

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• S.O. 103-13/2017-2207)] - dated 29-6-2017 - Bihar SGST
  The Bihar Goods and Service Tax Rules, 2017

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• S.O. 101-13/2017- 2206 - dated 29-6-2017 - Bihar SGST
  Council, hereby fixes the rate of interest per annum

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• S.O 99-13/2017-2205 - dated 29-6-2017 - Bihar SGST
  Reverse charge exemption

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• 17/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  Electronic Commerce Operator Notification - SGST

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• 16/2017-State Tax - dated 29-6-2017 - Bihar SGST
  Refund to specialised Agency UN, diplomatic mission etc - SGST

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• 15/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  No refund of overflow ITC for construction - SGST

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• 14/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  Neither Goods Nor Supply 243G - SGST

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• 13/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  Notifies the categories of supply of services reverse charge basis.

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• 12/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  Exempttion the intra-State supply of services.

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• 11/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  Notifies the State tax, on the intra-State supply of services

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• 10/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  Exempts intra-State supplies of second hand goods.

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• 09/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  Exempts intra-State supplies of goods or services or both received by a deductor under section 51 of the Act

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• 08/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  Exemption from reverse charge upto ₹ 5000 per day SGST

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• 07/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  Exempts, supplies of goods,The supply of goods by the Canteen Stores Department (CSD) to the Unit Run Canteens

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• 06/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  Refund of fifty per cent. of the applicable State tax paid by it on all inward supplies of goods to CSD SGST

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• 05/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  Notification for restriction of ITC SGST

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• 04/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  State tax shall be paid on reverse charge basis of the intra-state supply of such goods

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• 03/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  Exempts 2.5% intra-State supplies of goods, Petroleum operations undertaken under specified contracts

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• 02/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  Exemptions for intra-State supplies of goods,

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• 01/2017-State Tax (Rate) - dated 29-6-2017 - Bihar SGST
  Notification for SGST rate Schedule

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• S.O. 63-01/2017-2171 - dated 28-6-2017 - Bihar SGST
  Bihar Taxation Law Amendment Act 2017

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• S.O. 61-05/2017-2169 - dated 28-6-2017 - Bihar SGST
  Amendment in Bihar Goods & Service Tax Act 2017

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• Va Kar/GST/07/2017-S.O. 054 - dated 29-6-2017 - Jharkhand SGST
  SGST HSN Rule - Jharkhand

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• Va Kar/GST/07/2017-S.O. 053 - dated 29-6-2017 - Jharkhand SGST
  Amendment in Notification No. S.O. 29 dated 20 June, 2017

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• Va Kar/GST/07/2017-S.O. 052 - dated 29-6-2017 - Jharkhand SGST
  Jharkhand Goods and Services Tax (Second Amendment) Rules, 2017

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• Va Kar/GST/07/2017-S.O. 051 - dated 29-6-2017 - Jharkhand SGST
  Jharkhand Goods and Services Tax (Amendment) Rules, 2017

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• Va Kar/GST/04/2017-S.O. 050 - dated 29-6-2017 - Jharkhand SGST
  U/s 10(1) of Jharkhand Goods and Services Tax Act, 2017 - Composition of levy

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• Va Kar/GST/04/2017-S.O. 049 - dated 29-6-2017 - Jharkhand SGST
  Rate of interest Under the Jharkhand Goods and Services Tax Act, 2017

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• Va Kar/GST/04/2017-S.O. 048 - dated 29-6-2017 - Jharkhand SGST
  Notification regarding to bring into force certain sections of the Jharkhand Goods and Services Tax Act, 2017 w.e.f 01.07.2017

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• 17/2017-State Tax (Rate) - S.O. 047 - dated 29-6-2017 - Jharkhand SGST
  Under section 9(5) of Jharkhand Goods and Services Tax Act, 2017 notifying categories of services on which tax shall be paid by the electronic commerce operator

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• 16/2017-State Tax (Rate) - S.O. 046 - dated 29-6-2017 - Jharkhand SGST
  Refund for UN and foreign diplomatic mission under section 55 of the Jharkhand Goods and Services Tax Act, 2017

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• 15/2017-State Tax (Rate) - S.O. 045 - dated 29-6-2017 - Jharkhand SGST
  Notification regarding the supplies not eligible for refund of unutilized ITC under the Jharkhand Goods and Services Tax Act, 2017

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• 14/2017-State Tax (Rate) - S.O. 044 - dated 29-6-2017 - Jharkhand SGST
  Activities not to be considered neither supply of goods nor services

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• 13/2017-State Tax (Rate) - S.O. 043 - dated 29-6-2017 - Jharkhand SGST
  Notifies the categories of supply of services reverse charge basis

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• 12/2017-State Tax (Rate) - S.O. 042 - dated 29-6-2017 - Jharkhand SGST
  Notification regarding the exemptions on supply of services under the Jharkhand Goods and Services Tax Act, 2017

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• 11/2017-State Tax (Rate) - S.O. 041 - dated 29-6-2017 - Jharkhand SGST
  Rate of tax for services under section 9(1) of the Jharkhand Goods and Services Tax Act, 2017

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• 10/2017-State Tax (Rate) - S.O. 040 - dated 29-6-2017 - Jharkhand SGST
  Exemption of intra-State supplies of second hand goods received by a registered person

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• 09/2017-State Tax (Rate) - S.O. 039 - dated 29-6-2017 - Jharkhand SGST
  Exemption for tax deductor under section 11(1) of the Jharkhand Goods and Services Tax Act, 2017

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• 08/2017-State Tax (Rate) - S.O. 038 - dated 29-6-2017 - Jharkhand SGST
  Exemption from reverse charge upto ₹ 5000 per day SGST

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• 07/2017-State Tax (Rate) - S.O. 037 - dated 29-6-2017 - Jharkhand SGST
  Exemption for inward supply to Canteen store department under section 11(1) of the Jharkhand Goods and Services Tax Act, 2017

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• Va Kar/GST/07/2017-S.O. 029 - dated 20-6-2017 - Jharkhand SGST
  Government of Jharkhand notifies the modes of verification

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• F.12(56)FD/Tax/2017-Pt-I-55 - dated 29-6-2017 - Rajasthan SGST
  Notification under section 9(5) of Rajasthan Goods and Services Tax Act, 2017 notifying categories of services on which tax shall be paid by the electronic commerce operator

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• F.12(56)FD/Tax/2017-Pt-I-54 - dated 29-6-2017 - Rajasthan SGST
  Notification under section 55 of Rajasthan Goods and Services Tax Act, 2017 specifying organisation and persons entitled to claim a refund of taxes paid on the notified supplies of goods or services or both received by them

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• F.12(56)FD/Tax/2017-Pt-I-53 - dated 29-6-2017 - Rajasthan SGST
  Notification under section 54(3) of Rajasthan Goods and Services Tax Act, 2017 notifying the supplies of services for which no refund of unutilised ITC shall be allowed

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• F.12(56)FD/Tax/2017-Pt-I-50 - dated 29-6-2017 - Rajasthan SGST
  Notification regarding the exemptions on supply of services under Rajasthan Goods and Services Tax Act, 2017

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SEZ

• S.O. 2178(E) - dated 5-7-2017 - SEZ
  Central Government notifies the 4.05 hectares (10 acres) area at Ameenpur Village, Patancheru Mandal, Medak District, in the State of Telangana and constitutes an Approval Committee

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• S.O. 2177(E) - dated 5-7-2017 - SEZ
  Central Government de-notifies an area of 121.43 hectares at Ponnada, Mulapeta, Ramanakkapeta Villages in Kakinada, East Godavari District, in the State of Andhra Pradesh

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• S.O. 2179(E) - dated 4-7-2017 - SEZ
  Central Government notifies an additional area of 2.30 hectares at Nanakramguda Village, Serilingampally Mandal, Ranga Reddy District, in the State of Telangana

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• S.O. 2203(E) - dated 19-6-2017 - SEZ
  Central Government notifies 4.03 hectares area at Kharadi Village, Taluka- Haveli, Distt. Pune, in the State of Maharashtra and constitutes an Approval Committee

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Circulars / Instructions / Orders

Customs

• 03/2017-Cus - dated 13-7-2017
  Constitution of Review Committees of the Commissioners of Central Excise and Service Tax-Regd.

Highlights / Catch Notes

Income Tax

• Income received from outside India in foreign currency - taxabaility in India - sum received from two employers in a Non-Resident (external) bank account, as NRE account - AO was wrong in adding the aforesaid sum to the income chargeable to tax of the assessee for the relevant assessment year. - HC
  Visit to Get Source

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• Deduction u/s 80GGB - donation made by the assessee to the political parties - claim made first time before the CIT(A) - Power of appellate authority - claim allowed - HC
  Visit to Get Source

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• Reopening of assessment - the notice for reopening was issued under the directives and compulsion of the audit party, a mode which is not permissible - HC
  Visit to Get Source

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• Claim of deduction u/s 40(b) - book profit - amount surrendered in the course of survey U/s. 133A -The character of the income does not change dependent upon the section to be applied. - HC
  Visit to Get Source

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Service Tax

• Levy of penalty - the appellant was recovering the said tax amount from their customers, in which case again their plea of financial difficult cannot be appreciated. In these circumstances, the applicability of Section 80 is ruled out - levy of penalty confirmed.
  Visit to Get Source

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• The drawback Rules are not applicable for the input services received for export of goods which only includes input services used in manufacturing or processing of export goods. Admittedly, the services in question have been received by the appellant after manufacturing of goods and the same is not included while calculating the drawback claim - refund allowed.
  Visit to Get Source

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• Consulting Engineers service - license and technical co-operation agreement - the main contention raised by the respondents before the authorities below is that there is no liability to pay service tax as they are only service recipients and the foreign company viz. SAME, Italy, is the service provider - Demand set aside
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Central Excise

• CENVAT credit - catch covers, a packing material - denial for the reason that the catch covers are not the essential primary or secondary packing material - Once it is not disputed that the packing material is used in the manufacture of final products and sale thereof, such packing material is an admissible input and the credit is allowable
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• Valuation - service charges - includibility - these services were provided by the assessee apart from the manufacture and sale of goods at the factory gate and therefore is not includable in the assessable value
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• Metal scrap and waste arising out of the repair and maintenance work of the machinery used in manufacturing of cement, by no stretch of imagination, can be treated as a subsidiary product to the cement which is the main product - demand set aside
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• CENVAT credit - inputs - short received inputs from job-worker - denial of credit on the ground that certain inputs were rejected/ spoiled by the job worker and certain inputs were not received back by the appellant from the job worker - when duty is paid on such waste or rejected goods, demand cannot be sustained
  Visit to Get Source

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• The appellant though engaged in the manufacture of Nuts and Bolts have also bought out duty paid Nuts and Bolts and thereafter they have carried out certain activities such as cleaning, testing and buttoning and cleared thereafter on payment of duty which is equal to the CENVAT credit. - Credit is admissible in view of the Rule 16
  Visit to Get Source

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• CENVAT credit - GTA service on iron ore and coal - Revenue is of the view that the respondent should have reversed the input service credit on the ground that the iron ore fines and coal fines were not used in the manufacture of final products - There is no such provision to reverse credit of service tax - demand set aside
  Visit to Get Source

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Case Laws:

• Income Tax

• 2017 (7) TMI 503
  Income received from outside India in foreign currency - taxabaility in India - sum received from two employers in a Non-Resident (external) bank account, as NRE account - Held that:- The interpretation be given to sub Section (b) of Section 5(2) of the Act would also apply to Section 5(2)(a) of the Act. The Circular is clarificatory in nature and is applicable for construing the aforesaid provision for the relevant assessment year. In our opinion the authorities under the Income Tax Act did not properly apply the provisions of law to the case of the assessee. We are of the view that the Assessing Officer was wrong in adding the aforesaid sum to the income chargeable to tax of the assessee for the relevant assessment year. We accordingly allow the appeal and answer the question framed by us in favour of the assessee.

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• 2017 (7) TMI 502
  Deduction u/s 80GGB - donation made by the assessee to the political parties - claim made first time before the CIT(A) - Power of appellate authority - Held that:- The facts relevant for the purpose of this appeal are that the assessee made donation to political parties. In the return filed by the assessee this was not claimed as a deduction. There is no conflict between the Gurjargravures Private Ltd. (1977 (11) TMI 1 - SUPREME Court) and Goetze (India) Ltd. (2006 (3) TMI 75 - SUPREME Court ). In the former a claim for exemption was for the first time put up before the Appellate Assistant Commissioner who rejected the claim as not made before the I.T.O. This rejection was set aside by the Tribunal with direction upon the Appellate Assistant Commissioner to entertain the question of relief under section 84, claimed by the assessee in that case. The Supreme Court held that it was not competent for the Tribunal to have done so. The distinction between the two authorities eliminating any conflict is that in Gurjargravures Private Ltd. (supra) the competence of the Tribunal to direct the Appellate Assistant Commissioner to entertain a claim not made before the I.T.O was found to be lacking. In Goetze (India) Ltd. (supra) the Supreme Court held that the assessing Authority’s power was limited but not that of the Tribunal in the context of dealing with a claim of the assessee therein not put forward before the Assessing Officer. In Gurjargravures Private Ltd. (supra) the Tribunal itself did not consider to allow the claim for relief. - Decided in favour of the assessee

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• 2017 (7) TMI 501
  Nature of receipts - Amount received by way of exemption of sales tax payments - trading receipt OR capital receipt hence not liable to tax? - Held that:- In the present case, the provisions of the original scheme (i.e. the original policy of 1990) and its subsidy scheme are relevant; they have quite correctly been relied upon by the revenue. Paras 6 (A) and 6(B) of that scheme specifically provided for capital subsidy to set up prestige units; the amounts indicated (Rupees fifteen lakhs) were to be towards capital expenditure. Now, if that was the scheme under which the assessee set-up their units, undoubtedly it contained specific provisions that enabled capital subsidies. Whether the assessees were entitled to it, or not, is not relevant. Assessee's are now concerned with the sales tax amounts they were permitted to retain, under the amended scheme (dated 27.07.1991) which allowed the facility of such retention, after the unit (established and which could possibly claim benefit under the first scheme) was already set up. This subsidy scheme had no strings attached. It merely stated that the collection could be retained to the extent of 100% of capital expenditure. Whilst it might be tempting to read the linkage with capital expenditure as not only applying to the limit, but also implying an underlying intention that the capital expenditure would thereby be recouped, the absence of any such condition should restrain the court from so concluding. How a state frames its policy to achieve its objectives and attain larger developmental goals depends upon the experience, vision and genius of its representatives. Therefore, to say that the indication of the limit of subsidy as the capital expended, means that it replenished the capital expenditure and therefore, the subsidy is capital, would not be justified. The specific provision for capital subsidy in the main scheme and the lack of such a subsidy in the supplementary scheme (of 1991) meant that the recipient, i.e. the assessee had the flexibility of using it for any purpose. The absence of any condition towards capital utilization meant that the policy makers envisioned greater profitability as an incentive for investors to expand units, for rapid industrialization of the state, ensuring greater employment. Clearly, the subsidy was revenue in nature. - Decided against the assessee. Depreciation claim by lessee - Whether the assessee was entitled to claim depreciation under Section 32 despite not owning the property or not being the owner and being a lessee during the years? - Held that:- A lessee can claim depreciation. See Commissioner of Income Tax v Bhushan Steels and Strips [2016 (12) TMI 1085 - DELHI HIGH COURT]. - Decided against revenue.

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• 2017 (7) TMI 500
  Payments made towards illegal gratification and bribes - block assessment - validity of Income Tax Settlement Commission - Held that:- Unfortunately the linkage between the material seized from the assessee's premises and those from UPDA's premises as well as the statement of Sh. Miglani was not established through any objective material. It is now settled law that block assessments are concerned with fresh material and fresh documents, which emerge in the course of search and seizure proceedings; the revenue has no authority to delve into material that was already before it and the regular assessments were made having regard to the deposition, the inability of the revenue to establish as it were, that the assessee’s expenditure claim was bogus, or it had underreported income and that it resorted to over invoicing and diversion of funds into the funds allegedly maintained by the UPDA, was not established. The findings of the Commission therefore cannot be faulted as contrary to law. Suppression of profits for various financial years - Held that:- Commission was of the opinion that the documents relied upon were work estimates and projections that revealed tentative profitability in respect of the assessee’s activities towards sale of country liquor i.e. that the documents did not reflect actual figures. The documents reflected profit methods for both years which left the Commission to infer they were in fact not based upon actuals but alternative projections. Here again the view taken by the Commission cannot be said to be unreasonable as to warrant interference.The assessee’s managing director prepared these estimates. The Commission accepted this contention and concluded that the revenue’s arguments were based upon surmise; the Commission also felt that the documents did not disclose that any payments made were illegal. Furthermore it relied upon the document observing that it contained no writings highlighting that in case a means was made in further expenses would have been incurred in respect of various divisions of the assessee. Here too the interpretation of the documentary evidence by the Commission – which is to be viewed with caution, does not appear to be contrary to law or unreasonable. In the circumstances the revenue’s contentions on this aspect too cannot be accepted. Bogus expenditure claimed - Held that:- The court is of the opinion that while expenditure claimed by itself might be suspect, the revenue had a further obligation to investigate further and more deeply into the matter having regard to the fact that the agreement between the assessee and Rimjhim was disclosed earlier. The mere statement of one employee of Rimjhim would not have discredited the agreement itself. It was incumbent upon the revenue-had it suspected the expenditure, (in the over four-month period given to it to furnish its report under Rule 9), to elicit particulars from the concerned AO having jurisdiction over Rimjhim as to whether that concern in fact had received the amounts towards the assessee's claim. The omission in this regard and lack of any particulars to discredit the services and expenditure claimed by the assessee, justified the Commission’s conclusion that the addition of ₹ 9.11 crores demanded by the revenue or other arguments on the basis that the assessee did not disclose such amount, was not warranted. The Commission's findings are not contrary to law or unreasonable.On an overall assessment of the materials that the Commission was confronted and had to deal with, its findings are neither unreasonable nor contrary to law. The findings are based on a proper appreciation of facts, which this court affirms.

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• 2017 (7) TMI 499
  Reopening of assessment - the audit party had raised an objection of the freight and insurance charges being included in the export turnover for computation of benefit under Section 10A - Held that:- Notice for reopening came to be issued which was passed solely on the ground of the assessee’s claim of deduction under Section 10A of the Act and reduction of the freight and insurance charges from the export turnover. Thus, clearly the notice for reopening was issued under the directives and compulsion of the audit party, a mode which is not permissible as held by the decision of this Court in the case of Adani Exports vs. Deputy Commissioner of Income Tax (Assessments) [1998 (12) TMI 51 - GUJARAT High Court] . - Decided in favour of assessee.

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• 2017 (7) TMI 498
  Deduction u/s 80IB - Held that:- The mere fact that nut blanks were purchased from Unit I cannot be a reason to deny deduction under Section 80IB, vis-a-vis Unit II. The deduction is made available to the Assessee, vis-a-vis Unit II, as it fits the attributes of an industrial undertaking and not to the Assessee per se. As long as the Assessee has invested a substantial amount in setting up an industrial undertaking, which is separate and distinct, it is entitled to claim the said deduction. The substantial expansion of Unit I or even, if, Unit II is concerned as an expanded form of Unit I, which, for the reasons given above, is clearly substantial, it cannot be denied deduction under Section 80IB of the 1961 Act. The fact that it has used raw material, i.e., nut blanks, which have been supplied by Unit I, cannot come in the way of one reaching a conclusion that it is a separate and independent unit. This proposition can be better explained by the following illustration. Say for example, the Assessee had established Unit II, in another company or entity, would the Revenue, then, be able to deprive such an entity of exemption under Section 80IB of the 1961 Act. The distinction, separateness and independence of an industrial undertaking cannot be made dependent only on the attribute of ownership. Therefore, for all these reasons, we are of the view that both CIT(A)s as well as the Tribunal were wrong in concluding that the Assessee could not claim deduction under Section 80IB of the 1961 Act vis-a-vis Unit II. Computation made by the Assessing Officer in respect of deduction claimed by the Assessee under Section 80IA - Held that:- Therefore, according to us, in computing the deduction claimed by the Assessee under Section 80 IA of the 1961 Act, the Assessing Officer ought to have treated the two power divisions as a separate undertakings and furthermore, desisted from setting off the losses of earlier years against the profits of the Assessment Years in issue, by bringing them forward notionally, despite the fact that they had already been set off, as claimed by the Assessee in the earlier years.

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• 2017 (7) TMI 497
  Levy of penalty u/s 271(1)(c) - sales to parties covered under Section 40A (2)(b) - Held that:- Assessee cannot be held guilty for non-disclosure of income, which was determined by invoking discretionary jurisdiction under Section 40A (2)(b) of the Act.In this view of the matter, the Tribunal held that where deeming provisions are applied in assessing the income, the provisions of imposing penalty would not be attracted. There is no concealment of income or furnishing of an incorrect particulars of the income, the penalty cannot be imposed on account of addition of income by applying the deeming provisions. Accordingly, we are of the opinion that the Tribunal has not committed any error of law in removing the penalty imposed by the Assessing Authority. - Decided in favour of assessee.

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• 2017 (7) TMI 496
  Claim of deduction u/s 40(b) - book profit - amount surrendered in the course of survey U/s. 133A - surrender amount was shown as business income and assessed as business income - Held that:- It is undisputed that the Assessing Officer has brought to tax the amount of ₹ 1,50,000/shown as other income in profit and loss account as income from business under Section 28 of the Act. The assessment order does not classify the same as income from other sources or under any other head. Once the aforesaid position is accepted, then for the purpose of computing book profit as defined in section 40(b) of the Act, the other income of ₹ 1,50,000/has also to be considered to be part of income from business arrived at in accordance with the Chapter IVD of the Act. It is not open to the Revenue to contend that the amount of ₹ 1,50,000/is part of business income while computing the tax payable but not so for the purposes of Section 40(b) of the Act. The character of the income does not change dependent upon the section to be applied. This issue has not been examined at all by the authorities under the Act. It goes to the root of the dispute. - Decided in favour of appellant/assessee and against the Revenue.

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• 2017 (7) TMI 495
  Unexplained expenditure u/s 69C - Held that:- From the order of the lower authorities it is not clear as to whether AO has called for the concerned persons to whom interest was alleged to be paid and from whom loan was alleged to be received by the assessee. Merely on the basis of paper seized, the AO came to the conclusion that assessee had paid the interest without recording the same in its regular books of accounts. In view of the above discussion, we set aside the order of the lower authorities and the matter is restored back to the file of the AO for deciding afresh after considering the evidences filed by the assessee in support of the fact that interest was paid by the society and TDS was also deducted thereon by the society itself and not by the assessee. We also direct the AO to call the concerned parties to whom assessee has been alleged to be paid interest so as to verify the genuineness of the transaction of interest having actually been paid and the loan actually having been received. Appeal of the assessee is allowed in part for statistical purposes.

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• Customs

• 2017 (7) TMI 472
  Benefit of N/N. 13/81-Cus dt. 09/02/1981 - recovery of amount of duty from loanee - Held that: - the appellant herein had made a commitment before their lordships, that if any amount determined in an adjudication proceedings against the loanee i.e. KTL, it shall, out of the sale proceeds, pay the same. In our considered view, the undertaking given by APSFC the appellant herein, to the Hon'ble High Court has to be honoured by them and since the impugned order confirms the demand of duty on KTL who is the loanee originally, it was the bounden duty of the APSFC to discharge the duty liability to the customs authorities - merits in the appeal filed by the appellant in contesting the duty liability i.e. confirmed against KTL and sought to be recovered from them. Penalty u/s 112 of CA - Held that: - the adjudicating authority has erred in imposing the penalty under Section 112 of the Customs Act on the appellant inasmuch appellant has never engaged themselves in an import of goods which are liable for confiscation under the provisions of Section 111 of the Customs Act - penalty set aside. Appeal disposed off. - decided partly in favor of appellant

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• 2017 (7) TMI 471
  Valuation - freight - includibility - sale of goods on principal to principal basis - Held that: - Revenue has presented four grounds in the said grounds of appeal and we find that the main ground of appeal was at Serial No. (iv). We find that it was already adjudicated upon by ld. Commissioner (Appeals) through impugned Order-in-Appeal dated 13.05.2013 and Revenue has not brought forward any ground to contest the finding by ld. Commissioner (Appeals) - there are no grounds to interfere with the value of export goods declared by the respondent while filing the said 31 Shipping Bills - appeal dismissed - decided against Revenue.

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• Corporate Laws

• 2017 (7) TMI 467
  Rectification of register of members of second respondent substituting his name in the place of petitioner's name and issue share certificates in his name - Held that:- The first respondent while he was minor filed C.S.No.412 of 2008 in this Court through his mother for partition of properties of HUF, which are with the petitioner as kartha. In the present suit, the first respondent claiming that the shares do not belong to HUF, but it belongs to him as his individual capacity. A reading of the plaint in C.S.No.412 of 2008 pending before this Court and the present suit reveal that the cause of action as well as the reliefs sought for are entirely different. Hence, the present suit is not hit by the provisions of Order II Rule 2 of C.P.C. The petitioner has not stated as to how the Section 38 of the Specific Relief Act is a bar to the present suit. The petitioner has made a vague statement that the suit is not maintainable as per Section 38 of the Specific Relief Act. In view of the above reasons, both the above contentions of the petitioner are untenable, unsustainable and hence they are hereby rejected. Thus, points 1 and 2 are answered against the petitioner. The contention of the learned counsel for the petitioner is that as per Section 10GB of the Companies Act, 1956, which was inserted by the Companies (Second Amendment) Act, 2002, the suit is barred by the provisions of the Companies Act, is devoid of merits. As already held supra, the second relief of permanent injunction relates to title of the share and this Section is not applicable to the facts of the present case. The learned Judge held that the suit relates to title of the share and therefore dismissed the application. The judgment relied on by the learned Senior Counsel for the petitioner do not advance the case of the petitioner. On the other hand, the judgments relied on by the learned Senior Counsel for the first respondent are squarely applicable to the facts of the present case. In view of the judgments relied on by the learned Senior Counsel for the first respondent as well as the judgment dated 10.03.2017 made in S.L.P.No.4388 of 2017 and for the reasons stated above, hold that this Civil Revision Petition is liable to be dismissed and it is hereby dismissed.Consequently, connected Miscellaneous Petition is closed.

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• Insolvency & Bankruptcy

• 2017 (7) TMI 466
  Initiation of proceedings under Insolvency and Bankruptcy Code - Held that:- Dispute in Insolvency and Bankruptcy must relate to specified nature in clause (a), (b) or (c) of sub-Section (6) of Section 5 of the Code, this Adjudicating Authority holds that the case on hand, in view of the clear violation of covenant provided in the Lease Deed executed between the parties in this case, squarely falls under section 5(6)(c) of the Code. There being vacation, in between, there has been a delay of more than one month in passing this order.Accordingly, this Petition is dismissed with liberty to the operational creditor to approach appropriate forum for suitable remedy if eligible under any other law in force.

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• Service Tax

• 2017 (7) TMI 494
  Classification of services - mining service or GTA Service - Transportation of coal - Whether the goods i.e. coal transported by the respondent–Singh Transporters from the pit-heads to the railway sidings would fall within taxable service as defined under Section 65(105) (zzzy) of the Service Tax Act of 1994 or as defined under Section 65(105)(zzp) of the Act? - definition of the term 'mines” under Section 2(j) of the Mines Act, 1952 - Held that: - a mine is not to be understood necessarily in respect of pit-heads of the mining area or the excavation or drilling underground, as may be, but also to the peripheral area on the surface. The said definition has no apparent nexus with the activity undertaken and the service rendered - appeal dismissed - decided against appellant.

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• 2017 (7) TMI 493
  Penalty u/s 76, 77 and 78 - non-payment of service tax - appellant is engaged in providing Stevedoring/Customs House Agent and other connected services related to import/export of goods - Held that: - the provisions of Section 80 which are to the effect that no penalty would be imposed under Section 76,77, or 78 of the Finance Act, if the noticee proves that there was reasonable cause for the said failure. What is a reasonable cause has to be seen and examined in each and every case. Admittedly, such reasonable cause has to be a bonafide cause and must not be burdened with appellant assessee's intentions. The appellant was admittedly liable to pay the service tax in respect of services provided by him. Prior to the present proceedings, a show cause notice for the earlier period was issued to them. As such they were aware of their liability to discharge service tax and it cannot be said that they were entertaining any bonafide belief about their service tax liability - In any case, it stands observed by the lower authority that the appellant was recovering the said tax amount from their customers, in which case again their plea of financial difficult cannot be appreciated. In these circumstances, the applicability of Section 80 is ruled out. The law provides for imposition of penalty, which stands rightly imposed by the adjudicating authority - penalty upheld. Scope of SCN - demand of ₹ 2,81,446/- on the ground that the said service tax amount got escaped from the earlier SCN - Held that: - Such piecemeal adjudication is not permissible. Even if there was some calculation mistake in the earlier show cause notice, Revenue was within its rights to issue corrigendum instead of including the said deficiency in the subsequent show cause notice - confirmation of demand of ₹ 2,81,446/- is neither appreciated nor justified - demand set aside. CENVAT credit - car hire charges - air travel charges - denial on account of nexus - Held that: - it is a well settled law that the car hire charges and air travel charges incurred by the assessee in connection with their business are cenvatable input services and are available as Cenvat credit - credit allowed. Appeal allowed - decided partly in favor of appellant.

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• 2017 (7) TMI 492
  Refund claim - N/N. 41/2007-ST dated 06.10.2007 - Transport of Goods - denial on the ground that the condition of the Notification has not been fulfilled and not possible to determine whether the services in question has been used for export of goods or not - Held that: - the appellant is able to co-relate with the services of the transportation for used in export of goods - the transportation charges from port to their factory is covered under Transport of Goods Service availed by the appellant for export of goods, therefore, the refund claim for Transport of Goods cannot be denied to the appellant - refund allowed. Refund claim - Terminal handling Charge - Bill of Lading Charges - denial on the ground that these are not port services - Held that: - the services received at port by the appellant is covered under Port Services and it is admitted fact that the Terminal Handling Charges and Bill of lading Charges has been paid at the port by the appellant, therefore, the same are covered under port services - refund allowed. Refund claim - Customs House Agency Service - denial on the ground that the said service is not covered under the Notification - Held that: - this Tribunal in the case of Sopariwala Exports [2015 (9) TMI 940 - CESTAT MUMBAI] held that the Customs House Agency service received by the appellant for export of goods is entitled for refund claim - refund allowed. Refund claim - Duty Drawback - The allegation of the Revenue is that as the appellant is claiming drawback claim against the export of the goods, therefore, refund on the service tax paid for the services received for export of goods are not entitled - Held that: - the said issue came up before this Tribunal in the case of M/s Mittal International and others [2017 (3) TMI 1512 - CESTAT CHANDIGARH] wherein this Tribunal held that the drawback Rules are not applicable for the input services received for export of goods which only includes input services used in manufacturing or processing of export goods. Admittedly, the services in question have been received by the appellant after manufacturing of goods and the same is not included while calculating the drawback claim - refund allowed. Refund claim - denial on the ground that the invoices issued by the services provider has not having a details as per Rule 4(A) of the Service Tax Rules, therefore, they are not entitled for refund claim - Held that: - vide CBEC Circular No. 112/6/2009-ST dated 12.03.2009, it has been clarified that procedural violations should be dealt with at the end of the service provider and not the end of the service recipient i.e. exporter. Moreover, in this case, the ld. Commissioner (A) held that the appellant has been able to co-relate the services received by the appellant in the course of their export of goods, therefore, the clarification given by the CBEC Circular dated 11.12.2008 has been met out. In that circumstance, the refund claim cannot be denied to the appellant. The refund claim sought to be denied on the ground that in the invoices, the address of Karnal unit of the appellant has been mentioned. I find that the appellant has produced the certificate issued by the service provider that they have given wrong address of their Karnal unit instead of their unit located at Gurgaon and certified that the services has been provided at their Gurgaon unit, therefore, merely on that ground the invoices have been issued in the name of the Karnal Unit, the refund claim cannot be denied. Appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 491
  Consulting Engineers service - license and technical co-operation agreement - the main contention raised by the respondents before the authorities below is that there is no liability to pay service tax as they are only service recipients and the foreign company viz. SAME, Italy, is the service provider - Held that: - the provision that makes the service recipient liable to pay service tax was inserted with effect from August 16, 2002 and that in the instant case, the service if any was received in 1996 which is prior to the insertion of the said provision - reliance was placed in the case of SAME ENGINES INDIA PVT. LTD. Versus COMMISSIONER OF C. EX., CHENNAI [2005 (3) TMI 558 - CESTAT, CHENNAI], wherein the Tribunal set aside the demand observing that the respondents are recipients of service and not service providers - demand set aside - appeal dismissed - decided against Revenue.

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• Central Excise

• 2017 (7) TMI 490
  CENVAT credit - catch covers, a packing material - denial for the reason that the catch covers are not the essential primary or secondary packing material used for the manufacture and marketability in the normal course of trading - Held that: - It is upto the trade that which type of packing has to be used in the manufacture and sale of final products. Therefore, the Revenue should not have any say or decided, which packing material is essential and otherwise to decide the eligibility of the CENVAT Credit. Once it is not disputed that the packing material is used in the manufacture of final products and sale thereof, such packing material is an admissible input and the credit is allowable. CENVAT credit - for the period November 2001 to January 2008, the Cenvat Credit in respect of catch covers was proposed to be denied on the ground that the value of the cost of the catch covers was not included in the value of the physician samples supplied free of cost - Held that: - the condition of inclusion of cost of packing material in the final product in order to allow the credit is not required - credit allowed. Appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 489
  MODVAT credit - removal of Capital goods as such - demand of an amount equal to the Modvat credit taken on the capital goods by invoking Rule 3 (5) of the CCR, 2004 on the ground that the capital goods were removed as such - Held that: - when capital goods are removed after use it cannot be said that the goods are removed as such for the purpose of reversing the entire credit taken at the time of receiving the capital goods as prescribed in Rule 3 (5) of CCR 2004 - appellants have removed the capital goods after more than 10 years and that also after being used in their factory for a long time. The cenvat credit was taken in May 1995 to August 1995. The factory was later closed down and the capital goods were removed on 26.12.2006, after payment of excise duty on the transaction value - the demand is unsustainable - appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 488
  Valuation of intermediate products - captive consumption - administrative expense - advertisement expense - interest expense - includibility - Held that: - the respondent has not been put to notice regarding this aspect and the issue at that time was only with regard to non-inclusion of administrative expense, advertisement expense, interest expense in the cost of production. The Commissioner (Appeals) has also stated that the rate arrived by the department on the basis of Trial Balance of the unit is incorrect, for the reason that what is to be taken into account for finding out the cost of production on the intermediate goods is only the related expenditure incurred for the said intermediate products. If the entire expenditure shown in the Trial Balance is taken for arriving at the overhead rate, then this will definitely reflect the overhead for the manufacture of the final product viz., Tyre in this case and will not represent the overhead rate for the intermediate goods - appeal dismissed - decided against appellant.

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• 2017 (7) TMI 487
  Classification of goods - Lead Glass Tubings Flange Tubings & Exhaust Tubings - The contention of the respondent was the same were classifiable under CSH 7008.90 of Schedule to CETA, whereas Revenue claimed that the said products are un-worked and classifiable under Chapter Sub-heading No. 7001.90 - Held that: - the respondent had explained that the Lead Glass Tubings for use in Electrical Lamps having to be further processed/by way of annealing, diameter sorting, precise cutting to the specified length and their ends have to be glazed by fire polishing and therefore the tube emerging from such process shall fall under classification under Sub-heading No. 7008.90 - appeal dismissed - decided against Revenue.

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• 2017 (7) TMI 486
  Abatements on durable and returnable containers - Held that: - the Commissioner (Appeals) has given a detailed discussion as to how the original authority has granted abatement. Ld. Counsel for the respondent has explained that for the metal containers which were returned, the refund paid by them was ₹ 5.50 and ₹ 5, whereas the price of such containers was ₹ 8.03 and ₹ 6.88. The department contends that the respondents are eligible only on the amount that is refunded and not on the price declared in the price list. This grievance of the department has been answered by the adjudicating authority - there is no ground to interfere with the quantification of abatement on durable and metal containers made by the authorities below - appeal dismissed - decided against Revenue.

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• 2017 (7) TMI 485
  Valuation - includibility - conversion cost upto the stage of spinning and cone-winding - Held that: - all costs only upto the spindle stage when excisable product comes into existence should be included in the assessable value and the costs of processes after that stage like winding, warping, weaving, sizing etc., should not be included - there is no merit in the grounds raised by the department. The impugned order calls for no interference - appeal dismissed - decided against Revenue.

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• 2017 (7) TMI 484
  Valuation - service charges - includibility - whether the service charges collected for storage and dispatch in the depot of the assessee is includable in the assessable value? - Held that: - separate correspondence exists for providing service of storage and delivery of the goods from the depot according to the directions of AEEL; so also separate amount was paid @ 5% on such service charges by raising debit notes. That these services were provided by the assessee apart from the manufacture and sale of goods at the factory gate and therefore is not includable in the assessable value - appeal dismissed - decided against Revenue.

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• 2017 (7) TMI 483
  SSI exemption - time limitation - Held that: - As the appellants have cleared the finished products by paying duty on the assessable value arrived after including the amortized cost of free items, it is evident that the appellants are guilty of suppression of facts. Therefore, SCN issued invoking the extended period of limitation in our view is proper - demand upheld - appeal dismissed - decided against appellant.

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• 2017 (7) TMI 482
  SSI exemption - use of Brand name of others - Held that: - the brand name Extus is used by several persons - The judgment in the case of Bhalla Enterprises [2004 (9) TMI 109 - SUPREME COURT OF INDIA] squarely covers the issue when the brand name is used by several persons. By respectfully following the same ratio, the denial of benefit of SSI exemption on this ground is not legal and proper. With regard to brand names Colter, Bezec, Fecit C etc., we find that the department has not been able to establish that these brand names does not belong to the appellants. In the statement of Shri R. Subramaniam, Director of M/s. Care-Med Pharmaceuticals, he states that these brand names belonged to appellant and that they purchased it. There is no evidence to establish such purchase and that the brand name belongs to M/s. Care-Med Pharmaceuticals. Thus, the department has not been able to establish the allegation that the brand name belongs to other person. Therefore, denial of benefit of SSI exemption is unjustified and the demand raised is unsustainable. Appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 481
  Waste - The appellant had cleared iron and steel, stainless steel item in domestic tariff area without payment of duty as Wastes & Scrap - Department was of the view that the appellant is liable to pay duty on such waste and scrap as these are leviable to duty under Chapter Note 8 (a) of Section XV of Customs as well as CETA - Held that: - the appellant has cleared only components of machinery due to wear and tear of the machineries. The iron metal scrap cleared by the appellants are not waste arising in the course of manufacture and therefore are not exigible to duty - the issue in dispute stands covered by the judgment in the case of Grasim Industries Ltd. [2011 (10) TMI 2 - SUPREME COURT OF INDIA], where it was held that the metal scrap and waste arising out of the repair and maintenance work of the machinery used in manufacturing of cement, by no stretch of imagination, can be treated as a subsidiary product to the cement which is the main product - demand set aside - appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 480
  CENVAT credit - capital goods - SS Sheets, Air Distributer S. S. Cold rolled coils etc., used in repairing of spray dryer machines - denial on the ground that these items do not fall under the definition of capital goods - Held that: - This issue has been considered by this Tribunal in Kissan Sahakari Chini Mills Ltd's case [2013 (7) TMI 2 - CESTAT NEW DELHI], where it was held that the activity of repair and maintenance of plant and machinery is an activity which has direct nexus with manufacture of final products and the goods used in this activity would be eligible for Cenvat credit - appeal allowed - decided in favor of assessee.

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• 2017 (7) TMI 479
  CENVAT credit - inputs - short received inputs from job-worker - denial of credit on the ground that certain inputs were rejected/ spoiled by the job worker and certain inputs were not received back by the appellant from the job worker - Whether the cenvat credit of ₹ 6,00,613/- can be denied to the appellant on account of inputs rejected/spoiled at the end of job worker premises which have been received by the appellant? - Held that: - as per Rule 4(3) of the CCR, 2004 if any inputs were used in manufacturing of final product is entitled to take cenvat credit. Admittedly, the inputs later on found rejects/spoiled were sent for manufacturing to the job worker and used in manufacturing process, therefore, as per cenvat credit Rules, 2004, the appellant is entitled to avail cenvat credit - credit allowed. Whether Cenvat credit of ₹ 67,16,069/- can be denied to the appellant inputs short received short on account waste/scrap generated at the end of job workers? - Held that: - scrap generated at the end of the job worker is not manufactured for final product, therefore, the Rules 4(6) of the CCR, 2004 are not applicable to the facts of the case - said issue is covered by the circular B-4/7/2000-TRU dated 03.04.2000 and various decisions namely in the case of Mahindra Hinoday Industries Ltd. [2015 (1) TMI 26 - CESTAT MUMBAI], where it was held that the appellant is entitled for Cenvat credit on inputs which contained in waste and scrap generated at the end of job worker - the waste and scrap generated at the end of the job worker, who had cleared the said waste and scrap on payment of duty. The appellant cannot be denied cenvat credit, therefore, we hold that the cenvat credit on ₹ 67,16,069/- cannot be denied to the appellant. Appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 478
  CENVAT credit - manufacture of Nuts and Bolts - process not amounting to manufacture - The department’s case is that since the activity of bringing nuts and bolts cleaning, testing and buttoning does not amount to manufacture, the appellant is not entitled for the CENVAT credit - Held that: - Rule 16 stipulates that even though the activity does not amount to manufacture but if the assessee cleared the goods on payment of duty which is equal to Cenvat Credit, the cenvat credit on the bought out duty paid goods is admissible, as if the same is input - the appellant though engaged in the manufacture of Nuts and Bolts have also bought out duty paid Nuts and Bolts and thereafter they have carried out certain activities such as cleaning, testing and buttoning and cleared thereafter on payment of duty which is equal to the CENVAT credit. In this fact the credit is admissible in view of the Rule 16 - appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 477
  CENVAT credit - GTA service on iron ore and coal - Revenue is of the view that the respondent should have reversed the input service credit on the ground that the iron ore fines and coal fines were not used in the manufacture of final products - Held that: - the issue is no more res integra in view of the decision of the Tribunal in the case of Seven Star Steels Ltd. v. Commissioner of C.Ex., Cus. & S.T., BBSR-II [2013 (5) TMI 119 - CESTAT KOLKATA], where it was held that There is no such provision to reverse credit of service tax availed in relation to such inputs or capital goods when removed from the factory - appeal dismissed - decided against Revenue.

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• 2017 (7) TMI 476
  Confiscation - 8 bags of Ronak brand Gutkha containing 94,200 pouches of MRP ₹ 1 seized at the time of inspection - redemption fine - penalty - Rule 17 of Pan Masala Packing Machine (capacity determination & collection of duty) Rules, 2008 - Section 11A read with Section 3A of the Central Excise Act, 1944 - jurisdiction - Held that: - The order is wholly without jurisdiction being under Section 11 A of the Act in view of the ruling of Hon'ble Supreme Court in the case of Hans Steel Rerolling Mills [2011 (3) TMI 2 - SUPREME COURT OF INDIA], where it was held that Importing of elements of one scheme of tax administration to a different scheme of tax administration would be wholly inappropriate as it would disturb the smooth functioning of that unique scheme. The time limit prescribed for one scheme could be completely unwarranted for another scheme and time limit prescribed under Section 11A of the Act is no exception. There is no redetermination and or challenge by Revenue to the orders determining duty payable under Rule 6 of the Pan Masala Packaging Rules, 2008. The confiscation of the gutkha available in the factory is also wrong as such finished products were found inside the factory and there is no allegation that the same were being attempted to be removed in a clandestine way. Further from the photographs which are relied upon by the Revenue it is evident that the machines have been kept in a small place and placed very close to each other, there being hardly any space to operate and/or space for workers to operate the said machines. It appears like, in a tightly packed elevator people are doing aerobics, as per allegation in the Show Cause Notice. Further from examination of the so called invoices of the machine manufacturer which have been relied upon in the show cause notice, we find that the format of the said invoices is very different from the earlier invoices issued a few months back for purchase of packing machine, Supari cutting machine etc., from the same manufacturer/supplier - Further as stated by the said manufacturer- Lalit Kumar Singh, who has stated that he has sold the subsequent seven machines on credit, but has not produced any evidence of delivery of such machines on credit nor any credible evidence in the form of any acknowledgment from the authorized person of M/s Wizard Fragrances that they have received those machines on credit. It is very unlikely that any manufacturer will deliver machines on credit without retaining proper evidences for the same. Duty imposed along with confiscation & penalty being unsustainable - appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 475
  Scope of SCN - Benefit of N/N. 67/95-CE dated 16.3.1995 - denial of benefit on the ground that the appellant has consumed the dyed yarn in their factory and since the handloom durries was chargeable to nil rate of duty the benefit of Notification not available - Held that: - the provisions of Rule 12B were neither invoked in the show cause notice nor dealt in the adjudication order. On being asked, the Learned AR also could not show us where Rule 12B was referred directly or indirectly in the SCN. In the absence of the same, the Commissioner (Appeals) clearly traveled beyond the scope of SCN - invocation of Rule 12B by the Commissioner (Appeals), which fastens duty liability on the appellant, is without jurisdiction. Extended period of limitation - penalty - Held that: - the dyed yarn for which duty has been demanded is used in the manufacture of goods which were exported. In case the appellants were to pay duty on the inputs used in the exported good, the same would have been liable to be refunded to the appellants themselves as manufacturer exporter. In these circumstances, the situation was revenue neutral and there appears to be no mala fide on part of the appellants. Hence, extended period and penal provisions are not applicable in this case. Appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 474
  CENVAT credit - inputs - angles - plates - MS angles - MS joists/shapes/sections - channels - whether the goods have been used as inputs for manufacturing capital goods in the factory? - Held that: - At the time of visit of the officers, the director of the company had clearly admitted that they had wrongly taken the credit on these items and therefore, reversed the same - The appellants have admitted during the hearing that they had not declared anywhere that the capital goods were captively manufactured from the impugned goods in their factory and that no declaration had been made in the ER-1. In this backdrop, the production of Chartered Engineer certificate issued after two years to co-relate the use and consumption to manufacture of EOT crane and other items appears to be an attempt to justify irregularly used Cenvat credit - the case of Bajaj Hindustan Limited [2013 (9) TMI 536 - CESTAT, NEW DELHI], is directly applicable to the case, where the Tribunal held that the structural steel items used at the time of commissioning of new plant for production of the capital goods are not eligible for credit as inputs and that ER-1 returns did not declare their use in the manufacture of capital goods. Penalty - Held that: - Since the credit was irregularly taken and there is no production of capital goods under Notification No.67/95 dt.16.3.1995 and no declaration was made by the appellant in the ER-1, the penalty has been correctly imposed on the appellant. Appeal dismissed - decided against appellant.

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• 2017 (7) TMI 473
  CENVAT credit - M/s Motherson Sumi Systems Ltd.(MSSL), was engaged in the manufacture of Wiring Harness falling under Chapter 85.44 of the Central Excise Tariff Act, 1985. PVC Tape is one of the inputs of M/s MSSL, and is an output product of the other appellant M/s NPIL. Further M/s NPIL is one of the suppliers of PVC Tape to M/s MSSL - Revenue is of the view that M/s NPIL was engaged in illegal availment of Cenvat Credit on CP 172 Resin which is one of their major inputs and have diverted their input and/or major part of the input - whether the appellant- M/s Motherson Sumi Systems Ltd. have received the inputs namely; PVC Filler/Tape, from their supplier, Nataraj Plast industries Ltd. and accordingly, whether the Authorities below are justified in denying the CENVAT credit of ₹ 37,26,151.68/- along with equal amount of penalty imposed on MSSL with further penalty on Shri Rakesh Kumar Sharma & Nataraj Plast Industries Ltd., for the period September, 2004 to October, 2005? Held that: - Revenue have not found any error in the records of M/s MSSL regarding receipt of the goods from M/s NPIL, the proper account and payment for the same and utilization of the PVC Tapes in the production of wiring harness which have been cleared on payment of duty - Revenue have drawn adverse inference based on some minor variation and or clerical error, in about 8 invoices out of total of 91 invoices, in the disputed period, which is also in respect, only vehicle nos. as mentioned in the invoices and as compared with the manual register of vehicles entering the factory maintained at the gate by the security staff. Such gate register is not by the management of M/s MSSL, and as such no reliance can be placed on the same for drawing adverse inferences - credit allowed - appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2017 (7) TMI 470
  Validity of assessment proceedings - the allegation against the petitioner is that the transaction effected by them were bogus transactions with bill traders - principles of natural justice - Held that: - the petitioner was required to produce the books of accounts for the relevant year and if he complies with the condition there was a direction to the respondent to furnish the copies of the available documents on which the Assessing Authority proposed to rely in making an order of assessment - the respondent has not complied with the direction issued by the Tribunal though it is admitted that the petitioner had produced the books account as per the direction of the Tribunal. This is sufficient to hold that the impugned order is contrary to the direction issued by the Tribunal and consequently in violation of the principles of natural justice - petition allowed - decided in favor of petitioner.

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• 2017 (7) TMI 469
  Validity of assessment order - Held that: - the first respondent need not have laboured much to decide the controversy in issue as the Division Bench of this Court in the case of Oberoi Associated Hotels Limited vs. Commercial Tax Officer and others [1994 (3) TMI 358 - MADRAS HIGH COURT], where the orders of assessment quashed and the matter remanded for fresh consideration - the assessment orders have to be necessarily set aside and the matter has to be remanded to the Assessing Officer, who has to take a decision in terms of the directions issued by the Division Bench of this Court - petition allowed by way of remand.

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• 2017 (7) TMI 468
  Extension of time to file objection - Input tax credit - capital goods - penalty - Held that: - the onus is on the petitioner to establish that these goods are capital goods and the petitioner is entitled for input tax credit on the same - After having fixed the date for personal hearing and filing the objection, the petitioner was not justified in seeking for two months further time. Therefore, this Court is satisfied that this is not a case, where there is violation of principles of natural justice, but a case, where the petitioner failed to avail the opportunity granted to him. Therefore, this Court is not inclined to set aside the impugned assessment orders - if one more opportunity is granted to the petitioner to establish their case before the Assessing Officer, they will be able to produce the documents and other proof to show that the goods qualify for availment of input tax credit, this Court is inclined to grant one more opportunity, but subject to certain conditions - petition allowed.

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