Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
July 19, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Service Tax
Central Excise
TMI SMS
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Non-filing of part B of E-way bill - Inter and Intra State Supply of Goods or Services - Rule 138 and Section 68 of Central Goods and Service Tax Act, 2017 and M. P. Goods and Service Tax Act, 2017 - it is mandatory for the petitioner to file the Part-B of the e-way bill giving all the details - levy of penalty confirmed.
Income Tax
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Transfer of case u/s 127 - “Absence of dissenting note” from officer of equal rank who has to agree to the proposed transfer would not constitute Agreement, envisaged under Section 123(2)(a) of the Act.
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Addition of Short term capital gains u/s 45 - agriculture land - land sold as capital asset - transfer of land within a short span of one year, clearly reveals that the land under consideration was never intended by the assessee to be exploited for agricultural operations - additions confirmed.
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Income received by the appellant from sub-leasing a pert of the sub-licensing capacity alongwith part of the manufacturing unit - to be taxed as‘business income’ and not as ‘income from other sources’.
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Credit of TDS - assessee has raised this claim in the proceedings which were conducted by the AO u/s 154 otherwise than by filing revised return of income u/s 139(5) - TDS credit to be allowed subject to verification
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Disallowance of deduction u/s.35AD - There is no fault on the part of the assessee to apply and/or obtain the said certificate so far delay is concerned nor there any time limit specified for obtaining such certificate in this Statute.
Service Tax
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Small Scale exemption utpo ₹ 10 Lakhs - N/N. 6/2005-ST - the purpose of calculation of aggregate value as per said explanation “B” 60% of the consideration received by the appellant for which exemption was admissible does not need to be taken into consideration.
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Serving of food/beverages in the Canteen of the Factory - Even if such services are considered as OUTDOOR CATERING, those have been used for providing services in relation to serving food and beverages in a canteen - Benefit of exemption allowed.
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Refund of unutilized CENVAT credit - Section 11B of CEA - in the case of export of goods, the relevant date should be the date on which the export of goods was made and not the end of the quarter.
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Refund of accumulated CENVAT Credit - time limitation - one year limitation as provided in Section 11B is applicable for claiming refund under Rule 5 of Cenvat Credit Rules.
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Refund of cenvat credit - the relevant date for the purpose of deciding the time limit for consideration of refund claim under Rule 5 of the Cenvat Credit Rules may be taken as the end of the quarter in which the FIRC is received in cases where the refund claims are filed on a quarterly basis.
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Business Auxiliary service or not? - purchase and sale of liquor - canalising agency - transaction of purchase & sale of liquor not liable to service tax - SC dismissed the SLP filed by the revenue against the decision of HC
Central Excise
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Extended period of limitation - assessees chose to baldly assert that they were victims of fraud - There is no denial of the fact that the appellants availed of and sought to take advantage of the fraudulent documents, which they pleaded to be genuine, even though the amounts in fact were never deposited - extended period invoked.
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Demand of duty u/s 11D of the Central Excise Act 1944 - SSI units - price is inclusive of duty of excise - Since the appellant has not collected the Excise duty from the buyer during the time when he was availing the SSI exemption, there is no question of demanding the duty from the appellant under Section 11D.
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Distribution of input tax credit - the eligibility to CENVAT credit can only be questioned by the tax authorities under whose jurisdiction, the ISD is registered and not by the tax authorities where the appellant is registered.
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Classification of Absorbent Cotton Wool, Carded Cotton/Non-absorbent Cotton, Handloom Gauze, Handloom Bandages and Bandages, etc. - classification of all the aforementioned products under Chapter 30 is not appropriate and legal.
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Small Scale exemption - determination of turnover upto ₹ 4 crores of previous financial year - There was no justification in including the value of clearance during the Financial Year 2006-07 since the same were returned during the month of March, 2007, as provided by provisions under Rule 16 of Central Excise Rules, 2002
Case Laws:
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GST
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2018 (7) TMI 1099
Removal of check posts after introduction of GST Regime - Notification dated 24/06/2017 - case of petitioner is that they cannot restrict or obstruct any of the vehicle from asking them to pay tax on the check posts except the GST - Held that:- learned Govt. Advocate accepts notice on behalf of the respondents No.1 and 2 and, therefore, no further notice is required and he prays for and is granted four weeks time to file reply. In the meanwhile, they shall take appropriate steps in pursuant to the notification issued on 24/06/2017 and 1/07/2017, by which all the check posts have been abolished, directing the officers for removal of the check posts and file a detailed affidavit regarding compliance of the aforesaid provisions, within a period of two weeks from today - List in the week commencing 6.08.2018.
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2018 (7) TMI 1098
Principles of Natural Justice - petitioner’s prayer for quashing the impugned order for the reason that principles of natural justice stood violated - Held that:- The authority below has to adjudicate the factual matrix and the parties, if so aggrieved, can resort to the appropriate statutory remedy - petition disposed off on the terms as mutually agreed.
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2018 (7) TMI 1097
Non-filing of part B of E-way bill - Inter and Intra State Supply of Goods or Services - Rule 138 and Section 68 of Central Goods and Service Tax Act, 2017 and M. P. Goods and Service Tax Act, 2017 - case of petitioner is that due to technical error, Part-B of the e-way bill cannot be updated - demand of GST with equal amount of penalty - petitioner placed reliance on the Division Bench decision of Allahabad High Court in the case of VSL Alloys (India) Pvt. Ltd. vs. State of UP & others [2018 (5) TMI 455 - ALLAHABAD HIGH COURT] and submitted that in identical circumstances, the Division Bench found that there was no ill intention at the hands of the petitioner nor the petitioner was supposed to fill up Part-B giving all the details including the vehicle number before the goods are loaded in the vehicle, which is meant for transportation to the same to its end destination. Held that:- In the case of VSL Alloys (India) Pvt. Ltd., the distance was within 50 kilometeres and, therefore, the petitioner therein was not under an obligation to fill the Part-B of the e-way bill and the Division Bench of the Allahabad High Court has rightly quashed the order. In the present case, the distance was more than 1200-1300 kilometers and it is mandatory for the petitioner to file the Part-B of the e-way bill giving all the details including the vehicle number before the goods are loaded in the vehicle. Thus, he admittedly violated the provisions of the Rules and Act of 2017 and, learned Authority rightly imposed the penalty and directed the petitioner to pay the same - demand upheld - petition has no merit and is dismissed.
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2018 (7) TMI 1096
Input tax Credit - transition to GST - case of petitioner is that though he attempted to upload it within the time, he failed because of some system error - Held that:- The petitioner may apply to the sixth respondent, the Nodal Officer. The petitioner applying, the Nodal Officer will look into the issue and facilitate the petitioner’s uploading FORM GST TRAN-1, without reference to the time-frame - petition disposed off.
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Income Tax
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2018 (7) TMI 1106
Penalty u/s 271(1)(c) - assessee filed revised computation of income during the course of assessment proceedings by surrendering a sum on account of unverified creditors and on account of wrong claim of deduction u/s 80G - mere concealment will not be the case for penalty - Held that:- There is a delay of 151 days in filing the instant petition for which no satisfactory explanation is given. The special leave petition is dismissed on the ground of delay.
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2018 (7) TMI 1105
Reopening of assessment - whether the shareholders who have invested in the shares of the Respondents are fictitious or not? - evidence to establish the existence of such Companies - Held that:- SLP dismissed.
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2018 (7) TMI 1104
Validity of proceedings under Section 153C - addition u/s 69C - non satisfaction of the condition precedent viz. the seized document - Held that:- In view of the order passed by this Court in COMMISSIONER OF INCOME TAX CENTRAL III MUMBAI VERSUS M/S AMBIT REALTY PVT LTD [2018 (7) TMI 563 - SUPREME COURT OF INDIA] this SLP dismissed.
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2018 (7) TMI 1103
Disallowance U/s 40(ba) - payments made by the assessee to ITD Cementation India Limited were only on account of salary and related expenses - Held that:- SLP dismissed.
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2018 (7) TMI 1102
Addition on the basis of documents found in search - no further expiry - document was “silent as to the payer and payee of the amount in question nor does it disclose that the payment was made by cheque or cash nor it is proved that the document is in the handwriting of assessee or at least bears his signatures - Held that:- SLP dismissed.
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2018 (7) TMI 1101
Taxability of interest income as dependent upon subsequent use of the interest income - interest earned on the deposits would be used as part of the cost of the projects and no other purpose - Held that:- SLP dismissed.
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2018 (7) TMI 1100
Constitutional validity of provisions of Section 245D(4A) and 245HA - automatic abatement of settlement application if no final order is passed by the Settlement Commission before 31.03.2008 - cause of delay - Held that:- The special leave petition is dismissed on the ground of delay.
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2018 (7) TMI 1095
Transfer of case u/s 127 - Held that:- Revenue has not placed anything on record to show, that CCIT, Pune has given a consent to request of CCIT (Central), Mumbai so as to constitute agreement as a pre-condition for invoking powers under Section 127. “Absence of dissenting note” from officer of equal rank who has to agree to the proposed transfer would not constitute Agreement, envisaged under Section 123(2)(a) of the Act. Thus, making the impugned order dated 2nd July, 2018 without jurisdiction.
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2018 (7) TMI 1094
TPA - comparable selection - ALP - substantial question of law or fact - Held that:- The controversy involved herein is no more res integra in view of the decision of this Court in M/S. SOFTBRANDS INDIA P. LTD. [2018 (6) TMI 1327 - KARNATAKA HIGH COURT], wherein it has been observed that unless the finding of the Tribunal is found ex facie perverse, the Appeal u/s. 260-A of the Act, is not maintainable
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2018 (7) TMI 1093
Disallowance made u/s 40A(3) - whether a payment of about ₹ 56 lakh made by the assessee to a country liquor vending centre would fall under the exception contained in Rule 6DD(b) - Held that:-Tribunal noticed the matter in the appropriate perspective and referred to a judgment rendered by the same Tribunal in another case pertaining to country-spirit. Tribunal referred to a notification published in the Kolkata Gazette on September 20, 2005 where the warehouse from which a retail vendor obtained the country-spirit was identified as the warehouse for supply of country-spirit. The Tribunal agreed with the previous opinion rendered by it that in such a situation the payment in cash made to such a warehouse would be within the exception recognized in the relevant Rule. Since the Appellate Tribunal considered the matter in the appropriate perspective and based its decision on a Government notification by which the warehouse from which the assessee obtained country-spirit was the Government identified warehouse for the supply thereof, the matter does not call for any further consideration.
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2018 (7) TMI 1092
Unexplained cash deposit in the bank account - Held that:- The cash in hand of the earlier year is available to assessee for making cash deposit in bank account in year under appeal. Similarly, the assessee has withdrawn ₹ 2,00,000/- on 5th March, 2005 from his bank account which is available to assessee to make re-deposit on 21st March, 2005 and 23rd March, 2005 in a sum of ₹ 1,00,000/- each. AO has not brought any evidence on record to prove that the amount withdrawn by the assessee from the bank account was utilized somewhere else for other purposes. Explanation of assessee should not have been rejected for availability of cash of ₹ 2,00,000/- for making re-deposit in the bank account. Thus, the assessee was having sufficient evidence to explain, it was having availability of the cash of ₹ 13,49,879/- which would explain the deposit of ₹ 14,00,000/- in the bank account of the assessee on different dates. Set aside the orders of authorities below and delete the addition of ₹ 13,49,879/- out of ₹ 14,00,000/-. Appeal of assessee is partly allowed.
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2018 (7) TMI 1091
Addition of Short term capital gains under Section 45 - land sold as capital asset - Held that:- The entire chain of events and the material available on record viz. (i). that prior to purchase of land the Government of Maharashtra had vide a notification dated 05.08.2009 accorded permission to M/s Prakhyat Infra Projects Pvt. Ltd (in which company the spouse of the assessee was a director) to purchase the said land for establishing an industrial estate for service industry and warehousing; (ii). that a perusal of the 7/12 extracts revealed that grass was grown on the said land; and (iii). the transfer of land by the assessee to M/s Prakhyat Infra Projects Pvt. Ltd within a short span of one year, clearly reveals that the land under consideration was never intended by the assessee to be exploited for agricultural operations, but was intended from the date of its purchase for setting up of an industry. As the assessee had sold a non-agricultural industrial land, therefore, the A.O had rightly brought the profit arising from the transfer of the same to tax as STCG in the hands of the assessee. We thus, not finding any infirmity in the order of the CIT(A) in context of the issue under consideration, thus uphold the same. The Ground of appeal No. 1 is dismissed. Entitlement towards deduction under Sec. 24(b) of the interest on housing loan to an amount - Held that:- The property under consideration was not a residential property referred to in Sec. 23(2) of the Act, but was a residential property which was admittedly let out during the year to a third party, hence the applicability of the second proviso to Sec. 24(b) was not applicable in its case. We are persuaded to subscribe to the aforesaid claim of the ld. A.R and are of the considered view that as the property under consideration viz. Flat No. 1503/2A, Sidhanchal, Thane was admittedly let out and had fetched a rental income of ₹ 70,000/- during the year under consideration, thus, the applicability of the second proviso of Sec. 24(b) stands excluded. We thus, set aside the order of the CIT(A) in context of the issue under consideration and direct the A.O to allow the claim of the assessee as regards interest paid on housing loan under Sec. 24(b) to the extent of ₹ 2,93,656/-. The Ground of appeal No. 2 is allowed.
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2018 (7) TMI 1090
Disallowance of reimbursement of expenses incurred by assessee on behalf of its AE pertaining to travel cost, marketing cost etc. - Held that:- Assessee has paid for the cost incurred and that these amounts were charged to AE as reimbursements for actual cost incurred by assessee. We do not find any infirmity in the directions issued by DRP and direct Ld.TPO to compute the adjustment if any by considering actual reimbursement received from AE and actual cost incurred by assessee in operating income/expenditure. Assessee shall file all the requisite bills raised by upon AE relating to reimbursement of the expenses, along with vouchers/bills, proving details of total expenditure incurred by assessee, on behalf of AE. Ld.TPO shall then verify the same. In the event it is found to be reimbursements on actual, no adjustments are called for. AO shall allow the claim of assessee to the extent it is reimbursements of expenditure incurred by assessee on behalf of AE. Selection of comparable - Held that:- Assessee is a wholly owned subsidiary of Inductis LLC. It provides IT enabled back-office research and data analytics services to Exl Group Companies (which includes Inductis companies as well) thus companies functionally dissimlar with that of assessee need to be deselected. Disallowance under section 14 A read with rule 8D - Held that:- Under such circumstances respectfully following the decision of Hon’ble Delhi High Court in the case of Cheminvest Ltd versus CIT (2015 (9) TMI 238 - DELHI HIGH COURT) in our considered opinion Section 14 A cannot be invoked as assessee do not have exempt income for the year under consideration and the disallowance deserves to be deleted.
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2018 (7) TMI 1089
Addition of gift received by the assessee from the wife of the elder brother of the assessee’s husband (Jethani) - Held that:- CIT(A) has simply brushed aside the documentary evidence filed by the assessee, observing that the affidavit, or confirmation, or transaction of cheque just explained the receipt of the amount by the assessee, but not the genuineness of the gift. The contents of the documentary evidence filed and the statement of the donor have not even been discussed. It is, thus, a case of non-reading and misreading of material documentary evidence brought on record by the assessee before the ld. CIT(A). Therefore, the matter is remitted to the ld. CIT(A), to be decided afresh in accordance with law, discussing, on merits, all the evidence relied on by the assessee, on providing due and adequate opportunity of hearing to the assessee. All pleas available under the law shall remain so available to the assessee. The assessee, no doubt, shall co-operate in the fresh proceedings before the ld. CIT(A). Ordered accordingly.
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2018 (7) TMI 1088
Validity of the proceeding initiated u/s 158BD - main grievance of the assessee company is that sec. 158BD proceeding could not have been initiated against the assessee company because the shares seized from the premises of UIC Group did not belong to it, when the search was conducted on 07.05.2002 - Held that:- From the facts emerging as noted by us the assessee company though had purchased the shares of certain UIC Group companies in October, November, 1999 and February, 2000, it had been sold to the four persons named above before the date of search on 07.05.2002 and the assessee company has received the amount of ₹ 1,21,65,000/- through account payee cheque and has deposited it in bank account and have duly recorded in the books of account and incorporated the above details in the Income Tax Return. The jurisdictional fact for assumption of jurisdiction is absent and, therefore, the AO could not have invoked jurisdiction u/s. 158BD of the Act against the assessee company. Therefore, the AO erred in invoking sec. 158BD proceedings against the assessee company and, therefore, the order of AO passed after invoking section 158BD is ‘Null’ in the eyes of law and so has to be quashed. The jurisdictional fact which is the condition precedent for invoking jurisdiction u/s. 158BD is absent, the very invocation and framing of assessment u/s. 158BD is ab initio void and consequently is null in the eyes of law and is quashed. Since the facts of the other four appeals are identical and orders have been passed without satisfying the jurisdictional fact for invoking jurisdiction u/s. 158BD AO lacks jurisdiction to initiate and pass orders in consequence to sec. 158BD of the Act, therefore, the impugned orders passed by the AO are null in the eyes of law and are, therefore, quashed. - Decided in favour of assessee.
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2018 (7) TMI 1087
Addition on account of transfer pricing adjustment made in the Transport segment - Held that:- In the given facts and circumstances, we are of the opinion that the assessee’s application for additional evidence including expert technical opinion provided by the assessee and the report of the Valuation Officer need to be examined at the end of the TPO/AO on the facts relevant for the year under consideration. Even if the AO/TPO has found the additional evidence as supporting the Departmental view for the A.Y. 2006-07, that does not per se operate as res judicata for other years. The facts of each year need to be separately examined in the light of the additional evidence before jumping to any conclusion. We are concerned with additional evidence which has not been examined by the AO/TPO in the light of the facts for the relevant year. Our view in restoring that matter to the AO/TPO for a fresh adjudication of this issue is fortified by the judgment of the Hon'ble Calcutta High Court in CIT vs. Trimline Vyapaar Ltd. (2014 (5) TMI 748 - CALCUTTA HIGH COURT) in which it has been held that additional evidence cannot be permitted to be adduced without making an opportunity to the AO. In that case, the Tribunal decided the issue in assessee’s favour by relying on additional evidence without confronting it to the AO. The Tribunal order was set aside by holding that consideration of additional evidence, without giving any opportunity to the AO to examine the same, is gross violation of principles of natural justice. Depreciation on leasehold improvement - Held that:- Spirit and text of Explanation 1 to section 32 is that any capital expenditure by the assessee on a building not owned by him, in which he carries on the business, shall be considered as building owned by him for the purposes of section 32, to the extent of the amounts spent on the construction of structure or doing of any work in or in relation to and by way of renovation or extension or improvement to the building. It therefore, follows that in order to bring any amount within the ambit of Explanation 1 to section 32, it is paramount that the expenditure incurred by the assessee on the premises in the capacity of non-owner should firstly be in the nature of capital expenditure and then it should fall within any of the clauses as discussed above. If these conditions get satisfied, as is the case under consideration, then the amount incurred for such works falls under Explanation 1 to section 32. In other words, the amount so incurred would be capitalized entitling the assessee to depreciation as per the eligible rate. The facts of the instant case precisely fall within the ambit of Explanation 1 to section 32. In view of the foregoing discussion, we uphold the impugned order treating such amount as capital expenditure, eligible for depreciation. Receivable treated as an international transaction - Held that:- Applying the decision in Kusum Health Care (2017 (4) TMI 1254 - DELHI HIGH COURT), the Hon’ble High Court directed the TPO to study the impact of the receivables appearing in the accounts of the assessee; looking into the various factors as to the reasons why the same are shown as receivables and also as to whether the said transactions can be characterized as international transactions. In view of the above decision in Avenue Asia Advisors (2017 (9) TMI 1295 - DELHI HIGH COURT), we deem it appropriate to set aside the impugned order on this issue and remit the matter to the file of the Assessing Officer/TPO
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2018 (7) TMI 1086
Enhancement of income - addition on account of bank interest and other income - Held that:- AO disobeyed the order of the Tribunal dated 13th October, 2016 by repeating the addition of ₹ 18,18,599/- on account of bank interest and others which addition has already been deleted by the Tribunal vide order dated 13th October, 2016. AO and the Ld. CIT(A) have exceeded their jurisdiction in making addition and enhancing the same addition on account of bank interest etc. The orders of the authorities below are illegal, void ab initio. The AO and the CIT(A) have without any justification fail to follow the order of the Tribunal and as such liable for proceedings under contempt of court’s Act. Set aside the orders of the authorities below and delete the entire addition made by the AO and enhanced by the Ld. CIT(A). - Decided in favour of assessee
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2018 (7) TMI 1085
Bogus purchases - profit earned by assessee against possible purchase of material in the grey market - Held that:- Addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize for profit earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against such bogus purchases, which Ld. CIT(A) has rightly done. However, keeping in view the factual matrix, conduct of assessee and the products being dealt by the assessee, the rate of 1.77% as estimated by Ld. CIT(A), in our opinion, is quite low. Therefore, we enhance the same to 4% of alleged bogus purchases as well as purchases made by the assessee from Amee Enterprises. Accordingly, we estimate the additions @4% of aggregate purchases of ₹ 3,86,98,368/- made by the assessee from these entities including purchases made from Amee Enterprises. The same comes to ₹ 15,47,935/-. Appeal of revenue stand partly allowed.
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2018 (7) TMI 1084
Eligibility to section 11 - Registration under section 12AA - Held that:- If the main activity of the assessee i.e. providing hostel facilities to the students fall within the ambit of expression “education” employed in the main provision of section 2(15) then generation of surplus would be immaterial because ultimately is to be ascertained whether surplus is being used for the purpose of fulfilling all the objects of the trust or not. If the surplus is being applied on the objects of the trust or being accumulated as provided in the scheme, then nothing is to be taxable. AO has unnecessarily created an artificial distinction. The assessee is not admitting other persons in the building. It is providing facility only to the students, and there are lots of rules and regulations, bye-laws for admitting students, according to their merits in education. Thus, taking into account overall facts and circumstances, we are of the view that the assessee is entitled for benefit of sections 11 and 12. If the assessee is entitled for benefit of sections 11 and 12, then the amount spent from the corpus fund for construction of building is also to be looked into with that angle. We set aside both the orders of the Revenue authorities and restore this issue to the file of the AO. AO shall re-determine taxable income of the assessee and after providing benefit under sections 11 and 12. Appeal of the assessee is allowed for statistical purpose.
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2018 (7) TMI 1083
Income received by the appellant from sub-leasing a pert of the sub-licensing capacity alongwith part of the manufacturing unit - ‘business income’ or ‘income from other sources’ - Held that:- Hon'ble Supreme Court in case of Shri Laxmi Silk Mills Ltd. [1951 (9) TMI 1 - SUPREME COURT] also held that the yield of income by a commercial asset is the profit of the business irrespective of the manner in which that asset is exploited by the owner of the business. The Hon’ble Apex Court further held that the owner is entitled to exploit to his best advantage and he may do so either by using it himself personally or by letting it out to somebody else. DR’s contentions that the assessee intends to lease out the Unit on a continuous basis and hence, the same should be treated as Income from Other Sources appears to be incorrect as the manufacturing activity of the assessee is going on till date. Income from resale of raw and packing material - Held that:- The same is also business income as the raw and packing material belongs to the assessee irrespective of whether it is used for the manufacturing activities conducted by the assessee or not. Thus, the same is part and parcel of the business activity of the assessee. Assessing Officer as well as the CIT(A) was not correct in disallowing this by holding that it is “income from other sources.” Ground No. 3 of the Assessee’s appeal is allowed. Allowance of deduction u/s 57 (iii) - Held that:- There is no dispute regarding the genuineness of the above expenses by the Assessing Officer. These expenses were incurred for running the business operations of the assessee including various packaging services provided to M/s. Jagatjit Industries Ltd.. Entire expenses were incurred wholly and exclusively to earn the business income. Salary and wages including PF, ESI, Bonus etc. were paid to labour and the executives of the assessee working for last many years with the assessee. Similarly, administrative and selling expenses were incurred for running the day-to-day business operations of the assessee company. Being so such expenditure are allowable as business expenditure under section 37(1) of the Act, as allowed in earlier years. Thus, the personnel expenses and administrative & selling expenses, having been incurred by the assessee for earning income by way of lease rent, from provision of packaging services to M/s Jagatjit Industries Limited and carrying out its own manufacturing and business activities, should be allowed as deduction as per section 37(1) as also under section 57(iii) of the Act. Addition marketing expenses - Held that:- Marketing expenses was paid to Mr. J. Jaiswal who is senior employee of the assessee company stationed at Delhi as well as experienced personnel in liquor business and was looking for the business affairs of the assessee company in respect of the Delhi based company M/s. Jagatjit Industries Ltd. Thus, the expenditure incurred by the assessee is allowable under the provisions of Section 37(1) of the Act.
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2018 (7) TMI 1082
Disallowance of interest - Held that:- On perusal of the balance sheet filed before us, we find that the assessee has not taken any fresh loan during this year and has earned profit of ₹ 34.00 crores approx. Therefore, no adverse inference can be drawn that these capital work in progress incurred by the assessee amounting to ₹ 1,00,61,241/- has been expended out of borrowed funds. The Revenue could not adduce any evidence that this amount has been incurred out of any borrowed funds. Claim of depreciation on sale proceeds of the assets - Held that:- Once, the asset has been taken in the block of assets, and if any sale value of the asset is realized or credited into the fixed asset account, it is reduced from the block of assets and it cannot be treated as a profit on sale of asset until and unless whole of the block does not exhaust. Therefore, ground No. 4 for the assessment years 2010-11 and 2011-12 are dismissed. Calculation of interest on the loans outstanding as on 31.03.2011 - Held that:- AR did not agree to produce the requisite balance sheet, only stating that the issue is covered by the decision of Tribunal and Hon’ble High Court. We are, therefore, unable to ascertain whether the loans given by the assessee during the year under consideration were out of owns funds or from borrowed funds. Therefore, we deem it expedient in the interest of justice that this matter should go back to the file of the AO to decide the issue afresh after due verification, as observed above from the books of assessee. Similar is the position with respect to the disallowance of interest made by A.O. of ₹ 26,86,443/- on the expenditure incurred by assessee as capital work in progress of ₹ 2,23,87,021/-. This expenditure also needs verification to the extent whether this amount was expended by the assessee out of own funds or out of borrowed funds. Therefore, this issue is also sent back to the Assessing Officer for deciding the same afresh after due verification.
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2018 (7) TMI 1081
Credit of TDS - assessee has raised this claim in the proceedings which were conducted by the AO u/s 154 otherwise than by filing revised return of income u/s 139(5) - Held that:- If the AO could not have taken cognisance of the fresh claim filed by the assessee which was not filed by filing revised return of income u/s 139(5) , the learned CIT(A) being appellate authority could have always admitted the said fresh claim and thereafter adjudicated the same on merits. Hon’ble Bombay High Court decision in the case of CIT v. Pruthvi Brokers & Shareholders reported in (2012 (7) TMI 158 - BOMBAY HIGH COURT) is relevant and binding being jurisdictional High Court. Thus, the assessee could not be denied the said claim of credit of TDS to the tune of ₹ 9,93,555/- but however for limited purposes for verification of contentions raised by the assessee, we are restoring this issue of grant of credit for prepaid taxes to the tune of ₹ 9,93,555/- being TDS back to the file of the AO for necessary verification of the TDS certificates filed by the assessee purported to be received from Elecon Engineering Co. P. Ltd. and Prayas Engineering Ltd. as to the credit of taxes to Central Government and also for verification of offering of the corresponding income by the assessee to taxation in the return of income filed u/s 139(1) on 20-09-2008, before allowing credit for said TDS
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2018 (7) TMI 1080
Addition u/s 68 - genuineness of share capital received - shares issued at high premium - Held that:- No adverse inference can be drawn against the assessee, even if replies were not received from the share subscribers Companies though the notices u/s 133(6) were duly served on them; that it is not the case of the AO that notices had come back unserved or share subscriber Companies were not available at the address given by the assessee Co. - assessee Company produced sufficient documentary evidence including the confirmations, bank statements, balance sheets, ROC records, ITRs & PAN indicating Ward/Circle of the share applicants where they were assessed to income tax and hence, the onus which lay on the assessee to prove the identity, genuineness and creditworthiness of the share subscriber Companies stood duly discharged. Accordingly, ground No. 2 of appeal of the assessee deserves to be allowed. Addition u/s. 69C on account of commission/premium allegedly paid @ 1% to entry operators out of assessee’s undisclosed income for receiving bogus accommodation entries in the form of share capital of ₹ 30,50,000, is concerned - Held that:- In view of deletion of connected addition on account of share application money, the addition made u/s. 69C of the Act cannot be sustained. Accordingly, ground No. 3 of assessee’s appeal also deserves to be allowed. Addition on account of high premium paid for shares cannot be sustained unless and until some material was brought on record by the AO to show that confirmation and other evidences placed by the Assessee were not genuine. No such material is available on record before us. Accordingly, the impugned order of ld. CIT(A) does not suffer from any infirmity while deleting the addition
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2018 (7) TMI 1079
Disallowance of deduction u/s.35AD - Deduction in respect of expenditure on specified business - Held that:- Any capital expenditure incurred by the assessee prior to the commencement of operations of the new unit shall be allowed as deduction in the previous year in which the assessee commences the operation of offices as new specified business if the assessee has capitalized the amount of expenditure in its books of accounts on the date of commencement of operation of the specified business which is present in the case in hand. The assessee commenced its business on 17.11.2011 and he applied for the star classification certificate on 07.06.2013 which was granted by the concerned department on 24.09.2013 with effect from 11.09.2013 till 10.09.2018. Application was made by the assessee in due time, inspection was conducted by the concerned department and ultimately certificate was issued. There is no fault on the part of the assessee to apply and/or obtain the said certificate so far delay is concerned nor there any time limit specified for obtaining such certificate in this Statute. The assessee thus fulfills the criterion prescribed under the Statute and is entitled to deduction on capital expenditure incurred by him prior to the commencement of its operation and therefore we find no infirmity in the order passed by the CIT(A) and thus we uphold the same. Revenue’s appeal on this ground stands dismissed. Addition/disallowance made by the AO is hereby deleted. - Decided against revenue
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2018 (7) TMI 1078
Agricultural or non agricultural land - ascertainment of nature of land - proof of agricultural operation - TDS u/s 194LA - TDS determined only on the basis of records furnished by assessee and no inquiry, investigation, physical verification is permissible/desirable at the end of assessing officer - Held that:- SLP dismissed.
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2018 (7) TMI 1077
Interpretation of Total Turnover & Export Turnover under 10A - Held That:- In view of the Order in Commissioner of Income Tax, Central-III Vs. HCL Technologies Ltd.[2018 (5) TMI 357 - SUPREME COURT], the present Special Leave Petition also stands dismissed in the same terms.
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2018 (7) TMI 1076
Benefit of Section 80-IC - proof of income derived from business - income earned by way of interest - scope of the term business u/s 2(13) r.w.s 28(i) - Held that:- SLP dismissed.
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2018 (7) TMI 1075
Addition u/s 69(B) - Since books of accounts was not rejected therefore, provisions of Section 69(B) was wrongly invoked - Held that:- SLP dismissed.
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2018 (7) TMI 1074
Penalty under Section 271(1)(c) - addition on account of sundry balances written off which was not suo motto offered for taxation even though the same was taken into consideration for claiming deduction under Section 80IB - Held that:- SLP dismissed.
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2018 (7) TMI 1073
Addition on account of capital gains computed u/s 48 by adopting the full value of consideration as adopted by the Stamp valuation Authority in pursuance of provisions of section 50C(1) - valuation of Registered Valuation Officer - Held that:- SLP dismissed.
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2018 (7) TMI 1072
TPA - Adjustment made in the Arms Length Price of international transaction by taking into account TNMM at entity level - Addition on account of inventories written off - Traveling expenses disallowance - TDS u/s 194H - TDS liability on gifts and trade incentives - Adhoc miscellaneous expenses disallowance - Held that:- SLP Dismissed.
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2018 (7) TMI 1071
Disallowance invoking the provision of section 94(7) - Held that:- No ground to interfere with the impugned order. The special leave petition is, accordingly, dismissed.
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2018 (7) TMI 1070
Registration u/s 12AA - proof of charitable activities - treatment as registered trust - receipt of land as Donation - Held that:- SLP dismissed.
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2018 (7) TMI 1069
Deduction u/s.80IB (10) - Interpretation of section 80-IB(10)(d) - project approved by the Pune Municipal Corporation which is the local authority - Effect of amendment w.e.f. 01.04.2005 - Whether section 80-IB(10)(d) which was brought into force w.e.f. 1st April, 2005 would apply to projects that were approved by the local authority prior to it being brought on the statute book – Held that:- The High Court has dismissed the appeal by following its order in respect of the same assessee for earlier assessment years and in the process, it has not considered question no.2 which was not involved in the earlier appeal. In view thereof, we permit the petitioner to approach the High Court by way of review petition. If the review petition is filed within 30 days, it will be decided on merits and shall not be dismissed on limitation. In case the order is against the petitioner, the petitioner shall be entitled to challenge not only the order passed in the review petition but also the impugned order. The special leave petition stand disposed of.
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2018 (7) TMI 1068
Addition u/s.68 - Proof of identity of the share applicant or substantiated the credit worthiness of the share applicant - whether assessee cannot be assessed for the applicant, who is paid by the account payee cheque - Held that:- The special leave petition is, accordingly, dismissed. Pending application(s), if any, shall also stand disposed of.
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Customs
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2018 (7) TMI 1067
Monetary Limit involved in the appeal - Held that:- List the matter for final disposal on 28th August, 2018 - In the meantime, the proceedings before the learned Customs, Excise and Service Tax Appellate Tribunal, Allahabad pursuant to the order of the High Court shall remain stayed.
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2018 (7) TMI 1066
Release of seized goods - Betel Nuts - power of DRI under Section 110 of the Customs Act, 1962 - prayer of the petitioner herein is that since the DRI authorities have kept the said huge amount of Betel Nut for over more than 2 (two) months, it should now be released to him considering it to be an unlawful seizure in abuse of the power vested under Section 110(1) of the Customs Act, 1962. Held that:- It is seen from the annexures that statement of the petitioner and other persons involved in the case have already been recorded under Section 108 of the Customs Act, 1962 and that the respondents No. 2 and 3 being DRI Officials are not proper officers to decide provisional release of the seized goods seized under the provisions of the Customs Act, 1962 - Section 128 of the Customs Act, 1962 provides for an appeal against any such order passed by the authority concerned under the Customs Act and in the present case, it is only after issuing the show-cause notice to the petitioner to which the petitioner submitted his reply, the Additional Commissioner of Customs Department on consideration of the report dated 20.11.2017 of the Regional Plant Quarantine Station, Kolkata showed that the test sample of said seized betel nuts were found to be infested by fungus “Aspergillus sp.”, the concerned adjudicating authority under the Customs Act, 1962 rejected the prayer of the petitioner for such provisional release of the areca nuts seized in the present case. When a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation and as Section 128 of the Customs Act, 1962 itself provides for an appeal against any order passed under the said 1962 Act before the appropriate authority as provided in the said Act - reliance placed in the case of Commissioner of Income Tax and Ors. Vs Chhabil Dass Agarwal [2013 (8) TMI 458 - SUPREME COURT]. This writ petition of the petitioner, being not maintainable, his prayer for provisional release of the seized article (areca nuts) cannot be considered - appeal dismissed being not maintainable.
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Service Tax
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2018 (7) TMI 1065
CENVAT Credit - service tax paid on sales commission - amendments in relevant statutory provisions - Held that:- A co-ordinate bench of the Tribunal in case of M/s. Essar Steel India Ltd. vs. C.C.E. & S.T., Surat-I,[2016 (4) TMI 232 - CESTAT AHMEDABAD] had held that such amendments were clarificatory in nature and therefore even with respect to cases arising prior to the amendment service tax paid on sales commission would be eligible for cenvat credit. It was noticed that such judgement of the Tribunal has been carried in appeal by the department before the High Court - such appeal is admitted and is pending [2016 (6) TMI 1305 - GUJARAT HIGH COURT]. The Tribunal ought not to have disposed of the appeals in the above manner. The appeals presently stands disposed of without finality. Even after the High Court decides the issue, it is not clear how the outcome would apply to the appeals which are disposed of by the Tribunal by the present judgement. Notice for final disposal returnable on 05.07.2018.
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2018 (7) TMI 1064
100% EOU - Refund of accumulated CENVAT Credit - time limitation - appellant has filed a refund claim on 03/07/2015 for the period October 2014 to December 2014 - Held that:- The time limit for taking CENVAT credit was introduced first time from 01/09/2014 and a period of 6 months was prescribed but vide N/N. 6/2015-CE dt. 01/03/2015, this time period of 6 months was increased to one year and this amendment has substituted the words one year in place of six months. Relying on the decision in the case of Hon'ble Karnataka High Court in the case of Fosroc Chemicals (India) Pvt. Ltd. [2014 (9) TMI 633 - KARNATAKA HIGH COURT], it is held that this amendment which was introduced by way of substitution is applicable retrospectively and the appellant is entitled to CENVAT credit on all the invoices which have been produced on record except one invoice for ₹ 27,810/- which is beyond one year from the amendment dt. 01/03/2015. The appellant is entitled to the CENVAT credit of ₹ 3,09 964/- which is within one year from the amendment vide N/N. 6/2015 dt. 01/03/2015 - appeal allowed in part.
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2018 (7) TMI 1063
Refund of service tax paid - no documents produced to establish the claim - appellant contended that Lower Authorities did not give them opportunity to establish their case - Held that:- The applications were without any documents to establish that the amount claimed by appellant for refund was actually credited to exchequer - Central Board of Excise and Customs has issued supplementary instructions under Chapter IX of supplementary instructions in Para 2.4 issued instruction in respect of Refund which says that The claim shall be taken as filed only when all relevant documents are available. The Original and Appellate Authority are bound by the said instructions which also includes that the refund claims received without supporting documents should be rejected - appeal dismissed - decided against appellant.
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2018 (7) TMI 1062
Small Scale exemption utpo ₹ 10 Lakhs - benefit of N/N. 6/2005-ST dated 01.03.2005 - Held that:- The issue is covered by precedent decision of this Tribunal in the case of SHRI ASHOK KUMAR MISHRA, VERSUS COMMISSIONER OF CENTRAL EXCISE & S.T., ALLAHABAD [2018 (2) TMI 573 - CESTAT, ALLAHABAD], where it was held that the purpose of calculation of aggregate value as per said explanation “B” 60% of the consideration received by the appellant for which exemption was admissible does not need to be taken into consideration. The consideration received in each of the years was within threshold limit of small scale exemption provided through N/N. 6/2005-ST dated 01.03.2005 - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1061
Serving of food/beverages in the Canteen of the Factory - benefit of N/N. 25/2012-ST as amended by N/N. 14/2013-ST dated 22/10/2013 - Interpretation of Statute - scope to those canteens “maintained by and run by the factory themselves” - intent in the Entry No.19A of the mega exemption Notification. Held that:- The Adjudicating Authority has sought to whittle down the scope to those canteens “maintained by and run by the factory themselves”. The words in the Notification do not support this view inasmuch as the Notification uses the phrase “canteen maintained in a factory” and not “maintained by and/or run by a factory”. If the intent of the Notification were to be as interpreted in the impugned Order-in-Original, then the wording in the Notification should have been “maintained by and/or run by the factory” - a narrow interpretation of SI. No.19A of the Notification, based on the fact that an outdoor caterer is maintaining the canteen, is neither warranted nor contemplated in the Notification. Maintaining canteen for employees is a statutory requirement under the Factories Act for certain category of factory and outsourcing the same is not barred under the Act ibid and Rules made thereunder. In the circumstances, if the Notification is interpreted to mean that exemption will be available only when the canteen is run by factory, such interpretation will be doing violence to the language of the Statute and in fact will amount to adding words in the Notification which is not permitted under established law. Exemption under N/N. 14/2013-ST - Section 66F(1) of the Act - It is also alleged that the main service i.e. canteen service is exempted under the Notification No.14/2013-ST and not the outdoor catering services which is used to provide such service - Held that:- It emanates from the facts that the appellant is entering into agreement with factories for providing catering services in their canteens, for the employees as per rates agreed upon for not only supplies but also serving of food and beverages - Even if such services are considered as OUTDOOR CATERING, those have been used for providing services in relation to serving food and beverages in a canteen. The services provided by the appellant is covered by Entry No.19A of the Negative List and exempted from payment of Service Tax - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1060
Time Limitation - Refund of unutilized CENVAT credit - Section 11B of CEA - cut off date as the last date of the quarter to which the claim pertains or not? - Held that:- The finding of the Commissioner that the cut of date for filing the refund claim in terms of Section 11B has to be interpreted as the last date of the quarter to which the claim pertains is not sustainable in law in view of the specific provisions as provided in Section 11B and also the decision of the Madras High Court in the case of GTN Engineering [2011 (8) TMI 960 - MADRAS HIGH COURT] wherein it has been categorically held that in the case of export of goods, the relevant date should be the date on which the export of goods was made and not the end of the quarter - appeal allowed - decided in favor of Revenue.
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2018 (7) TMI 1059
100% EOU - Refund of accumulated CENVAT Credit - time limitation - appellant filed application seeking refund of cenvat credit for the period from 01.04.2011 to 31.03.2012 and 01.04.2012 to 31.03.2013 on 30.03.2015 along with the documents - refund was rejected on the ground of time limitation - Section 11B of the Central Excise Act - Rule 5 of Cenvat Credit Rules read with Notification 5/2006 dated 14.03.2006. Held that:- This issue has been considered by the Hon'ble Gujarat High Court in the case Indo-Nippon Chemicals Co. Ltd. Vs. Union of India [2002 (2) TMI 136 - GUJARAT HIGH COURT], where it was held that Since the provisions of the Act, do not expressly exclude applicability of Sections 4 to 24 and particularly Section 17 of the Limitation Act, the said provision of the Limitation Act can be made applicable to refund claims filed under Section 11B of the Act Madras High Court in the case of Celebrity Designs India Pvt. Ltd. [2015 (3) TMI 660 - MADRAS HIGH COURT] has categorically held that the one year limitation as provided in Section 11B is applicable for claiming refund under Rule 5 of Cenvat Credit Rules. There is no infirmity in the impugned order rejecting the refund claim as time-barred - appeal dismissed - decided against appellant.
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2018 (7) TMI 1058
100% EOU - Refund Claim - time limitation - Export of services - applicability of Section 11B of the CEA - Held that:- The issue involved in the present appeal is no more res integra and has been settled by the Larger Bench of the Tribunal in the case of CCE & CST, Bangalore Vs. Span Infotech (India) Pvt. Ltd. [2018 (2) TMI 946 - CESTAT BANGALORE] whereby the Larger Bench has held that in respect of export of services, the relevant date for the purpose of deciding the time limit for consideration of refund claim under Rule 5 of the Cenvat Credit Rules may be taken as the end of the quarter in which the FIRC is received in cases where the refund claims are filed on a quarterly basis. In the present case also it is the export of service and therefore by following the ratio of the Larger Bench, it can be concluded that there is no infirmity in the impugned order passed by the Commissioner. Appeal disposed off.
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2018 (7) TMI 1057
Business Auxiliary service or not? - purchase and sale of liquor - canalising agency - Held that:- The Special Leave Petition is dismissed.
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Central Excise
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2018 (7) TMI 1056
Tenability of invocation of the extended period of limitation - Section 11 of the Central Excise Act - case of appellant is that there is no positive finding rendered by any of the authorities below which says that the assessees were parties to the fraud - Held that:- All the appellants stated in their defence that they had tasked one or the other individual to deposit the duty amounts with the concerned bank periodically. The least that could have been done by them in these circumstances, was to establish through some credible material i.e. by summoning the bank records or citing the concerned individuals as witnesses and ensuring that their statements were recorded. The assessees however, chose to baldly assert that they were victims of fraud and that the First Information Report was in fact lodged against a certain individual, one Sachin, against whom investigations are ongoing. There is no denial of the fact that the appellants availed of and sought to take advantage of the fraudulent documents, which they pleaded to be genuine, even though the amounts in fact were never deposited. The invocation of the extended period was justified - appeal dismissed - decided against appellant.
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2018 (7) TMI 1055
Clandestine removal - 95 wagons - appellant did not pay excise duty on these wagons - N/N. 64/95-CE dated 16th March, 1995 - Held that:- This exemption notification covered all goods falling under heading nos.86.01 to 86.06 of the schedule to the Central Excise Tariff Act, 1985. It is not in dispute that these heads include wagons for exemption but this exemption was subject to certain qualifications. Having regard to the stand of Railways as reflected in the letter of 24th July, 1997, it appears to us that the Railways had also proceeded in the matter on the assumption that excise duty was not payable for the period before the letter was issued on 24th July, 1997 - also, this appeal does not involve substantial question of law - the appeal and the application are dismissed.
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2018 (7) TMI 1054
CENVAT Credit - duty paying documents - Debit Notes - Rule 9 of Cenvat Credit Rules, 2004 - Held that:- The Debit Note contains all the details as required for availment of credit. Further, the copies of Debit Notes have also been placed on record and in the Debit Notes the assessee has mentioned the Invoice No. by which the goods were originally sent by the appellant relates to and therefore it can easily be ascertained that the goods received by the assessee is the same as was originally sent - further, the original authority as well as Commissioner (Appeals) who has upheld the Order-in-Original has traveled beyond the SCN inasmuch as there was no allegation in the SCN that the goods are not returned back to the factory. The only allegation in the show-cause notice is that Debit Note is not a valid document as per Rule 9 of CCR - credit cannot be denied on this count. CENVAT Credit - common input services used in the factory and dealership unit without maintaining separate records - Rule 6(3) of CCR - Held that:- Tribunal in the case of HCL Infosystem Ltd. [2014 (7) TMI 76 - CESTAT NEW DELHI] has held that trading was an exempted service even prior to 01.04.2011 and therefore by following the ratio of the decision, the CENVAT credit availed on common input services relating to trading activity is required to be reversed by the appellant proportionately and therefore this issue is decided against the assessee - credit not allowed - also it is held that the demand is not barred by limitation. CENVAT Credit - sales rejects under Rules 16 - goods returned from EOU - it was alleged that appellant did not repair or return the goods and stored them as scrap - Held that:- Since the goods are lying with the appellant and as and when the appellant would clear those goods then he will pay the requisite Excise duty - demand at this stage not sustainable - further, it is a settled position that the charging of duty by supplier cannot be questioned at the recipient end - demand set aside. Appeal allowed in part.
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2018 (7) TMI 1053
Demand of duty u/s 11D of the Central Excise Act 1944 - SSI units - price is inclusive of duty of excise - it was alleged that the appellant had availed the SSI Exemption as per N/N. 08/2003 CE dated 01.03.2003 and concurrently collected the Central Excise Duty from their customers but not deposited with the Department - Held that:- Admittedly the appellant was working as a SSI unit during the material period and he was availing the SSI exemption. It is also a fact that the assessee has not charged Excise duty from the buyer and he has not shown the Excise duty in the invoices because as per the agreement between the appellant and his buyer the price is inclusive of Excise duty - Since the appellant has not collected the Excise duty from the buyer during the time when he was availing the SSI exemption, there is no question of demanding the duty from the appellant under Section 11D. Demand do not sustain - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1052
100% EOU - Refund of accumulated/unutilized CENVAT credit - Scope of SCN - Held that:- In the present case, the issue was whether the appellant is eligible for the refund of unutilized input service credit under Rule 5 of CENVAT Credit Rules 2004 but the Department has gone beyond the SCN and has examined the eligibility and recovery of the credit which can only be done by issuing a SCN for recovery of irregular credit as held in the case of Grasim Industries Ltd. [2011 (8) TMI 689 - SUPREME COURT OF INDIA]. In the present case, the appellants have availed the credit on the basis of invoices issued by their Head Office which is also registered as ISD and as per Rule 9 of the CENVAT Credit Rules, the CENVAT credit can be availed on the basis of an invoice, a bill or challan issued by an ISD under Rule 4A of the Service Tax Rules, 1994 and in the present case, the appellant has availed the credit on the basis of the invoices issued by the ISD which satisfied the requirement of Rule 9 of CENVAT Credit Rules - Further the eligibility to CENVAT credit can only be questioned by the tax authorities under whose jurisdiction, the ISD is registered and not by the tax authorities where the appellant is registered. Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1051
Seizure and Confiscation of goods lying in the factory - CENVAT Credit - shortages and excesses of goods and stock - it was alleged that wrong method of stock taking was applied - Held that:- The duty is on manufacture and the payment of duty is differed till such time the goods are not removed from the factory. -The alleged excess quantity of finished goods lying in the factory should have been ordered to be entered into RG-1 so that they get accounted for and suffer Central Excise duty and the appellant should have been charged with non maintenance of proper records - The goods manufactured by the appellants unless removed without payment of duty from the factory cannot be seized and confiscated. CENVAT credit is admissible on inputs on receipt of the goods and unless it is establish that the inputs were not received or unless it is establish that inputs were cleared as such the Cenvat credit cannot be recovered - In the present case, there is no evidence either to establish that inputs on which reversal of Cenvat credit was sought were alleged not to have been received by the appellant - Further, there is no evidence that the same were removed without reversal of CENVAT credit. Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1050
CENVAT Credit - re-assessment of the inputs can be done or not? - Held that:- The provisions of Cenvat Credit Rules allow credit of entire duty paid on the inputs and capital goods and it is settled position of law that assessment cannot be done at the end of the receiver of the inputs - Hon’ble High Court of Punjab & Haryana in the case of Commissioner of Central Excise, Ludhiana Versus Perfect Synthetics [2005 (2) TMI 162 - HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH] has held that the assessee is not prevented from taking credit on the ground that excess duty was paid by the supplier. There is no case for Revenue to reverse the CENVAT credit availed by the appellants or to recover interest or to impose penalty on any of them - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1049
CENVAT Credit - job-work - inputs sent to job-worker not received back within 180 days - Held that:- The demand pertains to the period 2002-2003 and during the relevant period, there was no recovery mechanism incorporated under Rule 4 of CENVAT Credit Rules to recover the CENVAT credit availed on inputs which was sent to job work but not received back after completion of 180 days - the demand of ₹ 14,80,599/- relating to demand of CENVAT credit on inputs sent for job work not received back within 180 days is not sustainable in law. CENVAT Credit - non-receipt of goods within 180 days - captively manufactured moulds, dies and tools without payment of duty, sent for job work - Held that:- As per the erstwhile N/N. 214/86-CE dt. 25/03/1986, the said notification provides for exemption to items if manufactured in a factory as a job-work and used in the manufacture of final product or cleared as such from the factory of supplier of raw materials or semi-finished goods. Further, even if the duty is paid on the said capital goods, the same would be available as CENVAT credit to the appellant - the demand of ₹ 3,52,346/- on captively manufactured moulds, dies and tools without payment of duty, sent for job work and did not receive back within 180 days is also not sustainable. Time Limitation - Held that:- The case pertains to the period 2002-03 and the show-cause notice was issued on 14/11/2006 by invoking the extended period of limitation - Department has not produced any material to show that the appellant has suppressed the facts with intent to evade payment of duty - entire demand is time barred. Appeal allowed on merits as well as on limitation - decided in favor of appellant.
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2018 (7) TMI 1048
Classification of goods - Absorbent Cotton Wool, Carded Cotton/Non-absorbent Cotton, Handloom Gauze, Handloom Bandages and Bandages, etc. - respondent classified the goods under Chapter 52 & 56 of Schedule to Central Excise Tariff Act, 1985 which did not attract any Central Excise duty - It appeared to Revenue that the respondent should have registered with the Central Excise Department since it appeared to them that the goods manufactured by the respondents were classifiable under Chapter 3005 and were attracting Central Excise duty. Held that:- Reliance placed in the case of IN RE : SHANTI SURGICALS PVT. LTD. [2009 (3) TMI 868 - COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE (APPEALS), KANPUR], where it was held that classification of all the aforementioned products i.e. Absorbent Cotton Wool, Cotton Carded/Non-absorbent Cotton, Handloom bandage cloth, Handloom Gauze Cloth/Gauze under Chapter 30 is not appropriate and legal - appeal dismissed - decided against Revenue.
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2018 (7) TMI 1047
Small Scale exemption - determination of turnover upto ₹ 4 crores of previous financial year - The appellant has availed the said exemption during the Financial Year 2007-08 whereas Revenue alleged that during Financial Year 2006-07 appellant had exceeded the said limit of aggregate value of clearance for home consumption - N/N. 08/2003-CE dated 01.03.2003 - Held that:- There was no justification in including the value of clearance of ₹ 6,69,600/- during the Financial Year 2006-07 since the same were returned during the month of March, 2007, as provided by provisions under Rule 16 of Central Excise Rules, 2002 - During the Financial Year 2006-07 the value of clearance was less than the threshold value of ₹ 4 crores. Therefore, the appellants were eligible for availment of Small Scale Exemption under N/N. 08/2003-CE dated 01/03/2003 for the Financial Year 2007-08. Demand set aside - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1046
Clandestine removal - shortage of stock and finished goods - no method of stock taking recorded in the panchnama - Held that:- The panchnama does not indicate, as to how the stock taking was conducted and also there is no calculation sheet available with the panchnama. Therefore, the shortage of finished goods and pet coke shown in the panchnama are not substantiated - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1045
Penalty u/r 26 of CER - Pan Masala/ Gutkha - It was alleged that the seals of machines were broken and the machines were used in production process - Held that:- At the time of panchnama proceedings on 2nd May, 2010 on being questioned respondent Shri Awdhesh Agnihorti stated that he does not have any knowledge regarding the seal, found to be broken. It is only at the time of inspection that he also came to know that the seal of the three machines is in broken condition - It is further evident from the panchnama, which was drawn at about 17:00 hours on 2nd May, 2010 that no production was being carried on, on the said three machines. Demand cannot sustain - appeal dismissed - decided against Revenue.
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