Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
July 20, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Articles
News
Notifications
Customs
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63/2018 - dated
19-7-2018
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Cus (NT)
Exchange Rates Notification No.63/2018-Custom(NT) dated 19.07.2018
GST - States
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38/1/2017-Fin(R&C)(64) - dated
6-7-2018
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Goa SGST
The Goa Goods and Services Tax (Seventh Amendment) Rules, 2018.
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38/1/2017-Fin(R&C)(63) - dated
5-7-2018
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Goa SGST
The Goa Goods and Services Tax (Sixth Amendment) Rules, 2018.
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38/1/2017-Fin(R&C)(12/2018-Rate) - dated
29-6-2018
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Goa SGST
Amendment in the Government notification No. 38/1/2017-Fin(R&C) (8/2017-Rate), dated the 30th June, 2017.
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38/1/2017-Fin(R&C)(11/2018-Rate) - dated
28-5-2018
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Goa SGST
Amendments in the Government Notification No. 38/1/2017-Fin(R&C)(4/2017-Rate) dated the 30th June, 2017.
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29/2018-State Tax - dated
6-7-2018
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Gujarat SGST
The Gujarat Goods and Services Tax (Seventh Amendment) Rules, 2018.
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12/2018-State Tax (Rate) - dated
29-6-2018
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Gujarat SGST
Amendment in the Government Notification, Finance Department No.(GHN-39)GST/2017/S.11(1)(4)/TH dated the 30th June,2017, Notification No.8/2017-State Tax (Rate),
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62/GST-2 - dated
6-7-2018
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Haryana SGST
Haryana Goods and Services Tax (Ninth Amendment) Rules, 2018.
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EXN-F(10)-22/2017 - dated
17-7-2018
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Himachal Pradesh SGST
Constitute the Appellate Authority for Advance Ruling consisting of following officers.
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EXN-F(10)-5/2018-29/2018-State Tax - dated
7-7-2018
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Himachal Pradesh SGST
The Himachal Pradesh Goods and Services Tax (Seventh Amendment) Rules, 2018.
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EXN-F(10)-5/2018-28/2018-State Tax - dated
3-7-2018
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Himachal Pradesh SGST
The Himachal Pradesh Goods and Services Tax (Sixth Amendment) Rules, 2018.
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EXN-F(10)-33/2017-12/2018-State Tax (Rate) - dated
3-7-2018
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Himachal Pradesh SGST
Amendment in the Notification of the Government of Himachal Pradesh, No.8/2017–State Tax (Rate), dated the 30th June, 2017.
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EXN-F(10)-5/2018-27/2018-State Tax - dated
15-6-2018
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Himachal Pradesh SGST
Notify the goods or the class of goods.
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EXN-F(10)-5/2018-26/2018-State Tax - dated
15-6-2018
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Himachal Pradesh SGST
The Himachal Pradesh Goods and Services Tax (Fifth Amendment) Rules, 2018.
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EXN-F(10)-22/2017 - dated
29-5-2018
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Himachal Pradesh SGST
Re-constitute the Authority for Advance Ruling consisting of following officers.
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EXN-F(10)-33/2017-11/2018-State Tax (Rate) - dated
26-5-2018
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Himachal Pradesh SGST
Amendments in the Notification No.4/2017-State Tax (Rate) dated 30th June, 2017.
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EXN-F(10)-14/2018-22/2018-State Tax - dated
25-5-2018
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Himachal Pradesh SGST
Waiver the late fee payable the return in FORM GSTR-3B.
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EXN-F(10)-22/2017 - dated
1-5-2018
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Himachal Pradesh SGST
Supersession of notification No. EXN-F(10)-22/2017-Loose dated 5th September, 2017
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EXN-B(1)-1/2017 - dated
1-5-2018
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Himachal Pradesh SGST
Officers appointed under Himachal Pradesh Goods and Services Tax Act, 2017.
Income Tax
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32/2018 - dated
17-7-2018
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IT
Central Government notifies that the provisions of Mutual Agreement through exchange of letters, shall be given effect to in the Union of India with effect from 29th April, 2018
VAT - Delhi
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F. No. Zone-5/W-61/Misc./2018-19/3402-06 - dated
13-7-2018
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DVAT
Notified for general information that the Declaration Forms “C” and “F” are declared to be obsolete and invalid for all purposes with effect from their date of issue
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Composite supply - Marine Consultancy Service (MCS) provided to foreign ship owners - principal supply - MCS provided to foreign ship owners do not constitute “composite supply” with the principal supply of consultancy service - qualifies as “intermediary service” in terms of Section 2(13) of the IGST Act.
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Detention and seizure of goods violation of Rule 138 - e-way bill- declaration uploaded was subsequent to the detention of the vehicle - This would not absolve the liability to tax and penalty under Section 129
Income Tax
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TDS u/s 195 - payments of transponder fees by the Appellant to MEASAT Satellite Systems Snd. Bhd, Malaysia ('MEASAT') - we are not sitting in judgement on the chargeability in hands of the recipient as the facts and the necessary background material are not available on record before us - additions confirmed.
Customs
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Refund of IGST on export of Goods on payment of duty-Setting up of Help Desks
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Refund of IGST on export of goods on payment of duty-Clarification in case of SB003 errors and extension of date in SB005 & other cases using officer Interface for rectification of errors
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Classification of Excursion Boat - the impugned boat is not principally designed and manufactured for the purpose of transport of persons and goods, it cannot be classify under Heading 8901
Service Tax
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Construction of Residential Complex Service - personal use or not? - tribunal is right in concluding that, if the Government of India Department could be treated as using the ‘Residential Complex’ in question constructed by NBCC for its ‘personal use’, how another Corporate body like M/s.ITC Limited in the present case could be denied the benefit of that type of user of ‘Residential Complex’ to be occupied by its Managerial Staff.
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Confirmation of demand of the Service Tax, which has already been discharged by the exchange on whose behalf the appellant had collected those charges and remitted to the exchange, to our opinion, is a patent error on the part of the Commissioner (Appeals) - demand set aside.
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Supplying bed rolls to the Indian Railways - The services provided by the respondent has rightly been held to be service provided by him to the Railways and not to the passengers on behalf of the Railways - demand under the head Business Auxiliary Services cannot sustain.
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CENVAT Credit - common input services used for providing taxable as well as exempt services - Where the assesse has categorically by way of intimation opted for option provided under 6(3)(ii), CCR then the Revenue cannot insist the assesse to opt for Rule 6(3)(i)
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GTA Services - Benefit of N/N. 34/2004 -ST dated 3.12.2004 - freight paid exceeds ₹ 750/- but does not exceeds ₹ 1500/- - Since there is no multiple consignment, benefit of exemption u/s ₹ 1500 not available.
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Diagnostic centres services - arrangement with the doctors - activity in the nature of Renting of Immovable Property Services or not - It is the appellant who shall be employing its own staff for billing and receiving the payment at such rate as to be decided by the appellant - no element of renting - demand set aside.
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Refund of service tax deposited after the death of proprietor - Penalty on successor - non-existent firm - In view of the death of the sole proprietor, no recovery proceedings can be initiated against the appellant - no penalty - refund allowed.
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Reverse Charge Mechanism - Business Auxiliary Services - Share of profit in the joint ownership of business - revenue failed to prove that assessee was engaged in providing BAS.
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Works contract - commercial construction - the construction of Asharam Padhdhati Vidyalaya by the appellant is not in the nature of commercial or industrial construction.
Central Excise
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Classification of manufactured goods - Potato Flakes - the subject goods are classifiable under Tariff Item No. 11052000
Case Laws:
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GST
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2018 (7) TMI 1182
Composite supply - Marine Consultancy Service (MCS) provided to foreign ship owners - principal supply of consultancy service - place of supply of services - Intermediary services. Whether MCS provided to foreign ship owners constitutes “composite supply” with the principal supply of consultancy service? - Held that:- Even if the applicant is called on to do all of the services, the same would still not amount to a composite supply as the foreign ship-owner’s natural course of business as understood from the agreement reveals that the services may or may not be assigned to the applicant or could be got done from outside, too. Thus when part of the services are performed by the applicant and the remaining by others, each has equal importance in terms of delivery thereof - The perception of the service receiver which is the foreign ship-owner in the instant case that the services need not be bundled and could be got performed from different service providers or from his own staff, too. We see that the flyer on ‘composite supply and mixed supply’ has made a very clear observation that the illustrative indicators are not determinative but indicative of bundling of services in ordinary course of business. Hence, when the foreign ship-owner himself perceives the situation as being so, we need not even look at how the other players in the field, view the services to be. The requirement of ‘principal supply’ would, therefore, not be met in the facts of the instant case - the provision of services under the impugned agreement would not be a composite supply under the GST Act. Where services are provided to foreign ship owners distinctively as supply of consultancy service and support service with separate and demarcated fees for their consultancy service and for support service: (a) Whether consultancy service will qualify as business consultancy service in terms of the scheme of classification of services (Annexure to Notification 11/ 2017 Central Tax (Rate), dated 28th June, 2017? - Held that:- The business consultancy services of sr. no.299 are covered under the Group “Management consulting and management services” - A general understanding of the term ‘Management Consultancy’ is that it is the practice of keeping organizations to improve their performance, operating primarily through the analysis of existing organizational problems and the development of plans for improvement. As a result of their exposure to and relationships with numerous organizations, consulting firms are typically aware of Industry Best practices - In the present case, it is very apparent that the consultancy services being provided by the applicant are not in the nature of guiding the ship owning company in the management of the ship owning company but are only in the nature of consultancy in respect of opportunities of marine transportation business - The applicant would have to identify the category as per the services delivered in terms of Annexure about Scheme of Classification of Services. Thus the classification of their service will depend on the exact nature of service/services they would provide in specific case. Where services are provided to foreign ship owners distinctively as supply of consultancy service and support service with separate and demarcated fees for their consultancy service and for support service: (b) Whether support service qualifies as “intermediary service” in terms of Section 2(13) of the IGST Act? - Held that:- From the very nature of support services that are being provided by the applicant, as visible from the terms of agreements as referred above and submitted to this authority, it is clear that the support services being provided by them would be ‘intermediary services’ and the applicant would be covered in the definition of an intermediary in terms of Section 2(13) of the IGST Act, 2017 - The support service qualifies as “intermediary service” in terms of Section 2(13) of the IGST Act. Ruling:- MCS provided to foreign ship owners do not constitute “composite supply” with the principal supply of consultancy service. The consultancy service will not qualify as business consultancy service in terms of the scheme of classification of services [Annexure to Notification 11/ 2017 – Central Tax (Rate), dated 28th June, 2017. The support service qualifies as “intermediary service” in terms of Section 2(13) of the IGST Act.
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2018 (7) TMI 1181
Detention and seizure of goods - Declaration as required under Rule 138 being KER-I, was not seen uploaded or the print out accompanied with the goods - Whether in the case of a transport, wherein obviously there is no tax liability on the goods, there could be a detention and seizure effected under Section 129 of the Central Goods and Services Tax Act, 2017 (CGST Act) and Kerala State Goods and Services Tax Act, 2017 (SGST Act) and a release ordered as provided under sub-section (1) or order passed under sub-section (3) of Section 129? Held that:- In the present case, the delivery challan which accompanied the transport is one issued by the assessee respondent, over which the assessee has absolute control and could be subject to manipulation. The assessee having transported the goods with delivery chalan, could very well sell the goods if the transport is undetected and then tear it up, as also issue a chalan with the same number for the next transport. The intimation regarding the transport of goods to the Assessing Officer is not achieved by the mere issuance of a challan under Section 55. This would be achieved only if there is a declaration under Section 138, which would ensure that the transaction is not otherwise and there is no diversion of the goods. This would establish the bonafides of the assessee and the transport, which could very well be checked and verified by the Department. There is no dispute that in the present case the declaration uploaded was subsequent to the detention of the vehicle. This would not absolve the liability to tax and penalty under Section 129 - The violation would stand on a totally different footing, from a forged declaration or an incomplete or blank declaration accompanying the transport. Hence if the declaration as in this case, was infact uploaded prior to the transport the assessee could be absolved from the penalty but otherwise penalty is an automatic consequence. The time when such declaration was uploaded is crucial and a declaration made after the detention of the goods cannot lead to the assessee being absolved from the penalty. We cannot agree with the learned Single Judge that merely because there was no suspicion raised against the delivery challan there is an admission of non-taxability of the goods transported. The finding that the transaction would not fall within the scope of taxable supply under the statute, cannot be sustained for reason of there being no declaration made under Rule 138. The resultant finding that mere infraction of the procedural rules cannot result in detention of goods though they may result in imposition of penalty cannot also be sustained - The respondents are entitled to an adjudication, but they would have to prove that in fact there was a declaration made under Rule 138 before the transport commenced. If they do prove that aspect, they would be absolved of the liability; otherwise, they would definitely be required to satisfy the tax and penalty as available under Section 129. The vehicle and the goods having been already released unconditionally, further notice shall be issued and the adjudication under sub-section (3) completed; upon which if penalty is imposed, definitely the respondents would have to satisfy the same - Petition allowed - Decided in favor of revenue.
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Income Tax
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2018 (7) TMI 1180
Retrospective effect of first proviso to section 43B - scope of Amendment to section 43B - omission [deletion] of the second proviso to Section 43-B – regarding restriction of deduction in respect of any sum payable by an employer by way of contribution to provident fund/superannuation fund or any other fund for the welfare of employees, unless it stood paid within the specified due date - Held that:- SLP dismissed.
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2018 (7) TMI 1179
Deduction u/s 80IA - income generated from the Electric Plant - Disallowance made under Section 14A - Held that:- SLP dismissed.
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2018 (7) TMI 1178
Unexplained income - document had been seized from the residence of Assessee - Held that:- SLP dismissed.
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2018 (7) TMI 1177
Provision for diminution in value of stock - TDS u/s 195 OR 194C - existence of TDS liability - Held that:- SLP dismissed.
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2018 (7) TMI 1176
Disallowance under Section 14A - Assessing Officer (AO) did not expressly record reasons for rejection of that figure and instead proceeded to disallow a sum - Held that:- In view of decision rendered in Principal Commissioner of Income Tax-I vs. D.B. Corp Ltd. [2018 (3) TMI 805 - SUPREME COURT OF INDIA] this Special leave petition is dismissed.
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2018 (7) TMI 1175
Benefit of exemption under Section 10(10C) - assessee as retirees of the ICICI Bank under Early Retirement Option Scheme, 2003 as filed a revised return well beyond the period stipulated under Section 139(5) - Held that:- All the contentions which were advanced by the second respondent in the counter affidavit have been dealt with by this Court and thereafter, the writ petition has been allowed. I find that there is absolutely no ground made out by the respondents to distinguish the decision rendered in the case of S. SEVUGAN CHETTIAR [2016 (12) TMI 415 - MADRAS HIGH COURT] wherein held default in complying with the requirement was due to circumstances beyond the control of the assessee, the Board is entitled to exercise its power and relax the requirement contained in Chapter IV or Chapter VI-A - as held the petitioner, being a senior citizen, cannot be denied of the benefit of exemption under Section 10(10C) of the Act and the financial benefit that had accrued to the petitioner, which would be more than a lakh of rupees. Therefore, this Court is of the view that the third respondent should grant the benefit of exemption to the petitioner. The writ petition is partly allowed and the impugned order is set side and the second respondent is directed to grant the benefit of exemption under Section 10(10C) of the Income Tax Act, 1961, and refund the appropriate amount to the petitioner, within a period of eight weeks from the date of receipt of a copy of this order. This time limit is fixed on the ground that the petitioner is aged 61 years and has a rare cardiac problem and a pacemaker is installed in his heart. No costs.
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2018 (7) TMI 1174
Addition u/s 68 - Held that:- As noticing the fact that the assessees are Institutions in the Co-operative sector and taking note of its members who are from the general public as also from the marginalised sections, we are of the opinion that an opportunity could be afforded to the assessees to produce the details of deposits. To avoid any recalcitrant attitude by the assesses, we directed the learned Counsel to file an affidavit of undertaking, which has been done by the respective Secretaries in the three appeals before us. The affidavit categorically undertakes to produce the details of the deposits before the First Appellate Authority. Assessees would also produce any further details required by the First Appellate Authority or the Assessing Officer on a report being called for by the First Appellate Authority. The same shall be done within the time stipulated by the First Appellate Authority or the Assessing Officer on directions of the First Appellate Authority. In any event, we do not think that a blanket stay can be granted. Considering all and also the failure of the assessee's to produce the details at the first stage, we are of the opinion that the assessee's will have to make a deposit of 1% of the tax addition made under Section 68 of the Act within a period of one month from the date of receipt of a certified copy of this judgment. Writ appeals are disposed of with no observation on merits.
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2018 (7) TMI 1173
Revision u/s 263 - affirmation made by the Tribunal of the electricity charges for the period prior to the purchase being taken as capital expenditure - Order erroneous and prejudicial to revenue - Held that:- No discussion by the AO of having accepted the claim of the assessee that the remittance of prior electricity charges under One Time Settlement Scheme was a revenue expenditure. The learned counsel for the assessee has relied on Annexure-C reply submitted before the AO to contend that the specific claim along with the demand letter received from the KSEB was produced before the AO. However, that is not to say that the AO had come to a conclusion as to whether the claim was allowable as a revenue expenditure. The AO erroneously did not disallow electricity charges paid; claimed as revenue expenditure, erroneously assuming that the charges are for the subject year. There is hence erroneous assumption of facts and wrong application of law. It cannot also be said that the claim raised as revenue expenditure is a plausible view, for the reasoning already supplied by us that the electricity charges for the period prior to sale was a hidden cost which had to be settled by the assessee after the sale. We are of the opinion that there was an erroneous decision entered into by the AO which could have been revised under Section 263, provided there is a prejudice caused to the Revenue. The mere fact that capital expenditure could be claimed as depreciation cannot avoid the prejudice caused to the Revenue. First of all, the capital expenditure could be claimed as depreciation only in the course of a period of years. Then it would depend upon whether there was any profit earned by the assessee in the subsequent years. Further the question whether prejudice is caused has to be examined on the tax liability for the subject year and not the anticipated claims that could arise in the future years which again is dependent on various elastic factors. We are of the opinion that there is clear prejudice caused to the revenue - decided against assessee
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2018 (7) TMI 1172
Validity of reopening of assessment - Assessing Officer empowered to reopen an assessment based on a subsequent Supreme Court decision - Section 80 HHC denied for tyre retreating charges - whether reopening of the assessments both within four years and beyond four years could have been done for the reasons assigned by the Revenue? - Held that:- As pointed out in the preceding paragraphs, the Assessing Officer, while reopening the assessment, has not disclosed the reasons for reopening. This is evident from the assessment order dated 05.03.1999, which only states that the assessment was reopened to consider certain points with prior permission of the Commissioner of Income Tax. Thus, the basic requirement for recording reasons to believe that income chargeable to tax has escaped assessment is absent in the instance case, which would be sufficient to hold that the reopening proceedings are wholly without jurisdiction. The power to assess or reassess or recompute the loss or depreciation allowance or any other allowance could be done only if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. Therefore, Explanation 2 cannot be read in isolation and it has to be read harmoniously with the powers under Section 147 of the Act including the proviso under the said Section. Therefore, we are unable to accept the submission of the learned Senior Standing Counsel for the Revenue. One more submission, which was made, was that the Assessing Officer without application of mind, had granted the benefit of deduction and therefore, the Revenue had to file appeals before the CIT(A). On a reading of the assessment orders passed under Section 143(3) dated 18.03.1993, it is clear that there has been discussion between the assessee and the Assessing Officer and all materials have been placed before him and then the assessment has been completed granting benefit. Therefore, the order of assessment cannot not be stated to be an order without application of mind. Whether reopening of an assessment could be done based upon the decision in the case of Madurai Pandian Engineering Corporation Ltd (1998 (3) TMI 65 - MADRAS HIGH COURT ) as as held that retreading of tyres does not amount to manufacture? - Held that:- The law stood in the case of Madurai Pandian Engineering Corporation Ltd (supra) was in favour of the assessee. Notices, under Section 148 of the Act, were issued on 08.08.1997. Thus, the notices for reopening were issued prior to the decision in the case of Madurai Pandian Engineering Corporation Ltd (supra) and on the date when the notices were issued, the law was clearly in favour of the assessee and retreading of tyres was held to be a manufacturing activity. Based on the decision in Madurai Pandian Engineering Corporation Ltd (supra), reopening could not have been done. The Hon'ble Supreme Court in Simplex Concrete Piles (India) Ltd. (2012 (9) TMI 516 - SUPREME COURT ), held that the subsequent reversal of the legal position by the judgment of the Hon'ble Supreme Court does not authorise the Department to reopen the assessment, which stood closed on the basis of law, as it stood at the relevant point of time. Thus the reopening proceedings was wholly without jurisdiction - decided in favour of assessee.
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2018 (7) TMI 1171
TDS liability on assessee society - rectification application filed as found that the ‘Demand as per Traces’ for the Financial Year 2010-11 for the petitioner Mission amounts to ₹ 3,54,120 but, the respondent Income Tax department in the impugned order dated 27.3.2018 for the Financial Year 2010-11 have assessed an amount of ₹ 6,84,60,590/- which is almost double of the said amount which is still pending for disposal - Held that:- The maintainability of this writ petition shall be considered at the time of its admission. Considering the impugned order issued by the Assistant Commissioner of Income Tax Act, TDS, Guwahati under Section 201(1)/201(A) of the Income Tax Act, 1961 against the petitioner and during the pendency of the application dated 11.4.2018 (Annexure-N to the writ petition) made by the petitioner Mission before the Income Tax Department regarding rectification of the mistake, the operation of said impugned order dated 27.3.2018 shall remain suspended till the returnable date, i.e. 19.6.2018.
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2018 (7) TMI 1170
Validity of assessment u/s 153A - Held that:- Impugned assessment year involved 2008-09 for which the return was filed under section 139(1) on 29.09.2008 and the due date for issue of the notice under section 143(2) of the Act was up to 30.09.2009, no such notice was issued to the assessee. On 6.11.2009 search under section 132(1) was carried out at the residence of the assessee. Admittedly during the course of search some cash seizure was made. However, with respect to the disallowance made admittedly no incriminating documents were found Even in case of the assessment or on the issue of addition the interpretation which favours the assessee, in case of ambiguity shall be followed. In view of this, the balance of scale is tilted in favour of the assessee. As following various HC decisions we state that in the present case without any incriminating material, addition cannot be made. Admittedly there are no incriminating materials found with respect to the disallowance of expenditure made by the Assessing Officer. In view of this, ground No. 1 of the appeal of the assessee is allowed.
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2018 (7) TMI 1169
Rent received - treated as income from house property and the assessee’s treatment of crediting the same towards work-in-progress is justified - Held that:- We note that the assessee’s business is development of property. For the same property, for getting vacation, the sums paid are being debited to the work-in-progress which is being accepted by the Assessing Officer. However, pending vacation, the rent receipt from the tenants of the said property is not being given the same treatment by the Assessing Officer. He is treating the same as income from house property. In our considered opinion, the rent received is inextricably linked with the business of the assessee, i.e., development of the property. Hence, in our considered opinion, the rent received cannot be treated as income from house property and the assessee’s treatment of crediting the same towards work-in-progress is justified. For this proposition, the case laws relied upon by the ld. Counsel of the assessee referred in the submissions hereinabove are germane and support the case of the assessee, particular the case law from the Hon'ble Bombay High Court in the case of Lokholdings (2008 (1) TMI 365 - BOMBAY HIGH COURT) is of particular emphasis. - Decided in favour of assessee Income from assignment of Development Rights of Chaudhary Plot at Thane - Value of constructed area to be acquired pursuant to the development agreement - Held that:- The assessee entered into an agreement for the receipt of ₹ 300 lacs on 28.11.2011 in lieu of the carpet area it was entitled as per the agreement for sale. The assessee offered the same for taxation in assessment year 2012-13. The above was not accepted by the authorities below. The Revenue is of the view that the assessee should have accounted for the value of constructed area to be acquired pursuant to the development agreement. However, the assessee’s plea is that no construction work had commenced and even the plan of the project was not approved. Hence, it has been claimed that there is no question of accrual of income during the year. For this proposition, reliance has been placed by the tribunal decisions. Further, the claim of the assessee is that the agreement to sale the development right in the said property is related to assessee’s stock-in-trade and, hence, since the stock-in-trade is to be valued at cost or net realizable value, no profit can be attributed by the assessee in this regard. Assessing Officer shall examine as to whether the assessee’s claim that during the year neither the plan of the project was approved nor any construction was started. If the said claim is true, the ratio from the tribunal’s decisions referred by the assessee in the submissions hereinabove will follow. The assessee cannot be fastened with liability for taxation on hypothetical income. Accordingly, we remit the issue to the file of the Assessing Officer with the above directions.
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2018 (7) TMI 1168
Disallowance made u/s 40A(3) - purchases of country spirit in cash - revised procedure prescribed by the Excise Department, for lifting country spirit - Held that:- There could be no disallowance u/s 40A(3) of the Act in the facts and circumstances of the case and accordingly we direct the ld AO to delete the same. We also find that this issue is recently decided in favour of the assessee by the Hon’ble Jurisdictional High Court in the case of CIT vs Sri Ritwik Kumar Bera [2018 (7) TMI 1093 - CALCUTTA HIGH COURT]. Addition towards difference in purchases and profit added thereon - Held that:- AO based on the information obtained u/s 133(6) of the Act from M/s Asansol Bottling & Packaging Pvt Ltd wherein the total sales made to assessee was reflected at a higher figure by ₹ 79,104/- . No explanation was offered by the assessee before the AO. Hence the addition made towards unexplained purchases and consequential profit thereon was made. CIT-A had upheld the action on the ground that no arguments were advanced by the assessee before the ld CIT-A.
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2018 (7) TMI 1167
Rejecting the books of account u/s 145(2) - addition on estimation basis @7% on account of construction receipts - Held that:- The undisputed fact remain that the assessee has failed to submit the quantitative details of the trading operations as well as details of construction activities carried out by him during the impugned AY. AR is merely harping on the point that the assessee was a listed public company and therefore, the books could not be rejected by Ld. AO and the profits could not be estimated by lower authorities. We are not convinced with the same since the complete onus to substantiate the financial results was on assessee which he has failed to discharge. Rather this argument put more onus on assessee to support the transactions carried out by him with documentary evidences and plausible explanation. Further, in terms of Section 44AA, the assessee was required to keep and maintain books of accounts and other documents as may enable the Ld. AO to compute the total income in accordance with the provisions of the act. Therefore, Ld. CIT(A), in our opinion, erred in shifting the onus upon Ld. AO to provide relief to the assessee since even the primary onus of substantiating the transactions remained un-discharged by the assessee. No quantitative details could be filed by the assessee with respect to trading done by him and further no details with respect to construction activities as called for by Ld. AO were furnished by the assessee. In such a situation, Ld. AO was left with no option but to reject the books and estimate the income of the assessee on some reasonable basis. The same is evident from the fact that Ld. first appellate authority has also confirmed the stand of Ld. AO in estimating the income from construction activities. So far as the Tribunal’s order for AY 2007-08 is concerned, we find that the same could not help the assessee in any manner since the matter is factual one and secondly, in that year, Ld. AO, by mistake, estimated the additions by invoking the provisions of Section 44AD/44AF, which is not the case here. Further, the status of assessment / appellate proceedings for intervening AYs i.e. 2008-09 to 2010-11 has not been placed before us to appreciate the position therein. Keeping in view the fact that the assessee is corporate assessee and subjected to statutory audits and therefore, the books could not rejected in a light manner, the matter stand remitted back to the file of Ld. AO for readjudication with a direction to the assessee to substantiate the transactions carried out by him by way of trading as well as by way of construction activities failing which Ld. AO shall be at liberty to adjudicate the issue on the basis of material / explanation available on record. The order of Ld. first appellate authority, to that extent, stands reversed.
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2018 (7) TMI 1166
Disallowance of depreciation on fixed asset acquired by the assessee-society - Held that:- In the instant case, the provisions of section 11(6) are not applicable as the same will be applicable from AY 2015-16. For the impunged assessment year, respectively following the decision case of Commissioner of Income Tax-III, Pune vs. Rajasthan & Gujarati Charitable Foundation Poona [2017 (12) TMI 1067 - SUPREME COURT] the assessee trust is held eligible to claim depreciation. - Decided in favour of assessee
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2018 (7) TMI 1165
TDS u/s 195 - payments of transponder fees by the Appellant to MEASAT Satellite Systems Snd. Bhd, Malaysia ('MEASAT') are taxable under the Income tax Act, 1961 and under the India-Malaysia Tax Treaty - Held that:- The present issue in the appeal as to whether the assessee was liable for deducting the TDS on transponder fee payable to MEASAT Malaysia has to be decided against the assessee by following the decision of the ITAT in assessee’s own case hereinabove, since the reasoning submitted by assessee to deviate from the earlier order of the tribunal in assessee’s own case had already been dealt with hereinabove. It will further be not out of place to mention that in judicial hierarchy decisions of honourable High Court are ranked higher than that of the tribunal. In some of the decisions of the tribunal referred by the learned counsel of the assessee, the decision in favour of assessee was also rendered by taking into account the fact that it had been conclusively held by honourable High Court that the income was not chargeable to tax in the hands of the payee. Hence, there was no liability on the part of payer to deduct tax at source. In the present case, we find that except for the assessee’s submission that the recipient being non-resident is not chargeable to tax on the sum paid, there is no decision of honourable High Court backing the scheme. Furthermore, we are not sitting in judgement on the chargeability in hands of the recipient as the facts and the necessary background material are not available on record before us. - decided against assessee
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2018 (7) TMI 1164
Penalty u/s 271(1)(c) - whether the notice issued by the Assessing Officer dated 26/12/2011 is valid or not? - non striking irrelevant portion of notice - Held that:- The assessing officer did not strike off the irrelevant column in the notice and made known the assessee whether the penalty was initiated for the concealment of income or for furnishing the inaccurate particulars. In the assessment order also the AO simply recorded that the penalty proceedings u/s 271(1)(c) are initiated separately. Neither in the assessment order nor in the penalty notice, the assessing officer has put the assessee on notice for which offence, the penalty u/s 271 was initiated. See CIT Vs. SSA’s Emerald Meadows [2016 (8) TMI 1145 - SUPREME COURT]- Decided in favour of assessee.
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2018 (7) TMI 1163
Rectification of mistake - taxability of interest on enhanced compensation - Held that:- The proposition laid down in Ghanshyam, HUF (2009 (7) TMI 12 - SUPREME COURT) remains and which having been laid down by the Hon'ble Apex Court is the law of the land and has to be followed by all lower authorities. The interest received by the assessee during the impugned year on the compulsory acquisition of its land u/s 28 of the Land Acquisition Act, is in the nature of compensation and not interest which is taxable under the head income from other sources u/s 56 of the Act as held by the authorities below. The compensation being exempt u/s 10(37) of the Act is not disputed. In view of the same the order passed by the CIT(Appeals) upholding the addition made by the AO on account of interest on enhanced compensation is, not sustainable. Further the issue under consideration regarding the taxability of interest on enhanced compensation is a debatable issue and do not constitute a mistake apparent on record. In view of the limited and restricted powers of rectification u/s 154 or u/s 254 as the case may be, it cannot be said that any mistake apparent on record had occurred in the order of the Tribunal. In view of the above discussion, these appeals of the assessee are hereby allowed.
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2018 (7) TMI 1162
Revision u/s 263 - directing the AO to disallow the short term capital loss and instead assess short term capital gain - Held that:- In the audited financial statements of the appellant/assessee, the assessee had made appropriate disclosure which established that the assessee had sold both the plant and machinery and Capital WIP for a composite consideration of ₹ 27,50,00,000/- and the resultant loss of ₹ 12,65,47,945/- was declared in the P&L Account. The assessee had in fact made proper disclosure of the aforesaid facts in the audited accounts as well as in the transactional documents which proved that the assessee had in fact sold both plant & machinery and Capital WIP for a composite consideration of ₹ 27,50,00,000/-. In the aforesaid facts and circumstances, we hold that the finding of the Ld. Pr CIT that consideration received by the appellant/assessee pertained to only sale of plant & machinery and no evidence in support of sale of Capital WIP was furnished is factually incorrect and, therefore, unsustainable. Since the facts of the instant case demonstrate beyond doubt that the price of ₹ 27,50,00,000/- received by the assessee was in respect of plant & machinery as well as Capital WIP, the Ld. Pr. CIT’s finding that such price was paid only in respect of plant & machinery was based on no material and, therefore, the finding recorded by the Ld. Pr. CIT on incorrect understanding of the facts is unsustainable in law. Similarly, the Ld. Pr. CIT’s finding in show cause notice as well as impugned order that the loss on sale of fixed assets was determined by AO without conducting any enquiry is also even factually wrong. Therefore, Ld. Pr. CIT’s order which is based on incorrect understanding of the material facts as discussed above is unsustainable and needs to be set aside on this score alone. Notice u/s. 142(1) of the Act dated 03.11.2014, the AO had raised specific question requiring the assessee to furnish details of machinery and capital WIP sold and the reasons for low sale consideration. From the material placed before him and only after examination of the document furnished the AO passed the assessment on 16.01.2015. On these facts, therefore, we are unable to accept the Ld. Pr. CIT’s allegation in the show cause notice that the AO has passed the order without obtaining any information from the assessee on the issue. As far as the question whether cost of capital WIP is required to be computed for computing capital gains, we hold that the Ld. Pr. CIT’s reference to section 50(2) of the Act was irrelevant. It should be kept in mind that section 50(2) of the Act only lays down the manner of computation of capital gain on sale of depreciable assets. It does not define the term “Capital Asset”. One may say that capital WIP is not a depreciable asset unless put to use, but it is indeed a ‘capital asset’ and hence, any gain/loss arising on this transaction is taxable by way of capital gain/loss. Section 2(14) of the Act which defines the term “Capital Asset” is an inclusive definition which means it is not exhaustive and, therefore, it includes within this ambit “Property of every kind”. In the circumstances, by no stretch of imagination one can argue that any blind person would pay a consideration of almost seven times of the actual cost at which the machinery was originally acquired but at the relevant time of sale have been used, old, depreciated and worn out scrap item. Indeed therefore, we concur with the assertion of assessee that the capital WIP was sold along with the plant and machinery which were lying idle in the appellant/assessee’s factory whose business was under suspension. Accordingly, both the appellant/assessee as well as the AO was right on the facts and in law in taking into account the cost of acquisition of capital WIP for computing the overall loss accruing on sale of fixed assets including capital WIP. For the reasons set out in the foregoing we are therefore, unable to agree with the Ld. Pr. CIT’s finding in the impugned order that no evidence was furnished before him satisfying the claim raised by the assessee is not tenable and, therefore, we find that the jurisdiction invoked for exercising his revision jurisdiction is not tenable in the eyes of law and, therefore, we have no hesitation in quashing the impugned order passed by the Ld. Pr. CIT. Therefore, the ground of appeal of assessee is allowed.
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2018 (7) TMI 1161
Validity of order passed by the Settlement Commission u/s 245D - additional disclosure of income - Held that:- In the peculiar facts of this case, we are not inclined to interfere with the matter. The special leave petition is dismissed. However, the question of law is left open.
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2018 (7) TMI 1160
Eligibility to deduction u/s 10B - deduction only for period of 10 consecutive assessment years beginning with the Assessment year relevant to the previous in which the undertaking commences its manufacturing - Held that:- SLP dismissed.
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2018 (7) TMI 1159
Addition u/s 68 - ingenuity of transaction - identity of the investors not established - Held that:- SLP dismissed.
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2018 (7) TMI 1158
Validity of notice under Section 158BC - valid service of notice - authorization to issue notice - Held that:- SLP dismissed.
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2018 (7) TMI 1157
Validity of assessment order in the name of the amalgamating company - assessment framed in the name of the non-existent company - procedural defect - successor-in-interest - Held that:- In view of the order passed by this Court in C.I.T., New Delhi Vs. M/s. Spice Enfotainment Ltd [2017 (12) TMI 754 - SUPREME COURT OF INDIA] SLP dismissed.
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2018 (7) TMI 1156
Items of income not to be included whilst computing the profits derived from the business of the Gadepan I unit and were not eligible for a deduction under section 80IA - Held that:- SLP dismissed.
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2018 (7) TMI 1155
Addition of unexplained cash credit u/s 68 for unscecured loan - no genuine transactions - Held that:- SLP dismissed.
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2018 (7) TMI 1154
Monetary limit - maintainability of appeal - Held that:- Since the High Court has dismissed the appeal only on the ground of tax effect being less than ₹ 20 Lakhs, it is obvious that the High Court has not gone into the question of law proposed. We do not find any ground to interfere with the impugned order. The special leave petitions are, accordingly, dismissed.
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2018 (7) TMI 1153
Exemptions u/s 10(23C)(iv) - genuineness of the activities of the trust or institution and also attainment of objects of the trust - Held that:- We do not find any ground to interfere with the impugned order. The special leave petition is, accordingly, dismissed. Pending application(s), if any, shall also stand disposed of.
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2018 (7) TMI 1152
Unexplained share application money under Section 68 - Held that:- We do not find any ground to interfere with the impugned order. The special leave petition is, accordingly, dismissed. Pending applications, if any, are also stand disposed of.
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2018 (7) TMI 1151
Addition of bogus purchases made by the Assessee Company from its group company - ITAT deleted the addition - Held that:- The special leave petition is dismissed both on the ground of delay as well as on merits.
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2018 (7) TMI 1150
Capital gain - partnership firm - conversion from investment into stock in trade of shareholding - Firm transferred the shares as loss to partners and adjusted its profit - partners transferred the shares at profit and adjusted against their loss - tax avoidance or not - Held that:- The special leave petition is dismissed on the ground of delay as well as on merits. Pending application stands disposed of.
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2018 (7) TMI 1149
Custom duty paid on purchase of plant and machinery - capital or revenue expenditure - Held that:- The special leave petition is dismissed on the ground of delay as well as on merits.
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2018 (7) TMI 1148
Remission of principal amount of loan obtained from financial institutions and banks - whether constitutes a benefit or perquisite arising from business and would fall within the ambit of Section 28(iv)? - Held that:- Special Leave Petition is dismissed. Pending application stands disposed of.
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2018 (7) TMI 1147
Penalty u/s 271(1)(c) - Exemption claimed u/s 54B - proof of sale of agricultural land at Neelankarai and re-investment in agricultural land at Mahabalipuram - Bonafide belief - Held that:- SLP dismissed.
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2018 (7) TMI 1146
Anonymous donations - benefit of deduction in respect of the amount of donation denied - appellant received anonymous donations within the meaning of Sub-section (3) of Section 115-BBC - Held that:- SLP dismissed.
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2018 (7) TMI 1145
Annulling the block assessment order - validity of proceedings under Section 153C - Held that:- SLP dismissed.
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2018 (7) TMI 1144
Interpretation of Total Turnover & Export Turnover under 10A - The question raised in this appeal is answered against the appeallants by this Court in CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] - Held That:- SLP dismissed.
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2018 (7) TMI 1143
Claim of deduction u/s 10A - Unit –B to treated as separate and independent unit or not – Held that:- The intention of the Assessee was to claim Unit-B as a separate Unit - That is to enable it to extend the tax holiday of 10 years enjoyed by Unit-A and particularly when it was coming to an end in the AY 2005-06 - Held that:- As submitted at the Bar that the connected matters have been dismissed by this Court.Therefore, this Special Leave Petition is also dismissed.
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2018 (7) TMI 1142
Capital gain on revaluation of partnership - Tax the consideration received by assessee as partner of the two firms upon reevaluation and distribution of the partnership assets as short-term capital gain - Held that:- SLP dismissed.
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2018 (7) TMI 1141
Disallowance u/s 14A - we would be governed by the judgment of the Division Bench in the case of Godrej Boyce Manufacturing Company (2010 (8) TMI 77 - BOMBAY HIGH COURT) - Held that:- SLP dismissed.
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2018 (7) TMI 1140
Royalty and Warranty - Deletion of Addition made by AO on account of Royalty - appeal filed by revenue is delayed - provision of warranty/after sale service compensation - Held that:- The special leave petition is dismissed on the ground of delay as well as on merits.
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Customs
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2018 (7) TMI 1139
Classification of Excursion Boat - Bayliner 325 SB - case of Revenue is that the boat was not one designed for ferrying/transporting passengers on scheduled trips but was the one designed for leisure or pleasure boating and the importers did not dispute the same - whether the Boat is classifiable under CTH 89011030 or under CTH 89039990? Held that:- Whatever be the actual use of the said boat, it is required to classify as per the making of the vessel - it is seen that the impugned boat is not principally designed and manufactured for the purpose of transport of persons and goods, it cannot be classify under Heading 8901 - decided in favor of Revenue. The classification of the impugned boat under heading 8903 of CTH have been decided, the refund claim does not sustain on merits. The classification of the impugned boat under CTH 8903 upheld - appeal allowed - decided in favor of Revenue.
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2018 (7) TMI 1138
Advance License Scheme - import of brass scrap without payment of customs duty - N/N. 48/99-Cus dated 29.04.1999 - M/s The Village Art could not discharge the export obligation and, therefore, customs duty were demanded from them - Held that:- The Original Authority has ordered recovery of customs duty of ₹ 19,88,113/- alongwith interest in terms of bond from Shri Manoj Sikka, the appellant, Smt. Madhu Vij and Smt. Hema Sikka - It is found that the appellant is not signatory to the bond and he has not bound himself to pay customs duty in the event of non-fulfilment of export obligation - the customs duty adjust through the original order which has survived through the impugned Order-in-Appeal and penalty and interest ordered therein cannot be recovered from present appellant - appeal allowed - decided in favor of appellant.
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Service Tax
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2018 (7) TMI 1135
Levy of Service Tax - Construction of Residential Complex Service - Sub-contract - personal use or not? - Circular dated 24-05- 2010 issued by CBEC - Extended period of Limitation - Section 73(1) of the Finance Act, 1994 - Held that:- There are no substantial question of law arises in the present case requiring consideration. The ‘Residential Complex’ in question was undertaken to be constructed by the Respondent Assessee M/s. Nithesh Estates Limited for ITC Limited under the Contract dated 01/04/2006. It is equally undisputed before us that the construction activity in question was in its entirety sub-contracted by M/s. Nithesh Estates Limited to M/s.Larsen and Toubro Limited. There is no material on record or evidence to indicate that any part of construction activity in question was undertaken by the Respondent Assessee M/s. Nithesh Estates Limited itself. The Revenue cannot be allowed to argue against the legal position rightly explained by the CBE&C itself which can certainly be invoked and applied by this Court for interpreting the provisions of law on the Principles of interpretation of Contemporenea Expositio and the Central Board of Excise and Customs or the highest Administrative body of the Respondent Department itself has interpreted the provisions that the construction activities of this nature where Bi-parte or Tri-partite Agreements are entered into is clearly indicated in the said Circular, which clearly and rightly hold the sub-contractors liable to pay the Service Tax as it is the Sub-contractor who actually undertakes the construction activity - In view of the undisputed factual matrix of the present case, that the sub-Contractor M/s. Larsen and Toubro Limited has duly discharged the obligations to pay the Service tax in the present Contract, we are at a loss to understand how the Revenue could again demand the Service Tax from the Respondent Assessee M/s. Nithesh Estates Limited, the Principal Contractor or the Developer, who did not undertake any construction activity in the present case. The learned Tribunal was perfectly justified and correct in applying the Circular dated 24/05/2010 also, while holding that if the Government of India Department could be treated as using the ‘Residential Complex’ in question constructed by NBCC for its ‘personal use’, how another Corporate body like M/s.ITC Limited in the present case could be denied the benefit of that type of user of ‘Residential Complex’ to be occupied by its Managerial Staff - The law does not envisage any such distinction among the Private Sector Corporate Entities and the Departments of Government or Government Companies or Undertakings. No substantial question of law would really arise in the present case including the question of extended period of limitation under Section 73(1) of the Finance Act, 1994 - When the levy of Service Tax on the Respondent Assessee itself is held to be illegal, the question of availability of extended period of limitation for levying such Service Tax does not arise - appeal being devoid of merit, is dismissed.
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2018 (7) TMI 1134
Pre-deposit of of 10% of Interest - Held that:- The record would disclose that at the stage of show-cause notice the principal liability was discharged, since the concerned agency i.e. Indraprastha Gas Limited paid the amount to the petitioner - the Court is of the opinion that the impugned order’s direction should be modified. Accordingly, upon the petitioner depositing 7.5% of the amount claimed as demand towards interest liability [as confirmed by the Commissioner (Appeals)] within 4 weeks from today, the CESTAT shall proceed to hear the appeal on merits - petition allowed in part.
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2018 (7) TMI 1133
Valuation - forward contract service - inclusion of brokerage charges, transaction charges and turnover charges etc. in assessable value - Held that:- As far as the consideration of brokerage charges, it is admitted that the liability has been discharged. Since Brokerage/commission is a consideration which was paid by the client for the provisions of Forward Contract Services and that the same stands paid, the demand is not sustainable - demand set aside. Turnover charges - Held that:- The Commissioner has failed to appreciate the annexures attached to the appeal memo where the books of accounts are showing the Service Tax to have been paid on the transaction charges by NCDEX. In the given circumstances, confirmation of demand of the Service Tax, which has already been discharged by the exchange on whose behalf the appellant had collected those charges and remitted to the exchange, to our opinion, is a patent error on the part of the Commissioner (Appeals) - demand set aside. Penalties u/s 78 - Held that:- There was a reasonable cause on part of the appellant to not to pay Service Tax, which otherwise had been paid by the exchange on whose behalf appellant was collecting it and in fact was remitting it to exchange only for onwards discharge of liability - penalty set aside by invoking section 80 - penalty set aside. Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1132
Business Auxiliary Services - the respondent was providing services of supplying bed rolls to the Indian Railways, Jodhpur under a contract during the period w.e.f. 14.01.2005 to 29.02.2008 - Department has demanded the service tax payable on the amount received by the respondent from the Railways for the above said period in respect of the said services being provided to the passengers of the Railways. Held that:- What the respondent in this case was doing was supplying the cleaned linen to the Railways where, after the job of that particular day for the contractor stands over. It is also apparently clear that respondent contractor was not required to come in contact with the passengers which means no service he was rendering whether on behalf of the Railways, to the passengers/ the service recipients of Railways. The contractor was not even required to berth the washed/ cleaned linen in each Railway coach. The activity of washing and cleaning is apparently on principle-to-principle basis. The services provided by the respondent has rightly been held to be service provided by him to the Railways and not to the passengers on behalf of the Railways - demand under the head Business Auxiliary Services cannot sustain - appeal dismissed - decided against Revenue.
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2018 (7) TMI 1131
CENVAT Credit - common input services used for providing taxable as well as exempt services - non-maintenance of separate records - Held that:- The clear and literal interpretation when read with Rule 6 (1) and Rule 6(2) CCR is that when the inputs are used for rendering exempted services no Cenvat Credit is allowed. It may however happen that the imports are used in rendering both exempted as well as taxable services, in which event if the register as required is maintained credit, can be taken for quantity of the imports used in rendering the taxable services if records are not maintained, as required, the duty is to be paid in terms of Rule 6(3) - Where the assesse has categorically by way of intimation opted for option provided under 6(3)(ii), CCR then the Revenue cannot insist the assesse to opt for Rule 6(3)(i) - the Adjudicating Authority has failed to interpret Rule 6(3) CCR properly while confirming the impugned demand. Time Limitation - the impugned demand pertains to the period for April, 2009 to September, 2010 and the SCN is dated 19.04.2014 - Held that:- The facts were very much in the notice of the Department at least since the admitted letter but as proven on record since the prior letter of 01.05.2009 - there is no apparent suppression of facts or fraud committed on part of appellant as is alleged - Otherwise also, appellant is a public sector bank, there seems no motive to have malafide intentions to evade the payment of service tax - extended period cannot be invoked. Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1130
Refund of Service tax paid by mistake - rejection on the ground of limitation and also on the ground that appellants have failed to produce documentary evidence to support their claim that they have constructed flats by themselves without engaging any other person. Held that:- The claim of ₹ 1,00,000/-, ₹ 35,535 & ₹ 4184/- is barred by limitation. The said finding passed by the authorities below is upheld - Appellant is not eligible for refund of the said amounts - demand of this part hit by limitation. With regard to the contention that appellant has not filed necessary documents to establish that the construction activities were done by themselves without engaging any other person, we deem it fit to remand the matter to the adjudicating authority who shall consider this aspect on the basis of evidence furnished by appellant in de novo proceedings and decide the matter afresh. The impugned order is partly upheld and partly remanded to the adjudicating authority.
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2018 (7) TMI 1129
GTA Services - Benefit of N/N. 34/2004 -ST dated 3.12.2004 - transports where, for the whole transport carriage, the freight paid exceeds ₹ 750/- but does not exceeds ₹ 1500/- - Held that:- In the instant case the individual consignment transported in a goods carriage exclusively for transportation of goods consigned to the appellant had freight amount exceeding ₹ 750/- thereby attracting the provisions of clause (ii) of the said Notification Clause (i) will apply only where the gross amount charged on consignments transported in a goods carriage does not exceed ₹ 1500/- - admittedly, there is no multiple consignments. A similar view was taken by this Tribunal in the matter of Bellary Iron & Ores Pvt. Ltd. V. CCE Belgaum [2009 (12) TMI 150 - CESTAT, BANGALORE], wherein this Tribunal while interpreting the N/N. 34/2004 has held that Where the goods carriage transports several consignments, the exemption will be available if the aggregate freight charged for the trip does not exceed ₹ 1500/-. Therefore, where an assessee incurred freight upto ₹ 1500/- per consignment the assessee is not eligible for exemption. Benefit of notification not allowed - appeal dismissed - decided against appellant.
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2018 (7) TMI 1128
Rectification of mistake - revision power under Section 84(1) of the Act - Held that:- The final finding that the Order-in-Revision dated 31.1.2011 is correct is only in relation to Section 84(4) of the Finance Act and otherwise, the Tribunal has already allowed the appeal of the assessee but the assessee has an apprehension that the final findings may not be misinterpreted by the department and in future may not raise the demand - the apprehension is unfounded but still it is clarified that the said final conclusion is only with regard to section 84(4) of the Finance Act - ROM Application disposed off.
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2018 (7) TMI 1127
Diagnostic centres services - arrangement with the doctors - activity in the nature of Renting of Immovable Property Services or not - Held that:- It is the appellant who shall be employing its own staff for billing and receiving the payment at such rate as to be decided by the appellant. Thereafter such percentage of the Revenue as collected shall be given to the diagnostic centre as mentioned in the respective agreement - The bare perusal of these terms and conditions makes one thing clear that there is no element of rent is involved in the transaction between the appellant and diagnostic centre - demand do not sustain. Business Support Service - facilitation of customer relationship to the diagnostic centres by employing their own staff to collect the amount from the patients against the diagnostic services to be received by them but to be provided by the diagnostic centres in the appellants premises - whether same can be classified to be held as Business Support Service, as alleged - Held that:- The fact remains is that in the given arrangements/agreements with the diagnostic centres the appellant is not providing any health service. It is merely collecting money on behalf of the diagnostic centres for providing them the number of patients. Hence, the share of revenue so collected in the hands of the appellant cannot be categorized as a consideration for rendering the health service to the patients - there is no role of the appellant for providing diagnostic health services to the patients except retaining revenue share on that pretext - considerations received undoubtedly is for such activities as are enumerated in the definition of the BSS - Demand under BSS upheld. Management Maintenance & Repair Services - Held that:- As apparent, the agreement of the appellant with the FCs is to provide basic amenities as water, electricity, air-conditioning, power back-up etc. It is also apparent that appellant while allowing the FCs to operate in its premises, it charges a fixed amount and also receives a fixed percentage from the sale of these FCs. The activity is opined to not to fall under definition of MMR in Section 65 (64) of the Act - the demand of service tax as levied vide SCN dated 30.01.2015 for rendering Management, Maintenance & Repair Services is hereby set aside. Appeal allowed in part.
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2018 (7) TMI 1126
Delay in payment of service tax - Services of recovery agent to M/s. ICICI Bank Ltd. - Appellant is collecting dues from the borrowers of ICICI Bank Ltd. and to take possession of the assets from the borrowers of the bank - Demand of interest for delay in payment of Service tax and levy of penalty - Held that:- It is not disputed that the appellant has paid the entire service tax before the adjudication order on 31/05/2011 - here is no suppression of facts with intent to evade payment of tax because after taking the registration, the appellant started paying service tax. The appellant has submitted that there was delay in payment of service tax because the service recipient refused to make payment towards service tax in spite of repeated demand - A penalty will ordinarily be imposed in cases where the party acts deliberately in defiance of law, or is guilty of contumacious or dishonest conduct or acts in a conscious disregard of its obligation, but not in cases where there is a technical or venal breach of the provisions of the Act or where the breach flows from a bonafide belief that the offender is not liable to act in the matter prescribed by the statute. The penalty is not imposable since the appellant had a reasonable cause which resulted in failure on the part of the appellant to pay the service tax in time, by invoking section 80, penalty is set aside - But since there is a delay in payment of service tax, the appellant is liable to pay the interest on the delayed payment which will be quantified by the original authority after considering the facts - matter is remanded for the purpose of this quantification. Appeal allowed in part.
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2018 (7) TMI 1125
Levy of Service tax - amount received from Print Media and passed on to its customers as additional discount - Held that:- The service tax is leviable on the taxable service provided by the advertising agency to its clients and there is no shortfall on the service tax payment on the amounts billed to the clients - demand set aside - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1124
Refund of service tax deposited after the death of proprietor - Penalty on successor - non-existent firm - proprietor of the firm expired due to cancer on 18/04/2005 before adjudication of the case and the proprietary firm ceased to exist from 18/04/2005 - Held that:- It is a fact that Shri M.B. Lingadalli who was the proprietor of the firm died on 18/04/2005 and that too before the case was a adjudicated. It is also a fact that service tax registration was surrendered vide letter dt. 19/05/2005 and the said letter is on record. In view of the death of the sole proprietor, no recovery proceedings can be initiated against the appellant in view of the judgment of the Hon'ble Supreme Court in the case of Shabina Abraham [2015 (7) TMI 1036 - SUPREME COURT] No penalty - refund allowed - decided in favor of appellant.
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2018 (7) TMI 1123
GTA Service - consignment note not issued - Rule 2(l)(d)(v) of the Service Tax Rules, 1994 - Held that:- In the present case, the appellant does not fall in the definition of GTA as defined under the provisions of Section 65(105)(zzp) because he is not issuing any consignment receipt - the decision in the case of COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX VERSUS JAIKUMAR FULCHAND AJMERA [2016 (10) TMI 42 - CESTAT MUMBAI], is squarely applicable to the facts of the present case, where it was held that During the transportation stage, the respondent does not acquire any lien on the goods which is implicit in the issue of a consignment note. Therefore, no stretch of imagination can document issued by District Supply Officer conveying the goods transported be construed as a consignment note to render the respondent to be a goods transport agency. The appellant is not liable to pay the service tax in the light of the provisions of Rule 2(l)(d)(v) of the Service Tax Rules, 1994 because both the consignor and consignee fall under the category of specified categories and if any tax is to be paid, then the tax is to be paid by DC of Karwar and not the appellant. Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1122
Demand of Interest and penalty - irregular availment of CENVAT Credit - it was alleged that assessee had availed and utilized inadmissible credit on services after apportionment of service tax credits by their unit at Hosur plant - challans issued under Rule 4(A)2 of Service Tax Rules, 1994 - case of Revenue is that the services on which service tax was paid were not common services applicable to the Mysore Unit of the assessee - scope of SCN - Held that:- The Commissioner has not traveled beyond the show-cause notice as alleged by the Revenue - the Commissioner has examined the eligibility of the respondent to avail the credit and found that they were eligible to avail the credit and therefore he set aside the demand of interest and imposition of penalty. In view of the decision of the Karnataka High Court in the case of Ecof Industries Pvt. Ltd.[2011 (2) TMI 1130 - KARNATAKA HIGH COURT], the demand of interest and imposition of penalty will not arise if the credit availed by the assessee is in order. Appeal dismissed - decided against Revenue.
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2018 (7) TMI 1121
Scope of SCN - whether Service Tax can be fastened on the appellant/assessee under the Classification not Proposed in the Show Cause Notice? - whether the demand of Service Tax under the Category of “Construction of Residential Complex” for construction of single-storey residential units is tenable? - Held that:- It is found from the perusal of Show Cause Notice that there is no alternate proposal to Classify under the category of “Commercial or Industrial Construction Services” and as such, this demand to be denied beyond the scope of SCN - demand set aside. Levy of Service Tax on meditation centre and library building constructed for Gautam Buddha University - Commercial or Industrial Construction Services or not? - Held that:- This demand is also beyond the scope of SCN, as there was no proposal to levy Tax under the Category of CICS - Further also, as the Construction of Library and Meditation Centre is neither residential nor for commercial purpose. Hence, the same is not taxable even under the Category of CICS - demand set aside. Penalties are also set aside. Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1120
Reverse Charge Mechanism - Business Auxiliary Services - Share of profit in the joint ownership of business - Revenue claims that the amounts paid by the appellant to SSLC were on account of ‘Business Auxiliary Services’ - Held that:- Revenue has not produced any invoices raised by SSLC on the appellant for providing ‘Business Auxiliary Service’ to establish that the amounts of ₹ 16,77,30,366/- paid by appellant to SSLC was not in terms of para 6.1 of the agreement, but it was for providing ‘Business Auxiliary Service’ by SSLC to the appellant - the said SCN is not sustainable for demand of Service Tax of ₹ 1,84,88,270/- under Reverse Charge Mechanism from the appellant - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1119
Works contract - Whether the construction of Ashram Type School (Rajkiya Ashram Padhdhati Vidyalaya) constructed by the appellant for U.P. Samaj Kalyan Nirman Nigam Ltd. (U.P. Government undertaking) is commercial construction and liable to service tax under the Head Works Contract for the work done during the period 2010-11 2011-12? Held that:- The appellant have constructed facility for school and Rajkiya Ashram Padhdhati Vidyalaya which is made for providing school education as a Residential School to Orphan, Schedule Caste and Schedule Tribes, Extremely Backward Classes, Extremely Poor Sections of the society as is evident from letter dated 10th August, 2006 of the Chief Secretary of U.P. address to Director of Samaj Kalyan/Janjaati Vikash, U.P., Lucknow in respect of admission policy to Rajkiya Ashram Padhdhati Vidyalaya which provides preference in education to the aforementioned classes of children/students - the construction of Asharam Padhdhati Vidyalaya by the appellant is not in the nature of commercial or industrial construction. Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1118
Management, Maintenance or Repair Service - appreciation of factual and legal submissions not made - Principles of natural justice - Held that:- Since the learned Commissioner has not considered the submissions raised by the assessee regarding the wrong calculation of interest, I am of the opinion that this case needs to be remanded back to the original authority to consider the details of payment of interest keeping in view the various documents which may be submitted by the appellant and re-compute the interest on the basis of various documents which may be produced by the appellant. Penalty for non-filing of returns - Held that:- The said penalty is not imposable in view of the fact that the appellants have filed the returns and this fact has been observed in the show-cause notice itself and the stand of the appellant from the very beginning is that he has filed the return in time - penalty set aside. Appeal allowed by way of remand.
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2018 (7) TMI 1117
Extended period of Limitation - denial of CENVAT Credit - plethora of litigation existed between the assessee and the Revenue - Whether the learned Commissioner have rightly held that the extended period of limitation is available in the facts and circumstances? Held that:- It is an admitted fact that all the transactions are properly recorded in the books of accounts ordinarily maintained by the appellant assessee - Further, from the facts on record which are not disputed, it is found that the proposal to deny Cenvat Credit is by way of change of opinion, as admittedly the appellant assessee was registered with the Department and had filed regular returns and maintain proper records. The extended period of limitation is not invocable - demand set aside - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1116
Revision of orders by the Commissioner - Section 84 of Finance Act - power of Commissioner to review orders passed by the original authority in remand proceedings - Held that:- The impugned order passed by the Commissioner of Service Tax by exercising his revision power under Section 84 of the Act is not sustainable in view of the Division Bench decision of the Tribunal in the case of Vardhaman Fabrics Pvt. Ltd. [2017 (8) TMI 1228 - CESTAT NEW DELHI] wherein the Division Bench has held that the Commissioner does not have the power under Section 84 of the Finance Act to review the decision of the lower authority if the same is passed in pursuance of the remand order by the Commissioner (Appeals). Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1115
Exemption for commission paid to foreign agents - benefit of N/N. 42/2012-ST dated 29/06/2012 - case of Revenue is that Since, the respondent has not complied with the conditions of N/N. 42/2012-ST, they are liable to pay service tax - Held that:- In the case at hand the respondent has availed the services of foreign agents who procured Orders for export of goods and the respondent exported goods through proper channel. While exporting the goods, ARE-1 & Shipping Bill were issued & the Shipping Bill as well as Form SDF filed to Customs, mentions commission paid to foreign agents, thus condition No. 1 & 3 of N/N. 42/2012-ST are satisfied - benefit of notification cannot be denied - appeal dismissed - decided against Revenue.
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Central Excise
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2018 (7) TMI 1114
Refund claim - GTA Service - reverse charge mechanism - denial on the ground of unjust enrichment and time limitation - Section 11B of the Central Excise Act, 1944 - Held that:- The Service Tax paid, was paid under the category of "Reverse Charge Mechanism", The appellant himself was the service recipient. Therefore, the question of passing on incidence on other person, does not arise at all since the appellant was service recipient. Time Limitation - Held that:- Karnataka High Court in the case of K.V.R. Constructions Versus Commissioner of Central Excise, Bangalore [2009 (8) TMI 150 - KARNATAKA HIGH COURT] wherein it was held that if an amount paid by assessee to Revenue considering Service Tax, it is to be treated as deposit at the hands of Government and over such amount limitation under Section 11B of the Central Excise Act, 1944, does not apply. Refund allowed - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1113
CENVAT Credit - supply of goods to SEZ at NIL rate of duty - sub Rule (3) of Rule 6 of Cenvat Credit Rules - amendment through Notification dated 31.12.2008 having retrospective effect or not? - Held that:- The said amendment, amended through said Notification dated 31.12.2008 is having retrospective effect. Therefore, said amended provision was applicable to the clearances covered by the impugned Order-in-Original. Once the said provisions become effective for the period of show cause notice the Cenvat Credit availed by the appellant which has gone into the goods manufactured which were cleared at nil rate of duty and supplied to SEZ developers for the period from 17.05.2008 to 15.10.2018 become lawful credit. Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1112
Classification of manufactured goods - Potato Flakes - the contention of Revenue is that Potato Flakes manufactured by the appellant were classifiable under said Chapter 20 - Held that:- Reliance placed in the case of M/S. CENTURY LAMINATING CO. LTD. M/S. YOGENDRA VERMA VERSUS COMMISSIONER OF CENTRAL EXCISE, MEERUT [2017 (9) TMI 408 - CESTAT ALLAHABAD], where this Tribunal has decided the classification of said goods to be under Tariff Item No. 11052000 of Schedule to Central Excise Tariff Act, 1985 - impugned order not sustainable - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1111
Clandestine removal - reclaimed rubber, 2.75x18 Tubes, Nylon Fabric, Zinc Oxide - appellant case is that they are not manufacturer of said items, the impugned demand cannot sustain - Held that:- Admittedly the items which have been cleared are not the items which the appellant manufactured. Thus, the duty demand for the removal of manufactured goods is not tenable - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1110
Abatement under Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008 - manufacture of Pan Masala & Gutkha - no production for a continuous period of 15 days or more - whether appellant can take suo-motu abatement u/r 10 of PMPM Rules, 2008 wherein admittedly there was no production for a continuous period of 15 days or more? Held that:- The issue herein is squarely covered in favor of the assessee by the ruling of Division Bench of this Tribunal in the case of M/s Thakkar Tobacco Products Pvt. Ltd. & Others [2015 (2) TMI 606 - CESTAT AHMEDABAD], where it was held that if factory remains closed for a period of 15 days or more, after payment of duty by 5th of April, for the subsequent month, assessee adjusted the amount of abatement under Rule 10 and paid the balance, it was also held that in a series of judicial pronouncements, a consistent approach has been taken to the effect that in case of such adjustment of duty which is mandatorily required to be abated, Revenue cannot insist upon recovery of amount so adjusted. The appellant shall also be entitled to refund of the amount of interest adjusted by giving refund of the abatement amount - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2018 (7) TMI 1109
Levy of VAT - supply of Rice - whether the price fixed for levy rice, includes the element of tax on paddy and rice? - Held that:- Besides the cost of paddy, the components which have been taken care of while calculating the price of rice, included the element of tax on rice. The basic price of rice after adding all costs including the profit of the miller was calculated at ₹ 935.36 for common variety of rice and component of 4% VAT was added thereon to the tune of ₹ 37.41. After adding the cost of gunny bags and tax thereon, final procurement price was determined. Hence, the argument that merely because in the price of levy rice fixed by the Central Government the word, 'inclusive of all taxes' has been mentioned, the same will not mean that the tax is included therein, is totally misconceived. While making the payment of the amount of rice supplied by the petitioner to the Corporation, out of the bills so raised, while calculating the value as per the price fixed by the Government of India, the Corporation had deducted the element of tax on rice finding that the petitioner is an exempted unit, which is not liable to pay tax to the State. The fact cannot be denied that in case the petitioner being an exempted unit collects tax on sale, he shall not be entitled to retain the same as on the principle of unjust enrichment, the same may have to be deposited with the State. The price of levy rice fixed by the Government of India, at which the petitioner had supplied rice to the Corporation, includes the component of tax on rice, he will not be entitled to claim the same from the Corporation being a unit exempted from payment of sales tax - Petition dismissed - decided against petitioner.
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2018 (7) TMI 1108
Four weeks’ time as a last opportunity is granted to learned counsel for the petitioner(s) to cure the defects as pointed out by the Registry failing which the petition shall stand dismissed for non-prosecution.
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2018 (7) TMI 1107
Four weeks’ time as a last opportunity is granted to learned counsel for the petitioner(s) to cure the defects as pointed out by the Registry failing which the petition shall stand dismissed for non-prosecution.
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Indian Laws
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2018 (7) TMI 1137
Whether the Division Bench was right in setting aside the letter dated 13.03.2013 of IOC which terminated the respondent's dealership and was, therefore, justified in issuing a mandamus against the IOC to restore the dealership of the respondent herein and resume supply of fuel to his fuel station? - Held that:- The Division Bench was not justified in doing so - reconsideration of the respondent's case as to whether his dealership should be restored or not was an independent cause of action between the parties and the same arose after the award was passed and upheld by the Single Judge. It has, therefore, nothing to do with the award and nor it could be linked with the arbitration proceedings. It was solely within the discretion of the IOC they being the principal to decide as to whether the respondent's dealership should be restored or not and, if so, on what grounds. The IOC considered the case of the respondent and after taking into account all the facts and circumstances appearing in the respondent’s working, came to a conclusion that it was not possible for them to restore his dealership. It was accordingly informed to the respondent vide letter dated 13.03.2013 - the writ Court (Single Judge) was, therefore, justified in dismissing the respondent's writ petition and upholding the rejection on the ground that the High Court cannot interfere in the administrative decision of IOC and nor it can substitute its decision by acting as an Appellate Court over such decision in exercise of writ jurisdiction. It is more so when such decision is based on reasons involving no arbitrariness of any nature therein which may call for any interference by the High Court. The Division Bench committed an error in interpreting the award. The Division Bench proceeded on entirely wrong assumption that since the award was in respondent's favour, the IOC had to simply issue a consequential order in compliance thereof directing the IOC to revive the respondent's dealership and restore the supply of fuel to the respondent. Appeal allowed - the impugned order of the Division Bench set aside and the order of the Single Judge (writ Court) restored.
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2018 (7) TMI 1136
Confusion with regard to the age of superannuation - petitioner submits that certain positions in the National Consumer Disputes Redressal Commission (NCDRC) have not yet been filled up though vacancies are there - Held that:- There is some confusion with regard to the Income Tax Appellate Tribunal (ITAT) as regards the age of superannuation - It is clarified that the person selected as Member of the ITAT will continue till the age of 62 years and the person holding the post of President, shall continue till the age of 65 years - Let the matter be listed on 13.8.2018.
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