TMI Tax Updates - e-Newsletter
July 21, 2018

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy FEMA PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. SOME CRYING ISSUES OF GST

   By: CAPratyush Parashar

2. GST Charcha: Consultancy and support services aren’t composite supply in GST

   By: Bimal jain

News

1. Finance Commission to visit Gujarat from Sunday

2. Foreign investment for technological upgradation and modernisation in Railways

3. INVITATION FOR PUBLIC COMMENTS ON THE DRAFT NATIONAL GUIDELINES ON SOCIAL, ENVIRONMENTAL & ECONOMIC RESPONSIBILITIES OF BUSINESS, 2018

Notifications

Customs

1. 54/2018 - dated 20-7-2018 - Cus

Seeks to make amendments to Notification number 50/2017

Highlights / Catch Notes

Income Tax

• Section 80P(2) Benefits Denied: Co-operative Societies Not Classified as Co-operative Banks.

  Case-Laws - HC : Denial the benefit under Section 80P(2) - The position of these assesses as co-operative societies being clear they cannot be construed as co-operative banks.
  Visit to Get Source

  ---

• Tribunal Rules Foreign Company Assessment Void Due to Non-Compliance with Draft Order Procedure in Section 144C(1).

  Case-Laws - HC : Assessment of foreign company - in the working out of the order of the Tribunal results in the returned income being varied, then the procedure of passing a draft assessment order u/s 144C(1) of the Act is mandatory and has to be complied with, which has not been done - the order is without jurisdiction
  Visit to Get Source

  ---

• Income Accrual and Lease Nature Examined Under AS-19; Finance Lease Claim Rejected in Hire Purchase Case.

  Case-Laws - HC : Accrual of income - Nature of Lease – Finance by hire purchase lease – classification as per Accounting Standard 19 (AS-19) - the question has to be seen from the terms of the agreement entered into between the assessee - the contentions of the assessee's is rejected that the transaction is only a finance lease
  Visit to Get Source

  ---

Customs

• Courier Agency M/s DHL Not Liable for Misdeclaration Due to Unawareness of License Fees in Contract.

  Case-Laws - AT : Levy of penalty on courier agency - The enhancement of value is due to suppression of the fact related to the contract of licence. Since this fact was not known to the courier M/s DHL, he can not be implicated for misdeclaration of value due to non inclusion of licence fees
  Visit to Get Source

  ---

Service Tax

• Insurance Company Eligible for CENVAT Credit on Tax Paid for Repair Services by Authorized Service Stations to Insured Vehicles.

  Case-Laws - AT : CENVAT Credit - whether the appellants (general insurance company) would be eligible for availing credit on tax paid on repair service provided by Authorized Service Station to insured vehicles? - Held Yes
  Visit to Get Source

  ---

• Court Confirms CENVAT Credit on Service Tax for Consultancy Services in Emission Reduction Sales; Success Fee Qualifies.

  Case-Laws - AT : CENVAT Credit - input service - “success fee” payable against the sale of Certified Emission Reduction - whether the appellants are entitled to service tax credit on "Consultancy Engineering Services" in relation to sale of Certified Emission Reduction? - Held Yes
  Visit to Get Source

  ---

• Air Travel Agents Exempt from Additional Service Tax on Airline Incentives u/r 6, Sub-rule 7 of 1994 Rules.

  Case-Laws - AT : Booking of passage for travel by air - Air Travel Agent - Whether the service provider who has discharged his service tax liability as provided under Sub-rule 7 of Rule 6 of Service Tax Rules, 1994, is required to pay service tax on the incentive received from Airline? - Held No
  Visit to Get Source

  ---

Central Excise

• Appellants can adjust paid service tax against Central Excise duty demand on mould development charges. Eligibility confirmed.

  Case-Laws - AT : Adjustment of amount of service tax paid against the demand of Central Excise duty - taxability of developing charges received for moulds - While demanding Central Excise duty appellants are eligible for adjustment of amount already paid as service tax.
  Visit to Get Source

  ---

• Cream Mix in Biscuit Production Deemed Non-Marketable, Exempt from Excise Duty Under Central Excise Laws.

  Case-Laws - AT : Excisability/marketability - Cream mix - intermediate goods - cream was prepared to be used in making of cream biscuits - The goods which are called ‘cream mix’ by Revenue are not marketable and, therefore, not excisable
  Visit to Get Source

  ---

• Discounts on Demo Cars Excluded from Central Excise Value; No Advertising Element Found, Contradicting Section 4 Transaction Value.

  Case-Laws - AT : Valuation - inclusion of discounts in assessable value - There is no element of advertisement in the discount given by the appellant company in clearance of the Demo Cars - further, the SCN are against the concept of transaction value under Section 4 of the Act.
  Visit to Get Source

  ---

• CENVAT Credit Allowed for Legal Services in CEO's Defense Case, Tribunal Rules in Favor of Company.

  Case-Laws - AT : CENVAT Credit - ‘legal services’ availed by the appellant for defence of suit filed against the Chief Executive of the appellant-company - credit cannot be denied.
  Visit to Get Source

  ---

Case Laws:

• GST

• 2018 (7) TMI 1262
  Classification of goods - Power Bank - Whether the product power bank which is used to charge portable devices can be classified under heading 8504 attracting GST rate of 18%? - Held that:- The comments of the concerned officer were sought under section 98 (1) of the Act ibid, but before the applicant could be provided a personal hearing, the applicant has withdrawn their application vide their application received today i.e. and requested to drop the verification and examination of the said application - application dismissed as withdrawn.

  ---

• 2018 (7) TMI 1261
  Whether local cable operators to whom signals of cable TV are provided by the applicant as MSO are agents of the applicant for the purpose of liability to GST of the applicants on services provided by the LCO to the end customers? Held that:- Applicant has presented an application for withdrawal Of their application dated 20.12.2017 filed for seeking advance ruling. The request is acceded to - application dismissed as withdrawn.

  ---

• 2018 (7) TMI 1260
  Detention and seizure of goods - reliance placed in the case of THE ASSISTANT STATE TAX OFFICER, ERNAKULAM AND STATE TAX OFFICER (INTELLIGENCE) O/O. INSPECTING ASST. COMMISSIONER (INT.) , VERSUS M/S. INDUS TOWERS LIMITED [2018 (7) TMI 1181 - KERALA HIGH COURT], where it was held that 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 - following the same, the judgment impugned in this writ appeal is set aside enabling the Department to proceed under Section 129 of the Kerala State Goods and Service Tax Act, 2017 - appeal disposed off.

  ---

• Income Tax

• 2018 (7) TMI 1259
  Depreciation on building held on long term lease for 99 years - Held that:- We find on an examination of the subject order of the tribunal that in legal principle the tribunal has not been able to deny the claim that a lessee of over 12 years of a place of business is deemed to be the owner under the Income Tax Act, 1961 and can claim depreciation. But as far as the case of the assessee is concerned, we find that the Tribunal has not been able to come to any clearcut finding as to whether the subject lease was for 12 years duration or not. Revenue relied on Peerless General Finance & Investment Co. Ltd. vs. Commissioner of Income-tax, W.B.-I, Kolkata (2012 (10) TMI 896 - CALCUTTA HIGH COURT) a Division Bench judgment of our Court. This pertained to the assessment year 1993-94 of the assessee. Relying on paragraph 10 of the judgment he submitted that the assessee had not been able to substantiate that the lease was for more than 12 years. That is not the case. Mr. Chatterjee pointed out that the paragraph in question was a continuation of the submission on behalf of the assessee recorded by the Court and should not be taken to be its finding. Mr. Chatterjee is absolutely right though we confess that at least one sentence in the paragraph has been worded in such a way so as to create a doubt that it is the submission of a party or a finding by the Court. Deduction and expenditure disallowed on the ground that such expenses were on account of income which was exempt from taxation and hence could not be claimed as an allowable expense - Held that:- The view expressed by a Division Bench of this Court in Commissioner of Income Tax vs. Crish Park Vincom Ltd. [ 2015 (5) TMI 264 - CALCUTTA HIGH COURT] that in appeal this Court should not interfere with the findings of fact is correct on legal principles. But unfortunately there is no finding or determination of deductible expenses, in this case. As far as both these issues are concerned, the questions are remitted back to the Tribunal to redetermine them in accordance with law, withing a period of six weeks from the date of communication of this order. Those parts of the subject order of the Tribunal dealing with the aforesaid issues are necessarily set aside. Denial of natural justice - Held that:- Under section 260A this Court can only interfere if a substantial question of law is involved. If we entertain these appeals flood gates of appeals could be thrown open which was not the intention of the legislature. We do not think that this finding of the tribunal should be interfered with. If we do then in all cases this ground may be taken and a finding arrived at by the Tribunal which will be carried in appeal under section 260A, we take the subject matter covered by the question as a question of fact only and do not entertain the same.

  ---

• 2018 (7) TMI 1258
  TPA - exclude the expenditure in foreign currency from the export turnover and the total turnover for provision in section 10A - searching for comparable companies of the assessee under TNMM - substantial question of law - Held that:- This Court in Prl.Commissioner of Income Tax & Anr. Vs. M/s.Softbrands India Pvt. Ltd. (2018 (6) TMI 1327 - KARNATAKA HIGH COURT ) has held that in these type of findings of the learned Tribunal remained final fact findings of the learned Tribunal and are binding on the lower authorities of the Department as well as this Court and unless an established ex-facie perversity is found in the findings of the learned Tribunal, the appeal u/s.260A of the Act is not maintainable.

  ---

• 2018 (7) TMI 1257
  Denial the benefit under Section 80P(2) - co-operative banks or not - Held that:- It is not in dispute that the assesses/respondents herein are engaged in providing credit facilities to its members and have not obtained any banking licence to deny the benefit under Section 80P(2) of the Act as falling under Section 80P(4) of the Act, as a co-operative bank. The position of these assesses as co-operative societies being clear they cannot be construed as co-operative banks. We have no reasons to differ from the aforesaid co-ordinate Bench Judgments of this Court and accordingly we answer the substantial questions of law in favour of the assessee and against the revenue.

  ---

• 2018 (7) TMI 1256
  Assessment of foreign company - Non adherence to mandatory requirements of Section 144C - assessment order passed without having passed the necessary draft Assessment Order under Section 144C(1) - mandations applicable to a Foreign Company such as the petitioner - Held that:- “Fresh adjudication” itself would imply that it would be an order which would decide the lis between the parties, may not be entire lis, but the dispute which has been restored to the Assessing Officer. According to us, the order dated 31st January, 2018 is not an order merely giving an effect to the order of the Tribunal, but it is an assessment order which has invoked Section 143(3)and also Section 144C of the Act. This invocation of Section 144C has taken place as the Assessing Officer is of the view that it applies, then the requirement of Section 144C(1) has to be complied with before he can pass the impugned order invoking Section 144C(13). Section 144C(13) of the Act can only be invoked in cases where the assessee has approached the DRP in terms of sub- Section 144(C)(2)(b) of the Act and the DRP gives direction in terms of Section 144C(5) of the Act. In this case, the assessment order has invoked Section 144C(13) of the Act without having passed the necessary draft Assessment Order under Section 144C(1) of the Act, which alone would make an direction under Section 144C(5) of the Act by the DRP possible. Thus, the impugned order is completely without jurisdiction. So far as a Foreign Company is concerned, the Parliament has provided a special procedure for its assessment and appeal in cases where the Assessing Officer does not accept the returned income. In this case, in the working out of the order dated 5th May, 2017 of the Tribunal results in the returned income being varied, then the procedure of passing a draft assessment order under Section 144C(1) of the Act is mandatory and has to be complied with, which has not been done. The impugned order is without jurisdiction. Thus, the plea of alternate remedy advanced by the Revenue so as to not entertain this petition, does not merit acceptance in the present facts.

  ---

• 2018 (7) TMI 1255
  Accrual of income - Nature of Lease – Finance by hire purchase lease – whether the transaction is only a finance lease? - accounting standards - Held that:- The impugned order is squarely covered by the judgment of this Court in Simpson and General Finance Co. Ltd., Vs. Deputy Commissioner of Income Tax [2014 (4) TMI 215 - MADRAS HIGH COURT] as held there was no justifiable ground to accept the case of the assessee that based on AS19 only that the agreement in question was entered into by the assessee and it has to be treated as the finance agreement - the question has to be seen from the terms of the agreement entered into between the assessee, which was placed before the AO as well as before other Appellate Authorities - the contentions of the assessee's is rejected that the transaction is only a finance lease. - Decided against the assessee.

  ---

• 2018 (7) TMI 1254
  Penalty u/s 271(1)(c) - Held that:- Learned Departmental Representative’s only argument is that the assessment order duly clarified that the impugned penalty had been initiated for processing inaccurate particulars of income. We find no merit in Revenue’s above plea since it is only the relevant notice issued u/s. 274 of the Act that carries prime significance in the penalty proceedings in question. We therefore accept assessee’s argument on merits.This assessee’s appeal is accordingly allowed.

  ---

• 2018 (7) TMI 1253
  Expenditure under the head ‘power and fuel’ - Held that:- Assessing Officer after considering the explanation of the assessee, came to a conclusion that the entire amount of 3, 84, 60, 222/- is not exclusively incurred for the purpose of business and only expenditure incurred as per the Director’s Report (Form-A) of 1, 80, 66, 693/-, is allowed by treating it as exclusively incurred for the purpose of business. The remaining balance of 2, 03, 93, 529/- (Rs. 3, 84, 60, 222 – 1, 80, 66, 693) was disallowed and added back to the total income of the assessee. On appeal, ld. CIT(A) by considering the explanation given by the assessee directed the Assessing Officer to delete the addition. CIT(A) not at all examined the details in respect of 2, 03, 93, 529/- claimed by the assessee. Even, the Assessing Officer also not examined the details filed by the assessee. The assessee has not filed the Director’s Report before us. The claim of the assessee has to be examined with proper evidence - set aside the order passed by the ld. CIT(A) and remit the matter back to the file of the Assessing Officer and direct the AO to decide the issue denovo by considering the details in accordance with law after providing reasonable opportunity of hearing to the assessee. The assessee is also directed to file all the details in respect of expenditure claimed of 2, 03, 93, 529/- before the Assessing Officer.

  ---

• 2018 (7) TMI 1252
  Addition u/s 68 - AO has asked the assessee to furnish the details and complete addresses of the buyers, the assessee has not responded and no details were furnished - CIT(A) by considering the GPA directed the AO to delete the addition made by him - Held that:- It is a fact that the assessee has not filed GPA before the AO. He has only filed unregistered sale deed dated 23. 08. 2011. The Ld. CIT(A) before taking into consideration of the GPA dated 24. 08. 2011, ought to have called for the remand report from the AO. Not only that in the GPA filed by the assessee, he has not referred unregistered sale agreement dated 23. 08. 2011. Therefore, it cannot be construed that the GPA executed by the assessee is in pursuance to the unregistered sale agreement. As per GPA, the market value of the property of 1,00,50,000/- only was mentioned. Nowhere, it is mentioned that the sale consideration has been received by the assessee from Mr. Atluri Ram Babu of 1,00,50,000/-. Therefore, the Ld. CIT(A) is not correct in deleting the addition made by the AO based on GPA. Therefore, under these facts and circumstances of the case, we are of the opinion that the Ld. CIT(A) ought to have referred the GPA to the AO and called for remand report and decide the matter - Appeal filed by the revenue is allowed for statistical purpose.

  ---

• 2018 (7) TMI 1251
  Penalties u/s 271D and 271E - period of limitation - penalty imposed in a wrong assessment year - Held that:- From the records, it is undisputedly established that the Assessing officer was very well aware about the receipt of alleged loan in cash during the Assessment Years 2004-05 and 2002-03 and the repayment of the loan and but had wrongly initiated the earlier penalty proceedings for A.Y. 2005-06. The Assessment order was passed on 5.10.2007 and the penalties were initiated by the then Additional CIT on 15.11.2010 and the penalty orders were passed on 19.05.2011 and, thus, the imposition of the penalties in the first round was time-barred. The second round of penalty proceedings was initiated on 06/08/2014 after the dismissal of the department’s appeals by the ITAT on the ground that the penalties had been imposed in a wrong assessment year. It is very much evident that the present penalty orders were passed beyond the period of limitation and as such the same are not sustainable. A perusal of the orders of the Ld. CIT (A) also shows that the Ld. CIT (A) has reached the conclusion after examining the entire factual matrix of the case and these findings of the CIT (A) remain unconverted. The Ld. Sr. Departmental Representative was also unable to point out any factual inaccuracy in the findings as recorded by the Ld. CIT (A) in the impugned orders. - Decided against revenue

  ---

• 2018 (7) TMI 1250
  Penalty u/s 271(1)(c) - admitting the additional ground - invalid notice - Held that:- In the present case, the notice is not clear, whether the penalty is levied for concealment of income or for furnishing inaccurate particulars of income. See THE PRINCIPAL COMMISSIONER OF INCOME-TAX-I, VISAKHAPATNAM VERSUS SMT. BAISETTY REVATHI [2017 (7) TMI 776 - ANDHRA PRADESH HIGH COURT] - decided against revenue

  ---

• 2018 (7) TMI 1249
  Disallowance of expenditure u/s. 40(a)(ia) - due date for payment into the account of Central Government - explanation to section 40(a)(ia) added on 1.4.2005 to be applied retrospectively - Held that:- SLP dismissed.

  ---

• 2018 (7) TMI 1248
  Disallowance of expenditure u/s. 40(a)(ia) - due date for payment into the account of Central Government - Held that:- SLP dismissed.

  ---

• 2018 (7) TMI 1247
  Surplus arising from sale of shares and securities - short terms capital gains OR income from business - period of holding - Held that:- SLP Dismissed.

  ---

• 2018 (7) TMI 1246
  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:- There is a delay of 159 days delay in filing the present petition which is not satisfactorily explained. Notwithstanding the same, we have gone into the merits of the case and do not find any substance in the special leave petition. The special leave petition is dismissed on the ground of delay as well as on merits.

  ---

• 2018 (7) TMI 1245
  Deduction u/s 80IB(10) - reason for holding assessee as the developer - whether specific development agreement entered into by assessee merely as land owner with another developer to execute and construct the flats on the land of the assessee? - Held that:- SLP dismissed.

  ---

• 2018 (7) TMI 1244
  Sums received upon encashment of bank guarantees - additions were unjustified because the income could not be approved as the dispute is pending litigation and final adjudication before the Court Depreciation of claim in respect of assets not registered in the name of the assessee - assessee had paid all amounts to the transferor and had obtained possession Exemption under Section 80IA - exemption claimed for the Inland Container Depot (ICD), Container Freight Station (CFS) and rolling stock - Amortized depreciation Depreciation of land - not considered the applicability of Section 32(1)(ii) Held that:- SLP dismissed.

  ---

• 2018 (7) TMI 1243
  Disallowance u/s 40(a)(ia) - Tax Deducted at Source deposited after the due date - Enhancement under Section 40 (a) (ia) - TDS liability on charges paid to the truck owners for transportation of the goods - Held that:- The special leave petition is dismissed on the ground of delay as well as on merits.

  ---

• 2018 (7) TMI 1242
  Exemption u/s 10A – manner of computation – treatment of interest income for the purpose of section 80HHC – exclusion of interest and not gross interest for the purpose of section 80HHC – Impact of disallowance of expenses in computation of deductions / exemptions – Held that:- SLP dismissed.

  ---

• 2018 (7) TMI 1241
  Disallowance u/s 40(a)(ia) - Tax Deducted at Source deposited after the due date - Enhancement under Section 40 (a) (ia) - TDS liability on charges paid to the truck owners for transportation of the goods - Held that:- The special leave petition is dismissed on the ground of delay as well as on merits.

  ---

• 2018 (7) TMI 1240
  Invocation of Section 145 - interpretation to Section 80IA (8) and (10) - ITAT concluded that the AO had arbitrarily made the addition by rejecting the books of accounts and the additions made by the AO were rightly deleted by the CIT(A) - Held that:- SLP dismissed.

  ---

• 2018 (7) TMI 1239
  Deduction u/s 10A - The questions raised in this appeal are answered against the appellants by this Court in CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] and CIT v. Yokogawa India Ltd. [2011 (8) TMI 845 - KARNATAKA HIGH COURT] - Held that:- Subject matter of this Special Leave Petition is covered by the judgment of this Court rendered in COMMISSIONER OF INCOME TAX, CENTRAL-III VERSUS HCL TECHNOLOGIES LTD. [2018 (5) TMI 357 - SUPREME COURT]. SLP dismissed

  ---

• 2018 (7) TMI 1238
  Application u/s 10 (23C)(vi) - rejection of application on the ground that the assessee had not been complying with the provisions of RTE Act - whether the provisions of the RTE Act would apply to the school being run by the assessee-society, which imparts education from Class Play to Class K.G only? - Held that:- SLP dismissed.

  ---

• 2018 (7) TMI 1237
  Deduction u/s 10A - The questions raised in this appeal are answered against the appellants by this Court in CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] and CIT v. Yokogawa India Ltd. [2011 (8) TMI 845 - KARNATAKA HIGH COURT] - Held that:- subject matter of this Special Leave Petition is covered by the judgment of this Court rendered in COMMISSIONER OF INCOME TAX, CENTRAL-III VERSUS HCL TECHNOLOGIES LTD. [2018 (5) TMI 357 - SUPREME COURT]. SLP dismissed

  ---

• 2018 (7) TMI 1236
  Surplus arising from sale of shares and securities - short terms capital gains OR income from business - period of holding - Held that:- SLP dismissed

  ---

• 2018 (7) TMI 1235
  Exemption u/s 10A – manner of computation – treatment of interest income for the purpose of section 80HHC – exclusion of interest and not gross interest for the purpose of section 80HHC – Impact of disallowance of expenses in computation of deductions / exemptions – Held that:- SLP dismissed.

  ---

• 2018 (7) TMI 1234
  Deduction u/s 10A - Interpretation of Total Turnover & Export Turnover under 10A - question raised in this appeal is answered against the appellants by this Court in CIT v. Tata Elxsi Ltd. (2011 (8) TMI 782 - KARNATAKA HIGH COURT ) - Held That:- SLP diminished.

  ---

• 2018 (7) TMI 1233
  Disallowance u/s. 14A - the method adopted by Assessing Officer is not applicable to the year under consideration i.e. Assessment Year 2007-08 - Held that:- In view of the order passed by this Court in ‘Godrej and Boyce Manufacturing Co. Ltd. vs. Dy. Commissioner of Income Tax, Mumbai & Ors.[2017 (9) TMI 1689 - SUPREME COURT] the present special leave petition is not entertained and is accordingly dismissed.

  ---

• Customs

• 2018 (7) TMI 1230
  Mis-declaration of value of imported goods - Confiscation of goods - Held that:- It was the responsibility of the Appellant importer to inform the exporter and the courier to mention correct details in the documents. Further the Bill of Entry could not have been filed without intimating the Appellant. The charges of mis-declaration are thus sustainable as the Appellant did not adduce any evidence that they had instructed/ informed courier of licence fee amount to be included in assessable value - the goods has been rightly confiscated. Penalty u/s 112(a) of CA - Held that:- The enhancement of value is due to suppression of the fact related to the contract of licence. Since this fact was not known to the courier M/s DHL, he can not be implicated for misdeclaration of value due to non inclusion of licence fees - penalty set aside. Appeal allowed in part.

  ---

• 2018 (7) TMI 1229
  Duty free import of goods to be re-exported - N/N. 97/79 dated 2nd May 1979 read with Custom House Public Notice No. 48 dated 22.03.1982 - denial of benefit of notification on the ground of non-submission of proof of re-exportation - Held that:- It is an admitted fact on record that in respect of 16 containers, the appellant did not produce any documentary evidence to show that the said containers imported by the appellant were re-exported. Since the condition of the Notification dated 02.05.1979 has not been complied with by the appellant in proper perspective, the benefit contained therein should not be available to the appellant. Further, the appellant had not produced any other evidence before the authorities below to show that the documents / records in relation to the disputed containers were destroyed in fire. Furthermore, the premises where fire took place does not belong to the appellant and the same belongs to another Company namely, M/s Armstrong Smith Ltd. Since no plausible evidence was produced by the appellant to demonstrate that the containers imported by it were in fact re-exported, the conditions prescribed in the Notification dated 02.05.1979 have not been complied with, for getting the benefit contained therein. Benefit of notification rightly denied - demand upheld - appeal dismissed - decided against appellant.

  ---

• 2018 (7) TMI 1228
  Imposition of Redemption fine and penalty - import of restricted goods - second hand personal computers/labtops including their refurbished/reconditioned spares parts - requirement of special import authorization from DGFT - Held that:- In their own case for the earlier import, this Tribunal in the case of M/S. GAGAN IMPEX VERSUS C.C.E PATPARGANJ NEW DELHI [2016 (10) TMI 335 - CESTAT NEW DELHI] has held that in terms of circular no. 27/2011- Cus dated 04.07.2011 issued by CBEC at Sl. no. B 1110 of the schedule 3 relating to waste electrical and electronic assemblies can be imported with permission from ministry of Environment and Forest and said permission has been obtained by the appellant vide their certificate dated 17.06.2003, therefore, it cannot be held that the goods are restricted in question. As this Tribunal has held that the goods in question cannot be held as restricted goods, in that circumstances, the redemption fine and penalties are not imposable on the appellant, therefore, impugned orders qua holding that goods are liable for confiscation are set aside, consequently redemption fine and penalty imposed on the appellant are not sustainable. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1227
  Test of imported Natural Uncoated Ground Calcium Carbonate - facility of CRCL to conduct the test of Natural Calcium Carbonate - Revenue's case is that CRCL is fully equipped to test the goods - Held that:- The appellant has referred to Circular No. 43/2017. Customs dated 16.11.2017, clarifying – that CRCL has shortlisted the items whose samples cannot be tested in their Laboratories at present and also identified the Lab, where such samples could be tested. Natural Calcite Powder is one of the specified product which CRCL Lab is unable to test - there is no merit in Revenue's case - appeal dismissed - decided against Revenue.

  ---

• 2018 (7) TMI 1226
  Valuation of imported goods - enhancement of value based on NIDB data - Held that:- The Revenue’s contention that enhancement of assessable value by the Assessing Officer was correct has not been supported by any evidence by Revenue - there are no merits in the grounds of appeal filed by Revenue - appeal dismissed - decided against Revenue.

  ---

• 2018 (7) TMI 1225
  Smuggling - Export of Dal/pulses to Nepal - It was alleged that huge quantity of pulses has been exported to Nepal on tractor trolleys and trucks illegally through off routes, located at the Indo Nepal border - Whether there was any activity of Smuggling on the part of appellant or not? Held that:- There is no seizure of the pulses, even in small quantity. It is nowhere on record that either the Dal Mill owner or the broker or the said Sushil Kumar Agarwal, Siliguri have indulged in activity amounting to smuggling - It is admitted fact on record that the pulses have been dispatched to a place in India and the same ultimately reached a place in India. There is no allegation that post delivery of Dal to a dealer located near the Indo Nepal Border, within India, was in violation of the provisions of the Customs Act or the appellants herein were involved in the presumed smuggling. The whole case is based on presumptions and assumptions and lacking any corroboration. Suspicion how so ever strong cannot take place of legal proof. Appeal allowed - decided in favor of appellant.

  ---

• Corporate Laws

• 2018 (7) TMI 1232
  Winding up petition - Held that:- On the contrary, it categorically states that where the issue relates to right in rem the same are not arbitrable. Hence, there is no merit in the said plea of the respondent regarding the existence of an arbitration clause as it cannot oust the jurisdiction of this court to adjudicate the winding up petition. The next plea of the respondent is that the laws of Sweden applies and it is possible that the claim may not be maintainable under the laws of Sweden. This plea is vague and bereft of any details. Merely stating that it is possible that under the law of Sweden this claim of the petitioner may be barred by limitation or there may be any other impediments in the case of the petitioner to recover this amount, is a vague plea, which cannot be permitted to be raised whatsoever. The respondent has not been able to point out as to under which applicable law of Sweden, the claims of the petitioner are not maintainable. There is no merit in the contention raised by the petitioner. The plea lacks bonafide and cannot be accepted. Accordingly, the petition is admitted and the Official Liquidator attached to this Court is appointed as the Provisional Liquidator. He is directed to take over all the assets, books of accounts and records of the respondent-company forthwith. The citations be published in the Delhi editions of the newspapers ‘Statesman’ (English) and ‘Veer Arjun’ (Hindi), as well as in the Delhi Gazette, at least 14 days prior to the next date of hearing. The cost of publication is to be borne by the petitioner who shall deposit a sum 75,000/- with the Official Liquidator within 2 weeks, subject to any further amounts that may be called for by the liquidator for this purpose, if required. List on 30.10.2018.

  ---

• 2018 (7) TMI 1231
  Winding up petition - Held that:- It is quite clear from the perusal of the so called acknowledgement that respondent was acknowledging the amount of 66,24,136/- stating that the said pending amount would be adjusted only against future purchases. To the same effects are some of the emails which were sent later in time which show the stand of the respondent company that they would adjust the payment against future orders that may be received. In fact, as pointed out to the learned counsel for the petitioner that the respondent would be obliged to take back unsold books and refund the prices only in case there is a specific provision in the agreement between the parties. Petitioner has failed to show any provision in the vendor agreement dated 29.10.2011 which obliges the respondent to take back the surplus stocks lying with the petitioner and refund the consideration paid. The petitioner however states that this condition was mutually agreed between the parties and the respondent is bound by the terms and conditions of the said agreement that was agreed upon between the parties. Under section 19 of Sales of Goods Act, 1930, the property in the goods is transferred to the buyers at such time as the parties to the contract intended it to be transferred. In the present facts, there is nothing to show that when the goods were purchased by the petitioner, the title to the goods did not pass to the petitioner. Hence, it cannot be said that the respondent company is liable for the stated dues. It is settled legal position that it is not the function of the company court to enter into an adjudication of disputed facts which should have been the subject matter of the Civil Suit. The respondent has raised disputes that are bonafide. Clearly, the contentions which are now being raised by the petitioner are the issues which ought to have raised before the Civil Court. There is no merit in the present petition. Needless to add that any observations made herein will not in any manner prejudice the rights of the parties.

  ---

• Insolvency & Bankruptcy

• 2018 (7) TMI 1263
  Corporate insolvency process - Whether there exists a financial debt owed by the Respondent Company to the Applicants? - Held that:- It is noted that the settlement agreement talks only about the debts due to Naresh Kumar Aneja and is completely silent about the debts owed to Sushant Aneja, Applicant No. 1 or Naresh Kumar Aneja (HUF), Applicant No. 2. Further, there is no explanation or description of the debts to be set off, thus, it cannot be ascertained whether the settlement agreement actually deals with the debts owed to the Applicants by the Respondent Company. Further, nothing has been placed on record to show that the settlement agreement has been actually executed by the parties. For the reasons stated above it is held that a financial debt was owed to the Applicants by the Respondent Company. Whether there has been a default in payment of the financial debt, if any? - Held that:- Taking into consideration all the above, this Tribunal is of the view that a default has been committed in terms of Section 3(12) of the Code of financial debt as defined under Section 5(8) of the Code and that the Applicant has rightly invoked the provisions of the Code. It is also seen from the Application that the above named IRP has given a written consent in Form 2 wherein he has agreed to accept appointments as IRP if Application is admitted. Further, it is also evident from the said Form 2 as filed by the IRP as well as the certificate as enclosed therein signed under his hand that he is not a related party to the Corporate Debtor and that he is eligible to be appointed as an independent director on the Board of the Corporate Debtor.

  ---

• FEMA

• 2018 (7) TMI 1224
  Allegation against the appellant Jaswinder Singh as contravened Sections 9 (1) (d) of FERA - payments of 2.85 Crore to persons in India on behalf of persons residing outside India - Held that:- In any event, the case of the department is improbable on the face of it as the allegation of the department that the appellant indulged in hawala business is falsified from the fact that the said diary allegedly contains the details of the payment made by the appellant Jaswinder Singh for the period of January 1998 onwards to various persons named therein while he was not in India. There was no recovery from the appellant. Counsel for the appellant says that due to long passing of time and harassment, the appellant has compounded his offence and he was accordingly discharge by imposing costs and the same was deposited. With regard to Disclosure statement of the appellant Jaswinder Singh before Police. The statement of appellant and the co-accused before police is not admissible in evidence and as such no reliance can be placed on this inadmissible piece of evidence. The other important issue is that dispute contravention facts which are contrary to the evidence available on record such as pass-port entries as well as entries made in diary with one pen, he was also denied permission to cross examine witnesses notwithstanding a specific request in writing in this regard. It is submitted that the statements made by the co-accused or the officers of the ED cannot be taken as corroboration. The statements should be corroborated from the independent facts and statements are not reliable till their veracity and genuineness is not tested by cross examination. Therefore, under the established principles of natural justice, the appellant requested before the Adjudication Authority for permission to cross examine the witnesses so as to enable them to establish his innocence and to state and/or explain his case. The cross examination of the officers who recorded his statement dated 08.09.1998 (in jail) and that of the IO is imperative in order to arrive at the truth of the matter, it was a perfect case where the crossexamined should have been allowed. Thus ED has failed to prove its case even by way of preponderance of probability and the allegations made by the ED are improbable that no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the appellant. The finding of the Adjudicating Authority was wholly perversed, contrary and those suffer many infirmities.

  ---

• PMLA

• 2018 (7) TMI 1223
  Offence under PMLA - Attachment orders - transaction from proceeds of crime - Held that:- In the impugned order there is no finding at all as to whether 70 lakhs which was received by the appellant was from alleged tainted amount is received from 85 crores or from 19 crores which is claim to the untainted money. In the impugned order, there is no specific finding after going through the record to establish as whether 70 lakh loan which was given to the appellant from 85 crores and part of 19 crores (which was admitted untainted amount as per the case of the respondent no. 1). In case provisional attachment order and prosecution complaint are read together, merely a general reasons are given that the amount received by her was generated from the proceed of crime and if amounts to money laundering. There are no reasons or findings that on the date of receipt of loan amount, she was aware that if any, it was proceed of crime. No such question was put when her statement u/s 50(2) of PML Act was recorded. In the light of the above said reasons, we allow the appeal. The impugned order 28.09.2017 passed against the appellant is set-aside. Consequently, provisional attachment order is also quashed.

  ---

• 2018 (7) TMI 1222
  Offence under PMLA - Provisional Attachment Order - Held that:- the respondent cannot be permitted to say that since the bank was not a party to the proceedings by taking the reap advantage or benefit from such transfer of shares as the respondent No. 1 was the party and the interim order was passed in the presence of his counsel. The said argument have no substance. Even after transfer of shares by the bank in favour of the respondent No. 1, it was the duty of the respondent no. 1 to inform the bank that the said transfer has been made after passing the interims and the same is in violation of orders. There is no material on record to show the respondent No. 1 in order to show its bonafide to re-transfer the same to the bank. Thus direct the respondent to re-transfer back the equity shares of appellant which are the subject matter of the present appeal to the demat account of the appellants forthwith. The above said order shall have no bearing in other proceedings in authorities. The present order is pertaining to the subject matter of present appeal only.

  ---

• Service Tax

• 2018 (7) TMI 1220
  Business Auxiliary Service - respondents had tie up with various financial institutions like GE Countrywide, TVS Finance etc. for purchase of consumer durables from the show rooms; that in respect of customers who avail the loan facility from such financial institutions, the respondents receive incentives depending on the quantum of business provided through them - whether the service would fall under the category of Business Auxiliary Services or not? Held that:- To determine whether a particular activity would constitute “Business Auxiliary Service’, the Larger Bench in the case of M/S PAGARIYA AUTO CENTER VERSUS CCE, AURANGABAD [2014 (2) TMI 98 - CESTAT NEW DELHI (LB)], has held that “transactional documents and other evidence on record" should indicate that the substantial activity is falling within the contours of BAS - In the case before us, these tests have not been applied - Interests of justice require that the matter should be remanded for de novo consideration by the original authority to apply the tests laid down by the Larger Bench of the Tribunal - matter on remand - In such de novo proceedings, the adjudicating authority shall also look into the contention of the respondents that the proceedings per se are hit by limitation. Penalties u/s 77 and 78 - Held that:- The penalties are not warranted and is set aside. Appeal allowed by way of remand.

  ---

• 2018 (7) TMI 1219
  Penalty u/s 78 of the Finance Act, 1994 - case of appellant is that non-payment was due to the financial crisis and for the delay in payment of service tax there was no willful intention to evade tax - Held that:- The facts put forward as well as the records would show that other than delay in payment of service tax, there is no evidence to show that appellant has suppressed facts with intention to evade payment of tax - The figures required for quantification of the demand of service tax has been taken from the accounts maintained by the appellant and there is nothing unearthed by the department to show that there was any positive act of suppression on the part of the assessee. This is a fit case for invoking Section 80 of the Finance Act, 1994 as the appellant has put forward reasonable cause for non-payment of service tax during the disputed period - penalty set aside, without disturbing the demand confirmed as well as the interest thereon - appeal allowed in part.

  ---

• 2018 (7) TMI 1218
  CENVAT Credit - whether the appellants would be eligible for availing credit on tax paid on repair service provided by Authorized Service Station to insured vehicles? - Held that:- The very issue was addressed by this CESTAT Chennai in the case of United India Insurance Co. Ltd. Vs CCE & ST LTU, Chennai [2018 (6) TMI 200 - CESTAT CHENNAI], where it was held that The general insurance service provided by the appellant basically insures the vehicle against damages. It is obvious that such service can be provided to the customer ie., owners of the vehicle only by way of reimbursement of the repair charges. The service tax paid on the bill of the ASS is to be considered as falling within the definition of the input service which is used for providing the output service of the vehicle insurance. Credit allowed - appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1217
  Refund of Service Tax paid - export of output service - Rule 5 of the CCR 2004 read with N/N. 27/2012-C.E.(N.T.) dated 18.6.2012 - denial of refund on account of nexus - Held that:- The fact is not under dispute that the appellant provides the entire output services to its overseas clients and none of the output services were provided to the clients within the country. Thus, it cannot be said that the input services, on which refund benefit has been sought, were not utilized for providing the exported output service. The amended provisions of Rule 5 of the rules have also been clarified by the Tax Research Unit of Department of Revenue vide Circular dated 16.3.2012. It has been stated therein that the nexus between the input service used in export of service should not be insisted upon and the benefit of refund should be granted on the basis of ratio of export turnover to total turnover demonstrated by the assessee. As per the statutory mandates read with clarification furnished by TRU, rejection of refund benefit by the authorities below cannot be sustained for judicial scrutiny. Refund cannot be denied - appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1216
  CENVAT Credit - input service - “success fee” payable against the sale of Certified Emission Reduction - whether the appellants are entitled to service tax credit on "Consultancy Engineering Services" in relation to sale of Certified Emission Reduction? - Held that:- When a particular service not mentioned in the definition clause is utilized by the assesse /manufacturer and service tax paid on such service is claimed as Cenvat credit, the question is what are the ingredients that are to be satisfied for availing such credit. If the credit is availed by the manufacturer, then the said service should have been utilized by the manufacturer directly or indirectly in or in relation to the manufacture of final products or used in relation to activities relating to business. If any one of these two tests is satisfied, then such a service falls within the definition of “input service” and the manufacturer is eligible to avail Cenvat credit of the service tax paid on such service.” An identical issue was considered by the Tribunal in the case of Heidelberg Cement India Ltd. Vs. Commr. of Central Excise, Bangalore [2016 (9) TMI 677 - CESTAT BANGALORE], wherein the consultancy services used for greenhouse gas emission reduction and Carbon Credit Management Services were held to be cenvatable. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1215
  Penalty u/s 77 and 78 of FA - No intent to evade - tax deposited before issuance of SCN - Held that:- It is admitted facts that the tax short paid is part of the admitted tax not deposited as per the ST-3 returns, filed by the appellant, though belatedly - the appellant has taken care to deposit the tax in arrears before the passing of the adjudication order. There is no matter of contumacious conduct, suppression of facts from revenue or false statement of account, is made out against the appellant - in view of the declaration made in return filed before the issuance of show cause notice by the appellant, there is no suppression of facts or falsification statement of account (s) is made out - penalty not warranted. Penalty set aside - appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1214
  Business Auxiliary Services - Commission received from the foreign parties - export of services or not? - Held that:- The issue is decided by the Tribunal in favor of the assessee/appellant in the case of Sumitomo Corporation of India Pvt. Ltd. [2017 (3) TMI 1366 - CESTAT NEW DELHI], where it was held that the services have been provided to foreign entities as per the agreement entered into and the beneficiary is such foreign entities. The amount as consideration for such services was also paid by the said foreign entities in convertible foreign exchange. Therefore, the services rendered by the appellants are squarely covered by the Export of Service Rules and there is no service tax liability on them. Demand do not sustain - appeal allowed - decided in favor of appellant-assessee.

  ---

• 2018 (7) TMI 1213
  Valuation - inclusion of value of spare parts raised by the party against the servicing of vehicles in assessable value - C.B.E. & C. Circular No.87/05/2006-Service Tax - Held that:- In view of the settled legal position in the case of Samtech Industries [2014 (4) TMI 995 - CESTAT NEW DELHI], and also in view of the letter of the C.B.E. & C., accepted the legal position that the cost of items supplied/sold and there is documentary proof specifically indicating value of the goods, the demand of Service Tax against the assessee for the cost of the goods supplied during repair does not appear sustainable - appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1212
  Levy of Service Tax - respondent-assessee is engaged in providing the services to the government assets, WBM work, construction of pavement & Foot path, construction of roads, widening of roads, drainage of water etc. for Cantonment Board, Jabalpur - Management, Maintenance of Repair of roads Services or not? - Held that:- The Cantonment Board is a local body and is not a commercial organisation under the Ministry of Defence. Hence, the services provided by the respondent-assessee are not subject to Service tax - appeal dismissed - decided against Revenue.

  ---

• 2018 (7) TMI 1211
  Booking of passage for travel by air - Air Travel Agent - Whether the service provider who has discharged his service tax liability as provided under Sub-rule 7 of Rule 6 of Service Tax Rules, 1994, is required to pay service tax on the incentive received from Airline? Held that:- The appellant had exercised option not to pay tax on commission at the rates specified in Section 66 of the Act and they were paying service tax according to option available under Rule 6 (7) of Service Tax Rules, 1994 on the basic fair value of the Air Ticket at rates specified in the said Rule - demand not sustainable - appeal allowed - decided in favor of appellant.

  ---

• Central Excise

• 2018 (7) TMI 1264
  CENVAT Credit - duty paying documents - supplementary invoices - Held that:- There is no element of fraud and suppression on the part of the appellant. The issue herein is recurring in nature - the appellant is entitled to take CENVAT credit on the supplementary invoices in question - Appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1210
  Valuation - inclusion of amortized costs in assessable value - Held that:- From the invoice, it is clear that on the amortized cost, the respondent has already paid the duty; therefore, they complied with the conditions to the Board Circular No. 170/4/96-CX dt. 23.01.1996. The Revenue has misunderstood the issue by holding that as amortization cost has not been recovered from the buyer, therefore the respondent is liable to pay the duty - Admittedly, as per the invoice, the respondent has paid duty on amortization cost, therefore no proceedings were required to be initiated against the respondent. Demand do not sustain - appeal dismissed - decided against Revenue.

  ---

• 2018 (7) TMI 1209
  Valuation - physical samples sold to the principle manufacturer - related party transaction - Held that:- As the physical samples are sold to the principle manufacturer who is not related to the appellant, therefore the transaction value is the assessable value on which the appellant have already paid the duty - Tribunal in the case of CCE, Panchkula vs. E.G. Pharma Pvt Ltd [2018 (1) TMI 256 CESTAT CHANDIGARH], wherein it has been held that in case where the physical samples are sold to the principle manufacturer, who is not a related person on the transaction value, the transaction value shall be the assessable value - appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1208
  CENVAT Credit - inputs/capital goods - steel items, profile sheets, electrodes, cement, etc. - Held that:- The findings recorded by the adjudicating authority that these items were used for foundation/civil construction, structures of various industrial equipments and roof of plant and machinery, we find and there is no dispute as to the fact that these inputs were received and consumed in the factory premises of the appellant - in the case of Penna Cement Industries Ltd [2018 (5) TMI 653 - CESTAT HYDERABAD] it was held that CENVAT credit availed on various items in the period prior to 07.07.2009 needs to be allowed. Credit allowed - appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1207
  Clandestine removal - Cigarettes - Confiscation - Held that:- 15,000 cigarettes which were lying within the factory premises were not contravening goods and had not violated any provision of Central Excise Act and, therefore, their confiscation is set aside. Confiscation of goods at the premises of transporters and traders - Held that:- In respect of other goods which were confiscated such as at the transporter premises of Baba Roadlines and at trading premises of Ganesh Trading and at Varanasi Cantt. Railway Station the redemption fine cannot be directed to be paid by the appellants because said goods were not moved to have been manufactured by the appellant - demand do not sustain. Cigarettes found in excess at the residential premises of Shri Roop Singh - Held that:- In respect of 2,88,000 sticks of Captan brand cigarettes stated to have been found in excess at the residential premises of Shri Roop Singh it can be very clearly inferred that they cannot be contravening goods because the manufacturers factory was under physical control and it was not possible to remove manufactured goods without payment of duty - demand do not sustain. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1206
  Clandestine Manufacture and removal - Revenue entertained a view that the three raw material manufacturers have supplied the LD film to the respondent, who have utilized the same for manufacture of their final product, without reflecting the same into statutory records - revenue’s case is based upon the recovery of some loose slips from the 3rd party premises. Held that:- It is well settled law that allegations and findings of clandestine removal are required to be based upon positive evidences produced by the revenue. There is admittedly no such evidence available on record which could show that there was unaccounted production and clearance of final products - The burden of proof to establish clandestine removal is on the revenue and is required to be discharged effectively. In the present case, apart from the confessional statement and the recovery of the loose slips from the premises of 3rd party, there is factually no other evidence to indicate any clandestine activity on the part of the respondents - demand cannot sustain. Appeal dismissed - decided against Revenue.

  ---

• 2018 (7) TMI 1205
  Adjustment of amount of service tax paid against the demand of Central Excise duty - taxability of developing charges received for moulds - appellant claimed that they were under the bonafide belief that the amount received towards mould developing charges are in the nature of service and were liable for payment of Service Tax - penalty - Held that:- This issue is fully covered by the decision of this Tribunal in the case of M/s K.R. Packaging [2017 (2) TMI 893 - CESTAT NEW DELHI], where it was held that no duty is leviable as the Department never raised any objection which is an implied consent for having the Service Tax from the assessee-appellants. While demanding Central Excise duty appellants are eligible for adjustment of amount already paid as service tax. Accordingly, the demand is reduced by the amount so paid - penalty not warranted as the issue involved is interpretational one. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1204
  Penalty u/r 26 of CER - Clandestine removal - goods cleared clandestinely from Noida unit, mischievously showing as cleared from Haridwar (UK) - whether penalty under Rule 26 of Central Excise Rules, 2002 is rightly imposed on the appellant? - Held that:- The Courts below have rightly held that the appellant, a limited company, have knowingly misled the said M/s Dynasty and have received the job worked goods, although dutiable, without payment of duty - Evidently the appellant was aware that the job work is being done by M/s Dynasty, Noida– UP, and such goods were dutiable, whereas the appellant indulged in falsification of records in connivance with the said M/s Dynasty, Noida which issued challans as if the goods have been job worked at Haridwar, (UK). Impugned order upheld - appeal dismissed - decided against appellant.

  ---

• 2018 (7) TMI 1203
  CENVAT Credit - inputs sent for job-work - it was alleged that the appellant-assessee were sending the goods for job work, but some of such Cenvatable inputs have not been received back within the stipulated time - Held that:- The goods sent for job work have subsequently been received back in the factory and the assessee has already availed the credit on 31st March, 2007. Revenue have not objected to the said credit - credit allowed. The respondent-assessee has submitted copies of bills, ledger account, proof of payment to suppliers, cash payment vouchers for payment of freight, copies of GR’s, material receipt register, ledger account of freight and cartage to prove that the goods had actually been received in the factory - Suppliers of input had in their statements confirmed supply of goods to the assessee - credit rightly allowed. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1202
  CENVAT Credit - input services - Outdoor Catering Service - Held that:- In all the rulings pointed out by the ld. Counsel for the appellants Hon’ble High Courts of Bombay, Gujarat & Allahabad have held that Service Tax paid on Outdoor Catering Service, when such services are availed by manufacturer for providing canteen facility to the workers as required by Factory Act were admissible as input service - credit allowed - appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1201
  Rectification of Mistake - Held that:- The mistake is apparent on the face of record and the same needs to be corrected - The said table in Para 1 at Page 2 of the Final Order which stands replaced as contended by appellant - ROM application allowed.

  ---

• 2018 (7) TMI 1200
  Area-Based Exemption - N/N. 50/2003-CE dated 10.06.2003 - Substantial expansion of capacity - cross examination of Professor Arun Kumar not done. Held that:- The directions of this Tribunal to pass order after cross examination of Professor Arun Kumar were not followed. This Tribunal makes a note that it was not possible to cross examine Professor Arun Kumar because of his sad demise before the date of personal hearing - In the circumstances Revenue should have moved an application before this Tribunal for its direction in the circumstances where it was not possible to follow the directions of this Tribunal. The Original Authority has no where established that certificate dated 25.09.2003 issued by Shri B.K. Arora, Chartered Engineer is not an admissible piece of evidence - Further the Original Authority has relied on the actual production whereas the requirement of notification is installed capacity. Demand do not sustain - appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1199
  CENVAT Credit - various items of boiler structure, fabricated channels for economiser structure and sheeting, pipes and fittings for boiler structure, structure granting, foundation studs with nuts and washers etc., received in the factory of the appellant - C.B.E.C. Circular dated 02/04/2012 and 18th May, 2012. Held that:- The items like boiler structure, etc., have also been supplied after fabrication by M/s Walchand Industries Ltd., who have also supplied the boiler. Thus these items are not angles, channels, plates, joist etc., falling under Chapter 72/73 - These items being components and accessories of the boiler will qualify under Chapter 84 along with the boiler. All the items in question are components and accessories of capital goods which shall qualify as capital goods. Even otherwise if any item otherwise qualifies as an input under Rule 2(k) of Cenvat Credit Rules, the same is also available for Cenvat credit. Admittedly all the goods in question have been used by the manufacturer-appellant in their factory of production - the court below have erred in observing that these materials/goods/components/structures have been used in repair 41,18,310/- under dispute - appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1198
  CENVAT Credit - Cascade/storage tank/cylinders for ‘Compressed Natural Gas’ - denial on the ground that they have not been used in the factory premises of the appellant - Held that:- The manufacture of CNG is not possible without the use of the cascades in question which acts as the storage tank for the CNG upon its manufacture - these cascades are in the nature of storage tanks for the manufacture and sale of CNG - they qualify as capital goods under Rule 2(a)(A)(vii) of the CCR 2004 - appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1197
  Recovery of Interest - Wrong utilization of credit of AED (GSI) - Section 11AB of the Central Excise Act, 1944 - Held that:- On perusal of Rule 12 of the Cenvat Credit Rules, 2002 and Section 11AB of the Central Excise Act, 1944, it is found that Rule 12 provided for recovery of interest only along with recovery of Cenvat credit taken or utilized wrongly - further, Section 11AB of the Central Excise Act, 1944 is invocable only when Section 11A of the Central Excise Act, 1944 has been invoked. In the present case, the learned Original Authority has held that the credit was properly taken and correctly utilized and therefore, there was no confirmation of demand of duty either under Rule 12 of Cenvat Credit Rules, 2002 nor under Section 11A of the Central Excise Act, 1944 - in the absence of any confirmation of demand under Section 11A of the Central Excise Act, 1944 or under Rule 12 of the Cenvat Credit Rules the interest demanded does not sustain - appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1196
  Excisability/marketability - Cream mix - intermediate goods - cream was prepared to be used in making of cream biscuits - The Cream Biscuits were exempt from payment of duty - Whether the duty can be demanded on Cream, which is captively consumed? - Held that:- Tribunal in the case of Bhagwati Foods [2016 (9) TMI 678 - CESTAT ALLAHABAD] held inter-alia that there was no evidence to prove that sugar syrup in question in form in which it comes into existence in the appellants factory was marketable. In the present case also as contended by appellant, Revenue could not produce any evidence of similar goods being available in the market - The Hon’ble Supreme Court of India in the case of Union of India V/s Sonic Electochem Pvt. Ltd. [2002 (9) TMI 104 - SUPREME COURT OF INDIA] had laid down the test that the product which is specially manufactured and captively consumed in the factory should be shown to be available in the market so as to fasten any duty on the same. The goods which are called ‘cream mix’ by Revenue are not marketable and, therefore, not excisable - appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1195
  Clandestine Removal - stock verification based on estimation - photocopies of invoices - Whether the appellant is liable to pay duty for the variation of less than 10% found during the course of physical verification of stock? - Held that:- The stock taking have been done by way of estimation and/or eye estimation. Thus, there is bound to be error and/or variation in such method of stock taking - the variation in the stock is less than 10% which calls for no adverse inference - duty demand do not sustain. Photocopies of invoices - whether the appellant can be charged with duty with respect to photocopies of some invoices in possession of the Revenue, purportedly issued by the appellant? - Held that:- There is no whisper either in the Panchnama or in the statement recorded on the date of Panchnama, as to the source of possession of such photocopies of invoices - Only based on the duty deposited by the appellant in the course of investigation, it appears the Revenue have taken adverse view, as admission, on the part of the appellant with respect to the allegation of clandestine removal. Accordingly, the allegation of clandestine removal is not proved and the court below have erred in drawing adverse inference on the fact that the appellant have deposited the duty during the course of investigation - demand set aside. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1194
  Condonation of Delay of 57 days in filing Appeal - power of Commissioner (Appeals) to condone the delay - proviso to Section 35 of the Central Excise Act, 1944 - Held that:- In the facts of the present case, the issue is clubbing of the clearances of the appellant with the clearances of several other assistance being M/s Jai Hardware Pvt. Ltd., M/s Door Devices Manufacturing Co., M/s Deepak Hinges Pvt. Ltd., M/s Monika Steels Ltd., M/s D. D. Hardware Pvt. Ltd. & M/s D. P. Garg Exports Ltd. with the turnover of the appellant - We condone the delay in filing the appeal there being reasonable cause and further, we remand the matter back to the file of the Original Adjudicating Authority to decide the issue afresh - COD application allowed.

  ---

• 2018 (7) TMI 1193
  CENVAT Credit - capital goods - M.S. Steel Tube, M.S. Black Tube, H.R. Plate, M.S. Plate/Pipe, Hot Strip, Mill Plate and other similar items - Held that:- It is admitted fact that the appellants have used the items under dispute in fabrication of capital goods which have been further used in production of excisable goods - the appellant is entitled to Cenvat credit on the items under dispute - appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1192
  Clandestine removal - whether the appellant was tallying excess molasses without recording the same in their RG-1 register with intent to remove those clandestinely? - Held that:- Save and except the excess quantity of molasses, there is no allegation in the SCN - The appellant cannot discharge any quantity of molasses without specific permissions issued by the State Excise Authority, even for own consumption, the appellant is required to obtain requisite permit from the State Excise Authority - further, no clandestine clearance has been found under the facts and circumstances - demand do not sustain - appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1191
  Demand of duty - Intermediate products - Urea Formaldehyde Resin, Phenol Formaldehyde Resin and Melamine Formaldehyde Resin. Held that:- Reliance placed in the case of M/S GREENPLY INDUSTRIES LTD. (UNIT-I) , M/S RAMA PANELS PVT. LTD., M/S ARCHIDPLY INDUSTRIES LTD. VERSUS COMMISSIONER OF CUSTOMS & CENTRAL EXCISE, MEERUT [2018 (2) TMI 365 - CESTAT ALLAHABAD], where it was held that on the intermediate products emerges in manufacturing process of particle boards, the appellant is not required to pay duty. Demand do not sustain - appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1190
  Refund/abatement of duty - closure of factory - Pan Masala Packing Machines (Capacity Determination 3,63,000/- for the period 1st December, 2011 to 09th December, 2011 is bad and fit to be set aside. There is an apparent error on the face of the record in the order of the Commissioner (Appeals) dated 26/09/2012, in rejecting the refund claim for the period 1st December, 2011 to 09th December, 2011. Accordingly this appeal is allowed allowing the refund - decided in favor of appellant.

  ---

• 2018 (7) TMI 1189
  Clandestine Removal - unaccounted receipt of raw material and unaccounted clearance of final products - demand on the basis of third-party records and the statement of the third-party - Held that:- In spite of interrogation of the responsible persons of the appellant company, there is neither any admission on their part nor Revenue have brought any corroborative evidence in support of this allegation. It is established principle that suspicion howsoever strong cannot take place of evidence, particularly in the case of clandestine removal. Demand cannot be confirmed based on presumptions and assumptions as it is a serious charge required to be proved by Revenue by sufficient evidence. Mere statement of buyers based on their memories was insufficient without support of corroborative evidence. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1188
  Valuation - inclusion of discounts in assessable value - Whether the discount allowed by the appellants/manufacturer to its authorized dealers in respect of “Demo Cars” whether the same have been rightly disallowed by the Courts below and added back in the assessable value? - Held that:- There is no element of advertisement in the discount given by the appellant company in clearance of the Demo Cars - further, the SCN are against the concept of transaction value under Section 4 of the Act. The discount has been given by the appellant in terms of the business policy, which was widely known as “Trade Discount” and they had also made adequate disclosures to the Revenue. The Trade Discount under dispute was known to all, prior to removal of the goods, and the same have also been given at the time of clearance. Accordingly, the same is permissible under Section 4 of the Act. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (7) TMI 1187
  Abatement u/r 10 of Pan Masala Packaging Machines (Capacity Determination and Collection of Duty) Rules, 2008 - period of closure - Whether the period of closure of minimum of 15 days prescribed should be confined to any calendar month or it can spread over more than one month, and even if the number of days in case of continuous closure in a particular month is less than 15 days, whether the assessee shall be entitled to abatement? Held that:- The issue herein is squarely covered in favor of the assessee by the Ruling of Hon'ble Allahabad High Court in the case of Commissioner of Customs, Central Excise and Service Tax Vs Dharampal Satyapal Ltd. [2013 (9) TMI 775 - ALLAHABAD HIGH COURT], wherein under similar facts and circumstances the Hon'ble High Court has held that The period 15 days may fall within a month or more than one month, provided it is continuous and that the assessee complies with other conditions set out in Rule 10 of the Rules of 2008 - Assessee is entitled to the benefit of abatement - appeal dismissed - decided against Revenue.

  ---

• 2018 (7) TMI 1186
  Deposit of Tax as per Rule 8 (3A) of Central Excise Rules, 2002 - it so happened that one cheque was deposited in the correct running account of the assessee whereas the other cheque was inadvertently deposited in another account, which was in operation prior to the subsequent account - Revenue refused to receive the payment made in the earlier account, though the same was active and the duty deposited in the said account, in the name of the Exchequer was accepted by the Bank - Held that:- Revenue has not doubted the fact that the second account was also belonging to the same assessee and the money deposited in the second account has gone to the Exchequer. In such circumstances, Revenue’s objection cannot be appreciated - appeal dismissed - decided against Revenue.

  ---

• 2018 (7) TMI 1185
  CENVAT Credit - ‘legal services’ availed by the appellant for defence of suit filed against the Chief Executive of the appellant-company - denial on account of nexus - Held that:- It is very clear that the legal services were availed by the appellant and that legal services are permissible ‘input service’ for availment of CENVAT credit as per rule 2(l) of the CCR 2004 - Legal services availed in the present dispute was necessary for the continuation of the production facility of the appellant and hence the nexus with the manufacturing process is undeniable - Credit allowed - appeal allowed - decided in favor of appellant.

  ---

• CST, VAT & Sales Tax

• 2018 (7) TMI 1184
  Maintainability of petition - petitioner states that the matter has become infructuous and seeks permission to withdraw the petition - Held that:- Permission is granted - Special Leave Petition is dismissed as withdrawn.

  ---

• 2018 (7) TMI 1183
  Maintainability of petition - Held that:- The petition has become infructuous and thus same may be dismissed as withdrawn - petition dismissed as withdrawn.

  ---

• Indian Laws

• 2018 (7) TMI 1221
  Seeking of Information from CPIO - RTI application - Held that:- The Commission directs the CPIO/FAA to provide information on point A(iii) to the Appellant within a period of 15 days from the date of receipt of this order - It is appalling to note that the FAA had also not acted in accordance with the provisions of the RTI Act, 2005 and therefore is advised to be alert and cautious in the implementation of the RTI Act, 2005 with due diligence and care - appeal disposed off.

  ---