TMI Tax Updates - e-Newsletter
July 4, 2017

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise

Articles

1. Harassment and forcing taxpayers- even for copy of order sheets taxpayer has to approach High Court

   By: DEVKUMAR KOTHARI

2. GST COMES TRUE

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Markets cheer GST rollout; Sensex vaults 300 points

2. GST effect:Honda Cars cuts vehicle prices by up to ₹ 1.31 lakh

3. RBI Reference Rate for US $

4. GST Rollout in J&K in next few days: Piyush Goyal

5. 2nd Day after roll-out of GST passed without any major problems; Dhabas and big Restaurants as well as from Kirana shops to Departmental Stores have started getting acclimatized to the new tax system;.

6. The Revenue Secretary, Government of India, Dr. Hasmukh Adhia busts seven misconceptions about newly implemented law relating to Goods and Services Tax (GST)

7. GSTN unveils excel template for to help taxpayers perform easy data entry offline before uploading on the GST portal; Excel template together with an offline tool will make uploading large numbers of invoices much easier and quick; Offline Tool to be unveiled on July 17, 2017

8. Auction for Sale (Re-issue) of Government Stocks

Notifications

Central Excise

1. 19/2017 - dated 1-7-2017 - CE

Rescind Notification No.16/2010-Central Excise Dated 27th February 2010.

2. 18/2017 - dated 1-7-2017 - CE

Seeks to provide exemption to all goods mentioned in the seventh schedule to the finance act,2005 from whole of the additional duties of excise leviable thereon.

Customs

3. 61/2017 - dated 30-6-2017 - Cus

Amendment to Notification No. 40/2015-Custom dated 21.07.2015

4. 60/2017 - dated 30-6-2017 - Cus

Amendment to Notification No. 09/2012-Custom dated 09.03.2012

5. 59/2017 - dated 30-6-2017 - Cus

Amendment to Notification no. 52/2003-Custom dated 31.03.2003

6. 58/2017 - dated 30-6-2017 - Cus

Seeks to Amend Notification 24-2005-customs, dated the 1st March, 2005,

7. 57/2017 - dated 30-6-2017 - Cus

Rates of Basic Customs Duty (BCD) on certain electronic goods

8. 56/2017 - dated 30-6-2017 - Cus

Seeks to Increase Tariff rate of BCD on certain goods

9. 55/2017 - dated 30-6-2017 - Cus

Seeks to exempt Secondary and Higher Education cess on IGST and Compensation cess on import of goods

10. 54/2017 - dated 30-6-2017 - Cus

Seeks to Exempt Education Eess on IGST and Compensation cess on Import of Goods

11. 53/2017 - dated 30-6-2017 - Cus

seeks to levy SAD on the goods specified in the notification.

12. 52/2017 - dated 30-6-2017 - Cus

Seeks to prescribe effective rate of duty on goods specified in the notification

13. 51/2017 - dated 30-6-2017 - Cus

Exemption from additions duty

14. 49/2017 - dated 30-6-2017 - Cus

Seeks to exempt SAD on goods in Fourth schedule to central excise act

15. 48/2017 - dated 30-6-2017 - Cus

Exemption to re-import of goods exported under duty drawback, rebate of duty or under bond catering cabin equipment’s and food and drink on re-importation by the aircrafts of the Indian Airlines Corporation from foreign flights.

16. 47/2017 - dated 30-6-2017 - Cus

Exemption to re-import of goods in Fourth schedule of the Central Excise Acct, 1944 exported under duty drawback, rebate of duty or under bond

17. 46/2017 - dated 30-6-2017 - Cus

Exemption to re-import of goods exported under duty drawback, rebate of duty or under bond on or before the 30th June 2017

18. 45/2017 - dated 30-6-2017 - Cus

Exemption to re-import of goods exported under duty drawback, rebate of duty or under bond on or after the 1st July 2017

19. 44/ 2017 - dated 30-6-2017 - Cus

Amnendments in Various Notification

20. 43/2017 - dated 30-6-2017 - Cus

Seeks to amend Specified exemption notifications relating to re-import, bilateral/ multilateral agreements, imports by defence, security, sportsperson to

21. 42/2017 - dated 30-6-2017 - Cus

Seeks to amend notification Nos. 102/2007 dated the 14th September, 2007, 4/99 dated the 8th January 1999, 172/1994 dated the 30th September 1994

22. 41/2017 - dated 30-6-2017 - Cus

Exemption to Challenge cups, trophies and medals and prizes etc. won by Indian players

23. 40/2017 - dated 30-6-2017 - Cus

Exemption to imports from Bhutan and Nepal from Basic Customs Duty

24. 39/2017 - dated 30-6-2017 - Cus

Seeks to amend notification No. 3/57 – Customs dated 8th January 1957 so as to provide exemption to imports by Diplomats, trade Representatives

25. 38/2017 - dated 30-6-2017 - Cus

Exemption to re-import of engines and parts of aircraft

26. 37/2017 - dated 30-6-2017 - Cus

Exemption to imports relating to Defence and internal security forces

27. 36/2017 - dated 30-6-2017 - Cus

Exemption to imports by Vice-President

28. 35/2017 - dated 30-6-2017 - Cus

Exemption to Aviation Turbine Fuel in tanks of aircrafts by Indian Airlines, United Arab Airlines and Indian Air Force.

29. 34/2017 - dated 30-6-2017 - Cus

Exemption to Tags and labels, or printed bags of foreign origin imported for repairs and return

30. 33/2017 - dated 30-6-2017 - Cus

Exemption to re-import of challenge cup and trophies, won by Defence units

31. 32/2017 - dated 30-6-2017 - Cus

Exemption to works of Art and books, being antiques of an age exceeding one hundred years

32. 31/2017 - dated 30-6-2017 - Cus

Exemption to re-import of unclaimed postal articles

33. 30/2017 - dated 30-6-2017 - Cus

Exemption to motion pictures, music, gaming software

34. 29/2017 - dated 30-6-2017 - Cus

Exemption to Specimen, models, wall pictures and Diagrams for instructional purposes

35. 28/2017 - dated 30-6-2017 - Cus

Seeks to grant Rescinds the Notification No. 151/1982 - Customs, dated the 14th May 1982

36. 27/2017 - dated 30-6-2017 - Cus

Seeks to Rescind the Notification No. 171/1993 - Customs, dated the 16th September 1993

GST

37. 15/2017 - dated 1-7-2017 - CGST

The Central Goods and Services Tax (Third Amendment) Rules, 2017.

38. 14/2017 - dated 1-7-2017 - CGST

Assigning jurisdiction and power to officers of various directorates

39. F. No. 354/117/2017-TRU - dated 30-6-2017 - CGST Rate

Corrigendum – Notification No. 1/2017-Central Tax (Rate), dated the 28th June, 2017

40. F. No. 334/1/2017 –TRU - dated 1-7-2017 - GST CESS Rate

Corrigendum – Notification No. 2/2017-Compensation Cess (Rate), dated the 28th June, 2017

41. [F. No. 354/117/2017-TRU - dated 30-6-2017 - GST CESS Rate

Corrigendum – Notification No. 1/2017-Compesnation Cess (Rate), dated the 28th June, 2017

42. F. No. 354/117/2017-TRU - dated 30-6-2017 - IGST Rate

Corrigendum – Notification No. 4/2017-Integrated Tax (Rate), dated the 28th June, 2017

43. F. No. 354/117/2017-TRU - dated 30-6-2017 - IGST Rate

Corrigendum - Notification No. 1/2017-Integrated Tax (Rate), dated the 28th June, 2017

44. F. No. 334/1/2017 –TRU - dated 30-6-2017 - IGST Rate

Corrigendum – Notification No. 8/2017-Integrated Tax (Rate), dated the 28th June, 2017

45. F. No. 354/117/2017-TRU - dated 30-6-2017 - UTGST Rate

Corrigendum – Notification No. 1/2017-Union Territory Tax (Rate), dated the 28th June, 2017

46. F. No. 334/1/2017 –TRU - dated 30-6-2017 - UTGST Rate

CORRIGENDUM – Notification No. 11/2017-Union Territory Tax (Rate), dated the 28th June, 2017

Circulars / Instructions / Orders

DGFT

1. Trade Notice No 11/2018 - dated 30-6-2017

Important FTP provisions in the context of the implementation of the GST regime applicable w.e.f. 01.07.2017

Customs

2. 26/2017 - dated 1-7-2017

Export procedure and sealing of containerized cargo-regarding

Highlights / Catch Notes

Income Tax

• Taxpayer Cannot Challenge Jurisdiction in Appeal Due to Lack of Initial Objection to Income Tax Officer.

  Case-Laws - AT : Jurisdiction assumed by the ITO - There was no valid objection filed by the assessee before the Assessing Officer and in the absence of the same, the assessee cannot now challenge the jurisdiction in appellate proceedings
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• Business Expenditure Claim Denied: Agents Lacked Product Knowledge and Connections, Commission Unjustified, Ruling Against Assessee.

  Case-Laws - AT : Disallowance of commission as business expenditure - the agents had no knowledge of the product sold, had no links with the purchasers, had claimed receipt of commission only for introducing the buyers and the fact that most of the buyers were known to the assessee and did not require any introduction, seals the matter against the assessee.
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• Cash Loan Repayment Penalty u/s 271E: Liberal Interpretation of "Reasonable Cause" in Section 273B Urged to Avoid Penalties.

  Case-Laws - AT : Penalty order passed u/s 271E - reasonable cause - cash loan from her husband and mother-in-law which has been repaid in cash - the expression “reasonable cause” in section 273B for non imposition of penalty u/s.271D and 271E would have to be construed liberally.
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Case Laws:

• Income Tax

• 2017 (7) TMI 72
  Reopening of assessment - cancellation of registration u/s 12A - as per the assessee registration for the impugned year was not cancelled and thus the reasons recorded to reopen assessee’s case for the impugned year were incorrect - Held that:- Admittedly, the reasons for reopening was the order cancelling registration granted to the assessee, dated 25.2.2013. A perusal of the same reveals that the Ld. Commissioner of Income Tax has cancelled registration which was granted vide order dated 9.3.1992. The arguments of the Ld. counsel for the assessee that the cancellation of registration could have been effective only from assessment year 2011-12 and thus cannot form the basis the basis for reopening of assessment of the impugned year i.e. assessment year 2009-10, we find, are relevant for challenging the order passed u/s 12AA(3) and not for challenging the jurisdiction assumed by the AO for reopening the case of the assessee. Even otherwise we do not find any merit in the contention of the assessee. We reject the contention of the Ld. counsel for the assessee that the cancellation of registration did not affect the assessment year prior to 2011-12. In view of the above, we hold that the reason recorded by the Assessing Officer of reopening of assessment on the basis of cancellation of registration by the Commissioner of Income Tax was in order. - Decided against assessee Claim of exemption under sections 11 and 12 - Held that:- We have already dealt with this issue in ground No.2 raised by the assessee wherein we have held that the cancellation can be of period prior to 2011-12 also as held by the Hon'ble Bombay High Court in the case of Sinhagad Technical Education Society (2012 (3) TMI 262 - BOMBAY HIGH COURT ). Even otherwise, the learned Commissioner of Income Tax vide his order dated 25.2.2013 has cancelled the registration granted to the assessee society w.e.f. 1992. In the absence of registration the assessee had, therefore, no basis for claiming exemption under sections 11 and 12 of the Act at all as rightly held by the Commissioner of Income Tax. - Decided against assessee Disallowance of expenses incurred on account of repair and maintenance - revenue v/s capital - Held that:- We consider it fit to restore the issue back to the file of the Assessing Officer to verify the nature of expenses incurred and thereafter pass a speaking order in accordance with law. We may add that the assessee be granted due opportunity of hearing in this regard and is free to adduce all evidences on which he wishes to place reliance. - Decided in favour of assessee for statistical purposes.

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• 2017 (7) TMI 71
  Jurisdiction assumed by the ITO, Solan - appellant firm was regularly being assessed at New Delhi till last year - Held that:- The letters do not mention as to how the ITO, Delhi has jurisdiction over the assessee and not the ITO, Solan. The letters are, therefore, mere information being imparted to the AO and cannot be termed as objection. The Assessing Officer, we find had also clarified to the assessee as to how the jurisdiction lies with him which argument was not countered or controverted by the assessee before the Assessing Officer. There was no valid objection filed by the assessee before the Assessing Officer and in the absence of the same, the assessee cannot now challenge the jurisdiction in appellate proceedings,in view of the clear provisions of section 124 (3)which prescribed objection to be filed within the stipulated time of 30 days of receipt of notice. Territorial jurisdiction lies with the ITO, Solan only and no question, therefore, arises whether he had jurisdiction to assess the assessee and, therefore, also the provisions of section 124(2) and (3) or sub-section (4),which prescribe the procedure for dealing with “question” relating to jurisdiction of AO’s, do not become applicable at all since they are applicable only when a “question” relating to jurisdiction arises. No merit in the argument of the assessee that the issue related to transfer of jurisdiction and hence required order to be passed by the requisite authority as per the provisions of section 127 of the Act. As stated above, in the present case the jurisdiction has been established categorically as lying with the ITO,Solan and the issue is definitely not of transfer of case from Delhi to Solan,since that could be the case only if the ITO at Delhi had valid jurisdiction which for some reason was being transferred to ITO,Solan. That being not the case, the provisions of section 127 we find do not apply in the present case - Decided against assessee. Addition on account of estimation of net profit - Held that:- If the assessee had some material or some basis to dislodge this belief or this rate adopted by the Assessing Officer, it could have produced the same atleast before us, which has not been done. The assessee cannot adopt the attitude of non-cooperation all along when the onus lies on the assessee to prove that the profit returned by it is correct. The assessee cannot shift the onus on the Revenue after not cooperating throughout the proceedings and then stating that there has to be some basis with the Assessing Officer to adopt a net profit rate. It is a highly unreasonable and illogical argument given by the assessee which cannot be accepted and the addition made on account of net profit rate amounting to 44,97,725/- is, therefore, upheld.- Decided against assessee. Addition made on account of introduction of capital of the partners - AO treated the difference between the opening and closing balance of capital account as unexplained and made addition of the same to the income of the assessee firm - Held that:- During appellate proceedings the assessee furnished copy of Income Tax return of one of the partners,Sh, Vikas Bhalla and a copy of his Bank account showing two entries transferring 68 lacs and 1,90,000/- to the assessee firm.Since the capital introduced is adequately explained by the aforestated documents as having been introduced by one of the partners himself from his bank account, we see no reason for making any addition on account of unexplained credit in the hands of the assessee. Therefore we delete the addition made - Decided against revenue.

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• 2017 (7) TMI 70
  Disallowance of interest under section 36(1)(iii) - Held that:- The assessee got over draft limit from Axis Bank, Ludhiana for business purposes by mortgaging the property of partner of M/s B.S.W. Tools Corporation Ltd., a sister concern. If the over-draft facility would not have been available to the assessee, assessee would not have done the business to the extent as explained before the authorities below. The sister concerns have also earned profit by using the impugned funds and paid the taxes thereon. The ld. counsel for the assessee was, therefore, justified in arguing that where there is a revenue neutral, no adverse inference should be drawn. The assessee is, therefore, able to explain that interest free loans have been advanced to sister concern for business expediency. The assessee also pleaded before authorities below that Assessing Officer has not proved any nexus that interest free advances were made out of borrowed funds. Disallowance of interest under section 36(1)(iii) of the Act is not justified. - Decided in favour of assessee Addition u/s 40A(2)(b) - Held that:- The assessee filed chart of interest paid to the same persons on unsecured loans to show that in preceding two assessment years, the rate of interest paid to them was at 8%. The ld. CIT(Appeals) confirmed the addition because assessee paid interest to the banks ranging between 12 to 15%. It is not denying fact that while obtaining loans from the bank, the parties shall have to go through various legal formalities and shall have to give securities to the satisfaction of the bank but in the case of unsecured loan, no such formality and guarantee/security shall have to be given. AO has also not make out a case of unreasonable payment of interest, as regards the facilities available to the assessee. Therefore, considering history of the assessee that assessee paid interest @ 18% to the same parties in preceding assessment years, we not find it to be unreasonable or excessive interest paid. Thus we delete the addition. - Decided in favour of assessee

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• 2017 (7) TMI 69
  Disallowance of commission as business expenditure - proof of actual work - Held that:- No work was done by the agents for the assessee warranting payment of commission. This fact has not been controverted by the assessee before us. No evidence whatsoever has been produced before us contradicting this finding of the CIT(A). The only evidences on which the Ld. AR places reliance upon is the Income Tax Returns of the agents which do not establish that they had done any work for the assessee. Further the statement of the three agents admitting in so many words that the commission paid was merely an accommodation entry, explaining the manner of execution also coupled with the above facts as found by the AO that no evidence of services rendered by the agents was filed by the assessee, the agents had no knowledge of the product sold, had no links with the purchasers, had claimed receipt of commission only for introducing the buyers and the fact that most of the buyers were known to the assessee and did not require any introduction, seals the matter against the assessee. Thus we uphold the order of the CIT(A) confirming the disallowance of commission expenses - Decided against assessee.

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• 2017 (7) TMI 68
  Penalty order passed u/s 271E - “reasonable cause” - Held that:- The assessee had taken cash loan from her husband and mother-in-law which has been repaid in cash and there is no repeated transactions and the assessee has explained the reasonable cause for accepting such loans and repayment thereof in cash, therefore, in our opinion, the expression “reasonable cause” in section 273B for non imposition of penalty u/s.271D and 271E would have to be construed liberally. Accordingly we hold that penalty u/s.271D and 271E are not imposable in the facts of the present case. See case of M/s Deepali Mandar Joshi [2016 (9) TMI 262 - ITAT PUNE] - Decided in favour of assessee.

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• 2017 (7) TMI 67
  Estimation of earnings by the assessee - net average profit computation - number of vehicles processed by the assessee for the purpose of obtaining loan - AO computed the income by applying the average profit per Rikshaw - Held that:- Assessing Officer computed the income by applying the average profit per Rikshaw as net commission and no further expenses were allowed in the hands of assessee. However, the CIT(A) allowed the deduction on account of First Category of expenses and no deduction was allowed on account of Second Category of expenses. The estimation of earnings by the assessee is based on the material found from the possession of assessee in assessment year 2003-04 for some of the vehicles and in view of the evidence found during the course of search, the estimation worked out by the Assessing Officer merits to be applied. However, to meet the ends of justice and keeping in mind the fact that on the basis of documents seized, the estimation for assessment year 2006-07 at 8,888/- is lower than the estimation for assessment year 2005-06 at 9,571/- which is not possible. Keeping in mind the principles of natural justice, we direct the Assessing Officer to adopt the average profit per Rikshaw in the hands of assessee in assessment years 2001-02 to 2003-04 @ 6000/-, for assessment years 2004- 05 and 2005-06, the same may be adopted @ 6,500/- and for assessment years 2006-07 to 2008-09 @ 7,000/- per vehicle.

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• 2017 (7) TMI 66
  Addition u/s 68 - assessee has not complied with the direction given by him to prove the net credit balance as on 31st March, 2005 - Held that:- It is the submission of the Ld. Counsel for the assessee that the assessee has not received any amount from Shri Prakash Basrani as secured or unsecured loan and infact the assessee has paid the amount to Shri Prakash Basrani and therefore proof of the capacity of the said person does not arise. It is also his alternative submission that the matter be restored to the file of the Assessing Officer with a direction to give one more opportunity to the assessee to produce the said person before the AO to substantiate her case. We find merit in the alternate argument of the Ld. Counsel for the assessee. We deem it fit and proper to restore the issue back to the file of the Assessing Officer with a direction to give one more opportunity to the assessee to substantiate her case and produce Shri Prakash Basrani before the Assessing Officer for his examination. The Assessing Officer shall decide the issue as per law and fact after giving due opportunity of being heard to the assessee.

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• 2017 (7) TMI 65
  Disallowance of amount of addition made u/s 43B in Assessment year 2008-09 in respect of provision for ex-gratia - Held that:- Since, the impugned amount was allowed to the assessee in Assessment year 2008-09, therefore, in the present Assessment year, it has to be disallowed. Ex-gratia payment do not fall within the ambit of section 36(1)(ii) of the Act. Since, the same addition was deleted in Assessment year 2008-09, and no appeal was filed by the Department, being the same amount, it has to be disallowed in the present Assessment year, thus, this ground is decided against the assessee.

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• Customs

• 2017 (7) TMI 47
  Jurisdiction - power of Directorate of Revenue Intelligence (DRI) to issue SCN - Held that: - similar issue has come up before this Tribunal on many earlier occasions also. The Tribunal remanded the cases to the original adjudicating authority - appeal allowed by way of remand.

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• 2017 (7) TMI 46
  Jurisdiction of Directorate of Revenue Intelligence (DRI) - power to issue SCN - Held that: - sub-section 11 was inserted under section 28 of the Customs (Amendment and Validation) Act, 2011 dated 16.09.2011, assigning the functions of proper officers to various DRI officers with retrospective effect - Later on, i.e. for the period subsequent to the amendment, the matter i.e. the DRI officers having the proper jurisdiction to issue the SCN or not had come up before the Hon’ble Delhi High Court in the case of Mangali Impex vs. Union of India [2016 (5) TMI 225 - DELHI HIGH COURT], and the High Court inter alia, held that even the new inserted section 28(11) does not empower either the officers of DRI or the DGCEI to issue the SCN for the period prior to 8.4.11. Matter remanded to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Hon’ble Supreme Court decision in the case of Mangli Impex and then on merits of the case but by providing an opportunity to the assessee of being heard - appeal allowed by way of remand.

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• 2017 (7) TMI 45
  Illegal import - smuggling of gold - confiscation - packing material - baggage rules - Held that: - the issue herein is no longer res integra. This Tribunal under similar facts and circumstances in the case of CC, Lucknow Vs. Mohd. Nayab and another [2017 (1) TMI 3 - CESTAT ALLAHABAD], where it was held that there is no reason to interfere with the order of the learned Commissioner (Appeals) who have upheld the order of confiscation with redemption fine, redeemable on deposit of duty and fine. Further, the penalty imposed on the respondents, is adequate. There is no case of smuggling of the Gold is made out and at best it may be the case of non-declaration at best, against the respondent - confiscation with redemption fine upheld - penalties u/s 112 and 114 AA have been upheld. Appeal dismissed - decided against Revenue.

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• 2017 (7) TMI 44
  Penalty u/s 114 of the CA, 1962 - jurisdiction - whether the officers of SIIB are not empowered or assigned the function of a ‘proper officer’ under Section 2 (34) of Customs Act 1962 at the time of issue of show cause notice? - mis-declaration of export goods - Held that: - the matter is covered by the Tribunal’s decision in the case of Rahul Arora V/s CCE, Delhi [2017 (5) TMI 1436 - CESTAT NEW DELHI], where it was held that new inserted Section 28(11) does not empower either the officers of DRI or the DGCEI to adjudicate the SCN issued by them for the period prior to 08/04/2011 - the matter is remanded to the original adjudicating authority to first decide the issue of jurisdiction - appeal allowed by way of remand.

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• 2017 (7) TMI 43
  Jurisdiction of Directorate of Revenue Intelligence (DRI) - power to issue SCN - Held that: - sub-section 11 was inserted under section 28 of the Customs (Amendment and Validation) Act, 2011 dated 16.09.2011, assigning the functions of proper officers to various DRI officers with retrospective effect - Later on, i.e. for the period subsequent to the amendment, the matter i.e. the DRI officers having the proper jurisdiction to issue the SCN or not had come up before the Hon’ble Delhi High Court in the case of Mangali Impex vs. Union of India [2016 (5) TMI 225 - DELHI HIGH COURT], and the High Court inter alia, held that even the new inserted section 28(11) does not empower either the officers of DRI or the DGCEI to issue the SCN for the period prior to 8.4.11. Matter remanded to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Hon’ble Supreme Court decision in the case of Mangli Impex and then on merits of the case but by providing an opportunity to the assessee of being heard - appeal allowed by way of remand.

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• Corporate Laws

• 2017 (7) TMI 41
  Petition under Insolvency & Bankruptcy Code - non-payment of monthly interest, pending since long, admitted factual position is that the Corporate Debtor had committed “Default” - Held that:- In the wisdom of Hon'ble Legislatures a new Act/Code is therefore needed to safeguard the interest of all the creditors, thus resulted into enactment of Insolvency & Bankruptcy Code 2016. As a result it can be safely concluded that the provisions of I & B Code 2016 are not in conflict with the provisions of SARFAESI Act. Certain conditions precedent for 'Admission' of a petition under I&B Code, prima facie, have been presently completed, like the 'Default' of non-payment is established. Rather the Corporate Debtor being present in the court has not objected for the impugned default in making the payment of the outstanding dues as claimed by the Petitioner. When the Adjudicating Authority is satisfied that a default has occurred and the application is complete and the proposed Insolvency Resolution Professional is a qualified person, then by an order under sub-section (5) of Section 7 can admit a petition. Resultantly, the petition is hereby declared as Admitted. In the present case the consequence is that once the “Moratorium” is set in motion then the rights of the Petitioner shall get protected. As a consequence, the assets of the Corporate Financial Debtor must not be liquidated until the Corporate Insolvency Resolution Process is completed. The process of Moratorium shall be effective from today i.e. 29th May,2017 till the completion of the Corporate Insolvency Resolution Process or by any other order of this bench, if deem fit.

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• Insolvency & Bankruptcy

• 2017 (7) TMI 42
  Arbitration proceedings - Held that:- Any and all disputes arising from or related to the Agreement will be settled amicably and promptly upon consultation between the parties, If the parties do not succeed in reaching such amicable resolution, then all such disputes shall be settled by arbitration without submission to ordinary courts of law. The board will also decide upon the charging of the parties with the costs resulting from the dispute. In case of arbitration, all disputes arising in connection with the present Agreement including the question of its validity shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce in Paris by three arbitrators appointed in accordance with the said Rules. The arbitrators shall base their decisions on the provisions of this Agreement. The arbitration shall be conducted in Zurich/Switzerland. This Agreement shall be subject to Swiss law. The arbitration award shall be final and binding upon the parties hereto. The award shall also indicate, how to distribute arbitrator's fee and arbitration expenses between the parties. Disputes leading to arbitration shall not entitle any Party to suspend or retain any supplies and services. This is no reason to accept the contention that the respondent has not raised the dispute, as is evident from the contents of the reply to the notice. There being a notice of dispute raised by the petitioner and also on account of the defect, as discussed above, the instant petition is rejected

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• Service Tax

• 2017 (7) TMI 64
  Abatement - rent-a-cab service - Held that: - When the scheme of taxation is looked into, the taxing entry seeks to levy service tax on the service provider in relation to renting of a cab - It is an admitted fact on record that assessee rented its vehicle to the users thereof for transportation of their employees from one place to another as stated by the ld. Adjudicating authority in para 13 & 14 of the order. There was a consideration followed for such renting of motor vehicle by the appellant. The vehicles rented were under control and possession of the users thereof for their exclusive use under a contract. Whether driver was provided to the user by the license holder of the vehicle is immaterial. No other user other than the recipient of service was allowed to use the vehicle so rented during tenure of the contract. Incidence of the levy having arisen in the present case in relation to renting of motor vehicle services provided by the assessee, levy of service tax is confirmed. However, quantum of levy may undergo amendment subject to consideration of abetment if permissible which is left to the ld. Adjudicating authority for examination in the light of the law, considering the argument of the assessee and also subject to production of evidence if any. Time limitation - Held that: - the appellant has collected the taxes but not having paid the same to the treasury, it loses all its right to further argue when its conduct of evasion was patent - However, considering that there was a confusion between the assessee and Revenue due to varied judgment of different High Courts, the levy of penalty is considerable under the section 80 of the Finance Act 1944. Appeal allowed by way of remand.

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• 2017 (7) TMI 63
  Refund claim - GTA services - reverse charge mechanism - extended period of limitation - Held that: - since the goods were exported by the appellant and the disputed service was utilized for exportation of the goods. Thus, the present case is entirely revenue neutral. Therefore, demand, if any, should be confined to the normal period provided under Section 73 ibid. Since the show cause proceedings were initiated beyond the normal period, I am of the considered view that the same is clearly barred by limitation of time - appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 62
  Export of service - 100% EOU - Penalty - Held that: - the appellant is not a subcontractor, but a co-venture along with JBL in executing the research and development assignments for clients like Eli Lilly and Company Ltd, USA situated outside India. We are further satisfied that the appellant have exported their services under the agreements, and also received payments in convertible foreign exchange through the EEFC account operated by JBL, as the lead venture - We also take notice of the certificate of chartered accountants, annexed in the paper book, which was also before the court below, which certifies that during the period in question, the affairs of the appellant have been verified and examined the payments made by Jubilant Biosys Limited to Jubilant Chemsys Ltd for its share of activities under the work orders received from the parties located outside India - the appellant have satisfied both the conditions for export of service, namely rendering of service from India and receipt of the service by the client outside India of consideration in convertible foreign currency in India - Decided in favor of the assessee.

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• 2017 (7) TMI 61
  Refund claim - N/N. 41/2007-ST dated 06.10.2007 - THC charges - bill of lading charges - origin haulage charges - repo charges etc. - denial on the ground that the services are not port services - Held that: - the services in relation to THC charges, bill of lading charges, origin haulage charges, repo charges etc., were used/utilized by the appellant within the port for exportation of the goods. Since the services were used by the appellant within the port, irrespective of the classification of those services, the refund benefit should be available in terms of Notification dated 06.10.2007 - refund allowed. Refund claim - denial also on the ground that debit note is not the proper document, in terms of Rule 4 A and 4 B of the Service Tax Rules, 1994 - Held that: - sample copy of debit note contains the reference of the container, shipping bill No., description of service value, and the service tax, registration No. of the service provider etc. Since the said information are corelatable with the export documents, I am of the view that refund benefit cannot be denied for the reason that the debit note is not the prescribed document under the Service Tax Statute - the matter should go back to the Original Authority for verification of the documents, to be submitted by the appellant - matter on remand. Appeal allowed - decided partly in favor of appellant and part matter on remand.

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• Central Excise

• 2017 (7) TMI 60
  CENVAT credit - Water Treatment Expenses - duty paying invoices - Rule 9 of CCR - Held that: - the impugned order denying the cenvat credit on Company Secretary Service, Water Treatment Service and Xerox Machine Service is not sustainable in law in view of the decisions cited by the appellant in the case of M/s Arm Embedded Technologies Pvt Ltd Versus Commissioner of Central Excise, Customs and Service Tax [2016 (7) TMI 1207 - CESTAT BANGALORE], where it was held that the impugned services are eligible input services - appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 59
  SSI exemption - use of brand name of others - Held that: - Clause 6 of this agreement deals with Trade Mark and Logo. It states that J.V. Company will be entitled to use the Trade Mark and Logo of the Germany Company. We do not find any provision of assignment of the said Trade Mark to the assessee-Appellants. As such, we find no merit in the submissions made by the assessee-Appellants regarding their eligibility for SSI exemption - appeal dismissed - decided against appellant.

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• 2017 (7) TMI 58
  Input service credit - insurance of vehicle i.e. cars - construction service for making labour colony quarters - Revenue is of the view that the car is being used by the Director of the appellant's company and residential quarters have been constructed for the welfare of the labours/workers, therefore, the same do not qualify as input service as per Rule 2(l) of the CCR, 2004 - Held that: - as the factory of the appellant is located in the remote area and the appellant has provided the residential facility to their workers who are working in their factory, in that circumstances, the appellant is entitled to avail cenvat credit on construction services for residential colony. Insurance of vehicle i.e. cars - Held that: - the car has been owned by the appellant and being used in their factory, in that circumstance, relying on the decision of this Tribunal in the case of Technical Associates ltd. [2015 (12) TMI 544 - CESTAT NEW DELHI], the appellant is entitled to avail cenvat credit on insurance charges for car. Appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 57
  CENVAT credit - tour operator service - denial on account of nexus - Rule 15(3) of CCR, 2004 - Held that: - the appellants have lawfully availed credit on input service of tour operator service for transportation of employees from and to the factory as well as for company official to visit the suppliers premises - reliance was placed in the case of THE COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, MANGALORE Versus M/s MANGALORE REFINERY AND PETROCHEMICALS LTD. [2016 (1) TMI 481 - KARNATAKA HIGH COURT] - credit allowed - appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 56
  CENVAT credit - job-work - whether the appellants were eligible to avail CENVAT credit on inputs and input services used in the manufacture of job work goods and use the said credit for clearance of goods manufactured at a later stage? - Held that: - MODVAT credit of duty paid on inputs used in the manufacture of final products cleared without payment of duty for further utilization in the manufacture of final products which are cleared on payment of duty by the principle manufacturer would not be hit by provisions of Rule 57C - reliance was placed in teh case of STERLITE INDUSTRIES (I) LTD. Versus COMMISSIONER OF CENTRAL EXCISE, PUNE [2004 (12) TMI 108 - CESTAT, MUMBAI] - appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 55
  Manufacture - appellants received flats and angles of iron and steel supplied by M/s ABB Ltd. After cutting to size the said flats and angles and drilling holes therein, the said products were joined by using nuts, bolts and washers before returning the same to the principal namely M/s ABB Ltd. - whether the said process amounts to manufacture or not? - Held that: - The products, in question, as cleared by the appellants are specifically identifiable and classifiable under a tariff heading under Chapter 73. The raw materials are of general nature falling under Chapter 72. As such, we have no reason to interfere with the findings of the lower authorities, that the process amounts to manufacture - demand upheld. Extended period of limitation - Held that: - when the raw materials are supplied by principal/buyer they have not paid Central Excise duty for claimed to have paid service tax. In such situation, the appellants had knowledge and applied different reasoning to follow different tax liabilities for the same processes - extended period rightly invoked. Appeal dismissed - decided against appellant.

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• 2017 (7) TMI 54
  100% EOU - manufacture - combed cotton /sliver falling under heading 52.03 of the Central Excise Tariff - Department was of the view that the appellant is required to pay duty on such goods in terms of S.No.4 of N/N. 23/2003 dated 31.3.2003. The appellant resisted the move by arguing that goods cleared in DTA will be liable to payment of Customs duty only when they are subjected to process of manufacture within the meaning of “manufacture” as defined under section 2(f) of the Central Excise Act, 1944 - whetehr the combed cotton/sliver derived from cotton fabric amounts to manufacture - Held that: - The Board’s letter has clarified that EOU scheme covers even those activities which may not be strictly considered as manufacture under section 2(f) of the Central Excise Act. Hence, it has been further clarified that exemption under notification No.1/95-CE will also be applicable to a 100% EOU. In the present case, the process of making cotton sliver from fibre, may not amount to manufacture as per section 2(f). But the appellant has been permitted to produce the same and export. As per the 100% EOU scheme, if such goods are cleared into DTA, Customs duty will be payable with benefit of N/N. 23/2003. Appeal dismissed - decided against appellant.

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• 2017 (7) TMI 53
  Confiscation - penalty - goods were not entered in the specified Register RG-1 - Held that: - the involvement of the appellant in contravention of the provisions of law of Central Excise has been found - looking to the facts that the goods were lying in the factory premises only for which RG-1 register was not produced, the penalty is reduced to Rs. one lakh only. Seizure of goods - the invoices were produced on 30th June 2010, i.e. after two days of seizure, but those invoices were not examined by the Revenue - Held that: - those invoices were not examined by the Revenue, neither at the level of original adjudicating authority nor at the appellate stage. Therefore, the impugned order in the case of appellant M/s Aarkaylite Electricals is hereby set aside and the matter is remanded to the original adjudicating authority, who shall examine the invoices/documents produced by the appellant and after giving opportunity of personal hearing - appeal allowed by way of remand. Penalty on Shri R.K. Gupta, who is working only as a part time Clerk cum Accountant at a remuneration of 1000 per month with M/s Prakash Switchgear - The department’s stand is that Shri R.K. Gupta has dealt with excise records and abetted the assessee appellant, M/s Prakash Switchgear in suppression of facts with intent to evade payment of duty of Central Excise - Held that: - the fact that Shri R.K. Gupta had taken RG-1 register, itself shows that he is equally responsible for contravention of Central Excise law. From the records and submissions of both the sides, there is no dispute that he is a part time employee, who is working on a small remuneration of 1000/- a month; therefore, taking a lenient view, the penalty imposed on him of 1 lakhs is reduced to 1000/- only. Appeal allowed - decided partly in favor of appellant and part matter on remand.

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• 2017 (7) TMI 52
  CENVAT credit - dumpers and locomotive - manufacturer of Cement - Held that: - reliance was placed in the case of COLLECTOR OF CENTRAL EXCISE Versus RAJASTHAN STATE CHEMICAL WORKS [1991 (9) TMI 73 - SUPREME COURT OF INDIA], where it was held that dumpers tippers which are used within the factory will be entitled to Cenvat credit as capital goods - credit allowed. CENVAT credit - locomotives - Held that: - reliance placed in the case of Commissioner of Central Excise, Customs & Service Tax, BBSR-I Versus M/s. Bhusan Steel Ltd. [2012 (10) TMI 306 - CESTAT, KOLKATA], where it was held that diesel locomotive used to carry molten metals in torpedo ladle car in the process of manufacturing of iron and steel products in the integrated steel plant, having railway siding within the factory premises and laid down lines within the factory connecting one plant to another plant for movement of raw material, semi-finished and finished goods, Cenvat credit of duty paid on the diesel locomotive is admissible in terms of Rule 3 of Cenvat Credit Rules, 2004 - credit allowed. Appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 51
  Time limitation - power of Commissioner (appeals) to condone delay - Held that: - The time taken from the date of receipt of the communication from Superintendent to the date of filing writ before the High Court is 19 days. Thereafter, the matter was subjudice and finally was decided by Hon’ble Rajasthan High Court on 13th May 2009 when the writ petition was dismissed on the ground of alternative remedy, relegating the appellant to the process of appeal. Thereafter from such date, the appellant filed appeal before the Commissioner (Appeals) on 24/07/2009, which on computation comes to 71 days. Thus, the appellant have taken the total of 71+19, or 90 days in filing the appeal before the learned Commissioner (Appeals). During the relevant period, that is the year 1983 as the law stood then, the time allowed for filing appeal was 90 days and further 90 days condonation period was provided, which could be condoned by learned Commissioner (Appeals) on reasonable cause being shown. In this view of the matter, we hold that the learned Commissioner (Appeals) have erred in dismissing the appeal on the ground of limitation and we hold that the appeal was filed within the period of limitation. We find it fit and proper that the issue on merit regarding correct classification of the impugned product should be examined and decided afresh by the Jurisdictional Original Authority to whom we are remanding the matter. It is made clear that the appellants should be given adequate opportunity to submit their side of the case alongwith whatever supporting evidence they want to place - appeal allowed by way of remand.

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• 2017 (7) TMI 50
  Classification of goods - Absorbent Cotton Wool, Carded Cotton/Non-Absorbent Cotton, Handloom Gauze, Handloom Bandages & Bandages etc. - The appellant claimed the classification of the said items under Chapter Sub-heading No.5601, 5203 & Chapter 58 whereas Revenue ordered for classification of aforesaid goods under so-called Chapter 3005 - Held that: - Id. Commissioner (Appeals) has gone into the details of the case and held that the impugned goods would fall under Chapter Sub-heading No.5601, 5203 & Chapter 58 - appeal allowed - decided in favor of assessee.

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• 2017 (7) TMI 49
  Classification of goods - whether the goods described viz. Switches, relays, fuses, plugs, lamps in para 14 of the adjudication order belong to the Tariff heading 87.08 or 85.36/85.39 or any other entry for levy of duty under Third Schedule to the Central Excise Act, 1944? - Held that: - In the absence of detailed examination in the manner above, in the adjudication order, it is very difficult on the part of the Tribunal to go into the grass root for classification. Description of goods in tariff entry may depend on the technical literature as well as various technicalities of the goods, which learned adjudicating authority shall have advantage to examine better - to grant fair opportunity of hearing to both sides to place their case before adjudicating authority for his determination of classification and decide leviability, matters are remanded to the Ld. Authority who shall grant hearing and test each goods covered by the show-cause notice for appropriate classification and levy of excise duty, if any leviable - appeal allowed by way of remand.

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• 2017 (7) TMI 48
  100% EOU - refund claim - rejection on the ground of time limitation - Rule 5 of CCR - Held that: - the relevant date for the purpose of time limit would start from the date on which final products are cleared for export - the matter needs to be remanded back to the original authority to decide the matter keeping in view the law laid down in GTN Engineering Ltd. [2011 (8) TMI 960 - MADRAS HIGH COURT], where it was held that the relevant date should be the date on which the export of the goods was made and for such goods - matter on remand. Refund claim - input services - denial on account of nexus - advertisement services - membership charges - travel agent services - housekeeping service - CA service - ESI clarification - Held that: - the input service fall in the definition of input services and the appellants are entitled for refund of the same. Appeal allowed in part and part matter on remand.

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