TMI Tax Updates - e-Newsletter
July 6, 2017

Case Laws in this Newsletter:

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

TMI Short Notes

1. Classification (HSN Code) for "Johnson's Prickly Heat Powder and Phipps Processed Talc are patent or proprietary medicines"-Interpretation of Tariff ( 30.03 or 33.04)

  Central Excise:

2. Classification (HSN Code) for a product uses for "Therapeutic or Prophylactics"-Interpretation of Tarrif ( 3003.10 or 38.08)

  Central Excise:

3. Classification (HSN Code) for "Dimethicone"-Interpretation of Tariff (3003.20 or 3910.00)

  Central Excise:

4. Classification (HSN Code) for "Sloans Balm" and "Sloans Rub"-Interpretation of Tariff (3003.30 or 3003.10)

  Central Excise:

5. Classification (HSN Code) for "Himtaj Oil"-Interpretation of Tariff (3303.30 or 3305.10)

  Central Excise:

6. Classification (HSN Code) for "Lip Salve"-Interpretation of Tariff (33.03 or 33.04)

  Central Excise:

7. Classification (HSN Code) for Fragrant Mat-Interpretation of Tariff (3307.41 or 3307.49)

  Central Excise:

8. Classification (HSN Code) for conveyor Belt-Interpretation of Tarrif (3922.90 and 3926.90)

  Central Excise:

Articles

1. GST on Rice and other cereals

   By: V ALAGAPPAN

2. SERVICE TAX IS NOW A HISTORY

   By: Dr. Sanjiv Agarwal

3. Red-carpet entry of GST from July 1, 2017 and gist of the various GST Notifications

   By: Bimal jain

News

1. GST to benefit our economy: Meghwal to traders

2. GST: Govt increases consumer helplines to 60

3. Meaning of registered brand name in the context of GST rates; CGST rate of 5% will not be applicable on the supply of goods unless the brand name or trade name is actually on the Register of Trade Marks and is in force under the Trade Marks Act, 1999.

4. GST, re-monetisation among major initiatives of Government: Dr Jitendra Singh

5. GST-KI-Master Class to be held on six days covering issues relating to Registration & Migration Transition & Invoice Making, Composition and Record Keeping; To be telecast Live on DD National and other Channels

6. 10th Session of the India- Jordan Trade and Economic Joint Committee (TEJC)

7. RBI Reference Rate for US $

Notifications

Customs

1. 62/2017 - dated 1-7-2017 - Cus

seeks to rescind notification no. 318/1976-Customs, dated the 2nd August, 1976

GST

2. 02/2017 - dated 1-7-2017 - GST CESS

Goods and Services Tax Compensation Cess Rules, 2017

3. 15/2017 - dated 30-6-2017 - UTGST

Seeks to notify the number of HSN digits required on tax invoice - Lakshadweep

4. 14/2017 - dated 30-6-2017 - UTGST

Seeks to notify the number of HSN digits required on tax invoice - Daman and Diu

5. 13/2017 - dated 30-6-2017 - UTGST

Seeks to notify the number of HSN digits required on tax invoice - Dadra and Nagar Haveli

6. 12/2017 - dated 30-6-2017 - UTGST

Seeks to notify the number of HSN digits required on tax invoice - Chandigarh

7. 11/2017 - dated 30-6-2017 - UTGST

Seeks to notify the number of HSN digits required on tax invoice - Andaman and Nicobar Islands

8. 10/2017 - dated 30-6-2017 - UTGST

Fixes the rate of interest per annum

9. 09/2017 - dated 30-6-2017 - UTGST

Union Territory Goods and Services Tax (Lakshadweep) Rules, 2017

10. 08/2017 - dated 30-6-2017 - UTGST

Union Territory Goods and Services Tax (Daman and Diu) Rules, 2017

11. 07/2017 - dated 30-6-2017 - UTGST

Union Territory Goods and Services Tax (Dadra and Nagar Haveli) Rules, 2017

12. 06/2017 - dated 30-6-2017 - UTGST

Union Territory Goods and Services Tax (Chandigarh) Rules, 2017

13. 05/2017 - dated 30-6-2017 - UTGST

Union Territory Goods and Services Tax (Andaman and Nicobar Islands) Rules, 2017

14. 04/2017 - dated 30-6-2017 - UTGST

Central Government notifies www.gst.gov. as the Common Goods and Services Tax Electronic Portal for facilitating registration, payment of tax, furnishing of returns, computation and settlement of integrated tax and electronic way bill

Circulars / Instructions / Orders

GST

1. 2/2/2017 - dated 4-7-2017

Issues related to furnishing of Bond/ Letter of Undertaking for Exports–Reg.

Highlights / Catch Notes

Income Tax

• Section 43D: Tax Deductions for NPAs Differ from NHB Standards; Separate Frameworks for Income Tax and NPA Classification.

  Case-Laws - HC : NPA - the real income principle would have no application as far as Section 43D of the Act. A distinction is required to be drawn between the concept of 'deductions' claimed under the Act which has to satisfy the conditions laid down therein to qualify as such and the prudential norms that the NHB Act may lay down for determining an NPA - HC
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• Unclaimed Guarantee Reserve Account funds now taxable as income after conversion from deposits.

  Case-Laws - HC : The unclaimed amounts out of the Guarantee Reserve Account received in earlier years was assessable to tax as the deposit had changed its character into income - HC
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Customs

• Appellant Challenges Inclusion of Film Royalties in Customs Valuation, Citing Lack of Findings on Supplier Relationship.

  Case-Laws - AT : Valuation - includibility - royalty paid to copyright-holders of films - The appellant is not wrong in contending that there is no proper finding on relationship with the foreign supplier and the consequent rejection of declared value on that ground will not meet the test of law
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Service Tax

• Swimming Pool Cleaning Services for Pimpri Chinchwad Municipal Buildings Exempt from Service Tax Requirement.

  Case-Laws - AT : Cleaning services - Cleaning Service of swimming pool, deck and toilets which are owned by Pimpri Chinchwad Municipal Corporation - being in respect of Government building which is for public utility does not fall under the definition and not liable for Service Tax
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• RTO Registration Fees Not Classified as Business Support Services for Service Tax Purposes.

  Case-Laws - AT : Business Support Services - charges towards registration fees of the RTO - service in question is not covered under Business Support Service
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Central Excise

• Refund Allowed for Excess Duty Paid: No Sale to Sister Concern, Revenue's Argument Rejected.

  Case-Laws - AT : Refund of excess paid duty - The contention of the revenue that since the duty was based on sale value of their sister concern is absolutely incorrect for the reason that there is no sale to the sister concern. There is no question of passing of any element either value or duty to the sister concern - refund allowed
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Case Laws:

• Income Tax

• 2017 (7) TMI 145
  Order passed under Section 201(1) and 201(1A) - assessee in default - variation in TDS amounts shown in the salary slips issued by the assessee to three Capt. A.K. Vohra, Capt. S.C. Mehta and Capt. J.H. Patel and the actual TDS amounts deposited in respect of such individuals - Held that:- As at the time of receiving the salaries and signing on the documents which reflected the TDS, the alleged complainants never stated that the documents reflected any incorrect picture. In the case of Capt. B.S. Sandhu, the ITAT noticed that the tenor of his letter and his grievance was that he was not paid salary for substantial periods, rather than complaining that amounts lesser than what was deducted were in fact deposited with the Revenue. As against this, significantly, in reply to the summons issued to all pilots, under Section 131 of the Act, there was no response. Furthermore, there was no attempt on the part of the Revenue to reconcile the records as it were and verify whether in the individual tax returns filed by the pilots, larger amounts were reflected. This failure, in the opinion of the Court, cannot result in penalizing the assessee. ITAT’s reasoning that the Revenue’s findings were essentially based upon conjectures and complaints rather than evidence or material is reasonable and sound. There is no discussion for instance, as to the contractual amount in the agreement signed by each pilot and the assessee; the AO has ignored the important fact that no pilot joined the proceeding and answered summons under Section 131 and most importantly, to reject the Form 24 furnished by the assessee, mere complaints were insufficient. If the assessee’s explanation about lack of records due to fire seemed suspicious, nevertheless, the AO was under a duty to cross-check and reconcile the returns filed by the individual pilots from the concerned Wards and Circles before rendering its findings. Decided in favor of the assessee

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• 2017 (7) TMI 144
  Claim for deduction on account of the method for determining an NPA - entitlement to deduction on account of de-recognition of interest accruing upon NPAs applying Rule 6EB of the Income Tax Rules, 1962 - directions issued by the National Housing Bank under Section 30A read with 36 of the National Housing Bank Act, 1987 - Held that:- In the present case, there is no doubt that Section 36 of the NHB Act states that the provisions of Chapter V of the NHB Act would have the effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. However, Section 30A of the NHB Act under which directions are issued by NHB to housing financial institutions, etc. does not contain a non-obstante clause. It is not meant to override Section 43D(b) of the Act in the matter of computation of taxable income. Section 43D of the Act read with Rule 6EB is a complete Code in itself. There is an element of discretion for the rule making authority to follow or not to follow the NHB guidelines as and when they are revised. The purpose of classification of debts as NPA by the NHB and the purpose for non-recognition of income for the purposes of the Act are different. Given the wording of the relevant provisions of the Act and the NHB Act, it is not possible to agree to HUDCO's proposition that with every change in the NHB guidelines there would be a corresponding automatic change in Rule 6EB. As pointed out by the ITAT, the real income principle would have no application as far as Section 43D of the Act. A distinction is required to be drawn between the concept of 'deductions' claimed under the Act which has to satisfy the conditions laid down therein to qualify as such and the prudential norms that the NHB Act may lay down for determining an NPA. The present case is similar to Southern Technologies Ltd. v. CIT (2010 (1) TMI 5 - SUPREME COURT OF INDIA) where the Supreme Court had to deal with the claim for deduction on account of the method for determining - Decided in favour of the Revenue and against the Assessee.

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• 2017 (7) TMI 143
  Ground of maintainability - rejection of revision - recommendation of the 5th Pay Commission in respect of revised salary - Held that:- This Court is satisfied that in the present case, the CIT erred in rejecting the revision application of the Petitioner on the ground of maintainability. The CIT ought to have entertained the revision petition on merits. One possible consequential direction is to remand the revision application of the Petitioner to the file of the CIT for a fresh decision on merits. However, considering that the issue has been pending for a number of years, remanding the matter to the CIT would only delay the proceedings further. Consequently, the Court is of the view that there is sufficient material on record already, which is not disputed by the Revenue, to grant relief to the Petitioner on merits in the present petition itself. The Court directs that the revision application filed before the CIT should be treated as having been allowed on merits. Consequently, while setting aside the impugned order of the CIT dated 24th March 2014, the Court allows the revision petition filed by the Petitioner before the CIT and directs the AO now to give effect to this order by computing the tax liability of the Petitioner for the AY 1998-99 after allowing the claim for provision made for wages arrears as per the 5th Pay Commission which became effective on 1st January 1996.

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• 2017 (7) TMI 142
  Unclaimed amounts out of the Guarantee Reserve Account received in earlier years - accessibility to tax - deposit had changed its character into income - Held that:- Tribunal has considered the contract between the parties i.e. after lapse of two months, the right of students to claim the amount coming to an end. The second circular was disbelieved by the Tribunal. The said finding is a findings of fact, which cannot be gone into in the reference. The contract between the parties was clear that the refund must be claimed by the candidate within two months of the declaration of the result of the concerned written test. Refund claimed thereof will not be granted. In view of the clear finding of fact, the parties would be governed by the contract. Considering the facts of the case of the Petitioner, the observations of the Apex Court in case of Commissioner of Income Tax vs. T.V. Sundaram Iyengar and Sons Ltd (1997 (11) TMI 50 - MADRAS High Court) would be relevant. In case of Commissioner of Income Tax vs. Sugauli Sugar Works (P.) Ltd.(1999 (2) TMI 5 - SUPREME Court) before the Apex Court, the facts were different. If the Petitioner would have proved the second circular, then the Assessee would have been on a better footing. - Decided against the Assessee.

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• 2017 (7) TMI 141
  Assessment under Section 153C - addition u/s 69C - Held that:- The jurisdiction and vesting in the Assessing Officer could have been exercised and the satisfaction in that regard was enough, are not matters which can be decided in the further appellate jurisdiction of this Court. It is not possible for us to reappraise and re-appreciate the factual findings. The finding that Section 153C was not attracted and its invocation was bad in law is not based just on an interpretation of Section 153C but after holding that the ingredients of the same were not satisfied in the present case. That is an exercise carried out by the Tribunal as a last fact finding authority. Therefore, the finding is a mixed one. There is no substantial question of law arising from such an order and which alternatively considers the merits of the case as well. As a result of the above conclusion, we cannot agree with the learned Additional Solicitor General that we can pass a different order and entertain these Appeals for the current year of the search, namely, the Assessment Year 2009-10. That was based on the argument that the action under Section 153C for this year is an incorrect conclusion. All the earlier orders in these Appeals having being noted by us, we have no hesitation in concluding that despite sufficient opportunity being given to the Revenue, it has not been able to satisfy this Court that a different view can be taken.

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• 2017 (7) TMI 140
  Reopening of assessment - Held that:- Tribunal conclusively held that there was no failure on part of the assessee to disclose truly and fully all material facts necessary for the assessment and that, therefore, notice for reopening of the assessment could not have been issued beyond a period of four years from the end of relevant assessment year. As perused the reasons recorded by the Assessing Officer for issuing the notice for reopening. We do not find any grounds suggesting that even according to the Assessing Officer the income chargeable to tax has escaped the assessment on account of failure on the part of the assessee to disclose truly and fully all material facts. That being the position, we see no error in the judgement of the Tribunal. No question of law

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• 2017 (7) TMI 139
  Deduction under Section 35D - Held that:- Apex Court in the case of C.C.E., Navi Mumbai Vs. Amar Bitumen & Allied Products Pvt. Ltd.(2006 (8) TMI 187 - SUPREME COURT OF INDIA) has held that the principles of consistency has to be followed. According to the Assessee, in the last assessment year, the same amount was claimed as deduction under Section 35D of the Act and allowed by the Revenue. The Revenue has not assailed the said order. In view of the above, the order with regard to previous assessment year has become final. The same principle will have to be adopted. More particularly, when the same amount was claimed as deduction under Section 35D of the Act for the earlier year also

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• 2017 (7) TMI 138
  Addition on anonymous donations under Section 115 BBC - Held that:- We do not hold that the remand report once called would be binding on the Appellate Commissioner. The remand report would be in the nature of fact finding commission, which the Assessing Officer would present before the Appellate Commissioner in view of additional documents or evidence produced by the assessee or the department, as the case may be. However, in the present case, the Commissioner (Appeals) did not cite sufficient or appropriate reasons to discard such report of the Assessing Officer and proceeded to confirm the addition ignoring the additional information supplied by the assessee before him. This order was rectified by the Tribunal. Addition made on account of admission fees - treated as an income in the hands of the assessee - Held that:- The Tribunal as noticed that said sum of Rs. 67.80 Lacs was by way of receipt from admission fees. The trust had passed a resolution receiving admission fees separately from the students with specific stipulation that the same would be used for educational purposes. That being the position, no question of law arises.

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• 2017 (7) TMI 137
  Genuineness of the transaction - accommodation entries - reopening of assessment - Held that:- In view of the incriminating evidence/by way of statement of Shri Narendra R. Shah, the Revenue has doubted the genuineness of the transaction. Once the Revenue has doubted the genuineness of the transaction, the onus shifts back to the assessee to prove by the cogent evidences/material that the above said transaction in shares was genuine. The assessee during the course of proceedings before us has raised legal issues which goes to the root of the matter that the Assessing Officer has does not have the original records of the assessment and also that no approval of CIT-A was taken before reopening of the assessment. Further contention was raised that the statement of Shri Narendera R. Shah was not provided to the assessee nor opportunity to cross examine said Narendra R Shah was given to the assessee. Further the assessee has raised the contention that said narendra R. Shah is not connected with M/s Surya Deep Salt Refinery and Chemical Works Ltd.. All these contentions are legal contention, which requires investigation of facts, therefore, the interest of justice will be best sub served if the matter is set-aside and restored to the file of the Assessing Officer to denovo determine the issue on merits after giving opportunity of being heard to the assessee. Appeal of the assessee is allowed for statistical purposes only.

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• 2017 (7) TMI 136
  Addition being the deposit in the bank account unexplained - Held that:- As per the cash flow statement, the available cash balance from withdrawals made in from 20th to 28th August 2008 and the net withdrawals from Axis Bank in the month of September 2008 amounted to Rs. 14,00,000/ which were deposited to the extent of Rs. 9,24,760/- from 13/10/2008 to 21/10/2008. Thus, cash was retained for a period of one month which cannot be said to be an unreasonable period . Further, withdrawal in cash from Axis bank on 10/11/2008 of Rs. 7 lakhs was deposited to the extent of Rs. 2,30,000/- on 17.01.2009. Again, the holding period is approximately 2 months which cannot be said to be unreasonably long. Moreover we find that it is not the case of the Revenue that the assessee utilized the cash in any other manner. The Hon’ble Punjab and Haryana High Court in the case of Shiv Charan Dass vs.CIT, Punjab (1980 (4) TMI 74 - PUNJAB AND HARYANA High Court) has held that where the explanation of the assessee was reasonable and there was nothing on record to show that the amount was utilized by the assessee in any other manner than the one which was represented by the assessee, the onus lay on the department to show that the explanation of the assessee should not be accepted. We hold that the deposits stand explained and addition on account of the same, therefore, be deleted.- Decided in favour of assessee.

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• Customs

• 2017 (7) TMI 122
  Maintainability of petition - Section 130-E(b) of the Customs Act, 1962 - case of Revenue is that since, the issue, at hand, would effect the value of the goods, for the purpose of assessment, the Writ Petitioner ought to file an appeal before the Supreme Court - Held that: - Qua the issue, as to whether, the remand directions go beyond the scope of appeal, we can only say that, since, there is an appeal remedy available, this is an aspect, which can be agitated in the appeal, if any, filed by the Writ Petitioner. These are not matters, which go to the root of the jurisdiction of the Tribunal. The Tribunal, being an authority, which is empowered to deal with the issues, of both, fact and law, the error, if any, can be corrected by way of an appeal remedy. Appeal dismissed, being not maintainable.

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• 2017 (7) TMI 121
  Valuation - the expenses incurred in the production of the film - includibility - rule 7A of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 - Held that: - no quantification has been done by either of the two lower authorities for determination of the duty liability. Nor is there any notice that has computed the consequential duty liability of the appellant - In the absence of any computation of duty liability, the detriment to the appellant is not apparent. A detriment would arise only upon an assessment and we do not find any record of an assessment that is under challenge before us - Appeal dismissed - decided against appellant.

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• 2017 (7) TMI 120
  Valuation of imported goods - furniture parts and fittings - natural justice - Held that: - it is apparent that the evidence required to meet the rigours of Customs Valuation (Determination of Price of Imported Goods) Rules, 1998 have not been appropriately dealt with in the impugned order. In the interests of conformity with the principles of natural justice, it is necessary that the evidence be considered afresh - appeal allowed by way of remand.

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• 2017 (7) TMI 119
  Valuation - rough diamonds - confiscation - penalty - Held that: - it calls for a more stringent examination of the evidence against the alleged mastermind who claims that he is not associated with the importing entities and that the importing entities should bear full responsibility for any misdeeds - The adjudicating authority has not accorded due importance to the confiscation on the basis of value of ‘rough diamonds’. The enhancement that was proposed is the very basis of the allegation of misdeclaration and, hence, was required to be in strict compliance with Customs Valuation (Determination of Price of Imported Goods) Rules framed for implementation of section 14 of Customs Act, 1962. The sequential application of the rules, as well as the justification for adoption of the value proposed by the expert, does not find a place in the impugned order - matter remanded for fresh consideration - appeal allowed by way of remand.

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• 2017 (7) TMI 118
  Liability of interest - goods lying in the warehouse after the warehousing period is over - Held that: - section 61 of Customs Act, 1962 as amended in 1983 creates liability of interest till the goods were actually removed from the warehouse - the interest liability has been incorrectly limited in the impugned order and direct that the interest be charged on the duty recoverable till the date of receipt of sale proceeds. Warehousing charges - jurisdiction of the adjudicating or appellate authority to decide on the quantum - Held that: - Merely because the sales appear to have been effected by the Customs authorities, the liability for warehouse-keeper charges would not alter. The actual charges due to the warehouse-keeper would require to be met out of the sale proceeds in accordance with the priority enacted in section 150 of Customs Act, 1962. Obviously, the charges that are communicated by the warehouse-keeper is to be deducted. The competent authority is directed to limit the recovery to such amount as has been claimed by the warehouse-keeper as charges. Appeal disposed off - re-computation will be effected by the original authority within a period of three months from the date of receipt of this order - decided partly in favor of respondent.

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• 2017 (7) TMI 117
  Penalty u/s 112 of CA - alleged beneficiary of the import and the role of other individuals in the transaction - Held that: - Section 112 of Customs Act, 1962 prescribes the imposition of penalty for any act that may, directly or indirectly, have contributed to the confiscation of the goods. The appellant had concerned himself with the documentation that enabled the waiver of prescriptions relating to the advance licences as well as with the engagement of agents to handle the cargo are not disputed or controverted. It was the purportedly genuine appearance accorded to the fabricated shipping bills by involving ‘custom house agents’ that enabled the ostensible importer to avail exemption from duty on the goods that were imported. The link between the appellant and the imported goods has been clearly established in the impugned order. The penal provision does not require a direct and proximate contact with the offending goods. A link is sufficient. That is established in the impugned order. Appeal dismissed - decided against appellant.

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• 2017 (7) TMI 116
  Import of prohibited item - Confiscation - failure to comply with post importation condition - import of ‘diesel engines’ - Held that: - The import of used diesel engines into the country is prohibited under the Foreign Trade Policy unless with backing of an express license to do so - The licence issued to the appellant that was utilised to clear the ‘live’ consignment is found to be incapable of being complied with in the absence of materials and facility to manufacture diesel generator sets - confiscation and penalty upheld. The direction to redeem the goods that are physically not available with the adjudicating authority to be without authority of law and incapable of being enforced. Appeal allowed - decided partly in favor of appellant.

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• 2017 (7) TMI 115
  DEPB benefit - unjust enrichment - Held that: - penalties were imposable under law on these respondents has been based on the evidence on record - Considering that the propositions and submissions of Revenue carry weight we hold that there is basis for consideration of imposition of penalty. Accordingly learned adjudicating authority is directed to issue notice to the respondents for appearance and to lead defence if any against imposition of penalty - appeal allowed by way of remand.

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• 2017 (7) TMI 114
  Project import - permission for setting up a similar project in Goa permitting change of location from Pondicherry to Goa - confiscation for the reason the condition of the Project Import licence could not be fulfilled by appellant - Held that: - When N/N. 230/86 dated 3.4.1986 relating to the Project Import Regulation is read, that does not exhibit any embargo or barrier restricting transfer of capital goods from shifting a project from one place to other - learned Commissioner shall conduct enquiry from the Goa Commissionerate as to whether the goods covered by the aforesaid bill of entry have arrived in Goa and installed thereat. If he is satisfied, that may not constitute violation of project of Project Import - matter is remanded to learned adjudicating authority to conduct a thorough enquiry and arrive at a proper conclusion affording reasonable opportunity of hearing to the appellant - appeal allowed by way of remand.

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• 2017 (7) TMI 113
  Valuation - the goods were overvalued to take undue DEPB credit - attempted export of polyester fabrics - Held that: - it is surprising how adjudication is made with total disregard to law causing prejudice to interest of Revenue - Observing that the appellants had oblique motive to defraud revenue in the manner brought out in the SCN and fake and fabricated invoices were used to make undue DEPB claim, appeals are bound to be dismissed which otherwise would cause outflow of the public revenue at the cost of this country - appeal dismissed - decided against appellant.

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• 2017 (7) TMI 112
  Valuation - includibility - royalty paid to copyright-holders of films that are imported by the appellant, M/s Saregama India Ltd, in the form of ‘digital versatile disk’ (DVD) that are sold in the ‘home video market’ - Held that: - A post-importation implementation of the royalty agreement is not amenable to prescient crystallisation at any time before the goods are put up for sale and is contingent on the sale. Surely, it cannot be his argument that the goods should be provisionally assessed for the tenor of the agreement, that would fly in the face of the order of the original authority to finalise all assessments on the basis of his direction. It would appear that Revenue is not consistent in articulating its stand on the inclusion of royalty in the assessable value. The appellant is not wrong in contending that there is no proper finding on relationship with the foreign supplier and the consequent rejection of declared value on that ground will not meet the test of law - In the circumstances, the only option before us is to have the matter re-determined - appeal allowed by way of remand.

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• Corporate Laws

• 2017 (7) TMI 111
  Taking over possession of Movable assets - Official Liquidator contended that the assets and properties of the company under liquidation are therefore required to be sold by a public auction by giving public advertisement and therefore, it is essential to constitute a sale committee for the said procedure - Held that:- Having heard Ms. Bhoomi M. Thakore, learned advocate for the applicant and on perusal of the record of this report, the inventory report as well as the search report in particular and the minutes, the summons deserves to be accepted as prayed for in para 10(a). Considering the fact that there is only one secured creditor, a sale committee may be constituted as under: 1) Official Liquidator as Chairman. 2) Official representative of respondent no.1 secured creditor. 3) Assistant Official Liquidator. Such sale committee shall undertake the process of disposal of assets and properties of the company under liquidation.

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• Insolvency & Bankruptcy

• 2017 (7) TMI 110
  Petition under Section 7 of The Insolvency and Bankruptcy Code, 2016 - Held that:- The Guarantee is a continuing Guarantee. There was a demand for payment on 10.10.2012 itself. There was a refusal on the part of the Respondent by revocation of Guarantee on 30th March, 2010 and by giving Reply on 1.11.2012. Therefore, period of limitation starts running either from 30th March, 2010 or from 1.11.2012, but not from 27.2.2017 as stated in the Written Arguments of the learned counsel for the Petitioner. Looking to the facts of this case, Petitioner Bank having kept quiet for 2 ½ years without initiating any proceeding against Respondent after the revocation of the Guarantee Agreement, on the verge of limitation, filed OA No. 242/2013 against the Respondent Company. Thereafter, Petitioner Bank remained silent till notice was issued on 13.2.2017 with a view to trigger Insolvency Resolution Process. Even at the cost of repetition, it may be stated that the Petitioner Bank already made a claim before the Liquidator appointed in the winding up proceedings against the Principal Borrower. Of course, that may not be a ground for the Bank not to proceed against the Guarantor if Guarantee is enforceable. But the intermittent actions that are being taken up by the Petitioner Bank shows that it chose to have a chance remedy under the Code by suppressing the material facts including the revocation of Guarantee Agreement dated 14.1.2008. The incomplete record placed by the Petitioner Bank amounts to misleading also. Coming to suppression of material facts, except the Petitioner's saying that proceedings before DRT are pending, it did not choose to file any papers relating to the proceedings before DRT. Petitioner totally suppressed the Suit filed by the Respondent before the High Court of Colombo. Petitioner having knowledge about revocation of Bank Guarantee, did not disclose about the same. Inspite of direction given by this Authority on 17.5.2017 to parties, Petitioner not filed documents relating to proceeding before DRT. Petitioner shall file the copies of Entries in Bankers' Book in accordance with the Bankers' Books Evidence Act. In these set of facts, and in the light of controversy on limitation aspect and in view of bona fide substantial pleas raised by Respondent as long back in 2010, 2011 and 2013 in earlier proceedings, it is not just to record satisfaction of the authority regarding existence of default or occurrence of default in respect of liability, if any, and obligations, if any, that may or may not arise under the Guarantee Agreement dated 14.1.2008 determined on 30.3.2010. This Adjudicating Authority is of the view that there is no occurrence of default. This petition is rejected.

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• PMLA

• 2017 (7) TMI 109
  Malaise of money-laundering - Enforcement officers empowered by PMLA to make investigation - Held that:- There is no requirement in law that an officer empowered by PMLA may not take up investigation of a PMLA offence or may not arrest any person as permitted by its provisions without obtaining authorization from the court. Such inhibitions cannot be read into the law by the court. The prime argument of the petitioners is of political vendetta. This argument is not supported by any material. These proceedings are not the appropriate forum for the court to examine such plea which, in the interest of the petitioners themselves, must be left for it to be pressed, if they were so advised and if they have material to substantiate the same, at some appropriate stage in future. Suffice it to observe in this context, and at this stage, that those in public life are expected to be open to probity. Higher the position in life (or polity), higher the obligation (moral, if not legal) to be accountable. Endeavours to stall investigation into their affairs by the law enforcement agencies, particularly on technical grounds, have the potency of giving the impression that there is something to hide. There is nothing shown to the court from which it could be inferred that the issuance of summons by the respondents to the petitioners for investigation into the ECIR, in exercise of statutory powers, has caused, or has the effect of causing, any prejudice to any of them.

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• Service Tax

• 2017 (7) TMI 135
  Refund claim - Whether the decision of the Tribunal in allowing the refund of CENVAT credit even without registration of the assessee under Section 69 of the Finance Act, 1994, is correct in law? - Held that: - question of law as framed, will have to be answered in favor of the Assessee and against the Revenue - appeal dismissed - decided against Revenue.

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• 2017 (7) TMI 134
  Refund of accumulated CENVAT credit - Rule 5 of CCR, 2004 read with N/N. 5/2006-CE(NT) dated 14.03.2006 - denial on the ground that the appellant have not submitted relevant invoices and also in some cases nexus of input services with output services was not established - Held that: - there is no such allegation in the show-cause notice but we are of the view that for processing any refund claim documents which are required for processing refund claim are indeed required and even there is no demand in the show-cause notice for such documents, it should be placed before the sanctioning authority. From the case records it is not clearly established that all the relevant invoices were submitted before the sanctioning authority or before the Commissioner (Appeals) - this issue needs to be verified and if at all required the assessee-appellant shall provide the invoices to the sanctioning authority - matter on remand. Refund claim - rejected on the ground that the assessee-appellant have debited an amount of Rs. 33,91,087/- but the same is not debited towards the sale of service in the domestic market - Held that: - The reversal of Rs. 33,91,087/- was made by the assessee-appellant against the excess CENVAT credit availed in the period which is prior to the relevant period for this refund. If this was the reversal of CENVAT credit of earlier period that too not related to any sale of service in the relevant period, it will not affect the net CENVAT credit availed during the relevant period. Therefore the same should not have been reduced from the total claim amount of the refund in the relevant period. If the above fact on the claim of the appellant is found correct the assessee-appellant is entitled for the refund of this amount - refund allowed. Appeal allowed by way of remand.

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• 2017 (7) TMI 133
  Business Support Services - charges towards registration fees of the RTO and also some incidental services such as providing Number Plate of the car and miscellaneous activity related to RTO registration - Held that: - the identical issue has been decided by the Tribunal in the case of Wonder Cars Pvt. Ltd. [2016 (1) TMI 738 - CESTAT MUMBAI], where the RTO registration charges i.e. Smart card fees, vehicle registration fees and other extra charges was held not to be under Business Support Service, accordingly the demand was dropped - In the present case, the customer of car is not a business entity, so called business service to the customer of cars is not in relation to business of commerce of the customer of cars. Therefore service in question is not covered under Business Support Service - appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 132
  Refund claim - GTA Services - Port Services - CHA Services - Terminal Handling Services - N/N. 17/2009-ST dated 07.07.2009 - denial on the ground that the refund claim was filed by the non-manufacturer-exporter therefore they should have filed refund in Form A-2 - Held that: - Merely because the Registered Office of the respondent filed the refund claim does not mean that they are non-manufacturer and non-registered unit. Though the Registered Office filed the refund claim but it is in respect of manufacturing unit. Accordingly they have rightly followed the conditions of para (2)(b) of Notification by filing refund in Form A-1, therefore there is no substance in the grounds of Revenue’s appeal - refund allowed - appeal dismissed - decided against Revenue.

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• 2017 (7) TMI 131
  Works Contract Service - fixing of swimming pool tiles at the Balewadi Stadium for Commonwealth Youth Games - Held that: - there is no dispute that Works Contract service is provided in respect of the service of fixing of swimming pool tiles at the Balewadi Stadium for Commonwealth Youth Games which is clearly not in respect of any Commercial or Industrial building and does not cover under the services of Works Contract - In respect of the same service provided to the same service recipient in the case of B.G. Shirke Construction Technology Pvt. Ltd. [2013 (11) TMI 870 - CESTAT MUMBAI], this Tribunal has held that the construction of sports complex and sports stadium is non-commercial construction therefore not liable to Service Tax - demand set aside. Cleaning services - Cleaning Service of swimming pool, deck and toilets which are owned by Pimpri Chinchwad Municipal Corporation - Held that: - As per the definition of cleaning activity given under Section 65(24b) of the Act, cleaning Service provided only to Commercial or Industrial establishment is covered. As per the definition of cleaning service, in the present case being in respect of Government building which is for public utility does not fall under the definition and not liable for Service Tax - demand set aside. Appeal allowed - decided in favor of appellant.

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• 2017 (7) TMI 130
  Commercial training and coaching services - if the nature of training provided by the appellant amounts to vocational training or not? - Held that: - the appellants are providing vocational training and service provided by them are exempt from service tax during the period of N/N. 9/2003 and 24/2004. For the intervening period, the appellants would be liable to pay service tax - Since the activities conducted by the appellant are exempt from service tax for most of the period, the credit of CENVAT would have to be recalculated for the same period. As a result, the matter relating to recalculation of demand of duty and credit available for the said period needs to be remanded to the original adjudicating authority - the appellants are liable to penalty under Section 76, 77 and 78 of the Act read with Rule 4, 6 and 7 of the Rules. However, the quantum of the penalties would have to be recalculated in terms of revised demand of service tax for the limited period - appeal allowed by way of remand.

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• Central Excise

• 2017 (7) TMI 129
  Maintainability of appeal - In the waiver application, stay has been granted without any order of deposition of the amount, for which, order-in-original has been passed by the Commissioner, Central Excise & Service Tax, Jamshedpur - Held that: - we see no reason to entertain this Tax Appeal - Nonetheless, looking to the fact that Excise Appeal has been preferred by Respondent No.1, against the order-in-original passed by the Commissioner, Central Excise & Service Tax, Jamshedpur. The said appeal is of the year 2013 and hence, we, hereby, direct the Central Excise and Service Tax Appellate Tribunal(CESTAT), Kolkata to decide Appeal No. E/71365/2013-DB as early as possible and practicable - appeal disposed off.

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• 2017 (7) TMI 128
  Refund claim - benefit of N/N. 108/95 - denial on account of the certificate produced by the appellant is in respect of buses whereas the appellant is manufacturing chassis - Held that: - From the certificate it is apparent that it is in respect of both viz. manufacture of chassis and body building activities done by specified body builders. In terms of the said certificate, the benefit has to be extended to chassis as well. This view is further fortified by the fact that the appellant has been permitted to clear chassis, other than 179 chassis cleared during this period, after availing exemption under N/N. 108/95 - The issue regarding unjust enrichment has not been examined by the lower authorities. The doubt regarding correlation between the goods cleared and buses supplied to BEST has not been dealt by the Commissioner (Appeals). The appeal is allowed so far as it relates to eligibility of notification to the clearance of 179 chassis cleared by the appellant - in respect of the issue of unjust enrichment and correlation, the matter is remanded to the original adjudicating authority - appeal allowed by way of remand.

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• 2017 (7) TMI 127
  Refund of excess paid duty - appellant cleared their final product through depot, accordingly the prices were not known at the time of clearance from the factory - Held that: - The Ld. Commissioner (Appeals) despite detailed verification was done by the original authority and also which is based on the report from the Range Superintendent, given finding that the sale invoice and relevant records were not verified which is absolutely incorrect on the face of the finding in the adjudication order - it is settled that in case of sale of the goods through depot after stock transfer when the value from the depot is charged than the value at which the excess duty was paid at the time of clearance from the factory there is not question of unjust enrichment. The Commissioner (Appeals) has not explicitly remanded the matter to the original authority for re-consideration even if it is presumed that the request of the Revenue for remand of the matter was allowed by the Commissioner (Appeals) it is open for the assessee to challenge the finding of the impugned order, therefore the appeal is very much maintainable before this Tribunal.

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• 2017 (7) TMI 126
  Refund of excess paid duty - denial on the ground that the appellant should have adopted the provisional assessment in terms of Rule 7. In failure to opt for the provisional assessment whatever duty was paid at the time of clearance is the correct duty and the same cannot be claimed as refund - unjust enrichment - Held that: - since the appellants have cleared the goods to their sister concern, it does not involve sale, therefore the question of passing of either the value of goods or the duty paid thereon does not arise. Therefore firstly no incidence of any duty was passed on to their sister concern - The contention of the revenue that since the duty was based on sale value of their sister concern is absolutely incorrect for the reason that there is no sale to the sister concern. There is no question of passing of any element either value or duty to the sister concern. Moreover, the recipient unit being in Roorki availing the area based exemption also do not claim the cenvat credit. In view of this fact, the excess paid duty is refundable to the appellants - appeal allowed by way of refund.

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• 2017 (7) TMI 125
  Clandestine removal - safety gears (helmets) - quantum of redemption fine - penalty - Held that: - the original authority has imposed the redemption fine of Rs. 3,24,592/- whereas the duty involved on the goods were to the tune of Rs. 2,11,530/- which according to me is on a higher side and therefore, I reduce the redemption fine to the extent of Rs. 1,00,000/-. Penalty - Held that: - since the appellants have paid the duty before the issue of show-cause notice, therefore, he was entitled to avail the benefit of reduced penalty of 25% of the duty under Section 11AC of the Central Excise Act but this benefit has not been given by both the authorities and therefore, I grant the benefit of Section 11AC and held that appellant is entitled to the availment of reduced penalty of 25%. Appeal allowed - decided partly in favor of appellant.

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• 2017 (7) TMI 124
  Clandestine removal - it was alleged that appellants have cleared the goods without reversal / payment of the equivalent credit availed on the returned goods at the time of final clearances - Rule 16 of Central Excise Rules, 2002 - Held that: - reliance placed in the case of TOYOTA KIRLOSKAR MOTOR PVT. LTD. Versus COMMR. OF C. EX., LTU., BANGALORE [2007 (8) TMI 274 - CESTAT Bangalore], where it was held that Rule 16 can override Section 4 - the duty paid on transaction value is incorrect as the question of determination of transaction value arise only if the goods are subjected to any process amounting to manufacture and therefore they are required to pay an amount equal to the credit availed and not payment of duty as per transaction value - appeal dismissed - decided against appellant.

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• 2017 (7) TMI 123
  Clandestine removal - Propriety of commuting liability to duty on the shortage of goods without offsetting the excess found in stock and the resort to estimation in stock taking - Held that: - the impugned order has had to re-work the duty liability that had been arrived at by the original authority - number of contentions of the appellant pertaining to verification of lot numbers with apparent duplication in the inventory and subjecting specific records to ascertainment would establish the correctness of stock in hand had not been examined at the level of the original authority and the first appellate authority - computations require to be re-worked after detailed examination of the records - appeal allowed by way of remand.

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