Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
August 11, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
GST
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34/2018 - dated
10-8-2018
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CGST
Seeks to prescribe the due dates for filing FORM GSTR-3B for the months from July, 2018 to March, 2019
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33/2018 - dated
10-8-2018
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CGST
Seeks to prescribe the due dates for quarterly furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover of upto ₹ 1.5 crores for the period from July, 2018 to March, 2019
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32/2018 - dated
10-8-2018
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CGST
Seeks to prescribe the due dates for furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover of more than ₹ 1.5 crores for the months from July, 2018 to March, 2019
GST - States
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G.O.Ms.No. 398 - dated
25-7-2018
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Andhra Pradesh SGST
Further Extension of Date for the Andhra Pradesh Goods and Services Tax Act, 2017 (Act No.16 of 2017) - Reverse Charge Under Section 9(4)
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G.O.Ms.No. 397 - dated
25-7-2018
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Andhra Pradesh SGST
Andhra Pradesh Goods and Services Tax (Twenty First Amendment) Rules, 2018
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G.O.Ms.No. 226 - dated
22-6-2018
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Andhra Pradesh SGST
THE ANDHRA PRADESH GOODS AND SERVICES TAX ACT, 2017 (ACT NO. 16 OF 2017)-SUB-SECTION (2) OF SECTION 23 OF THE ACT-SPECIFYING THE CATEGORY OF PERSONS EXEMPT FROM OBTAINING REGISTRATION UNDER THE ACT
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38/1/2017-Fin(R&C)(21/2018-Rate) - dated
26-7-2018
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Goa SGST
Exempts the intra-state supplies of handicraft goods
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38/1/2017-Fin(R&C)(20/2018-Rate) - dated
26-7-2018
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Goa SGST
Amendment in Notification No. 38/1/2017-Fin(R&C)(5/2017-Rate) dated the 30th June, 2017,
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38/1/2017-Fin(R&C)(19/2018-Rate) - dated
26-7-2018
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Goa SGST
Amendment in Notification No. 38/1/2017-Fin(R&C)(2/2017-Rate) dated the 30th June, 2017
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38/1/2017-Fin(R&C)(18/2018-Rate) - dated
26-7-2018
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Goa SGST
Amendment in Notification No. 38/1/2017-Fin(R&C)(1/2017-Rate) dated the 30th June, 2017
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38/1/2017-Fin(R&C)(17/2018-Rate) - dated
26-7-2018
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Goa SGST
Amendment in Notification No. 38/1/2017-Fin(R&C)(11/2017-Rate) dated the 30th June, 2017
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38/1/2017-Fin(R&C)(16/2018-Rate) - dated
26-7-2018
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Goa SGST
Amendment in Notification No. 38/1/2017-Fin(R&C)(14/2017-Rate) dated the 30th June, 2017
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31/2018-State Tax - dated
6-8-2018
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Gujarat SGST
Special procedure for persons having Provisional Identification Number.
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22/2018-State Tax (Rate) - dated
6-8-2018
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Gujarat SGST
Exemption from RCM under Section 9 by 4 upto 30.9.2019
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74/GST-2 - dated
6-8-2018
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Haryana SGST
Amendment in the Haryana Government, Excise and Taxation Department, notification No. 42/ST-2, dated the 30th June, 2017
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73/GST-2 - dated
6-8-2018
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Haryana SGST
Notification to lay down the special procedure for completing migration of taxpayers who received provisional IDs but could not complete the migration process under HGST Act, 2017.
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EXN-F(10)-24/2018-31/2018-State Tax - dated
6-8-2018
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Himachal Pradesh SGST
Special procedure for persons having Provisional Identification Number.
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EXN-F(10)-24/2018-22/2018-State Tax (Rate) - dated
6-8-2018
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Himachal Pradesh SGST
Amendment in the Notification No.8/2017–State Tax (Rate), dated 30th June, 2017.
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EXN-F(10)-24/2018-21/2018-State Tax (Rate) - dated
27-7-2018
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Himachal Pradesh SGST
Exempts the intra-state supplies of handicraft goods.
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EXN-F(10)-24/2018-20/2018-State Tax (Rate) - dated
27-7-2018
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Himachal Pradesh SGST
Amendments in the Notification No.5/2017-State Tax (Rate), dated the 30th June, 2017.
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EXN-F(10)-24/2018-19/2018-State Tax (Rate) - dated
27-7-2018
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Himachal Pradesh SGST
Amendments in the Notification No.2/2017-State Tax (Rate), dated the 30th June, 2017.
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EXN-F(10)-24/2018-18/2018-State Tax (Rate) - dated
27-7-2018
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Himachal Pradesh SGST
Amendments in the Notification No.1/2017-State Tax (Rate), dated the 30th June, 2017.
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EXN-F(10)-24/2018-17/2018-State Tax (Rate) - dated
27-7-2018
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Himachal Pradesh SGST
‘Business’ shall not include any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities.
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EXN-F(10)-24/2018-16/2018-State Tax (Rate) - dated
27-7-2018
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Himachal Pradesh SGST
Amendments in the Notification No.14/2017- State Tax (Rate), dated the 30th June, 2017.
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EXN-F(10)-24/2018-15/2018-State Tax (Rate) - dated
27-7-2018
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Himachal Pradesh SGST
Amendments in the Notification No.13/2017- State Tax (Rate), dated the 30thJune, 2017.
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EXN-F(10)-24/2018-14/2018-State Tax(Rate) - dated
27-7-2018
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Himachal Pradesh SGST
Amendments in the Notification No.12/2017- State Tax (Rate), dated the 30thJune, 2017.
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EXN-F(10)-24/2018-13/2018-State Tax (Rate) - dated
27-7-2018
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Himachal Pradesh SGST
Amendments in the Notification No.11/2017- State Tax (Rate), dated the 28th June, 2017.
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47/2018 - dated
10-8-2018
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Jammu & Kashmir SGST
Extend the time Limit for furnishing the FORM GSTR-3B.
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25885–FIN-CT1-TAX- 0043/2017 - dated
6-8-2018
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Orissa SGST
Special procedure for persons having Provisional Identification Number
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25881–FIN-CT1-TAX- 0043/2017 - dated
6-8-2018
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Orissa SGST
Amendment in Notification No. 19857-FIN-CT1-TAX-0022-2017, dated the 29th June,2017
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Seeks to prescribe the due dates for furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover of more than ₹ 1.5 crores for the months from July, 2018 to March, 2019
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Seeks to prescribe the due dates for quarterly furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover of upto ₹ 1.5 crores for the period from July, 2018 to March, 2019
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Seeks to prescribe the due dates for filing FORM GSTR-3B for the months from July, 2018 to March, 2019
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The fertilizers supplied for direct use as fertilizers, or supplied for use in the manufacturing of other complex fertilizers for agricultural use (soil or crop fertilizers), will attract 5% IGST.
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GST will be payable by the refinery only on the net quantity of petroleum gases retained by the recipient manufacturer for the manufacture of petrochemical and chemical products.
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Applicable GST rate on Disc Brake Pad - in view of the HSN Explanatory Notes that the said goods, namely “Disc Brake pad” for automobiles, are appropriately classifiable under heading 8708 of the Customs Tariff Act, 1975 and would attract 28% GST.
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Applicable GST rate for bus body building activity - in case the supply made is that of bus, and accordingly supply would attract GST @28%. - In the case as mentioned at Para 12.2(b) above, fabrication of body on chassis provided by the principal (not on account of body builder), the supply would merit classification as service, and 18% GST as applicable will be charged accordingly.
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Applicable GST rate on cotton quilts under tariff heading 9404-Scope of the term “Cotton Quilt” - a quilt filled with cotton constitutes a cotton quilt, irrespective of the material of the cover of the quilt. The GST rate would accordingly apply.
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Applicability of GST on marine engine - the supplies of marine engine for fishing vessel (being a part of the fishing vessel), falling under tariff item 8408 10 93 attracts 5% GST.
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Classification and applicable GST rate on real zari Kasab (thread) - imitation zari thread or yarn known as “Kasab” or by any other name in trade parlance, would attract a uniform GST rate of 12% under tariff heading 5605.
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Appropriate classification of baby wipes, facial tissues and other similar products - if the baby wipes are impregnated with perfumes or cosmetics, then the same would fall under HS code 3307 and would attract 18% GST rate. Similarly, if they are coated with soap or detergent, then it would fall under HS code 3401 and would attract 18% GST.
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GST rate on Human Blood Plasma - normal human plasma would attract 5% GST rate under List I (S. No. 186), whereas plasma products would attract 12% GST rate, if otherwise not specifically covered under the said List.
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Applicability of GST on supply of safe drinking water for public purpose - supply of drinking water for public purposes, if it is not supplied in a sealed container, is exempt from GST.
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Applicable GST rate on refined beet and cane sugar - would attract GST @ 5%.
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Applicability of GST on Fortified Toned Milk (with vitamins ‘A’ and ‘D’) - attracts NIL rate of GST
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Applicable GST rate on treated (modified) tamarind kernel powder and plain (unmodified) tamarind kernel powder - both attract 5% GST
Income Tax
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Exemption u/s 11 - Application of income for charitable purposes - Where in the law has it been provided that a trust has to incur expenditure on its own and cannot give donation in kind to institutions who in turn have given to the needy which otherwise are for charitable purposes?
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Payment of compounding fee to RBI for default in obtaining approval form RBI for the purpose of FIPB and FEMA - Claim of expenditure not hit by the explanation to section u/s 37(1) - expenditure allowed.
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Transfer pricing - knowledge management systems - assessee seeks to be identified as a BPO and not as a KPO - the services rendered by it are specialized and require specific skill based analysis and research that is beyond the more rudimentary nature of services rendered by a BPO.
Customs
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Classification of goods - Unless and until the nature of the goods is ascertained it is not proper to decide whether the goods can be classified by taking recourse of either note 2(a), 2(b) or 2(c) of Section XVI of Customs Tariff Act.
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Duty Drawback - export of handicrafts items of export of furniture - the fact that the appellant is registered with the ‘Export Promotion Council for Handicrafts’, is indicative of the fact that furniture manufactured by the appellant is Handicrafts” - Benefit of duty drawback allowed.
Service Tax
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CENVAT Credit - common input services - non-maintenance of separate records - Rule 6(3)(i) - only the Cenvat credit in respect of input services relatable to their uses in the exempted services is required to be reversed on proportionate basis.
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Demand of Service Tax - Reverse charge mechanism - import of services - As such it is not the liability of service recipient but the liability of service provider which gets shifted to the service recipient on deemed basis. - In case of no liability of IFC to pay the tax, no liability to pay the same by the service recipient on reverse charge basis would arise
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Commercial concern or not - Merely because the appellant has referred in the his address as Capital consultancy, even if it is a proprietor ship firm, it is an individual - the applicant will not be commercial concern in view of clause 65(105) (zzb) of the Finance Act, 1944.
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Demand of service tax - mistake in recording the amount due - Section 74 does not contemplate any particular format as such, empowering the Central Excise to rectify the mistake on his own and, if any mistake is brought to his notice by the Assessee.
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Extended period of limitation - it is admitted on record that the respondent had not got itself registered and had failed to file return within the prescribed period of time. Thus, the period for issuing notice u/s 70 of the Act is five years on account of non-filing of the return.
Central Excise
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CENVAT Credit - input services - rent-a-cab - in terms of clause (B) of definition of capital goods provided under Rule 2 (a) the motor vehicle taken on rent by the appellant is a capital good. Therefore, it does not cover under the exclusion entry provided under clause 2 (e) under sub clause B of Rule 2(a) of CENVAT credit rules. Therefore, rent a cab is an admissible input service and credit is admissible.
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Entitlement of Interest on delayed refund - relevant date for calculation of Interest - interest is payable only from the date after completion of 3 months from the date of filling the refund application - the interest in any case is not payable from the date of deposit of the amount during the investigation.
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Benefit of exemption from payment of National Contingent Calamity Duty (NCCD) on the POY - Captive consumption of POY - Whether the NCCD is payable on POY captively consumed or exempted from payment of duty by virtue of N/N. 67/1995-CE dated 16.03.1995, as amended? - Held Yes, demand confirmed.
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CENVAT Credit - reasonable steps to be taken by the assessee to ensure that duty has been paid by the supplier of inputs - The department has not sufficiently proved its case. The allegations in the show cause notice are not supported by any solid evidence but only statements. Hence, even a preponderance of probability has not been proved by the department.
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CENVAT Credit - duty paying documents - supplementary invoices - duties which became payable by the manufacturer on account of willful misstatement or suppression of facts on their part - there cannot be suppression of fact when the issue of liability of payment of Excise duty at the end of the coal companies was a debatable issue which is pending adjudication before the Hon’ble Supreme Court.
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Classification of goods - appellants procured “Commingled Crude oil” and Dehydration process was undertaken - merely alleging that the burden was on the appellants is not acceptable - the onus of proving the classification is on the Department which has not clearly discharged the burden of doing so.
VAT
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Principles of Natural Justice - reversal of Input Tax Credit - assessing authority would lead us to infer that he has taken the report submitted by the Enforcement Wing officials as gospel truth and passed orders being influenced by the same. Such an order is not fair and sustainable.
Case Laws:
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GST
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2018 (8) TMI 587
Refund of input tax credit on account of inverted duty structure - Rule 89(5) of the CGST Rules, 2017 - Scope of retrospective amendment to the term "Net Credit" - notices issued.
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Income Tax
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2018 (8) TMI 598
Carry forward of unabsorbed depreciation - limitation of six years - Held that:- the issue raised herein stands concluded against the Appellant-Revenue and in favour of Respondent-Assessee - no substantial question of law arises. - revenue appeal dismissed.
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2018 (8) TMI 597
Assessment u/s 153A(1) (a] r.w.s 153C - failure to issue notice u/s 153C - Additional ground of appeals on question of law - filing of return in pursuance of notice and then revising the return of income (ITR) - Held that:- the additional grounds are legal in nature and no new facts shall have to be considered. The additional grounds go to the validity of the assessment proceedings under section 153C of the I.T. Act, therefore, the same should be admitted for deciding the appeal. The First Proviso to Section 153C of the I.T. Act provides that the 06 assessment years for which assessments or re-assessments could be made under section 153C of the I.T. Act, would also have to be construed with reference to the date of handing-over of the assets or documents to the A.O. of the assessee. Therefore, the 06 assessment years under section 153C of I.T. Act in the case of assessee would be A.Y. 2008-2009 to 2013-2014. The A.O, therefore, shall have to pass the assessment order under section 153C of the I.T. Act. However, A.O. has not issued any notice under section 153C of the I.T. Act before initiating the proceedings against the assessee which is also admitted by the A.O. in reply to the assessee under RTI Act. The issue of notice u/s 153C is mandatory and a condition precedent for taking action against the assessee under section 153C of the I.T. Act. The assessment order, therefore, vitiate, void, illegal and bad in law and cannot be sustained. Decided in favor of assessee.
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2018 (8) TMI 596
Exemption u/s 11 - Application of income for charitable purposes - deduction of donations paid to various charitable institutions registered u/s 12A - CIT (A) went step further in analysing each and every heads of expenses so as to conclude that most of these expenditures incurred cannot be held to be spent for charitable activities at all and hence would not fall within the utilisation limit of 85% as provided in section 11(1). Held that:- We are unable to fathom as to how giving of such donations to schools and colleges for scholarship of students; amount given for activities like marathon race, tree plantation; distribution of prizes to the students; donations given in kind like donating of school furniture, school buses, solar water heating system / solar street lights, rain water harvesting systems, RO system etc. to schools; motor car to mobile crèches; donation of sweaters to Schools; to literacy India; donation to Mumbai Mobile Creches etc.; can be held for noncharitable activities. Where in the law has it been provided that a trust has to incur expenditure on its own and cannot give donation in kind to institutions who in turn have given to the needy which otherwise are for charitable purposes? The contention of Ld. CIT (A) that donations made in kind or in cheques to charitable organisation which are registered u/s 12A are deemed to not allowable as per section 13(3)(d) is completely misunderstanding of the said provision, because disallowance under this clause can only be of the payment made to another charitable institution out of accumulated funds and there is no embargo of payment / application of current year income. All will fall within the category of advancement of general public utility and we were unable to appreciate that how these expenditures can be held to be for noncharitable purposes. Hence, we allow such expenditures as application of income for charitable purposes. Regarding administrative expenses - Held that:- these are being incurred for day to day activities for the assessee trust and running of the trust and without such expenditure no charitable trust can carry out these activities. The entire addition and disallowance made by the Ld. CIT (A) is deleted - Decided in favor of assessee.
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2018 (8) TMI 595
Depreciation on BOT Rights of Road - Determination of Cost of BOT project - treatment of grant received for computing deferred revenue expenditure - Held that:- assessee is eligible for claim of depreciation. Respectfully following the decision of the Co-ordinate Bench in case of holding company, we direct the AO to allow assessee’s claim of depreciation as per law. Regarding reduction of subsidy from the cost of toll road - Held that:- we restore the matter back to the file of the AO for deciding afresh after considering the order of Tribunal and considering the assessee’s contention and verifying the nature of subsidy so received by the assessee. Decided partly in favor of assessee.
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2018 (8) TMI 594
Reopening of an assessment - validity of notice issued u/s 148 - mechanical recording of satisfaction by the AO - reliance of the statement of the assessee which were retracted by them before the Court - Held that:- The CIT(A) has after taking due diligence has come to the conclusion that the notice issued u/s 148 is not proper and is void ab initio. The case laws relied upon by the Ld. DR are distinguishable and not applicable to the facts of the present case as there is factual difference in each case. - Decided in favor of assessee. Addition of interest on financing of money - Held that:- The CIT(A) has rightly deleted the addition on the ground that since the amount has not been financed by the assessee there is no question of making any addition of interest in this regard. - Decided against the revenue.
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2018 (8) TMI 593
Nature of expenditure - major repairs, renovations re-furbishing the premises / project site - revenue or capital expenditure - Held that:- Although the benefit of the stated expenditure may have been derived by the assessee for more than one year but as already noted, there is no concept of deferred revenue expenditure under the statute and therefore, once the expenditure is found to be revenue in nature, the same is allowable to the assessee in the year of incurrence thereof - once expenditure is allowed as revenue expenditure, deprecation allowed is to be reversed. - Decided in favor of assessee. Disallowance of expenditure u/s 14A - Held that:- it is undisputed fact that the assessee has not earned any exempt dividend income during the impugned AY - Decided against the revenue. Claim of deduction towards advances written-off - Held that:- the justification / basis of the same or the circumstances under which these have been written-off is not clear from the record, In principle, while approving the submissions that the business losses written-off in ordinary course of business were allowable to assessee as business loss - Matter remanded back for verification. Addition u/s 40(a)(ia) for late deposit of TDS amount - Held that:- the amendment to Section 40(a)(ia) as made by Finance Act, 2010 was retrospective in nature and therefore the amount of TDS which is deposited late but before due date of filing of return of income enables the assessee to claim the deduction of the expenditure in the concerned year itself. - Decided in favor of assessee. Payment of compounding fee to RBI for default in obtaining approval form RBI for the purpose of FIPB and FEMA - Claim of expenditure u/s 37(1) - Held that:- the assessee applied for postSodexo facto approval of the same from FIPB which was granted subject to compounding of the same by Reserve Bank of India [RBI]. The aforesaid lapse, in the opinion of assessee, was merely procedural defect in nature and was in the nature of condonation subject to pecuniary payment and therefore, not hit by the explanation to Section 37(1). - Decided in favor of assessee.
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2018 (8) TMI 592
Transfer pricing - knowledge management systems - international transactions/activities - services rendered to its associated enterprises, i.e. AE - assessee seeks to be identified as a BPO and not as a KPO - Adjustments with regard to notional interest attributed to the assessee - Exclusion of relative comparables which were held to be irrelevant for the purpose of ALP determination - controlled transactions Held that:- this court is unpersuaded by the assessee’s assertion that it is merely a BPO; the services rendered by it are specialized and require specific skill based analysis and research that is beyond the more rudimentary nature of services rendered by a BPO. Therefore it would be incorrect to slot the services provided by the Assessee into that of a BPO, when it is more akin to a KPO. As per the amended provisions of Section 92B, if there is any delay in the realization of a trading debt arising from the sale of goods or services rendered in the course of carrying on the business, it is liable to be visited with transfer pricing adjustment on account of interest income short charged/uncharged. - the assessee’s contention that the ITAT erred in concluding that charging of interest on delayed receipt of receivables is a separate international transaction which requires to be benchmarked independently, is incorrect. Selection of comparable - revenue urged that a stringent application of the comparability test was unnecessary - Held that:- even if due consideration is given to a certain level of dissimilarity between the Assessee and the comparable companies, it can be observed that the nature of services provided by the abovementioned comparable companies do not demonstrate even a degree of similarity with the services rendered by the Assessee that would be sufficient to qualify under rule 10B(2) of the Income Tax Rules, since, as established above, the Assessee’s services under its R&I segment are in the nature of services provided by a KPO and they are functionally dissimilar from the comparable companies, in terms of their services as well as their risk profiles. Decided partly in favor of assessee and partly in favor of revenue.
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2018 (8) TMI 586
Fees for technical services received - computation of period of stay - whether taxable by reason of article 12(2) of the Double Taxation Avoidance Agreement with Japan? - Held that:- No ground to interfere with the impugned order. The special leave petition is, accordingly, dismissed. Pending application(s), if any, shall also stand disposed of.
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2018 (8) TMI 585
Validity of reopening of assessment u/s 147 - reasons to believe - the finding of fact is that the Assessing Officer had an occasion to examine the details - Held that:- No merit in these petitions. The Special Leave Petitions ares accordingly dismissed. The question of law is however, kept open.
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2018 (8) TMI 584
Addition made on account of unexplained investment in properties as per the diaries recovered - identity of the property has been established and found to be matching in amount with the seized document which could be treated as corroborative evidence - addition on account of household expenses - Held that:- SLP dismissed.
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2018 (8) TMI 583
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:- Issue notice. There shall be stay of operation of the order passed by the High Court, in the meantime.
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2018 (8) TMI 582
Deductible / Exempted income u/s 10(29) - depreciation to be excluded from the income or not - CIT(A) allowed the computation after excluding depreciation as part of the expenditure and taking gross receipts from warehousing and Inland Container Depot/ Container Freight Station (‘ICD/CFS’) - Held that:- Special Leave Petition is dismissed. Pending applications, if any, stand disposed of.
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2018 (8) TMI 581
Capital gain tax - Whether an asset is capital asset u/s 2(14) and liable for capital gain tax - land in question was beyond 8 km from the municipal limit - Held that:- The special leave petition is dismissed on the ground of low tax effect, leaving the question of law open
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2018 (8) TMI 580
Assessment passed by AO u/s 143(3) - denial of principle of natural justice - Held that:- Delay condoned. Issue notice. There shall be stay of operation of the order passed by the High Court, in the meantime.
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2018 (8) TMI 579
Reassessment u/s 147 - Business of export of Back Office and computer software - claimed deduction u/s 10B - AO disallowing 100% deduction u/s 10B stating that assessee had not fulfilled the requirement of being a 100% export oriented undertaking - Held That:- No merit in this petition. Special Leave Petition is accordingly dismissed.
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2018 (8) TMI 578
Unexplained share application money under Section 68 - Held that:- No merit in this petition. The Special Leave Petition is accordingly dismissed.
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2018 (8) TMI 577
Income-Tax Settlement Commission order been passed under Section 245(D)(4) - Held that:- Parliament has not provided for any Appeal from orders of the Commission. This with the hope that the order of the Commission would finally bring an end to a dispute between a party who has approached the Commission and the Revenue Department. It is in these circumstances that a party who seeks to approach the Court to challenge the orders of the Commission, must act expeditiously and ensure that the other party is not put to any prejudice because of the delay. Entertaining petition after almost over a period of one and half year would upset the settled positions and re-open matters without any explanation for the delay. No reason to exercise our extra-ordinary jurisdiction under Article 226 of the Constitution of India.
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2018 (8) TMI 576
Application for adjustment or refund of the amount paid under Income Declaration Scheme – 2016 rejected - Held that:- Hon'ble Supreme Court in the case of Hemlatha Gargya (2002 (11) TMI 6 - SUPREME COURT) is relevant which reads having held that the assessee are not entitled to the benefit of the Scheme since the payments made by them were not in terms of the Scheme, we direct the Revenue Authorities to refund or adjust the amounts already deposited by the assessee in purported compliance with the provisions of the Scheme to the concerned assessee in accordance with law. All the appeals are accordingly disposed of without any order as to costs. Considering the aforesaid we quash the impugned order and direct the respondent - Revenue to adjust the amount of ₹ 3,28,068/- which has been deposited by the petitioner in relevant Assessment Year 2014-15
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2018 (8) TMI 575
Non issuance of the draft assessment order u/s 144C - whether after remand, it was necessary to issue a draft assessment order - Held that:- The issuance of a draft assessment order is not an empty formality. When a draft assessment order is passed and copy is given to the Assessee, the Assessee can raise objections before the Dispute Resolution Panel on any of the proposed variations. There is a right given to the Assessee to object, and to have the objections considered not by the Assessing Officer, but by the Dispute Resolution Panel. The Tribunal, by order dated 1 October 2012, set aside the entire exercise and the matter was relegated to the Assessing Officer. Once the matter was sent back to be decided afresh it went back to the stage of Section 144C(1) of the Act. Since the Tribunal set aside the proceedings on the ground of violation of principles of natural justice, the first exercise was void and without jurisdiction. Nothing remained on the record, including the draft assessment order. Therefore, issuance of a draft assessment order was necessary. We do not find from the scheme of Section 144C that if the proceedings were to be started a fresh on remand, the draft assessment order is not required to be given. Non issuance of the draft assessment order has thus vitiated the final assessment order. The view taken by the Tribunal in the impugned order that for want of issuance of draft order, the assessment order is without jurisdiction, cannot be faulted with. No substantial question of law
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2018 (8) TMI 574
TPA - Tribunal justification in law in excluding M/s. E Zest Solutions Ltd., M/s. FCS Software Ltd., M/s. KALS information Systems Ltd. and M/s. Bodhtree Consulting Ltd. from the set of comparables selected by the TPO - Held that:- Assessee is engaged in rendering software development services to its Associated Enterprises (AE) worldwide on captive basis at cost plus basis. Revenue and the Assessee who seek to prefer appeals from the orders of the Tribunal on Transfer Pricing particularly inclusion/exclusion of comparables. CIT and the Assessee in general would do well to also review the appeals filed and withdraw the same, in case the only challenge therein is to finding of facts, if the same is without evidence of any perversity or is in the face of settled legal position. Revenue is directed to serve a copy of this order on the Principal Chief Commissioner of Income Tax within the State of Maharashtra for necessary action
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2018 (8) TMI 573
The appeal is admitted on the following substantial question of law : Whether on the facts and in the circumstances of the case and in law, the Tribunal is justified in directing the Assessing Officer to exclude the concern namely M/s. Bodhtree Consulting Limited in the final set of comparables when the same concern has been included in the set of comparables by the assessee itself in the Transfer Pricing study report?
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2018 (8) TMI 572
Disallowance made of interest made u/s 36(1)(iii) - Held that:- Investment made in capital work in progress the ITAT, we find, agreed with the CIT(Appeals) that for the purpose of making disallowance of interest on account of investment made in work in progress, it was necessary to show that interest bearing funds had been borrowed specifically for the said purpose, which was not done by the Revenue. The Revenue, in the present case, we find, has not brought out to our notice any distinguishing facts. Even otherwise, assessee has demonstrated the availability of enough own funds for the purpose of making investment in land during the year, which fact has not been controverted by the Revenue before us. Therefore, following the parity of reasoning made in the earlier years by the I.T.A.T., no disallowance of interest on account of investment made in land during the year, we hold, was also warranted. Disallowance made u/s 14A r.w.r. 8D - Held that:- In view of the admitted fact that in preceding years the ITAT had held the exclusion of interest paid on specific loans taken for business purposes from the interest disallowable u/s 14A of the Act, we find no reason to interfere in the order of the CIT(Appeals) directing the Assessing Officer to recompute the disallowance in accordance with the said direction of the ITAT. No distinguishing facts have been brought to our notice by the Ld. DR. Therefore the direction of the CIT(Appeals) to follow the order of the ITAT in the preceding year in this respect is upheld.
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2018 (8) TMI 525
Speculation loss arising from commodity trading to the Assessee in off market transactions - added to its income or not - Tribunal held that there is no bar in undertaking off market transactions in commodities under the law and AO was duty bound to accept the profit shown in the Profit & Loss Account of the Assessee - Held that:- This is essentially a finding of the Tribunal on fact. No material has been shown to us which would negate the Tribunal's finding that off market transactions are not prohibited. As regards veracity of the transactions, Tribunal has come to its conclusion on analysis of relevant materials. That being the position, Tribunal having analysed the set of facts in coming to its finding, we do not think there is any scope of interference with the order of the Tribunal in exercise of our jurisdiction under Section 260A of the Income Tax Act, 1961. No substantial question of law is involved in this appeal. The appeal and the stay petition, accordingly, shall stand dismissed.
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Customs
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2018 (8) TMI 571
Misdeclaration of value and description of imported goods - Held that:- No ground is made out to entertain this appeal - Appeal dismissed.
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2018 (8) TMI 570
Classification of imported goods - projectors of a kind which are principally used in an Automatic Data Processing System - Held that:- Delay condoned - No ground is made out for our interference with the impugned judgment - appeal dismissed.
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2018 (8) TMI 569
Anticipatory bail - Import of Australian Desi Chickpeas - goods is covered by the Tariff Item No.07132000 where the duty payable was ‘Nil’ only as per the N/N. 50 of 2017 dated 30.06.2017 - on 21.12.2017, the N/N. 93 of 2017 was displayed on the notice board of the Customs House and published in the Official Gazette around 10:45 p.m., whereby the duty of Australian Desi Chickpeas was raised to 30% advalorem - demand of differential duty alongwith Interest. Held that:- This Court had specifically queried with the learned counsel with regard to the stand taken by the Department considering the fact that the Notification under section 93 of 2107 issued by the Department of Revenue, Ministry of Finance, was issued on 21.12.2017 at 10:45 p.m. and the official gazette also was published at 10:45 p.m. which had replaced the earlier Notification No.50 of 217 dated 30.06.2017, where the import duty on assessment of Australian Desi Chickpeas was nil. Nothing could be clarified as to how merely because the goods could not be physically removed from the Port, and when charge order was already issued, this kind of stand continued to be taken by the authority. The applicant has made out a case for grant of anticipatory bail in his favor. The application is allowed by directing that in the event of the applicant herein being arrested pursuant complaint, the applicant shall be released on bail on furnishing one solvent surety of ₹ 50,000/- with one solvent surety of like amount to the satisfaction of the trial Court on certain conditions.
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2018 (8) TMI 568
100% EOU - Refund claim - duty paid under protest - Held that:- This Court is of the view that when the order passed by the Tribunal has not been stayed or set aside by the Hon'ble Supreme Court, it is the bounden duty of the Adjudicating Authority to follow the law laid down by the Tribunal. Since a binding decision has not been followed by the Adjudicating Authority in this case, this Court can interfere straight away without relegating the assesse to file an appeal - order passed by the Adjudicating Authority shall stand quashed. Petition allowed - decided in favor of petitioner.
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2018 (8) TMI 567
Refund Claim - rejection on the ground that the Bill of Entry was not reassessed for arriving at the quantum of refund. Held that:- The issue whether the appellant can claim refund without challenging the assessment is already settled in the case of Fresenius Medical Care India Pvt. Ltd. Vs. Commissioner of Customs [2018 (7) TMI 103 - CESTAT CHENNAI] where it was held that the refund claim cannot be rejected for the reason that the assessment was not challenged. The matter requires to be remanded to the adjudicating authority who is directed to verify whether the appellant has paid excess duty - appeal allowed by way of remand.
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2018 (8) TMI 566
Duty Drawback - denial of benefit of drawback on the ground that the goods exported by the appellant were not handicrafts but furniture - Held that:- The identical issue stands considered by the Tribunal in the case of Commissioner of Customs, Jodhpur vs. Art Asia Sankalp International [2015 (1) TMI 795 - CESTAT NEW DELHI]. While dealing with same, the Tribunal observed that “The Revenue has gone by the examination of the furniture by the Customs Officers, who cannot be held to be experts in the field. There is no expert opinion produced by the Customs Authorities - the fact that the appellant is registered with the ‘Export Promotion Council for Handicrafts’, is indicative of the fact that furniture manufactured by the appellant is Handicrafts”. In view of the fact that the appellant is not only registered with the ‘Export Promotion Council for Handicrafts’ but has also produced certificates from them, certifying that the goods exported by the appellant were Handicrafts, it has to be held that the appellant exported handicraft items - the appellants are entitled to drawback benefits by treating the exported goods as Handicrafts. Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 565
Classification of goods - Washing Machine Parts (Wash Motor) - Claim of the Revenue is that the same should be classified as parts of washing machine under Customs Tariff Head 84509010, whereas the appellant claimed the classification under Customs Tariff Head 85012000 - Held that:- The Ld. Commissioner (Appeals) has not given any finding particularly with reference to the nature of the goods and whether the said motor is covered under the description of the Tariff Entry provided under 85012000 - Unless and until the nature of the goods is ascertained it is not proper to decide whether the goods can be classified by taking recourse of either note 2(a), 2(b) or 2(c) of Section XVI of Customs Tariff Act. Therefore, the finding of the Commissioner (appeals), only with the reference to section note without asserting the nature of the goods, is not proper. Matter remanded to the Commissioner (Appeals) for first examine the nature of the goods, thereafter to decide whether the wash motor imported by the respondent is covered under description of motor under CTH 85012000, only thereafter it can be decided whether it falls under 85012000 or 84509010 - appeal allowed by way of remand.
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Insolvency & Bankruptcy
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2018 (8) TMI 591
Corporate insolvency process - Held that:- The claim of the FCs that the FC-1 had granted a loan to the tune of ₹ 31, 66,000/- to the CD on 16-05-2013 and FC 2 had granted a loan to the tune of ₹ 72,32,000/- to the CD on 27-05-2013 on the terms and conditions, enumerated in the Annexures B and B-1, in a very poor light which , in turn, throw its weight more and more not behind the claim of the applicants herein -but-- behind the claims of the CD instead. It may be noticed here that the FCs also placed enormous reliance on the bank statements to show that the CD did receive the amounts, so stated in the resolution dated 16-05-2013 and the resolution dated 27-05-2013, and that too, under terms and conditions, incorporated therein. According to the FCs, since there was clear correlation between the bank statements and the statements, made in the Annexure B and B-1, there cannot be any escape from the conclusion that the CD had actually received the amounts, so stated in the Annexure B and B-1, and that too, on the terms and conditions, stated therein. Since there was no evidence whatsoever from the side of the CD to show that it ever repaid such loans, there was clear default in repayment of such loans which, in turn, provides this proceeding a robust basis requiring this Authority to initiate CIRP against the CD. I have considered such submission in the light of discussion, made hereinbefore and have already found that all the basic documents , tendered from the side of FCs, fail to establish that the CD had actually accepted the aforesaid loans, agreeing to the terms and conditions, specified in Annexure-B and B-1. Being so, when the primary evidence, pressed into service from the side of the FCs ,failed to show that the CD had actually received the amounts, so stated in the Annexure B and B-1, and that too, only under the terms and conditions, the bank statements, which are evidently in the nature of corroborative evidence only, could not do the role of resurrecting the case of the FCs. In such a situation, no difficulty, whatsoever in rejecting the argument, from the side of FC which structured taking bank statements as its fulcrum. Consequently, the claims of FCs that the FC1 had granted the CD a loan to the tune of ₹ 31,66,000/-on the basis of resolution dated 16-05-2013 and the FC-2 had also granted it a loan to the tune of ₹ 72,32,000/- on the basis of resolution, dated 27-05-2013 on the terms and condition enumerated in the Annexure-B and B-2 and that the CD failed to repay such loans in accordance with terms and conditions, being found untenable in view of materials available on record, are rejected. This proceeding is found devoid of merit and same is accordingly dismissed.
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2018 (8) TMI 590
Corporate insolvency resolution process for non-payment of dues - compliances required under Section 9(5)(i) for admitting the Application - Held that:- No evidence of repayment of any amount by the Corporate Debtor to the Operational Creditor. No repayment was made within the prescribed statutory period of ten days under Section 8(2)(b) of the I&B Code which gave the right to the Operational Creditor to file this present Application under Section 9 of the I&B Code. The compliances required under Section 9(5)(i) for admitting the Application have been fulfilled by the Operational Creditor. The written communication in Form 2 by the Interim Resolution Professional is also annexed to the Application Annexure ‘4’ declaring that no disciplinary proceedings are pending against him. The Application is in proper form with all the requisite Annexures. As stated above, there is no proof of any pending dispute regarding the claim amount and no payment has been made by the Corporate Debtor till date. The Bank Certificate issued by the Punjab National Bank certifying that no payment has been received from the Corporate Debtor and the bank statements provided proves that no payment has been made by the Corporate Debtor against the goods received by it. Thus the Operational Creditor has complied with all other formalities to maintain this petition as stated under Section 9(3)(b) and (c) of the I&B Code and the application is complete as per Section 9(5)(1)(a) of the Code. We do not find any reason to reject this petition.
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2018 (8) TMI 589
Corporate Insolvency Resolution Process - Held that:- In the case in hand the respondent company has committed default in repayment of the outstanding amount. Moreover, the application of the financial creditor is complete and there is no disciplinary proceeding pending against the proposed IRP. We are satisfied that the present application is complete and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been a default in repayment of the financial debt. As a sequel to the above discussion and in terms of Section 7(5)(a) of the Code, the present application is admitted.
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2018 (8) TMI 588
Initiating Corporate Insolvency Resolution Process - pre-existing dispute - Held that:- There is nothing on record which proves that there was pre-existing dispute relating to the alleged debt amount. Given above said facts and principle laid down in above cited case the contention of the respondent that there was a pre-existing dispute regarding goods/services given by the Operational Creditor to the Corporate Debtor is found devoid of merit. The Operational Creditor had not received the outstanding dues from the Corporate Debtor, and the requirements as prescribed under I &B Code have been completed by the Petitioner. The operational creditor has not proposed the name of any insolvency professional, but under section 9 of the insolvency in the Bankruptcy Code, it is not mandatory to propose the name of insolvency professional. The application is in form 5 duly filled all five parts of the form (under rule 6(1) of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016) and accompanied with the fee prescribed under the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. On the basis, we find the Application is complete and deserves ‘Admission.’ Hence Admitted.
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Service Tax
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2018 (8) TMI 564
Adjustment of the second installment of service tax - Held that:- The Petitioner had called upon the Authorities to verify the office record and rectify the error. Though it is the contention of Ms. Dessai that this document is more of a representation than an application, we cannot overlook the fact that the proprietor of the firm, a lady was suffering from cancer when she made the representation. Further more, Section 74 does not contemplate any particular format as such, empowering the Central Excise to rectify the mistake on his own and, if any mistake is brought to his notice by the Assessee. The Petition can be disposed of by directing the Respondent-Authority to decide the representation dated 20 August 2016.
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2018 (8) TMI 563
Commercial concern or not - demand of Service Tax - Whether, the Tribunal was justified in holding that the applicant is a commercial concern as per section 65(105)(zzb) of the Finance Act, 1944 and is liable to pay service tax for the period from 1.7.2003 to 1.3.2005 of ₹ 36,935/- whereas the appellant was working as an individual, in getting investments in mutual funds on commission basis? Held that:- Merely because the appellant has referred in the his address as Capital consultancy, even if it is a proprietor ship firm, it is an individual - the applicant will not be commercial concern in view of clause 65(105) (zzb) of the Finance Act, 1944. Appeal allowed - decided in favor of assessee.
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2018 (8) TMI 562
Whether the Hon’ble Tribunal is right in dismissing the appeal even though the retrospective amendment with regard to the payment of service tax is pending before the Hon’ble Apex Court? Held that:- The Order dismissing the Appeal is consequential to Order, dated 30-12-2014. It could be seen from the Memorandum of Grounds of Appeal that the appellant has failed to question Order, dated 30-12-2014, passed in the stay application. Unless the appellant has questioned the said order, it is not entitled to question the consequential order. The Appeal is wholly misconceived and the same is, accordingly, dismissed.
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2018 (8) TMI 561
Business Auxiliary Services - commission/incentive/remuneration etc. - Held that:- As regard the taxability of the services, the same has been settled against the appellant by the Larger Bench in case of Pagariya Auto Centre [2014 (2) TMI 98 - CESTAT NEW DELHI (LB)] - demand upheld. Time Limitation - Held that:- The appellant have neither registered themselves nor filed any ST-3 return. In such a situation department was absolutely unaware about the activity of the appellant. Therefore, there is a clear suppression of fact - the demand was rightly confirmed for the extended period. Penalty u/s 76 and 78 of FA - Held that:- The penalty under Section 76 and 78 cannot be imposed simultaneously - reliance placed in the case of Raval Trading Co. [2016 (2) TMI 172 - GUJARAT HIGH COURT] - penalty u/s 76 set aside - penalty u/s 78 upheld. Appeal allowed in part.
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2018 (8) TMI 560
Demand of Service Tax - Reverse charge mechanism - Section 66A of Finance Act, 2006 - ECB obtained by the respondent from International Finance Corporation Washington, USA - the said corporation does not have any office in India - Held that:- Revenue has not disputed the fact that IFC enjoys immunity from payment of tax. Their only contention is that tax is not being confirmed against IFC but the confirmation is against the assessee, who is located in India - there is no merits in the above contention of the Revenue. Admittedly, the service provider is IFC and the demand relates to the services provided by the said organization located in USA. It is also admitted that the said organization enjoys immunity from payment of service tax. In the ordinary course the tax liability is on the service provider and it is only when the services are obtained from abroad and service provider has no office in India, the tax liability gets shifted to the service recipient, who is required to pay the tax on reverse charge basis. Thus, though there is no obligation on the part of the service recipient to pay the tax but in case service is received from a foreign entity, not having any office in India, the service tax liability gets shifted to the service recipient on reverse charge basis. As such it is not the liability of service recipient but the liability of service provider which gets shifted to the service recipient on deemed basis. In case of no liability of IFC to pay the tax, no liability to pay the same by the service recipient on reverse charge basis would arise. Appeal dismissed - decided against Revenue.
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2018 (8) TMI 559
CENVAT Credit - common input services, which had been used in or in relation to providing of “taxable service” as well as exempted service - non-maintenance of separate records - Rule 6(3)(i) of the Cenvat Credit Rules, 2004 - Held that:- Admittedly appellant have reversed the Cenvat credit availed in respect of the common input services - As per the Hon‟ble Karnataka High Court decision in the case of CCE, Mangalore vs. Kudremukh Iron & Steel Company Ltd. [2011 (4) TMI 950 - KARNATAKA HIGH COURT], the reversal of the credit relatable to the exempted final services would amount to a situation as if no credit was availed. If that be so the question of payment of any amounts on the final exempted service does not arise at all - thus, only the Cenvat credit in respect of input services relatable to their uses in the exempted services is required to be reversed on proportionate basis - matter remanded for calculation of the credit to be reversed by the assessee. Penalty - Held that:- There being a bona fide issue of interpretation of legal provisions as also for appreciating the fact that the credit was availed by reflecting the same in the statutory records, the penalty is set aside. Appeal allowed by way of remand.
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2018 (8) TMI 558
CENVAT Credit - input services - rent-a-cab services - Held that:- The issue involved in the instant case were specifically addressed by Hon’ble High Court of Gujarat in the case of Vijay Travels [2015 (1) TMI 809 - GUJARAT HIGH COURT], where it was held that Petitioner cannot escape tax liability on the ground that the hiring is different from renting as the intention of the Government is to tax service provider of a service which involves both hiring and renting of a cab for a longer duration and distinction as sought to be carved out by the petitioner is not finding favour with this Court. Demand upheld - however, the demand beyond the period of limitation is set aside - appeal allowed in part.
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2018 (8) TMI 557
CENVAT Credit - various inputs - the inputs are used for construction of factory shed, building or lying of foundation or making of structures for support of capital goods etc used for providing outward service of Erection, Commissioning and Installation - N/N. 16/2009-CE (NT) 07.07.09 - Held that:- The entire controversy revolves around the Notification No. 16/2009-CE (NT) 07.07.09 whereby in the definition of the inputs under explanation to the goods such as Cement, M S Angles, Channels, TMT bars, TMT Rods etc used for construction of factory shed building or laying of foundation or making of structures for support of capital goods were excluded. It is clear that this explanation is exclusively in respect of manufacturer for the reason that explanation was provided in respect of the goods such as Cement, Angles, MS Channels, TMT Bars & Rods etc only when it is used for construction of factory shed, building or laying of foundation or making of structure for support of capital goods. The use of factory shed is very clear that it is meant for manufacturer and not for service provider. Therefore, by taking inference form the aforesaid explanation credit in respect of the inputs which is undisputedly used for providing output service namely, Erection Commissioning Installation Credit cannot be denied. Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 556
Commercial Training and Coaching Centre - appellant M/s Institute of Chartered Financial Analysis of India (M/s. ICFAI) offer the certificate and degree in courses offered by them through a branch office located in Baroda - Vocational training or not? - N/N. 24/2004-ST dated 10.09.2004 as amended - Held that:- The very same issue has already been decided in the appellant’s own case by this Tribunal in M/s Institute of Chartered Financial Analysis of India vs. Commissioner of Service Tax, Bangalore [2017 (11) TMI 349 - CESTAT HYDERABAD], where it was held that There can not be any doubt as to the fact that the students successfully completing the educational programmes of the appellants are being selected for employment by various organisations, whereas the explanation as to what is vocational training institute indicates that the said exemption can be extended to any vocational training institute which imparts skills to enable the trainee to seek employment or undertake self-employment directly after such training or coaching. Demand set aside - appeal allowed - decided in favor of appellant.
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2018 (8) TMI 555
Taxability - margin received in the form of discount - sale of Sim Card of Vodafone, a Telecommunication service provider - Held that:- The issue is no more res-integra and is decided in the case of COMMISSIONER CENTRAL EXCISE, LUCKNOW VERSUS M/S CHOTEY LAL RADHEY SHYAM [2017 (9) TMI 509 - ALLAHABAD HIGH COURT], where it was held that activity of purchase and sale of SIM card belonging to BSNL where BSNL has discharged the service tax on the full value of the SIM cards, does not amount to providing business auxiliary services and confirmation of demand on the distributors for the second time is not called for - demand set aside - appeal dismissed - decided against Revenue.
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2018 (8) TMI 554
CENVAT Credit - service received from MSO - cable operator service - appellant were under bonafide belief that since MSO was brought into tax net, the MSO are supposed to pay the service tax and the appellant was not required to pay the service tax on the same service, and therefore, during the period April 2005 to August 2006 they have not discharged the service tax - Held that:- If the appellant is entitled to the Cenvat Credit accordingly the demand of Service Tax should stand reduced to that extent. As regard entertainment tax, there is a finding of the adjudicating authority that though they made a submission but no evidence was adduced in this regard. The Ld. Counsel has invited our attention to Chartered Accountant Certificate by which it appears that they have paid the entertainment tax - If it is found correct, the gross value should stand reduced to the value of entertainment tax and the Service Tax demand should be computed accordingly. The appeal by way of remand to the adjudicating authority for passing a fresh order.
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2018 (8) TMI 553
CENAVT Credit - Reversal of 6 % in terms of Rule 6 - refund as per Section 102 of Finance Act, 2016 - scope of SCN - Held that:- This is not a case of normal availment of CENVAT credit knowingly that the output service is exempted. The appellant have legally and correctly availed the CENVAT credit as their output service was taxable during the period April 2015 to February 2016. Thereafter as per the mandate given under Section 102 of Finance Act, 2016, they became entitled for the refund. In order to process the refund, they were supposed to reverse the CENVAT credit attributed to the output service. In this exceptional case, the Commissioner (Appeals) should not have brought into a new ground of Rule 6 for denying the refund. However, the adjudicating authority had no occasion to verify the correctness of the reversal of credit attributed to the exempted output service - the adjudicating authority needs to verify the facts - appeal allowed by way of remand.
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Central Excise
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2018 (8) TMI 552
Permission to withdraw special leave petition - Maintainability of petition - alternative remedy of appeal - Held that:- Permission is granted - the special leave petition is dismissed as withdrawn.
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2018 (8) TMI 551
Whether the Tribunal is justified in ignoring the explanation submitted by the appellant that mistake was on the part of supplier of cartons in delivering the cartons belong to M/s Sadhvi Gramodyod Samita, Umran, Kanpur Dehat and M/s Manoj Gupta & Co., Chiraura, Kanpur Dehat in the factory premises of the party-appellant? Held that:- It is clear from the impugned order itself that the appellant-assessee had accounted those confiscated goods and cleared on payment of duty as well. The aforesaid questions of law are not the questions of law and only are factual aspects of the matter. The appeal thus, has no merit and substance inasmuch as no question of law for interpretation by the High Court is involved and, therefore, the appeal is dismissed on this ground alone.
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2018 (8) TMI 550
Classification of goods - appellants procured Commingled Crude oil and Dehydration process was undertaken - whether the goods would be classified under CTH 27101950 or under CETH 27090000? - Held that:- It appears that the process undertaken is only Dehydration and not akin to Distillation - in the above process, only water is removed from the Crude oil and is collected and re-channeled. As normally understood, Distillation is the technique of heating a liquid to create vapour which is collected when cooled separate from the original liquid. It is based on the different boiling point or volatility and values of the components, the technique may be used to separate components of a mixture or to add in purification. HSN 27.10 categorically states that the products covered by this heading are those who have undergone any process other than those specified in the Explanatory Note to Heading 27.09. In view of the above, it is clear that for the products to fall under 27.10 they have to undergo the processes which are other than those listed under 27.09 - in the instant case, the processes undertaken by appellants are not those beyond the cases listed therein - thus, there is no hesitation in holding that the impugned product is rightly classifiable under CTH 27090000. It was incumbent on the Department to immediately study the process of manufacture or to get it examined by an expert or by getting the samples so as to conclude that the process undertaken by the appellants amounted to manufacture and a clearly distinguishable product having a distinct name, character and use has emerged. This was not done so. Therefore, merely alleging that the burden was on the appellants is not acceptable - the onus of proving the classification is on the Department which has not clearly discharged the burden of doing so. Going by the process undertaken by the appellants, HSN Notes and the ratio of cases referred, it can be concluded that the product emerging out of the process undertaken by the appellants is rightly classifiable under CTH 27090000 - appeal allowed - decided in favor of appellant.
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2018 (8) TMI 549
CENVAT Credit - duty paying documents - supplementary invoices - Rule 9(1)(b) of the Cenvat Credit Rules - whether the Appellants are entitled to Cenvat Credit on the basis of supplementary invoices issued by the coal companies? - whether the said credit stands denied in terms of Rule 9(1)(b) of the Cenvat Credit Rules which denies the credit if the supplementary invoices are issued for duties which became payable by the manufacturer on account of willful misstatement or suppression of facts on their part? Held that:- It is an admitted position that demand raised by the department against M/s. SECL is under challenge before the Hon’ble Supreme Court and therefore the Cenvat credit can be availed by the manufacturer on the strength of supplementary invoice since such amount of duty cannot be said to be paid on account of any non-levy or short levy by reason of fraud, collusion or any willful mis-statement or suppression of facts or contravention of any provision of the Central Excise Act/Rules with intent to evade payment of duty. In identical set of facts involving the same coal company i.e. M/s. SECL, this Tribunal has allowed the Cenvat Credit holding that there cannot be suppression of fact when the issue of liability of payment of Excise duty at the end of the coal companies was a debatable issue which is pending adjudication before the Hon’ble Supreme Court. The Appellant is entitled to take Cenvat Credit on the supplementary invoices in question - credit allowed - appeal allowed - decided in favor of appellant.
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2018 (8) TMI 548
CENVAT Credit - common input services for “trading goods’ as well as for manufactured taxable goods - whether the appellant are entitled for Cenvat credit of common input services used for trading of the goods or not? Held that:- The matter is no longer res-integra as it has already been decided in the case of M/s Mercedes Benz India Pvt. Ltd. vs. CCE, Pune – I [2014 (4) TMI 12 - CESTAT MUMBAI] that the assessee is not entitled to input service Cenvat credit on the exempted goods which also cover trading activity. Amendment to Rule 2 (e) of the Cenvat Credit Rules, 2004 vide Notification No. 3/2011-CE (NT) dated 01/03/2011 has been inserted w.e.f. 01/03/2011 - Held that:- The retrospective applicability of the explanation, which has been inserted under Rule 2 (e) of the Cenvat Credit Rules, 2004 becomes applicable retrospectively as same is being considered as an explanation to the already existing provisions. Whether the appellant need to reverse back the Cenvat credit @ 6% of the value of traded goods or the proportionate of Cenvat credit as availed by them towards trading of the goods? - Held that:- Tribunal in its various decisions has held that it has never been intention of the legislature to recover from the assessee what is actually attributed to have been used for providing exempted service. In another case of the assessee - reliance placed in the case of M/S. MERCEDES BENZ INDIA (P) LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [2015 (8) TMI 24 - CESTAT MUMBAI] - thus, the appellant is not entitled for taking Cenvat credit on common input services going for trading of goods. Penalty u/s 11AC of Central Excise Act, 1944 - Held that:- Since the position of the CENVAT credits attributable towards the trading of goods have already been reversed by the appellant voluntarily before issue of show cause notice, there is no justification in imposing penalty under section 11AC of Central Excise Act, 1944 on the appellant. Matter remanded back for denovo adjudication to the Original Adjudicating Authority to see whether the party’s claim of reversal of common input service credit is correct or not and to decide the same
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2018 (8) TMI 547
CENVAT Credit - the allegation is that UAL failed to take reasonable steps to ensure that inputs in respect of which they had taken CENVAT credit were the goods on which appropriate duty of excise as indicated in the documents accompanying the goods have been paid - Held that:- There is no allegation that the supplier / dealers are not registered. It is also indicated that these dealers have received various types of scrap from manufacturers and at the same time, they have also purchase local scrap in cash - There is nothing in the statement of P. Kumaresan to support any allegation that the samples tested by him were found to be different from that invoiced. It is also not the case that the department had intercepted some of the raw materials supplied, taken samples thereof, got them tested and proved that what was received was not what was invoiced. The department has not sufficiently proved its case. The allegations in the show cause notice are not supported by any solid evidence but only statements. Hence, even a preponderance of probability has not been proved by the department. Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 546
Compounded levy Scheme - Closure of machinery - demand of Central Excise duty in respect of closed machines - N/N. 17/07-CE dated 01/03/2007 - Held that:- In the instant case N/N. 17/07, gives an option of concessional rates of duty subject to certain conditions. The opening para of the said notification clearly prescribes that the assessee shall have an option to pay duty of excise on the cold rolling machines “installed” for cold rolling. It is apparent that the appellant have consciously opted for a scheme which does not envisage any concession in respect of machines which is installed in the factory but is not used. Para 6 and 8 of the Notification prescribed on the condition in respect to new factory/close factories resuming number of factories ceasing to work or reverting to normal procedure. There is no procedure in the notification or the scheme regarding non use of installed machines - Having chosen the option of availing the concession on the basis of number of machines installed, the appellants cannot now claim that the benefit of machines which they have declared to have not been used during certain period. Appeal dismissed - decided against appellant.
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2018 (8) TMI 545
Valuation - enhancement of value on the basis of private records recovered from shop premises - Held that:- In the instant case the matter was earlier remanded by Commissioner (Appeals) in special direction to provide the relied upon document namely diary to the appellant. However, the diary was not provided as the same could not be traced by Revenue. The demand was however confirmed by the Original Authority and subsequently by the first Appellate Authority without providing diary. The primary evidence against the appellant in the instant case is diary and the statement of Shri S.S. Saboo recorded on 28/29.10.1997. The said diary has not been providing to the appellant and the statement of Shri S.S. Saboo was retracted on the very next day - In absence of primary evidence not being supplied to the appellant to contest the charge made on them, the demand cannot be sustained. Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 544
Benefit of exemption from payment of National Contingent Calamity Duty (NCCD) on the POY - Captive consumption of POY - Whether the NCCD is payable on POY captively consumed or exempted from payment of duty by virtue of N/N. 67/1995-CE dated 16.03.1995, as amended? Held that:- In the present N/N. 67/95 CE, NCCD has not been mentioned allowing exemption from duty. Therefore, following the principle, in the context of N/N. 50/2003 CE, which is in pari materia with N/N. 67/95CE, it can be safely inferred that exemption from NCCD cannot be extended to POY captively consumed - the decision in the case of M/S. BAJAJ AUTO LIMITED VERSUS UNION OF INDIA AND THREE OTHERS [2014 (11) TMI 616 - UTTARAKHAND HIGH COURT], followed, where it was held that Exemption granted by a notification must be read limited to the duty of excise as mentioned in the notification, and by simple interpretation it cannot be extended to cover any other kind of excise duty. The Respondent are not eligible to the benefit of exemption N/N. 67/1995-CE dt.16.3.1995 from NCCD, on captive consumption of POY. Appeal allowed - decided in favor of Revenue.
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2018 (8) TMI 543
Recovery of Sugar Cess - export of Sugar Cess - whether the sugar cess is payable on export of sugar during the relevant period? - N/N. 42/2001-CE (N.T.) dated 26.06.2001 - Held that:- The levy of sugar cess has been exempted by virtue of notification issued by the Ministry of Food dated 30.07.1993 as mentioned in Appendlix-III of the Central Excise Tariff Act, 1985 on its export out of India - Also, in the Circular of the CBEC dated 20.03.2007, it is clarified that cess is payable unless it is exempted. Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 542
Demand of Differential duty - redetermination of the Annual Capacity of Production under Hot Rerolling Mills Annual Capacity Determination Rules, 1997 read with Rules 96ZP of erstwhile Central Excise Rules, 1944 - Held that:- In the case of Venus Castings (P) Ltd. [2000 (4) TMI 37 - SUPREME COURT OF INDIA], Rule 96ZP(3) was held ultravirus however in another case of Bhuwalka Steel Industries Ltd. Vs UOI [2017 (3) TMI 1357 - SUPREME COURT OF INDIA], the Hon’ble Supreme Court dealing with the same issue referred the matter to the Larger Bench of Hon’ble Supreme Court. It will not be appropriate for this Tribunal to take any decision at this stage - the matter remanded to the original authority to decide the matter only after the outcome of the Hon’ble Supreme Court judgment by the larger Bench in the case of Bhuwalka Steel Industries - appeal allowed by way of remand.
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2018 (8) TMI 541
N/N. 83/94-CE - Job-work - benefit denied on the ground that the Principle manufactures who supplied them, the goods for Job Work neither had any factory nor manufacturing facilities and was also not registered under Excise - Held that:- The principal who had supplied the goods for Job work is not having the factory and is also not registered. The principal had also not filed the declaration with jurisdiction of Central Excise Authority undertaking to used the goods received from the Job Worker for manufacturer of dutiable goods - as the principal does not have a factory or registration he would not fulfill requirements of N/N. 83/94-CE. In instants case, Power of Attorney holders of his principle supplying the goods for Job Work, and the appellant manufacturer, was common entity. In this circumstance, the claim of the appellant that they cannot be expected to know about of activities of the Principal full flat. Appeal dismissed - decided against appellant.
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2018 (8) TMI 540
Rectification of Mistake - Typographical error - Held that:- There has been typographical error in the order dated 03.04.2017. The Words "Excisable Goods" appearing at the end of para 4 of the said order may be substituted by the words "Exempted Goods". In para 5 of the order dated 03.04.2017 for the words "Shri Saibal Niyogi" the words "M/s Hindalco Industries Limited and Mr. Saibal Niyogi" May be substituted. ROM applications are allowed.
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2018 (8) TMI 539
Entitlement of Interest on delayed refund - relevant date for calculation of Interest - whether the appellant is entitled for interest on refund of amount of duty paid during the investigation of the case from the date of deposit or after 3 month from the date of filling appeal in the event when the demand was dropped by the Tribunal order? - Held that:- As regard, the deposit made during the investigation it is obvious that there is no provision in Central Excise or to make a deposit. Whatever payment made it is towards the probable Excise duty liability for which the investigation is undergoing, therefore, it cannot be said that any deposit made during the investigation so made by the assessee is not a duty but only a deposit - Once the adjudication authority confirms the demand the said amount stands confirmed as duty only, the same being the duty stands appropriate against the demand confirmed in the adjudication order. For this reason also the amount even though that paid during the investigation, shall be considered as payment of duty. The refund of such duty amount is clearly governed by the Section 11B, of Central Excise Act, 1944 - In case of refund under Section 11B provision, of interest is available Under Section 11BB. In terms of such section, of interest is payable only from the date after completion of 3 months from the date of filling the refund application - Therefore, the interest in any case is not payable from the date of deposit of the amount during the investigation. Appeal dismissed - decided against appellant.
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2018 (8) TMI 538
CENVAT Credit - credit availed on the strength of Photocopy of bill of entry which was certified by the Custom Authority - Held that:- The credit was availed by the appellant on photocopy but photocopy was certified by Custom Authority that means the bill of entry is not under doubt - Secondly, he has produced various documents such as bills of entry along with copy of transport LR and Challan, stock register, gate inward register etc. which establish that the goods covered under the bill of entry has been received in the factory of the appellant and used in the manufacture of final product, therefore, merely the documents is the photocopy CENVAT cannot be denied particularly when other evidences show that the goods receipt is not in dispute. CENVAT Credit allowed - appeal allowed - decided in favor of appellant.
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2018 (8) TMI 537
Validity of SCN - cylinders procured for manufacture of the goods - the appellant have neither manufactured nor supplied the packing material to M/s ICI Ltd - Held that:- In the SCN the demand was straightaway issued on the debit notes raised towards the cost of cylinder to M/s ICI Ltd. The SCN has not brought out any details of the final product manufactured and supplied to M/s ICI Ltd, therefore, the demand raised on the cylinder cannot be sustained for the reason that the cost of the cylinder can at the most be included as an amortization cost in the manufacture of final product, when admittedly no goods using this cylinder were manufactured by the appellant neither the amortization cost can be included, nor the demand on the cost of cylinder can be raised, therefore, the demand confirmed on cost of cylinders does not sustain. Since the appellant is not contesting the demand of ₹ 8687/- the same stand upheld. Appeal allowed in part.
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2018 (8) TMI 536
CENVAT Credit - various input services - car hiring services - aircraft hiring services - subscription to membership charges - online information & database access service - training service - advertisement & publicity service - denial on account of nexus. Aircraft hiring services - Held that:- Since there is exclusion provided in respect of certain services which exclude such services which are used for personal use. It is necessary to establish that whether the input services, on which the credit availed by the appellant; is for personal use of the employees of the appellant. This being a matter of facts needs verification from the records of the appellant - matter on remand. Subscription to membership charges - Held that:- The subscription is in respect of associations such as the Chambers of Commerce and Indian Business Council. Subscription of these associations and Chambers are only for the purpose of business of the assessee. This issue of credit in respect of Business subscription has been considered by this Tribunal in many cases and in respect of all the business associations subscription was held as admissible input service, and the credit was allowed - credit allowed. Online information and database access service - training services - advertisement service and publicity services - Held that:- All these three services are specifically in the inclusion clause of the definition of input services - In respect of services which are included in the inclusion clause, the assessee need not to establish nexus - credit allowed. Appeal allowed in part and part matter on remand.
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2018 (8) TMI 535
CENVAT Credit - duty paid return goods - denial of credit on the ground that the customers of the appellant while returning the goods have not shown the purpose for which it is returned - Held that:- Rules 16 does not prescribe the condition that the supplier of the return goods should mention the purpose. Even if no activity is carried out, the transaction is squarely covered by Rule 16. Therefore, the purpose is not significant for availing the CENVAT credit in Rule 16. The appellant have not violated or contravented any such provision as regard Rule 16 - credit allowed - appeal allowed - decided in favor of appellant.
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2018 (8) TMI 534
CENVAT Credit - place of removal - services in relation to export of the goods which has taken place from foreign port to the foreign customer’s port - denial on the ground that services were beyond the place of removal - Held that:- ₹ 5340 was demanded which related to Swacch Bharat Cess paid on the Service Tax. As per the submission of the appellant they have not availed the CENVAT credit as there is no provision for taking the credit. Therefore, as per the appellant, credit was not taken on Swacch Bharat Cess. The same should not have been included in the demand. However, the lower authorities have not given any finding on this. Therefore, this needs to be verified by the adjudicating authority and if the credit is not taken the same should be set aside. Time limitation - it was contended that the appellant have not given the description of the services in ER-1 return - Held that:- There is no provision in the law or column in the ST3 return for giving the description of the services. Therefore, merely on that ground suppression cannot be alleged against the appellant - the adjudicating authority has not properly dealt with the issue of limitations - matter needs reconsideration. Appeal allowed by way of remand.
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2018 (8) TMI 533
CENVAT Credit - input service - whether appellant is entitled for CENVAT credit in respect to the construction services of residential building for the staff - Time Limitation - Held that:- Though the appellant have raised the issue of limitations before the Commissioner (A) who has not given any finding as regard the time bar of the demand. Since the issue of limitation is a mixed question of facts and law, the Commissioner (A) was supposed to give finding. The Commissioner (A) has not dealt with this issue. It is in the interest of justice that the matter should go back to the Commissioner (A) for deciding the issue of limitations - appeal allowed by way of remand.
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2018 (8) TMI 532
CENVAT Credit - input services - construction services - rent a cab services - whether the appellant is entitled for CENVAT credit in respect of services namely, construction service, rent a cab service and conventional services? - Held that:- Though the exclusion in respect of rent a cab services was made with effect from 01.04.2011, the exclusion entry reads as (B) services provided by way of renting of a motor Vehicle, is so far as they relate to a motor vehicle which is not the capital goods. On reading of the above entry, the rent a cab service was excluded only in a case where a motor vehicle which is rented out is not a capital goods - In the present case, the passenger vehicle was taken on rent by the appellant which falls under Chapter Head 87.02 and the rent a cab service falls under clause (0) sub clause (o) of clause 105 of section 65 of the Finance Act. Accordingly, in terms of clause (B) of definition of capital goods provided under Rule 2 (a) the motor vehicle taken on rent by the appellant is a capital good. Therefore, it does not cover under the exclusion entry provided under clause 2 (e) under sub clause B of Rule 2(a) of CENVAT credit rules. Therefore, rent a cab is an admissible input service and credit is admissible - credit allowed. Conventional services - Held that:- The credit was denied only on the ground that it is an optional service for the appellant. It is not understood how the Revenue can decide which are the optional and which are the essential services of a business organization. From the fact it is clear that conventional services was availed for upgrading their overall system of maintenance of bulk handling which is related to the manufacture and removal of goods - credit allowed. As regard construction service, the finding of the Ld. Commissioner upheld as much as he has directed to the adjudicating authority for verification. Appeal disposed off.
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2018 (8) TMI 531
CENVAT Credit - input service - Construction Service - the invoice of Construction Service on which the Credit was availed issued on 24.08.2011 - case of Department is that Construction Service was excluded from the purview of definition of inputs service - Held that:- As per the completion Certificate produced by the appellant even to the lower authority, it is clear that the service was completed as on 25.03.2011 for which the invoice was issued on 28.04.2011. In view of this certificate, there is no dispute that the service was completed prior to 01.04.2011. Tribunal in the case Kamal Rub Plast Industries Pvt. Ltd [2016 (5) TMI 13 - CESTAT NEW DELHI], wherein the identical situation was existing and the Tribunal has held that the credit cannot be denied for the delay in issuing the invoice. Credit allowed - appeal allowed - decided in favor of appellant.
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2018 (8) TMI 530
Valuation - related party transaction - whether the appellants herein namely; M/s L. G. & M/s Onida are related to the appellant - M/s VPIPL as per the provisions of Section 4(3)(b) of the Act? - If they are so related, whether the goods cleared by M/s VPIPL to the other appellants are liable to be valued in the light of Rules 8 & 9 read with Central Excise Valuation Rules, 2000 for the purpose of payment of duty on such goods? - whether penalties have been rightly imposed on M/s VPIPL under Rule 173Q of the Central Excise Rules, 1944 along with penalty under Rule 26 of the Central Excise Rules, 2001/2002 on M/s L. G. & M/s Onida? Held that:- It is clear that M/s VPIPL was manufacturing Plastic Molded Components for and on their own behalf. Such observation is also corroborated on looking to the Terms & Conditions with M/s L. G., laying down about M/s L. G. having right of rejection, where the goods supplied by M/s VPIPL were not found in accordance with the Specifications and Quality. In such eventuality, it is M/s VPIPL who have to make arrangement for the transportation of the rejected goods from the premises of M/s L. G. to their own factory. The order passed by the Commissioner of Central Excise, Noida, does not provide any evidence which could nullify the Terms of the Agreement, referred to above. The Terms of the Agreement goes on to establish that such terms could only be where the Transactions between the Buyer & Seller are on Principle-to-Principle basis. - There is not an iota of evidence which could establish about M/s L. G./M/s Onida having any Managerial, Administrative and Financial control on M/s VPIPL or vice-versa. M/s VPIPL has Share-Holding of the members of Batra family M/s L.G/ M/s Onida being Multi-National-Companies. In no way they can be considered under the Term “Related” as per Section- 4 (3) (b) of Central Excise Act. The Transactions between M/s VPIPL with M/s L.G/M/s Onida are on Principal-to-Principal basis and the price charged for sale of Plastic-Molded-Components to M/s LG/M/s Onida is the sole consideration of the Sale. They are not covered also by the expression “Related” as defined under Section – 4 (3) (b) of the Central Excise Act. Accordingly, the provision of Section 4(3)(b) (iv) of the Central Excise Act cannot be invoked in the present case. The demand confirmed along with interest and penalty imposed on M/s VPIPL needs to be set aside - as the case is decided on merits, the another plea of time bar is not discussed. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2018 (8) TMI 529
Compounding of offences - section 74 of the Kerala Value Added Tax Act, 2003 - Petitioner challenges the assessment order inter alia contending that it was based on a compounding order which is patently illegal - Held that:- The Special Leave Petition is dismissed.
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2018 (8) TMI 528
Principles of Natural Justice - reversal of Input Tax Credit - the original invoices were not produced before the Enforcement Wing officials at the time of surprise inspection, nor they were enclosed in the objections submitted by the petitioner - Held that:- Admittedly, the petitioner while filing his objections, has given an undertaking that he will produce the original invoices before the respondent - It is well settled that before deciding the issue, an opportunity of personal hearing shall be given. Had the respondent called for production of the original invoices as promised by the petitioner, he would have produced them and a decision on the basis of materials could have been taken. The observation made by the assessing authority would lead us to infer that he has taken the report submitted by the Enforcement Wing officials as gospel truth and passed orders being influenced by the same. Such an order is not fair and sustainable. The matter is remanded back to the respondent for fresh consideration - petition allowed by way of remand.
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2018 (8) TMI 527
Levy of Luxury Tax - inclusion of rent charged on furniture and utensils in the total turn over for determination of the luxury tax - Kerala Tax on Luxuries Act, 1976 - Held that:- When, as submitted by the learned counsel, utensils and furniture are supplied by outsiders even on rent, then necessarily, such component cannot be included in the turn over of the assessee. However, the assessee has not been able to show even in one instance, when such an amenity or service was provided from outside and included in the turnover - The contention taken is a mere speculation without any backing on facts - appeal dismissed. Penalty - Held that:- The orders issued in Ext.P6 and P6(a) reveal that the assessee despite notice on inspection refused to furnish the books of accounts. The penalty imposed is also based on the materials recovered on inspection; assessing tax on the turn over found and proved by the recovered materials - penalty upheld. Appeal dismissed - decided against appellant.
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2018 (8) TMI 526
Input tax credit - double claim of input tax credit - Section 19(18) of the Tamil Nadu Value Added Tax Act, 2006 - Held that:- It is admitted fact that there is an excess input tax credit to the credit of the petitioner. Even assuming that the respondent wanted to reverse the input tax credit, he ought to have deducted the same from the available credit of the petitioner as on 30.06.2017. Since the Goods and Service Tax Act came into force with effect from 01.07.2017, the question of carrying forward does not arise. The petitioner is entitled to maintain an application for refund - The respondent misdirected himself in the manner in which the proceedings should have been conducted, resulting in, an erroneous order. Had the respondent afforded an opportunity of personal hearing, these writ petitions itself could have been avoided and proper assessment orders could have been passed. The matter requires to be remanded to the respondent for fresh consideration - appeal allowed by way of remand.
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