TMI Tax Updates - e-Newsletter
August 12, 2023

Case Laws in this Newsletter:

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

Articles

1. Benefits of Company Registration in USA for Foreign US- Resident

   By: Ishita Ramani

2. SEBI INTERMEDIARY - INVESTMENT ADVISER

   By: DR.MARIAPPAN GOVINDARAJAN

3. Revenue Department cannot pass ex-parte rectification order u/s 161 of the CGST Act

   By: Bimal jain

4. Revenue Department cannot seize cash which does not form part of stock in trade

   By: Bimal jain

News

1. Govt. plans to make Open Network for Digital Commerce accessible and far-reaching

2. DPIIT conducts All India Nodal Officers' Workshop to engage with key stakeholders for accelerating Open Network for Digital Commerce initiative

3. Finance and Corporate Affairs Minister Nirmala Sitharaman delivers keynote address at G-20 Finance Track seminar on ‘Global Economy: Challenges, Opportunities and the Way Forward’

4. Direct Tax Collections for F.Y. 2023-24 up to 10.08.2023

5. 53rd National Planning Group Meeting under PM GatiShakti recommends 6 infrastructure projects

Notifications

GST - States

1. 1/2023-TNGST PP-2/GST-15/54/202 - dated 1-8-2023 - Tamil Nadu SGST

Exemption from filing annual return for the said financial year to registered person whose aggregate turnover in the financial year 2022-23 is up to two crore rupees.

2. G.O.Ms. No. 86 - dated 27-7-2023 - Tamil Nadu SGST

Amendment in Notification No. II(2)/CTR/532(d-14)/2017, dated 29th June, 2017

3. G.O.Ms. No. 85 - dated 27-7-2023 - Tamil Nadu SGST

Amendment in Notification No. II(2)/CTR/1099(e-5)/2018, dated 31st December, 2018

4. G.O. Ms. No. 84 - dated 27-7-2023 - Tamil Nadu SGST

Amendment in Notification No. II(2)/CTR/532(d-4)/2017 dated 29th June, 2017

Income Tax

5. 60/2023 - dated 10-8-2023 - IT

Exemption from specified income U/s 10(46) – Notifies ‘State Pollution Control Board Odisha’ a Board constituted by the State Government of Odisha

6. 59/2023 - dated 10-8-2023 - IT

Exemption from specified income U/s 10(46) – Notifies ‘Chandigarh Building and Other Construction Workers Welfare Board, Chandigarh’ a Board constituted by the Administrator, Union territory, Chandigarh

7. 58/2023 - dated 9-8-2023 - IT

Income-tax (Fifteenth Amendment) Rules, 2023.

SEBI

8. SEBI/LAD-NRO/GN/2023/143 - dated 10-8-2023 - SEBI

Securities and Exchange Board of India (Foreign Portfolio Investors) (Second Amendment) Regulations, 2023

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/IMD/IMD-PoD-2/P/CIR/2023/142 - dated 11-8-2023

Timeline for the Exit Option Window Period for Change in Control of AMC

2. SEBI/HO/MIRSD/FATF/P/CIR/2023/0144 - dated 11-8-2023

Simplification of KYC process and rationalisation of Risk Management Framework at KYC (Know Your Client) Registration Agencies (KRAs)

Highlights / Catch Notes

GST

• Court Rules Petitioner Must Prove Supplier's Authenticity After Goods Detained Despite Valid Invoices.

  Case-Laws - HC : Detention of goods and vehicles while in transit with valid invoices - As the Petitioner claims to have purchased goods from the Supplier whose physical existence in the given address is highly doubtful as per the enquiry conducted by the Joint Commissioner (ST), Kurnool, the Petitioner, owes a responsibility to prove the genuineness of the transactions between him and the supplier - HC
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• High Court Affirms: Succeeding Officer Must Notify and Hear Assessee Before Canceling Registration u/s 29(2.

  Case-Laws - HC : Principles of natural justice - change of officer during the proceedings - The requirement that the succeeding Officer should put the assessee on notice is thus better emphasised by the usage of the words “proper Officer” in the proviso to Section 29(2). The necessary implication is that the proper officer has to hear the concerned person before cancelling the registration, which would mean that the assessee is put on notice by the succeeding officer also. - Relief granted - HC
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• Order on ITC Refund Deemed Void Due to Assistant Commissioner's Jurisdiction Overreach in Export Case.

  Case-Laws - HC : Refund of ITC - inputs and input services utilized for the export - Certainly it was not open to the Assistant Commissioner to pass the impugned order which amounted to sitting in appeal over the order passed by the Additional Commissioner of Appeals. On this ground, the impugned order is required to be held to be passed in patent lack of jurisdiction, as also on the face of it illegal. - HC
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• Court Rejects Appeal Due to Delay; Criticizes Commissioner for Rigid Approach on 10% Tax Pre-Deposit Requirement.

  Case-Laws - HC : Rejection of appeal on the ground of time limitation - sufficient cause for delay or not - When the bank account of the petitioner is freezed by the authorities, it is a relevant fact to consider the delay since the pre-deposit of 10% disputed tax at the time of filing of the appeal is mandatory. The view taken by the learned Commissioner appears to be forcing the horse to run after tying the legs. The right of appeal which is created under statute is a substantive right of the party that cannot be denied by taking pedantic view. - HC
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• Voluntary Deposits Under Protest Can Satisfy Pre-Deposit Requirement for CGST Appeals: Section 73(5) & 107(6) Explained.

  Case-Laws - HC : Maintainability of appeal - compliance with the pre-deposit - the voluntary deposit as made under protest by the Petitioner under the provisions of sub-section (5) of Section 73 of the CGST Act, cannot be excluded from consideration for the purpose of compliance as mandated by sub-section (6) of Section 107 of the CGST Act. - HC
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• Input Tax Credit Denied: Tax Not Paid Due to Registration Cancellation Before Invoice Issuance.

  Case-Laws - HC : Input tax credit - A registered person is not entitled to credit of input tax in respect of any supply of goods or services of both if tax is not paid to the Government. The registration of the second respondent has been cancelled on 31.10.2018 before three invoices dated 23.11.2018 were raised. Thus, it is clear that the second respondent could not have paid the tax to the ex-chequer. - ITC cannot be allowed - HC
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• Alcohol Sales Exempt from GST: Reverse Input Tax Credit Required per Section 17(2) & Rule 42 of GST Rules 2017.

  Case-Laws - AAAR : Reversal of ITC - the sale of alcoholic liquor for human consumption is a non-taxable supply under Section 2(78) of the GST Act, 2017 and subsequently is an exempt supply under Section 2(47) ibid. - the appellant is required to reverse input tax credit (ITC) in terms of sub-section (2) of section 17 ibid read with Rule 42 of the GST Rules, 2017 for sale of alcoholic liquor for human consumption. - AAAR
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Income Tax

• Tribunal's Error in Allowing NPA Deduction Appeal Without Fact Verification; Assessing Officer to Reassess u/s 36(1)(vii.

  Case-Laws - HC : Deduction u/s 36(1)(vii) - excess provision made in the accounts towards NPA - Tribunal was clearly in error in allowing the appeal preferred by the assessee through a mere application of a ratio in Vijaya Bank - the Tribunal ought to have ascertained whether the factual situation that was established in Vijaya Bank (Supra) existed in the instant case. - AO directed to re-do the assessment - HC
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• Reassessment Proceedings Invalid Without Mandatory Notice u/s 148 of Income Tax Act: Cannot Be Fixed by Section 292B.

  Case-Laws - HC : Validity of reopening of assessment u/s 147 - mandation to issue notice u/s 148 - The reassessment proceedings can only commence once notice under Section 148 of the Act is issued. It is, clearly, a step which the AO is required to take before he assumes jurisdiction; inter alia, for reassessing the case. Non issue of notice for reopening is not a curable defect u/s 292B. - HC
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• Appeal Confirms Income Additions Due to Lack of Evidence on Agricultural Land Ownership by Assessee.

  Case-Laws - AT : Agriculture Income - genuineness and proof of agricultural activities - During hearing of appeal as raised very specific question that how, much agriculture land is owned by the assessee. Assessee fairly accepted that he does not have any evidence with him to show that the assessee owned agriculture holding - Additions confirmed - AT
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• Assessee Denied TDS Set-Off Claim Due to Non-Deposit by Company, Despite Being Employer and Principal Officer.

  Case-Laws - AT : Set-off of the TDS against tax demand which was never deposited by the assessee acting as employer of himself - The assessee is not entitled to any claim of set-off of TDS, which was never deposited by the company, the assessee being the principal officer and overall administrative head of the company, out of his own act and conduct. - AT
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• Penalty u/s 271(1)(c) Not Justified for Alleged Bogus Purchases if Quantitative Details Are Undisputed.

  Case-Laws - AT : Penalty u/s 271(1)(c) - Estimation of income on bogus purchases - Once the quantitative details of purchases and the corresponding quantitative sales have not been disturbed and has been accepted, then there cannot be any case for levy of penalty on account of alleged bogus purchases. - No penalty - AT
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• Warranty Provision Disallowed Due to Lack of Scientific Method; AO to Verify Unutilized Provisions for Taxation.

  Case-Laws - AT : Disallowance of Provision for Warranty - Absence of scientific method adopted by the assessee - The assessee has submitted that the period of warranty is maximum for one to three years, if the provision for warranty is unutilized for more than three years from the date of commencement of warranty of the products, it should be reversed and offered for taxation in the year of expiry of warranty. - AO directed to verify the claim - AT
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• Income Surrendered in Survey Tied to Business, Not Deemed Income u/ss 69/69A, Says CIT(A).

  Case-Laws - AT : Nature of income surrendered during the course of survey u/s 133A - deemed income u/s 69 and 69A or business income - The surrender on account of advances were relating to the business being carried on by the assessee. The ld CIT(A) has also returned a finding that the advances were admitted as being related to business activity of the assessee. - AT
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Customs

• Customs Review: Snow Goggles for Indian Army Correctly Classified Under CTH 90049090, Not Sunglasses.

  Case-Laws - AT : Classification of imported goods - snow goggles supplied to the Indian Army - The goods are meant for protection of eyes in snowy region and not protection of eyes from sunlight which is the purpose of sun glasses as is common knowledge. Thus, the finding in the impugned order that the Snow Goggles are also sun glasses is not correct. - they were correctly classified by the importer under the residual CTH 90049090 as others. - AT
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• Valuation of Imported Goods: Importer and OMIFCO Not Related Parties, Affecting Transaction Valuation Assessment.

  Case-Laws - AT : Valuation of imported goods - Related party transaction - import of foreign base supplier namely Oman India Fertiliser Company, Oman (OMIFCO) - It is apparent that the appellant importer and the foreign base exporter cannot be the treated as related parties. - AT
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• Dispute Over Interest Demand on Bank Guarantee and Security Deposit in Import Transaction; No Need for Interest Payment.

  Case-Laws - AT : Demand of Interest - It is clear that this is not a case where the Bank Guarantee has been encashed by the Department when the OIO was passed. The Security Deposit was available right on the day when the import has taken place. Therefore, when the entire amount was available in the form of Security Deposit of Rs.73,65,624/- on the day of import, the question of the Appellant paying any interest till the payment of duty will not arise. - AT
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• Court Reviews Anticipatory Bail Request in Alleged Overvalued Diamond Import Case Linked to Money Laundering and Terrorism Financing.

  Case-Laws - DSC : Seeking grant of anticipatory bail - import of Diamond - gross over valuation of goods or not - The prosecution is suspecting Money Laundering and Terrorist Financing activities behind import of such diamond. Custodial interrogation of the present applicant is just and necessary. If prearrest bail is allowed, it will derail the investigation which is in progress. - DSC
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IBC

• Adjudicating Authority Erred in Rejecting Resolution Plan; Should Have Sent Back to CoC for Reconsideration.

  Case-Laws - AT : CIRP - Resolution Plan - The Resolution Applicant having himself expressed not insist for assignment of Personal and Corporate Guarantees and to be continued with the Dissenting Financial Creditors, the Adjudicating Authority ought not to have rejected the Resolution Plan and accepting the request of the Dissenting Financial Creditor ought to have remitted the plan to the CoC for reconsideration. - AT
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• Resolution Plan Approval: MSME Promoters Can Submit Plans, No Preferential Treatment Required by CoC Under Insolvency Code.

  Case-Laws - AT : Seeking approval of the ‘Resolution Plan’ - rights of MSME - The Promotor being an MSME is given an opportunity under the Provisions of the Code to present a Plan. At the same time, the Code does not contemplate any kind of preference to be given to an MSME Promotor by the CoC while accepting a Resolution Plan. - AT
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Service Tax

• Tribunal Denies Rectification Request, Cites No "Mistake Apparent from the Record" in Error Number 3 Case.

  Case-Laws - HC : Rectification of mistake - mistake apparent of the face of record or not - The Tribunal in its original order dated 10th December 2018 have dealt with this decision and observed that it is distinguishable on facts. Therefore, the Tribunal was justified in rejecting the rectification application filed by the petitioner with respect to error no. 3 since same would not amount to ‘mistake apparent from record.’ - HC
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• Service Tax Refund on Parking Charges: "Immovable Property" Excludes Land Used for Parking u/s 65(105)(zzzz).

  Case-Laws - AT : Refund of the Service Tax - parking charges - The legislature has used the words “land” and “vacant land” in accordance with the context, wherever applicable. When “land” in a legal sense includes structures, if any, raised thereon, the same covers the land appurtenant to a building or a part of the building as well. - For the purposes of sub-clause (zzzz) of Section 65 (105), “immovable property” does not include land used for parking purposes - AT
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• Weighment Activity to Verify Grain Quantity Not Considered a Business Auxiliary Service; No Service Charges Applied.

  Case-Laws - AT : Taxability of activity - weighment charges - It is found that weighment, by the appellants, is done to ensure that the declared quantity of grains is supplied by the agencies; therefore, it cannot be said that the weighment is a service, leave alone Business Auxiliary Service; deduction of weighment charges is not a consideration towards any service rendered. - AT
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Central Excise

• Intravenous Fluids with Boric Acid and Chlorocresol Retain Excise Duty Exemption; Product's Essential Purpose Unchanged.

  Case-Laws - SC : Exemption from payment of excise duty given to intravenous fluids - Mere addition of Boric Acid and Chlorocresol, that too in minimal proportion, would not alter the character of the product. The product retains its essential purpose of replenishment; and not partake the character of a medicine used only for the treatment of any particular disease. - Tribunal rightly allowed the benefit of exemption - SC
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VAT

• Court Rules "Milk Cream" Should Be Classified by Common Meaning for VAT and Sales Tax, Not Technical Definition.

  Case-Laws - HC : Classification of goods - milk cream - A scientific or technical meaning of the term ‘milk cream’, as is sought to be projected by the assessee, should not be adopted and the popular meaning of milk cream as is commonly understood, should be taken note of, i.e. that it is a product which is different from milk. - HC
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Case Laws:

• GST

• 2023 (8) TMI 584
  Provisional attachment of three bank accounts - attachment primarily on the basis that the Petitioner had claimed input tax credit from 14 parties which as per the preliminary investigation of the Respondents are suppliers who are fictitious/non-existent - Section 83 of the Central Goods and Service Tax Act, 2017 - HELD THAT:- As per Section 16(2), ITC can be taken only if there is actual receipt of goods or services. In the instant case, the Respondents preliminary investigation have revealed that the 14 parties from whom the Petitioner has purchased the goods, are not in existence and, therefore, there is a question mark whether if at all the goods have been received or not. The Respondents are investigating the entities/persons from whom the Petitioner has purchased the goods and as of today, they have found 14 parties who are fictitious. The amount of alleged ITC and the purchases made by the Petitioner are substantial and which is under investigation by the Respondents. It is informed that the Respondents would issue a show cause notice after completing their investigation. The Petitioner has not made out a prima facie case for grant of any interim relief. Furthermore, attachment of Overdraft Account having been lifted, there cannot be any irreparable damages or inconvenience in operating the business. Furthermore, the Petitioner has its offered to reverse ITC availed on purchases from these 14 parties which till today, the Petitioner has not reversed. In the peculiar facts and circumstances of the case, if the Petitioner deposits a sum of Rs. 2 crores with the Respondents, then in that case, the provisional attachment of all the accounts shall stand lifted which shall be subject to the further orders to be passed on this petition - Insofar as the legal issues as raised in the petition in the context of Section 83 of the CGST Act are concerned, it is opined that the petition would require final hearing. List this petition for final hearing on 29th September 2023.

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• 2023 (8) TMI 583
  Detention of goods and vehicles while in transit with valid invoices - Proceedings against the Seller / 4th respondent alongwith the proceedings against the purchase of goods - Seller being alleged to be fake and registration proposed to be cancelled by the authorities having jurisdiction over seller - whether the Revenue can confiscate the goods of the petitioners basing on the proceedings initiated against the 4th respondent? - HELD THAT:- The proceedings for detention of goods can be initiated while the goods are in transit in contravention of provisions of the CGST/APGST Act. In the instant case also the 1st respondent has detained the goods of the 1st petitioner while they were in transit from Vijayawada to Sankarampet, Medak, Telangana State. That being the factual scenario, the question is whether 1st respondent can confiscate the goods of the 1st petitioner without initiating any proceedings against him U/s 129 but initiating proceedings U/s 130 of CGST/APGST Act against the 4th respondent on the ground of dubious credentials of the 4th respondent. In our considered view though the 1st respondent may initiate proceedings against the 4th respondent U/s 130 of the Act in view of his absence in the given address and not holding any business premises at Vijayawada, however, he cannot confiscate the goods of the 1st petitioner merely on the ground that the 1st petitioner happen to purchase goods from the 4th respondent. In essence, the petitioners have to establish their own credentials but not the 4th respondent. In that view, the 1st respondent is not correct in roping the petitioners in the proceedings initiated against the 4th respondent without initiating independent proceedings U/s 129 of CGST/APGST Act against the petitioners. As the 1st petitioner claims to have purchased goods from the 4th respondent whose physical existence in the given address is highly doubtful as per the enquiry conducted by the Joint Commissioner (ST), Kurnool, the 1st petitioner as observed supra, owes a responsibility to prove the genuineness of the transactions between him and the 4th respondent. Therefore, the 1st respondent can initiate proceedings U/s 129 of CGST/APGST Act against the petitioners and conduct enquiry by giving opportunity to the petitioners to establish their case. These writ petitions are accordingly disposed of giving liberty to the 1st respondent to initiate proceedings against the petitioners U/s 129 of CGST/APGST Act, 2017 within two weeks from the date of receipt of a copy of this order and conduct enquiry by giving an opportunity of hearing to the petitioners and pass appropriate orders in accordance with governing law and rules.

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• 2023 (8) TMI 582
  Maintainability of petition - principles of natural justice - It is contended that a separate notice affording an opportunity is not required in the case of a change of officer - Cancellation of registration of petitioner - HELD THAT:- In the case on hand, admittedly, there has been no hearing by the Officer who issued Ext.P2 order. Nor was the petitioner put on notice about such an order being proposed. In Anantha Naganna [ 1969 (9) TMI 27 - ANDHRA PRADESH HIGH COURT] the Court was considering a case of levy of penalty under the Income-tax Act. That was a case where there was a change of the Income-tax Officer regarding which the assessee had no intimation. The provision of law which was considered was Section 28(3) - Considering the said provision, the Court held that it is obligatory on the part of the authorities imposing a penalty to hear and give a reasonable opportunity to the assessee before an order imposing penalty is passed. Regarding the question of whether the succeeding Officer should hear the assessee, Section 5(7)(c) of the Act contains a specific provision that if an Income-tax Authority is succeeded by another authority, the succeeding authority may continue the proceeding from the stage where it was left by his predecessor - The Court, after taking note of Section 28 and Section 5(7)(c), held that unless the assessee is put on notice regarding the change of Officer, he does not even get an opportunity to demand a re-hearing or re-opening. It was hence found that it is inherent in such circumstances that the succeeding Officer should inform the assessee about the proposal to continue the proceedings. The statutory provision in the case on hand is a little different. In the case referred to above, which arose under the Wealth Tax Act and Income-tax Act, the emphasis was only on the opportunity of being heard to be given to the assessee before an order of penalty is issued under Section 28(3) of the Income Tax Act. Under Section 29(2) of the GST Act, the proviso also mentions that the proper Officer shall not cancel the registration without giving an opportunity of being heard, which is in the nature of an embargo on the officer. The requirement that the succeeding Officer should put the assessee on notice is thus better emphasised by the usage of the words proper Officer in the proviso to Section 29(2). The necessary implication is that the proper officer has to hear the concerned person before cancelling the registration, which would mean that the assessee is put on notice by the succeeding officer also. The petitioner is entitled to relief in this writ petition. The writ petition is allowed.

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• 2023 (8) TMI 581
  Refund of ITC - inputs and input services utilized for the export - primary contention of petitioner is that the Assistant Commissioner has patently erred in passing the impugned order, inasmuch as, the Assistant Commissioner in fact has sat in appeal over the orders passed by the Additional Commissioner (Appeals) dated 11 October 2022, by which the appeal filed by the petitioner was allowed on merits - HELD THAT:- It is observed that the petitioner has been pursuing the refund application in question from December 2021, when the petitioner made such application on 31 December 2021 and on such application, the entire procedure was adopted namely of issuance of a show cause notice dated 1 February 2022, its adjudication denying refund and an appeal against the same before the Appellate Authority culminated into a final order dated 11 October 2022 of the Additional Commissioner, CGST Central Excise (Appeals) having taken place, is not in dispute. When the entire fact finding exercise was subjected to the scrutiny in an appeal resulting in the appeal being allowed, then it is difficult to accept the contention as urged on behalf of the respondents that the Assistant Commissioner, who has had no authority and jurisdiction to re-visit the concluded findings of fact and the conclusions as derived by the Additional Commissioner of Appeals. The only remedy for the department and as rightly asserted in the reply affidavit filed on behalf of respondent Nos. 1, 3 and 4 if at all was to seek review. If the department was of the opinion that the order passed by the Additional Commissioner needs to be challenged, the same was required to be assailed in the appropriate proceedings as set out in paragraph 11 of the reply affidavit. Thus, from the position as taken by respondent Nos. 1, 3 and 4, certainly it was not open to the Assistant Commissioner to pass the impugned order which amounted to sitting in appeal over the order passed by the Additional Commissioner of Appeals. On this ground, the impugned order is required to be held to be passed in patent lack of jurisdiction, as also on the face of it illegal. The Assistant Commissioner could not have passed the impugned order, of the nature he has passed as he was certainly bound by the orders passed by the Additional Commissioner (Appeals), and in the absence of any stay to the orders passed by the Additional Commissioner (Appeals), grants benefit of the orders of the Additional Commissioner (Appeals) dated 11 October 2022 to the petitioner. Petition allowed.

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• 2023 (8) TMI 580
  Principles of Natural Justice - Cancellation of GST registration of petitioner - scope of SCN - contention is that the cancellation of the petitioner s registration is not on the ground as contained in the show cause notice - HELD THAT:- There is substance in the contention as urged on behalf of the petitioner, inasmuch as there appears to be no dispute that the impugned order cancelling the registration of the petitioner appears to be on the ground completely outside the scope of show cause notice issued to the petitioner. This would certainly cause prejudice to the petitioner as the petitioner was never granted an opportunity of being confronted with such grounds in the show cause notice, so as to have an opportunity to meet such case of the department. In the absence of such opportunity, certainly the principles of natural justice would become applicable and any order of such nature as passed, would be required to be held to be in breach of the principles of natural justice. The impugned order dated 12 July 2021 is required to be quashed and set aside, with liberty to the respondent to issue a fresh show cause notice to the petitioner as permissible in law and after according an opportunity of a hearing to the petitioner, pass an appropriate order in accordance with law - petition allowed.

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• 2023 (8) TMI 579
  Cancellation of GST registration of petitioner - case of petitioner is that if the cancellation is set aside and the GST registration is revoked, then the petitioner is willing to pay the GST along with late fee - HELD THAT:- On perusal of the impugned order, dated 19.12.2022, it is seen that the respondent have not cited any reason. It is seen from the records that the Government has issued Notification No.03/2023-Central Tax dated 31.03.2023 and has extended the time up to 30.06.2023, but the extension is granted to taxpayers granting time on or before 31.12.2022. Unfortunately, the petitioner s cancellation was on 12.01.2023, had it been prior to 31.12.2022 then the petitioner would have come within the time prescribed under the said notification. But the consideration for extension was pending during that period, hence this Court is of the considered that the petitioner is entitled to the benefit. This Court is allowing the writ petition and the respondent is directed to restore the petitioner s GST registration number. After restoration, the petitioner is directed to file the returns and pay tax and penalty as per law - Petition allowed.

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• 2023 (8) TMI 578
  Excess availment of ITC in GSTR-3B than available in their GSTR-2A - petitioner had failed to file a reply in time - HELD THAT:- The petitioner ought to have appeared for a personal hearing and made a detail submission instead of requesting the respondent to pass orders based on the documents that were furnished along with the reply dated 28.06.2023. The officers would have required proper assistance or otherwise the officers would be left with no other option but to confirm the demand proposed in the Show Cause Notice, if the document filed themselves do explain the defence of the petitioner. Prima facie it appears that the credit was availed by the petitioner on the supplies which were taxed, although, the returns were filed belatedly by the petitioner s supplier. The case is remitted back to the respondent to pass appropriate orders on merits and in accordance with law after duly considering the petitioner s reply dated 28.06.2023 - the impugned order is set aside - Petition allowed by way of remand.

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• 2023 (8) TMI 577
  Rejection of appeal on the ground of time limitation - sufficient cause for delay or not - petitioner was prevented by sufficient cause from presenting the appeal within the statutory period of limitation or not - HELD THAT:- The word sufficient cause as appearing in Section 107(4) of CGST Act, 2017 for the purpose of seeking condonation of delay in filing the appeal before the Commissioner (Appeal) has been interpreted by the Hon ble Apex Court in the light of Section 5 of Limitation Act relating to Land Acquisition Matter would guide the Court in deciding the point. In COLLECTOR, LAND ACQUISITION VERSUS MST. KATIJI AND OTHERS [ 1987 (2) TMI 61 - SUPREME COURT] where it was held that Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. While considering the application for condonation of delay, it is not the length of the delay, but cause for delay which would be paramount consideration. If the cause shown as indicated under Section 107(4) of the act, such delay deserves to be condoned irrespective of the length of the delay. It does not mean that the learned Commissioner (Appeals) can condone the delay beyond the condonable period that is one month after expiry of three months after statutory period of three months. As seen from the order impugned, the learned Commissioner opined that the reasons are not convincing. Pertinent to say that, the learned Commissioner never denied about freezing of bank account of the petitioner and about issuing of notices to the purchasers who are yet to pay consideration to the petitioner - In this context it is necessary to refer Section 107 (6) which is vivid on the point of deposit of 10% of the disputed tax which is mandatory at the time of filing of the appeal. When the bank account of the petitioner is freezed by the authorities, it is a relevant fact to consider the delay since the pre-deposit of 10% disputed tax at the time of filing of the appeal is mandatory. The view taken by the learned Commissioner appears to be forcing the horse to run after tying the legs. The right of appeal which is created under statute is a substantive right of the party that cannot be denied by taking pedantic view. The impugned order passed by respondent No. 2 dated 03.06.2023 is set aside - petition allowed.

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• 2023 (8) TMI 576
  Maintainability of appeal - compliance with the pre-deposit - amount as deposited by the Petitioner anterior to the filing of the appeal under the provisions of Section 73(5) of the CGST Act - whether the said amount can be taken into consideration for the purpose of compliance of the requirement of pre-deposit under Section 107(6) of the CGST Act? HELD THAT:- There cannot be two opinions, that any procedural rule or technical requirement cannot defeat the availability of a remedy of an appeal, made available to the assessee under a substantive statutory provision nor can such remedy be rendered illusory. The interpretation of the provisions need to be made to recognise the intention of the legislature, which is to aid access to justice, which itself is a fundamental right guaranteed under the Constitution. When it comes to right of an appeal, as guaranteed by a statutory provision, such right needs to be made effective and meaningful. It cannot be frustrated by shackles of complex procedural formalities. When it comes to the compliance of sub-section (6) of Section 107 of the CGST Act, namely, the mandatory payment of the tax, being a condition precedent, mandated in terms of the provisions of sub-sections (6)(a) and (6)(b) of Section 107 of the CGST Act, in our opinion the principle as laid down in Supreme Court in VVF (INDIA) LIMITED VERSUS THE STATE OF MAHARASHTRA ORS. [ 2021 (12) TMI 477 - SUPREME COURT] would become applicable considering that the provisions of the CGST Act on pre-deposit are not too different from the provisions of the MVAT Act, which fell for consideration of the Supreme Court. In VVF India Ltd., the Supreme Court was considering the correctness of the view of the High Court on the interpretation of Section 26(6A) of the MVAT Act. Sub-section (6A) of Section 26 of the MVAT Act is a provision almost in similar terms to sub-section (6) of Section 107 of the CGST Act. Such provision inter alia provided that no appeal against an order passed on or after the commencement of the Maharashtra Tax Laws (Levy Amendment and Validation) Act, 2017 shall be filed before the appellate authority, unless it is accompanied by the proof of payment of an aggregate of the amounts as applicable and as set out in clauses (a) and(d) of sub-section (6A) of Section 26 of the MVAT Act. Clause (a) of sub-section (6A) of Section 26 of the MVAT Act provided that in case of an appeal against an order, which involved dis-allowance of a claim, an amount equal to 10 per cent of an amount of tax disputed by the appellant would be required to be made. Thus, the provision, which fell for consideration of the Supreme Court, was materially different from the provisions under the CGST Act with which the present proceedings are concerned. The Supreme Court, referring to the decision of the Supreme Court in AV FERNANDEZ VERSUS THE STATE OF KERALA [ 1957 (4) TMI 46 - SUPREME COURT] held that the approach of the High Court was not correct. While allowing the appeal and permitting such benefit of the amount, which was paid under protest for the purposes of the fulfillment of sub-section (6A) of Section 26 of the MVAT Act, the Supreme Court observed T he non-obstante provision contained in section 26 of the Act has the effect of taking these transactions out of the purview of the Act with the result that the dealer is not required nor is he entitled to include them in the calculations of his turnover liable to tax thereunder. Thus, the voluntary deposit as made under protest by the Petitioner under the provisions of sub-section (5) of Section 73 of the CGST Act, cannot be excluded from consideration for the purpose of compliance as mandated by sub-section (6) of Section 107 of the CGST Act. The Petitioner is permitted to file an appeal under Section 107 of the CGST Act either by the electronic mode or by manual filing within a period of two weeks from the day a copy of this order is made available - Appellate Authority is directed to register compliance of the provisions of sub-section (6) of Section 107 of the CGST Act by taking into consideration the voluntary deposit made by the Petitioner under sub-section (5) of Section 73 of the CGST Act - petition allowed.

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• 2023 (8) TMI 575
  Sealing of property - specific case of the petitioner is that the petitioner s son had registered under GST Act and had closed on the business and the address of the property, which is a rented one, where the petitioner and her family are staying was given as address for the business of her son Arun Umesh at the time of obtaining registration. HELD THAT:- This Writ Petition is disposed at the time of admission stage itself, by directing the respondents to cause inspection of the property immediately, in presence of the petitioner and de-seal the property. This exercise shall be completed by the respondents positively on 12.07.2023. The petitioner shall co-operate with the respondents during inspection.

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• 2023 (8) TMI 574
  Seeking provisional release of the goods and conveyance - Section 67(6) of the Gujarat State Goods and Services Tax Act, 2017 - HELD THAT:- Rule returnable on 02.08.2023. Further, by way of interim relief, it is directed that the goods and vehicle of the petitioner shall be released provisionally, provided the petitioner complies with the following conditions; (i) The petitioner shall deposit with the competent authority of the respondents, total amount of penalty of Rs. 3,55,252/-; (ii) The petitioner shall deposit the total amount of fine in lieu of confiscation of conveyance, of Rs. 1,77,626/-; (iii) The petitioner shall also furnish fresh bonds for an amount of Rs. 35,52,500/- with regard to the fine in lieu of confiscation of the goods; (iv) it is, further, directed that the Respondent-authority shall not pass any other and further order under Section 130 of the Gujarat State Goods and Services Tax Act, till final disposal of this petition. Upon compliance of the aforesaid conditions, the goods and the vehicle both, shall be released by the Respondent-authorities, forthwith.

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• 2023 (8) TMI 573
  Input tax credit - relief u/s 16(2)(c) of the Central Goods and Service Tax Act, 2017 r/w Rule 36(4) - HELD THAT:- A registered person is not entitled to credit of input tax in respect of any supply of goods or services of both if tax is not paid to the Government. The registration of the second respondent has been cancelled on 31.10.2018 before three invoices dated 23.11.2018 were raised. Thus, it is clear that the second respondent could not have paid the tax to the ex-chequer. Therefore, there cannot be a mandamus to the first respondent contrary to the provisions of the respective GST Act of 2017 and the Rules made thereunder. Therefore, there is no merits in the present writ petition. The writ petition is dismissed.

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• 2023 (8) TMI 572
  Reversal of ITC - sale of alcoholic liquor for human consumption effected by it at its premises - whether the appellant is required to undertake reversal in terms of Rule 42 to the extent of the turnover that relates to sale of alcoholic liquor for human consumption? - HELD THAT:- From the plain reading of the explanation to the Rule 42(1) of the GST Rules, 2017 as well as Entry 5 I and 54 of List II of seventh schedule, it is clear that for the purpose of computation of exempt turnover as well as total turnover, duties and taxes on alcoholic liquor for human consumption shall be excluded and not the whole value of sales of alcoholic liquor for human consumption. The appellant has claimed that under several legislations in India the term goods has been defined for charging of taxes on alcoholic liquor, and so the definition of goods under section 2(52) of the GST Act, 2017, cannot include alcoholic liquor for human consumption. This claim of the appellant is not tenable. Defining goods in other Acts, does not bar defining the same in any other Acts including GST Act 2017. Clause 12A of Article 366 of the Constitution which was inserted vide Section 14 of the Constitution (101st Amendment) Act, 2016 also establishes alcoholic liquor for human consumption as goods even though that is in exclusion for the purpose of charging GST. It is established that alcoholic liquor for human consumption is goods even under virtue of the Constitution. Section 9 of the GST Act, 2017 provides for levy of GST on intra-state supplies of goods and/or services except on the supply of the alcoholic liquor for human consumption. This provision is in consonance of Clause 12A of Article 366 of the Constitution - Further, as per Section 49(4) of the GST Act, the amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or IGST Act. So, the objective behind ITC is for making payment towards output tax. Therefore, ITC cannot be allowed for the supplies which are non-taxable. Hence, as alcoholic liquor for human consumption is non-taxable, ITC cannot be allowed for supply of the same. Thus, the sale of alcoholic liquor for human consumption is a non-taxable supply under Section 2(78) of the GST Act, 2017 and subsequently is an exempt supply under Section 2(47) ibid. - the appellant is required to reverse input tax credit (ITC) in terms of sub-section (2) of section 17 ibid read with Rule 42 of the GST Rules, 2017 for sale of alcoholic liquor for human consumption. Appeal dismissed.

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• Income Tax

• 2023 (8) TMI 596
  Refund of excess amount adjusted against the disputed demand - direction of the CIT(A) is that the respondents/revenue cannot recover anything more than 20% of the demand - HELD THAT:- The respondents/revenue will refund the amount which is in excess of 20% of the outstanding demand concerning AY 2017-18. The said sum will also include as sought to be adjusted against the disputed demand for AY 2017-18 by respondent no. 1. CIT(A) will endeavour to dispose of the appeal at the earliest. The amount will be remitted as expeditiously as possible, though, not later than six (6) weeks from the date of receipt of this order, along with applicable interest.

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• 2023 (8) TMI 595
  Deduction u/s 36(1)(vii) - excess provision made in the accounts towards NPA that was not allowable as a deduction as per Explanation -1 to Section 36 (1)(vii) - While the assessee had initially not claimed the said amount while computing the loss that was returned, it had subsequently claimed the said amount towards bad debts written off in terms of Section 36(1)(vii) - ITAT found the assessee entitled to the deduction under Section 36(1)(vii) relying on the judgment of the Supreme Court in Vijaya Bank [ 2010 (4) TMI 46 - SUPREME COURT] - HELD THAT:- Since we found force in the submission of learned Standing counsel for the Income Tax Department that the Appellate Tribunal had not examined the factual aspect as to whether or not the respondent assessee in the instant case had actually reduced the amount representing bad debts from the value of its assets in the balance sheet and had merely adopted the ratio of Supreme Court judgment in Vijaya Bank [ 2010 (4) TMI 46 - SUPREME COURT ], we requested assessee to make available a copy of the audited balance sheet and profit and loss account of the company for the assessment year in question so as to verify the factual aspects therein. Tribunal was clearly in error in allowing the appeal preferred by the assessee through a mere application of a ratio in Vijaya Bank (Supra). In our view, the Tribunal ought to have ascertained whether the factual situation that was established in Vijaya Bank (Supra) existed in the instant case. We, therefore, find that the substantial questions of law raised by the revenue in this appeal has to be answered in favour of the revenue and against the assessee. AO directed to re-do the assessment.

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• 2023 (8) TMI 594
  Revision u/s 263 - Tribunal had set aside the order passed by the CIT u/s 263 - HELD THAT:- Adjudication of the present appeal itself is rendered academic inasmuch as the effect of the order passed by the CIT exercising powers under Section 263 of the I.T. Act had percolated in an assessment order being passed by the Assessing Officer under Section 143(3) read with Section 263 of the I.T. Act, being order dated 30th March 2011. As the proceedings under the said order itself had ended in the Assessee s appeal being allowed and the challenge to the same being withdrawn by the Revenue, adjudication of the present proceedings, which arise from the proceedings under Section 263, is rendered completely academic and inconsequential. Revenue, will not dispute as to what has ultimately happened in the Revenue s appeal arising from the orders passed under Section 143(3). He, therefore, would not dispute on the contention as urged on behalf of the Assessee that the proceedings of the present appeal are rendered academic. The appeal is, accordingly, disposed of as infructuous, in view of the antecedents as noted by us.

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• 2023 (8) TMI 593
  Unexplained cash deposits - Addition of certain peak credits - AO concluded that the assessee had willfully concealed the true particulars of his taxable income and made certain additions to the income from the other sources - contention is advanced by the assessee that each and every entry qua the deposits of cash has been explained and the Tribunal was not right in upholding the direction given by the CIT (A) that addition of peak credit be made in respect of the deposits made in the bank, since bank pass books are not books of account and the provisions of Section 68 are not applicable. HELD THAT:- Since the assessee did not provide evidence in the nature of cash flow statement or otherwise to explain the cash deposits and withdrawals; and even then, only peak credits were directed to be taken into account; and since the assessee himself in the appeal filed by the Department had accepted that addition to the extent of peak credit in the bank account should be sustained, we find no substantial question of law arising for consideration in this appeal and the same is accordingly dismissed.

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• 2023 (8) TMI 592
  Validity of reopening of assessment u/s 147 - mandation to issue notice u/s 148 - notice issued with serious defects [Notice directed to an entity in wrong name, wrong PAN, Wrong AY and wrong DIN] - HELD THAT:- A plain reading of the extract Section 148 would show that the AO, before making the assessment, reassessment or re-computation u/s 147 of the Act, is required to serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of Section 148A of the Act. As per the provision, the AO is required to call upon the assessee within a defined period, to furnish a return of his income or income of any other person, in respect of which he is assessable, under this Act during the relevant AY. The return filed is, in law, considered as if it was furnished u/s139 of the Act. The reassessment proceedings can only commence once notice under Section 148 of the Act is issued. It is, clearly, a step which the AO is required to take before he assumes jurisdiction; inter alia, for reassessing the case. Non issue of notice for reopening is not a curable defect u/s 292B. Undoubtedly, there is a misstep on the part of the AO since the AO has not assumed jurisdiction as per law. Therefore, we have no hesitation in quashing the impugned notice issued under Section 148 of the Act. Decided in favour of assessee.

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• 2023 (8) TMI 591
  Allowability of provision made for liquidated damages represented an ascertained liability - HELD THAT:- Tribunal has made no reference to either the clause relating to liquidated damages or the agreement which was operable between the assessee and BSNL, nor did it clearly formulate as to whether represented the ascertained liability under the head Provision for Liquidated Damages . To our minds, the flaw in the Tribunal s formulation is found in the following part of which reads as follows impugned amount was not only the provision but the actual amount of the liquidated damages pertaining to the period of delay falling within the previous year relating to the assessment year under consideration . It is no one s case, leave alone that of the assessee, that Rs. 17,61,99,672/- represented the actual amount of liquidated damages. It is the respondent/assessee s case that Rs. 17,61,99,672/- represents an ascertained liability, which could change if there are any waivers or remissions. The issue which the Tribunal had to grapple with, and clearly return a finding, one way or the other, was whether the said amount in the given facts and circumstances of the case, represented an ascertained liability. Given this position, both counsels agree that the matter can be remanded to the Tribunal, with a direction to dispose of the matter based on the documents already on record. The impugned order is set aside - Tribunal will reexamine the issue based on the material already on record and return a finding, one way or the other, as to whether such amount represented an ascertained liability.

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• 2023 (8) TMI 590
  Agriculture Income - genuineness and proof of agricultural activities - AO disallowed the entire agriculture income by taking view that agriculture income is not supported with reliable documentary evidences and in other years the assessee has shown less agriculture income - HELD THAT:- The agriculture income was treated as non-genuine. CIT(A) granted partial relief to the assessee by taking view that in subsequent years the assessee has shown similar income in AY 2018-19 and 2019-20. CIT(A) on the basis of agriculture income declared in AY 2019-20, granted relief to that extent. Before Tribunal the assessee has filed various documents to substantiate the agriculture income, however, the basic evidence to substantiate such income i.e. the evidence of holding of agriculture land is not filed either before assessing officer, or before CIT(A) or before me. During hearing of appeal as raised very specific question that how, much agriculture land is owned by the assessee. Assessee fairly accepted that he does not have any evidence with him to show that the assessee owned agriculture holding. Thus, in absence of such basic and primary evidence, find no merit in submissions of assessee to extent any further relief, in addition to the relief granted by ld CIT(A) in absence of ownership of the land. In the result, this ground of appeal is dismissed. Additions of cash deposits - AO made the additions of cash deposits by taking view that during the demonetization period the assessee made deposit during demonetization period - HELD THAT:- As recorded above before ld CIT(A) the assessee retreated that he has received Gift from sister of his mother. Assessee also filed gift deed executed by the donor, however, CIT(A) not accepted such gift deed by taking view that why the donor kept such cash amount with her. We find that the ld CIT(A) has neither made any investigation of fact before discarding the gift not sought any remand report from the assessing officer. And as such the evidence in the form of gift deed was discarded without bringing any evidence against such evidence. Thus, accept the gift as genuine. So far as other remaining receipt and receipt of Sound system is concerned find that CBDT in its instruction No. 3/2017 [F.NO.225/100/2017/ITA-II], Dated 21-2-2017, has issued standard operating procedure (SOP) that cash deposits up may be accepted in case of individual, thus, by giving benefit of the above circular, hence, the addition to the extent is also deleted from disallowance. Thus, the assessee is allowed total relief of Rs. 3.50 lakhs and Rs. 2.50 lakhs against the total addition of Rs. 10,00,500/-. And on remaining addition as concurred with the finding of ld CIT(A) that no such rental income was shown by assessee prior to 25.07.2016 and after 24.10.2016 and there were discrepancies in the cash book. In the result, this ground of appeal is partly allowed.

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• 2023 (8) TMI 589
  Penalty u/s 271(1)(c) - disallowance of claim of Long Term Capital Gain as exempt u/s 10(38) treating it as business income of the assessee - HELD THAT:- We observe that the ITAT Ahmedabad in assessee s own case has deleted the quantum additions in favour of the assessee. Accordingly, since the very basis/foundation on which penalty u/s 271(1)(c) of the Act had been levied on the assessee itself has been vacated, then the consequential penalty imposed u/s 271(1)(c) of the Act is also liable to be vacated. In the case of CIT v Shah Alloys [ 2012 (9) TMI 957 - GUJARAT HIGH COURT] held that penalty cannot be imposed when addition made, which was basis for penalty, was set aside. In the case of LRs Management [ 2023 (5) TMI 351 - ITAT RAJKOT] it was held that Where quantum addition made by AO was deleted by Tribunal, there remained no basis for levy of penalty under Section 271(1)(c) of the Act. In view of the facts of the instant case and the settled legal proposition on the subject that once the quantum proceedings itself have been decided in favour of the assessee, there is no scope of levy of penalty u/s 271(1)(c) - Decided in favour of assessee.

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• 2023 (8) TMI 588
  Validity of assessment passed u/s 144C - Period of limitation - Reference to TPO under section 92CA was made beyond permissible period as prescribed u/s 153(1) - HELD THAT:- In this case, admittedly, the learned Transfer Pricing Officer has passed the order u/s 92CA(3) of the Act on 1st November, 2019. Therefore, the order passed by the TPO is beyond the time limit prescribed u/s 92CA(3A) i.e. delayed by one day. Therefore, the order of the TPO is illegal as it is barred by limitation. Thus, in the case of the assessee there is no variation as a consequence of transfer pricing order. The assessee is also a resident company. Therefore, according to section 144C(15)(b) of the Act, assessee is not an eligible assessee and therefore, extended the time limit of 12 months as prescribed u/s 153(4) of the Act is also not available to the learned Assessing Officer. Therefore, the assessment order should have been passed on or before 31st December, 2018, which is passed on 29th April, 2021, hence, final assessment order passed is barred by limitation and hence, quashed. See cases Virtusa Consultancy Pvt. Ltd.[ 2022 (7) TMI 497 - MADRAS HIGH COURT] and Atos India Pvt. Ltd. [ 2023 (2) TMI 1112 - ITAT MUMBAI] - Additional ground raised by the assessee is allowed.

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• 2023 (8) TMI 587
  Non-granting of foreign tax credit as per section 90 - AR submitted that, the assessee filed form 67 before the authorities below which has not been considered - HELD THAT:- In the interest of justice, we remand this issue to the Ld.AO/TPO to consider the claim of assessee in accordance with law. Levy of interest u/s. 234A - as submission by assessee return of income was filed within the due date and therefore interest u/s. 234A cannot be computed - HELD THAT:- In the interest of justice, we remand this issue to the Ld.AO to verify the claim and to consider in accordance with law. Short grant of TDS credit and short grant of credit for advance tax paid - HELD THAT:- In the interest of justice, we remand these issues back to the AO. Assessee is directed to once again file all the relevant details in respect of the TDS paid and the advance tax paid. AO is directed to verify the same and consider the claim of assessee in accordance with law. Short grant of credit for refund adjusted against the year under consideration - AR submitted that the Ld.AO has not granted credit for the adjustment in respect of the refunds pertaining to other Assessment Year that was adjusted against the year under consideration - HELD THAT:- Assessee is directed to once again file all the relevant details in respect of the TDS paid and the advance tax paid. The Ld.AO is directed to verify the same and consider the claim of assessee in accordance with law.

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• 2023 (8) TMI 586
  Set-off of the TDS against tax demand which was never deposited by the assessee acting as employer of himself - HELD THAT:- It is pertinent to note here that the assessee being the managing director of the company himself was liable to file and verify the income tax return on behalf of the company as per the provisions of section 140(c) of the Income Tax Act. Even if an action is brought against the company for non-deduction of TDS even then the assessee being the principal officer of the company is liable to be treated as assessee in default under the provisions of section 201(1) and 201(1a) read with section 204 of the Income Tax Act and even as per the provisions of section 271C, it would be assessee being the managing director and the principal officer of the company who would be liable to be prosecuted u/s 271C of the Act for default in deduction of TDS or non-deposit of TDS. Therefore, even otherwise, if the taxes to be recovered from the company, it will be the assessee who will be liable on behalf of the company to pay the taxes and interest thereupon including liable to be tried under Penal provisions for non-deduction/non-deposit of tax on his own salary. I Assessee being the managing director and chief executive officer of the company himself is the principal officer/person responsible for all acts of defaults in non-deduction/non-deposit of TDS and under such circumstances, he cannot be allowed to take benefit of his own wrong. Assessee has made another attempt to harp upon a wrongful claim of the assessee by stating that the employer of the assessee company namely AMW Motors was admitted into Corporate Insolvency Resolution Process before the National Company Law Tribunal, Ahmedabad and that affairs of the assessee company was managed by resolution professional appointed by NCLT. We find that the above contention of the ld. counsel is also misleading and does not depict true picture of the events. Though the company was admitted into CIRP by the Adjudicating Authority on 01.09.2020 and Interim Resolution Professional was appointed on 01.09.2020, whereas, the financial years involved in the present appeals are F.Y 2017-18 relevant to A.Y 2018-19 and F.Y 201819 relevant to A.Y 2019-20. Therefore, there is no merit in the above contention raised by assessee. The assessee is not entitled to any claim of set-off of TDS, which was never deposited by the company, the assessee being the principal officer and overall administrative head of the company, out of his own act and conduct. Decided against assessee.

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• 2023 (8) TMI 585
  Penalty u/s 271(1)(c) - Estimation of income on bogus purchases - AO held that GP rate of 12.5% should be estimated to factor the suppressed profit on bogus purchases made - HELD THAT:- All the payments made have been through banking channels and there is no dispute regarding the quantitative statement of the purchases along with the bills and corresponding sales along with the copies of proceeding bills. None of these evidences or documents or the copies of sales bills or the quantitative details or the corresponding sales has been found to be incorrect or trading results have been disturbed. It is not a case that in the course of any enquiry conducted by the AO, parties have denied the transaction or it has been found that assessee has made these purchases outside the books. The sources of purchases are from the books and through banking channels and quantitative details of purchases have been accepted. Once the quantitative details of purchases and the corresponding quantitative sales have not been disturbed and has been accepted, then there cannot be any case for levy of penalty on account of alleged bogus purchases. Ultimately, the AO held that at the most there could be element of suppression of gross profit on the purchases, but such estimated addition alone cannot be the basis for levy penalty u/s. 271(1)(c), penalty proceedings being separate and distinct from the assessment proceedings and the assessee can explain on the basis of same material facts on record that he has not concealed any particulars of income or furnished any inaccurate particulars of income. The explanation of the Assessee and all the evidences filed before the authorities below have neither been rebutted nor has been found to be incorrect or assessee has failed to substantiate the explanation. Appeal of revenue dismissed.

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• 2023 (8) TMI 571
  Reopening of assessment u/s 147 - change of opinion - reassessment opened after four years - HELD THAT:- This Court must ask the question whether the allegation that there is failure to disclose material fact fully and truly should be stated in the exact words that are found in the statute, and then the answer is obvious. In law it is not mere repetition of the requirement in the exact words but a disclosure of the requirement as would be justified in the facts and circumstances of the case. It is obvious that the respondent alleges that the material facts are detected in scrutiny and survey proceedings under the relevant provisions of the I.T.Act. This Court must opine that the opening statement as extracted would satisfy the requirement of an allegation, and hence the petitioner cannot succeed on the ground that there is no allegation. As such, the petitioner is not granted any indulgence on the first ground. Reasons to believe - It is seen from the records, as enclosed to this writ petition, that the petitioner s transaction for the subject land with M/s. SSS Realty and Co. is declared in the returns filed and it would be useful to refer to the different notes where there is a reference not just to the Revaluation Reserve as mentioned consequent to the transaction, but the transaction itself. If the AO has repeatedly asked pointed questions and clarifications about the transaction in the light of the declarations made in the Returns, but without additions while framing assessment u/s 143(3) there must be a presumption that the Assessing Officer has applied his/her mind and has framed an opinion. In this regard, a useful reference could be made to the decision of Kelvinator of India Ltd. [ 2002 (4) TMI 37 - DELHI HIGH COURT] wherein it is exposited that in terms of Clause (e) of Section 114 of the Indian Evidence Act 1872, the judicial and official acts have been regularly performed. If repeated and detailed queries are asked after the issuance of notice under Section 143(2) of the I.T.Act but without any addition, or disallowance, there is a deemed opinion and reassessment is proposed despite such opinion. It would be a case of change in opinion , and in that event reassessment would be impermissible. In the fact and circumstances of this case, this Court must opine that the respondent s reasons to say that there is no change in the opinion because the details were not available until there was a scrutiny and survey proceedings, cannot be accepted and the proposed reassessment is based on clear change in opinion. Decided in favour of assessee.

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• 2023 (8) TMI 570
  TP adjustment - MAM - Rejection of Internal Comparable Uncontrolled Price Method adopted as the most appropriate method by the Appellant - HELD THAT:- We noticed from the documents submitted by the assessee that this issue has been continuously held in favour of the assessee that the CUP is the most appropriate method for determining the ALP of the assessee for the importing of goods for manufacturing segment. As relying on the assessee s own case for the assessment year (AY) 2015-16 [ 2020 (3) TMI 471 - ITAT BANGALORE] allow the grounds raised by the assessee that the CUP is MAM for the determination of international transactions for the computation of PLI in above terms. AMP Expenditure pertaining to trading segment - international transaction - HELD THAT:- We are of the view that this issue is covered from the order of the co-ordinate bench of Tribunal in favour of the assessee in the assessee s own case for assessment year 2015-16 [ 2020 (3) TMI 471 - ITAT BANGALORE] it would be just and appropriate to set aside the issue of determination of net margin of the assessee and in the trading segment, as claimed by the assessee in Scenario-3 before the TPO. If the margins are accepted as at arm s length and then applying the principles laid down in the case of Sony Ericsson Mobile Communications India P. Ltd. [ 2015 (3) TMI 580 - DELHI HIGH COURT] incurring of AMP expenses cannot be treated as international transaction and consequently determination of ALP would not arise for consideration at all. We therefore set aside the order of the AO and remand the issue to the TPO for consideration of ALP of the trading segment applying the net profit margin method and if by such method the price received in the international transaction is considered as at arm s length, then no separate addition needs to be made. Disallowance of Provision for Warranty - DR submitted that the assessee has not demonstrated that there is any scientific method adopted by the assessee - HELD THAT:- In the case on hand the method followed has not been shown to be not scientific by the revenue authorities - we are of the view that the method followed by the Assessee should be accepted as proper and the deduction should be allowed as per the provision created by the Assessee following the above judgement in assessee s own case cited supra. AO has observed that there is huge amount of balance of the provisions are carry forwarding over the years but no details submitted year wise balance of provision for warranty before the AO, therefore, we direct to the asseesse for giving the details of provisions for warranty is outstanding year wise remained unutilized. The assessee has submitted that the period of warranty is maximum for one to three years, if the provision for warranty is unutilized for more than three years from the date of commencement of warranty of the products, it should be reversed and offered for taxation in the year of expiry of warranty. We noted from the order for the AY 2015-16 there is only opening balance plus provisions created and utilized is mentioned but there is no any entry for unutilized warranty amount found. Considering the entire facts the AO is directed to follow the direction in above terms. MAT computation - addition of provision for warranty loss to the book profit u/s 115JB - HELD THAT:- In the judgement cited by the assessee for the AY 2015-16 [ 2020 (3) TMI 471 - ITAT BANGALORE] in which it has been held that the provision for warrant expenses is not contingent and has to be allowed as deduction while computing income under the head Income from Business Profession . As a consequence of such finding, the addition made to the book profits is to be deleted because the liability cannot be said to be contingent, accordingly, the same ought not to be added for computing book profit. Disallowance of unrealized foreign exchange loss - HELD THAT:- This issue is covered in favour of the assessee vide Hon ble High Court of Delhi judgment in the case of Pr.CIT Vs. Simon India Ltd. [ 2022 (12) TMI 358 - DELHI HIGH COURT] wherein as held that loss on account of Forward Contracts, cannot be considered as speculative loss. The assessee has reinstated its debtors and creditors from the underlying transactions on the value of the foreign exchange at the year end. Thus loss is allowed u/s 37. Unrealized Foreign Exchange Loss u/s 115JB - HELD THAT:- Since we have uphold that the unrealized foreign exchange loss is ascertained liabilities and it is covered u/s 37 of the Act. therefore, the addition can not be made while calculating book profit u/s 115JB of the Act. for the year under consideration. Considering the rival submissions we allow these grounds.

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• 2023 (8) TMI 525
  Characterization of income - income surrendered during the course of survey u/s 133A - deemed income u/s 69 and 69A or business income - HELD THAT:- Foundational requirement before invoking the deeming provisions is not that there were certain survey operations u/s 133A and some undisclosed income has been detected and surrendered by the assessee and thus, the deeming provisions are automatically attracted. Rather the foundational requirement is whether the assessee has made the investment/has been found to be owner of cash and the explanation offered by the assessee explaining the nature and source of such undisclosed income and the reasonability of the explanation so offered by the assessee keeping into account the facts and circumstances of the relevant case. The mere fact that survey/search proceedings have been initiated at the business premises of the assessee doesn t mandate the Assessing officer to automatically invoke the deeming provisions and before invoking the deeming provisions, he has to call for the explanation of the assessee and only where the explanation so offered is not found satisfactory, he can proceed and invoke the deeming provisions. In the instant case as well, we find that the difference in stock so found out by the authorities has no independent identity and is part and parcel of entire stock, therefore, it cannot be said that there is an undisclosed asset which existed independently and thus, what is not declared to the department is receipt from business and not any investment as it cannot be co-related with any specific asset and the difference should thus be treated as undeclared business income. Following the said decision of DCIT Vs . Shri Ram Narayan Birla [ 2016 (9) TMI 1354 - ITAT JAIPUR] has taken a similar view holding that the excess stock so found during the course of survey was part of the stock and the Revenue has not pointed out the excess stock has any nexus with any other receipts other than the business being carried on by the assessee. The surrender on account of advances were relating to the business being carried on by the assessee. The ld CIT(A) has also returned a finding that the advances were admitted as being related to business activity of the assessee. Where the same has been found unrecorded in the books of accounts, the same has to be brought to tax under the head business income . Thus the income surrendered during the course of survey cannot be brought to tax under the deeming provisions of section 69 and 69A of the Act and the same has been rightly offered to tax under the head business income . In absence of deeming provisions, the question of application of section 115BBE doesn t arise for consideration. Decided in favour of assessee.

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• Customs

• 2023 (8) TMI 569
  Direction to the Respondents to permit the Petitioner to clear the goods by undertaking the exercise as directed by the Commissioner of Customs (Appeals) - HELD THAT:- On perusal of the order passed by the Commissioner of Customs (Appeals), it is quite clear that the Appellate Authority had taken into consideration the necessary requirements, which were required to be complied by the importer in regard to the compliance of the BIS requirements and also under the CRO. It is held by the Commissioner of Customs (Appeals) that such exercise could be validly undertaken by the Petitioner, so that the goods can be cleared for consumption in the domestic market, after the labelling requirements are fulfilled under the supervision of the Customs Authorities, which was held to be a permissible course of action in law, including the circular issued by the Customs Authorities. Learned Counsel for the Petitioner has stated that the Petitioner is ready to undertake the labelling of the impugned goods as per the BIS requirements under the Customs supervision as per the directions of the Customs Authorities. The Petitioner needs to be permitted to clear the goods by undertaking the exercise of labelling of the goods as per the directions of Commissioner Customs (Appeals). The Respondents are, accordingly, directed to permit the Petitioner to clear the goods in terms of the directions of the Commissioner of Customs (Appeals) in his order dated 13th June 2023 - Petition disposed off.

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• 2023 (8) TMI 568
  Detention of export goods - silk carpets - delay in export of the consignment - non-co-operation in the investigation - HELD THAT:- There is substance in the contention as alleged on behalf of the Petitioners that the goods ought not to be detained any further, as also the Petitioners need to co-operate in the investigation and/answering the questions, which the Customs Authorities may have in regard to the consignments. What is also relevant for the Customs Authorities to consider is that the Petitioners are running small businesses. The business is of export of the carpets, which are stated to be handmade and customised. Considering this peculiar situation, the goods ought not to be detained and are required to be released on the Petitioners furnishing an appropriate bond as may be desired by the custom officers. The Petitioners also shall co-operate in the investigation. It is found from the record that in response to the summons as issued by the Petitioners under Section 108 of the Customs Act, 1962, the Petitioners were called upon to submit all shipping bills, tax invoices, GST returns as also the export details and consignee details, photo id and authorization, etc. It is seen that all such requirements were met and such details were supplied to the Superintendent of Customs, by the Petitioners, as seen from the letters of the Petitioners dated 21st May 2023 and 2nd June 2023 - It is not found from the record that there is any other communication from the Customs Officer to furnish any other details. The Petitioners to furnish an appropriate bond within a period of two weeks from today, to be submitted to the Deputy Commissioner of Customs/Respondent No. 2. On the Petitioners furnishings such bond, the Respondents are directed to forthwith permit the Petitioners to export the consignments in question - petition disposed off.

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• 2023 (8) TMI 567
  Violation of principles of natural justice - petitioner not afforded reasonable opportunity of hearing - petitioner had connived with the exporter in clearance by over valuing the goods with a view to claim higher draw back / IGST - levy of penalty u/s 114 114AA of the Customs Act, 1962 - HELD THAT:- During the pandemic, there was difficulties faced by the litigants, therefore, taking judicial notice, the Hon ble Supreme Court was pleased to pass the order / direction. For the circumstances, this Court deems it appropriate that the petitioner may be granted one final opportunity to put forth this case. The impugned order dated 15.12.2020 is set aside. The petitioner would appear before the respondent on 10.08.2023 along with his objections and supporting documents. The respondent would thereafter pass orders on merit after hearing the petitioner and considering the objections and documents filed in support during the hearing. Failure on the part of the petitioner to appear before the respondent on the aforesaid date would result in restoring the impugned order. Petition disposed off.

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• 2023 (8) TMI 566
  Levy of redemption fine and penalty u/s 112(a)(i) of the Customs Act, 1962 - import of 213 units of used Multifunction machines - enhancement of value as per the Chartered Engineer s certificate - violation of import conditions - HELD THAT:- It is seen from the records that there have been number of orders issued by this Tribunal and various High Courts accepting the fact that the impugned MFDs are not liable for absolute confiscation. Considering lack of indigenous facility for manufacturing Multi Function Machines, lenient view is taken on such import and imported used MFD are released on payment of redemption fine of 10% penalty of 5%. From the decision in ACCORD DIGITECH VERSUS C. C-BANGALORE [ 2020 (12) TMI 647 - CESTAT BANGALORE] passed by this Tribunal, it is clearly evident that the used Digital Multifunction Printing and Copying Machine were released on payment of redemption fine of 10% and penalty of 5% of the enhanced value of the imported goods - This was also followed by this Bench in the case of SR ENTERPRISES AND DIGITAL EXPRESS VERSUS COMMISSIONER OF CUSTOMS, BANGALORE [ 2021 (9) TMI 1251 - CESTAT BANGALORE] wherein the redemption fine and penalty was 10% and 5% respectively. Thus, in the interest of justice since 06 years have already been lapsed, the present appeal is partially allowed by reducing the redemption fine and penalty by 10% and 5% respectively of the enhanced value - appeal allowed in part.

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• 2023 (8) TMI 565
  Classification of imported goods - snow goggles supplied to the Indian Army - classifiable under Customs Tariff Heading [CTH] 90049090 or under CTH 90041000? - redemption fine - interest and penalty - HELD THAT:- The facts of the case are not in dispute. The appellant imported Snow Goggles to supply to Indian Army as per its contractual obligation. The contract does not place any order for sun glasses nor does it use the terms sun glasses and snow goggles synonymously. Thus, as far as the trade parlance, i.e., knowledge of those who deal with the imported goods is concerned, the imported goods are Snow Goggles and not sun glasses. The goods are meant for protection of eyes in snowy region and not protection of eyes from sunlight which is the purpose of sun glasses as is common knowledge. Thus, the finding in the impugned order that the Snow Goggles are also sun glasses is not correct. The contract also lays down detailed specifications of the materials, processing, quality control, dimensions, tolerances, workmanship and finish, pre-inspection, sampling procedure, conformity, test methods, packaging and user instructions - there are nothing in these to suggest that these are the same as sun glasses. It is undisputed that the goods fall under the broad heading of 9004. The dispute is if they are sunglasses and, therefore, fall under 90041000. We found, after examining the contract of the appellant with the Army (to meet which these were imported), that they are not sunglasses but are Snow Goggles. Therefore, the disputed goods cannot fall under 90041000 (sun glasses) and must fall under 900490 Other . This heading covers three types of goods viz., passive night vision goggles, prismatic eye glasses for reading and others. Night vision goggles enable the viewer to see in the dark by converting the infra red rays which are emitted by all objects even in the dark, into visible light. Prismatic eye glasses are meant for reading correcting the vision. The imported goods do not fall under either of these categories. Hence, they were correctly classified by the importer under the residual CTH 90049090 as others. The demand needs to be set aside. Consequently, the demand of interest also needs to be set aside. Levy of redemption fine and penalty - HELD THAT:- As the demand itself is set aside, the fine imposed on the appellant also needs to be set aside on this ground alone. Further, penalty under section 112(a) can be imposed if the goods are liable to confiscation under any clause of section 111. In this case, the impugned order held that the goods imported by the appellant which had already been cleared for home consumption were liable for confiscation under section 111(m) for the reason that the imported goods did not match the classification of the goods (as decided in the impugned order). As per Section 17 the importer or exporter has to self-assess duty and the proper officer can re-assess the duty. Both the self-assessment by the importer (or, as the case may be, the exporter) and the re-assessment by the proper officer fall under the definition of assessment as per section 2(2). Thus, the importer (or exporter) and the proper officer are competent to classify the goods and assess the duty payable on them - remedy against self-assessment is re-assessment by the officer [or an appeal to Commissioner (Appeals)]and the remedy against the re-assessment is an appeal to the Commissioner (Appeals) which option is available to both sides or a notice under section 28 (which is available only to the Revenue and only to recover duties not levied, not paid, short levied, short paid or erroneously refunded). The imported goods do not become liable to confiscation under section 111(m) on the ground that the importer classified the goods under a CTH different from the opinion of the officer. Firstly, the importer is not an expert in taxation and can make mistakes and he cannot be penalized for making mistakes. Secondly, classification is a matter of opinion and the importer s goods cannot be confiscated nor can he be penalized for his opinion. Thirdly, the filing of the Bill of Entry and the self-assessment precede re-assessment by the proper officer and it is impossible for the importer to anticipate under which heading the officer is likely to classify the goods and file the Bill of Entry accordingly. Fourthly, there is no legal obligation on the importer to conform to the possible subsequent view of the officer. The law cannot be read to obligate the importer to do the impossible task of predicting the views of the officer and following them. Thus, wrong classification or wrong claim of an exemption notification, in the Bill of Entry even if they are found to be completely incorrect, do not attract section 111(m) or the consequential penalty under section 112. The impugned order is set aside and the appeal is allowed.

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• 2023 (8) TMI 564
  Levy of redemption fine and penalty u/s 112(a)(i) of the Customs Act, 1962 - import of 230 units of used Multifunction machines - enhancement of value as per the Chartered Engineer s certificate - violation of import conditions - HELD THAT:- It is seen from the records that there have been number of orders issued by this Tribunal and various High Courts accepting the fact that the impugned MFDs are not liable for absolute confiscation. Considering lack of indigenous facility for manufacturing Multi Function Machines, lenient view is taken on such import and imported used MFD are released on payment of redemption fine of 10% penalty of 5%. From the decision in ACCORD DIGITECH VERSUS C. C-BANGALORE [ 2020 (12) TMI 647 - CESTAT BANGALORE] passed by this Tribunal, it is clearly evident that the used Digital Multifunction Printing and Copying Machine were released on payment of redemption fine of 10% and penalty of 5% of the enhanced value of the imported goods - This was also followed by this Bench in the case of SR ENTERPRISES AND DIGITAL EXPRESS VERSUS COMMISSIONER OF CUSTOMS, BANGALORE [ 2021 (9) TMI 1251 - CESTAT BANGALORE] wherein the redemption fine and penalty was 10% and 5% respectively. Thus, in the interest of justice since 06 years have already been lapsed, the present appeal is partially allowed by reducing the redemption fine and penalty by 10% and 5% respectively of the enhanced value - appeal allowed in part.

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• 2023 (8) TMI 563
  Levy of redemption fine and penalty u/s 112(a)(i) of the Customs Act, 1962 - import of 128 units of used Multifunction machines - enhancement of value as per the Chartered Engineer s certificate - violation of import conditions - HELD THAT:- It is seen from the records that there have been number of orders issued by this Tribunal and various High Courts accepting the fact that the impugned MFDs are not liable for absolute confiscation. Considering lack of indigenous facility for manufacturing Multi Function Machines, lenient view is taken on such import and imported used MFD are released on payment of redemption fine of 10% penalty of 5%. From the decision in ACCORD DIGITECH VERSUS C. C-BANGALORE [ 2020 (12) TMI 647 - CESTAT BANGALORE] passed by this Tribunal, it is clearly evident that the used Digital Multifunction Printing and Copying Machine were released on payment of redemption fine of 10% and penalty of 5% of the enhanced value of the imported goods - This was also followed by this Bench in the case of SR ENTERPRISES AND DIGITAL EXPRESS VERSUS COMMISSIONER OF CUSTOMS, BANGALORE [ 2021 (9) TMI 1251 - CESTAT BANGALORE] wherein the redemption fine and penalty was 10% and 5% respectively. Thus, in the interest of justice since 06 years have already been lapsed, the present appeal is partially allowed by reducing the redemption fine and penalty by 10% and 5% respectively of the enhanced value - appeal allowed in part.

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• 2023 (8) TMI 562
  Levy of redemption fine and penalty u/s 112(a)(i) of the Customs Act, 1962 - import of 112 units of used Multifunction machines - enhancement of value as per the Chartered Engineer s certificate - violation of import conditions - HELD THAT:- It is seen from the records that there have been number of orders issued by this Tribunal and various High Courts accepting the fact that the impugned MFDs are not liable for absolute confiscation. Hence have taken a lenient view and released these goods on payment of redemption fine of 10% penalty of 5%. From the decision in ACCORD DIGITECH VERSUS C. C-BANGALORE [ 2020 (12) TMI 647 - CESTAT BANGALORE] passed by this Tribunal, it is clearly evident that the used Digital Multifunction Printing and Copying Machine were released on payment of redemption fine of 10% and penalty of 5% of the enhanced value of the imported goods - This was also followed by this Bench in the case of SR ENTERPRISES AND DIGITAL EXPRESS VERSUS COMMISSIONER OF CUSTOMS, BANGALORE [ 2021 (9) TMI 1251 - CESTAT BANGALORE] wherein the redemption fine and penalty was 10% and 5% respectively. Thus, in the interest of justice since 05 years have already been lapsed, the present appeal is partially allowed by reducing the redemption fine and penalty by 10% and 5% respectively of the enhanced value - appeal allowed in part.

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• 2023 (8) TMI 561
  Valuation of imported goods - Related party transaction - import of foreign base supplier namely Oman India Fertiliser Company, Oman (OMIFCO) - HELD THAT:- The matter has been examined earlier by Tribunal in INDIAN FARMERS FERTILIZERS CO OPERATIVE LIMITED, KRISHAK BHARTI COOPERATIVE LIMITED VERSUS C.C. -KANDLA AND C.C (PRV.) , JAMNAGAR VERSUS INDIAN FARMERS FERTILIZERS CO OPERATIVE LIMITED [ 2023 (1) TMI 155 - CESTAT AHMEDABAD ], wherein it has been held that IFFCO and OMIFCO are not related parties. It is apparent that the appellant importer and the foreign base exporter cannot be the treated as related parties. The impugned order which treats two as related party cannot be sustained and the same is set aside and appeal is allowed.

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• 2023 (8) TMI 560
  Demand of interest on differential duty - Appellant could not reexport the goods since the project work was not completed within the prescribed time and most of the equipments were damaged/broken/lost in the river belt when the project was being undertaken - N/N. 27/2008-Cus dated 01/03/2008 - HELD THAT:- On going through the Notification No. 27/2008-Cus dated 01/03/2008, it is seen that the condition under (5) of Limitations and Condition s (Col.2) states that the importer is required to execute Bond with Bank Guarantee. This Notification does not specify that at the discretion of the Customs officials, instead of Bank Guarantee, they can insist on Security Deposit. Clearly violating this provision, the officials have insisted on Security Deposit in the present case. This means that the importer had to make arrangement for the full duty amount at the time of imports which completely nullifies the benefit sought to be extended under this Notification. It is clear that this is not a case where the Bank Guarantee has been encashed by the Department when the OIO was passed. The Security Deposit was available right on the day when the import has taken place. Therefore, when the entire amount was available in the form of Security Deposit of Rs.73,65,624/- on the day of import, the question of the Appellant paying any interest till the payment of duty will not arise. In this case, it is seen that entire amount has been paid on the date of import itself, partly by way of 15% payment through Bill of Entry and balance 85% by way of Security Deposit. The Bangalore Tribunal in the case of FEMCO FILTERS (P) LTD. VERSUS COMMISSIONER OF CUSTOMS, BANGALORE [ 2006 (5) TMI 317 - CESTAT, BANGALORE ] has held there was no provision under Notification No. 160/92 for demand of interest. Therefore, the demand of interest is not sustainable. As regards the confiscation, we find there was no deliberate violation of the conditions of the Notification. In the present case also in the Notification No. 27/2008-Cus dated 01/03/2008, it is seen that there is no provision to impose any interest when the differential duty is paid - the OIO demanding interest is required to be set aside. Accordingly, the interest confirmed under the impugned OIO is set aside - the Appellant is not required to pay the interest of Rs.20,71,220/- which they have paid on 26/08/2011. Redemption Fine and penalty - HELD THAT:- Coming to the issue of confiscation, Redemption Fine and penalty, in the case of SUN KNITWEAR PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS, BANGALORE [ 2006 (9) TMI 374 - CESTAT, BANGALORE ], the Tribunal has held that Once the appellants pay the duty and interest, the goods will be out of the ambit of the said notification and they cannot be held liable for confiscation under Section 111(o) of the Customs Act. In the present case, as the Appellant has brought in proper explanation for non-export of the goods, following the ratio of the cited case law, we hold that the goods are not liable for confiscation and no penalty is to be imposed. Accordingly, the confiscation set aside, redemption fine and the penalty imposed by the Adjudicating Authority - since the appellant is not required to pay interest and penalty, the amounts paid by the Appellant under the heading of interest (Rs. 20,71,220) and penalty (Rs.6,00,000) would be eligible for consequential refund to him along with interest as per the statutory provisions. Appeal disposed off.

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• 2023 (8) TMI 559
  Valuation of export goods - Iron Ore Fines - enhancement of value - correctness of determination of value of the goods based on the price by adopting the wet metric ton weight of the Iron Ore find i.e. by including moisture content - HELD THAT:- Admittedly there is no dispute to the fact that the Respondent has provided the copy of the Agreement with the overseas importer wherein, it is specified that the Respondent will be paid based on the dry matric weight of the iron ore. This Tribunal in the case of COMMR. OF CUS. (AIRPORT) , CHENNAI VERSUS KOTHARI SUGARS CHEM. LTD. [ 2008 (2) TMI 757 - CESTAT, CHENNAI] where it was held that bank guarantee furnished by an assessee under court s order to secure the Revenue was held not amounting to payment of duty of excise and, accordingly, the provisions of Section 11B of the Central Excise Act was held inapplicable to a claim for refund of such amount. The above decision is squarely applicable in the present case also since no Stay has been granted by the Supreme Court. There are no merit in the Appeals filed by the Revenue - appeal dismissed.

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• 2023 (8) TMI 558
  Absolute Confiscation of imported goods - 1,70,000 dozen pieces of goods described as Zinc Choride Heavy Duty R6 AA Battery - misdeclaration of country of origin and RSP of the goods - non-compliance of conditions under Notification No.44 (RE-2000) - HELD THAT:- The ld.Commissioner (Appeals) agreed upon that in the impugned order, there is no contrary evidence to the findings of the ld.Commissioner (Appeals) that the impugned batteries are not having country of origin in Malaysia. Therefore, there is no infirmity in the misdeclaration of the country of origin and the price of the impugned goods. The price declared by the respondents is accepted. Consequently, the respondent has not contravened the DGFT Notification No.44(RE-2000)/1997-2002 dated 29.11.2002. There are no infirmity in the impugned order. Therefore, the same is upheld - appeals filed by the Revenue are dismissed.

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• 2023 (8) TMI 557
  Levy of additional duty of Customs (CVD) - Aluminium Used Beverage Can (UBC) scrap - manufactured goods or not - HELD THAT:- Considering the facts that the respondents in their own case for the earlier import in COMMR. OF CUS. (PORT), KOLKATA VERSUS L. MADANLAL (ALUMINIUM) LTD. [ 2010 (6) TMI 426 - CESTAT, KOLKATA ], this Tribunal has held that Aluminium Used Beverage Cans are not excisable, as these are not manufactured goods, the goods in question are not excisable and therefore, in view of the decision of Hon ble Supreme Court in the case of Hyderabad Industries [ 1999 (5) TMI 29 - SUPREME COURT] , additional duty not payable. As this Tribunal has taken the decision in the respondent s own case that the Aluminium Used Beverage Cans are not excisable as they are not manufactured goods. Therefore, Aluminium Used Beverage Cans in question are not excisable as these are not manufactured goods. Therefore, no CVD can be demanded from the respondent. There are no infirmity in the impugned order. Accordingly, the same is upheld - appeal of Revenue dismissed.

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• 2023 (8) TMI 556
  Seeking grant of anticipatory bail - import of Diamond - gross over valuation of goods or not - mis-declaration of value of goods or not - HELD THAT:- There is substance in the prosecution case that there is mis declaration in terms of value of the goods. It appears that diamond in the form which were recovered appears to be prohibited goods. The prosecution is suspecting Money Laundering and Terrorist Financing activities behind import of such diamond. Custodial interrogation of the present applicant is just and necessary. If prearrest bail is allowed, it will derail the investigation which is in progress. The aforesaid citation relied upon by the applicant relating to merit of case are not helpful to the applicant at this stage. If the investigation machinery proceeds for arrest of the applicant they will follow the necessary guidelines as held in SATENDER KUMAR ANTIL VERSUS CENTRAL BUREAU OF INVESTIGATION ANR. [ 2022 (8) TMI 152 - SUPREME COURT] . The interrogation with the accused in respect of the alleged offence is necessary for which presence of accused with the investigation machinery is necessary. Thus perusal of the prosecution material at this juncture prima facie it appears that there is mis declaration of the value. The Circumstances on record shows that this is not fit case for anticipatory bail and the custodial interrogation of the applicant is necessary, more especially in light of the fact that offence being economic offence affecting the national economy. The applicant being actively involved in the alleged offence therefore, he will not be entitled for pre arrest bail. The bail application dismissed.

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• 2023 (8) TMI 526
  Levy of redemption fine and penalty u/s 112(a)(i) of the Customs Act, 1962 - import of 204 units of used Multifunction machines - enhancement of value as per the Chartered Engineer s certificate - violation of import conditions - HELD THAT:- It is seen from the records that there have been number of orders issued by this Tribunal and various High Courts accepting the fact that the impugned MFDs are not liable for absolute confiscation. Considering lack of indigenous facility for manufacturing Multi Function Machines, lenient view is taken on such import and imported used MFD are released on payment of redemption fine of 10% penalty of 5%. From the decision in ACCORD DIGITECH VERSUS C. C-BANGALORE [ 2020 (12) TMI 647 - CESTAT BANGALORE] passed by this Tribunal, it is clearly evident that the used Digital Multifunction Printing and Copying Machine were released on payment of redemption fine of 10% and penalty of 5% of the enhanced value of the imported goods - This was also followed by this Bench in the case of SR ENTERPRISES AND DIGITAL EXPRESS VERSUS COMMISSIONER OF CUSTOMS, BANGALORE [ 2021 (9) TMI 1251 - CESTAT BANGALORE] wherein the redemption fine and penalty was 10% and 5% respectively. Thus, in the interest of justice since 05 years have already been lapsed, the present appeal is partially allowed by reducing the redemption fine and penalty by 10% and 5% respectively of the enhanced value - appeal allowed in part.

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• Corporate Laws

• 2023 (8) TMI 555
  Auction of assets of company under liquidation - Refusal to extend the period for depositing the amount offered by the present appellant towards sale consideration - HELD THAT:- It is an admitted fact that the present applicant was supposed to deposit an amount of Rs. 73,23,30,000/- within a period of thirty days starts from the intimation of confirmation of the tender which was on 02.02.2023. The amount was to be paid on or before 03.03.2023. It is pertinent to note that the learned Single Judge, by an order dated 02.03.2023, that is, one day prior to the completion of the aforesaid period, granted thirty days time to deposit the entire amount. But, only Rs. 37 Crores was paid by the applicant. It is true that, under Clause 13.3 of the Terms and Conditions of the Approved E-Auction, High Court has the right to rescind, amend, delete, invalidate any of the settled terms and conditions. The High Court exercised its power once and extended the time for depositing the entire sale amount, but the applicant failed to comply the same. The observations made by the learned Single Judge agreed upon - there are no reason to interfere with the judgment of the learned Single Judge - appeal dismissed.

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• 2023 (8) TMI 554
  Seeking transfer of present petition to the National Company Law Tribunal [NCLT] - It is submitted that since no effective steps have been taken in the present matter pursuant to the appointment of the Provisional Liquidator, as such the present matter may be transferred to the NCLT - Section 434 (1)(c) of the Companies Act, 2013. HELD THAT:- The Supreme Court in ACTION ISPAT AND POWER PVT. LTD. VERSUS SHYAM METALICS AND ENERGY LTD. [ 2020 (12) TMI 535 - SUPREME COURT] held that So long as no actual sales of the immovable or movable properties have taken place, nothing irreversible is done which would warrant a Company Court staying its hands on a transfer application made to it by a creditor or any party to the proceedings. It is only where the winding-up proceedings have reached a stage where it would be irreversible, making it impossible to set the clock back that the Company Court must proceed with the winding up, instead of transferring the proceedings to NCLT to now be decided in accordance with the provisions of the Code. Whether this stage is reached would depend upon the facts and circumstances of each case. In view of the judgment passed by the Supreme Court in Action Ispat, the present application is allowed subject to the petitioner clearing the expenses incurred by the OL. The OL is directed to raise a demand upon the petitioner within one week, which the petitioner will clear within two weeks thereafter.

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• 2023 (8) TMI 553
  Contempt petition - Alleged wilful breach of orders of this Appellate Tribunal - Complainants alleged that Contemnors have been trying to start a competing jewellery business using deceptively similar names in order to take benefit of the trade mark and goodwill of CKC Sons - whether there have been specific and clear orders for doing or not doing any stipulated action by the Contemnors or not - whether there could be one and only one interpretation without any ambiguity, whatsoever, to any party to the said order? - Section 2(b) of the Contempt of Court Act, 1971. HELD THAT:- Section 2(b) of the Contempt of Court Act, 1971, Civil Contempt means disobedience to any judgment, decree, directions, orders or other process of Court or wilful breach of an undertaking given to Court. From this it becomes clear that in order to prove contempt, two elements are required to be established i.e., (i) Disobedience of any judgment, decree, directions, orders or other process of Court; (ii) Disobedience or breach must be wilful, deliberate and intentional. Similarly, mere disobedience or breach of the Tribunal s order by the Contemnor may not be sufficient to convert into contempt unless it is proven beyond doubt that such disobedience or breach was wilful. While doing so, we are duty bound to take into consideration whether if any alleged breach was of trivial or in nature of technical breach or it was gross and substantial breach with clear intention to take advantage over the other party/ complainants for seeking undue benefits for the Contemnors. After conjoint readings of the contents of the order, relief sought and direction of the Tribunal not to precipitate of the matter, we are not in position to agree to the submissions of the Complainants regarding any violation of the orders of this Appellate Tribunal; leave aside wilful disobedience amounting to contempt. No specific directions can be read from this order except general restrain to both the parties by this Appellate Tribunal, that too at the best, in the context of the main appeal No. 65 of 2019. Permission to hold Board Meeting in accordance with Section 173 of the Companies Act, 2013 r/w Section 8 of Companies (Meeting of Board and its Power) Rule, 2014 - HELD THAT:- This Appellate Tribunal gave direction to Respondent No. 9 therein- Mr. C. Ganesh Narayan therein/ Contemnor No. 1 herein not to take any coercive action against the matter concerned. This makes quite clear that the order dated 25.11.2021 by this Tribunal was only for Mr. C. Ganesh Narayan and not to any other (Complainants/ Contemnors) and this restrain order is required to be read with prayer made in I.A. No. 1075 of 2021 (I.A. filed by the Complainants herein), which was specifically in relation to holding Board Meeting in terms of Section 173 of the Companies Act, 2013. In this order, neither there has been any discussion regarding non operation of existing business or opening new store as brought out in present Contempt Case or any specific directions by this Appellate Tribunal on any other matter other than relating to Board Meeting only to Mr. C. Ganesh Narayan - we are not able to appreciate the case being made out by the Complainants regarding alleged violations or breach by Contemnors w.r.t order dated 25.11.2021 passed by this Appellate Tribunal. There are no alleged contempt - the contempt case devoid of any merit(s) is dismissed.

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• Insolvency & Bankruptcy

• 2023 (8) TMI 552
  Condonation of delay in filing appeal - HELD THAT:- There is a delay of fifty-two days in filing the civil appeals. The delay on the part of the Union of India in filing the appeals is beyond the maximum period of fifteen days which can be condoned by this Court under Section 62(2) of the Insolvency and Bankruptcy Code 2016. The appeals are dismissed only on the ground of delay.

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• 2023 (8) TMI 551
  Non-furnishing of notice to the appellant, while allowing the statutory appeal under Section 61 of the IBC 2016 - HELD THAT:- The petitioner would be at liberty to bring such a grievance to the attention of the National Company Law Appellate Tribunal by filing a recall application on that ground. Appeal disposed off.

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• 2023 (8) TMI 550
  Sanction of the One Time Settlement (OTS)/compromise proposal - HELD THAT:- As per the terms of the clause 10 of OTS, all expenses from the date of appointment of the Resolution Professional (RP) on 03.01.2020 till the date of OTS Sanction/sanction advice, that is 21.07.2020, have to be met by the respondent Bank of Baroda. Post the OTS sanction/sanction advice, the expenses have to borne and paid by the borrower, that is, the appellant Pitampur Poly Products Limited. The RP who is present through video conferencing and has drawn our attention to the Statement of RP Fees and Expenses (Security, Lawyer etc.), enclosed at page 330 of the appeal paper book. She agrees that an amount of Rs.2,36,000/- remains to be paid as fees, which she accepts will be for the period upto 04.08.2020. In addition, the expenses of Rs.5,22,902/- are payable as legal fees, security guard expenses etc. The RP on being questioned has stated, that the market value of the property of which title deed/document are with the respondent Bank of Baroda is about Rs.2,00,00,000/-. The respondent Bank of Baroda directed to make a payment of RS.3,79,451/- being 50% of the total amount of Rs.7,58,902/- due to RP, within a period of one month from today - appeal disposed off.

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• 2023 (8) TMI 549
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - claim was barred by limitation since the default had occurred over three years prior to the filing of the petition under Section 9 of IBC - HELD THAT:- It emerges from the record that while the adjudicating authority dismissed the company petition on the ground of limitation, the appellate authority has affirmed the judgment of the adjudicating authority primarily on the ground that there was a pre-existing dispute and on limitation - From the narration of the facts, it appears to this Court that the appellant has a serious grievance on whether the order of the adjudicating authority for the production of documents was complied with. Production of documents was sought to establish that there was an acknowledgment of debt. The impugned order of the NCLAT has not entered any finding of fact on whether there was compliance of the order for production of documents. Though it was urged by the respondent that the order for production of documents had been complied with, no expression or opinion expressed on finding by the NCLAT on this aspect of the matter. Matter restored back.

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• 2023 (8) TMI 548
  Application filed by the Resolution Professional for approval of the Resolution Plan of the Appellant rejected - Appellant submits that in the Resolution Plan relevant clause which provide for assignment of security interest in favour of the Appellant was voted upon by the CoC and no objection was raised at any point of time by the Dissenting Financial Creditors about the aforesaid - HELD THAT:- The objection which was raised by the Dissenting Financial Creditor before the Adjudicating Authority, has been noticed in detail by the Adjudicating Authority. The submission on behalf of the Resolution Applicant to modify the plan and not to demand release of the Personal and Corporate Guarantees of dissenting and absenting financial creditors has also been noted. The stand which has been taken by the Successful Resolution Applicant in this Appeal is that the Successful Resolution Applicant has submitted an undertaking that the Personal and Corporate Guarantees of the Dissenting Financial Creditors shall not be assigned and they will be allowed to retain their Personal Guarantees - it is not necessary to consider submission as to whether the Resolution Plan violates Section 30(2)(e) of the IBC Code since the Successful Resolution Applicant himself is ready to modify the clauses which provide for assignment of securities in favour of Successful Resolution Applicant. There is no lack of jurisdiction in the Adjudicating Authority to remit the plan for reconsidering the amendment which the Successful Resolution Applicant himself was requesting to be carried out. The present is a case where the Corporate Debtor is sought to be revived by a Resolution Plan which was approved by the majority. It is also relevant to notice that the Appellant s Resolution Plan value is Rs.432.90 Crore where the liquidation value of the Corporate Debtor was only Rs.147.11 Crores. The Successful Resolution Applicant has proposed an excess amount of Rs.285.79 Crores - The Resolution Applicant having himself expressed not insist for assignment of Personal and Corporate Guarantees and to be continued with the Dissenting Financial Creditors, the Adjudicating Authority ought not to have rejected the Resolution Plan and accepting the request of the Dissenting Financial Creditor ought to have remitted the plan to the CoC for reconsideration. The ends of justice be served in permitting the Successful Resolution Applicant to prepare an Addendum to the Resolution Plan incorporating condition as given in the Affidavit dated 20.02.2023, which Addendum be placed before the CoC for voting by the Resolution Professional and after decision of the CoC, in event, the CoC decides to approve the Addendum, the Addendum as well as the Resolution Plan be submitted before the Adjudicating Authority for fresh consideration - appeal disposed off.

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• 2023 (8) TMI 547
  Seeking direction for payment of fees to the Resolution Professional beyond the period 31.08.2019 - consent was with the caveat of allowing fees and expenses only for the period till 31.08.2019 - RP s fee and expenses is payable till 24.04.2022 or after that - reduction of fees to Rs.1 lakh per month - validity of adverse remarks made on the professional conduct of RP by the Adjudicating Authority - deprecatory remarks on the professional conduct of the RP. Whether the decision of the Adjudicating Authority to allow payment of fees to the RP for the period 01.09.2019 till 24.04.2022 is sustainable in the face of the contention raised by the major Financial Creditor on the CoC - Religare Finvest that it had not given any such consent? - HELD THAT:- It is well established that the fees of the RP are required to be ratified by the CoC. Coming to the facts of the present case, perusal of the minutes of the first CoC meeting reveals that it had ratified the appointment of the Interim Resolution Professional including payment of fees and in the second CoC meeting held on 14.06.2019 his appointment as RP was confirmed - in the present case, it is undisputed fact that the CoC even after deciding to replace the RP did not make any endeavours for effectuating the substitution of the RP. Hence the RP continued to remain in position. It is also an admitted fact that the third CoC had resolved to pay the RP on the existing terms and conditions till the date of his demitting office. Contention of Religare Finvest is that it had given consent for payment of fees of RP only up to 30.08.2019 but the Adjudicating authority had wrongly recorded their consent for the period up to 24.04.2022 - HELD THAT:- There are no force in their contention. Once the CoC in the third meeting had decided to continue with the RP on the same terms and conditions until the replacement was appointed and this decision was not subsequently modified by the CoC, the logical corollary is that the RP was entitled to claim fees/expenses. Any consent of Religare Finvest in this regard is redundant and inconsequential. When the CoC had itself ratified the fees and allowed the RP to continue to discharge the responsibilities of RP until a fresh RP was appointed, there are no reasons to disagree with the Adjudicating Authority in holding that the RP was well entitled to claim his fees along with actual expenses. Whether the reduction of the fees from Rs. 3.75 lakhs to Rs 1 lakh plus GST by the Adjudicating Authority was reasonable or not? - justified decision or not - HELD THAT:- RP admittedly was unable to publish Form G. Neither could Expression of Interest be invited. The RP was also unable to elicit any successful resolution plan for the Corporate Debtor within 180 days from the initiation of CIRP. We find that the Adjudicating Authority had also taken notice of the fact that the RP had entered into a tussle with the CoC which put hurdles in the progress of the CIRP. That resolution of the Corporate Debtor had not taken place due to ongoing tussle between the Appellant and CoC is writ large. In fact, the Adjudicating Authority while considering the liquidation application filed vide MA 3668/2019 had been constrained to note of serious misunderstanding between the RP and the CoC causing a deadlock in the CIRP process leaving no option but for liquidation. Given the material on record and the facts and circumstances in the present matter, the finding of the Adjudicating Authority is agreed upon that the active CIRP period having expired with no substantial work to be taken up further and the Covid pandemic also having generally disrupted work, the scaling down of the fees to Rs 1 lakh was not discriminatory or unfair. The Adjudicating Authority was therefore well within its rights in exercising its wisdom in adjudicating on the reasonability quotient of fees payable to the RP - there are no error in the proportionate reduction of fees/expenses as carried out by the Adjudicating Authority as the rationalization has been done with proper application of mind. Whether the deprecatory remarks on the professional conduct of the RP were appropriate or they deserve to be expunged? - HELD THAT:- The CoC had recommended liquidation but RP had orally opposed liquidation of the Corporate Debtor before the Adjudicating Authority even after having filed the liquidation application. The RP had also not acted on the suggestion of the CoC to file a petition before the Adjudicating Authority against the suspended management for non-cooperation in submitting statutory registers and other documents etc. The CoC was of the view that much harm was caused to the Corporate Debtor by handing over the control of its assets to the erstwhile management. These actions of the RP do not reflect well on his professional conduct and cannot be countenanced - RP was more focused on claiming his fees/remuneration and other expenses than discharging his responsibilities of completing CIRP in a time bound manner - the Adjudicating Authority has been justified in taking a serious note of the conduct of the Resolution Professional. There are no reasons to interfere with the impugned order - appeal dismissed.

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• 2023 (8) TMI 546
  Seeking approval of the Resolution Plan - Adjudicating Authority had wrongly directed for project wise CIRP - CoC was improperly constituted and that the amount in the Resolution Plan entitled for Kotak Mahindra Bank Limited is much more than the actual Claim admitted by the Resolution Professional - Amount claimed less than the amount provided under the plan - Resolution Plan value is less than the Liquidation value - SRA Consortium is ineligible under Section 29A of IBC - disqualification on account of non-filing of the Financial Statements of their Companies. Project wise CIRP and wrong constitution of COC - HELD THAT:- The Application under Section 7 of the Code was filed by the 2nd Respondent, Kotak Mahindra Bank and the Company was admitted into CIRP on 31/01/2020. Kotak Bank has charged on Project Arun Auroville and sought for CIRP of Project Arun Auroville and therefore, the IRP constituted the CoC for Project Arun Auroville and the CIRP was limited to that project only - this Tribunal is of the considered view that there is no merit in the 1st issue raised by the Appellant that the Project wise CIRP was wrongly initiated or that the CoC was erroneously constituted, specifically keeping in view that the Order of project wise CIRP was never challenged. Further, the CoC on 29/10/2020 approved the eligibility criteria for a Prospective Resolution Applicant to provide a Resolution Plan in respect of Project Arun Auroville alone. Based on this eligibility criteria, public announcement was effected on 14/11/2020 clearly stipulating that the Resolution Plan was sought only for Project Arun Auroville . Having participated and attended the CoC Meetings, the Appellant had never exercised his choice of raising this issue - there are no substance in this matter in question. Disqualification of the SRA Consortium u/s 29A of the code - HELD THAT:- Admittedly, the Resolution Applicants, Mr. Kamal Pasha and Mr. Syed Fahad were Directors of other Companies which had defaulted in filing their Balance Sheets and Annual Returns for three years prior to 01/04/2014 and these Companies were struck off and the Resolution Applicants suffered disqualification, challenging which decision, the Resolution Applicants filed W.P. No. 43859 and 43860/2017 in which a Common Order was passed by the Hon ble High Court of Karnataka on 12/06/2019, wherein it was held that the provisions of Section 164 (2) (a) of the Companies Act, 2013 is prospective in nature and would not be applicable to default committed prior to 01/04/2014 - A perusal of the Minutes of the Meeting of the CoC held on 21/07/2021 and a plain reading of Form H shows that the aspect of the DIN of the Resolution Applicant being active, is clearly noted. Therefore, this Tribunal is of the considered view that the 4th Respondent / The Consortium of Resolution Applicants cannot be stated to be disqualified under Section 29A of the Code. Is charging of penal interest by Kotak Bank against the provisions of 30(2) of IBC - capitalization of penal interest by the Bank - HELD THAT:- This Tribunal is of the considered view that as far as penal interest is concerned, the Appellant is bound by the terms of the Settlement Agreement. The next question which arises for consideration is whether after the moratorium is imposed under Section 13 of the Code, the clock will stop ticking with respect to the Claim amount and therefore, no further interest after the admission of the Claim by the RP is to be charged - A simple and purposive reading of this Section 14 does not specify any interest waiver during the period of moratorium. Therefore, this Tribunal is of the earnest view that the contention of the Learned Counsel for the Appellant that no interest could be charged subsequent to the admission of the Claim by the RP is untenable, specifically keeping in view the Agreement, the Provisions of Section 14 of the Code. As regarding the argument of the Appellant that the RP ought not to have added the interest of the Claim amount after admission of the Claim, it is held that the role of the RP under IBC, 2016 is only to collate the Claims and that he does not have any adjudicatory powers. The right which vested with the Kotak Bank / The Financial Creditor by virtue of the Loan Agreement / Settlement Agreement cannot be interfered by the Code. It is mainly for this reason that the non obstante clause, in the widest terms possible is contained in Section 238 of the Code, so that any vested right of either the Corporate Debtor or the Creditor, under any other law for the time being in force, cannot come in the way of the Code - It is also seen from the record that the Appellant had not filed any Suit to redeem the mortgage and the Bank / Financial Creditor has taken steps to recover the balance amount due from the Appellant after the approval of the Resolution Plan. The Hon ble Supreme Court in a catena of Judgments has laid down that the Commercial wisdom of the CoC is non-justiciable. This Tribunal finds it relevant to place reliance on the Judgment in the matter of KALPRAJ DHARAMSHI ANR. VERSUS KOTAK INVESTMENT ADVISORS LTD. ANR. [ 2021 (3) TMI 496 - SUPREME COURT ], wherein the Hon ble Apex Court has held that unless there is any violation of Section 30 (2) of the Code, the Commercial wisdom of the CoC is not be interfered with. Thus, there are no violation of the Provisions of Section 30(2) of the Code. Being a MSME, the appellant ought to have been given sufficient opportunity and due preference with respect the the plan - HELD THAT:- One of the issues raised by the Appellant is that the Resolution Plan value is less than the Liquidation value and that this is in violation of the Provisions of Section 30(2) of the Code. The Adjudicating Authority observed that the Liquidation value is merely to assist the CoC in deciding of the Resolution Plan and its commercial viability - there are substance in the argument of the Learned Counsels for the Respondents that the Liquidation value is Rs. 77,00,00,000/- which is based on the assumption that the project is fully completed in all aspects. The Plan value is Rs. 53,42,00,000/- and it is submitted by the SRA that they would need to invest an additional Rs. 15,00,00,000/- over and above the sum of Rs. 54,00,00,000/-. Additionally, another Rs. 35,00,00,000/- would be required to make the Project viable and also to correct the deviations in the construction of the project as four pent houses were constructed without approval. It is seen from the table that all the dues of the Corporate Debtor company are settled to 100 % and the CoC in its commercial wisdom has unanimously approved the Resolution Plan - there are no force in the contention of the Appellant that the Resolution Plan is for a low amount less than the liquidation value and ought not to have been approved. The Promotor being an MSME is given an opportunity under the Provisions of the Code to present a Plan. At the same time, the Code does not contemplate any kind of preference to be given to an MSME Promotor by the CoC while accepting a Resolution Plan. The CoC in its commercial wisdom examines the criteria for maximisation of value of assets and protecting the interest of all stakeholders. Therefore, the contention of the Appellant that being an MSME Promotor he ought to have been given a preference is unsustainable, more so when the Appellant did not furnish any Resolution Plan but now at a belated stage, after the approval by the Adjudicating Authority , is offering an amount in settlement. Any kind of settlement is between the Parties and no settlement can be directed by way of an Order under the Provisions of IBC, 2016. Appeal dismissed.

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• PMLA

• 2023 (8) TMI 545
  Grant of bail - appellant Rajesh Kumar Rathaur has suffered incarceration for a period of 8 years in the predicate offence and was not arrested during the course of the investigation, which had begun in the year 2016 - HELD THAT:- The bail granted by the trial court will continue during the pendency of the trial. However, in case the appellant Rajesh Kumar Rathaur violates the terms and conditions of the bail or if there are any grounds which justify the cancellation of bail, it would be open for the prosecution to file an application seeking such cancellation. The impugned order/judgment is set aside and the appeal is allowed.

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• Service Tax

• 2023 (8) TMI 544
  Maintainability of Appeal - circular : 80/10/2004-S.T. issued on 17.09.2004 - HELD THAT:- This Civil Appeal is dismissed on the ground of delay as well as on merits.

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• 2023 (8) TMI 543
  Maintainability of appeal - appeal to Supreme Court (appropriate Forum) - Section 35H and 35L of the Central Excise Act, 1944 - Determination of taxability - Franchisee service - whether in relation to services in question, any tax can at all be levied under the provisions in question? - HELD THAT:- Sub-section (2) of Section 35L, itself clarifies that for the purpose of Chapter VI-A, the determination of any question having a relation to the rate of duty, shall include the determination of taxability or excisability of goods for the purpose of assessment. A Full Bench of this Court in case of Commissioner of Central Excise, Mumbai-V Commissionerate Vs. M/s. Reliance Media Works Ltd. [ 2019 (12) TMI 392 - BOMBAY HIGH COURT] also dealt with such issue that the appeals which arises from the orders of the Tribunal which relate to taxability or excisability passed prior to 6 August, 2014, i.e., the date on which Section 35L(2) of the 1944 Act, came to be inserted, being an issue on rate of duty, would be appealable only before the Supreme Court and not before the High Court. The Full Bench also held that the amendment made to Section 35L of the Act was clarificatory in nature and, had a retrospective in operation. Even otherwise Section 35H of the 1944 Act which provides for an appeal to the High Court, clearly carves out an exception in regard to exclusion of matters not relating, amongst other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment, which is now the legislative clarification as provided by an amendment as incorporated to Section 35L by insertion of sub-section (2), which is a clarification in relation to the entire Chapter in question namely Chapter VI-A dealing with the Appeals. The present appeals raise an issue on the taxability of the services in question, hence these appeals are not maintainable before this Court.

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• 2023 (8) TMI 542
  Rectification of mistake - mistake apparent of the face of record or not - Refund claim - export of services or not - Petitioner had not received the entirety of the consideration in foreign exchange - not allowing the Petitioner s Appeal for the period 2010-11 in the operative portion of the Final Order BOARD OF CONTROL FOR CRICKET IN INDIA VERSUS COMMISSIONER OF SERVICE TAX-II, MUMBAI (VICE-VERSA) [ 2018 (12) TMI 872 - CESTAT MUMBAI] - feed in the present matter left India or not. For FY 2011-12, the CESTAT has committed a clear mistake apparent on record by holding that the Petitioner had not received the entirety of the consideration in foreign exchange - HELD THAT:- The submission of the petitioner that the Tribunal s finding that the petitioner has not received the entirety of the consideration in foreign exchange cannot be construed as a mistake apparent from the record. The fact that the petitioner has made an attempt to canvass this point by drawing attention to various documents for 2 hours itself indicates that such error cannot be construed as a mistake apparent from the record. It would amount to reconsideration of the disputed facts on record. This is a disputed question of fact whereby the contention of the petitioner that they have received full consideration in foreign exchange has been rejected by the Tribunal and same is also disputed in show cause notice. Such a disputed question of fact cannot constitute mistake apparent from record - the Tribunal was justified in observing that what is sought to be attempted by the petitioner in the rectification application is a review of the order which cannot be done under Section 35C(2) of the Central Excise Act as applicable to the Service tax - the Tribunal was not wrong in rejecting the rectification application on this error. For FY 2010-11, the CESTAT answered the question of law in favour of the Petitioner, but erred in not allowing the Petitioner s Appeal for the period 2010-11 in the operative portion of the Final Order in BOARD OF CONTROL FOR CRICKET IN INDIA VERSUS COMMISSIONER OF SERVICE TAX-II, MUMBAI (VICE-VERSA) [ 2018 (12) TMI 872 - CESTAT MUMBAI] - HELD THAT:- The Tribunal categorically observed that for the period post 27th February 2010, the said benefit has been extended to the petitioner, to the extent they have shown that the payment against the said services was received in convertible foreign exchange. Therefore, the petitioner cannot contend that although the question of law is answered in favour of the petitioner, the Tribunal in the operative portion has not given any such finding. In paragraph 7.10 of the original order, the Tribunal has categorically held that post 27th February 2010, the petitioner has been given benefit of export, to the extent of payment received in convertible foreign exchange. In view thereof, the same cannot constitute a mistake apparent on record. Petitioner had cited the decision of the CESTAT in COMMISSIONER OF SERVICE TAX-VI, MUMBAI VERSUS BALAJI TELEFILMS LTD. [ 2016 (4) TMI 152 - CESTAT MUMBAI ] in support of its case on merits. This was distinguished by the CESTAT on the sole premise that the feed in the present matter did not leave India whereas the feed in the Balaji Telefilms case left India prior to returning to India. This is a clear factual error since the Petitioner s feed undoubtedly does leave India - HELD THAT:- On a query posed to the petitioner as to whether wrong distinction of a particular decision made by the Tribunal can at all constitute a mistake apparent on record, the petitioner was fair to contend that it cannot be the case. In any view of the matter, whether the decision of Balaji Telefilms has been correctly appreciated by the Tribunal or not, would require debate and which certainly cannot constitute a mistake apparent from the record. The Tribunal in its original order dated 10th December 2018 have dealt with this decision and observed that it is distinguishable on facts. Therefore, the Tribunal was justified in rejecting the rectification application filed by the petitioner with respect to error no. 3 since same would not amount to mistake apparent from record. Section 35C (2) read with Section 83 of the Finance Act, 1994 empowers the Tribunal to rectify the order only on mistakes which are apparent from record. The phrase mistake apparent from record has been explained by the Supreme Court as far back as in the year 1971 in case of TS BALARAM, INCOME-TAX OFFICER, COMPANY CIRCLE IV, BOMBAY VERSUS VOLKART BROTHERS AND OTHERS [ 1971 (8) TMI 3 - SUPREME COURT ] wherein the Supreme Court held that a debatable point of law cannot constitute a mistake apparent from the record on which two opinions are conceivable, it cannot be said to be an error apparent on the face of the record. In the present case as observed, none of the errors agitated constitutes mistake apparent from record. The Tribunal s order rejecting application of the petitioner to rectify mistake apparent from record in its order cannot be faulted - Petition dismissed.

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• 2023 (8) TMI 541
  Short payment of service tax - availed exemption from the gross amount received towards the services rendered by them to the units located inside the SEZ, exemption provided by N/N. 4/2004-ST dated 31.3.2004 - the notification was superseded by Notification No. 9/2009-ST dated 3.3.2009 - recovery alongwith interest and penalties - HELD THAT:- N/N. 9/2009-ST dated 3 March 2009 supersedes the older N/N. 4/2004 by providing for exemption from the levy of service tax in respect of the taxable services rendered to SEZ Developers and SEZ Units by way of a refund. Notification 9/2009 has in a change of policy modified the earlier procedure of automatic exemption from payment of service tax provided in relation to the authorised operations in a SEZ under the SEZ Act. Exemption of service tax under the new notification is by way of a refund and is subject to the various conditions enumerated therein. The appellant is of the view that the main portion of the Notification exempts the levy itself and that the proviso contemplates that even if tax or duty is paid, the exemption is available in the form of Refund. This is not a proper reading of the notification. The exemption provided by the notification is circumscribed by the proviso. There is no scope for intendment. Plain words of the notification must be given meaning to. It cannot be read disjointedly in different parts - the same basic rule of interpretation applies to a notification too. It is within the remit of Government to change a policy keeping in view the economic conditions, financial constraints and many other administrative and other attending circumstances. Hence when an exemption of service tax is made under a new notification which replaces an old notification, the grant of exemption/ refund is subject to the various conditions enumerated therein. The contention of the appellant is hence devoid of merit. Though the show cause notice was dated, 11.09.2009. the same was received only on 04.05.2010 - HELD THAT:- The impugned order also only examines the date of receipt of OIO, which is not relevant to determine the question of time bar. Hence this matter which was not brought for consideration to the Original Authority by the appellant needs to be examined by him along with the available evidence. Penalty - HELD THAT:- The appellant was earlier availing exemption under Notification No. 4/2004-ST dated 31.3.2004 which got superseded by Notification No. 9/2009-ST dated 3.3.2009. The exemption availed was reflected in the ST-3 returns and the demand is also only for the period of March 2009. The short-payment was noticed during the scrutiny of the ST-3 returns and was a genuine mistake. Hence no penalty is imposable in this case. The demand of duty and interest made in the impugned order is as per law - Penalty set aside - with regard to the issue of time bar as per the normal time limit i.e. the matter regarding the receipt of Show Cause Notice by the appellant within normal time or whether time-barred alone is remanded to the Original Authority to be decided after giving sufficient opportunity to the appellant to state his case both in writing and orally as per law - appeal allowed in part and part matter on remand.

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• 2023 (8) TMI 540
  Refund of the Service Tax - parking charges - excluded from the definition of immovable property for the purposes of service under RIPS or not - HELD THAT:- The inclusive part of the definition of immovable property covers inter alia building and part of a building and the land appurtenant thereto and also land incidental to the use of such building or part of a building. Clause (iv) of Explanation 1 excludes, inter alia, land used for educational, sports, circus, entertainment and parking purposes. The legislature has used the words land and vacant land in accordance with the context, wherever applicable. When land in a legal sense includes structures, if any, raised thereon, the same covers the land appurtenant to a building or a part of the building as well. From a reading of the provisions, it is seen that, for the purposes of sub-clause (zzzz) of Section 65 (105), immovable property does not include land used for parking purposes - While clauses (a) and (b) under Explanation 1 make a reference to vacant land , clause (c) refers only to land . The purpose for the use of land is also mentioned as educational, sports, circus, entertainment and parking. Therefore, the word parking takes colour from the preceding words educational, sports, circus, entertainment. These activities in the normal course are of a nature that would normally be carried out in buildings to be put up either as a temporary or a permanent structure on land. It is perhaps for this reason that exclusion clause (c) uses the term land instead of the term vacant land as used in exclusion clauses (a) and (b). Thus, a building or its part put up on land and which is used for car parking will get the benefit of the exclusion from levy of Service Tax under Section 65(105)(zzzz) ibid., as it stood then - the rejection of the refund claim is held to be not in order - the impugned order is set aside and the appeal is allowed.

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• 2023 (8) TMI 539
  Levy of Service tax - mark-up in freight income (ocean freight) - commission income under category of BAS - legal expenses - difference in figures in ST-3 - value shown as non-taxable in the financial data summary sheet which is taxable under BSS - difference in value in Form 26AS and ST-3 returns - extended period of limitation. Service tax on mark-up in freight income - HELD THAT:- In terms of paragraph 3 of the Circular dated 12.08.2016, the demand is liable to be set aside as the destination of goods are outside India in terms of rule 10 of the Place of Provision of Service Rules, 2012. For imports, the transaction would be non-taxable in terms of section 66D (ii)(p) of the Finance Act. Service tax on Commission income under BAS - HELD THAT:- This demand was proposed under category of BAS as defined under section 65(19) of the Finance Act but the show cause notice does not mention any of the sub-sections of 65(19) of the Finance Act. It needs to be noted the appellant was not acting as an agent on behalf of the shipping lines as it bought and sold space on its own account. Thus, it cannot be said that the appellant was acting as a commission agent and thereby, covered under the definition of BAS. Legal expenses and difference in figures in ST-3 returns - HELD THAT:- During the audit, an objection was raised with respect to non-payment of service tax on legal expenses and on difference in figures in ST-3 returns. The said payments were made by the appellant with interest before the issuance of the show cause notice. Thus, the appellant was entitled to the benefit of section 73(3) of the Finance Act. The demand could not, therefore, have been confirmed. Demand on income shown as non-taxable in summary sheet - HELD THAT:- The demand has been rightly dropped in the order dated 22.05.2018. By letters dated 01.01.2016 and 15.01.2016, the appellant was asked to provide details of the value shown as non-taxable under financial data summary sheet earned for activities covered under BSS. In the third show cause notice dated 11.04.2016, which was issued for period 2014-15 the demand was proposed on the amount under the category of BSS only. There is no mention of section 65B(44) of the Finance Act. Thus, the demand was proposed under BSS which was not even in existence during the period in dispute from 2014-15. This specific submission was made by the appellant when it submitted data by letter dated 29.1.2016, but the show cause notice dated 11.04.2016 did not advert to this issue. The demand cannot, therefore, be sustained as it is based on obsolete provisions and under a category which ceased to exist. The non-taxable amount includes amounts like customs duty, BAF CAF charges, ocean freight and air freight. All these amount are paid by the appellant on behalf of the client and later on are reimbursed. Thus, same cannot be taxed as they are in nature of reimbursements. Demand of service tax on difference in figure in ST-3 and Form 26AS - HELD THAT:- The department has challenged the dropping of demand contending that the failed to appreciate the importance of Form 26AS in assessing the service tax liability. It has been repeatedly held that no demand can sustain merely on the basis of the difference in figures in ST-3 and Form 26AS as there is difference in the methodology in preparing both the records and Form No. 26AS is not a statutory document for determining the taxable turnover under the service tax provision. Extended period of limitation - HELD THAT:- Failing to file the ST-3 returns properly infers malafide intent to evade tax and so the extended period of limitation would be invokable and interest would be recoverable, and penalty imposable under section 78 of the Finance Act. It would not be necessary to examine whether the extended period of limitation could be invoked in regard to the first show cause notice dated 10.10.2014. Appeal disposed off.

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• 2023 (8) TMI 538
  Classification of services - Business Auxiliary services or not - weighment charges, collected by the appellants, from their customers, charges constitute the consideration for the Business Auxiliary Service or not - HELD THAT:- The service alleged to have been rendered by the appellants, does not appear to fall under any of the sub causes (i) to (vii) of Business Auxiliary Service. The Revenue did not produce any evidence to show that there is an agreement or an understanding between appellant and their customers for rendering of any service; there is no agreement on any consideration. The nature of service should emanate from the terms of the contract or agreement or understanding mutually agreed upon by the parties. Alternatively, the service, if any, has to fulfill the criterion laid down under the definitions provided by the statute for various services. In the instant case the Revenue fails to establish either of the conditions. It is found that weighment, by the appellants, is done to ensure that the declared quantity of grains is supplied by the agencies; therefore, it cannot be said that the weighment is a service, leave alone Business Auxiliary Service; deduction of weighment charges is not a consideration towards any service rendered. The appellants are deducting certain charges, in addition to weighment charges, towards the allowance for moisture if any. The impugned order cannot be sustained and is liable to be set aside - Appeal allowed.

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• 2023 (8) TMI 537
  Invocation of Extended period of limitation - issuance of SCN u/s 73 (1) of the Finance Act, 1994 - although the appellants did not take registration in time, but later on, they themselves taken registration and paid the service tax - HELD THAT:- Although the appellants were liable to pay service tax from the year 2005 onwards and have not taken service tax Registration at that time, but later on, they have taken service tax registration and paid the entire amount of service tax due against them in their own motion. The facts were known to the Department at the time of filing of ST-3 Returns for not paying service tax in time. In that circumstances, when it was known to the Department, therefore, the show-cause notice issued by invoking extended period of limitation, is not sustainable - the service tax already paid has been appropriated which has not been disputed by the appellants, the same is confirmed. But the penalties imposed on the appellants are set aside. As there is no suppression of facts, on relying on the decision of the HINDUSTAN INSECTICIEDES LTD. VERSUS COMMISSIONER CENTRAL EXCISE, LTU [ 2013 (8) TMI 225 - DELHI HIGH COURT] , it is held that the demand of interest for extended period of limitation is also not sustainable. But the appellants are liable to pay interest for the period within limitation. Appeal disposed off.

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• Central Excise

• 2023 (8) TMI 536
  Exemption from payment of excise duty given to intravenous fluids - whether benefit allowed when product used only for the purpose of replenishment and not for any other purpose? - benefit of Notification dated 01.03.2000 (Notification No. 6/2000) and the subsequent Notification dated 01.03.2001 (Notification No. 3/2001). HELD THAT:- It can only be said that intravenous fluids or solutions are made of chemicals, such as, sugar, electrolytes or amino acids, and are necessary for the circulatory system to assimilate them and for the purpose of maintaining the electrolyte balance in the circulatory system of the body, whether of a human or an animal. The object and purpose of the grant of such an exemption is to ensure that these products are available at a reduced price and that therefore, they can be easily accessible to be used for human beings or animals readily as it is in the nature of a life-saving product - sufficient material was produced by the Assessees in response to the show cause notice as well as at the time of being heard before the order of the Commissioner was passed in order to demonstrate the nature of the subject product. No doubt, the order in original is a lengthy one and takes into consideration the material which was produced by the respondents/Assessees as well as the material that was produced by the Revenue. However, there appears to be a mis-impression in the mind of the Authority while considering whether, the Assessees herein were entitled to the benefit of exemption or not. The simple test that ought to have been followed was to note the composition of the product in question and not as to whether it was being used for treatment of any particular disease. A reading of the license issued to the Assessees, makes it apparent that the composition of the product predominantly consists of Glucose (sugar) and electrolyte (minerals) which are essentially for the purpose of replenishment, not necessarily only used at the time of treatment for any particular disease but also as a preventive measure. Mere addition of Boric Acid and Chlorocresol, that too in minimal proportion, would not alter the character of the product. The product retains its essential purpose of replenishment; and not partake the character of a medicine used only for the treatment of any particular disease. The CESTAT was justified in holding that the respondents/Assessees were entitled to the benefit of exemption as per the Notifications dated 01.03.2000 and 01.03.2001 - Appeal dismissed.

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• 2023 (8) TMI 535
  Maintainability of appeal - non-prosecution of the case - No request for adjournment received except one received, on when the matter was listed on 27.09.2019 - HELD THAT:- In terms of proviso to Sub Section 1A to Section 35 C of the Central Excise Act, 1944, CESTAT could have not granted adjournment more than three times to a party during the hearing of appeal. Even for adjourning the matter reasons have to be recorded in writing. In absence of any appearance or request for adjournment even the requirement of recording the reason for granting adjournment can be recorded. Hon ble Supreme Court has in the case of ISHWARLAL MALI RATHOD VERSUS GOPAL AND ORS. [ 2021 (9) TMI 1301 - SUPREME COURT] held that The resultant effect would be that such a litigant would lose confidence in the justice delivery system and instead of filing civil suit and following the law he may adopt the other mode which has no backing of law and ultimately it affects the rule of law. Therefore, the court shall be very slow in granting adjournments and as observed hereinabove they shall not grant repeated adjournments in routine manner. In the present case, it is found it has been adjourned a number of times without a party causing the appearance before the Bench. Such mechanical adjournment sought allowed has been adversely commented upon by Hon ble Supreme Court in the decision referred above. Appeal is dismissed in terms of Rule 20 of CESTAT Procedure for the non prosecution.

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• 2023 (8) TMI 534
  Marketability - intermediate goods or not - clearance of fabricated steel structures being unfinished goods - revenue is of the view that the steel structures were cleared by the appellant are manufactured goods - HELD THAT:- A similar issue has been examined by the Hon ble High Court of Karnataka in the case of THUNGABHADRA STEEL PRODUCTS LTD. VERSUS UNION OF INDIA [ 1997 (3) TMI 119 - HIGH COURT OF KARNATAKA AT BANGALORE ] , wherein High Court held that the parts which has been cleared by the appellant are inter-mediate parts of final product consisting of all raw materials becomes the final structure which is identifiable, therefore, on the clearance of this intermediate parts, no duty is leviable. Therefore, following the said decision, as the appellant has cleared the above said parts being intermediate product for fabrication of the entire structure, which is identifiable, therefore, it is held that the appellant is not liable to pay duty on the intermediate parts cleared by them for fabrication of the structures identifiable as Gantry Crane. Thus, no duty is payable by the appellant. Accordingly, the impugned orders are set aside and the appeals are allowed.

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• CST, VAT & Sales Tax

• 2023 (8) TMI 533
  Classification of goods - milk cream - tax free item in view of Entries 16 and 23 in Schedule-B of the Act or taxable @ 12.5%/13.75% - exercise of suo moto revisional powers by the 1st respondent - HELD THAT:- As per Section 46(1) of the Act, the 1st respondent may, of his own motion, call for the record of any proceedings which are pending before, or have been disposed of by, any Authority subordinate to him for the purpose of satisfying himself as to the legality or propriety of such proceedings or order made therein, and on finding the proceedings or the orders prejudicial to the interest of revenue, he may pass such order in relation thereto as he may think fit - Similar provision is contained in the Punjab General Sales Tax Act, 1948. A Division Bench of the Punjab and Haryana High Court in HOTEL OBEROI MOUNTVIEW VERSUS ASSESSING AUTHORITY, UT., CHANDIGARH [ 1996 (1) TMI 392 - PUNJAB AND HARYANA HIGH COURT ] held that though the Revisional Authority has to act of his own motion; he can indeed exercise such power whenever he receives any information about any illegality or impropriety committed by any of his subordinate authorities; that such information may come from any source whether it be the department or any other person, including an assessee; and the object of giving this power of Revision to the Commissioner is for proper administration of the Act, and it is his duty to see that neither the assessee should be allowed to escape from the tax net, nor should he be required to pay tax ,which he is not liable to pay under the law. In fact the Supreme Court in THE BOARD OF REVENUE, MADRAS VERSUS RAJ BROTHERS AGENCIES [ 1973 (2) TMI 114 - SUPREME COURT ] also held that even an assessee can invoke the suo moto revisional power of the Board of Revenue under the Madras General Sales Tax Act, 1959. The Supreme Court held that such a suo moto revisional power is conferred on the Board to remedy any injustice and it was open to an assessee or the Revenue to bring to the notice of the Board any error made by the subordinate authorities. It held that it is upto the Board to consider whether the case is a fit case for exercising its revisional jurisdiction. The information to exercise suo moto revisional power can come from any source and can even come from the assessee or from the Department itself. In the instant case also, a scientific or technical meaning of the term milk cream , as is sought to be projected by the assessee, should not be adopted and the popular meaning of milk cream as is commonly understood, should be taken note of, i.e. that it is a product which is different from milk. This is because a person who wishes to buy milk cream would not go to the market and ask for milk. He would only ask for milk cream because it is a separate product though also a milk product. There are no merit in this Revision petition, it is accordingly dismissed.

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• 2023 (8) TMI 532
  Invocation of revisional jurisdiction of this Court under Section 48(1) of the VAT Act, 2005 - rectification of mistake or error apparent in the order - rate of tax on mobile/cell Phones, electronic and electrical goods - HELD THAT:- The clear mandate of law is that this Court can exercise revisional jurisdiction under Section 48 of the Act only against the orders passed by Tax Tribunal either under Section 45(2) or Section 46(3) of the VAT Act. Such jurisdiction can be exercised if the person aggrieved applies to this Court within 90 days of the communication of the order and also if the involvement of any question of law arising out of erroneous decision of law or failure to decide a question of law is found to exist. The impugned order passed by the Tax Tribunal in Rectification Application filed by the petitioners under Section 47 of the VAT Act is not open to challenge by the petitioners before this Court under Section 48 of the VAT Act. Petitioners can also not be allowed to assail the order dated 14.06.2017, passed by the Tax Tribunal being clearly beyond the period of limitation, as prescribed under Section 48 of the Act. Revision petition dismissed.

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• 2023 (8) TMI 531
  Levy of entry tax on granites - tax levied on the premise that the goods viz., granites which were purchased from dealers across the State were exported as such or sold to exporters - non-application of mind - violation of principles of natural justice - HELD THAT:- This Court finds that there is no finding in the assessment order with regard to the above objections which relates to the jurisdiction to levy tax. It is rudimentary that when objections are raised, the same ought to be dealt with by the Assessing Authority. Non-application of mind to the objection would vitiate the proceedings. The learned counsel for the Respondent would submit that they would redo the assessment. This Court is inclined to set aside the impugned order and remit the matter back to the Assessing Authority to redo the assessment. The petitioner is permitted to file fresh objections within a period of 4 weeks from the date of receipt of a copy of this order - It is also open to the petitioner to place reliance on the assessment completed under CST Act in respect of the above transactions wherein the transactions in issue is stated to be treated as export sales in terms of Sections 5(1) and 5(3) of the CST Act. Petition disposed off.

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• 2023 (8) TMI 530
  Rectification of Assessment Order - Assessing Officer has exceeded its jurisdiction under Section 24(1) of the MVAT Act - non-application of mind - opportunity of hearing was before the order rectifying the mistake - re-determination of turnover of the petitioner No. 1 so as to add to the turnover, a tax liability which is worked out in the operative part of the order. HELD THAT:- The Assessing Officer appears to have totally overlooked his jurisdiction under Section 24 which is purely for rectification of mistakes, and which would be exercised to rectify the mistake which was apparent on the face of the record. On perusal of the impugned order passed by the Assessing Officer under Section 24(1), it clearly appears that the Assessing Officer has exceeded his jurisdiction, inasmuch as, from the reasoning of the impugned order, which we have noted above, it cannot be said to be an order of rectification of mistake apparent on record. The Assessing Officer also appears to have resorted to a formality of a hearing and inviting reply to his notice for purported rectification of mistake, inasmuch as, the position on record as pointed out by the petitioners, of the Coimbatore Authorities not agreeing for issuance of Form F for transfer of the goods in question from Mumbai to Coimbatore for processing, has not been taken into consideration in passing the impugned order. The Assessing Officer has thus acted without application of mind as also completely mis-applied the provisions of Section 24 in passing the impugned order - Petition allowed.

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• Indian Laws

• 2023 (8) TMI 529
  Dishonour of Cheque u/s 138 of NI Act - reduction in the sentences imposed on petitioner - complainant submits that the complainant has received the whole amount of cheque as per the settlement - no minimum sentence provided under the Negotiable Instruments Act, 1881. HELD THAT:- Since the parties are entering into compromise at the stage of revision, therefore, law laid down by the apex Court in the case of DAMODAR S. PRABHU VERSUS SAYED BABALAL H. [ 2010 (5) TMI 380 - SUPREME COURT ] will be applicable in this case, where it was held that The competent Court can of course reduce the costs with regard to the specific facts and circumstances of a case, while recording reasons in writing for such variance. Bona fide litigants should of course contest the proceedings to their logical end. Considering the fact that the parties have amicably settled their dispute and have entered into compromise before this Court in the revision and decided to avoid further litigation, hence, the applicant is liable to pay 3% of the cheque amount i.e. Rs.4,500/- by way of cost to be deposited with the State Legal Services Authority Indore - Subject to payment of cost at the rate of 3% of the cheque amount with the State Legal Services Authority Indore, within a period of 15 days from today, the applicant be released from the jail. Sentence awarded to the applicant is hereby modified by reducing the sentence to the period already undergone. In case of failure to deposit of the said amount before the State Legal Services Authority, the petitioner shall undergo the original sentence and compensation as awarded by learned trial Court - revision disposed off.

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• 2023 (8) TMI 528
  Dishonour of Cheque - discharge of legally enforceable debt - status of Sunny Traders (to whom cheque was issued) - sole proprietor concern or otherwise - HELD THAT:- There is no denial of issuing the cheque by the accused in discharge of his debt and liability and also it being dishonoured, and so also the valid notice. The only contention of the petitioner is regarding the status of Sunny Traders which is not clear. The transaction between the parties is on the basis of a verbal agreement - The business transaction between the parties is also admitted - It is on record by way of evidence before the trial Court that the complainant Avijit Sarkar carries on his business in the name of Sunny Traders - petitioner/accused has not adduced any evidence to prove that the complainant is not the sole proprietor of his business. The complainant has clearly proved that he is the sole proprietor of his business Sunny Traders . Thus, the findings of the Appellate Court in the proceeding under Section 138 of the Negotiable Instrument Act, 1981 being in accordance with law, requires no interference by this court and is affirmed - revision application dismissed.

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• 2023 (8) TMI 527
  Dishonour of Cheque - rejection of complaint on the ground that the cheque was presented beyond the period of its validity - burden of proof on the complainant - HELD THAT:- The cheque Ex. P/1 dated 11.02.2015 was valid for three months only. The averment in Para 5 of the complaint as also Pramod Chauhan (CW/1) in his examination-in-chief (para 5) state that on 15.05.2015 accused assured him encashment of cheque and insisted to present the cheque after couple of days. Relying on this assurance, he presented the cheque at Canara Bank, Madhav Ganj, Gwalior. This statement itself shows that cheque was presented after 15.05.2015. The clarification in para 18 and 19 of the evidence of Pramod (CW1) is an attempt in despair to bring the presentation within validity period. Thus, learned Trial Court after considering the evidence on record committed no mistake in holding that cheque was presented beyond the period of its validity. In the opinion of this Court, learned trial Court has considered the entire material against accused on record and on reasonable appreciation of evidence, after assigning detailed and cogent reasons, has acquitted the accused/respondent. The findings of Trial Court cannot be said to be contrary to the evidence on record. The judgment is not patently illegal or perverse, therefore, no case for interference in the finding of acquittal is made out. This application for leave to appeal against acquittal deserves to be and is hereby rejected - appeal dismissed.

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