TMI Tax Updates - e-Newsletter
August 19, 2017

Case Laws in this Newsletter:

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

Articles

1. All about GSTR-3B

   By: CA.VINOD CHAURASIA

2. All you should know while filing GSTR - 3B Return

   By: Ravi Kumar Somani

3. EXPORT/SEZ PROCEDURES (BOND/LUT OR REFUND ROUTE) - Part-II

   By: CASanjay Kumawat

4. LOCAL SALE V. INTER-STATE SALE

   By: DR.MARIAPPAN GOVINDARAJAN

5. GST CONCERNS OF AUTOMOBILE DEALERS

   By: Dr. Sanjiv Agarwal

News

1. 'राजस्व ज्ञान संगम' Annual Conference of Tax Administrators, 2017 – reg.

2. Finance Minister Sh Arun Jaitley writes to State Chief Ministers to reduce burden of Value Added Tax on Petroleum Products used for manufacturing

3. PRESS NOTE ON FILING OF RETURN IN FORM GSTR-3B FOR JULY, 2017

4. On Clarification regarding availability of Transitional Credit for GST

5. India will benefit from growing tax revenue in Financial Year 2018

6. RBI Reference Rate for US $

7. Shri Arun Jaitley, Union Minister of Finance, Corporate Affairs & Defence to deliver the Inaugural Address at the National Conference on ‘Insolvency and Bankruptcy: Changing Paradigm’ at Mumbai tomorrow

Notifications

Customs

1. 80/2017 - dated 17-8-2017 - Cus (NT)

Making E-payment of Customs duty mandatory where duty of customs is ten thousands or more and where importers registered under Authorised Economic Operator Programme

GST

2. 23/2017 - dated 17-8-2017 - CGST

Seeks to notify the date and conditions for filing the return in FORM GSTR-3B for the month of July, 2017

3. 22/2017 - dated 17-8-2017 - CGST

Central Goods and Services Tax (Fifth Amendment) Rules, 2017

GST - States

4. FTX.90/2016/105 - dated 8-8-2017 - Assam SGST

Corrigendum - Notification No.FTX.56/2017/15 dated the 29th June, 2017, (Notification No. 2/2017-State Tax Rate).

5. FTX.90/2016/104 - dated 8-8-2017 - Assam SGST

Corrigendum - Notification No.FTX.56/2017/14 dated the 29th June, 2017, (Notification No. 1/2017-State Tax Rate),

6. FTX.90/2016/073 - dated 8-8-2017 - Assam SGST

The Assam Goods and Services Tax (Fourth Amendment) Rules, 2017.

7. 04/2017-GST - dated 8-8-2017 - Assam SGST

Date for filing of FORM GSTR-3B for July and August,2017.

8. 03/2017-GST - dated 7-8-2017 - Assam SGST

Time period for filing of details in FORM GSTR-3

9. 02/2017-GST - dated 7-8-2017 - Assam SGST

Time Period for filing FORM GSTR-2.

10. 01/2017-GST - dated 7-8-2017 - Assam SGST

Time Period for filing FORM GSTR-1.

11. FTX.56/2017/Pt-I/039 - dated 31-7-2017 - Assam SGST

CORRIGENDUM - Notification No. FTX.56/2017/15 dated. 29-06-2017

12. FTX.56/2017/Pt-I/007 - dated 31-7-2017 - Assam SGST

CORRIGENDUM - Notification No.FTX.56/2017/14 dated. 29-06-2017.

Circulars / Instructions / Orders

VAT - Delhi

1. 13/2017-18 - dated 17-8-2017

Filing of online return for First quarter of 2017-18 — extension of period thereof

SEZ

2. Instruction No. 88 - dated 16-8-2017

Restriction of Gold content upto maximum limit of 22 Carats for export of Gold jewellery, including partly processed jewellery, whether plain or studded and articles

GST - States

3. CIRCULAR No. 02/2017-GST - dated 17-8-2017

Further clarification to Circular No. 1/2017 - GST dated 21st July, 2017.

4. CIRCULAR No. 01/2017-GST - dated 21-7-2017

Furnishing of LUT or bonds for exports and guidelines thereof.

5. Order No. 04/2017-GST - dated 21-7-2017

Extension of time limit for filing intimation for composition levy under sub-rule (1) of rule 3 of the Assam Goods and Services Rules, 2017

6. Circular No. 07/2017 - dated 11-7-2017

Modification to Guidelines for online issuance of GST permit and Transit Passes etc. for facilitating movement of goods

7. CT/GST-10/2017/175. - dated 29-6-2017

Notifies the following modes of verification.

8. Order No. 03/2017 - dated 29-6-2017

Assignment of functions to the proper officer under Section of the Assam Goods and Services Tax Act, 2017 or the Assam Goods and Services Tax Rule, 2017.

9. No. CT/GST-10/2017/176 - dated 29-6-2017

Territorial jurisdiction of proper officer.

Highlights / Catch Notes

GST

• Due date for Form GSTR-3B extended for those claiming input tax credit u/s 140, Rule 117.

  Notifications : Due date of furnishing Form GSTR-3B extended for the Registered persons entitled to avail input tax credit in terms of section 140 of the said Act read with rule 117 of the said Rules and opting to file FORM GST TRAN-1 on or before the 28th August, 2017 with conditions.
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• Government Departments No Longer Need to Provide Bank Details for Supplier Registration in Form GST REG-01 Amendment.

  Forms : Government departments applying for registration as suppliers may not furnish Bank Account details - Form GST REG-01 amended
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• Authority for Advance Ruling Now Requires Members to Be at Least Joint Commissioner Rank per Rule 103 Amendments.

  Act-Rules : Member of the Authority for Advance Ruling shall not be below the rank of Joint Commissioner - See Rule 103 as amended.
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• GST Payment for OIDAR Services to Non-Taxable Recipients via ACES or SWIFT per Amended Rules 87(2) & 87(3).

  Act-Rules : Electronic Cash Ledger - payment of GST towards supplying online information and database access or retrieval services (OIDAR) from a place outside India to a non-taxable online recipient can be paid either through ACES or through international money transfer through Society for Worldwide Interbank Financial Telecommunication payment network - See Rule 87(2) and 87(3) as amended.
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• GST Payment Challan Valid for 15 Days Under Amended Rule 87(2) Using Form GST PMT-06.

  Act-Rules : Electronic Cash Ledger - Challan Generated for payment of GST in Form GST PMT-06 shall be valid for 15 days. - See Rule 87(2) as amended
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• Commissioner Empowered to Set Conditions for Form GSTR-3B Submission under Amended Rule 61(5) in GST Regulations.

  Act-Rules : Commissioner empowered to specified the conditions for submitting Form GSTR-3B where dues date of submitting GSTR-1 and GSTR-2 has been extended. - See Rule 61(5) as amended.
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• ITC for CVD on imported gold dore bars before July 1, 2017, limited to one-sixth per Rule 44A.

  Act-Rules : ITC of CVD paid on stock of imported Gold dore bar before 1.7.2017 restricted to one-sixth of such credit - see New Rule 44A
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• Sub-Rule 1(b) of Rule 40 amended: Changes to claiming credit and Form GST ITC-01 filing deadline.

  Act-Rules : Manner of claiming credit in special circumstances - Sub-Rule 1(b) of Rule 40 substituted regarding due date of filing of details in Form GST ITC-01 - See amended Rule 40
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• Rule 17 Amended: Proper Officers Gain Expanded Authority to Assign Unique Identity Numbers for Special Entities Under GST.

  Act-Rules : Assignment of Unique Identity Number (UIN) to certain special entities - Power of Proper officer to assign extended - See the amended Rule 17
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• GST Rule 3 Amended: Stock Statement Filing Deadline Extended to 90 Days for Composition Scheme Opt-ins.

  Act-Rules : Due date for filing of Stock statement in FORM GST CMP-03 extended from 60 days to 90 days in case of a person opting for Composition scheme in GST. - See the amended Rule 3.
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• Application for Unique Identity Number for UN Bodies and Embassies under GST Tax Exemption Framework.

  Forms : FORM GST REG-13 - Application/ Form for grant of Unique Identity Number (UIN) to UN Bodies/ Embassies /others - Goods and Services Tax - As amended
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Income Tax

• Court Rules No Addition u/s 41 for FDI Advance Converted to Capital; No Link to Prior Deductions Found.

  Case-Laws - HC : Addition u/s 41 - conversion of advance into capital - advance was received under FDI - nexus with an allowance or deduction for any previous year as a claim of loss, expenditure, or trading liability not established - no addition - HC
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• High Court Allows Deduction Claim for Loan Waiver; Assessee Gains No Trading Benefit u/s 41(1) BIFR Scheme.

  Case-Laws - HC : Additions u/s 41(1) - The liability remains and because under the scheme of the BIFR the principal sum was waived, the assessee has not enjoyed any actual benefit of remission of liability in the nature of trading. - claim of deduction in respect of the waiver of loan allowed - HC
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• High Court Rules: Changes in Law Don't Justify Review or Error Claims u/ss 234A and 234B.

  Case-Laws - HC : Withdrawal of Waiver of interest u/s 234A & 234B - order by settlement commission - Rudimentary legal principle is that subsequent development of law cannot be a ground to exercise review jurisdiction and that cannot be taken into consideration as an error apparent on the face of the record - HC
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• Cash Payments to Truck Drivers Not Deductible u/s 40A(3); Rule 6DD Exception Inapplicable.

  Case-Laws - AT : Cash payments - violation u/s 40A(3) - where the payment is made to the agent of the payer, Rule 6DD comes to the rescue and not otherwise. The truck drivers are not the agent of the assessee company and thus not covered under the exception carved out in Rule 6DD.
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• TDS Not Applicable: Transactions Are Purchase Agreements, Not Works Contracts, u/ss 194C and 40(a)(ia).

  Case-Laws - AT : TDS u/s 194C - addition u/s 40(a)(ia) - purchase from various manufacturers who in turn manufacture the same as per the specifications provided by the assessee - not in the nature of works contract but it is agreements for purchase of goods simpliciter.
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Customs

• E-payment required for customs duties over $10,000 and Authorised Economic Operators from September 1, 2017.

  Notifications : Making E-payment of Customs duty mandatory where duty of customs is ten thousands or more and where importers registered under Authorised Economic Operator Programme w.e.f. 1.9.2017
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SEZ

• Export Limitation: Gold Jewelry from SEZs Cannot Exceed 22 Carats in Purity for Global Trade.

  Circulars : Restriction of Gold content upto maximum limit of 22 Carats for export of Gold jewellery, including partly processed jewellery, whether plain or studded and articles, shall apply Mutatis Mutandis on exports from SEZ
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Service Tax

• Belated appeal on Business Auxiliary Service imports: No service tax on imported services before April 1, 2006. Interest, penalties dismissed.

  Case-Laws - SC : Belated appeal - Import of services before 1.4.2006 - Business Auxiliary Service - service tax was paid but no interest and penalty - later the law was declared in another case that no service tax was not payable on import of services during the impugned period - demand of interest and penalty set aside - SC
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• Service Tax Demand Overruled: Maharashtra Water Resources Dept. Not a Commissioning Agency for Own Installations.

  Case-Laws - AT : Erection commission and installation Services - The Chief Engineer, Water Resources Department of the Government of Maharashtra is not a commissioning and installation agency as they do not undertake these activities for anybody else except themselves - demand of service tax set aside
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Central Excise

• High Court Rules Proviso to Rule 3(4) of CENVAT Credit Rules Unconstitutional, Limits on Credit Utilization Struck Down.

  Case-Laws - HC : CENVAT credit - the effect of proviso to Rule 3(4) of CCR is that though a manufacturer is obliged to discharge excise duty liability by 5th or 6th day of the next month, the CENVAT Credit taken by the manufacturer only till the end of the month to which the excise duty related could be utilized - The proviso to Sub Rule (4) of Rule 3 of CENVAT Credit Rules is held to be ultra vires and unconstitutional to the Scheme of CENVAT Credit - HC
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VAT

• Supreme Court dismisses petition; VAT can't be imposed on service-taxed portion of restaurant bills, per High Court decision.

  Case-Laws - SC : VAT on supply of cooked food in the restaurant - SC dismissed the SLP against the decision of HC wherein it was held that, where element of service has been so declared and brought under Service Tax (i.e. 40% of bill amount to customers having food or beverage in the restaurant was made liable to service tax) no VAT can be imposed thereon.
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Case Laws:

• Income Tax

• 2017 (8) TMI 620
  Addition u/s 41 - conversion of advance into capital - advance was received under FDI - nexus with an allowance or deduction for any previous year as a claim of loss, expenditure, or trading liability - Profits chargeable to tax - Held that:- the nexus has not been established in the present case. Since the tribunal nonetheless decides the issue against the assessee relying on the judgment of the Supreme Court in the Case of T.V.Sundaram Iyengar, [1996 (9) TMI 1 - SUPREME Court], we advert to the same straightaway. In T.V.Sundaram Iyengar [1996 (9) TMI 1 - SUPREME Court] the Bench notes as a fact, that the amounts received had depleted by adjustments made by the assessee from time to time and the resultant balance had been transferred by the assessee to the profit and loss account. This is not the case in the present matter. The amounts in this case, though no doubt received as advances for supply of garnet, had remained static without depletion of any sort and more importantly, not been claimed in the previous years. This pre-condition to the application of section 41(1) has not been satisfied in the instant case. The case of T.V.Sundaram Iyengar turned on two facts distinguishable from the present case that the deposits received from the customers had remained unclaimed and become barred by limitation and that TVS itself, treated the money as its own, crediting it to the Profit and Loss account. No reference is made to section 41(1) or the compliance of the condition thereunder. The judgments of the Supreme Court in the case of Kesaria Tea Company (2002 (3) TMI 1 - SUPREME Court) and Polyflex (India) (2002 (9) TMI 4 - SUPREME Court) would be more relevant to the facts and circumstances of this case. - Decided in favour of assessee.

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• 2017 (8) TMI 619
  Penalty u/s 271E - violating the provisions of Section 269T - genuineness of the transaction - proof of intentional violation - Held that:- The Tribunal has relied on a decision of Punjab 20,000/-. The aforesaid finding is purely a finding of fact, which is based on sound reasoning. - Decided against revenue.

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• 2017 (8) TMI 618
  Disallowance of depreciation - no business activity and the plant and machinery are not in use - Held that:- The orders of the authorities were perused, including the Tribunal's order in the assessee's own case for the previous Assessment Years 2004­-05 and 2005­-06 wherein the Tribunal has allowed the claim of depreciation holding that the assets said to have been put to use as the claim of depreciation allowed in the earlier years and the facts are no different in the order under consideration. Thus, when the Tribunal allowed the claim of depreciation holding that the assets said to have been put to use were identical, the depreciation on assets was directed to be allowed. Goodwill as held to be an asset eligible for depreciation. See Commissioner of Income­Tax Vs. Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] Addition on surplus on one time settlement with Banks - application of Sections 28(iv) and 41(1) - Held that:- As overlooking the aspect of payment of interest which has not been waived and in regard to which no relief was claimed. The loan agreement, in its entirety, was not obliterated in the present case as well. Therefore, we are of the opinion that in the present case Section 28(iv) was not attracted.overlooking the aspect of payment of interest which has not been waived and in regard to which no relief was claimed. The loan agreement, in its entirety, was not obliterated in the present case as well. Therefore, we are of the opinion that in the present case Section 28(iv) was not attracted. As far as Section 41(1) is concerned, the act of remission was attributable to the creditor and it could not be unilaterally attributed to the debtor himself declaring that he would not pay. There was no material which suggested any act or omission on the part of the creditor which resulted in extinguishment of the liability of the assessee on its account. Writing off such liability in the books of account by the debtor only conveyed the intention of the assessee not to pay. The Revenue relied on the circumstances stated by the Income Tax Officer that claims had not been filed before the Board by Creditors. However, as rightly observed by the Division Bench of the Rajasthan High Court that, there is no provision in the Sick Industrial Companies (Special Provisions) Act, 1985 permitting lodging or raising of claims by the creditor before the BIFR. Before us as well, the BIFR issued notices to those whose debts are secured and equally those whose stakes are involved. As far as the company is concerned, the BIFR could have recommended winding up but it took on record a scheme of rehabilitation and revival of the company. In that process, the arrangements as carved out have been made. Therefore, as held by the Tribunal, in the present case the ingredients of subsection (1) of Section 41 are not attracted. The liability remains and because under the scheme of the BIFR the principal sum was waived, the assessee has not enjoyed any actual benefit of remission of liability in the nature of trading. It is in these circumstances that the claim of deduction in respect of the waiver of loan amounting to 8,36,99,463/­ was granted. The Assessing Officer was directed to allow it. Addition being increase in the value of land hived off - matter restored to the file of the First Appellate Authority - Held that:- To our mind, reliance placed by Mr. Pinto on “Solid Containers” [2008 (8) TMI 156 - BOMBAY HIGH COURT] is misplaced. The Tribunal has neither misdirected itself in law nor its order can be termed as perverse when it took assistance of the Division Bench Judgment of Rajasthan High Court in the case of Commissioner of Income ­Tax Vs. Shree Pipes Limited (2006 (4) TMI 70 - RAJASTHAN HIGH COURT) as also the Division Bench Judgment of this Court in Mahindra and Mahindra [2003 (1) TMI 71 - BOMBAY High Court]. In the facts and circumstances, the view taken by the Tribunal is imminently possible. Revenue appeal dismissed.

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• 2017 (8) TMI 617
  Entitlement to deduction under Section 80HHC - as per revenue the profit must have been derived by the assessee from the export of goods on merchandise - whether the written back provision and liabilities written back do not qualify for deduction - Held that:- As rightly found by the Tribunal, the credits aggregating to 29.45 lakhs, represents the write back of expenditure debited to the profit and loss account for an earlier year/years claimed as business expenditure, and written back on being found as having been provided for (and claimed) in excess, i.e. to that extent. In other words, these are amounts which were expenditure debited from the profits earned by the assessee from the export of goods on merchandise. When such amounts are written back, it still should retain the character of profit derived by the assessee from export. If that be so, the assessee would be entitled to deduction under Section 80HHC as held by the Tribunal. Therefore, we do not find any merit in the contentions. - Decided in favour of assessee.

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• 2017 (8) TMI 616
  Treatment of Land as Agricultural land - Sale of land - nature of land - substantial question of law or question of fact - AO took note of the phenomenal rise in the value of the lands and also the fact that the assessee had sold the lands to a real estate developer. - Held that:- CIT (A) allowed the appeal of the assessee holding that the lands in question transferred by the assessee were agricultural lands and that there was sufficient evidence to prove that the lands were used for agricultural purposes. The fact remained that agricultural activities, i.e., cultivation of trees and vegetables, had actually been carried out in the lands as evidenced by the 'adangal' copies and the fact that positive income/loss from the said activities had been reflected in the capital account of the assessee and also reflected in the return of income of the assessee, duly supported by the report of the Departmental Valuation Officer (DVO) and photographs taken by the DVO during inspection. Further, the conditions laid down in Section 2 (14) in relation to distance from the nearest Municipality/Municipal Corporation/Cantonment Board and in relation to population were also fulfilled. Appellate Tribunal perusing the materials including the copy of the sale deed, copy of the revenue records, the survey report, photographs taken by the DVO during survey, etc., arrived at the finding that the lands in question were agricultural lands within the meaning of Section 2 (14) of the Income-Tax Act and accordingly, dismissed the appeal of the Revenue. As held by the Supreme Court in Sarifabibi Mohmed Ibrahim (1993 (9) TMI 10 - SUPREME Court ), whether a land is an agricultural land or not, is essentially a question of fact. Several tests have been evolved in the decisions of the Supreme Court and the High Courts, but all of them are more in the nature of guidelines. The question has to be answered in each case having regard to the facts and circumstances of that case. There may be factors both for and against a particular point of view. The Court has to answer the question on a consideration of all of them a process of evaluation where inference has to be drawn on a cumulative consideration of all the relevant facts. In the instant case, the Appellate Tribunal has concurred with the factual finding arrived at by the CIT (A) and affirmed the decision of the CIT (A). The decision is based on some materials. It cannot be said that the decision is perverse. It is not for this Court to re-analyse the evidence or decide whether the evidence on record was sufficient to justify the finding. Right of appeal is not automatic. Right of appeal is conferred by Statute. If the right of appeal conferred by the Statute is limited to cases where there is a substantial question of law, this Court cannot sit in appeal over factual findings by re-weighing and re-analysing the evidence and materials on record. - Decided against revenue

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• 2017 (8) TMI 615
  Levy of penalty under Sections 271E and 271D - violation of Sections 269SS and 269T by reason of receipt of cash loan and repayment of loan in cash during the same assessment year - existence of substantial question of law - Held that:- Learned Commissioner of Income Tax (Appeals) arrived at the factual finding that provisions of Sections 269SS and 269T were clearly attracted as the contention of the representative of the Assessee that each of the transaction and repayment were below 20,000.00 was unsubstantiated. The Assessee appealed before the Tribunal and the appeals have also been dismissed holding that violation of Sections 269SS and 269T of the IT Act attract penalty. The imposition of penalty has been upheld. An appeal lies under Section 260-A of the IT Act, only when there is a substantial question of law. We find that there is no question of law involved in this appeal much less any substantial question of law. Right of appeal is not automatic. Right of appeal is conferred by statute. When statute confers a limited right of appeal only in a case which involves substantial questions of law, it is not open to this Court to sit in appeal over the factual findings arrived at by the Assessing Officer, Appellate Commissioner and the Appellate Tribunal. Hence, both these appeals cannot be entertained.

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• 2017 (8) TMI 614
  Withdrawal of Waiver of interest u/s 234A & 234B - order by settlement commission - petitioners were aggrieved as they cannot be saddled with liability alone and the 1st respondent cannot be permitted to withdraw the concessions unilaterally - terminal date for charging of interest under Section 234B - rectification petition - Held that:- In an identical circumstance, in the case of R. Vijayalakshmi V. Income Tax Settlement Commission [2016 (8) TMI 657 - MADRAS HIGH COURT] answered the issue in favour of assessee wherein held that Sub-section (1) of Section 245(F) which states that Settlement Commission shall have all powers which are vested in Income Tax Authority under the Act cannot be read in isolation but it should be red in tandem with Section 245(I) and if it is done, then it is to be held that there is no power of review conferred on the Commission to reopen the proceedings. This position held the field till an amendment was inserted under Section 6(b) of Section 245D by Finance Act 2011 with effect from 01.06.2011. Even the said provision is not a power of review. But, the phraseology used by the legislation is 'rectification'and such rectification can be done on any mistake apparent from the record. Therefore, such power exercisable under sub Section 6D of Section 245D can be exercised only to rectify a mistake and such mistake should be apparent from the record. Thus, even as per the amendment made by Finance Act, 2011, power of review is not conferred on the Settlement Commission. The order passed by the Settlement Commission rectifying its earlier order cannot be sustained and must perish. Even otherwise, it is an error within the jurisdiction of the Commission and it was not an error which went to the root of its jurisdiction and held that if at all revenue had to question the same, it should be by a writ of certiorari. Revenue while rectification/recalling of the order passed by the Commission, referred to a decision of Hindustan BulK Carrirs [2002 (12) TMI 10 - SUPREME Court] with respect to the terminal date for charging of interest under Section 234B. Admittedly, these decisions were rendered by the Hon'ble Supreme Court much after the final order was passed by the Commission under Section 245D(4). Rudimentary legal principle is that subsequent development of law cannot be a ground to exercise review jurisdiction and that cannot be taken into consideration as an error apparent on the face of the record. Hence, on that ground also, the Department should be non-suited

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• 2017 (8) TMI 612
  Addition on account of depreciation - increased value of assets being unabsorbed depreciation of the amalgamating company JG Glass Ltd. which had amalgamated into the assessee - Held that:- It is self evident from the reading of Section 32 and Section 43(6)(c)(ii) that the depreciation would be allowed on the written down value of the block of assets in the immediately preceding previous year as reduced by the depreciation actually allowed on the the block of assets in the preceding previous year as further adjusted in terms of Section 43(6)(c)(i) of the Act. In the above view, for the subject assessment year the written down value of the block of assets which includes the assets belonging to the amalgamating company on which depreciation was first taken in the assessment year 1989-90 cannot be disturbed for the subject year unless the written down value of the earlier assessment years is modified. This modification of the written down value would go back to the assessment year 1989-90 when the amalgamation took place and the unabsorbed depreciation was added to the assets of the amalgamating company to determine the written down value of the block of assets. So far as the written down value of the block of assets for assessment year 1989-90 is concerned the inclusion of unabsorbed depreciation into the assets of amalgamating company is now final in favour of respondentassessee by virtue of our dated 10.07.2017 in ITR No.39/1998. Therefore, for all the subsequent years after assessment year 1989-90 depreciation is actually allowed in respect of the written down value of block of assets in accord with Section 32 read with Section 43(6) of the Act. No substantial question of law as the position is self evident on reading of the definition of "written down value" under Section 43(6) of the Act for the purposes of depreciation to be allowed on block of assets as provided under Section 32 of the Act.

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• 2017 (8) TMI 611
  Additional depreciation of 20% on windmills u/s 32(1)(iia) - whether windmills have not connection with the business activity of the assessee? - Held that:- The only requirement under Section 32(1)(iia) of the Act is that the assessee should be engaged in the business of manufacture or production of article or thing, to claim additional depreciation on installing of plant or machinery on or after the cut off date i.e. 31.03.2002. The setting up of new plant and or machinery need not have the operational connectivity to the article or thing which has been manufactured by the assessee. The further contention on behalf of the Revenue that the respondent – assessee is not in the business of generation of power and, therefore, not entitled to the benefit of additional depreciation completely overlooks the order of the Assessing Officer which clearly records that the assessee is in the business of wind power energy. This fact is not disputed either by the Commissioner of Income Tax or the Tribunal. Therefore, the question as framed that the windmills have no connection with the business activity of the assessee is factually incorrect. In view of the fact that Madras, Gujarat and Karnataka High Courts have taken a view that additional depreciation on windmills acquired and installed prior to 31.03.2002 is available under Section 32(1)(iia) of the Act. All that is required for allowing additional depreciation is that the assessee must be engaged in the manufacture or production of any article or thing, and such an assessee would on the setting up of a new machinery or plant would be entitled to additional depreciation on the new plant and or machinery under Section 32(1)(iia) of the Act. There is no requirement in Section 32(1) (iia) of the Act that additional depreciation on the new plant or machinery would be available only if the plant or machinery has some nexus/connection with the article or thing being manufactured by the respondent-assessee. To accept the Revenue's contention would require reading words into Section 32(1)(iia) of the Act which is not permissible. - Decided in favour of assessee

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• 2017 (8) TMI 610
  Business expenditure - Deduction of royalty on Bamboo exploited at revised rate - contingent liability or ascertained liability - allowed at rates other than those specified in the 1968 and 1947 agreements drawn with the Government of Maharashtra - claim of the Respondent-Assessee at 115/- per ADMT under both the 1947 and 1968 Agreement - Held that:- Apex Court in Kedarnath Jute Manufacturing Co. Ltd. (1971 (8) TMI 10 - SUPREME Court ) has laid down the text to ascertain whether the amount is a debt by holding that “ a liability depending upon a contingency is not a debt in presenti or in futuro till the contingency happened. But if there is a debt, the fact that the amount is to be ascertained does not make it any less a debt if the liability is certain and what remains is only quantification” Applying the above text, the amount @ 115/- per ADMT is a debt. The aforesaid observations of the Apex Court would apply to the facts of the present case. In the present facts, the State Government had already by its communication dt.19.3.1983 decided to enhance the rate of royalty to 230/- per ADMT less discount at the prescribed rates. Besides the assessee therein had not made provision for the liability that may arise or any part of the amount in the previous year relevant to the Assessment Year under consideration. As against that, in the present facts, the Respondent/assessee has not only debited the entire amount of royalty payable according to interim order but has proceeded further and paid that amount also during the previous year relevant to subject Assessment Year 1998- 99. Thus, the decision of this Court in Standard Mills Co. Ltd. (1997 (3) TMI 64 - BOMBAY High Court ) would have no bearing in the context of present facts. - Decided in favour of assessee. Addition on account of interest free loan given to Andhra Pradesh Rayon Ltd - commercial expediency - Held that:- This charging of interest on advance made to M/s. Andhra Pradesh Rayons Ltd. would clearly be covered by the decision of the Apex Court in S.A. Builders Ltd. vs. Commissioner of Income Tax (Appeals) and another, (2006 (12) TMI 82 - SUPREME COURT ) wherein held that once it is established that there was nexus between the expenditure and the purpose of business (which need not necessarily be the business of the Assessee itself) then the Revenue cannot justifiably claim to put itself in the armchair of the businessman or in the position of the Board of directors and assume its role to decide how much is reasonable expenditure having regard to the circumstances of the case. Thus a business decision was taken to give loans to the company of which it is promoter so as to safeguard itself from litigation to pay amounts which were advanced by banks to M/s. Andhra Pradesh Rayons Ltd. of which the Respondent/Assessee was a guarantor. The Order of Tribunal in the Subject Assessment Year relies upon its Order for the earlier Assessment Year wherein the reason for deleting the disallowance of interest was on the ground of commercial expediency in order to stabilize finances of M/s. Andhra Pradesh Rayons Ltd. This holds good for the subject Assessment Year also. - Decided in favour of assessee.

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• 2017 (8) TMI 609
  Claim of expenditure on improvement of leasehold asset - revenue treated it as capital in nature as against the claim of the assessee as revenue expenditure - Held that:- The appropriate procedure that should have been followed by the respondent is to put the petitioner on notice, afford an opportunity and then take decision in the matter. However, the respondent has straight away proceeded and passed the impugned order, which is not sustainable, as it is in violation of principles of natural justice. The learned counsel for the petitioner would point out that there is an order of the Tribunal, which has been extracted and the extracted portion is not found in the earlier order. This submission is made to show that the impugned order has been passed without due application of mind and has virtually prejudged the issue. As this Court is convinced that the impugned order passed is in violation of principles of natural justice, the matter requires to be remanded to the respondent for fresh consideration

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• 2017 (8) TMI 608
  Trading addition - rejection of books of accounts - Held that:- There is no dispute with regard to the gross profit. It is also not undisputed that the assessee is maintaining books of accounts. Moreover, the Assessing Officer has not given any basis for making addition as to how this figure of 5 lacs as arrived at would be sufficient for estimating the profit. In the absence of such finding, we do not see any reason to interfere into the finding of the Ld. CIT(A), same is hereby affirmed. Disallowance of deduction claimed u/s 80IA - Form 10CCB was not e-filed till the date of assessment proceedings although it was mandatory to file upto 31/10/2013 - reasons for delay - Held that:- The reports in the form no. 10CCB have been filed manually within the due date before the Assessing Officer which could not be uploaded electronically. Further, evidence has been filed in support of the fact that there was a technical issue in filing the report while the assessee had registered on the portal on 29.03.2013 itself as evidenced from the snap shot, yet the same could not be uploaded. In view of the above there has been a reasonable cause for non e-filing of the reports and in view of the fact that the manual reports were filed in time, in view thereof the deduction is allowable. - Decided in favour of assessee.

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• 2017 (8) TMI 607
  Disallow the claim of deduction u/s 80IA - non filing of audit report in Form 10CCB before the due date of filing of return - mandatory requirement of filing of Audit Report - Held that:- Admittedly, in support of claim of deduction under section 80IA, the audit report in prescribed Form 10CCB has been filed by the assessee company during the course of assessment proceedings. The Hon’ble Supreme Court in CIT v. G.M. Knitting Industries (P) Ltd. (2015 (11) TMI 397 - SUPREME COURT) dismissed the appeal of Revenue and confirmed the view taken by Madras High Court in case of CIT v. AKS Alloys (P.) Ltd. [2011 (12) TMI 39 - MADRAS HIGH COURT] holding that “Even though necessary certificate in Form 10CCB along with return of income had not been filed but same was filed before final order of the assessment was made, the assessee was entitled to claim deduction under section 80-IB.” In light of the above, we agree with the contention of the ld AR that while filing of the audit report is mandatory, the further condition that it should be filed with the return of income is directory in nature and so long as the audit report has been filed during the course of assessment proceedings, substantial compliance has been made. In the result, ground no. 1 of the assessee’s appeal is allowed. Cash payments in violation of provisions of section 40A(3) - Held that:- In the present case, the assessee company has hired the services of transport agency, it thus incurs a liability and owe payment to such transport agency for availing its services. It can either make payment through account payee cheque or bank draft or in cash. Where it makes payment in cash, it is hit by provisions of section 40A(3). The payment to a truck driver is thus a payment to and on behalf of the transport agency and is not a payment to the truck driver in his individual capacity as the assessee has availed the services of the transport agency to transport its goods and not that of the truck driver simpliciter. Therefore, where the payment is made to the agent of the payer, Rule 6DD comes to the rescue and not otherwise. The truck drivers are not the agent of the assessee company and thus not covered under the exception carved out in Rule 6DD. Given the current provisions in section 40A(3) read with Rule 6DD, in the instant case, the payments to individual transport agencies exceed the threshold of 35,000 and thus rightly disallowed by the AO - Decided against assessee Addition u/s 14A - disallowance expenditure incurred in relation to earning exempt income in accordance with Rule 8D - Held that:- CIT(A) accepted that no disallowance is to be made out of the interest expenses but has wrongly confirmed the disallowance out of administrative expenses at 13,414/- as against 1,487/- disallowed by AO. Therefore, even if order of Ld. CIT(A) is upheld, the disallowance be directed to be restricted at 1,487/- as against 13,414/- incorrectly mentioned by the Ld. CIT(A). After hearing both the parties, disallowance of administrative expenses is restricted to 1,487. In the result, the ground is partly allowed. Rejection of method of valuation of stock - identification of stock - defective stock identification - Held that:- As find that the defective stock has been referred to by the assessee as a stock which is not of best quality, is slow moving and has got accumulated at the end of the year and which is determined based on physical verification. It is thus a stock which is identifiable and not a dead stock but a slow moving stock in the sense that it takes longer to dispose it off and the fact that it has been disposed off subsequently at a particular value. The onus is thus on the assessee to demonstrate the position of defective stock and movement (sale) thereof over the past years. Where through such movement of stock, it can be demonstrated that the trend of defective stock throws a percentage of 25% or 50% of specified goods as defective, the same can then be accepted as a reliable and robust basis to help determination of relevant trend for identification of defective stocks. As we have held above, the assessee has to demonstrate through facts of the instant year that such a trend percentage of defective stock can be applied for the year under consideration taking into consideration the position of opening stock, purchases, sale and closing stock. There is however nothing on record to suggest that the assessee has discharged this initial onus placed on it. In the result, we are setting aside the matter to the file of the ld CIT(A) to examine the matter afresh as per law after providing appropriate opportunity to the assessee. In the result, the ground of the revenue is allowed for statistical purposes.

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• 2017 (8) TMI 606
  Estimation of income - determination of N.P. - assessee is engaged in the business of (IMFL) liquor trade - Held that:- The very same issue of estimation of profit in the trade of IMFL was considered by the coordinate bench of the Tribunal in the case of Tangudu Jogisetty [2016 (7) TMI 379 - ITAT VISAKHAPATNAM] and held that estimation of 5% net profit on purchase is reasonable and directed the A.O. to estimate the net profit of 5% on total purchases net of all deductions Unexplained investment - Held that:- As the assessee did not place any evidence to establish the source of unexplained investment therefore, we do not find any infirmity in the order of the CIT(A) and the same is upheld. The assessee’s ground of appeal on the issue is dismissed. Addition towards other income - Held that:- We agree with the assessee that since the income is estimated by rejecting the books of accounts, no separate addition required to be made on account of further expenditure/income. The assessee stated that the income was earned on the deposits made as guarantee deposit. The deposit made for securing the guarantee in connection with the setting up of business required to be considered while estimating the business income and the same cannot be taken as separate source. Therefore, once the business income is estimated, no separate addition required to be made towards the interest. Hence, we set aside the order of lower authorities and allow the appeal of the assessee.

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• 2017 (8) TMI 605
  Estimation of income - determination of N.P. - assessee is engaged in the business of (IMFL) liquor trade - Held that:- The very same issue of estimation of profit in the trade of IMFL was considered by the coordinate bench of the Tribunal in the case of Tangudu Jogisetty [2016 (7) TMI 379 - ITAT VISAKHAPATNAM] and held that estimation of 5% net profit on purchase is reasonable and directed the A.O. to estimate the net profit of 5% on total purchases net of all deductions Unexplained expenditure and interest income - Held that:- In regard to creditor - Smt. Goka Bujjamma - CIT(A) gave a categorical finding that the balance sheet filed by the assessee as on 31/03/2010, the cash in hand was 94,882/-. There was no other evidence before the ld. CIT(A) that she is having sufficient means to advance the loan. Even before the Tribunal, assessee has not filed any details to show that she is having sufficient money to advance loan to the assessee. Under these facts and circumstances of the case, I find that Assessing Officer as well as ld. CIT(A) rightly believed that the assessee failed to prove the creditworthiness of the creditor. Therefore, find no infirmity in the order of the ld. CIT(A). Thus, this ground of appeal raised by the assessee is dismissed. With regard to creditor - G. Jagannadam, he deposed that he advanced the impugned amount in cash for his brother’s business, out of HUF agricultural income and savings. The assessee has not filed any evidence with reference to the said creditor G. Jagannadam neither before the Assessing Officer nor before the ld. CIT(A). Therefore, ld.CIT(A) confirmed the order of the Assessing Officer by observing that the assessee failed to prove the creditworthiness of the creditor. Thus find no infirmity in the order passed by the ld. CIT(A). Thus, this ground of appeal raised by the assessee is dismissed. With regard to claim of agricultural income from HUF Assessing Officer took a view that agricultural income to the tune of 55,000/- is acceptable. However, ld. CIT(A) has enhanced the agricultural income to the tune of 1 lakh in the individual status as available to explain the source for the initial expenditure/investment. Thus find that ld. CIT(A) has taken a reasonable view in calculating the agricultural income, hence, no interference is called for. Addition being unexplained amount - Held that:- AO has asked the assessee to explain the source of 3,49,461/-. It was submitted before the Assessing Officer that it forms part of opening capital and it could not be added. The assessee has not filed any evidence to show that it forms part of the opening balance, therefore, the Assessing Officer added the same to the total income of the assessee. Even before the ld. CIT(A), he did not file any details. Even before the Tribunal, no details in respect of above addition are filed. Addition in respect of interest income - AO has treated the same as income from other sources - Held that:- Before the Tribunal, the assessee has not brought any material to show that the interest income received by the assessee is from business. As find that the assessee has received interest income from the bank deposits, therefore, it cannot be considered as business activity. Thus, ld. CIT(A) correctly held that interest income received by the assessee as income from other sources. Therefore, find no infirmity in the order of the ld. CIT(A).

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• 2017 (8) TMI 604
  TDS u/s 194C - addition u/s 40(a)(ia) - purchase from various manufacturers who in turn manufacture the same as per the specifications provided by the assessee - nature of works contract or agreements for purchase of goods simpliciter - obligation on principal-to-principal basis - Held that:- As perused the seminal features of the contract entered into by the assessee with the three concerns for purchase of goods. Such features has been elucidated in the Statement of Facts filed before the CIT(A), and which clearly bring out that the contract for supply of goods is on principal-to-principal basis and is a contract for purchase of goods by the assessee and sale of goods by the respective manufacturers. No doubt, the manufacturers are obliged to manufacture products as per the specifications and standards provided by the assessee but it is a case where the contractual obligations are entered into on a principal-to-principal basis. The manufacturers buy raw material and packing material at their own cost and as per their requirements and it is the obligation of the manufacturers to deliver the products as per specifications provided by the assessee. Considering the factual matrix, we find no reason to depart from the earlier finding of the Tribunal with regard to similar contracts which have been held not to be in the nature of work contracts. Therefore, in this view of the matter, we hereby affirm the findings of the CIT(A) in deleting the disallowance - Decided against revenue. Set-off of the brought forward unabsorbed depreciation - Held that:- As decided in General Motors India Pvt. Ltd. vs. DCIT [2012 (8) TMI 714 - GUJARAT HIGH COURT] any unabsorbed depreciation available to an assessee on 1st day of April 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001, thus once the Circular No.14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from A.Y.1997-98 upto the A.Y.2001-02 got carried forward to the assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and were available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever. Also see case of M/s. Autolite (India) Ltd. [2016 (11) TMI 1424 - RAJASTHAN HIGH COURT] - Decided against revenue

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• Customs

• 2017 (8) TMI 582
  Power of review - relevancy of the exoneration of disciplinary proceedings for quashing of sanction - Held that: - It is legally settled that the power of review is possible only when there is an express provision enabling the Authority to review the earlier stand. It is equally settled that in respect of the grant of sanction to prosecute, when once on certain materials the Sanctioning Authority decides not to grant sanction, certainly, on the same materials, the Sanctioning Authority cannot change its opinion. By a catena of decisions, it has been held that the authority entitled to grant sanction must apply its mind to the facts of the case, evidence collected and other incidental facts before according sanction. A grant of sanction is not an idle formality but a solemn and sacrosanct act, which removes the umbrella of protection of Government servants against frivolous prosecutions and the aforesaid requirements must, therefore, be strictly complied with before any prosecution could be launched against public servants. The mind of the Sanctioning Authority should not be under pressure from any quarter nor should any external force be acting upon it to take a decision one way or the other. Since the discretion to grant or not to grant sanction vests absolutely in the sanctioning authority, its discretion should be shown to have not been affected by any extraneous consideration. While law is thus settled, on the facts of the present case, the impugned sanction that has been given by the authority on the same material, which was available before the authority on the earlier occasion, when the refusal was made, cannot stand. The Sanctioning Authority having taken a lenient view earlier of declining to grant sanction has changed its opinion without any fresh materials and granted sanction, which cannot be allowed to stand. It is not permissible for the Sanctioning Authority to review or reconsider the matter on the same materials again. Petition allowed - decided in favor of petitioner.

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• 2017 (8) TMI 581
  Import of, and trading in unbranded gold jewellery - smuggling - benefit of N/N. 12/2012 (CE) dated 17.03.2012 - Held that: - Sub-section (1) of section 130 uses the expression determination of any question having a relation to the rate of duty or to the value of goods for the purposes of assessment . In the present case, the issue for consideration is, simply put, whether the assessee is to be called upon to pay 6% or 1% duty. The satisfaction of conditions for eligibility to claim the concessional rate is a mere factor relevant to determine the actual liability. The expression includes the determination of a question relating to the rate of duty; to the valuation of goods for purposes of assessment; to the classification of goods under the Tariff and whether or not they are covered by an exemption notification; and whether the value of goods for purposes of assessment should be enhanced or reduced having regard to certain matters that the said Act provides for. The issue that was formulated as the lis between the parties was the applicable rate of duty to the transaction at issue - Appeal dismissed being not maintainable.

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• 2017 (8) TMI 579
  Benefit of N/N. dated 13th August, 2008 - whether the CESTAT is right in law in allowing the benefit claimed by the Respondent? - Held that: - the CESTAT has considered the merits of the matter after the verification of the documents and arrived the correct conclusion and further directing to allow the clearances of the goods imported is well within the power and based upon the record. There is no perversity and/or illegality in the order. The CESTAT has power to consider all the documents and record to give final finding on facts - decided against the Revenue.

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• Insolvency & Bankruptcy

• 2017 (8) TMI 575
  Initiation of corporate insolvency resolution process - Held that:- The amount is due from the Respondent to the Applicant. Respondent is a Company registered under the Companies Act. Therefore, Respondent is a Corporate Debtor within the meaning of sub-section (8) of Section 3 of the Code. The Application filed by the Applicant is complete. Inspite of service of notice, Respondent did not choose to appear before this Authority. No notice of dispute has been given by the Respondent to the Applicant even after receipt of demand notice from the Applicant. Applicant did not name the Interim Insolvency Resolution Professional in the Application. Applicant made a request to refer the matter to the Insolvency Board under Section 16 of the Code. Therefore, there is no need to file the Written Communication of the Interim Resolution Professional. It it is a fit case to initiate insolvency resolution process by admitting the Application under Section 9(5)(1) of the Code. In the case on hand, simultaneous with the admission order, this Adjudicating Authority is not going to appoint Interim Resolution Professional because the Applicant did not propose the name of Interim Resolution Professional. But, this Adjudicating Authority is going to appoint Interim Resolution Professional after the same is recommended by the Insolvency and Bankruptcy Board of India under Section 16(4) of the Code. The Registry is directed to address a letter to the Insolvency and Bankruptcy Board of India, New Delhi to recommend the name of Interim Insolvency Resolution Professional to this Authority, against whom no disciplinary proceedings are pending, within 10 days of receipt of the letter.

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• FEMA

• 2017 (8) TMI 574
  Disobedience to respond to the summons issued under Section 40(3) FERA - offence under Section 56 of FERA, 1973 - Held that:- This point has come up for consideration before this Court in Enforcement Director and Anr. v. M.Samba Siva Rao and Ors. (2000 (5) TMI 586 - SUPREME COURT OF INDIA). Due to the divergence of opinion of the High Courts of Kerala, Madras on one hand and High Court of Andhra Pradesh on the other, a three Judge Bench of this Court considered the matter and held as clauses (i) and (ii) of Section 56(1) are material for deciding the quantum of punishment and further, there is no reason why the expression “in any other case” in Section 56(1)(ii) should be given any restrictive meaning to the effect that it must be in relation to the money value involved, as has been done by the Kerala High Court. The summons issued under Section 40, if not obeyed, must be held to be a contravention of the provisions of the Act and at any rate, a contravention of a direction issued under the Act, and therefore, such contravention would squarely come within the ambit of Section 56 of the Act. The question of service under Section 40(3) of FERA, 1973 not being effected on the Respondent is irrelevant at this point of time as he was represented by an Advocate before the Trial Court. It appears that the Respondent is not interested in these proceedings. In any event, the judgment of the High Court cannot be sustained as it is contrary to the law laid down by this Court in Enforcement Director and Anr. v. M. Samba Siva Rao and Ors. (supra).

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• PMLA

• 2017 (8) TMI 572
  Offense under PMLA - bail application - Held that:- Having regard to the period of custody suffered and the fact that the trial has not commenced we are of the view that the accused appellant should be released on bail. We order accordingly. Therefore, the appellant is ordered to be released on bail to the satisfaction of the learned Special Judicial Magistrate, CBI & Economic Offences, Indore (M.P.). At the same time, to take care of the apprehension expressed by the learned Solicitor General for India that the accused appellant may abscond like two other co-accused which apprehension is considered to be reasonable we direct that the learned trial Court will release the accused appellant on bail subject to such conditions including the condition requiring the accused appellant to report to the local police station at periodic intervals as may be considered appropriate and only after hearing the learned Public Prosecutor on the issue of conditions to be imposed for grant of bail.

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• Service Tax

• 2017 (8) TMI 603
  Belated appeal - Import of services before 1.4.2006 - Business Auxiliary Service - commission paid to overseas agents - service tax was paid but no interest and penalty - maintainability of appeal - alternative remedy of appeal - Held that: - The Joint Commissioner had passed the orders on February 27, 2008. No statutory appeal was preferred by the appellant challenging that order. The writ petition was filed only in March, 2012. During this period, the appellant was also making payment towards service tax demanded by the respondents without challenging the order. The appellant now wants to take advantage of other litigation pending in respect of same subject matter. When the appellant had not challenged the demand and was merely sitting on the fence, watching the proceedings in other similar cases, the decision in those cases cannot furnish any cause of action to the appellant to file the writ petition. Law on this behalf is crystal clear. Though the service tax levied for the period in question was to the tune of 11,62,728/- which stands paid by the appellant, liability on account of penalty and interest is also fastened upon the appellant. The legal position which is settled is that this service tax was not payable for the period in question i.e. July 9, 2004 to March 31, 2006 inasmuch as such a liability arises only w.e.f. April 18, 2006 after the insertion of the relevant charging Section 66A in the Finance Act, 1994. This legal position is not confined to only those who approached the Court but is a declaration of law. Equities would be balanced by not insisting on payment of penalty and interest. Thus, when the appellant approached belatedly, it may not be entitled to refund of service tax already paid but at the same time, the appellant should not be called upon to pay any interest and penalty levied on a tax which was not payable at all in law. The High Court, to this extent, committed an error by not dealing with this aspect of the matter and dismissing the writ petition in its entirety - appeal allowed - decided partly in favor of appellant.

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• 2017 (8) TMI 602
  Sale or service - value of SIM cards sold - Whether the value of sim card sold attracts service tax or sale tax under the sales tax act - Held that: - the issue has been settled in the case of IDEA MOBILE COMMUNICATION LTD. Versus CCE. & C., COCHIN [2011 (8) TMI 3 - SUPREME COURT OF INDIA], where it was held that it is established from the records and facts of this case that the value of SIM cards forms part of the activation charges as no activation is possible without a valid functioning of SIM card and the value of the taxable service is calculated on the gross total amount received by the operator from the subscribers - the amount received by the cellular telephone company from its subscribers towards SIM Card will form part of the taxable value for levy of service tax, for the SIM Cards are never sold as goods independent from services provided - petition allowed.

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• 2017 (8) TMI 601
  Alternative remedy of appeal - principles of Natural Justice - Held that: - The general principles of law to be followed while entertaining a writ petition, when an alternative remedy is available, as per the decision of the Hon'ble Apex Court in U.P.State Spinning Co. Ltd. Vs. R.S.Pandey and Another [2005 (9) TMI 634 - SUPREME COURT OF INDIA]. Violation of principles of natural justice can be urged before the appellate authority. If the original authority has taken note of some other provision, not stated in the SCN, the same also can be urged before the appellate forum. Writ petitioner can always raise, tenable grounds before the appellate authority, and as rightly observed by the writ Court that, if any appeal is preferred, the concerned appellate forum has to look into the substance of the reasoning and then to decide as to whether the order impugned, in the writ petition, has to be sustained or not. Petition dismissed - decided against petitioner.

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• 2017 (8) TMI 600
  CHA service - charges collected as Break bulk fee - Held that: - similar issue decided in the appellant own case [2009 (3) TMI 158 - CESTAT, BANGALORE], where it was held that the activity relating to one of the categories could not be subjected to service tax under any other category. In other words, the activities relating to Freight forwarding cannot be brought under CHA - the demand of service tax under the head of CHA service for the revenue earned under the head of Break Bulk Fee is set aside. Business Auxiliary Service - freight rebate - Held that: - It is apparent that collection or recovery of cheques, accounts and remittance is specifically covered under BAS. In view of that activity of collecting remittances by the appellant for a fee would fall under this category of service as BAS. In view of above, the demand of service tax on the Revenue streams of CCX Fee is upheld. CENVAT credit - denial on the ground that the documents on the basis of which credit was taken or not in the name of the appellant - Held that: - the only error is that instead of the appellant address at Gurgaon, the address of Mumbai is mentioned. The show cause notice seeks to deny credit on the ground that these addresses are not disclosed under the list of Branch Officers. Show cause notice does not challenge the receipt of use of the service. Since, the invoices are in the name of appellant themselves and the receipt of service by the appellant have not challenged, credit on the same cannot be denied merely because of a different address being shown - credit allowed. Appeal allowed - decided partly in favor of appellant.

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• 2017 (8) TMI 599
  Erection commission and installation Services - appellants are carrying out erection of gates with Govadari Marathwada Irrigation Development Corporation - departments case is that the erection of gate is the taxable service of erection commission and installation which is liable to service tax - Held that: - similar issue decided in the appellant own case THE EXECUTIVE ENGINEER (MECHANICAL) WATER RESOURCES DEPARTMENT Versus COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX, NASIK [2014 (3) TMI 734 - CESTAT MUMBAI], where it was held that The Chief Engineer, Water Resources Department of the Government of Maharashtra is not a commissioning and installation agency as they do not undertake these activities for anybody else except themselves - appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 598
  100% EOU - Refund of unutilised CENVAT credit - Export of Services - case of appellant is that he has produced all the documents along with the reconciliation statement for each quarter but the Commissioner (Appeals) has wrongly observed that the appellants have failed to provide proper evidence to their availment of credit and their eligibility of refund to the original authority - Held that: - this case needs to be remanded back to the original authority to pass a fresh order after considering all the documents which may be produced by the appellant in support of his claim - appeal allowed by way of remand.

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• 2017 (8) TMI 597
  Return u/s 70 - effect of amendment, retrospective or prospective? - invocation of section 73 of the Finance Act, 1993 - demand - Held that: - the Hon’ble Supreme Court in the case of CCE, Vadodara-I Vs. Gujrat Carbon & Industries Ltd. [2008 (8) TMI 4 - SUPREME COURT] dismissed the appeal filed by the Revenue, and held that the amended Section 73 covers the case of assesses who are liable to file return under Section 70. In respect of GTA, the liability to file return was cast on the appellant’s u/s 71A. The class of persons who come under Section 71A is not brought under the net of Section 73 - appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 592
  CENVAT credit - duty paying documents - Rule 9(1)(b) of the 2004 CCR - Whether the Tribunal was right in holding that the service tax credit taken by M/s.JSW Steel Ltd., Salem on the basis of supplementary invoices/bills/challans issued by the service provider? - Whether in view of the suppression, detection of evasion of service tax and registration of offence case against the respondent, the Tribunal was right in law to allow the availment of credit under CENVAT Credit Rules 2004? - Held that: - on a plain reading of Rule 9(1) of 2004 CCR, that the Explanation appended to Clause (b) of Sub-Rule (1) of Rule 9 only seeks to clarify that supplementary invoice would also include a challan or any other similar document, which evidences payment of "additional amount of additional duty" leviable under Section 3 of the Customs Tariff Act, issued by a manufacturer, importer of inputs or capital goods - the documents included in Clauses (e), (f) and (g) of Sub-Rule (1) of Rule 9 of 2004 CC Rules, would not be governed by the Explanation, as it is sought to be argued by the Revenue - the documents included in Clauses (e), (f) and (g) of Sub-Rule (1) of Rule 9 of 2004 CC Rules, would not be governed by the Explanation - the Assessee has correctly availed the CENVAT credit, based on the invoice / TR 6 challan - decided in favor of assessee. Whether the violation of Rule 4A of Service Tax Rules, 1994 entitles the respondent to avail credit under CCR, 2004? - Held that: - A bare perusal of the Rule would show that the obligation, in that behalf, essentially rests on the service provider. The Rule does not advert to any consequences, in case issuance of invoice, bill or challan is delayed. The period provided appears to be directory and not mandatory. Nothing to the contrary has been articulated by the Revenue - Rule 4A of the Service Tax Rules, 1994, inter alia, at the relevant time, required the provider of taxable service, to issue, not later than fourteen days from the date of provisioning of taxable service, an invoice, bill or challan. The details, which were to be provided in such an invoice, bill or challan, are also set out in the Rule - decided in favor of assessee. Appeal dismissed - decided against Revenue.

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• Central Excise

• 2017 (8) TMI 596
  Power to review - scope of Section 35 C (2) of the Central Excise Act, 1944 - Classification of goods - HDPE Tapes - the trade claimed that the goods were articles of plastic classifiable under Chapter 39 of the Central Excise Tariff, whereas the view of the Revenue was that they were textile goods classifiable under Chapter 54 of the Tariff - rectification of mistake - Held that: - The plain and simple reading thereof would clearly reflect that the tribunal does not have any power to review the order and the purport and scope of Section 35 C (2) of the Central Excise Act, 1944 is limited to rectifying the mistake only and that too the error or mistake apparent on the face of record. This provision is not required to be so enlarged as to clothe the tribunal with the power of reviewing its own order, which otherwise is conspicuous lacking in the statutory provision of the Central Excise Act. The Court is of the considered view that the entire application, which was made in the month of March 2017 in which the department sought to rectify the mistake of tribunal was completely misconceived and not tenable in eye of law. There was, therefore, no cause of action whatsoever for allowing the application, which would have given no jurisdictional facts to the tribunal for exercising any power under Section 35 C (2) of the Central Excise Act. Hence, the order passed by the tribunal on the application recalling the order dated 29th September 2016 is patently erroneous and not tenable in eye of law and is required to be quashed and set aside. Petition allowed - decided in favor of petitioner.

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• 2017 (8) TMI 595
  Maintainability of appeal - alternative remedy - Section 35B (1)(b) of the Excise Act - Held that: - the only ground for invoking the writ jurisdiction or seeking waiver of pre-deposit, is that the Petitioners are not in a financial condition to deposit the amount. In our considered view, this cannot be considered as an exceptional circumstance to invoke the writ jurisdiction or to waive the pre-deposit, particularly when the amount required to be deposited is 7.5 per cent of the duty demanded - also, in view of the availability of the alternative efficacious remedy, we are declined to entertain the writ jurisdiction - petition dismissed - decided against petitioner.

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• 2017 (8) TMI 594
  CENVAT credit - validity of proviso to Rule 3(4) - vires of Rule 3(4) of the CENVAT Credit Rules, 2004 - the effect of this proviso is that though a manufacturer is obliged to discharge excise duty liability by 5th or 6th day of the next month, the CENVAT Credit taken by the manufacturer only till the end of the month to which the excise duty related could be utilized and CENVAT Credit legally availed during the first 5 days or 6 days of the subsequent months could not be utilized for paying duty of excise for the goods cleared in the previous month. - Scope of Rule 8(1) of the Central Excise Rules, 2002 Held that: - Though the manufacturer may have CENVAT Credit in his account the same cannot be permitted to be utilized after the end of the month, more particularly, between the last day of the month and the 6th day of the following month, and therefore, proviso to Sub Rule (4) of Rule 3 of the CENVAT Credit Rules would be just contrary and /or in conflict with Rule 8(1) of the Central Excise Rules, 2002. A manufacturer can be and should be permitted to utilize the CENVAT Credit legally availed during the first 5 days or 6 days of the subsequent month for paying the duty of the excise for the goods cleared in the previous month. Proviso to Sub Rule (4) of Rule 3 of the CENVAT Credit Rules can be said to be ultra vires to Rule 3(1) of the CENVAT Credit Rules as it does not have any nexus with the object sought to be achieved by the Rules and in fact runs contrary to the principles of CENVAT Credit Rules. The proviso to Sub Rule (4) of Rule 3 of CENVAT Credit Rules is held to be ultra vires and unconstitutional to the Scheme of CENVAT Credit - the appropriate authority to adjudicate the show cause notice accordingly and consider and /or treat the proviso to Sub Rule (4) of Rule 3 of CENVAT Credit Rules as unconstitutional, in accordance with law. Petition allowed - decided in favor of petitioner.

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• 2017 (8) TMI 593
  Jurisdiction - power of the Joint Commissioner of Central Excise to remand the matter to the adjudicating authority - Section 85 of the Finance Act 1994 - Held that: - the first respondent while exercising powers under Section 85 (4) of the Finance Act has powers to pass orders as he thinks fit and such orders will also include an order of remand and amendment to Section 35-A (3) with effect from 11.05.2001 does not in any manner impact the power of the Commissioner of Central Excise (Appeals) while dealing with an order passed under the Finance Act - petition dismissed - decided against petitioner.

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• 2017 (8) TMI 591
  Reduction in the quantum of penalty - clandestine removal of goods - Whether the order of the Tribunal rejecting option to pay penalty which is granted as a matter of right under Section 11AC is valid in law? - interpretation of provisions of Section 11AC of the Central Excise Act, 1944 - Held that: - a conjoint reading of the main provision with the first proviso would have us conclude that, in the ordinary course, where, duty has not been levied or paid, or has been short-levied and/or short-paid or erroneously refunded by reasons of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of the Act and the Rules made thereunder with the intent to evade the payment of duty, the Assessee is liable to pay penalty equivalent to 100% of the duty so determined. The first proviso, however, carves out an exception to the main section - perhaps, to maximise the revenue, by holding out to the Assessee that, if, it were to accelerate the payment of dues, (i.e., duty and interest), by paying the same within the outer limit of thirty (30) days of the communication of the order of the Central Excise Officer, the penalty imposed would get reduced to 25% of the duty so determined. It is incumbent on the part of the statutory authorities to bring to the notice of the Assessee that it is entitled to a statutory "benefit" under the first proviso to Section 11AC - the question is answered in favor of the Assessee and against the Revenue - appeal allowed - decided in favor of assessee.

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• 2017 (8) TMI 589
  CENVAT credit - inputs written off in Balance Sheet - demand has been confirmed against the appellant on the finding that they have not been able to establish the possession of written off inputs as directed by the Tribunal in the first round of litigation - Held that: - There cannot be any doubt to the legal issue that such establishment is required to be done by the appellant himself as the onus is upon him. When the factual verification of inputs was conducted by the Revenue only 31 part nos. were found in their stock. The appellant has not been able to explain the use or removal of the balance 484 nos. of parts. If it is the appellant's stand that such parts were used by them in the manufacture of their final products, it is for them to establish the same by production of the relevant documents. Merely because certain issuance of the parts has been reflected in their statutory records, the same does not automatically leave to the inevitable conclusion that such issuance was in respect of the very same written of inputs - appeal dismissed - decided against appellant.

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• 2017 (8) TMI 588
  Clandestine removal - manufacture of Pan Masals/Gutkha - use of brand name - the entire SCN is based on bilties/GR's claimed to have been recovered from M/s. Vinod Forwarding Agency, Kanpur - cross examination - Held that: - During the cross examination as stated in the foregoing paragraphs it has been established that the brand name of the Gutkha booked by M/s. Vinod Forwarding Agency has not been stated on the said GR s/bilties and it was only presumed by Revenue that wherever no mention of Rajshree is established said Gr s/bilties should be treated as if the said goods were booked by the appellants and that the said goods were having brand name of Patel and Kisan. Through the cross examination it has been very clearly revealed that the statements on the basis of which said show cause notice was issued were recorded under duress and all the submissions made in the statements were retracted by the witnesses and during the cross examination they have also stated that the statements were recorded under pressure by the officers and one of the witness has also stated that he was tortured for extracting statement from him. There is no investigation conducted about procurement of raw material of allegedly clandestinely cleared goods. Further unless criteria is provided through legal provisions to charge duty on the basis of capacity of production or consumption of electricity the same cannot the basis for allegation of manufacture of goods and their clandestine removal. Appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 587
  Valuation - Branded Chewing Tobacco - N/N. 13/2002 - CE(NT) dated 01/03/2002, as amended vide N/N. 10/2003(NT) and dated 01/03/2003 - whether the appellant assessee have paid excise duty correctly under the provisions of Section 4 of the Act, instead of Section 4A? - manufacture of 9gm. purias/pouch of their product - Held that: - wholesale package have been defined in the Package Commodity Rules as meaning a package containing (i) Retail packages, where such first mentioned package is intended for sale, distribution or delivery to an intermediary and is not intended for sale direct to a single consumer, or (ii) a commodity sold to an intermediary in bulk to enable such intermediary to sell, distribute or deliver such commodity to the consumer in similar quantities, or (iii) packages containing 10 or more than 10 retail packages provided that the retail packages are labeled as required under the Rules. Accordingly, the larger pouches containing more than 10, under the admitted facts, 20/27 Purias are wholesale packages - also, there is no material on record that such wholesale packages were marked with MRP or where intended for retail sale. The appellant was entitled to assessment to duty under the provisions of Section 4 of the Central Excise Act in respect of the retail packages in question - appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 586
  Liability of interest - death of proprietor - invocation of Section 11AA of the erstwhile Central Excise Act - Held that: - as per Rule 22 of CESTAT (Procedure) Rules, where in any proceedings the appellant or applicant or a respondent dies or is adjudged as an insolvent or in the case of a company, is being wound up, the appeal or application shall abate - demand of interest unsustainable - appeal dismissed - decided against Revenue.

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• 2017 (8) TMI 585
  Valuation - includibility - freight charges - loading charges - stock transfer - whether the transportation charges from the factory to depot/consignment agent premises and the cost of unloading charges at the depot are to be included in the assessable value? - Rule 7 of Central Excise Valuation Rules, 2000 - Held that: - The new section 4 (Transaction Value) was introduced with effect from 01.07.2000 which defined the ‘place of removal' as factory gate alone. Later, with effect from 14.05.2003 the definition of place of removal was restored to include depot as well as consignment agent premises. That for the period 01.07.2000 to 14.05.2003, as per law the place of removal is only factory gate and when goods are sold at place other than factory gate Rule 5 of Central Excise Rules, 2000 would apply. This Rule provides for deduction of freight and other charges from assessable value - from 01.07.2000 excise duty is to be paid on transaction value and, therefore, valuation under Section 4(1)(a) and depot not being place of removal is to be adopted and transportation charges need not be included. Reliance placed in the case of Indian Oil Corporation [2015 (3) TMI 1158 - CESTAT MUMBAI], where it was held that the transportation charges/unloading charges are includable in the assessable value. Extended period of limitation - Held that: - it is abundantly clear that there was much confusion regarding the issue whether transportation charges are to be included or not. The same was set right by the amendment brought to the definition of 'place of removal' with effect from 14.05.2003 - the appellants cannot be said to be guilty of suppression of facts with intent to evade payment of duty - appellants succeed on the issue of limitation. The demand beyond the normal period is set aside on the ground of being time-barred - appeal allowed - decided partly in favor of appellant.

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• 2017 (8) TMI 584
  MODVAT credit - denial on the ground that invoices issued by unregistered dealer - Held that: - the Hon'ble High Courts of Ahmedabad as well as Punjab and Haryana in the case of COMMISSIONER OF C. EX., DELHI-III, GURGAON Versus MYRON ELECTRICALS PRIVATE LIMITED [2006 (11) TMI 213 - HIGH COURT OF PUNJAB 47,144/- only. Instead of disallowing this excess credit of 47,144, the department has disallowed the entire credit of 17,684/-. The appellants admittedly having debited the excess credit of 47,144/-, the disallowance of credit on this ground is unjustified. CENVAT credit - denied on the ground that the parent quantity mentioned in invoices is only 275 kgs., whereas, the quantity supplied to the appellants is 675 kgs - Held that: - the parent invoices was in fact for 850 kgs, and only by mistake the same has been mentioned as 275 kgs - denial of credit unjustified. The disallowance of credit for the reason that the quantity of inputs was received was not entered in Part-1 RG 23A register is also explained by the appellants, which according to us is acceptable and tenable. CENVAT credit denied also on the ground that the appellants have taken only less credit of 2,375/- against the duty paid to the tune of 2,500/- - Held that: - The same has been explained by the appellants stating that during the relevant period N/N. 14/90 permitted only 95% credit to be availed, Needless to say that disallowance of credit is unjustified. Appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 583
  Area Based Exemption - N/N. 50/2003-CE dated 10.06.2003 - Job-work - denial of notification on the ground that neither the goods manufactured by them on job work were used in or in relation to the manufacture of final products nor the said goods have been cleared on payment of duty from the Roorkee unit - lack of proper evidence - Held that: - the learned Commissioner have erred in confirming the demand, ignoring the documentary evidence on record and relying on the various statements which have got no evidentiary value. Further, such statements recorded during investigation cannot be relied upon without the witnesses being examined in the course of proceedings, as provided by Section 9 D of the Central excise Act. We further find that all the transactions are properly recorded in the books of accounts maintained in the ordinary course of business and the returns filed with the Department. The evidences on record, particularly the inspection report and delivery order issued by the respective buyer (Electricity distributing Companies) corroborates the stand of the appellants, as to manufacture, inspection and sale at the Roorkee unit - further, there is no test report brought on record by revenue in support of their contention that the appellant have not removed the Transformer- spares parts, but have removed complete transformer. Thus, the whole case of the revenue is based on presumption and assumptions, which falls flat, in view of the overwhelming documentary evidence - none of the persons whose statement was recorded have made an averment that the Transformer components have not moved from Sahibabad Ghaziabad unit to their Roorkee unit. The whole case of the revenue is based on presumption, which has not been corroborated, in view of overwhelming documentary evidences, on record - appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2017 (8) TMI 578
  Order of assessment - Refund claim - reopening of assessment while processing refund claim - Section 9(2)(g) of the DVAT Act - the decision in the case of I Smart Mobile Technology Private Limited Versus Commissioner Of Vat & Anr. [2017 (5) TMI 656 - DELHI HIGH COURT] contested, where it was held that with reference to Section 9(2)(g) of the DVAT Act, it requires to be noticed that it envisages a situation where a selling dealer fails to deposit the tax that has been collected or fails to lawfully adjust it against the output tax liability - Held that: - the decision in the above case upheld - leave granted.

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• 2017 (8) TMI 577
  Whether supply of cooked food in the restaurant are covered under Uttarakhand VAT Act, 2005 - the decision in the case of Valley Hotel & Resorts, (Through its partner Shri Arun Goyal) Versus The Commissioner, Commercial Tax, Dehradun [2014 (5) TMI 97 - UTTARAKHAND HIGH COURT] contested, where it was held that where element of service has been so declared and brought under Service Tax vide Government of India notification dated 06.06.2012 (i.e. 40% of bill amount to customers having food or beverage in the restaurant was made liable to service tax) no VAT can be imposed thereon - Held that: - Delay condoned - Application for amendment of cause title is allowed - SLP dismissed.

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• 2017 (8) TMI 576
  Anticipatory Bail under Section 438 of the Code of Criminal Procedure, 1973 - offences punishable under Sections 406, 420, 467, 468, 471 of the Indian Penal Code and under sections 85(1)(c), 85(1)(d), 85(1)(f) and 85(1)(g) of the Gujarat Value Added Tax Act, 2003 - Held that: - Considering the statement of the applicant that the applicant would me making payment of value added tax as may be due against him in accordance with the relevant provisions as also considering the fact that the entire case of the State is based upon the documentary evidence and the right of the investigating agency to make out a case for remand of the applicant is always open as indicated in detail in this order below, the applicant is required to be admitted to anticipatory bail - bail application allowed - decided in favor of applicant.

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• Indian Laws

• 2017 (8) TMI 613
  Revising of seniority list in the cadre of ITO - promotion from the post of ITO to the post of ACIT - Held that:- All these petitions are allowed / disposed of with the following directions: (1)That the Department to finalize the revised seniority list in the cadre of ITO within a period of 8 weeks from today without fail. The Department to complete the entire process of finalization of revised seniority list in the cadre of ITO within the period of two months from today, without fail and submit the compliance report before this Court in the present proceedings just on completion of above two months. (2)As already ordered earlier till the revised seniority list in the cadre of ITO as per the decision of the Hon'ble Supreme Court in the case of N R Paramr (2012 (12) TMI 872 - SUPREME COURT ) is finalized and the cases of the respective petitioners are considered for promotion to the post of ACIT, as already ordered earlier the respondents are restrained from filling up the post of ACIT on promotion on ad hoc promotion by operating the select list pre N. R. Parmar (Supra) decision. (3) However, during the aforesaid two months it will be open for the department to grant ad hoc promotion on the post of ACIT in the meantime and till revised seniority list in the cadre of ITO is finalized, by operating the draft revised seniority list and thereby to consider the case of the respective petitioners for promotion to the post of ACIT on ad hoc basis, as was done in the case of applicant of Shri Jatashanker Meena. (4) In any case, the aforesaid exercise shall be completed and the revised seniority list in the cadre of ITO be finalized within a period of two months from today as stated above, and immediately, thereafter case of the respective petitioners be considered for promotion to the post of ACIT forthwith.

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• 2017 (8) TMI 590
  License for Retail Sale - Indian Made Foreign Liquor (IMFL) - the legality or otherwise of the action of the official respondents to cancel the temporary licenses and/or notice dated 14.12.2005 issued by the Excise Commissioner in his capacity as the Licensing Authority - Vend for the purpose of sale of IMFL - competent authority to grant license for opening Vend - how should the Excise Commissioner make selection when there were large number of applications for the limited number of vends? - Held that: - there have been numerous interim directions passed in the civil miscellaneous petitions moved by the petitioners from time to time whereby the official respondents have been directed to continue and/or renew the licenses issued in favour of the petitioners and to accept the requisite annual fee in lieu thereof from the petitioners. There is no dispute that by notice dated 25.06.2006 issued by the Excise Commissioner the licenses were essentially operable only for one year, i.e., for the year 2005-06 and with respect to 95 locations only identified by the Committee of officers constituted by the respondents in compliance of the directions of the Division Bench. Therefore, I think, it would be inconsequential to delve into the legality or otherwise of the impugned notices issued to the petitioners. Any discussion on the submissions made at the Bar would have only academic value. Furthermore, the temporary licenses in question were issued in favour of the petitioners in terms of the Excise Police promulgated in terms of Government, vide Order No. 99-F of 2003 dated 7.4.2003 read with Order No. 156-F of 2003 dated 22.7.2003. More than thirteen years have passed since then. The said policy recognized the need for restrictive and regulative trade in the liquor till the time it was considered appropriate to bring about a total prohibition. Since the matter has been pending in the Court since then and there had been an interim order operating in the matter, obviously, the Government and the official respondents have not been able to revise the liquor policy during these years. On the other hand, the petitioners, who were granted temporary licenses for four months which could be regularised to be operable, at best, for one year, have been continuing on such licenses for more than eleven years now on Court orders merely because of pendency of these petitions. The official respondents shall undertake and complete the requisite exercise by the end of the current financial year, i.e., 31.03.2017, and issue fresh licenses to the selectees for the year 2017-2018 operative with effect from 01.04.2017. In case the present vendees have not paid the annual fee and other dues for the current or any other previous year, he shall deposit the same with the Excise Department before closure of the present financial year. Petition allowed by way of remand.

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• 2017 (8) TMI 580
  Withdrawal of Tender Notice - selection of transporter for providing transport solution for various identified routes for DPD, ISO freight containers from the four terminals of JNPT - interpretation of tender conditions - Held that: - The position of law with regard to the tender, contract and/or such policy decision has been settled through various judgments, specifically when it comes to taking administrative and/or executive decision to bring in and/or make policy - the Court needs to consider the facts and the nature of terms and conditions of tender. The tender conditions, if are against the provisions of law, arbitrary, discriminatory, illegal and affects the fundamental rights of the Petitioners, covering Articles 14, 19(1)(g) of the Constitution of India, an appropriate writ or directions may be issued by the Court, but not otherwise. There is no issue that of the stake­holder including the Petitioners importers have appreciated this DPD mechanism. The Government directives therefore, required to be implemented in line by JNPT and the Customs and the related stakeholders, including the Petitioners/ importers/transporters. The DPD model is stated to be simple and less time consuming. The duration of agreement is three years with a provision to extend the arrangement for a period of two years at negotiable rate, terms and conditions on mutual consent. Section 1 provides for the notice inviting tender, followed by instructions to bidders, the evaluation of bids, scope and volume of work. The requirement of minimum truck trailers is in clause (b) from 1.4.2. The provision is made about the “operational contract” for truck trailors. The volume of work and special terms and conditions of contract have been elaborated in clause (5) and (6). The High level committee is provided to select more number of tenderer in a route. The volume of each route is estimated. The Grievance Redressal Committee is provided in clause 5.8, that will address the issues of stakeholders related to the transport solution. The Committee shall ensure the overall quality of service of the transport solution. Policy decision by any mechanism­ - Held that: - The concept of “policy decision” may include Executive instructions/instructions also. The effect and use of it only enlightend its utility and usefulness. Any challenge to policy decision, without factual document/material is premature. Any policy decision cannot be challenged on presumption and assumption. The policy decision can be changed and modified, subject to its practice, utility and its use. It is ultimately the State/expert's/ executive decision, keeping in mind the interest of people at large, rather than private individual or associations' rights of doing business. Judicial review is permissible only if such decision is contrary to law and/or breaches constitutional provisions. Some leverage and latitude requires to be given to the State and its authorities, for implementation of such policy decision. It is clear therefore, considering the preamble and object of policy decision, taken at higher level, in furtherance of the DPD model to promote the government of India's “Make in India”, and “Ease of Doing Business” initiatives. The Respondents' decision to rerationalise and streamline the implementation of the DPD model at its port is well within the scheme. The DPD model is introduced to bring in a change in the existing clearance framework to meet contemporary needs. The tender, is with view to implement the policy decision to promote the manufacturing industry and streamline the processes for import of goods. The Policy is within the power and jurisdiction of Respondents - ­No breach of law. The Respondents required to allow to proceed with the tender and to implement the same. In case of difficulties and/or issues various mechanisms have been provided. Those mechanisms require to be utilized by all the concerned as and when occasion comes. The halting of such implementation at the instance of the Petitioners, therefore, is not in the interest of people at large - The impugned tender, therefore, is not arbitrary unreasonable and cannot be stated to be without any application of mind. All the clauses are required to be read and so also all the connected schemes. Power to change or modify the policy decision in the public interest­ - Held that: - the terms and conditions of the tender and its object and purpose, is in the interest of general public. The infringement, even if any, to some extent as stated by the Petitioners, of the private interest of transporters/importers or few importers/transporters, cannot prevail over in the public interest so referred in the policy decision and the tender conditions - the transportation policy would be optional and not compulsory, is not acceptable. Such optional policy will create confusion, chaos and will be uncontrolled and unregulated. The policy decision and its implementation therefore, required to be implemented and extended to all the concerned. Unless the decision is concrete and make compulsory, it will be difficult to implement and as it is nothing but extension of DPD policy and supported by the customs and all the concerned departments, it will not be entail the desire result, to achieve the aims and objects of the scheme/policy decision. Its implementation by all, is a must. Petition dismissed - decided against petitioner.

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• 2017 (8) TMI 573
  Conviction of offence under Section 138 of the Negotiable Instruments Act, 1881 - proof of existing debt - acquittal of charge - Held that:- The absence of any evidence to show the solvency of the respondent for him to have advanced loan to the petitioner leads to the presumption that there was no existing debt. There is no documentary evidence to show that such a huge amount of loan was advanced to the petitioner. It is difficult to accept the proposition that such amount of loan would be paid on oral agreement. Both the courts below, therefore, have erred in holding that the petitioner could not rebut the presumption as contemplated under Section 139 of Negotiable Instruments Act, 1881. For the reasons aforestated, this revision petition is allowed and the judgment of conviction by the Trial Court and its affirmation by the Appellate Court are set aside and the petitioner is acquitted of the charge.

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