TMI Tax Updates - e-Newsletter
August 28, 2017

Case Laws in this Newsletter:

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

TMI Short Notes

• Income Tax:

  Whether the costs incurred for securing the contract would have to be claimed in the year of incurrence or in the year in which contract is secured.

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Articles

• Reduced rate of GST vide Notification 20/2017 on certain specific kind of Works Contract
• FAILURE TO FILE ANNUAL INFORMATION RETURN (AIR)
• FIRST GST RETURNS TO BE FILED AT A GLANCE

News

• Important Instructions by Chairman on Rajaswa Gyan Sangam

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• India denies fresh anti-dumping duties on Chinese products

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Notifications

Companies Law

• F. No. 1/12/2013 CL-V - S.O. 2751(E). - dated 24-8-2017 - Co. Law
  Central Government appoints the 24th day of August, 2017 as the date on which the provisions of sub-sections (8), (9) and sub-section (10) of section 212 of the said Act shall come into force

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• F. No. 1/12/2013 CL-V - G.S.R. 1062(E) - dated 24-8-2017 - Co. Law
  Companies (Arrests in connection with Investigation by Serious Fraud Investigation Office) Rules, 2017

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Customs

• 40/2017 - dated 25-8-2017 - ADD
  Seeks to impose anti-dumping duty on the imports of "Sodium Nitrite" originating in or exported from China PR.

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DGFT

• 25/2015-2020 - dated 25-8-2017 - FTP
  Amendment in import policy of gold and silver under Chapter 71 of the ITC(HS) 2017, Schedule-I (Import Policy)

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• 24/2015-2020 - dated 25-8-2017 - FTP
  Amendment in Para 2.07 of Foreign Trade Policy 2015-2020

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GST - States

• G.O.Ms. No. 384 - dated 22-8-2017 - Andhra Pradesh SGST
  Amendments in the Notification No. G.O.Ms.No.257, Revenue (Commercial Taxes-II) Department, 29th June, 2017 -

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• CCW/GST/74/2015 - dated 22-8-2017 - Andhra Pradesh SGST
  Last date for persons furnishing of return in FORM GSTR-3B

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• G.O.Ms. No. 376 - dated 18-8-2017 - Andhra Pradesh SGST
  CORRIGENDUM - Notification No. G.O.Ms.No.258, Revenue (Commercial Taxes-II) Department, dated the 29th June, 2017

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• CCW/GST/74/2015-4 - dated 8-8-2017 - Andhra Pradesh SGST
  Time period for filing of details in FORM GSTR-3.

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• CCW/GST/74/2015-3 - dated 8-8-2017 - Andhra Pradesh SGST
  Date for filing of GSTR-3B

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• CCW/GST/74/2015-2 - dated 8-8-2017 - Andhra Pradesh SGST
  Time period for filing of details of inward supplies in FORM GSTR-2

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• CCW/GST/74/2015-1 - dated 8-8-2017 - Andhra Pradesh SGST
  Time period for filing of details of outward supplies in FORM GSTR-1

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• 02/2017-Central Tax (Rate) - dated 28-6-2017 - Andhra Pradesh SGST
  Exempts intra-State supplies of goods, description of which is specified in column (3) of the Schedule.

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• 22/2017-State Tax - dated 22-8-2017 - Delhi SGST
  Delhi Goods and Services Tax (Fifth Amendment) Rules, 2017

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• 1500-F.T. - 23/2017-State Tax (Rate) - dated 22-8-2017 - West Bengal SGST
  Amendment in the Department Notification No. 1141-F.T. dated 28th day of June, 2017.

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• 1499-F.T. - 22/2017-State Tax (Rate) - dated 22-8-2017 - West Bengal SGST
  Amendments in the Notification No. 1137-F.T. dated 28th day of June, 2017 [No. 13/2017-State Tax (Rate)]

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• 1498-F.T. - 21/2017-State Tax (Rate) - dated 22-8-2017 - West Bengal SGST
  Amendments in the Notification No. 1136-F.T. dated 28th day of June, 2017 [No. 12/2017-State Tax (Rate)]

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• 1497-F.T. - 20/2017-State Tax (Rate) - dated 22-8-2017 - West Bengal SGST
  Amendments in the Notification No. 1135-F.T. dated 28th day of June, 2017 [No. 11/2017-State Tax (Rate)].

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• 06–C.T./GST - dated 21-8-2017 - West Bengal SGST
  Amendments in the notification No. 05-C.T./GST dated the 17th August, 2017.

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• 1475-F.T. - 19/2017-State Tax (Rate) - dated 18-8-2017 - West Bengal SGST
  Amendments in the Notification No. 1125-F.T. dated 28th day of June, 2017 [No. 1/2017-State Tax (Rate)] - Rates for Tractor Parts.

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• 1456-F.T. - dated 17-8-2017 - West Bengal SGST
  The West Bengal Goods and Services Tax (Fifth Amendment) Rules, 2017.

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SEZ

• S.O. 2736(E) - dated 16-8-2017 - SEZ
  Central Government, notifies the 2.39 hectares (5.93 acres) area at Gachibowli Village, Serilingampally Mandal, Ranga Reddy District, in the State of Telangana and constitutes an Approval Committee

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Circulars / Instructions / Orders

DGFT

• 20/2015-2020 - dated 25-8-2017
  Introduction of Appendix - 2X in Appendices and Aayat Niryat Forms (2015-20)

Highlights / Catch Notes

Income Tax

• Constitutional validity of the amendment to Section 142(2A) - arbitrary powers of AO - special audit of accounts - it was contended that sch unguided discretion, having no nexus to the object of Section 142(2A), submits the petitioner, is contrary to the principles of equality enshrined in Article 14 - There is no merit in the challenge - HC
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• Unexplained cash deposit in assessee’s bank account - proof of primary activities for earning agricultural income - In absence of any reliable and cogent material, claim of assessee for sale of poplar tree for exempt agricultural income cannot be accepted.
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• Tribunal is custodian of the 1961 Act and is the last fact finding authority vested with powers of wide amplitude to enforce implementation of the provisions of the 1961 Act.
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• LTCG - Just by mentioning in block of asset that too with Zero depreciation rate should not change nature of the asset. Ultimately the facts remain that no benefit of Depreciation is claimed and the asset is held for more than 3 years then the same should be treated as Long term capital and the gain on sale of such asset should be treated as Long term capital gains.
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• TDS u/s 194C OR u/s. 194J - payments to various T.V channels for broadcasting its serials during fixed time slots - tds liability on telecasting fees paid - the same fall within the ambit of the provisions of Section 194C
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Indian Laws

• Complaint u/s 138 - The presumption under Section 139 of the Act, is always in favour of the complainant. Though it is a rebuttable presumption, the rebuttal has to come from the accused side, and the same must be an acceptable rebuttal - HC
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Service Tax

• Classification of services - as per the agreement, they have to pay royalty @ 3% on local sales and 7.5% on export sales of the equipment/parts manufactured and sold - None of these services can be called intellectual property service (IPR service)
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• 00% EOU - Refund claim - export of services - cenvat credit - whatever service improves the quality of output service, the same has to be held as availed in connection with the output service - there is no justifiable reason to deny credit.
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• Export of services - promotion and marketing of spares and accessories of Yamazaki Mazak Trading Corporation, Japan(YMTCJ) and they have received commissioner from YMTCJ - various activities performed in India on behalf of the foreign principals - Benefit of export allowed
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Central Excise

• Deemed manufacture - pasting of sticker on the imported product to indicate the name of the importer and MRP which is the requirement under the Standards of Weights and Measures Act would not attract the Chapter Note - HC
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• SSI exemption - Use of brand name of others - The use of the moulds by appellant bearing the mark RKI is only on account of the fact that these moulds were obtained from RKMI. - the impugned clearances cannot be treated as clearances bearing a brand name / trade name for the purpose of indicating a connection in the course of trade between the said goods and RKMI
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• Denial of the benefit of exemption - Goods imported not used for intended purpose - the expression "for use" must mean "intended for use".
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• Excisability/Marketability - Intermediate goods - Revenue has failed to prove that sugar solution/sugar syrup in question is marketable and in the absence the said element, the sugar syrup/sugar solution is not excisable. Consequently, no duty can be demanded from the appellant.
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Case Laws:

• Income Tax

• 2017 (8) TMI 1074
  Constitutional validity of the amendment to Section 142(2A) - arbitrary powers of AO - special audit of accounts - it was contended that sch unguided discretion, having no nexus to the object of Section 142(2A), submits the petitioner, is contrary to the principles of equality enshrined in Article 14. - nature and complexity of the accounts, volume of the accounts, doubts about the correctness of the accounts, multiplicity of transactions in the accounts or specialised nature of business activity of the assessee. Held that:- Section 142(2A) was enacted to facilitate investigation into the accounts of an assessee for the proper determination of tax liability. It deals with cases where the AO needs to take the assistance of a Chartered Accountant in order to be able to understand the assessee’s accounts and determine the correct tax liability. It is, therefore, abundantly clear from the aforesaid dictum, that Section 142(2A)confers an important power on the Revenue to curb tax evasion and balances it with the inconvenience that an assessee may face. The impugned amendments to Section 142(2A) also have to be viewed in that light and hence must be considered to be reasonable. It is clear that in fiscal matters, the Legislature has the ability to amend the law retrospectively. Moreover, Section 142(2A) of the Act does not confer any vested right on the petitioner, which could not be taken away by retrospective amendment. Therefore, even if the amendments to Section 142(2A) were given retrospective effect, the same would be within the powers of the Legislature There is no merit in the challenge. - Writ petitions dismissed.

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• 2017 (8) TMI 1073
  Addition of bad debts claim - Held that:- The claim of bad or doubtful debt would be limited to the amount by which such debt or part thereof exceeds the credit balance in the provision for bad and doubtful debts account made in clause (viia) in case of an assessee to which such clause applies. The fact that clause (viia) applies to the assessee is not in dispute. However, Mr.Soparkar for the assessee submitted that the assessee had not claimed any part of the provision made for bad or doubtful debts in its account and that therefore the first proviso to clause (vii) in any case had no applicability. He submitted that the Assessing Officer therefore advisedly did not proceed on such basis and that the Commissioner of Income Tax (Appeals) erred in invoking the said provision. He would draw our attention to the observations of the Tribunal in the impugned judgment, in which, in this context, it was stated that proviso to section 36(1) (vii) refers to section 36(1)(viia) and the provisions made under such subclause which admittedly is not the case here. In our opinion if that is the case, reliance of the Commissioner of Income Tax (Appeals) on the proviso to section 36(1)(vii) also would be redundant. However, by way of abundant caution, it is clarified that while granting the deduction on the said sum of ₹ 11.72 crores it may be verified that the assessee is not in any manner, getting table deduction. Disallowance of excess provision returned back - Held that:- Section 41(1) of the Act in plain terms provides for adding back of an allowance or deduction which has been made by the assessee in any year in respect of loss expenditure or trading liability and subsequently during any previous year such liability ceases. The primary requirement of applicability of this provision therefore is where an allowance or reduction has been made in the assessment for any year in respect of such loss or expenditure or trading liability. When no such allowance or deduction was made, question of applicability of section 41(1) of the Act would not arise.

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• 2017 (8) TMI 1072
  Exercise u/s 263 undertaken after a full-fledged exercise already been undertaken by the AO under Section 153A - Held that:- As noticed by the ITAT, following the notices issued in the course of the assessment proceedings by the AO, on more than one occasion the Assessee furnished the complete details sought. Where the Assessee has in fact furnished the details that are available with him along with explanation to the queries raised by the AO, to permit the exercise of the revisionary jurisdiction only on the ground that the AO did not have sufficient time to verify the details furnished would be unfair to the Assessee. The PCIT must be satisfied, after application of his mind, that the order of the AO was erroneous with respect to the material made available to him. No such application of mind by the PCIT is evident from the impugned order which was under challenge before the ITAT. No substantial question of law arises

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• 2017 (8) TMI 1071
  Addition made on account of suppressed receipts - Assessee is not entitled for the deduction of 42% from the gross receipts towards non receipt of fees and cost of medicines - block assessment - Held that:- There are no materials or guidelines or discussion of evidence with regard to deduction of 42% granted by the tribunal towards non receipt of fees and cost of medicines.

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• 2017 (8) TMI 1070
  Waiver of a principal amount of loan - whether this constitutes a trading liability - Section 28(iv) and Section 41(1) clause (a) applicability - Held that:- Waiver of the principal amount of loan utilized for acquisition of capital assets and not for the purposes of trading activity and accordingly the issue is covered in favour of the assessee by the judgment in the case of Mahindra and Mahindra Ltd. (2003 (1) TMI 71 - BOMBAY High Court) it has to be held that the waiver of the principal amount of loan granted by the DEG, Germany to the extent of ₹ 29,63,27,000/in terms of OTS Scheme is in the nature of capital receipt not chargeable to tax. From a perusal of these factual findings, we find the same to be in consonance with the principle of law laid down by the Division Bench of this Court in the case of Mahendra & Mahendra Ltd. V/s. CIT, (2003 (1) TMI 71 - BOMBAY High Court] - Decided against revenue

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• 2017 (8) TMI 1069
  Claim of deduction under Section 80HH - exercise of powers under Section 254(2) by tribunal - Held that:- As could be noticed from the specific findings of the AO in respect of the subsequent assessment year the assessee appears to have not maintained separate books of account in respect of its Medak unit. Had there been separate books of account a specific contention would have been raised in this year also either before the AO or before the CIT(A) or in the grounds of appeal before the Tribunal. Thus, it has to be assumed that the assessee has not maintained separate accounts for its Medak unit but the fact remains that by the powers vested under Section 254(2) the Tribunal cannot look into some other circumstances to reconsider the matter or to review the matter. So long as the overall judgment of the Tribunal is based on proper logic, even if there is an error of judgment that by itself cannot give rise to exercise of powers under Section 254(2) of the Act. We find to be in consonance with the language of Section 80HH of the Income Tax Act, which enables claiming deduction in respect of profits and gains from newly established industrial undertaking or hotel business in backward areas, that no substantial question of law arises for determination and consideration in this Appeal. Such findings of fact, cannot be termed as perverse or vitiated by any error of law apparent on the face of record.

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• 2017 (8) TMI 1068
  Revision u/s 263 - addition under section 40(a)(ia) - Held that:- Merely because the Assessing Officer noted the provision of section 40(a)(ia) and made certain limited disallowance, the order of assessment cannot be taken into revision. We do not propose to lay down such broad legal propositions. Nevertheless in the facts of the present case we are not inclined to interfere for entirely different reasons. As noted the assessee's contentions before the Assessing Officer and the Commissioner was that the recipient of the payments, the German Company had no tax liability and there was therefore no question of deducting tax at source and further that with respect to the second head of payments, the assessee company had merely corrected an error and recovered the amounts from the company. These issues were before the Assessing Officer and unless shown to the contrary can be presumed to have been considered by him while not making the additions. If the Commissioner was of the opinion that either of the two contentions were invalid in facts or law, he ought to have come to such a conclusion without holding to the contrary. He merely brushed aside the assessee's contentions observing that the Assessing Officer had not made proper inquiries. - Decided against revenue.

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• 2017 (8) TMI 1067
  Maintainability of second writ petition - abuse of this Court's jurisdiction - Levy of penalty - allegation of suppressing residential status to evade tax - earlier writ petition was withdrawn, when the same was taken up without seeking any liberty to file a fresh petition on the same cause of action. - Held that:- we would be failing in our duty if we do not apply Sarguja Transport's principle [1986 (11) TMI 377 - SUPREME COURT] to the present facts and circumstances. We have clearly noted the observations of this Court and which point towards an abuse of this Court's jurisdiction. The Court was persuaded to go on with the matter despite the objection raised by the respondents about the status of the petitioner. The petitioner despite noticing this position insisted on arguing the writ petition and argued it. After a preliminary hearing, on finding that it is not possible to get over the objection raised and the allegation of suppression of a material fact, the petitioner withdrew the writ petition, but without seeking any liberty to file a fresh petition on the same cause of action. We would be acting contrary to judicial discipline, if we entertain a second writ petition on the same cause of action but with a marginal improvement, as pointed out. We uphold the preliminary objection of the learned Additional Solicitor General and dismiss these writ petitions.

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• 2017 (8) TMI 1066
  Review petition - succeed to the assets of the deceased - Held that:- In the present case, the understanding of the Revenue official, that there was an alleged dispute, would not be an acceptable cause in law. However, the proposed respondents are not prejudiced. We are not expressing any opinion on the maintainability of the Review Petition or on its merits. Equally, we are not expressing any opinion about the entitlement of the proposed respondents to succeed to the assets of the deceased. These are not relevant matters for deciding the Chamber Summons. We have before us a Review Petition, and its pendency will not assist or help either. It wold be better if the same is disposed of by granting full opportunity to the parties. In the larger interest of justice, we condone the delay, but by imposing conditions. We direct the Review Petitioner to pay costs to the proposed Respondents quantified at ₹ 25,000/, which shall be paid as expeditiously as possible and within a period of four weeks from today. Thereafter, steps be taken to remove all office objections by carrying out the requisite amendments to the memo of the Review Petition. We grant time of six weeks for above purposes. In the event no steps are taken within the stipulated period, the Review Petition will stand dismissed without any adjudication on merits. When the Review petitioner takes steps to amend the memo of the Review Petition, it shall include the name of the widow Mrs. Dimple Khanna and thereafter, the names of the proposed respondents, as set out in the schedule. The memo of the Review Petition shall be amended accordingly.

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• 2017 (8) TMI 1065
  Denying registration to the assessee society u/s. 12A(a) - objectives of assessee society as charitable in nature - Held that:- At the stage of granting registration u/s 12A the Ld. CIT(E) has required to see the objects of society and not required to examine on the application of income which will have to be undertaken by the Assessing Officer (AO) on a year to year basis after assessee files return of income claiming exemption u/s 11. This position is now well settled by several authoritative pronouncements on the subject. On the facts of present case there cannot be even an iota of doubt that the objectives of assessee society are charitable in nature being an objective of general public utility within the meaning of section 2(15) of the Act as detailed herein above. We are of the considered opinion that the assessee is entitled for registration u/s. 12A of the Act. Therefore, we set aside the impugned order passed by the Ld. CIT(Exemptions), Lucknow and accordingly, direct the Ld. CIT(E), Lucknow to grant registration under section 12A of the Act to the applicant. Appeal of the Assessee is allowed.

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• 2017 (8) TMI 1064
  Unexplained cash deposit in assessee’s bank account - proof of primary activities for earning agricultural income - sale proceeds from cutting of poplar trees grown on agricultural land belonging to the assessee - application under rule 46A for admission of additional evidences - Held that:- When notice was given by the AO to prove earning of agricultural income of ₹ 78,700/-, the assessee did not even explain the sale of poplar trees through Mr. Salim Hasan at any point of time. Advance against sale of poplar tree is alleged to be recovered in preceding A.Y. No evidence of receipt of any such amount in Assessment Year in appeal has been filed. No evidence of cutting of poplar tree are filed. No income from sale of poplar tree has been disclosed in return of income. Therefore the story set up before the Ld.CIT(A) for selling polar trees is clearly an afterthought and rightly have been rejected. AO and Ld.CIT(A) without any basis accepted the agricultural income of ₹ 78,700/- for which even no ground of appeal has been raised by the assessee before the Ld.CIT(A). The Ld.CIT(A) in his findings has gone through the explanation of the assessee regarding cash deposits in the bank account and receipt of advance from Sri Salim Hasan which did not match with the cash deposited in the bank account of the assessee. In absence of any reliable and cogent material, claim of assessee for sale of poplar tree for exempt agricultural income cannot be accepted. Thus the assessee has not earned any agricultural income of ₹ 78,700/- for which credit has been given by the Ld.CIT(A), the assessee has also not earned any income on sale of poplar trees. - Decided against assessee.

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• 2017 (8) TMI 1063
  Addition on account of low gross profit - CIT(A) deleted the additions - Held that:- Since, It is on record that the assessee filed part details as sought by the AO only at the fag end when the assessment was getting time barred thereby preventing any meaningful enquiry and examination by the AO and the AO made adhoc estimation of the addition to the total income of the assessee on account of low GP, this is an open remand so far as this issue is concerned and the AO shall be entitled to make additions, if so warranted after considering the evidences and explanations filed by the assessee uninhibited by the earlier adhoc addition on account of low GP made in original assessment proceedings u/s 143(3) r.w.s. 143(2) of the 1961 Act. - Matter remanded back.

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• 2017 (8) TMI 1062
  Computation of the income arising from activities of accommodation entries - Held that:- One thing is clear that it is writ large that the assessee has chosen a path of non co-operation with Revenue as no documents/details/ bank statements/ books of accounts etc were submitted by the assessee before the authorities below and thus it is clear that the assessee has not approached the Court with clean hands and it is well settled proposition of law that Courts will not help those who come to the Court with dirty hands. Matter remanded back.

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• 2017 (8) TMI 1061
  Imposition of penalty under section 271(1)(c) - non valid notice - Held that:- The notice issued by the Assessing Officer under section 274 r.w.s. 271 of the Act dated 30/12/2009 is untenable since it reflects non-application of the mind by the Assessing Officer, having regard to the ratio of the Hon’ble Supreme Court in the case of Dilip N. Shroff (2007 (5) TMI 198 - SUPREME Court) as well as Hon'ble Bombay High Court in the case of Shri Samson Perinchery (2013 (11) TMI 369 - ITAT MUMBAI). Thus, on this preliminary point itself the penalty imposed under section 271(1)(c) of the Act is liable to be deleted. - Decided in favour of assessee.

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• 2017 (8) TMI 1060
  Sale of capital asset [shop] - LTCG V/S STCG - section 50C applicability - deemed depreciable asset - Held that:- The benefit of section 54E of the Act will be available to the assessee irrespective of the fact that the computation of capital gains is done either under sections 48 & 49 or under section 50 of the Act. The contention of the revenue that by amendment to section 50 of the Act the long term capital asset has been converted into to short term capital asset is also without any merit. Therefore, it cannot be said that section 50 of the Act converts long term capital asset into a short term capital asset. In the present case of the Assessee has not charged depreciation on the asset (shop) and the asset is held for more than 36 months, this asset to be considered as long term capital asset. Further even though the asset is shown under the block of asset in the Balance sheet it is not a business asset and the depreciation rate is shown as 0% which implies that no depreciation has been charged on the asset. Just by mentioning in block of asset that too with Zero depreciation rate should not change nature of the asset. Ultimately the facts remain that no benefit of Depreciation is claimed and the asset is held for more than 3 years then the same should be treated as Long term capital and the gain on sale of such asset should be treated as Long term capital gains. The intention of Section 50 of the Act is clear to tax the business asset for which benefit has been claimed by way of depreciation. Accordingly, allow the claim of the assessee.

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• 2017 (8) TMI 1059
  Allowing carry forward and set off of unabsorbed depreciation from any head of income (except salary head) - A.O. has concluded that sale of depreciable assets is taxable as short term capital gain as per provision of section 50 thus brought forward business loss cannot be set off against short term capital gain - Held that:- The assessee has claimed the set off of depreciation from short term capital gain. However, the A.O. has wrongly understood the claim of set off of unabsorbed depreciation by the appellant, as set off of brought forward business loss and therefore, disallowed the claim. In these facts, the findings of the A.O. that the appellant has claimed set off of brought forward business loss, is not correct. It is also clear that the assessee has set off the unabsorbed depreciation, against short term capital gain in terms of section 32(2) r.w.s. 72(2) of the Act. In these facts and circumstances, the findings of the A.O. regarding set off of brought forward business loss, was not correct, hence, the claim of the assessee of brought forward depreciation against short term capital gain, is correct and accordingly, findings of the A.O., are erroneous, therefore, disallowance was rightly deleted and after set off of brought forward depreciation total income will be at NIL, as claimed by the assessee in the return of income, which does not need any interference on my part, hence, uphold the same and reject the issue involved in the present Appeal raised by the Revenue. - Decided in favour of assessee.

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• 2017 (8) TMI 1058
  Determination of disallowance u/s 14A r w Rule 8D - Held that:- The decision of CIT Vs Shivam Motors judgement [2014 (5) TMI 592 - ALLAHABAD HIGH COURT] where it was held the “in the absence of any interest free income, there cannot be any disallowance as no corresponding expenditures were incurred to earn a particular tax free income” in above circumstances and in view of the above decisions that assessee has not claimed exempt income. So, no disallowance can be made. Therefore, the addition made by the AO was rightly deleted by the Ld. CIT(A) in view of the extant law on the subject, presently settled by judicial precedents from the courts. - Decided in favour of assessee. Addition u/s. 36(1)(iii) on account of interest expenses on business advance for purchase of equity shares out of borrowed funds - Held that:- As observed from the appellant's submission that the investment in M/s. Globus Industries & Services ltd was to increase its stake in that company which is in the line of manufacture and sale of edible oils, Vanaspati etc. There appears to be no finding of the fact that M/s. Globus Industries & Services ltd. and the appellant are sister concerns. Finally, even in the impugned order the business of the appellant includes trading in Vanaspati and edible oils. Accordingly, considering all these observations and arguments, the disallowance of interest u/s 36(1)(iii) made in the impugned order by working out the average rate of interest at 12% on the interest-free advance of ₹ 368.56 lacs (= ₹ 44,22,7201-) was rightly deleted by the Ld. CIT(A), which does not need any interference - Decided in favour of assessee.

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• 2017 (8) TMI 1057
  TDS u/s 194C OR u/s. 194J - payments to various T.V channels for broadcasting its serials during fixed time slots - tds liability on telecasting fees paid - Held that:- Impugned payments in the instant case, are nothing but the telecasting fees paid by the appellant company in pursuance of the Agreements and hence the same fall within the ambit of the provisions of Section 194C of the Act and Accordingly, the relevant grounds of appeal stand allowed in favour of assessee.

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• 2017 (8) TMI 1056
  TDS u/s 194C or 194J - payment made to the cable operators as Channel Subscription Fee - addition u/s 40(a)(ia) - Held that:- The Tribunal noted the earlier decision of the Tribunal in assessee’s own case for Assessment Years 2008-09 to 2011-12 [2014 (12) TMI 716 - ITAT MUMBAI] held that such payments were liable for deduction of tax at source u/s 194C of the Act and not u/s 194J of the Act, as canvassed by the Revenue. The aforesaid precedents continue to hold the field as the same have not been altered by any higher authority and, therefore, in this view of the matter, it has to be held that the Assessing Officer was wrong in concluding that there was a default on the part of the assessee in deducting tax at source on the impugned payment u/s 194C of the Act so as to trigger Sec. 40(a)(ia) of the Act. A mere shortfall in deduction of tax at source would not justify invoking of Sec. 40(a)(ia) of the Act in order to disallow the expenditure. The CIT(A) correctly accepted the aforesaid plea and accordingly directed the Assessing Officer to delete the disallowance made u/s 40(a)(ia) of the Act. - Decided in favour of assessee.

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• 2017 (8) TMI 1055
  Assessment u/s 153A - unexplained cash credit u/s 68 - Held that:- There are incriminating material during search in the form of unreconciled balance sheets, entries remaining unexplained in the Axis bank ‘s bank statement coupled with the statement of the director of the company offering disclosure which is further being confirmed during the course of assessment proceedings. Therefore we are not in agreement with the assessee that no incriminating material was found by revenue during the course of search. Therefore in this case the statement of the director of the company was further corroborated by wrong return to the income tax department and Ministry of Corporate Affairs and unexplained entries in the bank account for which assessee’s director could not explain coupled with the report of the investigation wing with respect to investor companies. In view of the above facts we are of the view that once the assessee itself has accepted that there are unaccounted income which covers any specified entries which may open up Pandora’s box and then it cannot be contended that no incriminating material was found during the course of search. Further the order u/s 153A has also been correctly made by ld AO in view of finding of CIT (A) that search was conducted on premises of the assessee. - Decided against assessee. Unexplained cash credit out of the above 13 parties which are located at Kolkata that enquiry letter were issued u/s 133 (6) of the Act to six person only and all of them on 11.02.2013 and 18.03.2013 submitted the information about their annual returns filed with the tax authorities, their bank statement and their annual accounts. The ld first appellate authority also noted that this information received by the AO remained uncontroverted as well as note investigated. The ld CIT(A) further correctly also noted that the flow of funds from the investor companies to the assessee. There is no report available pertaining to the other assessee on whom the Assessing Officer relied very heavily.- Decided against revenue. Unsecured loan from Index Securities without bringing an adverse material on record, the Assessing Officer's conclusion that the appellant did not discharge its onus is not borne out of the material on record. As per the provisions of section 68 of the IT Act, 1961, the appellant discharged its onus on the identity of the lender, genuineness of the transaction as it was through banking channels and not disputed channel and submitted ITR to show the creditworthiness. Therefore, in the absence of any such finding by the Assessing Officer to say that the loan amount taken from and given back to M/s Index Securities & Research Pvt. Ltd., represented unaccounted money of the appellant, is unjustified, without bringing any adverse material on record. Therefore, such addition cannot be sustained

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• Customs

• 2017 (8) TMI 1032
  Redemption fine - penalty - Confiscation of export goods - misdeclaration - whether the goods exported are Finished Leathers? - Held that: - Section 113 of the Customs Act, 1962 provides for confiscation of goods that are entered for exportation which do not correspond in any material particular with any information furnished by the exporter. Since the finding has been entered that the goods declared as Finished Leathers do not conform to the standards of Finished Leathers , the same are liable for confiscation - however, imposition of both the Redemption Fine and penalty are on the higher side and both are required to be reduced to ₹ 1,00,000/- and ₹ 50,000/- respectively - appeal allowed - decided partly in favor of appellant.

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• 2017 (8) TMI 1031
  Penalty u/s 117 of CA on CHA - misdeclaration of description of goods - Held that: - During the relevant period (prior to 10.05.2008) the maximum penalty that can be imposed under that Section is ₹ 10,000/- and therefore the penalty imposed in our view is highly excessive. The appellants have issued a letter requesting for permission to move the container specifically to Raja CFS. The letter head is that of the appellant. The strong contention of the Ld. Counsel for the appellant is that the appellant had no contact with the importer and that the appellant had not filed the Bill of Entry. It is seen that as per facility intimation No. 13/2006 dated 23.08.2006 an application along with letter dated 18.05.2007 was filed for movement of the container to Raja CFS. The appellant being CHA ought to have verified the genuineness before issuing such letter. From the submissions made as well as perusal of records, we do not find grounds for setting aside the penalty in toto. We therefore hold that imposing penalty of ₹ 10,000/- would meet the ends of justice. Appeal allowed - decided partly in favor of appellant.

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• 2017 (8) TMI 1030
  Principles of Constructive resjudicata - Goods not unloaded - The main line operator has instructed the petitioner by telex dated 22.02.1994 to reship the containers back to Singapore as per the instructions of the shippers at Seoul, Korea - demand of duty with penalty - Held that: - the present writ petition is liable to be dismissed on the sole ground of constructive resjudicata. The petitioner had filed the earlier writ petition to set aside the order passed by the Original Authority, the Appellate Authority and the Revisional Authority, which was dismissed by order dated 07.07.2004 - There is a legal presumption that when the petitioner challenges the validity of an order before the Court of law or before the statutory Appellate Authority, it is presumed that all contentions have been canvassed and the Court or the Authority having rejected the challenge a second round of challenge to the same processings is not maintainable. There cannot be a piecemeal challenge especially when impugned communication is not an order, but it is only an intimation to the petitioner to pay the shortlanding charges based on an order which has attained finality - petition dismissed - decided against petitioner.

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• 2017 (8) TMI 1029
  Condonation of delay of 470 days in filing appeal - Held that: - the Court is of the opinion that in the peculiar circumstances of the case, the larger interest of justice would be subserved if the appellants’ contentions are accepted - the delay in the filing of appeal to the CESTAT is condoned - appeal allowed.

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• 2017 (8) TMI 1028
  Transportation of consignments to various places - freight charges - Whether the respondent/plaintiff is not entitled to recover a sum of ₹ 3,09,689/- paid towards the Customs duty at Nepal Border? - Held that: - Though the Customs duty will be payable at 5% concession rate, it is the duty of transporter to contact the customer at Kathumandu. Except the above no obligation whatsoever imposed on Transport Corporation of India. It is the specific case of the plaintiff that since all the relevant documents were not given by the appellant. The lorries were detained at check post. The transporter, in order to release the lorries detained for more than 28 days, has no other option except to pay the Customs duty from his own pocket. It is also informed to the defendant that the transporter cannot endlessly wait for the customer to pay the Customs duty. It is the duty of the consignor also. Therefore, merely because some conditions was imposed on the plaintiff in the agreement to contact the customer, it cannot be stated that the amount legally paid by the plaintiff cannot be recovered. D.W.1, in his evidence also admitted that lorries were detained at Nepal and that they have not taken any steps to release the lorries. In the absence of specific pleading with regard to the amount liable to be adjusted, merely on the basis of some admission in one of the correspondence in Ex.A11 that their engineers also issued certificate, it cannot stated that specific amount has been quantified. In the absence of any specific pleadings in that regard, and also failure to produce any evidence to substantiate the nature of the damages allegedly suffered, the amount with regard to the damages in respect of consignment during transit period, cannot be adjusted, merely on the basis of some surmise. Appeal dismissed - decided against appellant.

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• 2017 (8) TMI 1027
  Permission to leave India - Smuggling - Gold - Baggage Rules - Held that: - for the purpose of employment, the applicant should be permitted to leave India. He is likely to lose his job - the condition imposed by the Court of learned Additional Chief Metropolitan Magistrate, Ahmedabad, vide order dated 8-8-2015, directing the applicant not to leave the country is hereby suspended for a period of six months. The Customs Authorities are directed to hand over the passport to the applicant at the earliest - decided in favor of applicant.

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• 2017 (8) TMI 1026
  Interpretation of Statute - Whether in the circumstances of the case the CESTAT’s interpretation of the orders appealed against is correct having regard to their expressed terms? - Held that: - The error which apparently crept in inadvertently in two orders-in-appeal (of the Commissioner) was that even after recording express findings on substantial issue, a mere setting aside of the penalty was recorded. The CESTAT mindlessly endorsed those opinions in the assessee’s appeal. The CESTAT was constituted precisely for the purposes of lightening the burden of the higher judiciary which existed prior to its composition. It cannot view itself mechanically as a body which has an optional jurisdiction or one which chooses not to go into the substantial issue. Appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 1025
  Jurisdiction - power of DRI to arrest a person - case of petitioner is that no formal FIR was lodged in this case and without lodging of FIR, the DRI Officers were not competent to either arrest the petitioner or record the statement under Section 67 of the Act and seize the contraband or proceed in any manner - It is further contended that the powers of an investigating officer is similar to that of a police officer and the NDPS Act specifically makes a provision that the provisions of the Code of Criminal Procedure would apply, meaning thereby that a formal FIR is required to be lodged before proceedings in the case. Held that: - The NDPS Act deals with the two situations, one when the offence is investigated by a police officer and the other when offence is investigated by an officer authorized by the Central Government or State Government in accordance with Section 53 of the Act. The Act further provides that if the matter is investigated by a police officer, the Special Court would take cognizance on submission of a police report but if the matter is investigated by an officer authorized by the Central or State Government, the Special Court would take cognizance upon complaint being filed by such officer. There is no provision whatsoever under the Act directing the officer authorized by the Central or State Government to lodge an FIR, meaning thereby that the officer authorized by the Central or State Government may investigate a matter and after investigation if some case is made out, they can file a complaint straightway before the Special Court. If such complaint discloses commission of offence, the Special Court under Section 36A(1)(d) would take cognizance of the offence. Reliance placed in the case of Kishin S. Loungani v. Union of India, [2017 (1) TMI 1066 - KERALA HIGH COURT], wherein the Kerala High Court was dealing with a case under the Customs Act. Section 104 of the Customs Act gives power of arrest to an officer of Customs. The Court held that registration of FIR is not necessary before arrest. Similarly Section 42 of the NDPS Act empowers the officers authorized by the Central or State Government to enter, search, seize and arrest without warrant or authorization - In the present case in hand also, the Act empowers the officers authorized by the Central or State Government to search, seize and arrest a person and there is no mandatory requirement that a FIR is required to be lodged before proceeding to search, seize or arrest. That being so, the objection that the DRI Officers could not investigate and arrest without lodging of the FIR do not have any force. Petition dismissed - decided against petitioner.

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• 2017 (8) TMI 1024
  Project import - denial of the benefit of N/N. 6/2002-CE dt.1.3.2002 - import of steam turbine gearbox and spares - the decision in the case of M/s. Purti Sakhar Karkhana Ltd. Versus Commissioner of Customs (Import) , Mumbai-I [2016 (11) TMI 983 - CESTAT MUMBAI] contested, where it was held that we are not convinced with the appellants plea that the turbine is eligible for nil rate of duty under Sl. No. 251 of Notification No. 6/2000, read with Sl. No. 16 of list of the said notification or under N/N. 6/2002, dated 1-3-2002 read with Sl. No. 16 of List 9 - Held that: - the decision in the above case upheld - appeal dismissed.

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• 2017 (8) TMI 1023
  To what extent the Kolkata Port Trust (in short ‘KPT’) is entitled to recover demurrage charges from the respondent no. 1/writ petitioner in respect of containers in which poppy seed was imported by the respondent company from Karachi to Kolkata on route to Nepal - the decision in the case of The Board of Trustees, For the Port of Calcutta & Ors. Versus India Trident Maritime (Pvt.) Ltd. & Ors. [2016 (7) TMI 277 - CALCUTTA HIGH COURT] contested, where it was held that Any debit entry made by KPT in ITM’s Marine A/c held with it on account of rent/demurrage charges for the period subsequent to endorsement of bill of lading and/or issuance of delivery order by ITM in favour of the consignee, is not sustainable in law and must be reversed - Held that: - the decision in the above case upheld - appeal dismissed - decided against appellant.

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• Corporate Laws

• 2017 (8) TMI 1019
  Dues of the revenue authorities are outstanding - Taluka Development Authority directed to submit outstanding dues in two parts, viz., preliquidation dues and post liquidation dues in relation to the aforesaid property of the Company in liquidation - Official Liquidator took possession of the assets and property of the Company in liquidation - Held that:- Having heard the learned counsel appearing for the parties and on perusal of the record of this report, at the outset, it deserves to be noted that as far as prayers 10(a) and (c) are concerned, the same cannot be granted in jurisdiction of this Court. However as far as prayers 10(b) and (d) are concerned, the Official Liquidator is hereby directed to consider the claim filed by the respondent no.1 DGFT in accordance with law and also get the same verified and is also permitted to engage Govt. approved valuer for valuation of the property in question. As far as prayers prayed in paras 10(e) and (f) are concerned, the same cannot be dealt with in composite manner as is sought to be prayed for by the Official Liquidator. The Official Liquidator shall file appropriate report even for fresh valuation.

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• Insolvency & Bankruptcy

• 2017 (8) TMI 1018
  Petition under Insolvency and Bankruptcy Code, 2016 - Held that:- The application preferred by Nikhil Mehta & Sons is to be admitted, and Resolution Process will be initiated, the question of initiation of further proceeding under any of the provisions of I&B Code (Sections 7, 9 or 10) does not arise. The appellants herein, whether they are 'Financial Creditor' or 'Operational Creditor' or 'Secured Creditor' or 'Unsecured Creditor', as claim to be creditors are now entitled to file their respective claims before the 'Interim Resolution Professional', as may be appointed and the advertisement as may be published in the newspaper calling of such application(s) with regard to resolution of 'Corporate Debtor'- AMR Infrastructure Ltd. In such case, their claim should be considered by the Interim Resolution Professional (IRP) and the Committee of Creditors, in accordance with the provisions of the 'I&B Code'. Therefore, no further order is required to be passed in these appeals. In case the application preferred by 'Nikhil Mehta and sons' under Section 7 of I&B Code is not found to be complete or if they fail to complete the defect, if any, as per proviso to Section 7 of I&B Code and in case the said application of 'Nikhil Mehta and Sons' is dismissed on such ground, in such case, as the appellants cannot prefer any application before the Interim Resolution Professional, we give liberty to the appellants to file 'interlocutory applications' in these present appeals for recall of this order for their decision on merit.

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• 2017 (8) TMI 1017
  Petition under Insolvency & Bankruptcy Code, 2016 - Whether the appellants who reached with agreements/Memorandum of Understandings with respondent for the purchase of three units being a residential flat, shop and office space in the projects developed, promoted and marketed by the respondent come within the meaning of 'Financial Creditor' as defined under the provisions of sub-section (5) of Section 7 of the I & B code - Whether an application for triggering insolvency process under Section 7 of I & B code' is maintainable where winding up petitions have been initiated and pending before Hon'ble High Court against the 'Corporate Debtor'? Held that:- The amount disbursed by the appellants was “against the consideration of the time value of the money” and “the Respondent-Corporate Debtor raised the amount by way of sale - purchase agreement, having a commercial effect of borrowing.” This is also clear from annual returns filed by Respondent and not disputed by the Respondent-Corporate Debtor in their annual returns, wherein the amount so raised/borrowed has been shown as 'commitment charges' under the head “Financial cost”. The financial cost includes “Interest of loans” and other charges. Therefore, the 'commitment charge', which include interest on loan, shown against the head “Financial cost” having accepted by the Corporate Debtor in their annual return, we hold that the appellants have successfully proved that they are 'financial Creditor' within the meaning of Section 5(7) of the I & B Code'. Learned Adjudicating Authority while rightly interpreted the provisions of law to understand the meaning of expression 'financial creditor' at paragraph 12 of the impugned judgment as quoted above, but failed to appreciate the nature of transactions in the present case and wrongly came to a conclusion “that it is a pure and simple agreement of sale and purchase of a piece of property and has not acquired the status of a financial debt as the transaction does not have consideration for the time value of money”. Thus we set aside the impugned judgment passed by the learned Adjudicating Authority and remit the matter to Adjudicating Authority to admit the application preferred by appellants and pass appropriate order, if the application under Section 7 of the 'I & B Code' is otherwise complete. In case it is found to be not complete, the appellants should be given seven days' time to complete the application as per proviso to Section 7 of the 'I & B Code'.

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• FEMA

• 2017 (8) TMI 1016
  Provision of Section 78 of the Foreign Exchange Regulation Act, 1973 and Section 44 of the Act applicability - Held that:- The petitioner who had come to India from foreign country, wanted that their NRI Account/FCNR Account may be continued in the same status. It was a kind of privilege claimed. Such status could be accorded only within the permissible parameters and in accordance with law by the Reserve Bank of India. It is difficult to conceive that the petitioners' claim to maintain status of FCNR Account could be asserted as enforceable right. It was only a kind of benefit offered to such class of persons. The petitioners cannot enjoy such benefit when they did not comply with the conditions. For all the aforesaid reasons and grounds, the petition is bereft of merits. No relief is liable to be granted to the petitioner. Therefore, the petition is dismissed with cost of ₹ 20,000/- which shall be deposited by the petitioner with Gujarat High Court Legal Aid Committee on or before 31st August, 2017 and the receipt shall be produced with the Registry. Rule stands discharged.

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• PMLA

• 2017 (8) TMI 1012
  Eligibility of hearing officer as a judicial Member - offence under PMLA - Held that:- hearing officer was not a judicial Member - Held that:- The hearing was fixed on 08.06.2015, Monday, despite the 6th June being Saturday. The notice was issued by E-mail. At the request of the appellant, the matter was adjourned to 11th June, 2015. On 11th June, 2015 the application was filed for re-call of order dated 8th June, 2015 and also to file the reply within one week, however no time was granted. The application was dismissed in limine and on the other hand the matter were reserved by the Adjudicating Authority. Left with no option, the appellants aggrieved by the said order dated 11th June, 2015 filed the writ petition before Hon’ble High Court of Karnataka on 16th June, 2015 for recalling of order who passed interim order directed not to pronounce and sign the order if the same has not been pronounced. However, the Adjudicating Authority passed the impugned on 15th June, 2015. Admittedly the officer who have passed the impugned order is not the Judicial officer. We are of the view that the proceedings conducted in violation of principles of natural justice and contrary to the PMLA and Regulation Act, 2013. The appellants were only asking for one week time to file the reply, however the said request was refused. We are of view that once it is held by the Hon’ble Court that the hearing officer was not a judicial Member and was not competent to decide the matter of a party who was one of the defendant in the common OC, the said final judgment has to be applied in favour of other defendants also who are parties to the same OC. For the reasons stated above, all the appeals are allowed. The impugned order is set-aside on the ground of parity only and however not on merit

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• 2017 (8) TMI 1011
  Provisional attachment of property under PMLA - eligible connections - Held that:- The appellant did not have any nexus with the accused Saradha Group of Companies, that they did not know about the criminality attached to the subject payments received in terms of the co-sponsorship agreement between the parties and that the appellant is a bona fide receiver of the payments in good faith and for valuable consideration provided. It is accordingly held that the subject property in the hands of the appellant i.e amount of ₹ 32,11,797/- lying in the appellants Bank Account as on 25.09.2014, which was attached in this case and confirmed under the impugned order is not the proceeds of crime and is therefore, not liable to provisions of attachment and confirmation under PMLA. Consequently, the appeal is allowed and provisional attachment order dated 29.10.2014 to the extent of provisional attachment of subject property and the impugned order dated 03.03.2015 to the extent of confirming the attachment of the said amount are set aside with consequential relief to the appellant.

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• Service Tax

• 2017 (8) TMI 1054
  Classification of services - the appellants had entered into agreement with M/s. General Motors and as per the agreement, they have to pay royalty @ 3% on local sales and 7.5% on export sales of the equipment/parts manufactured and sold - The department is of the view that such payment is royalty charges paid for technical know-how and would fall under IPR services - reverse charge mechanism - whether the service is to be classified under Intellectual Property Right Services or otherwise? - Held that: - reliance placed in the case of M/s. Saint-Gobain Gyproc India Limited Versus CCE, Rohtak [2014 (4) TMI 955 - CESTAT NEW DELHI], where on similar issue it was held that None of these services can be called intellectual property service - the services would not fall under IPR services. The impugned order is modified to the extent of only setting aside the classification of the service without disturbing the order passed setting aside the demand - appeal allowed - decided partly in favor of appellant.

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• 2017 (8) TMI 1053
  100% EOU - Refund claim - export of services - Renting of Immovable Property - Management Consultancy - Manpower supply - Information Technology (Software) service - Commercial Training and Coaching - Technical Inspection & Certification - Convention services - Held that: - there is no dispute about the fact that service tax stands paid by the appellant in respect of services availed by them from their Director, in her individual capacity, under the category of Renting of Immovable Property service. In such a scenario, the stand of the Revenue that they were under no legal obligation to discharge service tax cannot be appreciated. Refund on Information Technology services - denied on the ground that the same were used for preparation of conveyance allowance chart of the employees and not in connection with the output service - Held that: - As per the appellant they updated and installed new software only for the efficient working and to improve the administrative efficiency. In that process the upgradation of pay roll of the employees is an effort for the better provision of output service. The Board's Circular dated 19.01.2010 was observed that whatever service improves the quality of output service, the same has to be held as availed in connection with the output service - there is no justifiable reason to deny credit. Refund on delegate fees paid by the appellant to various service providers for training of their employees - Held that: - The Tribunal in their decision vide Final Order no. 41497 to 41525/16 dated 07.09.2016, for the same appellant has held the said service to be cenvatable input service - credit allowed - Similarly an amount of ₹ 1,598/- which stands made as delegate fee/registration fee to various organizations for receiving, training and improving the skills of the employees would be eligible for the purpose of Cenvat credit and consequent refund. Refund claim - Management Consultancy Services - Manpower Recruitment Services - Technical Inspection and Certification Services - denial on the ground that the same cannot be held to be cenvatable input services - Held that: - all the said services are connected with the business of the appellant and have to be held as having been used in relation to their business - refund allowed. Appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 1052
  Works Contract Service - benefit of N/N. 32/2007-ST dated 22.05.2007 - the Ld. Commissioner instead of scrutinizing all the invoices extended the benefit only on the basis of examination of sample invoices - Held that: - Even though the Revenue has submitted that the said finding of the ld. Commissioner(Appeals) is erroneous since all the invoices had not been examined, before arriving at the conclusion, but, not a single invoice had been placed on record contrary to the sample invoices - appeal dismissed - decided against Revenue.

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• 2017 (8) TMI 1051
  Penalty u/s 76 and 78 - entire amount of service tax alongwith interest had been paid prior to issuance of the SCN - Held that: - penalty both under Section 76 and 78 of the Finance Act, 1994 cannot be imposed simultaneously, in view of the judgement of Hon’ble Gujarat High Court in Raval Trading Company Vs. Commissioner of Service Tax [2016 (2) TMI 172 - GUJARAT HIGH COURT] - Further, the appellant are entitled to discharge 25% of the penalty imposed under Section 78 of the Finance Act, 1994 subject to fulfilment of the conditions laid down thereunder - the impugned order is modified to the extent of setting aside imposition of penalty under section 76 and allowing the benefit of discharging 25% of the penalty imposed under Section 78 of the Finance Act, 1994 - appeal allowed - decided partly in favor of appellant.

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• 2017 (8) TMI 1050
  Export of services - promotion and marketing of spares and accessories of Yamazaki Mazak Trading Corporation, Japan(YMTCJ) and they have received commissioner from YMTCJ - appellants are involved in various activities in India on behalf of the foreign principals for a consideration - extended period of limitation - Held that: - it is apparent in terms of circular dated 24-2-2009, the Indian agent who undertake marketing in India of goods of foreign seller and received the commission for the service in convertible foreign exchange would qualify for the benefit of export of service. The period covered in the instant case is 1-1-2009 to 26-2-2010 - It is seen that the impugned order relies on the circular dated 13-5-2011 to interpret phrase "use outside India” to ascertain if the said services qualifies as export service. The circular dated 24-2-2009 simply prescribed that the said service qualifies as exports if recipient is located outside India. In this circumstances appellant's claimed that they had bonafide belief on the strength of these circular dated 24-2-2009 cannot be dislodged. Circular date 24-2-2009 clearly held that in the case of Business auxiliary services provided by Indian Agent who undertakes marketing in India of goods of foreign seller and received the commission for service in convertible foreign exchange and where recipient is located out side India the same would qualify as export of service. In view of the above extended period of limitation cannot be invoked in the instant case. Reliance placed in the case of Microsoft Corporation (India) Pvt. Ltd [2014 (10) TMI 200 - CESTAT NEW DELHI (LB)], where it was held that The service being provided may or may not result in any sales of the product in Indian soil. The transactions and activities between the appellant and Singapore principal company are the disputed activities. As such, the services are being provided by the appellant to Singapore Recipient company and to be used by them at Singapore, may be for the purpose of the sale of their product in India, have to be held as export of services. The services provided by the appellant qualify as export of service - appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 1049
  Refund claim - input services - Rent-a-Cab Service - whether the Rent-a-Cab service at the relevant time is excluded from the definition of input service or otherwise? - Held that: - As such the interpretation of the lower. authorities that motor vehicle are not capital goods for the services recipient cannot be appreciated in as much as motor vehicles are admittedly capital goods in terms of the Rule 2(A) of Cenvat Credit Rules - appellant in the facts of the present case is entitle for the Cenvat credit in respect of Rent-a-Cab services and also for consequential refund - appeal dismissed - decided against Revenue.

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• Central Excise

• 2017 (8) TMI 1048
  Deemed manufacture - Valuation - whether the petitioner, who had labelled the retail packs of biscuits for the purpose of complying the statutory obligation under the Standards of Weights and Measures Act, 1976, and under the Prevention of Food Adulteration Act, is said to have undertaken the process of manufacture and if so, whether the petitioner should have registered themselves with the respondent department and whether they are liable to pay the Central Excise Duty? - Held that: - similar issue decided in the case of GERMAN REMEDIES LTD. Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI-IV [2003 (5) TMI 180 - CEGAT, NEW DELHI], where it was held that affixing the sticker indicating the name of the importer and MRP as per the requirement under the Standard of Weights and Measures Act does not amount to labeling/re-labeling and does not amount manufacture in terms of Note 4 of Chapter 33 of the Tariff. Further, it was held that pasting of sticker on the imported product to indicate the name of the importer and MRP which is the requirement under the Standards of Weights and Measures Act would not attract the Chapter Note - decided in favor of petitioner. Whether the respondent is justified in invoking the extended period of limitation? - Section 11A of the Act - Held that: - there is no specific allegation of fraud made out by the second respondent at the time of issuance of the show cause notice. The allegation is that non-intimation of activities to the department, which according to the respondent, amounts to suppression. However, to invoke the extended period of limitation, something more is required to be on record and the statute mandates the same which has been explained in the aforementioned decisions. Thus, it is a clear case where the extended period of limitation could not have been invoked under the facts and circumstances of the case - decided in favor of petitioner. Petition allowed - decided in favor of petitioner.

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• 2017 (8) TMI 1047
  SSI exemption - Use of brand name of others - whether clearances of ingots with the marking R K I will attract the mischief of brand name of another person and in consequence rendering said clearances ineligible for the benefit of SSI N/N. 8/2001-CE dt. 1.3.2001? - Held that: - A combined reading of para 3 (b) and para-4 of the notification brings out that clearances bearing the brand name or trade name, whether registered or not, of another person, are ineligible for the grant of exemption under the notification - In the case before us, no doubt, appellant was manufacturing ingots from the moulds obtained from RKMI whose proprietrix is wife of the proprietor of the appellant. Interestingly, however, as per facts on record, RKMI themselves were not availing any SSI exemption. From the records, we are not able to locate any evidences unearthed by the department to show that although the ingots were made by the appellant, the invoices were issued in the name of RKMI or for that matter, ingots were sold only to the customers of the latter and on their instructions. There is no allegation that the appellant was a dummy unit or a unit set up only to sell goods of RKMI under their trade mark. Nor have the appellants sold the ingots as representing the production or sales of RKMI. There is also no evidence by way of statements of customers or any other corroborative evidence to indicate that there is any connection perceived in the trade, or, amongst the buyers, between ingots sold by the appellant, to RKMI. The use of the moulds by appellant bearing the mark R K I is only on account of the fact that these moulds were obtained from RKMI. This being so, the impugned clearances cannot be treated as clearances bearing a brand name / trade name for the purpose of indicating a connection in the course of trade between the said goods and RKMI - appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 1046
  N/N. 21/2002-Cus. dt. 1.3.2002 - goods imported not used for intended purpose - Appellant had imported 2000 MTs Hot Rolled Stainless Coils (HRSS coils) vide Bills of Entry No.411286 dt. 19.7.2002 and 388555 dt.08.04.2002 availing full exemption from Customs duties under Notification No.21/2002-Cus. dt. 1.3.2002 Sl.No.196. It appeared that appellants have used only a quantity of 457.113 MTs HRSS coils for the intended purpose namely for manufacture of coin blanks for supply to Indian Government Mint - Held that: - There is no dispute about the quantity of 457.113 MTs of HRSS coils which have been converted and supplied as coin blanks to the Mint - In respect of 1178.570 MTs imported HRSS coils, they have been converted into CRSS strips and supplied to the Mint. Sufficient proof has also been adduced, which has not been disputed, to confirm that CRSS strips thereupon were used in the manufacture of coin blanks by the Govt of India Mint. The only controversy in respect of this quantity is whether the words for use in the manufacture of coin blanks requires the appellant to manufacture and supply only coin blanks to the Govt of India Mint. The scope of phrase "for use" was gone into by the Hon'ble Supreme Court in the case of State of Haryana Vs Dalmia Dadri Cement Ltd. [1987 (11) TMI 94 - SUPREME COURT OF INDIA]. The issue therein related to a dispute concerning cement supplied to Electricity Board on the basis of certificates issued by the latter that such cement was required for use in the generation or distribution of electrical energy which would attract exemption granted under Punjab General Sales Tax. The Hon'ble Apex Court held that the expression "for use" must mean "intended for use". In respect of 1178.570 MTs imported HRSS coils which have been converted to Cold Rolled Stainless (CRSS) strips by the appellant and entire quantity thereof supplied to the Government Mint, who in turn, have certified and confirmed that they have been used in the manufacture of coin blanks, the imported goods have satisfied the post-importation condition of Notification No.21/2002-Cus., The imported goods have been converted into CRSS coils which are intended for use for manufacture of coin blanks by the Government of India Mint, the factum of which is not disputed. In the event, in respect of this quantity of 1178.570 MTs of HRSS coils, it will have to be considered that they have satisfied the condition "for use in manufacture of coin blanks" mandated in the said notification. Hence there cannot be any demand of duties of customs on this quantity. That part of the impugned order demanding duty on this quantity will therefore require to be set aside, which we hereby do. In respect of the quantity of 364.317 MTs, appellants have themselves conceded that post-importation condition of the Notification No.21/2002 has not been complied with and have paid up the duty forgone thereof. Hence demand of duties of customs on the said quantity of 364.317 MTs HRSS coils, along with interest liability thereon will sustain. In respect of the remaining quantity of 457.113 MTs, there is no allegation or dispute about their not having been used in the manufacture and supply of coin blanks supplied to the Mint. Hence no differential duty liability against the said quantity can be demanded. Appeal allowed - decided partly in favor of appellant.

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• 2017 (8) TMI 1045
  Exemption under N/N. 6/2002-CE dt. 1.3.2002 (Sl.No.196A) and its successor N/N. 6/2006-CE dt. 1.3.2006 - exemption from payment of duty on machinery and their components/parts cleared for setting up water treatment plant and pipes - case of Revenue is that certificate issued by the District Collector cannot be accepted as the basis for compliance of the condition in the notification - Held that: - When the certificate has been issued by the District Collector as well as TWAD Board authorities, we have to say that department cannot deny the exemption by merely relied upon a letter issued by Executive Engineer, Special Division, Cuddalore - In the case of Jain Irrigation Systems Ltd. Vs CCE & Customs, Nashik [2017 (3) TMI 990 - CESTAT MUMBAI], the Tribunal in similar set of circumstances had observed that it is not open for the Central Excise authority to overrule the certificate issued by a competent a public authority - appellant are eligible for the exemption - appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 1044
  Excisability/Marketability - Intermediate goods - demand has been confirmed on sugar solution/sugar syrup manufactured at intermediate stage during the manufacture of Pro-biotic Milk - N/N. 67/95-CE dated 16.03.1995 - whether the appellant is required to pay duty on sugar syrup manufactured as an intermediate product which has been used in manufacturing Pro-biotic Milk and consumed captively? - Circular No. 9/89 dated 25.07.1989 - Held that: - It is admitted fact that as per the test reports, the total soluble solid content in the sugar syrup is 52.09% - As per Section 26 of the Act, the appellant is required to ensure that the articles of food satisfy the requirements of this Act and the rules and regulations made thereunder at all stages of production, processing, import, distribution and sale within the businesses under his control. No food business operator shall himself or by any person on his behalf manufacture, store, sell or distribute any article of food which is unsafe; or in contravention of any other provision of this Act or of any rule or regulation made thereunder. Revenue has failed to prove that sugar solution/sugar syrup in question is marketable and in the absence the said element, the sugar syrup/sugar solution is not excisable. Consequently, no duty can be demanded from the appellant. Appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 1043
  CENVAT credit - various input services - denial on the ground of nexus - The contention of Revenue is that the appellants could not established that the said services were used in or in relation to the manufacture of final product and therefore, denied Cenvat credit of service tax paid on the said services - Held that: - Hon’ble High Court of Bombay in the case of Commissioner of Central Excise Nagpur vs. Ultratech Cement Ltd. [2010 (10) TMI 13 - BOMBAY HIGH COURT], has held that very clearly held that all services used in relation to the business of manufacturing of final products are covered under the definition of input services - the services are eligible for CENVAT credit - appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 1042
  Valuation - clearance of ‘polyester staple fibre’ to some customers who were in possession of import licences for inputs that had been invalidated as a condition for such procurement - Held that: - It would appear that the buyers of the respondent in the impugned transactions had been issued with licences for import of raw materials for use in the manufacture of export products, and instead of procuring from abroad, opted to source them from respondent. Needless to say, the licence, being rendered superfluous, was liable to be invalidated and the privilege of duty-free import by the licence holder no longer available. There is no evidence to arrive at the conclusion that respondent was a beneficiary in consequence of invalidation or was eligible for any incentives prescribed in the Foreign Trade Policy. Appeal dismissed - decided against appellant.

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• 2017 (8) TMI 1041
  Maintainability of appeal - refund of duty against export of goods made under bond - Section 35B(1) proviso to clause (b) - Held that: - the present case is for rebate of duty paid on the export clearance, as provided under Section 35B(1)(b) of Central Excise Act, 1944, the case involving rebate of duty in respect of export clearance are excluded - the appeal in such case is not maintainable before this Tribunal whereas the remedy of revision application before the Joint Secretary, Revisionary Authority to Government of India is available to the assessee - appeal dismissed being not maintainable.

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• 2017 (8) TMI 1040
  Exemption under N/N. 5/98-C.E., dated 21-6-1998 - The department’s case is that appellant after aggregate clearances of ₹ 85 lakhs the appellant did not avail the consessional rate of duty @ 5%, whereas they have paid duty at the applicable rate should and consequently availed Modvat credit, therefore they are not entitled for exemption - Held that: - In the notification there is no condition that for availing exemption notification the assessee cannot opt out in the middle of the financial year. As per condition of the notification for availing exemption Modvat credit should not be availed - In the present case since respondent has availed Modvat credit, they have cleared the goods at normal rate of duty therefore exemption availed upto the aggregate value of ₹ 85 lakhs cannot be disputed for the reason that during the clearance up to the said limit appellant has not availed Modvat credit, accordingly complied with the condition of N/N. 5/98-C.E - benefit allowed - appeal dismissed - decided against Revenue.

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• 2017 (8) TMI 1039
  Manufacture - cutting and slitting of jumbo rolls of aluminium foil into smaller size - Held that: - reliance in the case of SR Tissues Pvt. Ltd. [2005 (8) TMI 111 - SUPREME COURT OF INDIA] wherein it was held that the process of slitting/cutting of jumbo roll of plain tissue paper/aluminium foil into smaller size will not amount to "manufacture" on first principles as well as under Section 2(f) of the said Act - appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 1038
  100% EOU - Refund claim - N/N. 24/2003-C.E., dated 31-3-2003 - appellant erroneously paid duty on export items - Held that: - The said exemption which is unconditional has to be followed by the EOU. Reference can be made to the decision of Hon’ble Rajasthan High Court in Vanasthali Textiles Industries Ltd. v. Union of India [2014 (9) TMI 224 - RAJASTHAN HIGH COURT]. Accordingly, the view of the Original Authority that the appellants are not eligible for rebate claim in terms of Rule 18 of Central Excise Rules, 2002 is correct. Regarding clearance of export goods under ARE-1 on payment of duty and thereafter filing of rebate claims the impugned order did not elaborate as to how such a thing was not examined and correct action taken by the Jurisdictional officers in control of EOU. In fact, the impugned order states the assessee did a mistake and deposited the amount voluntarily without ever mentioning how such rebate was examined and sanctioned by the Jurisdictional officer. Regarding the availment of Cenvat credit of ₹ 76,72,000/-, we note that the whole issue cropped up only because of irregularity of the procedure followed by the appellant in exporting the goods on payment of duty in terms under various ARE-1s. Surprisingly, the Revenue become party to such action as the ARE-1s and the claims were examined and considered by the Jurisdictional officers. Had the appellant being given a proper instruction on the non-admissibility of export under claim for rebate, the question of paying duty on export goods would not have arisen? Admittedly, the credit now suo motu availed by the appellant is the amount they have already discharged on the export consignments. The action of the appellant in availing re-credit of duty paid on export goods is without support of law. The fact remains that the appellant should not have paid any duty on such exports. The Department also should not have processed the ARE-1 applications and thereafter the rebate claims. The whole blame was sought to be placed on the erroneous action of the appellant. Admittedly, if the credits on the inputs were rightly taken by the appellant, the same cannot be taken out of their books simply on the ground that the amount was debited by them on export of goods under claim for rebate. The credit on inputs available in the books of the appellant is rightly eligible for refund under Rule 5 subject to verification of quantification. It is not correct on the part of the lower authorities to deny re-credit of improperly debited credit on export of goods and at the same time reject the appellant’s claim under Rule 5 on the ground that there is no balance in the credit account. This actually puts the appellant in no win situation with reference to legitimately available credit on inputs and their further right to claim benefit out of the same. The matter has to go back to the Original Authority to examine all the above-mentioned issues and take a holistic view about correctness of credit initially taken by the appellant on various inputs and the benefit accruing on such inputs to be paid to the appellant in terms of applicable provisions of law, more specifically Rule 5 of Cenvat Credit Rules, 2004 - appeal allowed by way of remand.

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• 2017 (8) TMI 1037
  Denial of Cenvat credit - Shortage of weight - Held that: - credit was denied on 0.35% shortage found in the weight as compared to the weight mentioned in the invoice. However, there is no dispute that number of blooms and the billets supplied by the supplier mentioned in the invoices have been fully received. There is no shortage in number of pieces. If this is so, then there is no actual shortage in the quantity of the goods covered by the invoices. The difference in weight is only the weight variation from the weight taken in one weighbridge and others - decided against the revenue.

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• 2017 (8) TMI 1036
  SSI exemption - N/N. 8/2003-C.E., dated 1-3-2003 - denial of exemption on the ground that during the period under consideration by mistake on the invoices, the excise duty were charged - When the mistake was realised the same was reversed - Held that: - the identical issue was decided in favor of the assessee in the case of Salvi Chemicals Industries v. CCE [2005 (1) TMI 432 - CESTAT, MUMBAI], where it was held that the assessee opted for the exemption benefit and the payment at normal rate for a limited period in respect of one of the product was an error on the part of the appellant and not their option - benefit of exemption allowed - appeal dismissed - decided against Revenue.

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• 2017 (8) TMI 1035
  Applicability of period of limitation - claim of interest - whether period of limitation is applicable to claim of interest? - Held that: - law of limitation has not been incorporated in the statute book casually. That has been enacted with an object of bringing an end to the litigation. Without limitation prescribed by the statute, the litigation shall be unending. Therefore, that should be interpreted in a sense to bring an end to the litigation - judgment rendered by three Judge Bench of the Hon’ble Apex Court in the case of CCE Versus TVS Whirlpool Ltd. [1999 (10) TMI 701 - SUPREME COURT OF INDIA], where it was held that The period of limitation that applies to a claim for the principal amount should also apply to the claim for interest thereon, prevails as a rule of precedence for which appeal is allowed - decided in favor of appellant.

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• 2017 (8) TMI 1034
  CENVAT credit - Manufacture or repair? - Some of the picture tubes were found to be defective and these were sent to the manufacturer for repair and after repair they were getting the picture tubes - denial of credit on the ground that the manufacturer of the picture tubes that is Samtel Colour Ltd., had in fact cleared new picture tubes and the picture tubes received by the appellants were not the same, which were returned as defective - Held that: - this Court in a case relating to Central Excise has taken a view that this was not correct and the department had wrongly presumed that the picture tubes, which were being sent after repair were new ones or that the process of manufacture had taken place - appeal dismissed - decided against Department.

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• 2017 (8) TMI 1033
  Whether the Hon’ble Tribunal is justified in maintaining the penalty under Section 11AC when admittedly extended period of limitation contemplated under Section 11A of Central Excise Act, 1944 is not invoked and there is absolutely no intention to evade duty? - Held that: - The admission made by the Director was that the shortage was not denied and, moreover, the goods have been removed without the payment of duty. Once the fact is established that the goods have been removed without the payment of duty, clearly the penalty become imposable under Section 11AC and it is for this reason that the penalty has been imposed - reliance placed in the case of in the case of Usha Martin Construction Steel Ltd. v. Commissioner of Income Tax, Kanpur [2014 (11) TMI 537 - ALLAHABAD HIGH COURT], wherein also the Allahabad High Court ruled that in a case where duty has escaped payment at appropriate stage, penalty would be attracted - appeal dismissed - decided against assessee.

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• CST, VAT & Sales Tax

• 2017 (8) TMI 1022
  Liability to pay audit fees - what should happen if a registered dealer who is required to make payment for the fees of the special audit defaults in making payment? Does the liability get transferred to the DT&T? - Held that: - by virtue of a proviso to Section 142 (2D) of the Income Tax Act, 1961 inserted with effect from 1st June, 2007, in the event of a default by an Assessee in making the payment of fees to the CA for the special audit “the expenses so determined shall be paid by the Central Government - In the present case the determination of the fees payable was communicated by the Commissioner to the Petitioner on 3rd June, 2014, i.e., after the amendment came into effect. This was pursuant to the order passed by this Court on 5th May, 2014 in the earlier writ petitions. While the DT&T is right that at the time when the special audit took placed Section 58A (4) of the DVAT Act had not been amended, the fact remains that the fees payable to the Petitioner was determined after the amendment came into force. It is precisely for dealing with a situation where a professional chartered accountant may be left high and dry by a defaulting dealer whose accounts have been specially audited, that Section 58A (4) of the DVAT Act was amended. The Court sees no reason why the benefit of this amendment should not be extended to the Petitioner considering that the fees payable to the Petitioner has been fixed by the of 11 Commissioner only after the amendment came into effect - Nevertheless the Court is also of the view that the power of the Commissioner in these cases to recover from the defaulting dealer the amount paid to the Petitioner should be kept reserved. For the purposes of such recovery, the amount due from the defaulting dealers would be treated as being due in terms of Section 30 of the DVAT Act, particularly since Section 58A (4) of the DVAT Act as it stood prior to 18th June 2012 permitted such recovery. The DT&T will pay the Petitioner of the outstanding fees as determined in terms of the rates fixed by the Commissioner VAT - petition allowed - decided in favor of petitioner.

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• 2017 (8) TMI 1021
  Reversal of input tax credit - interstate sale - penalty - principles of natural justice - Held that: - whatever proposal was made in the revision notice, dated 26.10.2016, is deemed to have been superseded, as per the revised revision notice, dated 29.05.2017. Therefore, the respondent can adjudicate only the revised revision notice, dated 29.05.2017 and not the earlier notice, dated 26.10.2016. Hence, that being the position, then, obviously, the respondent should have referred to the petitioner's reply, dated 14.06.2017 - This, having not been done, amounts to serious violation of principles of natural justice - as long as the respondent / Department continues to adopt this age old practice of giving acknowledgment in Letter Delivery Book, whatever the assessee produce as an endorsement before this Court, the Court will be inclined to accept the same as sufficient proof to show that reply was received in the Office of the Assessing Officer. Therefore, the reply, dated 14.06.2017, having been received in the Office of the respondent, the respondent was duty bound to consider the same and should not have passed the impugned order, without even referring to the said reply. Opportunity of personal hearing - Held that: - Opportunity of personal hearing should be afforded, while fixing the date, after the receipt of the objections. This is so, because, if the objections are to the satisfaction of the Assessing Officer, he need not hear the dealer, while dropping the proposal in the revision notice. However, when objections are being made by the dealer and the dealer specifically seeks for an opportunity of personal hearing, the Assessing Officer is bound to fix the date for personal hearing and intimate the same to the dealer and therefore, on that score also, the impugned order is in violation of the principles of natural justice. Matter is remanded back to the respondent for fresh consideration, who shall fix the date for personal hearing - appeal allowed by way of remand.

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• 2017 (8) TMI 1020
  Penalty u/s 27(5)(ii) of the TNVAT Act - mis-declaration of value - it was alleged that the petitioner has not reported certain interstate sales in the monthly returns - the petitioner requested the respondent to wait till the adjudication under the Customs Act by the Customs Authority/DRI is completed. Further, the petitioner requested that fresh notice may be issued for each year after adjudication of the cases is over by the Customs Authority and also to give them an opportunity of personal hearing - Held that: - the averments in the counter affidavit filed by the DRI in the bail petition nor the averments which are set out in the show cause notice issued by the DRI dated 22.06.2016, can ipso facto be the basis for demand of sales tax. It is well open to the respondent to rely upon such material based on information received from the DRI. What is required to be done is to conduct independent enquiry for which the petitioner should be given opportunity of personal hearing. This can be done only after the DRI completes the adjudication of the show cause notice dated 22.06.2016, as all documents are in the custody of the DRI. Therefore, the respondent has to necessarily await the adjudication of the case by the DRI or the Customs Officials with regard to the allegation of sales suppression/mis-declaration of value. The respondent is directed to furnish all the details in respect of the allegation of mismatch and allegation of interstate sales suppression culled out from the website - so far as the assessment made under the head mis-declaration of value dated 22.06.2016, is concerned subject to the out come of the show cause notice issued by DRI dated 22.06.2016, the respondent is at liberty to initiate proceedings under the TNVAT Act - petition allowed - decided in favor of petitioner.

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• Indian Laws

• 2017 (8) TMI 1015
  Recovery of dues - jurisdiction for initiating steps under The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, since the Bank is a cooperative Bank - Held that:- It is in the interest of both the sides to put an end to this litigation by extending an equitable treatment to the petitioner debtor. Accordingly, this writ petition is disposed of directing Respondent No.2 to first proceed against the first two items described in Schedule “B” (Annexure P-2) and in case still the liabilities are not wiped out they may proceed against the fourth item. We make it clear that before taking recourse to the sale of the fourth item, the petitioner shall also be put to notice as to whether he would otherwise clear the liability for the remaining balance. We also make it clear that the petitioner shall not take recourse to any other litigation regarding the procedure for sale without permission from this Court. This condition we are imposing since we are informed that no willing purchaser is prepared to take the property in view of the litigations.

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• 2017 (8) TMI 1014
  Cause of action arose as per Clause 8 of the Proviso to section 138 of Negotiable Instruments Act - period of limiatation - complaint was filed beyond the period of one month from the date on which the cause of action arose - Held that:- In the present case, the issue is not relating to the retrospective application of the amendment. When the complaint was filed, it is true that the complainant can file a petition to condone the delay. Merely because such petition is not filed along with the complaint, it cannot be said that such application can never be filed. The details of the cheque should be given in the notice itself. However, it was also stated that the question as to whether the notice is proper or not, should be decided depending upon the prejudice that is alleged by the accused in the case. In this case, though the notice was given, it refers to the particulars of the cheque to the understanding of the accused, even in the reply notice, no specific prejudice that was actually pleaded by the accused either by stating that he was confused, or by stating that the details of the Cheque are insufficient to enable him to effectively defend the case. In such circumstances, the contention of the Petitioner to quash the proceedings cannot be sustained and thus the Criminal Original Petition fails.

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• 2017 (8) TMI 1013
  Complaint maintainable under Section 138 of the NI Act - non issuance of statutory notice - Held that:- In the case in hand, admittedly, there was a notice on 21.11.2007 and the said notice was received by the responsible sub-staff or assistant of the petitioner's house/family on 22.11.2007. Therefore, absolutely there is no ground to show that there was no notice statutorily issued by the respondent and as such, notice was not served on the accused persons including the petitioner. In the matter of cheque dishonoured cases under Section 138 of the NI Act, the law has marched well and in fact, it has been settled. The presumption under Section 139 of the Act, is always in favour of the complainant. Though it is a rebuttable presumption, the rebuttal has to come from the accused side, and the same must be an acceptable rebuttal. The petitioner/accused did not bring any rebuttable presumption as the presumption has already been in favour of the complainant and against the accused within the meaning of Section 138/139 of the NI Act. Therefore, this Court finds that there is no ground to interfere with the order of the trial Court, as has been confirmed by the order of the First Appellate Court. Quantum of sentence is concerned, the Court below has sentenced the accused to undergo Simple Imprisonment for six months and had directed the petitioner/accused to pay the cheque amount as compensation in terms of Section 255(2) of the Code of Criminal Procedure. The petitioner is a woman, considering the said factor, though the Court is empowered to punish the accused under Section 138 of the NI Act, to an extent of two years maximum punishment, this Court is of the view that the punishment given by the Trial Court as confirmed by the First Appellate Court, can be modified to the extent that the petitioner/accused is convicted and sentenced to undergo Simple Imprisonment for a period of three months. Quantum of compensation is concerned, since the loan amount was ₹ 10 lakhs and as a part payment, the cheque was issued by the petitioner for a sum of ₹ 9,25,000/- only, this Court feels that the said compensation, equal to the cheque amount is not on the higher side and therefore, such compensation does not warrant any interference.

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