TMI Tax Updates - e-Newsletter
September 1, 2023

Case Laws in this Newsletter:

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

Articles

1. Request for digitization of records related to a major financial sectorIntroduction

   By: G Binani

2. Provision For withdrawal of application under IBC Laws

   By: SHUBHANKAR AGNIHOTRI

3. Department cannot arrest without issuing a notice for recovery of GST

   By: Bimal jain

4. REGISTRATION OF DECREE

   By: DR.MARIAPPAN GOVINDARAJAN

5. Customs dues do not impact the rights of secured creditors

   By: Bimal jain

Notifications

DGFT

1. 29/2023 - dated 29-8-2023 - FTP

Amendment in Export Policy of Non-basmati rice under HS Code 10063090

GST - States

2. 38/1/2017-Fin(R&C)(253)/3753 - dated 14-8-2023 - Goa SGST

Amendment in Notification No. 38/1/2017--Fin(R&C)(246)/3446 dated the 12th May, 2023

3. 38/1/2017-Fin(R&C)(252)/3752 - dated 14-8-2023 - Goa SGST

Amendment in Notification No. 38/1/2017-Fin(R&C)(245)/3445 dated the 12th May, 2023

4. 38/1/2017-Fin(R&C)(251)/3751 - dated 14-8-2023 - Goa SGST

Amendment in Notification No. 38/1/2017-Fin(R&C)(244)/ /3444 dated the 12th May, 2023

5. 38/1/2017-Fin(R&C)(250)/3750 - dated 14-8-2023 - Goa SGST

Amendment in Notification No. 38/1/2017-Fin(R&C)(243)/ /3443 dated the 12th May, 2023

6. 38/1/2017-Fin(R&C)(249)/3749 - dated 14-8-2023 - Goa SGST

Amendment in Notification No. 38/1/2017-Fin(R&C)(38)/323, dated the 12th January, 2018

Income Tax

7. 72/2023 - dated 29-8-2023 - IT

Computation of Perquisite - Value of residential accommodation provided by the employer to employee - words inserted “or taken on lease or rent”- Corrigendum Notification No. 65/2023 dated 18th August, 2023

Circulars / Instructions / Orders

GST - States

1. CCT/26-4/2023-24/G/1486 - dated 16-8-2023

Clarification regarding applicability of GST on certain services

2. CCT/26-4/2023-24/G/1487 - dated 16-8-2023

Clarification regarding GST rates and classification of certain goods based on the recommendations of the GST Council in its 50th meeting held on 11th July, 2023

3. CCT/26-4/2023-24/G/1381 - dated 4-8-2023

Clarification on charging of interest under Section 50(3) of the Goa GST Act, 2017, in cases of wrong availment of IGST credit and reversal thereof.

4. CCT/26-4/2023-24/G/1380 - dated 4-8-2023

Clarification to deal with difference in Input Tax Credit (ITC) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for the period 01-04-2019 to 31-12-2021

Highlights / Catch Notes

GST

• Court Quashes Order, Restores Advance Ruling Application for Reconsideration After Denial Without Fair Hearing.

  Case-Laws - HC : Validity of rejection of Advance Ruling application - application rejected without due opportunity to show cause against the reason assigned - The petition is allowed in part, and the respondent’s order dated 29.11.2022 [Annexure-A] rejecting the petitioner's application for advance ruling without admitting it for detailed consideration is quashed and the application is restored for reconsideration with due opportunity to the petitioner. - HC
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• High Court Denies Relief Under GST Act Section 69, Citing Supreme Court Ruling and Existing Safeguards.

  Case-Laws - HC : Power to arrest and GST - Section 69 which is akin to Section 19 of PMLA has inherent safeguards before affecting the arrest of accused persons. Thus, taking into account the totality of the facts and circumstances and in view of the judgment of The State of Gujrat Etc. [2023 (7) TMI 1008 - SUPREME COURT], no relief can be granted in the present petition to the petitioner. - HC
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• GST Registration Revived for Canceled Registrants; Deposit Tax with Interest by August 31, 2023, to Continue Business Operations.

  Case-Laws - HC : Cancellation of GST registration of petitioner - failure on the part of the petitioner to remit the admitted tax liability - Although the scheme applies to those whose registrations were cancelled before 31.12.2022, the intention of the Government is to allow the registrants, whose registration have been revoked to revive their registration to carry on the business. - Petitioner directed to deposit the amount of GST with interest before the cut off date on 31.08.2023 - HC
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• Treated water from effluent plants by dyeing units is GST-exempt, except for drinking water in 20-liter bottles.

  Case-Laws - AAR : Classification of supply - supply of treated water - effluent treatment plant promoted by dyeing units - water sold as water including natural or artificial mineral waters and aerated waters, not containing added sugar or sweetening matter, not flavoured (other than drinking water packed in 20 litre bottles) - Exempted from GST - AAR
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Income Tax

• Supreme Court Affirms CBDT Guidelines Cannot Limit Tax Authorities' Power on Offense Compounding u/s 279(2) and 276B.

  Case-Laws - SC : Compounding of an offence committed u/s 276B, r/w. Section 287B - Period of limitation for filing compounding application - Decision of High Court holding that, the guidelines contained in the CBDT Guidelines could not curtail the power vested in PCIT or CCIT or PDGIT or DGIT u/s 279(2), sustained - SC
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• Court Reprimands Tax Officer for Unjustified Reassessment of SEZ Unit's Foreign Exchange Gains u/s 147 & 10AA.

  Case-Laws - HC : Reopening of assessment u/s 147 - exemption u/s 10AA - SEZ unit - Source of profit derived - foreign exchange fluctuation gain - This case can be no better example of a case where an Officer at the drop of the hat has sought to change his opinion which is contrary to the decision of the Supreme Court - HC
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• Court Rules Reopening of Assessment u/s 147 Invalid Due to Mere Change of Opinion by Assessing Officer.

  Case-Laws - HC : Reopening of assessment u/s 147 - review v/s reopening - AO has allowed the Long Term Capital Gains and Short Term Capital Gains claimed by the assessee considering the sell of the Government Securities as investment and not stock-in-trade. Therefore, the reasons recorded by the respondent is mere change of opinion in the facts of the case. - HC
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• Section 68: Jewelry Purchases Below 2 Lakh Rupees Don't Require PAN or Full Address, Even During Demonetization.

  Case-Laws - AT : Additions u/s 68 - Bogus sales - purchase of sewelleng without PAN - Taking full address and PAN of the customers who have purchased the jewellery below 2 lakhs is not mandatory under law and not taking the address and the PAN details during demonization rush and pressure on the sales of the jewellery which is otherwise not mandatory under law cannot be ground for drawing adverse inference against the sales made by the assessee - AT
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• Section 263 Revision: Registration Fees as Revenue Expenses Debated u/s 37(1) of Income Tax Act.

  Case-Laws - AT : Revision u/s 263 - payment towards registration fees are not allowable as revenue expenses as per provision of section 37(1) of the Act - It is a settled law by now that where the AO has exercised the quasi judicial power vested in him in accordance with law and arrived at a conclusion and such a conclusion cannot be considered erroneous simply because the ld. PCIT does not feel satisfied with the conclusion - AT
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• Section 56(2)(vii)(b) Applied: Property Purchase Below Circle Rate Uses Agreement Date Stamp Duty Value for Taxation.

  Case-Laws - AT : Addition u/s 56(2)(vii)(b) - Purchase of property below circle rate / stamp value - since the assessee/co-owners has made part payment (part consideration of Rs. 3 Lakhs) by cheque , therefore, the date of agreement as per the proviso to section 56(2)(vii) (b) of the Act should be taken as 25.11.2011. In such a scenario, the stamp duty value as on the date of agreement must be taken for the purpose of taxation under consideration u/s 56(2)(vii)(b). - AT
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• AO to Estimate Notional Rent for Unsold Vacant Stock Using Municipal Ratable Value for Current Assessment Year.

  Case-Laws - AT : Estimation of notional rent - assessee had unsold closing stock which was kept vacant during the current Assessment Year - AO directed to estimate the rent on the basis of municipal ratable value for computing the notional rent. - AT
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Customs

• Court Overturns Order on Overvalued Imported Diamonds for Violating Customs Act and Valuation Rules 2007.

  Case-Laws - AT : Overvaluation of imported goods - cut and polished diamonds - There has been blatant disregard not only of the scheme of valuation, now in force and consistent with international convention, as set out in Customs Act, 1962 and Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 but also in the particulars of process and method embodied therein. - Demand and confiscation order set aside - AT
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• Customs Broker Penalized for Misconduct; License Violation Leads to Reduced Penalty After Scrutiny of Critical Role.

  Case-Laws - AT : Levy of penalty - mis-conduct and moral turpitude - Customs Broker License - It is noted that it was imperative for the appellant to have with greater sincerity and due care taken measures to abide by the summons issued. This is all the more, relevant for them as they are a licensed Customs Broker and thus in a way being an extended arm of the department and an important interphase with the trading (importing and exporting) community, they had to be more vigilant and demonstrative in their actions and conduct. - Amount of penalty reduced - AT
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• Court Condones 27-Day Appeal Delay for 70-Year-Old Sole Proprietor; Reasons Deemed Sufficient Within 30-Day Limit.

  Case-Laws - AT : Condonation of delay in filing appeal - The appellant is a sole proprietorship firm and the Proprietor is aged about 70 years, therefore, we are of the view that the reasons given by the appellant for delay are sufficient to be condoned, more so for the reason that the delay is only of 27 days, which falls within the period of 30 days - Delay condoned - AT
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Indian Laws

• Court Uncertain About Director's Liability in Cheque Dishonor Case Due to Ambiguity in Resignation Date.

  Case-Laws - HC : Dishonour of Cheque - vicarious liability of Director - resignation on the date of issuance of cheques in dispute - this Court, at this stage, cannot come to a conclusion, with utmost certainty, as to when had the petitioner actually resigned from the office of Director of accused company and as to whether or not he was involved in dishonouring of the cheques in question - HC
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IBC

• Court Order Enforces No Trespass Rule on Corporate Debtor's Property During Insolvency Resolution Process.

  Case-Laws - AT : CIRP - Restriction on Trespassing on a property, allegedly owned by the corporate debtor - The Impugned Order does not give any finding regarding the ownership of the said property, but merely requires that the Appellant or any other person should not trespass on the property of the corporate debtor and status quo regarding the scheduled property should be maintained till the successful completion of the liquidation process - Order sustained - AT
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Service Tax

• Service tax on royalty for technical know-how transfers overseas isn't IPR taxable unless registered in India u/s 65 (55a).

  Case-Laws - AT : Levy of Service Tax - royalty paid to overseas entity - transferring of technical know-how cannot be equated to transfer of Intellectual Property Right and that as long as the said Intellectual Property Right is not registered or patented in India; the same would not qualify to be IPR taxable in India in terms of Section 65 (55a) of Finance Act, 1994. - AT
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Central Excise

• CENVAT Credit Approved for Construction Services in Steel Plant Modernization, Renovation, or Repair.

  Case-Laws - AT : CENVAT Credit - input services - construction and erection services in the factory - The appellant took credit on the services used in the construction of civil structure for newly setup of Steel Melting of Continuous Castings Machine (SMS), and for provision of fabrication and erection service for the installation of the SMS plant, which is covered under the definition ‘modernization, renovation or repair’. - Credit allowed - AT
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• First Case Differentiating CENVAT Credit Rules for Regular vs. Supplementary Invoices; Denial Deemed Unsustainable u/r 9(1)(bb).

  Case-Laws - AT : Denial of CENVAT Credit - input services on the strength of supplementary invoices - It is the first time that CENVAT credit rules made distinction between the Invoice and Supplementary invoices in respect of service tax paid. Hence order of Commissioner drawing support from newly inserted rule 9 (1) (bb) to apply the Rule 9 (1) (b) for denying the credit availed by the appellant cannot cannot be sustained. - AT
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VAT

• Court Rules Interest Waiver Essential for Amnesty Scheme; Adjusting Tax Payments Towards Interest Violates Scheme's Intent.

  Case-Laws - HC : Amnesty Scheme - Considering the intention of the amnesty scheme, the interest had to be waived in respect of the tax declared under the scheme, and therefore, the action of the respondents in adjusting the tax paid along with the returns towards the interest is completely contrary to the object, purpose and the terms of the scheme - HC
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Case Laws:

• GST

• 2023 (8) TMI 1357
  Jurisdiction - power to confiscate goods - exercise of powers under Section 129 and thereafter switching over to Section 130 and passing order thereunder without availing the petitioner the benefits of release of the goods under Section 129 - violation of principles of natural justice - HELD THAT:- Rule, returnable on 21.06.2023. By way of interim relief, the goods of the petitioner shall be released provided the petitioner complies with the conditions imposed - petitioner shall deposit with the competent authority of the respondents, total amount of penalty of Rs.8,34,832/-, tax is not assessed by the authorities - application disposed off.

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• 2023 (8) TMI 1356
  Maintainability of appeal - appeal dismissed for reason of non-prosecution of the same when even in the context of non-appearance of the appellant, the Appellate Authority was statutorily obliged to dispose of the appeal on merits - HELD THAT:- The specific statutory mandate is that after hearing the appellant, the Appellate Authority is to make further enquiry, if found necessary and pass such orders as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against. Such affirmation, modification or annulment shall not be an empty formality nor can it be mechanical, without the consideration of the grounds of appeal - When an appeal is dismissed for reason only of absence of the appellant or lack of effective prosecution, then the Tribunal should be found to have abdicated its powers and not followed the statutory mandate. There is no efficacious alternate remedy available as of now, against the appellate order, since the Tribunal, to which a further appeal is provided, has not been constituted. Leaving the Assessee/petitioner to the appellate remedy as and when the Tribunal is constituted, that too with a further direction to pay 20% of the disputed tax amount would unnecessarily prejudice the assessee. It is deemed appropriate that the appellate order is set aside without any observation on merit - the Appellate Authority are directed to restore the appeal to its files and the appellant shall appear before the authority on 04.05.2023 - petition allowed.

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• 2023 (8) TMI 1355
  Violation of principles of natural justice - refund claim denied - immediately after the SCN was issued the petitioner paid the entire penalty - amount impugned order passed without providing any opportunity to the petitioner - HELD THAT:- For the alleged violation of Central Goods and Services Tax, the petitioner was issued with show cause notice on 18.11.2022 directing the petitioner to appear before the Authority on 19.11.2022, however, without providing any opportunity to the petitioner the respondent has passed the impugned order on 18.11.2022 itself, which is clear violation of principles of natural justice. The impugned order dated 18.11.2022 is set aside and the matter is remanded back to the respondent for fresh consideration - petition allowed by way of remand.

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• 2023 (8) TMI 1354
  Validity of rejection of Advance Ruling application - application rejected without due opportunity to show cause against the reason assigned - violation of principles of natural justice - HELD THAT:- This Court is of the considered view that opportunity of hearing as contemplated under Section 98(2) cannot be an empty formality, and the petitioner should have been informed that the application could be rejected without admission on the ground the corresponding contractual period has expired. Therefore, this Court is persuaded to opine that the opportunity of hearing contemplated is rendered a mere formality. The petitioner must therefore have appropriate liberty to file additional plea to show cause against such reasoning and the respondent must reconsider the application. The question whether even a petition filed against the Advance Ruling Authority s order under Section 98(2) or 98(4) of the CGST Act/KGST Act could be considered in its full import in an appropriate case, but for the present, this Court is of the considered view that as the interference is with the Advance Ruling Authority s order under Section 98(2) of the CGST Act/KGST Act on the ground of denial of opportunity of hearing as contemplated under the Statute which inheres the principles of natural justice, this petition need not be placed before a Division Bench. The petition is allowed in part, and the respondent s order dated 29.11.2022 [Annexure-A] rejecting the petitioner s application for advance ruling without admitting it for detailed consideration is quashed and the application is restored for reconsideration with due opportunity to the petitioner.

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• 2023 (8) TMI 1353
  Profiteering - Respondent had not passed on the benefit of ITC by way of commensurate reduction in the price - violation of provisions of Section 171 (1) of the CGST Act, 2017 - HELD THAT:- The Commission observes that no benefit of additional ITC during the GST period as compared to the pre-GST period has accrued in the case of this Project to the Respondent, which he is obliged to pass on to his buyers. Hence, the provisions of Section 171 of the CGST Act, 2017 are not attracted in this case and there is no requirement of any commensurate reduction in the prices of the units in the said project by the Respondent. Applicant No. 1 could have availed the above benefit only if the above project was under execution/implementation before the date of GST implementation viz., 01.7.2017. Hence, the allegations made by the Applicant No. 1 are incorrect and therefore, the same cannot be accepted. The Commission finds that the provisions of Section 171 (1) of the CGST Act, 2017 are not attracted in the Respondent s project Godrej Elements . Therefore, the proceedings in the present case are hereby dropped.

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• 2023 (8) TMI 1352
  Direction to Respondent to not arrest the Petitioner in relation to the summons - power to arrest - HELD THAT:- The bare perusal of the Section 69 of the CGST makes it clear that there are sufficient inherent safeguards contained in Section 69 prior to the affecting arrest of the accused persons. The legislature in its wisdom has made it mandatory that before affecting the arrest of the accused, the commissioner should have reasons to be believe that a person has committed an offence under Section 132 of the CGST, it further provides that the officer authorized to arrest the person shall inform such person the ground of arrest. Section 69 which is akin to Section 19 of PMLA has inherent safeguards before affecting the arrest of accused persons. Thus, taking into account the totality of the facts and circumstances and in view of the judgment of The State of Gujrat Etc. [ 2023 (7) TMI 1008 - SUPREME COURT] , no relief can be granted in the present petition to the petitioner. The relief as stated by the learned senior counsel for the petitioner was granted by the Apex Court in view of the peculiar facts and circumstances. The Court has also taken into account the submissions made by learned counsel for the department that as of now, the department has not even moved a file for effecting the arrest of the accused and there is no apprehension - Petition dismissed.

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• 2023 (8) TMI 1351
  Rejection of appeal - pre-deposit of 10% of admitted tax amount, debited through the Electronic Credit Ledger (ECL) instead of Electronic Cash Ledger - HELD THAT:- It is seen that by circular dated 6th July 2022 issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance, Government of India, it has been clarified that payment of pre-deposit can be made by using the ECL. The impugned order dated 31.03.2023 is set aside. As the learned counsel for the Petitioner points out that the Petitioner has already made the pre-deposit using the ECL, that will now be accepted by the Department. The appeal will now be listed before the 1st appellate authority i.e., the Additional Commissioner of CT GST on 11 th September, 2023. Petition disposed off.

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• 2023 (8) TMI 1350
  Cancellation of GST registration of petitioner - failure on the part of the petitioner to remit the admitted tax liability - HELD THAT:- This Court had earlier passed a detailed order in the case of Suguna Cutpiece Centre Vs. The Appellate Joint Commissioner of GST (ST) (GST) and another [ 2022 (2) TMI 933 - MADRAS HIGH COURT] whereby registrations were directed to be restored back. The Government had itself recognised the difficulties of assessees and had given a amensty scheme vide Notification No.03/2023 - Central Tax dated 31.03.2023. By virtue of the aforesaid scheme, assessee s registration whose registrations were cancelled before 31.12.2022 given a reprieve. As per the explanation of the notification, the person who has failed to apply for revocation of cancellation of registration within the time period specified in Section 30 of the said Act includes a person whose appeal against the order of cancellation of registration or the order rejecting application for revocation of cancellation of registration under Section 107 of the said Act has been rejected on the ground of failure to adhere to the time limit specified under Sub-Section (1) of Section 30 of the said Act - the Scheme has been now extended up to 31.08.2023 vide Notification No.23/2023 Central Tax, dated 17.07.2023. Although the scheme applies to those whose registrations were cancelled before 31.12.2022, the intention of the Government is to allow the registrants, whose registration have been revoked to revive their registration to carry on the business. Considering the fact that the benefit of the scheme is available for those, whose registrations were cancelled before 31.12.2022, Court is of the view that the benefit of the scheme should ensure to persons like petitioner also whose registrations was cancelled after the cut-off date. The Court is therefore inclined to dispose this writ petition by directing the petitioner to pay the arrears of tax together with interest before the cut off date on 31.08.2023 under Notification No.23/2023 Central Tax, dated 17.07.2023 - petition disposed off.

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• 2023 (8) TMI 1349
  Classification of supply - supply of treated water - effluent treatment plant promoted by dyeing units - water sold as water including natural or artificial mineral waters and aerated waters, not containing added sugar or sweetening matter, not flavoured (other than drinking water packed in 20 litre bottles) - to be classified under heading 2201 or not. HELD THAT:- From the conjoined reading of section 4 of The Sale of Goods Act, 1930 and the Hon ble Supreme Court in State Of Madras vs Gannon Dunkerley Co.,(Madras) [ 1958 (4) TMI 42 - SUPREME COURT] , it is clear that the modus of operation as purchase of effluent and sale of output is applicable only if all the elements cited in the Section and judgement cited are present. If that is the case, then the classification of supply by the Applicant as sale of goods is correct. However, it is emphasized that the mode of operation intended by the applicant i.e. purchase of raw effluent, treating the same and selling the resultant products, can be classified as sale of goods, if and only if, the applicant follows the procedures envisaged in the Sale of Goods Act and rationale of the observations of Hon ble Supreme Court. Whether the classification of water sold as water including natural or artificial mineral waters and aerated waters, not containing added sugar or sweetening matter, not flavoured (other than drinking water packed in 20 litre bottles) under heading 2201 is correct? - HELD THAT:- The water grouped under the heading 22.01 is ordinary water whether or not clarified or purified. And this heading specifically excludes distilled or conductivity water and water of similar purity which arc classified in heading 28.53. Therefore, it is amply clear that, water recovered out of the effluent treatment process nothing but an ordinary water which is suitable for reuse by the dyeing and bleaching units as a solvent and as a washing, rinsing medium. Thus, it aptly fits into SI. No. 99 of Notification No. 02/2017, CT (Rate), dt. 28.06.2017 under the heading 2201 rather than SI.No. 24 of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 under the same heading 2201. Thus, the ultimate intention behind the effluent treatment process is to treat the effluent water discharged by textile units to recover water, salt and other chemicals consumed during the course of dyeing and bleaching to the maximum extent possible so as to reuse the same without getting it discharged to pollute water bodies - it is evident that the common effluent treatment plant has been set up in order to comply with the legislative and environment regulations thereby conserving water through recovery and reuse and not to manufacture water or chemicals. Exempted from GST.

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• Income Tax

• 2023 (8) TMI 1348
  Revision u/s 263 by CIT - deemed dividend addition u/s 2(22) - As decided by HC [ 2022 (1) TMI 796 - CALCUTTA HIGH COURT] Tribunal correctly noted that AO has taken a conscious decision bearing in mind the legal position that section 2(22)(e) was not applicable to the loan amount received by the assessee and allowed the appeal filed by the assessee and granted relief - HELD THAT:- There is a huge delay of 470 days in filing the special leave petition and the same has not been explained to the satisfaction of this Court. Hence, the special leave petition is dismissed on the ground of delay as well as on merits.

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• 2023 (8) TMI 1347
  Compounding of an offence committed u/s 276B, r/w. Section 278B - Period of limitation for filing compounding application - Power of the CBDT (Board) u/s 119 r.w.s. 279(6) to restrict compounding where application is filed beyond stipulated period - Failure to deposit the TDS amount, which was deducted u/s 192 from salary - As per HC [ 2023 (1) TMI 1018 - BOMBAY HIGH COURT] , the guidelines contained in the CBDT Guidelines dated 14th June 2019 could not curtail the power vested in Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General under the provisions of Section 279(2) of the Income Tax Act. Learned counsel for the petitioner submitted that the order of remand has been implemented. HELD THAT:- In the circumstances, we decline to interfere in the matter. The Special Leave Petition is dismissed. The question of law, if any, is kept open, to be raised in an appropriate matter. Pending application(s) shall stand disposed of.

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• 2023 (8) TMI 1346
  Refund the amount adjusted in excess of 20% of the disputed demand - action of the respondents and the Revenue Authorities is violative of Article 265 of the Constitution of India. - need to pass strictures against the offices - HC held action of recovery on the part of the respondents was de-hors the statutory provisions specified under Section 220(6), 245 of the IT Act and was without jurisdiction in terms of Sections 222 and 223 of the IT Act and imposed a cost upon the respondents which is quantified to Rs.50,000/- which the respondent-department shall pay - HELD THAT:- There is a delay of 345 days in filing this special leave petition. Delay condoned. In the circumstances, we are not inclined to interfere in the matter on merits as such, but the cost of Rs. 50,000/- imposed by the High Court is set aside.

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• 2023 (8) TMI 1345
  Reopening of assessment u/s 147 - SEZ unit - exemption u/s 10AA - Source of profit derived - foreign exchange fluctuation gain - recorded reasons indicating that profits not derived from any export from its unit of Special Economic Zone - HELD THAT:- As respective parties what is noticeable is that in coming to the conclusion that the petitioner was not entitled or not eligible for exemption u/s 10AA and that the assessee had wrongly claimed the exemption, what is evident from reading the reasons and the order disposing the objections is that the author of these communications is the very same Officer who in response to a notice u/s 142 having been satisfied with the explanation given by the petitioner vide its communication passed an assessment order, accepting the explanation tendered by the petitioner in the communication. This case can be no better example of a case where an Officer at the drop of the hat has sought to change his opinion which is contrary to the decision of the Supreme Court in the case of CIT Vs. Kelvinator of India Ltd. [ 2010 (1) TMI 11 - SUPREME COURT] Petition is allowed.

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• 2023 (8) TMI 1344
  Reopening of assessment u/s 147 - review v/s reopening - LTCG and STCG pertaining to the sale of investment comprising of the Government of India Bonds - scope of change of opinion - HELD THAT:- As there is no new fresh material available with the respondent nor there is any live link shown by the respondent with the material on record for formation of reasonable belief to reopen the assessment within the period of four years. The respondent has relied upon the assessment record for the year under consideration. The respondent has also relied upon the Circular No. 665 of CBDT dated 5th October, 1993 for the issue of considering the LTCG and STCG shown by the petitioner in the return of income considering the sell of the Government of India Securities as investment instead of stock-in-trade. AO during the course of regular assessment has considered the computation of LTCG and STCG which was declared by the petitioner in the Return of Income together with the audited accounts produced on record along with the return filed by the assessee. AO has allowed the Long Term Capital Gains and Short Term Capital Gains claimed by the assessee considering the sell of the Government Securities as investment and not stock-in-trade. Therefore, the reasons recorded by the respondent is mere change of opinion in the facts of the case. As decided in case of Kelvinator of India [ 2010 (1) TMI 11 - SUPREME COURT] that AO has no power to review, he has only power to re-assess and mere change of opinion cannot be the reason to reopen. Decided in favour of assessee.

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• 2023 (8) TMI 1343
  Assessment u/s 153C - Scope of amended provision to proceedings emerging from searches initiated prior to 01.06.2015 - as argued documents seized from third party there were no handwriting of the assess as well as no address of the assessee has been mentioned - whether documents seized during the course of the search did not belong to the assessee? - HELD THAT:- Hon ble Supreme Court in case of Income Tax officer vs. Vikram Sujitkumar Bhatia [ 2023 (4) TMI 296 - SUPREME COURT] dealing with identical issue held common judgment and order passed by the High Court is held to be unsustainable and the question, i.e., Whether the amendment brought to Section 153C vide Finance Act, 2015 would be applicable to searches conducted under Section 132 of the Act, 1961 before 01.06.2015, i.e., the date of amendment? , is answered in favour of the Revenue and against the assessees and is answered accordingly. Thus the amendment brought to Section 153C of the Act, 1961 vide Finance Act, 2015 shall be applicable to searches conducted under Section 132 of the Act, 1961 before 01.06.2015, i.e., the date of the amendment. The appeal is required to be allowed and is accordingly allowed. The impugned order dated 23.11.2022 passed by the Tribunal is hereby quashed and set aside by answering the question of law in affirmative and the matter is remanded back to the CIT (Appeals) to decide the same on merits.

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• 2023 (8) TMI 1342
  Settlement of dispute under Vivad Se Vishwas Scheme - petitioner seeks for refund of the excess amount as according to the petitioner there was no delay on the part of the petitioner as the account had been attached by the respondent / Income Tax Department - HELD THAT:- Considering the fact that the petitioner s account was attached there is no justification in recovering the amount in excess which was to be paid by the petitioner on or before 30.09.2021 recovering an amount in excess is unjustified. At the same time, since the amount of Rs. 7,15,678/- was only payable and was paid Rs. 9,32,536/- (Rs. 17,19,782 Rs. 7,87,246), the petitioner is liable to pay interest on Rs. 7,15,678/- at 10% at Rs. 71,568/-. The balance amount after appropriation of the aforesaid amount has to be refunded back to the petitioner. Writ petition is allowed by directing the respondents to refund a sum of Rs. 9,32,536/- as expeditiously as possible within a period of six (6) weeks from the date of receipt of a copy of this order.

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• 2023 (8) TMI 1341
  Order passed u/s 201 - petitioner had not deducted TDS u/s 194A for interest payments during various financial years especially when such interest payments were above Rs.10,000/- and also called for necessary 15G and 15H forms from the petitioner - HELD THAT:- This Court has perused the impugned orders and finds that even though the petitioner has admitted that they have not been able to furnish all the necessary particulars required by the Department, it is seen that it is only at the time of the survey. However, even from the impugned order it is seen that in para 5 under the heading Hearing letter calling for Interest payment details for the Financial Year the Department has made the marks - Interest payment details above and below Rs.10,000/- have been furnished vide email dated 16.03.2023. This Court is of the view that the interest of the petitioner as well as the Department would be satisfied if the impugned orders are set aside and the Department is directed to conduct a fresh enquiry affording an opportunity to the writ petitioner. Accordingly, the impugned orders are set aside and the respondent is directed to consider the details furnished by the petitioner on 16.03.2023 and if required call upon the petitioner to give full and complete details as may be required by the Department to fully and finally adjudicate the matter. This exercise shall be completed within a period of six weeks from the date of receipt of a copy of this order and the writ petitioner shall extend its fullest cooperation to the Department. These writ petitions have been filed seeking issuance of a Writ of Certiorari to call for the records on the file of the respondent and quash the impugned orders passed under Section 201 of the Income Tax Act, 1961 being illegal and not in accordance with law.

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• 2023 (8) TMI 1340
  Addition of capital gain - assessee failed to furnish the evidence during the assessment and remand proceeding also - HELD THAT:- The facts that the AO has verified indexed cost of acquisition and cost of improvement claimed by the assessee to be correct as per the records of the assessee. This fact is not rebutted by the Revenue by placing any contrary material. Therefore, we do not see any reason to interfere in the findings of Ld.CIT(A), the same is hereby, affirmed. Hence, the ground raised by the Revenue is dismissed. Assessee failed to produce evidence of cancellation of MoU related to transaction of transfer of property - CIT(A) deleted the addition - HELD THAT:- The finding recorded by CIT(A) is that only INR 5,00,000/- was paid which was not rebutted by the Revenue by placing any contrary material. In our considered view, the AO ought to have brought some evidence by making inquiry from the concerned builder about the transactions. AO without making independent inquiry, was not justified in treating the total sale consideration as unexplained investment. Therefore, we do not see any reason to interfere in the finding of Ld.CIT(A), the same is hereby, affirmed. Ground No.3 raised by the Revenue is thus, dismissed.

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• 2023 (8) TMI 1339
  Validity of the assessment made u/s 153C - adhoc disallowance of assumed expenditure - i ncriminating material found during search or not? - HELD THAT:- As even after the amendment, AO can proceed only on the basis of incriminating material which has a bearing on determination of the total income of such other person. Nowhere in the Satisfaction Note it has been mentioned that the said description of shares is related to alleged business of providing accommodation entries by the captioned assessees. In light of the decision of Singhad Technical Education Society [ 2017 (8) TMI 1298 - SUPREME COURT] has held that when the seized documents did not establish any co-relation document wise with the assessment years in question, then the validity of the assessment so framed was legally unsustainable. Thus we are of the considered view that the additions/disallowance, devoid of any incriminating material found during the course of search, cannot validate the assessment orders framed u/s 153C of the Act. Decided in favour of assessee.

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• 2023 (8) TMI 1338
  Addition u/s 68 - bogus sales - A.O. found certain suspicions features in the books in terms of sudden spike in cash sales as compared to earlier and succeeding years - HELD THAT:- AO was not able to point out any defect in the books of account or audit financial statement of the assessee. The suspicion, however, strong it may be the same cannot be accepted as final truth without bringing on record some tangible evidence. Mere surmise cannot replace an evidence to prove the wrong doing if any by the assessee. Once, the A.O. accepts the books of accounts and the entries in the books of account are matched, there is no case for making the addition as bogus sales. As in the case of Lal Chand Bhagat Ambica Ram [ 1959 (5) TMI 12 - SUPREME COURT] held that the assessee maintained the books of accounts according to the mercantile system and there was sufficient cash balance in its cash books and the books of account of the assessee were not challenged by the AO. If the entries in the books of accounts are genuine and the balance in cash is matching with the books, it can be said that the assessee has explained the nature and source of such deposit. Assessee has not obtained full address details of the customers who have purchased jewellery below the amount of Rs. 2 lacs. - Taking full address and PAN of the customers who have purchased the jewellery below 2 lakhs is not mandatory under law and not taking the address and the PAN details during demonization rush and pressure on the sales of the jewellery which is otherwise not mandatory under law cannot be ground for drawing adverse inference against the sales made by the assessee specially when all the other para meters like purchase, stock register, sufficient of stock for sale made are accepted. There is no allegation on the assessee of non availability of stocks or fictitious purchases and A.O. has also not rejected the Assessee s books of account u/s 145(3) we find no ground to interfere with the observations and conclusion of the CIT(A) and find no merit in the grounds of Appeal of the Revenue, accordingly, the Grounds of Appeal of the Revenue are dismissed.

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• 2023 (8) TMI 1337
  Revision u/s 263 - payment towards registration fees are not allowable as revenue expenses as per provision of section 37(1) of the Act - HELD THAT:- Scope of revisionary jurisdiction u/s 263 is very specific, limited and also different from appellate jurisdiction. Law contained in section 263 does not allow ld. PCIT to impose his view over judicious view adopted by the ld. AO unless the view adopted by the ld. AO is established to be not at all sustainable in law. AO in the present case on appreciation of the facts and using his judicial wisdom allowed sum as borne by the assessee towards registration of lease deed by debiting in the profit and loss account u/s 37(1) - The view of the AO in present case is also supported by case of Cinecita Pvt. Ltd. [ 1982 (2) TMI 58 - BOMBAY HIGH COURT] as held that the impugned expenditure did not involve any element of premium in the amount claimed as expenditure. It was incurred only to draw up and get registered an effective and proper lease deed and would have remained the same irrespective of the period of lease as long as it was more than one year. Further the period of lease itself could not be decisive of the question whether the asset was enduring nature. On these facts, the impugned expenditure was revenue in nature. In the present case of the assessee was selected for scrutiny on few issues it cannot be said that there was lack of enquiry on the part of AO on this issue. It is a settled law by now that where the AO has exercised the quasi judicial power vested in him in accordance with law and arrived at a conclusion and such a conclusion cannot be considered erroneous simply because the ld. PCIT does not feel satisfied with the conclusion - extent of enquiry cannot be stretched to any level by forcing the AO to go through the assessment process again and again. Thus the assessment order passed by the AO was after full enquiry and, therefore, the case does not fall within the clause (a) and (b) of Explanation 2 to Section 263 - Decided in favour of assessee.

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• 2023 (8) TMI 1336
  Validity of order passed un/s 143(1) - Whether CPC erred in not following the mandate as required by first proviso to section 143(1) which says that no such adjustment shall be made unless an intimation is given to the assessee of such adjustment either in writing or in electronic mode? - HELD THAT:- As the adjustment has been made by the ld. Assessing Officer, CPC to the income of the assessee without even giving any intimation in terms of proviso to section 143(1)(a) of the Act and, therefore, the said order is quashed as invalid and nullity in the eyes of law. In the result, the additional ground is allowed. Exemption u/s 11 comprising capital expenditure and revenue expenditure - claim denied as income tax return and Form 10B were filed late - HELD THAT:- Admittedly the return of income was filed in Form 7 and Form 10B on 31.03.2021 and 30.03.2021 while the extended due date for filing the return of income in relevant assessment year was 15.02.2021. We note that the COVID 19 pandemic was spread all over the country and the entire country rather the entire globe were completely brought to standstill. And so was the condition so far as the assessee trust is concerned. So considering all these practical difficulties for making compliances, Hon ble Apex Court has extended the period of limitation with respect to judicial or quasi-judicial proceedings. As relying on Apex Court vide its order IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [ 2022 (1) TMI 385 - SC ORDER] there is no delay in filing the return of income as well as Form 10B and, therefore, the order of the CIT(A) upholding the order of ld. Assessing Officer, wherein the exemption claimed u/s 11 by the assessee-Trust has been rejected resulting into disallowance of capital expenditure, revenue expenditure and exemption of 15% of total receipts u/s 11(1)(a) which is incorrect and against the ratio laid down by the Hon ble Supreme Court. Accordingly direct the AO allow the exemption claimed u/s 11 of the Act. The ground No. 1 to 5 are allowed.

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• 2023 (8) TMI 1335
  Addition u/s 56(2)(vii)(b) - Purchase of immovable property below circle rate / stamp value - difference between the value as per the Valuation Report and the sale consideration/agreement value - non reference of matter to DVO - HELD THAT:- As before making addition applying provision of section 56(2)(vii)(b) in the facts and circumstance of the case, AO ought to have referred the matter to the Valuation Officer (DVO), since the Assessee objected for the value to be taken according to the stamp valuation authorities. In the present case, the AO has made addition u/s 56(2)(vii)(b) without making reference to the valuation officer as required by proviso under sub clause (c) of section 56(2)(vii)(b). In this context, it is gainful to refer to the decision of ITO Vs. Aastha Goel [ 2018 (10) TMI 500 - ITAT DELHI] wherein addition was made under section 56(2)(vii)(b) and it was held that in the absence of the reference to the valuation officer, the addition made was deleted. ITAT also rejected the request of the Department to set aside the matter to the file of the Assessing Officer for referring the case to the Valuation Officer. We not accept the DR s request to restore the matter back to AO for referring the valuation of flat to DVO because that will tantamount to condoning the erroneous action of AO and consequently allowing a second inning for no fault of assessee. This would tantamount to breathing fresh life to an order which on the facts on records exposes the arbitrary and whimsical action of AO and so is unsustainable in law. Therefore, the addition made by AO u/s 56(2)(vii)(b) is directed to be deleted. Decided in favour of assessee.

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• 2023 (8) TMI 1334
  Addition u/s 56(2)(vii)(b) - Purchase of property below circle rate / stamp value - computation of tax chargeable u/s 56(2)(vii)(b) - FMV determination - HELD THAT:- As in the case of Vembu Vaidyanathan [ 2015 (11) TMI 1069 - ITAT MUMBAI] which action has been upheld by the Hon ble High Court [ 2019 (1) TMI 1361 - BOMBAY HIGH COURT] we are inclined to take the allotment letter of the flat date i.e. 25.11.2011 as the date of agreement for sale because in the allotment letter itself the details of flat, sale consideration, payment terms etc has been spelled out i.e, the sale consideration was agreed at Rs. 2.11 Crores ,and balance amount [after adjusting the advance paid of Rs. 3,00,000/-] was acknowledged as Rs. 2.08 crores for sale/purchase of Flat No. 1306 B Wing along with specification of sq. ft etc. And it was agreed between parties that in case of default/delayed payment of instalments as the work/construction progresses was specified i.e. penal interest of 21%. Therefore, accordingly the first second proviso to section 56(2)(vii)(b) of the Act is applicable in the facts of the case. As noted that the assessee along with three (3) of the co- owners has been allotted Flat No. 1306 B Wing of building/flat developed by American Spring And Pressing Works Pvt. Ltd. vide allotment letter dated 25.11.2011 wherein the developer acknowledges advance payment of Rs. 3,00,000/- by cheque no. 342339 dated 15.11.2011; and the assessee along with otherwise agreed to make the payment of balance amount of Rs. 2,08,00,000/- (Rs. 2,08,00,000/- only). According first proviso and second proviso is applicable in the facts of the case. Therefore, as per the first proviso to Section 56(vii)(b) of the Act, the date of agreement fixing the amount of consideration for the transfer of immovable property was on 25.11.2011 (AY. 2012-13). And since the assessee/co-owners has made part payment (part consideration of Rs. 3 Lakhs) by cheque , therefore, the date of agreement as per the proviso to section 56(2)(vii) (b) of the Act should be taken as 25.11.2011. In such a scenario, the stamp duty value as on the date of agreement must be taken for the purpose of taxation under consideration u/s 56(2)(vii)(b). Such an exercise has not been carried out by the AO or Ld. CIT(A). Therefore, the impugned order of the Ld. CIT(A) is set aside and the issue is restored back to the file of the AO to compute the tax chargeable if any u/s 56(2)(vii)(b) of the Act by taking into consideration , the stamp duty value of the flat in question as on 25.11.2011 and if the as see contests, the AO to seek DVO report to find the fair market value of the property. Needless to say that the assessee should be given sufficient opportunity to submits necessary documents to substantiate its claim/stand. Appeal of the assessee is allowed for statistical purpose.

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• 2023 (8) TMI 1333
  Assessment u/s 153A - additions relating to notional income from the unsold flats and made additions relating to unsecured loans - HELD THAT:- On careful consideration of the facts on record, we observe that in the case of CIT v. Continental Warehouse Corporation [ 2015 (5) TMI 656 - BOMBAY HIGH COURT] it is held that for assessment u/s. 153A in case of unabated assessment, if no incriminating material was found during the course of search in respect of an issue, then no additions in respect of any other issue can be made to the assessment u/s. 153A and 153C. Estimation of notional rent - assessee had unsold closing stock which was kept vacant during the current Assessment Year - AO has estimated the notional income adopting the rent based on property tax - HELD THAT:- As relying on M/s. Inorbit Malls Pvt. Ltd [ 2022 (10) TMI 1150 - ITAT MUMBAI] we direct the Assessing Officer to estimate the rent on the basis of municipal ratable value for computing the notional rent. Accordingly, ground raised by the assessee is partly allowed.

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• Customs

• 2023 (8) TMI 1332
  Scope of SCN - Refund of Customs Duty paid under protest - classification of imported goods - appeal rejected on the ground which was out of the scope of the show cause notice and the Order-in-Original - HELD THAT:- As the appellant had failed to bring on record the document of final assessment of such provisionally assist bill of entry. Hence, he has rejected the refund claim. This is not tenable. The show cause notice in the instant case sought to reject the refund claim on the grounds that the documents submitted were not original and were photocopies. The original adjudicating authority has rejected the claim purely on the ground that they had not submitted the proof of payment of duty, and other supporting documents such as the bill of entry in original. Therefore, instead of appreciating or examining the grounds on which the original authority had rejected the refund claim, the appellate authority has introduced a new ground for rejection of the refund claim which was not indicated in the show cause notice. This is not acceptable. Reliance placed in SENOR METALS PVT LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST, RAJKOT [ 2023 (7) TMI 1115 - CESTAT AHMEDABAD] wherein it has been held that no new ground not specified in the show cause notice can be raised by the adjudicating authority. Thus, matter remanded to the original authority to examine the refund claim in the light of the fact that the claim with all the relevant documents in original had been filed with the department on 23.08.2004 by the appellant. Mere observation that the payments cannot be verified, cannot be a ground to deny the claim - appeal disposed off by way of remand.

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• 2023 (8) TMI 1331
  Valuation of imported goods - cosmetics , branded as TYA - enhancement of value - non-compliant with Legal Metrology (Packaged Commodities) Rules, 2011 as well as Drugs and Cosmetics Act, 1940 - HELD THAT:- It is clear from the impugned order that the appellant is a regular importer; indeed, consignments imported in the past were taken up for detrimental action in the impugned proceedings. Market survey was also undertaken. Though it was submitted by the appellant that the market survey occurred behind their back, it is found from record of proceedings before the lower authority that the contents of the report had not been disputed. Learned Counsel contended that values of earlier imports are clearly ascertainable. However, no details were furnished - It would only be appropriate for such evidence to be furnished and for the adjudicating authority to cause verification of prices at which these were actually sold - it is directed that fresh adjudication to be made. The matter is remanded to the original authority for re-determination on the facts pertaining to earlier imports to be furnished by the appellant.

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• 2023 (8) TMI 1330
  Overvaluation of imported goods - cut and polished diamonds - reliance placed upon two trade advisory panel reports to discard the declaration - confiscation - penalties - difference between the declared value and the ascertained value is about 20% - request for cross-examination was rejected on the ground that the difference between the estimation of the first and the second panels was a mere 8.3%. In the light of these variations - HELD THAT:- There is no finding that the declared value is inconsistent with the essence of section 14 of Customs Act, 1962 nor of any ground, within the prescription of rule 3(4) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 enabling recourse to subsequent alternatives. Nor is there any narration in the impugned order that can lead us to conclude that the process set for invoking rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 had been taken to its logical conclusion. The value adopted in the impugned order has not been shown to lack the impediments enumerated in rule 9(2) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 which is essential as the reasons that prompted the trade advisory panel to arrive at the disputed values is not on record. There has been blatant disregard not only of the scheme of valuation, now in force and consistent with international convention, as set out in Customs Act, 1962 and Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 but also in the particulars of process and method embodied therein. The re-determination of value is not in accordance with the law. As the penal consequences arise from confiscation based on illusory foundation, the detriment to the individual appellants lack authority of law - Appeal allowed.

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• 2023 (8) TMI 1329
  Levy of penalty - mis-conduct and moral turpitude - Restoration of Customs Broker License - Customs Broker did not appear before the Deputy Director DRI, Ahmedabad against the two summons issued to him - HELD THAT:- It is noted that the appellant did not actively cooperate in the investigations, initiated by the DRI in its initial stage. They however and being an outstation broker, in all propriety have sought 15 day s prior notice, which on both the occasions of DRIs summons was elusive. Also the appellant has been penalized by the Additional Chief Metropolitan Magistrate in the criminal complaint filed by DRI at Ahmedabad, for non attendance to summons and making over the required documents - thus, having suffered the imposition of penalty by the ACMM, Ahmedabad there is least of justification in imposition of penalty involving moral turpitude, under regulation 18(f) for the said act. Also this may not actually be a case involving moral turpitude, be as it is certainly not linked to an immoral act on the part of the appellant. It is noted that it was imperative for the appellant to have with greater sincerity and due care taken measures to abide by the summons issued. This is all the more, relevant for them as they are a licensed Customs Broker and thus in a way being an extended arm of the department and an important interphase with the trading (importing and exporting) community, they had to be more vigilant and demonstrative in their actions and conduct. There is no justification in imposition of maximum penalty prescribed under the regulations - the ends of justice would be met by imposing a token penalty of Rs. 10,000/- on the appellant, under regulation 20 of the CHALR, 2004 - Appeal disposed off.

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• 2023 (8) TMI 1328
  Valuation of imported goods - old and used worn clothing, completely fumigated - restricted item or not - classifiable under Tariff Item No.63090000 of the First Schedule of the Act - enhancement of value - confiscation - redemption fine - penalty - HELD THAT:- This issue came up before this Tribunal in the case of VENUS TRADERS, RAINBOW INTERNATIONAL, AL-YASEEN ENTERPRISES, GLOBE INTERNATIONAL, KRISHNA EXPORT CORPORATION, PRECISION IMPEX, BMC SPINNERS PVT. LTD., SHIVAM TRADERS, LEELA WOOLEN MILLS, M.U. TEXTILES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) MUMBAI [ 2018 (11) TMI 625 - CESTAT MUMBAI] , wherein this Tribunal has held that failure of the original authority to comply with the direction in remand to disclose the margin of profit that prompted the fine and penalty, the matter would normally have to be remitted back by another remand order. There is a failure of the original authority to comply with the direction in remand to disclose the margin of profit that prompted the fine and penalty, the matter would normally have to be remitted back by another remand order - the confiscation of the goods under Section 111(d) of Customs Act, 1962 upheld - the ends of justice would be served by reducing the redemption fine to 10% of the ascertained value and penalty to 5% - appeal allowed in part.

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• 2023 (8) TMI 1327
  Condonation of delay in filing appeal before commissioner (appeals) - appeal rejected on the ground of time limitation - sufficient reasons for delay or not - HELD THAT:- The appellant is a sole proprietorship firm and the Proprietor is aged about 70 years, therefore, we are of the view that the reasons given by the appellant for delay are sufficient to be condoned, more so for the reason that the delay is only of 27 days, which falls within the period of 30 days, as provided in the Proviso to Section 128 (1) of the Customs Act. The judgement of the Apex Court in SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [ 2007 (12) TMI 11 - SUPREME COURT] was followed by this Tribunal in the case of M/S SHAMBHU SYNTHETICS PVT. LTD VERSUS COMMISSIONER OF CUSTOMS ICD, TUGHLAKABAD (IMPORT) NEW DELHI [ 2021 (4) TMI 118 - CESTAT NEW DELHI] , whereby it was held that Tribunal does not have any power, much less discretionary power, to condone any delay beyond the extended period of 30 days, after the expiry of the normal period of 60 days. The reasons given by the appellant for condonation of delay are adequate and enough to condone the delay of 27days in filing the appeal. The ends of justice would be met, if the appeal filed by the appellant is considered on merits by the Commissioner (Appeals) and hence matter remanded to decide the issue on merits - appeal allowed by way of remand.

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• Corporate Laws

• 2023 (8) TMI 1326
  Seeking stay on auction sale - right over the Disputed Land - Administrator contended that the alleged sales are void against the Company and the Official Liquidator because they were subsequent to the commencement of winding up and not bona fide - HELD THAT:- The Company asserts title through the MOU, the GPAs, the sale receipts, the deeds of undertaking, and on the basis of being in possession of parent documents. The MOU was executed by the Company and a local intermediary, namely, Mr.T.V.Pattan. The terms and conditions disclose that Mr.T.V.Pattan was responsible for procuring 200 acres of land and 20% of the total amount was agreed to be paid as advance. The agreed price was Rs.11,250 per acre. It is further provided in the MOU that Mr.T.V.Pattan agreed to hand over all the original documents relating to the respective lands at the time of registration of the GPAs. The contention of learned Administrator that about 58 acres was conveyed to the customers of the Company through the GPA holder, Sankaran, is liable to be accepted. When the survey numbers specified therein are compared with the survey numbers mentioned in the sale deeds executed by the GPA holder in favour of the predecessors-in-interest of the applicants, it is also evident that the GPA holder had fraudulently sold/re- sold 86.86 acres of land, including the 58 acres sold earlier through such GPA holder to the Company s customers under registered sale deeds. What is the effect of the injunction order on the sale deeds executed by the GPA holder subsequent thereto? - HELD THAT:- By taking into account the MOU, the GPAs, receipts and letters of undertaking, there is sufficient basis to conclude that the Disputed Land is an asset of the Company. Considering the fact that the MOU, GPAs and receipts were executed in 1995, whereas the sale deeds in favour of the applicants were in 2013, which is much after the commencement of winding up, the said dispositions are void in terms of Section 536(2) of CA 1956. Such sales were detrimental to the interest of the Company and, therefore, cannot be validated. Consequently, the sale deeds are declared void and the pattas issued on that basis are also void. Application dismissed.

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• Insolvency & Bankruptcy

• 2023 (8) TMI 1325
  Admission of application u/s 9 of IBC - application under Section 9 was filed in the year 2021 inspite of notice issued by the Adjudicating Authority Corporate Debtor did not file any reply and apparently did not contest the proceedings - HELD THAT:- Before the Adjudicating Authority neither the Corporate Debtor nor the Operational Creditor brought all the facts into the notice of the Adjudicating Authority and Adjudicating authority without taking into consideration the subsequent events which have bearing on the CIRP process has admitted Section 9 application by initiating CIRP - appellants who have been handed over the projects and who under the statutory orders have submissions which need to be looked into by the Adjudicating Authority before passing any order under Section 9. The order impugned cannot be sustained and is set aside, however, the application is revived before the Adjudicating Authority to be preceded and decided again in accordance with law - Appellants are impleaded to the Section 9 application and they are permitted to file their reply. Appeal allowed.

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• 2023 (8) TMI 1324
  CIRP - Trespass on a property, allegedly owned by the corporate debtor - Non application of mind and without any evidence finding given that the Appellant has trespassed on the said property - violation of principles of natural justice - HELD THAT:- A close perusal of the Impugned Order in respect of the furnishing of the original documents in possession in support of acquisition of land as appearing in the Audited Financial Statement shows that the Adjudicating Authority has only directed R-1 (Appellant) to provide all the original documents in his possession in support of acquisition of land as appearing in the financial statement of the liquidator. Such an order does not cause any prejudice to the appellant, but merely requires the appellant to produce original documents which may be in his possession in support of acquisition of said land. It is seen from the judgment in Shailesh Chawla and Ors. Vs. Vinod Kumar Mahajan and Ors. [ 2020 (9) TMI 947 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] that an application is placed on the promoters and personnel of the corporate debtor to cooperate with the Interim Resolution Professional (IRP) and help in timely completion of the resolution or liquidation process. The Impugned Order in both the appeals have been given to ensure that proper and adequate cooperation is rendered by the personnel, ex-promoters and directors of the corporate debtor to the Resolution Professional/Liquidator to ensure that the process of insolvency resolution or liquidation is completed in a timely manner, which is at the very heart of IBC. The Impugned Order does not give any finding regarding the ownership of the said property, but merely requires that the Appellant or any other person should not trespass on the property of the corporate debtor and status quo regarding the scheduled property should be maintained till the successful completion of the liquidation process - such an order does not cause any prejudice to the Appellant and merely requires him to maintain status quo. The question of his ownership or otherwise of the said land is not the subject of section 19 application filed by the liquidator. These appeals do not deserve to be admitted and are dismissed at the stage of admission.

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• 2023 (8) TMI 1323
  Change in date of default - application filed by the Financial Creditor is hit by Section 10A of IBC or not - It is submitted that the date of default (30.04.2020) occurs during the period from 25.03.2020 to 25.03.2021, therefore, the petition could not ever have been filed. Whether the date of default once mentioned in Part- IV by the Financial Creditor can be changed in view of a decision of the Hon ble Supreme Court in the case of Ramesh Kymal [ 2021 (2) TMI 394 - SUPREME COURT] - Whether the Financial Creditor (Bank) who has already furnished ROD can change the date of default by a subsequent ROD on the basis of circular dated 03.04.2023 issued by the NCLT? HELD THAT:- Since, we have found that there are arguable points involved in this appeal, therefore, we issue a formal notice to the Respondents who is already on caveat, enabling it to file its reply - Let the reply be filed within two weeks i.e. up to 25th August, 2023 and rejoinder, if any, be filed by the Appellant within two weeks thereafter i.e up to 14th September, 2023. List for hearing on 20th September, 2023. In the meanwhile, till the next date of hearing, operation of the impugned order shall remain stayed.

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• Service Tax

• 2023 (8) TMI 1322
  Refund of CENVAT Credit - input services - inclusive clause is independent of means clause or not - nexus established between services rendered and the business carried out by the Assessee or not - HELD THAT:- The activities relating to business have been further amplified by describing each of these services such as accounting, auditing, financing, computer networking, credit rating, security, etc., used in relation to the business. Therefore, the definition of input service covers both services used by the provider of taxable service for providing output service as well as services used in relation to, inter alia, activities relating to business as long as it is not specifically excluded from the definition of input service. Admittedly, none of these services were specifically excluded. There is also force in the argument that the ratio of M/S. MARUTI SUZUKI LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-III [ 2009 (8) TMI 14 - SUPREME COURT] in respect of input service is not appropriate in as much as it was primarily in the context of input(s) and not any input service - In the case of M/S ALLIANCE GLOBAL SERVICES IT INDIA PVT. LTD. VERSUS THE COMMISSIONER C.C.E ST, HYDERABAD [ 2016 (6) TMI 720 - CESTAT HYDERABAD] , the Coordinate Bench of the Tribunal, in the case of service provider/exporter of ITSS, held various input services including Courier service, Management, Maintenance Repair service, Manpower Recruitment service, Renting of Immovable Property service, etc., as having nexus with the exported service. The service was in the nature of Business Auxiliary Service and the service has been held to be otherwise an eligible service in respect of their company - Therefore, on both counts, this is eligible service for the purpose of taking credit. In the light of the said clarification, the credit claimed in the subsequent quarter for refund, even if pertaining to earlier quarter, has to be considered, if the same has not been availed or claimed as refund subsequently in another refund matter(s). This needs to be ascertained by the Lower Authority. Appeal allowed by way of remand.

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• 2023 (8) TMI 1321
  Works Contract Service - Failure to discharge the service tax on the consideration received - appellant had not obtained service tax registration and had not filed ST-3 returns - N/N. 06/2015-ST dated 20.03.2015 - HELD THAT:- It is noted by the adjudicating authority that due to lack of documents, the income as shown in the P L Statement is taken as the basis for computing the tax liability. The Department has quantified the duty by extending the benefit of abatement, wherever documents are available. Wherever there was no documentary evidence, the quantification of Service Tax was arrived at without extending the benefit of abatement. Needless to say, that in works contract services, as cost of materials also form part of the contract, the benefit of abatement has to be extended to an assessee. It is clarified in the letter dated 26.07.2022 issued by the Public Works Department that the amount shown under Service Tax heading has to be read as TDS on Sales Tax (VAT). Such letters have been issued by other Government departments also. The impugned order does not seem to have considered all these aspects. It is also to be borne in mind that in case of works contract services rendered to Government authorities, the amount is paid to the contractor on the basis of work completion as recorded in the Measurement Book (M-book) which is maintained by the departments. The appellant could not obtain such documents due to the outbreak of the Covid-19 pandemic. They have now produced filed miscellaneous application, and produced documents. The appellant has to be given an opportunity to put their defence on the basis of the documents furnished by them. The matter is remanded to the adjudicating authority for de novo adjudication - Appeal allowed by way of remand.

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• 2023 (8) TMI 1320
  Levy of Service Tax - Business Auxiliary Service - amount of royalty paid to overseas entity and the commission received from Greg Norman Division for identifying and negotiating with Indian exporters - Reverse charge mechanism - consideration received from Matrix Clothing Pvt. Ltd, Super Fashion and Paragon Apparel for importing assistance with respect to exports - Technical Inspection and Certification Service - time limitation. Taxability of the royalty received by the appellants from their masters for the technical know-how received from them under an Agreement - HELD THAT:- There is no mention of any patent of any design etc. being registered in India. Also, there is no mention of any separate payment for the different constituents forming part of the know-how - Tribunal has been taken a consistent stand that transferring of technical know-how cannot be equated to transfer of Intellectual Property Right and that as long as the said Intellectual Property Right is not registered or patented in India; the same would not qualify to be IPR taxable in India in terms of Section 65 (55a) of Finance Act, 1994. The Tribunal in the case of ASEA BROWN BOVERI LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, LTU [ 2016 (7) TMI 559 - CESTAT BANGALORE] observed that the service(s) if any, provided by the foreign companies by way of transfer of subject matter(s) under respective agreements to the appellants cannot be covered under the taxable service of Intellectual Property Service as defined under Section 65(105)(zzr) of the Finance Act, 1994. This Bench in the case of Schneider Electric India Pvt. Ltd. [ 2023 (6) TMI 1198 - CESTAT CHANDIGARH] considered all the earlier judgments of the Tribunal and came to a considered conclusion that technical know-how is not taxable unless the same is shown to have been registered in India - In the instant case too, it is found that the Department did not produce any evidence to show that the technical know-how or any constituent items therein have been registered in India. This being the case, there are no reason to differ with own finding given in the case of Schneider Electric and in the case of ABB Ltd. - thus, no case has been made by the Department to recover service tax from the appellants in the impugned case. The appellants have also contended that the taxable event having taken place much earlier to the levy of service tax on Intellectual Property Rights, no service tax can be levied on the same in the instant case as the Agreement was made in 1995 and was renewed in 2002 - the Larger Bench in the case of Arcelor Mittal Stainless (India) Pvt. Ltd. [ 2023 (8) TMI 107 - CESTAT MUMBAI] held that: concept that service tax is a destination-based consumption tax is also in conformity with international practice in respect of vale added taxes. Thus, in a destination-based consumption tax, the tax is levied only at the place where the consumption takes place. It is for this reason that exports are not taxed and imports are taxed on same basis as domestic supplies. In respect of all the issues raised in the show-cause notice, Revenue did not make out any case for levy of service tax on the appellants. The impugned orders, thus, cannot be sustained and are liable to be set aside - Appeal allowed.

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• 2023 (8) TMI 1319
  Levy of Service Tax - rent- a-cab service - providing bus service to the school children for Transportation from their home to school and from school to home - service clearly for the school children who are taking education in the school run by M/s. J K Paper Limited - HELD THAT:- From the definition of Cab it can be seen that the motor vehicle which is rented for use by an educational body imparting skill or knowledge or lesson on any subject or field shall not be included within the meaning of cab. In this case it is admitted fact that the motor vehicle has been used by an educational body i.e., school for transportation of school children. Therefore, the same is excluded from the definition of rent-a -cab. The lower authorities have denied the exclusion of such service in definition on the ground that the service recipient is J.K paper Limited which is a commercial organization and cannot be treated as educational body - the use of motor vehicle being for transportation of school children is clearly excluded from the definition of rent- a cab service. Therefore, the same is not liable to service tax. The impugned order is modified. The appeal is allowed.

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• Central Excise

• 2023 (8) TMI 1318
  Captive Consumption - molasses manufactured and captively consumed for the manufacture of neutral alcohol , rectified spirit which is not appearing in the first schedule to Central Excise Tariff Act, 1985 - denial of N/N. 67/95-CE dated 16.03.1995 as amended - HELD THAT:- The issue is squarely covered by the Final Order of Tribunal in the case of M/S MANKAPUR CHINI MILLS LTD., M/S BALRAMPUR CHINI MILLS LTD. VERSUS C.C.E. S.T. -LUCKNOW [ 2017 (5) TMI 391 - CESTAT ALLAHABAD] and BANNARI SMMSN SUGAR LTD VERSUS C.C.,C.E. S. T-MYSORE [ 2018 (2) TMI 813 - CESTAT BANGALORE] , which was affirmed by the Hon ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S. DHARANI SUGARS AND CHEMICALS LTD. [ 2022 (3) TMI 274 - SC ORDER] , where it was held that rectified spirit which is not used for human consumption is nothing but ethyl alcohol and is finding place in tariff item No. 2207 20 00. Appeal allowed - decided in favour of appellant.

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• 2023 (8) TMI 1317
  CENVAT Credit - input services - construction and erection services in the factory - It is the contention of the Department that after the amendment to the definition of the input service, all construction services undertaken within the factory premises fall outside the scope of the said definition - HELD THAT:- It is concluded that a harmonious reading of the inclusive part of the definition and the exclusion clause mentioned at clause (a) relating to construction service of the definition of input service , it is apparent that the construction service relating to modernization, renovation and repair of the factory continued to be within the meaning of input service and accordingly, the Service Tax paid on such service is eligible to credit. It is a fact that the appellant took credit on the services used in the construction of civil structure for newly setup of Steel Melting of Continuous Castings Machine (SMS), and for provision of fabrication and erection service for the installation of the SMS plant, which is covered under the definition modernization, renovation or repair . The Tribunal has consistently held that credit on such services is available to the taxpayer, which have been quoted by the learned counsel while making his arguments. The impugned order is set-aside and the appeal is allowed.

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• 2023 (8) TMI 1316
  Denial of CENVAT Credit - Levy of penalty on appellant - input services on the strength of supplementary invoices - interpretation of Rule 9 (1) of the CENVAT Credit Rules, 2004 - HELD THAT:- Rule 9(1) of CCR provides for the documents against which the appellant could have taken the CENVAT credit. Whereas sub rule 1 (a) and (b) are with reference to the documents that are in respect of the clearance and payment of Central Excise Duty/ Countervailing duty, sub rule 1 (e), (f) and (g) prescribes the documents against which the CENVAT Credit of Service Tax could have been taken. Sub-rule 1 (b) makes the distinction between the invoices issued at the time of clearance of goods and those issued subsequently as supplementary invoices. As the manner of payment of service tax was made on the accrual basis with effect from 01.04.2011, which was akin to the what had been provided in respect of the goods, Rule 9 (1) (bb) was a natural consequence to align the CENVAT Credit Rules in respect of services and goods. It is the first time that CENVAT credit rules made distinction between the Invoice and Supplementary invoices in respect of service tax paid. Hence order of Commissioner drawing support from newly inserted rule 9 (1) (bb) to apply the Rule 9 (1) (b) for denying the credit availed by the appellant cannot cannot be sustained. There are no merits in the impugned order denying the credit on the supplementary invoices evidencing the payment of service tax for the period prior to amendments made in the CENVAT Credit Rule, 2004 by way of insertion of Rule 9 (1) (bb) with effect from 01.04.2011 - the issue of invocation of extended period of limitation not required to be taken of. The order disallowing the CENVAT Credit set aside, the order demanding the interest and for imposition of penalty will be set aside - the demands for Cenvat credit, interest and penalty is set aside. Appeal allowed.

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• 2023 (8) TMI 1315
  Valuation - adopting a lesser price than the price at which similar goods were sold by the said consignment agents on that date and place of removal during the period 01.07.1997 to 31.03.2001 - place of removal - price declaration as required under Rule 173C of erstwhile Central Excise Rules, 1944 - HELD THAT:- The show cause notice is dated 25.07.2002. It is not disputed that the appellant had filed price declaration as required under Rule 173C of Central Excise Rules, 1944. However, the department noticed some price variation for certain invoices in regard to clearance of goods to consignment agents for which the demand has been issued - It is seen that due to non-availability of certain invoices the department has adopted the nearest comparable price. The appellant has been in continuous litigation against the demand of duty. It has been their consistent view that the quantification of demand is incorrect and they have discharged the duty as applicable during the material time. It is also their contention that they have been requesting the department to furnish documents relied upon by the department for quantification of the duty. Undisputedly, the original documents have been taken by the department during the investigation. It is seen that the direction of the Tribunal has not been complied by the department. The appellant had filed RTI application and in the reply dated 17.01.2018, the department has stated that the documents are not readily available. However, the de novo order has been passed by the adjudicating authority on 29.05.2018 - It cannot be understood how the department has been able to pass the de novo order without perusing the relied upon documents if the documents were not available. In case, the documents were available, the same ought to have been supplied to the appellant before passing the order. In the personal hearing dated 08.05.2018, the counsel appearing for the appellant has stated before the adjudicating authority that appellant has not received the required documents to put forward their defence with regard to the error in the quantification by the department. There is nothing to conclude that the documents (especially final sale invoices) were not taken away by department. In fact it is expressly stated in the SCN that documents were taken by the department. The appellant has been consistently contending that they have paid Rs.18,81,1515/-. Commissioner (Appeals) in the earlier round of litigation after perusal of available records accepted this contention of the appellant and ordered for appropriation of Rs.18,81,515/- and so also reduced the penalty to Rs.7,91,568/- holding that the balance differential duty payable by the appellant would be only Rs.7,91,568/-. Taking all these aspects into consideration we do find that there is some confusion with regard to the quantification of the duty. If the Department had obtained original records of the appellant at the time of inspection / investigation, these records ought to have been returned to the appellant after retaining the photo copy. It is forthcoming from records that appellant has not been able to sufficiently put forward their defence due to non-supply of relied upon documents. This is indeed violation of principles of natural justice. The impugned order is modified - the duty demand to the tune of Rs.18,81,515/- is upheld and the balance is set aside - the penalties imposed are entirely set aside - Appeal allowed in part.

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• 2023 (8) TMI 1314
  CENVAT Credit - input services - nexus with the manufacture goods - Way Bill Generation - Belt Jointing Services - H.O. Rent - H.O. Car Parking - H.O. other Services - penalty u/s 11AC of CEA. Belt Jointing Services - HELD THAT:- Admittedly the Appellant has cleared the Conveyer Belts in CKD and the same is installed at the premise of the buyer - the Appellant has cleared the goods to the buyer in CKD from the factory premises, the place of removal in this case would be that of the Appellant s factory only. Therefore, the Belt Joining Services used by the Appellant at the buyers end, would not be an eligible service for taking Cenvat credit. The provision that the Cenvat credit would be eligible only up to the place of removal has come into effect from 01.04.2011. Therefore, in this case if any of the demand is on account of input services towards Belt Joining Services were received prior to 01.04.2011, they would be eligible for the Cenvat credit. This fact is required to be verified by the Adjudicating Authority and should be allowed by him in such cases. Way Bill Generation - H.O Rent - H.O Car Parking - H.O other Services - HELD THAT:- The input services used are essential for carrying out the business activities of the Appellant. Therefore, they are eligible for the Cenvat credit only. The appeal to this extent is allowed. Thus, no case of suppression has been made out by the Department. Further, it is seen that in respect of four out of the five services, it has been held that the Appellant is eligible for Cenvat credit. Even in the case of Belt Jointing Services, the amendment came into effect only from 01.04.2011 only. Therefore, the penalty imposed under Section 11AC is not called for and the same is set aside. Appeal disposed off.

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• CST, VAT & Sales Tax

• 2023 (8) TMI 1313
  Amnesty Scheme - denial of scheme on the ground that the dues have not been completely paid - wilful mis-statement in the return - HELD THAT:- Sec. 30(6) would indicate that where a dealer is liable to pay interest under Sub-section (5) or under Sub-section (7) of Sec. 42 and he makes payment of an amount which is less than the aggregate of the amount of tax, penalty and interest, the amount so paid shall be first applied towards the amount of interest. In case of the petitioners, at the relevant time, there was no purchase tax due nor was it payable. What was required to be seen was the actual tax due as per the return actually filed by the dealer and not the return which ought to have been filed. Reading the Section as a whole indicates that the concept of interest on such payments is on the payment of tax due as per returns. In the case of the petitioners, the scrutiny of the actual returns filed indicate that the petitioners had claimed erroneous input tax credit of the purchase tax amount shown in the return, and therefore, such purchase tax was not shown as due in the return. In light of this, it was not actually due and payable, and therefore, the provisions of Sec. 30 could not have been pressed into service. Considering the intention of the amnesty scheme, the interest had to be waived in respect of the tax declared under the scheme, and therefore, the action of the respondents in adjusting the tax paid along with the returns towards the interest is completely contrary to the object, purpose and the terms of the scheme. Even as per the scheme, there is no appeal that would lie against the rejection of a claim thereunder. The Demand Notice dated 30.10.2021 issued by the respondents is quashed and set aside and the action of modifying the assessment order by adjusting the tax paid by the petitioners against interest liability is set aside and the respondents are directed to consider such tax as paid and adjusted against principal tax liability - Petition allowed.

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• 2023 (8) TMI 1312
  Refund of Input Tax Credit - stock transfer of Gold Bullion - invocation of revision under Section 32(2) of the VAT Act - HELD THAT:- The reasons for seeking to revise the concluded assessment must be expressly stated in the show cause notice. The revisional authority cannot initiate proceedings with a view to start a fishing and roving enquiry and cannot be permitted to begin fresh litigation because of new views he may entertain on facts or new versions as to what should be the inference or proper inference either on facts disclosed or the weight of the circumstances. Merely because the view expressed by the assessing authority is not acceptable to the revisional authority would not render the assessment order to be prejudicial to the interests of revenue. It is true that a revisional order passed under Section 32(2) of the VAT Act is an appealable one under Section 33(1) of the VAT Act. However, as already noted above, the present writ petition was admitted on 07.09.2021 with an interim order. Having admitted the writ petition, it would not be justified to non suit the petitioner on the ground of availability of alternative remedy at the stage of hearing - the law is well settled that notwithstanding availability of alternative remedy, a petition under Article 226 of the Constitution of India would well be entertainable, provided the aggrieved person makes out a case of violation of the principles of natural justice, when there is a challenge to vires of a statute, when there is violation of fundamental rights or an order is without jurisdiction or in excess of jurisdiction. There was no material before respondent No. 3 to come to the definite conclusion that petitioner had transferred the purchased gold bullion from Hyderabad to its manufacturing unit at Kolkata and thereafter had exported the manufactured gold jewellery from Kolkata on the basis of purchase orders - Since respondent No. 3 had taken the view that petitioner had not furnished details of the manufacturers with their addresses and the quantity of gold sent for manufacturing as per specific designs of the foreign buyers etc., it would be appropriate to remand the matter back to the file of the revisional authority for a fresh decision in accordance with law with liberty to the petitioner to produce evidence to support its contention. Petition allowed by way of remand.

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• Indian Laws

• 2023 (8) TMI 1311
  Dishonour of Cheque - vicarious liability of Director - resignation on the date of issuance of cheques in dispute - cause of action arisen for filing impugned complaints - Sections 138 and 141 of NI Act - HELD THAT:- In the case at hand, considering the proximity of time in alleged resignation of the petitioner and issuance of cheque in question and its dishonour, absence of other details and material such as appointment of any new director in place of present petitioner, any board resolution to strengthen the case of petitioner and in view of other reasons mentioned in preceding paragraphs, this Court, at this stage, cannot come to a conclusion, with utmost certainty, as to when had the petitioner actually resigned from the office of Director of accused company and as to whether or not he was involved in dishonouring of the cheques in question, amounting to Rs. 11.75 crores, especially when there are specific averments to the effect that he was involved in the process of obtaining loans from the complainant and issuing the cheques in question. The material placed on record by the petitioner is not sterling incontrovertible material or unimpeachable material to show that petitioner was not involved either in day-to-day activities of the company or had no role in issuance of cheque in question or its dishonouring. Petition dismissed.

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