Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 10, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
GST
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GST Council: Medicines Cheaper, Insurance Under Lens, Snacks Taxed Lower.
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Commissioner's order for provisional GST attachment quashed due to lack of recorded reasons.
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Small dealer's delayed GST return filing condoned; to pay late fees.
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Company denied tax credit due to alleged improper purchases, creditor non-payments, and auditor payments.
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Petitioner gets 2 weeks to reply, respondents 6 weeks to pass reasoned order after hearing; order communicated in 2 weeks.
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GST Cancellation Chaos: Retrospective Effect Revoked, Fairness Prevails.
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Illegal GST raid alleged, private data accessed; probe ordered, CCTV sought.
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GST registration cancellation order quashed for lack of proper show cause notice and reasoned order.
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Procedural Compliance in GST Assessment Upheld with Partial Relief on Pre-Deposit.
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Tax registration abruptly cancelled; court restores it temporarily for compliance.
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Petitioner challenges GST rate hike notice, court rules mere issuance not unlawful, right to reply and appeal available.
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Contractor KG Foundation liable for GST, not petitioner; High Court dismisses petition challenging tax order on construction services.
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Tax demand revoked due to procedural lapse; chance to contest notice after part-payment.
Income Tax
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Property Value Dispute: FMV Difference Below 10% Exempts Invocation of Sections.
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Lawful share trading losses & expenses disallowed on mere suspicion, audited records ignored.
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Maintenance charges paid by tenants attract 2% TDS, not rent TDS.
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Incorrect reporting of interest on tax refund as business income; no tax evasion.
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Tax claims extinguished after insolvency resolution plan approval, no further proceedings allowed.
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Unexplained cash expenses can't attract penalty if not corroborated by search evidence.
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Charitable trust's delayed final 80G registration allowed on technicality.
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Trademark Transfer Chargeable as Short-Term Capital Gain; Deductions Allowed for Leave Encashment & Land Surrender Loss.
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Kachha Adhatiya allowed TDS credit u/ss 194H & 194Q on commission income.
Customs
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Importers win provisional release of seized digital devices after long legal battle.
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Amount deposited during probe entitled for interest till refund as per Constitution.
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Customs duty case: Personal use vs. integrated tax on imported goods - Onus not discharged in show cause notice.
IBC
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Tax authority deems invoices bogus, rejects creditor's debt claim; legal battle continues.
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Creditor's debt claim upheld as borrower's letter deemed acknowledgment of liability, extending limitation period.
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Unpaid operational creditor's challenge to approved resolution plan dismissed despite harsh outcome.
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Disciplinary Committee can have single IBBI whole-time member under IBC Section 220.
Service Tax
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Bank referral service ruled as 'Export of Services', not 'Intermediary Service' - exempt from tax.
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Service tax exemption for cheque dishonour & late delivery penalties - no service rendered through default.
Central Excise
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Clandestine manufacture allegations on structural items dismissed due to lack of cross-examination of witnesses.
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Central Excise Duty challenge on bought-out items; delayed adjudication citing GST unacceptable.
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Refund denied on confirmed interest demand settled under amnesty scheme. Unjust enrichment irrelevant when refund inadmissible.
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2024 (9) TMI 447
Constitutional Validity of Sections 2, 9, 12 and 18 of the Constitution (101 st Amendment) Act, 2016 violating the basic structure of the Constitution of India - grounds raised are based on the constitution of a Goods and Services Tax Council (GST Council), on whose recommendations the Parliament is alleged to be acting, which, according to the writ petitioner, is an abdication of the legislative functions - it was held by High Court that ' A writ petition under Article 226 of the Constitution, as held by the Hon ble Supreme Court, is maintainable either for the purpose of enforcing a statutory or legal right or with respect to breach of statutory duty on the part of the authorities. The petitioner has no enforceable right judicially recognized, insofar as the 101st Amendment to the Constitution is concerned and he does not claim any prejudice having been caused to him'. HELD THAT:- It is not required to entertain the Special Leave Petition under Article 136 of the Constitution. SLP dismissed.
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2024 (9) TMI 446
Provisional attachment of a petitioner's property - it is submitted that the impugned order is infirm inasmuch as it does not reflect the opinion of the Commissioner - HELD THAT:- The language of Section 83(1) of the Central Goods and Services Tax Act, 2017 is mandatorily to be followed as it visits the petitioner with penal consequences. It was, therefore, necessary that the impugned order under Section 83(1) of the Central Goods and Services Tax Act, 2017, indicate the reasons which weighed with the Commissioner to form an opinion, that for the purpose of protecting the interest of the Government of revenue and order of provisional attachment was necessary. The mandate of Section 83(1) of the said Act enjoins upon the Commissioner to pass an order in writing in that regard, the very purpose of which is to embody the reasons for forming such an opinion, which then can be tested in a challenge raised thereto. However, in absence of any reason for forming such an opinion, the impugned order cannot be sustained. The same is accordingly hereby quashed and set aside and the matter is remitted back to the Commissioner to record reasons in writing for forming such an opinion in case he deems it fit and proper again to do so - Petition allowed by way of remand.
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2024 (9) TMI 445
GST rate on construction work under Pradhan Mantri Gramin Sadak Yojna - HELD THAT:- Upon perusal of the materials on record to sub serve justice the petitioner shall submit its composite reply to the said Show Cause Notice dated August 9, 2024, Annexure-P7 at page 37 to the writ petition within a period of two weeks from date. The petitioner shall be at liberty to take all the points he wishes to urge before the authority by relying upon whatever records and documents he wishes to reply upon. After receiving the said reply to show cause, the respondent no. 3 upon issuing a prior hearing notice of at least seven days to the petitioner and the respondent no.6 and after giving them an opportunity of hearing shall decide the issue by passing a reasoned order in accordance with law. The entire exercise shall be carried out and completed by the respondent no. 3 positively within a period of six weeks from the date of receiving the reply to show cause from the petitioner as directed above. The reasoned order then shall be communicated to the petitioner, positively within a further period of two weeks from the date of the said reasoned order to be passed by the respondent no. 3 - this Court has not gone into the merits of the writ petition and the petitioner shall be at liberty to urge whatever points he wishes to urge before the respondent no. 3 on the issue. Petition disposed off.
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2024 (9) TMI 444
Cancellation of petitioner s Goods and Services Tax (GST) registration with retrospective effect - SCN directed the petitioner to appear before the concerned officer on the appointed date and time, but no such time or date was indicated in the impugned SCN - violation of principles of natural justice - HELD THAT:- It is material to note that the impugned SCN did not mention any proposal to cancel the petitioner s GST registration with retrospective effect from the date when it was granted. Although, the impugned SCN directed the petitioner to appear before the concerned officer on the appointed date and time, but no such time or date was indicated in the impugned SCN. It is also material to note that the impugned SCN did not specify any particulars as to the allegations that the petitioner had collected the tax and had failed to deposit the same in the account of the Central / State Government beyond the period of three months. The impugned SCN did not mention any particulars as to the amount of tax collected or the transaction in respect of which the allegation is made. The impugned order cancelling the petitioner s GST registration was passed in violation of the principles of natural justice. First, the petitioner was not afforded any opportunity of hearing as no date or time was fixed for such hearing. Second, the impugned SCN did not propose retrospective cancellation of the petitioner s GST registration. And third, the impugned SCN did not contain any specific particulars as to the alleged collection and non-deposit of the tax or the transaction on which such allegation was premised. Plainly, the impugned SCN is vague and cryptic. The impugned SCN and the impugned order are set aside - Petition disposed off.
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2024 (9) TMI 443
Cancellation of petitioner s Goods and Services Tax (GST) registration with retrospective effect - SCN does not set out any specific reason which was capable of eliciting a meaningful response - violation of principles of natural justice - HELD THAT:- The impugned order is unsustainable as it has been passed in gross violation of the principles of natural justice. The impugned SCN does not mention any reason for proposing to cancel the petitioner s GST registration. It merely reproduces the statutory provision which enables the proper officer to cancel the taxpayer s registration, if it is obtained by means of fraud, wilful misstatement or suppression of facts. The impugned SCN does not set out any particulars as to the alleged fraud or statement which is alleged to be a wilful misstatement. It provides no clue as to facts allegedly suppressed by the petitioner. The purpose of issuance of a show cause notice is to enable a noticee to meaningfully respond to the same. In the present case, the impugned SCN does not set out any specific reason which was capable of eliciting a meaningful response. In absence of any particulars as to the alleged fraud, wilful misstatement, or facts allegedly supressed, the petitioner cannot be expected to respond to the same. It is also not clear from the impugned SCN whether the allegation is one of obtaining registration by means of fraud or by wilful misstatement or by suppressing facts. It is also important to note that the impugned SCN did not propose any action for cancelling the petitioner s GST registration with retrospective effect. The impugned order is liable to be set aside as having been passed in violation of the principles of natural justice - Petition allowed.
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2024 (9) TMI 442
Cancellation of petitioner s Goods and Services Tax (GST) registration with retrospective effect - SCN does not indicate any reason for cancelling the petitioner s GST registration with retrospective effect - Violation of principles of natural justice - HELD THAT:- The impugned SCN did not propose any adverse action of cancelling the petitioner s GST registration ab initio, that is, from the date when it was granted. There is no cavil that in terms of Section 29(2) of the CGST Act/DGST Act, the proper officer may cancel the tax payer s registration if any of the grounds as set out in the said provision are satisfied. This also includes the power of the proper officer to cancel the GST registration with retrospective effect. However, such an action cannot be arbitrary or whimsical. It must be informed by reasons. The proper officer must have cogent reason to cancel the tax payer s registration with retrospective effect. The impugned cancellation order was passed not only in violation of the principles of natural justice, but is also not informed by reasons. Thus, the impugned cancellation order is liable to be set aside - it is considered apposite to direct that the impugned cancellation order will not be operative from 01.07.2017, but with effect from 08.02.2021 being the date on which the petitioner had applied for cancellation of its GST registration. Petition disposed off.
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2024 (9) TMI 441
Legality of raid conducted on 16.11.2023 - petitioner alleges that his data and private information had been illegally accessed by unauthorised persons with the connivance of the GST officials - HELD THAT:- It is considered apposite to direct respondent no.2 to consider the complaint of the petitioner and if it is found merited, appropriate action be taken in accordance with law. The petitioner shall also supply the copy of the CCTV footage to respondent no.2 within the period of one week from date. In so far as the impugned SCN is concerned, it sets out certain allegations, which the petitioner is required to meet. The learned counsel for the petitioner submits that the petitioner has responded to the impugned SCN. Petition disposed off.
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2024 (9) TMI 440
Input Tax Credit has been availed in contravention of Section 16 (2) (c) of the Central Goods and Services Act, 2017 - seller has undergone liquidation under the provisions of the Insolvency and bankruptcy Code, 2016, and which fact was made known to the Respondent Authorities - violation of principles of natural justice - HELD THAT:- This petition is being disposed of with liberty to file appeal within two weeks from the date of receipt of copy of this order, by raising all the issues along with the supported judgments. If such appeal will be filed, the same will be decided by the concern appellate authority within a period of four weeks from the date of receipt of copy of order of this Court, in accordance with law.
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2024 (9) TMI 439
Challenge to order in original - order was not uploaded in the portal - HELD THAT:- It is appreciated that the petitioner is aggrieved by impugned order in original. Alternative, efficacious, statutory remedy is available by appeal. The contention that revenue must act as per its own circular is not subject matter of the writ petition. Petitioner will be entitled to exclusion of time spent in prosecuting the writ petition. It was presented on 29th August, 2024. Petitioner must avail of its statutory remedy. The exclusion of time will be from 28th August, 2024 till 3rd September, 2024. Petition disposed off.
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2024 (9) TMI 438
Challenge to the cancellation of registration and rejection of application for revocation of cancellation - denial to petitioner of right to object appropriately in absence of appropriate disclosure - SCN does not identify the name of the issuer and as such the petitioner couldn t appear and explain its case - Violation of principles of natural justice - HELD THAT:- It is found that although, a show cause had been issued for cancellation of registration and though the petitioner had been called upon to respond and appear before the undersigned as recorded in such notice on 11th August, 2023, such notice only has a digital signature with the mark validity unknown . The name of the signing authority is not available. The show cause notice is also vague. No particulars of the fraud and misstatement or suppression have been disclosed. It is found that the petitioner had not responded to the aforesaid notice. No reason has been disclosed for cancellation of registration. The order is absolutely vague and non-speaking - Since, the petitioner did not respond to the show cause notice dated 19th December, 2023, the application for revocation of cancellation had been rejected. The order dated 2nd January, 2024 is set aside - the writ petition is disposed of.
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2024 (9) TMI 437
Challenge to Assessment and demand orders - validity of SCN - SCN had been given only with regard to the proposal of assessing tax and not for the interest and imposing of the penalty. Discrepancy in the assessment amount compared to the proposal - HELD THAT:- On going through the SCN as well as the final order passed by the assessing authority and as pointed out by the learned Government Advocate appearing for the respondent Revenue, it is found that both in the show cause notice as well as in the final assessment order, the proposal under nine heads have been mentioned and has been considered and final order also had been passed for all the nine heads. Violation of Section 75(7) of the GST Act - HELD THAT:- There are no reason to accept the contention of the learned counsel for the appellant, the reason being that, since the amount mentioned in the proposal, if it is calculated totally under the nine heads, certainly that would match with the final figure arrived at by the assessing authority in the final assessment order. Moreover, now by virtue of the order that has been made by the writ Court, of course on payment of 10% of the disputed tax, for which the appellant agreed upon before the writ Court, the second contention also cannot be countenanced. There are no plausible reason to interfere with the order passed by the writ Court, which is impugned in these writ appeals - the impugned order affirmed - order slightly modified, to make payment of 7.5% of the disputed tax instead of 10% as ordered by the writ Court, within a period of three months from the date of receipt of a copy of this order. On making such payment, the assessing authority shall proceed with the re-assessment as per the remand order passed by the writ Court through the impugned order and, after giving an opportunity of being heard to the appellant / assessee, final decision shall be made on merits and in accordance with law. It is made clear that if the modified condition of making the payment of 7.5% of the disputed tax is not complied within the time limit stipulated. Appeal disposed off.
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2024 (9) TMI 436
Rejection of petitioner s application for revocation of cancellation order - to furnish the returns for a continuous period of six months - SCN did not propose the cancellation of the petitioner s GST registration with retrospective effect - principles of natural justice - HELD THAT:- It is material to note that the impugned SCN did not propose the cancellation of the petitioner s GST registration with retrospective effect. Thus, the petitioner had no opportunity to contest such cancellation. The impugned cancellation order also does not set out any reasons for cancelling of the petitioner s GST registration ab initio, that is, from the date of grant of such registration. Section 29 (2) of the CGST Act/the DGST Act expressly empowers the proper officer to cancel the GST registration including with retrospective effect if any of the conditions as set out in the said provision are satisfied. However, it is settled law that such an exercise is to be informed by reasons and the tax payer s registration cannot be cancelled retrospectively whimsically or arbitrarily. It is required to be based on some cogent reasons. In the present case, the impugned cancellation order does not reflect any such reasons. The cancellation of the petitioner s GST registration with retrospective effect is in violation of the principles of natural justice as no such adverse action was contemplated in the impugned SCN. It is considered apposite to direct the respondents to restore the petitioner s GST registration for a period of thirty days to enable the petitioner to file its returns. In the event, the petitioner does so, the proper officer may consider whether any other action is necessary - petition disposed off.
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2024 (9) TMI 435
Challenge to SCN in Form GST DRC-01 - main grievance of the petitioner is that by issuing show-cause notice, the respondents want to levy GST @28% instead of prevalent GST @ 18%, which the petitioner and his counterparts have been paying since 2017 - HELD THAT:- Merely because petitioner has been given notice and his counterparts have not been given notice, the same cannot said to be bad in law. We are also of the view that merely on issuing of the show-cause notice, writ jurisdiction cannot be invoked for the very reason that the petitioner has right to file reply to the show-cause notice and as per the CGST Act, they have a right to be heard before any order is passed on the show-cause notice. Further, any order passed by the authorities is appealable. There are no force in the writ petition and the same deserves to be and is accordingly, dismissed.
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2024 (9) TMI 434
Challenge to order passed by the respondent under Section 62 of the GST Act, 2017 - specific case of the petitioner is that the petitioner is a small time dealer and had failed to notice the same - HELD THAT:- The rigors of sub section 2 to section 62 of the respective GST Act need not be pressed against the petitioner, as the intention of the Department is only to ensure the statutory compliance as long as the dealer complies with the same and pays the necessary late fee charges. The delay in filing the returns in GSTR 3B on 30.05.2024 although beyond the period of 30 days from the date of the impugned order dated 30.01.2024 is deemed to have been condoned. Suffice to state that the petitioner shall pay the late fee as per Section 47 of the GST Act, 2017. The respondent may thereafter independently proceed to assess the returns filed by the petitioner and if there is any shortfall in payment of tax, appropriate proceedings may be initiated against the petitioner under the provisions of the respective GST Act, 2017. Petition disposed off.
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2024 (9) TMI 433
Principles of natural justice - order in original assailed on the ground that the petitioner did not have a reasonable opportunity to contest the tax demand on merits - mismatch between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A - HELD THAT:- It is evident that the tax proposal was confirmed because the petitioner did not reply to the show cause notice or participate in the personal hearing pursuant to the two reminders issued by the respondent. Since the petitioner was not heard before such order was issued, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits by putting the petitioner on terms. The impugned order dated 15.12.2023 is set aside and the matter is remanded for reconsideration on condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order - Petition disposed off.
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2024 (9) TMI 432
Challenge to rejection order dated 24.11.2022 for assessment period 2019-20 - rate of GST - construction activities by KG Foundation - HELD THAT:- GST is imposed on construction services on forward charge basis on the provider of services. In this case, services were provided by KG Foundation and not by the petitioner. Therefore, the contention of learned Additional Government Pleader is liable to be accepted. This writ petition is not maintainable at the instance of the petitioner. Petition dismissed.
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2024 (9) TMI 431
Violation of principles of natural justice - petitioner was not provided a reasonable opportunity to contest the tax demand on merits - petitioner was unaware of proceedings culminating in the impugned order because GST compliances were entrusted to an Accountant who abruptly left the services of the company - mismatch between the GSTR 3B returns of the petitioner and the auto populated GSTR 2A - HELD THAT:- The tax proposal pertains to the mismatch between the GSTR 3B returns of the petitioner and the auto populated GSTR 2A. It is also clear that the tax proposal was confirmed because the petitioner did not respond to the show cause notice. In these facts and circumstances, especially by taking into account the fact that the petitioner could not participate in proceedings because the petitioner was unaware of the same, the interest of justice warrants that the petitioner be provided an opportunity albeit by putting the petitioner on terms. The impugned order dated 16.06.2023 is set aside subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to with in a maximum period of two weeks from the date of receipt of a copy of this order. With in the aforementioned period, the petitioner is also permitted to submit a reply to the show cause notice. Petition disposed off.
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2024 (9) TMI 430
Levy of GST on reverse charge mechanism on transfer of the lease hold rights for the GIDC Estate - HELD THAT:- Issue Notice returnable on 3rd July, 2024.
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2024 (9) TMI 429
Violation of principles of natural justice - SCN and impugned order were uploaded on the View Additional Notices and Orders tab on the GST portal, but not communicated to the petitioner through any other mode - HELD THAT:- On examining the impugned order, it is evident that the tax proposal pertained solely to the alleged wrongful availment of ITC. Learned counsel for the petitioner submitted that the petitioner availed of eligible ITC but committed an inadvertent error while filling up GSTR 3B returns. In these circumstances, it is just and necessary that the petitioner be provided an opportunity to contest the tax demand on merits, albeit by putting the petitioner on terms. The impugned order dated 21.11.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to with in a period of two weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand.
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2024 (9) TMI 428
Violation of principles of natural justice - respondent failed to consider the petitioner's reply and instead confirmed the audit observations in the form of an adjudication order - denial of Input Tax Credit (ITC) in respect of payments made to the statutory auditors - Alleged purchase of goods falling under HSN 85171110 - Alleged non payment to creditors for a period exceeding 180 days. Denial of ITC in respect of payments made by the petitioner to its statutory auditors - HELD THAT:- On perusal of the show cause notice, it appears that the petitioner was called upon to show cause as to why ITC should not be denied because the supply falls within the scope of sub-section (5) of Section 17. The petitioner replied stating that supply of services by an auditor does not fall within the scope of sub-section (5) of Section 17. The show cause notice did not call upon the petitioner to produce relevant invoices. The petitioner has also placed invoices on record. In these circumstances, reconsideration is necessary on this issue. Alleged purchase of goods falling under HSN 85171110 - HELD THAT:- The petitioner asserted that it deals with online recharge coupons and not mobile phones. At the time of audit, the petitioner has produced extensive documents relating to the nature of business carried on by the petitioner, including all financial statements and income tax returns. In view thereof, on this issue also, the matter requires reconsideration. Alleged non payment to creditors for a period exceeding 180 days - HELD THAT:- The show cause notice was based on the balance sheet for the relevant period indicating the outstanding of about Rs.2.05 lakhs to the creditor. In reply to the show cause notice, the petitioner stated that the only creditor is Sun TV and that the credit period is three days. In the absence of evidence of non payment for more than 180 days, it could not have been concluded that the petitioner was not entitled to avail of ITC in this regard. As regards non maintenance of the stock register, even the audit report indicates that it is inapplicable to the nature of services provided by the petitioner. The impugned order is unsustainable and is hereby set aside. As a corollary, the matter is remanded for reconsideration by the respondent. After providing a reasonable opportunity to the petitioner, including a personal hearing, the respondent is directed to pass a fresh order within a period of three months from the date of receipt of a copy of this order - Petition disposed off by way of remand.
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2024 (9) TMI 427
Rate of GST - bill raised after carrying out the contract has not been honoured by the respondents - HELD THAT:- The difficulty expressed is technical. It can also be seen from Ext. R2(b) that the 4th respondent has to approve the payment. This writ petition is disposed of.
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2024 (9) TMI 397
Maintainability of appeal - time limitation - appeal dismissed on the ground that the appeal is filed beyond the limitation provided and there was no application for condonation of delay and the amount of pre-deposit has also not been made - HELD THAT:- On the amount of pre-deposit, there is enough evidence annexed to the petition that a sum of Rs.7,89,09,672/- has been deposited and even the receipt is annexed to the petition. Therefore, to say that there is no pre-deposit in the impugned order is incorrect. Respondent No.2 shall give personal hearing to Petitioner once again, notice whereof shall be communicated atleast 5 working days in advance. The order to be passed shall be a reasoned order dealing with all submissions of Petitioner. If Respondent No.2 is going to rely on any order or judgment of any Court or Tribunal or any other forum, a list thereof shall be made available alongwith the notice for personal hearing. If the order or a judgment is unreported then a copy thereof shall also be made available alongwith the notice. This will enable Petitioner to deal with / distinguish the judgment or order. The appeal shall be disposed by 30th November 2024.
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2024 (9) TMI 396
Appeal dismissed on the basis that the appeal has not been signed by authorised signatory and the Appellant has not submitted Board Resolution under the Companies Act, 1956 - HELD THAT:- Appellate Authority who will hear this appeal shall give personal hearing to Appellant, notice whereof shall be communicated atleast 5 working days in advance. The order to be passed shall be a reasoned order dealing with all submissions of Appellant. If the Appellate Authority is going to rely on any order or judgment of any Court or Tribunal or any other forum, a list thereof shall be made available along with the notice for personal hearing. If the order or a judgment is unreported then a copy thereof shall also be made available along with the notice. This is to enable Appellant to deal with/distinguish the judgment or the order. Appeal disposed off.
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Income Tax
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2024 (9) TMI 452
Assessment as done ex-parte - Addition unexplained investment in property/land - CIT(A) has dismissed the appeal of the assessee, considering the submission of the assessee as afterthought and hence, the appeal of the assessee was dismissed - HELD THAT:- Assessee assured before the Bench if one chance be given to the assessee he will submit all the details related to the investment made and thereby to assessee income before the AO. As it is evident from the record that the order in this case is ex-parte before the AO and therefore, considering that aspect of the matter we hold to remand back the matter to the file of the AO who will decide the issue based on evidence and submission of the assessee as submitted in the remind proceeding. The assessee will not seek any adjournment on frivolous ground and remain cooperative during proceedings before the AO. Appeal filed by the assessee is allowed for statistical purposes.
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2024 (9) TMI 451
Revision u/s 263 - Application of section 56(2)(x)(b) to the purchase of an immovable property - HELD THAT:- We find that the assessee has purchased two different properties i.e. impugned property and another property as referred and detailed by us in foregoing para. Both properties were held by assessee as stock-in-trade and not capital assets and both properties were purchased for a consideration less than the stamps authority valuation. However, while completing assessment, the AO has made addition u/s 56(2)(x)(b) for another property but not for impugned property . In fact, the AO is totally silent about impugned property in assessment-order. When it is so, we are in immediate agreement with DR for revenue that the order passed by AO is certainly erroneous for non-consideration of impugned property for taxation u/s 56(2)(x)(b) when there is no difference in two transactions. Hence, the PCIT is very much justified in invoking revisionary action to assessee s case. Claim of AR that the issue of taxability done by AO u/s 56(2)(x)(b) qua another property is pending before CIT(A) and therefore the PCIT is barred from invoking revisionary action in terms of Explanation 1(c) to section 263 - Explanation 1(c) empowers the PCIT to take up revisionary action to such matter as had not been considered and decided in appeal . Undisputably, the appeal filed by assessee before CIT(A) is qua the addition made by AO in relation to another property and the matter of impugned property is not before CIT(A). Therefore, the Explanation 1(c) very much empowers the PCIT to take up the issue of impugned property for revision. Hence, we do not find any merit in the claim raised by Ld. AR. The above discussion brings us to conclude that the order passed by PCIT is very much in accordance with the provision of section 263. We therefore uphold the same. The assessee fails in this appeal.
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2024 (9) TMI 450
Addition invoking provisions of section 56(vii)(b) r.w.s. 50C - difference between the purchase value and the Circle Rate has come down to less than 10% and therefore the provisions of Section 56(2)(vii)(b) r/w section 50C cannot be attracted - HELD THAT:- We find that in the instant case, the difference in FMV as so determined by the DVO and the stated purchase consideration is 5.32% i.e, less than 10% of the stated sale consideration, the provisions of section 56(vii)(b) cannot be invoked in light of proviso to section 56(vii)(b) r/w the third proviso to section 50C which has been held applicable retrospectively with effect from 01/04/2003 by the Coordinate Mumbai Benches in case of Maria Fernandes Cheryl [ 2021 (1) TMI 620 - ITAT MUMBAI] difference between the stated consideration vis- -vis the stamp duty valuation is admittedly less than 10% of the stated consideration in this case, and we are of the considered view that section 50C will have no application in the matter. Appeal of the assessee is allowed.
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2024 (9) TMI 449
Violation of Order passed by the CPC u/s. 154 - Delay in filing appeal before the Ld. CIT (A) - violation of principles of natural injustice - rental income was taxed twice - under the head income from business and profession and income from house property - HELD THAT:- CIT (A) has not decided the case on merit and rejected the appeal on the ground of delay in filing appeal, it would be in the interest of justice if the matter is sent back to the file of the CIT(A) to decide, on merit, the grounds of appeal filed by the appellant against the order u/s.154 passed by the CPC dated 14/02/2020 by condoning the delay considering the submissions made by the appellant. The matter is, thus, remanded back to the file of the CIT (A) to decide the issue on merit by providing reasonable opportunity of being heard to the appellant. The appellant is also directed to explain its case before the CIT (A). Appeal is allowed for statistical purpose.
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2024 (9) TMI 448
Disallowance of loss suffered by the appellant on genuine share trading and direct expenses incurred in respect of the said trading - HELD THAT:- Reasoning given by AO in the Assessment Order are in the nature of doubts and suspicion and the opinion of the AO as to how such transactions are normally structured. We are inclined to accept the contentions that a bonafide business arrangement between the sister concerns for which an agreement was signed between the parties, which agreement has not been treated as a shell or bogus even by the AO or the CIT(A), does not convert the genuine transaction into bogus transaction as has been done by authorities below. It is not the case of the AO or CIT(A) that losses have not been incurred. On the contrary losses incurred by SGS Infratech Ltd. have been assessed. Only such part of losses, which SGS Infratech Ltd. incurred on behalf of assessee and recovered from assessee have been added in the hands of assessee by holding that assessee should have opened a demat account in its own name in spite of the fact that based on an agreement between the parties. Transactions of sale and purchase of shares were recorded in the regular books of accounts on day today basis. Such books of accounts are audited and accepted by the Department both in SGS Infratech Ltd. as well as assessee. On these facts, the views of the AO or CIT(A) cannot be accepted and are reversed. Addition was made by the AO without any sound legal basis and the facts supported the case of the assessee. The additions made are hereby deleted. Disallowance on account of various expenses - Disallowance is that the transaction of sale and purchase of shares trading business was held to be bogus by the learned AO - HELD THAT:- Since we have already held that the arrangement of sale and purchase of shares is not bogus and therefore we have no hesitation in allowing this ground of appeal to the assessee, the addition is hereby directed to be deleted. Addition on account of income of house property - HELD THAT:- We are of the opinion that for the purposes of computing the income from house property u/s 22 of the Income Tax Act, the ALV is required to be computed at per section 23. Section 23 is a deeming provision and taxes are required to be paid by an assessee if it is found to be the owner of such property. Admittedly, the assessee is owner of such property although for the part of the year. The provisions of section 23(2) have two sub-clauses (a) and (b). Admittedly clause (b) of section 23(2) is not attracted on the facts of the assessee s case. As far as clause (a) is concerned, the same can be invoked only if the assessee as an owner is in occupancy of such property for his own residence. It is not the case of the assessee that the property was kept for its own residence and the assessee claims that the same was held for sale. Property held for sale cannot be treated as occupied for one s own residence. Upon these facts and upon the aforesaid interpretation of provisions of law on this issue, we are of the opinion that no interference in the order of learned CIT(A) is called for and the order of CIT(A) on this issue is upheld and addition is confirmed.
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2024 (9) TMI 426
Validity of income tax proceedings once company dissolved - resolution plan approved u/s 31 of the Insolvency and Bankruptcy Code, 2016 on tax authorities - HELD THAT:- Once a resolution plan is duly approved u/s 31 (1) of the IBC, the debts as provided for in the resolution plan alone shall remain payable and such position shall be binding on, among others, the Central Government and various authorities, including tax authorities. All dues which are not part of the resolution plan would stand extinguished and no person would be entitled to initiate or continue any proceedings in respect of any claim for any such due. No proceedings in respect of any dues relating to the period prior to the approval of the resolution plan can be continued or initiated. In this clear view of the matter, there can be no manner of doubt that the Impugned Proceedings initiated by the Revenue and sought to be defended as if they relate to liabilities that somehow emerge after the CIRP, are wholly misconceived and untenable. The resolution plan, upon its approval, brought a quietus to all claims pursued or capable of being pursued by the Revenue against the Petitioner-Assessee for any operation prior to the CIRP. The stance of the Revenue in the Reply Affidavit, namely, that if the tax claim amount had not been crystallised, would be future dues and not past dues, is totally untenable. Ghanshyam Mishra makes it clear that the continuation of existing proceedings and the initiation of new proceedings, as they relate to operations prior to the CIRP, are totally prohibited after the approval of the resolution plan. Consequently, nothing would survive insofar as the Impugned Proceedings relate to the Petitioner-Assessee. In Alok Industries Ltd. [ 2024 (3) TMI 1083 - BOMBAY HIGH COURT ] a Division Bench of this Court held in favour of the Assessee quashing various proceedings for reassessment initiated against a corporate debtor that had undergone a resolution under the IBC. Evidently and admittedly, the tax proceedings against the Vinod Jatia Group pre-date the CIRP and no matter when the liabilities are purported to get crystallised, even if they are allowed to get crystallised, they would relate to the period prior to the approval of the resolution plan of the Petitioner-Assessee, and therefore stand extinguished. This is why the Supreme Court has clearly ruled that initiation and continuation of proceedings relating to the period prior to the approval of the resolution plan cannot be indulged in. Upon completion of the CIRP, the Petitioner-Assessee has completely changed hands and has begun on a clean slate under new ownership and management. Consequently, all the notices and communications issued by the Revenue in connection with the Impugned Proceedings, and the consequential actions as impugned in this Writ Petition are hereby quashed and set aside.
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2024 (9) TMI 425
Penalty u/s 271AAB - unexplained cash commission expenses u/s 69C - treatment to additional income disclosed by the assessee in the return of income - incriminating material found during the course of search or not? - HELD THAT:- CIT(A) observed that the AO did not bring on record any seized material found during the search to substantiate his finding that assessee had taken bogus LTCG and unexplained cash transactions. We are in agreement with the CIT (A) that the additional income disclosed by the assessee in the return of income should be corroborated with the incriminating material found during the search . AO has not linked the additional income disclosed by the assessee with the materials found during search. As per the record, we observed that assessee has disclosed the additional income without there being any incriminating material found during search. It is a fact on record that assessee has disclosed additional income after search proceedings. In order to impose penalty u/s 271AAB, the onus is on the part of the AO to bring on record that the additional income disclosed by the assessee is having direct link with the incriminating material found during search. In absence of the same, the penalty cannot be levied u/s 271AAB - After considering the detailed findings of the ld. CIT (A), we do not see any reason to disturb the same. Accordingly, grounds raised by the Revenue are dismissed.
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2024 (9) TMI 424
Rejection of final registration u/s 80(G)(5)(iii) - form 10AB was filed beyond time limits prescribed under Clause (iii) of first proviso to sub-section (5) - HELD THAT:- Admittedly the application seeking final registration under Section 80G has been moved by the assessee on 04/09/2023 after getting the provisional registration on 24/08/2023 - find merit in the contention advanced by the AR that the application seeking final registration has been moved well within the prescribed time period i.e, before expiry of six months of provisional registration and is thus not barred by limitation. As far as requirement of second limb of moving such application within six months of commencement of its activities, the same doesn t apply in the facts of the present case as the assessee has already commenced its activities well before seeking the provisional registration and the period of six months of its activities had already expired well before applying the provisional registration thus, making the said requirement as not applicable. Scope of Circular no. 07/2024 dated 25/04/2024 - It has been provided in the said circular that where the Principal Commissioner or Commissioner has passed an order rejecting such application, on or before the issuance of the Circular, solely on account of the fact that the application was furnished after the due date or that the application has been furnished under the wrong section code, it may furnish afresh application in Form No. 10AB within the extended time provided in paragraph 3(H) i.e. 30/06/2024. In the instant case, we find that the application of the assessee has been rejected vide order dated 19/03/2024 before the issuance of the aforesaid circular dated 25/04/2024 and though the time limits prescribed therein have expired, going by intent and spirit of the circular so issued by the CBDT and submissions so made by the ld AR and ld CIT/DR, the assessee application deserve to be examined on merits and cannot be dismissed as barred by limitation. we remit the matter to the file of the CIT(E) to admit the application of the assessee as filed within the stipulated period and examine the same on merits - Appeal of the assessee is allowed for statistical purposes.
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2024 (9) TMI 423
Nature of receipt - receipt on account of transfer of trademark - Revenue or capital receipt - contention of the assessee is no capital gain is chargeable since there was no cost of acquisition - HELD THAT:- We are not in a position to agree with the assessee that the assessee has not incurred any cost on registration of the trade name Rath . No doubt, its value has increased over the years, which is closely linked to the turnover of the assessee company over the period. Therefore, it cannot be claimed that no expenditure incurred to register the brand and it is factual matter that the goodwill and trademark are two different concepts. Before us, it was claimed that it is a self-generated non-depreciable asset, the assessee has relied on the decision of B.C. Srinivasa Setty [ 1981 (2) TMI 1 - SUPREME COURT ] However, facts on record are distinguishable to the facts of the above case. Assessee has already claimed the cost of registration of trademark and other relevant costs during the course of business. It can be termed as a capital asset and as far as the trademark as a capital asset, the assessee also made a submission before the AO agreeing that it is a capital asset as defined under section 2(14) of the Act. Since it is the capital asset, the transfer of such capital asset will come under the head capital gains. Since the cost of registration of the trademark is already claimed as an expenditure it can only be a short term capital asset chargeable to tax as short term capital gain. Therefore, the present transaction of transfer of trademark to ITC is a capital asset chargeable to tax under the head capital gain. Revenue authorities treated the same as business receipt by linking above transaction with non-compete clause mentioned in the agreement. In our considered view, any transaction with intellectual property like trademark, the non-compete clause is automatic and part of the any agreement entered with parties. Therefore, what is relevant is transfer of intellectual assets not consequential clause mentioned in the agreement. Therefore, present transfer is chargeable to tax under the head capital gains. In the result, ground raised by the assessee is dismissed. Disallowance of provisions for employees leave encashment - HELD THAT:- We observed that the issue under consideration is squarely covered by the decision of Hon ble Supreme Court in the case of Bharat Earthmovers Ltd. [ 2000 (8) TMI 4 - SUPREME COURT ] as held if a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied the liability is not a contingent one. The liability is in praesenti though it will be discharged at a future date. It does not make any difference if the future date on which the liability shall have to be discharged is not certain - Decided in favour of assessee. Disallowance of capital loss on surrender of land to DDA - HELD THAT:- We observed that assessee has made similar claim in AY 2004-05. However, [ 2024 (1) TMI 1315 - ITAT DELHI] the coordinate Bench decided the issue against the assessee with the submission made by the assessee that the assessee has claimed the loss by way of revised return only and it was stated that this loss of surrender of land to DDA was claimed in AY 2001-02 wherein the claim has been disallowed and without prejudice to the claim in AY 2001-02, the claim is made in AY 2004-05 as an abundant precaution. Based on the above declaration, the claim of the assessee in AY 2004-05 is dismissed - allow the ground raised by the assessee that assessee has incurred the abovesaid loss and it is allowed to claim the same in the year of claim. Penalty u/s 271(1)(c) - HELD THAT:- We observed that the assessee has claimed receipt from transfer of trademark as capital receipt not chargeable to tax, claimed provision for employee leave encashment based on the actual report and claimed capital loss of transfer of land to DDA. No doubt, the above claim of the assessee is debatable, however these claims were rejected by the AO and does not attract penalties automatically.
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2024 (9) TMI 422
Denial of credit of TDS deducted u/s 194H and 194Q - appellant being a Kachha Adhatiya (Commission Agent) and claiming TDS credit - HELD THAT:- As already been clarified in circular number 452 dated 17th of March 86 issued by the Central Board of Direct taxes that so far as kachha Artia is concerned , then the turnover does not include the sales affected on behalf of the principals and only Commission has to be considered for the purpose of Income Tax under Section 44AB and in support thereof the assessee is Kachha artia and made purchases from the farmers on behalf of buyer and for the very same amount the assessee raised its invoice to the buyer. Therefore for such type of transactions, the assessee receives Commission on which tax is deducted under section 194H of the Act. Also in some cases buyers deduct Tax u/s 194Q of the Act apart from u/s 194 H and in this regard sample invoices raised by the assessee had also been placed on record. As relying on Shri Madan Lal Gupta [ 2024 (4) TMI 1174 - ITAT JAIPUR] Bench directs the AO to allow the credit of TDS deducted under section 194 H and 194Q to the assessee. Thus this ground raised by the assessee stands allowed.
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2024 (9) TMI 421
TDS u/s 194C OR 194I - payment of Common Area Maintenance ('CAM') -Applicability of correct TDS provision - assessee-in-default u/s 201(1) - short deduction of TDS - HELD THAT:- We find that the issue involved in this case is covered by a series of decisions of Co-ordinate Benches of ITAT in the case of Connaught Plaza Restaurants P. Ltd [ 2022 (1) TMI 409 - ITAT DELHI ] CAM charges paid by it were liable for deduction of tax at source @2%, i.e., u/s. 194C of the Act as CAM charges paid by the assessee did not form part of the actual rent that was paid to the owner by the assessee company. In this case, the appellant has taken a shop in R City Mall. The payee has included the amount received as its business income in its return of income and paid the taxes accordingly. The CAM charges paid are for separate and distinguishable services and cannot be said to be for use of building. On similar facts, the Co-ordinate benches of ITAT had held that the CAM charges paid are not covered by Section 194I of the Act and only TDS provision that can be applied is Section 194C of the Act. Appeal of the assessee is allowed.
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2024 (9) TMI 420
Excessive and bogus expenses - Addition made on account of impounded loose papers, showing Income and Expenditure A/c - case of the AO is that what was found during the survey was the real and actual expenditure incurred, whereas the claim of expenditure made by the assessee now through the audited accounts is more as shown in the impounded documents - HELD THAT:- Claim of expenditure of Rs. 4.12 crore cannot be alleged to be excessive, bogus or in-genuine, merely based on the admission made by the assessee during the course of survey, in absence of any other corroborative evidence, specifically showing that what the assessee claimed through the audited accounts, audited income P L account, was not genuine or real expenditure incurred. No doubt, such a remand report operates as an estoppel, against the revenue. However, an independent examination of the record by us, also shows that expenses related to bank charges, bank interest and interest charges which were all routed through banking channels and subjected to TDS. The major expenditure claimed related to discount and rebate in support of which copies of ledger account of all the payees were submitted and available at Pg 62 to 181. No enquiry appears to have been made by the AO from these parties directly. The salary expenses were verifiable from the salary sheet. It is noticed that copies of the ledger account and other supporting evidence were furnished. Thus, if in the final accounts, which are duly audited, there is an increase in the expenditure as compared to the sheet found during the course of survey, such increase itself cannot result in an income and the allegation of the Revenue of having claimed excessive and bogus expenses is nothing more than a suspicion. DR failed to rebut all these factual findings and evidence brought on record by the assessee during the course of hearing. Very pertinently, the accounts were neither rejected directly by invoking section 145 nor indirectly in any manner and therefore, we find no substance in the grounds taken by the Revenue. Relevance of document relied upon by the AO - We are also in agreement with the finding of the ld. CIT(A) that the impounded document relied upon by the AO, has been fully explained by the assessee with the help of corroborate evidence to support the claim of the assessee and such relief has not been granted merely on the legal aspects and technicalities. Therefore, the Department's grounds of appeal as hereby dismissed. Assessee in his statement had already claimed / admitted undisclosed income during the course of assessment proceedings for A.Y. 2016-17, which fact was not appreciated by the CIT(A) - No merit and force in the ground taken by the Revenue and the same appears factually incorrect on the face of it inasmuch as based on the admission of the Assessee that such expenditure related to A. 2015-16 and not to AY 2016-17 only, the AO considered this issue in A.Y. 2015-16 only but not in AY 1617. The ld. CIT(A) has nowhere said that such an issue was to be considered in A.Y. 2016-17 but not in A.Y. 2015-16, hence the ground of the Revenue fails on this count only. However, the other part of the ground wherein it is alleged that the assessee admitted such undisclosed income for A.Y. 2015-16 is contrary to facts. The assessee right from the beginning has been agitating such addition, the merit of which we have already dealt with in response to Ground No. 1 and 3 taken by the Revenue and already stands dismissed and in fact, it was only an alternate argument raised that if at all additions are sustained, they pertain to A.Y. 2015-16 and not A.Y. 2016-17, which cannot be considered as an acceptance or admission of the Assessee. Hence, this ground of the Revenue fails and is hereby dismissed.
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2024 (9) TMI 419
Addition due to income by way of interest on refund - income other sources OR business income - HELD THAT:- Admittedly, in the return of income, relating to the Assessment Year 2017-18, the assessee firm depicted income against column No. 02(x) of Profit and Loss Account for the Financial Year 2016- 17. In the opinion of the AO and ld. CIT(A), said income was not an income from business of the assessee, and rather an income from other sources. The fact remains that the said income was shown under sub-column any other income of main column other income , so far as Profit and Loss Account for the Financial Year 2016-17 is concerned. DR for the department does not dispute this fact. No doubt, when interest is paid on the income tax refund amount, same is required to be reported under the head income from other sources. Here, interest was admittedly allowed u/s 244A of the Act and the assessee firm somehow treated and depicted the said amount as business income, instead of income from other source, but there cannot be said to be any loss to the exchequer, particularly, when the assessee is said to have paid tax on said income at the same rate, even though under a different heading. The appeal filed by the assessee challenging the impugned order as regards the addition due to income by way of interest on refund, deserves to be allowed, and the addition deserves to be deleted.
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Customs
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2024 (9) TMI 418
Refund of amount of interest paid on the amount collected during course of investigation which was paid much before issuance of Show cause Notice - interest on refund - rate of interest. Refund of amount of interest paid on the amount collected during course of investigation which was paid much before issuance of Show cause Notice - HELD THAT:- It is worth noting that amount of Rs.50,00,000/- was deposited much before issuance of show cause notice and adjudication order did not confirm any demand against the appellant and thus the said amount was never appropriated against any demand. There was no demand against the appellant and accordingly such collection of amount was without authority of law. From the decision in Parle Agro Pvt. Ltd. [ 2017 (2) TMI 984 - CESTAT ALLAHABAD] and Omjai Bhavani Silk Mils (P) Ltd. [ 2009 (2) TMI 321 - CESTAT, BANGALORE] it is clear that any amount received during investigation is Revenue Deposit hence cannot be retained for want of any authority of law to retain such amount. Unless there is valid demand against the depositor, it must be refunded with interest from the date it was wrongly collected. Interest on refund - HELD THAT:- Section 11B and 11BB of Central Excise Act will not be applicable to the amount in question. The assessee is entitled for interest on the amount deposited during investigation. Otherwise also, as per the Article 300A of Constitution of India also, no person shall be deprived of his property, save by authority of law. Once the demand proposed under five show cause notices is set aside, it becomes clear that the money deposited continues to be the appellant's property. He cannot be deprived of the same and is entitled for benefits arising out of said property. Hence interest accrued on the amount in question during the period it was in fixed deposit is the property of the owner of the amount i.e. the appellant herein. It was otherwise, involuntary deposited - the appellants are entitled to claim the interest on the amount as has been refunded in their favour that too to be paid from the date of payment of initial amount till the date of its refund. Rate of Interest - HELD THAT:- This Tribunal in the case of M/s. Parle Agro Pvt. Ltd. Vs. Commissioner, Central Goods Service Tax, Noida (vice- Versa) [ 2017 (2) TMI 984 - CESTAT ALLAHABAD] has held that in the light of the above discussed notifications the grant of interest at the rate of 12% per annum seems to be appropriate. Thus, the payment made by the appellant at the time of investigation, in absence of any SCN for the same, cannot be held to be the payment against the demand raised by the Department without even going into the merits of the nature of demand. Though no notification, if any, is brought to notice by the department, irrespective, in view of the decisions of Hon ble Supreme Court and others, the appellant is eligible for refund of interest at the rate of 12%. The findings of the order under challenge are upheld with respect to holding appellant entitled for getting refund of the amount along with interest. However, it is held that the appellant is entitled to have interest on the amount of refund sanctioned at the rate of 12% per annum to be calculated from the date of the deposit of the amount till the date refund thereof. Appeal allowed.
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2024 (9) TMI 417
Exemption of 4% of SAD against at Sno. 2 of table to Notification No.21/2012-Cus dated 17.03.2012 - failure to comply with provisions of Legal Meteorology Act, 2009 and the Rules made there under - HELD THAT:- As per the evidence available on the record, the goods were cleared under Bill of Entry dated 04.08.2014 and thereafter on 07.11.2014, the respondent had intimated the appellant regarding short levy of Rs. 70,384/- in respect of the above bill of entry on the ground that on Post Clearance Audit of Bill of Entry, it is noticed that for few of the items in the bill of entry, 4% SAD exemption was claimed under Notification No. 21/2012-Cus. However, to claim the exemption, the goods should be pre-packaged and intended for Retail Sale and Retail Sale Price should be declared on the packages. Thus, for the above omission, the demand was raised. There is no allegation that the goods do not fall under MRP statutory provisions to claim eligibility of the benefit of N/N. 21/2012-Cus under the Legal Meteorological Rules, 2011. As per the finding in the impugned order, it is alleged that the importer failed to declare the MRP details in any of the import document. However, there is no requirement under any provision of law to make declaration of MRP in the Bill of entry and requirement is only to affix the MRP on the retail packages. In the absence of any such requirement under the Notification No. 21/2012-Cus, no presumption can be drawn that after the clearance of the goods, the packages were not affixed with MRP to meet the requirement of the Notification No. 21/2012-Cus. Appeal allowed.
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2024 (9) TMI 416
Chargeability to integrated tax on imported goods - authority vested by section 3(7) of Customs Tariff Act, 1975 - expression personal use employed in the rate notification - HELD THAT:- Bearing in mind the limitations set out in re Hansoli Devi [ 2002 (9) TMI 799 - SUPREME COURT ], there are no competent to interpret personal use , in the rate notification intended for inter-state sales that was extended also to cover imported goods, as the impugned order has and arrogate a jurisdiction that may be in conflict with interpretation in an inter-state supply transaction. Such an exercise on our part would not only be futile but also has potential for chaos in the mechanism for levy and collection of goods and service tax (GST). The adjudicating authority did venture upon such an exercise through a show cause notice that should, in accord with the General Rules for Interpretation of the Tariff, have set out the justification for resort to Schedule IV of the rate notification instead of attempting to establish that the declaration of the importer was incorrect. Unlike the valuation mechanism which has offerings of alternatives upon discard of declarations, classification may offer several alternatives of which only one must be determined first with full certainty as apt before comparison of aptness. Thus, onus not being discharged in the show cause notice issued to the appellant owing to which the confirmation of duty liability and other detriment failed to meet the tests of law as set out by the General Rules for Interpretation of the Tariff - appeal allowed.
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2024 (9) TMI 415
Request for provisional release of seized goods rejected - Used Multifunctional Digital Devices (MFD) (14 containers) - HELD THAT:- It is seen from the records that there have been number of orders issued by this Tribunal and various High Courts accepting the fact that the impugned MFDs are not liable for absolute confiscation. In this regard, support found from judgments of the Hon ble Supreme Court in the case of COMMISSIONER OF CUSTOMS VERSUS M/S. ATUL AUTOMATIONS PVT. LTD., AND PARAG DOMESTIC APPLIANCES [ 2019 (1) TMI 1324 - SUPREME COURT] stating, the review petition filed by the revenue against the order has been dismissed. The Appellant s request for provisional release of goods was fully covered by the provisions of Section 110A of the Act. Accordingly, the impugned order is set aside and appeal is allowed. Since, the this matter of provisional release of the goods is pending for last more than five years, in the interest of justice, the adjudicating authority is directed to order for provisional release of goods in accordance with law within a period of one month from the date of this order. Appeal allowed.
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Insolvency & Bankruptcy
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2024 (9) TMI 414
Interpretation of statute - Section 220 of IBC - Order passed by the Disciplinary Committee consisting of a whole-time member of the Insolvency and Bankruptcy Board of India - suspension of petitioner s registration for a period of one year from the date of the order - whether the Disciplinary Committee constituted under Section 220 of the Code can consist of a single whole-time member? - HELD THAT:- What is relevant to note is that though the words in singular would include the plural and vice-a-versa, the same is subject to there being nothing repugnant in the subject or context of the matter. In other words, it is not that in all situations a word in the singular can mean to include the plural and vice-a-versa. The context in which such expression has been used would govern the matter. If the subject or context indicates otherwise, it would not be permissible to interpret a singular word to include the plural and vice-a-versa. Reference in this regard can be made to the decisions in The Newspapers Ltd. Vs. The State Industrial Tribunal [ 1957 (3) TMI 55 - SUPREME COURT ] and Dhandhania Kedia Co. Vs. The Commissioner of Income Tax [ 1958 (10) TMI 11 - SUPREME COURT ] wherein it has been held that the principle underlying Section 13 of the Act of 1897 does not have universal application and that the said principle can apply only when no contrary intention is deducible from the scheme or the language used in the statute. The issue with regard to the requisite number of members of the Disciplinary Committee has to be answered by referring to Clause 2 (1) (c) of the Regulations of the 2017 and not on the basis of the proviso to Section 220 (1) of the Code. There is nothing repugnant either in the subject or context of Chapter VI of the Code or the Regulations of 2017 to construe and restrict the sweep of the expression members occurring in the proviso to Section 220 (1) of the Code only to the plural. Rather, the expression member(s) in Clause 2 (1) (c) of the Regulations of 2017 is a clear indicator of the intention of the rule-makers that a Disciplinary Committee envisaged under Section 220 (1) of the Code could be either a single member committee or may comprise of members more than one. In the present case, Clause 2 (1) (c) of the Regulations of 2017 seeks to indicate the manner in which a Disciplinary Committee can be constituted. It could comprise of either a whole-time member or wholetime members. It therefore cannot be said that this clause travels beyond what has been provided by Section 220 (1) since the latter provision merely requires the members of the Disciplinary Committee to be wholetime members of the IBBI. For the very same reason, the ratio of the decision in Bharathidasan University and Anr. [ 2001 (9) TMI 1126 - SUPREME COURT ] cannot be applied to the case in hand. The interim order passed by the Gujarat High Court merely expresses a prima-facie view which cannot be treated as a precedent. The objection raised by the petitioner to the constitution of the Disciplinary Committee on the ground that it consists only of a single whole-time member of the IBBI cannot be accepted. It would be permissible to constitute a Disciplinary Committee consisting of either a single whole-time member or more than one whole-time member of the IBBI. The challenge as raised therefore fails. Rule stands discharged with no order as to costs.
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2024 (9) TMI 413
Rejection of Section 9 Application filed by the Appellant/Operational Creditor - reliance on Income Tax Assessment order for rejecting the application - HELD THAT:- The Adjudicating Authority has returned categorical finding that the Income Tax Department has found the invoices bogus, hence, the application was rejected, under Section 9 which was filed by the Appellant. The submission advanced by the Counsel for the Appellant that reliance on Assessment Year 2021-22 could not have been relied is now no more available in view of the relevant assessment orders of the Income Tax Authority passed Company Appeal (AT) (Insolvency) No. 568 of 2024 4 of 4 for the year 2022-23 during which the relevant invoices are covered. Thus, no grounds have been made out to interfere with order rejecting Section 9 Application. However, rejection of Section 9 Application shall not preclude, the Appellant to take such remedy in law as available. The imposition of cost deserves to the deleted. The said cost is deleted - appeal dismissed.
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2024 (9) TMI 412
Admitting Section 95 Application challenged by the Personal Guarantor - challenge on the ground that Application filed by Financial Creditor under Section 95 was barred by time - whether Letter dated 12.06.2017 which was written by the Appellant to the Financial Creditor had effect of extending the Limitation for a period of three years from 12.06.2017 or the Letter cannot be treated an acknowledgement within meaning of Section 18 of the Limitation Act? HELD THAT:- It is well settled that acknowledgement whether by Borrower or by Guarantor has effect of extending the limitation under Section 18 of the Limitation Act. The above proposition was laid down by the Hon ble Supreme Court in the matter of Laxmi Pat Surana Vs. Union Bank of India Anr [ 2021 (3) TMI 1179 - SUPREME COURT] . In Paragraph 48 of the Judgment, Hon ble Supreme Court held that a fresh period of Limitation be required to be computed from the time when the acknowledgement so signed by the Principal Borrower or the Corporate Guarantor. The Hon ble Supreme Court in several cases has laid down that acknowledgement under Section 18 has to be liberally construed and the intention of the Party writing acknowledgement has to be looked into to find out as to whether debt is acknowledged or not. The Letter contains clear acknowledgment of debt and Adjudicating Authority did not commit an error in giving the benefit of Section 18 of the Limitation Act. When the letter dated 12.06.2017 is treated to be acknowledgement, Limitation of three years will expire on 11.06.2020 and the period from 15.03.2020 to 25.03.2021 directed to be excluded by Hon ble Supreme Court by its Order passed in Suo Motu Writ Petition No. 03/2020 [ 2021 (3) TMI 497 - SC ORDER] , Application filed on 30.09.2021 was well within time and Adjudicating Authority has rightly overruled the objection of the Appellant that Application is barred by time. There are no error in the Order of the Adjudicating Authority, holding that Application is well within time - appeal dismissed.
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2024 (9) TMI 411
Challenge to approved Resolution Plan - no consideration with regard to payment to Operational Creditor - Operational Creditor not been proposed any amount in the Resolution Plan - HELD THAT:- Section 30(2)(b) provides that payment of debts of the Operational Creditors shall not be less than the amount to be paid to such Creditor in the event of Liquidation of the Corporate Debtor under Section 53. Hon ble Supreme Court in the matter of COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS [ 2019 (11) TMI 731 - SUPREME COURT ], has categorically laid down that the scope of interference in decision of the CoC regarding the approval of the Resolution Plan. The Hon ble Supreme Court has laid down that payment to different class of Creditors can be different payment and entitlement of Operational Creditor is not less than payment which becomes due in event the Corporate Debtor is liquidated. It has been held by the Hon ble Supreme Court that so long as the provisions of the Code and Regulations having met, it is the commercial wisdom of the CoC which is to negotiate and accept the Resolution Plan which may involve differential payment to different classes of Creditors. The Hon ble Supreme Court while noticing the jurisdiction of the Adjudicating Authority and Appellate Tribunal has held that provisions investing jurisdiction in NCLT and NCLAT has not made the commercial wisdom exercise by CoC of not approving the Plan rejecting the same justiciable. Hon ble Supreme Court held that Adjudicating Authority is circumscribed by Section 30(2). As per the provision of Section 30(2)(b) Operational Creditor has to be paid not less than the amount which would have been payable in event the Corporate Debtor is liquidated under Section 53. On notionally computing the amount which could have been payable to the Operational Creditor in the Liquidation, the amount comes as NIL since sole Financial Creditor itself is not able to receive its full amount. The sole Financial Creditor who is the sole Member of the CoC has approved the Resolution Plan which Plan has proposed payment of total payout to ₹23,12,50,000/- to the Financial Creditor and CIRP Cost ₹30,50,206/ . The payout as proposed in the Resolution Plan cannot be said to be violate in any manner provisions of Section 30(2)(b). It is well settled that Adjudicating Authority can interfere with commercial wisdom of CoC only when Resolution Plan violates any of the provisions of Section 30(2)(b). It is true that Operational Creditor s claim was submitted for an amount of ₹1,54,64,926/ but as per the provisions of Section 30(2)(b), it cannot be said that in the facts of the present case there is any non-compliance of Section 30(2)(b) in proposing NIL amount to the Operational Creditor. It is true that non-payment of any payment of Operational Creditor is harsh but the law as stand today is to that effect. It is noticed that this Tribunal in the matter of Damodar Valley Corporation Vs. Dimension Steel and Alloys Pvt. Ltd. Ors. [ 2022 (5) TMI 1365 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] , has observed that time has come when it should be examined by the Government to find out as to whether there are any grounds for considering change in the Legislative Scheme towards the payment to the Operational Creditor which also consists of the Government dues. It is true that Operational Creditors as the law stands now are denied any payment when the amount payable to them in the event of Liquidation is NIL, but till the Legislature comes to the aid of the claim of Operational Creditor by amending the Legislative Scheme hands of the Courts are tied to take any other view in the matter. There are no error in the Order of the Adjudicating Authority, approving the Resolution Plan which was approved by the CoC - there is no merit in the appeal - appeal dismissed.
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Service Tax
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2024 (9) TMI 410
Maintainability of petition - availability of equally efficacious remedy of appeal - Confirmation of service tax in addition to the penalty under Section 76 and 77 (2) of the Finance Act, 1994 - HELD THAT:- It is not considered apposite to entertain the present petition - petition dismissed.
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2024 (9) TMI 409
Classification of service - referral service of the Appellant provided to Canadian Bank and foreign universities - Intermediary Service or not - export of services or not - extended period of limitation - interest - penalties. Whether the services provided by the Appellant fall under the ambit of Export of Services and are exempted from service tax; or are classifiable under Intermediary Service as defined under Rule 2(f) of the Place of Provision of Service Rules, 2012 read with Rule 9 of the Place of Provision of Service Rules, 2012? HELD THAT:- Hon ble Punjab Haryana High Court in the case of GENPACT INDIA PVT. LTD. VERSUS UNION OF INDIA AND OTHERS [ 2022 (11) TMI 743 - PUNJAB AND HARYANA HIGH COURT] has held that the following three conditions must be satisfied primarily for a person to qualify as an Intermediary: i). the relationship between the parties must be that of a principal-agency relationship. ii). the person must be involved in arrangement or facilitation of provisions of the service provided to the principal by a 3rd party. iii). the person must not actually perform the main service intended to be received by the service recipient itself. Scope of an intermediary is to mediate between two parties i.e. the principal service provider (the 3rd party) and the beneficiary who receives the main service and expressly excludes any person who provides such main service on his own account. It is found that in the Appellant s own case for the same impugned services for the earlier period in M/S SUNRISE IMMIGRATION CONSULTANTS PRIVATE LIMITED VERSUS CCE ST, CHANDIGARH [ 2018 (5) TMI 1417 - CESTAT CHANDIGARH] this Tribunal has allowed the appeal of the Appellant and has held that the services rendered/provided by the Appellant do not fall in the definition of Intermediary Services . The Tribunal has also held that the services rendered by the Appellant satisfy the conditions prescribed for the Export of Services and therefore, the Appellant are not liable to pay service tax on the services rendered by them. Since the issue involved in the present case has already been decided by this Tribunal in the above case, in favour of the Appellant holding that the services provided by the Appellant amount to Export of Services and not Intermediary Services . The said decision of the Tribunal was appealed by the Revenue before the Hon ble High Court but later on the appeal was withdrawn on monetary limit under CBIC instructions dated 22.08.2019. Invocation of extended period of limitation - HELD THAT:- The activities carried on by the Appellant were in the knowledge of the department because for the previous period also, the extended period of limitation was invoked and the Tribunal in M/S SUNRISE IMMIGRATION CONSULTANTS PRIVATE LIMITED VERSUS CCE ST, CHANDIGARH [ 2018 (5) TMI 1417 - CESTAT CHANDIGARH] , has held that the demand is barred by limitation; therefore, invocation of extended period is bad in law in the present case also. Interest and penalties - HELD THAT:- The question of interest and penalties does not arise because the demand of service tax itself is not sustainable. The impugned order is not sustainable in law and is liable to be set aside - Appeal allowed.
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2024 (9) TMI 408
Levy of service tax - payment of Rs.59,12,145/- reported as income from sale of service in the ITR of the appellant - burden of proof on Department - presumption as to document as available under Section 36A of Central Excise Act, 1944 - HELD THAT:- It is abundantly clear that the demand in question has been confirmed purely based on third party document/information gathered from the Income Tax Department for Financial Year 2016-17. Hon ble Supreme Court in the case of JAIPRAKASH INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., CHANDIGARH [ 2002 (11) TMI 92 - SUPREME COURT ] has held that the demand based on Income Tax Returns and Form 26AS and/or Balance Sheet is not sustainable without proper enquiry and analysis. Further it is observed that it is the settled principle of Revenue jurisprudence that the burden to prove the allegations against the assessee rests on the department - support drawn from the decision in the case titled as COMMISSIONER OF C. EX., BANGALORE VERSUS BRINDAVAN BEVERAGES (P) LTD. [ 2007 (6) TMI 4 - SUPREME COURT ], wherein it was additionally held that if the allegations in show cause notice are not specific, the same is sufficient to hold that the notice was not given proper opportunity to meet the allegation the said show cause notice. The said burden stands absolutely un-discharged by the department. It is coming from the show cause notice itself that the appellant is registered with the service tax department having registration no. AEBPJ1665HSD001. Despite this there is no mention of the nature of services for which the appellant has got itself registered even in the show cause notice. Also it is apparent from the show cause notice that no provision under which the payment would have been made before Income Tax Authorities has been observed or cited by the department - the department has failed to act diligently ant to discharge its burden of proving the appellant s alleged failure. No proper investigation has at all been conducted by the department. The document which has been relied upon by the department and has been used against the assessee was neither produced by the assessee nor has been seized from his premises or control. This observation is sufficient to hold that presumption as to document as available under Section 36A of Central Excise Act, 1944 is not applicable to the DGS and DM s letter dated 22.05.2019 based whereupon the impugned show cause notice was issued and the demand proposed therein has been confirmed on the same basis. The document is not at all admissible into evidence. Hence the very basis of department s case vanishes. The order under challenge is set aside - appeal allowed.
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2024 (9) TMI 407
Levy of service tax - cheque dishonour charges - late delivery Charges - amount recovered by the Appellant is a consideration or not - HELD THAT:- This issue is no more res-integra. The Learned Counsel reliance on the Tribunal s decision in M/s South Eastern Coal Fields Ltd [ 2020 (12) TMI 912 - CESTAT NEW DELHI ] is justified - It was held in the case that ' The recovery of liquidated damages/penalty from other party cannot be said to be towards any service per se, since neither the appellant is carrying on any activity to receive compensation nor can there be any intention of the other party to breach or violate the contract and suffer a loss. The purpose of imposing compensation or penalty is to ensure that the defaulting act is not undertaken or repeated and the same cannot be said to be towards toleration of the defaulting party. The expectation of the appellant is that the other party complies with the terms of the contract and a penalty is imposed only if there is non-compliance.' The Tribunal has consistently held that penalty/late delivery charges cannot be subjected to Service Tax Under Section 66E of the Finance Act 1994. Consequently, the impugned order dated 08.01.2019 is set aside. Appeal allowed.
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2024 (9) TMI 406
Levy of service tax - works contract services of C R Building, foundation, cable trench, compound wall, etc to Gujarat Energy Transmission Corporation Ltd (GETCO) in relation to transmission of powers - SCN barred by time limitation or not - HELD THAT:- There is no dispute that the works contract service was provided by the appellant to M/s. GETCO and this service is exclusively for overall activity of recipient in relation to transmission of electricity. Such service has been made exempted retrospectively as well as prospectively vide Notification No. 45/2010 ST dated 20.07.2010 and Notification No. 11/2010-ST dated 27.02.2010. The service relating to transmission of electricity is exempted but the term relating to transmission is very wide, accordingly, not only the actual service of transmission but all the infrastructure made for the purpose of ultimate objective of transmission of electricity covered under the terms relating to transmission of electricity. Therefore, in the present case the works contract service for the construction of building and other work is in relation to transmission of electricity, therefore, the same is exempted under the aforesaid notifications and not liable for service tax. This issue has been considered by the Tribunal in various judgments. In the case of Kedar Construction [ 2014 (11) TMI 336 - CESTAT MUMBAI ] this tribunal held that ' the confirmation of service tax demand in respect of the construction, maintenance or repair activities undertaken by the appellant so far as it relates to the transmission/distribution of electricity cannot be sustained in law.' Thus, it is clear that the appellant s service of works contract is covered by the exemption Notification No. 45/2010 ST dated 20.07.2010 and Notification No. 11/2010-ST dated 27.02.2010. The impugned order is set aside - appeal allowed.
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Central Excise
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2024 (9) TMI 405
Challenge to SCN - recovery of differential Central Excise Duty by enhancing assessable value on account of supply of bought out items which were directly supplied by the suppliers of Petitioner to the site of Petitioner s customers - HELD THAT:- Admittedly, there is no dispute that the show cause notice dated 5th May 2017 was not adjudicated for a period of almost 6 years and it is only in September 2023 to revive the said show cause notice that a personal hearing came to be fixed on 26th September 2023. The only explanation given by Respondents for delay in adjudication is the change in the functioning of the jurisdiction on account of implementation of GST. This justification cannot be accepted for more than one reason; firstly, after the show cause notice was issued on 5th May 2017, Petitioner filed a detailed reply of more than 400 pages on 1st July 2017. A personal hearing also took place on 18th September 2017 before Respondent No. 2 and pursuant to the personal hearing, Petitioner filed further additional submissions running into 500 pages on 10th October 2017. This shows that the office of Respondents was functioning post introduction of GST, i.e., post 1st July 2017. Therefore, the justification given in the reply of Respondent No. 2 for not adjudicating the show cause notice on account of revamping of jurisdiction cannot be accepted. The reason given is general in nature and in any case, if the reason was true then the functioning of the department during the period of implementation of GST ought to have come a stand still which is not the case because the department was functioning as evident by the fact of the proceedings which Petitioner attended in September and October 2017. Thus, relegating Petitioner to attend the show cause notice would be unfair, unreasonable and gross abuse of the power. Respondents have not filed any evidence in support of paragraph 6 of their affidavit to show even prima-facie that the show cause notice could not be adjudicated because of overall in functioning of department on account of implementation of GST. There are no hesitation in exercising jurisdiction under Article 226 of the Constitution of India - petition disposed off.
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2024 (9) TMI 404
CENVAT Credit - input - cement and TOR steel used for erection/installation of plant/machinery - reliance placed upon unamended Explanation 2 to Rule 2 (k) of the Rules of 2004 - dismissal of appeal without considering the submissions made by the appellant - principles of natural justice - HELD THAT:- On account of divergent views of various Benches of the Tribunal, the issue as to whether the Cement and Steel Bars used in the Structural foundation to support the plant and machinery embedded qualified either as Capital Good or Input was referred to a Larger Bench by the Tribunal. The Larger Bench in the case of M/s. Manglam Cement Limited Vs. CCE, Jaipur-I [ 2018 (3) TMI 1547 - CESTAT NEW DELHI ], after considering the decisions of the Supreme Court and amendment of the explanation, allowed the claim of the assessee after recording a factual finding that the use of cement and steel was for laying foundation for erection of Capital Goods . Nothing has been put before this Court to show that the Department has successfully challenged the decision of the Larger Bench. In view of the decision of the Larger Bench, it would be appropriate that orders of the Tribunal are set aside. The matter is remitted to the Tribunal to decide the issue afresh in accordance with law, after considering the usage to which Cement and Steel was put to - Appeal disposed off.
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2024 (9) TMI 403
Clandestine manufacture and clearance of the finished goods (Structural Items/ Rolled Products) - allegation merely on the basis of Private Records of a Third Party (manufacturer of Billets) and Statements of persons who did not remain present for cross-examination - entire case is made on the basis of alleged receipt of clandestinely removed Billets by M/s Twenty First Century Wire Roads Ltd. - relevancy of third party statements - HELD THAT:- There is no evidence of clandestine manufacture of appellant s final product. The revenue couldn t bring a single evidence of finished goods allegedly manufactured received by any buyer. There is not a single evidence of receipt of sale proceed against alleged clandestine manufacture and clearance of final product. No evidence of transport of any single consignment of alleged clandestinely removed goods was adduced. Third party's evidence is not sufficient to establish the clandestine removal of appellant s goods particularly when the said third party's statement was not examined under Section 9D of Central Excise Act, 1944 - By reading the Section 9D, it is clear that it is not the optional but mandatory to conduct the cross examination of the witnesses. Since in the present case no cross examination was allowed, the statements can not be relied upon which is the root of the evidence and in the absence of root tree cannot stand. It is a settled law that in absence of cross examination the statements cannot be relied upon as evidence as the same lose its evidentiary value - reliance can be placed in ANDAMAN TIMBER INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II [ 2015 (10) TMI 442 - SUPREME COURT ] where it was held that ' we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the show cause notice.' Thus, the revenue could not establish it s case of clandestine removal. Hence the demand will not sustain. Accordingly, the impugned order is set aside and appeals are allowed.
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2024 (9) TMI 402
CENVAT Credit - interpretation of statute - Rule 6 of CCR - appellant did not maintain separate accounts for Cenvat credit - demand equal to 6% of difference between the sale price and purchase price of the goods traded during the period January 2016 to February 2017 in terms of Rule 6 of Cenvat Credit Rules - interest on delayed reversal of proportionate credit under Rule 14 of CCR - HELD THAT:- The appellant have reversed the proportionate credit attributed to common input service i.e. trading activity therefore, in view of the various judgments relied upon by the appellant, it is settled law that once the proportionate credit attributed to common input services has been reversed, no demand at the rate of 6% of the difference between the purchase price and sale price is sustainable. As regards the correctness of the reversal of credit, the Revenue can verify the same. Since the appellant have reversed the credit belatedly, it is their submission that during the relevant time they have not utilised the Cenvat credit and maintained the balance more than the amount to be reversed therefore, interest is not payable in terms of Rule 14 prevalent at the relevant time. Interest on delayed reversal of proportionate credit under Rule 14 - HELD THAT:- As per the Rule 14 it is clear that interest is payable not merely on availment of Cenvat credit but also on utilisation thereof. In the present case, though the appellant have taken Cenvat credit but not utilised the same as they have maintained sufficient balance in Cenvat account which was more than the amount of reversal therefore, in view of the provisions of Rule 14, prevalent at the relevant time, the appellant is not liable to pay any interest. The demand under Rule 6 is not sustainable. Accordingly the impugned order is set-aside - Appeal allowed.
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2024 (9) TMI 401
Demand of interest - SCN for demanding the said interest amount is pending for adjudication - principles of unjust enrichment - HELD THAT:- It is seen that the show cause notice demanding this interest was confirmed by the original Adjudicating Authority. The said show cause notice was settled under SVLDRS Scheme in this circumstances the question of refund of the amount confirmed in the said show cause notice does not arise. The lower Authority has gone into the question of unjust enrichment which was superfluous at the stage when the same authorities have held that refund is not admissible. The question of unjust enrichment would only arise when the authorities come to the conclusion that refund is admissible to the appellant on merits. Once the lower authority come to the conclusion that refund is admissible on merits only then they can go into the question of unjust enrichment - No order under unjust enrichment can be issued rejecting the refund claim, the only order which can be issued under unjust enrichment is sanctioning the refund claim and transferring amount to the Consumer Welfare Fund. There are no merit in the claim made by the appellant - appeal dismissed.
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2024 (9) TMI 400
Recovery of differential duties with interest and penalty - scope of expressions deployed in Foreign Trade Policy (FTP) when appended to notification under section 5A of Central Excise Act, 1944 - N/N. 23/2003-CE dated 31st March 2003 - HELD THAT:- The issue is simple enough when viewed through the prism of cross-jurisdictional lexicon. Customs authorities, empowered to deal with goods in their statutory enactment, are unfamiliar with products employed in the language of the Director General of Foreign Trade (DGFT). They have no assistance either from the Foreign Trade Policy (FTP), the notification concerned or any other authority. Indeed, that was not in the ken of the adjudicating authority as it should have been. Customs authorities, though not unfamiliar with similar , are permitted to draw upon that within the restricted framework set out for the purposes of section 14 of Customs Act, 1962. In the absence of any discussion by the adjudicating authority in the impugned order, it can only be speculated that the singular approach of customs authorities to goods has been transposed on products which, in the context of the description deployed in the Letter of Permission (LoP) issued to the appellant and plea of assessee, should have been. Guidance taken by the observation of the Tribunal in Ginni International Ltd [ 2001 (9) TMI 165 - CEGAT, COURT NO. IV, NEW DELHI] that ' If the Revenue is of the view that the value of deemed export should not have been taken into consideration for arriving at the value of goods to be allowed to be sold in the DTA, the matter should have been taken up with the Development Commissioner who had initially accorded the permission to the Appellants. This has been the consistent view of the Appellate Tribunal wherever the permission under the Central Excise Act/Rules or Notification is accorded by an authority outside the Department.' The impugned order set aside to remand the matter back to adjudicating authority for a fresh decision based on such reference.
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2024 (9) TMI 399
Refund of pre-deposit - clandestine production and clearance of mild steel ingots on the basis of investigation conducted by the Central Excise authorities, Nagpur - HELD THAT:- The existing mission of Central Board of Excise Customs (CBEC) is, inter alia, to provide an efficient system by realizing revenue in a fair, equitable, transparent and efficient manner, it is a necessary responsibility for the field formation of CBEC-tax department, to lay down the specific ground on which the pre-deposit paid, is either eligible or not eligible to the assessee as refund. Inasmuch as the basic details produced by the appellant have not been verified to come to a conclusion, whether such pre-deposit can be refunded or not in terms of the legal provisions of Central Excise Act, 1944, there is a need that such exercise is to be undertaken by the jurisdictional authorities. Hence, for the limited extent of verification of the documents submitted in support of the claim for having made the pre-deposit by the appellant and to decide the issue of refund of pre-deposit of Rs.24 lakhs, it is deemed necessary to remand the case back to the original authority for fresh fact finding and for passing a speaking order. Interest from the date of deposit till the date of refund - HELD THAT:- The issue has been examined in detail and considering the factual position that the refund has been granted within three months time in respect of the sanctioned amount of Rs.2,50,61,298/-, there are no infirmity in the order passed by the Commissioner (Appeals). The impugned order is modified to the extent of allowing the appeal filed by the appellant in respect of refund of Rs.24 lakhs to be subjected to a process of verification in the de novo proceedings by the original authority.
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CST, VAT & Sales Tax
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2024 (9) TMI 398
Challenge to order passed by the Assessing Officer u/s 52 of the M.P. Value Added Tax Act, 2002 - period w.e.f. 01.04.2015 to 31.03.2016 - HELD THAT:- The petitioner, after receipt of notice dated 22.03.2017 issued under Section 52 of the M.P. VAT Act, appeared before the Commercial Tax Officer and submitted an explanation which was not found satisfactory. Thereafter, an appeal was filed and the Assessing Officer imposed the penalty of Rs. 29,76,757/-, against the said order, the petitioner neither preferred the Commercial Tax Officer nor before the Appellate Board and raised the issue of limitation. Once the petitioner has preferred the first appeal, therefore, the petitioner can also prefer VATA before this Court. The petitioner submits that since the petitioner did not raise the issue of limitation before the First Appellate Authority, therefore, the petitioner is precluded from raising this issue in VATA. Hence, the petitioner has filed the present writ petition before this Court. HINDUSTAN COCA COLA BEVERAGE (P) LTD. VERSUS UNION OF INDIA AND OTHERS [ 2014 (9) TMI 585 - SUPREME COURT ] has held that no writ lies if the efficacious remedy of statutory appeal is available. Petition dismissed.
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