Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 13, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Articles
News
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Profiteering Activity - Benefit of reduction in the rate of tax from 28% to 18% not passed - Respondent has deliberately acted in defiance of the above law and hence he is guilty of the conduct which is contumacious and dishonest.
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Constitutional validity of section 47 of the CGST Act, 2017 - Levy of late-fees - principal contentions of the petitioners are that the Government is trying to recover penalty in the guise of late fee charges - Petition dismissed since the, the petitioners who are themselves active tax consultants and tax practitioners, not the person who suffered the penalty.
Income Tax
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Keeping this objective behind section 14A in mind, the said provision has to be interpreted, particularly, the word 'in relation to the income' that does not form part of total income. Considered in this hue, the principle of apportionment of expenses comes into play as that is the principle, which is engrained in section 14A
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Disallowance of legal and professional fees - the expenditure incurred by the assessee in the form of legal and professional fees paid to an architect is for the purpose of construction of building and is capital in nature.
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Penalty u/s 271(1)(c) - The assessee’s belief that assessee was entitled for depreciation out of purchase made from capital contribution received from Government was bonafide. - no case is there for furnishing of inaccurate particulars of income or concealment of income.
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Revision u/s 263 - deduction u/s 80P(2)(a)(i) against interest income earned by the assessee - case falls under the category of ‘no inquiry’ rather than ‘lack of inquiry’ or ‘inadequate inquiry’ - Revision proceedings sustained.
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Disallowance with respect to the write off of advances provided to employees in the course of business - the advances were given to employee (who left the organization) and the advances were not recovered - Claim allowed as revenue expenditure.
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Admissibility of claim in revised return u/s. 139(5) - Depreciation on goodwill - When the revised return was filed on time as per section 139(1) and 139(5), in our considered opinion, the ld. CIT(A) has erred in holding that the assessee required any condonation u/s. 119(2)(b).
Customs
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Demand of Customs Duty - loss of goods and remission of Customs duty - once the appellant have written letter for loss of their goods and remission of duty, without any decision on their request by the Commissioner of Customs JNPT, both the lower authorities should not have proceeded with deciding a Show cause notice.
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100% EOU - Refund claim - excess export Duty paid under protest. - Since a binding decision has not been followed by the Adjudicating Authority in this case, this Court can interfere straight away without relegating the assessee to file an appeal.
Service Tax
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Business Auxiliary Service - appellant are engaged in the activity of job work such as Grinding, Boring and Nitriding work on the goods supplied by their principal - during the relevant period the activity of production of goods on behalf of client was taxable.
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Place of provision of service - custodial services provided by the assessee to Foreign Institutional Clients (FII's) amounts export of service - the relevant factor is the location of the Services recipient and not the place of performance.
Central Excise
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Levy of penalty - effect of amendment - A default, which is a continuing default and not a default once for all, can be dealt with under the provision of new enactment, if it continues when the new enactment came into force, although it commenced when the old enactment was in force.
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The authorities have intentionally dragged the appellant into litigation by issuance of the show cause notice after the lapse of five years, the action of the authorities below cannot be appreciated which cause harm to the industry - No penalty.
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The appellant having been once found to be eligible for exemptions and refund of duty paid, denial of benefit of exemptions and refund on the ground of delay, in our considered opinion, will cause grave injustice which cannot be permitted.
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Jurisdiction of Tribunal - The issue which was subject matter of appeals before the Tribunal pertains to rebate of excise duty on export and, therefore, the Tribunal had no jurisdiction to entertain the appeals
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Penalty u/r 26 of CER, 2002 - Clandestine manufacture and removal - If providing blank challans/invoices to a company to enable them to remove the manufactured goods clandestinely, will not fall under the category “in any manner dealing with the goods”, we do not know what these words “deals with’’ would mean. - Levy of penalty confirmed.
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Rule is to prefer an appeal and entertaining a writ is only an exception. - When an effective alternative remedy is available, a writ petition cannot be maintained - Till the appeal is taken up for hearing, the respondents are directed not to initiate any coercive action against the writ petitioner.
Case Laws:
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GST
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2018 (9) TMI 625
Profiteering Activity - Benefit of reduction in the rate of tax - it was alleged that Respondent had not passed on the benefit of reduction in the rate of tax by lowering the price of Vaseline VTM 400 ml, which he had purchased from the respondent, when the Goods and Services Tax (GST) was reduced from 28% to 18% on this product on 15.11.2017 - Rule 129 (1) of the CGST Rules, 2017. Held that:- Respondent has himself admitted through the Table submitted by him vide his submissions dated 23.4.2018 that prior to the reduction in the GST on the product from 28% to 18% w.e.f. 15.11.2017 it was being purchased by the Respondent at the base price of ₹ 158.66/- per unit with GST of ₹ 44.42/- @ 28% and the total purchase price was ₹ 203.08/ per unit and it was being sold by him on the price of ₹ 213.63/per unit after adding his margin @ 4.06% of ₹ 10.55/-. He had 1288 units of the product in stock on 14.11.2017. He has also admitted that after 15.11.2017 he had sold the product at the base price of ₹ 172.77/- after levying GST of ₹ 31.10/- @ 18% and charging margin of ₹ 9.77/- per unit and the product was sold by him at the price of ₹ 213.64/-. Therefore, it is clear that there was no reduction in the sale price charged by him although the rate of GST was cut by 10%, rather the base price was increased by ₹ 14.11/- per unit by the Respondent. It is established from the record as well as the admission of the Respondent himself that he had resorted to profiteering by increasing the base price in violation of the provisions of Section 171 of the above Act and had thus not passed on the benefit of reduction in the rate of tax by commensurately reducing the price of his product rather the base price was increased by him exactly by the same amount by which the tax had been reduced. The Respondent has claimed that the HUL had changed the base price in its software and hence he was bound to charge the increased base price at the time of issuing invoices. However, the Respondent being a registered dealer having GSTIN 08AAEFS7072EIZ4 under the CGST/SGST Acts 2017 was fully aware of the reduction in the rate of tax of the product issued vide Notification No. 41/2017- Central Tax (Rate) dated 14.11.2017, with effect from 15.11.2017 and Section 171 of the above Act and hence he was legally bound not to charge the enhanced base price resulting in negation of the effect of reduction in the rate of tax and thus he cannot escape his accountability of passing on the benefit of the reduction in the rate of tax to his customers. The Respondent has also averred that Section 171 of the Act did not provide for any methodology for determining the commensurate reduction in the prices - Held that:- Section 171 only stipulates that any benefit of reduction in the rate of the tax or the ITC which accrues to a supplier must be passed on to the consumers as both are the concessions given by the Government from its own revenue and the suppliers cannot appropriate them as they are not entitled to do so. Both the benefits must go to the consumers and in case they are not identifiable the amount so collected by the suppliers should be deposited in the CWF so that it can be used in the public interest - The Respondent was at no stage required to perform an impossible act and hence the doctrine of "Lex non cogit ad impossibilia" does not apply in his case. It is clear from the narration of the facts stated above that the Respondent has indulged in profiteering in violation of the provisions of Section 171 of the CGST Act, 2017 and has not passed on the benefit of reduction of tax as per the Notification dated 14.11.2017 supra in respect of the above product to his customers and therefore, he is liable for action under Rule 133 of the CGST Rules, 2017 - the Respondent is directed to reduce the sale price of the product immediately commensurate to the reduction in the rate of tax as was notified on 14.11.2017 and pass on the benefit of reduction in the rate of the tax to his customers. Penalty - Held that:- It is clear from the facts of the present case that the Respondent was fully aware of the Notification dated 14.11.2017 whereby the rate of GST was reduced on the above product from 28% to 18%. He was also fully aware of the provisions of Section 171 of the above Act whereby he was bound to pass on the benefit of reduction in the rate of tax by commensurate reduction in the price of the above product. However, the Respondent has deliberately acted in defiance of the above law and hence he is guilty of the conduct which is contumacious and dishonest - Accordingly, it is proposed to impose penalty on the Respondent under Section 122 of the CGST Act, 2017 read with Rule 133 (d) of the CGST Rules, 2017. However, before the penalty is imposed the Respondent is hereby given notice as to why such penalty should not be imposed on him. Application disposed off.
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2018 (9) TMI 613
Extension of time period for filing of GST Tran- 1 - case of petitioner is that despite making several efforts on the last date for filing of the application, the electronic system of the respondent no.2 did not respond - input tax credit - Held that:- The respondents are directed to reopen the portal within two weeks from today. In the event they do not do so, they will entertain the GST TRAN-1 of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner - petition allowed.
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2018 (9) TMI 612
Extension of time period for filing of GST Tran- 1 - case of petitioner is that despite making several efforts on the last date for filing of the application, the electronic system of the respondent no.2 did not respond - input tax credit - Held that:- The respondents are directed to reopen the portal within two weeks from today. In the event they do not do so, they will entertain the GST TRAN-1 of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner - petition allowed.
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2018 (9) TMI 611
Appeal filed before wrong authority - prayer for transfer of appeal before appropriate forum - notice issued in form GST MOV-07 - detention of vehicle - Held that:- Since the petitioner has preferred an appeal, may be at a wrong forum, it would be appropriate to direct the Bolpur Commissionerate to transmit the records of such appeal to the appellate authority of Siliguri Commissionerate, within a period of seven days from date. The petitioner is at liberty to proceed with its appeal before the appropriate forum, in accordance with law. All the points with regard to the stay of the order impugned in the appeal proceedings are kept open to be decided in such appeal, in accordance with law - petition disposed off.
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2018 (9) TMI 610
Constitutional validity of section 47 of the Central Goods and Service Tax Act, 2017 - Penalty - principal contentions of the petitioners are that the Government is trying to recover penalty in the guise of late fee charges - Held that:- The petitioners who are themselves active tax consultants and tax practitioners have challenged the vires of section 47 of CGST Act. They are obviously indirectly concerned with the same. There are millions of dealers who would be adversely affected by the provisions made therein. There is no reason why such an issue should be examined in a public interest petition when, the group of persons whom the statute affects does not suffer from any handicap preventing them from taking up the litigation themselves and pursuing it. Petition dismissed.
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2018 (9) TMI 609
Non-speaking order - Seizure of goods - while the petitioner submitted detailed representation pointing out that the goods and the bag containing the receipts had been stolen, without taking into consideration the averments made in the representation, the respondents have proceeded to pass order under Section 130 - Held that:- This Court finds that the requirement of Section 129 (4) & (5) of the Act has not been followed and the concerned authority has failed to take notice of the objections and it cannot be said that the order impugned is a speaking order. The respondents are directed to release the seized goods in terms of Rule 140 of the Central Goods and Service Tax Rules, 2017. Petition disposed off.
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Income Tax
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2018 (9) TMI 624
Disallowance of legal and professional fees - nature of expenses - capital or revenue expenditure - Held that:- No infirmity in the order of learned CIT (A) who has held that legal and professional expenditure incurred by the assessee were incurred in relation to construction of a building is a capital expenditure, which was not used for the purpose of the business during the year under consideration. The assessee during appellate proceedings have admitted for allowance of depreciation on the above amount therefore it is apparent that the expenditure incurred by the assessee in the form of legal and professional fees paid to an architect is for the purpose of construction of building and is capital in nature. Before the lower authorities, assessee could not show that how the architect fee paid is not a capital expenditure. - decided against assessee TDS u/s 194A - Disallowance u/s 40(a)(ia) - advertisement and interest expenditure on which tax has not been deducted at source - Held that:- Mr. Lakhani borrowed the sum, from bank it was deposited with the company, and interest was paid by assessee to Mr. PD Lakhani however, on behalf of Mr. PD Lakhani the assessee paid same amount to the loan account of Mr. PD Lakhani with the bank. Merely because the same amount has been deposited by the assessee in the bank account of the lender to the assessee but borrower of the bank does not make any difference as assessee has incurred an interest expenditure of ₹ 1 575000/– on which tax was required to be deducted u/s 194A of the act. In view of this, we do not find any infirmity in the order of the learned CIT (A) in confirming the above disallowance. With respect to the advertisement expenditure assessee could not give any explanation why tax has not been deducted on the same amount therefore in absence of any explanation disallowance require to be confirmed - decided against assessee Disallowance u/s 14A - Held that:- No doubt, the assessee may have made the investment in order to gain control of the investee company. However, that does not appear to be a relevant factor in determining the issue at hand. Fact remains that such dividend income is non-taxable. In this scenario, if expenditure is incurred on earning the dividend income, that much of the expenditure, which is attributable to the dividend income, has to be disallowed and cannot be treated as business expenditure. Keeping this objective behind section 14A in mind, the said provision has to be interpreted, particularly, the word 'in relation to the income' that does not form part of total income. Considered in this hue, the principle of apportionment of expenses comes into play as that is the principle, which is engrained in section 14A - we reject the contention raised by the assessee before the lower authorities and confirm the finding of the learned CIT (Appeals) in confirming the disallowance on account of expenditure at the rate of 0.5% of average value of investment on investments u/s 14A - Decided against assessee
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2018 (9) TMI 623
Penalty u/s 271(1)(c) - provisions of the section 43(1) applicability - Held that:- There is no infirmity on the plank of the ld. CIT(A) under which he has deleted this penalty. It is settled law that the assessment proceedings and penalty proceedings are distinct. Sustenance of the additions by the CIT(A) and assessee’s not contesting the same before ITAT cannot be said to be adversely affecting the assessee’s plea that penalty u/s. 271(1)(c) is not leviable. All the details of depreciation claim was duly made and disclosed in the computation of income. So there is no question of concealment of income or furnishing of inaccurate particulars of income. The authorities below have only denied the claim on merits on the basis that term “subsidy or grant or reimbursement (by whatever name called)” would include capital contribution. Hence, the assessee’s claim has been denied. The assessee’s plea that it was under a bonafide belief that asset acquired out of capital contribution cannot be said to be in violation of the Act is absolutely bonafide. It will be not out of place to mention that the authorities below opinion, that the said term would include capital contribution also, prima facie itself has no basis. The principal of ‘ejusdem generis’ would also not support such an extension of the term “subsidy or grant or reimbursement (by whatever name called)”. The assessee’s belief that assessee was entitled for depreciation out of purchase made from capital contribution received from Government was bonafide. Hence, no case is there for furnishing of inaccurate particulars of income or concealment of income - Decided against revenue.
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2018 (9) TMI 622
Disallowing claim for deduction u/s 37(1)/28 of advances written off and investments written off - allowability of business loss - Held that:- As relying on M/S. TAMILNADU MAGNESITE LTD. VERSUS THE ASSISTANT COMMISSIONER OF INCOME TAX [2018 (6) TMI 1236 - MADRAS HIGH COURT] the aforesaid expenditure, being business loss for the assessee, was allowable to him once it was established that the project could not takeoff and the management considered it prudent to wrote-off the same in the books of accounts. The assessee has placed two identical Board Resolutions stated to be passed in two different Board Meetings i.e. 19/02/2007 & 02/07/2007 wherein the Board of Directors of the assessee company has decided to write-off the stated advances in the books of account. The dates of the two Board meetings fall in two different years and it becomes important to ascertain the true factual matrix since the claim of the assessee could be admissible only in the year in which the management finally took a decision to write-off the same in the books of accounts. As a logical consequence, it also become imperative to find out that the aforesaid claim has not been claimed /allowed to the assessee in any of the other years. Secondly, Ld. CIT(A) has noted that complete details of expenditure could not be filed by the assessee. Keeping in view the aforesaid factors, while agreeing with the claim of the assessee in principle, the matter stand remitted back to the file of Ld. AO for verification of aforesaid facts. - Decided in favour of assessee for statistical purposes.
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2018 (9) TMI 621
Expenses allowability when the business has not been set up - whether the business to be assumed to be set-up notwithstanding the fact that the actual commencement of the business has not taken place? - Held that:- It is undisputed fact that the assessee has not reflected any major income from business activities during the impugned AY except Income from Deputation for ₹ 5.39 Lacs. However, the earning of the business income, in our opinion, was not a sine qua non to enable the assessee to claim the business expenditure as per statutory provisions provided other conditions as envisaged by law were fulfilled by the assessee. Upon perusal of nature of expenses incurred by the assessee, we find that the out of total expenditure of ₹ 14.67 Crores, the major expenses pertains to staff expenses for ₹ 4.85 Crores, sales, administration & other expenses for ₹ 7.28 Crores and amortization of intangible assets for ₹ 1.65 Crores which demonstrate that the assessee had already recruited employees during the impugned AY and incurred various administrative and sale expenditure. As rightly noted by Ld. CIT(A), the assessee had participated in three bids during the impugned AY, out of which one bid was successful which is not disputed by the revenue. The aforesaid factor raises a strong pointer in assessee’s favor that the assessee was ready with all the necessary infrastructure to deliver the proposed goods / services to the prospective customers. Another noteworthy factor is that this is not the first year of assessee’s existence since the documents on record reveal that the assessee had filed return of income for immediately preceding AY 2008-09 also wherein it has, on identical factual matrix, claimed business expenditure in that year and carried forward business losses to the extent of ₹ 5.06 Crores, which has not been disputed by the revenue at any point of time so far. - decided in favour of assessee.
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2018 (9) TMI 620
Penalty levied u/s 271(1)(c) - Revision u/s 263 on share capital - Held that:- It is pertinent to note that as of today the situation is that order passed u/s 263 has been quashed by the Tribunal vide order dated 30/5/2016 [2016 (5) TMI 1453 - ITAT DELHI]. These two appeals are passed in consequence to the order u/s 263 which is now quashed. Therefore, these two appeals does not survive. There is no appeal pending in Hon’ble High Court. Therefore, both the appeals are dismissed. The revenue is at liberty to revive these appeals in case the Hon'ble High Court given the decision in favour of the Revenue. - Decided in favour of assessee.
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2018 (9) TMI 619
Addition on account of unexplained investment in gold coins - Held that:- Assessee did not argue this ground of appeal. In the absence of any explanation or arguments from the side of the assessee, no interference is required in the matter. However, it may be noted that the issue pertains to recovery of unaccounted 13 gold coins found during the course of search, for which, no explanation was made before the authorities below. Whatever explanation was given either for declaring the jewellery in wealth tax return or jewellery possessed by family members was irrelevant to the matter in issue - decided against assessee Addition on account of unexplained cash - Held that:- The assessee could not produce any credible evidence in respect of source of the cash found during the course of search. The assessee explained that cash is available to him out of withdrawals made earlier which was kept for any contingency. However, such explanation was not supported by any cogent evidence. The assessee also tried to explain that cash was declared in the wealth tax return. However, in assessment year under appeal, assessee has declared cash of ₹ 75,612/- in wealth tax returns, therefore, there were no evidence filed by assessee to explain availability of the cash with him and the source thereof. The authorities below were, therefore, justified in considering it to be unexplained cash found during the course of search - decided against assessee Cash received as advance for sale of property - income from undisclosed sources - Search proceedings - Held that:- In the present case, huge unaccounted cash was found and seized during the course of search from assessee which is not disputed by the assessee. Whatever explanation was given by the assessee later on was not supported through any evidence or material on record. Therefore, the authorities below have correctly considered it to be unexplained cash found during the course of search and rightly treated as income of assessee from undisclosed sources. The addition of ₹ 2 lakhs on account of cash found is independent to this issue. Therefore, no telescoping benefit can be given. No interference is called for in the matter. Appeal of the assessee is accordingly dismissed
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2018 (9) TMI 618
Revision u/s 263 - deduction u/s 80P(2)(a)(i) against interest income earned by the assessee - ‘no inquiry’ OR ‘lack of inquiry’ or ‘inadequate inquiry’ - Held that:- The justification of claiming deduction against bank interest has neither been adduced / substantiated by the assessee nor being examined / verified by the AO. Nothing on record suggests any application of mind on the issue by Ld. AO. This being the case, we find no force in the submissions of Ld. AR that the issue was examined by Ld. AO with due application of mind and the deduction was allowed after due deliberations. The aforesaid factual matrix lead us to conclude that the case falls under the category of ‘no inquiry’ rather than ‘lack of inquiry’ or ‘inadequate inquiry’ as contended by Ld. AR. In such a case, the reliance placed by Ld. AR on various judicial pronouncements could not help the assessee, in any manner. Therefore, the order being clearly erroneous as well as prejudicial to the interest of the revenue justifies invocation of jurisdiction u/s 263. - Decided against assessee.
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2018 (9) TMI 617
Deduction u/s 10A computation - deducting the foreign currency amounting to ₹ 114,299,979/- from the Export turnover for the purpose of computing deduction u/s 10A - Held that:- As decided in assessee's own case [2014 (11) TMI 1159 - ITAT MUMBAI] the facts pertaining to the assessee’s business of software development, the charges and which are claimed to have incurred, are in relation to the business of software development within India. They couldnot be said to be costs deductible from export turnover for the purposes of Section 10A of the Act. In such circumstances, we are of the opinion that any wider controversy or larger question does not require any answer. We can leave that aspect open for the decision in an appropriate case. In relation to the business of the assessee before us, it is not necessary to go into the other contentions raised before us by the revenue Deduction of Insurance expenses from the Export turnover for the purpose of computing deduction u/s 10A - Held that:- This issue has already been adjudicated by Hon’ble Bombay high court in the assessee’s own case for the A.Y. 2006-07 [2014 (4) TMI 1224 - BOMBAY HIGH COURT] the facts pertaining to the assessee's business of software development, the charges and which are claimed to have incurred, are in relation to the business of software development within India. They could not be said to be costs deductible from export turnover for the purposes of Section IDA of the Act, in such circumstances, we are of the opinion that any wider controversy or larger question does not' require any answer. We can leave that aspect open/for the decision in an appropriate case. In the facts and circumstances of the present case and in relation to the business of assessee before us, it is not necessary to go into the other Contentions raised before us by the revenue. Deduction of tele-communication and satellite link charges from Export turnover for the purpose of computing deduction u/s 10A - Held that:- As decided in assessee's own case [2011 (5) TMI 509 - ITAT, MUMBAI ] since we have held that these expenses have been incurred in the business of software development in India, these could not be considered as expenditure attributable to delivery of computer software outside India. We therefore set aside the order of AO on this point and hold that these expenses are not to be excluded from the export turnover. Disallowance with respect to the write off of advances provided to employees in the course of business - as argued by assessee that the advances were given to employee (who left the organization) and the advances were not recovered, therefore, the same is revenue in nature and hence the expenses are liable to be allowed u/s 37(1) - Held that:- The expenses were incurred during the course of business which could not be bifurcated on account of any one and other reasonable if this expenses have been incurred during the course of business, therefore, no doubt, the same is revenue in nature hence the same is allowable, hence, we allowed accordingly.
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2018 (9) TMI 616
Revision u/s 263 - AO has failed to examine whether assessee’s claim of deduction u/s 54 in respect of two flats purchased by him is in compliance to the conditions mentioned under the said provision - order to be erroneous and prejudicial to the interests of Revenue - Held that:- If the Assessing Officer allows assessee’s claim after considering the fact that the two flats have been converted to one residential unit having single entrance and one kitchen, the view adopted by the Assessing Officer cannot be considered to be erroneous since it is a possible view. That being the case, one of the conditions of section 263 of the Act is not fulfilled. Therefore, the assessment order cannot be subjected to the proceedings under section 263 of the Act. As per the provision of section 54 of the Act, applicable to the impugned assessment year, “a residential house” does not mean one residential house. This interpretation has been given in various judicial precedents, a few of which have been cited before us by the learned Authorised Representative. In these decisions, it has been held that if the flats purchased by the assessee are adjacent or contiguous to each other and are used as a single residential unit having common entrance and common kitchen, they have to be considered as a single residential unit satisfying the condition of section 54 of the Act. Directions of the Principal Commissioner of Income-tax to the Assessing Officer while setting aside the assessment order is conflicting and contradictory. While in Para–6 of the impugned order, he has directed the Assessing Officer to examine the claim of the assessee, to the effect that the two flats are single units, and decide the issue after affording opportunity of being heard to the assessee, whereas, in Para–7 of the order, he has directed the Assessing Officer to restrict the deduction under section 54 of the Act to one flat at ₹ 54,12,800. Once the learned Principal Commissioner of Income-tax directs the AO to restrict the deduction under section 54 of the Act to one flat, the other direction for examining assessee’s claim that the residential unit is a single unit becomes redundant. - Decided in favour of assessee
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2018 (9) TMI 615
Admissibility of claim in revised return u/s. 139(5) - Depreciation on goodwill disallowed - AO made the disallowance holding that the enhanced claim in the revised return cannot be allowed, as the same was in violation of the provision of section 80 and section 139(1) - CIT(A) confirmed the action of the A.O. on the ground that the return has been filed beyond the time specified and no condonation has been sought u/s.119(2) - Held that:- The revised return was filed on 15.03.2013 and the same was within the due date of filing the revised return in the extant period. There is no dispute about the validity of revised return inasmuch as the A.O. has made the assessment subsequent to the filing of the revised return and the revised return has not been treated as nonest. Moreover, there was no reason to treat the same as nonest as the same was filed within the time mandated u/s. 139(5) of the Act. When the revised return was filed on time as per section 139(1) and 139(5), in our considered opinion, the ld. CIT(A) has erred in holding that the assessee required any condonation u/s. 119(2)(b). The assessee has duly filed the return u/s. 139(1) within the due date. Thereafter, the assessee claimed the depreciation on goodwill in the revised return u/s. 139(5) which was filed on time. This claim of deprecation in the revised return cannot be denied solely on the ground that it was not claimed in the original return. The issue raised by the ld. CIT(A) for seeking condonation for delay in filing in term of section 119(2)(b) is irrelevant CIT(A) while confirming the disallowance has only referred to the time factor involved and he has not made any adverse observation on the validity of assessee’s claim otherwise. He has in fact admitted that on merits the Hon’ble Apex Court’s decision in the case of Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] is in favour of the assessee which is an undisputed fact. Accordingly, we set aside the orders of the ld. CIT(A) and decide the issue in favour of the assessee.
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2018 (9) TMI 614
Penalty u/s 271(1)(c) - assessee surrendered the income in revised return - proof of concealment or non-disclosure - Held that:- Concealment of particulars of income or furnishing of inaccurate particular of income by the assessee has to be in the income tax return filed by it. The assessee can furnish the particulars of income in his return and everything would depend upon the income tax return filed by the assessee. This view gets supported by Explanation 4 as well as 5 and 5A of Section 271 of the Act. In the instant case the appellant has included the surrendered amount of ₹ 77,42,720/- in the revised return of income filed by it. There is no such concealment or nondisclosure as the assessee had made a complete disclosure in the income tax return and offered the surrendered amount for the purposes of tax. - Decided in favour of assessee
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2018 (9) TMI 608
Method of computing the exemption u/s 10-A - whether the expenses excluded from the export turnover are also to be excluded from the total turnover for the purpose of Section 10-A - Held that:- The issue involved viz. whether the expenses on certain items should be allowed as deduction or not is covered under the decision of this Court in Commissioner of Income Tax, Central-III vs. HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT].
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2018 (9) TMI 607
Grant of approval u/s 80G - proof of genuineness of charitable activity - Tribunal recorded that the condition regarding approval of the trust under Section 80G(5) are satisfied - HC held at least three years details have been provided to show that the charitable activities were being carried on and also in view of the fact that the registration under Section 12-A of the Act continued in favour of the assessee - Held that:- SLP dismissed.
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2018 (9) TMI 606
Deduction u/s 80HHE - exports made by the assessee for the previous year relevant to assessment year 1992-93 - Held that:- This Court is unpersuaded with the Revenue’s contentions; firstly, for the previous year as well the assessee’s claim under Section 80HHE of the Act for similar receipt of export proceeds for earlier periods, was allowed. Apart from that the fact remains that the amounts were supposed to be received, but were not received, on account of extraneous political circumstance, i.e. disintegration of Soviet Union. In these circumstances, as and when the amounts were received, the assessee did claim deduction – albeit in the course of assessment proceedings. This occurred at a point of time when there was no bar in such claims – the restriction was imposed by an amendment in the Finance Act, 2009 with retrospective effect from 01.04.2003. Consequently, the assessee was not barred from claiming the deduction, when the amounts were in fact received by it. - decided against revenue
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2018 (9) TMI 605
Addition in terms of section 40(a)(ia) - assessee's failure to deduct tax at source - assessee contented that payee had already paid tax - Tribunal was of the opinion that such claim had to be verified and instead of remanding the proceedings before the CIT(Appeals)remanded to the AO and also required the Assessing Officer to decide his own jurisdiction - Held that:- For multiple reasons, we would make minor modifications in the order of the Tribunal. Firstly, there would be no purpose in remanding the proceedings before the Assessing Officer which would only add one more level to the proceedings. Instead CIT (Appeals) can examine the same aspects with the help of remand report from the Assessing Officer. Secondly, there is no purpose in asking the AO to decide on his own jurisdiction. Both the advocates agreed that let CIT (Appeals), Ahmedabad who now has jurisdiction over the subject matter, decide the appeal afresh. The assessee's appeal is revived and placed before CIT(Appeals) Ahmedabad for consideration and disposal in accordance with law
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2018 (9) TMI 604
Addition on account of interest u/s.36(i)(iii) - Held that:- While deleting addition Tribunal relied on the judgment of the Supreme Court in the case of S. A. Builders [2006 (12) TMI 82 - SUPREME COURT]. The Tribunal noted that undisputedly the loans and advances were given by the assessee to the subsidiary companies for the purpose of their business and there was no dispute that such advances were utilized by the subsidiaries for their businesses. No question of law in this regard therefore arises. Claim of depreciation on the leased asset - AO was of the opinion that the transaction itself was not genuine - Tribunal allowed such depreciation on the ground that the transaction was genuine - Held that:- The assessee had demonstrated ownership of the assets, genuineness of the lease transaction, user of leased asset for the purpose of the business of earing lease rental. Such lease rental was accepted by the Assessing Officer and taxed the same. Quite apart from such finding of the Tribunal regarding genuineness of the transaction being a finding of fact what emerges further is that the Assessing Officer had accepted lease rental as income of the assessee and taxed the same. It was on this ground that the Tribunal was of the opinion that the depreciation of leased asset cannot be denied. This question therefore also does not require consideration. Disallowance u/s 14(A) - Held that:- Tribunal had noted that the assessee had sufficient interest free funds for making investment in assets earning tax free income. It was in this background that the Tribunal deleted the disallownace but apportioned ₹ 2 lacs for administrative expenses. Here also no question of law arises therefore, tax appeal is dismissed.
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2018 (9) TMI 603
Allowability of additional expenses incurred by the assessee for restructuring its business - revenue v/s capital expenditure - Held that:- The Appellate Tribunal assessed the facts and it was primarily on the appreciation of facts that the Tribunal found that the expenditure on account of restructuring incurred by the assessee had to be regarded as a revenue expenditure. Since the issue as to whether the restructuring of expenses could, in the circumstances, be treated as a revenue expenditure or a capital expenditure was essentially a question of fact and the Appellate Tribunal has taken relevant considerations into account and noticed the law applicable, such question does not call for any reconsideration. Expenditure in relation to unit sold - Held that:- As sale of one of the units of the assessee to Nicholas Piramal India Limited (NPIL) for a consideration of about ₹ 2.43 crore. At the time of the sale of the pharmaceutical business of the assessee as a going concern and for a slump price, it was agreed that the purchaser would take over the risk of the business with effect from January 1, 2002 though the actual transfer of the business to NPIL was on March 27, 2002. In considering the views of the assessing officer and of the Commissioner (Appeals), the Appellate Tribunal referred to the test of determining whether the several businesses of an entity carrying on various businesses could be segregated and regarded as different units or had to be taken as a whole. The Appellate Tribunal referred to the judgment in BR LIMITED VERSUS V.P. GUPTA C.I.T. BOMBAY [1978 (5) TMI 3 - SUPREME COURT] rendered in similar circumstances and was satisfied that since the whole of the expenses of the assessee had been indicated rather than the expenses incurred in respect of the particular unit, the point sought to be raised by the Revenue was of no significance. No real question of law arises on such aspect.
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2018 (9) TMI 602
Claim of exemption u/s 11 - activities of NDDB (i.e. the assessee) involved the rendering of services in relation to carrying on commercial or business activities and is clearly covered by the new proviso to section 2(15) therefore, the assessee cannot be treated to be engaged in charitable activities - Held that:- We find the CIT(A) allowed the claim of exemption u/s 11 and 12 on the ground that in the immediately preceding assessment year, CIT(A) has allowed the claim of exemption u/s 11 and the Revenue has not challenged the same. In the immediately succeeding assessment year the AO himself has allowed the claim of exemption u/s 11 by treating the activities of the assessee as charitable in nature. No infirmity in the order of the CIT(A) since in the immediately preceding assessment year the CIT(A) has allowed the claim of exemption u/s 11 which has attained finality and the AO himself in the subsequent assessment year has treated the activities of the assessee as charitable in nature and has allowed the claim of exemption u/s 11 therefore, the order of the CIT(A) is upheld and the grounds raised by the Revenue are dismissed. Short computation of interest u/s 244A by computing interest for the period till issuance of refund instead of the period till receipt of refund - Held that:- We, therefore, restore this issue to the file of the AO with a direction to compute correct interest u/s 244A as per law. AO shall give due opportunity of being heard to the assessee while calculating such interest. The ground raised by the assessee in the Cross Objection is accordingly allowed for statistical purposes.
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2018 (9) TMI 601
Grant of registration u/s 12AA - denying the exemption to the assessee u/s 11 and 12 in absence of registration u/s 12AA for the respective years - Held that:- On the basis of information available on record, the ld CIT(E) held that as assessee is already registered u/s 12AA fresh registration cannot be granted. It is apparent that before the CIT(E) all other correspondence as well as the order of the CBDT condoning the delay was not available before him. The assessee has also stated that it received the query letter dated 18.11.2016 only on 26.11.2016 and immediately on 29.11.2016 it prepared a reply and sent by Speed Post on 30.11.2016. Looking to the whole time chart, it is apparent that assessee could not furnish complete details before the ld CIT(E). Therefore, we set aside the whole issue back to the file of the ld CIT(E), Lucknow with a direction to the assessee to submit all the details which are furnished before us including the order of the CBDT. CIT(E) is also directed to consider the order of the CBDT dated 04.05.2016 and pass speaking order on the application u/s 12AA of the assessee after granting proper opportunity of hearing. Appeal filed by the assessee is allowed for statistical purposes with above direction.
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2018 (9) TMI 600
Capital gain on the assessee's share of built up area in the project executed under JDA - CIT(A) held that the sale consideration should be adopted - assessee himself has offered profit from sale of constructed area received at ₹ 3,24,85,000/- on which tax was offered by assessee in the assessment years 2014-15 to 2016-17 - Held that:- Since the CIT(A) has adjudicated the issue in the light of jurisdictional High Court in the case of CIT Vs. Ved Prakash Rakhra [2012 (10) TMI 286 - KARNATAKA HIGH COURT] and also the Apex Court in the case Balbir Singh Maini [2017 (10) TMI 323 - SUPREME COURT OF INDIA], we find no infirmity in his order as the guidance value of the property was of ₹ 20 lakhs and the assessee himself has offered the higher value i.e., ₹ 37,60,000/- to tax. Therefore, we confirm the order of CIT(A). Accordingly, the appeal of the Revenue is dismissed.
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2018 (9) TMI 599
Disallowance u/s. 14A -assessee did not earn any exempt income - Held that:- As held in the case of Cheminvest Ltd. v. CIT, [2015 (9) TMI 238 - DELHI HIGH COURT] has categorically held that section 14A envisages that there should be actual receipt of income which was not includible in the total income during the relevant previous year for the purpose of disallowing any expenditure in relation to the said income. Provisions of section 14A cannot be invoked as there is no exempt income in the hands of the assessee. Accordingly, we find no infirmity in the order of the CIT(Appeals) who has rightly deleted the addition. - Decided in favour of assessee
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2018 (9) TMI 598
Disallowance u/s 14A - non recording of satisfaction by AO - interest free funds available with the assessee - Held that:- Hon'ble Supreme Court in the case of Maxopp Investment Ltd. (2018 (3) TMI 805 - SUPREME COURT OF INDIA) has categorically held that before applying the provisions of section 14A read with Rule 8D, the Assessing Officer needs to record satisfaction as to how the suo motu disallowance, if any, made by the assessee was not correct. On merits also we find that interest free funds available with the assessee for assessment year 2008-09 were ₹ 15.74 crore whereas in assessment year 2010-11 the figure of interest free funds is ₹ 18.04 crore. As against these interest free funds, the value of investments in shares is only ₹ 88,85,839/-. These figures are verifiable from the copy of balance sheet of the assessee for the assessment years as placed. Hon'ble Delhi High Court in the case of PCIT vs. Sintex Industries Ltd. (2017 (5) TMI 1160 - GUJARAT HIGH COURT) has held that where assessee had surplus funds against which minor investment was made, no question of making any disallowance or expenditure in respect of interest and administrative expenses u/s 14A arose - Decided in favour of assessee
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Customs
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2018 (9) TMI 594
Quantum of penalty - Smuggling - Gold Bars - Confiscation - penalty - Held that:- There are no question of law arising in the present matter. The adjudicating authority was justified in recording a finding on available material about the involvement of the appellant with other accused and also taking note of the fact that charge sheet against him was also filed in the Court of Economic Offences, Jaipur and considering that he visited Dubai around the relevant time on as many as four occasions. The Commissioner of Central Excise (Appeals) imposed penalty of ₹ 2 lakhs on the appellant. The appeal filed by the appellant before the Tribunal was dismissed by the Tribunal on non-deposition. This Court restored the appeal confining the matter to only penalty part. The Commissioner of Central Excise (Appeals), Customs and Central Excise by his order dated 27.9.2016, however, imposed the penalty of ₹ 2 lakhs. The Tribunal by his order dated 7.9.2017, however, reduced the same to ₹ 1 lakh. Appeal dismissed.
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2018 (9) TMI 593
Exemption from CVD - Serial No.1A(i) of Notification No.4/2006-CE, dated 01.03.2006 - petitioner could not produce the invoices as well as the bill of entries questioned by the authority - the petitioner says that the authority has passed orders without considering all the bill of entries and complete set of invoices. Now, the petitioner has traced those documents. Therefore, non consideration will lead to failure of justice and gross injustice will be done to the parties - Principles of Natural Justice. Held that:- The Hon'ble Supreme Court, in very many cases, has held that instead of rejecting the matter on the ground of technicalities, it shall be seen that substantial justice is done on merits of the matter. Here is the case, there are materials, which should have been considered by the authority, which are now available before the Court. Consideration of these materials evidences may change the cause of the order. Non consideration will cause grave hardship and irreparable hardship to the petitioner - In the interest of justice, the original authority is directed to consider the available materials and decide afresh. The matter is remitted back to the original authority for fresh consideration on the basis of the material evidences produced by the petitioner - petition allowed by way of remand.
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2018 (9) TMI 592
100% EOU - Refund claim - excess export Duty paid under protest. Held that:- It is well-settled that the duty paid by the assessee under protest, if ultimately found, was not leviable, it would automatically entitle him for refund. The payment under protest by itself would tantamount to claiming refund, but, it cannot be turned down merely because he has not filed any appeal or appeal was filed by the Department before a higher forum - the petitioner is entitled to get refund. Since a binding decision has not been followed by the Adjudicating Authority in this case, this Court can interfere straight away without relegating the assessee to file an appeal. Petition allowed.
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2018 (9) TMI 591
Refund claim - re-assessment of Bill of Entry on the basis of the declared invoice value - Held that:- The issues decided by the order dated June 18, 2014 are final so far as the petitioner and the department is concerned in respect of the eight bills of entries. It is incumbent upon the department to act in terms of order dated June 18, 2014. The subsequent action of the petitioner or the department does not obviate compliance of the order dated June 18, 2014. All steps taken subsequent to June 18, 2014 in violation of the direction contain therein are, therefore, nullity - the assessing officer is directed to comply with the direction contained in the order dated June 18, 2014 passed by Commissioner of Customs (Appeals) in accordance with law - petition disposed off.
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2018 (9) TMI 590
Refund claim - amount was pre-deposited by the petitioner vide order dated 2-9-2010 with interest - Held that:- Since the amount was received by the Department, pursuant to the orders passed by the Hon’ble Division Bench of this Court, it cannot be treated as an amount to be paid but it is only an amount, which has been deposited pursuant to the interim orders granted by this Court and such deposit will abide by the final order passed in the said matter. The final order dated 28-3-2017 has been passed in favour of the petitioner - the petitioner is entitled for refund of the amount of ₹ 3,00,000/- along with interest, if admissible in law - petition allowed.
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2018 (9) TMI 589
Provisional release of goods - Section 110A of CA - Held that:- In such a situation it cannot be conclusively said that the enhancement of the value proposed by DRI is correct, at the same time it can also not to be concluded that price declared by the appellant is also correct, therefore taking their balance we are of the opinion that the condition imposed i.e. bank guarantee for 200% of differential duty is very harsh - appeal allowed in part.
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2018 (9) TMI 588
Demand of Customs Duty - benefit of N/N. 32/97-Cus denied - loss of goods and remission of Customs duty - Held that:- The appellant intimated to the Commissioner of Customs JNPT regarding loss of goods and remission of Customs duty, however, the Commissioner has not responded. This has been recorded by both the lower authorities but it was contended that since, there is no reply from the Commissioner of Customs JNPT, they cannot wait for the same and accordingly proceeded to confirm the demand and upholding the same - once the appellant have written letter for loss of their goods and remission of duty, without any decision on their request by the Commissioner of Customs JNPT, both the lower authorities should not have proceeded with deciding a Show cause notice. Matter remanded to the adjudicating authority. The commissioner of Customs JNPT is also directed to dispose of the letter dated 16.04.2003 submitted by the appellant only, thereafter, the adjudicating authority would pass the De-novo adjudication order - appeal disposed off by way of remand.
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Corporate Laws
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2018 (9) TMI 597
Winding up proceeding - application of provisions of the SARFAESI Act - Held that:- The official liquidator will in that case be also not dependent on the secured creditors to put in funds to protect the assets of the company (in liquidation) at Silvasa or for the administrative charges to carry out the sale. The applicant bank can easily obtain actual physical possession of the Silvasa property by removing the encumbrances, if any more conveniently by applying the provisions of the SARFAESI Act and the said Rules. If the official liquidator has to sale the assets of the company (in liquidation) he would be compelled to sell the same with encumbrances, if any as it will take the official liquidator more time to remove the encumbrances if any in the event he chooses to remove such encumbrances by observing the legal formalities. The official liquidator may have to either file proceedings or defend in a competent court having jurisdiction over Silvasa Property from its office at Kolkata. The applicant bank is therefore permitted to remain outside the winding up proceedings since it had initiated proceedings before the DRT prior to the company being wound up and is also allowed to sell the Silvasa property in association with the official liquidator. The same procedure as laid down above has to be followed in respect of selling the movables of which the applicant bank claims to be its securities. The official liquidator, if satisfied that the assets of the company (in liquidation) are secured asset of the bank he should make over the symbolic possession thereof or the actual physical possession if he has taken the same in the meantime to the applicant bank to effect the sale. The applicant bank should bring to the notice of DRT about the restraint order dated 5th May, 2015 and get it varied and/or modified prior to proceeding for to sale by invoking the provisions of the SARFAESI Act pursuant to this order upon notice to the official liquidator who has to be also substituted in the OA pending before DRT in the place of the company (in liquidation).
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2018 (9) TMI 596
Winding up petition on the ground that the company is unable to pay its debts - bona fide defence to the claim of the petitioner - Held that:- Company has failed to make out any bona fide defence to the claim of the petitioner in this application. Accordingly, this winding up application against the company is admitted for a sum of ₹ 1,74,65,867/- with interest thereon, at the rate of seven per cent (7%) , per annum from the date of receipt of the statutory notice dated March 15, 2016 till the date of payment. The company is directed to pay the said principal amount of ₹ 1,74,65,867/-, together with interest to the petitioner by eight equal monthly instalments. By the first seven equal monthly instalments the company shall pay the principal amont of ₹ 1,74,65,867/- and by the last instalment the company shall pay the interest amount to the petitioner. The first of such instalments shall be paid by the company to the petitioner, within August 31, 2018 and the subsequent instalments shall be paid to the petitioner within the 10th day of each succeeding month. In the event of any failure on the part of the company to pay any one of the above instalments within the time stipulated above, the petitioner shall be free to advertise this application once in the English newspaper, "The Statesman” and once in the Bengali newspaper, “Bartaman”. In the said notices the petitioner shall mention that the application shall appear before this Court on the first Monday, after four weeks from the date of publication thereof.
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2018 (9) TMI 595
Winding up application - company is commercially insolvent - application filed by the said bank under Section 7 of the IBC, 2016 against the company has not yet been listed - Held that:- In the present case, the company has been contesting the winding up application, and it has filed in its affidavit-in-opposition. Even the petitioning creditor has also filed its affidavit-in-reply. The winding up application was ready for hearing and the learned counsel appearing for the petitioning creditor has made his arguments. Whereas, the application filed by the said bank under Section 7 of the IBC, 2016 against the company has not yet been listed before the NCLT and, as such, the question of admission of the said application under Section 7(5) of IBC, 2016 has not arisen. In any event, there is no certainty that the said application by the bank shall be admitted by the NCLT. For all the foregoing reasons, thus find merit in the contentions made by the petitioning creditor not to entertain the prayer made by the company in this application. Accordingly, the application stands rejected.
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Service Tax
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2018 (9) TMI 585
Classification of service - Contract to supply drilling rigs to ONGC - Drilling rigs hired by assessee - Supply of Tangible Goods for Use service - Imposition of interest and equivalent penalty - Held that:- Four weeks’ time as a last opportunity is granted to the learned counsel for the appellant to make up the deficit Court Fee failing which, the Civil Appeal shall stand dismissed without further reference to the Court.
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2018 (9) TMI 584
Export of service - Place of provision of service - Whether in the facts and circumstances of the case, the CESTAT was right in holding that the custodial services provided by the assessee to Foreign Institutional Clients (FII's) amounts export of service as provided under Rule 3 of Export of Service Rules, 2005, for the period from May, 2006 to December, 2007? Held that:- The custodial services provided, would be clearly covered by sub-clause (iii) of Rule 3 of the Export Services Rules, 2005 and the Respondent would be entitled to its benefit - In fact, the Central Board of Excise & Customs has on 24th February, 2009 has issued a clarificatory Circular No.111/ 2009, clarifying that in respect of services following under category/ clause (c) above i.e. Rule 3(I)(iii) of the Export of Services Rules 2005, the relevant factor is the location of the Services recipient and not the place of performance. It also clarified that the phrase used 'outside India', is to mean that the benefits of the service is to accrue outside India. This Circular which is binding on the Revenue, also concludes the issue in favour of the Respondent. Appeal dismissed.
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2018 (9) TMI 583
Restoration of Appeal - Renting of Immovable Property Service - Whether in facts and circumstances of the case, the Appellate Tribunal was right in dismissing the appeal of the Appellant sustaining the demand on new grounds which were not alleged in the show cause notice or the subsequent proceedings? - Held that:- The Appeal requires admission. However, on our observing this, the Counsel for both the parties pray that the impugned order dated 12th April, 2016 can be set aside and restored to the Tribunal for fresh disposal, in accordance with law. The impugned order dated 12th April, 2016 is quashed and set aside. However, the Appellant's appeal be restored to the file of the Tribunal for fresh disposal - Appeal restored.
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2018 (9) TMI 582
Non-registration - non-payment of service taxes - proceedings impugned are in the nature of notices calling upon the petitioners herein to show cause the reasons as to the non-registration and non-payment of service taxes by them - Held that:- There shall be a direction that the respondent/first respondent, the Joint Commissioner/the Additional Commissioner, Office of the Commissioner of Central Excise and Service Tax,Tiruchirappalli - 620 001, shall bear in mind the clarifications issued in Circular No.123/5/2010 dated 24.05.2010 and proceed further in the matters - petition disposed off.
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2018 (9) TMI 581
Valuation - inclusion of value of loading agreement into the value of mining agreement - Revenue has been of the view that the appellants are not paying service tax properly as the service value of both loading agreements and transportation agreement need to be included into the mining services value. Held that:- The matter is no-longer res-integra in view of the decision of Hon’ble Supreme Court in Singh Transporters [2017 (7) TMI 494 - SUPREME COURT] for the demand period between 01/04/2012 to 31/06/2012, wherein the service akin to the one provided by the appellants to M/s South Eastern Coal Fields Ltd. have been found by Hon’ble Supreme Court to be rightly classifiable under transport of goods by road service - demand set aside. So far as the demand from 01/07/2012 to 31/03/2013 is concerned, same has also been decided by this Tribunal in its final decision in the case of M/s H.N. Coal Transport Pvt. Ltd. and others vs. CCE & ST, Raipur [2018 (8) TMI 173 - CESTAT NEW DELHI] in the similar cases, where it was held that wherein this Tribunal has found that since the service provided by the appellants within mining area has already been classified by Hon’ble Supreme Court in Singh Transporters case even in the post negative regime w.e.f. 01/07/2012 the appellants are entitled for abatement on the value of services provided by them and since the service tax has already been paid by the service recipient after availment of the abatement and, therefore, no service tax liability remains with the appellant - demand set aside. Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 580
Business Auxiliary Service - appellant are engaged in the activity of job work such as Grinding, Boring and Nitriding work on the goods supplied by their principal - penalty - Held that:- the appellant s activity such as Grinding, Boaring and Nit Riding work on the semi finished goods supplied by their principal is amount to production even though not a manufacturing activity in terms of Section 2 (f) of the Central Excise Act, 1944. The production activity was very much covered under Sub Clause (v) of Clause (19) under Business Auxiliary Service. Therefore, during the relevant period the activity of production of goods on behalf of client was taxable - demand upheld. Penalty u/s 76 and 78 of FA - Held that:- As of now it is a settled Law that penalty Under Section 76 78 cannot be imposed simultaneously. Therefore, the penalty imposed Under Section 76 is set aside - As regard, the penalty imposed Under Section 78, the adjudicating authority has not given the option of 25% penalty to the appellant in the Order in Original. The penalty reduced to 25% under the proviso to Section 78 subject to condition that total amount of Service Tax, interest and penalty of 25% stand paid within a period of one month from the date of receipt of this order. Appeal allowed in part.
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2018 (9) TMI 579
SSI Exemption - Whether the Service Provided by the Sub-Broker of main Stock-broker is branded Service and not eligible for small scale exemption up to aggregate gross value of ₹ 4 Lakhs in the financial year? - Whether the Service provided by Sub-broker of Stock-Broker is per se liable to Service Tax or otherwise? Held that:- The appellant is acting as a commission agent on behalf of the Stock-broker, the entire deal of Stock trading is between Stock broker and ultimate client. In this fact it cannot be said that the appellant’s service is a branded service. Moreover, the appellant is providing services to the Stock-broker the issue of service being branded could arise only when branded service is provided to a person other than the brand name owner - Only by using the brand of third person which is not the case here, therefore, the service provided by the appellant cannot be treated as branded service of another person - There is no dispute that the aggregate value of the service provided by the appellant in a financial year is well within the exemption limit of ₹ 4 Lakhs. Therefore, they are clearly eligible for small scale exemption provided under Notification No.06/2005-ST. The demand of Service Tax is not sustainable - Since, we are deciding the matter only on the first issue of small scale exemption Notification, we do not incline to address the issue of taxability of Sub-broker during the relevant period. Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 578
Restoration of appeal - appeal was dismissed for non-making of pre-deposit - the appellant have deposited ₹ 8 lakhs by WCL by Challan dated 6.2.2018 - Held that:- There has been error apparent on record in dismissing the appeal of the appellant for want of pre-deposit whereas there was sufficient amount already paid on behalf of the appellant by WCL, which the Revenue had undertaken to adjust. But somehow this material fact was not placed before this Tribunal and resulted in dismissal of the appeal although the relevant documents was on record. There has been miscarriage of justice in dismissing the appeal of the appellant in spite of their being sufficient pre-deposit of tax - we re-call our earlier order of dismissal of the appeal and also modify our earlier stay order demanding pre-deposit from the appellant and accordingly, we hold that there is sufficient pre-deposit for admission of the appeal - appeal restored.
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2018 (9) TMI 577
Business Auxiliary Service - appellant acts as a distributor and receiving commission from his client - benefit of cum-tax - Held that:- Since, there is clear provision under Sub-Section(2) of Section 67 whatever amount was received as service charges it is to be treated as inclusive of service Tax, hence cum- Tax benefit is available to the appellant - benefit of cum-tax extended - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 576
Security Agency Service - whether the appellant who is a co-operative society are taxable under ‘Security Agency Service’? - service tax for the period from 01.11.2004 to 30.11.06 - Held that:- The matter need no further consideration in view of the settled law till date that the activity of the appellant was taxable under Section 65(105)(k) read with section 65 (94) of the Finance Act, 1994 - the issue of limitation has also been adjudicated by the Tribunal holding the show cause notice as being beyond time - demand for normal period of one year confirmed - appeal allowed in part.
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2018 (9) TMI 575
Condonation of delay of 55 days in filing appeal - time limitation - delay of 55 days in filing the appeal beyond the statutory period of 3 months - principles of Natural Justice - Held that:- From the medical certificate and the prescriptions placed on record, it is seen that the proprietor of the appellant, which is a proprietorship firm, was having medical problems for which he was receiving treatment and the same was brought to the notice of the Commissioner (Appeals). Even though the Ld. Commissioner (Appeals) has mentioned about it in Para 4 (1) (ii) of her order, the same appear to have been completely disregarded and no finding whatsoever has been given on it while considering the application for condonation of delay. When the appellant has made specific ground for condonation of delay along with documentary evidence, and the same has not been considered by the first appellate authority, it would be appropriate to remand the matter back to Commissioner (Appeals) to re-consider all the grounds in the application for condonation of delay - matter remanded back.
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2018 (9) TMI 574
Consulting engineers Service - receipt of royalty against technical know-how - Held that:- The fact is not under dispute that the appellant have transferred the technical know-how to M/s. A.T.E. Enterprises against which they have received the technical know-how fees. Therefore, the service does not fall under the category of consulting engineer - Mere providing the assistance to the service recipient will not take away the service of technical know-how. Appeal allowed - decided in favor of appellant.
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Central Excise
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2018 (9) TMI 573
Whether the Tribunal was right in directing the Commissioner to take into account the period during which the petitioner's factory was not in operative and the furnaces were not functioning while determining the Annual Capacity of Production (ACP) of the factory afresh? Held that:- No substantial question of law arises for consideration in the instant case, as the dispute raised by the department is in a very narrow campus. On a reading of the Order-in-Original, it is evidently clear that the claim of the assessee was only for abatement. Therefore, the terminology which should have been used by the Tribunal in paragraph No.4 should have been abatement and not to direct redetermination of ACP of the assessee's factory afresh. In fact, the assessee's case is that during the period factory was shutdown and equipment was dismantled, the question of demanding the duty does not arise. No question of law has arisen for consideration, much less substantial question of law and only thing that requires to be clarified is, on remand, the Commissioner is directed to consider the case of abatement in accordance with Rule 96ZO(3) and other applicable provisions - appeal dismissed.
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2018 (9) TMI 572
Alternative remedy of Appeal - waiver of appeal remedy - Maintainability of petition - Exhausting the efficacious alternative remedy provided under the statute. Held that:- The Appellate Authority being a quasi judicial functionary is empowered to adjudicate the merits as well as the legal grounds raised by the respective parties under the provisions of law. Thus, this Court cannot waive the appeal remedy in a routine manner. The appeal remedies are provided under the statute for a purpose and the very object in this regard cannot be deviated by entertaining the writ petitions under Article 226 of the Constitution of India in a routine manner. This Court is of a strong opinion that institutional respects are to be maintained by the constitutional Courts. Whenever there is a provision for an appeal under the statute, without exhausting the remedies available under the statute, no writ petition can be entertained in a routine manner. Only on exceptional circumstances, the remedy of appeal can be waived, if there is a gross injustice or if there is a violation of fundamental rights ensured under the Constitution of India. Otherwise, all the aggrieved persons from and out of the order passed by the original authority is bound to approach the Appellate Authority - Rule is to prefer an appeal and entertaining a writ is only an exception. This being the legal principles to be followed, this Court cannot entertain the writ petitions in a routine manner by waiving the remedy of appeal provided under the statute. Exhausting the efficacious alternative remedy provided under the statute - Held that:- When an effective alternative remedy is available, a writ petition cannot be maintained - Till the appeal is taken up for hearing, the respondents are directed not to initiate any coercive action against the writ petitioner. It is needless to state that the writ petitioner has to pay pre-deposit and the appeal to be submitted in the prescribed format. The writ petitioner is at liberty to prefer an appeal within a period of four weeks from the date of receipt of a copy of this order and on receipt of any such appeal, the Appellate Authority is bound to consider the same on merits and in accordance with law - petition disposed off.
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2018 (9) TMI 571
Clandestine removal - Whether the Tribunal substantially erred in law in not accepting the case of the revenue about clandestine removal of goods in the guise of waste even when the Manager/Authorized Signatory had admitted the offence in his statement recorded under Section 14 of the Central Excise Act, 1944 and even when the statement was not retracted? Held that:- Primarily two authorities have concurrently held that the assessee’s stand of fire breaking out in its units was duly established. This led to higher wastage than average. The customers had admitted having received goods and made payments through cheques. Demand cannot sustain - appeal dismissed - decided against Revenue.
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2018 (9) TMI 570
Penalty u/r 26 of CER, 2002 - Clandestine manufacture and removal - Copper Tubes - Whether the impugned order of the Tribunal to the extent of confirmation of penalty under Rule 26 of the Central Excise Rules, 2002 is correct and proper when the appellants had not dealt with the goods physically in any manner and when there was no proposal for confiscation of the goods in the show cause notice and when no goods are held liable for confiscation? Held that:- It is seen from Rule 26(1), that the liability to penalty is fastened upon a person (i) who acquires possession of any excisable goods, (ii) who is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing; or (iii) who in any other manner deals with the goods. The argument of the Learned Counsel for the appellants is that Rule 26 can be invoked only when a person has dealt with the goods physically and that since there is no allegation in the notices that the appellants physically dealt with the goods, no penalty can be imposed - this contention does not hold water in the light of the fact that Rule 26 uses the expression “in any other manner deals with any excisable goods”. The words “deals with’’ need not necessarily mean the physical dealing with the goods - If providing blank challans/invoices to a company to enable them to remove the manufactured goods clandestinely, will not fall under the category “in any manner dealing with the goods”, we do not know what these words “deals with’’ would mean. Therefore, the contention based upon Rule 26 does not hold water. Another contention of the learned counsel for the appellants is that there was no proposal for confiscation and that therefore, the decision of the Larger Bench of the Tribunal in the case of Steel Tubes of India Limited, v. CCE, Indore [2006 (10) TMI 146 - CESTAT, NEW DELHI [LB]] would squarely apply - Held that:- The Tribunal rightly distinguished the said decision on the ground that the Larger Bench did not focus on the expressions “in any way concerned in transporting, removing, depositing, keeping, concealing, selling and purchasing or in any manner deals with any excisable goods”. The Larger Bench focused attention in Steel Tubes of India, only on the words “any person, who acquires possession”. Therefore, the decision was distinguishable and the CESTAT rightly did so. To ward off the penalty, the appellants should have come out clean. No logical explanation is offered as to why and how they parted with blank challans/invoices. Therefore, the question of law has to be answered against the appellants. The appeals are accordingly disposed of, answering the question of law against the appellants, but reducing the penalty to the extent of 50% of the amount ordered by CESTAT and which amount is stated to have been already paid - appeal allowed in part.
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2018 (9) TMI 569
Maintainability of appeal - Jurisdiction of Tribunal to decide the appeal in view of 1st proviso to Section 35B of the Central Excise Act, 1944 - Section 35G of the Central Excise Act, 1944 - first Proviso to Section 35B(1) and Section 35EE(1) - Held that:- From a conjoint reading of first Proviso to Section 35B(1) and Section 35EE(1), it is clear that if the order relates, inter alia, to a rebate of duty of excise on goods, exported to any country or territory outside India or on excisable materials used in the manufacture of goods which are exported to any country or territory outside India, the same would not be amenable to the appellate jurisdiction of the Tribunal and the remedy would be as provided under Section 35EE(1) of the Act. It is the Central Government alone which can annul and modify any order passed under Section 35A of the Act which is in the nature referred to in the first proviso to sub-section (1) of Section 35B of the Act. The Central Government, however, would do so only on application of any person aggrieved of such order. The issue which was subject matter of appeals before the Tribunal pertains to rebate of excise duty on export and, therefore, the Tribunal had no jurisdiction to entertain the appeals - impugned order set aside - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 568
Refund claim - transfer of refund amount to the Consumer Welfare Fund in terms of Section 12C of the Central Excise Act - Section 11B of the Central Excise Act - issuance of two parallel show cause notices one for refund and other for recovery of demand on the buyer for availment of credit - unjust enrichment. Held that:- The Tribunal has seriously committed an error in following the Division Bench judgment of the Tribunal in spite of the fact that Single Bench decision of the Tribunal was confirmed by the Jurisdictional High Court in A.K. Spintex Ltd. [2008 (11) TMI 89 - RAJASTHAN HIGH COURT] - The matter is required to be remitted back to the Original Authority and Original Authority will examine the matter and decide the same in accordance with law. Appeal allowed by way of remand.
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2018 (9) TMI 567
Levy of penalty - effect of amendment - Whether Section 11AC of the Central Excise Act is prospective; if so, whether the matter should be remitted to the Tribunal for applying the judgment of the Apex Court in Union of India v. Dharmendra Textile Processors and Ors., [2008 (9) TMI 52 - SUPREME COURT ] to the facts of the present case? Held that:- The contention that in the present case as the notice period is 1-4-1994 to 16-1-1997, the provisions of Section 11AC of the Act cannot be invoked as the same would tantamount to retrospective effect of the provisions. In our considered opinion, it is not a correct interpretation. In respect of discovery of the fact on misrepresentation to evade the duty, it is the law which is prevalent on the date when such an act is discovered would be applicable. The contentions when examined in the context of the present fact situation wherein the period includes the period when section 11AC of the Act come into existence, deserves to be rejected. A default, which is a continuing default and not a default once for all, can be dealt with under the provision of new enactment, if it continues when the new enactment came into force, although it commenced when the old enactment was in force. The substantial question as to whether Section 11AC of the Central Excise Act is prospective; if so, whether the matter should be remitted to the Tribunal for applying the judgment of the Apex Court in Union of India v. Dharmendra Textile Processors and Ors., to the facts of the present case, is answered in negative. Appeal dismissed.
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2018 (9) TMI 566
Eligibility for refund of duty paid - time limitation - refund was rejected on the ground of delay - area based exemption / North Eastern Region - substantial expansion - procedural lapse Held that:- The appellant was first required to prove its eligibility for notified exemptions by establishing that the three industrial units had undertaken substantial expansion of not less than 25% on or before 24th day of December, 1997 and then file every month’s statement of duty paid from the account current to the Assistant Commissioner. And, if these two conditions were fulfilled, the appellant was entitled to refund of the amount of duty paid. As seen above, the appellant has fully established before the Commissioner (Appeals) that the three industrial units had undertaken increase by more than 45.80%, 57% and 27.56% before 24-12-1997. The finding of the Commissioner (Appeals) confirming this position was not questioned by the Revenue in appeals filed before the Tribunal. The eligibility of the appellant for the benefit of exemptions and refund of duty paid stands conclusively proved. The appellant having been once found to be eligible for exemptions and refund of duty paid, denial of benefit of exemptions and refund on the ground of delay, in our considered opinion, will cause grave injustice which cannot be permitted. Even otherwise, it is well settled law that non-following of procedural requirement cannot deny the substantive benefit, otherwise available to the assessee. Decided in favor of appellant - appeal allowed with cost of ₹ 3000/-.
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2018 (9) TMI 565
Extended period of limitation - CENVAT Credit - service tax paid on the services used for outwards transportation of the appellant’s final product from their factory gate to the customer’s premises - penalty - Held that:- Apart from that the said credit has been availed by reflecting the same in the statutory document in which case again no mala fide can be attributed to the assessee so as to justifiably invoke the longer period of limitation - the major part of the demand is barred by limitation and the Original Adjudicating Authority is within his rights to re-quantify the demand falling within limitation period, which would be payable by the appellant. There was no mala fide on the part of the assessee, imposition of penalty upon them is not justified - Penalty set aside. Appeal disposed off.
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2018 (9) TMI 564
CENVAT Credit - whether the appellant is eligible to avail CENVAT credit of the service tax paid by him on Royalty charges paid to M/s Solute? - time limitation. Held that:- The show cause notice issued in September, 2015 is blatantly time barred. Hence the entire demand raised on the appellant needs to be set aside on the question of limitation itself. Appeal allowed.
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2018 (9) TMI 563
Restoration of appeal - appeal was dismissed for non-prosecution - whether the refund claim filed by the appellant on 24.06.2009 for the period 04.05.2006 and 19.07.2007 would be barred by limitation or not? - Held that:- Admittedly, during the relevant period the appellant had discharged its tax liability on reverse charge basis in respect of services received from a foreign person. Neither any protest was alleged by the appellant nor the assessments were provisional. The refund claims stand filed on 24.06.2009 i.e., after the normal period of limitation under Section 11B. Admittedly, the refunds are required to be adjudicated in terms of the provisions of Section 11B of Central Excise Act inasmuch as there is no other provision in the Act to deal with the refunds. The limitation as provided under Section 11B is to be applied to each and every refund claim. The refunds in the present case having been admittedly filed beyond the period of limitation of one year are barred by limitation. Appeal dismissed - Restoration of appeal application disposed off.
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2018 (9) TMI 562
Valuation of excisable goods manufactured and cleared by the appellant - Revenue held a view that the goods were sold and cleared at the factory gate and the appellant is not liable to include the freight component in the transaction value - Held that:- The impugned order records that the appellant have not produced anything on record which would show that they had cleared the goods from the factory gate to a warehouse, any other premises, a depot, consignment agents premises etc. from where such excisable goods were sold. Admittedly, the goods sold by the appellant delivered at the buyers premises will not make the place of removal as buyers premises - there is no justification for the appellant to consider the assessable value with inclusion of freight element after the goods were sold/removed from the factory - decided in favor of appellant. Exemption/refund of education/higher education cess paid on the goods manufactured and cleared by the appellant by availing Area Based Exemption - N/N. 56/2002-CE dated 14/11/2002 - Held that:- the question of paying duty on such value addition to be covered by the exemption under Notification 56/2002-CE does not arise - decided against appellant. N/N. 19/2008-CE dated 27.03.2008 and 34/2008-CE dated 10.06.2008 - whether the appellants are entitled to claim refund/self-credit as restricted by these notifications or not? - Held that:- In terms of Notification No. 56/2002-CE dated 14.11.2002, the appellants are entitled to claim refund/ self-credit of duty paid through PLA relying on the decision of this Tribunal in the case of M/s Boistadt India Limited & others vide Final Order No. 61350-61411/2018 dated 14.03.2018 - Benefit allowed. Appeal allowed in part.
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2018 (9) TMI 561
Classification of goods - Chewing Tobacco - whether 'chewing tobacco' classifiable under heading 24039910 or as 'zarda scented tobacco' (24039930)? - Period from 05.06.2015 to 14.07.2015 and from 15.07.2015 to 26.01.2016 - Held that:- The test report is prima facie appears to be in favor of the appellant as the product consist of tobacco without any scent prior to February, 2016 and with flavourant subsequent to February, 2016. Revenue has attempted to classify this product under 'zarda scented tobacco' (24039930) scent which is not sustainable in view of the order passed by this Tribunal in the case of Tara Chand Naresh Chand vs. CCE&ST, Alwar [2018 (4) TMI 221 - CESTAT NEW DELHI] wherein the classification of the product manufactured by the appellant (TCNC) has been classified under heading 24039910. Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 560
Issuance of two SCN - SCN pending adjudication - eligibility to exemption Notification 01/93-CE during the period 01.03.1994 to 31.03.1994 - Held that:- It is recorded in the order-in-original that for the period 01.04.1993 to 28.02.1994, two show cause notices dated 22.11.1993 and 06.05.1994 were issued proposing denial of exemption Notification 202/88-CE dated 20.05.1988. However, it is not available on record whether show cause notices were decided Without outcome of show cause notices dated 21.11.1993 and 06.05.1994 deciding the eligibility to exemption Notification 01/93-CE during the period 01.03.1994 to 31.03.1994 is clearly pre-mature - the matter needs to be remanded to the Adjudicating Authority to pass a fresh order after considering the status of the case covered under show cause notices dated 21.11.1993 and 06.05.1994 - appeal allowed by way of remand.
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2018 (9) TMI 559
100% EOU - Refund claim - deemed exports - for the purpose of 50% of DTA clearance, in respect of 100% EOU, whether the deemed exports should be considered as exports or only the physical exports should be considered? Held that:- The issue is no more res-integra as in the cases of M/s. Ginni International Limited, [2007 (8) TMI 649 - SUPREME COURT OF INDIA], the Hon'ble Supreme Court held that for the purpose of calculation of 50% of export, the export will include the deemed export also - impugned order set aside. As regards the demand of duty on raw materials, since the demand on the finished goods itself is not sustainable the duty on raw material is also not sustainable. Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 558
Method of Valuation - physician sample sold to the brand owner - to valued u/s 4 or u/s 4 A of Central Excise Act 1944? - Held that:- The fact is not under dispute that the appellant had initially paid the duty on free sample on proportionate of value under section 4 A of the trade pack. Since the physician’s samples were sold by them to the brand owner by raising the sale invoice, the Excise duty should have been paid on the transaction value. The proportionate of section 4A is applicable only in a case where the physician sample are not sold and cleared free of cost, which is not the case here. The duty should have been paid under section 4 - the differential duty is rightly refundable in accordance with the law - Appeal dismissed - decided against Revenue.
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2018 (9) TMI 557
SSI Exemption - crossing of threshold limit - Job-work - Held that:- Since the job work goods is used in the manufacture of edible oil by the principal which is exempted from payment of Excise Duty, the appellant, being job worker, is not entitled for job work exemption notification as per 214/86-CE dated 25/03/86. Therefore, value of clearance job work goods should be included in the overall clearance value. It is observed that the appellant have exceeded the SSI Exemption Limit of ₹ 1 crore. Therefore, appellant is liable to pay duty on the value exceeded to the exempted limit - penalty on Director id also maintained. Appeal allowed in part.
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2018 (9) TMI 556
CENVAT Credit - amount of discounts given to the appellant - Rule 3 of Cenvat Credit Rules, 2004 - Held that:- In terms of Rule 3 of Cenvat Credit Rules, 2004 an assessee entitled to avail Cenvat credit of duty paid. From the facts of the case, it is not coming out that the appellant has got discount on the duty part, therefore, in terms of Rule 3 of Cenvat Credit Rules, 2004, whatever duty has been paid by them, they are entitled to avail Cenvat credit. Credit allowed - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 555
Waiver of penalty - Rule 173Q, of the Central Excise Rules, 1944 - no proposal for confiscation of the goods is made - case of appellant is that as the goods were not liable for confiscation, in that circumstances, no penalty is impossable under Rule 173Q of Central Excise Rules, 1944 - Held that:- To impose penalty under Rule 173Q of the erstwhile Central Excise Rules, 1944, the goods are required to be held liable for confiscation. Admittedly, in the case, the goods were not held liable for confiscation - in the light of the decision of this Tribunal in the case of Shri Mahavir Wire Industries Vs. Commissioner of C. Ex., Indore [2015 (10) TMI 2549 - CESTAT NEW DELHI], the penalty is not impossible under Rule 173Q, of erstwhile rules, therefore, the penalty imposed on the appellant is set aside. Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 554
Penalty u/s 11AC of CEA - removal of capital goods after use - Rule 3(5) of Central Credit Rules, 2004 - Time Limitation - Held that:- The period of dispute is January 2007 whereas the show cause notice has been issued on 13.01.2013 which is beyond the period of five years, both the authorities below imposed the penalty on the appellant under Section 11AC of the Act on the ground that there is no time limit prescribed for the lack of penalty under Section 11AC of the Act. The authorities have intentionally dragged the appellant into litigation by issuance of the show cause notice after the lapse of five years, the action of the authorities below cannot be appreciated which cause harm to the industry - As on merits, the Ld. Commissioner (Appeal), held that the duty along with interest cannot be demanded as barred by limitation, therefore, no penalty is imposable on the appellant. Penalty set aside - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2018 (9) TMI 553
Permission to withdraw Appeals - Validity of assessment order - Held that:- Permission is granted - The civil appeals are, accordingly, dismissed as withdrawn.
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2018 (9) TMI 552
Principles of natural justice - validity of assessment order - the impugned orders of assessment were passed without affording sufficient opportunity to the petitioner to place their objections with materials documents - assessment years 2011-2012 to 2015-2016 - Held that:- Apart from these five assessment years, notice of proposal were sent to the petitioner in respect of the other three assessment years viz., 2009-2010, 2010-2011 and 2016-2017. It is not in dispute that the petitioner had given their reply to those three assessment years and it is stated that based on such reply, a deviation proposal is sent by the Assessing Officer. Considering the fact that the petitioner had already participated in the assessment proceedings in respect of those three assessment years, by filing their reply, I do not think that any attempt is being made by the petitioner to drag the proceedings insofar as these five assessment years are concerned, as they only want further time to file their reply, since they have to collect voluminous documents in support of their reply - such request is considered as genuine. Penalty - Section 27(3) of the TNVAT Act, 2006 - Held that:- It is true that the petitioner has not given any reply to the notice before conclusion of the assessment. But, at the same time, perusal of the impugned orders insofar as the imposition of penalty portion is concerned, would show that no reasons or findings are given as to how the Assessing Officer is satisfied to impose the penalty on the petitioner. The assessment orders are totally silent on that aspect - In the absence of any justifiable reasons stated for imposition of penalty, this Court is of the view that the matter has to go back to the Assessing Officer to consider the issue afresh and pass fresh orders of assessment on merits and in accordance with law. Petition allowed by way of remand.
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2018 (9) TMI 551
Acceptance of Forms / certificates produced by the assessee, even after passing final assessment orders - Revision of assessment order - Section 84 of TNVAT Act - Held that:- When the circular of the Commissioner of Commercial Taxes in Acts Cell-1/12975/2011, dated 28.02.2011, itself is in very clear terms that the Assessing Officers are empowered to accept the forms / certificates, even after passing final assessment orders and revise the assessments, the act of the respondent in passing the impugned notice could not be countenanced - The respondent is directed to accept the industrial input certificates filed by the petitioner on 27.04.2018 along with the petition under Section 84 of TNVAT Act and revise the assessment for the assessment year 2014-15, on merits and in accordance with law. Petition allowed - decided in favor of petitioner.
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2018 (9) TMI 550
Principles of Natural Justice - Stay on condition of pre-deposit - case of appellant is that the order passed by the respondent without giving the appellant an opportunity of personal hearing - Held that:- As there is violation of principles of natural justice and the only request of the learned counsel for the appellant is to remit the matter back to the respondent for re-consideration after affording him a personal hearing, the impugned order passed by the respondent dated 04.07.2013 may be set aside and the matter may be remitted back to the respondent for re-consideration - petition allowed by way of remand.
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2018 (9) TMI 549
Principles of Natural Justice - opportunity of personal hearing not given - Validity of assessment order - TNVAT Act - CST Act - Held that:- It is clear that before passing the impugned order, the petitioner has submitted his reply and sought for personal hearing. When that be so, the third respondent ought to have given an opportunity of personal hearing before passing the impugned order - In similar circumstances, a Hon'ble Division Bench of this Court also in a decision Tvl.SRC Projects Private Limited Vs. the Commissioner of Commercial Taxes, [2008 (9) TMI 914 - MADRAS HIGH COURT], has categorically held that when request is made for a personal hearing, the Assessing Officer is bound to afford such an opportunity. Further, in the instant case, the Assessing Officer has admitted that the dealer has submitted his reply, but has ignored to note the specific request for personal hearing. This error would vitiate the impugned order of assessment. The matter is remanded to the third respondent / Assessing Officer for fresh consideration - petition allowed by way of remand.
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2018 (9) TMI 548
Principles of Natural Justice - contention of petitioner is that without considering the reply given by the petitioner and without providing an opportunity of personal hearing, the respondent has passed the impugned order, dated 30.09.2010 - Held that:- Admittedly, in this case, the petitioner has given his objection, dated 24.06.2010, quoting various judgments. The respondent has also accepted the receipt of the objections of the petitioner, dated 24.06.2010, in the impugned order. However, the respondent has rejected the same stating that the decisions relied on by the petitioner is not relevant to the case on hand. The impugned order passed by the respondent is set aside and the same is remitted back to the file of the respondent - petition allowed by way of remand.
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2018 (9) TMI 547
Attachment of property - Arrears of Sales Tax payable - Held that:- The purchase was made by the petitioner through bankers of the 2nd respondent vide registered sale deed dated 02.05.2016 and 30.06.2016. Admittedly, on the said date there was no attachment of the property in question. Therefore, the subsequent attachment or the proceedings initiated by the 1st respondent would neither bind the petitioner nor the 1st respondent can proceed against the property owned by the petitioner, as they are a bona fide purchaser for valuable consideration much prior to action being initiated by the 1st respondent. The writ petition is allowed and the impugned p\notice is quashed as being without jurisdiction with a direction to the 1st respondent to lift the attachment and accordingly intimate the Sub Registrar, Hosur, to remove the encumbrance - decided in favor of petitioner.
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Indian Laws
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2018 (9) TMI 587
Dishonor of Cheque - recovery of loan granted - Section 138 of Negotiable Instruments Act - Held that:- The appellant / complainant has failed to prove the case of 138 of the Negotiable Instruments Act against the accused - appeal dismissed - decided against appellant.
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2018 (9) TMI 586
Detention of person - Section 3(1) of COFEPOSA Act - Bail Application - prayer is for direction to the respondents to place on record the said detention order - Smuggling in arms and ammunition/pistol - Held that:- In the present case the facts not in dispute are that far from avoiding the processes of law, the petitioner responded to the notices issued to him by the DRI. In the first instance after being detained for more than two months he applied for and obtained statutory bail under Section 167(2) Cr. PC. That order, as already noted, was subject to stringent conditions including an LOC having to be opened by the authorities to ensure that the petitioner is not able to leave the country notwithstanding that his passport is in the custody of the DRI. It is not the case of the respondents that any of those conditions have been violated by the petitioner - If indeed the petitioner was refusing to co-operate in the investigations concerning him, an application ought to have been filed before the Learned CMM for cancellation of his bail. There is no such application till date - Thirdly, the petitioner did respond to the SCN issued by the DRI on 13th October, 2017. He appeared before the Adjudicating Authority i.e. the Principal Commissioner of Customs (Preventive) along with his Advocate on 24th October 2017. The Court would like to add that in the instant case, even when the DRI challenged the order dated 9th October, 2017 of the CMM before this Court, the petitioner in response to the notice issued by this Court filed an affidavit. It is not as if, therefore, the petitioner has tried to avoid the process of law. Mr. Diwakar was unable to point out how the case of the petitioner on merits was any different from that of the co-detenues. The only explanation offered is that while the co-detenues underwent some period of detention, the petitioner did not. If on merits, the case of the petitioner is no different from that of the co-detenues and the detention orders in respect of the co-accused have not been confirmed by the Advisory Board, the Court sees no purpose being served in the petitioner being detained on the basis of the impugned detention order, the grounds for which are no different from the detention orders issued in respect of the co-detenues, which have not been confirmed by the Advisory Board. The Court is also not satisfied that any serious attempt was made during the time when the detention order in respect of the co-detenues was still alive, to execute the impugned detention order to take the petitioner into custody despite the DRI knowing of his participation in the adjudication proceedings pursuant to the SCN issued by it. That stage having been crossed, the Court has no hesitation in holding that the detention order issued in respect of the petitioner has ceased to serve any purpose whatsoever. The Detention Order quashed - petition allowed.
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