Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 19, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
FEMA
PMLA
Service Tax
Central Excise
Indian Laws
Highlights / Catch Notes
GST
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Penalty for typographical error in e-way bill quashed; goods & vehicle release ordered by High Court.
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Govt can't be forced to clarify GST on energy storage systems; rely on law.
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Taxpayer's right to fair hearing violated due to lack of notice on discrepancies.
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Unreasoned GST orders voided, fresh hearing ordered respecting due process.
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Taxpayer challenges tax order, files writ & appeal - Court allows appeal to continue, stays recovery.
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Overlapping notices led to confusion, violated natural justice - Order set aside, Petitioner to pay Rs 1.4 cr for fresh hearing.
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Transporter vindicated: Tax & penalty wrongly levied on goods with valid docs like invoice & e-way bill.
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Petitioner's ITC blocked for alleged bill trading, approached HC prematurely.
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Registration cancelled without opportunity of hearing or assigning reasons, violating natural justice.
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Taxpayer wins court order for tax refund processing in 2 weeks. Respondent to inform any formalities.
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Delay in filing GSTR 3B leads to reversal of ITC; Court grants interim relief subject to deposit.
Income Tax
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TDS already deducted but not credited? AO must amend assessment once Form 26AS presented. Denying refund illegal.
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Tax evasion case rightly transferred to jurisdiction where incriminating materials seized, overriding objections.
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Taxpayer scores partial victory as tribunal upholds genuine payments, deletes unsupported additions.
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Property Allotment Date Key for Calculating Capital Gains & Stamp Duty Differential Income.
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TDS evasion case quashed after full payment with interest. No need for prosecution.
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Rental Income Tax Controversy: Business vs. House Property.
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Procedural nuances of faceless assessment regime: Opportunities for objections, DRP's non-binding role, deletion of share capital addition. /PFContributions.
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Offshore drilling rig charter income: To include or exclude GST/service tax for presumptive taxation?
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Tax Assessment Reopened Due to Discrepancy in Purchase & Sales Amounts, Leading to Alleged Income Suppression.
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Company in liquidation can't appeal tax demands due to IBC moratorium, must seek NCLT nod.
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Reopening assessment invalid without new material, mere change of opinion not allowed.
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Reopening of assessment quashed as no income escaped assessment despite search info.
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Tax reassessment invalid; disclosure fully made. Court quashes reopening notice issued after 4 years.
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Taxpayer wins against Income Tax dept for violating due process, gets re-assessment chance with hearing rights.
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Incorrect residential status determination invalidates tax assessment order.
Customs
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Importers challenge arecanut classification; Court remits case for fresh order after finding lack of opportunity.
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Spectrometers import duty classification dispute: Time-barred demand quashed.
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Advance Authorization imports: IGST recovery allowed, but interest, fine & penalty recovery unsustainable due to lack of legal provisions.
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World Bank project machinery import gets customs duty exemption.
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Customs broker cleared of wrongful classification in shipping bills for MEIS benefits.
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Customs duty dispute: Fair valuation upheld in clearance from SEZ to DTA.
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Compressors for car ACs classified as gas compressors, not parts; tax classification norms applied.
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Exporter's invoices led customs broker to file multiple bills avoiding examination - No broker's fault.
FEMA
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Foreign exchange violation - Fake exports, penalty reduced due to delay and circumstances.
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Unfair denial of hearing to non-family member in FERA case, remanded for fresh hearing under FEMA.
PMLA
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Man accused of laundering minor proceeds granted bail as role limited to land deal.
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Money laundering mastermind denied bail over deep-rooted conspiracy involving bank entries for commission.
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Bail plea rejected; Court cites presumption of money laundering, rejects non-compliance claim.
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Depositors' Crores Siphoned: No Laundering Without Scheduled Offence Conviction.
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Money laundering probe into financial crime allegations, no arrests sought.
Service Tax
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Reversal of CENVAT Credit for unsold flats post-completion certificate: A legal conundrum.
Central Excise
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Appellants' excess CENVAT credit refunded as cash under GST transition provision.
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Duty liability upheld on imported parts for outdoor cabinets used in telecom towers despite exemption claim.
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2024 (9) TMI 1014
Maintainability of petition - availability of remedy of appeal under Section 107 of UPGST Act - Denial of opportunity of hearing to the assessee - violation of principles of natural justice - HELD THAT:- The issue decided in MAHAVEER TRADING COMPANY VERSUS DEPUTY COMMIS [ 2024 (3) TMI 334 - ALLAHABAD HIGH COURT ] where it was held that ' In view of the facts noted above, before any adverse order passed in an adjudication proceeding, personal hearing must be offered to the noticee. If the noticee chooses to waive that right, occasion may arise with the adjudicating authority, (in those facts), to proceed to deal with the case on merits, ex-parte. Also, another situation may exist where even after grant of such opportunity of personal hearing, the noticee fails to avail the same. ' Upon a perusal of record, it appears that the factual matrix is very similar to one in Mahaveer Trading Company. There are no reason to take a different stand. The impugned order dated 16.12.2023 is quashed and set-aside with a direction given to the officer concerned to grant the petitioner another opportunity of filing a fresh reply and thereafter fix a date of hearing and pass a reasoned order - Petition disposed off.
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2024 (9) TMI 1013
Penalty u/s 129(3) of the CGST Act, 2017 - typographical error in the e-way bill - no intent to evade tax - HELD THAT:- On perusal of the documents, there does not appear to be any intention to evade tax and error is only typographical error. Normally in such cases, the jurisdiction is not exercised and the writ petitioner is relegated to the alternative remedy of statutory appeal. However, in this case relegating the writ petitioner to the statutory appeal would be a significant waste of time and energy of the petitioner and the department. Since the mistake is clearly only a typographical error. Since there is no intention to evade tax, the penalty imposed under Section 129(3) of the Act is not justified. Accordingly, the impugned order dated 05.09.2024 is quashed and set aside. The goods and vehicle that have been detained by the authorities should be released to the petitioner within a period of two weeks from the date of production of certified copy of this order. Petition allowed.
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2024 (9) TMI 1012
Restraint on respondent from recovering the tax liability, including interest and penalty from the petitioner's bank account - HELD THAT:- Though the petitioner has filed this Writ Petition challenging the order dated 30.04.2024, challenging the very same order dated 30.04.2024, the petitioner has also filed an Appeal before the Appellate Authority, therefore, certainly, the petitioner has to pursue his remedy via. Appeal before the Appellate Authority, in accordance with law. However, taking into considering of the fact that in pursuance of the impugned order dated 30.04.2024, the petitioner has been initiated with recovery proceedings, this Court is inclined to dispose of the Writ Petition - The respondent is directed to defer the recovery proceedings till the disposal of the Appeal filed by the petitioner dated 28.08.2024. This Writ Petition is disposed of accordingly.
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2024 (9) TMI 1011
Multiple discrepancies raised in notices - two show cause notices are independent or not - short payment of tax upon comparing GSTR-9 and GSTR-3B - irregularity in reporting transactions attracting TDS - short payment of interest due to delayed tax payment - claiming of ITC for the period 2017-2018 - HELD THAT:- Upon consideration, it is evident that two show cause notices were issued: one on 15.07.2022 and another on 09.01.2024. The first discrepancy in the notice dated 15.07.2022 and the fourth discrepancy in the notice dated 09.01.2024 are identical, resulting in an overlap. This duplication, along with the issuance of multiple overlapping notices, raises concerns regarding the respondent's non-application of mind. Furthermore, the petitioner did not file a reply to the show cause notice dated 09.01.2024 due to the confusion caused by repeated allegations and the complexity of the ongoing proceedings. While the petitioner had filed an appeal against the impugned order dated 30.04.2024, which culminated from the initial show cause notice dated 15.12.2022, the subsequent ex parte proceedings deprived the petitioner of a fair opportunity to present their case. Hence, this Court is of the opinion that the order under Section 73, dated 30.04.2024 in Reference No.ZD3304242560010 was passed without considering these circumstances, and an ex parte order was issued without affording the petitioner an adequate opportunity to respond or be heard. As a result, the impugned order was passed in clear violation of the principles of natural justice. It is just and proper to set aside the impugned order and direct the respondent to provide the petitioner an opportunity to file a reply/objection along with supporting documents. The impugned order in Reference No.ZD3304242560010, dated 30.04.2024 is set aside, and the matter is remanded to the respondent for fresh consideration, on the condition that the petitioner pays a sum of Rs. 1,40,00,000/- to the respondent within four weeks from the date of receipt of a copy of this order. The setting aside of the impugned order shall take effect only upon payment of the said amount. Petition disposed off.
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2024 (9) TMI 1010
Levy of tax and penalty on detained goods - no intention to avoid the payment of tax - HELD THAT:- The record shows that the goods in question were accompanying with the documents i.e. Tax invoice, GR and Eway Bills. In the E-way bill, the dispatch place is specifically mentioned as Ghaziabad UP. Further the records shows that after detention of the goods, a reply was submitted by the petitioner wherein, in para 3, it was specifically mentioned that purchase was made from Ghaziabad dealer and therefore due entries has been made in its purchase account. This fact has not been denied at any stage. Merely because that the E-way bill was issued by the Ghaziabad dealer on the purchase made by the petitioner, this will not make that the goods was purchased from non bonafied dealer. The State respondent has failed to bring on record any material to show that the goods were purchased from non bona fied dealer. The movement of the goods in question is shown by the petitioner of which tax invoice and E-way bill was issued in which in the place of dispatch, it was specifically mentioned as Ghaziabad. The GR has also been issued. The record further reveals that no discrepancy whatsoever with regard to quality, quantity or specification i.e. MS scrap, was found otherwise. In the present case, the petitioner was present before the respondent authority, therefore, the proceedings ought not to be initiated under Section 129 (1) (b) of the Act. When consignor with the tax invoice and e-way bill claim himself to be the owner of the goods, the provisions of Section 129(1)(b) of the Act could not be invoked. The impugned orders cannot be sustained in the eyes of law and same are hereby quashed - Petition allowed.
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2024 (9) TMI 1009
Clarifications sought by the petitioner regarding GST applicability on Battery Energy Storage Systems (BESS) - HELD THAT:- The petitioner s prayer that directions be issued to CBIC to clarify the applicability of GST cannot be acceded to. GST is chargeable by virtue of the Central Goods and Services Tax Act, 2017 (hereafter the CGST Act), the State Goods and Services Tax Act, 2017 (hereafter the SGST Act) and the Integrated Goods and Services Tax Act, 2017 (hereafter the IGST Act). Any contentious issue as to whether Central GST, State GST, or Integrated GST is leviable on services is required to be answered with reference to the said statutes and the rules made thereunder. There is no provision in the said statutes requiring the CBIC to entertain queries from taxpayers or to provide clarifications regarding the statutory provisions pursuant to queries posed by taxpayers. In terms of Section 168 of the CGST Act/ SGST Act, the CBIC, if it considers it expedient for the purpose of uniformity in the implementation of the CGST Act/SGST Act, may issue orders, instructions or directions to the Central Officers as it may deem fit. However, there is no provision where CBIC is required to issue clarifications on separate queries raised by taxpayers directly. There are merit in the respondents contention that the present petition is highly delayed. If the bidders had entertained any apprehension regarding the terms and conditions of RfS, the same were required to be clarified in the Pre-Bid Meeting held on 12.07.2024. Petition dismissed.
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2024 (9) TMI 1008
Violation of principles of natural justice - non-issuance of any notice regarding the discrepancies as provided in the Rule 101(4) of the Central Goods and Servies Tax Rules, 2017 - discrepancies in audit report and demands made - HELD THAT:- Prima facie, there does appear to be certain gaps in the communications. The petitioner has been throughout asserting that it had provided all the documents as sought for and on the other hand, the respondents have been issuing reminders to the petitioner to provide such documents. The petitioner also submits that the petitioner would be satisfied if the order is passed directing the adjudicating authority to consider the responses to the show cause notices uninfluenced by the observations made in the audit memo or audit report. This Court consider it apposite to direct that the adjudicating authority shall not implicitly rely on the observations made in the audit memo or audit report. The adjudicating authority shall examine the petitioner s response/reply to the impugned SCN and independently take the decision in regard to the proposed demand - Petition disposed off.
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2024 (9) TMI 1007
Issuance of SCN in Form GST DRC-01, dated 21.08.2024, issued by the respondent - Refund claim - ineligible input tax credit - suppliers non-existent and involved in bill trading activities - HELD THAT:- In the present case, the petitioner claimed ineligible input tax credit on purchases from the supplier, Tvl. Bharat Marketing, during the year 2022- 2023. The basis for this claim was the allegation that Bharat Marketing is a non-existent business entity and engaged in bill trading activities, as per the inspection report received from CBIC during a Special All India Drive targeting fake registrations and beneficiaries of bill trading. Consequently, the ITC for the petitioner s firm was blocked on 19.07.2024. The show cause notice in Form GST DRC-01 was issued on 16.08.2024, with the summary uploaded on 21.08.2024. It is important to note that the petitioner approached this Court without responding to the show cause notice. Procedural norms and principles of natural justice require that before seeking judicial intervention, the parties must respond to show cause notices to address the issues raised. Considering the fact that the petitioner did not respond to the show cause notice and has prematurely approached this Court, it is deemed inappropriate to entertain the challenge at this juncture. The appropriate course of action for the petitioner would be to submit a response to the show cause notice - Petition dismissed.
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2024 (9) TMI 1006
Challenge to impugned order - violation of principles of natural justice - non-service with the order of assessment - HELD THAT:- The petitioner may appear before the respondent on 26.09.2024, along with the reply and the materials in support of his contention. If any objections / documents are filed, the respondent shall consider the same and grant an opportunity of personal hearing to the petitioner and thereafter pass appropriate orders in accordance with law, within a period of four weeks therefrom. If the petitioner does not appear on the above date, the impugned order stand revived. Petition disposed off.
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2024 (9) TMI 1005
Violation of principles of natural justice - opportunity of hearing as well not provided as such order was passed without assigning any reason for cancellation of the registration of the petitioner - Cancellation of registration order passed by the Assessing Officer - appeal was dismissed on the ground of limitation - HED THAT:- The Coordinate Bench of this Court in case of M/s. Aggrawal Dyeing Printing vs. State of Gujarat [ 2022 (4) TMI 864 - GUJARAT HIGH COURT ] has issued the guidelines to the respondent-authorities holding that ' all the writ applications deserve to be allowed solely on the ground of violation of principles of natural justice and, accordingly, the writ applications are allowed.' The aforesaid judgement was rendered in the year 2022. However, in spite of the above direction issued by this Court, the respondent-authorities without following such directions are issuing cryptic notice and order for cancellation of registration number of the petitioner - In the present matter, order of cancellation of registration is passed without giving any reason by the respondent authorities, and appeal filed by the petitioner under Section 107 of the GST Act is also dismissed. This petition is partly allowed by quashing and setting aside the impugned order passed by the Appellate Authority as well as order of cancellation of registration and the matter is remanded to the Assessing Officer at show-cause notice stage, however, the registration number of the petitioner shall remain suspended till such show cause notice is disposed of - Petition disposed off.
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2024 (9) TMI 1004
Seeking sanction of eligible refund amount alongwith the applicable interest - HELD THAT:- The respondent states, on instructions, that the petitioner s application will be processed within a period of two weeks and the applicable amount would be refunded. He further states that the petitioner may be required to complete certain formalities and file an application for receiving the amount in cash, if the same is found due. And, the petitioner must comply with the same. It is also directed that in the event the petitioner is required to comply with any formalities, the respondent shall intimate the same to the petitioner. It is also clarified that in case there has already been a delay in complying with the said formalities, the same would not impede the petitioner s application for refund. Petition disposed off.
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2024 (9) TMI 1003
Violation of principles of natural justice - challenge to unreasoned orders passed under Section 73 of the Central Goods Services Tax Act, 2017 / Delhi Goods Services Tax Act, 2017 - HELD THAT:- The orders impugned in these petitions are set aside and the matters remanded for consideration afresh by the adjudicating authority. It is also directed that the adjudicating authority shall not pass any adverse order against any of the petitioners without affording them a reasonable opportunity to be heard. We also clarify that all rights and contentions of the petitioners are reserved and the disposal of the present petitions would not preclude them from raising such contentions as advised including those that may have been raised in the present petitions. Petition disposed off.
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2024 (9) TMI 1002
Violation of priciples of natural justice - failure on the part of the respondents to afford the petitioner with an opportunity of personal hearing in terms of the provisions contained in Section 75 (4) of the CGST/WBGST Act, 2017 - HELD THAT:- It may be noted that provisions of Section 75 (4) of the said Act contemplates affording an opportunity of hearing where a request is received in writing from the person chargeable with tax, or penalty or where any adverse decision is contemplated against such person. Admittedly, in this case, adverse decision was contemplated against the petitioner. The order impugned dated 13th December, 2023 passed under Section 73 of the said Act for the tax period July, 2017 to March, 2018 stands vitiated on the ground of failure to comply with statutory provision. There is also some explanation on the part of the petitioner which prevented the petitioner from filing his response. The impugned order is set aside and the matter is remanded back to the proper officer - Petition disposed off by way of remand.
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2024 (9) TMI 1001
Challenge to adjudication order passed u/s 73(9) of the CGST/WBGST Act, 2017 - HELD THAT:- Taking note that a sum of Rs. 3,96,08,142/- was found to be reversible, as would appear from the show cause notice, for reasons of the petitioners having availed ITC by filing GSTR 3B after the last date and since, from the Finance Bill No.02, being Bill No.55 of 2024, it would appear that in Clause 114, amendment of Section 16 of the said Act has been proposed thereby making a provision to give benefit to those registered tax payers who are entitled to Input Tax Credit and have filed a return under Section 39 of the said Act up to 30th November, 2021, in respect of an invoice or debit note for supply of goods or services or both pertaining to the Financial years 2017-18, 2018-19, 2019-20 and 2020-21, and since the petitioners had filed Form 3B for the Tax period 2018-2019, belatedly but before 30th November, 2021, the petitioners having made out a prima facie case are entitled to an interim order, as the finance bill no.2 of 2024 takes care of a major part of the determination made under Section 73 of the said Act for the Financial Year 2018-19. The petitioners are directed to make a deposit with the learned Registrar General a sum of Rs.25 lakhs within a period of 3 weeks from date. If the aforesaid amount is deposited with the learned Registrar General, the same shall be invested in any interest bearing fixed deposit account with any Nationalized Bank of his / her choice and the same shall be kept renewed until further order of this Court.
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2024 (9) TMI 1000
Rejection of appeal - time limitation - petitioner's appeal rejected on the ground that such appeal was barred by limitation - HELD THAT:- The facts material for the disposal of this writ petition are undisputed. The order in original was received by the petitioner on 16.10.2023. The period of three months from such date expired on 16.01.2024 and the further period of thirty days expired on 16.02.2024. The petitioner's appeal was presented on 13.03.2024, which is only twenty five days beyond the condonable period. The petitioner has placed on record documents corroborating the assertion that the Accountant was unwell during the relevant period. In the facts and circumstances outlined above, the interest of justice warrants that the petitioner's appeal be received and disposed of on merits. Petition is disposed of by directing the appellate authority to receive and dispose of the petitioner's appeal on merits without going into the question of limitation, if such appeal is represented within ten days from the date of receipt of a copy of this order.
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2024 (9) TMI 999
Condonation of delay in filing the revocation application - complaince with all the requirements of paying the taxes, interest, late fee, penalty etc. due, the 3B Return Form filed by the Petitioner - HELD THAT:- In that view of the matter, the delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. The writ petition is disposed of.
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2024 (9) TMI 998
Seeking leave to withdraw the petition with liberty to approach the Appellate Authority in accordance with law - Rejection of application for refund - HELD THAT:- The petition is dismissed as with drawn with liberty as prayed for.
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2024 (9) TMI 997
Interest on delayed refund granted - HELD THAT:- Perusal of the refund sanction orders show that there is no delay attributable to the petitioner for the processing of the refund claim. Accordingly, petitioner is prima facie entitled to grant of interest at the statutory rate in terms of Section 56 of the Central Goods and Services Tax Act i.e. 6% per annum for the entire delayed period. Accordingly, respondent-Central GST is directed to consider the claim of the petitioner for grant of interest for the delayed period and process the same within two weeks from today. In case, Proper Officer is of the view that interest is not payable then the reasons thereof be communicated to the petitioner with in two weeks.
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2024 (9) TMI 996
Seeking grant of bail - conspiracy with co-accused and assisted in transportation of narcotics under the invoices issued in the name of his company which deals in tobacco - HELD THAT:- Petitioner is a dealer in tobacco. He had been allotted GST number to deal in the said product. Misusing the GST number of the petitioner fake invoices were prepared and 89 kgs. of Poppy Straw was transported. Consignment was seized. Interrogation of the co- accused Santanu Banerjee discloses involvement of the petitioner. In collusion with the petitioner, his GST number was misused and fake invoices prepared for smuggling of narcotics. Petitioner has criminal antecedents. In the light of these incriminating circumstances and statutory restrictions under Section 37 of the NDPS Act, it is not inclined to grant bail to the petitioner at this stage. Application for bail is, thus, rejected.
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2024 (9) TMI 995
Condonation of delay in filing the revocation application - compliance with all the requirements of paying the taxes, interest, late fee, penalty etc. due, the 3B Return Form filed by the Petitioner - HELD THAT:- The delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. Petition disposed off.
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2024 (9) TMI 994
Condonation of delay in filing the revocation application - compliance with all the requirements of paying the taxes, interest, late fee, penalty etc. due, the 3B Return Form filed by the Petitioner - HELD THAT:- The delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. Petition disposed off.
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2024 (9) TMI 993
Condonation of delay in filing the revocation application - compliance with all the requirements of paying the taxes, interest, late fee, penalty etc. due, the 3B Return Form filed by the Petitioner - HELD THAT:- The delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. Petition disposed off.
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2024 (9) TMI 992
Maintainability of petition - availability of alternative statutory remedy of Appeal - non-constitution of Appellate Tribunal - HELD THAT:- The issue is decided in the case of M/S. MAA TARINI TRADERS, M/S. SURA CONSTRUCTION, M/S. SMT. AMULU PATRO, M/S. THE NATIONAL SMALL INDUSTRIES CORPORATION LIMITED, ASHISH MOHANTY, M/S. V.S.T. TILLERS TRACTORS LIMITED, NIRANJAN PRADHAN VERSUS STATE OF ODISHA OTHERS, JOINT COMMISSIONER OF STATE TAX, ANOTHER, CHIEF COMMISSIONER OF C.T. G.S.T., ODISHA, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS (CBIC) , DEPARTMENT OF REVENUE, MINISTRY OF FINANCE OTHERS, C.T. G.S.T. OFFICER, CUTTACK-I [ 2024 (2) TMI 1421 - ORISSA HIGH COURT ] where it was held that ' Taking into account the aforesaid Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019 issued by the Government of India and subsequent clarification issued by the Central Board of Indirect Taxes and Customs (GST Policy Wing) vide Circular No.132/2/2020 dated 18th March, 2020, it is deemed proper in the interest of justice to dispose of these writ applications subject to conditions imposed.' This writ petition stands disposed of in terms of the observation and directions issued in M/s. Maa Tarini Traders.
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2024 (9) TMI 991
Challenge to assessment order - petitioner was not provided a personal hearing - violation of principles of natural justice - HELD THAT:- The petitioner has placed on record replies dated 20.11.2023 06.12.2023, respectively. By such replies, the petitioner has responded to all defects mentioned in the show cause notice. On perusal of the petitioner's reply, it appears that the petitioner did not annex supporting documents. Undoubtedly, the petitioner's failure to annex relevant documents resulted in the rejection of the defence raised by the petitioner to all the defects. However, the failure of the respondent to provide a personal hearing in spite of an express request for a personal hearing vitiates the impugned orders. The impugned orders call for interference on account of breach of the statutory prescription in sub-section (4) of Section 75 of the Tamil Nadu Goods and Services Tax Act, 2017. The orders impugned here in are quashed and the matters are remanded for reconsideration - Petition disposed off.
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2024 (9) TMI 990
Violation of principles of natural justice - petitioner was not provided a reasonable opportunity to contest the tax demand on merits - petitioner asserts that he was unaware of proceedings culminating in the impugned order since the notices and order were uploaded on the GST portal but not communicated to the petitioner through any other mode - discrepancy between the petitioner's GSTR-3B returns - HELD THAT:- On perusal of the impugned order, it appears that the confirmed tax proposal pertains to wrongful availment of ITC. It is also evident that the tax proposal was confirmed because the petitioner did not reply to the show cause notice or attend the personal hearing. In these circumstances, the interest of justice warrants that an opportunity be provided to the petitioner after putting the petitioner on terms. The impugned order dated 20.10.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand with in two weeks from the date of receipt of a copy of this order - Petition is disposed off.
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2024 (9) TMI 989
Seeking to set aside a bank attachment order and direct a fresh order with a hearing opportunity - HELD THAT:- As agreed by learned counsel for the parties and after going through the records, this Court, without expressing any opinion on the merits of the case, disposes of the Writ Petition directing Opposite Party No.3 to consider and dispose of the representation filed by the Petitioner vide Annexure-2 and pass appropriate order as early as possible within a period of three months from the date of production of certified copy of this order.
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2024 (9) TMI 988
Condonation of delay in filing the revocation application - non-compliance with all the requirements of paying the taxes, interest, late fee, penalty etc. due, the 3B Return Form filed by the Petitioner - HELD THAT:- In that view of the matter, the delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. Petition disposed off.
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2024 (9) TMI 987
Seeking to quash the rejection order - seeking to restore an appeal related to GST payments - HELD THAT:- It is brought to the notice of this Court that as against the total demand of Rs.42,822/- under Annexure-2 if CGST SGST @ 10% each is calculated, it comes out Rs.4282/- each, i.e., in total Rs.8564/-. But the petitioner has already paid the tax amounting to Rs.12,244/-, which is in excess to the demand amount. Therefore, the appellate authority, while passing the order impugned under Annexure-3, has not taken into consideration of the said fact. There by, the appellate authority without application of mind and without assigning any reason has passed the impugned order. Accordingly, the order dated 25.04.2022 passed by the Joint Commissioner of CT GST rejecting the appeal filed by the petitioner is liable to be quashed and is hereby quashed. This Court remits the matter to the very same authority to hear afresh and pass appropriate order by affording opportunity of hearing to the petitioner. The writ petition stands disposed of.
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2024 (9) TMI 986
Violation of principles of natural justice - SCN and assessment order were uploaded on the View Additional Notices and Orders tab on the GST portal and not communicated to the petitioner through any other mode - HELD THAT:- On examining the documents placed on record, it appears that the impugned orders were issued without hearing the petitioner. The petitioner has also placed on record the payment receipt pertaining to the payments of Rs.88,028/- 3,05,551/-, respectively. The impugned orders relate only to interest. In these circumstances, it is just and appropriate that the petitioner be provided an opportunity to contest the interest liability on merits. The orders impugned herein dated 17.03.2023 are set aside and the matters are remanded to the respondent for reconsideration. The petitioner is permitted to submit a reply to the show cause notices with in a period of 15 days from the date of receipt of a copy of this order. Petition disposed off by way of remand.
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2024 (9) TMI 985
Cancellation of GST registration of petitioner - HELD THAT:- The petition is disposed of directing the proper officer to decide the Show Cause Notice dated 21.12.2023 in accordance with law within a period of two weeks after giving an opportunity of personal hearing to the petitioner.
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2024 (9) TMI 984
Violation of principles of natural justice - entitlement to cenvat credit under GST transition rules - HELD THAT:- The petitioner appears to be a registered person under applicable GST enactments as on date. As a registered person, the petitioner is under an obligation to monitor the GST portal on an ongoing basis. The present state of affairs has transpired on account of the petitioner not monitoring the GST portal and responding to the show cause notice and hearing notices. At the same time, it should be noticed that transitional credit was reversed under the impugned order without hearing the petitioner. The petitioner contends that the respondent did not have the authority to question eligibility when the same was not questioned under the erstwhile regime when the petitioner availed of cenvat credit. It is, therefore, just and necessary to provide an opportunity to the petitioner to contest the tax demand, albeit by putting the petitioner on terms. The impugned order dated 29.12.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand with in three weeks from the date of receipt of a copy of this order - Petition disposed off.
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2024 (9) TMI 983
Seeking quashing of SCN - GST registration of the petitioner is proposed to be cancelled - HELD THAT:- In view of the fact that show cause notice is pending consideration before the proper officer, we dispose of the present petition directing the proper officer to adjudicate the show cause notice within 30 days after giving an opportunity of personal hearing to the petitioner. The proper officer shall also conduct a fresh visit to the said premises to ascertain the existence of petitioner at the said premises prior to passing a final order.
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2024 (9) TMI 982
Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - impugned order were uploaded in the view additional notices and orders tab of the GST portal - discrepancy between the petitioner's GSTR 3B return and the auto populated GSTR 2A - HELD THAT:- On examining the impugned order, it is clear that the tax demand pertains to discrepancy between the petitioner's GSTR 3B return and the auto populated GSTR 2A. It is also evident that such order was issued because the petitioner did not reply to the show cause notice or participate in proceedings. In these circumstances, it is just and appropriate that the petitioner be provided such opportunity albeit by putting the petitioner on terms. The impugned order dated 04.05.2023 is set aside subject to the condition that the petitioner remits 10% of the disputed tax demand within a period of three weeks from the date of receipt of a copy of this order. With in the aforesaid period, the petitioner is permitted to submit a reply to the show cause notice - petitin disposed off.
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2024 (9) TMI 981
Breach of principles of natural justice - Non-service of SCN - petitioner was unaware of proceedings - petitioner is willing to remit 10% of the disputed tax demand as a condition for remand - HELD THAT:- On examining the impugned order, it is evident that the order pertains to reconciliation of turnover as per the Income Tax return and GSTR 3B return. It is also clear that the tax proposal was confirmed because the petitioner did not reply to the show cause notice. In these circumstances, albeit by putting the petitioner on terms, it is just and necessary that the petitioner be provided an opportunity to contest the tax demand on merits. The impugned order dated 25.09.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand within two weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is directed to submit a reply to the show cause notice - petition disposed off.
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2024 (9) TMI 980
Attachment of cash credit account of the petitioner in Canara Bank - HELD THAT:- Copy of the communication dated 08.04.2024 is produced in Court. The same is taken on record. The petition is disposed of directing Canara Bank to comply with the directions issued by Principal Additional Director General dated 08.04.2024.
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2024 (9) TMI 979
Seeking a direction to the respondents to clarify that the Integrated Goods and Services Tax [IGST] rate applicable to the petitioner for import of dialysis machines is 5% as per HSN code 90189031 in terms of office memorandum dated 13.10.2023 - HELD THAT:- Petition is disposed of binding the respondents to their statement.
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2024 (9) TMI 978
Condonation of delay in filing the revocation application - compliance with all the requirements of paying the taxes, interest, late fee, penalty etc. due, the 3B Return Form filed by the Petitioner - HELD THAT:- The delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. Petition disposed off.
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2024 (9) TMI 977
Violation of principles of natural justice - failure to provide a reasonable opportunity to the petitioner - petitioner is willing to remit 10% of the disputed tax demand as a condition for remand - HELD THAT:- Since the petitioner was not heard before the impugned order was issued, the interest of justice warrants that an opportunity be provided by putting the petitioner on terms. The impugned order dated 28.07.2023 is set aside and the matter remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to with in two weeks from the date of receipt of a copy of this order - Petition disposed off.
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Income Tax
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2024 (9) TMI 976
Rejection of application u/s 10(23C)(vi) - Charitable activity or not? - HELD THAT:- Both the authorities have failed to record a specific finding that the appellant University is not existing solely for educational purposes and is existing for purposes of profit, which was sine qua non for rejecting the application for registration under the provisions of Section 10(23C)(vi) of the IT Act. Both the authorities in order to consider the application would have considered the fact whether the University is solely existing for educational purposes or it is existing for purposes of profit and in case it is affirmative, it could have granted the application and in case it is negative, it could have rejected the application. Both the authorities have failed to go through the objects of the University and failed to record finding with respect to education or educational activities. No express finding has been recorded by both the authorities that the appellant University does not satisfy the objects and the genuineness of its activities as required under the 2nd proviso to Section 10(23C) of the IT Act. Orders impugned passed by both the authorities are hereby set aside and the matter is remitted to the CIT(E), Bhopal to consider and decide the application under Section 10(23C)(iii) afresh in light of the decision of the Supreme Court in New Noble Educational Society [ 2022 (10) TMI 855 - SUPREME COURT] .
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2024 (9) TMI 975
Maintainability of Writ petition - tax demand notices and orders under the Income Tax Act - as argued when the Appeal was already filed and pending before the 2st Respondent, the aforesaid impugned order made by the 2nd Respondent is totally non application of mind and against the principles of natural justice and therefore seeks to set aside the same - HELD THAT:- In the impugned order the 2nd Respondent has clearly stated that if the Petitioner disagrees with the impugned order, he can file the rectification petition u/s 154 of the Act and also directed the Petitioner to pay 20% of demand, if the Appeal is pending. Therefore, the right course to be adopted by the Petitioner is to file a rectification petition under Section 154 of the Act, but without doing so, the Petitioner has approached this Court. Thus, right course to be adopted by the Petitioner is to file a rectification petition under Section 154 - But without doing so, the Petitioner has approached this Court by way of this Writ Petition and therefore this Court is of the view that the Writ Petition filed by the Petitioner is devoid of merits and the same is liable to be dismissed.
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2024 (9) TMI 974
Offence u/s 276B - accused was making various payments such as fees of artists and other contracts, professional and other consultancy charges, rents etc., without deducting tax at source (TDS) - HELD THAT:- As per section 276B if a person fails to pay to the credit of the Central Government, the tax deducted at source by him as required by or under the provision of Chapter XVII(B) or the tax payable by him as required or under sub Section (2) of Section 115-O or the second proviso to Section 194B, shall be punishable with imprisonment not less than three months but which may extend to 7 years and with fine. In this case, the allegation is that, the petitioners never deducted tax at source. If that be the case, there is force in the argument of the petitioners that Section 276B is not attracted. Moreover, the entire amount with penal interest is already paid by the petitioners. If that be the case, the continuation of prosecution is not necessary against the petitioners. Therefore, this Criminal Miscellaneous Case is allowed. All further proceedings against the petitioners on the file of Additional Chief Judicial Magistrate Court (Economic Offences) Ernakulam are quashed.
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2024 (9) TMI 973
Reopening of assessment u/s 147 - notice is given within four years - assessment previously framed after scrutiny - deduction of foreign exchange loss - HELD THAT:- It emerges from the facts of the case that during the regular assessment, AO has called for the details with regard to claim of deduction made by the petitioner which was provided by the petitioner. AO also called for the details for deduction of foreign exchange loss. AO has, therefore, on the same facts and scrutiny on record has formed reason to believe that the foreign exchange loss pertaining to indigenous assets could not have been allowed as per the provisions of Section 43A. Petitioner has provided justification before the AO in regular course of assessment for the said deduction. There was no new tangible material available with the AO with regard to the said deduction and in absence of such new information, the AO could not have assumed the jurisdiction to reopen the assessment merely on change of opinion . AO while framing the original scrutiny assessment, has examined the claim of deduction made by the petitioner and as such, after considering the explanation tendered by the petitioner, the regular assessment order was passed and in the process, if he had made any legal error, then the succeeding AO cannot correct such error. Therefore, process of reopening of assessment from the reasons recorded clearly reflects that as AO seeks to correct the error in his opinion, such foreign exchange loss could not have been allowed. We are therefore of the opinion that such reasons cannot be the basis for reopening of the assessment previously framed after scrutiny. Decided in favour of assessee.
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2024 (9) TMI 972
Estimation of income - bogus purchases - ITAT restricted addition to 6% - HELD THAT:- Addition at 5% of bogus purchase / accommodation entries on account of bogus purchase relying on the judgement of Pankaj K. Choudhary [ 2023 (3) TMI 1402 - GUJARAT HIGH COURT] No substantial question of law.
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2024 (9) TMI 971
Application u/s 264 - petitioner has been denied the credit of tax which had been deducted at source - correctness of the view expressed by the Commissioner when it held that the petitioner was liable to revise its return before being considered eligible to refund of the tax which had been deducted at source - HELD THAT:- The statute prescribes that where credit for tax has not been given on the ground of either a certificate having not been furnished or filed, but which is subsequently presented before the AO, the same would be sufficient for the assessment order being amended. Section 155(14) thus places the AO under a statutory obligation to amend the order of assessment once it is established that the contingencies alluded to in that provision are duly established. Sub-section (14) neither contemplates nor mandates the original return being amended or revised. That provision essentially takes care of contingencies where TDS is either subsequently credited or comes to be reflected in Form 26AS after a time lag. An assessee may face such a spectre on account of a variety of unforeseeable reasons. However, that in itself can neither be viewed as fatal nor an irreversible event which would detract from the right of the assessee to claim benefit of tax which has been duly deducted. The statute itself adopts measures to cater to such an eventuality by incorporating remedial measures in Section 155 (14) of the Act. The essence of Section 155 (14) is that once that amount comes to be reflected in Form 26AS and the updated form comes to be submitted before the AO for its consideration, that authority is obliged to acknowledge the same and amend the assessment accordingly. Since the tax which was deducted by BALIC stood duly embedded in the Form 26AS which was produced by the writ petitioner and the income earned from that entity had never been held to be subject to tax under the Act, the refusal on the part of the respondents to refund that amount is rendered wholly illegal and arbitrary. Writ petition is accordingly allowed. The impugned order referable to Section 264 is hereby quashed.
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2024 (9) TMI 970
Validity of Assessment Order - lack of opportunity for a video conference hearing as a breach of natural justice. HELD THAT:- It is not in dispute that there is no adherence to the principles of natural justice by not providing opportunity of personal hearing to the petitioner before passing the impugned assessment order. It is true that for the Assessment Year under consideration i.e. 2018 19 there was no mandatory requirement for providing video conferencing. However, as the respondents have approved the video conferencing for the petitioner and on two earlier occasions, such video conferencing could not take place due to the technical difficulties on the part of the respondent Department, it was incumbent upon the respondent Department to provide video conferencing before passing the impugned Assessment Order to comply with the principles of natural justice. Thus, without entering into the merits of the matter, we quash and set aside the impugned Assessment Order passed by the respondent Authority under Section 143 (3) read with Section 144B of the Act and remand the matter back to the respondent AO to pass a fresh de novo order after providing a fresh opportunity of hearing through video conferencing to the petitioner in accordance with law.
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2024 (9) TMI 969
Reopening of assessment u/s 147 - acceptance of income u/s 115JB - information on insight portal, a search action u/s 132 of the Act was conducted at the premises of accomodation entry provider - HELD THAT:- It is apparent that the petitioner was assessed under the provisions of Section 115JB of the Act and has paid tax at the rate of 7.5% under the said section. Adding the amount calculated by the AO towards the escaped income to the amounted computed under the ordinary provisions of the Act, the aggregate amount would be less than the amount of tax paid by the petitioner on being assessed under Section 115JB of the Act. Therefore, when the tax payable, as per the reasons recorded, is less than the amount paid by the petitioner under the assessment framed u/s 143 (3) of the Act, the question of any income having assessed would not arise . Therefore, the reasons recorded itself would indicate that in fact no income has escaped assessment to form such belief. Basic precondition for reopening of the assessment under Section 147 of the Act that the AO should have reason to believe that income has escaped assessment is not satisfied. Assessing Officer, therefore, could not have assumed the jurisdiction to issue impugned notices u/s148 of the Act and the impugned notices and the proceedings pursuant thereto cannot be sustained. Decided in favour of assessee.
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2024 (9) TMI 968
Reopening of assessment - sale of the land - notice beyond the period of four years - respondent contended that the transactions were in the nature of trade and should be taxed as business income - HELD THAT:- The reasons recorded pertain to sale of the land during the year under consideration which was subjected to scrutiny in the regular assessment. As per the second proviso to Section 147, AO would not have any jurisdiction to reopen the assessment when there is no failure on part of the assessee to disclose fully and truly all the material facts relevant for the assessment. The reasons recorded by AO are also not correct as the assessee has never filed the return in Form ITR-3 or Form ITR-4, as stated in the reasons recorded by treating the income so as to treat the sale consideration received as a business income. Assessee has filed the return of income in Form ITR-5 which is for the purpose of salary income and the other income from the capital gain and as such, the information recorded in the reasons is not correct and the entire reasons are based on the assumption and presumption that the assessee ought to have disclosed the LTCG as business income, without there being any basis. AO has, therefore, not arrived at an independent reasoning for reopening of the assessment. It appears that the impugned notice is issued on the basis of the audit objection which is not permissible in law, in absence of any fresh tangible information available with the AO to reopen the assessment, which is already completed u/s 143 (3) after more than four years in absence of any failure on part of petitioner to disclose fully and truly all material facts relevant for the assessment. The impugned notice u/s 148 is hereby quashed and set aside - Decided in favour of assessee.
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2024 (9) TMI 967
Validity of Assessment Order under Income Tax Act based on breach of principles of natural justice and denial of opportunity of personal hearing - HELD THAT:- As petitioner ought to have been granted the opportunity of hearing as provided under the provisions of the Act. Therefore, the petition succeeds and is accordingly allowed. The impugned order of Assessment passed by the respondent authority u/s 143 (3) r.w.s.144B and the demand notice u/s 156 of the Act are hereby quashed and set aside. The respondent shall be at liberty to proceed with the assessment under the provision of Section 144B from the stage of issuance of the draft Assessment Order as permissible under the law after providing an opportunity of hearing to the petitioner.
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2024 (9) TMI 966
Transfer the case case to the Central Circle at Kolkata from Coimbatore - Whether the respondents have sufficient material for transfer of the case from Coimbatore to Central Circle, Kolkata? - Number of incriminating documents and materials came to be seized, which were directly connecting with the involvement of the petitioner in the business operation of Lottery in the state of West Bengal in different capacities such as Sub-distributors, Stockist, Printing press, etc. Therefore, for the sake of coordinated and meaningful assessment of entire block, it was proposed by the respondents that assessment of all such related individuals/concerns be conducted together - Whether the respondents have provided an opportunity for filing a reply and personal hearing before passing the impugned Notification? HELD THAT:- Since all the materials have been collected in Kolkata Central Circle, the 1st respondents, taking into consideration of the reply filed by the petitioner, decided to transfer the petitioner's case to the Central Circle, Kolkata. No substance in the contentions raised by the learned counsel for the petitioner that the respondents failed either to provide an opportunity or lack of sufficient materials to transfer the case from DCIT, Central Circle, Chennai to DCIT, Central Circle-4(4), Kolkata. Accordingly, the Issue Nos. 1 and 2 are answered. Thus, this Court is of the considered opinion that although the registered office of the petitioner is situated at Chennai and they had not carried out any business activities at Kolkata, it will be appropriate to make the assessment through the Circle, where the incriminating materials have been seized based on the place of business of the Assessee, irrespective of situation of the registered office. This is what had taken place in the present case. If the contentions raised by the petitioner are accepted and allowed, the Chennai jurisdictional Assessing Officer has to finalize the assessment of the petitioner and in such event, certainly, it will be difficult for him to complete the assessment in the absence of material documents, which were seized upon search by the Income Tax (Investigation) authorities of Kolkata Central Circle. Hence, it would be appropriate to transfer the petitioner's case to DCIT, Central Circle, Koltaka since the Income Tax authorities have traced out and seized number of incriminating documents which reveal the involvement of the petitioner in conducting the business operations of lottery and deciding the issue of evasion of taxes is within their jurisdiction. Therefore, the 1st respondent has rightly transferred the cases from Chennai jurisdiction to Kolkatta jurisdiction.
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2024 (9) TMI 965
Appeal to High court u/s 260A - receipt of cash on sale of land from the present assessee - HELD THAT:- From a bare reading of the Section, it is apparent that an appeal to the High Court from a decision of the Tribunal lies only when a substantial question of law is involved, and where the High Court comes to the conclusion that a substantial question of law arises from the said order, it is mandatory that such question(s) must be formulated. The expression substantial question of law is not defined in the Act. Nevertheless, it has acquired a definite connotation through various judicial pronouncements. A finding of fact may give rise to a substantial question of law, inter alia, in the event the findings are based on no evidence and/or while arriving at the said finding, relevant admissible evidence has not been taken into consideration or inadmissible evidence has been taken into consideration or legal principles have not been applied in appreciating the evidence, or when the evidence has been misread. Thus, we are of opinion no substantial question of law arises from the order of the Tribunal as the appellant has raised all the question of facts and have disputed the fact findings of the ITAT in the garb of substantial questions of law which is not permitted by the statute itself. This Court refrains from entertaining this appeal as there is no perversity in the order passed by the ITAT since the ITAT has dealt with all the grounds raised by the appellant in the order impugned and has passed a well reasoned and speaking order taking into consideration all the material available on record. Thus, in our opinion, the present case does not involve any substantial question of law so as to meet the provisions of Section 260(A) of the Act for admitting the appeal.
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2024 (9) TMI 964
Validity of order passed u/s 147 r/w 144 resorting to best judgement u/s 144 - petitioner, a HUF, claimed that after the death of the main Karta, returns were filed for the AY 2012-2013 but not for 2013-2014 - petitioner's wife filed independent returns for 2013-2014, declaring the HUF income for the last two months post the Karta's death. Notices were sent to the designated email ID which were not replied back by the petitioner HUF - As submitted that even if the Karta died on 15.01.2013, the status of the HUF did not get disintegrated and it was the responsibility of the surviving coparcener to file the returns HELD THAT:- The petitioner can be given one opportunity as there are several factors which have contributed to the passing of the impugned order partly, on account of the death of the Karta on 15.01.2013 and thereafter due to out break of Covid 19 pandemic. Therefore to balance the interest of the parties, Court is inclined to come to the rescue of the petitioner by quashing the impugned order and remits the case back to the respondent to pass a fresh order on merits. The impugned order which stands quashed shall be treated as addendum to the notices issued to the petitioner as detailed in para 4 of the impugned order. Under these circumstances, there shall be a direction to the respondent to take steps to complete the assessment in accordance with the faceless assessment scheme.
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2024 (9) TMI 963
Transfer the case case to the Central Circle at Kolkata from Coimbatore - Whether the respondents have sufficient material for transfer of the case from Coimbatore to Central Circle, Kolkata? - replies filed by the petitioners, the petitioners expressed their personal difficulties citing the age factor, costs of litigation as well as they are having the registered office at Coimbatore and the availability of documents at Coimbatore, etc. Therefore, they made an objection for transferring the case to Central Circle, Kolkata. HELD THAT:- The petitioners are having their registered office at Coimbatore, but, they have a place of business directly or indirectly at Kolkata. Therefore, these are all the facts that have been known upon search and seizure conducted by the Kolkata Circle. Only the Kolkata Office Circle had seized some incriminating materials, which were directly linking the involvement of the petitioners into the business of Lotteries, which was carried out within the jurisdiction of Kolkata Office Circle. Therefore, they have requested the Coimbatore Office Circle to transfer the cases to Kolkata. Thereafter, the show cause notice was issued and a reply was also filed. Taking into consideration of all these aspects and non appearance of the petitioners for the personal hearing held on 02.01.2024, the Notification dated 25.04.2024 was issued, wherein it is stated that the case falls under the category of either 133A or 153A / 153C of the Income Tax Act having impounded materials or under FATCA / Benami or Black Money Act. As all the materials have been collected in Kolkata Office, the respondents, taking into consideration of the replies filed by the petitioners, have decided to transfer the petitioners' case to Central Circle, Kolkata. Of course, in the present case, since the incriminating materials were found by the Kolkata Office against the petitioners, connected with the search conducted with regard to Lottery business, it was closely linked with the assessment of the petitioners. No material to show that the respondents failed either to provide an opportunity of personal hearing or sufficient materials to transfer the case from Coimbatore to Central Circle, Kolkata. Even if it is so, it will not alter in anyway the final decisions to transfer the cases to Calcutta Circle and it would not affect in any manner. Accordingly, Issue Nos. 1 and 2 answered. Thus, this Court is of the opinion that if any search was conducted based on the place of business of an Assessee, though the Registered Office is situated at different place, it will be appropriate to make the assessment through the Circle, where the incriminating materials have been seized based on the place of business of the Assessee, irrespective of situation of registered office. This is what happened in the present case. Section 127 also empowers under the circumstances of these nature, for transfer of cases from one place to other place. If the contention of the petitioner is accepted and allowed, the Coimbatore jurisdictional Officer will be directed to proceed with the assessment and it will be difficult for those officers to complete the assessment, since they neither have any material nor have any place of business within their jurisdiction. Hence, it would be appropriate to transfer the cases in the present matter, since the Kolkata Circle Officer have traced out and seized some incriminating material with regard to the involvement of the petitioner in the Lottery business for the evasion of taxes within their jurisdiction. Therefore, the respondent has rightly transferred the cases from Coimbatore jurisdiction to Kolkatta jurisdiction.
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2024 (9) TMI 962
Validity of order of assessment u/s 143(3) - opportunity granted was not real but illusory and therefore the order of assessment is liable to be set aside on the ground of violation of principles of natural justice - order is made invoking Section 37 and 40 of the Act, instead of referring to the Transfer Pricing Officer (TPO) - HELD THAT:- We find merit in the submission of petitioner that the opportunity granted was not real but illusory and therefore the order of assessment is liable to be set aside on the ground of violation of principles of natural justice. It may be relevant to note that fixation of time- limit during the working hours of a notified date has been deprecated by this Court. In this regard, it may be relevant to refer the judgment of this Court in Velu Palandar case [ 1971 (8) TMI 42 - MADRAS HIGH COURT] where in after recording that the petitioner was granted time till 11.30 a.m. to file its objections and the same not having filed by 11.30 a.m., the assessing officer proceeded to pass orders of assessment on the same date, thus satisfied that the petitioner did not have an effective opportunity to state his objections and sustain his case that the goods in question cannot once over be subjected to tax, as, in law, they are liable to sales tax at one single point. Thus, we are inclined to set aside the order and to remand the matter back to the assessing officer to decide the matter afresh. The assessing officer shall pass orders after affording reasonable opportunity to the petitioner in accordance with law.
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2024 (9) TMI 961
Correct head of income - rental income receipts - to be assessed under the head Income From House Property or Income from Business' - HELD THAT:-Though there were many objects as revealed from the Memorandum of Association, even the AO finds that the assessee did not have any other business but lease of the properties. The finding is also that no construction project has been carried out by the assessee since its incorporation in 1975 nor has it booked any major sale since Financial Year 2000-2001. Even the AO finds that the assessee has been pursuing its object of earning rental income through letting out and makes a casual statement that this is the object pursued more vigorously than the others referred in the Memorandum of Association. The presumption of the AO that no prudent person would wait for more than 10-20 years even after payment of twice the cost of the building cannot be countenanced. If the building has not been conveyed to the purchaser and remains with the developer then there is nothing wrong in the developer leasing out the premises. There is no sale noticed, in the very many years, by the AO who also states that the Company had furnished the name of 25 persons who had entered into agreements for sale who were all related parties of the assessee. It is also presumed that the transactions appear to be a prima facie business connivance (sic) and that retention of huge advance money without any legal claims from the prospective customers cannot be countenanced. We cannot understand how the absence of legal proceedings by the intending purchasers can impact the tax levy of the assessee. The fact remains that the Assessing Officer has clearly found that but for the lease of properties the assessee is not engaged in any other business. This is the precise facts on which Rayala Corporation and Chennai Properties [ 2016 (8) TMI 522 - SUPREME COURT] have been decided. The First Appellate Authority rightly found the income to be from business and not under the head, income from house property, especially since the assessee has only the business of renting out buildings in the subject years. On the specific finding of facts made by the Assessing Officer in the assessment order, we are convinced that there is no question of the income of the assessee being treated as income from house property. Decided in favour of the assessee
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2024 (9) TMI 960
Addition u/s 68 - unexplained/bogus credits - HELD THAT:- As the assessee had duly proved on the file that the aforesaid amount represents the payment made by the assessee to the contractor M/s Growfast Realtors (P) Ltd. Therefore, both the lower authorities misconstrued the aforesaid amount as unexplained credits. The impugned addition is, therefore, not sustainable and the same is accordingly ordered to be deleted. Addition as unexplained credits - counsel has submitted that in respect of the above amount/transaction, both the lower authorities have wrongly and mistakenly taken the said amount as unexplained credits, whereas, the said amount was a payment made to M/s Sarda Vanijya (P) Ltd. during the course of business - HELD THAT:- Referring certificate of an accountant under first proviso to sub-section (1) of section 201 of the Act certifying the aforesaid payment to M/s Sarda Vanijya (P) Ltd. by the assessee and TDS was duly deducted thereupon and further that the payee had duly taken into consideration the aforesaid payments in its return of income. The ld. counsel has also invited our attention to submit that the aforesaid transaction was duly explained to the AO. The aforesaid documents on record duly proved that the aforesaid amount was business payment by the assessee to M/s Sarda Vanijya (P) Ltd. and there is no question of addition on the same as unexplained credits into the income of the assessee. Therefore, the aforesaid addition made/confirmed by the lower authorities are ordered to be deleted. Bogus trading liability - HELD THAT:- As trading liabilities of the small amounts cannot be merely added only because the assessee could not furnish the relevant documents in respect of the aforesaid two parties. The preponderance of probabilities in this respect lie in favour of the assessee. Considering that the assessee has been able to produce evidences in respect of the remaining parties and also considering that the assessee has collected records from the various parties, we do not find justification on the part of the lower authorities in making the addition in respect of the aforesaid two parties. The same is accordingly ordered to be deleted. Trading liability - HELD THAT:- Considering the overall facts and circumstances of the case and considering that the assessee has been able to explain most of the transactions and also considering that the record of the assessee got damaged and that the assessee has collected the record/document including the bank account etc. from the respective parties and produced before the AO therefore, taking a balanced view, the addition in respect of the aforesaid two parties i.e. Kripa Infrastructure and Swastik Engineering is restricted to 50% of the addition made by the AO. Appeal of the assessee is treated as partly allowed.
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2024 (9) TMI 959
Assessment completed u/s 143(3)/144C - Impugned assessment order passed by JAO instead of NFAC - HELD THAT:- Historically two types of assessee are assessed to tax, viz, regular assessee who are falling under the regular assessment proceedings viz., section 143(3), 144, 147 and another category falling under section 144C (eligible assessee whose cases are referred to Transfer pricing officer and non-resident not being a company or any foreign company). The procedure for assessment for assessee falling u/s 144C are already coded in the section 144C itself prior to introduction of faceless assessment regime. When newly scheme of faceless assessment proceedings were announced, it was new to all the stake holders and the procedure was specifically designed to make assessment falling under section 143(3), 144 and 147 of the cases. The set procedure u/s 144B was codified to facilitate the process of completing the assessments. In the same codification of process of assessment, the procedure laid down for special category falling u/s 144C was also codified u/s 144B of the Act. The procedure laid out in such a way that after the initial assessment by the assessment units, they will forward the same to the NFAC, NFAC will send the draft assessment order, if required after the review of the same in special cases, to the respective assessee. After giving opportunity of being heard to the assessee or by allowing them to submit relevant information through the e-portal, the final assessment orders are being finalized and forwarded to the respective assessee. The process of one more opportunity at the stage of draft assessment order to the assessee are duplicate in nature, even if there is violation it is only curative in nature since the assessment is not complete. Whereas in the case of other assessment like assessments u/s 143(3), 144 and 147 once the draft assessment are issued and after granting opportunity or non granting of opportunity to the assessee, the outcome is the final assessment order. The courts have held that the passing of FAO without granting opportunity of being heard is bad in law and held that the relevant assessment is deserves to be quashed. Whereas in the case of assessment u/s 144C is different, the final outcome of assessment from the NFAC is the draft assessment order, even there is violation, there is no prejudice caused to the assessee. Assessee gets one more opportunity before the Dispute Resolution Panel (DRP). The issue raised by the assessee that the draft assessment order passed without giving opportunity of being heard to the assessee at the stage of DAO is beyond comprehension and there is if at all violation of section 144B(1)(xiv) in the case of assessments falling u/s 144C of the Act, the same can be rectified at the stage of DRP by filing the relevant objections, this will fall under the category of rectifiable mistake. Therefore this is issue accordingly dismissed. Passing of FAO by the JAO beyond the jurisdiction of section 144B - In our considered view, assessment procedure laid down in section 144B is common and the assessment once initiated u/s 144B, it has to be completed in the same way. But this involves administration interference to smooth functioning of the assessment process. We are aware that at the time of introduction of faceless assessment scheme, there were several confusions and were several administrative constrains. In order to cope up with the administrative constrains, the relevant administrative heads were given several directions to ease the assessment process and take corrective measures. One of them, in our view, is to transfer certain cases to JAO. There is no illegality involved in the finalizing the FAO, Ld DR has brought to our notice that the respective administrative heads/NFAC were given suitable permission to transfer the cases to JAO. Therefore, as far as assessee is concerned, the FAO has to be completed within the statutory period. In this case, the assessment was completed within the time and the assessment was completed by the JAO and not any other officer. As per system, the jurisdiction always lies with the JAO. In our view, there is no prejudicial caused to the assessee by this FAO. JAO not followed the directions of DRP - We observed that Ld DRP has directed the AO to verify and spell out the reasons on breaching the provisions of section 144B - We observed that no doubt Ld DRP has given direction with regard to spell out the reasons for breaching the provisions of section 144B, we noticed that the FAO was passed by JAO and has no authority to give reasons on the issues of NFAC. Beyond his capacity, therefore, we do not see any violation on the part of JAO. Ld DRP gave direction to the NFAC and ultimately the assessment was completed by the JAO. Hence, we do not see any reason to make the assessment bad in law. FAO passed without considering the submissions and evidences before the AO, is a serious issue and needs to be addressed - This issue can be resolved by remitting the issue back to the file of AO. However, we observed that the issue relating to section 68 is issue of share capital to its AE s and this issue was already considered in the TP stage itself and TPO has not passed any adverse comments and accepted that there is no variation. Instead of remitting the issue back to the file of AO, we are inclined to adjudicate the issue on merit. Addition u/s 68 - Share capital subscribed by a non resident and received through proper banking channel, the same cannot be disallowed invoking the provisions of section 68. In this case, the assessee has already proved the identity of the share holders since the same shareholders have invested in the previous assessment year and relevant documents submitted to prove the identity before the authorities. With regard to credit worthiness, the same was invested by the AE s of the same group and the same was also approved by the RBI as well as funds have come thru inward remittances. With regard to genuineness, we observed that the assessee has properly received the share capital alongwith the share premium and invested the same in the business. This is part of capital transactions, therefore, all the ingredients of the section 68 are already satisfied and invoking the deemed provision after verification once by the TPO and again the JAO has made addition without proper verification after all the relevant documents before him. Further he has not considered the voluminous documents submitted before him shows that recklessness in which the FAO was passed by the JAO. Therefore, we are inclined to direct the AO to delete the addition made u/s 68 - In the result, the ground no 4 raised by the assessee is allowed. Other addition of ESI/PF - We observed that the assessee has remitted the employee shares of ESI/PF belatedly but before filing the return of income. The same was disallowed by the JAO. We observed that the assessee has raised ground against the above disallowance, however, after the decision of Checkmate Services Private Limited [ 2022 (10) TMI 617 - SUPREME COURT] which has rested all the controversy of deduction of belated remittance of employee shares of ESI/PF and distinguished the various decisions relied by the assessee before us. Therefore, the relevant ground raised by the assessee is accordingly dismissed.
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2024 (9) TMI 958
GST amount inclusion while computing the gross receipts u/s. 44BB - assessee is a non-resident company incorporated under the law of Brazil and is engaged in providing onshore and offshore oil well drilling services and had entered into a contract with Oil and Natural Gas Corporation Limited (ONGC) for charter hire of Anchor Moored Drilling Rig Olinda Star for drilling operations to be carried out in offshore waters of India - HELD THAT:- Though the CBDT Circulars is a clarification on the issue of excluding service tax component while computing the income of the assessee who is a resident, the intention of the said Circular nevertheless is to exclude the service tax component while deducting TDS on the rent paid or payable for the purpose of computing the income of the assessee. This, in our view, would also be applicable in the present case where the assessee being a non resident is given the benefit of special rate of tax as per section 44BB of the Act where the intention of the legislature is only to tax the assessee @ 10% on the amount paid or payable to the assessee, received on account of the business activity of the assessee. The word amount here cannot be interpreted to mean the GST/service tax which is collected by the assessee from its customers and paid to the Government. CBDT Circular mentioned above has categorically excluded the service tax component, while computing the income of the assessee and the same could not be interpreted differently to include GST/service tax while computing the profit and gains of a non resident, engaged in the business of exploration, etc. of mineral oils. Furthermore, it is to be noted that section 44BB is a special provision for computing the profits and gains in connection with the business of exploration, etc. of mineral oils which evidences that for the purpose of computing the profit and gains of the assessee, the natural corollary would be from the receipts which are in the nature of income that has to be considered for the said purpose and not the service tax that the assessee was duty bound to collect from its customers in addition to the charges for the services rendered by it. As decided in M/s. Schulumberger Asia Services Limited [ 2009 (7) TMI 51 - UTTARAKHAND HIGH COURT] which was in line with the issue in the present case as to whether the service tax collected by the assessee was to be included in the amount paid or payable for computation of presumptive tax as per section 44BB(1) and (2) of the Act, it was held that the reimbursement of service tax should not be included in the aggregate amount while calculating the profits and gains as per section 44BB of the Act. It is also pertinent to point out that the co-ordinate bench in the case of McDermott International Management [ 2024 (2) TMI 636 - ITAT DELHI] has also held that the service tax component do not form part of the receipt for computation of income as per section 44BB - Decided in favour of assessee.
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2024 (9) TMI 957
Unexplained investment in land based on an unsigned agreement - HELD THAT:- As correctly contended by the assessee that this is merely an offer made by the seller Mr. Ghan Shyam Sharma which was never accepted and executed even till the date of search the agreement was never agreed and signed by the assessee, as is evident from the copy of agreement furnished. AO though the document in possession since 28.09.2017 to till the completion of the assessment till 27.12.2019 did not controvert the contention of the assessee that he has in fact not undertaken the transaction. Though the land is agreed to purchase at 70 lac per vigha he satisfied by making addition of Rs. 5 lac only and that too without making any efforts of finding the truth by making independent inquiries from the seller rather or of the witness but he opted for making the impugned addition merely on surmises and conjectures. The bench noted that signature on agreement of all the parties to the agreement is very important without which it cannot be treated as executed and enforceable by law. The consent of all parties to an agreement is one of the essential aspect for a valid agreement which is not present in the present case as the appellant has not given her consent by signing the agreement. An agreement not enforceable by law and is void agreement as per section 2(g) of the Indian Contract Act, 1872. Thus, when there is no inquires conducted to controvert the submission made by the assessee the same cannot be considered as evidence against the assessee. The apex court in the case of Dhakeshwari Cotton Mills Ltd. [ 1954 (10) TMI 12 - SUPREME COURT] held that a suspicion remains a suspicion unless the same is established and can never take place of reality. Assessment cannot be made on guesswork without any reference to any material on record. Thus, we see no reasons to sustain the addition in the hands of the assessee and therefore, the same is directed to be deleted. Based on these observations ground no. 1 raised by the assessee is allowed.
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2024 (9) TMI 956
Reopening of assessment - difference in purchase shown by the assessee and sales shown by the party from where purchases are made - CIT(A) held that the AO had recorded the reasons for reopening as needs to be verified , which is outside the purview of section 147 - HELD THAT:- CIT(A) held that the AO has merely mentioned that he needs to verify the transactions. However, we do not agree with the conclusion drawn by the ld.CIT(A). AO in the reasons has specifically mentioned that Rs. 1,68,24,239/- is required to be taxed in the hands of the assessee. Similarly, AO has mentioned that assessee has suppressed gross profit and hence, there is an escapement of income - Thus, in the reasons AO has properly recorded after analysing the ledger accounts, that there was an escapement of income. In certain parts, AO does have mentioned that he needs to verify certain amounts. However, one needs to read the reasons recorded in totality. We can appreciate the reasons only when we read the entire reasons in totality. Therefore, after reading the entire reasons, we are convinced that AO has properly recorded the satisfaction regarding escapement of income. The mere mention of the word verification does not vitiate the entire reasons in totality. The Hon ble Supreme Court in Raymond Woollen Mills ltd. [ 1997 (12) TMI 12 - SUPREME COURT] has laid down the law that the sufficiency or correctness of the material is not a thing to be considered at this stage. One only needs to see whether there was any prima-facia satisfaction based on some material. We are convinced that the AO has properly recorded the reasons for reopening. Therefore, CIT(A) has erred in holding that AO was not justified in taking recourse to the provisions of section 147 of the Act, merely to verify the facts. Decided in favour of revenue.
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2024 (9) TMI 955
Addition u/s 56(2)(x) - difference between the stamp duty value of the property and the sale consideration of the property - holding period of the property or determination of LTCG HELD THAT:- No hesitation to hold that for consideration of the holding period of the property or for determination of LTCG, the date of the allotment of property is also paramount and the payment of installments/consideration, delivery of possession and execution of sale deed etc. are infact consequential acts in pursuance to allotment letter and/or originates from the date of allotment letter and therefore the same can be considered for determining the stamp duty value u/s 56(2)(x) as relevant. The difference between the two values is to be assessed in the hands of the Assessee with respect to her share only i.e. 1/3rd of difference between the stamp duty value of the property as on 22.12.2014 and the sale consideration of the property and is to be added under the head Income from other sources . Therefore, in view of the decision of the then Ld. CIT(A) in the case of the Assessee s daughter and the rule of consistency, the case of the Assessee is also liable to be allowed on same footing. Thus, AO is directed to consider the stamp duty value of the property as on 22.12.2014 as Rs. 1,88,00,000/- as valued by the Registered Valuer and the sale consideration of the property as Rs. 1,75,00,000/-as per the provisions of section 56(2)(x) of the Act and add 1/3 of the difference between the two values i.e. Rs. 13,00,000/- (Rs. 188,00,000/- - Rs. 1,75,00,000/-) in the hands of the Assessee under the head Income from other sources , as done by the then CIT(A) in the case of the Assessee s daughter. Consequently, the addition under consideration is modified accordingly. Appeal of the Assessee is partly allowed.
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2024 (9) TMI 954
Validity of order passed by the TPO u/s 92CA(3A) computation period of limitation - HELD THAT:- As per provision of Sec. 92CA(3A) the TPO is required to pass an order u/s 92CA(3) of the Act at any time before 60 days prior to the date on which the period of limitation referred to in Sec. 153 for making the assessment order on assessment or reassessment or re-computation or fresh assessment as the case may be expires. Thus, it is undisputed fact that transfer pricing officer has passed order u/s 92CA(3) on 01.11.2019 whereas the limitation for passing the said order u/s 92CA(3) expires on 31.10.2019 Therefore, as relying on Saint Gobain India P. Ltd. [ 2022 (4) TMI 808 - MADRAS HIGH COURT ] and Pfizer Healthcare Ltd. [ 2021 (2) TMI 1152 - MADRAS HIGH COURT ] the order u/s 92CA(3) of the Act is time barred by 1 day. Order of the TPO and draft assessment order are barred by limitation, therefore, resulting in assessee not being a eligible assessee u/s 144C(15)(b)(i) of the Act. Consequently, the final assessment was also bad in law. Assessee appeal allowed.
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2024 (9) TMI 953
Validity of assessment order passed u/s. 147 r.w.s. 144C(13) - residential status of assessee - Eligible assessee as per section 144C(15)(ii) - jurisdiction of the AO for issuing notice - Jurisdictional error in treating the appellant as a non-resident - HELD THAT:- It is well settled that the law applicable for the relevant AY should be seen. The assessee is not an eligible assessee as per section 144C(15). See SHREE CHOUDHARY TRANSPORT COMPANY VERSUS INCOME TAX OFFICER [ 2020 (8) TMI 23 - SUPREME COURT] In income tax matters, the law to be applied is the law in force for the relevant assessment year, unless otherwise stated or implied. Here in the case on hand, for the impugned assessment year, the assessee was resident. However, the revenue authorities have considered the residential status as Non- Resident of the assessee on the date of issue of notice u/s. 148 which is not correct. Accordingly, assessee is not eligible assessee as per section 144C(15)(ii) of the Act for the impugned assessment year being a resident. Assessee appeal allowed.
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2024 (9) TMI 952
Unexplained cash credit u/s 68 - onus cast upon the appellant to escape the rigours of Section u/s 68 was not discharged - HELD THAT:- It is clear that merely filing income tax details, share application form allotment letter, bank details and details about the creditworthiness of the share applicants is not enough to prove a transaction from the point of view of Section 68 of the Act. In this case also, the appellant is seen to have filed documents but following the extracted portions from the case of One Point Commercial Pvt Ltd, [ 2024 (4) TMI 751 - CALCUTTA HIGH COURT] it is held the onus cast on the appellant for escaping from the provisions of Section 68 of the Act have not been discharged and thus, the action of the authorities below is confirmed and the appeal on this point is dismissed. Addition u/s 14A r.w.r. 8D - As appellant has not earned any exempt income this year and thus, relying on the findings in the case of Eveready Industries India Ltd. [ 2019 (12) TMI 1033 - ITAT KOLKATA] , Vardhman Chemtech (P.) Ltd. [ 2018 (10) TMI 1037 - PUNJAB AND HARYANA HIGH COURT] and ERA Infrastructure (India) Ltd. [ 2022 (7) TMI 1093 - DELHI HIGH COURT] the appellant deserves relief. Addition u/s 14A is directed to be deleted. Decided in favour of assessee.
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2024 (9) TMI 951
Validity of income tax proceedings against company in liquidation process - HELD THAT:- Apparently, the provisions of section 14 of the Insolvency and Bankruptcy Code, 2016, provides that all these suits or continuation of pending suits or proceedings against the corporate debtor including any judgment or decree or order in any court of law, tribunal, arbitration panel or other authority cannot be passed during the moratorium period. The period of moratorium shall have the effect from the date of such order till the completion of the corporate insolvency resolution process. In the present case, the appeal filed by the assessee is prohibited under section 14 of the Code. As held by the Supreme Court in case of Alchemist Asset Reconstruction Co. Ltd. v. Hotel Gaudavan (P.) Ltd. [ 2017 (12) TMI 1107 - SUPREME COURT ], it has been held that even arbitration proceedings cannot be initiated after imposition of the moratorium u/s 14(1)(a) has come into effect and it is not nice in law and could not have been allowed to continue. Further with respect to the appeals filed by the assessee also cannot be sustained as assessee did not furnish any permission obtained from National company law tribunal as held in Mrs. Jai Rajkumar v. Standic Bank Ghana Ltd. [ 2019 (1) TMI 1254 - MADRAS HIGH COURT ] The assessee neither complied by filing proper letter of authority nor sought further time. None of the directors remained present before us. Therefore, the appeal filed by the company in all the three appeals cannot be sustained in absence of any permission from the National company law tribunal or filing of the proper letter of authority by the insolvency resolution professional. In view of this, we dismiss the appeals filed by the assessee with the liberty to Assessee to file these appeals after moratorium period, if Assessee wants to continue with these proceedings, making the respective representative of committee of creditors, IRP. Thus, all the appeals of assessee with respect to these three years are dismissed.
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Customs
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2024 (9) TMI 950
Seeking grant of bail - offence u/s 135(1)(a), 135(1)(b), 135(1)(i)(a) of Customs Duty Act, 1962 - smuggling of golden bars - HELD THAT:- Keeping in view the fact that in the matter trial has not started even yet and the complicity of the accused applicant is yet to be determined in trial, the gold seized is in the possession of the Department, the offence appears to be compoundable by virtue of Section 137(3) of the Customs Act and there is nothing on record to demonstrate that the applicant, if enlarged on bail, would in any way adversely affect the trial, no criminal antecedent to the credit of the applicant, the applicant is in jail since 25.6.2024, without further commenting upon the merits of the case, it is opined that the applicant has made out a case for bail. The bail application of the accused-applicant is allowed.
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2024 (9) TMI 949
Benefit of adjustment of Countervailing Duty (CVD) against Duty Entitlement Pass Book (DEPB) scrips - time limitation - HELD THAT:- This issue is no longer res integra as it has been considered and decided in favour of the assessee in the case of COMMISSIONER OF CENTRAL EXCISE, SPIC LIMITED (PHARMACEUTICAL DIVISION) VERSUS M/S. SPIC HEAVY CHEMICALS DIVISION, CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL [ 2013 (9) TMI 93 - MADRAS HIGH COURT] . The duty on imports in that case had also been paid by way of debit to DEPB scrips and the question of law that was decided was whether such debit was correct in light of Notification 34/97 Customs dated 07.04.97 and the provisions of Cenvat Credit Rules, 2002. The stipulations under Notification dated 03.04.97 cannot under any circumstances be held to be a limitation for the purpose of claim of MODVAT. There does not appear to be anything available to show that this decision has been reversed in appeal. Hence, and applying the ratio of the decision of this Court in the case of SPIC Ltd., the direction of the writ court in granting refund of a sum of Rs. 28,42,745/- paid in cash by the petitioner on 19.07.1999 is confirmed. The question of re-credit to the DEPB scrips does not arise as the scrip has itself expired. Time Limitation - HELD THAT:- The petitioner had remitted the duty in cash on 19.07.1999 and the claim for re-credit has been made on 27.8.99 within a period of six months from the day of payment as aforesaid. The application has thus been made within the period of limitation as stipulated under Section 27 of the Act. The order of the writ court dated 03.08.2010 is confirmed - appeal dismissed.
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2024 (9) TMI 948
Classification and valuation of imported goods - Arecanut - to be classified under CTH 21069030 or not - provisional release of the imported consignment - case of the petitioner is that the petitioner was not heard before the impugned order was passed - violation of principles of natural justice - HELD THAT:- The petitioner has not co-operated with the respondents as the petitioner neither filed a reply nor participated in the personal hearing. The impugned order is otherwise appealable in terms of Section 128 of the Customs Act, 1962 before the Commissioner (Appeals). If the appeal has to be filed, the petitioner has to deposit 7.5% of the duty demanded or the penalty levied therein and produce the proof of such payment. Therefore, to balance the interest of the Customs Department and the petitioner, the impugned order is set aside and the case remitted back to the third respondent to pass fresh order on merits and in accordance with law. Petition disposed off.
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2024 (9) TMI 947
Refund of custom duty paid under protest with interest - prayer to direct the Custom Authorities to re-assess the Bills of Entry and process the refund or to direct respondent-State Government, Custom Department, for dispersal - HELD THAT:- Having considered the facts of the case it is not in dispute that the petitioner imported four machines which are used for the World Bank project and accordingly, the State of Gujarat has issued project authority certificate. It is also not in dispute that the respondent authorities can amend the Bills of entry under sections 149 and 150 of the Act for the purpose of reassessment under sections 17 of the Act and the decision of the Hon ble Apex Court in case of ITC Limited [ 2019 (9) TMI 802 - SUPREME COURT ] is not applicable in the facts of the case as observed in case of Sony India Pvt Ltd [ 2023 (4) TMI 1086 - SC ORDER ]. On perusal of N/N. 84/97-Customs dated 11.11.1997, more particularly, clause (iii) thereof, the petitioner is entitled to the exemption from payment of custom duty on import of the machinery used for the World Bank Aided project. Certificate issued by the State of Gujarat is also clearly specifies that the machinery has been used by the project is it approved by the World bank and given to the petitioner for construction for the road. On perusal of the sections 149 of the Customs Act, the petitioner has obtained a certificate from the Government of Gujarat claiming duty benefit as per Notification No. 84/97 and the custom authorities therefore required to pass necessary reassessment of the bills granting exemption and therefore the custom duty paid under protest is liable to be refunded to the petitioner. In view of the above provision of the Act and more particularly clause (iii) of the Notification No. 84/97 coupled with the fact that the petitioner has also produced certificate issued by the Chartered Accountant that the petitioner has not passed on the benefit of custom duty to be paid under protest to anyone and therefore there is no unjust enrichment if the amount paid under protest is refunded to the petitioner. The respondent authorities are directed to reassess the Bills of Entry of the import of the four machines by the petitioner granting benefit of exemption under Notification No. 84/97 dated 11.01.1997 and custom duty paid under protest by the petitioner amounting to Rs. 86,00,068/- within a period of twelve weeks from today along with interest statutory interest, if payable in accordance with the provisions of the Act. Petition allowed.
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2024 (9) TMI 946
Levy of penalty - filing shipping bills with incorrect classification intentionally with the aim of getting higher MEIS benefits - violation of provisions of Regulations 10(d) and 10(e) of CBLR 2018 - HELD THAT:- The appellant has filed Shipping Bill classifying the goods under the CTH 36050010 whereas the department proposed the classification under CTH 36050090. The appellant submits that it is not the responsibility of the CHA to file the appropriate classification. The department is free to modify the classification adopted by the appellant and finalize the benefit under the MEIS eligible to them. It is found the appellant cannot be held responsible for misdeclaration of classification, if any, in the Shipping Bill. It is the responsibility of the proper officer of customs to decide the classification of the goods. Accordingly, the allegation in the impugned order that the appellant has contravened the Regulation 10 (d) and 10(e) of CBLR 2018 is not sustainable. Thus, the penalty imposed on the appellant under 18(1) of the CBLR, 2018 is also not sustainable. This view is supported by the decision of the Tribunal in the case of M/s. Max Miller Agencies Vs Commissioner of Customs [ 2024 (1) TMI 1220 - CESTAT CHENNAI ] wherein this Tribunal has held that 'once it has been observed by the learned Commissioner that there is no mens rea on the part of the appellant then in that case imposition of penalty of Rs.25,000/- for violation of Regulation 10 (d) and 10(e) of CBLR 2018 is not sustainable in law.' The appellant has not violated the provisions of Regulations 10(d) and 10(e) of CBLR, 2018 and hence the penalty imposed on the appellant under Regulation 18(1) of the CBLR, 2018 is not sustainable - the penalty imposed on the appellant is set aside - appeal allowed.
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2024 (9) TMI 945
Valuation of imported goods - enahncement of value in respect of the goods warehoused in Kandla Special Economic Zone on the basis of NIDB data - confiscation - redemption fine - penalty - HELD THAT:- It is admitted fact that the NIDB data is of 2017 whereas the DTA clearance in this case was taken place in 2018 therefore, since the import under NIDB data and in the present case on a different time, the NIDB data cannot be applied straightaway. Moreover it is observed that there is absolutely no evidence with regard to the allegation of undervaluation such as any manipulation in the invoice issued by the appellant from their SEZ unit or there is any flow back of consideration from the buyer of the goods, therefore, in these facts the enhancement of value is baseless and on assumption. Therefore, the department could not establish the case of undervaluation against the appellant. As regard, the redemption fine and penalty imposed on the appellant, it is found that the value declared in the bill of entry as per the invoice since there is no other material adduced by the revenue, no malafide intention can be attributed to the appellant that there was intentionally undervalued the goods. In such case, no fine and penalty can be imposed. The impugned order is not sustainable. Hence, the same is set aside - Appeal allowed.
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2024 (9) TMI 944
Classification of imported goods - COMPR CL ASY A/C (Motor vehicle components) - to be classified under Chapter Headings 8421 9900, 8409 9990 and 8414 9090 or under CTH 84159000? - classification of the impugned goods claimed by the Appellant earlier under a different CTH would operate as an estoppel or not - applicability of 'predominant use' or sole/principal use test stated in Westinghouse Saxby Farmers [ 2021 (3) TMI 291 - SUPREME COURT] . Whether the imported compressors are to be classified under CTH 8415 9000 (revenue) or CTH 8414 8011 (appellant)? - HELD THAT:- It is seen that Heading 8415 covers Air-conditioning machines, comprising a motor-driven fan and elements for changing the temperature and humidity, including those machines in which the humidity cannot be separately regulated. While 8414 covers Air or vacuum pumps; air or other gas compressors and fans etc. and parts thereof. Hence compressors used in car air conditioning units are reasonably classifiable under two competing headings and recourse to Section or Chapter Notes would be necessary to determine the classification. Revenue is of the view that as per the HSN notes to chapter 841590, the components of air conditioning machines, if presented as separate elements are to be classified in their respective headings in accordance with the provisions of Note 2(a) to Section XVI whether or not they are designed for building into a self-contained units i.e. air conditioning machine. Hence compressor in this case, which are parts imported and presented as separate elements are in all cases to be classified in their respective headings i.e. CTH 8415 9000 as parts of air-conditioning machines of a kind used for persons in motor vehicles - Hence the subject goods, being Air Compressors used for Car Air Conditioning Equipment, are rightly classifiable under its respective heading CTI 8414 8011 as gas compressors of a kind used in air-conditioning equipment as per Note 2(a) to Section XVII of CTA, 1985. In SANTHOSH MAIZE INDUSTRIES LIMITED VERSUS THE STATE OF TAMIL NADU ANR. [ 2023 (7) TMI 191 - SUPREME COURT ], it was held that law is well settled that if in any statutory rule or statutory notification two expressions are used one in general words and the other in special terms under the rules of interpretation, it has to be understood that the special terms were not meant to be included in the general expression; alternatively, it can be said that where a statute contains both a general provision as well as a specific provision, the latter must prevail. The Hon ble Supreme Court in the case of OK. PLAY (INDIA) LTD. VERSUS COMMISSIONER OF C. EX., DELHI-III, GURGAON [ 2005 (2) TMI 114 - SUPREME COURT (LB) ], held that the scheme of the Central Excise Tariff [which is equally applicable to the Customs Tariff] is based on Harmonized System of Nomenclature and the explanatory notes thereto. Therefore, HSN along with the explanatory notes provide a safe guide for interpretation of an Entry. This being so we find force in classifying the impugned goods based on the HSN Explanatory Notes to Section XVI. Whether the classification of the impugned goods claimed by the Appellant earlier under different CTH would operate as an estoppel? - HELD THAT:- The issue is no loner res integra. There is no estoppel in Law against a party in taxation matters. In this regard, reliance is placed on the case of DUNLOP INDIA LTD. MADRAS RUBBER FACTORY LTD. VERSUS UNION OF INDIA AND OTHERS [ 1975 (10) TMI 94 - SUPREME COURT ], wherein it was held ' There is, however, no estoppel in law against a party in a taxation matter. In order to clear the goods for the Customs, the appellant Agents may have given the classification in accordance with the wishes of the authorities or they may even be under some misapprehension. But when law allows them the right to ask for refund on a proper appraisement and which they actually applied for, we do not attach any significance to this aspect of the matter pointed out by counsel. The question is of general importance and must be decided on its merits.' Whether the predominant use or sole or principal use test stated in Westinghouse Saxby Farmers will be applicable to the present case? - HELD THAT:- The Hon ble Supreme Court in Westinghouse Saxby Farmers held that relays are classifiable as parts of railway signalling equipment under Heading 8608 of the Central Excise Tariff, by applying the sole or principal use test of Section Note 3 in precedence over Note 2(f) ibid of Section XVII. However, the impugned issue pertains to the classification of goods under Section XVI. When the two Section Notes are not in pari materia, then decision rendered with reference to one Section Note of the Schedule to the Central Excise Tariff Act, cannot be applied with reference to the provisions of another Section Note of the schedule to the Customs Tariff Act - the ratio of the judgment of the Hon ble Supreme Court in Westinghouse Saxby Farmers would not be applicable in deciding the issue in this case. Thus, revenue has not been able to establish its case and the impugned order merits to be set aside - the impugned order is set aside - appeal allowed.
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2024 (9) TMI 943
Levy of penalty u/s 114(i) of the Customs Act, 1962 - appellant, proprietor of Customs Broker firm, having handled all the eight S/Bs involving overvaluation of export goods - HELD THAT:- It is found that the exporter Shri Aijaz Esmail Pawaskar, in his voluntary statement given before the Customs investigation authorities on 18.10.2011, to a specific question regarding why he had submitted eight shipping bills for one consignment had answered as following: I prepared 8 Invoices and gave to my CHA and submit the paper accordingly to Customs . It thus transpires, that the exporter himself had prepared eight separate consignments for export, leading to the appellant requiring eight shipping bills to be filed in the present case, as per the directions of the exporter. Since the Customs EDI facility under ICES provide for filing multiple commercial invoices under single S/B, the department had alleged that the appellant had failed to file such eight export consignments under eight different invoices in one single S/B instead of eight S/B, resulting in artificial splitting single export consignment, for avoiding examination of the goods by the customs officers and in exploitation of the simplified procedure of assessment / examination of export consignments. It is a fact on record, that the exporter himself had prepared eight different invoices and asked the appellant to prepare the export documents accordingly. Further, there is no evidence on record to suggest that the appellant had prepared eight different S/Bs on his own; even if this was done to avoid examination by the Customs officers, all such S/Bs were filed on the same day, simultaneously as the S/B Numbers reveal that they are almost in same serial order. Thus, it does not stand to logic that the appellant had purposefully split the consignments to avoid examination and to facilitate availment of simplified procedure. For the alleged non-compliance of procedure in filing S/Bs, the right course of option open for the customs authorities is to take action under Customs House Agents Licensing Regulations, 2004/Customs Brokers Licensing Regulations, 2018 for any failure of the obligation on the part of appellant as CB. It is also seen from the records, that such an action has already been taken by the customs authorities and the licensing authority i.e., the Commissioner of Customs (General), Mumbai vide Order dated 24.05.2013 had imposed penalty by forfeiture of security deposit of Rs.20,000/- on the appellant CB. Further, the legal provisions governing Section 114(i) ibid deal with imposition of penalty in respect of prohibition in force for export of goods, leading such export goods liable for confiscation under Section 113 ibid. There are no specific findings in this regard being mentioned by the authorities below, except overvaluation of export goods on the basis of market survey, and hence even on this account, the impugned order upholding imposition of penalty under Section 114(i) ibid, on the appellant is not sustainable. In the case of P.D. Prasad [ 2017 (5) TMI 1179 - CESTAT NEW DELHI ], the Co-ordinate Bench of the Tribunal has held that there is no evidence of CB being aware of overvaluation, then he cannot be held liable for any aiding and abetting and consequently to penalty. Thus, on the basis of the factual matrix of the present case, particularly when the appellant is the proprietor of the CB, who was not aware of the overvaluation of export goods, it cannot be said that the appellant is responsible for such act and for imposition of penalty under Section 114 ibid. There are no merits in the impugned order passed by the learned Commissioner (Appeal), Mumbai Zone-III, in upholding imposition of penalty under Section 114(i) of the Customs Act, 1962 on the appellant - impugned order set aside - appeal allowed.
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2024 (9) TMI 942
Classification of imported goods - spectrometers - to be classified under Customs Tariff Heading (CTH) 90273010 or under Customs Tariff Heading (CTH) 90221900? - benefit of exemption N/N. 24/2005 dated 01.03.2005 - Time Limitation. Time Limitation - HELD THAT:- There is no allegation of suppression of facts in the impugned orders. Appellant had made declaration as per the invoice/details provided by overseas supplier and there is no allegation of any fraud, collusion or willful misstatement or suppression of facts to invoke the extended period of limitation. Thus, the demand made against the goods imported against Bill of Entry No. 725969 dated 15.04.2008 by issuing a Show Cause Notice after 3(three) years and 8(eight) months is barred by limitation and impugned orders are unsustainable. Classification - HELD THAT:- Further, the issue of classification of the impugned imported goods is not decided as the issue of limitation is considered, and it is found that the impugned order is unsustainable on limitation. Appeal allowed.
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2024 (9) TMI 941
Classification of imported goods - spectrometers - to be classified under Customs Tariff Heading (CTH) under 90273010 or under CTH 90221900? - benefit of exemption Notification No. 24/2005 dated 01.03.2005 - time limitation. Time Limitation - HELD THAT:- There is no allegation of suppression of facts in the impugned orders. Appellant had made declaration as per the invoice/details provided by overseas supplier and there is no allegation of any fraud, collusion or willful misstatement or suppression of facts to invoke the extended period of limitation. Thus, the demand made against the goods imported against Bill of Entry No. 435639 dated 11.06.2010 by issuing a Show Cause Notice after 1 year and 6(six) months is barred by limitation and impugned orders are unsustainable. Classification - HELD THAT:- The issue of classification of the impugned imported goods is not decided as the issue of limitation is considered, and it is found that the impugned order is unsustainable on limitation. Appeal allowed.
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2024 (9) TMI 940
Recovery of IGST / Customs duty on import of goods - Liability of appellant to pay duty, Interest, Redemption Fine and penalty for violation of Pre-Import Condition in connection with imports made under Advance Authorization scheme during the period from 13-10-2017 to 09-01-2019 - time-bar demands under extended period - HELD THAT:- For recovery of IGST on import of goods, provisions are made under section 3 (7) of Customs Tariff Act 1975. However, no specific provision is made for recovery or charging of Interest, Fine and Penalty u/s 3 (7) or 3 (12) of Customs Tariff Act 1975 as compared to such similar provisions made under the Section 8B (9) and Section 9A (8) of Customs Tariff Act 1975. Such provisions u/s 9A (8) were introduced in Statute by The Finance (No. 2) Act, 2009 way back on 19-08-2009. However, while introducing similar provisions post GST Regime under Section 3 (7) or 3 (12) of the Customs Tariff Act 1975, Government of India has not incorporated such provisions for recovery of the Interest, Fine and Penalty under Section 3 (7) or Section 3 (12) of Customs Tariff Act 1975. Revenue has also not been able to show us such charging provision for levy and collection of interest, Fine and Penalty for late payment of IGST leviable under Section 3 (7) or under Section 3 (12) of Customs Tariff Act 1975. Therefore, the orders for recovery of interest, fine and Penalty on late payment of the IGST during Re-assessment process of Bill of Entry for the period from 13-10-2017 to 09-01-2019 are without authority of law and the same are unsustainable. In case of BIRLA CEMENT WORKS JK. SYNTHETICS LTD. VERSUS COMMERCIAL TAXES OFFICER AND STATE OF RAJASTHAN [ 1994 (5) TMI 233 - SUPREME COURT] the Hon ble Apex Court has held that interest can be levied and charged on delayed payment of tax only if the statute that levies and charges the tax makes a substantive provision in this behalf. In the case reported in COLLECTOR OF C. EX., AHMEDABAD VERSUS ORIENT FABRICS PVT. LTD. [ 2003 (11) TMI 75 - SUPREME COURT] the Hon ble Supreme Court has also referred to an amendment made in year 1994 by inserting the expression offences and penalties in Section 3 (3) of the Additional Duties Act and held that such amendment was required to remedy the defect contained in the unamended provisions. In absence of specific insertion of words like offences, penalties and interest, such levies could not be assumed and such additional tax cannot be charged. Penalties - HELD THAT:- This is a case also of interpretation of provisions. There is no statutory provision for imposing Penalty under section 3 (7) or 3 (12) of the Customs Tariff Act 1975. There is no evidence showing intention for evasion of duty. Imposition of penalty requires mala fide intention to evade duty, which is not found in these cases. The ingredients required for imposing penalty are not found in these cases. Thus, the orders for imposing Penalty are not sustainable, in terms of the applicable provisions of law and the decisions relied upon by the Appellant. Time limitation - HELD THAT:- There is no suppression by appellant. Since the case was made out on the basis of alleged violation of Pre-Import Condition in imports under Advance Authorisation scheme, customs authorities were also aware of the said Pre-Import Condition inserted by the Notification on 13-07-2017, hence the department could have taken action within the normal period. Further, the situation was complete revenue neutral for Appellant on availability of credit of duty paid. In these facts, since no suppression of fact is there and show cause notices were issued beyond two years, from import, the entire demand is time barred - There is no evidence or justification to invoke extended period u/s 28 (4) of Customs Act 1962. Since the demand made against the appellant was barred by time limitation, the duty liability is illegal and liable to be set aside. Such duty liability, would be permissible only when the assessee was guilty of deliberate omissions and/or commissions with mala fide intention, to evade duty. Thus, allegation of suppression of facts etc and invocation of extended period of limitation is not correct. Thus, it is settled that in the absence of specific provision relating to levy of Interest, Redemption Fine and Penalty in respective legislation for levy duty, the same cannot be demanded or imposed or recovered by taking recourse to machinery provisions relating to recovery of the duty. Therefore, the orders for recovery of Interest, Redemption Fine and Penalty in these cases are not sustainable considering charging provisions of the Customs Act 1962 and relevant provisions under the Customs Tariff Act, 1975 and the decisions rendered thereon as mentioned above. The issue on imposing Interest, Redemption Fine and Penalty is no longer Res Integra. The impugned orders on confirmation of demands for interest and appropriation thereof, order of confiscation of goods, imposition of Redemption fine and penalty are not sustainable and the same are set aside - Appeal allowed.
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FEMA
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2024 (9) TMI 939
Contravention of Section 8(1) and 9(1)(f)(i) of the Foreign Exchange Regulation Act, 1973 - receiving payments in foreign exchange during 1996-97 through fake export documents and without any export of goods to overseas parties - Adjudicating Authority finding contravention in the hands of the appellant imposed the penalty of Rs.2 lakhs for contravention of Section 8(1) and Rs.3 lakhs for contravention of Section 9(1)(f)(i) of the Act of 1973. HELD THAT:- Show Cause Notice was given in the year 2002 alleging contravention of the provisions of the Act of 1973. A period of more than 22 years has already passed from the date of Show Cause Notice and otherwise the appellant has deposited Rs.2 lakhs as against the total penalty of Rs.5 lakhs. Taking into consideration the peculiarity of the case and also that total penalty amount is of Rs.5 lakhs for which prayer is made to reduce it to Rs.2 lakhs, we find the prayer to be appropriate for which the counsel for the respondent left it open for the Tribunal to pass an appropriate order. We find it appropriate to reduce the penalty to Rs.2 lakhs out of which Rs.1 lakh each would be for the contravention of Section 8(1) and 9(1)(f)(i) of the Act of 1973. The amount aforesaid has already been deposited to satisfy the condition of pre-deposit thus on reduction of the penalty amount, the appellant would not be required to deposit the amount of Rs.2 lakhs, rather the amount deposited towards the pre-deposit be treated in satisfaction to the reduced penalty amount. Accordingly, we reduce the penalty from Rs.5 lakhs to Rs.2 lakhs.
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2024 (9) TMI 938
Contraventions of FERA - request for separate hearing due to non-membership in Kamani family - Violation of natural justice in passing the order - Denial of opportunity of hearing to A.P. Parekh - HELD THAT:- The perusal of the record does not show that the appellant was ever given an opportunity of hearing subsequently. It is in a given case where his case was separated thus we find that the plea taken by the appellant in his appeal is partly corroborated by the impugned order. A case is made out to remand the matter back to the Adjudicating Officer/Authority for hearing of the case afresh so that the appellant may get appropriate opportunity of hearing. It is necessary to clarify that the Show Cause Notice was in reference to FERA 1947 and FERA 1973 which have been repealed by FEMA 1999 thus the issue would be that who can provide an opportunity of hearing. It is required to be clarified to avoid any complications and accordingly while remanding the case back after quashing the order dated 20.09.2000 in regard to the appellant A.P. Parekh, the Department is directed to place the matter of the appellant before the appropriate authority of equivalent rank either under FERA or FEMA for providing him an opportunity of hearing which may be even the Adjudicating Authority under FEMA for which Notification has been issued by the Government of India.
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PMLA
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2024 (9) TMI 937
Seeking grant of regular bail - Money Laundering - allegation on petitioner is that he had projected and concealed the property which was a proceed of crime in relation to a Scheduled Offence and was a beneficiary thereof - principles of parity - twin conditions of Section 45 of PMLA, 2002 not satisfied - HELD THAT:- In the present case, it is evident that the proceeds of crime have been generated by one set of accused persons against whom the CBI case has been registered. However, the petitioner herein was roped in subsequently for laundering the proceeds of crime which had been generated by the accused persons in the predicate offence. Merely because those persons against whom the predicate offence has been registered, are also an accused under PMLA case would not in any way dilute or impact the involvement of the present petitioner whose role essentially has been determined to be in laundering the proceeds of crime. The argument, therefore, as projected by the petitioner, is not tenable. There are 14 main accused persons who were Member of Parliament or Member of Legislative Assembly or beneficiaries, but none of them has been arrested, except the petitioner which shows the role assigned to him is only of acquiring the land parcel worth Rs. 10.83 lakhs and the subsequent transfer of the company to Rabri Devi and Tejaswi Yadav in 2014 for a meagre amount of Rs. 1,00,00,000/-. The petitioner s role is miniscule essentially to the extent of Rs. 10.83 lakhs. While in this regard, it is pertinent to observe that while considering the grant of Bail, the parity is not so much essential considering as the role of the petitioner in the commission of offence. It is not disputed that out of 17 accused in PMLA, none of the accused even though they are the main perpetrators/beneficiaries of the offence under PMLA, have not been arrested and the prosecution Complaint had been filed against them without their arrest. Iit becomes significant and pertinent to examine the role of the petitioner in the present case. The allegations against him are that he had acquired a land valuing 10.83 lacs, which was the tainted money on the premise that the proceeds of sale are less than Rs. 1,00,00,000/-. It has been vehemently contended on behalf of the respondent that as per the prosecution, essentially the allegations made against the petitioner are that he had purchased the land parcel worth Rs. 10.83 lakhs which he transferred subsequently to the other main accused persons but actually the value of the land parcel was much more than its purchase value. Also, the Companies of the petitioner had been used for laundering the proceeds of crime - At no place has the respondent quantified the value of proceeds of crime to be more than that. Even if it is accepted as has been contended by the respondent, that the value of the land parcel was 3-4 times more than the value reflected but then too, it would be less than Rs. 1,00,00,000/-. The case of the petitioner is covered by the proviso thereby exempting him from satisfying the twin conditions under Section 45 of PMLA, 2002 for grant of bail. It may be observed that he is not a flight risk, as he has all throughout been joining the investigations and at no point of time tried to evade the summons or to join the investigations. There has been no endeavour him to tamper with the evidence which is essentially documentary in nature or to influence the witnesses. The Triple Test for grant of bail is, therefore, satisfied by him. The applicant is directed to be released forthwith on bail subject to fulfilment of conditions imposed - bail application allowed.
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2024 (9) TMI 936
Seeking grant of regular bail - Money Laundering - predicate offence - lack of evidence against petitioner - HELD THAT:- In the case of Vijay Madanlal Choudhary and Ors. v. Union of India and Ors. [ 2022 (7) TMI 1316 - SUPREME COURT ], it has been held that the Authority under the 2002 Act, is to prosecute a person for offence of money laundering only if it has reason to believe, which is required to be recorded in writing that the person is in possession of proceeds of crime . Only if that belief is further supported by tangible and credible evidence indicative of involvement of the person concerned in any process or activity connected with the proceeds of crime, action under the Act can be taken forward for attachment and confiscation of proceeds of crime and until vesting thereof in the Central Government, such process initiated would be a standalone process. Veerendra Kumar Ram used to give cash to Mukesh Mittal who with the help of entry providers including the present petitioner used to make entries in the bank accounts of his employees and relatives and then such fund was transferred by Mukesh Mittal into the bank accounts of Rajkumari (wife of Veerendra Kumar Ram) and Genda Ram (father of Veerendra Kumar Ram). The investigation further disclosed that Mukesh Mittal contacted Ram Prakash Bhatia, who is engaged in the illegal business of providing entries in lieu of commission for taking the entries into the bank account of Genda Ram. Subsequently, Ram Prakash Bhatia provided those entries with the help of his associate and present petitioner - The petitioner is the mastermind behind using the bank accounts for the purpose of laundering/routing of funds which makes it established that the petitioner is a key person of the nexus, which provides entries in lieu of commission and, hence, he was involved in the offence of money laundering of proceeds of crime of Veerendra Kumar Ram. When a serious offence of such a magnitude mere fact that accused was in jail for long time inconsequential besides such casual approach would undermine trust of public in integrity of Investigating Agency. Further, bail is the rule and jail is an exception but competing forces need to be carefully measured before enlarging the accused on bail. Socio economic offences constituted a class apart and need to be visited with different approach in the matter of bail since socio economic offences have deep-rooted conspiracies affecting moral fibre of society and causing irreparable harm. Moreover, investigating agency was in process of expediting the trial. Considering that there is direct allegation against the petitioner and he is involved in proceeds of crime, as such, the Court is not inclined to release the petitioner on bail - bail application dismissed.
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2024 (9) TMI 935
Money Laundering - proceeds of crime - non-compliance with the provision of section 19(1) of PMLA 2002 at the time of arrest - HED THAT:- The petitioner or his learned counsel was not informed of the grounds of his arrest and therefore, the arrest is bad in law. The petitioner has placed reliance on several authorities including Pankaj Bansal [ 2023 (10) TMI 175 - SUPREME COURT] , Arvind Kejriwal [ 2024 (9) TMI 780 - SUPREME COURT] Madhu Limaye [ 1968 (12) TMI 97 - SUPREME COURT] and Prabir Purkayastha [ 2024 (5) TMI 1104 - SUPREME COURT] in this connection. The arrest memo discloses that the petitioner refused to receive the same after going through each page of the grounds of arrest stated therein and conveyed to him. Therefore the plea taken by the petitioner is too weak to stand on its own feet. No illegality or irregularity in the arrest procedure has been made out. It is trite law an accused has a right to make successive applications for grant of bail and the Court entertaining such subsequent applications has a duty to consider the reasons and grounds on which the earlier bail applications were rejected - In the present case, this Court, while turning down the prayer of the petitioner on two occasions has dealt with the matter on merits and has come to a conclusion that there is material to show that the Enforcement Directorate has been able to collect material which would satisfy the presumptions attached to sections 22 and 23 of the 2002 Act and it cannot be held that the petitioner is not guilty of such offence at this stage. True, the conditions laid down in section 45 of the 2002 Act are the guiding factors for grant of bail to an accused under the said Act and the accused has to satisfy the said conditions for earning an order of bail in his favour. In a recent judgment in Manish Sisodia [ 2024 (8) TMI 614 - SUPREME COURT] the Hon ble Court has held that the right to bail in cases of delay coupled with incarceration for a long period should be read into section 439 of the Code of Criminal Procedure and section 45 of the 2002 Act. Section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023 as it stands after amendment of section 436A of the Code of Criminal Procedure envisages that a first-time offender (who has never been convicted for any offence in the past) shall be released on bond by the Court if he has undergone detention for the period extending up to one-third of the maximum period of imprisonment specified for such offence under that law. The petitioner being in custody for about two years is short of about four months in completing one-third of the maximum period of imprisonment. It is also not in dispute that he has not been convicted of any offence earlier and is therefore a first-time offender. The petitioner shall be released on bail subject to fulfilment of conditions imposed - bail application allowed.
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2024 (9) TMI 934
Money Laundering - proceeds of crime - scheduled offence - conspiracy - siphoning of crores of rupees deposited by innocent depositors of the Bank - Whether the subsequent FIR can be subsumed into an existing ECIR also deserve consideration - HELD THAT:- Since the offence under Section 3 of the Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence, and the existence of a predicate offence, is a sine qua non for prosecution under the 2002 Act, which has been held to be not permissible on notional basis, or on the assumption that the scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending inquiry/trial including by way of a criminal complaint before the competent forum, it is only if the person is finally discharged/acquitted of the scheduled offence, or the criminal case against him is quashed by the court of competent jurisdiction, the predicate offence having come to an end, there can be no offence of money laundering against him or any one claiming such property be linked to the scheduled offence through him. The question whether the subsequent FIR can be subsumed into an existing ECIR also deserve consideration. The term subsumption or subsuming is not defined under the statute, but in the normal parlance, it means to include something or someone. As per Merrium Webster s dictionary, subsume is defined as to include a place within something larger or more comprehensive; encompasses as a sub-ordinate or a component element. The word subsume would therefore be indicative of combining, comprehending, comprising, covering, inserting etc. The pronouncement of law in Vijay M. Chaudhary [ 2022 (7) TMI 1316 - SUPREME COURT ] to the effect that if the person accused of any scheduled offence is finally discharged/acquitted or the criminal case against him, is quashed by the Court of competent jurisdiction, no case of money laundering against him or anyone claiming such property through him, was presented in favour of the petitioners. Admittedly, the ECIR is based on the subject FIR as it contained an accusation against Rosary Education Group, which had obtained loan and secured the loan by mortgaging the property and they deceived the Seva Bank and their shareholders, and the accused persons i.e. Aranhas Group was alleged of amassing illegal wealth to the tune of Rs.11.5 crores as it did not repay the loan of Rs.11.5 crores obtained from Seva Bank against the mortgage property - Section 420 of the IPC being included as a scheduled offence in the Schedule to the PMLA Act, 2002, the subject ECIR was registered. It is now well settled that offence under Section 3 of the Act of 2002, is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence and it is concerning the process or activity connected with such property which constitute the offence of money laundering. The provisions of the Act of 2002, cannot be set into motion, and it do not permit prosecution of any person thereunder on notional basis, or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including filing of a criminal complaint before the competent forum. The grievance of the petitioners do not deserve any consideration. Necessarily, the Writ Petitions filed by different accused, seeking similar relief cannot be entertained. Hence, the Petitions are dismissed.
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2024 (9) TMI 933
Hawala and money laundering - proceeds of crime - locus standi of the petitioner to prefer the Writ Petition - HELD THAT:- The Enforcement Directorate is not an investigating agency stricto sensu. The command and mandate of the Enforcement Directorate under the 2002 Act is to ensure that no person benefits from the proceeds of crime derived out of the commission of a scheduled offence and to see that such property is confiscated to the State. Therefore, in the facts of this case there cannot be any direction issued to consider Ext. P3 which has been filed with a prayer to register a case and arrest certain individuals for that is not the mandate of the Enforcement Directorate. Moreover, the statement filed on behalf of respondents 2 and 3 filed in this case indicates that the Enforcement Directorate has registered an ECIR/KCZO/11/23 in the above matter and the same is being enquired into as well. Thus we see no reason to direct the consideration of Ext. P3. The prayer in Ext. P5 is that suitable action be taken by the State Government under Section 6 of the NIA Act 2008. This is misconceived. A reading of Section 6 of the NIA Act, 2008 shows that the process starts with the registration of an FIR under Section 154 Cr.P.C in respect of an offence set out in the Schedule to the NIA Act, 2008. A reading of Ext. P2 final report indicates that even in the final report there is no indication that any of the offences in the Schedule to the NIA Act, 2008 has been committed. The Writ Petition is liable to be dismissed and is dismissed.
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Service Tax
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2024 (9) TMI 932
Taxability - scope of the expression horticulture activity - HELD THAT:- Having regard to the nature of activities and obligations to be performed by the appellant assessee, we find that the said activities do not come within the scope of the expression horticulture activity . The show cause notice dated 13.10.2010 was rightly issued as against the appellant herein - there are no. merit in the appeal - appeal dismissed.
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2024 (9) TMI 931
Interpretation of Service Tax Mega Exemption N/N. 25/2012 for services provided to the Government Authority - liability of petitioner to pay the service tax for the services provided to the Government Authority - application seeking rectification of mistake by considering the submissions along with the annexure afresh - HELD THAT:- In SANJEEV SURESH DESAI VERSUS UNION OF INDIA AND ORS. [ 2024 (6) TMI 1167 - BOMBAY HIGH COURT] this Court has held that the concerned Appellate Authority cannot be blamed since it did not have the power to condone the delay. It was also recorded in paragraph No.5, that the Court was inclined to exercise it s jurisdiction under Article 226 of the Constitution of India particularly in view of Article 300A of the Constitution of India. We deem it appropriate to adopt the same course. On the merits of the impugned order dated 28.08.2023, passed by Respondent No. 3, as recorded below paragraph Nos. 3 and 4 hereinabove, it is obvious that Respondent No. 3 dismissed the claim of the deceased on the sole ground that adequate documents were not placed on record to indicate that the said Proprietary firm was eligible for an exemption under Clause 12 of the Notification dated 20.06.2012 - It is also recorded in the impugned order that had the Noticee produced the documents in support of the claim for exemption, the matter could have been looked at from that point of view. It was also recorded that the onus of placing such documents on record, lay on the claimant. It was finally recorded that as the relevant documents were not before the said Authority, the claim was rejected. The pending appeal, belatedly filed by the Petitioner on 30.05.2024, shall stand disposed off from the file of the Appellate Court - petition allowed in part.
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2024 (9) TMI 930
Maintainability of appeal - appeal rejected on the ground of non-payment of pre-deposit - HELD THAT:- It is found that factually, the payment of pre-deposit was made on 14.12.2023 and an e-mail was also sent to the appellate authority of the fact payment of pre-deposit, however, the order impugned does not take into consideration the said aspect of pre-deposit having already been made and the Appeal has been rejected. There is a basic error crept in the order impugned. Once the pre-deposit has been made and the same is already accepted, the Appeal could not have been rejected. Merely because the pre-deposit had not been submitted at the time of filing the Appeal, it cannot be said that the pre-deposit cannot be made after filing of the Appeal. The same has been deposited before adjudication and therefore, the appeal is required to be examined on merits. The condition of pre-deposit is to be understood as a pre-requisite for the purpose of adjudication of an appeal. Section 35-F of the Act which requires deposit of certain percentage of duty demanded or penalty imposed before filing of an appeal. Since the pre-deposit has been made in the present case, the appellate authority having knowledge of the pre-deposit already made could not or ought not have dismissed the appeal solely on the ground that at the time of filing of appeal, pre-deposit has not been made. The same has been deposited before adjudication of the appeal. Therefore, the appeal is required to be examined on merits. The impugned order set aside - petition allowed.
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2024 (9) TMI 929
Liability of appellant Shri Bhavik Hitesh Shah to discharge the service tax under the category of Man Power Recruitment and Supply Agency Service for undertaking the work of loading, unloading, sorting, breaking, cutting and casting of brass scrap into billets for M/s Rajhans Metals Private Limited. - HELD THAT:- From the nature of work in the contract and the payment terms against such work and other conditions clearly show that Shri Bhavik Hiteshbhai Shah has not provided the Man Power Recruitment and Supply Agency Service whereas he has undertaken the job of various activities up till the scrap converted into billets, therefore, the activity is amounting to manufacture in terms of Section 2(f) of Central Excise Act, 1944. Merely, because for carrying out the said job work the manpower is deputed that itself does not mean that the appellant have provided the Man Power Recruitment and Supply Agency Service . The appellant have also raised the bill of per KG of material processed by the appellant. From the bill raised by the appellant, it is clear that the rate was charged on the basis of the total weight of the material processed by the appellant. Therefore, the charges are not towards the wages of labour engaged for carrying out the job work. In this fact it is clear that the appellant have not provided any service of Man Power Recruitment and Supply Agency Service. This issue is no longer res-integra as it is directly covered by the various judgments cited by the learned counsel. The demand under Man Power Recruitment and Supply Agency Service is not sustainable - Hence, the impugned order is set aside - Appeals are allowed.
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2024 (9) TMI 928
Proportionate reversal/recovery of CENVAT Credit - unsold flats available on the day of issue of completion/occupancy certificate to the builder - HELD THAT:- There can be no second opinion that credit eligibility is to be examined as on the date receipt of input services and it is not governed by latter development such as portion of property getting converted into immovable property after receipt of completion certificate as could be noticed from para 12 and 14 of the relied upon judgment passed in the case of M/s. Alembic Ltd. Vs. Commissioner of Central Excise and Service Tax, Vadodara I [ 2018 (10) TMI 1557 - CESTAT AHMEDABAD] . Otherwise also going by the provision of law such sale of immovable property having been excluded by statute namely by the Finance Act, 1994, under Section 65B(44) from the definition of service that is apparently done taking the constitutional mandate available under Section 366(29) of the Constitution of India, including the same as a component of exempted service through Explanation-3 added to Rule, 6 of the CENVAT Credit Rules, 2004 can t be said to be a validly legislated rule in view of operation of Section 38A of the Central Excise Act, equally applicable to Service Tax matters as covered under Section 83 of the Finance Act, 1994. The order passed by the Commissioner of GST Central Excise (Appeals Thane), Mumbai is hereby set aside - Appeal allowed.
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2024 (9) TMI 927
Recovery of service tax along with interest and penalty, for the period October 2004 to March 2008 - amounts received by the bank under various Heads like amounts written of; insurance commission; postal charges recovered and miscellaneous income - HELD THAT:- While the first three categorically do not appear to involve any service by the appellants, learned Consultant for the appellants submits that the miscellaneous income is on account of sale of scrap etc. On the whole, the income appears to be revenue income in nature and not a consideration towards any taxable service rendered by the appellants. It is the responsibility of the Revenue to identify the service provider, the service rendered and the remuneration received before proceeding to recover service tax. No such effort has been made. Moreover, the case is made on the basis of the difference between ST-3 Returns and financial records without identifying the service and the remuneration. Under the circumstances, the Show-Cause Notice and the resultant impugned order cannot be legally sustained. The appeal is allowed.
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2024 (9) TMI 926
Levy of service tax - Cargo Handling Service - Cargo Handling Service - Transportation of Ash upto distance of 25 km./31 km. with incidental Loading of Ash (evacuation of Ash) - Extended period of limitation. Cargo Handling Service - Mining Service - HELD THAT:- This issue has been examined by this Tribunal in the case of M/S MAA KALIKA TRANSPORT PRIVATE LIMITED VERSUS COMMISSIONER OF CGST CENTRAL EXCISE, ROURKELA, ROURKELA [ 2023 (7) TMI 435 - CESTAT KOLKATA] , wherein this Tribunal has observed that ' the Appellant was not providing any of the services mentioned above which fall under the category of Cargo Handling Agent Service . Further, we observe that there was no proposal in the Notice to categorize the service rendered by the Appellant as Cargo Handling Agent service . In the impugned order, the adjudicating authority classified the services under the category of Cargo Handling Agent Service on his own.' As the issue has already been settled that the transportation of goods outside the mines, do not qualify under Cargo Handling Service . Therefore, the demand of Rs.14,92,41,316/- has been rightly dropped by the adjudicating authority and the demand of Rs.13,77,14,657/- is also not sustainable under the Cargo Handling Service , which is only transportation of goods agency service. Mining Service - HELD THAT:- The activity undertaken by the assessee, is the transportation of coal up to the distance of 7 km, which is incidental loading and the same is taxable under Transport of Goods by Road Service as held by the Hon ble Supreme Court in the case of Commissioner of Central Excise and Service Tax, Raipur Vs. Singh Transporters [ 2017 (7) TMI 494 - SUPREME COURT ], wherein it has been held that the transportation of coal from pit head to railway siding inside the mines is taxable as Goods Transport Agency Services . Circular No.334/1/2008-TRU dated 29.02.2008, has clarified that the method of charging or invoicing does not in itself determine whether the service is a single service or multiple service. Single price normally suggest single supply though not decisive. The real nature and substance of the transaction and not merely the form of the transaction should be the guiding factor to decide the classification. The classification is to be determined based on essential feature or dominant activities. Thus, the transportation of coal within mines up to the distance of 7 km, falls under the category of Transport of Goods Agency Services and not under the Mining Services - the demand under Mining Service of Rs.10,18,98,846/- is not sustainable against the assessee. Service tax of Rs.3,58,15,811/- is demanded on the differential value of services as provided and the service tax has been confirmed against the assessee - HELD THAT:- The contention of the assessee that the said demand is relating to works contract service , on which the assessee has paid the tax at the rate of 4.12% under composite scheme. Therefore, the said demand is not sustainable against the assessee. The appeal filed by the assessee is allowed and the appeal filed by the Revenue is dismissed.
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2024 (9) TMI 925
Cash refund claim of unutilized Cenvat credit - no correlation between input services utilized and the output services and invoices did not contain the proper description and classification - HELD THAT:- The Department has denied the refund claim solely on the ground that the Appellants were not eligible for taking Cenvat credit for the input services used by them and in some cases, there was no nexus between the input services and output services. In both the cases, the issue is that of taking of Cenvat credit on ineligible services. It is also an admitted fact that no SCN was issued in terms of Rule 14 to recover Cenvat credit on account of such ineligible services. The refund under Rule 5 is filed for the Cenvat credit already taken on record by the Appellant. Only when the refund claim under Rule 5 was filed while scrutinizing the refund claim, this point was raised and part of the refund claim was rejected solely on this ground. This issue is no more res integra. In the case of Qualcomm India Pvt Ltd [ 2019 (8) TMI 1645 - CESTAT HYDERABAD] , this Tribunal has held ' it can be said that taking of Cenvat credit on the disputed services by the appellant is in conformity with the Cenvat statute. Rule 5 ibid nowhere specifies that Cenvat credit can be denied on the ground of irregular availment or utilisation of the same. Thus, in absence of specific provisions contained in the statute, denial of the refund benefit provided under Rule 5 ibid, in our considered opinion, cannot stand for judicial scrutiny.' The facts of the present case call for application of the ratio of the cited case law. Accordingly, the Appellant is eligible for refund claims made by them, which actually have been rejected by the lower authorities on the ground of ineligibility of Cenvat credit. Appeal allowed.
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2024 (9) TMI 924
Violation of principles of Natural Justice - petitioner neither received the Show Cause Notice nor the notices for personal hearings - time limitation - whether in the facts of the case, the order of the Commissioner (Appeals) suffers from any infirmity in deciding the matter by remanding it back to the Original Authority keeping in view of the grounds which were raised by the appellant before the Commissioner (Appeals)? HELD THAT:- The grounds which were raised by the appellant, as discussed in para 4 of the impugned order, covers two broad aspects, firstly, that the demand for the period 2014-15 is time barred and secondly that there is no issue of show cause notice or correspondences etc., as alleged in the Order-in-Original from the Department and therefore there was a clear breach of principles of natural justice in the Order-in- Original. On going through the impugned order, it is found that as far as the first issue is concerned there is a clear finding by the Commissioner (Appeals) that the demand for the period 10/2014 to 06/2017 is not sustainable and therefore, he has set aside the same as time barred. There is no dispute by the Revenue on this issue. Appellant has also taken into account the grounds of non-receiving the letters of personal hearings as well as not getting the show cause notice and has come to the conclusion that there is a merit in appellant s contention that there is a violation of principles of natural justice and therefore the impugned order was set aside. Therefore, on this count also he has given observations and directions. A plain reading of the impugned order would indicate otherwise as in this case it is obvious that first the Adjudicating Authority is required to decide the issue of serving of proper notice on the appellant and thereafter by way of natural justice an opportunity is also to be extended for appellant to produce all the relevant documents in support of their defence. Thereafter, if the show cause notice has not been served in accordance with the law Original Authority would not be able to proceed further and would be bound by the law including various citations relied by the appellant in this regard. There are no infirmity in the order of the Commissioner (Appeals) in remanding the matter back for decision afresh for the period 10/2014 to 06/2017 subject to certain observations and directions - appeal disposed off.
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2024 (9) TMI 923
Failure to discharge appropriate service tax on the construction services provided - Construction of Residential Complex Service - Construction of Commercial or Industrial Construction - extended period of limitation - HELD THAT:-The demand is for the period from October 2006 to March 2011 under Construction of Residential Complex Service and Construction of Commercial or Industrial Complex Service. The Annexure to the Show Cause Notice would show that the appellant has provided both Construction of Residential project as well as Commercial project. The issue as to whether a builder / promoter / developer is liable to pay service tax for construction of residential complexes for the period prior to 01.07.2010 is settled by the decision in the case of M/S KRISHNA HOMES VERSUS CCE, BHOPAL AND CCE, BHOPAL VERSUS M/S RAJ HOMES [ 014 (3) TMI 694 - CESTAT AHMEDABAD ]. This Tribunal has followed the decision in the case of Vijay Shanthi Builders Ltd. Vs. Commissioner of Service Tax [ 2017 (8) TMI 519 - CESTAT CHENNAI] and set aside the demand. In the present case, it is very much clear that the appellant has carried out the construction services as a builder since the undivided share was also sold and thereafter constructions carried out. They have also carried out constructions for the landowner in exchange of the land value. All these would show that the appellant has acted as a builder / promoter / developer for residential projects. The decision rendered by the Tribunal in the above cases would squarely apply and the demand for the period prior to 01.07.2010 under Construction of Residential Complex Services cannot sustain. The same is set aside. Reliance placed in the case of Real Value Promoters Pvt. Ltd. [ 2018 (9) TMI 1149 - CESTAT CHENNAI] . The said decision was followed by the Tribunal in the case of Jain Housing Construction Ltd. Vs. Commissioner of Service Tax [ 2023 (2) TMI 1044 - CESTAT CHENNAI] . In the said case, it was held that demand of service tax under Construction of Residential Complex Services or Commercial or Industrial Construction Services cannot sustain when the works executed are composite in nature. In the present case, it is very much clear that the construction works carried out by the appellant are indivisible contracts which involve both supply of materials as well as rendition of service. In the Show Cause Notice, the Department has allowed abatement under Notification No. 1/2006 which would establish that all the works executed are composite in nature. Following the decision, in the case of Jain Housing Construction Ltd., it is opined that the demand for the entire period cannot sustain being composite contracts. The impugned order is set aside - Appeal allowed.
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2024 (9) TMI 922
CENVAT Credit - trading of securities - investing in mutual funds and securities - appellant has availed common input services for taxable and exempted services (amount received from mutual funds / securities) - period from 2010-11 to 2014-15 - HELD THAT:- As per Section 2 (h) (i) and 2 (h) (id) of the Securities Contract (Regulation) Act, 1956 (42 of 1956), the activity of purchase and sale i.e., trading of units of Mutual Fund Schemes and Equity Share indulged by a taxpayer, is nothing but trading of securities . As goods include securities and trading of goods is an exempted service, the activity of purchase and sale of units of Mutual Fund Schemes and Equity Shares indulged by the appellant, is an exempted service. It can be seen that the appellant is investing their surplus / income in mutual funds. The entire demand is raised on the basis of financial statements of the appellant for the disputed period. A sample of the financial statement for the year 2010-11 has been extracted above. In such financial statement the amount invested in mutual funds is shown under the heading purchase of money market mutual funds . The profit received from sale of mutual funds is shown as proceeds from sale of money market mutual funds . These fall under the main heading cash flow from investing activities . The appellant has no where accounted the income from purchase and sale of securities under the head of trading . In the present case, the appellant has invested their income in shares / mutual funds and also sold certain investments. They have acted like any individual who would invest funds in shares / securities. The appellant is not engaged in the business of trading of shares / securities as provided under Section 105 (zzzzg) of the Act ibid. It requires to be stressed that the activity of engaging in sale and purchase of securities for another is a taxable service under Finance Act, 1994. Only a licensed person or agent can engage in doing such activity of sale and purchase of shares. The department seems to have confused purchase and sale of shares as an investment with the trading of goods as a business - the trading of goods is part of the business of the manufacturer. The appellant is not engaged in the business of trading of shares. In fact it is stated that they have only one portfolio which is investment portfolio. All this goes to establish that appellant is not engaged in trading of goods / securities. The Tribunal M/S. INSTAKART SERVICES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL TAX, BENGALURU [ 2024 (3) TMI 1350 - CESTAT BANGALORE] after detailed discussion has held that the investment income cannot be held to be trading of goods so as to demand 6% value under Rule 6 (3) (iii) of CCR 2004. The demand cannot sustain - the impugned order is set aside - appeal allowed.
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Central Excise
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2024 (9) TMI 921
CENVAT Credit - Refund claim with interest - applicability of time limitation - case of the appellant is that effectively no Central Excise Duty had been claimed from M/s ONGC and Oil India Limited, and in this backdrop, the cenvat credit could not be availed by the purchaser - HELD THAT:- The Hon ble Supreme Court in the case of M/S. SUNRAYS ENGINEERS PVT. LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2015 (4) TMI 122 - SUPREME COURT ] had examined the case of limitation under Section 11B of the Central Excise Act, 1944. The Hon ble Supreme Court was examining a Notification dated 31.10.2000, where the rate of excise duty has been reduced with retrospective effect i.e. w.e.f 01.07.1999. The refund application was made on 19.06.2001. Keeping in view the Notification dated 31.10.2000, the Hon ble Supreme Court held that the trigger point which entitled the authority to refund was 31.10.2000, and the limitation has to be reckoned from the date the Notification has been issued. In the absence of such notification, there was no cause of action in favour of the assessee. Hence, the application moved for refund on 19.06.2001, was within time, and there was no logic in reckoning the limitation from July, 1999, under section 11B of the Central Excise Act, 1944. The ratio of the judgments are applicable in the facts of the present case, in the present case, after the Notification dated 18.04.2013, the DGFT, had no powers to grant the refund and the time taken before that authority could not be made basis to reject the application for refund on the ground of expiry of the limitation. The application in the present case was made on 03.10.2013, and after the Notification dated 18.04.2013, the period of one year would start from the date 18.04.2013, to approach the correct forum for grant of refund i.e. Deputy Commissioner. The period of one year would expire on 18.04.2014, and the appellant had approached the DGFT, Dehradun on 03.10.2013, which was before the expiry of limitation i.e. 18.04.2014. The order passed by the CESTAT, New Delhi is being set aside - Appeal allowed.
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2024 (9) TMI 920
Reversal of CENVAT Credit - Liability to pay an amount equal to 6% upon the difference between the sale price and the purchase price of the goods traded - credit on common input service was availed by appellant - such common service was used in the trading of goods as well as manufactured goods cleared on payment of duty - HELD THAT:- It is found that the demand of CENVAT Credit was raised which is equal to 6% of difference between the purchase price and sale price of trading goods in terms of Rule 6 (3). However, it is also not in dispute that the appellant have reversed the proportionate credit along with payment of interest. Therefore, after such reversal and payment of interest for the delayed period i.e. from the date of taking credit till the date of reversal of proportionate credit the demand equal to 6% under Rule 6 (3) shall not sustain as held in numerous Judgments. The demand is not sustainable. Hence the impugned order is set aside - Appeal allowed.
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2024 (9) TMI 919
Refund of CENVAT credit - upward revision as per the revised ER-1 for the month of June 2017 - refundable under Section 142(9) of the CGST Act, 2017 read with Section 11B of the Central Excise Act, 1944 or not - HELD THAT:- From the facts of the case, it is seen that the appellants had duly followed the procedure and conditions prescribed in complying with the obligations under Cenvat Credit Rules, 2004, and had also complied with in filing revised returns with the department. In terms of legal provisions prescribing the procedure for transitional credit under Section 142(9)(b) of the CGST Act, 2017, when the same is unable to be utilized for further payment of duty/tax, the appellants had applied for refund before the departmental authorities. The main ground on which the refund application of the appellants was held as not entertainable in the impugned order is, that there exists no provision under Rule 5 of the CCR, for cash refund of excess CENVAT credit and therefore the refund in terms of proviso (c) to Section 11B(2) ibid, is not permissible in the case of the appellants - the provisions of Section 142(9)(b) of the CGST Act, is a transitional arrangement wherein it has been specifically provided that such provisions apply as a non-obstanate clause whereby such provisions will have overriding effect, if anything to the contrary is contained under the provisions of existing law i.e., Central Excise Act, 1944, except for the provisions of sub-section (2) of section 11B ibid. Thus, all the conditions of the requirements of Section 11B ibid as it remained under the existing law, other than those relating to Unjust Enrichment clause contained in Section 11B(2) ibid would apply, only if they are not contradictory to the provisions of Section 142(9)(b) of the CGST Act, 2017, in dealing with refund of CENVAT credit . It is reasonable to conclude that when the Central Excise Act, 1944 amongst other laws relating to old tax regime was repealed by Section 174 of the CGST Act, 2017 and that the CCR is also being superseded vide Notification No.20/2017-C.E. (N.T.) dated 30.06.2017, by the Central Government for smooth implementation of transfer to GST regime in indirect taxation, it is found that the provisions of Section 142 of the CGST Act, 2017 are sufficient to provide for the tax administration for sanction of cash refund in circumstances stated therein, and I find that there is no need and it is not legally feasible to make any specific provision in CENVAT statute itself, for enabling cash refund of excess CENVAT credit relating to earlier regime while moving to the new GST regime. The issue of reversal of excess CENVAT credit under the transitional arrangement as provided under Section 142 of CGST Act, 2017 has already been addressed by the Co-ordinate Bench of the Tribunal in the following cases, and it was held that cash refund of such excess CENVAT credit is permissible. There are no merits in the impugned order passed by the learned Commissioner (Appeals) as it does not stand the scrutiny of law. Therefore, by setting aside the impugned order dated 13.01.2020, the appeal is allowed in favour of the appellants.
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2024 (9) TMI 918
Eligibility for benefit of N/N. 21/2002-Cus. dated 01.03.2002 and N/N. 12/2012-Cus. dated 17.03.2012 - parts imported and used in the manufacture of telecom racks - extended period of limitation - penalties. HELD THAT:- From the facts, it is clear that the imported parts classified under different Tariff Headings are used in the manufacture of outdoor cabinets which is called as Telecom Racks by the appellant and the outdoor cabinets are ultimately cleared by the appellant to M/s. Ericsson. The outdoor cabinets are enclosures with doors and panels made to specified dimension and fitted with various items such as fans, filters, cables, etc. They provide necessary cooling, cable entry and electrical connection for the complete function of BTS. The enclosures protects the BTS from dust and rain. It is supplied to M/s. Ericsson India Pvt. Ltd. who in turn mount the outdoor BTS inside the outdoor cabinet and integrated sub racks to generate signals as a Base Trans receiver Station . This Tribunal has considered in Raydean Industries case [ 2022 (4) TMI 1155 - CESTAT NEW DELHI ], the claim of the appellant that Module Mounting Structures whether could be considered as part of Solar Power Generating System . Sl. No.332 of the N/N. 12/2012-Cus. dated 17.03.2012 allowed Non-conventional Energy Device specified in List 8. The appellant claimed the parts as Solar Power Generating System where a specific mention about the parts consumed within the factory and production of such parts for manufacture of the goods specified at Sl. No.1 to 20 has been prescribed. In the instant case the use of imported parts were in the manufacture of Outdoor cabinets, which were cleared to M/s Ericson, who further uses the same in the manufacture and clears it to licensed Telecom service provider to be used as BTS. Needless to mention the principle strict interpretation has to be applied in extending the benefit of an exemption Notification as laid down by the Hon ble Supreme Court in the case of Dilip Kumar and Co. s case [ 2018 (7) TMI 1826 - SUPREME COURT ]. Thus, the appellants are not eligible to the benefit of exemption Notification No.21/2002-Cus. dated 01.03.2002 as amended and Notification No.12/2012-Cus. dated 17.3.2012 for the imported parts, classifiable under various subheading of the Tariff Act, which in turn used in the manufacture of outdoor cabinets/Telecom Racks, which subsequently used by M/s Ericson in the manufacture of BTS to Telecom service provider classifying the same BTS system. Time Limitation - Penalty - HELD THAT:- The appellant has been importing the said materials declaring the description of the goods correctly mentioned as above classifying the same under respective Tariff Heading - no facts was suppressed from the knowledge of the department about import of the said parts and its use in the manufacture of outdoor cabinets/Telecom Racks by the Appellant which had been cleared to M/s Ericson as part of BTS system.; therefore, invoking extended period of limitation in confirming the demand cannot be sustained. Consequently, imposition of penalty on the appellant and personal penalty on individuals also not warranted and accordingly are set aside. Since it is held that the appellants are not eligible to avail the benefit of Notification No. 21/2002 Cus. 12/2012 Cus. with regard to the imported goods used in the manufacture of outdoor cabinet, the application by the appellant in compliance with Condition 5 of the said Notifications read with Import of Goods at Concessional Rate for Manufacture of Excisable Goods (IGCRME) Rules, 1996 has been rightly denied by the lower authorities. The denial of the benefit of the Notification No.21/2002 Cus. 12/2012 Cus. is upheld; the demand for the extended period is set aside and the demand with interest be restricted to the normal period - Appeal allowed.
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Indian Laws
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2024 (9) TMI 917
Dishonour of Cheque - mandatory enquiry in respect of accused person - Rejection of prayer of the petitioner for conducting an enquiry under Section 202 of the CrPC and fixing a date for cross-examination of P.W. 1. Whether the amendment of Section 202 of the Code of Criminal Procedure, 1973 as enacted vide Section 19 of the Criminal Procedure (Amendment) Act, 2005 is mandatory in nature while conducting an enquiry under Section 202 of the CrPC before issuing process under Section 204 of the CrPC to an accused, who resides beyond the territorial jurisdiction of the Court of the Trial Magistrate? - Whether Section 202 of the CrPC is applicable in a case of the Court complaint filed under Sections 138 read with Section 142 of the NI Act, 1881 even supported by an affidavit by the Public Servant? HELD THAT:- It is admitted facts that the petitioner resides beyond the territorial jurisdiction of the Court concerned. There is no dispute with regard to the address. Accordingly, it would be necessary to assert whether the Learned Trial Magistrate should follow the provisions of sub-section (1) of Section 202 of the CrPC and for that this Court relied a judgment placed by the opposite parties passed in S. S. Binu v. State of West Bengal and another [ 2018 (5) TMI 2157 - CALCUTTA HIGH COURT] where the Division Bench observed ' keeping in mind the object sought to be achieved by way of amendment of sub-section (1) of Section 202, Cr.P.C., the nature of enquiry as indicated in Section 19 of the Criminal Procedure (Amendment) Act, 2005, the Magistrate concerned is to ward of false complaints against such persons who reside at far of places with a view to save them for unnecessary harassment and the Learned Magistrate concerned is under obligation to find out if there is any matter which calls for investigation by Criminal Court in the light of the settled principles of law holding an enquiry by way of examining the witnesses produced by the complainant or direct an investigation made by a police officer. This Court finds that the Learned Chief Metropolitan Magistrate has carefully perused the complaint supported by an affidavit and documents, taken cognizance and further transferred the case to Learned Metropolitan Magistrate, 16th Court for enquiry and disposal under Section 192 (1) CrPC - And finally satisfied that there are sufficient grounds for proceeding against the accused person under Section 138 read with Section 142 of the N.I. Act, 1881 and issued summon to the accused person. Moreover, accused person appeared through his learned Advocates. On 12.09.2019, a plea under Section 251 of the Code of Criminal Procedure was taken and the matter was fixed for evidence. The complainant was examined on 04.12.2019 and 20.01.2021 and the matter was fixed for cross-examination. Thereafter, at the stage of cross-examination, the accused person filed petition after more than a year on 05.04.2022 for examination under Section 202 of the CrPC. Revision dismissed.
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2024 (9) TMI 916
Seeking forbearance on respondents 1 to 5 from permitting installation of huge amusement rides by the respondents 11 and 12 or any other persons by damaging the river bed of Vaigai River at Paramakudi by installing huge amusement rides of 48 in number - HELD THAT:- On perusing the reason that has been given by the Public Works Department in the rejection order dated 26.02.2024, it is appealing, because even for drinking water purpose, if water is released from Vaigai dam to Ramanathapuram District, there is a likelihood of flood of water in the Vaigai River. Therefore, if in the River, these kind of amusement activities are taken place by erecting these amusement equipments of nearly about 50 or more, as another person seems to have obtained similar order today from the Writ Court in danger, where it may be for drinking water purpose or even there may be a flash flood due to heavy rain, suddenly if it is taken place, which will be endanger to the public, who participate in the festival by using these amusement equipments. Since the festival is going to be commenced by 20.04.2024, immediate action shall be taken by the respondents, for which, full co-operation shall be given by the private respondents, who want to establish such amusements rides. The afore said arrangement shall be made, as early as possible, preferably, before 22.04.2024. Petition disposed off.
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2024 (9) TMI 915
Seeking rescheduling of the CA Intermediate and Final Examinations to the second week of June, 2024 - Ubi jus ibi remedium - HELD THAT:- Ubi jus, goes the adage, ibi remedium. A remedy can only follow a right. The hope that the law can be a panacea for every difficulty faced by every citizen in this country, though a cherished ideal, must remain, at the end of the day, Utopian. The mere fact that certain individual candidates may face a hardship in undertaking it cannot constitute the basis for this Court to derail the entire CA Intermediate, or Final, examination, which presently is to be undertaken by as many as 4,36,246 candidates. Indeed, this Court is surprised that such a request has even been made. The respondent has taken care to ensure that no examination is held either on the date of elections or on the date immediately prior thereto. The elections are to be held on 7th and 13th May 2024 and there is no examination scheduled for 6th, 7th, 12th or 13th of May 2024. None of the other dates, for which the examinations are scheduled, conflict in any way, or are even proximate, to the dates on which the elections are to be held. The respondent has, therefore, been proactive and ensured that the right of the candidates, who are to undertake the examinations, to cast their votes, is not affected by conducting of the examinations. The scheduling of the examination has been so done as to ensure that an individual candidate is able, should she so desire, to cast her vote and undertake the examination. No more can be expected of the respondent. It is for the individual candidates now to work out their schedules, and adjust their itineraries accordingly. The petitioners are less than fair to the security administration in place, in their rather bleak prediction that there is likely to be chaos, commotion and violence during elections. General elections are periodically held, and the Court has, given past experience, no reason what so ever to doubt the capacity, or the capability, of the security machinery in place, to ensure that the elections take place in a free and fair atmosphere. The comparison between candidates who are undertaking the examination this year and those who undertook the examination in other years when there were no elections, is completely alien to Article 14. They are neither identically, nor even similarly, situated. Article 14 forbids discrimination amongst equals, not unequals. No plea of discrimination can be based on a comparison between candidates undertaking examinations during election year and others. Else, there would have to be an absolute proscription on holding of examinations during election year altogether. The plea of violation of Article 21 is based on the prediction, of the petitioners, that the entire nation is bound to be in a state of turmoil during elections. There is no basis for this presumption. It is clear on the face of it that this petition is completely bereft of substance. The petition is accordingly dismissed.
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