Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 20, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
News
Notifications
FEMA
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F.No.K-11022/ 45 /2018-Ad.ED - S.O. 4794 (E) - dated
12-9-2018
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FEMA
Seeks to amend Notification No. S.O. 534(E), dated the 1st June, 2000
GST - States
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35/2018 –State Tax - dated
6-9-2018
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Delhi SGST
Seeks to extend the due date for filing of FORM GSTR-3B for the month of July, 2018
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F.1-11(91)-TAX/GST/2018(Part) - dated
14-9-2018
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Tripura SGST
Notification regarding seeks to bring section 52 of the TSGST Act (provisions related to TCS) into force w.e.f 01.10.2018
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F.1-11(91)-TAX/GST/2018(Part) - dated
14-9-2018
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Tripura SGST
Notification regarding seeks to bring section 51 of the TSGST Act (provisions related to TDS) into force w.e.f 01.10.2018
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F.1-11(91)-TAX/GST/2018(Part) - dated
14-9-2018
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Tripura SGST
Tripura State Goods and Services Tax (Tenth Amendment) Rules, 2018
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F.1-11(91)-TAX/GST/2018 - dated
11-9-2018
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Tripura SGST
Tripura State Goods and Services Tax (Ninth Amendment) Rules, 2018
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F.1-11(91)-TAX/GST/2018 - dated
11-9-2018
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Tripura SGST
Notification regarding extension of due date for filing of FORM GSTR - 3B for newly migrated (obtaining GSTIN vide Gazette notification No. 564, dated 08.08.2018) taxpayers [Amends Gazette notf. No. 582]
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F.1-11(91)-TAX/GST/2018 - dated
11-9-2018
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Tripura SGST
Notification regarding extension of due date for filing of FORM GSTR - 3B for newly migrated (obtaining GSTIN vide Gazette notification No. 564, dated 08.08.2018) taxpayers [Amends Gazette notf. No. 332 and 86]
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F.1-11(91)-TAX/GST/2018 - dated
11-9-2018
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Tripura SGST
Notification regarding extension of due date for filing of FORM GSTR - 3B for newly migrated (obtaining GSTIN vide Gazette notification No. 564, dated 08.08.2018) taxpayers [Amends Gazette notf. No. 291 and 430]
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F.1-11(91)-TAX/GST/2018 - dated
11-9-2018
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Tripura SGST
Notification regarding extension of due date for filing of FORM GSTR - 1 for taxpayers having aggregate turnover up to ₹ 1.5 crores
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F.1-11(91)-TAX/GST/2018 - dated
4-9-2018
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Tripura SGST
Notification regarding waiving of late fee paid under section 47 of the TSGST Act, 2017
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F.1-11(91)-TAX/GST/2018 - dated
4-9-2018
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Tripura SGST
Tripura State Goods and Services Tax (Eighth Amendment) Rules, 2018
Income Tax
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52/2018 - dated
14-9-2018
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IT
U/s 10(46) of the Income-tax Act, 1961 Central Government notifies ‘Tamil Nadu Water Supply and Drainage Board’, a board constituted under the Tamil Nadu Water Supply and Drainage Board Act, 1970 (Tamil Nadu Act 4 of 1971), in respect of the specified income arising to that board
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51/2018 - dated
14-9-2018
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IT
U/s 10(46) of the Income-tax Act, 1961 Central Government notifies ‘Jharkhand State Electricity Regulatory Commission’, Ranchi, a commission constituted by the State government of Jharkhand, in respect of the specified income arising to the said Commission
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Anti-profiteering - Failure to pass on the benefit of Input tax credit - Construction service - assessee directed to reduce the price to be realized from the buyers of the flats in commensurate with the benefit of ITC received by him - Amount directed to be returned to the buyers with interest @18%
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Whether the activity of supply and installation of ‘car parking system’ would qualify as immovable property and thereby ‘works contract’ as defined in Section 2(119) of the CGST Act? - Held Yes - Once made operational the ‘car parking system’ obtains a state of permanency. It is not such as can be easily removed from the existing place and put into place at some other location.
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Classification of goods - marine paints - these consumable items are consumed and lost and cannot be reused and are also not worth recovery, reuse or recycle for use on ship - Marine Paint should not be considered as a part of Ship.
Income Tax
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Validity of revised return - delay in filing ROI - It is a settled position of law through various judicial pronouncements and section 10 of General Clauses Act and also by Board’s Circular that if the last day of filing of return happens to be a holiday, the return can be filed on next working day.
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Addition u/s 68 on account of claim of gifts - mere claim of gift would not fall in the ambit of provisions of section 56(2)(vii) - when the assessee has failed to establish the claim of gift then the said amount has to be added as unexplained cash credit under section 68.
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Disallowance of depreciation on sumo car - addition to the presumptive income declared u/s 44AD - AO could have estimated the income of the assessee if it was found to be less than as ought to have been under the provisions of section 44AD of the Act - Additions deleted.
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Levy of late filing fees u/s 234E - TDS returns - adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A.
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Protective addition - Addition of undisclosed income (on money consideration received by the assessee) - no similar addition was made in the hands of partners in their individual accounts - assessee firm was merely a confirming party and no consideration was received by the assessee firm - ITAT has correctly deleted the additions.
Customs
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Concessional rate of BCD - N/N. 12/2012 – capacity expansion of an existing Caustic Soda unit - The adjudicating authority has only concentrated on the first limb of the Notification, namely, modernization by using Membrane Cell Technology and he has ignored the second limb, namely, capacity expansion.
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Demand of Special Additional Duty (SAD) by debiting the DFCE scrips instead of in cash - If the appellant had been put to notice while debiting in the DFCE scrips, he would have opted to pay the SAD by cash itself. Instead, after a period of almost four months, the Show Cause Notice has been issued alleging short payment of duty.
Service Tax
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Business Auxiliary Service - the process of galvanization will stay out of the purview of Business Auxiliary Services, because, by definition, the BAS specifically excludes the activity of manufacture.
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Especially when there was confusion on this issue, nothing prevented the Department from having issued Show Cause Notices at regular intervals for the normal period of limitation. - The demand in this case is restricted to the normal period of limitation from the date of issue of Show Cause Notice, with interest liability as applicable - there shall be no penalty.
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Business Auxiliary Service or not - Advertising Services - taxability of amount of Discount received - assessee passed on a portion of the discount received to respective clients and the service tax was remitted by the assessee on the amount retained - Demand set aside.
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Refund claim - relevant date - In respect of export of services, the relevant date for purposes of deciding the time limit for consideration of refund claims under Rule 5 of the CCR may be taken as the end of the quarter in which the FIRC is received, in cases where the refund claims are filed on a quarterly basis.
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Nature of Services rendered by appellant - it was the obligation of appellants only to supply/provide all equipments, materials, labour and other facilities requisite for and incidental to the successful completion of the works and in carrying out all duties and obligations imposed by the contract documents - thus, the contract is composite in nature rather being the contract for service simpliciter.
Central Excise
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Principles of Natural Justice. - the orders of the original authority in these cases are found to be more or less a reproduction of the allegations contained in the respective show cause notices and a mechanical confirmation of the proposals made therein.
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Confirmation of demand beyond the scope of Show Cause Notice (SCN) - Reversal of Cenvat Credit - The adjudicating authorities have surely changed the goal post to a proposition which was not at all presented in the SCNs. On this very ground, the impugned orders will suffer from infirmity. - Demand Set aside.
Case Laws:
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GST
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2018 (9) TMI 1107
Anti-profiteering action - Failure to pass on the benefit of Input tax credit - Construction service - migration to GST Scheme - non-compliance of the provisions of Section 171 - Held that:- It is absolutely clear that the excess ITC was available to the Respondent the benefit of which he was required to pass on to the Applicants. The Respondent cannot appropriate this benefit as this is a concession given by the Government from it’s own tax revenue to reduce the prices being charged by the builders from the vulnerable section of society which cannot afford high value apartments. The Respondent is not being asked to extend this benefit out of his own account and he is only liable to pass on the benefit of ITC to which he has become entitled by virtue of the grant of ITC on the Construction Service by the Government. Profiteering - calculation based on turnover - the Applicants had disputed these calculations and submitted that the actual benefit that the Respondent has to pass on to all of them was to the extent of 6.1% for both the periods when the tax was levied @ 12% as well as when the tax was levied at @ 8% - Held that:- The Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent shall reduce the price to be realized from the buyers of the flats in commensurate with the benefit of ITC received by him as has been detailed above. Since the present investigation is only up to 28.02.2018 any benefit of ITC which shall accrue subsequently shall also be passed on to the buyers by the Respondent. He shall not only pass on the benefit as has been mentioned above to the 109 Applicants who are before us but to all the 2476 buyers as they are identifiable. Respondent is further directed to refund or reduce the amount, to the extent calculated above to each and every buyer at the time of collecting the last installment along with the interest @ 18% per annum to be calculated from the date of the receipt of the excess amount from each buyer, within a period of 3 months from the date of receipt of this order. It is evident from the above that the Respondent has denied benefit of ITC to the buyers of the flats being constructed by him under the above Policy in contravention of the provisions of Section 171(1) of the CGST Act, 2017 and has thus realized more price from them than he was entitled to collect and has also compelled them to pay more GST than that they were required to pay by issuing incorrect tax invoices and hence he has committed an offence under section 122 (1) (i) of the CGST Act, 2017 and therefore, he is liable for imposition of penalty. The Authority, as per Rule 136 of the CGST Rules 2017 directs the Commissioner of State Tax Haryana to monitor this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondent as ordered by the Authority is passed on to the all the buyers. A report in compliance of this order shall be submitted to this Authority by the Commissioner within a period of 4 months from the date of receipt of this order. Application disposed off.
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2018 (9) TMI 1106
Works contract - immovable property or not? - supply and installation of ‘car parking system’ - Whether the activity of supply and installation of ‘car parking system’ would qualify as immovable property and thereby ‘works contract’ as defined in Section 2(119) of the CGST Act? Held that:- The ‘car parking system’ is not supplied as chattel qua chattel. It is not brought as an identifiable set of goods. Dismantling one whole, to be assembled later, for the sake of convenience or transportation is one category where there is simple assembling without no further activity critical to the assembling - The other category is that various items are carried to be assembled and which require various steps of activities to be performed on these items and only after which it is possible that they can be assembled. Even without going into the activities that go into the making, we can infer that the impugned activity is such that the car parking system cannot be said to be supplied unless substantial work is carried out at the site where the same is to be installed. Rather whatever structure or item is brought to the site wouldn’t serve any purpose unless the same is fitted, commissioned and made working. And for this, several activities are needed to be carried out at the site. The site would, of course, be an immovable property such as a building. Or it could be a standalone structure for car parking. Whatever be it, the system is to be aligned to the immovable structure by way of support system. It is not the case that in case it is desired to do away with it, one can remove the system and put it into place AS IT IS at another location. The removal would always involve a total dismantling which cannot be without loss or damage. Bombay High Court in the case of M/S. BHARTI AIRTEL LTD. (EARLIER KNOWN AS BHARTI TELE-VENTURES LTD.) VERSUS THE COMMISSIONER OF CENTRAL EXCISE [2014 (9) TMI 38 - BOMBAY HIGH COURT] in relattion to tower parts, green shelter, printers and office chairs, have held that the product cannot be shifted without damage. Apart from that various items and components are embedded in the earth. The product,therefore, is immovable. Thus, it is concluded that The impugned car parking system, be it installed on a vacant plot of land or in a building, does not result into supply as chattel. In fact, before installation, there can be no goods as such which could be called a ‘car parking system’ - The system requires substantial work to be done at the site to be called a ‘car parking system’ - Once made operational the ‘car parking system’ obtains a state of permanency. It is not such as can be easily removed from the existing place and put into place at some other location - The definition of “works contract” under the GST Act is in relation to immovable property. Thus, the transaction of supply and installation of a ‘car parking system’ would qualify as immovable property and thereby ‘works contract’ as defined in Section 2(119) of the CGST Act. Ruling: The transaction of supply and installation of a ‘car parking system’ would qualify as immovable property and thereby ‘works contract’ as defined in Section 2(119) of the CGST Act.
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2018 (9) TMI 1105
Classification of goods - marine paints - Whether marine paints supplied by the applicant, would be considered to be part of ship and accordingly be then classified under SI no 252 of Schedule I of Notification No 1/2017 of Central Tax (Rates) dated June 28, 2017? Held that:- here is no dispute with regard to classification of the subject goods under CTH 3208 and 3209. The difference of opinion is only with respect to the claim of the applicant that the goods are parts of ship and therefore would be eligible for concessional rate of IGST @ 5% as given under Sr. No. 252 of Schedule -I of Notification No. 1/2017 of Integrated Tax (Rates). The benefit of concessional rate of IGST @5% is available to parts of goods of headings 8901, 8902, 8904,8905,8906 and 8907 - it is very apparent that parts of goods of Heading 8901, 8902, 8904, 8905, 8906 and 8907 are eligible for concessional rate of IGST @ 5%. Anchor, Bow, Bowsprit, Fore and Aft, Hull, Keel, Mast, Rigging, Rudder, Sails, Shrouds, Engines, gearbox, Propeller, Bridge, etc. are the very essential parts of a ship or vessel and are quite clearly parts of a vessel/ ship and a ship cannot be imagined to be in existence without these parts - in addition, there are some additional equipments that are required to be made available on a ship as a measure of statutory compliances under various marine acts such as Merchant Shipping Act or Additional Safety measures such as Walkie-talkie, Binoculars, Life Jackets, Lifeboats, etc. Though these are also to be compulsorily made available on a vessel and ship but cannot be taken to be parts of a ship as per general understanding but are rather additional equipments on a ship - also, other essential items like furniture, fans, air-conditioners, television, etc which are very essential for comfort of officers and crew of the ship but do not come under essential parts or equipments of a vessel/ship. The items that are discussed as essential parts of a ship/ vessel are such essential components of a vessel/ ship without which the ship would not be complete and would not exist. These are very integral for the functioning of the ship and can be separated from the ship for repair/replacement. There are various consumable items like paints varnish, oils, grease, etc. which are essentially applied and used in or on all or most of these essential ship parts as discussed above to make them tenable, durable and worthy of the ocean. Once applied, these consumable items are consumed and lost and cannot be reused and are also not worth recovery, reuse or recycle for use on ship. Considering the meaning of an expression (Part) as defined in the dictionary, besides common parlance test it can be safely concluded that Marine Paint is not a component part of Ship. This conclusion which we have drawn as above gets support from the facts stated by the appellant and detailed discussions above as per which marine paints are clearly consumable items and not parts. Marine Paint should not be considered as a part of Ship and are not covered under Serial No.252 of Schedule I of Notification No. 1/2017 of Central Tax(Rates) Dated June 28,2017. Ruling:- Marine Paint should not be considered as a part of Ship and are not covered under Serial No.252 of Schedule I of Notification No. 1/2017 of Central Tax(Rates) Dated June 28, 2017.
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Income Tax
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2018 (9) TMI 1104
Eligibility to registration under Section 12A - whether activities of Development Authority can be said to be 'charitable' as defined under Section 2(15)? - Held that:- Application is dismissed.
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2018 (9) TMI 1103
Maintainability of appeal - Tax effect - monetary limit - Miscellaneous petition was filed by the Revenue before the Tribunal on the ground that Circular No.21/2015 of the Central Board of Direct Taxes is not applicable to the appeal filed by the Revenue - Held that:- Special Leave Petition is dismissed
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2018 (9) TMI 1102
Determination of value of asset - whether assessment would have to be done on the basis of the value of assets as on 1st April 2011 when partnership firm was constituted or revalued value of assets? - what was the value of the assets as on 1st April 2011? - maintainability of appeal - substantial question of law - Held that:- SLP dismissed.
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2018 (9) TMI 1101
Nature of sale of land - whether plot of land is agricultural land or non agricultural land - maintainability of appeal - Held that:- SLP dismissed.
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2018 (9) TMI 1100
Reopening of assessment - denying carry forward of unabsorbed depreciation - Book profit determined as per section 115JB(2) on account of non-eligibility of bad debts provision - Held that:- SLP dismissed.
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2018 (9) TMI 1098
Attachment of properties by the Tax Recovery Officer exercising power u/s 222(1) - grievance of the petitioner is that out of nine items, when Item Nos.1 to 7 are sufficient enough to safeguard the interest of the Revenue, as the value of those properties exceeds more than ₹ 2 crores as per the market value, attaching the other two sets of properties viz., item Nos.8 and 9, is totally unnecessary - Held that:- Petitioner has already made a representation before the third respondent on 20.08.2018, ventilating the above said grievances. It is seen that the said representation is still pending and not disposed of. Therefore, it is for the third respondent to consider the said representation and pass orders taking note of the facts and circumstances and the documents filed by the petitioner in support of such contentions. The petitioner shall furnish a copy of the said representation to the third respondent along with the copy of the order passed in this writ petition. Writ petition is disposed of only by directing the third respondent to consider the said representation of the petitioner dated 20.08.2018 and pass orders on the same on merits and in accordance with law within a period of two weeks from the date of receipt of a copy of this order.
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2018 (9) TMI 1097
Registration u/s 12AA denied - assessee trust is not a charitable organization, as the Trust has not fulfilled the conditions laid down for registration in Section 12AA - ITAT allowed claim - Held that:- We are in broad agreement with the view of the Tribunal. We have noted existing objects as well as those which were added by an amendment in the trust deed. The objects in the original trust deed were sufficiently wide and cover range of charitable activities relateable to education, medical aid and help to poor in times of calamities. The existing objects would have enabled the Trust to support the diagnostic center as long as it was done for charitable purpose. The amended objects clarify that such center would be run on no charge, or at any rate on no profit basis. It is difficult to see how the Commissioner thought such center would be a commercial venture. - Decided against revenue
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2018 (9) TMI 1096
Denying the benefits of section 11 and 12 - proof of charitable activities - adherence to charitable objects - Held that:- The issues / questions raised in the present Appeals are concluded against the Department, in view of the decision of the Division Bench of this Court in the case of Commissioner of Income Tax vs. Gujarat Industrial Development Corporation [2017 (7) TMI 811 - GUJARAT HIGH COURT], in the case of the very assessee, but with respect to the earlier assessment years as held that considering the objects and purpose for which the assessee-Corporation is established and constituted under the provisions of the Gujarat Industrial Development Act, 1962 and collection of fees or cess is incidental to the object and purpose of the Act, and even the case would not fall under the second part of proviso to Section 2 [15] of the IT Act. As the activities of the assessee is for advancement of any other object of general public utility, the same can be for “charitable purpose” - decided in favour of assessee
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2018 (9) TMI 1095
Protective addition - Addition of undisclosed income (on money consideration received by the assessee) - addition made on the ground that the assessee firm signed in the sale deed as confirming party, which, as such, was between the partners of the assessee firm in their individual capacity - Tribunal deleting the addition on the ground that no material has been brought on record in respect of the assessment made - survey under Section 133A - Held that:- The assessee firm was merely a confirming party and no consideration was received by the assessee firm with respect to the transaction of transfer of certain lands and that the transaction was in favour of the partners of the firm in their individual capacity and that no similar addition was made in the hands of those partners in their individual accounts and that as such, the addition was made by the Assessing Officer in hands of the assessee as “protective addition”, it cannot be said that the learned Tribunal has committed any error in deleting the addition made by the Assessing Officer on account of alleged on money consideration received by the assessee firm. We are in complete agreement with the view taken by the learned Tribunal.- decided against revenue
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2018 (9) TMI 1094
Allowability of software expenditure - to be treated as a revenue expenditure OR capital expenditure - nature of the advantage in a commercial sense - Held that:- As held in Empire Jute Co. Ltd. v. CIT, [1980 (5) TMI 1 - SUPREME COURT] there may be cases where expenditure, even if incurred for obtaining advantage, of enduring benefit, may, none-the-less, be on revenue account and the test of enduring benefit may break down - what is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage is in the capital field that the expenditure would be disallowable on an application of this test. If the advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the assessee's business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future. We are inclined to accept the submission made by the assessee before the Tribunal that in view of the advanced technology software become obsolete within short intervals. Therefore, the Tribunal rightly applied the decision in the case of Southern Roadways Ltd. [2007 (6) TMI 193 - MADRAS HIGH COURT] - tribunal was right in holding that software expenditure is to be treated as a revenue expenditure - Decided in favour of assessee
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2018 (9) TMI 1093
Penalty u/s 271(l)(c) - non recording of mandatory “satisfaction” as per law - Held that:- The original assessment order passed u/s 143(3)/147 has been partially confirmed by the CIT(A) and addition of ₹ 20,40,399/- was deleted. Thus, the penalty for original assessment order does not sustain in toto but partially. Therefore, it will be appropriate to remand back this issue to the file of the Assessing Officer as there is no order giving effect to the CIT(A)’s order. The matter is remanded back to the file of the Assessing Officer. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice - Appeal of the assessee is partly allowed for statistical purpose.
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2018 (9) TMI 1092
Levy of late filing fees u/s 234E - intimation issued under section 200A in respect of processing of TDS - Held that:- We find that the issue in all these appeals is now squarely covered in favour of the assessee by the decision of ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT [2015 (6) TMI 437 - ITAT AMRITSAR] adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A. The impugned levy of fees under section 234E is unsustainable in law. We, therefore, delete the impugned levy of fee under section 234E of the Act. - Decided in favour of assessee.
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2018 (9) TMI 1091
Validity of assessment being beyond jurisdiction of the AO - addition u/s 68 and 69 - Held that:- CIT (A) has considered the fact that the additions made by the AO are only with respect to the unexplained source of addition to the capital account and, therefore, the AO has not travelled beyond the scope of selected scrutiny. Even otherwise, when the assessee can challenge the further addition made by the AO which is beyond the scope of limited scrutiny and, therefore, such addition made by the AO would not nullify the entire assessment proceedings when the jurisdiction assumed by the AO by issuing the notice under section 143(2) was one of the issues in the assessment. When the ld. CIT (A) has finally deleted the addition made by the AO, then this issue does not germane to the present proceedings. Addition on account of gift - assessee has claimed the gift of ₹ 8,00,000/- received from Smt. Poonaj Kanjani stated to be the Aunt of the assessee and non-resident Indian based at UAE - Held that:- We find that the AO has raised the pertinent objection regarding the claim of gift received from Smt. Poonam Kanjani and assessee has failed to satisfy the requirement as per the provisions of section 68 of the Act. Accordingly, we do not find any error or illegality in the impugned orders of the authorities below. - Decided against assessee
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2018 (9) TMI 1090
Disallowance of depreciation on sumo car - addition to the presumptive income declared u/s 44AD - Additions on the ground that vehicle was not put to use for his business purposes during the previous year - Held that:- The assessee has declared the profit @ 17.46% and the AO has not found fault in the profit declared by the assessee under section 44AD. The profit declared by the assessee is much more than the minimum income to be assessed under the provisions of section 44AD at 8%. Accordingly when the assessee has filed return of income declaring income under section 44AD then the AO could have estimated the income of the assessee if it was found to be less than as ought to have been under the provisions of section 44AD of the Act. Hence the addition made by the AO in the income declared under section 44AD is not justified and the same is deleted. Addition u/s 68 on account of claim of gifts - Held that:- In a case where the AO has accepted the claim of gift then in such a situation the gift received to the extent of ₹ 50,000/- cannot be added to the income of the assessee as per the provisions of section 56(2)(vii). In the case in hand the claim of the assessee that the said amount of ₹ 44,370/- is the gift received by the assessee from various persons/relatives has not been established either by furnishing any evidence or any details or explanation, therefore, a mere claim of gift would not fall in the ambit of provisions of section 56(2)(vii). Therefore, when the assessee has failed to establish the claim of gift then the said amount has to be added as unexplained cash credit under section 68. Accordingly, we do not find any error or illegality in the orders of the authorities below, qua this issue. Disallowance of depreciation on JCB - Held that:- It is not the case of the A.O. that the assessee has not used the JCB for the business purposes and further when the assessee has received the hire charges from use of JCB during the year under consideration, then the mere delay in registration would not negate the fact of use of JCB by the assessee. It is pertinent to note that the JCB is not a transportation vehicle but a machine used in digging and other excavation of work and, therefore, practically it is possible to use the JCB without getting the registration. Further, when the registration was granted with a penalty on account of delay in registration, the said defect was removed by paying the penalty and accordingly the claim of depreciation on the JCB cannot be disallowed. In view of the above facts and circumstances of the case, we allow the claim of depreciation on JCB.
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2018 (9) TMI 1089
Treating the income from warehousing structure - income from business OR income from house property - Held that:- As decided in assessee’s own case for the A.Ys 2000-01 to 2005- 06 and 2008-09 referring to the case of RB Jodhamal Kuthalia [1971 (9) TMI 2 - SUPREME COURT] income derived from warehousing charges are ‘income from business’. The ld. DR did not controvert the above submissions and placed no order contrary to the said order of ITAT, Kolkata. - Decided against revenue
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2018 (9) TMI 1088
TPA - ALP determination - comparable selection criteria - Held that:- Companies not suitable to be compared with a captive contract software developer like the assessee need to deselected rom final list of comparable. Treatment of forex adjustment - revenue or capital expense - Held that:- Since the issue is no longer res Integra while respectfully following the binding decision of the Special bench in the case of Prakash Shah [2008 (8) TMI 387 - ITAT BOMBAY-K] and other decisions, we hold that the foreign exchange loss or gain arising out of the transaction of revenue nature has to be considered as part of operating profit/cost. We, therefore, set aside the impugned order and remit the matter to the file of AO/TPO for reconsideration of the ALP afresh Adjustment on account of advance billing - Held that:- As decided in assessee's own case for Asstt. Year 2008-09 issue to be decided in favour of assessee. Adjustment on account of business promotion and conference - Held that:- These business promotion expenses were incurred wholly and exclusively for the purpose of business and were necessitated in view of commercial expediency and are earned year after year. Hence, it is correctly prayed that the same may be allowed as business expenses u/s 37 of the Act - Decided in favour of assessee.
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2018 (9) TMI 1087
Invocation of section 50C - adopting value of the property as per SRO by considering section 50C on the date of registration - Held that:- The assessee has sold a piece of land on 07/08/2008, and as on the date of registration, the SRO value of the property is ₹ 31,10,000/-. However, the assessee has only shown as a sale consideration received by her at ₹ 25.00 lakhs. When AO asked the assessee to explain, it was submitted that actual registration has took-place on 31/07/2008 as there was some dispute and therefore, the higher value cannot be accepted. The assessee neither filed any supportive evidence before the Assessing Officer nor before the CIT(A). Even before the Tribunal except stating that sale consideration was received on 31/07/2008 as there is a dispute in respect of property, but not filed any such details. Therefore, the authorities below have adopted the value of the property as per SRO by considering section 50C on the date of registration. No infirmity in the order of the CIT(A). - Decided against assessee. Disallowance of development expenses - addition as no evidence is filed - Held that:- On appeal, ld. CIT(A) has considered 1.00 lakh for improvement of the property and directed the Assessing Officer to re-compute the capital gains. We find no infirmity in the direction of the ld. CIT(A) to re-compute the capital gains. Thus, this ground of appeal raised by the assessee is dismissed.
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2018 (9) TMI 1086
Unexplained expenditure u/s 69C - N.P. estimation - Held that:- The assessee could not substantiate the delivery of material and failed to produce any of the party for confirmation of accounts. Notices issued u/s 133(6) elicited no satisfactory response. All these factors cast a serious doubt on assessee’s claim. Therefore, in such a situation, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize for profit earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against such bogus purchases. Therefore, on factual matrix, a composite addition @12.5% of bogus purchase, in our opinion, would be a reasonable estimation of additions - Decided partly in favour of assessee
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2018 (9) TMI 1085
Validity of revised return - delay in filing ROI - return filed on the next working day as the last date of filing of return happens to be a holiday - Held that:- Last date of filing of the return as per section 139(1) of the Act was 30.09.2012 and that was a holiday being Sunday. The return was filed on 01.10.2012, the next working day i.e., Monday. It is also an undisputed fact that it was made compulsory for the assessee for the first time to file the return online and for online filing there was no barrier of any holidays. It can be uploaded at any point of time. It is a settled position of law through various judicial pronouncements and section 10 of General Clauses Act and also by Board’s Circular that if the last day of filing of return happens to be a holiday, the return can be filed on next working day. In the instant case, undisputedly, the return was filed on the next working day on 01.10.2012 as the last day of filing of return happens to be a holiday i.e., Sunday. In the absence of clear notification by the Board or the Government, the public cannot be held to be responsible for the delay in filing of the return on income if it is filed on the next working day as the last date of filing of the return was a holiday. Under these circumstances, we are of the considered opinion that the return filed on the next working day if the last date of filing of return happens to be a holiday, would be a valid return. Disallowance of other expenditures are concerned, we find that AO, without pointing out any specific defects in the maintenance of books of accounts, has made ad-hoc addition of ₹ 20,00,000/- for want of supporting vouchers. Whereas the assessee has produced the vouchers of various expenditures incurred by the assessee during the course of hearing before the CIT(A). The CIT(A) has examined the issue in the light of business of the assessee and the nature of expenditure incurred by it and keeping in view the totality of the facts he restricted additions to the extent of ₹ 1,00,000/-. During the course of hearing, the learned DR did not point out specific expenditures which requires proper verification by the AO.Since the CIT(A) has properly examined the issue in the light of evidences placed before him, we find no infirmity in his order. We accordingly confirm the order of the CIT(A) in this regard. - Decided against revenue
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2018 (9) TMI 1045
Reopening of assessment - the reassessment proceedings were initiated against the petitioner- company for Assessment Year 2000-01 under Sections 147/148 of the Act by issuance of Notice vide Annexure ‘A’ dated 19.12.2007 to which the Assessee filed its objections on 23.01.2008 vide Annexure ‘D’ which objections were however rejected by the Assessing Authority vide Annexure ‘B’ on 19.02.2008 and aggrieved by the same, the Assessee preferred this writ petition. Held that:- A Co-ordinate Bench of this Court had stayed the further proceedings vide order dated 28.07.2008, which interim order was extended from time to time and is still continuing. In view of our aforesaid judgment rendered in connected ITAs as quoted above, the present writ petition is disposed of with a liberty to the asses sing authority to undertake the said reassessment proceedings now and leaving it free for the Assessee to raise the objections within the parameters of interpretation given by us vide aforesaid Judgment quoted above before the said Assessing Authority in accordance with law.
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Customs
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2018 (9) TMI 1082
Valuation of imported goods - polished small size cutter marble slabs - enhancement of value - revision of value under rule 7(2) of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 - Held that:- It is seen that the imports, though effected in 2002, were sought to be saddled with differential duty of ₹ 18,50,556/- by recourse to a market survey that was conducted on a date not in conformity with the prescription in Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. Accordingly, the enhancement of value does not stand the test of law in consequence of which the impugned order is set aside - appeal allowed.
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2018 (9) TMI 1081
Demand of Special Additional Duty (SAD) in cash - case of appellant is that SAD, has to be paid in cash and cannot be paid by debiting the DFCE scrips - N/N. 53/2003 - allegation of the Department is that since the appellants have not paid it by cash, there is short payment of duty - Held that:- Once the duty has been paid by debiting in the same, the appellant has suffered duty. Only the manner of payment of duty is not in accordance with law. If the appellant had been put to notice while debiting in the DFCE scrips, he would have opted to pay the SAD by cash itself. Instead, after a period of almost four months, the Show Cause Notice has been issued alleging short payment of duty. There is only error in the manner of payment of duty. For this reason, the appellant cannot be called upon to pay duty for the second time - Demand cannot sustain - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1080
Interest on delayed refund - EPCG Scheme - N/N. 28/97-Cus dated 01.04.1997 - Held that:- Hon’ble High Court of Karnataka in the case of C.C., Airport & ACC. Bangalore Vs. Pfizer Products India P. Ltd. [2015 (9) TMI 34 - KARNATAKA HIGH COURT] while considering a similar issue, has felt it proper to direct the Department to pay an additional interest at the rate of 9% per annum. The appellant is entitled for interest on refund as claimed but however, the same is subject to conditions of Section 27A and the Notifications issued by the Government - adjudicating authority is therefore directed to ascertain such Notifications available till the date of passing the consequential order and compute the interest at the prescribed rates for the period involved in the case on hand - Appeal allowed by way of remand.
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2018 (9) TMI 1079
Jurisdiction - power of DRI to issue SCN - Held that:- As no judgement of the jurisdictional High Court or any other higher appellate forum has been produced to us disallowing remand of such matters, both the appeals represented by the Ld. Advocate are being remanded to the original adjudicating authority to await final outcome of the matter in RE: Mangali Impex [2016 (9) TMI 1464 - SUPREME COURT] pending in the Hon’ble Apex Court - appeal allowed by way of remand.
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2018 (9) TMI 1078
Concessional rate of BCD - N/N. 12/2012 – Cus. Dt. 17.03.2013 - import of New 150 MT/day as NaOH 100% Evaporation Plant for concentration of Caustic Soda - denial of benefit on the ground that the same was not meant for modernizing an existing Caustic Soda unit or a caustic potash unit by using Membrane Cell Technology as envisaged in the Customs Notification No. 12/2012. Held that:- The scope of Notification 12/2012 is not only for modernization by using Membrane Cell Technology of an existing Caustic Soda unit, it could also be for capacity expansion of an existing Caustic Soda unit. From the documentary evidences placed on record wherein the production process has been explained along with the procedural techniques involved which are placed in the paper book of the assessee, it is found that the evaporation and flaking are integral processes involved in the production of Caustic Soda which requires evaporation to increase its concentration by adopting Membrane Cell Technology. The adjudicating authority has only concentrated on the first limb of the Notification, namely, modernization by using Membrane Cell Technology and he has ignored the second limb, namely, capacity expansion while he accepts that there was only capacity expansion which is not sufficient to satisfy Notification 12/2012. Appeal dismissed - decided against Revenue.
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Corporate Laws
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2018 (9) TMI 1084
Winding up petition - whether the company should be wound up or not? - Held that:- In view of the submission made by the company that it is not in a position to liquidate the debts of the creditors as of now and considering the fact that there has been decrease in tangible assets of the company between 31st March, 2016 and 31st March, 2017 and the change in position between 21st June, 2017 and 22nd August, 2018 as prima facie noticed it is necessary to preserve the assets of the said company for the benefit of its creditors till further orders are passed. A prima facie case that the company has transferred its assets after filing of the winding up application is established. The balance of convenience and inconvenience is in favour of the creditors of the said company. The company is therefore restrained by an order of injunction from dealing with, disposing of, alienating, encumbering or creating any third party interest in respect of its assets until further orders. Considering the need to preserve the assets of the company for the ultimate benefit of the creditors the Official Liquidator is appointed as the Provisional Liquidator who will make an inventory and prepare a list to that effect and thereafter be in symbolic possession of the assets of the company. The inventory list to be prepared by the Provisional Liquidator be submitted on the next date of hearing. The creditors are directed to serve a copy of this order immediately to the Provisional Liquidator.
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2018 (9) TMI 1083
Winding up petition - Held that:- Debt more than the statutory amount mentioned in Section 434 is due and respondent company is unable to pay the debt and there is nothing to indicate that debt is bonafidely disputed, hence the present case stands on different footing then the company petition earlier made . Having regard to the aforesaid, no case for recalling the order of admission is made out. The said order is confirmed. A case of winding up of respondent company is made out. Considering the circumstances, it is found that the petition has been presented on the ground that is just and equitable for passing an appropriate order of winding up. Accordingly I order winding up of the respondent-Company in accordance with the provisions of the Act read with the Company Court Rules, 1949.
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Service Tax
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2018 (9) TMI 1074
Business Support Services - non-compete agreement - Held that:- Appellant directed to make a deposit of tax with interest - penalty stayed - Application for exemption from filing certified copy of the impugned order is allowed - Permission to file additional documents is granted. Issue notice.
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2018 (9) TMI 1073
Nature of Services rendered by appellant - Erection, commissioning and installation Services or not? - appellant were awarded a contract from Delhi Metro Rail Corporation Limited (DMRC) for design of rail based mass rapid transport system by procuring the design, execution and completion and remedying any defects in the works of civil engineering contraction, mechanical and electrical installation of the station (including tunnel ventilation and station area conditioning and ventilation) and tunnel infrastructure and buildings. Held that:- The Erection, Commissioning or Installation is one of the activity for the impugned contract which is composite in nature, i.e. having other services, in addition, to be simultaneously provided for. A close look at Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to service contract simpliciter and not to the composite work contracts. This is clear from the very language of Section 65(105) which defines taxable service as “any service provided”. All the services referred to in the said sub-clauses are service contract simpliciters without any other element in them. Further, under Section 67 of the Act, the value of taxable service is the gross amount charged by the service provider for such service rendered by him. In the case before us, there is a contract (Design and Construct Contract) by Delhi Metro Rail Corporation in favour of the appellants for the design and construction of a rail based mass rapid transport system by procuring the design, execution and completion and remedying any defect in the works of civil engineering, construction, mechanical and electrical installations of the stations (including tunnel ventilation and station air conditioning and ventilation) and tunnel infrastructure and buildings. The perusal of contract shows that it was the obligation of appellants only to supply/provide all equipments, materials, labour and other facilities requisite for and incidental to the successful completion of the works and in carrying out all duties and obligations imposed by the contract documents - thus, the contract is composite in nature rather being the contract for service simpliciter. The taxability of composite contracts was brought into tax net w.e.f. 01.06.2007 itself under the category of rendering services of work contract taxable under Section 65(105) zzzza of the Act. Time Limitation - Held that:- The Order under challenge is absolutely silent about any positive act on part of the appellant which may entitle the Department to invoke the extended period of limitation - the Show Cause Notice in this case is otherwise barred by limitation. Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1072
Works Contracts Services - appellant ought to have paid service tax under “Commercial or Industrial Construction Services” from the period 10.09.2004 to 31.05.2007 and that they were not discharging the service tax liability - Held that:- The period involved in the case is from 10.09.2004 to 31.05.2007. That the issue being a works contract whether subject to service tax prior to 1.6.2007 has been settled by the judgment of the Hon’ble Supreme Court in the case of Commissioner Vs. Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT] - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1071
Refund claim - relevant date - Section 11B of the Central Excise Act, 1944 - Held that:- The issue with regard to interpretation of the time limit prescribed under Section 11B has been set at rest by the larger Bench, in the decision of C.C.E. & Cus. & S.T. Bengaluru Vs. Span Infotech (India) Pvt. Ltd. [2018 (2) TMI 946 - CESTAT BANGALORE], where it was held that In respect of export of services, the relevant date for purposes of deciding the time limit for consideration of refund claims under Rule 5 of the CCR may be taken as the end of the quarter in which the FIRC is received, in cases where the refund claims are filed on a quarterly basis - the appellant’s claim for refund is within the time limitation - refund allowed. Input tax credit - input service - Air Travel Services - Held that:- The credit on the above services also allowed. Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1070
Business Auxiliary Service or not - Advertising Services - taxability of amount of Discount received - promoting business of the media and for which he is receiving commission - Held that:- In many cases, the assessee passed on a portion of the discount received to respective clients and the service tax was remitted by the assessee on the amount retained. In this scenario, therefore, there is no service-provider – service-receiver relationship between the assessee and the media and therefore, the finding of the lower appellate authority that the media is not the customer of the assessee nor could the assessee be considered as a commission agent of the media is agreed upon - the assessee is not liable to pay service tax on the discount received under BAS - appeal dismissed - decided against Revenue.
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2018 (9) TMI 1069
Rent-a-Cab Services - provision of taxi services by the appellant to various customers against charges based on per kilometre basis and providing vehicles to companies for transport of their employees - Held that:- In the facts of the present appeal, there is no such shedding of control of the vehicles given on hire. Hon’ble High Court of Uttarakhand in the case of Commissioner of Customs & Central Excise Vs. Sachin Malhotra, [2014 (10) TMI 816 - UTTARAKHAND HIGH COURT], has held that unless control of a vehicle is made over to the hirer and he has given possession for howsoever short a period to deal with the vehicle, there would be no renting. Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1068
Extended period of limitation - tax liability along with interest paid after being pointed out by audit - Penalty u/s 77 and 78 of FA - Held that:- The issue of taxability on the impugned services was mired in litigation and was set to rest only by the decision of the larger Bench of the Tribunal in Pagariya Auto Center Vs. Commissioner of Central Excise, Aurangabad, [2014 (2) TMI 98 - CESTAT NEW DELHI (LB)] - Especially when there was confusion on this issue, nothing prevented the Department from having issued Show Cause Notices at regular intervals for the normal period of limitation. The demand in this case is restricted to the normal period of limitation from the date of issue of Show Cause Notice, with interest liability as applicable - there shall be no penalty - appeal allowed in part.
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2018 (9) TMI 1067
Time Limitation - franchise services - case of appellant is that the issue being interpretational and the appellant having no intention to evade service tax, failure to make the payment, being only because of interpretational issue, the demand for the extended period cannot sustain. Held that:- The definition of ‘franchise’ had undergone an amendment with effect from 16.06.2005. Prior to this date, in the absence of all the four ingredients in an agreement, the transaction would not fall into the category of ‘franchise’ - On perusal of the agreement of the appellant with vehicle owners, it is seen that Clause No. 5 does not make any obligation on the part of the vehicle owner not to cater to other customers. Thus, the driver/owner can cater to the requirements of other customers also even though they have entered into an agreement with the appellant. Thus, the fourth limb of the earlier definition has been given go-by after 16.06.2005 and hence, the argument of the learned Counsel that the issue is an interpretational one is not without force. The impugned order is modified to the extent of setting aside the demand for the extended period only - appeal allowed in part.
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2018 (9) TMI 1066
Construction Services - Commercial or Industrial Construction Service - Construction of Residential Complex Service - demand of service tax. Commercial or Industrial Construction Services - it is submitted that the said building was constructed for the appellant’s own use as an office - Held that:- The period involved is from 10.09.2004 to 30.06.2008. The demand for the period prior to 01.06.2007 cannot sustain as per the decision laid by the Hon’ble Apex Court in the case of Larsen and Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT] - demand set aside. Construction of Residential Complex Services - appellant has constructed two complexes, namely, Nelson Square and Krishna Sarathy - Held that:- In the present case, the appellant has not engaged any other person for construction and construction activity was carried out on his own. The land belonged to him as he had purchased the right/share of the land from M/s. Nelson Type Foundry Pvt. Ltd. Similar is the situation in the case of the Krishna Sarathy Residential Complex also. By the joint development agreement entered by the appellants with the land owners, part of the undivided share in the land was handed over to the appellants and, in turn, it was agreed to hand over certain portions of constructed area (flats) to land owner - Though the appellants may have received payments prior to completion of the flats from prospective buyers, these amounts do not attract service tax prior to 01.07.2010 for the reason that the explanation to Section 65(105)(zzzh) was added only on 01.07.2010 - demand set aside. Maintenance and repair services - Held that:- The appellants are not contesting the demand in respect of maintenance and repair services and the same is upheld. Appeal allowed in part.
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2018 (9) TMI 1065
Penalty under Section 78A of the Finance Act, 1994 on employees of the company - case of appellant is that since Section 78A ibid was brought into the statute book on 10th May 2013, penalty cannot be imposed on the employees of the company by invoking the non-existent provisions of Section 78A at the material time. Held that:- During the disputed period, Section 78A ibid was not incorporated in the statute and the same was inserted by Finance Act, 2013 with effect from 10th May 2013 - the provisions of Section 78A ibid cannot be invoked for imposition of penalty on the employees for the offence committed by the company - Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1064
Business Auxiliary Service - Commission for using the Amadeus Software Systems for International Air ticket booking - period in dispute is 2003-04 to 2004-05 - Held that:- The issue on taxability on the commission received from Amadeus had already been decided in a number of Tribunal decisions holding that the amount received would be exigible to service tax under BAS. In the present case, there is a definite requirement of the appellant to use Amadeus as the only Computer Reservation Systems (CRS) of choice for all the reservations from their main office and associated offices in India - these activities will surely then fall within the scope of BAS as defined in Section 65 (19) (2) of the Finance Act, 1994, in particular, promotion or marketing of services of the client. Time Limitation - Penalty u/s 78 - Held that:- The matter came to light only pursuant to an audit conducted in February, 2007. Hence there is no merit in this plea per se can be set aside on limitation - However, considering that the issue was and still is mired in litigation, there are sufficient cause for setting aside the penalty imposed under Section 78 ibid. Appeal allowed in part.
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2018 (9) TMI 1063
CENVAT credit - capital goods - denial on the ground that the appellant having acquired the capital goods on which it had availed credit from its registered premises, had not brought it back to their registered premises even after 180 days - Held that:- The issue is decided in the case of BSNL VERSUS COMMISSIONER OF SERVICE TAX, CHENNAI [2012 (12) TMI 112 - CESTAT, CHENNAI], where it was held that If any Inputs or Capital goods are removed outside the premises of the provider of output service for providing such service, there is no requirement for any demand of duty or reversal of credit - appeal allowed - decided in favor of assessee.
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2018 (9) TMI 1062
Penalty - Invocation of section 80 - ‘boat’ service - Convention Services - demands is not being pursued - Held that:- Confusion in the mind of the appellant is caused due to amendment - Nevertheless, the assessee obtained registration, which facts are not disputed by the Revenue. Hence, there is reasonable cause for the failure to discharge their tax liability and in consequence, the provisions of Section 80 ibid. are very much invokable - penalties set aside - appeal allowed in part.
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2018 (9) TMI 1061
Business Auxiliary Service - activity of powder coating and galvanization undertook by the job workers - Exemption in terms of N/N. 8/2005 - Held that:- Chapter Note 4 to Chapter 73, clearly holds that in relation to products of the said chapter, the process of galvanization shall amount to “manufacture”. This being so, the process of galvanization will stay out of the purview of Business Auxiliary Services, because, by definition, the BAS specifically excludes the activity of manufacture. Eligibility to Notification No. 8/2005 dated 01.03.2005 as amended - Held that:- An identical issue has been decided by the Mumbai Bench of the Tribunal in the case of Endurance Systems India (P) Ltd. [2014 (2) TMI 99 - CESTAT MUMBAI], where it was held that As the processes undertaken by the appellant amounts to manufacture as per the decision relied upon by the appellant as the same is part of manufacturing process. Therefore, appellants are not liable to pay service tax under the category of Business Auxiliary Service. Appeal allowed - decided in favor of appellant.
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Central Excise
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2018 (9) TMI 1060
Monetary limit involved in appeal - Clandestine removal - principles of Natural Justice - Whether the ld. CESTAT has grossly erred in law in ignoring the vital evidences in the form of voluntary statements of the Director and General Manager of the Company and the loose slips recovered by the Department during the search in setting aside the order of the ld. Adjudicating Authority? - Whether the ld. Adjudicating Authority grossly erred in law in ignoring the voluntary statements of the Director and General Manager of the Company while dropping the partial demand? - penalty on the Director and General Manager of the Company - sub section (3) & (5) respectively of Section 35G of the Central Excise Act, 1944. Held that:- The valuation of seven parchis which were found will come to less than 50 lacs and in view of the circular of the Department dated 11.7.2018, the appeal is not maintainable in view of monetary limits. No substantial questions of law arises - appeal dismissed.
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2018 (9) TMI 1059
Valuation - inclusion of Bonus gained for performance in assessable value - Held that:- The bonus/penalty is a post-sale payment and therefore not includible in the assessable value - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1058
CENVAT Credit - Job work - Scope of SCN - common inputs (furnace oil) used in manufacture of both dutiable and exempted goods - non-maintenance of separate records - Rule 6 of Cenvat Credit Rules - Held that:- The adjudicating authorities have gone beyond the scope of the SCNs. The adjudicating authorities have surely changed the goal post to a proposition which was not at all presented in the SCNs. On this very ground, the impugned orders will suffer from infirmity of having gone beyond the scope of SCNs - impugned orders do not sustain. Also, the matter is amply covered by the Tribunal in Federal Mogul Goetze India Ltd. Vs CCE Bangalore [2012 (7) TMI 713 - CESTAT, BANGALORE] where inter alia, it was held that N/N. 214/86-CE, though issued under Section 5A of Central Excise Act, 1944, is not per se an exemption notification. Impugned orders cannot sustain - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1057
Clandestine manufacture and Removal - suppressed production of match bundles in their factory - removal of chemical dipped splints to various group units and other units without payment of duty - Principles of Natural Justice. Held that:- Large quantum of documents / worksheets have not been considered by the lower authorities. There are no detailed analysis of these documents in the impugned orders. On the other hand, while the orders of the original authority in these cases are found to be more or less a reproduction of the allegations contained in the respective show cause notices and a mechanical confirmation of the proposals made therein. There is no attempt to sift, let alone apply the test of evidence or reason. We are also unable to fathom why cross examination has been denied in respect of persons from whom statements had been recorded, only on the grounds that they were co-noticees - thus, the appellants have not been given sufficient opportunity and consideration in the proceedings before both the lower authorities - in the interests of justice, it would be appropriate to remand the appeals filed by the assessees for de novo consideration to the original adjudicating authority. Appeal allowed by way of remand.
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2018 (9) TMI 1056
CENVAT credit - input services - hiring of cabs (Rent-a-Cab Services) - scope of exclusion Clause of the definition of input services - whether the appellants are eligible for credit on Rent-a-Cab Services after 01.04.2011, whereby the exclusion in clause (B) has been introduced in the definition of input services? Held that:- From the definition of input services, it can be seen that the services of Rent-a-Cab will not qualify as input service and will not be eligible for credit if the motor vehicle is not a capital good for the service provider. It can be seen from the definition of capital goods that when the motor vehicle which is used for transporting of the passengers or for renting of vehicles, is registered in the name of the service provider, the same would be a capital good for the service provider. Thus, if the motor vehicles are capital goods for the service provider who is providing service of Rent-a-Cab / renting of cabs, then the said services would be eligible for credit. The said fact as to whether these vehicles are capital goods for the service provider requires verification. Appeal allowed by way of remand.
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2018 (9) TMI 1055
Time Limitation - CENVAT credit - duty paying invoices - appellants have availed credit in respect of invoices which have been issued to their previous premises at Pattullous Road, Chennai - Held that:- There is no positive act of suppression unearthed by the Department so as to saddle the appellant with the intention to evade payment of duty by suppression of facts. The credit availed was disclosed in the accounts as well as the ER1 returns filed by them - extended period cannot be invoked - appeal allowed on ground of limitation.
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2018 (9) TMI 1054
Classification of goods - NIVARAN-90 - the very same issue concerning classification of “Nivaran-90 Herbal Cough Syrup” had come up in appeal before this Tribunal in the case of Velvette International Pharma Products [2010 (5) TMI 295 - CESTAT, CHENNAI], where this Tribunal had upheld the stand of the department that impugned goods are not entitled for exemption as Ayuverdic goods - Held that:- We do not find any reason why the classification as affirmed by the earlier order of Tribunal should not be reiterated in this case also. Extended period of limitation - Held that:- the extended period is being invoked on account of respondent having misdeclared the ingredients, formula and method of manufacture of Nivaran-90 cough syrups supplied as per Ayurvedic texts in their classification list / declaration filed and further that they suppressed the actual ingredients used by them in the said product, with intention to evade payment of duty - invocation of extended period upheld. Appeal allowed - decided in favor of Revenue.
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2018 (9) TMI 1053
Penalty - excess CENVAT Credit availed - it was alleged that appellant availed credit of duty paid on capital goods on machinery twice - whether the penalty imposed on the appellant for the excess credit availed, is sustainable or not? Held that:- It is brought out from the facts that the appellant has reversed the credit before utilization and that they had enough credit balance in their Cenvat Credit account for the disputed period - The Hon’ble High Court in the case of Strategic Engineering (P) Ltd. [2014 (11) TMI 89 - MADRAS HIGH COURT] has categorically held that when the credit has been reversed before utilization, the interest or the penalty imposed cannot sustain - penalty set aside - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1052
Levy of Interest and Penalty - credit availed wrongly on capital goods, was reversed subsequently - Held that:- This Bench in the case of M/s. Lenovo India Pvt. Ltd. Vs. C.C.E. Puducherry [2018 (7) TMI 243 - CESTAT CHENNAI] where reliance placed in the case of Commissioner of Central Excise, Madurai Vs. Strategic Engineering [2014 (11) TMI 89 - MADRAS HIGH COURT], where it was held that mere taking itself would not compel the assessee to pay interest as well as penalty - demand of interest and penalty set aside - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1051
CENVAT Credit - input services - Gardening Services - Held that:- The jurisdictional High Court of Madras, in M/s. Wipro Ltd. Vs. C.C.E. Goubert Avenue (Beach Road), Pondicherry [2017 (5) TMI 188 - MADRAS HIGH COURT] has considered an issue relating to Housekeeping, Landscaping and Gardening Services and held that Landscaping of factory or garden certainly would fall within the concept of modernization, renovation, repair, etc. of the office premises - credit allowed - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1050
Input Service Distributor - Distribution of input credit - Rule 7 of CCR - recovery of credit with Interest and penalty - time limitation - Held that:- The definition of ‘input service distributor’ cannot include M/s. MRF Ltd. or its factory premises as per the definition under Rule 2(m) of the CCR, 2004. We also find that the producer or the manufacturer of final product, as correctly contended by the Revenue, is the assessee. It is also not the case that the assessee is a unit or branch of M/s. MRF Ltd. - there are no valid reasons to sustain the findings of the Ld. Commissioner (Appeals). Time Limitation - Held that:- After initial objection in 2006, the CERA also did not raise any objection during its audit in 2009 and the Show Cause Notice, having been issued much thereafter, i.e, in the year 2010, there is no justifiable reason to allege suppression of facts - extended period cannot be invoked. Appeal dismissed - decided against Revenue.
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2018 (9) TMI 1049
CENVAT Credit - input service - Outdoor Catering Service - scope of exclusion clause provided in the definition of input service with effect from 1/04/2011 - Held that:- In the case of WIPRO Ltd. [2017 (7) TMI 1111 - CESTAT BANGALORE], the Bangalore Bench of the Tribunal has referred the matter to the Hon ble President for constitution of a Larger Bench for resolving the conflict between the Benches of the Tribunal. The matter has already been referred by the coordinate Bench for resolving the dispute through the Larger Bench, this appeal can also be tagged with the case of WIPRO Ltd. for deciding the issue by the Larger Bench - Registry is directed to transfer these case files to the Hon ble President of the Tribunal for necessary approval.
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2018 (9) TMI 1046
Issuance of notice for final adjudication - request of the petitioner for his cross-examination, during assessment proceedings was rejected by the respondent No.2 – the Commissioner Central Excise, Commissionerate, Udaipur - Held that:- This Court deems it proper to issue notice.
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CST, VAT & Sales Tax
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2018 (9) TMI 1048
Pre-deposit - demand of tax under repeal act which was replaced by GST - Held that:- Subject to deposit of 50% of the amount so demanded, the balance may be kept in abeyance for a period of one month i.e. till 25.10.2018.
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2018 (9) TMI 1047
Principles of natural justice - Personal hearing not granted - Held that:- In the instant case, even though personal hearing is sought for, that was not granted to the petitioner. A reading of the impugned order also clearly shows that the assessing authority has not at all considered the request of the petitioner or the instructions issued by the Commissioner of Commercial Taxes, before passing final orders - the order impugned is violative of principles of natural justice. The matter is remanded back to the respondent for fresh consideration - Petition allowed by way of remand.
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Indian Laws
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2018 (9) TMI 1077
Jurisdiction - territorial jurisdiction would be within the local jurisdiction of the branch of the bank - power of Supreme Court to transfer cases - Held that:- Even though the place where the cheque was presented for encashment by complainant/Respondent No.2 is Bhubaneswar, Orissa and in view of Negotiable Instruments (Amendment) Second Ordinance, 2015, the territorial jurisdiction would be within the local jurisdiction of the branch of the bank where the payee maintains the account which in the present case is Overseas Bank, Bhubaneswar, Orissa, however, the power of the Supreme Court to transfer cases is on an entirely different level. Petition disposed off.
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2018 (9) TMI 1076
Dishonor of Cheque - Section 138 of the Negotiable Instruments Act, 1881 - whether liability for an amount of ₹4,90,000/- towards the respondent accused existed? - Held that:- On appreciation of evidence led by the parties it is amply clear and as rightly noted by the learned Trial Court that the appellant has not been able to prove the liability for a sum of ₹4,90,000/-. Hence, this Court finds no error in the impugned judgment - appeal dismissed.
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2018 (9) TMI 1075
Dishonor of Cheque - recovery of loan - section 138 of Negotiable Instruments Act - preponderance of probability - Rebuttal of presumption - Held that:- When the statutory presumption against the accused person is rebutted through some material evidence, though may not be to the decree of proof beyond doubt, the preponderance of probability would go to show that the cheque, which was obtained under threat and the subject matter of the complaint dated 21.01.2013, is being utilised to prosecute the revision petitioner through the complainant/ Poongodi, who apparently not acquainted with the revision petitioner, except a tall claim that she and the revision petitioner know each other for merely 12 years. It is unacceptable that the person, who know each other for 12 years and was inspired her confidence, to lend the loan of ₹ 2,00,000/-, but without knowing his residential address. This Court finds that Courts below have erred in properly appreciating the defence explanation to rebut the presumption. Hence, this Criminal Revision Case is liable to be allowed - revision allowed.
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