Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 23, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
GST
-
Violation of natural justice: Bail cancellation without appellant's counsel.
Violation of principles of natural justice due to absence of appellant's counsel during proceedings. High Court noted counsel's absence on certain dates, but matter reserved on 29.04.2024 without hearing. Unexpectedly relisted on 18.07.2024 without counsel's presence. Impugned order cancelling bail passed on 25.07.2024 without hearing appellant's counsel who had obtained bail from trial court. Impugned order set aside, matter remanded to High Court to reconsider respondent's application for cancellation of bail after hearing both sides. Appellant to ensure counsel's presence, avoid delay.
-
Parallel proceedings on same subject matter by Central & State GST authorities not allowed; State to continue once initiated.
The court held that Section 6(2)(b) of the Act treats the empowered officers under the SGST/UGST Act at the central level to be at par and does not prescribe for transfer of investigation from State authority to Central authority or vice-versa. The object of Section 6(2)(b) is to avoid multiple proceedings on the same subject matter. Once the State authority initiates action, it would be the proper officer to conduct further proceedings. The Central Tax Officer cannot initiate proceedings if the State Tax Officer has already commenced proceedings. The word "subject-matter" means the nature of proceedings. If one authority has initiated proceedings, the other cannot initiate proceedings for the same subject matter. Allowing such action would violate Section 6(2)(b). The court quashed the Blocked Credit Ledger and summons issued by the Central authority as the State authority had already initiated proceedings. The petition was allowed.
-
Delay in GST appeal beyond limitation period uncondoned despite 2023 notification.
Original order confirming GST demand was passed without opportunity of hearing. Appeal dismissed on limitation ground. Notification dated 02.11.2023 allows condonation of delay for appeals filed before 31.01.2024 against orders passed before 31.03.2023 u/ss 73/74 of GST Act. Impugned order passed on 20.07.2023, after 31.03.2023 cutoff date, hence notification inapplicable. Cited judgement deals with non-condonation of delay beyond statutory limitation period. Delay in filing appeal cannot be condoned beyond prescribed limitation under the Act. Petitions dismissed for lack of merit.
-
Tax law amendment restricting input tax credit availability challenged; court seeks reconsideration.
The imposition of a time limit for availing Input Tax Credit (ITC) is violative of Articles 14, 19(1)(g), and 300A of the Constitution of India. The insertion of sub-section (5) u/s 16 of the CGST Act, effective from July 1, 2017, provided that for invoices or debit notes pertaining to Financial Years 2017-18 to 2020-21, the registered person could take ITC in any return filed until November 30, 2021. However, this decision was taken without considering the stipulation in sub-section (5) of Section 16, effective from July 1, 2017. Consequently, the High Court remitted the matter to the authority to pass a fresh order considering the implication of sub-section (5) of Section 16 of the CGST Act.
-
GST fraud masterminds denied bail over fake firms, money trail.
In the present case involving economic offenses related to GST fraud, the court denied bail to the applicants. The applicants were found to be connected with Sanjay Dhingra in transactions involving fake GST firms registered using stolen PAN and Aadhaar details. The money trail and financial transactions revealed unexplained huge amounts being deposited into the applicants' accounts, indicating their involvement in illegal activities. The court noted that such fraudsters set up companies only on paper to generate fake transactions and claim Input Tax Credit, abandoning them later. Economic offenses like large-scale fraud, money laundering, and corruption are viewed seriously as they affect the economic fabric of society. The court considered factors like the nature of accusations, evidence, severity of punishment, character of the accused, possibility of securing presence at trial, apprehension of witness tampering, and public interest. Precedents are not the sole basis for granting or refusing bail, and each case is considered on its specific facts and circumstances. Based on the evidence and submissions, the court found it not a fit case for granting bail and dismissed the application.
-
Penalty for tax evasion & undervaluation during goods detention; pay tax+penalty on market value to release goods.
Writ petition concerning levy of penalty u/s 129 of CGST Act for alleged tax evasion and undervaluation during detention of goods. Court permitted petitioners to pay tax and penalty calculated on market value determined by authorities within one week. Upon receipt of payment, authorities directed to release detained vehicle and goods within seven days thereafter. Writ petition partly allowed.
-
GST registration cancelled retrospectively without valid reasons; authority overstepped, order modified for prospective effect.
The petitioner's GST registration was cancelled retrospectively without indicating specific reasons, violating principles of natural justice. While the authority can cancel registration retrospectively u/s 29(2) of the CGST/DGST Act, the decision cannot be arbitrary. The show cause notice did not propose retrospective cancellation. The impugned order lacked reasoning for retrospective cancellation. Therefore, the order was modified to make cancellation operative from the show cause notice date instead of retrospectively.
-
Search & seizure of sales records from sister company, unable to reply notice.
Search and seizure operations conducted by respondent No. 3 on petitioner-Company's sister entity premises, seizing material like sales registers, accounts books, and data. Petitioner unable to file detailed reply to Show Cause Notice due to seized documents. Court accepted petitioner's explanation, set aside impugned orders, and remanded matter to respondent No. 2 for reconsideration of reply stage, directing respondent No. 3 to provide seized documents' copies to petitioner-Company.
-
Refund of input tax credits & 'intermediary' status u/s 2(13) IGST Act remanded for fresh consideration by Appellate Authority.
Appellate Authority's orders regarding refund of accumulated input tax credit with interest and determination of petitioner's status as an 'intermediary' u/s 2(13) of IGST Act set aside. Matters remanded for reconsideration by Appellate Authority to provide opportunity to both parties to present claims and contentions afresh within stipulated timeframe, as earlier orders failed to address factual and legal submissions correctly. Petition allowed for remand.
-
Goods transit sans docs: No penalty if invoices/e-way bills exist.
This case pertains to the refund of penal amounts or taxes paid for goods seized due to lack of proper documentation during transit. The court held that the movement of goods accompanied by e-way bills, tax invoices, or delivery challans from the originating state shall be treated as bona fide and not attract any penalty or tax under the GST regime. The court agreed with the precedent set by the Andhra Pradesh High Court in Kaveri Enterprises v. State of Andhra Pradesh, which had considered similar contentions. The petition was disposed of, subject to the fulfillment of specified conditions.
-
Assessee's reply to pre-notice communication not mandatory; dismissing writ plea against pending GST proceedings.
Non-consideration of reply given pursuant to GST DRC-01A notice violates principles of natural justice. Rule 142(1A) merely allows proper officer discretion to issue communication, not adjudicate submissions. Right of assessee arises only after show cause notice u/r 142(1)(a) with hearing opportunity. Affording hearing at different stages not contemplated by legislature. Taxing statutes strictly construed without implying equity or hardship considerations. Since only communication issued, no grounds to entertain writ petition filed to stall pending proceedings. Writ petition dismissed.
-
Delayed appeal rejected despite justification; partial fee paid; no ill-intent; tardy filing not beneficial: Appeal restored.
Appeal dismissed on ground of limitation despite explanation for delay, petitioner made partial pre-deposit, no lack of bona fide evident, filing belated appeal not advantageous to petitioner, Appellate Authority's order set aside by HC, petition disposed.
-
Taxpayer wins right to rectify adverse tax order; Authority directed to consider application fairly.
Section 161 allows an affected person to apply for rectification of an order. The authority had previously passed an order and decided no rectification was necessary, which the assessee felt adversely affected them. The High Court set aside that order, directing the authority to deal with the rectification application in accordance with law. The rectification process is separate from an appeal against the assessment order on merits, as provided for by the statute.
-
Order canceling registration quashed; non-application of mind, lack of reasoning, violation of natural justice.
Cancellation of registration order quashed due to non-application of mind, absence of reasons, and violation of principles of natural justice. Court followed precedent where non-reasoned order was set aside, allowing petitioner to file reply to show cause notice. Impugned orders liable to be set aside, original order dated February 22, 2023 quashed and set aside, petition allowed.
-
Taxpayer loses case for challenging tax assessment without exhausting statutory appeal remedies.
The petitioner challenged the assessment order solely on the ground of not availing the statutory remedy of appeal. The court held that the petitioner did not file an appeal and allowed the assessment order to become final, subsequently approaching the court through a writ petition to challenge the tax, interest, and penalty determination. The petitioner was given an opportunity for a hearing, and the impugned order was passed thereafter. No plausible explanation was provided for not resorting to the statutory appeal remedy. The petitioner consciously chose not to file an appeal u/s 107 of the RGST/CGST Act, 2017, allowing the limitation period and the maximum condonable delay period to expire. Having not preferred an appeal, the writ petition was dismissed as not maintainable.
-
Nonwoven fabrics with PVC coating can't be classified under HSN 56031400 or Chapter 50; PVC being the major constituent.
Nonwoven coated fabrics laminated or impregnated with PVC cannot be classified under HSN 56031400 or Chapter 50. As the major constituent is PVC sheet (120 GSM out of 240 GSM), the goods would be classified under Chapter 39, based on the material or component that gives the essential character, as per the Explanatory Notes. A conjoint reading of manufacturing process, Section Notes, Chapter Notes leads to this conclusion that the product falls under Chapter 39 and not under Chapter 56 or 50.
Income Tax
-
Govt's latest tax amnesty scheme aims to settle direct tax disputes through flexible payouts.
This appears to be a legal document providing details and schedules related to the Direct Tax Vivad se Vishwas Scheme, 2024 (DTVSV), which aims to settle direct tax disputes. The key points covered are: 1. Schedules detailing the calculation of amounts payable under DTVSV for various scenarios involving disputed tax deducted/collected at source (TDS/TCS), interest, and penalties, based on the appellant (assessee or department) and the appellate forum (JCIT(A)/CIT(A), ITAT, High Court, Supreme Court, revision u/s 264). 2. Schedules for cases where the appellant opts not to pay tax on additions reducing losses, unabsorbed depreciation, or minimum alternate tax (MAT) credit carried forward. 3. Formats for the certificate to be issued by the designated authority determining the payable amount, intimation of payment by the declarant, and the final order granting immunity from prosecution/penalty subject to payment. 4. The amounts payable are calculated as specific fractions of the disputed tax/penalty/interest, with lower fractions for new appellants and higher for old appellants, and varying based on the appellate stage and whether payment is made before or after January 1, 2025. The document provides a comprehensive framework for implementing the DTVSV.
-
Direct Tax Dispute Resolution Scheme 2024 Comes into Force on Oct 1.
This notification brings into force the Direct Tax Vivad Se Vishwas Scheme, 2024, a scheme aimed at resolving direct tax disputes. Issued by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, it appoints October 1, 2024, as the date on which the scheme shall come into force, exercising powers conferred by sub-section (2) of section 88 of the Finance (No. 2) Act, 2024.
-
Bank allowed tax deductions for bad debts written off & provision for doubtful debts.
The case pertains to deductions claimed by the assessee u/ss 36(1)(vii) and 36(1)(viia) of the Income Tax Act for amounts written off by rural branches and the difference between the amount written off and the doubtful debt account. The High Court held that there was no infirmity in the assessee claiming deductions under both provisions, as the provision made under clause (viia) in the previous assessment year was not being reduced from the bad debts written off in the next assessment year. The assessee's case fell within the parameters of deductions under clauses (vii) and (viia), and it was not erroneous or illegal for the assessee to make an independent provision for bad and doubtful debts under clause (viia) to be adjusted in the subsequent assessment year to claim the benefit under clause (vii). The High Court allowed the appeals, ruling that the assessee was entitled to deductions under clauses (vii) and (viia) for the assessment years in question.
-
Ruling clarifies Article 7 allows India to tax foreign company's PE based on its operations, not global profit/loss.
Applicability of Article 7 of the Double Taxation Avoidance Agreement (DTAA) between India and the United Arab Emirates regarding the taxation of profits attributed to a Permanent Establishment (PE) in India. The key points are: Income of a non-resident is taxable in India based on the principles of income accruing or arising, while global income of a resident is subject to taxation. Article 7 stipulates that only profits attributable to the PE are taxable in the source state, not the overall profits of the enterprise. The taxability of a PE's income is independent of the global profitability of the enterprise. The source state's right to tax a PE cannot be contingent upon the entity's overall income or loss. The decision clarifies that Article 7 does not restrict the source state's right to allocate income to the PE based on global income or loss of the cross-border entity.
-
Assessee's Appeals: ITAT directed to decide within 3 months; No coercive action for now.
The High Court directed the Principal Commissioner of Income Tax, Guwahati, to ensure disposal of the petitioner's appeals filed for assessment years 2020-21 and 2018-19 within three months. The court observed that u/s 250(6A) of the Income Tax Act, 1961, the Commissioner (Appeals) must decide appeals within one year from the end of the financial year in which they are filed. Considering the statutory mandate and guidelines, the court opined that the First Appellate Authority should not face difficulty in deciding the appeals expeditiously. The court also noted that no recovery has been made so far and ordered that no coercive measures be taken against the petitioner regarding the demands under appeal until their disposal.
-
Intimation under 143(1) of Income Tax Act challengeable via revision under 264 for errors correction.
The High Court held that the intimation u/s 143(1) of the Income Tax Act falls within the ambit of 'any orders' envisaged u/s 264, making revision maintainable against such intimation. Section 264 confers wide powers to correct errors committed by subordinate authorities or even errors by the assessee in not claiming legitimate deductions. The Commissioner has the power to condone delays to do substantial justice by disposing matters on merits. Relying on precedent, the Court ruled that revision u/s 264 is maintainable against intimations u/s 143(1).
-
Authority's rejection of delay condoned for filing audit report before income return quashed.
The High Court allowed the petition, quashing and setting aside the impugned order rejecting the application for condonation of delay in filing Form 10B under the Income Tax Act, 1961. The delay of 361 days occurred in filing Form 10B electronically. The Central Board of Direct Taxes directed authorities to condone the delay in cases where the audit report was obtained before filing the return of income. The authority erroneously interpreted that Form 10B should have been filed by 31st March, 2018, instead of considering the requirement of obtaining Form 10B before filing the return of income as per Circular No.10. The High Court held that the authority's interpretation was ex facie faulty and contrary to the plain language of the Circular, necessitating the quashing of the impugned order.
-
Reopening income tax assessment requires fresh tangible materials, not mere change of opinion. Proper approvals mandatory.
Provisions and requirements for reopening an assessment u/s 147 of the Income Tax Act, 1961, as amended. It emphasizes that mere 'change of opinion' without any new material on record is not sufficient for reopening an assessment. The key points are: (1) The Assessing Officer (AO) must have information suggesting that income chargeable to tax has escaped assessment and obtain prior approval from the specified authority to issue a notice u/s 148, unless an order u/s 148A(d) has been passed with prior approval. (2) The notice u/s 148 must precede the inquiry u/s 148A and comply with the time limit u/s 149. (3) Sanction from the specified authority is required before issuing notices u/ss 148 and 148A. (4) Fresh and tangible materials must be available with the AO, as per the explanations to Section 148, for reopening the assessment. (5) The test laid down in the Kelvinator case is still relevant and applicable even after the amendments. (6) Relevant court decisions, including Siemens Financial Services, Usha International, and Hexaware Technologies, have reiterated these principles. (7) If no fresh and tangible materials are available, the attempt to reopen the assessment completed u/s 143(3) woul.
-
Authorities' arbitrary rejection of share valuation per statutory rules challenged; assessee's appeal upheld.
Assessee issued shares at fair market value computed as per Rule 11UA(2), but Assessing Officer (AO) and CIT(A) rejected valuation without justification. Statute mandates following prescribed method, AO cannot deviate. Assessee discharged burden of proving identity, creditworthiness and genuineness of transactions u/s 68. Additions u/ss 68 and 56(2)(viib) deleted, assessee's appeal allowed. CIT(A) erred in enhancing income u/s 56(2)(viib) without accepting valuation report as per rules. When statute prescribes procedure, authorities must follow it.
-
Tax deduction disallowed for premature pension plan surrender; exemption eligibility to be examined.
Section 80CCC(2) applies only when the assessee has claimed and been allowed a deduction u/s 80CCC(1). Since the assessee did not claim deduction u/s 80CCC(1), Section 80CCC(2) is inapplicable. The accretion of Rs. 16,39,726 from premature surrender of pension policies requires examination u/s 10(10D) to determine eligibility for exemption. The matter is restored to the Assessing Officer to examine the exemption eligibility u/s 10(10D). The assessee's appeal is partly allowed.
-
Accommodation entry claim upheld; timelines for assessment scrutinized. Inadequate justification for revision u/s 263.
Revision u/s 263 regarding claim of accommodation entry - reliance on statements of third parties. Timelines for completing assessment u/s 143(3). Assessing officer duly inquired into claim of accommodation entry during Section 147 proceedings. Principal Commissioner of Income Tax (PCIT) did not provide specific findings on how assessment order was erroneous and prejudicial to revenue's interest. PCIT resorted to Section 263 proceedings to extend timelines for framing assessment u/s 147, which is impermissible. PCIT should have conducted necessary inquiries or verification to show Assessing Officer's findings were unsustainable. PCIT failed to provide independent finding on how assessment order was legally unsustainable based on available information. Assessee submitted no long-term capital gains earned during the year, only short-term capital gains on which taxes were paid. Assessee's appeal allowed by Income Tax Appellate Tribunal (ITAT).
-
Validity of reopening assessment over cash interest payment from undisclosed source based on employee's excel sheet.
The issue pertains to the validity of reopening the assessment u/s 147, where an addition was made based on an excel sheet found in a search on an employee of the Maverick Group. The assessee had filed objections against the reasons recorded, which were rejected by the Assessing Officer (AO) in a summary manner. The assessment was completed u/s 143(3) read with Section 147 by adding the said sum, alleging that the assessee had paid interest in cash out of an undisclosed source of income. Initially, a notice u/s 133(6) was issued, alleging that the amount appearing as 'adjustment interest' was interest received, and the assessee was asked to disclose the same in the return of income. However, the assessee explained that the interest was paid by them, not received, and confirmations were submitted during proceedings u/s 153A. The AO changed the stance, alleging that the 'Adjustment' column amount was interest paid by the assessee out of undisclosed sources and not recorded in the books. During the Maverick group's assessment, it was observed that the excel sheet was received from a finance broker working for multiple parties, and the broker was asking for additional interest not given. Relying on the ITAT Jaipur decision in M/s. Maverick Share Brokers Private Limited, it was found that.
-
Property transaction scrutinized for undervalued sale consideration.
Applicability of Section 56(2)(x) and the jurisdiction of the Principal Commissioner of Income Tax (PCIT), Jaipur-1, in revising the order u/s 263. The key points are: The PCIT had appropriate jurisdiction as the assessee failed to provide proof of address change in the PAN database. The contention regarding non-applicability of Section 56(2)(x) was dismissed as the deeds for the property differed in area and consideration, indicating a deviation from the claimed transaction. The assessee failed to clarify or provide evidence that both deeds related to the same property. Details of TDS deduction u/s 194IA were also not provided, further weakening the assessee's case. Consequently, the PCIT's order applying Section 56(2)(x) was upheld by the Appellate Tribunal.
-
Cash deposits matched revised returns; addition unwarranted.
The Income Tax Appellate Tribunal held that the revised return of income filed by the assessee cannot be treated as invalid by the Assessing Officer (AO). Since the AO issued notice u/s 143(2) based on the revised return and completed the assessment considering the same, the revised return should be deemed valid. Consequently, no addition u/s 68 for the cash difference between the original and revised returns is warranted. Further, the Tribunal observed that the Department did not dispute the turnover admitted in the revised VAT returns, which reflected an increase in sales. The closing stock and cash on hand matched the cash deposits in the bank account. Therefore, the addition confirmed by the CIT(A) was unjustified.
-
Business activity expenses rejected, proceedings under 153C upheld despite assessee's challenge.
The Commissioner of Income Tax (Appeals) rejected the assessee's plea challenging the validity of proceedings u/s 153C and upheld their validity. The authorities below disallowed the expenses booked in the Profit & Loss account on the ground that the assessee was not engaged in any business activities. The assessee failed to provide supporting evidence before the appellate authorities. The Income Tax Appellate Tribunal upheld the Commissioner's findings on both issues, dismissing the assessee's grounds.
-
Taxpayer's disclosed income from various sources in return, though tax audit report showed discrepancy - ITAT deletes AO's addition.
The assessee admitted certain income amounts under different heads like income from house property and income from other sources while filing the return. However, the amount was shown in the tax audit report as 'any other items of income' but not mentioned in the corresponding column of the return. The CPC made an addition under 'income from business or profession' based on this discrepancy. The ITAT held that since the assessee had already admitted and included these amounts under the respective heads, it was not necessary to mention them again under 'any other items of income'. Therefore, the addition made by the AO/CPC under 'income from business or profession' was not warranted and was set aside by the ITAT.
Customs
-
Redefining "laboratory chemicals" for customs duty and classification - chemicals imported for own use in small packs.
This notification amends Note 3 of Chapter 98 in the First Schedule of the Customs Tariff Act, 1975. It redefines the term "laboratory chemicals" for the purpose of Heading 9802 and classification. The new definition states that "laboratory chemicals" means all chemicals, organic or inorganic, whether or not chemically defined, imported and intended only for own use (i.e. other than purposes like trading, further sale etc.) in packings not exceeding 500 gms or 500 millilitres and which can be identified with reference to the purity, markings or other features to show them to be meant for use solely as laboratory chemicals. The notification comes into force from the date of publication in the Official Gazette.
-
Exporter's duty-free drawback claim upheld despite non-issuance of ARE-2.
Duty drawback recovery case involving merchant exporter manufacturing DOC using duty-paid Hexane. Petitioner did not issue ARE-2 while removing DOC, but Commissioner (Appeals) held non-issuance would not affect duty-free Hexane benefit u/r 19(2). No intention established by Adjudicating Authority for erroneous drawback claim. Commissioner (Appeals) found drawback claim legality valid as exporter did not unduly get double benefit. Revisional Authority failed to consider 1% drawback rate related to customs portion only, not excise. Non-issuance of ARE-2 not a breach of rules. Impugned order by Revisional Authority levying penalty quashed, Commissioner (Appeals) order deleting penalty restored. Petition allowed.
-
Import contraband case misses time limit, customs show cause notice invalid - license revocation & penalties avoided.
The case revolves around the issuance of a show cause notice (SCN) beyond the prescribed time limitation for an alleged violation involving the import of contraband, primarily cigarettes. The appellant obtained an investigation report dated 17.10.2014 from the Commissioner of Customs, which detailed the facts of the case and recommended initiating proceedings against the appellant for violations under various regulations of the Customs Brokers Licensing Regulations (CBLR) 2013 and 2018. The tribunal observed that since the investigation report, considered the offence report, was issued on 17.04.2014, and the SCN was issued on 06.12.2018, it was clearly barred by the limitation period. Consequently, the SCN itself did not survive the limitation period. As the SCN for revocation of license, forfeiture of security, and imposition of penalty under CBLR 2013 did not survive due to the limitation issue, the questions of revocation, forfeiture, and penalty imposition did not arise. The appeal was allowed by the CESTAT (Customs, Excise and Service Tax Appellate Tribunal).
-
Motor Vehicle Parts Reclassified: Transmission Assembly Components Fall Under Correct Tariff Heading.
The case pertains to the classification of imported goods, specifically Fork/Yoke 5th and reverse gear shift (parts of motor vehicles), under the appropriate Customs Tariff Heading (CTH). The appellant argued for classification under CTH 84831099, considering the goods as 'Transmission Shafts,' while the adjudicating authority classified them under CTH 8708400 as parts of motor vehicle gear boxes. The Tribunal held that although the imported goods are not transmission shafts or gear boxes themselves, they are assembly components located inside the gear box assembly. As per Note 2(e) of Section XVII, parts/components of gear boxes are covered under CTH 8708, precisely 87084000. The goods are not integral parts of engines or motors but are solely used as part of the transmission assembly, which are parts of motor vehicles of HSN 8701 to 8705. Additionally, as per GRI 3(c), when goods cannot be classified by other rules, they should be classified under the heading occurring last in numerical order, which in this case is 8708. Therefore, the imported goods (Fork and Yoke 5th) are rightly classifiable under 87084000, attracting BCD at 10%. The appellant's incorrect classification under CTH 84831099 led to evasion of BCD to the extent of.
-
Porcelain tiles' import value contested; transaction value upheld over custom database.
The case pertains to the valuation of imported porcelain vitrified tiles. The key points are: The assessment attained finality, but the appellant has the legal right to challenge the assessment order u/s 128 of the Customs Act, 1962, as per the Supreme Court's judgment in ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV. The NIDB (National Import Database) data cannot be the sole basis for rejecting the declared value. Comparing goods imported by different importers is unjustified. The adjudication authority acknowledged that the goods are not branded, and identical goods are unavailable for comparison. The impugned order lacks admissible evidence to reject the transaction value. Details of other imports were not furnished, and there is no mention of the lowest value among contemporaneous imports to ascertain if such imports can reject the declared value. The value enhancement was made without following the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Therefore, the declared value must be adopted for assessment. The appeal was allowed.
DGFT
-
Amended EPCG Scheme: Fewer Reports, More Ease for Exporters.
The Public Notice amends the provision related to reporting requirements for fulfillment of Export Obligation (EO) under the Export Promotion Capital Goods (EPCG) Scheme. Instead of annual reporting, authorization holders must now submit a report on EO fulfillment to the concerned Regional Authority after the expiry of the first four-year block period and continuously until the valid EO period ends. The report must contain details of shipping bills, invoices, bills of export, and foreign inward remittance certificates, duly certified by a Chartered Accountant, Cost Accountant, or Company Secretary, evidencing fulfillment of specific and average EO, where applicable. This amendment aims to reduce compliance burden and enhance ease of doing business for EPCG authorization holders.
Corporate Law
-
AGMs, EGMs via video mode till Sept 2025; no timeline extension; non-compliance risks action.
Companies allowed to conduct AGMs through video conferencing or other audio-visual means until September 30, 2025, subject to requirements in Circular No. 20/2020. No extension of statutory timeline for holding AGMs; non-compliance liable for legal action. EGMs and passing resolutions through postal ballot permitted via video conferencing or audio-visual means until September 30, 2025, following framework in previous circulars. Other requirements remain unchanged.
IBC
-
Operational creditor seeks payment of pre-CIRP dues defying approved resolution plan's schedule.
The Appellant sought payment of its pre-CIRP dues from the Respondent in a manner different from the approved resolution plan, which provided for payment of pre-CIRP dues in 8 quarterly installments from June 2022 to March 2024. The Appellant claimed that payments made by the Corporate Debtor after CIRP commencement should be appropriated towards pre-CIRP dues instead of current CIRP costs. The NCLAT held that the resolution plan's schedule for payment of pre-CIRP dues was sacrosanct and cannot be superseded. Any payments made after CIRP commencement must be appropriated towards current CIRP dues, not pre-CIRP dues. The Appellant was entitled to payment of pre-CIRP dues only as per the approved resolution plan. The Adjudicating Authority's view that post-CIRP payments cannot be appropriated towards pre-CIRP dues was reasonable and upheld. The appeal was dismissed.
-
Steel fabrication debt dispute: Creditor's plea rejected for lack of evidence on debt acknowledgment post 2013.
Application filed u/s 9 of the Insolvency and Bankruptcy Code, 2016 regarding default in fabrication and erection of steel structure at the Corporate Debtor's plant in Meghalaya. Respondents filed requisite documents on 03.12.2020 as per order dated 25.10.2019. Appellant failed to identify any document showing acknowledgement of debt by Corporate Debtor after 2013, despite multiple opportunities. Appellant unable to point out any entry in trial balance, balance sheet or other documents serving as acknowledgement of debt and extending limitation period. Appeal dismissed by NCLAT for reasons stated in order dated 25.11.2022.
Law of Competition
-
Amended Competition Act empowers regulator to enforce anti-trust rules from Sept 2024.
This notification brings into force the provisions of Section 19(f) of the Competition (Amendment) Act, 2023, issued by the Ministry of Corporate Affairs. Section 19(f) grants certain powers to the Competition Commission of India, likely related to enforcement or investigation of anti-competitive practices. The effective date for operationalizing this provision is September 19, 2024, as per the powers vested under sub-section (2) of Section 1 of the parent Act. The notification is a statutory instrument enabling the implementation of the specific clause within the broader amendments to the competition law.
PMLA
-
Money Laundering Case: Bail Granted, Citing Liberty Rights and Completed Probe.
The court granted regular bail to the applicant charged u/s 120B of the IPC and Sections 7/7A/8 of the Prevention of Corruption Act, 1988. The applicant has been cooperative during the investigation, and the investigations against them are complete. Despite the voluminous documents and witnesses involved, the applicant has been in custody since 29.11.2022, while co-accused in similar circumstances have been granted bail. Citing the Supreme Court's observations in Manish Sisodia v. Directorate of Enforcement, the court emphasized that prolonged incarceration before conviction should not become punishment, and the fundamental right to liberty under Article 21 is superior to statutory restrictions. The applicant has deep roots in society, and there is no risk of fleeing. Conditions can be imposed to ensure attendance during trial. Consequently, the court directed the applicant's release on bail subject to fulfilling the imposed conditions.
-
Influential businessperson granted bail in high-profile corruption case after prolonged incarceration.
The applicant, a highly-educated 50-year-old Indian citizen with a business background and deep roots in society, sought regular bail in a money laundering case related to large-scale malpractice and corruption in the framing and implementation of the Excise Policy for 2021-22. The prosecution's complaint has been filed, and investigations against the applicant are complete. The evidence is documentary, and there is no likelihood of tampering with witnesses. The applicant is not a flight risk, has businesses and professions based in India, and is unlikely to abscond. The Supreme Court has observed that prolonged incarceration before being pronounced guilty should not be permitted, and the fundamental right of liberty is superior to statutory restrictions. The applicant stands on a better footing than other co-accused recently granted bail. The High Court directed the applicant's release, subject to fulfilling conditions imposed, allowing the bail application.
SEBI
-
Mutual funds get more flexibility to trade credit default swaps for hedging and investment.
The circular allows mutual funds greater flexibility to participate in credit default swaps (CDS), enabling them to buy and sell CDS with adequate risk management. Schemes can buy CDS to hedge credit risk on debt securities held, with exposure not exceeding the debt security exposure. When protected debt security is sold, the CDS position must be closed within 15 working days. Exposure to reference entity or CDS seller, whichever has higher rating, will be considered for single issuer limits. Schemes can sell CDS as part of investment in synthetic debt securities, backed by cash/G-sec/T-bills as cover. Notional CDS exposure is included in issuer/sector limits. Disclosure requirements, valuation guidelines, and overall derivative exposure limits are prescribed. The changes don't constitute a fundamental attribute change for schemes.
-
New SEBI rules ease financial penalties on individuals for technical glitches in stock markets, focus on market institutions.
This circular modifies the Standard Operating Procedure (SOP) for handling technical glitches by Market Infrastructure Institutions (MIIs) like stock exchanges, clearing corporations, and depositories. It removes the provision for imposing financial disincentives on individuals like the Managing Director and Chief Technology Officer of MIIs for technical glitches. Instead, financial disincentives will now be imposed only on MIIs. MIIs will be given an opportunity to make submissions before any disincentive is imposed. MIIs must conduct internal examinations to ascertain individual accountability for glitches and take appropriate action. SEBI retains the right to initiate enforcement action against individuals if warranted. The amendments aim to promote ease of doing business while ensuring smooth system operations.
-
AIF portfolio valuation norms revised: Unlisted/illiquid securities to follow industry guidelines.
This circular modifies the framework for valuation of investment portfolios of Alternative Investment Funds (AIFs). Key changes include: Valuation of securities covered under SEBI (Mutual Funds) Regulations to follow MF norms. Unlisted, non-traded, and thinly traded securities to follow valuation guidelines endorsed by AIF industry associations representing at least 33% of registered AIFs, considering SEBI's advisory committee recommendations. Harmonization of valuation norms for thinly traded and non-traded securities across SEBI-regulated entities by March 31, 2025. Changes in valuation methodology to comply with AIF valuation guidelines not considered 'Material Change'. Eligibility criteria for independent valuers specified. Timeline for reporting valuations based on audited data extended to seven months. Compliance test report to include adherence to this circular. The circular aims to provide a consistent and standardized approach for AIFs' portfolio valuation.
Service Tax
-
Taxpayers can appeal against GST orders & claim refunds - CESTAT jurisdiction affirmed.
The Larger Bench held that an appeal against an order passed u/s 142(6) of the CGST Act, 2017 is maintainable before the CESTAT. The Tribunal, citing a precedent involving identical facts, allowed the appeal and set aside the impugned order. It held that the appellant is entitled to a cash refund u/s 142(9)(b) of the CGST Act, but remanded the case to the original authority for verification of original invoices/documents. The summary covers the key legal issues of maintainability of appeal, time limitation, refund claim, and the CESTAT's jurisdiction under the CGST Act.
-
Payment processors for Airbnb not liable for service tax, as not intermediaries but service exporters.
The appellants are not intermediaries but provide payment processing services to Airbnb, Ireland on a principal-to-principal basis. The conditions for being an intermediary under the Genpact case are not satisfied as there is no principal-agent relationship, and the appellants do not facilitate the main service provided by Airbnb. The appellants merely process payments to ensure property owners receive consideration for renting to Airbnb, without any involvement with Airbnb's customers. The appellants provide a single service of payment processing to Airbnb and have no tripartite agreement or commission-based arrangement. Their services qualify as export of services u/r 6A of the Service Tax Rules, making them eligible for refunds claimed and not liable for service tax. Consequently, the impugned orders are set aside, and the appeal is allowed.
Central Excise
-
Freight charges on invoices for excisable goods excluded from assessable value for excise duty.
Freight charges shown separately in invoices for excisable goods, as per agreements with buyers, are not includible in the assessable value for excise duty, irrespective of ex-factory or FOR sales. The Supreme Court has consistently held that when goods are handed over to the transporter and title passes to the customer, freight charges collected separately cannot be included in the assessable value. Therefore, any consequential demand for duty, penalty, and interest based on inclusion of such freight charges in the assessable value is unsustainable. The order imposing such demands is set aside, and the appeal is allowed.
Articles
Notifications
News
Case Laws:
-
GST
-
2024 (9) TMI 1237
Correctness and legality of the order passed by the Jaipur Bench of the Rajasthan High Court - absence of the appellant's counsel during the proceedings - violation of principles of natural justice - HELD THAT:- No doubt, the High Court has noted that the counsel for the appellant did not appear before the High Court on certain dates. However, when the matter was called and reserved on 29.04.2024 and the judgment has been pronounced on 25.072024, in between the matter was taken up on 18.07.2024 on which date the counsel for the appellant herein did not appear as such. It is not known as to why after the case was reserved for orders on 29.04.2024 it was once again listed on 18.07.2024. On that day at least, the counsel for the appellant could have been heard. If he was absent on that day, an opportunity ought to have been given with possibly a warning to the appellant to ensure that his counsel was present on the next date of hearing. However, we find that on 18.07.2024, possibly the matter was again reserved and on 25.07.2024, the impugned order has been passed. The fact remains that the counsel for the appellant herein who had the advantage of an order of bail in his favour granted by the trial Court, was not heard in the matter and the impugned order of cancellation of bail was passed without hearing the counsel for the appellant herein. The impugned order is set aside, the matter is remanded to the High Court. The High Court to re-consider the application filed by the respondent herein with regard to the cancellation of bail granted to the appellant herein. It is needless to observe that reasonable opportunity would be given to both sides for advancing their arguments on the said application. The appellant shall ensure that his counsel is present on the next date of hearing and not procrastinate the matter all over again. Appeal allowed.
-
2024 (9) TMI 1236
Supervisory jurisdiction or under the original jurisdiction under the Constitution of India - Concurrent jurisdiction of State and Central GST authorities - violation of Article 14 of the Constitution of India - blocking of Input Tax Credit - HELD THAT:- Section 6 (2) (b) of the Act treats the empowered officers under the SGTS/UGST Act at the central level to be at par and does not prescribe for transfer of investigation of the proceedings from State authority to the Central authority or vice-versa - The object of Section 6(2)(b) of the Act is to avoid multiple proceedings by the Sales Tax Officer and Central Tax Officer on the same subject matter and the Rules of purposive interpretation requires Section 6(2)(b) of the Act to be read in light of this object. It would be evident from the Circular issued by the Ministry of Finance/ Department of Revenue, dated 05.10.2018 that central government itself has acknowledged that once the officer of the State authority has initiated action, it would be the proper officer who would then conduct further proceedings under the Act. The import of the aforesaid Circular dated 5.10.2018 is to be understood to mean that when an inquiry is conducted by a proper officer of the State, an investigation is required to be done by the Central Tax Officer, the Central Tax Officer would exercise the said power for the purpose of investigation. However, it would not mean that the proceedings being conducted by the State Tax Officer would also be transferred to the Central Tax Officer and the proceedings as initiated earlier point of time would rather continue with that authority that initially commence the proceedings. Thus, it would be evidently clear from the aforesaid circular(s) that the State and Central Governments have been extended the same powers under the CGST and SGST Act and if one of the officers has already initiated proceedings, the same cannot be transferred to another and he alone is to issue process under the Act and take it to its logical end. The word subject-matter used in Section 6(2)(b) of the Act would mean, the nature of proceedings . In the present case, it would thus mean the proceedings initiated prior at any point of time vide Annexure P-1 by respondent No. 1 and, therefore, for the same subject matter, respondent No. 2 cannot be allowed to initiate proceedings. Such action, if allowed, would be contrary to the provisions contained in Section 6(2)(b) of the Act. There are merit in this petition and the same is accordingly allowed and the Blocked Credit Ledger dated 16.05.2024, popped up on the online web portal on 20.05.2024, passed by respondent No. 2 and the summons dated 16.03.2024 issued by respondent No. 2, are accordingly quashed and set aside - petition allowed.
-
2024 (9) TMI 1235
Cancellation of GST registration of petitioner - no opportunity of hearing was given to the petitioner - violation of principles of natural justice - HELD THAT:- On perusal of the order, it shows that no reason has been assigned while passing the impugned order. The Division Bench of this Court in the case of SURENDRA BAHADUR SINGH VERSUS STATE OF U.P. THRU. PRIN. SECY. COMMERCIAL TAX (GST) LKO. AND 2 OTHERS [ 2023 (8) TMI 1262 - ALLAHABAD HIGH COURT] has held ' In the present case from the perusal of the order dated 07.01.2023, clearly there is no reason ascribed to take such a harsh action of cancellation of registration. In view of the order being without any application of mind, the same does not satisfy the test of Article 14 of the Constitution of India, as such, the impugned order dated 07.01.2023 (Annexure - 2) is set aside. The petition is accordingly allowed.' In view of the facts and circumstances of the case as well as law laid down by this Court, the impugned orders cannot be sustained in the eyes of law and same are hereby quashed. The writ petition succeeds and is allowed.
-
2024 (9) TMI 1234
Appeal dismissed on the ground of limitation - original order confirming the demand u/s 74 of the GST Act was passed without providing any opportunity of hearing to the petitioner - HELD THAT:- It is admitted fact that the appeal has been dismissed on the ground of limitation. Learned counsel for the petitioner has relied upon the notification dated 02.11.2023 (Annexure No. 1 to the supplementary affidavit. On close scrutiny of the said notification, it is clear that if taxable person could not file appeal against the order passed by the Proper Officer on or before 31.03.2023 under sections 73 or 74 of the GST Act and if the appeal is preferred on or before 31.01.2024, the same will be considered on merit without taking recourse to the limitation. In the case in hand, the impugned order has been passed on 20.07.2023, much after the date mentioned in the aforesaid notification, i.e., 31.03.2023. Therefore, the said notification is of no aid to the petitioner. Further, the judgement cited by the learned counsel for the petitioner in the case of M/S SUMIT ENTERPRISES OFFICE AT BADEL NAWABGANJ BARABANKI THRU. PROPRIETOR ATUL KUMAR VERSUS STATE OF U.P. THRU. PRIN. SECY. MINISTRY OF FINANCE LKO. AND 2 OTHERS [ 2023 (10) TMI 342 - ALLAHABAD HIGH COURT] nowhere deals with condoning the delay; whereby the appeal has been dismissed on the ground of limitation and therefore, the same is also of no aid to the petitioner. In the above judgement, it has been specifically held that delay in filing the appeal cannot be condoned beyond the prescribed period of limitation in the Act. This Court does not find any merit in these writ petitions - Petition dismissed.
-
2024 (9) TMI 1233
Default committed by the petitioner in relation to the filing of returns beyond the prescribed period - benefit of insertion of sub-Section (5) to Section 16 of the CGST Act, 2017 - HELD THAT:- Having considered the materials on record and taking note of the provisions contained in Section 16(5) of the CGST Act, 2017 which has been inserted vide notification dated 16th August 2024, the present writ petition is required to be heard. Since, the petitioner has been able to make out a prima facie case, the order dated 26th April 2024 for the tax period 2018-19 forming subject matter of challenge in the instant writ petition, shall remain stayed till the next date of hearing - List this matter under the same heading in the combined monthly list of December 2024.
-
2024 (9) TMI 1232
Cancellation of GST registration of Petitioner s firm - time limitation - HELD THAT:- This is quite well known a fact that the object behind enacting the CGST/RGST Act, 2017 is to levy taxes on manufacture of certain goods in the form of Central Excise Duty and to levy tax by the State Governments on retail sales in the form of Value-added Tax, Entry Tax, Luxury Tax etc. The legislative intention to facilitate commercial and business activities is reflected in the several provisions under the CGST/RGST Act; one of such provisions is contained under Section 30. May be the statutory provisions of limitation under Section 107 of the CGST/RGST would bind the statutory authorities which cannot condone the delay except the circumstances envisaged thereunder, but then, such limitations are not binding on the writ Court. The writ Court having regard to the facts and circumstances in the case and keeping in mind that a right to appeal provided under the statute should normally be decided on merits may condone the delay and direct the statutory authority to entertain the appeal beyond the period of limitation. The present writ petition is entertained and the appeal preferred by the petitioner-firm vide Reference Number: ZA080323041640Y is restored to its original records. Petition allowed.
-
2024 (9) TMI 1231
Violation of the principles of natural justice - petitioner did not receive the SCN pursuant to which the impugned order was passed - petitioner states that the impugned SCNs were projected on the portal under the tab Additional Notices and Orders and therefore, the petitioner had no reason to access the same - HELD THAT:- The present petition is allowed and the impugned order is set aside. The petitioner may file reply to the impugned SCNs along with all relevant documents relied upon by it within a period of two weeks from date. The adjudicating authority shall consider the same and pass an appropriate order after affording the petitioner an opportunity to be heard. Petition disposed off.
-
2024 (9) TMI 1230
Imposition of time limit for availment of Input Tax Credit - violative of Article 14, Article 19 (1) (g) and Article 300A of the Constitution of India - HELD THAT:- It is evident that the insertion of the aforesaid provision has been made effective from the 1st day of July, 2017, whereby and whereunder, it has been provided that Notwithstanding anything contained in sub-section (4), 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, the registered person shall be entitled to take input tax credit in any return under section 39 which is filed upto the thirtieth day of November, 2021 . It is, thus, evident that the decision which has been taken as impugned in the present writ petition was in absence of the consideration by following the stipulation made in sub-section (5) of Section 16 which has been made effective w.e.f. 1st day of July, 2017. Considering the implication of insertion of sub-section (5) under Section 16 of the CGST Act, this Court is of the view that the matter needs to be considered afresh - the matter is remitted before the authority to pass afresh order taking into consideration the implication of sub-section (5) of Section 16 of the CGST Act.
-
2024 (9) TMI 1229
Permission to withdraw writ petition - discrepancy in tax period mentioned in the show cause notice and the impugned order - HELD THAT:- The writ petitioner seeks leave of this Court to withdraw the instant petition with a liberty to file an appeal as provided under Section 107 of the CGST. It has been submitted that the appeal will be filed within a period of two weeks. The instant writ petition is being disposed of by giving liberty to the petitioner to file the appeal within a period of two weeks.
-
2024 (9) TMI 1228
Violation of principles of natural justice - unreasoned impugned order - certain discrepancies in the input tax credit - HELD THAT:- Undisputedly, the impugned order does not deal with the petitioner s contentions. The petitioner s reply was rejected summarily by stating that it was found to be devoid of merits. The impugned order is ex facie unreasoned and, therefore, is liable to be set aside. The respondents fairly states that the impugned order may be set aside and the matter be remanded to the Adjudicating Authority to consider afresh. The matter is remanded to the Adjudicating Authority to consider afresh. The Adjudicating Authority shall pass a speaking order after affording the petitioner an opportunity of hearing - Petition disposed off by way of remand.
-
2024 (9) TMI 1227
Cancellation of petitioner s GST registration with retrospective effect from 07.02.2022 - petitioner did not respond to the show cause notice or appear before the officer - HELD THAT:- The petitioner neither responded to the SCN dated 08.11.2023, nor appeared before the concerned officer on 14.11.2023 - the proper officer had issued the impugned order. The petitioner has an equally efficacious appellate remedy against the impugned order and therefore, it is not considered apposite to entertain the said petition - petition disposed off.
-
2024 (9) TMI 1226
Seeking grant of bail - no direct evidence of being in any way connected with the fake GST firms - Validity of FIRs under Sections 420, 467, 468, 471, and 120B IPC - HELD THAT:- In the facts of the present case, the involvement, knowledge and actions following the deposit determines that the applicants were well connected with Sanjay Dhingra in respect of transactions which he had with GST firms which were registered by using PAN Card and Aadhaar Card of the informant. Money trail/ financial transaction and the records that have been traced to track the flow of funds, detect illegal activity which can be analyzed from the bank account of the applicants wherein it is not clear as to from where such huge amount of money came into accounts of the alleged accused persons and have been deposited in other accounts. The Investigating Officer has, while submitting the charge sheet, found unusual and unexplained transactions which indicate some illegal activity as showing involvement of the applicants in the criminal offence. Fraudsters, like all the alleged accused in the present case set up companies only on paper to generate fake transactions and claim ITC. Such companies are abandoned or shutdown after a short period. The present case relates to economic offences. Such offence like large scale fraud, money laundering and corruption, are often viewed seriously because they affect the economic fabric of the society. The Courts may deny bail in such cases especially if the accused holds a position of influence or power. In the present case, money trail of crores, which affects the society at large scale, is involved which started from registration of fake firms by using Aadhaar and PAN Cards of the informant who had not applied for such registration. The Apex Court in the case of Prahlad Singh Bhati v. NCT, Delhi and another [ 2001 (3) TMI 1053 - SUPREME COURT ], has held that while granting bail, the court has to keep in mind nature of accusations, nature of evidence in support thereof, severity of punishment which conviction will entail, the character, behaviour, means and standing of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, larger interest of the public or State and similar other considerations. The Apex Court has, in the case of P. Chidambaram v. Directorate of Enforcement [ 2019 (12) TMI 186 - SUPREME COURT ] , held that precedent of another case alone will not be the basis for either grant or refusal of bail though it may have bearing on principle and the consideration will have to be on case-to-case basis on facts involved therein and securing the presence of the accused to stand trial. Having gone through the submissions of learned counsel for the parties, nature of accusation of offence, role of the applicants as well as reasons given in judgement, it is found that this is not a fit case for granting bail. Bail application dismissed.
-
2024 (9) TMI 1225
Levy of penalty u/s 129 of CGST Act - Detention of goods - alleged tax evasion and under-valuation - HELD THAT:- The petitioners are permitted to make payment of tax and penalty under Section 129 (1) (a) of the CGST Act 2017, calculated on the market value as determined by the authorities within a period of one week from today. On receipt of the said amounts, the respondent No. 1 is directed to release the vehicle bearing No.MH-40-CM-9089 along with the goods which have been retained by respondent No. 1-authority under the impugned order within a period of seven days thereafter. The Writ Petition is partly allowed.
-
2024 (9) TMI 1224
Provisional attachment of bank account under Section 83 of the CGST Act, 2017 and Rule 159 of the CGST Rules, 2017 - objection to the provisional attachment is kept pending indefinitely - HELD THAT:- There is an inbuilt scheme of consideration of objection against provisional attachment of the property. The provision, in terms, does not provide any time limit within which such objection should be decided. However, the objection to the provisional attachment is required to be decided within a reasonable time and it cannot be kept pending indefinitely. Two months have already passed from the date of objection filed by the petitioner. The objections are required to be decided within a reasonable time and if the objections are kept pending for a long time without decision, it would frustrate the very object of consideration of objection as engrafted under Rule 159 (5) of the CGST Rules, 2017. The objections must be decided within a reasonable time limit. In the absence of any express provision, the objections, in such cases, are required to be decided within an outer limit of three months from the date of submission of the objections. Respondent No. 2 is, therefore, directed to decide the objection filed by the petitioner by affording him an opportunity of being heard within a period of one month from today - Petition disposed off.
-
2024 (9) TMI 1223
Retrospective cancellation of petitioner s GST registration - petitioner had not filed its returns for a continuous period of six months - impugned cancellation order does not set out any reasons for any such retrospective cancellation of petitioner s GST registration - Violation of principles of natural justice - HELD THAT:- It is considered apposite to set aside the impugned cancellation order and direct that the petitioner s GST registration be restored forthwith. The petitioner is bound down to his statement that he will file his returns up to date and pay the taxes due along with interest and penalty, if any, within the stipulated period of thirty days - petition disposed off.
-
2024 (9) TMI 1222
Cancellation of petitioner s Goods and Services Tax (GST) registration with retrospective effect - impugned order does not indicate any specific reason for cancelling the petitioner s GST registration with retrospective effect - violation of principles of natural justice - HELD THAT:- The petitioner is not aggrieved by the decision of the proper officer to cancel its GST registration. This is for of the reason that the petitioner had closed down its business with effect from April, 2022 onwards. The petitioner is essentially aggrieved by cancellation of its GST registration with retrospective effect, which also covers the period during which the petitioner claims that it was in existence. It claims that during this period it had duly filed its returns and paid the requisite taxes. The SCN does not set out any specific ground for cancellation of the petitioner s GST registration. It merely sets out the statutory provision under which the petitioner s GST registration was proposed to be cancelled. It is also material to note that the SCN did not include any proposal for cancelling the petitioner s GST registration with retrospective effect. Thus, the impugned order passed pursuant to the SCN is liable to be set aside. Section 29 (2) of the CGST Act/DGST Act empowers a proper officer to cancel the taxpayer s registration including from retrospective effect for the reasons set out in Section 29 (2) of the CGST Act/DGST Act. However, the said decision cannot be arbitrary or whimsical. It is necessary that the decision to cancel the taxpayer s GST registration with retrospective effect must be informed by reason - In the present case, no reasons are set out in the impugned order, which would support cancellation of the petitioner s GST registration with retrospective effect. It is considered apposite to modify the impugned order to a limited extent that it would be operative from the date of the SCN (that is with effect from 12.05.2022) and not with retrospective effect from 23.08.2017 - petition disposed off.
-
2024 (9) TMI 1221
Delayed availing of Input Tax Credit contrary to Section 16(4) of the respective GST enactments - HELD THAT:- Sections 16(5) and 16(6) of the Central Goods and Services Tax (CGST) Act have been incorporated. Similar amendments are expected by the Tamil Nadu State Legislature to insert Sections 16(5) and 16(6) of the Tamil Nadu Goods and Services Tax Act, 2017. Even otherwise, as per the decision of the Hon'ble Supreme Court in FORMICA INDIA DIVISION VERSUS COLLECTOR OF CENTRAL EXCISE [ 1995 (3) TMI 98 - SUPREME COURT] , once the tax is demanded, the benefit of Input Tax Credit has to be granted. The Impugned Order can be set aside and the case be remitted back to the respondent to pass a fresh order - Petition disposed off by way of remand.
-
2024 (9) TMI 1220
Irregular credit reversals made by the Petitioner - replies filed by the Petitioner to the ASMT-10 notice as well as DRC-01 notice was not satisfactory - HELD THAT:- In the present case, the show cause notice dated 02.04.2024 was initially issued by the respondent, for which, a reply dated 11.04.2024 has been sent by the petitioner. Thereafter, prior to the passing of assessment order, another show cause notice was issued by the respondent on 21.05.2024, for which, the petitioner sought 4 weeks time for filing reply vide letter dated 18.06.2024. Thereafter, again vide letter dated 18.07.2024, the petitioner sought 2 more weeks time for filing the reply. Under these circumstances, on 08.08.2024, the impugned order came to be passed against the petitioner. In the said impugned order, the respondent had captured with regard to the time sought by the petitioner for filing the reply. In terms of Section 75(4) of the Act, if the respondent are intend to pass any order against an Assessee, they are supposed to provide an opportunity of personal hearing prior to the passing of final assessment order. In the present case, though the time was granted to the petitioner for filing the reply, the impugned order came to be passed without any intimation with regard to the provision of personal hearing opportunity, which is contrary to the terms of Section 75(4) of the Act. In such case, it is crystal clear that the impugned order came to be passed in violation of principles of natural justice and hence, the same is liable to be set aside. The impugned order dated 08.08.2024 is set aside and the matter is remanded to the respondent for fresh consideration - Petition allowed by way of remand.
-
2024 (9) TMI 1219
Inability and omission to file a detailed response/reply along with relevant material to the Show Cause Notice - direction to furnish copies and extracts of the seized documents, data, computer etc., to the petitioner-Company - HELD THAT:- A perusal of the material on record will indicate that it is an undisputed fact that the respondent No. 3 conducted search and seizure operations on 01.03.2024 during the course of which, material belonging to the petitioner viz., material found in the premises of sister entity of the petitioner viz., sales and purchase registers, books of accounts, detailed data were seized by the respondent No. 3. The explanation offered by the petitioner that on account of the said search and seizure operations conducted by the respondent No. 3, the petitioner was not in a position to submit a detailed reply along with necessary material to the Show Cause Notice deserves to be accepted and the impugned orders at Annexure-H and H1 dated 15.04.2024 deserve to be set aside and the matter remitted back to the respondent No. 2 for reconsideration to the stage of submitting reply to the Show Cause Notice and by issuing further direction to the respondent No. 3. Petition allowed by way of remand.
-
2024 (9) TMI 1218
Refund of the accumulated input tax credit with interest - export of service or not - petitioner is an intermediary in terms of Section 2 (13) of the IGST Act, 2017 or not - HELD THAT:- A perusal of the material on record including the various contentions and written submissions of both sides are sufficient to come to the conclusion that the various factual and legal contentions and submissions made by both sides have not been addressed correctly or properly by respondent No. 2 Appellate Authority while passing the impugned orders at Annexure-A dated 29.05.2023 and 20.12.2022. Under these circumstances, in order to provide one more opportunity to both sides to put-forth their respective claims and contentions before respondent No. 2 Appellate Authority, without expressing any opinion on the merits / demerits of the rival contentions, it is deemed just and appropriate to set aside the impugned orders at Annexure A dated 29.05.2023 and 20.12.2022 respectively and remit the matters back to respondent No. 2 for reconsideration of the appeals afresh in accordance with law within a stipulated time frame. Petition allowed by way of remand.
-
2024 (9) TMI 1217
Dismissal of review pwtition - writ petition was filed after expiry of the period of limitation for preferring an appeal under Section 107 (1) read with Section 107 (4) of the CGST Act - HELD THAT:- From perusal of writ petition, it is apparent that the petitioner has himself stated that the Order in Original was passed on 30.03.2023, but the same was communicated to the petitioner on 10.04.2023. Even counting 3 months period, as canvassed by learned counsel for the petitioner, therefrom it would expire by 09.07.2023 whereas the writ petition was filed on 05.08.2023. Learned counsel for the review petitioner then submits that the delay as per Section 85 of the Finance Act is condonable for a further period of 3 months. This condonable period would not come for the purposes of counting the period of limitation which is the original period prescribed under the Act i.e. 2 months as per Order in Original, but 3 months as per learned counsel for the petitioner. Therefore, even though the provisions of CGST Act may not be applicable but applying the provisions of Finance Act, 1994 also the writ petition was filed after expiry of the period of limitation. There are no error in the impugned judgment to that extent warranting interference. Accordingly, the review petition is dismissed.
-
2024 (9) TMI 1216
Refund of penal amount/amounts paid - goods seized on the ground that the movement of goods were not accompanied by proper documents - HELD THAT:- A perusal of the order of the Division Bench of the erstwhile High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh in KAVERI ENTERPRISES VERSUS STATE OF ANDHRA PRADESH [ 2017 (12) TMI 1781 - ANDHRA PRADESH HIGH COURT] would show that the Division Bench had considered the very same contentions and had negatived the said contentions. There are no reason to differ from the view taken by the Division Bench and are in respectful agreement with the ratio set out in the said order. The question of whether the movement of goods, of the petitioners herein, would amount to a proper movement of goods, which would not attract any penal action or payment of tax, shall be determined by applying the guideline such as, wherever e-way bills/tax invoice/delivery challan of the originating State is produced, the movement of goods shall be treated as bona fide movement of goods and it would not attract any penal action/tax/penalty under the GST regime. The petition is disposed off subject to fulfilment of conditions imposed.
-
2024 (9) TMI 1215
Non-consideration of the reply given pursuant to the notice given under GST DRC-01A - requirement to consider the reply before issuing SCN - Violation of principles of natural justice - HELD THAT:- A plain reading of Rule 142 (1A) and 142 (2A) of the Rules of 2017 would go to show that it is discretionary for the proper Officer to either issue communication or not to do so. However, in the present case, a communication is issued and the person to whom communication is sent, has filed submissions against the proposed liability. In Form GST DRC-01A or in Part B of Form GST DRC-01A, there is no provision under the Rules for adjudication regarding submissions made by the person referred to in sub-rule (1A) of Rule 142 of Rules of 2017. Rule 142 (1A) of the Rules of 2017 is, basically, only a communication, which the proper officer , if he feels so, may give. The right of the assessee arises only after issuance of a show cause notice under Rule 142 (1) (a) of the Rules of 2017, in which case there is provision under the Rules for affording an opportunity of hearing. Affording opportunity of hearing at different stages was not contemplated by the legislature and thus, we beg to differ from the judgments cited at bar, by learned counsel for the petitioner. The RGST/CGST Act and Rules having financial implications have to be interpreted in the manner as promulgated. The Apex Court in the case of AJMERA HOUSING CORPORATION ANR. ETC. VERSUS COMMISSIONER OF INCOME TAX [ 2010 (8) TMI 35 - SUPREME COURT] observed that it is trite law that a taxing statute is to be construed strictly. In a taxing Act one has to look merely at what is said in the relevant provision. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. There is no room for any intendment. In interpreting a taxing statute, the Court must look squarely at the words of the statute and interpret them. Considerations of hardship, injustice and equity are entirely out of place in interpreting a taxing statute. Since in the present case, only communication has been given, there is no reason to entertain the present writ petition and the same appears to have been filed just to stall the proceedings, which are pending before the authorities. There are no force in the writ petition, hence, the same is dismissed.
-
2024 (9) TMI 1214
Rejection of appeal on the ground of time limitation - HELD THAT:- Admittedly in this case, it may be noted that the determination has been made under Section 73 of the said Act - Such appeal had been filed beyond the time prescribed though there appears to be some explanation for the delay in filing the appeal. The Appellate Authority, however, without considering such explanation had decided to dismiss the said appeal, inter alia, on the ground that the appeal is barred by limitation and the petitioner having not made the deposit of twelve and half per cent in terms of the notification dated 2nd November, 2023 is not entitled to the benefit of such notification. It appears that the petitioner has already made a pre-deposit of ten per cent of the amount of the tax in dispute. As such, it cannot be said that there was any lack of bona fide on the part of the petitioner in preferring the appeal. The petitioner certainly does not stand to gain by filing a belated appeal. The order passed by the Appellate Authority on 18th March, 2024 cannot be sustained. The same is accordingly set aside - Petition disposed off.
-
2024 (9) TMI 1213
Seeking for rectification of order - HELD THAT:- Section 161 clearly provides for, inter alia, affected person to apply for rectification. The third proviso says, where the rectification adversely affects any person, he is to be given hearing. The authority in already having passed impugned order, hereby set aside, had decided no rectification was necessary. That was continuation of the assessee feeling it stood affected by order dated 30th December, 2023. Appeal against the assessment order would be on merits. That is why the statute provides for rectification. The authority will deal with the rectification application on restoration in accordance with law - Petition disposed off.
-
2024 (9) TMI 1212
Cancellation of registration of petitioner - non-application of mind - absence of reasons for cancellation - violation of principles of natural justice - HELD THAT:- In the present case, the facts are similar to one in Surendra Bahadur Singh's case [ 2023 (8) TMI 1262 - ALLAHABAD HIGH COURT ] where the Division Bench took into consideration the original order and set aside the same being non-reasoned and allowed the petitioner therein to file reply to the show cause notice. The orders impugned herein are liable to be set aside. Accordingly, the order in original dated February 22, 2023 is quashed and set aside - Petition allowed.
-
2024 (9) TMI 1211
Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - confirmed tax demand pertains to TDS deductions made by Government Departments - HELD THAT:- On perusal of the impugned order, it appears that the confirmed tax demand pertains to TDS deductions made by Government Departments. The petitioner submits that all these deductions were reported in subsequent returns. In these circumstances, it is just and necessary to provide an opportunity to the petitioner. The impugned order dated 24.11.2023 is set aside on 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. The petitioner is also permitted to submit a detailed reply to the show cause notice with in the aforesaid period - Petition disposed off.
-
2024 (9) TMI 1210
Grant of anticipatory bail - economis offences - wrongful availment of ITC - offences punishable under section 132 (1)(c), 132(1)(b) and 132(1)(i) of the OGST Act, 2017 - HELD THAT:- Keeping in view the fact that the Petitioner is said to be involved in commission of economic offences, which are grave in nature for making huge unlawful gain by causing huge loss to the State Exchequer by putting up the show for such sincere involvement in business and carrying out the same, as also entitlement to the huge sum as incentive in the form of Input Tax Credit (ITC) flowed having the tendency of foiling the entire move in introducing this new Tax Regime, it is not required to grant anticipatory bail to the Petitioner. Petition disposed off.
-
2024 (9) TMI 1209
Cancellation of petitioner s registration on the ground of non-filing of return with in the stipulated time - HELD THAT:- This writ petition is disposed of by directing the respondent authority concerned to intimate the petitioner within seven working days with regard to the revenue due, if any, which is required to be paid by the petitioner for restoration of its registration and petitioner shall make such payment within ten days from the date of receipt of such intimation of revenue due. Respondents authority concerned shall open the portal for a period of thirty days from date to enable the petitioner to make such payment. Petition disposed off.
-
2024 (9) TMI 1208
Extension of time limit to pass adjudication order under Sub-Section 9 of Section 73 of the CGST/WBGST Act, 2017 - alleged wrongful exercise of power under Section 168A read with Section 73(10) of the said Act - HELD THAT:- The issues involved in this writ petition require adjudication on exchange of affidavits by the parties and petitioner has also been able to make out a prima facie case for interim relief. Considering the facts and circumstances of this case and submission of the parties and in view of involvement of pure question of law this writ petition is admitted - Let the respondents file affidavit-in-opposition with in four weeks, petitioners to file reply thereto, if any, with in two weeks there after. List this matter for final hearing in the monthly list of August, 2024.
-
2024 (9) TMI 1207
Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - SCN preceding the 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 on record, it is evident that the petitioner did not participate in proceedings leading to the impugned order. In the affidavit, it is asserted that all the notices and orders were uploaded on the view additional notices and orders tab of the GST portal. In these circumstances, the interest of justice warrants that an opportunity be provided to the petitioner albeit by putting the petitioner on terms. The order dated 08.06.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand within fifteen days 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.
-
2024 (9) TMI 1206
Seeking relief for bearing additional tax liability on government contracts due to GST implementation - seeking relief of issuance of direction upon the respondents authority concerned to neutralize the impact of unforeseen additional tax burden on Government contracts - HELD THAT:- This writ petition is disposed of by giving liberty to the petitioners to file appropriate representation, before the Additional Chief Secretary, Finance Department, Government of West Bengal with in four weeks from date. On receipt of such representations the Additional Chief Secretary, Finance Department shall take a final decision within four months from the date of receipt of such representation after consulting with all other relevant departments concerned. Petition disposed off.
-
2024 (9) TMI 1205
Correctness and validity of SCN - challenge to the assessment order on the sole ground that the statutory remedy of appeal - HELD THAT:- Present is a case where the petitioner did not even file appeal and allowed the order passed in assessment proceedings to become final and thereafter approached this Court by filing writ petition seeking to challenge the determination of tax, interest and penalty by the competent authority vide order dated 21.12.2022. Present is not a case where the order under Section 74 of the RGST Act, 2017/ the CGST Act, 2017 levying tax along with interest and penalty was passed without giving any opportunity of hearing to the petitioner. Even according to the petitioner, he was issued show cause notice and thereafter, impugned order was passed. In the writ petition, no plausible explanation has been offered as to why the petitioner did not take recourse to the remedy of statutory appeal. It, therefore, appears that the petitioner consciously did not choose to take recourse to the remedy of appeal as provided under Section 107 of the RGST Act, 2017/the CGST Act, 2017, but waited for the expiry of the period of limitation for filing appeal as also the maximum period of delay which could be condoned in the exercise of powers conferred upon the appellate authority under the provisions of Section 107 of the RGST Act, 2017/ the CGST Act, 2017. Having not preferred an appeal, the petition in the present case is not maintainable - Petition dismissed.
-
2024 (9) TMI 1204
Classification of goods - nonwoven coated fabrics-coated, laminated or impregnated with PVC - to be classified under HSN 56031400 or under Chapter 50 or under Chapter 39? Whether the goods [nonwoven coated, fabrics-coated, laminated or impregnated with PVC] are classifiable under tariff item 56031400 or not? - HELD THAT:- A conjoint reading of the manufacturing process, the section notes, chapter notes, etc, leads to a conclusion that the nonwoven coated fabrics-coated, laminated or impregnated with PVC, will not fall under chapter 56. If the product non-woven coated fabrics-coated, laminated or impregnated with PVC, does not fall under tariff item 56031400, then whether it will fall under chapter 50? - HELD THAT:- On going through the HSN explanatory notes of chapter 50, we find that generally speaking chapter 50 covers silk, including mixed textile materials classified as silk, at its various stages of manufacture, from the raw material to the woven fabrics. It also includes silk worm gut. The applicant s product non-woven coated fabrics-coated, laminated or impregnated with PVC, is a combination of nonwoven fabrics, adhesive coat and PVC sheet, thereby not meeting the primary requirement for falling under chapter 50. Whether the product nonwoven coated fabrics-coated, laminated or impregnated with PVC, would fall under which heading of chapter 39? - HELD THAT:- Since the product of the applicant is a mixture of various constituents as is already mentioned, the product is to be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. It is already stated that the major constituent is PVC sheet which is 120 GSM out of the total 240 GSM. Therefore, the goods of the applicant viz nonwoven coated fabrics-coated, laminated or impregnated with PVC would fall under chapter 39.
-
Income Tax
-
2024 (9) TMI 1203
Claim u/s. 36 (1) (vii) and 36 (1) (viia) - amount written off by the rural branches, the difference between amount written off and doubtful debt account - HELD THAT:- Applying the provision of Section 36 (1) (vii) and (viia) as it stands, there does not appear to be any infirmity in the assessee claiming deduction under both the provisions in the manner as done by the assessee. This more particularly for the reason, that it is not the case that a provision being made under clause (viia) in the previous assessment year, (i.e. closing balance as on 31 March, 1993) is not being reduced from the bad debts written off in the next assessment year to reduce the total bad debts as written off for the purpose of claiming deduction The assessee s case appropriately fall within the parameters of the deduction as per the requirements of clause (vii) as also clause (viia) of Section 36 (1). There was nothing erroneous or illegal for the assessee to make an independent provision for bad and doubtful debts under clause (viia), to be adjusted in the subsequent assessment year, so as to claim the benefit under clause (vii) as observed by us. Such approach of the assessee certainly would not fall foul of the stipulation of the proviso below clause (vii) of Section 36 (1). It is not the revenue s case that the assessee had exceeded the deduction beyond the limits as prescribed by the proviso, namely, the amount by which the bad debts or part thereof exceeds the credit balance in the provision, for bad and doubtful debts account, made under clause (viia). For the aforesaid reasons, we hold that the assessee was entitled for the deductions under clauses (vii) and (viia) of Section 36 (1) of the Act for the assessment years in question. We, accordingly, allow the appeals by answering the questions of law in favour of the assessee and against the revenue.
-
2024 (9) TMI 1202
Profit attribution to a Permanent Establishment [PE] in India - accrual of income in India - applicability of Article 7 of the DTAA between India and the United Arab Emirates, in case losses had been suffered at an entity level was reserved for further consideration - Determination of whether service charges received under various SOSA Agreements are taxable as royalty - HELD THAT:- The distinction which needs to be borne in mind with regard to the income of a non-resident as opposed to an entity domiciled and stationed in one of the Contracting States stands duly acknowledged in Section 5 of our Act and which subjects the global income of a resident alone to taxation. For non-residents, it is the principles of income accruing or arising which are decreed to govern. It is these broadly accepted and well recognised principles which imbue the DTAA also. As was noticed hereinabove, the profits of an enterprise do not become subject to taxation unless it be found that it functions in the other Contracting State through a PE. Article 7 further postulates that it is only such income which is attributable to the PE which would be subjected to tax in the source State. As is pertinently noted in the OECD and UN Commentaries, it would be wholly incorrect to found taxation on the basis of the overall activities or profitability of an enterprise. The source State is ultimately concerned with the income or profit which arises or accrues within its territorial boundaries and the activities undertaken therein. As those commentaries pertinently observe, the profits attributable to a PE are not liable to be ignored on the basis of the performance of the entity as a whole. This position also finds resonance in the decisions of the Supreme Court in Morgan Stanley and Ishikawajama [ 2007 (7) TMI 201 - SUPREME COURT ] and relevant parts whereof have been extracted above. While protecting the right of an enterprise to be subject to tax in the State where it be resident, Article 7 places a negative stipulation in respect of cases where a PE is found to exist coupled with an attribution exercise being undertaken in respect of the domestic enterprise. The contention of the respondents essentially requires us to confer a judicial imprimatur upon the principle that the domiciled entity, namely a PE, would be liable to be taxed only if the global enterprise were profitable. This even though the income of that entity, by virtue of Article 7, stands restricted to the extent of income being attributable to the PE. In fact, Article 7 itself restricts the taxability of the enterprise to the extent of income or profit attributable to the PE. We are thus of the firm opinion that the argument of global income or profit being relevant or determinative is totally unmerited and misconceived. The submission is clearly contrary to the weight of authority which has been noticed hereinabove. Regard must also be had to the fact that Article 7 does not expand its gaze or reach to the overall operations or profitability of a transnational enterprise. It is concerned solely with the profits or income attributable to the PE. The taxability of income earned by a PE existing in a Contracting State is not even remotely linked or coupled to the overall operations of the enterprise of which it may be a part. The argument of world-wide income is thus rendered wholly untenable. We come to the firm conclusion that the submission of global income being determinative of the question which stood referred, is wholly unsustainable. The activities of a PE are liable to be independently evaluated and ascertained in light of the plain language in which Article 7 stands couched. The fact that a PE is conceived to be an independent taxable entity cannot possibly be doubted or questioned. The wealth of authority referred to hereinabove clearly negates the contention to the contrary and which was commended for our consideration by the appellants. Bearing in mind the well-established rule of source which applies and informs the underlying theory of taxation, we find ourselves unable to countenance the submission of the source State being deprived of its right to tax a PE or that right being dependent upon the overall and global financials of an entity. The Division Bench in these appeals rightly doubted the correctness of taxation being dependent upon profits or income being earned at the entity level . The decision of the Special Bench in Motorola Inc. [ 2005 (6) TMI 226 - ITAT DELHI-A ] has clearly been misconstrued and it, in any case, cannot be viewed to be an authority for the proposition which was canvassed on behalf of the appellants. Article 7 cannot possibly be viewed as restricting the right of the source State to allocate or attribute income to the PE based on the global income or loss that may have been earned or incurred by a cross border entity. We would thus answer the Reference by holding that the tentative view expressed by the Division Bench in these set of appeals as well as the doubt expressed with respect to the findings rendered in Nokia Solutions [ 2022 (12) TMI 700 - DELHI HIGH COURT ] was well founded and correct. The Reference stands answered in terms of our conclusions set forth above. The papers of these appeals may now be placed before the appropriate Roster Bench for disposal in light of our conclusions recorded hereinabove.
-
2024 (9) TMI 1201
Application of Section 153C proceedings to the search conducted prior to 1st June 2015 - HELD THAT:- As in view of the decision of Hon ble Supreme Court in the case of Vikram Sujitkumar Bhatia [ 2023 (4) TMI 296 - SUPREME COURT we answer the question (a) raised in all the appeals with regard to applicability of Section 153C of the Act even to the search is conducted prior to 1st June 2015 as valid and the appeals stand allowed in favour of the appellant Revenue and against the respondent assessee. So far as the Assessment Year 2015-16 is concerned, question (b) is also answered in favour of the appellant - Revenue and against the respondent assessee as it is not dispute that the Assessing Officer has passed the impugned assessment order under Section 143 (3) of the Act and the Tribunal has committed an error by applying the provisions of Section 153C of the Act even for the Assessment Year 2015-16 while passing the common judgement and order. We however remand the matters back to the Tribunal by reviving appeals of the appellant Revenue as well as the cross-objections filed by the respondent assessee so as to enable the Tribunal to decide the appeals and the cross-objections on merits of each case. These Tax Appeals stand disposed of accordingly with no order as to cost.
-
2024 (9) TMI 1200
Nature of receipts - receipt of CER (sale of carbon credit) - Capital Receipt or Revenue receipts - HELD THAT:- Tribunal has followed its earlier decisions in the earlier years for Assessment Year 2014-15 wherein, in turn it has followed the decision for Assessment Year 2012-13 by treating the Carbon Credits as Capital Receipt. In view of the decision of this Court in case of Gujarat Flurochemicals LTD . [ 2023 (12) TMI 713 - GUJARAT HIGH COURT] we are of the opinion that no substantial questions of law arise from the impugned order of the Tribunal wherein, the Tribunal has followed the decision for its earlier year. Disallowance u/s 14A r.w.r. 8D - foreign investment made by the assessee - HELD THAT:- As decided in SUZLON ENERGY LTD. [ 2013 (7) TMI 697 - GUJARAT HIGH COURT] CIT(A) had directed exclusion of foreign investment made for the purpose of computation of disallowance us. 14A as per Rule 8D of the Income Tax Rules 1962 holding that the dividend earned from the said foreign investment was not exempt from tax. No substantial question of law arises from the impugned order of the Tribunal.
-
2024 (9) TMI 1199
Faceless assessment scheme - Jurisdiction of the Jurisdictional Assessing Officer (JAO) to issue notice u/s 148 - admittedly notice was issued by the JAO for re-assessment - HELD THAT:- As decided in Jasjit Singh [ 2024 (8) TMI 228 - PUNJAB AND HARYANA HIGH COURT ] Circular or instructions by the Board could not have been issued to override statutory provisions or to make them otiose or obsolete. Legislative enactments having financial implications are required to be followed strictly and mandatorily. By exercising the powers contained in Sections 119 and 120 of the Act, 1961 as well as Section 144B (7 8), the authorities cannot be allowed to usurp the legal provisions to their own satisfaction and convenience causing hardship to the assessees Notices issued by the JAO under Section 148 and the proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B have been found to be contrary to the provisions of the Act, 1961 and accordingly notices issued are set aside for want of jurisdiction.
-
2024 (9) TMI 1198
Denial of exemption-cum-payment under the Act without actually filing application under Section 12A(a) - whether the appellant/assessee ought to have filed a revised return to claim deductions as a Regular Assessee or as an Association of Person - HELD THAT:- The appellant/assessee obtained registration under Section 12AA of the Act only on 02.03.2016. The case pertains to the Assessment Year 2013- 2014. Therefore, in terms of the decision of the Division Bench of this Court in M/s.Soundaram Chokkanathan Educational and Charitable Trust case [ 2020 (12) TMI 737 - MADRAS HIGH COURT] the benefit of registration would not enure in favour of the appellant/assessee after registration. The appellant/assessee cannot be denied all the legitimate deductions that would have been available, if the returns were filed either as a Regular Assessee or as an Association of Person . The purpose of assessment is to recover just tax and not subject an assessee to unjust tax by holding that no return was filed either as a Regular Assessee or as an Association of Person merely because revised return was not filed under Section 139(4) of the Act, within a time specified under Section 134 of the Act. The last date for filing the returns under Section 139(4) of the Act would have expired on 31.03.2015 which was just few days before the return was processed on 12.03.2015 under Section 143(1) of the Act. If assessments are to be completed, deductions and applicable exemptions that are otherwise available to an assessee ought to have been extended by the Assessing Officer to an assessee before finalizing the assessment. Since the appellant/assessee was not entitled to exemption as a Trust under Sections 11, 12 and 12A of the Act in absence of registration under the Act as it stood Section 12AA of the Act, the benefit of other deductions under the Act ought to have been given. The Assessing Officer is not expected to act mechanically to confirm the liability to fasten an unjust tax liability on an assessee. Therefore, we are inclined to set aside the Impugned Common Order and remit the case back to the AO to pass a fresh order under Section 143(3) of the Act. Decided in favour of assessee.
-
2024 (9) TMI 1197
Delay in disposal of the appeals filed in respect to the assessment year 2020-21 and 2018-19 - grievance of the petitioner in so far as the appeal filed on 18.10.2022 is that in terms with Section 250 (6A) Commissioner (Appeals) is required to dispose of and decide the said appeal within one year from the end of the financial year in which such appeal is filed - HELD THAT:- This Court is of the opinion that there should not be any difficulty on the part of the First Appellate Authority to decide the Appeals at the earliest more so, taking into account the mandate of Section 250 (6A) of the Income Tax Act, 1961 and the guidelines dated 07.03.2024. In that view of the matter, this Court directs the Principal Commissioner of Income Tax, Guwahati to ensure that the Appeals filed by the petitioner for the assessment years 2020-21 and 2018-19 on 18.10.2022 and 10.04.2023 respectively are disposed of within a period of 3(three) months from today. Standing Counsel Income Tax shall duly intimate the Principal Commissioner of Income Tax Department, Guwahati for doing the needful in terms with the above directions. This Court also duly takes note of that till date no recovery have been made and as this Court had specifically directed the Principal Commissioner of Income Tax, Guwahati to ensure that the Appellate Authority disposes of the Appeals within 3(three) months from today, it would be in the interest of justice that till the disposal of the Appeals, no coercive measures be taken against the petitioner in respect to the demands which are the subject matter of both the Appeals.
-
2024 (9) TMI 1196
Validity of proceedings for reassessment by issuing notice u/s 148 - transactions with regard to sale consideration is reflected in each of the sale deed executed by the petitioner in the capacity of Power of Attorney holder - income being earned by the petitioner through such transactions which were reflected in the books of accounts of the Partnership Firm - HELD THAT:- The petitioner is working as peon in M/s. S.K. Enterprise and M/s. Anushri Enterprise. However, the transactions reported on portal were pertaining to both the partnership firms and the sale deeds were signed by the petitioner in the capacity of the Power of Attorney Holder and therefore, there is no question of any income being earned by the petitioner through such transactions which were reflected in the books of accounts of the Partnership Firm. As undisputed facts, the petitioner could not have been subjected to any proceedings for reassessment by issuing notice u/s 148 of the Act. Petition succeeds and is accordingly allowed.
-
2024 (9) TMI 1195
Maintainability of Revision u/s 264 against the intimation send u/s 143 (1) - whether the intimation u/s 143 (1) of the Act would fall within the ambit of expression any orders as envisaged under Section 264 of the Act? HELD THAT:- This Court, in a decision rendered in [ 2024 (8) TMI 1437 - GUJARAT HIGH COURT] after having considered catena of decisions, held that the powers conferred u/s 264 of the Act are very wide. That the powers conferred under Section 264 of the Act would imply that section does not limit the power to correct errors committed by the subordinate authorities but could even be exercised where errors are committed by assessee. It would even cover situations where the assessee because of an error has not put forth a legitimate claim at the time of filing the return and the error is subsequently discovered and is raised for the first time in an application u/s 264 of the Act. Therefore, the commissioner having been conferred the power to condone the delay to do substantial justice to parties by disposing the matter on merits should have, considering the facts and circumstances of the case, in particular that it took a long time for the CIT(A) to dispose petitioner's appeal, ought to have condoned the delay. As relying on SMITA ROHIT GUPTA [ 2023 (9) TMI 220 - BOMBAY HIGH COURT] Revision u/s 264 of the Act is maintainable against the intimation send under Section 143 (1) of the Act. We answer the question accordingly.
-
2024 (9) TMI 1194
Exemption un/s 11 (1) - Rejection of application for condonation of delay in filing Form 10B under the Income Tax Act, 1961 - delay of 361 days occurred in filing Form 10B electronically - HELD THAT:- Central Board of Direct Taxes directed the authorities to condone the delay caused in filing Form 10B in the cases where the audit report for the previous year has been obtained before filing of return of income. The interpretation made by the authority while passing the impugned order would reveal that the authority has held that Form 10B should have been filed on or before 31st March, 2018. In our considered opinion, the interpretation of the authority with regard to clause 4(i) is ex facie fault. We say so because as per the plain language of the Circular No.10, CBDT, in no uncertain terms, has directed that delay in cases where Form 10B obtained before filing of return of income is specified, meaning thereby, Form 10B ought to have been obtained before filing return of income so as to have the benefit of clause 4(i), whereas while passing the impugned order; instead of word obtained , the authority considered it as filed . Therefore, this being a basic factual understanding and interpretation of the Circular, in our view, based on such interpretation; the impugned order cannot be said to be in accordance with law and the Circular No.10 dated 22nd May, 2019. Present petition, on this count, deserves to be allowed and is hereby allowed by quashing and setting aside the impugned order.
-
2024 (9) TMI 1193
Reopening of assessment u/s 147 - reassessment proceeding being barred by limitation - mere 'change of opinion' without any new material on record - HELD THAT:- As per first proviso to Section 148 of the Income Tax Act, 1961 as amended, no notice under this Section shall be issued unless there is information with the AO which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the AO has obtained prior approval of the specified authority to issue such notice. Thus, if information is available with the AO which suggests that the income chargeable to tax has escaped assessment after obtaining obtained prior approval of the specified authority to issue such notice. As per second proviso, no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of Section 148A to the effect that it is a fit case to issue a notice under this Section. Thus, if an order under clause (d) of Section 148A of the Income Tax Act, 1961 has been passed with the prior approval of the specified authority also no such approval under the first proviso shall be required for issuing notice under Section 148 of the Income Tax Act, 1961. As per third proviso, any return of income, required to be furnished by an assessee under this section and furnished beyond the period allowed shall not be deemed to be a return under Section 139. Thus, a notice issued under Section 148 of the Income Tax Act, 1961, has to precede an enquiry after an opportunity of being heard and an opportunity of reply under Section 148A of the Income Tax Act, 1961. The notice under Section 148 also has to satisfy the time limit under Section 149 of the Income Tax Act, 1961. As per Section 151 of the Income Tax Act, 1961, before issuing the notice both under Sections 148 and 148A of the Income Tax Act, 1961, sanction of the specified authority also has to be obtained. Section 151 of the Income Tax Act, 1961, as amended contemplates sanction of the specified authority . Unless, fresh and tangible materials were available with the Assessing Officer as is contemplated under Explanations 1, 2 3 to Section 148 of the Income Tax Act, 1961 reopening of the complete assessment cannot be allowed for the period which would have been covered by the old provisions, if there was no amendment. The test in Kelvinator of India Ltd [ 2010 (1) TMI 11 - SUPREME COURT] cannot be ignored as the language used is still the same in the amended in the first proviso to Section 149(1) of the Income Tax Act, 1961, the test in Kelvinator of India Ltd [ 2010 (1) TMI 11 - SUPREME COURT] is both pristine and still contemporary in the context of amended provisions of Income Tax Act, 1961 with effect from 01.04.2021. The Division Bench of the Bombay High Court, in Siemens Financial Services (P). Ltd., [ 2023 (9) TMI 552 - BOMBAY HIGH COURT] reiterated the principles of law that were applicable to the provisions of the Income Tax Act, 1961 after 1989 amendment and for the period immediately prior to 01.04.2021. Similarly, the decision of Usha International Limited. [ 2012 (9) TMI 767 - DELHI HIGH COURT] is also relevant for the decision under the old regime. The decisions cited by petitioner rendered in the context of old regime are still relevant and therefore, they cannot be ignored as there has to be reasoned to believe that any tax has escaped assessment for any assessment year. This view has been reiterated in Hexaware Technologies Ltd. [ 2024 (5) TMI 302 - BOMBAY HIGH COURT] Since there are no fresh and tangible material were available for the AO to form an opinion that income escaped assessment, it has to be held attempt is to review the assessment completed u/s 143(3) of the Income Tax Act, 1961. Therefore, the impugned proceedings are held without jurisdiction and are liable to be quashed as prayed.
-
2024 (9) TMI 1192
Addition u/s 68 - No documentary evidence for establishing identity, creditworthiness of the investors and the genuineness of the transaction provided - addition of the entire share premium and share capital - CIT(A ) upheld the additions made by AO and enhanced income of the assessee u/s 251(1) read with 56(2)(viib) - HELD THAT:- Enhancement made by the CIT(A) u/s 251(1) r.w.s. 56(2) (viib) of the Act, the Ld. CIT(A) has not accepted the Valuation Report submitted by the Assessee as per Rule 11UA of the Rules. During the assessment proceedings the assessees have submitted the Valuation Report duly signed by the auditor by following NAV/DCF Method as required under Rule 11UA(2) of the Rules. The Valuation Reports are produced before us along with the paper book. Both the lower authorities have failed to follow the Rule 11UA of the Act, as per which the option to choose the valuation of the shares lies with the assessee and the same is binding on the Income Tax Authorities. Assessees having the choice to opt for one of the methods enumerated in the above provision and the appellant has chosen to opt for clause (b) in most of the abovementioned cases for valuation of unquoted equity shares and based on the same, the value of the share had been computed. Accordingly, the new shares were issued and allotted to the investors during the captioned assessment year. During the assessment proceedings, computation of Fair Market Value of shares as per Rule 11UA(2) was submitted before the Ld.AO to justify that the shares issued by the appellants were at Fair Market Value (FMV) which was computed in accordance with Rule 11UA(2) of the Income Tax Rules, 1962. But the AO has not given any reasoning for rejecting the valuation of shares nor have they furnished any material to the contrary which justified the rejection of the valuation of shares. When the statute provides for a particular procedure, the authority has to follow the same and cannot be permitted to act in contravention of the same. It has been hitherto an uncontroverted legal position that where a statute requires to do a certain thing in a certain way, the thing must be done in that way only. Other methods or modes of performance are impliedly and necessarily forbidden. The aforesaid settled legal proposition is based on legal maxim Expressio unis est exclusio alterius , meaning thereby that if a statute provides for a thing to be done in particular manner, then it has to be done in that manner and in no other and following other course is not permissible. The assessees have issued the shares at fair market value computed in accordance of the rules and no err has found in the method applied by the assessees The Ld CIT(A) has enhanced the value u/s 56(2) of the Act purely on the conjecture basis. The assessees have filed the document to prove the identity, creditworthiness and genuineness of the transaction of each shareholder and discharged their burden as requirement u/s 68 of the Act. The addition of income made u/s 68 of the Act as well as the enhancement of income u/s 56(2)(viib) of the Act are liable to be deleted and deleted accordingly. Assessee appeal allowed.
-
2024 (9) TMI 1191
Deduction in respect of contribution to certain pension funds u/s 80CCC(2) - Addition u/s 56 being accretion value on account of premature surrender of pension policies from LIC - HELD THAT:- On a plain reading of section 80CCC, it clear that 80CCC(2) is applicable only when the assessee is covered under sub section (1) i.e. where a deduction had been claimed and allowed under sub section (1). Admittedly, there has been no claim of deduction u/s 80CCC(1) of the Act by assessee and therefore 80CCC(2) is not applicable. However, in respect of the accretion of Rs. 16,39,726/- [ i.e. surrender value (51,23,726) - investment (34,84,000(] reference is required to be made to the provisions of section 10(10D) to determine whether this amount is exempt u/s 10(10D). For this limited purpose, the matter is restored to the file of AO to examine the eligibility of the proceeds from surrender of policy for exemption u/s 10(10D) of the Act. Appeal of the assessee is partly allowed.
-
2024 (9) TMI 1190
Revision u/s 263 - claim of accommodation entry - reliance on statements of third parties for accommodation entries - timelines for completing the assessment u/s 143(3) - HELD THAT:- As evident that during the course of 147 proceedings, the assessing officer had duly enquired into this aspect regarding the claim of accommodation entry. Further, from the facts placed on record before us, the principal CIT has not given any specific finding as to how the assessment order was erroneous and it is evident that the principal CIT had taken recourse to 263 proceedings only with a view to extend the timelines for completing/framing of assessment under section 147 of the Act, which is not permissible in law. PCIT before holding the order of the Ld. A.O as erroneous in so far as prejudicial to the interest of revenue should have to conduct necessary enquiries or verification in order to show that the findings given by Ld. A.O is unsustainable in law. in the instant facts, we observe that the principal CIT has not given any independent finding as to how the assessment order is erroneous and hence unsustainable in law. In our considered view, it is a well-settled principle that in order to hold that the assessment order is erroneous insofar as prejudicial to the interests of the revenue, the principal CIT has to give an independent finding as to how on the basis of information available on record, the assessing officer has taken a legally unsustainable view, which is liable to be set aside. However, in the instant facts, no such finding has been given by the principal CIT. We observe that the assessee had given a specific submission to the effect that during the impugned year under consideration, the assessee had not earned any exempt Long term capital gains, but in fact had earned short term capital gains on which due taxes had also been paid, and therefore, there is no basis of assuming that during the impugned year under consideration the assessee had earn any long term capital gains on which no tax had been paid. Appeal of the assessee is allowed.
-
2024 (9) TMI 1189
Validity of reopening the assessment u/s 147 - Addition based on pen drive found in search with an employee of the Maverick Group wherein contained an excel sheet - assessee had filed objections against the reasons so recorded which were rejected by AO in a summary manner and the assessment was completed u/s 143(3) r.w.s.147 by adding the said sum by alleging that the assessee had paid interest in cash out of undisclosed source of income. HELD THAT:- During assessment proceedings in the case of assessee himself, initial notice u/s 133(6) was issued wherein the said amount of interest appearing as adjustment interest was alleged to be interest received and was asked to furnish the manner of disclosing the same in the return of income. In reply to this vide letter it was explained that interest was not paid to them rather, it was paid by them. Further the confirmation of the same had already been submitted before ld.AO during proceedings u/s 153A - AO had changed his stand of treating the entries as interest paid instead of earlier observation as interest received and alleged that the amount appearing under the column Adjustment is the amount of interest paid by assessee out of his undisclosed sources and not recorded in the books of accounts. During the assessment proceedings in the case of the Maverick group, it was observed that excel sheet was received from some finance broker who had been working for many persons apart from Maverick Group and that broker was asking the additional interest which was not given. As relying on the case of the M/s. Marverick Share Brokers Private Limited [ 2022 (9) TMI 1334 - ITAT JAIPUR] interest whatever actual paid is duly recorded in the respective parties accounting only the additional interest claim across all the parties which were neither paid nor any supporting evidence have been found to have been paid. Based on that set of facts we do not find any reasons to sustained the addition made in the hands of the assessee. Based on these observations ground raised by the assessee.
-
2024 (9) TMI 1188
Revision u/s 263 on the order of the National Faceless Assessment Unit - Application of provisions of sec 56(2)(x) - HELD THAT:- The jurisdiction belongs to the PCIT, Jaipur-1, and contentions raised by the assessee has no force as per the records available with the revenue. Since, the assessee has not given any proof that he has corrected his address on the data base of the revenue the jurisdiction rest with the ITO, Ward 1(2), Jaipur and consequently, PCIT, Jaipur has appropriate jurisdiction as per provisions of section 263 - On the contrary, assessee was confronted to at time of hearing to submit any proof for change of address in the PAN data base he remained silent. He did not produce any record to support this contention. Merely, filing the tax return to a different address without correcting records of the revenue in the PAN data base, the contentions raised by the assessee has no force and therefore, ground Nos. 1 2 raised by the assessee stands dismissed. Applicability of Section 56(2)(x) - On comparing both deed, the bench noted that the area and consideration in both deed are different and therefore, the contentions so as to non applicability of provisions of section 56(2)(x) as contended the deed itself does not matches and therefore, the contention raised by the assessee has been misplaced and misguided fact as argued by assessee. There is no reference of such deviation as to why the same has happened is not mentioned in the submission so filed. Had it been so the assessee should have clarified that the both the deeds relate to the same property - We not that the reference to the payment are also not dealt with the payment made. Even the details of the TDS deducted as per provision of section 194IA has not been placed on record even though as contended by the ld. DR. Assessee failed to convince that the agreement dated 10.04.2015 relates to the same property and therefore, provision of section 56(2)(x) should have not been applied and if so of 2015. But here the fact as discussed being different we are of the considered opinion that considering the facts available on record we do not find any merits to deviate from the finding of recorded by the PCIT. Therefore, ground raised by the assessee stands dismissed.
-
2024 (9) TMI 1187
Treating the revised return of income as invalid - disallowance u/s 68 considering the revised return of income - HELD THAT:- There is no doubt regarding the issuance of notice u/s 143(2) by the AO in response to the revised return of income and made disallowance u/s 68 of the Act considering the revised return of income. While relying on revised return of income and reply therein in response to notice under section 143(2) of the Act, the AO completed the assessment in terms of the revised return of income, but, however, treating the same as invalid as reflected in para 8 of the assessment order, in our opinion is not justified. We, therefore, hold the revised return, based on which notice u/s 143(2) has been issued is valid return and since the assessee has disclosed cash as on 31.03.2015, no further addition of cash difference in original and revised return under section 68 of the Act is called for. Thus, ground raised by the assessee are allowed. Not considering the revised VAT returns reflecting increased in sales - We note that nothing was brought on record by the Department that the turnover as admitted in the sales tax return is incorrect and therefore, it establishes that the assessee correctly shown the sales and closing stock leading to cash on hand, which is directly matching with the cash deposits made into the bank account. Thus, the order of the ld. CIT(A) in confirming the addition is not justified. Accordingly, the grounds raised by the assessee are allowed.
-
2024 (9) TMI 1186
Validity of proceedings u/s 153C - CIT(A) after discussing the issue in detail, rejected assessee s plea on this issue and upheld the validity of proceedings u/s 153C - HELD THAT:- After going through the order of learned CIT(A) and there being no supporting material filed by the assessee in support of its claim, we see no reason to interfere with the finding of learned CIT(A) on this count. Accordingly, grounds taken by the assessee in this respect are rejected. Disallowance of expenses booked in P L a/c - Authorities below have disallowed the claim of the assessee on the ground that assessee was not found to be engaged in any business activities. Before us also the assessee failed to provide any supporting evidence in support of its claim. Under these circumstances we see no reason to interfere in the finding of learned CIT(A) on the issue in question. Consequently, grounds taken by the assessee on this issue are dismissed.
-
2024 (9) TMI 1185
Addition made in the Intimation passed u/s. 143(1) under the head income from business or profession - as mentioned by the CPC that the adjustment was made as the amount was shown in the tax audit report as any other items of income but the same was not mentioned in column No.5(D) of Part-A 01 Any other items of income in the return filed by the assessee - HELD THAT:- Assessee has admitted (i) Rs. 2,56,485/- under the head income from house property ; (ii) Rs. 16,800/- was admitted under the head income from house property and (iii) Rs. 2,93,988/- was admitted under the head income from other sources . Therefore, since the assessee has admitted Rs. 3,17,980/- (aggregating of the items (i) to (v) as mentioned above) in the respective heads of income while filing the return of income, it is not necessary to include these items in Part A 01 of the return of income under any other items of income . On this issue find merit in the argument of the Ld. AR. Therefore, the addition made by the Ld. AO / CPC in the Intimation passed u/s. 143(1) of the Act under the head income from business or profession is not warranted and hence hereby set-aside the orders passed by the Ld. Revenue Authorities and delete the addition made by the Ld. AO. It is ordered accordingly.
-
2024 (9) TMI 1184
Validity of non speaking and unreasoned order by CIT(A) - Unexplained expenditure u/s 69C and undisclosed income u/s 69A - CIT(A) deleted addition - HELD THAT:- We find that the impugned order passed by the learned CIT(A) is not a speaking and reasoned order and the same is issued without assigning any cogent reason. CIT(A) ought to have required to consider the entire matter in the light of the right perspective and then to pass a speaking and well reasoned order to decide the grievance of the assessee, which is totally missing in the in the order passed by the learned CIT(A). Simply allowing the claims of the assessee without giving any cogent reason is not enough to pass a speaking order. Considering this aspect that the learned CIT(A) has not passed speaking or reasoned order and seen the order from any angle, the impugned order cannot legally be sustained. Accordingly, we reverse the impugned order passed by the learned CIT(A) by allowing the grounds of appeal raised by the Revenue.
-
Customs
-
2024 (9) TMI 1183
Recovery of duty drawback with penalty - requirement to issue ARE-2 to the merchant exporter in case where the duty paid Hexane is used to manufacture DOC - HELD THAT:- It is not in dispute that the petitioner did not issue the ARE-2 while removing the DOC manufactured by using the Hexane without payment of Central Excise duty. However, as held by the Commissioner (Appeals) such non-issuance of the ARE-2 would not be for removal of the DOC manufactured out of the duty free procured Hexane by availing the benefit under Rule-19 (2) of the Rules would not make any difference as there is no intention established by the Adjudicating Authority and the only allegation levelled against the petitioner stand on pre-condition that the petitioner exporter had knowingly or intentionally claimed the duty drawback erroneously. However, the Commissioner (Appeals) has categorically held that the legality of claiming custom portion of the drawback by the merchant exporter, the allegation made by the Adjudicating Authority was devoid of any merit and there was no finding or discussion by the Adjudicating Authority whereby any conclusive evidence as how non-issuance of ARE-2 by the petitioner would tantamount to the intentional involvement in abetement of erroneous claim of the drawback by the exporter which purely relates to the custom portion of the drawback when the exporter manufacturer is not unduly getting the double benefit. The Revisional Authority while Considering the aspect in the facts of the case of the petitioner has not taken into consideration the fact that the rate of duty drawback is 1% in the facts of the case which relates to the custom portion only and not the Central Excise portion and therefore, the exporter did not get any double benefit in the facts of the case. In such circumstances, it cannot be said that the petitioner has committed any breach of the Rules by issuing the DOC without issuing ARE-2. In such circumstances, the impugned order passed by the Revisional Authority is not sustainable and is accordingly, quashed and set aside so far as the petitioner is concerned with regard to the levy of penalty which is deleted by the Commissioner of Customs (Appeals). The impugned order passed by the Revisional Authority levying the penalty upon the petitioner is quashed and set aside to the extent it confirms the levy of penalty upon the petitioner and the order of Commissioner (Appeals) to that extent is restored - Petition allowed.
-
2024 (9) TMI 1182
Issuance of SCN beyond time limitation - import of contraband mainly cigarette - violation of Regulation 10 (a), 10 (d), 10 (e), 10 (j), 10 (k), 10 (n) of CBLR 2013 (and also 11 (a), 11 (d), 11 (j), 11 (k), 11(e), 11(n) of CBLR 2018) - HELD THAT:- In the instant case the appellant has obtained the investigation report issued by the office of the Commissioner of Customs- Kutch Commissionerate SIIB branch dated 17.10.2014, wherein the entire facts of the case are narrated and recommendation for initiation of proceeding against the appellant have been made. It is observed that in the instant case the investigation report was issued letter dated 17.10.2014 which has been obtained by the appellant under RTI request dated 30.09.2022 made vide Letter No. S-43-29/SIIB/2013-14. The order of the Commissioner treats the show cause notice dated 03.03.2016 issued under Custom Act 1962 as offence report. Since, the investigation report, the offence report in the instant case, was issued on 17.04.2014 and the show cause notice was issued on 06.12.2018 it is clearly barred by limitation consequently. The show cause notice itself does not survive the best of limitation. Since, the show cause notice issued for revocation of license, forfeiture of security and for imposition of penalty under CBLR 2013 itself does not survive on the ground of limitation, the question of revocation, forfeiture and imposition of penalty also does not arise - Appeal allowed.
-
2024 (9) TMI 1181
Classification of imported goods - Fork/Yoke 5th and reverse gear shift (parts of motor vehicles) - to be classified under CTH 84831099 considering the goods as Transmission Shafts or to be classified under CTH 8708400 as parts of motor vehicle like gear boxes and parts thereof - HELD THAT:- Admittedly the good imported by the appellant is Fork and Yoke 5th which in itself is neither the transmission shaft nor the gear box. However it has been judicially noticed that Fork and Yoke are the assembly components located inside the gear box assembly. Since the parts/components of gearboxes are covered under 8708 precisely 87084000, that the impugned goods are not used as an integral part of engines or motors but are solely and principally used as part of transmission assembly only as claimed by the appellant which are parts of motor vehicles of HSN 8701 to 8705 because only those parts which are which constitute integral parts of engines or motors of heading 8483 are excluded from Section XVII as per Note 2(e). The above provisions of the explanations as provided by the chapter Note 8708 is an important material evidence to support the findings of the Adjudicating authority as the appellant himself has accepted that the impugned goods are transmission shafts which are further used in automobiles. In the present case, Transmission Shaft is a general classification for the goods in question. The goods since are meant to be embodied under the gear box, these are the parts of gear box for motor vehicles more specifically defined under 8708400. Also as per sub rule (c) of GRI 3 when goods cannot be classified by any of the other rules then those should be classified under heading which occurs last in numerical order among those which equally merit consideration - there are no equal merit consideration in the two contesting tariff entries however still 8708 is later in the numerical order. Seen from this perspectives also the impugned goods (Fork and Yoke 5th) are rightly classifiable under 87084000 which attract BCD at the rate of 10%. The appellant has wrongly classified the imported goods under CTH 84831099 and that due to said mis-declaration the appellant has evaded BCD to the extent of 2.5% thereof - there are no infirmity in the order under challenge - appeal dismissed.
-
2024 (9) TMI 1180
Valuation of imported porcelain vitrified tiles - adoption of value from NIDB data - assessment attained finality - HELD THAT:- As regards the finding of appellate authority that the assessment attained finality and cannot be challenged in appeal, the issue is squarely covered by the judgment of Hon ble Supreme court in the matter of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV [ 2019 (9) TMI 802 - SUPREME COURT] , where it is held that in case any person is aggrieved by any order, which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act. Thus, the appellant has got legal right to challenge the assessment order under Section 128 of the Customs Act, 1962. Adoption of NIDB data - HELD THAT:- It is the settled position of law that NIDB data cannot be the only basis for rejection of the declared value. There is no justification to compare the goods imported by different importers. Even as per the Order-in-Original, adjudication authority held that the goods are not branded goods and identical goods are not available for comparison. There is no admissible evidence forthcoming in the impugned order to reject the transaction value. Further, the details of such imports other than the Bill of Entry number were neither furnished to appellant and there is no mention regarding the said value as lowest among contemporaneous import to ascertain, whether such import can be considered as contemporaneous import to reject the declared value. Thus, enhancement of value is made without following the law laid down by Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Hence declared value has to be adopted for assessment. Appeal allowed.
-
Insolvency & Bankruptcy
-
2024 (9) TMI 1179
Entitlement to the payment of its pre-CIRP dues from the Respondent in a manner different from the manner of payment provided for in the resolution plan, as approved by the Adjudicating Authority - appropriation of all payments made after CIRP commencement only towards current CIRP costs - HELD THAT:- The insolvency commencement date was 18.05.2017. On completion of the CIRP proceedings, the resolution plan of the Corporate Debtor was approved by the Adjudicating Authority on 12.12.2017. It is also an undisputed fact that the resolution plan provided for payment of pre-CIRP dues of the Appellant and also prescribed the manner and modalities of how the payment of these pre-CIRP dues were to be provisioned. In terms of the resolution plan, the pre-CIRP dues were to be made good in 8 quarterly instalments commencing from June 2022 to March 2024. It is pertinent to note that though the Appellant had admittedly not filed their claims during CIRP, the payment of pre-CIRP dues of the Appellant had been provided for in the resolution plan. As the law stands today, no exception can be taken to such a plan as long as it provided for payment to the Appellant in accordance with Section 30(2)(b) of the IBC. In any case, the present is not a case where the Appellant is contending that payment of their dues is not as per provisions of Section 30(2)(b) of the IBC. It is neither a case where the Appellant is claiming entitlement to receive any higher amount in respect of pre-CIRP dues. Furthermore, the resolution plan not having been challenged, the terms of the resolution plan had attained finality and become binding on all stakeholders including the Appellant. The Appellant have not raised any dispute that the Respondent by their conduct had displayed any signs of disapproving or breaching or side-stepping or disturbing the schedule of payment as delineated in the plan in respect of meeting the pre-CIRP dues of the Appellant. There is nothing which has been placed by the Appellant on record, basis which, the intent of the Respondent to pay pre-CIRP dues in accordance with the resolution plan can be doubted - Merely because the Corporate Debtor had paid the pre-CIRP dues of Rs 1.76 Cr. in May-June 2017, the Appellant cannot insist that this payment has to be accounted only towards payment of pre-CIRP dues and that this amount cannot be subjected to adjustment against current CIRP electricity dues. The schedule and calendar of payment of pre-CIRP dues of the Appellant as given in the resolution plan is sacrosanct and cannot be allowed to be superseded simply because payment thereto had been voluntarily done earlier by the Corporate Debtor. If the payment of pre-CIRP dues is insisted upon being made in any manner which is not specified and factored in the resolution plan, that would amount to be an infraction of the resolution plan and cannot be countenanced. The Adjudicating Authority has rightly observed that any payment made by the Corporate Debtor to the Appellant after the insolvency commencement date cannot be appropriated towards electricity charges which have arisen prior to or became due as on the insolvency commencement date and that such payment, if already made, must be appropriated only towards the dues which become payable during CIRP period on account of availing of services during CIRP period only. Hence, any amount, if paid, by the Corporate Debtor after insolvency commencement date shall only be adjusted against CIRP dues while pre-CIRP dues shall be paid in accordance with the approved resolution plan. The Appellant was entitled to the payment of its pre-CIRP dues from the Respondent only in the manner as provided in the resolution plan of 12.12.2017 and hence payment of the pre-CIRP dues from the assets of the Corporate Debtor after insolvency commencement has been correctly appropriated by the Respondents towards current CIRP dues. The view taken by the Adjudicating Authority is therefore reasonable and sound and does not call for any interference. Appeal dismissed.
-
2024 (9) TMI 1178
Application under Section 9 of the IB Code, 2016 - default in respect of the work done qua fabrication and erection of steel structure at the plant of the Corporate Debtor situated in Meghalaya - time limitation - HELD THAT:- Admittedly on 03.12.2020 the Respondents have filed the requisite documents as were required vide order 25th October, 2019 and these are annexed as Annexure C to the reply to this appeal. The appellant was, therefore, required to inspect the documents and to pinpoint any document to show any acknowledgement upon the part of the Respondent to its debt after the year 2013. The matter was listed three times thereafter and only written submissions have been filed by the appellant, reiterating the same issue without identifying the exact document to show any acknowledgement of debt by the corporate debtor in the financial documents filed by the appellant since the year 2011-12 till 2017-18 and hence no further opportunity can be granted now. The appellant was not able to identify any entry in the trial balance or in the balance sheet or in other documents which could serve the purpose of acknowledgement of debt and thereby extension of limitation period, and hence we find no force in the appeal and the same is accordingly dismissed for the reasoning given in the order dated 25th November, 2022. Appeal dismissed.
-
PMLA
-
2024 (9) TMI 1177
Seeking grant of regular bail - bail sought on medical grounds - Section 120B of the Indian Penal Code, 1860 read with Sections 7/7A/8 of Prevention of Corruption Act, 1988 - HELD THAT:- The Applicant has not retracted any statements till date and was the first accused to complete inspection of unrelied documents suggesting that his conduct has been cooperative in the investigation - The investigations qua the Applicant are complete in the present matter. It is admitted that the Applicant has been behind bars since 29.11.2022, there are around 69,000 pages of documents involved in both CBI and ED matters. Moreover, there are 493 witnesses, who have to be examined on behalf of the prosecution. In the same case, the other accused persons, namely, Manish Sisodia, K.Kavitha, Vijay Nair, Sameer Mahendru, Abishek Boinpally have already been admitted to bail in similar circumstances. In the case of Manish Sisodia v. Directorate of Enforcement [ 2024 (8) TMI 614 - SUPREME COURT ] the Hon ble Supreme Court observed that prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial. It was further observed that fundamental right of liberty provided under Article 21 of the Constitution is superior to statutory restrictions and reiterated the principle that bail is the rule and refusal is an exception . Insofar as the role of the Applicant in the present case is concerned, he stands on a better footing that the other co-accused, who have been recently granted bail. In the present case, the Applicant is having deep roots in the society. There is no possibility of him fleeing away from the country and not being available for facing trial. Regardless, conditions can be imposed to ensure the Applicant s attendance to face the trial. The Applicant is directed to be released forthwith on bail subject to fulfilment of conditions imposed - bail application allowed.
-
2024 (9) TMI 1176
Seeking grant of regular Bail - oney Laundering - large-scale malpractice and corruption in the framing and implementation of the Excise Policy for the Year 2021-22 - HELD THAT:- It is pertinent to observe that the prosecution Complaint has already been filed against the Applicant in which he has been summoned. The investigations qua the Applicant are complete in the present matter. The Applicant is a highly-educated 50-year-old citizen of India who is holding B. Com. (Hons.) from Hindu College, University of Delhi with early training in the U.K. Graduate Honours and certifications from Harvard Business School, Masters of International Management and Stanford School of Business, Enterprise Program for Growing Companies (EPGC). The Applicant along with his family run M/s Brindco Sales Pvt. Ltd. ( M/s Brindco hereinafter), that is engaged in the business of sale and distribution of alcoholic beverages for the last 55 years with strong relationship with leading Indian alcohol manufacturing Companies. The Applicant has deep roots in the society and is not a flight risk and has business and professions which are based in India and he is not likely to abscond from the country - Also, the evidence so collected in the ED case is documentary in nature and there is no likelihood of his tampering with the witnesses or influencing the witnesses. Regardless, conditions can be imposed to ensure the Applicant s attendance to face the trial. In the case of Manish Sisodia v. Directorate of Enforcement [ 2024 (8) TMI 614 - SUPREME COURT] the Hon ble Supreme Court observed that prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial. It was further observed that fundamental right of liberty provided under Article 21 of the Constitution is superior to statutory restrictions and reiterated the principle that bail is the rule and refusal is an exception . Insofar as the role of the Applicant in the present case is concerned, he stands on a better footing that the other co-accused, who have been recently granted bail - Insofar as the role of the Applicant in the present case is concerned, he stands on a better footing that the other co-accused, who have been recently granted bail. The Applicant is directed to be released subject to fulfilment of conditions imposed - bail application allowed.
-
2024 (9) TMI 1175
Maintainability of application - Seeking permission to place on record the latest Medical Document dated 29.07.2024 - petitioner submits that he does not wish to press this application - HELD THAT:- For the reasons and grounds stated in the application, the application is allowed and disposed of. Seeking interim bail during the pendency of the main bail petition on account of his medical condition - HELD THAT:- The medical condition of the applicant/petitioner has become precarious. Therefore, the interim bail has been sought on his medical grounds - Issue notice.
-
Service Tax
-
2024 (9) TMI 1174
Entitlement for abatement of 70 % from the gross value for the purpose of paying service tax on ocean freight - confirmation of demand of deferential duty attributed to the abatement portion on the ground that the appellant have not fulfilled the condition for availing the exemption under N/N. 26/2012-ST dated 20.06.2012 (Serial No.10) - HELD THAT:- In the present case the service tax demand was confirmed on the ocean freight for the transportation of vessel in respect of imported goods from abroad to Indian port. As per the Hon ble Gujarat High Court judgment in the MESSRS SAL STEEL LTD. 1 OTHER (S) VERSUS UNION OF INDIA [ 2019 (9) TMI 1315 - GUJARAT HIGH COURT] the levy was itself held unconstitutional. However, before passing both the orders of the lower authorities the judgment was not delivered. Therefore in the change circumstances of law, the matter needs to be reconsidered by the adjudicating authority. The impugned order is set aside - appeal allowed by way of remand to the adjudicating authority to pass a fresh order.
-
2024 (9) TMI 1173
Maintainability of appeal - refund claim - time limitation - Whether the order passed under Section 142 of the CGST Act, 2017, is appealable before CESTAT? - HELD THAT:- The Larger Bench while answering the reference as to whether the appeal is maintainable before the CGST Appellate Tribunal and held that the appellant is not entitled to file an appeal against the order passed under Section 142 of the CGST Act, 2017 before the Appellate Tribunal under Section 112 of the CGST Act before the Appellate Tribunal, as Section 112 of the CGST Act allows appeal against the order passed under Section 107 or Section 108 of the CGST Act. Therefore, the Larger Bench came to the conclusion that appeal against the order passed under Section 142 (6) of the CGST Act is maintainable before this Bench. Tribunal has decided a case involving identical facts. Tribunal held in the case of PUNJAB NATIONAL BANK VERSUS COMMISSIONER, CENTRAL GOODS AND SERVICE TAX, CENTRAL EXCISE, JAIPUR, RAJASTHAN [ 2022 (5) TMI 652 - CESTAT NEW DELHI] that 'appellant is entitled for cash refund in view of Section 142(9)(b) of the CGST Act but for the purpose of verification of original invoices/documents, I remand the case back to the original authority for the limited purpose of verification of the invoices/documents.' The impugned order is set aside - appeal allowed.
-
2024 (9) TMI 1172
Grant of erroneous refund - appellants are an intermediary or not - whether the appellant are eligible for refunds filed by them periodically? - HELD THAT:- The appellants are working on a principal-to-principal basis as far as Airbnb, Ireland and PayU are concerned. Airbnb, Ireland is engaged in provision of accommodation to tourists/ visitors all over the places; Airbnb has a pool of accommodation which is offered by the owners of the properties to Airbnb for a consideration; the customers who require accommodation book the same on the website of Airbnb, Ireland. The appellant, pursuant to the Master Service Agreement provides Payment Processing Services by collection reservation amounts booked on Airbnb platform by Indian guests originating in India by initiating payment of fees due to hosts for utilization of their accommodation. In the instant case, the conditions laid down by Hon ble Punjab Haryana High Court in the case of Genpact [ 2022 (11) TMI 743 - PUNJAB AND HARYANA HIGH COURT] are not satisfied as the relationship between the appellant and the Airbnb, Ireland is not that of a principal agent; there is nothing in the agreement to indicate that the appellants are facilitating the main service provided by Airbnb to their customers; in fact, the appellants are rendering services to ensure that the property owners received their consideration for renting of the property to M/s Airbnb, Ireland; the appellants are not mediating between Airbnb, Ireland and their customers in the provision of the main service. There are no main service and the auxiliary service in the instant case. Though the appellant is located in India, the recipient of the service rendered by the appellant is located outside India; the appellant receives remuneration in foreign exchange and the appellant and Airbnb, Ireland is not different establishments of a distinct person. As far as the provision of main service is concerned, there are only two parties in the present case i.e. the appellant and Airbnb, Ireland; the appellant provides single service of processing of payment to Airbnb, Ireland; the appellants have no relation whatsoever with the customers accessing the platforms of Airbnb; there is no tripartite agreement either; the clauses of the agreements do not create a principal-agent relationship; the appellant does not receive a commission and does not facilitate any main service between Airbnb, Ireland and their customers. In fact, in the facts and circumstances of the case, the appellants are providing Back Office Services which are outsourced which cannot be called Intermediary Services. In the instant case, the appellants do not satisfy the conditions so as to render their services to be Intermediary . It is clear from the terms of the Agreement that they are on principal-to-principal basis; there is no principal-agent relationship and the appellants do not render any service to facilitate the provision of main service by Airbnb, Ireland. On the other hand, they satisfy the conditions of Rule 6A of Service Tax Rules and accordingly, the services rendered by them to Airbnb, Ireland are to be treated as Export of Services. Therefore, the appellants are eligible for the refunds claimed and they are not liable to pay any service tax on the services rendered by them. Accordingly, the impugned orders are liable to be set aside. Appeal allowed.
-
Central Excise
-
2024 (9) TMI 1171
Non-inclusion of handling charges in the assessable value for excise duty purposes - recovery of amount towards handling charges as well as inspection charges in the invoice from their buyers - whether the appellant charging equalized handling charges from their customers on excisable goods is includible in the assessable value for charging excise duty or otherwise? HELD THAT:- This very issue in the appellant s sister concern MESSRS MIRA INDUSTRIES VERSUS C.C.E. -AHMEDABAD-II [ 2023 (4) TMI 655 - CESTAT AHMEDABAD ] this Tribunal has taken a view that the handling charges recovered from the customers is not includible in the assessable value. The facts of the above case and the case in hand are absolutely identical. Therefore, following the judgment of Mira Industries, in the present cases the handling charges is not includible in the assessable value of the excisable goods. Accordingly, the demand in this respect is not sustainable. Appeal allowed.
-
2024 (9) TMI 1170
Classification of goods - Sulphur 90% WG with a brand name of COSAVET FERTIS - to be classified under sub heading 25030090 25030010 of Central Excise Tariff Act, 1985 or not - HELD THAT:- It is found that on the same product having same process department had issued various show cause notices and in all the show cause notices except the present one issue has been settled by this Tribunal in C.C. E-BHARUCH VERSUS SULPHUR MILLS LTD [ 2022 (10) TMI 732 - CESTAT AHMEDABAD] where it was held that 'there is no change in definition of manufacture and excisable goods under the Central Excise Act, nor it is there any new pronouncement of a Judicial or quasi-judicial forum affecting the concepts of manufacture or that of excisable goods or classification.' Thus, the impugned order in the present case is not sustainable - appeal allowed.
-
2024 (9) TMI 1169
CENVAT Credit - Inputs/capital goods - ISO Tank which is used for packing and transportation of the appellant s excisable final product namely Di-methyl Sulphate (DMS) from factory to the consignee premises/destination - denial on the ground that the appellant have taken credit under capital goods account and the ISO tank is not capital goods - HELD THAT:- The appellant realising their mistake claimed the Cenvat credit on packaging material i.e. ISO tank considering as input during the adjudication process. The Learned Commissioner should have examined that whether such ISO tank falls under the category of inputs and accordingly decided the matter on that basis. We are of the view that merely because the appellant under a belief treated the ISO tank as capital goods and taken the credit under that account does not make them disentitled for the Cenvat credit, if otherwise available on ISO tank has input. Therefore, not considering this aspect by the adjudicating authority is clearly violation of principles of Natural Justice. Merely because the appellant have taken the credit under the capital goods but if it is available under input, the credit should be extended. However, since the Commissioner has not examined the entire matter considering the ISO Tank as input the impugned order is not legal and proper. The Learned Commissioner should re-examine the matter - the impugned order is set aside - matter remanded to the adjudicating authority for passing a fresh order - appeal allowed by way of remand.
-
2024 (9) TMI 1168
Taxability - freight charged separately in the sale invoices of excisable goods - whether freight constitute part of the transaction value of the excisable goods when shown separately in the invoice for the purpose of computation of excise duty in terms of provisions of Section 4 of the Central Excise Act, 1944 read with Central Excise Valuation Rules, 2000? - HELD THAT:- From the sample purchase order, the order acknowledgement and corresponding sales invoice it can be seen that the freight was charged separately over and above the sale price of the goods and it is also undisputed that the bill clearly shows that the goods were sold directly to the customers without taking to depot or any other place from where the goods are sold, therefore, in this fact it is ex-factory sale and the freight charges is not includible in the assessable value. This issue has been considered time and again. In the case of Ispat Industries Limited [ 2015 (10) TMI 613 - SUPREME COURT] the Hon ble Supreme Court observed ' Further, for the period 1.7.2000 to 31.3.2003 there will be no extended place of removal, the factory premises or the warehouse (in the circumstances mentioned in the Section), alone being places of removal. Under no circumstances can the buyer's premises, therefore, be the place of removal for the purpose of Section 4 on the facts of the present case.' In view of the decision of Apex Court judgment in Ispat Industries Limited it is settled that in case of factory gate sale even though sale is on FOR basis the freight charges shown/ collected separately in the invoice shall not be included in the transaction value of excisable goods. Thus, demand on the said freight charges is not sustainable. The impugned order is set aside - Appeal allowed.
-
2024 (9) TMI 1167
Liability to pay Excise Duty - part of the Kerosene removed without payment of duty, availing exemption under N/N. 12/2012, having been mixed with MS and HSD losing the character of being an exempted product - HELD THAT:- The appellant No.1 is removing MS, HSD and SKO from their refinery. In the spirit of Section 4, the appellants are discharging duty on the quantity of goods removed by them by assessing the same in the condition in which they are removed by them. If a subsequent mixing happens at a later stage, duty liability, if any, cannot be fastened to the appellant No.1. Such duty liability, if any, can only be fastened to the appellant No.2 provided there is a provision to deem such mixing to be manufactured. This is not the case of the Department. The Hon ble Supreme Court in the case of Ispat Industries Ltd. [ 2015 (10) TMI 613 - SUPREME COURT] held that liability to pay excise duty arises at the place of removal. Hon ble Supreme Court in the case of Dalmia Dadri Cement Ltd. [ 1987 (11) TMI 94 - SUPREME COURT] held that exemption is available if the product is intended to be cleared to PDS. The impugned orders set aside - appeal allowed.
-
2024 (9) TMI 1166
Valuation of Excise Duty - inclusion of freight charges in case of ex-factory sale as well as FOR sale in the assessable value of excisable goods - in agreements with the buyer, there is specific clause for charges of freight and collection thereof - freight charges are shown separately in the same invoice of the excisable goods - invocation of extended period of limitation - HELD THAT:- On this issue much water has flown and in the various judgments of the Tribunal as well as the Hon ble Supreme Court, it was consistently decided that the freight charges shown separately in the invoice which is other than the price of the goods shall not include in assessable value of the excisable goods irrespective whether the sale is ex-factory or FOR sale. In the case of Ispat Industries Ltd [ 2015 (10) TMI 613 - SUPREME COURT] the Hon ble Supreme Court held 'When the goods were handed over to the transporter, the respondent had no right to the disposal of the goods nor did it reserve such rights inasmuch as title had already passed to its customer.' The freight charges shown separately in the invoice for which there is a contract between the assessee and the buyers of the goods the said freight charges shall not include in the assessable value of the excisable goods. Thus, in the present fact of the case, the freight charges collected by the appellant separately in the invoice in respect of transportation of excisable goods is not includible in the assessable value. Therefore, consequential demand of duty, penalty and interest will not sustain. Accordingly, the impugned order is set aside - appeal allowed.
-
2024 (9) TMI 1165
Valuation of Excise Duty - inclusion of handling charges which consists of loading/unloading of goods, freight and transit insurance charged separately in the assessable value - Extended period of limitation - HELD THAT:- The issue involved is interpretation of valuation provisions under Section 4 of the Central Excise Act, 1944. All the transactions of the appellant have been duly accounted for and the goods were cleared under proper invoices and excise duty has been paid on the value which as per the appellant s bonafide belief, is correct. Therefore the department was aware of all the activities performed by the appellant. Regular periodical returns were also filed wherein transaction of duty payment thereon were declared. In these facts, entire information was disclosed before the department and there is no suppression of facts. Accordingly, the demand for the extended period is not sustainable on the ground of limitation itself. In identical issue, the Hon ble Gujarat High Court in the case of Prolite Engineering Company vs. UOI [ 1990 (3) TMI 89 - HIGH COURT OF GUJARAT] has held that information which is not required to be disclosed or recorded by statutory provision or prescribed proforma does not amount to suppression or concealment - it is found that the appellant s case is on better footing than that of the case before the Hon ble High Court. Thus, the demand beyond the normal period of limitation i.e. for April 2003 to February 2007 is liable to be set-aside. Demand for the normal period - HELD THAT:- As regards freight and transit insurance, the issue is covered by Hon ble Supreme Court decision in the case of CCE vs. Ispat Industries Limited [ 2015 (10) TMI 613 - SUPREME COURT] . However, regarding loading-unloading, if the said activity was carried out within the factory then the expenses are incurred before the place of removal therefore, same is prima-facie includible in the assessable value. However, if the said loading and unloading has taken place after the removal from the place of removal, in such case, the same may not be includible in the assessable value. However, this issue is to be reconsidered after verifying the facts. Accordingly, only for the issue of duty relates to loading-unloading of goods, the matter is remanded to the Adjudicating Authority. The appeal of appellant company is partly allowed and partly remanded to the Adjudicating Authority.
-
CST, VAT & Sales Tax
-
2024 (9) TMI 1164
Seeking restoration of VAT and CST registration certificates after cancellation due to non-filing of returns - failure to file returns due to lack of proper office facilities and staff - HELD THAT:- The cancellation order which is never served upon petitioner cannot be said to have come into existence. However, as per the record of the respondents authorities, the said cancellation orders are still alive and as such the order dated 30th December 2019 passed by the appellate authority considering the compliance made by the petitioner is not being implemented by the respondents authorities. Both the orders dated 6th July 2017 cancelling the VAT and CST registration certificates of the petitioner are hereby quashed and set aside so as to enable the respondents authorities to give effect to the appellate order dated 30th December 2019 passed by the Deputy State Tax Commissioner, Circle 7, Gandhinagar. Petition disposed off.
|
9911796707
