TMI Tax Updates - e-Newsletter
September 26, 2018

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Service Tax Central Excise CST, VAT & Sales Tax Wealth tax

Articles

1. STUDENTS RELATED SERVICES TO FOREIGN UNIVERSITY NOT EXPORT UNDER GST

   By: Dr. Sanjiv Agarwal

News

1. Commerce Minister on a Three Day visit to Bangladesh for Bilateral Talks

2. More than ₹ 12,000 crore business recorded on GeM

3. Monthly Review of Union Government of India up to the month of August 2018 for the Financial Year 2018-19

4. The Union Finance Minister, Shri Arun Jaitley addresses the Chief Executives of Public Sector Banks (PSBs) at the Annual Review Meeting of PSBs; Exhorts the banks to ensure all steps at their end to ensure clean lending and effective action in cases of fraud and wilful default, to justify the trust reposed in banks; Banks must strive to be seen always as institutions of clean and prudent lending

5. Payroll Reporting in India – A Formal Employment Perspective

Notifications

Companies Law

1. F.No.1/27/2013-CL-V-(Part) - dated 25-9-2018 - Co. Law

Companies (Registered Valuers and Valuation) Third Amendment Rules, 2018

Customs

2. 65/2018 - dated 24-9-2018 - Cus

Seeks to extend the exemption from Integrated Tax and Compensation Cess upto 31.03.2019 on goods imported by EOU

3. 82/2018 - dated 24-9-2018 - Cus (NT)

Regarding amendment in notification No. 89/2017-Cus (N.T.) dated 21.09.2017 relating to AIRs of Duty Drawback on Gold Jewellery, Silver Jewellery and Silver Articles

4. 20/2018-Customs (N.T./CAA/DRI) - dated 24-9-2018 - Cus (NT)

Appointment of Common Adjudicating Authority by DGRI

GST - States

5. 89/GST-2 - dated 21-9-2018 - Haryana SGST

Notify the rate of tax collection at source (TCS) to be collected by every electronic commerce operator for intra-state taxable supplies under HGST Act, 2017.

6. 85/GST-2 - dated 18-9-2018 - Haryana SGST

The Haryana Goods and Services Tax (Twelfth Amendment) Rules, 2018.

7. 83/GST-2 - dated 18-9-2018 - Haryana SGST

The Haryana Goods and Services Tax (Eleventh Amendment) Rules, 2018.

8. 78/GST-2 - dated 11-9-2018 - Haryana SGST

The Haryana Goods and Services Tax (Tenth Amendment) Rules, 2018.

9. 52/2018-State Tax - dated 20-9-2018 - Maharashtra SGST

Seeks to notify the rate of tax collection at source (TCS) to be collected by every electronic commerce operator for intra-State taxable supplies.

10. 23/2018-State Tax (Rate) - dated 20-9-2018 - Maharashtra SGST

Seeks to insert explanation in an entry in Notification No. 12/2017 – State Tax (Rate) by exercising powers conferred under section 11(3) of MGST Act, 2017.

11. 731/2018/5(120)/XXVII(8)/CTR-21 - dated 20-8-2018 - Uttarakhand SGST

Exempts the intra-state supplies of handicraft good

12. 730/2018/5(120)/XXVII(8)/CTR-20 - dated 20-8-2018 - Uttarakhand SGST

Amendment in Notification No. 521/2017/9(120)/XXVII(8)/2017, dated 29th June, 2017

13. 729/2018/5(120)/XXVII(8)/CTR-19 - dated 20-8-2018 - Uttarakhand SGST

Amendment in Notification No. 518/2017/9(120)/XXVII(8)/2017, dated 29th June 2017

14. 724/2018/5(120)/XXVII(8)/CTR-14 - dated 20-8-2018 - Uttarakhand SGST

Amendment in Notification No. 530/2017/9(120)/XXVII(8)/2017, dated 29th June, 2017

15. 723/2018/5(120)/XXVII(8)/CTR-13 - dated 20-8-2018 - Uttarakhand SGST

Amendment in Notification No. 525/2017/9(120)/XXVII(8)/2017, dated 29th June 2017

16. 579/2018/10(120)/XXVII(8)/2018/CT-29 - dated 18-7-2018 - Uttarakhand SGST

Uttarakhand Goods and Services Tax (Seventh Amendment) Rules, 2018

17. 577/2018/10(120)/XXVII(8)/2018/CT-28 - dated 6-7-2018 - Uttarakhand SGST

Uttarakhand Goods and Services Tax (Sixth Amendment) Rules, 2018

18. 575/2018/4(120)/XXVII(8)/2018/CT-27 - dated 6-7-2018 - Uttarakhand SGST

Goods or the class of goods after its seizure be disposed by the proper officer

19. 574/2018/4(120)/XXVII(8)/2018/CT-26 - dated 6-7-2018 - Uttarakhand SGST

Uttarakhand Goods and Services Tax (Fifth Amendment) Rules, 2018

Highlights / Catch Notes

GST

• Misunderstanding Reverse Charge: Applicant Liable for Tax on Mineral Use Services Provided by Government.

  Case-Laws - AAR : GST on the services for the right to use minerals - The applicant has misconstrued the entry which in fact casts a liability of tax to be discharged by the recipient on reverse charge basis - the applicant is liable to discharge the tax liability on such services provided to it by the Government on reverse charge basis.
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• Court Reviews Validity of Rule 89(5) on Denial of Refunds for Unutilized Tax Credits; Ad-Interim Relief Granted.

  Case-Laws - HC : Vires of Rule 89(5) of the Central Goods and Services Tax Rules, 2017 - denial of grant of refund of unutilized tax credit in respect of tax paid on input services - Notices issued - ad-interim relief granted.
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Income Tax

• Assessee-Agent Commission Deemed Taxable, Including Waived Amounts by Principals, as Income in Their Hands.

  Case-Laws - HC : Amounts received by the assessee-agent on behalf of the Principal - nature of income - amount waived by the Principals - held as in the nature of commission and taxable in the hands of assessee
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• Interest on Compulsory Acquisition of Agricultural Land Qualifies for Exemption Under IT Act Section 10(37.

  Case-Laws - AT : Exemption u/s. 10(37) - Interest received u/s 28 in case of compulsory acquisition of agricultural land as nature of interest income or it is a part of enhanced compensation - benefit of exemption allowed.
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• Assessee in Banking Entitled to Deduction for Interest Income u/s 80P(2)(a)(i) of Income Tax Act.

  Case-Laws - AT : Deduction u/s 80P(2)(a)(i) - the assessee had made investments with sub-treasuries and banks in the course of its business of banking / providing credit facilities to its members. Therefore, it was entitled to deduction u/s 80P(2)(a)(i) of the I.T.Act in respect of interest income that was received on such investments.
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• Expenditure at Fiscal Year-End Must Be Capitalized Due to Long-Term Benefits, Not Classified as Revenue Expenditure.

  Case-Laws - AT : Nature of expenditure - substantial amount incurred at fag end of the year - The assessee has been unable to prove that this particular expenditure will not give benefit to the company for a long period. Thus the amount cannot be categorized as a revenue expenditure under the head repair and maintenance and the same needs to be capitalized
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• Income Tax Act Section 80IC Limits 100% Deductions for Substantial Expansion to Five Years Only.

  Case-Laws - AT : Deduction u/s 80IC - substantial expansion - in terms of the provisions of the section no claim of deduction @ 100% of profits beyond the stipulated period of five years is allowable.
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• Depreciation on Intangible Assets After Partnership to Company Conversion Can Be Reviewed in Subsequent Years.

  Case-Laws - AT : Depreciation on intangible assets - conversion of partnership firm into a company - Written Down Value - the claim of depreciation can be examined even in the assessments years subsequent to the assessment year in which the succession has taken place.
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Customs

• IGST Exemption Extended to March 31, 2019, for EOUs, STP, and EHTP Units on Certain Imports and Procurements.

  Notifications : Exemption from IGST extended upto 31.3.2019 to specified goods imported on procured by EOU's, STP Units, EHTP units etc. for specified purposes
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• Duty Drawback Rates Updated for Gold and Silver Jewelry: Impact on Export Competitiveness and Customs Duties.

  Notifications : Amendments to the AIRs of Duty Drawback on Gold Jewellery, Silver Jewellery and Silver Articles
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• Petitioners can present case for wall fan reclassification per Section 149 of Customs Act, 1962 using import documents.

  Case-Laws - HC : Reassessment of Bills of Entry - Revenue shall give an opportunity to the petitioners to establish their case for re-classification of the imported wall fans on the strength of existing documents on the date of the import as per the proviso to Section 149 of the Customs Act, 1962
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Corporate Law

• New Rules Refine Valuation Framework for Registered Valuers to Boost Clarity and Efficiency in Corporate Valuations.

  Notifications : Companies (Registered Valuers and Valuation) Third Amendment Rules, 2018
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Service Tax

• Composite Works Contract: Include All Goods' Value in Serviceable Value for Composition Scheme Benefits.

  Case-Laws - AT : Composite Works Contract - Benefit of Composition Scheme - the value of all goods used in or in relation to execution of the work contract need to be included in the serviceable value even when the goods might have been supplied under any other contract for execution of the composite work contract.
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• CENVAT Credit Exclusion: Motor Vehicle Insurance Not Capital Goods, Excludes Plant and Machinery Insurance for Output Services.

  Case-Laws - AT : CENVAT Credit - input services - general insurance services - The exclusion clause is specifically applicable only in respect of general insurance service for motor vehicles which are not being used as capital goods - It cannot be said that the exclusion will be applicable to the insurance for the general plant, machinery which is used for providing the output service.
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• Refunds by Forward Contract Provider to Sub-Brokers Excluded from Gross Value if Done Before Tax Return Due Date.

  Case-Laws - AT : Valuation - includibility - whether amounts refunded by the petitioner, a registered “Forward Contract” service provides to its sub-brokers, before the due date of filing of returns, could be excluded from the gross value of consideration received for the taxable services provided? - Held Yes.
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• Procuring Orders and Transmitting to Overseas Manufacturers Qualifies as Export of Services, Affects Service Tax Refunds.

  Case-Laws - HC : Refund claim - export of services or not - the service of procuring orders and passing it to overseas manufacturers / clients and receiving the payments for the same is an activity of export of service.
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• Court Dismisses Refund Claim Due to Lack of Unjust Enrichment; No Substantial Legal Question Raised.

  Case-Laws - HC : Refund claim - it was never the case of the Revenue that there was unjust enrichment on the part of the Assessee - the question does not give rise to any substantial question of law and is not entertained.
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Central Excise

• CENVAT Credit Denied for Concessional Duty on Imported Coal u/r 3(1) of CENVAT Credit Rules, 2004.

  Case-Laws - HC : CENVAT Credit - restriction on credit of duty paid availing the benefit of notification no 1 of 2011 - duty paid on import of coal - assessee claimed the duty paid at concessional rate cannot cannot be treated as duty of excise perse - proviso to rule 3(1) of CENVAT credit Rules, 2004 - credit not allowed.
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• CENVAT Credit Misuse on GTA Services Violates Section 4(3)(c) and Rule 2(t), Leading to Penalties and Recovery.

  Case-Laws - HC : CENVAT credit - input services - GTA service - Since the appellant in contravention of the provisions contained in Section 4(3)(c) of 1944 Act read with Rule 2(t) of the Rules 2004 availed the Cenvat Credit which was not available, the Revenue, was within its right in imposing recovery, interest and penalty.
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• CENVAT Credit Dispute: Party Seeks Suo-Moto Availment; Department Insists on Refund Claim u/s 11B. Proceedings Redone.

  Case-Laws - HC : CENVAT credit - credit was reversed now seeks to avail suo-moto credit - Department opined that once the assessee pays back the duty of excise and that in the instant CENVAT credit availed on SKO, the proper course is to seek refund claim under Section 11B of the Central Excise Act - The entire proceedings required to be redone.
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• Court Vacates Flat Attachment Due to Lack of Evidence on Benami Purchase; Department Fails to Prove Recovery Basis.

  Case-Laws - HC : Attachment of flat - There is no material on record suggesting that the same was a benami purchase. - Further, the Department has not even prima facie established that for recovery of any dues of the father of the petitioner, such property can be utilized. - Attachment orders vacated.
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• Assessee Exempt from 10% Charge on ICB Goods u/r 6(6)(vii); CENVAT Credit Demand Invalid.

  Case-Laws - AT : CENVAT Credit - demand of 10% of the price of the exempted goods - goods have been supplied under International Competitive Bidding (ICB) - the benefit of Rule 6(6)(vii) has to be extended to the assessee and no demand can be confirmed against them.
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VAT

• "Frooti" Classified as Non-Alcoholic Beverage Under Entry 14, Schedule II of 1976 Act, Using Common Parlance Test.

  Case-Laws - HC : Classification - “frooti” drink - In the present case, “frooti” is beverage within Entry 14 of Schedule II of the Act of 1976 in the name being non-alcoholic drink and beverage, ice-cream and candy is of vide import and common parlance test would apply.
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Case Laws:

• GST

• 2018 (9) TMI 1477
  Classification of services - rate of GST - person liable to discharge GST - mining lease for extracting Stone along with associated minor minerals - annual dead rent or royalty. What is the classification of service provided in accordance with Notification No.11/2017-CT (Rate) dated 28.06.2017 read with annexure attached to it, by the State of Haryana to M/S Pioneer Partners for which royalty is being paid? - Whether said service can be classified under 9973 specifically under 997337 as Licensing services for the right to use minerals including its exploration and evaluation or as any other service? - Held that:- A perusal of classification of services shows that services of right to use natural resources classify under tariff 9973 and since description of services under serial no. 17 (i) to (v) does not cover such services of right to use minerals therefore, it would fall under the residual entry at serial no. 17(viii). Being so, the rate of tax applicable on such services, as provided therein, shall be the same rate of tax as applicable on supply of like goods involving transfer of title in goods. What is the rate of GST on given services provided by State of Haryana to M/s. Poineer Partners for which royalty is being paid? - Held that:- Service charge by way of annual dead rent or royalty paid for services of granting right to use mineral would attract GST rate as applicable on supply of mineral which is being extracted through such mining - That the minerals which are extracted from the mine are classifiable under Tariff Heading 2516 and leviable to GST @ 5%. Whether services provided by State Government of Haryana is governed by applicability of Notification No 13/2017-CT (Rate) dated 28.06.2017 under entry number 5 and whether M/s. Poineer Partners is taxable person in this case to discharge GST under reverse charge mechanism or whether given service is covered by exclusion clause number (1) of entry no 5 and State Government of Haryana is liable to discharge GST on same? - Held that:- The applicant has misconstrued the entry which in fact casts a liability of tax to be discharged by the recipient on reverse charge basis - the applicant is liable to discharge the tax liability on such services provided to it by the Government on reverse charge basis. Ruling:- The services for the right to use minerals including its exploration and evaluation, as per Sr. No. 257 of the annexure appended to notification no. 11/2017-CT (Rate), dated 28.06.2017 is included in group 99733 under heading 9973. The royalty/dead rent paid/payable to the Government by the applicant is consideration against the transfer of right to use minerals including its exploration and evaluation as per the lease granted by the Government to the applicant. The services for the right to use minerals including its exploration and evaluation, as per Sr. No. 257 of the annexure appended to notification no. 11/2017-CT (Rate), dated 28.06.2017 is included in group 99733 under heading 9973. Hence it attracts the same rate of tax as on supply of the like goods involving transfer of title in goods. As per notification no. 1/2017-CT (Rate), dated 28.06.2017 under the CGST Act, 2017 and the corresponding State Tax notification under HGST Act, 2017, Schedule-I the stone boulders extracted by the applicant attract 5% GST (2.5 % CGST+ 2.5% HGST) as covered under HSN 2516 (At sr. No. 124 of the notification). As per entry no. 5 of the Notification No 13/2017-CT (Rate), dated 28.06.2017 under the CGST Act, 2017 and the corresponding Notification No. 48/ST-2 Dt. 30.06.2017 under the HGST Act, 2017, the recipient of such services, i.e., the applicant is liable to discharge the tax liability on such services provided to it by the Government on reverse charge basis.

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• 2018 (9) TMI 1476
  Time limit for making necessary declaration to avail CENVAT Credit - migration to GST regime - vires of Rule 117 of the Central Goods and Service Tax Rules, 2017 - Held that:- Sub-rule (1A) is inserted in Rule 117 of the CGST Rules which would enable the Commissioner to extend the time limit for making the declaration upto 31.03.2019 if a case of being prevented due to technical reasons is made out - It would be open for the petitioner therefore to seek such remedy before the appropriate Court - petition disposed off.

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• 2018 (9) TMI 1475
  Vires of Rule 89(5) of the Central Goods and Services Tax Rules, 2017 as amended vide N/N. 21/2018-Central Tax dated 18.4.2018 and N/N. 26/2018-Central Tax dated 13.6.2018 - denial of grant of refund of unutilized tax credit in respect of tax paid on input services - Held that:- We are inclined to issue Notice returnable on 10.10.2018 - there shall be ad-interim relief as prayed for in para 17(D) meaning thereby the impugned demand notice dated 21.6.2018 and its operation and implementation is stayed hereby.

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• 2018 (9) TMI 1474
  Unable to file TRAN 1 electronically - transitional credit - transition to GST Regime - petition could not file returns despite genuine efforts - Held that:- GST is a new progressive levy. One of the progressive ideal of GST is to avoid cascading taxes. GST Laws contemplate seamless flow of tax credits on all eligible inputs. The input tax credits in TRAN 1 are the credits legitimately accrued in the GST transition. The due date contemplated under the laws to claim the transitional credit is procedural in nature - the petitioner has made genuine efforts for filing returns not only through online but also manually, this Court is of the view that the petitioner may be granted the relief as prayed for. This writ petition is disposed of, with a direction to the respondents either to open the portal, so as to enable the petitioner to file the TRAN 1 electronically for claiming the transitional credit or accept the manually filed TRAN 1, dated 31.01.2018, and allow the input credits - petition disposed off.

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• Income Tax

• 2018 (9) TMI 1473
  Reassessment proceedings u/s 147 - change of opinion - non disclosure of provision for bad debts and doubtful debts and interest income - Held that:- Tribunal has correctly recorded a factual finding that the Assessee has disclosed the figure of provision for bad debts and doubtful debts and interest income also in the Profit and Loss Account submitted along with the return of income. Therefore, the Tribunal held that there is no failure on the part of the Assessee to disclose fully and truly all material facts. Furthermore, it was pointed out that the figures and reasons for reopening were picked up from the assessee's accounts submitted along with return The reopening was a change of opinion. When there is no allegation that the Assessee is not fully and truly disclosed all the materials, the question of reopening the assessment does not arise. The duty of the Assessee rests only to fully and truly disclose all facts in the return, which has been done by the respondent/Assessee. It is not for the respondent/Assessee to tell the Assessing Officer has to how he has to frame the assessment and in the instant case, it is evidently clear that the reopening was because of change of opinion. - decided in favour of assessee

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• 2018 (9) TMI 1472
  Deduction under Section 80HHC - amount of profits from sale of office waste and scrap to be treated as part of the business profits for the purpose - Held that:- As in the case of Commissioner of Income Tax-VII vs. Punjab Stainless Industries [2014 (5) TMI 238 - SUPREME COURT] for the purpose of calculating the deduction, according to the provisions of Section 80HHC of the Act, one has to take into account, the profits of the business of assessee, export turnover and total turnover and the deduction, subject to several other conditions, incorporated in the section, is determined as profits of the business X export turnover/total turnover. - Decided in favour of the assessee

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• 2018 (9) TMI 1471
  Condonation of delay - Revision petition under Section 264 - Held that:- First respondent is totally justified in rejecting the revision, since the reasons stated by the petitioner for the delay is neither convincing nor acceptable, as ignorance of law is no excuse. Petitioner invited this Court's attention to the communication sent by the ICICI Bank to the petitioner on 29.12.2010 to contend that the Assessing Officer has erred in making an addition of Rs. 6,58,237/-. I do not think that the above communication of the ICICI Bank, in any way, would help the petitioner, as the said communication clearly indicates only that no transactions were made for an amount of Rs. 6,80,348/- for the financial year 2007-2008 and not that the total transaction made for the said financial year was not for an amount of Rs. 6,80,348/-. As find that even on merits, the petitioner has not made out a case so as to seek for indulgence before the first respondent for considering the revision, by condoning such enormous delay. No grounds to interfere with the order of the first respondent. W.P. dismissed.

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• 2018 (9) TMI 1470
  Jurisdiction to impose penalty u/s 271(1)(c) - Inspecting Assistant Commissioner eligibility to pass orders - Held that:- Till 01.04.1997, the Income Tax Officer had no jurisdiction to impose penalty, under Section 271(1)(c) of the Act if the minimum penalty impassable exceeded Rs. 1,000/- and in such a case he was bound to make a reference to the Inspecting Assistant Commissioner, who, on such reference exercise all the powers conferred under Chapter XXI for the imposition of penalty. From 01.04.1971, the Income Tax Officer could impose penalty under Section 271 (1)(c) if the amount of income in respect of which the particulars were concealed or inaccurate particulars were furnished did not exceed Rs. 25,000/-. If the amount of such income exceeded Rs. 25,000/- the Income Tax Officer was required to refer the case to the Inspecting Assistant Commissioner who then got jurisdiction to impose penalty. The amending Act did not make any provision that the references validly pending before the Inspecting Assistance Commissioner shall be returned without passing any final order if the amount of income in respect of which the particulars have been concealed did not exceed Rs. 25,000/-. The previous operation of Section 274(2) as it stood before 01.04.1971, and anything done thereunder continued to have effect under Section 6(b) of the General Clauses Act, 1897, enabling the Inspecting Assistant Commissioner to pass orders imposing penalty in pending references. Therefore, the Inspecting Assistant Commissioner to whom the case was referred prior to 01.04.1971 had jurisdiction to impose the penalty. Sub-Divisional Officer was empowered to initiate proceedings for illegal extraction of minerals under the provisions of Section 247(7) of the Code and the order which was impugned in the writ petition was passed by the Sub-Divisional Officer after amendment under Rule 53 of the Rules of 1996, which came into force w.e.f. 18.05.2017. Appeal dismissed.

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• 2018 (9) TMI 1469
  Amounts received by the assessee-agent on behalf of the Principal - nature of income - amount waived by the Principals taxable as revenue receipt in the hands of assessee - Held that:- he amounts received by the assessee-agent, on behalf of the Principal, after setting of the expenditure incurred on behalf of the Principal and satisfying that due to the Principal, is not kept in its hands in a fiduciary capacity and is income in its hands. Tribunal was right in holding the amounts waived by the Principals; in accordance with a settlement arrived at with their agent as income in the hands of the assessee-agent. What is left with the assessee-agent after settlement of accounts with the Principals and after deducting the expenses incurred on behalf of the Principals, constitute the character of commission received and are trading receipts of the assessee. There is no question of any further liability arising from the litigation initiated by the Principals of the assessee, since the same has been settled and amounts due to the Principals satisfied. We hence answer the questions of law framed as 1 to 3 against the assessee and in favour of the revenue. TDS liability expenditure claimed in the previous year was disallowed for reason of no deduction of TDS having been made - Held that:- AO would have to look at whether the assessee is entitled to the benefit available under the first proviso to Section 40(a)(ia). The Tribunal by a laconic statement dismissed the plea finding the dis-allowance of the earlier assessment year not arising in the subsequent one. The proviso speaks of payment in a subsequent year and the allowance being made in that subsequent year. The question hence is answered against the revenue and in favour of the assessee, but the actual allowance being left to be decided by the Assessing Officer who has to verify the claim and decide accordingly.

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• 2018 (9) TMI 1468
  Exemption u/s. 10(37) - Interest received u/s 28 in case of compulsory acquisition of agricultural land as nature of interest income or it is a part of enhanced compensation - Held that:- It is not a case of Revenue that the assessee has not received interest u/s 28 of the Land Acquisition Act, 1894. This issue has been decided by the Hon’ble Apex Court in case of Union of India Vs. Hari Singh (2017 (11) TMI 923 - SUPREME COURT) wherein it is held that on agricultural Land no tax is payable when the compensation/enhance compensation is received by the assessee as their land was agricultural land. The compensation was received in respect of agricultural land belonging to the assessee which had been acquired by the state government. Therefore, the same comes under the purview of Section 28 of the Land Acquisition Act. - decided in favour of assessee

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• 2018 (9) TMI 1467
  Revision u/s 263 - granting deduction u/s. 80IA - Held that:- As brought to the notice of the AO that the CIT(A) had decided this issue in favour of the assessee for AY 2008-09 and 2010-11 and in the case of the assessee’s sister concern namely, M/s Selvel Advertising Pvt. Ltd. and also that the Tribunal’s decision on this issue in assessee’s own case for AY 2005-06 onwards which was held in favour of assessee. Since the issue has been enquired into by the AO and after taking note of the submissions, documents and decision given by the CIT(A) and the Tribunal in assessee’s own case on the very issue regarding justification for claiming deduction u/s. 80IA, according to us, the AO has taken a view which is a plausible view and which action of the AO cannot be termed as erroneous so far as prejudicial to the interest of the revenue. It was brought to our notice by the Ld. AR that the Tribunal’s decision in assessee’s own case on the issue from AYs 2005-06 to 2011-12 is in favour of the assessee and the similar issue raised in the case of assessee’s sister concern M/s. Selvel Advertising Pvt. Ltd. wherein the Tribunal for AY 2004-05. Therefore, the issue is no longer res integra and the view taken by the AO is as per the Tribunal as well as the Hon’ble High Court’s order, therefore, the action of the AO cannot be held to be erroneous so far as prejudicial to the interest of revenue and, therefore, we hold that Ld. Pr. CIT lacks revisional jurisdiction to interfere on this issue and therefore erred in doing so. Depreciation of hoarding structure @ 100% - CIT observed that the said structure was used for less than 180 days and, therefore, the assessee is entitled to depreciation @ 7.5% (50% of 15%) instead of 100% - Held that:- According to us, the view taken by the AO cannot be faulted with and, therefore, the Ld. Pr. CIT erred in holding the AO’s action of allowing the claim of 100% depreciation as erroneous so far as prejudicial to the interest of the revenue. Since we note that the hoardings being temporary structures are eligible for 100% depreciation as held by this Tribunal in assessee’s sister concern M/s. Selvel Advertising Pvt. Ltd. therefore, the view taken by the AO is a possible view and, therefore, Pr. CIT erred in invoking his jurisdiction u/s. 263 of the Act. AO’s order cannot be held to be erroneous so far as prejudicial to the interest of the revenue on both the issues discussed above. CIT lacks jurisdiction to interfere with the order passed by the AO by invoking his jurisdiction u/s. 263 of the Act. Therefore, we quash the impugned order of the Ld. Pr. CIT. Appeal of assessee is allowed.

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• 2018 (9) TMI 1466
  Reopening of assessment - unexplained cash deposits - AO has objected the affidavit of the assessee whereby the explanation of cash deposit in his bank account has been said to be an afterthought - Held that:- It reveals from the records that the reasons recorded for reopening clearly speaks about the cash deposits in the savings bank of the assessee during the FY 2005-06. Assessee has not filed return of income for the AY 2006-07 relevant to FY 2005-06. The reasons recorded by the AO shows prima-facie, which is sufficient for reopening of assessment in terms of provisions of section 147 invoking the provisions of section 148 an escapement of income by the assessee within the meaning of section 147 - Unable to appreciate the submissions made by the assessee on the issue of the reopening of assessment. No irregularities or error is found in the observation made by the Ld.CIT(A) while justifying reopening of assessment which calls for interference by us. As perused the affidavits on records we find those parties were not examined. It is an admitted fact that no enquiry whatsoever has been conducted by the Ld.AO even at the remand stage on the affidavit filed by the parties. When those two additional evidences are really germane to the issue involved in the matter and needed to be considered before making addition, the Ld.CIT(A) without taking into consideration of the conduct of the AO in ignoring to conduct enquiry on those affidavits, confirmed the addition in a routine manner. We, therefore, in the larger interest of justice find it proper to refer this issue to the file of Ld.AO to make an enquiry on this affidavits and also to examine the depositors of those affidavits. We therefore set aside the order passed by the authorities below and further direct the AO to consider the issue afresh - Assessee’s appeal is allowed for statistical purposes.

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• 2018 (9) TMI 1465
  Grant of deduction u/s 80P(2)(a)(i) - interest income received by the assessee on investments made with Sub-Treasuries, Banks etc. - whether interest income received by the assessee on investments with sub-treasuries and banks was liable to be assessed under the head income from other sources or income from business ? - Held that:- In the instant case the assessee had made investments with sub-treasuries and banks in the course of its business of banking / providing credit facilities to its members. Therefore, it was entitled to deduction u/s 80P(2)(a)(i) of the I.T.Act in respect of interest income that was received on such investments. As in the case of Vaveru Co-operative Rural Bank Ltd. v CIT (2017 (4) TMI 663 - ANDHRA PRADESH HIGH COURT) had also decided on identical issue in favour of the assessee as held that co-operative societies engaged in providing credit facilities to its members had in course of business made investments with treasury, bank etc. and earned interest income, such income was eligible for deduction u/s 80P(2)(a)(i) of the I.T.Act. - Decided in favour of assessee.

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• 2018 (9) TMI 1464
  Disallowance of repair and maintenance expenses - revenue v/s capital expenditure - A.O considered them to be a capital in nature and merely allowed depreciation on the impugned amount - Held that:- Major expenditure for repair are towards repair of DG sets at Rs. 40,97,741/-. This repair expenditure was incurred by the assessee towards repair of wartsila DG sets and details are available at page-7 of the paper book. On perusal of this ledger account of repair we observe that there are regular minor expenditure for repair from May 2004 till close of the year but at fag end of the year i.e. 31.03.2005 a sum of Rs. 40,97,741/- has been incurred. The assessee has been unable to prove that this particular expenditure will not give benefit to the company for a long period. Thus the amount of Rs. 40,97,741/- cannot be categorized as a revenue expenditure under the head repair and maintenance and the same needs to be capitalized and certainly the assessee will be eligible to claim the depreciation as provided under the provisions of law on this capital expenditure. Addition of machine hire charges - A.O only allowed this expenditure to the extent of 25% and this disallowance was maintained to 30% by Ld.CIT(A) - Held that:- necessary investigation ought to have been conducted by the Ld.Assessing Officer and he was refrained from doing so by non co-operation by the assessee by not filing necessary details. We also cannot support the findings of Ld.CIT(A) which are without going into the basic facts of the issue. We therefore are of the considered view that this issue of genuineness of the expenditure of hire charges for machine needs to be set aside to the file of Ld. CIT(A). If necessary he can call for a detailed remand report from the Ld.AO after carrying out necessary investigation of the alleged finance and leasing companies on the basis of details and information to be provided by the assessee as and when required without taking any unnecessary adjournment. Addition of commission expenses - Assessee is aggrieved with the disallowance of 15% of commission expenses whereas the revenue is aggrieved with the part relief given by the Ld.CIT(A) against the disallowance of 25% made by Ld.A.O to 15% - Held that:- In comparison to preceding financial year the turnover has increased by only 18% whereas the commission expenses has increased by 47%. In these circumstances when expenses has increased abnormally in comparison to past year and necessary details to prove the genuineness of the expenses are not to the mark as they are required to be, we find no inconsistency in the findings of Ld.CIT(A) sustaining disallowance at 15% of the total commission expenses incurred by the assessee during the year. In the result the grounds raised by the assessee and revenue is dismissed. Disallowance of traveling expenses - Held that:- Referring to all the details of traveling expenses, we find that the complete details of each expenditure along with purposes of tour by respective employees has been mentioned. Directors as well as staff officials of the company also travelled extensively across/ outside the country. There have been frequent travels to European countries also. However, assessee failed to bring on record the connection of the foreign travels for the business purposes in the firm in the form of details of the parties which have been visited, communications with those parties with regard to export/import and whether any orders were procured. In these given facts and circumstances of the case and fair play, we are of the view that disallowance of 20% of the total expenditure will cover the deficiency in the records of the assessee. We accordingly hold so and sustain the disallowance. Disallowance of vehicle expenses - Held that:- In the submissions made by the Ld. Counsel bifurcation of expenditure has been given out of which Rs. 16,93,629/- specifically relates to car running and maintenance of the cars owned by the company. Rest of other expenses relates to the vehicle expenses for the staff and auditors. In these circumstances wherein complete details have been provided by the assessee towards the car running and maintenance expenses, we are of the considered view that disallowance of 10% at Rs. 16,93,629/- is justified to cover the personal expenses of Directors/Promoters. Sustain the disallowance to Rs. 1,69,336/- as against Rs. 4,48,270/- confirmed by the Ld.CIT(A). Ground of the assessee is partly allowed. Disallowance of miscellaneous expenses - Held that:- Miscellaneous expenses are towards electricity charges, garden expenses, internal audit, office maintenance, printing and stationery, legal expenses etc. Books of accounts are audited. The finding has been given by Ld. Assessing Officer about ad-hoc disallowance made by him. However, CIT(A) restricted the disallowance to 10% of Rs. 67,02,718/- for the lack of relevant bills and vouchers should have been produced by the assessee before the lower authority. The nature of expenditure incurred under the head “miscellaneous expenses” even though related to business purposes but due to lack of proper details minor disallowance of 5% would meet the end of justice.

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• 2018 (9) TMI 1463
  Grant of deduction u/s 80P(2)(a)(i) - interest income received by the assessee on investments made with Sub-Treasuries, Banks etc. - whether interest income received by the assessee on investments with sub-treasuries and banks was liable to be assessed under the head “income from other sources” or “income from business”? - Held that:- In the instant case the assessee had made investments with sub-treasuries and banks in the course of its business of banking / providing credit facilities to its members. Therefore, it was entitled to deduction u/s 80P(2)(a)(i) of the I.T.Act in respect of interest income that was received on such investments. As in the case of Vaveru Co-operative Rural Bank Ltd. v CIT (2017 (4) TMI 663 - ANDHRA PRADESH HIGH COURT) had also decided on identical issue in favour of the assessee as held that co-operative societies engaged in providing credit facilities to its members had in course of business made investments with treasury, bank etc. and earned interest income, such income was eligible for deduction u/s 80P(2)(a)(i) of the I.T.Act. - Decided in favour of assessee.

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• 2018 (9) TMI 1462
  Benefit of deduction u/s 80P(2)denied - interest received on investments with sub-treasury - denial of claim as the assessee was primarily engaged in the business of banking and by virtue insertion of section 80P(4) with effect from 01.04.2007, the assessee was not entitled to deduction claimed u/s 80P(2) - Held that:- Identical issue was considered in the case of ITO v. The Chengala Service Co-operative Bank Limited [2018 (4) TMI 339 - ITAT COCHIN] as held The undisputed facts are that the assessee in these cases are primary agricultural credit societies, registered as such under the Kerala Co-operative Societies Act. In the case of Chirakkal Service Co-operative Bank Limited & Ors. (2016 (4) TMI 826 - KERALA HIGH COURT) had categorically held that when a primary agricultural credit Society is registered as such under the Kerala Co-operative Societies Act, 1969, such society is entitled to the benefit of deduction u/s 80P(2) of the Income-tax Act. Assessing Officer was not competent and did not possess the jurisdiction to resolve / decide the issue as to whether the assessee was a 'Primary Agricultural Credit Society' or a 'Co-operative bank', within the meaning assigned to it under the provisions of the Banking Regulation Act and to take a contrary view especially in view of the Explanation provided after the clause (ccvi) of section 5 r.w.s Section 56 of the Banking Regulation Act. Interest received on investments with sub-treasury is part of banking activities of the assessee and the same is entitled to deduction u/s 80P(2)(a)(i)- Decided in favour of assessee. Trade income entitled to deduction u/s 80P(2)(a)(iii) / 80P(2)(a)(iv)- Held that:- There is no specific reasons given by the A.O. nor CIT(A) for denying the deduction claimed u/s 80P(2) for trade income derived by the assessee. Therefore, we restore the issue of trade income whether it is entitled to deduction u/s 80P(2) of the I.T.Act, to the file of the A.O. It is ordered according Income from house property is not entitled to deduction under any of the clauses of Sec.80P(2)(a) of the I.T.Act.

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• 2018 (9) TMI 1461
  Denial of exemption of long term capital gains - gain arising on transfer of shares - exemption claimed u/s.10(38) - treating such sum as unexplained income u/s.68 - denial of natural justice - Held that:- As relying on MR. VIMALCHAND GULABCHAND, MR. PRAVEEN CHAND, MR. GATRAJ JAIN & SONS (HUF) , MR. MAHENDRA KUMAR BHANDARI VERSUS THE INCOME TAX OFFICER, CHENNAI [2018 (4) TMI 701 - ITAT CHENNAI] The transactions claimed by the assessee whether real or sham, requires a revisit by the ld. Assessing Officer. Useful reference may be made to the law laid down by Hon’ble Apex Court in the case of CIT vs. Sunita Dhadda [2018 (3) TMI 1610 - SUPREME COURT OF INDIA] while affirming a judgment of Hon’ble Rajasthan High Court in the case of CIT vs.Smt. Sunita Dhadda [2017 (7) TMI 1164 - RAJASTHAN HIGH COURT] where the importance of providing an opportunity to cross examine the witness has been stressed. Their lordship held that this was an important constituent of natural justice. Only after all the steps required under law is complete, it can be ascertained whether claim of capital gains was bogus or not. We therefore set aside the orders of the lower authorities and remit the issue back to the file of the ld. Assessing Officer for consideration afresh in accordance with law. Appeal of the assessee is partly allowed for statistical purposes.

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• 2018 (9) TMI 1460
  Stay of demand - Additions towards transfer pricing adjustments - assessee to prove prima facie case, financial hardship and prove balance of convenience - Held that:- The assessee was required to demonstrate the prima facie case and balance of convenience and financial hardship for the purposes of making out a case for grant of interim stay. Considering the totality of facts and circumstances, the bench direct the assessee to deposit a sum of Rs. 21 crore as condition of stay. The Bench has arrived at a sum of Rs. 21 crores, taking into account the total demand in both the years, excluding the interest element and after reducing the amount already paid by the assessee. If Rs. 21 crores is paid the total tax demand remaining unpaid would come to around Rs. 42 crores. - Amount allowed to be deposited in installments. If the assessee pays the above said amount of Rs. 21 crores within the time frame stated herein above then the balance Tax amount shall not be enforced by the Revenue by taking any steps whatsoever. This stay shall be in operation for a period of 180 days or till the disposal of the appeal whichever is earlier.

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• 2018 (9) TMI 1459
  Deduction u/s 80IC - restriction of claim to 30% of the eligible profits, as against 100% claimed by the assessee on account of substantial expansion carried out by it - Held that:- The issue had been settled and decided against the assessee in the case of CIT vs Classic Binding Industries [2018 (8) TMI 1209 - SUPREME COURT OF INDIA] wherein find that it has been categorically held by the Hon'ble Apex Court that the assessee is eligible to claim deduction under the section for a total period of 10 years, with the deduction being @ 100% of the eligible profits only for the initial five years and thereafter @ 25% or 30%, as provided in section 80IC(3) & 80IC(6) of the Act. The Hon’ble Apex court has in very clear terms held that in terms of the provisions of the section no claim of deduction @ 100% of profits beyond the stipulated period of five years is allowable. - Decided against assessee.

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• 2018 (9) TMI 1458
  Disallowance of depreciation on intangible assets - conversion of partnership firm into a company - Held that:- In the case on hand also, on account of conversion, the erstwhile partnership firm ceased to exist while the company has come into existence. Therefore, the assets come to vest in the hands of the company and there is no cost of assets to the company on such vesting. When the transaction itself has been treated to be not a transfer, but is akin to succession, in our opinion the 5th proviso to sub-clause (ii) of sec. 36(1) applies and the depreciation has to be calculated as if there is no transfer. As there is no transfer, there is no cost to the assessee. Depreciation is allowable on the WDV of the asset and WDV has been defined u/s 43(6) to mean in the case of assets acquired in the previous year, the actual cost to the assessee. As actual cost to the assessee was ‘Nil’, the WD value of the assets in the hands of the predecessor firm shall be considered for the allowance of depreciation. Therefore, we do not see any reason to interfere with the orders of the authorities below. Sub-sec(6) of sec. 43 defines ‘Written Down Value’ and it provides for both the acquisition of assets during the relevant previous year and acquisition of assets before the relevant previous year and both the clauses mention ‘actual cost to the assessee’. In the second circumstance i.e where the assets are acquired before the previous year as in the case of the assessee before us, the WDV shall be the actual cost to the assessee less all depreciation actually allowed to him under the Income-tax Act. Therefore, it is clear that the claim of depreciation can be examined even in the assessments years subsequent to the assessment year in which the succession has taken place. This argument is accordingly rejected. - Decided against the assessee

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• 2018 (9) TMI 1457
  Capital Gain addition - addition on the basis of difference between sale proceeds declared by the assessee and the sale proceeds taken by the AO on the basis of valuation report of DVO - Held that:- We are convinced with the arguments of Ld. AR, basing on the decisions reported in CIT vs. Puneet Sabherwal [2010 (12) TMI 846 - DELHI HIGH COURT] that no addition can be made merely on the basis of valuation report and fair market value cannot be substituted for actual consideration received. Commissioner of Income Tax (Appeals) rightly followed the binding precedents. Inasmuch as the Ld. CIT(A) basis is a decision on the binding precedent, which binds this Tribunal equally, we find it difficult to hold that the impugned order is either illegal or regular. By no stretch of imagination could it be said that such findings of the Ld. CIT(A) are perverse or liable to be set-aside. We, therefore, do not find any merits in this appeal and the appeal is liable to be dismissed. Appeal is accordingly dismissed.

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• 2018 (9) TMI 1419
  Addition under the head “sundry creditors” - addition on account of unexplained credit - Held that:- In the present case of the assessee, neither the Assessing Officer nor the ld. D.R. at the time of hearing disputed the purchases made by the assessee and once purchases are not doubted, in such a scenario question of creditors being non-genuine does not arise. As held in CIT vs. Orissa Corporation Pvt. Ltd. [1986 (3) TMI 3 - SUPREME COURT], it was the duty of the Assessing Officer to ensure production of those creditors before him and for the deeds of his inaction, assessee cannot be held liable. Assessee has always complied with the requirements of law before the Revenue authorities, meaning thereby they have filed additional evidences before the ld. CIT(A) on an application under rule 46A which provides that ld. CIT(A) may admit those additional evidences after confronting the same before the Assessing Officer to ascertain the veracity of those evidences. Instead of doing this exercise, ld. CIT(A) has summarily rejected the additional evidences placed before him under rule 46A on baseless and frivolous reasons which goes against the principles of natural justice. We find that complete names, addresses, amounts were provided by the assessee including entire confirmation from these creditors filed before us. CIT(A) has also not given a clear cut finding on the issue and has simply accepted the version of the Assessing Officer and the Assessing Officer, without taking procedure initiated by him under section 133(6) to a logical conclusion, has held the assessee liable for non-production of creditors, which is not warranted within the purview of tax legislation - Decided in favour of assessee

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• Customs

• 2018 (9) TMI 1454
  Reassessment of Bills of Entry - mistake in the classification adopted at the time of assessment in the respective bills of entry - excess payment of duty to the extent of 2.5%. Held that:- The time for filing an appeal against the assessment in the Bills of Entry would have expired and therefore the petitioners made an application for reassessment of the respective bills of entry for re-classification under Section 149 read with Section 154 of the Customs Act, 1962 - Section 154 of the Customs Act, 1962 deals with clerical error and allows correction of arithmetical mistakes in any decision or order passed by the Central Government, the Board or any officer of customs under this Act, or errors arising therein from any accidental slip or omission may, at any time, by corrected by the Central Government, the Board or such officer of customs or the successor in office of such officer, as the case may be. In Priya Blue Industries Ltd [2004 (9) TMI 105 - SUPREME COURT OF INDIA], power of assessesing officer to alter the assessment under Section 149 of the Customs Act,1962 was not brought to the notice of the Court. However, several decisions cited by the petitioners have allowed modification of assessment under Section 149 of the Act. The respondents shall give an opportunity to the petitioners to establish their case for re-classification of the imported wall fans on the strength of existing documents on the date of the import as per the proviso to Section 149 of the Customs Act, 1962 - If the classification proposed by the petitioners under subheading 8414 51 90 of the Customs Tariff Act, 1985 is applicable to imported wall fans, the respondents shall order refund of the excess duty. The 1st respondent or any other officer authorised under the Act is directed to pass a speaking order in respect of assessment made in the 23 and 9 bills of entries of the respective petitioner under Section 17 read with proviso to Sections 149 and 154 of the Customs Act, 1962 within a period of six month from the date of this order after giving adequate opportunity to the petitioners to establish the classification of imported wall fan under sub-heading 8414 51 90 following the principle of natural justice.

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• 2018 (9) TMI 1453
  Smuggling - Contraband item - Gold - who is the owner of Gold - the first respondent was not able to establish either before the Adjudicating Authority or before the Tribunal that he was lawfully entitled to possess the gold seized from him. Whether the Tribunal could have remanded the matter to the Commissioner with a direction to exercise discretion in a particular manner especially when it has been clearly established on facts that the gold was smuggled into the country, that the first respondent was the career of the gold and that he had no documents or explanation as to how he was entitled to be in possession of the gold? Held that:- There is no room for remanding the matter to the Commissioner for a fresh consideration, as the facts clearly show that no discretion can be exercised in favour of the first respondent - reliance placed in the case of COMMISSIONER OF CUSTOMS (AIR) VERSUS P. SINNASAMY, THE CUSTOMS, EXCISE SERVICE TAX APPELLATE TRIBUNAL [2016 (9) TMI 879 - MADRAS HIGH COURT], where it was held that the discretion ought not have been exercised in favour of a smuggler giving an option to redeem the goods and that the Tribunal ought not to have interfered with the order passed by the Competent Authority, who had denied the release of the goods. During the pendency of this appeal, the 80 gold bars were sold by the Department through the State Bank of India and that the amount has been credited to the account of the Government of India. Appeal allowed - decided in favor of Revenue.

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• Corporate Laws

• 2018 (9) TMI 1456
  Seeking winding up petition - existence of Bonafide dispute - Held that:- The disputes raised by the respondent are bonafide. It is appropriate that the petitioner approaches the executing court to execute the present decree where detailed examination of the objections raised by the respondent can be gone into including by leading evidence, if necessary. This petition is accordingly dismissed. I, however, grant liberty to the petitioner to approach the executing court as per law to execute the decree. It is made clear that any observation made herein are only for the purpose of adjudication of the present petition and would not in any manner prejudice the parties in case proceedings are commenced before the appropriate civil court.

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• 2018 (9) TMI 1455
  Winding up petition - inability to pay debts - company has not paid the professional fee of the appellant, the charges for use of the navigation machine and other dues inspite of statutory notice - Held that:- The Company Court can refuse a petition for winding up of the Company when the claim of the appellant is bonafide disputed by the Company and that the principles on which the court acts are; first that the defence of the Company is in good faith and one of the substance, secondly the defence is likely to succeed in point of law and thirdly the company adduces prima facie proof of the facts on which the defence depends. In the present case, the account/ledger has been disputed by the respondent – company. The stand of the respondent – company is that no such amount is due and claim is false. In absence of any material the learned Company Judge has rightly held that there is no document admitting the liability on record. On due consideration of the reasoning assigned we are of the view that the learned Company Judge has considered all the grounds which has been advanced by the learned counsel for the parties and came to the conclusion that the liability has been disputed by the respondent – company and, therefore, it is not proper to invoke the provisions of Section 433 (e) and (f) of the Act. We are completely agreed with the view taken by the learned Company Judge. No case to interfere with the well-reasoned order passed by the learned Company Judge, as prayed is made out

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• Service Tax

• 2018 (9) TMI 1452
  Penalty u/s 78 of FA - mining of mineral service - Non-payment of service tax - bona fide belief - service tax alongwith interest paid on being pointed out - invocation of Section 73(3) of the Finance Act. Held that:- The service tax liability was shown in the books of accounts but it was not paid on account of the fact that they could not get the service tax collected from their clients - further, there is no suppression of facts because all the transactions are reflected in the books of accounts and the audit party detected these transactions from their records only. Service tax paid alongwith Interest on being pointed out - Section 73(3) of the Finance Act - Held that:- When the service tax is paid along with interest before issuance of show-cause notice, then the Revenue should not have issued the show-cause notice as per Section 73(3) of the Finance Act. Penalty not warranted - appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 1451
  Penalty u/s 78 - Supply of Tangible Goods Service - tax paid alongwith Interest on being pointed out - invocation of Section 73(3) of FA - Held that:- The appellant has paid the duty along with interest before the issuance of show-cause notice and as per Section 73(3), once the duty is paid along with interest before the issue of show-cause notice, then in that case the Revenue should not issue the show-cause notice unless there is a allegation of fraud or suppression of facts with intent to evade payment of tax - Penalty not warranted and is set aside. CENVAT Credit - inputs/capital goods - it was alleged that capital goods which were cleared by the manufacturer under heading 87042319 covers motor vehicles and therefore are not eligible for availment of credit - discrepancies in documents - Held that:- The documents produced by the appellant did not tally with each other and in both the documents, the engine number is different and only the chassis number is matching. Further the amount of cenvat credit is also different in both the documents. In view of this discrepancy, the issue of availment of cenvat credit is remanded to the original authority to verify the said document - Matter on remand. Appeal allowed in part and part matter on remand.

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• 2018 (9) TMI 1450
  Valuation- Composite Works Contract - Benefit of Composition Scheme - It is alleged that by dividing the work contract into two parts and paying service tax applicable for one work contract (composition scheme for payment of service tax) an amount of Rs. 21,01,50,386/- has been evaded by the respondent - case of Revenue is that composite scheme was only available when the value of services alongwith the value of supply of goods is included in the service taxable value of the service. - Erection and commissioning on turnkey basis Held that:- The respondent/assessee were awarded contract on EPC basis by various electricity companies such as North Delhi Power Limited, Dakshin Haryana Bijli Vitran Limited etc. and it can be seen from the contract that all the contracts are composite contract for the supply of goods as well as for erection and commissioning on turnkey basis. It has also been the matter of fact that the respondent/assessee has opted to pay the service tax under Rule 3 (i) of Work Contract (Composition Scheme for Payment of Service Tax) Rules, 2007. The composition scheme for payment of the service tax was primarily meant to facilitate the service tax provider that they need not to bother with regard to bifurcation of supply and service element from the composite work contracts rather they were allowed to discharge their service tax liability on the concessional rate - From the perusal of the Rule 3 (i), it is clear that for determination of the value under the composition scheme, the value of all goods used in or in relation to execution of the work contract need to be included in the serviceable value even when the goods might have been supplied under any other contract for execution of the composite work contract. It is a matter of record in this case that all the contracts are composite contracts for both supply of goods and services as both the elements are absolute pre-requisite for completion of any turnkey project. It is also of the matter of fact that the respondent/assessee has opted for the benefit of composite work contract service and has availed the benefit of Rule 3 (i) of Work Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 - thus, the value of both supply and service need to be added for payment of service tax under composition scheme. Time limitation - Held that:- The appellant is fully aware of the legal implications of service tax liability on composite works contract. Their act of first paying composition rate on what is claimed to be a service contract and later switching over to full rate of payment without composition clearly reveals the knowledge and deliberate intend of the appellant - extended period rightly invoked. Matter remanded to the original Adjudicating Authority for purpose to verify the claim of the respondent/assessee in his arguments submitted before this Tribunal that on certain contracts they have paid full rate of service tax rather than concessional rate of service tax under composition scheme - appeal allowed by way of remand.

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• 2018 (9) TMI 1449
  CENVAT Credit - input services - general insurance services - appellant engaged in providing infrastructural support by ensuring the safe availability of Aviation Turbine Fuel at the Delhi Airport - whether the appellant is entitled to the cenvat credit on certain general insurance services? Held that:- Such services have been used for insuring the building, plant, machinery, pipes, cables etc. which were used by the appellant in providing the service of making available ATF at the Delhi International Airport. Clearly such services are in the nature of general business activity to ensure the security of the plant and machinery used for providing the output service - In Rule 2(l) of the Cenvat Credit Rules, 2004 it is seen that such services are covered within the definition under the ‘means’ as well as ‘inclusive’ portion. Whether the adjudicating authority was right in denying such cenvat credit by applying the exclusion providing under sub –clause ‘(BA)’? - Held that:- The exclusion clause is specifically applicable only in respect of general insurance service for motor vehicles which are not being used as capital goods - It cannot be said that the exclusion will be applicable to the insurance for the general plant, machinery which is used for providing the output service. Credit allowed - appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 1448
  Business Auxiliary Services - appellant acting as distribution agent of M/s. Amway India Enterprises in terms of the agreement entered between the two - Held that:- Tribunal in the case of Charanjeet Singh Khanuja v. C.S.T., Indore/Lucknow/Jaipur/Ludhiana [2015 (6) TMI 585 - CESTAT NEW DELHI], has dealt with an identical question and has held that the activity would fall under the category of ‘Business Auxiliary Services’ - the appellant was liable to pay Service Tax on the commission earned by him for acting as distributing agent of M/s. Amway. Extended period of limitation - penalty - Held that:- Following the decision of Charanjeet Singh Khanuja, extended period as well as penalty is not imposable. Matter remanded to the original adjudicating authority for re-quantification of the tax amount, for the period falling within the limitation and on the commission earned by the distributor - appeal allowed by way of remand.

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• 2018 (9) TMI 1447
  Commercial Coaching or Training - extension of cum-duty price benefit - penalty - Held that:- In appellant own case M/S NATIONAL INSTITUTE OF BANKING STUDIES & CORPORATE MANAGEMENT VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, NOIDA AND VICE-VERSA [2018 (7) TMI 1290 - CESTAT ALLAHABAD], where it was held that while calculating duty demand, the benefit of cum-duty has to be extended to the assessee. Demand is confirmed on merits, but matter remanded to the Lower Authorities for re-quantification of the demand by extending the benefit of cum-duty price to the assessee. Appeal disposed off.

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• 2018 (9) TMI 1446
  Completion & Finishing Services in relation to residential complex - applicability of abatement in terms of Notification No.01/2006-ST dated 01/03/2006 - appellant was also providing services falling under the category of “Construction of Residential Complex”. Held that:- As per condition of the Notification appearing against Sr. No.07 the exemption was not available in such cases where taxable services provided are only ‘Completion & Finishing Services’ in relation to residential complex - the use of expression only makes it clear that abatement is not available in those cases where ‘Completion & Finishing Services’ are being provided and no other services are being provided. In the instant case the appellant is not providing ‘Completion & Finishing Services’, only but such services are being provided by him in continuation of their main services which of Construction of Residential Complex - the said debarring condition appearing in the Notification, which denies the abatement in respect of ‘Completion & Finishing Services’ would not apply in a case where such ‘Completion & Finishing Services are in continuation of the main construction services. Appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 1445
  Valuation - includibility - whether amounts refunded by the petitioner, a registered “Forward Contract” service provides to its sub-brokers, before the due date of filing of returns, could be excluded from the gross value of consideration received for the taxable services provided? Held that:- The appellant have discharged the tax liability on the actual brokerage amounts received by them from the sub-brokers and there is no question of any reference or reliance to the initial invoices raised by them, which have subsequently been consolidated at the end of the month and the actual brokerage amounts stands reflected therein - appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 1444
  Classification of Services - construction of Petrol Pumps including the Canopies - whether taxable under Commercial or Industrial Construction Service or under Works Contract Service? - Held that:- The services provided by the appellant having been held as falling under the category of ‘Works Contract’ - matter remanded to Original Adjudicating Authority for re-quantification of the tax liability in accordance with law - appeal allowed by way of remand.

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• 2018 (9) TMI 1443
  Penalty u/s 76 and 78 of FA - Intellectual Property Services - Held that:- The appellant authority has already extended the due benefit to the appellant by agreeing with the contentions raised by the appellant and has reduced the confirmed tax amount as also has set aside penalty imposed under Section 76. It is also a fact that the appellants, after registration with the Department did not part with any information, which was being repeatedly asked for by the Revenue and did not discharge any service tax liability - imposition of penalty justified - appeal dismissed - decided against appellant.

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• 2018 (9) TMI 1442
  Valuation - inclusion of value of the goods sold separately on which VAT paid, in the assessable value - Section 67 readwith Service Tax (Determination of Value) Rules, 2006 - Held that:- The appellant’s transaction with their customers consist of sale as well as service, which are clearly identifiable. Moreover, when the appellant pay Sales Tax/VAT on the consumables and spare parts used by them for servicing, that transaction would have to be considered as sale and, hence, the same cannot be made part of the value of the service. In identical issue was the subject matter of various decisions of the Tribunal, wherein stands held that the value of the goods sold separately on payment of VAT would not constitute part of the value of the services. Appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 1441
  Rectification of Mistake - granting cum-tax benefit and thus to re-quantify the demand by treating the entire consideration as cum-tax - whether the same falls within the ambit of Rectification of Mistake or not? - Held that:- Section 74 of the Finance Act only authorizes the adjudicating authority to rectify such mistakes, which are apparent on the face of the records. The assessee’s claim of cum-duty cannot be considered to be a mistake apparent on the face of the records. The said issue is a legal issue and the appellant should have claimed the same at the time of adjudication by the original adjudicating authority or thereafter in their appeal before Commissioner(Appeals). The appellant having not done that and having allowed Commissioner(Appeals)’s order to attain finality, cannot now raise the said legal issue before the original adjudicating authority, by way of filing a Rectification of Mistake application - ROM Application dismissed.

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• 2018 (9) TMI 1421
  Refund claim - export of services or not - Whether the services provided by the Respondent herein qualify as export of service under the provisions of Export of Services Rules, 2005? - Held that:- An identical nature of service as rendered by the Respondent to its foreign clients had come up for consideration before this Court in Commissioner of Service Tax, Mumbai – VI Vs. ATE Enterprises (P) Ltd. [2017 (8) TMI 1233 - BOMBAY HIGH COURT], where this Court has held that the service of procuring orders and passing it to overseas manufacturers / clients and receiving the payments for the same is an activity of export of service. Thus qualifies as Export of Service under the Export of Taxable Service Rules, 2005 - decided in favor of respondent. Whether the CESTAT is right in holding that the Respondent herein are entitled for refund when there is no application made under the prescribed format under the relevant provisions of law and without complying the procedural formalities prescribed under the law? - Held that:- From the facts available on record, it was never the case of the Revenue that there was unjust enrichment on the part of the Respondent – Assessee. It seems to have accepted the assessee's stand that there is no unjust enrichment was made in the refund application. As at no point of time before the first Authority or Appellate Authorities was the issue of unjust enrichment raised by the Appellant either in the submissions and / or by filing the cross appeals / cross objections to the Appellate Authorities - the question does not give rise to any substantial question of law and is not entertained. Appeal dismissed - decided against Revenue.

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• Central Excise

• 2018 (9) TMI 1440
  CENVAT Credit - Capital goods - availment of 50% credit in subsequent year - Whether in the facts and circumstances of case and in law, the Tribunal ought to have held that the Cenvat Credit on 50% value of CI Moulds is available in the subsequent Financial Year under Rule 4(2) (b) of the Cenvat Credit Rules 2002? - Whether in the facts and circumstances of the case and in law, the Tribunal was justified in holding that the amendment made to Rule 4(2)(b) of the Cenvat Credit Rules 2002 by the Cenvat Credit (18th Amendment Rules 2003) i.e. Notification No.70 of 2003 Central Excise (M.T.) dated 15th September, 2003, are not retrospective and/or clarificatory in nature? - substantial question of law. Held that:- The Notification No.70/2003 very clearly makes it effective only from 15th September, 2003. Thus, it is prospective. Further, the Circular No.755 dated 13th October, 2003 issued by the Central Board of Excise and Customs also does not state that it is clarificatory or for removal of doubts. Thus, its benefit cannot be extended to availment of credit prior to 15th September, 2003 - the above-mentioned two questions, do not give rise to any substantial question of law in view of self evident position - the questions not admitted for consideration. Whether in the facts and circumstances of the case and in law, the Tribunal was justified in upholding the penalty of Rs. 2,00,000/- under the Cenvat Credit Rules, 2005? - Held that:- Nothing has been shown in the present facts which would justify imposition of penalty. Nor any reason has been shown for the Tribunal not to follow the decision of its Coordinate Bench in Sri Krishnan Alloys [2015 (7) TMI 1148 - MADRAS HIGH COURT] in the present facts, wherein the Court held that on similar facts, the Assesse therein had acted on the bona fide belief that he is entitled to take balance credit in the subsequent Assessment Year - penalty not warranted - decided in favor of assessee. Appeal disposed off.

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• 2018 (9) TMI 1439
  CENVAT Credit - restriction on credit of duty paid availing the benefit of notification no 1 of 2011 - duty paid on import of coal - assessee claimed the duty paid at concessional rate cannot cannot be treated as duty of excise perse - proviso to rule 3(1) of CENVAT credit Rules, 2004 Held that:- It is not in dispute that the assessee has availed of the benefit of exemption notification 1 of 2011 and also the benefits under Sr.No.67 and 128 of exemption notification 12 of 2012. In that view of the matter, the above noted proviso of the Rules, would disentitle the assessee from claiming CENVAT credit. The countervailing duty would not be included in the expression “duty of excise” for the purpose of the said rule - the assessee's very foundation of claiming the benefit of CENVAT credit would disappear. Penalty - Held that:- The Appellate Authority had noted that correct facts were suppressed by the assessee from the department and the reversal of payment of duty was made only after it was pointed out by the audit - Penalty upheld. Appeal dismissed.

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• 2018 (9) TMI 1438
  CENVAT credit - input services - GTA service - place of removal - recovery of CENVAT credit with Interest and penalty - Held that:- Though a plea was taken by the assessee in his reply that by issue of N/N. 2014-CE(NT) dated 11/07/2014, sub-rule (qa) has been inserted in Rule 2 of Cenvat Credit Rules 2004 incorporating the definition of place of removal, the Cenvat credit on outward freight was stopped w.e.f. 11/07/2014. This defense by the assessee appeared to be deliberate to overcome the show cause because even prior to insertion of definition of “place of removal” under Cenvat Credit Rules, 2004, the same definition of “place of removal” under Section 4(3)(c) of 1944 Act was applicable for Rule 2 of Rules 2004 in terms of Rule 2(t) of the 2004 Rules which stipulates that “words and expressions used in these rules and not defined but defined in the Excise Act or Finance Act shall have the meanings respectively assigned to them in those Act”. Since the appellant in contravention of the provisions contained in Section 4(3)(c) of 1944 Act read with Rule 2(t) of the Rules 2004 availed the Cenvat Credit which was not available, the Revenue, was within its right in imposing recovery, interest and penalty. No substantial question of law arises for consideration - appeal dismissed.

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• 2018 (9) TMI 1437
  Maintainability of appeal - alternate remedy of appeal before Supreme Court - Section 35L(b) of the Central Excise Act, 1944 - Held that:- As per Section 35L(b) of the Central Excise Act, 1944, any order passed by the Appellate Tribunal relating, to among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment, the appeal lies before the Hon’ble Supreme Court. When the appellant has an alternative remedy to prefer an appeal before the Hon’ble Supreme Court, the present appeal is not maintainable. Reliance placed in the case of CCE., MANGALORE VERSUS MANGALORE REFINERIES & PETROCHEMICALS LTD. [2010 (9) TMI 756 - KARNATAKA HIGH COURT], where it was held that an order passed by the Appellate Tribunal relating to the determination of any question having relation to the rate of duty of excise or to the value of goods for the purposes of assessment lies to the Supreme Court under Section 35L(b) of the Act and not to the High Court under Section 35G. The appeal is dismissed as not maintainable.

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• 2018 (9) TMI 1436
  CENVAT credit - credit was reversed now seeks to avail suo-moto credit - Department opined that once the assessee pays back the duty of excise and that in the instant CENVAT credit availed on SKO, the proper course is to seek refund claim under Section 11B of the Central Excise Act and therefore, taking suo-motu recredit of the duty reversed appears to be incorrect - whether the assessee was entitled to suo-motu avail credit of central excise duty which they have reversed? Held that:- Unfortunately, before the Tribunal, the parties appears to have not made any endeavour to put-forth their factual contentions. Thus, unless and until the factual contention is properly considered, conclusion cannot be arrived at - Furthermore, the question as to whether to what extent supplementary invoices would aid the stand of the assessee is also required to be gone into, since admittedly IOCL was a registered dealer of SKO only on 26.10.2005, much after the purchases effected by the assessee which was during the period from 01.02.2005 to 30.10.2005. The entire proceedings required to be redone and the factual matrix has to be considered - the matter is remitted back to the Adjudicating Authority for fresh consideration on the factual position - appeal allowed by way of remand.

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• 2018 (9) TMI 1435
  Time Limitation for filing refund claim - Section 11B of CEA - whether the Revenue could have denied the claim made by the assessee as being barred by limitation? - Held that:- The Court granted a declaratory relief in favour of the assessee holding that the assessee is not liable to pay excise duty for the betel nut powder known as “supari”. The assessee also sought for a consequential relief before the Writ Court to forbear the respondents from demanding any excise duty from them - So far as the consequential relief is concerned, the Court remanded the matter to the authorities to consider whether or not the duty paid by the assessee had been passed on to the consumers. If the assessee had passed on the duty to the consumers, they are not entitled for refund. However, it was left to the authorities to take an appropriate decision in the matter. The proper manner of interpreting the direction issued by the Court is to give relief to the order and not to render the order passed by the Court unworkable. The Writ Court has granted declaratory relief holding that the assessee is not liable to pay excise duty on betel nut powder. The necessary consequence that has to follow from it is as to what would be the relief that the assessee is entitled to after it has been declared that they are not liable to pay excise duty. There is no need for interpretation or speculation in this regard, since the High Court itself has issued appropriate direction with regard to the consequential relief. The Writ Court, for such purpose, has remanded the matter to the authorities to consider whether or not the duty paid by the assessee had been passed on to the consumers and if the assessee had passed on the duty to the consumers, they are not entitled for the refund. Thus, the scope of remand is the directions as pointed above and what the authority has to look into for the purposes of the consequential relief has also been clearly circumscribed. The authorities of the appellant-Department cannot sit in judgment over the orders passed by the Writ Court. The scope of remand cannot be altered by the Department. There is no requirement for the assessee to file an application for refund on the matter being remanded to the Assessing Officer. All that is required to be done is to issue a notice to the assessee calling upon him to establish that they have not passed on the duty to the consumers. Thus, the Department mis-directed itself in agitating the case as a fresh case. The substantial questions of law, which have been framed for consideration in this appeal, does not arise for consideration - appeal dismissed - decided against Revenue.

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• 2018 (9) TMI 1434
  Withdrawal of appeal - Monetary amount involved in the appeal - appellant has placed before this Court a communication sent by the Assistant Commissioner (Legal), Office of the Commissioner of GST and Central Excise, Salem, dated 09.08.2018 stating that on account of the monetary limit in this appeal, which is lesser than the threshold fixed by the Board's circular dated 11.7.2018, he seeks permission to withdraw the appeal - Held that:- The appeal is dismissed as withdrawn and the substantial questions of law, raised in this appeal, are left open.

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• 2018 (9) TMI 1433
  Appeal dismissed on pre-judging the issue - appropriate formula to determine the use of raw materials - Held that:- The Tribunal, at the very outset, merely cited and relied upon the Settlement Commission’s order, and proceeded to follow it without addressing itself as to whether in the present case that formula was applicable at all or when adverting or even taking into consideration the appellant’s submissions on the merits with respect to the inapplicability of the Settlement Commission’s formula in the context of its submissions that the period in question involved a separate product. This Court is of the opinion that the remand order should be appropriately modified - The impugned order is accordingly modified; the Commissioner shall while examining the matter afresh take into consideration the facts of the case as based upon the materials and evidence led before him to determine as to what is the appropriate ratio for deciding the increased weight as well as the percentage of Snuff and Tobacco in respect of the new product ‘Premium Khaini’ for the period April, 2006 to 07.03.2010. 2017 (12) TMI 217 - CESTAT NEW DELHI

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• 2018 (9) TMI 1432
  Attachment of flat - Prayer for Declaration that there is no charge of the Central tax authorities on the petitioner’s immovable property in the nature of a Flat No. 6/A, situated on 6th Floor, Usha Kiran Flats, Khanpur, Ahmedabad - prohibitory order on transfer of property. Held that:- The petitioner’s property must be cleared of the Department’s clutches. Firstly, as of now, there is no material suggesting any outstanding dues of the father of the petitioner. No order of assessment giving rise to any such liability is available. Secondly, the origination of acquisition of the property in his hands is from mother of the petitioner who acquired it way back in the year 1973. There is no material on record suggesting that the same was a benami purchase. Thirdly, the Department has not even prima facie established that for recovery of any dues of the father of the petitioner, such property can be utilized. The communication dated 10th June 1996 from the Superintendent of Central Excise to the Chairman/Secretary of the Society was also in the nature of general inquiries and cannot form shape of any prohibitory order. It is declared that there is no attachment of the respondents-tax authorities on the above mentioned immovable property of the petitioner and only on this ground, the Cooperative Society concerned shall not prevent its transfer, if the petitioner sales the same, following the rules and regulations and bye laws of the Society - petition allowed.

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• 2018 (9) TMI 1431
  CENVAT Credit - input services - services of Commission Agents to develop its market and promote sales - Held that:- The Tribunal has been consistently allowing the Cenvat Credit under similar circumstances - In the appellant’s own case M/S ULTRATECH CEMENT LTD. AND M/S JAQUAR AND COMPANY PVT LTD. VERSUS CCE & ST, ALWAR [2017 (12) TMI 891 - CESTAT NEW DELHI] Cenvat Credit has been allowed by holding that CBEC vide Circular No. 943/4/2011-CX. Dated 29/04/2011 has clarified that Cenvat credit is admissible on the services of the sale of the dutiable goods on commission basis - credit allowed - appeal dismissed - decided against Revenue.

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• 2018 (9) TMI 1430
  Extended period of Limitation - the period involved in the present case is from 01/04/2002 to 31/03/2005 whereas the show-cause notice was issued on 24/01/2008 - Bonafide intent - cutting of aluminium profile into doors and windows - activity amounting to manufacture or not? Held that:- The period involved in the present case is 01/04/2002 to 31/03/2005 whereas the show-cause notice was issued on 24/01/2008 which is clearly barred by limitation. During the impugned period, there were decisions favourable to the assessee holding that the activities carried out by the assessee does not amount to manufacture. But the authorities below have relied upon the decision in the case of Mahindra and Mahindra Ltd. which subsequently held that the structure in the movable state will be subject to duty - when there are conflicting decisions, the appellant has a bona fide belief and no suppression can be alleged against the appellant and extended period of limitation cannot be invoked in such a situation. Also, the facts were within the knowledge of the Department in 2005 itself but showcause notice was issued on 24/01/2008. Therefore, demand is barred by limitation. Appeal allowed on limitation itself.

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• 2018 (9) TMI 1429
  Rectification of Mistake - the specific rejection of availment of credits by the Commissioner (Appeals) on the ground of non-production of original documents was not dealt by the Tribunal specifically - Held that:- The signature of the Hon'ble Member in the said order is not a "dated signature" in conformity to the rule contained in chapter xiii of the CESTAT judicial manual and the date of order, though has been mentioned in the order as 21.07.2017, pronouncement date is not reflected therein while the order sheet of the court dated i.e. 21.07.2017 indicates that detail order to follow (DOTF). The rejection order passed by the Commissioner of appeals upon non receipt of original copies, in the normal circumstances, would not have been considered proper, had he not raised his doubt regarding wrong calculation of the refund claim without documentary evidence in the shape of original shipping bills, invoices etc., being placed before him to justify such calculation and the same finds support of the clarificatary circular no. 112/6-2009-ST dated 12.03.2009 issued by the board which authorises the authority granting refund to insist on production of original documents only in case of requirement of indepth enquiry. The ROM filed by the Appellant/Applicant is rejected as not maintainable since departmental authorities are duty bound to honour the order of the Tribunal - ROM Application dismissed.

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• 2018 (9) TMI 1428
  Refund of education cess and higher education cess - Area based exemption - N/N. 56/2002-CE dated 14.11.2002 - Held that:- The procedure for return of goods and re-clearance was clearly cover by the provisions of Central Excise Rules, 2002, and the appellants followed the same. There is no allegation of violation of any provision of said Rule or above mentioned notification. In the absence of any contrary legal provision, the concession available under N/N. 56/2002 on payment of duty on the goods cleared by the appellants, cannot be denied. Valuation of the final products cleared by the appellants - inclusion of freight element for paying duty - place of removal - Held that:- The appellant is claiming that the goods were sold on FOR basis and as such the place of removal is the delivery point to the buyer. The freight element incurred by the appellant should form part of the assessable value in such FOR sale - Hon’ble Supreme Court in CCE, Nagpur vs. Ispat Industries Limited [2015 (10) TMI 613 - SUPREME COURT] held that “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”. The impugned order records that the appellant has not produced anything on record which would show that they had cleared the goods from the factory gate to a warehouse, any other premises, a depot, consignment agents premises etc. from where such excisable goods were sold - Admittedly, the goods sold by the appellant delivered at the buyers premises will not make the place of removal as buyers premises. Refund/self-credit - eligibility in terms of N/N. 19/2008-CE dated 27.03.2008 and 34/2008-CE dated 10.06.2008 - whether the appellants are entitled to claim refund/self-credit as restricted by these notifications or not? - Held that:- The notifications in question have been examined by the Hon’ble J & K High Court in the case of Reckit Benckiser vs. UOI [2010 (12) TMI 237 - JAMMU AND KASHMIR HIGH COURT], wherein the Hon’ble High Court quashed the notifications in question. Therefore, in terms of N/N. 56/2002-CE dated 14.11.2002, the appellants are entitled to claim refund/ self-credit of duty paid through PLA - refund allowed. CENVAT Credit - Sales returns - Rule 16 of Central Excise Rules, 2002 - Held that:- The appellant-assessee are entitled for concession as envisaged under Notification No. 56/2002. The appeals on this ground are allowed. Appeal disposed off.

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• 2018 (9) TMI 1427
  CENVAT credit - Bagasse and Press mud, cleared as exempt goods - Rule 6(3) of Cenvat Credit Rules - Held that:- The issue is no more res-integra and stands covered by the Supreme Court’s judgment in the case of Union of India V/s DSCL Sugar LTD. [2015 (10) TMI 566 - SUPREME COURT], where it was held that It could not be pointed out as to whether any process in respect of Bagasse has been specified either in the Section or in the Chapter notice. In the absence thereof this deeming provision cannot be attracted - demand set aside. CENVAT Credit - sugar found short - demand is based upon the statement of only one Shri Muthu Kumar which is contrary to the statement of Shri Sandeep Singh - Held that:- There is no other corroborative evidence to establish the said allegations. As the appellant is not contesting the said confirmations having deposited the same along with depositing of interest, the same is upheld - penalties are set aside. Appeal disposed off.

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• 2018 (9) TMI 1426
  Clandestine manufacture and removal - manufacture of Pan Masala and Gutkha - Rate of duty for packing machine per month for pan masala containing tobacco having RSP per pouch up to Rs. 1.00 was Rs. 12.50 lakhs. It was noticed by revenue that during the period from January, 2010 to October, 2010 manufacturer-appellant manufactured Gutkha of RSP Rs. 1.00 and RSP Rs. 0.50 on the same machine - Rule 8 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008. Held that:- The basis for arising of the demand was treating RSP Rs. 0.50 and Rs. 1.00 as two separate slabs whereas the ruling by Hon'ble Allahabad High Court in the case of COMMISSIONER OF CENTRAL EXCISE KANPUR VERSUS M/S. TRIMURTY FRAGRANCES (P) LTD. [2015 (11) TMI 320 - ALLAHABAD HIGH COURT], clarified the law stating that if Gutkha with different MRPs are manufactured on the same machine when such MRPs fall within the same slab then it cannot be treated as two separate machines for fastening duty liability on the manufacturer. Demand not sustainable - appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 1425
  CENVAT Credit - demand of 10% of the price of the exempted goods - appellants were clearing their final products for home consumption partly on payment of duty and partly without payment of duty while claiming benefit of exemption Notification No.6/2006-CE dated 01.03.2006 as amended. Held that:- An identical issue has been considered by the Tribunal in the case of Commissioner of Central Excise vs. Bharat Heavy Electricals Ltd. [2015 (7) TMI 225 - CESTAT NEW DELHI]. It was observed that the Department’s contention that Clause (vii) of Rule 6(6) would not be applicable to goods manufactured in India and would be applicable only to the imported goods is absurd as Clause (vii) of Rule 6(6) has to be read alongwith provision of Rule 6(6) and cannot be interpreted in isolation. It is also noted that their goods have been supplied under International Competitive Bidding and M/s ABB Ltd., were awarded a contract by DMRC for supply of various items. In support, certificate of DMRC and certificate of ABB Ltd., have been produced on record and in fact are not disputed by the Revenue - The fact that the clearances were made in terms of Notification No.6/2002-CE dated 01.03.2002 do not stands disputed by the Revenue. In that scenario the benefit of Rule 6(6)(vii) has to be extended to the assessee and no demand can be confirmed against them. Appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 1420
  CENVAT Credit - input services - services of Commission Agents to develop its market and promote sales - Held that:- The Tribunal has been consistently allowing the Cenvat Credit under similar circumstances - In the appellant’s own case M/S ULTRATECH CEMENT LTD. AND M/S JAQUAR AND COMPANY PVT LTD. VERSUS CCE & ST, ALWAR [2017 (12) TMI 891 - CESTAT NEW DELHI] Cenvat Credit has been allowed by holding that CBEC vide Circular No. 943/4/2011-CX. Dated 29/04/2011 has clarified that Cenvat credit is admissible on the services of the sale of the dutiable goods on commission basis - credit allowed - appeal dismissed - decided against Revenue.

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• CST, VAT & Sales Tax

• 2018 (9) TMI 1424
  Taxability - frooti drink - rate of tax - taxable at 1% or at 2% - whether the assessing authority and the revisional authority are justified in holding that frooti would fall within Entry? - whether frooti is beverage? Held that:- In the present case, frooti is beverage within Entry 14 of Schedule II of the Act of 1976 in the name being non-alcoholic drink and beverage, ice-cream and candy is of vide import and common parlance test would apply and the product frooti will be covered under Entry 14 of Schedule II of the Act of 1976 and would be charged at the rate of 2% - The petitioners cannot be allowed to make separate entry when frooti is covered within the specific entry and residuary entry cannot be resorted into. Both the authorities are absolutely justified in holding that frooti is a product covered by Entry 14 of Schedule II of the Act of 1976 - petition dismissed.

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• 2018 (9) TMI 1423
  Principles of natural justice - case of respondent is that even though sufficient opportunities were given to the petitioner, he did not utilise the same and therefore, with the available records, an order has been passed - Held that:- The mere fact that the assessee was given an opportunity for perusing the D7 records by the Enforcement Wing Officer would not be sufficient compliance of the principles of natural justice by the assessing officer, as the assesse requested the Assessing Officer to furnish the copies of the D7 records at his cost, so that he could reply to the re-assessment notice after the D7 records came into the hands of the Assessing Officer for the purpose of making assessment. In the present case in hand, though the petitioner specifically gave a reply and prayed for the copies of D-7 records, based on which reassessment has been made at the time of admission, this Court has granted an interim order - since the principles of natural justice is violated, the order passed by the Authority is liable to be set aside. The matter is remanded back to the Authority to give copies of D-7 records - Petition allowed by way of remand.

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• Wealth tax

• 2018 (9) TMI 1422
  Wealth tax assessment - CWTA justification in deleting the addition to net wealth - Held that:- There is no additional document or evidence filed by the assessee before the ld CITA. All the documents filed by the assessee more particularly the rent agreements and the name of the tenants occupying the warehouses were already part of income tax assessment records and that the income tax assessment for the very same assessment year i.e Asst Year 2011-12 was completed by the ld AO u/s 143(3) of the Act on 13.3.2014 . We find that the AO himself in the first para of his wealth tax assessment order states that ‘on scrutiny of assessment records’. Hence all the details that were duly appreciated by the ld CITA were already part of income tax assessment records. We also find that the revenue had disputed only Rule 46A violation and had not disputed the fact and finding of ld CITA on the ground that the subject mentioned warehouses fall within the exclusion clause of definition of assets u/s 2(ea) of the Act. The issue is already covered by the decision of this tribunal referred to supra. In these facts and circumstances, we hold that there is no violation of Rule 46A of the IT Rules as alleged by the revenue in its grounds of appeal. Hence we hold that the warehouses owned by the assessee squarely falls within the exclusion clause of section 2(ea) of the Act and accordingly not liable to wealth tax. Accordingly, the grounds raised by the revenue are dismissed.

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