Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 27, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
TMI Short Notes
Articles
News
Notifications
Customs
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91/2017 - dated
26-9-2017
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Cus (NT)
Customs Valuation (Determination of Value of Imported Goods) Rules 2007
DGFT
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30/2015-2020 - dated
26-9-2017
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FTP
Amendment in import policy condition of Urea under ITC (HS) code 3102 10 00 of Chapter 31 of ITC (HS), 2012 — Schedule — 1 (Import Policy)
GST
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F. No. 336/20/2017- TRU - G.S.R. 1199(E) - dated
25-9-2017
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CGST Rate
Corrigendum – Notification No. 13/2017-Central Tax (Rate), dated the 28thJune, 2017
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F. No. 336/20/2017- TRU - G.S.R. 1200(E) - dated
25-9-2017
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IGST Rate
Corrigendum – Notification No. 10/2017-Integrated Tax (Rate), dated the 28thJune, 2017
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F. No. 336/20/2017- TRU - G.S.R. 1201(E) - dated
25-9-2017
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UTGST Rate
Corrigendum – Notification No. 13/2017-Union Territory Tax (Rate), dated the 28thJune, 2017
GST - States
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Va Kar/GST/07/2017-S.O. No. 074 - dated
7-9-2017
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Jharkhand SGST
The Jharkhand Goods and Services Tax (Sixth Amendment) Rules, 2017.
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FA-36/2017-1-V-(110) - dated
22-9-2017
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Madhya Pradesh SGST
Amendments in the Notification No. F.A.-3-36-2017-l-FIVE (66), dated the 30th June, 2017
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FA-3-35/2017-1-V-(111) - dated
22-9-2017
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Madhya Pradesh SGST
Amendments in the Notification No. FA-3-35-2017-1-FIVE (63) dated the 30th June, 2017,
SEZ
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S.O. 3113(E) - dated
15-9-2017
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SEZ
Central Government notifies additional area of 0.8 hectares, thereby making total area of the Special Economic Zone as 2.58 hectares at Gachibowli Village, Serilingampally Mandal, Ranga Reddy District, in the State of Telangana
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Levy of GST - Reverse Charge on Legal Services - Services provided by an individual advocate including a senior advocate or firm of advocates - Corrigendum notifications issued
Income Tax
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Reopening of assessment - independent application of mind by AO - Merely because the relevant material was brought to his notice by an AO of another assessee would not perse vitiate his satisfaction that income chargeable to tax has escaped assessment - HC
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There is nothing in section 264 which places any restriction on the Commissioner's revisional power to give relief to the assessee in a case where the assessee detects mistakes after the assessment is completed because of which he is over-assessed - HC
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Reopening of assessment - partnership firm having been dissolved - Since the TDS was deducted by the payee in the name of firm, AO has believed that firm is in existence - Notice cannot be quashed at this stage - HC
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Disallowing bonus/commission paid to the directors of the company - so long as the bonus or commission is paid to the directors for services rendered and as part of their terms of employment it has to be allowed and sec.36(l)(ii) does not apply.
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Levy of interest u/s 234B, 234D and 222 while passing order u/s 154/260A/143(3) - CIT is not correct in invoking the “doctrine of merger” since the subject matter was not in appeal.
Customs
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Valuation of imported goods - inner part of Mini-valve (zinc) - the sole basis of enhancement of value in this case is LME price of zinc, on which the importer was persuaded to pay the differential duty. No other evidence - redetermination of the value is not sustainable
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Valuation - inclusion of the cost of transport, loading, unloading and handling charges and the cost of insurance to the place of importation - Rule 10 of Customs Valuation (Determination of Price of imported Goods) Rules, 2007 amended.
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The term "place of importation" defined - Rule 2 of Customs Valuation (Determination of Price of imported Goods) Rules, 2007
Service Tax
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The pipelines constructed were for providing drinking water facilities to the people of the State through different Gram and Taluka Panchayats. Only a small portion of the water was provided to the industries at commercial rates - levy of tax set aside. - HC
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Activities carried out by the appellant do not fall within the definition of original works - even though services have been rendered for railways, the benefit of notification No.25/2012 is not available.
Central Excise
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CENVAT credit - input services - the services of merger has no relation with the manufacture. The said service relates to corporate restructuring and is not specifically covered under any of the heads of input services - credit denied.
Case Laws:
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Income Tax
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2017 (9) TMI 1416
Vladity of reopening of assessment - Tribunal's eligibility of allowing the assessee to raise the question of validity of the notices for reopening taking recourse to Rule 27 of the Rules without the assessee having filed cross appeal or cross objection before the Tribunal against the orders of the Commissioner (Appeals) - Held that:- Rule 27 of the Rules makes it clear that the respondent in appeal before the Tribunal even without filing an appeal can support the order appealed against on any of the grounds decided against him. It can be easily appreciated that all prayers in the appeal may be allowed by the Commissioner (Appeals), however, some of the contentions of the appellant may not have appealed to the Commissioner. When such an order of the Commissioner is at large before the Tribunal, the respondent before the Tribunal would be entitled to defend the order of the Commissioner on all grounds including on grounds held against him by the Commissioner without filing an independent appeal or cross-objection. Rule 27 of the Rules is akin to Rule 22 Order XLI of the Civil Procedure Code. Sub-rule (1) provides that any respondent, though he may not have appealed from any part of the decree, may not only support the decree but may also state that the finding against him in the Court below in respect of any issue ought to have been decided in his favour; and may also take any cross-objection to the decree which he could have taken by way of an appeal. - Decided in favour of the assessee. Tribunal has invalidated the reopening of assessments in both the assesment years by briefly referring to earlier notices of reopening and held that on identical grounds, the reopening was quashed. From the order of the Tribunal, we do not find a full comparison of the set of reasonings in the earlier and present reopening of assessments. For the assessment year 2002-03, in fact the conclusion of the Tribunal is merely by a reference. We would request the Tribunal to reassess this issue for both the assessment years and record its fuller reasons for coming to a particular conclusion.
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2017 (9) TMI 1415
Reopening of assessment - deemed dividend addition u/s 2(22)(e) - independent application of mind by AO - Held that:- There is nothing on record to suggest that the Assessing Officer was acting as per the directives of the audit party or any other officer or authority. Merely because the relevant material was brought to his notice by an Assessing Officer of another assessee would not perse vitiate his satisfaction that income chargeable to tax has escaped assessment. This aspect of law is sufficiently clear. The issue of applicability of section 2(22)(e) of the Act when the recipient of loan or advance by the company is not a shareholder but is a concern in which the shareholders are having substantial interest, is not free from any doubt. The judgment of Delhi High Court is not accepted by the department and is in challenge before the Supreme Court. The Supreme Court itself in the later judgment in case of Gopal and Sons (HUF) (2017 (1) TMI 331 - SUPREME COURT), had opened a new dimension to the whole controversy. The return of the petitioner was accepted under section 143(1) without scrutiny. Considering such facts, we cannot hold that the reasons recorded by the Assessing Officer for issuing notice of reopening lack validity so that the notice for reopening can be terminated at this stage itself on such ground. - Decided against assessee.
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2017 (9) TMI 1414
Withdraw the registration granted under Section 12A - Exercise of jurisdiction under Section 12AA(3) by the Director of Income Tax (Exemption) - Tribunal held that in the year under consideration AY 2009-10 DIT(Exemption), Mumbai could not have cancelled the registration u/s 12A - Held that:- This precise conclusion of the Tribunal in other matters were assailed before this Court. Mr. Kotangle, appearing on behalf of the Revenue and in support of this appeal, brings to our notice order in Director of Income Tax (Exemption) vs. The North Indian Association [2017 (3) TMI 37 - BOMBAY HIGH COURT] of this Court. It is conceded that the very question which is proposed as substantial question of law in this appeal stands answered in terms of this order against the Revenue and in favour of the assessee. Following it, we have no hesitation in concluding that the present appeal does not raise any substantial question of law. - Decided against revenue
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2017 (9) TMI 1413
Penalty u/s 271(1)(c) - additions on account of interest on FDRs with Dena Bank and TDR sale receipts - said incomes were detected by the Assessing Officer on examination of books of accounts and not declared voluntarily by the assessee in the return of income - ITAT deleted the addition - Held that:- Once the assessee is a beneficiary of the amount received as a consequence of the transfer executed by her husband, of which she had no knowledge, she offered that during the course of the assessment proceedings, that does not mean that her act can be brought within the penalty provision. The explanation rendered by the assessee is bona fide. There was no factual dispute. Therefore, Tribunal held that the assessee has discharged the primary burden. There was no material brought by the Revenue to show that the explanation of the assessee is either false or lacking in bonafides. It is in these circumstances, the Commissioner was justified in deleting the penalty. That view of the Commissioner was upheld. We do not think any wider question or larger controversy was dealt with by the Tribunal. The penalty is deleted essentially in the above factual background. - Decided in favour of assessee.
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2017 (9) TMI 1412
Validity of Orders passed by the Commissioner u/s 264 - expenditure wholly and exclusively incurred for the purpose of business of the firm and by or on behalf of the firm - Held that:- Commissioner is bound to apply his mind to the question whether the assessee was taxable on a particular income. Section 264 uses the expression 'any order'. It would imply that the section does not limit the power to correct errors committed by the subordinate authorities but could even be exercised where errors are committed by the assessee. There is nothing in section 264 which places any restriction on the Commissioner's revisional power to give relief to the assessee in a case where the assessee detects mistakes after the assessment is completed because of which he is over-assessed. First objection of the Commissioner was therefore not valid. Second objection of the Commissioner that there was no evidence to prove that the expenses claimed by the partner in the return were incurred wholly for earning business income of the firm - Merely because the claim of the expenditure being incurred wholly for the purpose of the partnership business was not verified, cannot be the ground for rejecting the claim. The occasion arose before both the Assessing Officers, that of the partner as well as of the firm to examine the veracity of the expenditure and the claim of the petitioners that it was expended wholly for the purpose of the business of the firm. In case of the partner the claim was rejected not on the ground that the expenditure was not wholly for the purpose of business of the firm but on entirely different ground. In case of the firm the claim was not even examined, despite which, if the Commissioner desired to examine it or have it examined, it was always open for him to call for a remand report or place the issue back before the Assessing Officer for passing an appropriate order. Last objection of the Commissioner was that the expenditure was not shown in the account of the firm and therefore allowing the expenditure would run counter to the accountancy principle. The Act proceeds on the fundamental principle of taxing real income. The accounts cannot change taxability or non-taxability of a certain receipt which depends on the nature of the receipt and the legal principles applicable. In case of Tuticorin Alkali Chemicals and Fertilizers Ltd vs. Commissioner of Income Tax [1997 (7) TMI 4 - SUPREME Court ]observed that income tax is attracted at the point when the income is earned. Thus setting aside the impugned orders passed by the Commissioner under section 264 of the Act. It is held that the expenditure in question, if found to be wholly and exclusively incurred for the purpose of business of the firm and by or on behalf of the firm, the same would be allowed in the hands of the firm. To verify this aspect, the proceedings are placed before the Commissioner who shall pass a fresh order on the revision petitions of the firm,
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2017 (9) TMI 1411
Revision u/s 263 - order erroneous or prejudicial to the interest of the Revenue - assessee made a wrong computation of capital gains by claiming deductions actually not allowable by law and the Assessing Officer passed the order by mechanically accepting the computation of the assessee - reversed CIT-A's revision order - Tribunal Held that:- Tribunal found that the Commissioner has perused the documents but failed to note that as far as the first issue is concerned, the depreciation was not claimed on the entire building. It has been claimed only on 1/6th portion of the building and the income from remaining 5/6th portion was offered to tax under the head 'income from house property'. That has been thoroughly examined by the Assessing Officer during the course of assessment proceedings and that is evident from the fact that he has made an addition of ₹ 4,31,298/under this head 'income from house property'. The claim for deduction of ₹ 31.05 crores was the second aspect which was examined by the Commissioner. Insofar as that is concerned, the Tribunal found that the claim was of deduction as there was an end to the litigation. It is only when the litigation ended that the building could be sold. The payment has been made as per the direction of the Company Law Board, as also as per the interim arbitration award. The Tribunal therefore found that once the Assessing Officer had before it such matters, the first objection that the assessee had sold a property, and in the opinion of the Commissioner, special provision of Section 50A shall apply, but the Assessing Officer found from the scrutiny of the records that it is only the 1/6th portion which was used by it as an office and remaining 5/6th portion of the building was leased. It is the 5/6th portion on which the lease rental income was derived. This was taken to be the 'income from house property'. Insofar as the 1/6th portion is concerned, that was used as an office and eventually disposed of. Insofar as that disposal is concerned as well, the Tribunal noted that the Assessing Officer's order was not erroneous insofar as prejudicial to the interest of the Revenue. The Assessing Officer adopted one of the courses permissible in law. Once the view taken by the Assessing Officer is a possible view of the matter and the Tribunal has given cogent and satisfactory reasons for interfering with the order of the Commissioner, then we do not think that any substantial question of law arises from this exercise. The Tribunal found that the observation of the Commissioner that the expenditure incurred for payment to shareholders is not deductible in any other manner is also incorrect because of the order passed by the Tribunal's Mumbai Bench. In such circumstances, this is not a case where, on a working of the capital gain by the Assessing Officer, he has committed any error. In the circumstances, the Tribunal was justified in setting aside the order of the Commissioner. - Decided against revenue
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2017 (9) TMI 1410
Exemption under section 10A - contention of the Revenue that in computing the deduction u/s 10A addition made on account of the disallowance of the provident fund/ESIC payments ought to be ignored - Held that:- The disallowance on the provident fund/ESIC payments has been made because of the statutory provisions section 43B in the case of the employer's contribution and section 36(v) read with section 2(24)(x) in the case of the employer's contribution which has been deemed to be the income of the assessee. The plain consequence of the disallowance and the add back that has been made by the Assessing Officer is an increase in the business profits of the assessee. The contention of the Revenue that in computing the deduction under section 10A the addition made on account of the disallowance of the provident fund/ESIC payments ought to be ignored cannot be accepted. No statutory provision to that effect having been made, the plain consequence of the disallowance made by the Assessing Officer must follow. The second question shall accordingly stand answered against the Revenue and in favour of the assessee. We do not think that an identical argument, and more or less relying on the same provisions, made before us by Mr. Pinto can be accepted. It cannot be accepted because the Tribunal's reliance on Gem Plus (2010 (6) TMI 65 - BOMBAY HIGH COURT ) is not erroneous, nor has the Tribunal misdirected itself in law. Its view, therefore, cannot be termed as vitiated by any error of law apparent on the face of record or perversity warranting our interference in further appellate jurisdiction. - Decided against revenue
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2017 (9) TMI 1409
Reopening of assessment - as the partnership firm having been dissolved, the notice for reopening of the assessment is issued to a wrong person - Held that:- Where the assessment is yet to be carried out, we are not inclined to enter into the disputed questions of facts in a writ petition. The department was not oblivion of the stand of the firm that it was already dissolved and that therefore no longer engages in the same business. This would be clear from the reasons recorded by the Assessing Officer. Despite which, the Assessing Officer on the basis of materials on record, noted that TDS was deducted by the payee on the amounts paid or credited in favour of M/s. Vinay Printing Press which would suggest that the said firm was in existence during the period relevant to assessment year 2010-11. He also noted that the ledger account in case of Narayan Sai and Aasaram Bapu showed sizable cash loan transactions with the firm. Such account showed credit and debit of several cash loan transactions running into crores of rupees. Admittedly, since the firm had not filed the return of income for the said assessment year, the Assessing Officer issued the impugned notice. Such being the facts, in exercise of writ jurisdiction, we do not find any reason to interfere on the ground raised by the petitioner. Petition is therefore dismissed.
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2017 (9) TMI 1408
Deduction available u/s 80IC - according to AO transfer from one unit to another unit should have been done at market value - Held that:- The component transfer to panel unit are customer specific product and of different strength and specification therefore, they cannot be compared with the similar components company sold in the open market. The AO had made the adjustment due to the market value of the inter unit transfer but could not discharge the onus which in our opinion lie on him to ascertain the market value in respect of the component which were transferred by the assessee from one unit to the other unit. The onus lies on the AO to bring the comparative instance if the AO was not able to bring any comparative instance, he should adopted the market value on the basis of the value as determined by the Government of India, Excise Department i.e cost plus 10%. Ignoring this value in our opinion, will tantamount to that provision of section 80IA(a) of the Act has not been correctly applied by the AO and, therefore on the basis itself ignoring the alternate contentions of the assessee that if any deduction has to be reduced u/s 80IC in respect of Panel Division that has to be reduced only by ₹ 28,405/-. We allow Ground No.1 taken by the assessee and set aside the order of the Ld.CIT(A) confirming the reduction of the deduction claimed u/s 80IC of the Act by ₹ 10,28,461/-. Thus, Ground No.1 and 1.2 taken by the assessee are allowed while Ground No.1 taken by the revenue stands dismissed. Claim of the deduction u/s 10B - Held that:- Direct the AO to allow the deduction u/s 10B in respect of the disallowance made u/s 40A Profit of the eligible unit for deduction u/s 10B computation - corporate expenses allocation - GP of eligible unit - Held that:- We noted that in the case of the assessee, the profits of the eligible unit were not higher in comparison with the other business. GP rate of eligible unit was 25.20% as compared to the GP rate of other units in aggregate at 29.97%. While the net profit ratio of the eligible unit was 5.87% as compared to the net profit of other units at 15.09%. We noted that in the case of Catvision Products Ltd. [2003 (1) TMI 265 - ITAT DELHI-C]. This Tribunal has held that only the direct expenditure has to be considered while working out the profit for the purpose of deduction u/s 80IC. Mumbai Bench of the ITAT also in the matter of DCW Ltd. [2010 (1) TMI 939 - ITAT, Mumbai] held for the purpose of section 80IA that indirect expenses cannot be reckoned in the computation of determining the profits of the eligible undertaking. Ld. DR even though vehemently referred to the order of the AO but could not brought to our knowledge any contrary decision. We, therefore, confirmed the order of Ld. CIT(A) in deleting the reduction made by the AO in the deduction u/s 10B of the Act Addition u/s 14A - AO without recording any satisfaction applied Rule 8D - Held that:- This is settled law that no disallowance u/s 14A r.w. Rule 8D can be made without recording the satisfaction by the AO u/s 14A(ii) that the claim made by the assessee is not correct having regard to the accounts of the assessee. Even we noted that in this case, the assessee had capital and reserve much more than the investment. The capital and reserve as on 31.03.2007 were ₹ 1,17,79,62,711/- while the investments were only ₹ 37,15,000/-. Therefore, in view of the decision of the Jurisdictional High Court in the case of TAIKISHA Engineering India Ltd. [2014 (12) TMI 482 - DELHI HIGH COURT ], no disallowance can be made Disallowance of the foreign travel expenses - expenses incurred for personal purposes - Held that:- It is not denied that the assessee has paid fringe benefit tax on these expenses. Since fringe benefit tax has been paid, therefore, no disallowance can be made on account of the personal expenses. Our aforesaid view is duly supported by the decision in the case of Aero Enterprises [2013 (11) TMI 479 - ITAT DELHI]. No contrary decision has been brought to our knowledge even though the provision of section 115W is clear in this regard. We, therefore, delete the disallowance Claim of depreciation on goodwill - Held that:- The issue involved is duly covered in favour of the assessee by the decision of this Tribunal in the case of Controls & Switchgear Contractors Ltd [2016 (6) TMI 1244 - ITAT DELHI] as held Type Test Certification Fees’ and ‘Customer Approval Fees’ are certainly intangible assets being business claims, business information, contracts and know-how etc., which were intangible and without which the assessee would have no business to start with. Thus, rights of the similar nature specified in section 32(1)(ii) of the Act Claim of depreciation - Held that:- The assessee in the original computation of income reduced a sum of ₹ 6,68,071/- out of the claim of depreciation in respect of building for which the assessee was declaring income under the had income from “house property” but we noted during the impugned assessment year, after the merger, the assessee was not earning any rent and the building being used by the assessee himself, therefore, the assessee filed the revised computation of income and claimed the depreciation on the building amounting to ₹ 6,68,071/-. The assessee has also explained the reasons for the short claim of the depreciation to the AO since the building was not more used for rental purpose. We, therefore, set aside the order of Ld. CIT(A) on this issue and allow the depreciation to the assessee
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2017 (9) TMI 1407
Disallowance u/s 14A - Rule 8D applicability - no suo-motu disallowance - Held that:- We find that the assessee had not claimed any expenditure against the exempt income, that the AO/FAA have not mentioned the basic fact as to how much expenditure was incurred by it for earning tax free income. The idea behind introducing the provisions of section 14A was to discourage the practice of claiming double benefit i.e.claiming exemption for a particular item of income and claiming expenditure against such income. But, if the assessee does not claim any expenses against the exempt income, then no disallowance can be made. In short, the pre-condition for making any disallowance u/s.14A r.w. Rule 8D is incurring of expenditure for earning exempt income. As the assessee has not claimed any expenditure against the dividend income or other exempt income, so, in our opinion, the FAA was not justified in upholding the order of the AO. Respectfully, following the order of the Tribunal in the case of Daga Global Chemicals Private Ltd. (2015 (1) TMI 1204 - ITAT MUMBAI) we decide first ground of appeal in favour of the assessee. Disallowance under the head electricity expenses - as per AO the electricity expenses claimed by the assessee were not of the office premises - Held that:- Meter no. is 776819, that it is issued in the name of Nitin R. Killawala, the bill issued in the name of K.R Killawala and the meter no. is 7716819, that the said bill is for the month of Nov.2009, that in the month of March 2014 the bill issued in the name Nitin R Killawala (Pg-23-24) of PB displayed meter No.7716820, that vide its application dated nil the assessee had submitted an undertaking for change of name (pg-27 to 31 ) of the PB, that on pg-29 present address of the assessee is given. It appears that AO and the FAA had decided the issue without considering these vital pieces of information. Therefore, in the interest of justice, matter is restored back to file of AO for fresh adjudication. Ad hoc disallowances under various heads - held that:- AO had not rejected the books of account nor has he pointed out specific defects about expenditure incurred by the assessee. In the audit report there is no mention of the personal expenses incurred by the assessee for the partners. Therefore, in our opinion ad hoc disallowances should not have been made where the results of books have been accepted. In the case of SSV Pvt. Ltd.(2011 (7) TMI 574 - PUNJAB AND HARYANA HIGH COURT) as held that ad hoc disallowance cannot be made once books of accounts are audited and if same are accepted to be as per law by the AO - Decided in favour of the assessee.
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2017 (9) TMI 1406
Disallowance u/s 14A read with Rule 8D - Held that:- As decided in assessee's own case for AYs 2008-09 and 2009-10 considering the nature of investments of the assessee during the year under consideration, we do not find any justification on the part of the AO in straightway applying Rule 8D and without recording any dissatisfaction in relation to the suo-moto working made by the assessee. Even otherwise, facts for the year under consideration are squarely cover with the decision of the Tribunal in the own case of the assessee in the subsequent year. We therefore do not find any justification for the Ld. CIT(A) to confirm the disallowance under Rule 8D(2)(iii) of the Income Tax Rules without considering the working/computation offered by the assessee and also without ignoring the nature of investments made by the assessee. The order of the Ld. CIT(A) confirmed the disallowance under Rule 8D(2)(iii) is therefore set aside. Appeal of Revenue is dismissed.
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2017 (9) TMI 1405
Addition u/s.40(a)(ii) - AO disallowed the amount of TDS on payment of royalty pursuant to Technical Collaboration Agreement - TDS borne by the resident Indian payer - deemed income of the recipient - Held that:- The provisions of Section 40(a)(ii) would apply only in a situation where the appellant has paid taxes on his own income and not in respect to income of others on which the appellant has paid taxes as per conditions of the agreements. See Karan Johar Vs. DCIT [2011 (3) TMI 202 - ITAT MUMBAI ] and Dashmesh Transport Co. (P) Ltd. vs. CIT (1973 (10) TMI 1 - PUNJAB AND HARYANA High Court ). CIT-A correctly held that TDS borne by the resident Indian payer is to be deemed as the income of the recipient and it is only out of such income of the recipient, the Indian payer is deemed to withhold the TDS at the appropriate rate and pay to the Govt. it was further observed by the Tribunal that what the Indian payer deposits to the Govt. cannot be construed as tax of the non-resident being borne by the Indian resident payer, but the amount paid is only out of the deemed income of the recipient and the same would not fall within the definition of tax on income for disallowance u/s 40(a)(ii) of the Act. - Decided against revenue
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2017 (9) TMI 1404
Bogus purchases - proof of genuineness of purchases - Held that:- Basic precondition for invoking the section 69C is that the expenditure incurred by the assessee should be out of books of accounts. Here, the payments to the suppliers, as stated earlier, have been made by cheques. So, it cannot be held that expenses were incurred by the assessee outside the books of accounts. Section 69C was introduced in to the statute with a specific purpose. A bare reading of the section makes it clear that if the assessee incurred any expenditure, but offered no explanation about the source of such expenditure or part thereof, or the explanation so offered is not satisfactory, such expenditure may be deemed to be the income of the assessee. We hold that the FAA was not justified in confirming the order of the AO partly and retaining the addition to the extent of 25% of the sales. The orders of the AO and FAA are not valid because of violation of principles of natural justice. Besides, the addition made u/s. 69C is also not maintainable. So, reversing the order of the FAA, we decide the effective ground of appeal in favour of the assessee.
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2017 (9) TMI 1403
Disallowance of deduction u/s. 80IA - job work executed by Unit I in Unit II - whether unit-II is merely reconstruction of already existing business unit-I of the assessee and hence not eligible for such deduction? - CIT-A allowed claim - Held that:- Revenue has failed to adduce any material on record to take a view different from that taken by ITAT in the case of assessee for earlier years as held It has not been disputed by the department that for two initial years i.e. 1998- 99 and 1999-2000, both units I & II were independently manufacturing and unit II was set up by separate new machineries. Thus unit II cannot be held to be a unit established by reconstruction of business. For two years it was an independent 4 business of the assessee set up by new plant & machinery and on which AO himself allowed deduction u/s 80-IA on these findings. 5.1 Once it is so, merely because in subsequent years Unit II got some of its manufacturing activities executed by Unit I on job work basis will not reverse the clock. It cannot be held that what was new and independent business stands transformed into a reconstructed old business, because of job work. Therefore, independent status of Unit II cannot be altered as proposed by AO due to job work executed by Unit I. - Decided in favour of assessee. Disallowing bonus/commission paid to the directors of the company - CIT-A allowed claim - Held that:- Revenue has failed to rebut the findings of the ld. CIT(A) which alludes that there was no any ulterior motive of the assessee behind payment of bonus/commission to the working directors of the company. Moreover, the issue has been well decided in favour of the assessee by Hon’ble Delhi High Court in the case of CIT vs. Career Launcher India Ltd. (2012 (4) TMI 440 - DELHI HIGH COURT ) as held so long as the bonus or commission is paid to the directors for services rendered and as part of their terms of employment it has to be allowed and sec.36(l)(ii) does not apply. - Decided in favour of assessee.
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2017 (9) TMI 1402
Levy of interest u/s 234B, 234D and 222 while passing order u/s 154/260A/143(3) - CIT invoking the “doctrine of merger” - Held that:- It is settled principle of law that once the appeal filed against the completed assessment is decided by the appellate authority, the assessment order merges into the order passed by appellate authority. Since there is no dispute that when the AO has passed original assessment order in all the aforesaid cases, he has categorically ordered to charge the interest as per law and in accordance with ITNS 150 and he has specifically enclosed computation of tax and interest as per ITNS 150 along with assessment order. So when there was specific order passed by the AO for charging the interest under the Act and the said order merges into the appeal order, there is no illegality or perversity in the findings returned by ld. CIT (A). The ld. AR for the assessee though raised ground in the alternative that without prejudice the calculation under various sections is neither correct nor as per spirit of law, but has failed to point out as to how and under what circumstances, the calculation of the interest made by the AO is not in accordance with law. As the assessee contended that since the Special Leave Petition filed by the assessee has been admitted by Hon’ble Supreme Court, this issue cannot be decided. However, when the ld. AR for the assessee is confronted with the fact that only interest has been calculated on the quantum of income on the basis of facts which have not been disputed in quantum proceedings rather question of law has been challenged the ld. AR has failed to reply otherwise. So far as second contention raised by the assessee in AY 2003-04 that the withdrawal of interest u/s 244 is not only illegal but also not authorized under the order passed u/s 144/260A/143(3), against the refund already issued, is concerned, when certain amount is found to be due against the assessee the same can be adjusted against the refund due to the assessee by issuing a demand notice as provided u/s 244A(1). In the instant case, the refund has been adjusted against the interest levied on the assessee as per assessment order and again, we are of the considered view that there is no illegality or perversity in the impugned order passed by the ld. CIT (A). - Decided against assessee.
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2017 (9) TMI 1401
Bogus purchases - quantitative details furnished by the assessee with regard to the purchases and sales - CIT(A) for restricting the addition to the extent of 5% - Held that:- As observed that when the purchases were not made from those parties, the assessee must have purchased from some other parties. Under this situation, adding entire amount of purchase to total income was not correct. After considering all vis-à-vis nature of business the assessee was involved, the CIT(A) concluded that addition to the extent of 5% on such purchase will serve the purpose of justice. The CIT(A) also found that in the immediately subsequent assessment year 2011-12, AO himself added 5% of value on such purchases made from the suspected party to take care of the margin earned by the assessee indulging in such activity. Appeal of the revenue is dismissed
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2017 (9) TMI 1400
Bogus purchases addition - CIT (A) deleted the addition on the ground that when the said expenditure is embedded in the work-in-progress, the same will be considered for computing the income of the assessee as per POC method - Held that:- From the totality of the facts and circumstances and the orders passed by AO in AY 2011-12, it is apparently clear that though the expenditure claimed by the assessee does not have any bearing on its income / profit during AY 2011-12 as the same have been accounted for as “work-in-progress”, but the same will certainly effect the income of the assessee in the next assessment year as well as at the conclusion of project. Though the AO has made a discreet enquiry through Inspector as to the existence of the firm from whom the assessee alleged to have purchased the raw material, but at the same time AO categorically recorded the observations that the assessee has failed to produce such parties inspite of repeated opportunities given to them but no such adequate opportunity allegedly provided by the AO to the assessee is visible on the record, particularly when examined in the light of the fact that ld. CIT (A) has categorically mentioned in the impugned order that the assessee has filed all the requisite evidences again without highlighting the said piece of evidence. Even the assessee has not been confronted with the report of Income-tax Inspector dated 23.11.2012 & 26.02.2013, relied upon by the AO. So, the impugned order is liable to be set aside to remand the same to the file of the AO for de novo assessment who shall provide adequate opportunity to the assessee to prove the alleged bogus purchases. - Decided in favour of revenue for statistical purposes.
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2017 (9) TMI 1399
Addition u/s 40A - Disallowance of leave salary payment in the shape of staff welfare in violation of rate schedule as per agreement - Held that:- We notice that the assessee has submitted the statement of leave salary payment wherein the payee has signed in front of the amount received by him. The payment made to each payee is below ₹ 20,000/-, hence, it does not attract the provisions of section 40A(3) of the I.T.Act. As, the ld Counsel also pointed out before us, that the assessee is ready to submit the pay register, details of amount paid to payee, books of accounts and other more information, before the AO, therefore, this issue should be sent to the file of the AO for fresh examination. Therefore, we are of the view that this issue requires a fresh examination on the part of the Assessing Officer therefore, we remit the matter back to the file of the Assessing Officer to examine the payment of leave salary and allow the payment as per the provision of the Act. - Decided in favour of assessee for statistical purposes. Disallowance of payment of bonus - Held that:- The assessee has demonstrated before us that two months wages were paid as bonus and reimbursed form M/s Jet Airlines India Ltd. The assessee paid bonus through vouchers which had been produced before the Assessing Officer. However, the Assessing Officer had denied this fact that no vouchers were produced by the assessee. Therefore, we are of the view that this issue requires fresh examination at the end of the Assessing Officer to examine the bonus vouchers and other related documents and information. Therefore, we direct the Assessing Officer to examine the bonus vouchers and other related information and adjudicate the issue afresh as per the provisions of the Act. Therefore, we allow this ground for statistical purposes. Addition on payment for extra work and tiffin expenses - CIT-A allowed claim - Held that:- The assessee has stated that late receipt of said payment from the Airlines, is a consistent practice over the year. As per the facts above, it seems that the sole reason for making disallowance is the suspicion of the Assessing Officer. The AO neither at the assessment stage nor at the remand report stage, proved that the details filed by the assessee were wrong. The bulk of the entire work claim has been reimbursement to the assessee by the Airlines. This is also important to note that for the financial year 2009-10 the assessee has an opening liability of ₹ 24,02,040/- for payment of extra work to her employees and the assessee has paid ₹ 20,78,040/-, out of the same to the employees during the financial year 2009-10 itself and this payment had not been doubted by the Assessing Officer but the Assessing Officer had disallowed the closing balance of outstanding extra work of ₹ 21,28,773/- which has no rational. These figures have been discussed by the Ld. CIT(A) also. Therefore, we are of the view that the order passed by the Ld. CIT(A) on this issue does not contain any infirmity. Therefore, we confirm the order passed by the Ld. CIT(A). Contribution towards ESI and PF paid beyond due date as envisioned in Section 43B - Held that:- The above issue is squarely covered by the Jurisdictional High Court, Calcutta in the case of M/s Vijay Shree Ltd. in (2011 (9) TMI 30 - CALCUTTA HIGH COURT ). It is jurisdictional High Court of the assessee. Therefore, we are of the view that employees’ share of contribution towards PF and ESI, if it is paid before filing of return of income then it would be a sufficient compliance of the Act. Accordingly, we dismiss the appeal of the Revenue.
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2017 (9) TMI 1398
Assessment made u/s. 143(3) - AO disallowing the loss under the head "Other sources" and addition for low withdrawals for household expenses - Section 14A applicability - denial of natural justice - Held that:- CIT(A) has not given proper chance to the assessee’s counsel to substantiate its case and wrongly affirmed the assessment made u/s. 143(3) by the AO disallowing the loss under the head "Other sources" and addition for low withdrawals for household expenses failing to appreciate that when Section 14A not applicable to the factual matrix of the present case. The disallowance of interest expenses on account of the copies of bank statements of two accounts with Bank of Baroda, sanction letter dated 03.09.2009 of one loan of ₹ 1.9 crores were found to be illegible and because of this reason alone, the disallowance was made. The above finding is against the principles of equity, justice and good conscience and instead another opportunity should have been provided to the assessee to file copies of the evidence on record as the copies of bank statements and loan sanction letter were illegible because of poor print quality of the printer from which the clerk took the printouts. CIT(A) has failed to appreciate the evidences regarding the use of the loan taken from bank and has wrongly disallowed the amount based on assumptions and surmises. Also find cogency in the submissions of assessee that the estimation of living expenses of ₹ 20,000/- per month in F.Y. 2011-12 to be regarded as too low for a family of three cannot be regarded as based on any principle of law or common sense as such amount of money is enough for a family of three to live a simple and decent lifestyle when there are no expenses for rent education and such other like expenses. As the assessee is in a possession of all the documents/ evidences to substantiate its case before the Ld. CIT(A), which has not been considered by the Ld. CIT(A) while deciding the appeal, which is now deserve to be appreciated. - Assessee’s appeal is allowed for statistical purposes.
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2017 (9) TMI 1397
Suppression of income or inflation of expenses - Taxability of income - additional evidence acceptance - Held that:- It is found that in letter dtd.19/11/2007 (Pg.9) of the PB the Director of the assesseecompany had stated that there was no suppression of income or inflation of expenses,that all the income/expenses were genuinely recorded in the books of account and were verifiable, that in that statement it was also explained that the declaration was to cover any error or to cover any future income toward loading of TDR or selling of balance FSI/TDR. At pg.11 of the PB similar assertion has been made in the computation of income. In our opinion,both these papers have to be considered while deciding the issue in right perspective. It is a fact that amounts were due to SC and documentary evidence were made available to FAA. We hold that without considering the same the taxable income of the assessee cannot be determined. The assessee was following a particular method of accounting for the project. Income earned from the project and expenditure incurred for the project for various years have to be taken into consideration before arriving at the final conclusion. The assessee had claimed that it had suffered a loss in the project. It is found that the AO has not offered any comment with regard to the claim of loss. Thus, there are many an aspects of the assessment that have not been dealt with or have not been adjudicated properly. Therefore, we are of the opinion that matter needs further investigation and verification. Before us, representatives of both the sides also agreed that matter could be sent back to the AO. So, we are remitting back the issue to the file of the AO for fresh adjudication. He is directed to consider the additional evidence filed before us before deciding the taxability of the assessee. He would afford a reasonable opportunity of hearing to the assessee Taxability of the amount arising out of the sale of TDR - year of assessment - Held that:- As stated earlier, the assessee had made the disclosure about future sale of TDR/FSI. The AO and the FAA has not given a clear cut finding about taxability of the amount arising out of the sale of TDR etc. It appears that the statements made during survey and the submissions made later on were not considered together. We direct the AO to deliberate upon the issue again and decide the year of taxability after affording a reasonable opportunity of hearing to the assessee. Disallowance u/s.40(a)(ia) - Held that:- It is found that the assessee had made the disclosure to cover the errors and omission in the project completed by it. In the earlier paragraphs,we have restored back entire issue of disclosure to the file of the assessee. We feel that this issue should also be adjudicated afresh by the AO,as it is also connected with the main issue.
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2017 (9) TMI 1396
Penalty u/s 271(1)(C) - Addition of ₹ 2.20 crores made/offered during the assessment proceedings - exact charge on which penalty imposed - proof of inaccurate particulars and concealment of income - Held that:- A perusal of the quantum assessment order reveals that the penalty has been initiated for furnishing of inaccurate particulars of income and concealment of income by invoking both Section 271(1)(c) and Section 271 AAA which altogether operate in different circumstances. Moreover, furnishing of inaccurate particulars and concealment of income as per settled legal propositions, are different connotations and carry different meaning and two separate limbs. The same also becomes clear from the language of show-cause notice which states that the assessee have concealed the particulars of income or furnished inaccurate particulars of income. Finally, the penalty has been levied for concealment u/s 271(1)(c) which shows confusion / doubt prevailing in the mind of Ld. AO. Undisputedly, the AO was required to specify the exact charge for which the assessee was being penalized which he has failed to do so and the same has resulted into taking away assessee’s valuable right of contesting the same and thereby violates the principles of natural justice. We are of the considered opinion that the penalty proceedings stood vitiated for want of satisfaction and in violation of principle of natural justice and therefore, liable to be quashed. We held so which results into dismissal of revenue’s appeal.
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2017 (9) TMI 1395
Income from sale of shares - LTCG or STCG - period of holding - Held that:- We find that the issue involved in the present appeal is squarely covered by the aforesaid order of the Tribunal, dated 04.11.2015, passed in the case of the assessee for the aforementioned preceding years, viz. A.Ys. 2005-06, 2006-07, 2007- 08 and 2008-09 . We further find that the CIT(A) on the basis of a well reasoned order had rightly concluded that in the backdrop of the facts involved in the case of the assessee for the year under consideration, the profit on the sale of the shares had rightly been reflected by the assessee under the head STCG. We further find ourselves to be in agreement with the view taken by the coordinate bench of the Tribunal in the case of the assessee, and in the absence of any perversity or distinguishable fact having been brought to our notice in respect of the order of the CIT(A) for the year under consideration, therein find no reason to take a different view. Disallowance u/s 14A r.w. Rule 8D(ii) - computation of claim - AO's satisfaction before makin disallowance - Held that:- We find ourselves to be in agreement with the contention of the assessee that the very process of determination of the amount of expenditure incurred in relation to exempt income would be triggered, only if the A.O. returns a finding that he is not satisfied with the correctness of the claim of the assessee in respect of such expenditure. It is only if the A.O. is not satisfied with the correctness of the claim of the assessee that no expenditure had been incurred in relation to the exempt income, therein only after recording cogent reasons as regards the same, that the A.O. can therein embark upon the determination of the amount of expenditure in accordance with the method prescribed in Section 14A r.w. Rule 8D. See Godrej & Boyce Manufacturing Company Limited (2017 (5) TMI 403 - SUPREME COURT OF INDIA ) As in the present case it can safely be concluded that the A.O had failed to arrive at a satisfaction that having regard to the accounts of the assessee, as placed before him, it was not possible for him generate the requisite satisfaction with regard to the correctness of the claim of the assessee that no expenditure had been incurred by her in respect of the exempt income - Decided in favour of assessee.
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Customs
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2017 (9) TMI 1394
Valuation of imported goods - inner part of Mini-valve (zinc) - it was alleged that the average declared value of the brass hardware imports was 25-30% lower than the prevalent notified tariff value for brass scrap - enhancement of value on the basis of LME price of zinc - Held that: - the sole basis of enhancement of value in this case is LME price of zinc, on which the Proprietor of importer was persuaded to pay the differential duty. No other evidence has been produced by the department - in a similar case, in which ball valves/check valves through JNPT, ICD, Mulund and where the value was also proposed to be loaded on the basis of LME prices, this Tribunal in the case of S.K. Dhawan and Ors. [2016 (3) TMI 888 - CESTAT MUMBAI] has held that the methodology adopted by the adjudicating authority for redetermination of the value of the imported consignments is totally on presumption and surmises and is not sustainable - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1393
Refund of SAD - N/N. 102/2007 - natural justice - case of appellant is that they were not issued with a deficiency memo or SCN or given a personal hearing before passing the adjudication order - Held that: - it is evident that appellant has not been given a chance to defend his case - also, an opportunity of personal hearing was not given - it is fit to remand the matter, so as to give opportunity to the appellant to establish his case - appeal allowed by way of remand.
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2017 (9) TMI 1392
Valuation of imported goods - "old and used photocopiers" - restricted item - Held that: - taking into account all factors, particularly, the aspect of the goods not being restricted at the time of their import, the interest of justice would be served in this case, by reducing the redemption fine imposed u/s 111(m) to ₹ 50,000/- and penalty imposed u/s 112 (a) ibid to ₹ 10,000/- - appeal allowed - decided partly in favor of appellant.
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2017 (9) TMI 1391
Refund claim - EPCG scheme - denial of refund on the ground of unjust enrichment - case of Revenue is that the appellants have not established beyond doubt that the said duty paid by them was not recovered from their customers - Held that: - the goods imported by the appellant are "light and light fittings" which are used by them in their hotel for enhancing the beauty and decor. The same are neither sold to any other person nor consumed in the manufacture of any other final products which are ultimately sold to their customers. In such a scenario, the principle of unjust enrichment will not apply. It is not the Revenue’s case that the said Chartered Accountant’s Certificate does not reflect the correct position. Neither they have been able to produce any evidence so as to cause doubt on the said certificate or to rebut the same - refund allowed - appeal dismissed - decided against Revenue.
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2017 (9) TMI 1390
Smuggling - Urea Fertiliser - illegal export - seizure of truck - penalty - Held that: - initially, Shri Om Prakash, Proprietor of M/s. Om Khad Beej Bhandar, disowned the goods before the Adjudicating Authority and it was claimed before the Commissioner (Appeal). There is a clear link between Shri Omprakash and Shri Niranjan Rai and therefore, imposition of penalty is justified. However, the quantum of penalty is excessive - penalty imposed on Shri Niranjan Rai and Shri Omprakash are reduced to ₹ 25,000/-. There is no material available that Shri Shiv Kumar Shastri had any knowledge of illegal attempt of export of goods. On perusal of the statement of the driver of the seized truck would not show any knowledge of the driver of the truck of the attempt of illegal export. Therefore, the confiscation of the seized truck and the imposition of penalty on Shri Shiv Kr. Shastri are not justified. Appeal allowed - decided partly in favor of appellant.
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2017 (9) TMI 1389
Release of confiscated goods - illegal import - Gold Biscuits - redemption fine - applicability of Section 125 of the Act - Held that: - the Adjudicating Authority observed that the appellant has failed to prove the sole question of ownership of the said goods and thus disentitled to claim option to pay the fine in lieu of confiscation under Section 125 of the Act - It is apparent on the face of the record that the appellant failed to establish the ownership of the seized goods - appeal dismissed - decided against Revenue.
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Corporate Laws
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2017 (9) TMI 1388
Restoration of name of company - reason for striking off the name of the petitioner company is non-filing of Balance Sheet and Annual Returns since 1999 which resulted in the belief that the petitioner was not carrying out any business - Held that:- The petitioner has not been able to show that on 31.05.2007 when it was struck off it was in fact carrying on business or it was in operation. On its own showing the petitioner filed his last annual returns in the year 2003 thus we find that section 252(3) would not come to the rescue of the petitioner. It is also patent from the record that the petitioner has not approached the Tribunal with clean hands in as much as it has been unfairly claimed that the annual returns was filed up to the year ending 2003. Otherwise on the basis of the record the ROC has pointed out that the last returns was filed in the year 1998. On that account also the petitioner would lose the right of obtaining any relief nay even the right of hearing. Moreover the so-called resolution attached with the petition (annexure P-2) is surrounded with doubts as the address of Shri Kamlesh Bajaj is entirely different than the one available in the record of the ROC. It would further fortify the view that the company has no business transaction. As a sequel to the above discussion this petition fails and the same is dismissed with cost of ₹ 10,000/- (Rs. Ten Thousand Only). The cost has to be borne by Shri Kamlesh Bajaj and same be deposited with ROC, NCT of Delhi and Haryana
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Insolvency & Bankruptcy
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2017 (9) TMI 1387
Corporate insolvency procedure - Insolvency and Bankruptcy Code, 2016 - proof of eligible debt - Held that:- Petitioner has disclosed all the details required by Section 10 of the Code read with Rule-7 of Rules. The particulars of the corporate applicant and those of the financial debt have been disclosed in all material particulars. The name of the Interim Resolution Professional has also been proposed. The record of the financial debt as per the Books of the Corporate-Applicant; and record of the 'Operational Debtors'; certificate of eligibility of the Interim Resolution Professional, Books of Account showing default; copies of the audited financial statement for the Financial Year ending 31.03.2016 and 31.03.2017 all have been placed on record. A list of assets and liabilities as on 31.07.2017 has also been disclosed. It has been submitted that the applicant company is in dire need of a resolution plan in the interest of all the stakeholders. The present application has been filed in the requisite form-6 containing the required particulars in terms of sub-section (2) of section 10 of the Code. The petitioner satisfies all the statutory requirements. Therefore, we are inclined to admit the application. In view of the above, we are satisfied that the present application is complete and that the applicant corporate debtor has committed a default. Therefore, as the application is complete the present application is admitted under section 10(4)(a) of the Code. The corporate insolvency resolution process shall commence from the date of this order under sub-section (5) of section 10 of the Code. Moratorium in terms of section 14 of the Code is being issued respectively.
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PMLA
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2017 (9) TMI 1358
Application for bail - offence under PMLA act - Held that:- Rigors of Section 21(4) of MCOC Act as under consideration which is pari materia with Section 45(1) of PML Act, and considering the facts of the present case and the observations made hereinabove grounds for grant of bail are made out. The reasonable satisfaction contemplated under Section 45(1) has to be construed on the basis of aforesaid principles. The observations herein are restricted to an application under Section 439 of Cr.P.C. and the same shall not be taken into consideration for purpose of quashing the proceedings, discharge application or at the time of trial. (i) The applicant is directed to be released on the bail in connection with ECIR/MBZO11/05/2016 registered by Directorate of Enforcement, Mumbai on furnishing P. R. Bond in the sum of ₹ 1 lakh (Rupees One Lakh only.) with one or more sureties in the like amount; (ii) The applicant is directed to report to Enforcement Directorate, Mumbai once in a month on the first Saturday of the month between 11.00 am to 1.00 pm till further orders; (iii) The applicant shall not leave country without the permission of the Court; (iv) The applicant is permitted to furnish cash security in the sum of ₹ 1 lakh for a period of four weeks in lieu of sureties;
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Service Tax
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2017 (9) TMI 1386
Commercial or Industrial Construction Service - service provided by the respondent in laying down long distance pipelines for transfer of drinking water in the State of Gujarat pursuant to a contract awarded by Gujarat Water Supply and Sewerage Board - levy of tax - Held that: - GWSSB discharged an important duty and responsibility of providing drinking water to the people, industries etc. The Board was constituted mainly to supply drinking water and maintenance of sewerage system. The usage charges recovered by the Board from Gram Panchayats, Nagar Palikas and Nagar Panchayats are at highly subsidized rates and therefore, cannot be considered as an industry in the sense that the said word is used in the definition of taxable entry. The Board was sustaining on the grants released by the State Government. The pipelines constructed were for providing drinking water facilities to the people of the State through different Gram and Taluka Panchayats. Only a small portion of the water was provided to the industries at commercial rates - levy of tax set aside. Appeal dismissed - decided against Revenue.
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2017 (9) TMI 1385
Classification of services - “Financial Advisory Services” in respect of energy, banking, development, finance, transport and urban infrastructure, disinvestment and risk management - whether classified under the head Banking and other Financial Services or under the head Management Consultancy Service? - Held that: - the Financial Advisory Services undertaken by the Respondent have been introduced for the first time in “Banking and other Financial Services” with effect from 16th August 2002 - From the definition of Banking and other Financial Services, it is clear that Financial Advisory Services were included as a part of the said services. Insofar as “Management Consultancy Services” are concerned these have at all times been under the Finance Act and chargeable to service tax. This would be the case even after the inclusion of Advisory and Auxiliary Financial Services under “Banking and other Financial Services” on 16th August 2002 - it is not open for the Appellant to take a contrary stand viz. that the Financial Advisory Services were falling under “Management Consultancy Services” prior to 16th August 2002. The Appellate Tribunal have also observed that the Board Circular dated 7th October 1998 categorically clarified that information and advisory services, if any, rendered by credit rating agency would not attract service tax. The Appellate Tribunal has arrived at correct finding that the advisory services provided by the Respondent does not fall under category of “Management Consultancy Services” and is correctly classified under the “Banking and other Financial Services” - Appeal dismissed - decided against Revenue.
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2017 (9) TMI 1384
Cargo Handling Services - case of assessee is that it was not a cargo handler but it was a mere transporter of luggage of the passengers delivered at the checking point or collected from different points engaging contractors - Board s Circular No. 80/2004 dated 17.09.2004. Held that: - As per the provisions of sub-section (23) of section 65 of the Finance Act, 1994, Cargo Handling Service means loading, unloading, packing or un-packing of cargo and includes Cargo Handling Services provided for freight in special containers or for non-containerized freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport and Cargo Handling Service incidental to freight, but does not include handling of export cargo or passenger baggage or mere transportation of goods - From the definition of Cargo Handling Service, what emerges is that mere transportation of cargo is excluded from that definition. Every activity of service of transportation of goods will surely include some manner of loading and unloading of the goods. It is further seen that the assessee themselves do not carry out even these peripheral activities of loading or unloading. The same is carried out instead by independent contractors. Throughout this exercise due carrier charges are collected by the appellants from the clients to defray the cost of carting and x-ray of cargo paid to third parties. This is just a reimbursement of convenience for all parties involved to ensure seamless, prompt and timely services to the clients. The activities of the assessee herein would definitely fall within the ambit of the said service, namely, "Transportation of Goods by Air" introduced w.e.f 10.09.2004. However, for the prior period (16.08.2002 to 09.09.2004), the department is seeking to bring the same activities under the fold of cargo handling service. This, in our considered opinion, is not just or fair. Law is well settled that when a new entry is brought under the levy of service tax, the same activity cannot be subjected to levy under an existing entry, unless the new entry has been specifically carved out of the earlier one. This is certainly not the case here. In a recent decision, in the case of United Shippers Ltd. Vs Commissioner of Central Excise, Thane-II [2014 (12) TMI 502 - CESTAT MUMBAI] the Tribunal to held that transport of coastal goods cannot be taxed under categories of Cargo Handling Service. The services provided by the assessee cannot be brought under the ambit of Cargo Handling Services - demand set aside - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1383
Classification of services - Site Formation Services or works contract services? - services rendered involves activities which include excavation, earth moving and demolition services, earth cutting, scaffold winch foundation, drilling and lining of return airshaft, works are executed on the basis of work orders received by the appellant mostly from collieries - Held that: - the contracts involved not only various services, but also includes the supply of the associated material. Consequently, such contracts fall under the category of Works Contract Service - The Hon’ble Supreme Court in the case of Larsen & Toubro [2015 (8) TMI 749 - SUPREME COURT] held that any contract which involves transfer of property in the goods along with rendering of services, will have to be necessarily classified under Works Contract Services, will have to be necessarily classified under Works Contract Service w.e.f. 01.06.2007, such contracts cannot be classified under any other category for the period prior to 01.06.2007. The benefit of the above decision of Apex Court was not available to the adjudicating authority at the time of passing of the impugned order - it is necessary to set aside the impugned order and remand the matter to the adjudicating authority for de novo decision - appeal allowed by way of remand.
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2017 (9) TMI 1382
Consideration received form railways - whether would be exempted under N/N. 12/2012-S.T. dated 20.06.2012? - Held that: - CBEC has clarified that welding of railway track is a process of metal joinery which falls in the category of completion of services as defined in the Commercial or Industrial Structure Services. Sl.No.14 of the above Notification exempts service tax in respect of services for Construction, Erection and Commissioning or installation of original works. Activities carried out by the appellant do not fall within the definition of original works as given above, since the activities do not fall within any of the sub-headings - even though services have been rendered for railways, the benefit of notification No.25/2012 is not available to the appellant. The activities rendered by the appellants will be liable to service tax w.e.f. 01.07.2012 as has been held by the lower authority in the impugned orders. Consequently there is no ground at all to interfere with the findings of the lower authority in this regard. Remuneration paid by the appellant to its whole time Directors - levy of tax - whether the consideration paid to the full time Directors will be liable to service tax? - Held that: - the appellant had not placed any record, or any documentary evidence before the Adjudicating Authority to support their claim that the Directors are paid employees of the company. However, they have attached copies of the Form-16 statement issued to the Directors for the Financial Year 2012-2013 and 2013-2014 and have claimed in appeal papers that the Directors are employees of the company. However, such documentary evidence was not submitted before the Adjudicating Authority - it is necessary to set aside the operation of the Order-in-Original only in respect of the demand of service tax on the amount paid to the Directors and remand the matter to the Adjudicating Authority to consider the documentary evidence produced by the appellant and re-decide the issue. Appeal allowed by way of remand.
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2017 (9) TMI 1381
Sub-contract - Classification of services - dredging service - work of drilling and blasting at Mithi River - whether the service of drilling and blasting is a dredging service in terms of Section 65(36a), and whether the appellant being sub-contractor is liable to pay service tax in the event that the main contractor RMJV is discharging the service tax on the composite service provided to MMRDA? Held that: - the clearing of river bed by scooping or "dragging" is a service of dredging. In the present case, the activity is admittedly not similar to scooping or "dragging" of silt, mud etc. but it is limited to drilling and blasting. The subsequent service i.e. removal of silt, mud, rock etc. is carried out by M/s. S.K. Construction - The classification of service in the hands of the individual service provider to be decided on the basis of that activity alone carried out by the individual service provider and same cannot be linked with the subsequent service provided - In the present case the service provided by M/s. S.K. Construction and RMJV. The service of drilling and blasting alone does not fall under the dredging service. The service of drilling and blasting provided by the appellant is not classifiable as dredging service - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1380
Classification of services - mandap keeper services - the revenue sought to levy service tax on the entire value i.e. including the value of room charges - whether the appellant is liable to pay service tax under the category of Mandap Keeper Service for the room rent received from hotel guest? - Held that: - the issue is decided in the appellant's own case Dukes Retreat Ltd. Versus Commissioner of Central Excise, Pune-I [2017 (5) TMI 465 - CESTAT MUMBAI], where the bench has categorically given finding that the entire amount of room rent collected by the appellant cannot be taxed under Mandap Keeper Service - the room rent cannot be charged to service tax under the head of Mandap Keeper Service. Time limitation - Held that: - on the same fact earlier, some proceedings were initiated and matter was settled by the Tribunal. Thereafter on the same set of facts for the present proceeding show-cause notice was issued invoking the extended period - the demand for the extended period cannot be sustained on limitation also. Appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1379
Erection, Commissioning and Installation Services - It appeared that the work entrusted and executed involved complete supply of required materials and carrying out the installation of materials, testing and commissioning - Held that: - it clearly emerges that even the department has considered the activity carried out by the respondents as being in the nature of "Works Contract" - the Hon'ble Apex Court Commissioner of Central Excise & Customs, Kerala Vs Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT] has clarified that such services which are in the nature of Works Contract carried out, as is the case here, cannot be exigible to tax till such service was brought under the tax net with effect from 01.07.2006 - appeal dismissed - decided against Revenue.
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2017 (9) TMI 1378
Penalty u/s 76 and 78 - payment of tax after issuance of the SCN - case of assessee is that they were under the bonafide belief of the applicability of the tax and therefore, no penal provisions should be invoked - Manpower Supply/Recruitment Agency Service - Held that: - it is clearly evident that the Department was aware of the activities of the appellant. It is noted that the appellant rendered the service on the basis of the agreement. The Adjudicating Authority observed that the appellant paid the amount of service tax after issuance of SCN, but have not shown any proof of payment i.e T.R. 6 Challan and therefore, their intention to evade service tax by suppressing the facts, cannot be ruled out - penalty u/s 78 is not warranted. The appellant immediately paid tax after issuance of show-cause notice and for the same reasoning, penalty under Section 76 of the Finance Act, 1994, should be waived by invoking Section 80 of the Act, 1994. Appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1377
Import of Intellectual Property Services (IPR services) - Reverse charge - revenue neutral exercise - the decision in the case of Reliance Industries Ltd. Versus Commissioner of Central Excise & Service Tax, LTU, Mumbai [2016 (6) TMI 1108 - CESTAT MUMBAI] contested - Held that: - Delay condoned - Appeal(s) admitted.
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Central Excise
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2017 (9) TMI 1376
Entitlement of interest - delayed refund of Excise duty - Section 35FF of the Central Excise Act, 1944 - Held that: - A composite reading of unamended Section 35FF and amended Section 35FF of the Act reveals that in respect of an amount deposited prior to the commencement of the Finance Act No. 25 of 2014, interest on the refunded amount is payable only if it is not refunded within three months of the communication of the order of the appellate authority entitling the refund and that too after the expiry of three months of the communication of the order. In the present case, the amount was deposited on 24.04.2014 and 28.04.2014, the appeal entitling the refund was allowed on 03.08.2016 and the refund was actually made on 28.11.2016 - All the aforesaid dates are earlier to 06.08.2016, the date of enforcement of Finance Act No. 25 of 2014. Thus, in view of the proviso to the amended Section 35FF of the Act, the payment of interest to the petitioner would be governed by the unamended Section 35FF of the Act. The application for refund was moved by the petitioner on 05.09.2016 and therefore, in the absence of any date of communication of the order, the date of the application would be recognized as the date of communication of the appellate order. There is no merit in this petition to direct for payment of any interest on the amount refunded in the absence of any specific provision providing for payment of interest for the entire period, the amount had remained in custody of the Revenue - petition dismissed - decided against petitioner.
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2017 (9) TMI 1375
Demand of interest - Rule 14 of the CENVAT Credit Rules, 2004 read along with Section 11AB of the Central Excise Act, 1944 - reversal of CENVAT credit - manufacture of taxable as well as exempted goods - non-maintenance of separate set of books - Rule 6(3)(b) of the Cenvat Credit Rules, 2004 - Held that: - reliance placed in the case of Commissioner of Central Excise, Chennai - 4 vs. Sundaram Fasteners Limited [2014 (2) TMI 551 - MADRAS HIGH COURT], where it was held that Though Rule 14 contemplates that Cenvat Credit taken shall be recovered from the manufacturer along with interest the facts of the present case are slightly different as there was no allegation that there was intention on the part of the assessee to evade payment of duty by wrongly availing the credit - levy of interest is valid. Whether CESTAT, Madras was right in setting aside demand and penalty? - Held that: - as per Section 73 sub-section (2) of the Finance Act, 2010, the assessee has to make an application to the Commissioner of Central Excise along with documentary evidence and a Certificate from the Chartered Accountant or a Cost Accountant, certifying the amount of input credit attributable to the inputs used in or in relation to the manufacture of exempted goods within a period of six months from the date on which the Finance Bill, 2010 received the assent of the President - Considering the fact that assessee had reversed the credit even prior to the amendment and the order of the Tribunal was in fact no different from what is contemplated under the Finance Act, 2010, this court held against the Revenue. There is no manifest error, in the final order of the CESTAT, Madras, in setting aside the demand, and restricting the same only to interest - appeal dismissed - decided against Revenue.
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2017 (9) TMI 1374
CENVAT credit - inputs used in the work in progress destroyed in fire in their premises - Rule 5B of the Cenvat Credit Rules - Held that: - Rule 5B deals with inputs and capital goods. It does not specifically deal with work in progress. Therefore no demand in terms of Rule 5B can be raised in respect of work in progress - the only conclusion that can be reached that the inputs on which the credit was taken have been used in the process of manufacture and therefore, condition for availing input credit has been made with - reliance placed in the case of The Commissioner of Central Excise Versus M/s. Joy Foam Pvt. Ltd., Customs, Excise and Service Tax Appellate Tribunal (CESTAT) [2015 (7) TMI 386 - MADRAS HIGH COURT] - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1373
CENVAT credit - input services - services used attributable to trading activity - Held that: - the issue is squarely covered by the decision of the Tribunal in Godfrey Phillips India Ltd. & Ors. [2016 (12) TMI 436 - CESTAT MUMBAI], where it was held that The said credit needs to be reversed in proportion to the trading turnover and the total turnover - demand of reversal of cenvat credit is sustained. Extended period of limitation - Penalty - Held that: - in the case of Godfrey Phillips India Ltd., it was seen that The appellants have not reversed any credit on their own and only when they were investigated that they have reversed as per their own calculation. There was no doubt regarding liability to reverse, extended period and penalty upheld - Relying on the said decision, penalty and the extended period of limitation is also upheld. Appeal allowed - decided in favor of Revenue.
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2017 (9) TMI 1372
CENVAT credit - input services - certain services obtained for handling a case on family settlement - Held that: - the said services have been used for the purpose of merger with other companies - the services of merger has no relation with the manufacture. The said service relates to corporate restructuring and is not specifically covered under any of the heads of input services - the said services do not qualify to an input service - appeal dismissed - decided against appellant.
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2017 (9) TMI 1371
CENVAT credit - GTA services used for supplying goods to their own depots - place of removal - Credit is sought to be denied on the presumption that the factory gate is place of removal and not the depot - Held that: - Hon'ble High Court of Chhattisgarh in the case of Ultra Tech Cement Ltd. [2014 (8) TMI 788 - CHHATTISGARH HIGH COURT] has observed that no such presumption can be made and the place of removal has to be decided on the basis of facts of each case. The Tribunal in M.P. Biscuits Pvt. Ltd. [2012 (10) TMI 623 - CESTAT, New Delhi] has in similar circumstances held that credit of input service of GTA can be allowed for removal up to the depot of the principal manufacturer in respect of M.P. Biscuits Pvt. Ltd. which are also assessed on the basis of MRP under Section 4A. At the time of clearance from the factory, the documents clearly indicate that the goods are intended for supply to their own depot and there is no sale involved. Taking all these facts into account, the place of removal in these circumstances will be depot and the credit of GTA service upto the depot of the appellant would be available irrespective of the fact that the said goods are trans-shipped at Bhiwandi or otherwise. Appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1370
Refund claim - abatement for non-production of notified goods for a continuous period of 15 days - Held that: - Proviso to Rule 6(5) of Rules, 2010 had given an option to the manufacturer in case, the machine is not feasible to remove from the factory, it shall be uninstalled and sealed by the Superintendent of Central Excise in such manner that it cannot be operated - it is clear that the Superintendent while sealing the packing machines in one case, categorically mentioned that the machine is sealed in such a manner that it cannot be operated. But in the other report, it has not been mentioned categorically - the report dated 19.10.2015 is inconsonance with the provisions of proviso to Rule 6 (5) of the Rules, 2010. In the other report, there is no indication that it cannot be operated. Appeal dismissed - decided against appellant.
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2017 (9) TMI 1369
CENVAT credit - steel items used in fabrication work at factory for construction of shed/ construction for support of machinery - Held that: - the Hon'ble Apex Court in the case of Saraswati Sugar Mills [2011 (8) TMI 4 - SUPREME COURT OF INDIA] has held that Iron and Steel structures are not the components of machineries used in the installation of Sugar Manufacturing Plant - items used for fabrication of supporting structure cannot be allowed. Moreover with effect from 07.07.2009 the definition of input appearing in Rule 2(k) of the Cenvat Credit Rules, 2004 has been amended and it specifically excludes cement, angles, channels, Centrally Twisted Deform bar (CTD) or Thermo Mechanically Treated bar (TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods from the ambit of definition of inputs. Appeal dismissed - decided against appellant.
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2017 (9) TMI 1368
Drawback - Fixation of brand rate - simultaneous availment of both DEPB and Draw back on the exported product - right to appeal - non-speaking order - Held that: - merely because the department chooses to issue a letter denying the benefit instead of issuing a SCN and passing an adjudication order, the appellant cannot be prevented from exerting his right to appeal against such decision - similar issue decided in the case of BHAGWATI GASES LTD. Versus COMMISSIONER OF C. EX., JAIPUR-I [2008 (1) TMI 712 - CESTAT, NEW DELHI], where appeal against the letter of the Superintendent of Central Excise to the effect that suo motu Modvat credit transferred by the appellants was inadmissible, was held to be maintainable. Circular No. 39/2001-Cus. dated 06.07.2001 would allow drawback only based on documents evidencing payment of excise duty on the inputs used in the body portion and not the adhoc rate of 7% fixed by the MOF itself for the product in question under export, considering its peculiarity and other reasons. MOF having clarified about the eligibility of duty drawback vide their letter dated 10.11.2006, the appellants presume that there is no ambiguity on the point that there is no double claim or benefit or the same export product. The appellants seek a chance to make their submission on merits as to how they are entitled for the adhoc rate of 7% drawback fixed by the MOF vide their Circular dated 1988 and also that there is no double benefit of DEPB and Drawback for the same export product ie., body portion contained in fully built vehicle. Matter remanded to the Commissioner of Customs, directing him to give reasonable opportunity for furnishing evidence and for personal hearing - appeal allowed by way of remand.
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2017 (9) TMI 1367
Cement sold in bags upto 50 kgs - N/N. 4/2006-CE dated 01.03.2006 as amended - requirement of RSP - whether the benefit of notification would be admissible to the assessees or otherwise? - Held that: - similar issue decided in the case of GRASIM INDUSTRIES LTD. (UNIT-I) Versus COMMISSIONER OF C. EX., TRICHY [2008 (10) TMI 462 - CESTAT, CHENNAI] where it was held that no RSP requires to be printed on the goods sold to ‘industrial/institutional consumers as defined under the rules framed under the Standards of Weights and Measures Act and that such goods would be covered under Sl. No. 1B or 1C of N/N. 4/2006-C.E. by virtue of the Second Proviso to the Explanation to Sl. No. 1C of the Notification as amended - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1366
CENVAT credit - job-work - receipt of goods with 180 days from the date of removal - Held that: - the appellant could not produce the evidence as directed by the Tribunal - The appellant failed to demonstrate before the Adjudicating Authority that the goods were returned back within 180 days from the date of removal of the goods - the Adjudicating Authority rightly disallowed the credit - appeal dismissed - decided against appellant.
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2017 (9) TMI 1365
Valuation - freight - includibility - case of Revenue is that assessee did not include additional amount realized from their customers under the garb of freight & insurance charges on sale of the excisable good to their customers as FOR destination sales, resulting in undervaluation of the said goods - Held that: - the department has proceeded on the basis that the contracts are on FOR basis. However, on examination of one of the appellants' contract available on record with Bhilai Steel Plant, it is found that the contract is on ex-works basis - as per the contract the transportation and insurance are billed by the supplier on the buyer. From the invoices, it is evident that the freight and transportation are separately indicated and excise duty is collected on the basic value excluding the freight and insurance. The matter is squarely covered by the judgement of Hon’ble Supreme Court in the case CCE, Aurangabad Vs. Roofit Industries [2015 (4) TMI 857 - SUPREME COURT], where it has been held that once the sale of the goods to the buyer is at the factory gate, the expenses which were incurred after removal of the goods from the factory gate are not to be included in the value of the goods for the purpose of excise duty. Demand set aside - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1364
Valuation - includibility - amounts collected as testing charges, service charges, installation charges - Held that: - In the case of testing charges, it is seen that the same is done at the customers' site. The testing is done by Indian Registrar of Shipping as per the statutory obligation and as hired by HPCL. In such cases, testing activity does not form part of manufacturing activity and therefore is not includable in the assessable value - The Tribunal in the case of Goyal M.G. Gases (P) Ltd. Vs. Commissioner [2014 (8) TMI 81 - CESTAT AHMEDABAD] held that cylinder testing charges are not includible in the assessable value. The service charges collected for servicing a pump cleared to the customer - includibility - Held that: - The purchase order was only for supply of DG sets and not for installation. No material required for erection/installation was cleared from their factory as part of the DG sets. There was separate order for installation and erection. Therefore, the above discussed charges cannot be included in assessable value in terms of definition of transaction value under section 4 of Central Excise Act. In Bharat Bijlee Ltd. vs. Commissioner of Central Excise, Mumbai [2016 (2) TMI 779 - CESTAT MUMBAI], where it was held that testing charges borne by customer is not includable in assessable value. Further, charges for erection and installation of DG sets are includable only if such charges are shown in the purchase order. Appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1363
CENVAT credit - duty paying documents - denial on the ground that the credit was taken under the transitional provisions on 20.12.1994 without submitting any declaration under Rule 57H (1) (b) of the erstwhile CER, 1944 - Held that: - there is no clarity on the facts of the case as to the date of registration, declaration filed under Rule 57G and the application for 57H and thereafter, the applicability of the law and case laws would apply - the matter should be remanded to the Adjudicating Authority to examine the facts in details with the documents and thereafter, the applicability of the law - appeal allowed by way of remand.
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2017 (9) TMI 1362
Confiscation - Valuation of stock - case of Revenue is that the officers had erred in evaluating the stock as they had not weighed the stock and their observations were merely as per eye estimation - Held that: - there is no dispute that the appellant failed to record the excess quantity of finished goods in the RG-I register. Thus, there is contravention of the Central Excise Rules, 2002. It is noted that large quantity of finished goods was found in excess. The finished goods found on Physical verification was 151165.28 Kgs and the stock recorded in RG-I register was 113550 Kgs. The quantity of 37615.28 Kgs was found in excess. The appellant has not explained the reason for excess of such large quantity of difference, and therefore, confiscation of goods is justified - the Redemption Fine reduced to ₹ 75,000/- and penalty to ₹ 50,000/- respectively - appeal allowed - decided partly in favor of appellant.
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CST, VAT & Sales Tax
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2017 (9) TMI 1361
Protective assessment order - Section 38(2) read with Section 36 and Section 72 of the KVAT Act, 2003 - Held that: - the respondent- Commissioner of Commercial Taxes department has assigned the matters for fresh and regular re-assessment proceedings U/s 39(1) of the KVAT Act to the Deputy Commissioner of Commercial Taxes (Audit)- 5.5, DVO-05, Bengaluru - the writ petition has become infructuous as the impugned protective assessment order stands withdrawn - petition dismissed.
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2017 (9) TMI 1360
Adjustment of the input tax credit - refund of input tax credit - time limitation - The petitioner's specific case is that they have been making the claim in Form No.1 within the period prescribed under Section 19(11) of the State Act and hence, the respondent was not justified in issuing the show cause notices proposing to reverse the input tax credit on the ground that the claim was not made within 180 days as per Section 18 of the State Act. Held that: - it is admitted that the appeal is yet to be numbered and it is still in the SR stage - The settled legal position is that mere pendency of an appeal would not amount to stay of a judgment or order. In the instant case, the appeal is yet to be numbered - the decision in the case of M/s. Everest Industries Limited Versus The State of Tamil Nadu, The Deputy Commissioner (CT) (FAC) [2017 (3) TMI 279 - MADRAS HIGH COURT], where it was held that the limitation provided in the proviso would apply only vis-a-vis the purpose specified in clause (v) and not qua other purposes set out in clause (i) to (iv) and (vi) of Section 19(2) of the 2006 Act. The impugned assessment orders are set aside in so far as the rejection of the petitioner's objections with regard to adjustment of input tax credit - Matter is remanded back to redo the asessment - petition allowed partly by way of remand.
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2017 (9) TMI 1359
Penalty - petitioners seek a direction to the respondent to issue C declaration forms to them through on-line by unlocking the facility in the corresponding tax payer identification number and the general sales tax number - Held that: - this Court upheld the power of the respondents to withhold the C Form declarations, as the respondents are statutorily empowered to do so - respondent are directed to release the C Form declarations, to which, the petitioners are eligible. Simultaneously, there will be a direction to the Puducherry Value Added Tax Act Appellate Tribunal, Puducherry to take up for hearing the stay petitions - petition allowed.
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