Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 29, 2023
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
SEBI
- SEBI/HO/IMD/IMD-I POD1/P/CIR/2023/160 - dated
27-9-2023
Nomination for Mutual Fund Unit Holders – Extension of timelines
IBC
- IBBI/LIQ/61/2023 - dated
28-9-2023
Clarification w.r.t. Liquidators’ fee under clause (b) of sub-regulation (2) of Regulation 4 of IBBI (Liquidation Process) Regulations, 2016
Customs
- Public Notice No. 14 /2023 - dated
26-8-2023
Transshipment permission to M/s DHL Express (India) Pvt. Ltd., Plot No.C-19, Express Cargo Terminal, Near Kempegowda International Airport, Devanahalli, Bengaluru for transshipment of import goods from Express Cargo Terminal, Bengaluru to Air Ports namely Mumbai, Chennai, Delhi, Cochin, Kolkata, Hyderabad and Ahmedabad through Bonded Trucking Services of M/s. Shreeji Trans Logistics Ltd. via road transport Services. -reg
- PUBLIC NOTICE NO. 13/2023 - dated
11-8-2023
M/s Bangalore International Airport Limited has been appointed as Customs Cargo Service Provider and Custodian at Air Cargo Terminal Bengaluru.
Highlights / Catch Notes
GST
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Time Limitation to issue SCN u/s 129(3) - detention of goods and conveyance - the last date for issuance of the impugned notice would have expired on 06.09.2023. However, the impugned notice has been dispatched through e-mail only on the following date i.e., on 07.09.2023 after the expiry of limitation. - notice quashed - HC
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Refund of IGST - zero-rated supplies - The Circular on which reliance is placed by the Respondents is dated 9th October, 2018, whereas the export was made on 25th July, 2017 and 5th September, 2017, which is much before the date of Circular. It is a settled position that the circular cannot be made applicable retrospectively. Even otherwise, the circular proceeds on a footing of claim of higher duty drawback and not where the rate of drawback is same and further more the circular also dose not deal with the rectification of mistake if suffix (A) is mentioned instead of suffix (B), while mentioning the HSN Code, which the facts in the instant case. - HC
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Exempted supply or not - composite supply - printing of Pre-Examination items like question papers, OMR sheets (optical Mark Reading), answer booklets for conducting of an examination by the educational boards - Entitled for exemption - AAR
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Advisory: Temporary /Short Period Pause in e-Invoice Auto Population into GSTR-1
Income Tax
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Validity of Settlement Commission order - validity of immunity granted to the assessee - Based on such disclosures and on noting that the appellant co-operated with the Commission in the process of settlement, the Commission proceeded to grant immunity from prosecution and penalty as contemplated u/s 245H - High Court ought not to have sat in appeal as to the sufficiency of the material and particulars placed before the Commission, based on which the Commission proceeded to grant immunity from prosecution and penalty as contemplated u/s 245H. - SC
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Recovery of tax from the Director of the company - Demand u/s 179 - Only on the ground of the show-cause notice being defective as the same is totally silent as regards the satisfaction of the condition precedent for taking action under Section 179 of the Act, the order passed by the respondent no. 1 is quashed and set aside. - HC
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Condonation of delay in filing the return of income - carry forward the capital loss denied - It is a settled position of law that the respondent Board has wide powers to condone the delay and in the facts of the case, such powers ought to have been exercised judiciously so as to render substantial justice. - Application filed u/s 116(2)(b) allowed - HC
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Difficulty being faced by the Trusts to file income tax return (ITR) - CBDT directed to look into the matter and resolve the difficulty articulated by the aforementioned petitioner trusts. Respondent no. 2/CBDT will treat the writ petitions as applications filed u/s 119 keeping in mind that this is a recurring problem. - HC
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Addition of interest income due to the difference of income of assessee as per 26AS statement and actual interest figure shown in the profit & loss account - Extra amount reflected in 26AS does not belong to the assessee - necessary correction has already been done in 26AS statement of the assessee - Additions deleted - AT
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Penalty u/s 271D - violation of provisions u/s 269SS - cash receipt claimed as advance against sales - recording of the satisfaction by the AO is sine qua non for initiating the penalty u/s 271D - AO though had mentioned that the AO has proposed the imposition of penalty u/s 271D for violation of the provisions of section 269SS, however, after looking into the assessment order reproduced herein below, it is abundantly clear that neither such proposal for imposition of penalty u/s 271D was proposed by the Assessing Officer nor any satisfaction for initiation of penalty was recorded in the assessment order. - AT
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Principle of the mutuality - Maintenance charges received from members - The question whether it is exempt under the ‘Principle of Mutuality’ which even though Ld. CIT(A) held to be essential question of fact did not bother to examine the same on the ruse that impugned order before him was an order of CPC u/s 154 of the Act - Matter restoredback - AT
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Foreign tax credit claimed u/s 90/90A - although there was delay in filing of such Form 67 beyond the due date of filing of the return wherein as held that FTC cannot be denied to the assessee, where the assessee filed FTC in Form No. 67, although belatedly since filing of such Form 67 is not mandatory but directory in nature. - AT
Customs
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Delay of 14 years in adjudication of SCN - Assessee was not knowing that matter was put in the call book - Authorization of Directorate of Revenue Intelligence (DRI) to act as a proper officer - It is at once clear that the period within which the impugned show cause notice was required to be adjudicated has long since elapsed. - Since the period for adjudication of the impugned show cause notice has elapsed, the same cannot be adjudicated. - HC
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Amendment in the shipping bill - CESTAT allowed the amendment - The respondents specifically stated in the application that no claim would be made by them under Paragraph (3) of the Relevant Notification - there was no reason to hold otherwise and nothing more was required to be done on the part of the respondents. - HC
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Valuation of imported goods - mixed lot of 100% polyester knitted fabric rolls of different colours and weight - Merely by providing NIDB data where it is not clear whether the NIDB data value is declared or assessed (enhanced) value, the onus of providing reasonable evidence by the Revenue is not discharged, the Revenue has failed to discharge the onus of providing reliable evidence which rejecting the declared transaction value. - AT
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Refund of excess amount paid over and above 1% of CVD - unjust enrichment - The refund claims were sanctioned by the original adjudicating authority itself. Those were diverted to the Consumer Welfare Fund solely on the presumptive ground of unjust enrichment. The order under challenge has reasonably well explained that the assessee has not at all been enriched unreasonably as no burden of enhanced CVD paid was found to have been passed on to the buyers of imported goods. - AT
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Denial of exemption of DFIA benefits - While the legislative purpose and intent of policy makers is not required to be looked into for interpreting any notification, it can be broadly analysed that if at any stage policy makers want to encourage innovation and advent of new technologies including usage of new materials, then such broad based imports within an industry and within same SION may be require to be encouraged, rather than persisting with old technologies and materials which can only restrict innovation. - AT
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Absolute Confiscation - penalty u/s 114AA of FA - baggage - gold bars shoes and socks - The adjudicating authority has held that the gold does not fall under the category of prohibited goods for the reasons of prohibition imposed under Custom Act or any other law, but the confiscation is for the case of non-declaration or miss-declaration of the same - The appellant should have been given an option to redeem the goods against the redemption fine. - AT
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Classification of goods intended to be imported - stepper motor for idle air control valve - The stepper motor (3800-B07F-0000) proposed to be imported by the applicant for use in manufacture of idle air control valve will be classifiable under sub-heading 8501 10 12 of the First Schedule to the Customs Tariff Act, 1975. - AAR
Indian Laws
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Dishonour of Cheque - acquittal of the accused - rebuttal of the presumption - the Learned Trial Court, by considering the legal presumption available under Section 139 of the Negotiable Instruments Act to have been rebutted merely on denial made by the accused/respondents, has clearly failed to appreciate the scope and purport of section 139 of the Negotiable Instruments Act. The impugned order of acquittal is thus erroneous in law as also in facts and is thus liable to be set aside. - HC
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Dishonour of Cheque - interference with the order of acquittal of the accused - If the Managing Director or Joint Director of the company takes personal responsibility to discharge the debt or liability which the company owed and issued cheque in his/their capacity, the said person is solely liable as drawer of the cheque - HC
IBC
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Admissibility of Section 7 application - Application is within the period of Limitation or not -The entire correspondence and the OTS proposals between the parties from 2008 to 2022, i.e. even after the filing of the Section 7 Application, the contention of the Appellant that there was no ‘acknowledgement of debt’ within 3 years of the date of the Debt Recovery Certificate pales into insignificance. - NCLT rightly admitted application - AT
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Condonation of delay in filing the claim - Refusal to admit the claim - IBC is a time bound process and the Liquidator cannot accept a belated Claim, which would go against with the provisions of the IBC, 2016 as well as the scope and objective of the `Code’. It is also seen from the record that the Appellant had made every effort to derail the process and this Tribunal, does not find any substantial grounds to interfere with the well-reasoned order of the Adjudicating Authority. - AT
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Admissibility of application u/s 9 of IBC - pre-existing dispute - There are force in the contention of the Appellant that since they had never accepted any liability to make payments to the Operational Creditor and that given the fact that there was pre-existing dispute surrounding the oral agreement of 08.05.2019 and modified arrangement on 05.09.2019, the Section 9 application ought not to have been admitted by the NCLT - AT
PMLA
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Legality of Bail granted - Money Laundering - The delay in completing the investigation by the CBI, Delhi cannot be a ground to presume that accused is not guilty of money laundering offence. Closure of investigation in a similar case also cannot be a reason to presume that the present case will also end in closure report. Ifs and buts cannot be an adequate reason to hold this petitioner, not prima facie guilty of the alleged offence. - HC
Service Tax
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Valuation of services - maintenance and repair charges - the value of goods supplied is ascertainable as appellant has paid VAT thereon. Therefore, the said amount on which VAT has been discharged by the appellant is to be excluded from the value of the total contract to ascertain the value of taxable service provided by the appellant - Demand of differential tax set aside - AT
VAT
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Applicability of ratio of decision of the Apex Court for the similar matters in other states - Classification of goods - Mosquito Mats, Coils and Vaporizers - Mortein Insect Killers - [2023 (4) TMI 408 - SUPREME COURT] - It is clarified that the observations made by this Court in judgment dated 10.04.2023 in paragraphs 9.1. and 9.4 are made in the context of Kerala Value Added Tax Act and are not general observations, which could apply to other State enactments. - SC
Case Laws:
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GST
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2023 (9) TMI 1245
Seeking refund of the unutilised ITC - time limitation - petitioner s application dismissed as being barred by time - HELD THAT:- The petitioner preferred an appeal against the impugned order dated 28.01.2022 passed by the adjudicating authority. However, the appellate authority also dismissed the petitioner s appeal by an order dated 11.08.2023, on the ground that it was barred by limitation. The notification no. 13/2022-Central Tax dated 05.07.2022 expressly provides that the period commencing from the 1 st day of March, 2020 to 28th February, 2022, would be excluded, inter alia, for the purposes of filing the refund application under Section 54 or Section 55 of the CGST Act - Undisputedly, the petitioner s application for refund was within the time limit as prescribed under Section 54(1) of the CGST Act, if the said period is excluded. The benefit of the said circular has not been provided to the petitioner, as the same was issued after the petitioner s refund application was rejected. The impugned orders are set aside - Petition allowed.
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2023 (9) TMI 1244
Issuance of summons requiring the petitioners to appear before the authority concerned for recording their statements - HELD THAT:- Shri Parv Agarwal, learned counsel for respondent Nos. 1 and 2 submits that summons under Section 70 of the Central Goods and Services Tax Act, 2017 have been issued for getting the statements of the petitioners recorded in an investigation that is being conducted. The petitioners may comply with the summons and get the statements recorded before the authority concerned. Let, this exercise be done within three weeks from the date of service of certified copy of the order of this Court - petition disposed off.
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2023 (9) TMI 1243
Revocation of cancellation of GST registration of petitioner - HELD THAT:- The revenue has not challenged any of such orders of this Court and hence the orders have attained finality. In view of the fact that this Court has been consistently following the directions issued in the case of TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST) , THE ASSISTANT COMMISSIONER (CIRCLE) , SALEM BAZAAR. [ 2022 (2) TMI 933 - MADRAS HIGH COURT] and the Revenue/Department has also accepted the said view as evident from the fact that no appeal has been filed in any of the matters, this Court intends to follow the above order of this Court. This Court is of the considered opinion that the benefit extended by this Court in the earlier orders referred to above in Suguna Cutpiece Centre, may be extended to the Petitioner. Petition allowed.
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2023 (9) TMI 1242
Violation of principles of natural justice - the impugned order does not record any reasons/findings - HELD THAT:- Further adjudication is not called for. The order dated 28 April 2023 as impugned in this writ petition as passed by the Deputy Commissioner, Sales Tax are quashed and set aside with liberty to the Department to issue a fresh show cause notice to the petitioner within a period of four weeks from today. Petition disposed off.
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2023 (9) TMI 1241
Time Limitation to issue SCN - impugned notice in Form GST Mov-07 has been issued beyond the period of limitation prescribed under Section 129(3) of the Central Goods and Services Tax (CGST) Act, 2017 - seeking release of detained goods alongwith vehicle - HELD THAT:- The impugned notice ought to have been issued to the petitioner within seven days on the date of detention/seizure of goods/conveyance as is contemplated under Section 129(3) of the TNGST Act, 2017. Section 129(3) of the TNGST Act, 2017 has not used the expression within seven days from the date of detention or seizure . The language in Section 129(3) of the TNGST Act, 2017 is clear. Notice specifying payment of penalty has to be issued within seven days of detention or seizure of goods. Issuance of notice within seven days has to be calculated from the date on which seizure was to be effected and not from the following date. Thus, the last date for issuance of the impugned notice would have expired on 06.09.2023. However, the impugned notice has been dispatched through e-mail only on the following date i.e., on 07.09.2023 after the expiry of limitation. The impugned notice stands quashed with a direction to the respondent to release the goods/conveyances of the petitioner, if they have not been released so far - Petition allowed.
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2023 (9) TMI 1240
Cancellation of GST registration of petitioner - time limitation - exclusion of time taken in filing the said application - HELD THAT:- A Show Cause Notice appears to have been issued on 27.02.2023. However, the petitioner failed to reply to the same. Therefore, the application filed by the petitioner for revocation of the cancellation of registration was also rejected by the Assistant Commissioner, Thiruvanmiyur on 14.03.2023. The petitioner has filed a Statutory Appeal before the first respondent on 14.07.2023 with a delay of 39 days. The petitioner was thus prosecuting the application filed for revocation of cancellation of the registration by filing an application on 16.02.2023 under Section 30 of the GST Act which was rejected on 14.03.2023. The time taken in filing the said application is liable to be excluded. The Court is inclined to dispose this writ petition by directing the respondents to consider the petitioner's appeal and pass appropriate orders on merits and in accordance with law without reference to the limitation on its turn - Petition disposed off.
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2023 (9) TMI 1239
Condonation of delay for filing the appeal beyond the statutory period of limitation prescribed - Section 107 of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017 - HELD THAT:- Although there is a delay in filing the appeal before the Appellate Forum, this Court is inclined to dispose this writ petition by directing the third respondent to take up the appeal filed by the petitioner through online on 04.07.2023 and number the same and dispose it on merits and in accordance with law as expeditiously as possible, preferably, within a period of six months from the date of receipt of a copy of this order, subject to the petitioner complying with the mandatory requirements of Section 107 of the TNGST Act, 2017. The Attachment Notice shall stand vacated, subject to the petitioner depositing 10% of the disputed tax from its Electronic Credit Ledger. Petition disposed off.
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2023 (9) TMI 1238
Refund of IGST - zero-rated supplies - Applicability of circular with retrospective effect - rejection on the ground that since the Petitioner has opted for higher duty drawback by mentioning Tariff Code 3907-A, the Petitioner has given up its right to claim the refund of tax paid under IGST Act - HELD THAT:- It is not disputed that the duty drawback rate under HSN Code 3907-A and 3907-B is same and therefore it is not a case of higher duty drawback. Secondly, the CHA in his affidavit has admitted the mistake in preparing the shipping bills on which instead of mentioning 3907-B, they have mentioned 3907-A. There is no rebuttal to the said averment of the Petitioner by the Respondents. The Circular on which reliance is placed by the Respondents is dated 9th October, 2018, whereas the export was made on 25th July, 2017 and 5th September, 2017, which is much before the date of Circular. It is a settled position that the circular cannot be made applicable retrospectively. Even otherwise, the circular proceeds on a footing of claim of higher duty drawback and not where the rate of drawback is same and further more the circular also dose not deal with the rectification of mistake if suffix (A) is mentioned instead of suffix (B), while mentioning the HSN Code, which the facts in the instant case. This Court in an identical facts/situation in the case of SUNLIGHT CABLE INDUSTRIES VERSUS THE COMMISSIONER OF CUSTOMS NS II AND 2 ORS. [ 2023 (7) TMI 160 - BOMBAY HIGH COURT] , faced with a similar situation allowed the claim of refund by observing the Petitioner is entitled to a refund of the IGST paid on the exports in question, as it is certain that this is not a case where the Petitioner is availing any double benefit that is of the IGST refund and a higher duty drawback. The Respondents are directed to refund of Rs. 17,04,127/- to the Petitioner the IGST paid in respect of the zero rated supply under shipping bills in question alongwith interest as per the IGST Act - Petition allowed.
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2023 (9) TMI 1237
Reimbursement of GST payable by the Petitioner for improvement of roads - HELD THAT:- The petitioner had filed the present writ petitions to direct the first Respondent to consider the representation of the Petitioner dated 24.11.2020 and also direct the first respondent to reimburse GST payable by the Petitioner for improvement of roads in Zone-9, Dn-109, 118, 119 and 123 (Package -13) and Zone -10, Dn -127, 129, 131 to 135 (Package 11), for the construction of Integrated Storm Water Drain in Padikuppam water shed of Cooum Basin (Package-18) and for the construction of Integrated Storm Water Drain in Manapakkam water shed of Adyar Basin (Package-34) awarded by the first respondent, along with applicable interest @ 18 percentage p.a. under Sec 50 of CGST Act 2017 to the Petitioner. The 1st respondent is directed to consider the representation of the petitioner dated 24.11.2020, on its own merits and pass appropriate orders in accordance with law, including the relevant Government orders after granting the petitioner reasonable opportunity within a period of four (4) weeks from the date of receipt of a copy of this order - petition disposed off.
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2023 (9) TMI 1236
Validity of impugned assessment order rectifying the earlier order dated 04.07.2023 - petitioner would submit that the petitioners' representation has not been considered - HELD THAT:- If the petitioner is so aggrieved by the impugned Assessment Order dated 06.07.2023 suo motu rectifying the order dated 04.07.2023, it is open for the petitioner to file a rectification application under section 161 of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017. The petitioner shall file such application within a stipulated period specified under Section 161 of TNGST Act, as expeditiously as possible. As and when the application is received by the Office of the respondent, the respondent shall endeavour to pass appropriate orders on merits and in accordance with law after hearing the petitioner. Petition disposed off.
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2023 (9) TMI 1235
Levy of penalty - conveyance was found to be transporting goods without any e-way bill and tax invoice - contravention of Section 68 of the WBGST Act of 2017 corresponding to Section 68 of the CGST Act 2017 read with Rule 138 of the WBGST Rules, 2017 - HELD THAT:- This Court is inclined to hold that the matter be remanded to the appellate authority for revisiting the same upon consideration of the submission which may be made on behalf of both the parties before the authority. The appellate authority shall arrive at a decision as to whether the vehicle in question was in movement at the time of alleged interception of the same, thereby attracting the provisions laid down under Sections 68 and 129 of the Act of 2017. The writ petition is disposed directing the 2nd respondent to reconsider the appeal upon affording reasonable opportunity of hearing to all the interested persons including the petitioner and pass a reasoned and speaking order thereto within four weeks from the date of communication of this order, in accordance with law. The parties shall be at liberty to place relevant documents before the concerned authority at the time of hearing.
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2023 (9) TMI 1234
Rejection of Bid of tender - rejected solely on the ground that GST returns have been filed for only last 5 months and return of March and April 2023 has not been filed - HELD THAT:- The Hon ble Supreme Court in the case of TATA MOTORS LIMITED VERSUS THE BRIHAN MUMBAI ELECTRIC) SUPPLY TRANSPORT UNDERTAKING (BEST) AND OTHERS [ 2023 (5) TMI 1253 - SUPREME COURT] held that The BEST committed no error or cannot be held guilty of favoritism, etc. in allowing EVEY to submit a revised Annexure Y as the earlier one was incorrect on account of a clerical error. This exercise itself was not sufficient to declare the entire bid offered by EVEY as unlawful or illegal. Considering the submissions advanced by the learned counsel for the petitioner as well as the considering the judgment of Hon ble the Apex Court in Tata Motors Ltd and particularly the fact that the respondent No.3, M/s. Govind Kumar Agarwal has already been selected as successful bidder L-1, there are no good ground to entertain this writ petition. Petition dismissed.
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2023 (9) TMI 1233
Principles of natural justice - non-speaking order - objections filed by the petitioner have not been taken note of by the respondent - opportunity of personal hearing not provided - HELD THAT:- A reading of the impugned orders does not imply the reasoning of the authority concerned. That apart, though adverse orders were being passed against the petitioner, no opportunity of personal hearing has been afforded to him, which is contemplated under Section 75(4) of the Central Goods and Services Act, 2017. Therefore, on this limited ground, without addressing the merits of the case, this Court allows all these Writ Petitions, sets aside the impugned orders and remits the matter back to the respondent. The petitioner is directed to file their better reply with all documents and not only the forms. Petition allowed by way of remand.
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2023 (9) TMI 1232
Exempted supply or not - composite supply - printing of Pre-Examination items like question papers, OMR sheets (optical Mark Reading), answer booklets for conducting of an examination by the educational boards - printing of Post-Examination items like marks card, grade card, certificates to educational boards (up to higher secondary) after scanning of OMR Sheets and processing of data in relation to conduct of an examination - scanning and processing of results of examinations - applicability of Entry 66 of Notification No. 12/2017-CGST (Rate), dated 28-06-2017 as amended. Whether the supply of test papers/question papers by the applicant for educational institutes should be treated as supply of goods or supply of service as the applicant makes the supply using the paper and ink owned by him? - HELD THAT:- The supply made by the applicant cannot be classified as selling of question papers to the educational institutes as the content to be printed on them is given by the latter to the applicant. The supply of Printed Question Papers cannot be in toto categorised as supply of goods to the educational institutes, as this is not a case where readymade printed material is bought by recipient who does not own the content in the material to be bought, but it is a composite supply of providing printing services on the papers owned by him. This composite supply involves both supply of printing services and supply of the paper owned by him on which the printing is done as per the content given by the educational institutes - Printing of test papers/question papers is the Principal supply of the composite supply, made by the applicant, which involves goods and services i.e. papers and printing services. Printing of test papers/question papers is the Principal supply of the composite supply and HSN classification of the entire supply should be done based on Principal supply. Supply of test papers/question papers would constitute supply of service falling under heading 9989 of the scheme of classification of services as the usage rights of the manuscript material of Question Papers/test papers (intangible inputs) are owned by the Educational Institutes and the physical inputs used for printing the same belong to the applicant. Applicability of Sr. No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended vide clause (o) of Notification No. 2/2018-Central Tax(Rate) dated 25.01.2018, read with Sr. No. 27 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 - HELD THAT:- As per Sr. No. 66(b)(iv) of Notification No. 12/2017-Central Tax (Rate), as amended, services provided to an educational institution, by way of services relating to admission to, or conduct of examination by, such institution is exempted from payment of Goods and Services Tax. It is to be noted that exemption is given only to services and not to goods in this Notification and the principal supply of the composite supply made by the applicant is printing services. The service of printing of question papers, if supplied by the applicant to other than educational institutions would attract Goods and service tax at rate as specified under Sr. No. 27(i) of Notification No. 11/2017-Central Tax (Rate), as amended, at rate of 12%. The applicant claims that he supplies Printing of test papers/question papers, OMR sheets, Certificates, Marks Memo, MICR cheque books etc. using his own paper and ink to educational institutions. This is a composite supply, of which Printing services is the principal supply, as defined under Section 2(90) of the Central Goods and Services Tax Act, which makes HSN classification of the supply to be done on printing services which falls under heading 9989. As it is a service done to educational institutions the exemption under S. No. 66 (b) (iv) of Notification No. 12/2017-CT(R) can be availed by him as the said Notification details the services provided to educational institution which are exempt. The same is clarified by Circular No. 151/07/2021-GST CBIC- 190354/36/2021 dated: 17.06.2021 while dealing with the issue of supply of various services by National and State Boards.
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Income Tax
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2023 (9) TMI 1231
Validity of Settlement Commission order - validity of immunity granted to the assessee - jurisdiction of the Settlement Commission in entertaining the application filed by the appellant u/s 245C(1) - Settlement Commission annulled the penalty levied by the AO u/s 271(1)(c) for the assessment year 1997- 1998 in respect of non-disclosure of lease rental income and same was annulled considering that the non-disclosure was on account of RBI guidelines and subsequent disclosure on the part of the appellant, of additional income of the lease income before the Settlement Commission when the appellant realised the omission to disclose the same as per income tax law. Whether the Division Bench of the High Court was right in affirming the findings of the learned Single Judge, to the effect that the Settlement Commission ought not to have exercised discretion u/s 245H and granted immunity to the assessee de hors any material to demonstrate that there was no wilful concealment on the part of the assessee to evade tax and on that ground, remanding the matter to the Commission for fresh consideration? HELD THAT:- Assessee may approach the Settlement Commission making full and true disclosure of his income and the manner in which such income has been derived. Such a disclosure may also include the income discovered by the AO. To say that in every case, the material disclosed by the assessee before the Commission must be something apart from what was discovered by the AO, in our view, seems to be an artificial requirement. In every case, there may not even be additional income to offer, apart from what has been discovered by the Assessing Officer. The object of Chapter-XIXA is to settle cases and to reduce the disputes, and not to prolong litigation. Therefore, instead of preferring an appeal against the assessment order, the assessee may, by making a full and true disclosure of income, approach the Settlement Commission and offer to tax income other than that disclosed in the return of income. As further to be noted that the power vested with the Settlement Commission under Section 245H is a discretionary power to be exercised if the Settlement Commission is satisfied that an applicant has complied with the preconditions specified therein. It is trite that any judicial, quasi-judicial or administrative authority must while exercising discretion, direct itself properly in law and consider all the facts and material that it is bound to consider while excluding from consideration irrelevant aspects of the matter. While exercising power u/s 245H, read with Section 245C of the Act the relevant facts and material which ought to be considered by the Commission are: i. the report which is to be submitted by the Commissioner, under Section 245D(1) of the Act; ii. the disclosures made by the applicant before the Commission as to income, and the source of such income; iii. any other relevant evidence let in by the assessee or the department. We find that in the present case, the Settlement Commission has rightly considered the relevant facts and material and, accordingly, decided to grant immunity to the appellant from prosecution and penalty. Single Judge of the High Court was not right in holding that the reasoning of the Settlement Commission was vague, unsound and contrary to established principles. Division Bench was also not justified in affirming such view of the learned Single Judge - Commission, in our view, adequately applied its mind to the circumstances of the case, as well as to the relevant law and accordingly exercised its discretion to proceed with the application for settlement and grant immunity to the assessee from penalty and prosecution. The Order of the Commission dated 04.03.2008 did not suffer from such infirmity as would warrant interference by the High Court, by passing an order of remand. In the present case, as noted above, we find that the appellant placed material and particulars before the Commission as to the manner in which income pertaining to certain activities was derived and has sought to offer such additional income to tax. Based on such disclosures and on noting that the appellant co-operated with the Commission in the process of settlement, the Commission proceeded to grant immunity from prosecution and penalty as contemplated u/s 245H - High Court ought not to have sat in appeal as to the sufficiency of the material and particulars placed before the Commission, based on which the Commission proceeded to grant immunity from prosecution and penalty as contemplated u/s 245H. We are of the view that the Order of the Settlement Commission dated 04.03.2008 was based on a correct appreciation of the law, in light of the facts of the case and the High Court ought not to have interfered with the same. Therefore, the judgment passed by the High Court of Karnataka at Bangalore whereby the judgment of the learned Single Judge passed in Writ Petition remanding the matter to the Settlement Commission to determine afresh, the question as to immunity from levy of penalty and prosecution was affirmed, is hereby set aside. Consequently, the order of the learned Single Judge is also set aside. Order of the Settlement Commission is restored. The appeal is allowed.
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2023 (9) TMI 1230
Disallowance of CSR expenses - Nature of expenses - Revenue or capital expenses - AO treated the CSR expenses as capital expenditure - HELD THAT:- Revenue in all fairness conceded that the issue pertaining to CSR expenses already stands covered by a judgment titled PCIT vs Steel Authority of India Ltd [ 2023 (1) TMI 779 - DELHI HIGH COURT] Disallowance of expenditure u/s 14A - assessee had invested substantial money in mutual funds, dividend whereon is exempt from tax; and that the respondent/assessee also held shares of a joint venture company, which shares being assets, can yield exempt income - Assessee contends that no expenditure has been incurred in relation to earning of exempt income - HELD THAT:- As recording the disbelief, the Assessing Officer did not examine even a shred of accounts of the respondent/assessee. Without looking into accounts of the respondent/assessee, the Assessing Officer held that the respondent/assessee had infused funds by way of equity in the joint venture company and also held that it was not believable that no expenditure had been incurred in relation to the assets, income wherefrom does not form part of total income. Completely ignoring the version of the respondent/assessee that being a cash rich company, it did not have to deploy any person by way of any special effort which could be treated as expenditure to earn the exempted income, the Assessing Officer recorded a conclusion that the respondent/assessee had infused significant funds by way of equity in the joint venture company. No cogent reasons, much less supported by data extracted from accounts of the respondent/assessee were advanced by the Assessing Officer to explain why the case set up by the respondent/assessee was not believable. Even the quantification of the disallowance was carried out under Rule 8D(iii) of the Rules without scrutinizing the accounts of the respondent/assessee and by jumping over the mandate to first proceed under Section 14A of the Act. Such conjectural decision of the Assessing Officer, that too, to the prejudice of the respondent/assessee cannot be sustained. Therefore, we are unable to find any infirmity in the impugned order of the learned Tribunal and the same is upheld, answering the question of law framed above against the appellant/revenue and in favour of the respondent/assessee.
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2023 (9) TMI 1229
Prosecution u/s 276(C)(2) r.w.s. 278B - petitioners are being prosecuted for making an attempt to evade the tax, which was self-assessed by them, while filing the Income Tax Returns for the Assessment Year 2011-12 - whether the delayed payment can be termed as evasion of tax, for which the complaint in question has been filed? - HELD THAT:- There was no attempted evasion on the part of the petitioners. There was undoubtedly delayed payment, but for that penalty had already been levied. There is no debate on the issue of maintenance of the criminal proceedings simultaneously with the civil proceedings (in the present case levying of penalty etc.). While maintaining both these proceedings simultaneously, the one fact that must be present there that there was or has been a criminal intent in the mind of the accused right from the beginning. In the instant case, it is not in dispute that the income tax was self-assessed and payment of the same stands also made, though belatedly. Thus, the question of evasion of tax does not arise in the present facts and circumstances. The facts and circumstances of the case further does not reveal that there was a deliberate and willful default of evasion of tax on the part of the petitioners Department is unable to show anything on record as to how and in what manner, the petitioners have ever tried to evade the tax particularly, when the same was duly shown and admitted/acknowledged while filing the Income Tax Returns for the Assessment Year 2011-12. Assessee petition allowed.
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2023 (9) TMI 1228
Recovery of tax from the Director of the company - Demand u/s 179 - director has resigned and more than nine years after his resignation, respondent no. 2 passed an order holding the petitioner/director responsible and liable for payment of outstanding demand in respect of the company concerned - HELD THAT:- As nothing had come on record and it is undisputed that the show-cause notice issued to the petitioner was bereft of material particulars as regards the steps said to have been taken by the department for the purpose of recovering the tax from the company. Only on the ground of the show-cause notice being defective as the same is totally silent as regards the satisfaction of the condition precedent for taking action under Section 179 of the Act, the order passed by the respondent no. 1 is quashed and set aside. It shall be open for the respondent to issue fresh show cause notice for the purpose of proceeding against the petitioner u/s 179 of the Act, if thought fit. All the contentions of the respective parties, as raised in this petition are kept open. Petition is accordingly allowed.
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2023 (9) TMI 1227
Reopening of assessment u/s 147 - assessee is a beneficiary of the Satish Saraf Group and had converted funds from cash to cheque - evidence received from the office of DDIT (Inv.), Unit-3(1), Mumbai the assessee was one of the beneficiaries of the Satish Saraf Group, managed by Satish Saraf - HELD THAT:- As taking into consideration the reply filed by the petitioner explaining the fact that this was not a transaction which he had undertaken with the Satish Saraf Group and also having found that the transaction in fact was in context of commodity profit from Hrim Comtrade for an amount, it was not a case for reopening and reassessment in light of the fact that it had earlier already been gone into. The details filed from time to time along with the explanation for the transaction allegedly carried out with Satish Saraf Group. These details have been verified and placed on record. The assessee has declared the business income as computed as per the provisions of section 44AD of the Act by applying the net profit rate of 8% on the gross receipts - assessee has declared the income under the head other sources. Decided in favour of assessee.
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2023 (9) TMI 1226
Condonation of delay in filing the return of income - carry forward the capital loss denied - HELD THAT:- The words in the section if it considers it desirable or expedient to do so for avoiding genuine hardship given wide powers on the Board and obligates the authority concerned dealing with the request for acceptance of the application, to consider the relevant facts and reasons which may have been advanced for condoning the delay. The object is to help the assessee, who for good and valid reasons is prevented from making an application. As it is not in dispute that the observations made in the impugned order regarding that the petitioner was a habitual defaulter is misconceived, as in three out of five years, there was no delay since the due dates were extended by the authorities. Moreover, in order to do substantial justice, the period of limitation would not come as hindrance as the loss suffered by the petitioner is genuine and not set off the same would result into denial of substantial justice. The three reasons given by the assessee for delay, namely, health problems of Senior Accountant Pragna Patel, computer system having got corrupted and heads of accounts being on the verge of retirement and heavy rainfall in the month of July disrupting routine were genuine and cannot be termed as an excuse for filing delayed returns. The petitioner has explained in detail all the above reasons for delay in filing the return. The delay is also of not more than 152 days. It is a settled position of law that the respondent Board has wide powers to condone the delay and in the facts of the case, such powers ought to have been exercised judiciously so as to render substantial justice. We, therefore, find that the rejecting the application of the petitioner by the impugned order dated 16.05.2008, the respondent-Board ignored the facts and the settled legal position of law while considering the genuine claim of the petitioner to condone the delay in filing the return of the income. We find that in rejecting the application of the petitioner vide impugned order dated 16.05.2018, the Board, the respondent, ignored the above position of law and failed to consider the petitioner s genuine claim for condoning the delay. Therefore, the order of the respondent is quashed and set aside. The application filed by the petitioner u/s 119(2)(b) for condonation of delay in filing the return of income for the Assessment Year 2014-15 seeking to carry forward the capital loss is allowed.
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2023 (9) TMI 1225
Estimation of income - bogus purchases - information received from the Investigation Wing which stated that assessee was one of the beneficiaries of bogus purchase bills obtained through hawala operators - HELD THAT:- ITAT as relying on case of Vijay Proteins Ltd. [ 2015 (1) TMI 828 - GUJARAT HIGH COURT] and also Smith P. Sheth [ 2013 (10) TMI 1028 - GUJARAT HIGH COURT] and held that no uniform yardstick can be applied for estimating gross profit on bogus purchases which is depending upon the facts of different cases. ITAT held that the Co-ordinate Bench in number of cases has taken a consistent view and directed AO to estimate gross profit of 12.5% on alleged bogus purchases and therefore, in the case at hand also directed AO to estimate gross profit at 12.5% on the bogus purchases. Thus view taken by the ITAT is a reasonable and possible view and hence, no substantial question of law arises
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2023 (9) TMI 1224
Difficulty being faced by the Trusts to file income tax return (ITR) - Trust directed to switch from ITR-2 to ITR-5 e-filing functionality commencing from AY 2021-22 - principal grievance of all three trusts is that while they have been directed to switch from ITR-2 to ITR-5 e-filing functionality commencing from AY 2021-22, concerning the deductions/rebates which were available to them when they were treated as individual assessees are not available in the new format - HELD THAT:- It appears that, grudgingly, this aspect has been accepted by the respondents/revenue. It is the stand of the respondents/revenue, conveyed via Mr Abhishek Maratha, learned senior standing counsel, who appears on behalf of the respondents/revenue, that the trusts can ventilate their grievances in the regular appellate forum . According to us, this is not a satisfactory response. As goes on to submit that the trusts can also approach the Central Board of Direct Taxes (CBDT), with an appropriate application for redressing their difficulties. In this context, our attention has been drawn by Mr Maratha to Section 119. The response, according to us, would not help in resolving the difficulty faced by the trusts before us as, ordinarily, the deductions/rebates claimed by the assessees should be embedded in the Return of Income (ROI). This is a recurring problem which the respondents/revenue will have to address. This problem may occur in the future concerning other assessees [i.e. private discretionary trusts] as well. We may note that up until today, the stand of the respondents/revenue was that they would resolve the glitch obtaining in the e-filing system. This is evident upon a perusal of the orders dated 31.10.2022, 09.12.2022, 06.01.2023 and 17.04.2023. As a matter of fact, a perusal of our order dated 09.12.2022 would show that the applications moved on behalf of the trusts for being permitted to file returns for the aforementioned AYs in physical form were closed, as it was portrayed to the court that the respondents/revenue are attempting to resolve the glitch in the e-filing system. All these factors would have to be taken into account by the respondent no. 2, i.e., the CBDT, while deliberating on the plea articulated by the petitioner trusts in their respective writ petitions. Thus, the above-captioned writ petitions are disposed of with a direction to respondent no. 2/CBDT, to look into the matter and resolve the difficulty articulated by the aforementioned petitioner trusts. Respondent no. 2/CBDT will treat the writ petitions as applications filed u/s 119 keeping in mind that this is a recurring problem. Respondent no. 2, i.e., the CBDT, is requested to pass a speaking order; a copy of which will be furnished to the petitioner trusts. List the above-captioned writ petitions for compliance on 09.11.2023.
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2023 (9) TMI 1223
Addition u/s. 68 as unexplained cash credit of investment - Gift received by the assessee from his father - HELD THAT:- On going to the facts of the instant case, we observe that it is not disputed that the assessee had received the aforesaid gift from his father as Gift . Further, it is also observed that the aforesaid amount of gift had been declared by the assessee in his return of income for the impugned assessment year. Further, since the gift received by the assessee from his father is below the exemption limit of Rs. 50,000/-prescribed under Section 56 of the Act, looking into the facts of the instant case,the aforesaid addition is directed to be deleted. Unexplained income u/s 68 - addition based on retracted statement - HELD THAT:- As statement of the assessee on the basis of which additions were made dated 23.05.2008 was also subsequently retracted by the assessee on July 5, 2008. It is a well established law that no additions can be sustained in the hands of the assessee on the basis of a statement which has been reacted by the assessee. In the case of Chandrakumar Jethmal Kochar [ 2015 (11) TMI 285 - GUJARAT HIGH COURT] held that merely on basis of admission that few benami concerns were being run by assessee, assessee could not be subjected to addition when assessee retracted from such admission and revenue could not furnish any corroborative evidence in support of such admission. Therefore, merely on the basis of the statement of the assessee, in our considered view, the additions cannot be sustained especially in light of the fact that the assessee has subsequently retracted the statement and further, the Department has not brought forth any corroborative evidences to sustain the additions in the hands the assessee during the impugned Assessment Year. Thus in respect of certain additions it is seen that there is concurrent inflow and outflow of Rs. 2 lakhs as evident from the from the statement made by the assessee, and the same being cross entries, therefore no addition can be sustained with respect to the amount of Rs. 2 lakhs. Further, on a perusal we agree with assessee that the sum of Rs. 50,000/- only represents an outstanding amount and does not mean that it is the disclosed income of the assessee. Accordingly, even on merits, certain additions are not sustainable in the hands of the assessee. Appeal of the assessee is allowed.
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2023 (9) TMI 1222
Income taxable in India - Taxability of the amount received from sale of software as fees for technical services (FTS) under Article 12(4) of India-Singapore DTAA - assessee purchased software products from third party vendors like Microsoft, Adobe etc. and distributes them to customers in India - HELD THAT:- Interestingly, in the final assessment order, while implementing the directions of learned DRP, the AO has treated part of the receipts from sale of software as FTS. However, on what basis, he bifurcated the receipts between the sale of products and provision of services is not forthcoming. AO has absolutely not made any discussion about the factual aspect of the issue and the evidences examined by him to come to such conclusion. Though, learned Departmental Representative has tried to make out a case before us that certain invoices of the assessee include service component, however, no such fact has been established on record. On verification of copies of invoices placed in the paper book, we are convinced that they are only in respect of sale of software and do not contain any element of service. Thus, in our view, even a part of the receipts cannot fall within the ambit of FTS. Even, assuming for arguments sake that a part of the receipts from sale of software also involves service element, hence, to be treated as FTS, however, the issue, which arises for consideration is whether such receipts can be treated as FTS under Article 12(4)(b) of India-Singapore DTAA in absence of fulfilment of make available condition. On a reading of assessment order, we do not find any material brought on record by the AO to establish that during rendition of services, the assessee has made available technical know-how, skill etc. to the service recipient so as to enable him to apply technical knowledge, know-how, skill etc in future independently, without the aid and assistance of the assessee . In fact, in the final assessment orders, the Assessing Officer has not made any discussion, under which limb of article 12(4) of India- Singapore DTAA, he has taxed a part of the receipts. In view of the aforesaid, we hold that the additions made by the Assessing Officer are unsustainable. Accordingly, we direct him to delete them.
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2023 (9) TMI 1221
TP Adjustment - ALP of the ESOP Expenses Determined at NIL - reimbursement towards ESOP expenses - HELD THAT:- AO and the TPO had failed to appreciate that the expenses for which deduction has been claimed by the Appellant pertain to RSUs granted in 2015 and exercised in the FY 2017-18. The ESOP expenses related to the RSUs granted and exercised were claimed as deduction by the Appellant over the vesting period. During the relevant previous year, the ESOP expenses were also remitted outside India on the basis of invoices raised upon the Appellant by its AE. Therefore, deduction for the ESOP expenses was claimed by the Appellant during the relevant previous year. Benefit accruing on account of ESOP plans - We find merit in the contention advanced on behalf of the Appellant that for the purpose of granting the RSUs to the employee of the Appellant was to retain and motivate him for continuing his employment with the Appellant. The cost incurred by AE on exercise of the RSUs by the employee of the Appellant is the cost reimbursed by the Appellant which was initially picked up by the AE. We hold that given the facts and circumstances of the present case discussed hereinabove, the ALP of the ESOP Expenses cannot be taken as Nil . The transfer pricing addition therefore, set aside and TPO/AO is directed to re-compute ALP and the transfer pricing adjustment, if any, by following the method adopted by the Appellant for determination of ALP of the international transaction of reimbursement of ESOP Expenses.
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2023 (9) TMI 1220
Denial of deduction u/s 80P - Claim inadmissible in view of section 80AC on the processing of returns u/s 143(1)(a) of the Act - invocation of s. 143(1)(a)(ii) of the Act for effecting a disallowance u/s. 80P r/ws. 80AC for processing a return prior to 01.4.2021 - scope of amendment to section 143(1)(a)(v) including within its scope disallowance of deduction claimed under any provision of Chapter VI-A, sub-heading (C), if the return is filed beyond the date specified u/s. 139(1), being the clear mandate of s. 80AC, is only by Finance Act, 2021 w.e.f. 01.4.2021 - HELD THAT:- The processing of the returns of income in the instant cases has been in July/August, 2020. Section 143(1)(a)(v), which could not have been made applicable prior to 28/3/2021, i.e., the date the Finance Act, 2021 became law, is made applicable w.e.f. 01/4/2021. The provision in the amended form was thus not on the statute at the time of processing of the relevant returns. There is thus no question of the same having been invoked for effecting the disallowance, as being claimed before us. Why, the processing of the return being machine-made, which could not possibly have been updated for the revised procedure prior to 28/3/2021, there is no question of disallowance u/s 80AC of the Act being carried out by the AO u/s. 143(1)(a)(v) of the Act prior to 01/4/2021. The only manner, therefore, whereby the impugned disallowance could be made on processing of a return u/s. 143(1)(a) of the Act is under sub-clause (ii) thereof, which is to be read along with Explanation below section 143(1) of the Act. The date of filing the return, it was submitted by Shri Suresh, is not an information required to be furnished under this Act to substantiate any entry. It cannot therefore be regarded as an invalid claim on the basis of inconsistency u/s. 143(1)(a)(ii) of the Act r/w Explanation thereto. The date of filing the return, he would add, appears only in the acknowledgement to the return, which cannot be regarded as part of the return. We agree. The return form has been scrutinized. The date of filing the return is not required to be entered to substantiate any entry in respect of any claim of deduction and, in fact, cannot possibly be. A return would stand to be regarded as complete in all respects, ready for being filed, on it being verified, and which would therefore only be prior to it s filing. For the purpose of giving effect to s. 143(1)(a)(v), however, it is permissible to travel outside the return. This further clarifies of sub-clauses (ii) and (v) of section 143(1)(a) as operating in different fields, i.e., without any overlap. The orders by the Tribunal relied upon by the Revenue are w.r.t. the strict interpretation of s. 80AC, which aspect is not disputed, and do not concern the applicability of s. 143(1)(a). The same would therefore not assist it in the matter. The invocation of s. 143(1)(a)(ii) of the Act for effecting a disallowance u/s. 80P r/ws. 80AC for processing a return prior to 01.4.2021 is, thus, not valid in law. We decide accordingly, and the appeals succeed.
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2023 (9) TMI 1219
Scrutiny assessment - Addition u/s 68 - introduction of cash in Cash Book - assessee s claim of having received this amount as gifts from relatives was not accepted by AO - HELD THAT:- The explanation of the assessee was disbelieved on the ground that the assessee had not furnished any evidence of receiving gifts from relatives as well as their sources of income, extent of agricultural holding, financial and status of her relatives, date and mode of receipt of gift to substantiate the genuineness of transactions and gift . From the available records, there is nothing to suggest that the Assessing Officer even asked the assessee to furnish these evidences/information /materials. Shortly after assessee s reply vide letter dated 14/12/2016, the Assessing Officer passed assessment order on 21/12/2016, taking adverse view against the assessee. Moreover, a total amount of Rs. 13,50,000/- received as gift, as claimed by the assessee, comes to an average of Rs. 4,50,000/- received from each donor. Whether having regard to facts and circumstances of the present case, this amount of Rs. 4,50,000/- is such that required the kind of rigorous and hot pursuit scrutiny by the Assessing Officer, which went as far as issue of summons to the assessee s relatives during remand to the Assessing Officer by the learned CIT(A); also deserves to be considered. Therefore, this is a fit case in which the Additional/ Joint Commissioner of Income Tax should play his role by issuing direction(s) u/s 144A of the IT Act to the Assessing Officer, giving due consideration to all relevant facts and circumstances. Therefore, AO is directed to make reference to learned Addl. CIT/Joint CIT u/s 144A and seek suitable directions (on whether the materials on record of the Assessing Officer are sufficient to accept the assessee s claim; and if not, the lines on which further investigation should be made) after the Assessing Officer starts fresh proceedings for passing denovo order in pursuance of aforesaid directions contained in foregoing paragraph (2.1) of this order. Both the Assessing Officer as well as Addl. CIT/Joint CIT are directed to view the entire matter with a fresh outlook without getting influenced by earlier orders of the Assessing Officer and the learned CIT(A).
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2023 (9) TMI 1218
Revision u/s 263 by CIT - payment of Dividend Distribution Tax - CIT has held that dividend was declared as per Section 115O 115P of the Act but the assessee failed to deposit such tax and interest has not been demanded/quantified in the assessment order and omission to do so resulted in non-levy of Dividend Distribution Tax on the total amount of dividend declared - HELD THAT:- Even though the assessee has claimed that all the details have been filed before the AO which as per ld. Pr. CIT has not been considered but even otherwise when these details were filed before ld. Pr. CIT, he ought to have considered the same and drop the revisionary proceedings. Therefore, since the issue raised by ld. Pr. CIT relates to payment of Dividend Distribution Tax for AY 2017-18 which as per ld. Pr. CIT ought to have been deposited subsequent to the completion of financial year, we under the given facts and circumstances of the case notice that the assessee has deposited the Dividend Distribution Tax before the close of FY 2016-17 relevant to AY 2017-18 and therefore, the accounting treatment and the details of Dividend Distribution Tax were duly incorporated in the return for AY 2017-18 filed on 31.10.2017 and therefore, ld. Pr. CIT erred in raising the alleged issue in the show cause notice u/s 263 of the Act for AY 2018-19. Appeal of assessee allowed.
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2023 (9) TMI 1217
Assessment u/s 153A - AO disallowed 50% of the operational expenses as well as depreciation on aircraft and air strip - Whether any incriminating material found during the search? - HELD THAT:- Since in the case on hand, the AO has not referred to any incriminating material found during the search while making the impugned disallowance, respectfully following Abhisar Buildwell (P) Ltd [ 2023 (4) TMI 1056 - SUPREME COURT] we hold that no addition can be made in the absence of any incriminating materials. Further we make it clear that during the remand proceedings rejoinder the assessee itself/suo-moto accepted that the for inadequate of documentation company used the aircraft for personal use to the extent of 15% and 85% was used for the business purpose. Since it is agreed addition to the extent of 15% of the aircraft expenses by the assessee itself, therefore, we direct the AO to calculate the addition in above terms and rest addition should be deleted.
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2023 (9) TMI 1216
GP estimation - non rejection of books of accounts - AO merely based on the comparison of previous year profit considered this year profit @ 4% - HELD THAT:- As assessee has filed the detailed explanation for the difference in GP by submission dated 20.04.2022 and 08.08.2022 the same is neither discussed by the ld. AO nor by the ld. CIT(A) while dealing with the facts of the case. The books of accounts of the assessee is duly audited by an independent chartered accountant. The assessee in detailed explained the reason behind the fall in the profit rate. Even the quantitative details of the opening stock, purchases, sales and closing stock were given and the same is not disputed by the lower authorities. In spite of all these details placed on record and without finding fault on the record the action of the AO estimating the profit rate @ 4% and that too without rejecting the books of account is not in accordance with the law. Even the ld. CIT(A) has not given any finding on the merits of the case. For estimating the profit without rejecting the books the jurisdictional high court in the case of CIT Vs. Maharaja Shree Umaid Mills Ltd. [ 1991 (5) TMI 46 - RAJASTHAN HIGH COURT] as held that question about the fall in gross profit rate cannot be looked into in this case because the Inspecting Assistant Commissioner has not rejected the books of accounts of the assessee and without making this as a base, it could not be said that the expenditure had been inflated, which is a question of fact and in view of the finding of the Commissioner which is confirmed by the tribunal, the same cannot be allowed. Assessee appeal allowed.
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2023 (9) TMI 1215
Rectification of mistake - Addition u/s 68 towards cash receipts - whether is there any mistake apparent on record from the order passed by the AO u/s. 254 r.w.s. 143(3) which can be rectified u/s. 154 of the Act or not? - HELD THAT:- We ourselves do not subscribe to the reasons given by the AO for simple reason that, in the order to give effect to the appellate order, the scope and power of the AO is limited to the extent of findings or directions given by any appellate authorities. AO cannot travel beyond the directions or findings given by the appellate authorities. In the present case, if you go through the additions made by the AO towards cash found and seized during the course of search with reasons given by the AO for making said additions, in our considered view, the AO has not followed specific directions or findings given by the Tribunal in their order on the issue of cash found and seized during the course of search. No doubt, the issue before the Tribunal was addition made by the AO towards cash receipts as per scribbling pad u/s. 68 of the Act. Just because cash found and seized, it cannot be concluded that the assessee has received unaccounted cash from various authorities. Since, there is specific directions from the Tribunal on the issue of addition made towards cash receipts and consequent cash seized during the course of search, in our considered view, there is no other option to the AO but to follow the directions or findings of the Tribunal while passing order u/s. 254 r.w.s. 143(3) of the Act. In the present case, the AO trying indirectly to do what he cannot do directly. In our considered view, once the main gate is closed, then the AO cannot take back door entry and further he cannot do indirectly what he cannot do directly. In our considered view, there is other provisions provided to deal with the situation where the AO can take other remedies available in the Act and consider the issue appropriately in accordance with law, but he cannot overlook the directions or findings of the appellate authorities and take a different view. AO has completely erred in making additions towards cash found and seized during the course of search, in order giving effect to Tribunal order u/s. 143(3) r.w.s. 254 of the Act. The CIT(A), without appreciating relevant facts simply sustained the additions made by the Assessing Officer. Decided in favour of assessee.
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2023 (9) TMI 1214
Disallowing loss on trading in shares - alleged company from which assessee booked loss is also identified one of the 84 BSE listed penny stock which have been used for generating bogus loss from share transactions - HELD THAT:- Even on similar facts and circumstances of the case, Hon ble Jurisdictional High Court passed an order in the case of Swati Bajaj [ 2022 (6) TMI 670 - CALCUTTA HIGH COURT ] which covered against the assessee.We, therefore, sustained the order passed by the authorities below and the ground taken by the assessee is dismissed. Addition on account of loss on sale of securities which turns into double addition in the hands of assessee - HELD THAT:- We notice that the ld. AO while framing the assessment order already disallowed a sum in the hands of assessee on account of loss of trading in shares from First Financial Services Ltd. separately and in addition in the hands of assessee which turned into double addition in the hands of assessee and same is not in accordance with law, therefore, we are not conformity with the view taken by the ld. CIT(A) by confirming the order passed by the ld. AO regarding the instant issue. Accordingly, ground taken by the assessee is allowed and addition made in the hands of assessee is hereby deleted. Addition of interest income due to the difference of income of assessee as per 26AS statement and actual interest figure shown in the profit loss account - assessee alleged figure does not belong to the assessee and it was happened due to wrong credit given by the party i.e. Bengal Merlin Housing Ltd. - HELD THAT:- As the addition was done due to wrong reflection of interest income as reflected in 26AS statement of the assessee which does not belong to the assessee as the assessee has never earned such interest income from said credit entry reflected in 26AS statements and also from the statements of the AR that during the intervening time, assessee has already taken appropriate corrective steps to rectify the interest income which the assessee has never earned from the said credit and reflected in 26AS statement and necessary correction has already been done in 26AS statement of the assessee relevant to assessment year in question. We find it fit to allow the grounds taken by the assessee by setting aside the addition sustained in the hands of assessee and direct the AO to delete the same.
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2023 (9) TMI 1213
Penalty u/s 271D - violation of provisions u/s 269SS - mandation of recording satisfaction - treatment of the advance as 'specified sum' after taxing the same as unexplained income - AO treated the said cash received as advance from the sale of land as unexplained income and taxed the same under the provisions of Section 69A r.w.s. 115BBE - HELD THAT:- The penalty cannot be imposed on the basis of alleged undisclosed income and simultaneously treating the said amount in violation of 269SS of the Act. As decided in the case of CIT vs. Standard Brand reported [ 2006 (7) TMI 126 - DELHI HIGH COURT] issue in favour of the assessee by holding that the penalty cannot be imposed on the basis of alleged undisclosed income and simultaneously treating the said amount in violation of 269SS of the Act. In our view, the requirement of 269SS is that the specified sum had been accepted by the assessee in cash which is prohibited by the Act. Undisclosed income is contrary to the disclosed income i.e. specified sum disclosed in the return. Also we are of the opinion that recording of the satisfaction by the AO is sine qua non for initiating the penalty u/s 271D - AO though had mentioned that the AO has proposed the imposition of penalty u/s 271D for violation of the provisions of section 269SS, however, after looking into the assessment order reproduced herein below, it is abundantly clear that neither such proposal for imposition of penalty u/s 271D was proposed by the Assessing Officer nor any satisfaction for initiation of penalty was recorded in the assessment order. We are of the opinion that the penalty imposed by the AO had been rightly deleted by the learned CIT (A). In view of the above discussion, the appeal of the Revenue is dismissed.
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2023 (9) TMI 1212
Nature of expenses - software expenses - Revenue or capital expenditure - HELD THAT:- Revenue has failed to controvert the fact that the assessee has merely got the license to use the software for its daily business requirement and has never owned the same and the assessee has paid on yearly basis. When the expenses for taking software was used for business purpose on yearly rent basis it has not given any enduring benefit to the assessee nor any capital has been created, CIT(A) has rightly treated these expenses as revenue expenditure as such we find no scope to interfere into the impugned findings returned by the Ld. CIT(A). So ground No.1 is determined against the Revenue. Addition u/s 36(10)(iii) - AO has computed the notional interest @ 10.19% being average cost of borrowing u/s 36(10)(iii) on the ground that the assessee has used interest bearing fund for giving loans and deposits to the associated concerns without interest and for giving advances to its supplier which resulted in excess interest burden on the assessee - CIT(A) deleted the addition by thrashing the facts in the light of the decision rendered in case of Reliance Utilities and Power Ltd [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] - HELD THAT:- When the interest free advances given by the assessee to its suppliers were far less than interest free funds available with the assessee in the form of share capital reserves and surplus, by applying the decision rendered in case of Reliance Utilities and Power Ltd. (supra) made by the AO is not sustainable in the eyes of law. So the Ld. CIT(A) has rightly deleted the disallowance. Refund of excess Dividend Distribution Tax ('DDT') paid - application for raising additional ground in its cross objection - HELD THAT:- Since it is a legal ground the assessee is entitled to raise the same at any stage of the proceedings in view of the law laid down in case of National Thermal Power Co. Ltd[ 1996 (12) TMI 7 - SUPREME COURT] However, during the course of argument the Ld. A.R. for the assessee has fairly conceded that the issue raised vide this ground has already been decided against the assessee by the Special Bench of the Tribunal passed in case of Total Oil India Pvt. Ltd. [ 2023 (4) TMI 988 - ITAT MUMBAI (SB)] as held where dividend is declared, distributed or paid by a domestic company to a non-resident shareholder(s), which attracts Additional Income Tax (Tax on Distributed Profits) referred to in Sec. 115-O of the Act, such additional income tax payable by the domestic company shall be at the rate mentioned in Section 115-O of the Act and not at the at the rate of tax applicable to the non-resident shareholder(s) as specified in the relevant DTAA with reference to such dividend income. Decided against assessee.
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2023 (9) TMI 1211
Principle of the mutuality - Maintenance charges received from members - taxing business income against Nil business income filed by the assessee co-operative society - CPC disallowing the claim filed rectified data correction , however, the same was not rectified - HELD THAT:- As per the Article 265 of the Constitution of India No tax shall be levied or collected except by Authority of Law . It must be borne in mind that Rules of procedure are not by themselves an end but to achieve the ends of justice. Rules of procedure are tools forged to achieve justice and not hurdles to obstruct the pathways to justice. Technicalities should not come in the way of substantial justice. Refer case of Nirmala Mehta [ 2004 (4) TMI 43 - BOMBAY HIGH COURT] as held that offer of receipt by assessee to tax under the Act, will not estop the assessee from contesting the receipt as not exigible under the Act. Therefore, taking note that the assessee is a premises Co-operative Society and is claiming exempt amount on the ground of principle of Mutuality amount which it has collected from its members for various charges has been disallowed without examining whether it is exempt under the Principle of Mutuality which even though Ld. CIT(A) held to be essential question of fact did not bother to examine the same on the ruse that impugned order before him was an order of CPC u/s 154 of the Act. Be that as it may, for the ends of justice and fair play, we restore this issue back to the file of AO to examine on facts whether the claim of assessee is allowable on the Principle of Mutuality in the light of plethora of decisions the subject and as per the decision of Bombay Oil Seeds Oil Exchange Ltd. [ 1993 (1) TMI 41 - BOMBAY HIGH COURT] and ITO vs Venkatesh Premises Co-operative Society Ltd [ 2018 (3) TMI 675 - SUPREME COURT] - Appeal of the assessee is allowed for statistical purposes.
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2023 (9) TMI 1210
TP Adjustment - comparable selection - functional dissimilarity - HELD THAT:- The statement made by assessee that there has been no change in the functions/business model of selected comparables in the impugned assessment year remains unrebutted. Thus, following the decision of Co-ordinate Bench in assessee s own case [ 2021 (7) TMI 1428 - ITAT MUMBAI ] and for parity of reasons, we direct the AO to exclude Apitco Limited, B V G India Limited, Axis Integrated Systems Limited and Killick Agencies and Marketing Limited from the list of comparables. Including Quadrant Communication Limited in the list of comparables as per the directions of DRP - DRP while deciding the issue of inclusion/exclusion of comparables has accepted assessee s comparable i.e. Quadrant Communication Limited to be valid comparable for assessment year 2014-15 as well. However, while passing the impugned assessment order, the AO has failed to give effect to the said direction of DRP. After inclusion of Quadrant Communication Limited, the list of comparables to benchmark the transactions of marketing service would have two comparables i.e. Quadrant Communication Limited and Marketing Consultant and Agencies Limited. The TPO is directed to give effect to the order of DRP and recompute ALP for provision of marketing service with the revised set of comparables. The additional ground of appeal is thus, allowed. TP adjustment on the premise that the assessee has recovered less marketing service fee from its AE - AO made adjustment to make good the short fall - HELD THAT:- As decided in own case DRP was not justified in disallowing the same There is no doubt about incurring of expenditure by the assessee, as stated earlier The assessee had introduced an incentive scheme and had incurred the expenses - Whether the money received from AE was at arm's length or not is a separate issue But, incurring of expenditure was never in doubt. So, in our opinion, the alternate argument raised by the assessee has to allowed. Disallowance of foreign exchange loss - HELD THAT:- We find that this is a perennial issue. The assessee has been claiming foreign exchange loss in the past and the AO has consistently disallowed the same. Tribunal in appeal by the assessee has allowed foreign exchange loss in the past. In AY 2013-14, the Co-ordinate Bench followed the order of Tribunal in assessee s own case [ 2019 (12) TMI 817 - ITAT MUMBAI] and allowed deduction towards foreign exchange loss. In the impugned assessment year, the facts are similar. The AO has not raised any doubt over quantum of charges or loss claimed. Hence, following the earlier order of Tribunal in assessee s own case, ground no. 3 of appeal is allowed, for parity of reason.
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2023 (9) TMI 1209
Foreign tax credit claimed u/s 90/90A denied - Rejection of rectification application on the ground that Form No. 67 was not furnished before the due date as provided u/s 139(1) in compliance to Rule 128(9) - HELD THAT:- As decided in the case of Shri Baburao Atluri [ 2022 (12) TMI 525 - ITAT HYDERABAD] after considering various decisions, has allowed the foreign tax credit, although there was delay in filing of such Form 67 beyond the due date of filing of the return wherein as held that FTC cannot be denied to the assessee, where the assessee filed FTC in Form No. 67, although belatedly since filing of such Form 67 is not mandatory but directory in nature. Thus we direct the Assessing Officer to allow the foreign tax credit after due verification. Grounds raised by the assessee are accordingly allowed.
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Customs
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2023 (9) TMI 1274
Large scale under valuation in the import of luxury cars - Matter placed at the bottom of the Board and, thus, could not be taken up - locus standi - HELD THAT:- The impugned order passed is surprising which directs that the matter be placed at the bottom of the Board. Without commenting upon the same any further, it is opined that interest of justice would stand served by requesting the Hon ble Chief Justice of the High Court to nominate Bench for disposal of the said writ petition expeditiously preferably within a period of three months since the issue involved has lot of cascading effect on the revenue. In so far as locus is concerned, having gone through the record and also the fact that this Court had entertained the Writ Petition filed by the petitioner under Article 32 of the Constitution of India and passed an order dated 15-7-2016, the petitioner has locus to approach the High Court for the reliefs claimed in the writ petition filed by him. Thus, the High Court shall proceed to consider and decide the writ petition in accordance with law on its own merits without entering into the question of locus of the petitioner to maintain the writ petition. SLP disposed off.
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2023 (9) TMI 1273
Maintainability of SLP - when this batch of matters are taken up for further hearing, it was pointed out that in the year 2017, the goods in question have been released on payment of penalty - HELD THAT:- In that view of the matter, when the goods in question are already released by the Department on recovery of the penalty, we dismiss all these Special Leave Petitions and Appeals, keeping the question of law open. SLP and appeal dismissed.
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2023 (9) TMI 1272
Delay of 14 years in adjudication of SCN - Assessee was not knowing that matter was put in the call book - constitutional validity of Section 97 of the Finance Act, 2022 - provision authorising an officer of the Directorate of Revenue Intelligence (DRI) to act as a proper officer under the Customs Act, 1962 can have any retrospective operation or not. Whether the time period for adjudicating the show cause notices in terms of Section 28(9) of the Customs Act, as in force prior to 29.03.2018, has lapsed? - Whether it is permissible for the Commissioner (Adjudicating) to now resume adjudication of the impugned show cause notice? HELD THAT:- During the prolonged period of 03.04.2009 to 21.07.2016, no effective steps were taken for adjudication of the impugned show cause notice. It is not disputed that during this period there was no impediment for the concerned officers to proceed with the adjudication. The fact that various communications were sent by the Adjudicating Authority to the concerned officers of the DRI for supply of the RUDs is clearly no ground to justify that it was not possible to adjudicate the impugned show cause notice during the said period. In view of the above, it cannot be accepted that it was not feasible or possible for the Adjudicating Authority to adjudicate the impugned show cause notice till 06.02.2017. It is stated that the impugned show cause notice was retrieved from the Call Book on 06.02.2017 in view of the instructions dated 06.01.2017. However, the Board opined that it was not feasible to adjudicate the notices issued prior to 08.07.2011 and therefore the said impugned show cause notice was not adjudicated. It is stated that it was re-entered in the Call Book and was retrieved from the Call Book on 23.01.2023 - Admittedly, the petitioners were not informed that the impugned show cause notice was put in the Call Book. It is at once clear that the period within which the impugned show cause notice was required to be adjudicated has long since elapsed. The controversy raised is squarely covered by the recent decision of this Court in SWATCH GROUP INDIA PVT LTD ORS. VERSUS UNION OF INDIA ORS. [ 2023 (8) TMI 864 - DELHI HIGH COURT] . In view of the above, it is no longer open for the respondents to proceed with the adjudication of the impugned show cause notice. Accordingly, the impugned letters recommencing the adjudication proceedings are set aside. Since the period for adjudication of the impugned show cause notice has elapsed, the same cannot be adjudicated. Petition allowed.
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2023 (9) TMI 1271
Amendment in the shipping bill - interpretation of statute - Section 149 ands the Notification dated 29 June 2012 - Allowing the amendment of documents filed with the Commissioner of Customs at the time of export of Gold Jewellery and Gold Medallions, purportedly in exercise of powers under Section 149 of Drawback Act - HELD THAT:- There is no gainsaying that Section 149 of the Act has to be read in conjunction with the requirement spelt out in the above Notification dated 29 June 2012. A careful perusal of Section 149 of the Act shows that firstly, it provides no period of limitation for filing of an application for amendment of relevant documents in order to seek rebate or any other benefit. Secondly, it does not provide for any reasons that may enable an exporter to claim amendments in the shipping documents. Thirdly, the proposed amendment in the shipping bills can be allowed by the Proper Officer subject to the only rider that same is based on documentary evidence that must be shown to be in existence at the time the goods were exported. Before alluding to the Notification dated 29 June 2012, it is pertinent to mention that admittedly, the goods already stood exported from time to time and the respondents were otherwise entitled to claim STR paid on input services, which had been prescribed at a fixed rate of 0.06% of the FOB value of exported goods falling under CTH 71 vide serial No. 162 of the schedule to the notification. Further, no dispute was raised by the appellant to the assertion/declaration by the respondents in their request letter dated 14 March 2017 that the sales remittances had already been received on each of the export consignments as per the RBI guidelines. It is borne out from the record that the respondents in their appeal before the learned CESTAT had specifically made a categorical assertion in ground (R) that they had suffered Service Tax on the input services and apparently had annexed relevant details, although the same were not alluded to while passing the impugned order dated 24 February 2020. We observe that learned counsel for the appellant was all at sea to indicate which document was amiss, or as to which information or declaration was lacking that were not filed along with the shipping bills/orders at the time of making the exports. Thus, apparently all the relevant documents which could have been filed at the time of exports, were available as it is in original form and format without any change as such and were submitted along with the application for amendment of the shipping bills etc. on 14 March 2017. The respondents specifically stated in the application that no claim would be made by them under Paragraph (3) of the Relevant Notification - there was no reason to hold otherwise and nothing more was required to be done on the part of the respondents. Therefore, there are no legal infirmity, perversity or incorrect approach adopted by the learned CESTAT in passing the impugned orders dated 24 February 2020 thereby allowing the respondents the benefit of STR based on the exports made during the relevant period. Appeal dismissed.
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2023 (9) TMI 1270
Refund of Export duty paid - rejection of refund claim of the respondent-assessee saying that claimant was neither the party in the case of proceedings before the Supreme Court nor the assessment order of the concerned bills of export was challenged - HELD THAT:- The learned Commissioner (Appeals) has already considered all the submissions which have been made by the appellant-department in their appeals here. It is opined that only review petition being pending before the Hon ble Apex Court cannot be the reason to set-aside the impugned order-in-appeal. In view of the fact that the jurisdictional High Court s order has neither been set-aside nor stayed by the Hon ble Apex Court and since the Hon ble Gujarat High Court s order as of today holds good. There is no illegality in the impugned order-in-appeal passed by the Commissioner (Appeals) and therefore, appeals are without any merit - Appeal dismissed.
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2023 (9) TMI 1269
Valuation of imported goods - old and used worn clothing - restricted goods or not - enhancement of value - confiscation - redemption fine - penalty - HELD THAT:- This issue came up before this Tribunal in the case of VENUS TRADERS, RAINBOW INTERNATIONAL, AL-YASEEN ENTERPRISES, GLOBE INTERNATIONAL, KRISHNA EXPORT CORPORATION, PRECISION IMPEX, BMC SPINNERS PVT. LTD., SHIVAM TRADERS, LEELA WOOLEN MILLS, M.U. TEXTILES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) MUMBAI [ 2018 (11) TMI 625 - CESTAT MUMBAI] , wherein this Tribunal has observed The failure of the original authority to comply with the direction in remand to disclose the margin of profit that prompted the fine and penalty, the matter would normally have to be remitted back by another remand order. However, the paucity of evidence and the negligible scope for ascertainment at this stage deters us from doing so. Against the confirmed duties and the penalties the Redemption Fine imposed by the Adjudicating Authority, the Respondent has not filed any appeals - the redemption fine and penalty imposed on the respondents by the adjudicating authority is sufficient to meet the end of justice. Therefore, the redemption fine and penalty confirmed by the adjudicating authority are upheld. There are no infirmity in the impugned order and the same are upheld - appeal filed by the Revenue is dismissed.
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2023 (9) TMI 1268
Valuation of imported goods - mixed lot of 100% polyester knitted fabric rolls of different colours and weight - rejection of declared value on the basis of contemporary import value as per the provisions of Section 14 of Customs Act, 1962 read with Rule 5 and Rule 12 of Customs Valuation Rules - eligibility for exemption from counter-veiling duty under Notification No. 30/2004-CE dated 09.07.2004 - inadvertent failure to claim the benefit of the notification at the time of import of the consignments of the 100% polyester knitted fabrics. HELD THAT:- While determining a particular import to be considered as a contemporaneous import for enhancement of the declared value, it is necessary to match all the relevant details such as quality, quantity, physical characteristics of the products, brand, country of origin, time of import, time of placement of order, stock sales etc. We are of the opinion that consideration of these factors is a necessary and legal requirement. Merely giving the details of only Bills of Entry may be of identical or similar goods would not be sufficient for legally rejecting the transaction value declared by the importer under Section 14 of the Customs Rules, 1962 - Merely by providing NIDB data where it is not clear whether the NIDB data value is declared or assessed (enhanced) value, the onus of providing reasonable evidence by the Revenue is not discharged, the Revenue has failed to discharge the onus of providing reliable evidence which rejecting the declared transaction value. Availability of Notification No. 30/2004-CE dated 09.07.2004 - HELD THAT:- The Hon ble Supreme Court in the case of M/S SRF LTD., M/S ITC LTD VERSUS COMMISSIONER OF CUSTOMS, CHENNAI, COMMISSIONER OF CUSTOMS (IMPORT AND GENERAL) , NEW DELHI [ 2015 (4) TMI 561 - SUPREME COURT ] has held that the condition of non-availment of Cenvat credit on input/ capital goods need not be satisfied by the importer of such goods and therefore, we are of the view that appellant was entitled for exemption from CVD at the time of clearance of imported goods. The matter is no longer res-integra as this Tribunal in the case of SEDNA IMPEX INDIA P LTD, GARG IMPEX AND SOIR INTERNATIONAL VERSUS C.C. -MUNDRA [ 2023 (3) TMI 1080 - CESTAT AHMEDABAD ] has already decided both the matters holding that In the present case, the adjudicating authority enhanced the value as the declared value appears to be low compared to value available in NIDB data, otherwise, there is no material available. The Tribunal consistently observed that the declared value cannot be enhanced merely on the basis of NIDB data. Further it was also held in the said case that An identical issue has been decided by this tribunal in the appellant s own matter of SEDNA IMPEX INDIA PVT LTD. VERSUS C.C. MUNDRA [ 2022 (2) TMI 1355 - CESTAT AHMEDABAD] where it has been held that the appellant are clearly entitled for the exemption Notification No. 30/2004-CE dated 09.07.2004 for exemption from CVD on the imported goods - it is settled that the appellants are entitled for the exemption from payment of CVD under notification No.30/2004-CE. The enhancement of transaction value in present appeals is without any legal backing therefore the same is rejected and declared value need to be adopted for the purpose of assessment - the benefit of Notification No. 30/2004-CE dated 09.07.2004 shall be available to the appellants. Appeal allowed.
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2023 (9) TMI 1267
Refund of excess amount paid over and above 1% of CVD - incidence of duty or interest passed on to customers or not - violation of principles of unjust enrichment - HELD THAT:- Under Section 28D of the Customs Act, there is a presumption as to the duty incidence having been passed to the customer. However, such a presumption is rebuttable and cannot be treated as absolute in the circumstances that the assessee produces sufficient documentary evidence to show that the incidence of duty has not, in fact, been passed on to the customer. It is pertinent that invoices clearly evidence that CVD has in fact not been recovered from the buyers. As no other alternate means of recovery of CVD is available, in the event the same is not reflected on the sale invoice, it cannot be presumed that the incidence of duty has infact, been passed onto the buyers because the sale price before as well as after the reassessment remained the same. The sale invoices produced by the appellants have rightly been considered. Once those were produced, the onus stands shifted upon the department to falsify those documents but there is no other document produced by the department. The findings of original adjudicating authority are therefore rightly held to be presumptive in nature in para 5.11 of the impugned order. In the light of documents and respective discussion, we find no reason to differ with the findings of Commissioner (Appeals). We also support the observation of Commissioner (Appeals) that Chartered Accountant s/Auditor s certificate has wrongly been ignored by the original adjudicating authority. Reliance placed upon the decision of Hon ble High Court of Delhi in the case of YU TELEVENTURES PVT. LTD. VERSUS UNION OF INDIA OTHERS [ 2017 (8) TMI 12 - DELHI HIGH COURT] , Wherein it was held that once the Chartered Accountant s certificate certifies that the incidence of CVD duty on import was not passed on to customers, it is sufficient to rebut the presumption of unjust enrichment. Though the department has laid emphasis upon the decision of Hon ble Apex Court in Mafatlal Supra case but we observe that Hon ble Apex Court has laid down that the person claiming refund or restitute has to establish loss or injury to him i.e. if person claiming refund has passed on the burden of duty to another and has not really suffered any loss or injury, question of reimbursing him does not arise. He even cannot successfully sustain an action of restitution even under Section 72 of Indian Contract Act - In the present case, the appellant has proved that burden of excess CVD paid has not been included in sale price, question of passing the amount claimed does not arise. Hence the said decision is not applicable to the facts of present case. There are no infirmity in the order of Commissioner (Appeals). The refund claims were sanctioned by the original adjudicating authority itself. Those were diverted to the Consumer Welfare Fund solely on the presumptive ground of unjust enrichment. The order under challenge has reasonably well explained that the assessee has not at all been enriched unreasonably as no burden of enhanced CVD paid was found to have been passed on to the buyers of imported goods. All the appeals by the department stands dismissed.
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2023 (9) TMI 1266
Levy of penalty u/s 114(i) and 114(aa) of Customs Act, 1962 - smuggling of Red Sanders - diversion of duty free imported materials - receive and sell some of the diverted duty free materials without any document, in cash. Levy of penalty on M/s. Krishna Shipping Agency, CHA - HELD THAT:- As the appellant has already been excluded from taking any action under section CHALR, 2004, therefore, we also refrain from imposing penalty on the appellant. Accordingly, penalty imposed on the appellant M/s. Krishna Shipping Agency, CHA is set aside. Levy of penalty on M/s. Krishna Shipping Transport Agency - abetting in smuggling of red sanders - HELD THAT:- The appellant is transporter and he has deputed his driver for the work of loading of the container from the premises of the exporter. It is a fact that the driver was negligent at the time of loading of the goods in the container and he made a bald statement that he has gone for refreshment with some unknown person. It is very strange that how can a driver go for refreshment with an unknown person, therefore, it is a case of complete negligence on the part of the driver and for the act of the driver, the appellant is liable to be penalized, therefore, the appellant is liable for penal action under section 114(i) of the Customs Act, 1962 for the alleged act of abetting the smuggling of Red Sanders logs outside India. Accordingly, penalty of Rs.8.00 Lakhs is confirmed against the appellant namely M/s. Krishna Shipping Transport Agency. Levy of penalty on Shri Srikant Taparia - HELD THAT:- Shri Srikant Taparia was handling the export consignment of the exporter and also paying the expenses on account of export of the consignment on behalf of the exporter, which clearly shows that Shri Srikant Taparia was having hand in glove with the exporter and was actively engaged in the activity of smuggling of Red Sanders logs outside India with the help of the exporter. Therefore, no leniency is required to be taken on Shri Srikant Taparia. Therefore, penalty of Rs.2.00 Lakh imposed on Shri Srikant Taparia, is confirmed. Levy of penalty on Shri Ajay Kumar Ghosh - HELD THAT:- Shri Ajay Kumar Ghosh was assigned the duty of looking after the loading of the export consignment at the premises of the EOU which he clearly ignored and as per him he has deputed Shri Asit Kumar Bandyopadhyay to oversee the loading of export consignment in the container. But he was required to sign ARE-1 and ARE-1 is to be signed and sealed altogether, so without counter-sign of Shri Asit Kumar Bandyopadhyay and with the signature of Shri Ajay Kumar Ghosh, who was not present at the site when the loading took place, the container was sealed - defence taken by Shri Ajay Kumar Ghosh is beyond doubt that he was actively involved in the loading of Red Sanders in the container. Therefore, the observation of the adjudicating authority in the impugned order are not acceptable. Accordingly, penalty of Rs.2.00 Lakhs imposed on Shri Ajay Kumar Ghosh. Appeal allowed in part.
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2023 (9) TMI 1265
Maintainability of appeal - time limitation - appeal filed after the expiry of 60 days which is prescribed under Section 128 of the Customs Act, 1962 for filing appeal before the Ld. Commissioner (Appeals) - Levy of Anti-Dumping Duty - HELD THAT:- In the present case, the appellant imported Euro Grey Float Glass 3300X2140 MM 5 MM from China and filed Bill of Entry No. 9422155 dated 26.12.2018 for home consumption. But the department was of the view that the goods attract Anti Dumping Duty and directed the appellant to deposit the Anti Dumping Duty and thereafter, sent the sample for analysis and after the Report of the Laboratory came, it was found that the impugned goods do not attract Anti Dumping Duty. Thereafter, the appellant filed refund claim before the Assistant Commissioner who vide his order rejected the refund claim and the order of rejecting the said refund claim was received by the appellant on 31.01.2020 and thereafter the appellant filed appeal before the Ld. Commissioner (Appeals) on 20.03.2020 which is within the stipulated period of 60 days as prescribed in Section 128 of the Customs Act, 1962. The appeal before the Ld. Commissioner (Appeals) was very much well within the period of limitation and the dismissal of the appeal as time barred by the Ld. Commissioner is not sustainable in law, therefore, the impugned order is set aside by remanding the case back to the Ld. Commissioner (Appeals) to decide the appeal on merits and the Ld. Commissioner (Appeals) is directed to decide the same within a period of 2 months from the date of receipt of the certified copy of this order. Appeal is accordingly allowed by way of remand.
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2023 (9) TMI 1264
Denial of exemption of DFIA benefits - Purchase of 1050 No.s of Lithium Ion Cells through High Seas Sales - N/N. 19/2015-CUS. - Lithium Ion Cells not been specifically used in export goods under paras 4.12 (i) (ii) of Foreign Trade Policy - HELD THAT:- Generally exemption notification is to be construed strictly but exemption notification dealing with export benefit schemes are liable to be liberally construed. Further a notification at threshold while deciding applicability is required to be liberally construed, same after the applicability threshold is passed, is liable to be construed strictly as a matter of interpretation. A substantive benefit in any case cannot be denied on such ground, specially when it is known that EV tractors use various chip based and lithium based sub assemblies of electronics. Leaned Advocate for the appellant emphasised that under DFR Scheme there is no prescription of actual user condition nor is one to one co-relation between the product exported and the product imported is required, and this is the uniqueness of the scheme. It was also pointed out by the learned Advocate and we agree with the proposition that impugned Customs Notification No. 19/2015 was under challenge and that the Hon ble Allahabad High Court in SACHIN PANDEY VERSUS U.O.I. THRU. SECY. MINISTRY OF COMMERCE INDUSTRIES AND ORS. [ 2019 (10) TMI 1057 - ALLAHABAD HIGH COURT] upheld non-correlation as one the feature of the DFIA Scheme. To the extent a particular material is capable of use even in any industry due to new patented or innovations in technology, the same shall be permitted to be imported against export of any specified material. It will be advisable to approach and decide the issue by the adjudicating authority keeping in mind that the DFIA Scheme unlike some other export scheme in the past which required some kind of a correlation in Tariff Heading does not require so as per various judicial pronouncements as well as by the application of the relevant notification - While the legislative purpose and intent of policy makers is not required to be looked into for interpreting any notification, it can be broadly analysed that if at any stage policy makers want to encourage innovation and advent of new technologies including usage of new materials, then such broad based imports within an industry and within same SION may be require to be encouraged, rather than persisting with old technologies and materials which can only restrict innovation. Appeal allowed.
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2023 (9) TMI 1263
Absolute Confiscation - penalty u/s 114AA of FA - concealment of gold bars shoes and socks - restricted goods or prohibited goods - HELD THAT:- The sections under which the gold has been held liable for confiscation are the sections in which the goods become prohibited for the reason of misdeclaration or any other violation of the provisions of Custom Act,1962. Thus adjudicating authority has held that the gold does not fall under the category of prohibited goods for the reasons of prohibition imposed under Custom Act or any other law, but the confiscation is for the case of non-declaration or miss-declaration of the same to the Customs Authorities by the passenger in an appropriate manner - in such cases the gold could have been allowed to be redeemed by the appellant on payment of redemption fine. In the case of COMMISSIONER OF CUSTOMS (PREVENTIVE) , JODHPUR VERSUS MEHBOOB [ 2022 (2) TMI 1391 - RAJASTHAN HIGH COURT] Hon ble Rajasthan High Court has analyzed the various provisions of the Customs Act. The appellant should have been given an option to redeem the goods against the redemption fine. Accordingly, the absolute confiscation made as per the impugned order will have to be modified to the extent of allowing the goods to be redeemed on payment of redemption fine of Rs.5 lakhs (Rupees Five Lakhs Only). In case appellant redeems the goods he is also required to pay Customs duties as applicable as per Section 125 (2) of the Customs Act. Since the case under consideration is a case where the goods sought to be imported as baggage, the applicable rate of duty will be the baggage rate of duty, which is much higher than the normal rate of duty applicable to the same goods. Penalty u/s 114AA of CA - HELD THAT:- From the plain reading of Section 114AA it is evident that penalty under this section can be imposed on a person who intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular for the transaction of any business under the Customs Act, 1962 - In the present case nothing has been brought on record by which it can be said that the appellant had made or caused to be made any declaration/ used or caused to be used any statement or document which is false or incorrect. In the present case the appellant carrying the Gold has in fact not made any declaration to the Custom Authorities as required under the Custom Act, 1962. No document etc., which has been produced by him which has been produced by him was found to be materially wrong. As the ingredients for invocation provisions of Section 114AA are absent in the present case penalty under the said section is not justified - the penalty imposed under Section 114AA of the Customs Act is set aside. The impugned order modified to the extent of setting aside the absolute confiscation and allowing the option to redeem the confiscated gold bars against payment of redemption fine of Rs 5,00,000/- (Rupees Five Lakhs) along with the baggage rate of duty as applicable and setting aside the penalty imposed under Section 114AA. Appeal allowed in part.
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2023 (9) TMI 1262
Classification of goods intended to be imported - stepper motor for idle air control valve - classifiable under Tariff Item 8409 91 99, Tariff Item 8409 99 90, Tariff Item 850110 12 or Tariff Item 8481 90 90? - HELD THAT:- From the M.F. (D.R.) Instruction No. 1/2022-Cus., dated 5-1-2022, it is observed inter alia that the Hon ble Supreme Court vide judgment in the case of Westinghouse Saxby Farmer Ltd. v. Commissioner of Central Excise, Kolkata [ 2021 (3) TMI 291 - SUPREME COURT] , held that the relay are classifiable as parts of railway signaling equipment under Heading 8608 of the Central Excise Tariff; in holding so, the Hon ble Supreme Court has given precedence to the sole or principal use test of Section Note 3 over the Note 2(f) of Section XVII which specifically excluded electric equipment from being classified under Section XVII whether or not it is identifiable as being for the goods of that Section. Hon ble Court in the case of A. Nagaraju Bros. v. State of A.P. [ 1994 (7) TMI 88 - SUPREME COURT] and Commissioner of Central Excise, Mumbai v. M/s. Fiat India (P.) Ltd. [ 2012 (8) TMI 791 - SUPREME COURT] and stated, thus, the classification of various parts of Section XVII is to be decided taking into account all facts, details of individual cases, all the decisions on the subject, and arrive at the appropriate classification. The stepper motor (3800-B07F-0000) proposed to be imported by the applicant for use in manufacture of idle air control valve will be classifiable under sub-heading 8501 10 12 of the First Schedule to the Customs Tariff Act, 1975.
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2023 (9) TMI 1208
Seeking to plead additional grounds of claim of Exemption Notification No. 30/2004-CE dated 09.07.2004 - HELD THAT:- The learned AR considering that same is a legal ground and has no objection on the same being taken on record. The miscellaneous application is allowed.
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Insolvency & Bankruptcy
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2023 (9) TMI 1261
Condonation of delay in filing the claim - Refusal to admit the claim - HELD THAT:- It is significant to mention that subsequent to the last date of receipt of Claim i.e. 22.10.2020, the Appellant had filed an Appeal on 10.11.2020, without choosing to prefer any Claim, within the stipulated period. Regulation 16 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations 2016 clearly stipulates that the Claim has to be submitted on or before the last date mentioned in the Public Announcement. In the instant case, it is an admitted fact that the Claim was submitted with an inordinate delay of 390 days. The contention of the Learned Counsel for the Appellant that this inordinate delay of 390 days is on account of pursuing the Appeal, challenging the Exparte Liquidation Order, is untenable on the ground that the last date for receipt of Claim was 22.10.2020, the Appeal challenging the Liquidation Order, was on 10.11.2020 and moreover, challenging the Liquidation Order by way of an Appeal, specifically in the absence of any `Stay Order , does not prevent, viewed from any angle, the Appellant in preferring a Claim, within the stipulated period of time. The Liquidator had intimated to the Appellant herein, the reason for having rejected the Claim as the last date for Submission of Claim, was 22.10.2020 and 14 months had elapsed, since the Liquidation Order, was passed. Being the Managing Director of the Corporate Debtor Company, the Appellant cannot plead ignorance of the Proceedings and this Tribunal is of the earnest view that preferring an Appeal and challenging the Liquidation Order, cannot be a substantial ground, for not having preferred the Claim on time. This Tribunal, is of the considered view that IBC is a time bound process and the Liquidator cannot accept a belated Claim, which would go against with the provisions of the IBC, 2016 as well as the scope and objective of the `Code . It is also seen from the record that the Appellant had made every effort to derail the process and this Tribunal, does not find any substantial grounds to interfere with the well-reasoned order of the Adjudicating Authority. Appeal dismissed.
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2023 (9) TMI 1260
Admissibility of application u/s 9 of IBC - operational debt qua the Corporate Debtor is due and payable or not - pre-existing dispute between the parties or not - HELD THAT:- This examination would be in consonance with the test which has been laid down by the Hon ble Supreme Court in MOBILOX INNOVATIONS PRIVATE LIMITED VERSUS KIRUSA SOFTWARE PRIVATE LIMITED [ 2017 (9) TMI 1270 - SUPREME COURT ] where it was held that Admittedly, the matter has never been resolved. Also, the respondent itself has not commenced any legal proceedings after the e-mail dated 30th January, 2015 except for the present insolvency application, which was filed almost 2 years after the said e-mail. All these circumstances go to show that it is right to have the matter tried out in the present case before the axe falls. The Adjudicating Authority has failed to take cognizance of the fact that there clearly existed dispute between the two parties anterior to the date of demand notice in respect of the terms and conditions of their business transactions as also on the liability to discharge the obligations to pay. Moreover, keeping in mind that IBC bestows only summary jurisdiction upon the Adjudicating Authority and this Tribunal, once plausibility of a pre-existing dispute is shown, it is not required of them to make further detailed investigation. What has to be looked into is whether the defence raises a dispute which needs further adjudication by a competent court. It is well settled that in a Section 9 proceeding, the Adjudicating Authority is not to enter into final adjudication with regard to existence of dispute between the parties regarding the operational debt. There was no reason for the Adjudicating Authority in the present case to go under the skin of dispute to unravel who is the principal debtor. There are force in the contention of the Appellant that since they had never accepted any liability to make payments to the Operational Creditor and that given the fact that there was pre-existing dispute surrounding the oral agreement of 08.05.2019 and modified arrangement on 05.09.2019, the Section 9 application ought not to have been admitted by the Adjudicating Authority in terms of the judgment of the Hon ble Supreme Court in Mobilox. The Adjudicating Authority committed serious error in admitting Section 9 application in the facts of the present case. The Impugned Order dated 12.05.2022 initiating CIRP of the Corporate Debtor and all other orders pursuant to Impugned Order are therefore set aside. The Corporate Debtor is released from the rigours of CIRP and is allowed to function independently through its board of directors with immediate effect - Appeal allowed.
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2023 (9) TMI 1259
Admissibility of Section 7 application - Application is within the period of Limitation or not - extension of OTS proposals - acknowledgement of Debt as defined under Section 18 of the Limitation Act, 1961 - HELD THAT:- Section 22 (1) SICA makes it clear that there is a bar for realisation of a right referred to in this Section against the Corporate Debtor when once an enquiry under Section 16 SICA is pending against it or any scheme referred to under Section 17 thereof, is being considered or an Appeal under Section 25 is pending, an exception being with the consent of the Board or that of the Appellate authority. The Hon ble Apex Court in the matter of Sabarmathi Gas Limited Vs. Shah Alloys Ltd. reported in [ 2023 (1) TMI 195 - SUPREME COURT] referred to a three judge Bench Judgment in the matter of KSL INDUSTRIES LTD. VERSUS ARIHANT THREADS LTD. [ 2014 (12) TMI 1023 - SUPREME COURT ] in which the issue whether a Recovery Application under the RDDB Act, 1963 would lie or be proceeded with against a sick company in view of the bar contained in Section 22 (1) of SICA, was addressed to. The facts are distinguishable as in Invent Assets [ 2021 (11) TMI 731 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH, NEW DELHI] , there was no acknowledgment of liability under Section 18 of the Limitation Act, 1963 and further the dismissal of the BIFR reference was also dated beyond 3 years from the date of default. The other Judgments relied upon by the Appellant in support of his case that this period spent before the BIFR / AIFR cannot be excluded in the facts of the attendant case, cannot be accepted for the reason that the ratio in Sabarmathi Gas Limited Vs. Shah Alloys Ltd. under the IBC Code, 2016 is squarely applicable to the case on hand. OTS proposals being conditional cannot be taken into consideration? - extension of period of limitation as they were given beyond three years from the date of default - HELD THAT:- The question of applicability of Section 8 of the Limitation Act, 1963 under IBC, 2016 is to be examined on the touch stone of the ratio laid down by the Hon ble Apex Court in the matter of DENA BANK (NOW BANK OF BARODA) VERSUS C. SHIVAKUMAR REDDY AND ANR. [ 2021 (8) TMI 315 - SUPREME COURT ] wherein it was held that issuance of a Recovery Certificate in favour of a Financial Creditor would rise to a fresh cause of action to initiate proceedings under Section 7 of the Code. Whether subsequent to the issuance of the Debt Recovery Certificate on 19/11/2009, there was any acknowledgement which falls within the scope and ambit of Section 18 of the Limitation Act, 1961, by the Corporate Debtor within 3 years of 19/11/2009? - HELD THAT:- It is seen from the record that several letters of OTS Proposals even prior to 19/11/2009, were exchanged between the Corporate Debtor Company and the Financial Creditor on 04/11/2008, 22/11/2008, 17/12/2008, 25/12/2008, 26/12/2008 and 27/12/2008 - From the letter, it is clear that there is a clear acknowledgement of the Debt together with the terms of payment. Even on 16/02/2010 an amount of Rs. 37,50,000/- was remitted to the bank in pursuance of the OTS settlement proposal. Only those OTS letters are being reproduced here where there is a promise to pay and there is also a reference to a part payment made. The next letter dated 15/11/2012 refers in paragraph 2, the earlier OTS letters dated 27/06/2007, 31/08/2007, 02/01/2008 and 19/03/2008, thereby establishing that even prior to the issuance of Debt Recovery Certificate there were several attempts made to discharge the loan, thereby acknowledging the Debt - The letter dated 27/10/2017 addressed by the Corporate Debtor shows the part payments of Rs. 20 lakhs made vide cheque dated 30/10/2017 and the said letter refers to OTS proposals and approvals from 21/09/2012 onwards. A letter dated 17/02/2018 (PG. 473) evidences the continued discussions with the bank and acknowledgment of payment to be made vis a vis the OTS proposals. The entire correspondence and the OTS proposals between the parties from 2008 to 2022, i.e. even after the filing of the Section 7 Application, the contention of the Appellant that there was no acknowledgement of debt within 3 years of the date of the Debt Recovery Certificate pales into insignificance. The period from 21/04/2013 to 02/07/2017 is also covered in this correspondence. Whether the Appellant / Party-in-Person that a conditional promise to pay and part payments made do not fall within the ambit of definition of acknowledgement of Debt as defined under Section 18 of the Limitation Act, 1961? - HELD THAT:- In the instant case, there is a continuous promise to pay in the OTS proposals made by the Corporate Debtor Company and this communication clearly evidences a jural relationship between the Corporate Debtor and the Financial Creditor - This Tribunal is of the considered and earnest view that an OTS proposal with a promise to pay and part payments being made thereafter, positively construes an acknowledgment of Debt as defined under Section 18 of the Limitation Act, 1963. The admitted OTS Proposals between the Corporate Debtor Company and the Financial Creditor substantiate that a reasonable inference can be made regarding the subsisting liability. Appeal dismissed.
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PMLA
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2023 (9) TMI 1258
Legality of Bail granted - Money Laundering - offence of siphoning of money to Foreign Country - failure to co-operate with investigation and withholding the trail of proceeds of crime - adjudication not completed even after expiry of five years - detailed order not made ready and there is only a docket order - reasons for satisfaction of the twin condition imposed under Section 45 of PMLA Act not present - HELD THAT:- After examining the earlier order of this Court, the order of the Hon'ble Supreme Court on appeal and trial Court orders passed subsequently, this Court is constrained to interfere in the bail order for the following reasons:- (i) The trial Court patently erred in passing a docket order on 16.08.2023 and thereafter, the detailed order which was made ready to the parties only on 21.08.2023. (ii) On 17.08.2023, the learned Special Public Prosecutor moved this Court for stay of the bail order and reported certain irregularities. This submission prompted the Court to issue oral direction to the Registrar (Vigilance) of the High Court to bring records from the trial Court (which is hardly two km away from the High Court Campus). The case bundle secured and produced to the shock of this Court did not contain the detail order, neither the docket order indicated that a detailed order passed separately. The enquiry made in the trial Court by the Registrar (Vigilance) revealed that the learned Judge had not made ready the detailed order. While so, the grant of bail in haste without making the detail order throw suspicion over the conduct of the trial Court. (iii) However, this Court is not dwelling upon that aspect since this matter is for the High Court administrative side to take note and proceed. Except to reinforce the view of the Hon'ble Supreme Court in THE REGISTRAR GENERAL, HIGH COURT OF KARNATAKA ANR. VERSUS SRI M. NARASIMHA PRASAD [ 2023 (4) TMI 1251 - SUPREME COURT] , which had observed that a judicial officer cannot pronounce the concluding portion of its judgement in open Court without the entire text of the judgement being prepared which dictated. In this case, the material collected immediately on the next day of pronouncing the order of granting bail, there was no prepared text of detailed order. (iv) The detail order made available on 21.08.2023 though runs to several pages, it does not contain the reasons for satisfaction of the twin condition imposed under Section 45 of PMLA Act. (v) The gravity of offence, the length and breath of crime committed has forced the Enforcement Directorate to request the trial Court to issue letter of rogatory and the trial Court had issued letter of request on 03.10.2022 to two countries. The responses from those countries are awaited. While so, it is incorrect to say that the Enforcement Directorate has not taken any steps to proceed with its investigation in respect of offshore entities. (vi) The delay in completing the investigation by the CBI, Delhi cannot be a ground to presume that accused is not guilty of money laundering offence. Closure of investigation in a similar case also cannot be a reason to presume that the present case will also end in closure report. Ifs and buts cannot be an adequate reason to hold this petitioner, not prima facie guilty of the alleged offence. (vii) This Court is conscious of the dictum that, it is not the expectation of law that Court must arrive at a positive finding that applicant for bail has not committed an offence under PMLA Act and if such is the expectation, it will be impossible for an applicant to establish that he has not committed the offence. However, in this case, records reveal that about 169 consignments with inflated price being encashed fraudulently by this petitioner through his Company and the money has gone out of the country. The provisional attachment of the property by efflux of time had lost its enforceability and therefore if the petitioner is enlarged on bail, apart from repeating similar crime by floating new Company, the danger of he fleeing from the hands of justice also cannot be ruled out. This Criminal Original Petition filed by the Enforcement Directorate is allowed.
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Service Tax
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2023 (9) TMI 1257
Liability to pay service tax - GTA Service - assessee appeared to have engaged the services of various contractors for transportation of limestone from the mines to their factory - HELD THAT:- In the case of KMB GRANITES (P.) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, SALEM [ 2010 (1) TMI 162 - CESTAT, CHENNAI] this Bench had an occasion to consider an almost similar issue of liability to Service Tax on services of GTA vis- -vis Rule 2(1)(d)(v) ibid, where Bench has held that It has been held by the Tribunal in the case of LAKSHMINARAYANA MINING CO. VERSUS COMMR. OF ST., BANGALORE [ 2009 (9) TMI 71 - CESTAT, BANGALORE] and in the case of CCE C, GUNTUR VERSUS KANAKA DURGA AGRO OIL PRODUCTS PVT. LTD. ANR. [ 2009 (3) TMI 130 - CESTAT, BANGALORE] that transport undertaken by individuals owning and operating lorry and trucks is not subject to service tax as in these cases services has not been provided by Goods Transport Agency Service. Demand set aside - Appeal allowed.
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2023 (9) TMI 1256
Principles of natural justice - issues not considered properly - Refund claim - rejection on the ground that there is discrepancy in the name of the remitter in the FIRCS and due to difference of Cenvat credit' and difference in CENVAT Credit - HELD THAT:- It is found that these two (2) issues namely, (I) Discrepancy in the name of the remitter on FIRCs; and (ii) Difference in the Cenvat credit, were not in issue before the Ld. Commissioner (Appeals) and the Ld. Commissioner (Appeals) has erroneously rejected the appeal mainly considering these two (2) issues only and did not give any finding remaining four (4) issues which were contested before him in this appeal filed by the appellant. The present case needs to be remanded back to the Ld. Commissioner (Appeals) to decide the remaining four issues on which appeal was filed by the appellant before him - Appeal allowed by way of remand.
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2023 (9) TMI 1255
Valuation of services - maintenance and repair charges - maintenance and repair services of Heavy Earth Moving Machinery (HEMM), which also entail supply of spare parts in respect of HEMM - extended period of limitation. It is alleged that the appellant has arbitrarily split the gross amount of the agreement towards spare parts and supply of service and that the appellant had inflated the value of spare parts charges and included the value of onsite management services in the value of spare parts and thus evaded payment of service tax. HELD THAT:- On similar facts the demand of service was was confirmed by the revenue on another assessee namely M/S. GAINWELL COMMOSALES PRIVATE LIMITED (FORMERLY M/S. TIL LIMITED) VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, RANCHI. [ 2023 (6) TMI 1308 - CESTAT KOLKATA] and in that case, this Tribunal has examined the issue and observed that But, in the case in hand, value of material supplied has already been ascertained and VAT has been paid thereon, in that circumstances, we hold that for the period post 01.07.2002, the taxable value is to be determined in terms of Rule 2A(i)(c) of the Valuation Rules, 2006, therefore in view of the above, this issue is also answered in favour of the Appellant. In this case, it is an admitted fact that appellant has paid VAT on the spare parts supplied by the appellant. In that circumstances, the value of goods supplied is ascertainable as appellant has paid VAT thereon. Therefore, the said amount on which VAT has been discharged by the appellant is to be excluded from the value of the total contract to ascertain the value of taxable service provided by the appellant and the appellant has paid service by excluding the value of spare parts supplied by them. The differential demand of service tax is not sustainable in the light of the decision in the case of Gainwell Commosales Private Limited - Appeal allowed.
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2023 (9) TMI 1254
Non-payment of Service Tax - Rent-a-Cab Service - the fact that the turnover of each of the appellants was well within the exemption limit provided under Notification No. 06/2005 dated 01.03.2005 not taken into account by authorities - service qualify as rent a cab service or not - penalties - HELD THAT:- The gross value of the taxable service rendered by each of the appellants is less than the threshold limit of Rs.10 Lakhs as prescribed under Notification No. 06/2005-ST dated 01.03.2005 after giving allowance to the exemption for 60% of the gross receipt in terms of Notification No. 01/2006-ST dated 01.03.2006. We find that the Departmental authorities have considered this principle and accepted the contention of the appellants in the case of VISHWANATH MISHRA VERSUS COMMR. OF C. EX., LUCKNOW [ 2018 (4) TMI 1677 - CESTAT ALLAHABAD] and SECY. FEDERATION OF BUS-OPERATORS ASSN. OF TN VERSUS UNION OF INDIA [ 2001 (4) TMI 7 - MADRAS HIGH COURT] . The Principal Bench of CESTAT, in the case of M/S. ASHOK KUMAR MISHRA VERSUS CCE, ALLAHABAD [ 2014 (1) TMI 609 - CESTAT NEW DELHI] held that for the purpose of calculating the threshold limit, 60% of the consideration exempt, vide Notification No.01/2006, should not be taken into account. If 60% of the consideration received by the appellants is excluded, they fall under the exempted category and as such, are not liable to pay any tax. Therefore, we find that the appeals succeed on this count. Ongoing through the agreements relied upon by the appellants, it is found that the appellants have simply provided their buses to M/s PRTC on hire and have received remuneration on per-kilometre basis; there is no arrangement of renting. Classification of service as rent-a-cab service or not - HELD THAT:- Hon ble High Court of Uttrakhand in the case of COMMISSIONER, CUSTOMS AND CENTRAL EXCISE, MEERUT-I VERSUS M/S. RS. TRAVELS [ 2014 (10) TMI 817 - UTTARAKHAND HIGH COURT] held that when there is a contract of hire and there is no renting of a cab, there is no question of the assessee being assessed in respect of services rendered in connection with rent-a-cab as there is no renting at all. Therefore, we are of the considered opinion that the appeals succeed on the issue of classification of services also. Penalties - HELD THAT:- The appeals succeed on both counts, the question of penalties does not arise. The impugned orders are not sustainable and are liable to be set aside - Appeal allowed.
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2023 (9) TMI 1253
Levy of Service Tax - free services provided by the appellant, an authorised dealer and service station of Maruti Udyog Ltd., to the customers during the warranty period for the sale of cars - HELD THAT:- It was noticed by the Commissioner (Appeals) in the order dated 13.04.2021, while deciding another appeal filed by the appellant to assail the order dated 03.03.2020 passed by the Superintendent, that the demand made in respect of a similar issue was set aside by the Tribunal and the appeal was allowed on 21.11.2008. - There is nothing on record to indicate that the aforesaid order dated 13.04.2021 passed by the Commissioner (Appeals) was assailed by the department or has been set aside by the Tribunal. It is not possible to accept the contention advanced by the learned authorised representative as the decision of the Tribunal in HINDUSTAN AUTO HOUSE (P) LTD. VERSUS CCE, JAIPUR [ 2008 (9) TMI 83 - CESTAT NEW DELHI] squarely applies to the facts of the present appeal. When the issue raised in this appeal has been decided in favour of the appellant, the order dated 16.11.2017 passed by the Commissioner (Appeals), which has given rise to the four appeals, deserves to be set aside and is set aside - Appeal allowed.
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Central Excise
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2023 (9) TMI 1252
Refund of Service Tax - refund claim was filed beyond the time limit prescribed under Section 11B of the Central Excise Act, 1944 - HELD THAT:- Similar is the view which has been taken by the Bombay High Court in Parijat Construction vs. Commissioner of Central Excise, Nashik [ 2017 (10) TMI 659 - BOMBAY HIGH COURT] . It would thus appear that High Courts across the board have taken a consistent view that where once it is found that the assessee was not liable to be subjected to a service tax, it would not be bound by the limitation as prescribed under Section 11B of the Act. This would also appear to appeal to reason since undisputedly and in terms of Article 265 of the Constitution, the Union can only levy a tax which is authorized by law. Since it is conceded before us that the respondent was not liable to pay any service tax, it would be wholly unjust to permit the Union to retain monies which were not liable to be collected or were authorized by law. This only leaves to deal with the issue of unjust enrichment. It is noted that the Order-in-Original dated 24 July 2020 while dealing with the aforesaid aspect has held in favour of the assessee solely on the ground that since service tax was not liable to be deposited, the question of unjust enrichment would not be applicable. As noted, the Appellate Authority in appeal against this order did not deal with the issue of unjust enrichment in its order dated 26 March 2021. However, prior to the passing of the CESTAT s impugned order dated 09 January 2020, when the matter reached the desk of the Appellate Authority against the Adjudicating Authority s order dated 17 October 2014, it was noted that the assessee had not submitted any documentary evidence to establish that the incidence of tax had not been passed on. CESTAT, however, has completely failed to allude to this aspect of the matter. In view of the above, while its decision is liable to be upheld, the assessee would be obliged to place adequate material before the concerned Assessing Authority, establishing that the incidence of service tax was not passed on. This since the issue of unjust enrichment and the burden so placed on the assessee is found in the principal provision of Section 11B of the Act itself. It was informed at the conclusion of the hearing that the refund has already been granted along with interest. In that view of the matter, let appropriate material be placed for the consideration and satisfaction of the competent Assessing Authority by the respondent. Appeal of Revenue dismissed.
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2023 (9) TMI 1251
Maintainability of appeal - non prosecution in terms of Rule 20 of CESTAT Procedure Rules, 1982 - adjourning the matter beyond three times - HELD THAT:- Today the judiciary and the justice delivery system is facing acute problem of delay which ultimately affects the right of the litigant to access to justice and the speedy trial. Arrears are mounting because of such delay and dilatory tactics and asking repeated adjournments by the advocates and mechanically and in routine manner granted by the courts. It cannot be disputed that due to delay in access to justice and not getting the timely justice it may shaken the trust and confidence of the litigants in the justice delivery system. Many a times, the task of adjournments is used to kill Justice. Repeated adjournments break the back of the litigants. Any effort which weakens the system and shake the faith of the common man in the justice dispensation has to be discouraged. Therefore the courts shall not grant the adjournments in routine manner and mechanically and shall not be a party to cause for delay in dispensing the justice. The courts have to be diligence and take timely action in order to usher in efficient justice dispensation system and maintain faith in rule of law - also whenever the trial courts refused to grant unnecessary adjournments many a times they are accused of being strict and they may face displeasure of the Bar. In the present case ten times adjournments were given between 2015 to 2019 and twice the orders were passed granting time for cross examination as a last chance and that too at one point of time even a cost was also imposed and even thereafter also when lastly the High Court passed an order with extending the time it was specifically mentioned that no further time shall be extended and/or granted still the petitioner defendant never availed of the liberty and the grace shown. In fact it can be said that the petitioner defendant misused the liberty and the grace shown by the court. It is reported that as such now even the main suit has been disposed of. There are no justification for adjourning the matter beyond three times which is the maximum number statutorily provided - Appeals are dismissed for non prosecution in terms of Rule 20 of CESTAT Procedure Rules, 1982.
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CST, VAT & Sales Tax
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2023 (9) TMI 1250
Applicability of ratio of decision of the Apex Court for the similar matters in other states - Classification of goods - Mosquito Mats, Coils and Vaporizers - Mortein Insect Killers - Petition sought clarification of the observations of this Court in M/S RECKITT BENCKISER (INDIA) LTD. VERSUS COMMISSIONER COMMERCIAL TAXES ORS.[ 2023 (4) TMI 408 - SUPREME COURT ] as the said observations ought not to be construed to be general observations, but only in the context of the Kerala Value Added Tax Act and the notifications issued thereunder. HELD THAT:- It is clarified that the observations made by this Court in judgment dated 10.04.2023 in paragraphs 9.1. and 9.4 are made in the context of Kerala Value Added Tax Act and are not general observations, which could apply to other State enactments. Application disposed off.
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2023 (9) TMI 1249
Provisional attachment of Bank Accounts - validity of notice being an intimation under Section 38 of the Maharashtra Value Added Tax Act, 2002 - HELD THAT:- Section 35 of the MVAT Act pertains to provisional attachment to protect revenue in certain cases. The same was issued more than a year back, hence, such provisional attachment stands automatically revoked by operation of law by virtue of the provisions of sub-section (2) of Section 35 of the MVAT Act, which mandates that every provisional attachment shall cease to have an effect after the expiry of one year from the date of the service of an order issued under Sub-section (1) - there are no order, whereby the proviso below sub-section (1) was invoked and/or for any reasons to be recorded in writing, the period of one year as contained in the order was in any manner and as permissible in law was extended. Thus, in our opinion, by operation of law, the provisional attachment of all demat accounts has come to an end. The interest of justice would require to stay the impugned notice dated 11th April 2022, issued by the Respondents under Section 38 of the MVAT Act against the Petitioner - the provisional attachment of the Demat Accounts of the Petitioner and his family members has lapsed by virtue of the provisions of Subsection (2) of Section 35 of the MVAT Act. List the matter on 15th September 2023, High on Board.
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Indian Laws
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2023 (9) TMI 1248
Dishonour of Cheque - insufficient funds - acquittal of the accused - rebuttal of the presumption - HELD THAT:- In the present case, the Learned Trial Court failed to appreciate that the accused persons failed to adduce any evidence to discharge the onus placed upon them by the presumption in law available under section 139 of the Negotiable Instruments Act. Besides making a general denial of the fact that the cheque had been issued in discharge of legal debt and/or liability, the defence failed to adduce any evidence to rebut the presumption nor did it make out a case citing the reason for which the cheque can be held to have not been issued in discharge of legal debt and/or liability. In such circumstances, the Learned Trial Court, by considering the legal presumption available under Section 139 of the Negotiable Instruments Act to have been rebutted merely on denial made by the accused/respondents, has clearly failed to appreciate the scope and purport of section 139 of the Negotiable Instruments Act. The impugned order of acquittal is thus erroneous in law as also in facts and is thus liable to be set aside. Considering the fact that the presumption under Section 139 N.I. Act goes in favour of the complainant unless and until rebutted by the accused in accordance with law, the principal of Natural Justice requires that the complaint case be remanded back to the trial court for retrial with the direction that the Learned Magistrate shall issue notice upon both sides and allow the parties to adduce fresh evidence in respect of the presumption under Section 139 N.I. Act by calling for the relevant documents and proving the same in accordance with law and provide sufficient opportunity to the accused/opposite parties to rebut the said presumption and proceed accordingly in accordance with law. Thus the findings of the Learned Magistrate is clearly against the provisions of Section 139 of the N.I. Act and thus not in accordance with law - Appeal allowed.
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2023 (9) TMI 1247
Dishonour of Cheque - acquittal of accused - applicability of Section 141 of the Negotiable Instruments Act on proprietorship concern - HELD THAT:- The learned Magistrate upon close examination of the evidence which has come on record, more particularly status of the drawer as reflected from the disputed cheque produced on record vide Exhs. 79 and 82, noticed that the cheque was drawn by Status Seramik India Private Limited. Though, the designation of the authorized signatory or the person who has drawn this cheque on behalf of company is not reflected in the disputed cheque, however, the fact remains that cheque has been drawn on behalf of the company. Having noticed the aforesaid fact, no error can be found with the approach of the learned Magistrate in applying provision of Section 141 of the Negotiable Instruments Act. The issue of maintaining the prosecution under the Negotiable Instruments Act without arraigning a company as a party accused has been decided by the Hon ble Supreme Court in the case of ANEETA HADA VERSUS GODFATHER TRAVELS TOURS (P.) LTD. [ 2012 (5) TMI 83 - SUPREME COURT ] has held that we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself. This Court is of the view that no arguable case is made out for reconsideration by admitting the appeal. Hence, present application seeking leave to appeal is hereby refused. Thus, present application stands rejected.
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2023 (9) TMI 1246
Dishonour of Cheque - interference with the order of acquittal of the accused - vicarious liability of the Directors of a company - personal liability of the drawer of cheques - failure to prove charge under Section 138 of the N.I Act - HELD THAT:- There is absolutely no evidence from which criminal law under Section 138 of the N.I Act could be attributed to respondent No. 3. Therefore, recording of the order of acquittal in favour of respondent No. 3 by the learned Magistrate cannot be called into question. The learned Advocate for the respondents has laid enough stress on the approach of the appellant court while deciding an appeal against the order of acquittal passed in favour of respondents. Series of decisions quoted above are cited by the learned Counsel for the accused. The law on this point is no longer res integra and settled by the Hon ble Supreme Court in a Three Judges Bench decision in RAJESH PRASAD VERSUS THE STATE OF BIHAR AND ORS. [ 2022 (1) TMI 1396 - SUPREME COURT] - an order of acquittal can be interfered with on the ground of (a) perversity (b) non-consideration of incontrovertible evidence (c) disbelieving the testimony of witnesses on an unrealistic conjecture (d) non-consideration of direct and cogent accounts of eye-witnesses (e) non-consideration of the testimony of natural witnesses on the ground of interestedness (f) imposition of unrealistic standard of implicit proof rather than that of the proof beyond reasonable doubt (g) rejection of circumstantial evidence on exaggerated and capricious theory (h) rejection of circumstantial evidence based on an exaggerated and capricious theory which are beyond the plea of the accused (i) order of acquittal resulting in gross miscarriage of justice (j) perfunctory consideration of evidence (k) acquittal caused on the ground of delay etc. Learned Magistrate held that the complainant gave loan to the company to M/s Amba Complex Private Limited and not the Directors of the company in their personal capacity. Therefore, the company was the principal accused under Section 138 read with Section 141 of the N.I Act - As drawer of the cheque respondent No. 1 is liable to be under Section 138 of the N.I Act. If the Managing Director or Joint Director of the company takes personal responsibility to discharge the debt or liability which the company owed and issued cheque in his/their capacity, the said person is solely liable as drawer of the cheque - this Court finds that the learned Magistrate recorded an order of acquittal on misreading of evidence and the evidence on record is sufficient to hold the respondent No. 2 liable for committing offence under Section 138 of the N.I Act. The respondent No. 1 is held guilty for committing offence under Section 138 of the N.I Act. The order of acquittal passed in favour of respondent No. 3 is not interfered with and the order acquitting the respondent No. 3 passed by the learned Magistrate is affirmed - order of acquittal is set aside - respondent No. 2 is convicted accordingly and sentenced to undergo simple imprisonment for a period of six months - appeal allowed.
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