TMI Tax Updates - e-Newsletter
September 6, 2017

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

• RECTIFICATION BY ITAT U/S.254(2) – no limitation when assessee or AO apply for rectification- appoint of view found in undisputed judgment of ITAT, Special Bench
• JOB WORK PROCEDURES
• E Way Bill [An understanding of e-way bill provisions]

News

• FAQs on levy of GST on supply of services to the Co-operative society

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• Tweet FAQs - GST

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• NITI Aayog calls renewed focus on Nutrition, launches the National Nutrition Strategy

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• Operation of Bank accounts of over 2 lakh companies ‘struck off” from the Register of Companies

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• RBI Reference Rate for US $

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Notifications

GST - States

• S.O. 143. - dated 1-9-2017 - Bihar SGST
  The Bihar Goods and Services Tax (First Amendment) Rules, 2017.

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• S.O. 141. - dated 1-9-2017 - Bihar SGST
  The Bihar Goods and Services Tax (Second Amendment) Rules, 2017.

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• S.O. 139. - dated 1-9-2017 - Bihar SGST
  The Bihar Goods and Services Tax (Third Amendment) Rules, 2017.

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• 23/2017-State Tax (Rate) - dated 22-8-2017 - Chhattisgarh SGST
  Amendments in the Notification No. 17/2017-State Tax (Rate),dated the 28th June, 2017 - To notify the categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator [Section 9 (5)].

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• 20/2017-State Tax (Rate) - dated 22-8-2017 - Chhattisgarh SGST
  Amendments in the Notification No. 11/2017-State Tax (Rate), dated the 28th June, 2017 - To notify the rates for supply of services under GST Act and value of construction services and lottery [Section 9 (1), 11(1),15(5), 16(1)].

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• 19/2017-State Tax (Rate) - dated 18-8-2017 - Chhattisgarh SGST
  Amendment in the Notification No. 1/2017-State Tax (Rate), dated the 28th June, 2017 - Change in rate of tax for tractor and tractor parts.

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• 23/2017-State Tax (Rate) - dated 22-8-2017 - Gujarat SGST
  Amendments in the Notification No.17/2017- State Tax (Rate), Dated 30th June, 2017. - Electronic Commerce Operator Liable for Registration.

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• 22/2017-State Tax (Rate) - dated 22-8-2017 - Gujarat SGST
  Amendments in the Notification No. 13/2017- State Tax (Rate), dated 30th June, 2017 - Notification for GTA and Limited Liability Partnership.

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• 21/2017-State Tax (Rate) - dated 22-8-2017 - Gujarat SGST
  Amendments in the Notification No. Notification No.(GHN-41)GST-2017/S.11(1)(7)-TH dated 30th June, 2017, Notification No.12/2017- State Tax (Rate), - Exemption For Fair MKT Shop.

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• 20/2017-State Tax (Rate) - dated 22-8-2017 - Gujarat SGST
  Amendments in the Notification No. No.11/2017- State Tax (Rate), Dated 30th June, 2017 - Reduction in Rates for Work Contract

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• 24/2017-State Tax - dated 21-8-2017 - Gujarat SGST
  Amendments in the Notification No. 23/2017–State Tax, dated the 17th August, 2017 - Extention for GSTR 3B and payment under GST.

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Income Tax

• 81/2017 - dated 28-8-2017 - IT
  U/s 35(1) (ii) of IT Act 1961 Central Government approved for organization M/s Institute for Stem Cell Biology and Regenerative Medicine, Bangalore

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Circulars / Instructions / Orders

GST - States

• 05/2017-GST - dated 4-9-2017
  System based reconciliation of information furnished in FORM GSTR-1 and FORM GSTR-2 with FORM GSTR-3B.
• 04/2017-GST - dated 28-8-2017
  Issue related to classification and GST rate on lottery tickets.

Highlights / Catch Notes

Income Tax

• Forward contract loss - speculation loss or not - trading of gold and bullion - CIT(A) and ITAT has rightly considered all the materials on record to conclude that the impugned loss amounts to hedging loss and constitutes business loss. - HC
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• Disallowance u/s 40A(2) - taking loans from sister concerns on interest @6% to 7% and giving loans on interest further @4% - ITAT rightly directed the AO disallow differential amount - Claim of revenue to disallow entire interest amount cannot be accepted - HC
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• Deduction u/s 10A - sez unit - proof of manufacturing activity for manufacture of gold medallions - Consumption of minimum units of electricity and non claiming of labour charges - It is not a complex or complicated procedure. The manufacturing process is simple - deduction u/s 10A cannot be denied - HC
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• Additional depreciation - machinery in mining - manufacturing activity u/s 2(29BA) or not - It cannot be said that mining is neither production nor manufacture. - HC
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• Determination of STCG u/s 50 - Sale of entire business with all assets - appropriation of sales consideration towards one block of Buildings or all blocks including furniture & fixtures - class of assets - Additions confirmed by CIT(A) deleted.
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• A charitable institution, which has purchased capital assets and treated amount spent on purchase of capital asset as application of income, is entitled to claim depreciation on same capital asset utilized for business. See Indraprastha Cancer Society case [2014 (11) TMI 733 - DELHI HIGH COURT]
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Customs

• Valuation of imported goods - magnets of various grades and sizes - contemporaneous import - it is not understood how and why the department has chosen to adopt per kg method of assessment if that is not the internationally accepted practice by foreign sellers and by the importers in India.
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• SAD refund - N/N. 102/2007-Cus. dt. 14.09.2007 - period of limitation - if an application is filed before an officer who does not have territorial jurisdiction, the application would not be ab initio either void or non-est
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Service Tax

• Business Support Services - cleaning of coaches/toilets of trains as well as supply of bed rolls to passengers - The services have been rendered to the passengers on behalf of IRCTC/Indian railways - such services are classifiable as business auxiliary services under the category of Customer care services
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• Valuation - includibility - P.F., E.P.F. and E.S.I. contribution - the gross value for the computation of service tax liability in the hands of the appellant will not take into consideration the amount of contribution made by the service receiver M/s HNGIL directly into the respective heads of account.
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• Activity of ‘entering into non-compete agreement with JSSL’ is nothing but a service covered by ‘support service of business and commerce’ - Demand of service tax confirmed
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Central Excise

• CENVAT credit - duty paying documents - whether the appellants are entitled to CENVAT credit availed on the debit notes relating to reimbursement of expenses? - Held Yes
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• Valuation - includibility - transportation, laying, joining, testing charges - place of removal - there is no scope for the respondent to claim deduction since transfer of property of the goods did not pass at the factory gate but transfer thereof occurred after value addition made thereto at the site
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• CENVAT credit - input service - Courier Service involves a host of uses relating to the activity of manufacture and sale of goods - it cannot be said that these are de hors of the activities of manufacturing business - credit allowed.
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Case Laws:

• Income Tax

• 2017 (9) TMI 253
  Reopening of assessment - Non-consideration of application for getting a copy of the approval letter issued on Employees Superannuation Scheme - escaped assessment within the meaning of Section 147 - Held that:- We do not think that in this Writ Petition, we can allow the petitioner to raise the issue of non-consideration of this application for approval or not passing any order on the request in that behalf. We find that the petitioner superannuation scheme is subjected to tax and an order was passed by the Income Tax Officer28(2)(5), Mumbai, on 17th March, 2016. That is for the assessment year 2013-2014. When the substantive appeal is also pending against the assessment order dated 17th March, 2016 for the assessment year 2013-2014, we are not inclined to grant any relief in our writ jurisdiction. It would be open for the petitioner to raise all grounds during the reassessment proceedings and in pending appeal. It can also resist the demand for the assessment year 2013-2014 on all permissible grounds.- Petition is misconceived and is dismissed.

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• 2017 (9) TMI 252
  Expenditure on acquisition of patent rights or copyrights u/s 35A - expenditure incurred by the assessee for acquisition of rerecording rights from film producers was a revenue expenditure or expenditure on the acquisition of patent rights or copy rights u/s.35A - Held that:-The Tribunal referred the following question of law for the opinion and answer by this Court that whether on facts of the case tribunal was right in law in holding that the expenditure incurred by the assessee for acquisition of rerecording rights from film producers was a revenue expenditure and not an expenditure on the acquisition of patent rights or copy rights within the meaning of sec.35A.- The Revenue's appeal to this Court against the order of the Tribunal for this assessment year was dismissed as timebarred.

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• 2017 (9) TMI 251
  Allowable business expenditure u/s 37(1) - inland transportation charges and commission to foreign parties - kickback payment or commission payment - business expediency - Reopening of assessment bad in law - Held that:- It is precisely the contentions of assessee that payment of ₹ 1,31,56,323/should be disallowed and added to total income because this is not a legal payment , Assessing Officer's order is legally and factually untenable.The fate of the present appeals would have to abide by order passed in 09.08.2017 (M/s. Ajanta Pharma's Case - 2017 (8) TMI 857 - BOMBAY HIGH COURT) wherein held the sum and substance of the lengthy discussion in the Tribunal's order is that even if what is alleged by the Assessing Officer and relying upon the report is taken as true and correct, still, the participation of the assessee was not established and proved. The assessee was not found to have made any kickbacks or payment of that nature which reached the Iraq Government and through the channels indicated in the Volcker Committee Report. There was no material of this nature in possession of the Assessing Officer against the assessee. It is in these circumstances that the Tribunal concluded, and essentially in the peculiar facts of the case of the assessee, that the assessee has not incurred any expenditure for any purpose which is an offence or which is prohibited by law. The essential ingredients of explanation below Sub-Section 1 of Section 37, therefore, were not attracted to the Assessee's payment - Decided in favour of assessee. Claim in relation to Section 80HHC - Held that:- This issue been answered by applying ratio of the Judgment of the Hon'ble Supreme Court in the Case of Topman Exports V/s. CIT, reported in (2012 (2) TMI 100 - SUPREME COURT OF INDIA).

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• 2017 (9) TMI 250
  Deduction u/s 10A - sez unit - proof of manufacturing activity for manufacture of gold medallions - Consumption of minimum units of electricity and non claiming of labour charges - Held that:- ITAT rejected the contentions of the revenue - We do not think that the Tribunal drew an incorrect legal inference from these materials. It recorded that there are books of account produced which demonstrate consumption of electricity, there are other materials which would evidence consumption of units in the months of September and October and the general assertion of the assessee that this process is not so complicated requiring heavy machinery or the deployment of existing machinery and plant for days and months together. It is not a complex or complicated procedure. The manufacturing process is simple. It was the Revenue which was, therefore, obliged to falsify this version, and particularly when similar claim of deduction under Section 10A was made in the earlier assessment year and not denied. The Revenue having failed to discharge this burden and obligation on it by law, that the Tribunal concluded that the assessee's version deserves to be accepted - Decided against the revenue. Addition u/s 69C/68 - addition pertains to cash transported by road from branches outside Ahmedabad - Held that:- As far as the cash transported from Ahmedabad is concerned, it accepted the plea of the assessee and found that there were no contrary materials to conclude that the sum of ₹ 1,90,56,727/, that related to the transport of cash from Ahmedabad to Kandla, cannot be brought in a few hours. That distance of 250 kms. was found to be reachable.- Decided in favour of assessee. Addition u/s 68 on account of the settlement of liabilities of 3 debtors - Held that:- The sum, as above, was finally received by the assessee from M/s. Joshi Bullion Gems and Jewelry Pvt. Limited (JBGJPL) headed by one Mr. Jayesh Desai. The sum was not directly received from the three parties who owed the money to the assessee. That is because the assessee and the said M/s. JBGJPL had entered into an assignment agreement. It is in these circumstances that the Tribunal extensively referred to all the three debtors and their debts, how they were settled and how the 3rd party M/s. JBGJPL came into picture. - No additions u/s 68 - Decided against the revenue. Addition in respect of the stock sold by the assessee on 24th October, 2008 - Held that:- Tallying of the stock register in the absence of the discrepancies enables the Tribunal to reverse the concurrent finding when it was proved that the relevant materials have been ignored or brushed aside in rendering such concurrent findings, then, the Tribunal has duly performed its duty as a last fact finding authority, though exercising a power of appeal. No substantial question of law. Disallowance of loss in diamond trade business - Held that:- The study of the transaction revealed that the real intention of the assessee was to earn interest arbitrage differences in the rates of interest. The moment the export sales are received, the assessee deposited the same with the bank and earned bank interest @ 8 to 9%. The same appears to be profitable to the assessee even after payment of guarantee commission and other incidental charges made to the bank. The fixed deposits help the assessee to avail 'buyers credit facility' with the bank, which is also a business decision. If the transaction is looked at holistically, then, it involves purchase and export of diamonds, advance or immediate realizations of the export realizations, investment in fix deposits, availing buyer's credit against FDRs, interest rates and commission rates, foreign exchange gains/losses. If this is a practice followed (arbitrage transactions) and the same does not violate any law, then, this ground of the assessee deserves to be allowed. - Decided against the revenue. Disallowance u/s 40A(2) - taking loans from sister concerns on interest @6% to 7% and giving loans on interest further @4% - Held that:- ITAT directed the AO to calculate direct interest over and above 4% and that be treated as unreasonable and excessive. This is part allowing of ground No.12 and not in its entirety. The reasoning in that behalf we do not see how such reasoning, which once again performs a balancing act and only allows a partial claim based on satisfactory explanation of the assessee, can give rise to a substantial question of law. Disallowance of interest expenses - assessee received huge interest free loans and advances - Held that:- The Tribunal has found that the assessee received interest free loans and advances and has also paid interest on other loans and advances. The funds position has also been noted and with relevant details. It is in these circumstances that the nexus was held to be established. No substantial question of law. Forward contract loss - speculation loss or not - trading of gold and bullion - Held that:- The Tribunal then terms the findings of fact as consistent with the legal provisions and the materials on record to conclude that the impugned loss amounts to hedging loss and constitutes business loss. The Commissioner of Income Tax (Appeals) has rightly examined this matter from this angle and by applying such legal principle. Whether the loss amounts to hedging loss or is a speculation loss has been examined by the Commissioner and in all details. Once there is such an exercise carried out to grant benefit of Section 43(5) of the IT Act to the assessee, then, the above grounds arising from the Revenue's Appeal are also not substantial questions of law - Decided against the revenue.

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• 2017 (9) TMI 249
  Appeals stand admitted on the following substantial questions of law: “(i) Whether it is incumbent on the Respondent No.1 to establish a nexus between the exempt income and the expenditure sought to be disallowed under Section 14A of the Act before any such disallowance could be made? (ii) Whether in the present case determination by the Tribunal of the disallowance under section 14A of the Act of ₹ 2,27,76,000/as administrative expenditure for earning of exempt interest/dividend income is unreasonable and excessive? (iii) Whether the Tribunal erred in denying the Appellant's claim for depreciation of ₹ 42,04,759/being the depreciation on plant and machinery at Jamnagar Refinery as relatable to the goods purchased from Durga, Surajbhan and Singhal Bros.?”

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• 2017 (9) TMI 248
  Addition u/s. 40(a)(ia) towards payment of commission of foreign agents - non deduction of tds - withholding of tax - whether commission paid to export agents is taxable in India in view of sec.5(2)(b) r.w.s. 9(1)(i) of IT Act? - Held that:- The question would not arise because the finding of the fact remained unchallenged. The question of TDS on commission income paid to foreign agents and the non-deduction of TDS is an issue fully covered by the decision of the Supreme Court in GE India Technology Centre Private Limited v Commissioner of Income Tax & Anr. (2010 (9) TMI 7 - SUPREME COURT OF INDIA) as held that commission earned by a non-resident (that is to say, foreign) agent who carried on the business of selling Indian goods outside India cannot be said to be deemed income accrued or arising in India. Disallowance of additional depreciation - proof of activities carried out by the assessee amounts to manufacture or production as defined in section 2(29BA) - Held that:- Mining for the purpose of production of mineral ore falls within the ambit of the word ‘production’. The Division Bench of this Court had held that in such a process, ore has to be extracted or raised from earth. This activity is ‘production’, entitling the assessee to the benefit of Section 32(A) of the Act. Thus, there would be an allowable depreciation deduction in respect of the machinery used in mining. It cannot be said that mining is neither production nor manufacture. See Sesa Resources Ltd. case [2017 (9) TMI 126 - BOMBAY HIGH COURT] Addition under Section 40(a)(ia) r/w. Section 195(1) - demurrage paid to a non-resident buyer of iron ore without deducting TDS - Held that:- This issue is also fully covered by the decision in GE India (2010 (9) TMI 7 - SUPREME COURT OF INDIA) and the assessee’s reliance on the decision of the Bombay High Court in Commissioner of Income-Tax v Orient (Goa) Private Limited [2009 (10) TMI 575 - Bombay High Court] is misplaced for that judgment was expressly overruled by the Full Bench of the Bombay High Court in Commissioner of Income Tax v VS Dempo and Company Pvt Ltd. [2016 (2) TMI 308 - BOMBAY HIGH COURT). No substantial question of law

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• 2017 (9) TMI 247
  Addition u/s 68 on account of unexplained sources - proof of identity and creditworthiness and the genuineness of the Companies - discharge of burden of proof - non cooperation by assessee - exparte qua assessee - Held that:- AO has passed assessment order u/s 143 by holding that assessee has failed to discharge the burden cast upon it to satisfy the genuineness and creditworthiness of the companies passed order u/s. 143(3) of the Act by assessing the income of the assessee at ₹ 2,46,51,592/-In view of evidence filed by the assessee, the onus had shifted to the AO, but the AO has not been able to controvert the evidence filed by the assessee. In view of aforesaid discussions, we are of the considered view that the assessee remain non-cooperative before the AO and did not file requisite documents before the AO, as asked by him and as a result thereof,we are deciding the present appeal exparte qua assessee and the AO did not verify the documents furnished by the Assessee and also not done the independent inquiry and verification properly. Therefore, we think it proper to set aside the issue in dispute to the file of the AO to decide the same afresh, after making independent inquiry and verification, as deem fit. However, the Assessee is also directed to submit all the necessary documents, as asked by the AO during the assessment proceedings and fully cooperate with the AO and did not take any unnecessary adjournment. Accordingly, the issue in dispute is set aside to the file of the AO with the aforesaid directions. Appeal filed by the Revenue allowed for statistical purposes.

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• 2017 (9) TMI 246
  Notice u/s 148 for reassessment- exparte qua assessee order u/s. 144/147 - addition on account of unexplained cash credit u/s 68 - reasons to believe - non-cooperation from assessee - non-independent inquiry and verification - Held that:- AO in his assessment order held that as the assessment proceedings were getting time barred on 31.12.2008 and in spite of the having been given numerous opportunities, assessee has not furnished any of the details asked vide questionnaire and order sheet entries. In view of aforesaid discussions, we are of the considered view that the assessee remain non-cooperative before the AO and did not file requisite documents before the AO, as asked by him, as a result thereof the AO passed the exparte order u/s. 144/147 of the Act and therefore, did not verify the documents furnished by the Assessee and also not done the independent inquiry and verification. Therefore, Ld.CIT(A) in the interest of justice, think it proper to set aside the issue in dispute to the file of the AO to decide the same afresh, after making independent inquiry and verification, as deem fit. However, the Assessee is also directed to submit all the necessary documents, as asked by the AO during the assessment proceedings and fully cooperate with the AO and did not take any unnecessary adjournment. Accordingly, the issue in dispute is set aside to the file of the AO with the aforesaid directions. Appeal filed by the Revenue stands allowed for statistical purposes.

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• 2017 (9) TMI 245
  Depreciation is allowable expenditure to assessee trust - double deduction - Held that:- A charitable institution, which has purchased capital assets and treated amount spent on purchase of capital asset as application of income, is entitled to claim depreciation on same capital asset utilized for business. See Indraprastha Cancer Society case [2014 (11) TMI 733 - DELHI HIGH COURT] - Decided in favour of assessee.

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• 2017 (9) TMI 244
  Addition on account of license fee and Data service management charges - allowable business expenditure - AO treating the same as Capital expenditure as providing enduring benefit - Held that:- CIT(A) has held that as the facts for AY 2011-12 are similar to the facts of AY 2008- 09 and AY 2010-11, therefore, he held that his findings in the order passed for AY 2008-09 would stand equally applicable here and accordingly, in view of the same, the impugned payment on account of license fee and data management service charges for use of the 'Vision Plus' software was rightly held as revenue in nature and allowable u/s 37 of the Act. We further note that the factual finding of the Ld. CIT(A) on the issue in dispute also could not be controverted by the department during the proceedings before us and we, therefore, find no reason to interfere with the findings of the Ld. CIT(A) on this issue as well and while upholding the same. - Decided against revenue

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• 2017 (9) TMI 243
  Addition u/s 14A - expenditure incurred for earning exempt income namely dividend - proof of having own funds - Held that:- When we peruse the availability of funds with the assessee company as on 31.03.2001 in the light of its investment, it goes to prove that the assessee has made investment for earning exempt income during the year under assessment was ₹ 9,04,03,525/- as against the total investment of ₹ 33,65,81,747/-. Assessee was having own funds of ₹ 34,44,42,623/- which are otherwise more than total investment made by the assessee company to the tune of ₹ 33,65,81,747/- Hon’ble Supreme Court in case of M/s. Godrej & Boyce Manufacturing Co. Ltd. vs. DCIT & Anr.(2017 (5) TMI 403 - SUPREME COURT OF INDIA) (SC) affirmed Bombay High Court in Godrej & Boyce Manufacturing Company Ltd. by “explaining the procedure for calculation of disallowance u/s 14A of the Act whereby the condition precedent is expenditure sought to be allowed need actually be incurred for earning dividend income.” So, in these circumstances, the ld. CIT (A) has rightly deleted the addition as the entire investment made by the assessee for earning exempt income was out of free funds available with it. Even otherwise, Rule 8D section 14A is effective from AY 2008-09. So, we find no illegality or perversity in the findings returned by ld. CIT (A) for AY 2001-02. In AY 2006-07 CIT (A) restricted the addition of ₹ 1,91,93,084/- to ₹ 70,69,155/- made by the AO in mechanical manner. As in view of the law laid down by the Hon’ble Supreme Court in Godrej & Boyce Manufacturing Company Ltd. (supra) when the assessee has interest free reserves to the tune of ₹ 35,32,74,483/- and disallowance made by the AO is not proved to be expenses incurred for the purpose of earning dividend income as the entire investment has been made out of interest free funds available with the assessee, no ground is made out to interfere into the findings returned by ld. CIT (A) to that extent.- Decided in favor of assessee.

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• 2017 (9) TMI 242
  Levy of penalty u/s. 271(1)(c) - assessment of commission income - business income or salary income - Survey under section 133A - Reopening of assessment u/s 148 escaped income - Held that:- The issue in dispute is squarely covered in favour of the assessee by the various decisions of the ITAT, Hon’ble High Courts and the Hon’ble Apex Court, because in the present case debatable issue is involved and Leave has been granted by the by the Hon’ble Supreme Court of India in the case of assessee [2013 (4) TMI 870 - SUPREME COURT] (from the judgment and order 2012 (12) TMI 168 - DELHI HIGH COURT). Hence, the penalty cannot be levied when the addition is made on debatable issue and appeal is admitted in Hon’ble High Court/ Hon’ble Supreme Court. - Decided in favor of the assessee

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• 2017 (9) TMI 241
  Seeking relief that assessee may not be treated as assessee in default u/s 201(1) - TDS u/s 194I - payment of lease rent - annual maintenance charges paid by the assessee to Yamuna development express authority - tds liability - demand under section 201 (1) and section 201(1A) - Held that:- This issue is now squarely covered in favour of the revenue by the decision of Hon’ble Delhi High Court in Rajesh Projects (India) (P.) Ltd. v. Commissioner of Income-tax (TDS)-II [2017 (2) TMI 1109 - DELHI HIGH COURT] where in it has been held that “amounts constituting annual lease rent, expressed in terms of percentage (e.g. 1%) of the total premium for the duration of the lease, are rent, and therefore subject to TDS. Since the petitioners could not make the deductions due to the insistence of GNOIDA, a direction is issued to the said authority (GNOIDA) to comply with the provisions of law and make all payments, which would have been otherwise part of the deductions, for the periods, in question, till end of the date of this judgment.” Now if the assessee wishes to take benefit of the proviso to section 201 of the income tax act, then it is for the assessee to furnish necessary detail, so that assessee cannot be treated as assessee in default with respect to the amount of tax deductible. As the proviso added to section 201 is for mitigating any hardship therefore we set aside the issue to the file of the assessing officer with a direction to the assessee to furnish necessary detail is provided therein and to deposit necessary interest under section 201(1A) of the act in accordance with the law.- Decided in favor of revenue and partly in favor of assessee. TDS u/s 194A - payment of interest on deferred payment of EDC lease premium - payment of interest to YEIDA - Held that:- As decided in CIT (TDS) Vs. Canara Bank [2016 (5) TMI 570 - ALLAHABAD HIGH COURT] while deciding the issue on payment of interest to Noida has held that authorities constituted by the State Act are entitled to exemption of payment of tax at source u/s 194A of the Act.Therefore ,TDS u/s 194A is not required to be deducted on interest payment to Yamuna Development Authority - Decided in favor of assessee. TDS u/s 194H - deduction of tax at source on bank guarantee commission - withholding tax - assessee acting not as an agent but on principle-to-principle basis - Held that:- The bank guarantee commission is not subject to withholding tax u/s 194H of the Act as it does not fall into Clause (i) of the Explanation of Section 194H. As decided by Hon'ble Delhi High Court in case of CIT Vs. Living Media India Ltd dated 06.05.2008 - Decided in favor of assessee

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• 2017 (9) TMI 240
  Determination of Short term Capital gains u/s 50 - Sale of entire business with all assets - appropriation of sales consideration towards one block of Buildings or all blocks including furniture & fixtures - class of assets - Scope of assets falling in the same class of assets under section 2(11) - Held that:- In the instant case, on going through the order of learned CIT (A), it is observed that he has failed to appreciate the fact that section 2(11) specifies as only two class of assets i.e. tangible and intangible assets and within these two classes of assets, assets having same rate of depreciation are prescribed and they fall within the same block. CIT (A) has completely misunderstood and misconceived the aforesaid provisions of the Act and has wrongly interpreted that two assets falling within two different classes can never constitute a single “block of assets” even though they may be eligible for depreciation at the same rate. Therefore , addition of ₹ 77,81,594/- so sustained by Id. CIT (A) is wholly unwarranted. - Decided in favor of assessee. Disallowance u/s 14A read with rule 8D - Held that:- The said disallowance is unwarranted on the facts of the instant case, as the same was so made by AO without recording a proper satisfaction with regards to the books of accounts of the assessee and in deleting the said disallowance of ₹ 1,21, 986/-. My aforesaid view is fortified by the judgment of the Hon'ble Supreme Court in the case of Godrej Boyce & Manufactoring Co. Ltd. CIT [2017 (5) TMI 403 - SUPREME COURT OF INDIA] .

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• 2017 (9) TMI 239
  TPA - selection of comparables - benchmarking technique - TNMM as most appropriate method (MAM) - Composite contract - Held that:- As per the contract between assessee and BALCO we find that entire contract of executing Turnkey projects is a composite contract and the assessee is required to deleiver both supply of equipment and rendering of services. Also assessee has applied same ratio of % of contract work executed for computing revenue from both the activities. While deciding the issue for benchmarking the aggregate approach, we have observed that 60% of the revenue of the assessee is earned from supplying equipments, spares etc and 40% of the revenue is earned from rendering services. therefore assessee cannot be considered as engaged in providing engineering services. Thus, we direct the TPO to characterize the assessee’s function as EPC contractor engaged in providing turnkey solutions. Since the TPO has characterized, the function of the assessee as engaged in the engineering services and the comparable have also been chosen keeping in mind the function of the assessee as engineering services, the comparables also need a relook. On perusal of the documents submitted in respect of TCE and Holtec, we agree with the contention of the Ld. counsel that the comparables TCE and Holtec were engaged in services of engineering consultancy only. Therefore, in our opinion, the transfer pricing officer, need to carry out a fresh search of comparables engaged in execution of the turnkey projects. Accordingly, in the interest of Justice, we restore the issue of searching comparables and computation of arm’s length of the international transactions to the file of the TPO/AO for adjudicating afresh. It is needless to mention that the assessee shall be afforded sufficient opportunity of hearing on the issue in dispute. The ground of appeal is accordingly allowed for statistical purposes. Additional claim on account of salary expenses of expatriates- Held that:- Salary of the few expatriates was computed incorrectly at the time of filing of return of income and subsequently higher amount was found to be payable to them. He also referred the TDS certificates issued to those employees and return of income filed by them. In our opinion, if the assessee has actually incurred higher salary expenses and same are found to be as expenditure wholly and exclusively incurred for the purpose of the business of the assessee in terms of section 37(1) of the Act, then same should be allowed to the assessee. In view of above facts and in the interest of Justice, we feel it appropriate to restore the matter to the file of the AO for verification of the claim of the salary expenses of ₹ 34,86,766/- and allow the claim in accordance with law. It is needless to mention that the assessee shall be afforded reasonable opportunity of being heard. Accordingly, the ground of the appeal is allowed for statistical purpose.

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• 2017 (9) TMI 238
  Validity of Reopening of assessment u/s 148 - reassessment on basis of audit objection raised by revenue audit party- "reasons recorded" alone is foundational fact to be examined while evaluating validity of reopening u/s 147 - without application of mind by AO - Held that:- There is no application of mind of the Assessing Officer from the materials already available on record and he has blindly gone by the observation of the audit party which cannot be reckoned as conclusive finding or opinion but mere suggestion. The Assessing Officer after having receiving the information in form of audit objection has to apply his mind independently from the records as to whether such an objection and suggestion by the audit party is actually tenable or not. Reopening in the present case is bad in law, firstly, no tangible material has come on record having live link nexus with the income alleged to have escaped assessment; and secondly, the issue which has been raised in the ‘reasons recorded’ was already on record and duly considered by the AO in the course of original assessment proceedings, which amounts to “change of opinion”, impermissible in law. Accordingly, the assessment order passed in pursuance of such “reasons” is liable to be quashed. - Decided in favour of assessee.

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• 2017 (9) TMI 237
  Disallowance of 25% legal and professional expenses on adhoc basis - Held that:- Merely because there is a substantial increase in the amount of expenses the disallowance cannot be made. The lower authorities could not say that any of the services obtained by the assessee is not for the purpose of business of the company. The assessee has given the names of the consulting companies which are definitely of necessary services looking to the size and nature of business carried out by the assessee. As the assessee has entered into the business of marketing of washing machines and refrigerators the market research analysis service as well as industrial reports are necessary for the purpose of business. The assessee has provided details of major expenses of legal fees for Trillegal as well as KPMG both the services are for the purpose of the business of the assessee. In view of this disallowance made by the ld AO cannot be sustained when the details of legal expenses are available with the AO where each and every party to whom the fees is paid is mentioned. Ld AO could not point out any services which are not for the purposes of business. Nature of expenses were shown to be not for the purposes of the business. Merely adhoc disallowance without pointing out any specific defect in details showing that it is not related to the business, such disallowance cannot be sustained Disallowance of written off by the assessee as sum becomes irrecoverable - Held that:- According to us the assessee is exploring the new business opportunity in the power sector and for that it hires a consultancy to carry out certain studies as the assessee is engaged in the business of support services. The assessee has obtained this project during the year and hence legal fees paid was written off. According to us the assessee is eligible for this deduction of expenses as it has incurred it for the purpose of the business and for consultancy expenses to be allowed i.e. deduction of income tax nowhere provided that corresponding credit to the profit and loss account should have been given. In view of this we allow ground of the appeal of the assessee and direct the ld AO to delete the disallowance. Disallowance on account of travelling expenses and conveyance expenses - Held that:- None of the expenditure of travelling are related to the share holder owners of the appellant company. These expenses are incurred by assessee for the relocation of employee designated as director along with their family it is incurred for the purpose of the business and is not the perquisite in the hands of the assessee therefore, naturally they are not entering into the Form No. 16 issued to those employees. It was further stated that merely because FBT is not paid does not make the expenditure disallowable. We do not find any infirmity in the submission of the assessee and we also see considerable force in the arguments - Decided in favour of assessee. Disallowance on account of Warranty expenditure - Held that:- According to us the assessee should have been granted the deduction of actual warranty provision of ₹ 18503389/- instead of ₹ 7842523/-. The Hon'ble Supreme Court in the case of Rotork Controls India Pvt. Ltd Vs. CIT [2009 (5) TMI 16 - SUPREME COURT OF INDIA] has held that warranty services are normal business expenditure and not contingent liability. In view of this we do not subscribe to the views of lower authorities in not allowing the claim of the assessee. Hence, we direct the ld AO to withdraw the deduction already granted to the assessee of ₹ 7842523/- and to allow deduction of ₹ 18503389/-. The above adjustment made may also result into lower assessment of the income of the assessee then returned income. As this has happened due to a fresh claim by the assessee during the appellate proceeding, assessee is not barred from claiming the same.

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• Customs

• 2017 (9) TMI 254
  Refund of SAD - N/N. 102/2007-Cus. dated 14.09.2007 - denial on the ground that the claim has exceeded the time limit allowed under N/N. 102/2007-Cus. dt. 14.09.2007 - Held that: - There is also no dispute that when the claim was filed in Sea Customs it was not filed within time - matter remanded back to the concerned original authority (refund sanctioning authority) in Air Cargo Complex to consider the claim of the appellant as if the same had been filed within time - appeal allowed by way of remand.

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• 2017 (9) TMI 204
  Valuation of imported goods - magnets of various grades and sizes - It appeared to the department that the declared value was low and hence the declared value was enhanced on the basis of contemporaneous import of magnets (N35 and similar goods) as unit price INR 1300 and ferrite magnets as INR 300 per kg - case of appellant is that the department has however bunched all the magnets together for adhoc uniform enhancement price - Held that: - It is noted that the commercial invoice accompanying the imported goods indicate the price therein as USD per piece. From the details of the contemporaneous imports submitted by the appellant during hearing, it appears that the pricing therein is also per piece If this be the case, it is not understood how and why the department has chosen to adopt per kg method of assessment if that is not the internationally accepted practice by foreign sellers and by the importers in India. Release of goods - Held that: - almost nine months the goods have been lying in the custody, presumably in the Docks at least for nine months. The appellant has a point in his contention that the magnetic properties of the imported goods would deteriorate over long periods of storage - the prayer for interim relief should be considered sympathetically and at the same time protecting the interest of Revenue to the extent possible and the resolution of this dispute will require denovo consideration of the matter by the adjudicating authority. Provisional release of the impugned goods will be allowed to the appellant on payment of deposit - For the purpose of assessment, the original authority will immediately take up denovo adjudication in the matter for arriving at the assessable value in respect of imported goods for the purpose of levy of customs duty by way of duties of customs - appeal allowed in part and part matter on remand.

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• 2017 (9) TMI 203
  Penalties u/s 114 (i)/114AA of the CA, 1962 - smuggling of Red Sanders - penalty on Shri Surender Kumar Singh who was G card holder - Held that: - From the FIR lodged by him, almost four months prior to incident of fraudulent export, it is apparent that he was not instrumental in filing the shipping bill covering the fraudulent export consignment. The inquiry carried out in terms of CHA Regulation also has exonerated Shri Surender Kumar Singh from any involvement in the export fraud. In view of the above, we find no justification for the penalty imposed on Shri Surender Kumar Singh, which is consequently set aside. Penalty on Shri Dinesh Khatri, who was the proprietor of M/s. Khatri Traders, Rohini - it was alleged that he facilitated the storage of contraband goods i.e. red sanders in his godown premises - Held that: - it is clearly evident that Shri Deepak Khatri has played a significant part in fraudulent export of contraband goods by facilitating storing of the same in his godown. Consequently connivance in the illegal export stand established and hence, we find no reason to interfere with the findings and imposition of penalty on Shri Dinesh Khatri. Penalty on Smt. Mili Khatri wife of Shri Dinesh Khatri for abetting the fraudulent export of red sander - Held that: - It is on record that the godown was given on rent to M/s. Khatri Traders which was rented by her husband Shri Dinesh Khatri. From the records, we find no evidence incriminating the role of Ms. Mili Khatri in the fraudulent export of red sanders. Consequently, there is no justification to impose penalty on her and same is set aside. Appeal allowed - decided partly in favor of appellant.

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• 2017 (9) TMI 202
  DEPB scheme - Jurisdiction - export of consignment of ‘Eau De Perfume’ - denial of DEPB benefit on the ground that alcohol content is more than 70%, whereas the DEPB credit is available only when the percentage of alcohol is upto 70% - case of appellant is that the Customs have no jurisdiction to deny DEPB credit and recover the same as duty of Customs - Held that: - At best, Customs authorities can take up the matter with the Licensing authority under the Foreign Trade Development Regulation Act for non-grant of such DEPB credit. From the record, we find this has already been done. However, in view of mis-declaration by the appellant, the order for confiscation of the export goods is upheld but the demand raised under section 28 is set aside. Demand of ₹ 11,58,438/- involving goods which have been already exported under various shipping bills - Held that: - no sample of the goods covered by earlier consignments have been drawn by the Customs Authorities. Further, there is no reference to any test reports of such earlier samples - Misdeclaration has to be established on the basis of positive evidence and cannot be by implication that the goods were same as what was exported later. In the absence of any kind of evidence with reference to goods exported earlier, the allegations of misdeclaration in the earlier consignment cannot be upheld. For the same reason, the benefit of DEPB already claimed by the appellant in respect of such exports cannot be denied. Appeal allowed - decided partly in favor of appellant.

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• 2017 (9) TMI 201
  SAD refund - N/N. 102/2007-Cus. dt. 14.09.2007 - period of limitation - original refund was filed before the wrong authority - transfer of refund application to the correct authority after a lapse of one year from the date of payment of duty - Held that: - reliance placed in the case of Poulose & Matthen Vs CCE [1985 (6) TMI 159 - CEGAT, NEW DELHI] where the Tribunal has laid down that if an application is filed before an officer who does not have territorial jurisdiction, the application would not be ab initio either void or non-est - we are unable to find any infirmity in the orders of the lower appellate authority remanding the matter back to the original authority for de novo consideration as if the claims have been filed within time limit before the jurisdictional Sea Customs - appeal dismissed - decided against Revenue.

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• 2017 (9) TMI 200
  Reference to larger bench - whether the reference is maintainable - Jurisdiction - evidence - precedent - Whether the decision of the Tribunal in Purewall & Associates Ltd. [1983 (10) TMI 254 - CEGAT BOMBAY] is the correct proposition of law or that of the view expressed in re Bajaj Auto Ltd. [1994 (8) TMI 127 - CEGAT, NEW DELHI]? - doctrine of merger - binding nature of tribunal decision where Apex Court dismissed the SLP - refund - goods imported whether shall be called as interchangeable goods or not Held that: - the decision in a case is a precedent only on the facts and circumstances of the case to the extent pleaded and such pleading supported by evidence as well as the law applied thereto - Purewall & Associates Ltd. case or Bajaj Auto Ltd. case are precedent on their own filed and to the extent the matter was in controversy therein before the Apex Court. Accordingly it is not the jurisdiction of the Larger Bench of Tribunal to hold which is the correct proposition of law in these two cases. It may be stated that in the case of Bajaj Auto, only upon exercise of appellate jurisdiction, appeal therein was dismissed. Therefore in the order of dismissal passed by Apex Court, Tribunal's order has been merged. As a result of which decision in Bajaj Auto reached to its finality. Apex Court has held that in spite of having granted leave to appeal, the Court may dismiss the appeal on such ground as may have provided foundation for refusing the grant at the earlier stage. But that will be a dismissal of appeal. The decision of Apex Court results in superseding the decision under appeal and thereby attracts the doctrine of merger. The irresistible conclusion that can be drawn is that the Bench referring the matter to Larger Bench should have examined all the four appeals before it, threadbare on the facts, pleadings of both sides and evidence as well as law applicable thereto, to arrive at its conclusion and stated reason of reference in clear terms having regard to the law as has been explained hereinbefore. Only upon detailed examination of each case, the Division Bench may have occasion to know whether the earlier decision of Tribunal on the same point is an impediment to the Referring Bench to reach to a conclusion different from the earlier decision of a coordinate Bench of Tribunal following rule of judicial discipline so as to make a reference to Larger Bench for answer. Therefore, without touching the merit of the cases as well as plea of limitation raised before us, we have only made effort to explain the law on the subject relating to reference to Larger Bench as well as law relating to the rule of judicial discipline and precedent and star decis, having been faced with the difficulty of absence of reason why the Division Bench found earlier decisions of Tribunal were impediment for it to draw a different conclusion, we return the reference to the Division Bench to deal the matter before it in accordance with law - appeal allowed by way of remand.

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• Corporate Laws

• 2017 (9) TMI 196
  Dominant position - abuse of power - case of contravention - allegation of unfair and anti-competitive activities - Held that:- Once the Commission came to a definite conclusion that the person holding 'dominant position' has not abused its power and/or activities and its activities are not unfair and anti-competitive, in absence of any specific evidence and finding, the Commission has no jurisdiction to issue any direction. for the alleged prima facie case of contravention. If the 'Flexi Rate Scheme' and 'classification of routes' and 'monopoly' and 'non- monopoly' destination point has not been held to be operative, the Commission has no authority to express its view as to what the State Government is required to do in the larger public interest. In absence of such power vested with the Commission, we have no other option but to set aside the last part of the order and observation as made in paragraph 20, as quoted above. Thereby, the direction, as given in paragraph 20 of the impugned order is set aside, rest part of the order dated 27th February, 2017 is affirmed. The order passed by the Commission stand modified to the extent above.

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• 2017 (9) TMI 195
  Mis-management of affairs - illegally smuggled potato seeds without the knowledge and consent of the petitioner and without taking the necessary approval from the Government of India - law on investigation into the affairs of the company - proof of misappropriation - Held that:- Substantial allegation disclosing credible information for us to conclude that respondents had been acting with an intention to commit fraud or mis-appropriate or commit any act of any misfeasance. The allegations merely remain the figment of imagination of the petitioners. Merely levelling an allegation would not be sufficient to constitute fraud as has been observed in paras (a) to (d) extracted from Barium Chemicals case Ltd. (1966 (5) TMI 36 - SUPREME COURT OF INDIA). the investigation can be ordered to unearth the facts shrouded in a mystery and not the one patent from the record. Therefore, we are unable to find any iota of evidence in support of any allegation levelled by the petitioner. For example, the allegation is that potato seeds have been imported in India without the requisite sanction from the Government of India. There is no document placed on record showing at least the import of potato seeds or its use or sale. Likewise, there are vague allegations without any substation that assets of 'Simplot India' were illegally sold and sale proceeds were misappropriated. There is not an iota of evidence as to the nature of assets whether land, movable assets or any other. There is no evidence when it was sold. A roving enquiry in law is prohibited by law laid down by Supreme Court Barium Chemicals Ltd. (supra). It is extremely difficult-nay impossible to consider such an allegation as credible information for triggering the investigation process. We, therefore, have remained unable to persuade ourselves to accept the prayer made by the petitioners. The issue concerning impugned meetings held on 08.10.2016, 24.10.2016 and 09.12.2016 at Seattle, Washington would also not be sufficient for us to pass an order concerning investigation. There is no denial by the respondents that the meetings were held and even explanation for holding that meeting have been tendered. The respondents have also placed on record the factum of associating the petitioner and another former Director, Mr. Kakkar for the aforesaid meetings. Such an allegation of illegality of meeting would not fall within the parameter of Section 213(b) of the Act and therefore, on that count also, we are not able to persuade ourselves to accept the prayer made by the petitioners.

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• Insolvency & Bankruptcy

• 2017 (9) TMI 256
  Seeking amendment of the cut-off date in the scheme sanctioned by the BIFR - petitioner seeks extension of the period of rehabilitation from 31.03.2018 to 31.03.2020, without any change in the terms and conditions of the scheme sanctioned by the BIFR - Insolvency and Bankruptcy Code, 2016 applicability - Held that:- Once BIFR and AAIFR have been dissolved under the Insolvency and Bankruptcy Code, 2016, the adjudicating authority for insolvent companies is the National Company Law Tribunal (NCLT). In view of the order dated 24.05.2017 issued by the Government, clarifying the position in respect of companies that have sanctioned schemes, and further empowering the NCLT to approve the resolution plan, no further orders are required to be passed on the present petition, which is accordingly disposed of along with the pending application with liberty granted to the petitioner to approach the NCLT (Calcutta), if so advised.

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• Service Tax

• 2017 (9) TMI 236
  Review of order - issuance of pre show cause notice - Held that: - the pre-show cause notice for consultation meeting was issued fixing the date on 11-11-2016 and on 18-11-2016 to the writ petitioner however he has taken time repeatedly. The writ petitioner intentionally suppressed the fact that those two documents are his audited balance sheets. The draft demand notice was issued along with such pre-show cause notice for consultation fixing the date to 29-11-2016 vide Annexure-6 of the writ petition - the present application is allowed.

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• 2017 (9) TMI 235
  Validity of SCN - the appellants have paid the service tax along with interest before issuance of the SCN - Section 73 (3) of the Finance Act, 1994 - Held that: - The amount of payment for which provision was made though not transacted actually also became liable for payment on service tax. The appellant appears to have followed the old provision inadvertently. This is not a case whether the appellant was not inclined to pay the service tax at all in respect of the amount payable to the foreign service provider for which the provision was made in the books of accounts, the appellant was otherwise making payment of service tax on the actual payment made to foreign service provider. Therefore, there was no intention to evade payment of service tax. When the suppression of fact is not established under sub-section (4) of Section 73 will not get attracted - it can be seen that there was a clear intention of the appellant to opt for the provision of Section 73 (3) of the Finance Act, 1994 - The appellant paid the service tax along with interest and submitted the above letter much before the issuance of the show-cause notice - SCN not valid - appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 234
  Commission - includibility - pure agent - the department was of the view that the appellant does not satisfy the conditions prescribed under Rule 5(2) of the Service Tax Rules to justify such exclusion as pure agent - Held that: - Rule 5(2) of the Service Tax (Determination of Value) Rules, specifies the conditions which are required to be satisfied for excluding certain expenditures or costs incurred by the service provider as a Pure agent of recipient of service - there is no justification for excluding 80% of commission from payment of service tax. Time limitation - Held that: - from the fact that the appellant wrote several letters explaining their stand and asking for clarification reflects upon the bonafide of the appellant, that they entertained a belief that 80% of the commission can be excluded - Department is not justified in invoking the extended period of limitation under section 73 for demand of Service Tax in the present case - The Show cause notice which has been issued on 15.4.2011 for demand of service tax for the period 2006-07 to 2008-09 is time barred and hence the demand is required to be set aside. Appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 233
  Business Auxiliary services - discount (commission) - 1% additional discount is over and above the normal trade discount - whether trade discount of conditional discount? - demand of tax on discount amount - Held that: - subject 1% additional discount pertains to Business Auxiliary Services being provided by the appellant to M/s. HP - Here, the appellant is providing Reseller Sell-Through Reports and Inventory Reports on weekly basis in specified format to M/s. HP and if the appellant does not provide such reports, they will not get said 1% discount from M/s. HP. These specified format reports which are furnished on weekly basis are inputs from the appellant for promotion of the business of sales of the goods belonging to M/s. HP. Therefore, the claim of the appellant that said 1% commission is under the category of normal trade discount, cannot be accepted - appeal dismissed - decided against appellant.

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• 2017 (9) TMI 232
  Maintenance and repair services - subcontractors - non-payment of service tax - appellant contested their liability to pay service tax only on the ground that the main contractor paid service tax on the full value which included the part of the consideration they received for the sub-contracted work - Held that: - the decision in the case of FOTO FLASH Versus COMMISSIONER OF SERVICE TAX [2007 (10) TMI 133 - CESTAT, BANGALORE], relied upon, where it was held that If the main contractor discharges the service tax liability, there is no need for sub-contractor to pay the service tax - the appellants produced various certificates and correspondents from their main clients like BHEL, NTPC, etc to the effect that service tax was not charged for sub-contracted work - demand upheld. Extended period of limitation - Held that: - The clarifications issued and decisions of the Tribunal did give room for bonafide belief for non-tax liability of a subcontractor - the demand of service tax is to be restricted to normal period with no liability to penalties. Appeal allowed - decided partly in favor of appellant.

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• 2017 (9) TMI 231
  Business Support Services - cleaning of coaches/toilets of trains as well as supply of bed rolls to passengers - Held that: - the supply of bed rolls as well as cleaning of coaches and toilets of trains are not covered within the meaning of support services of business or commerce. The services have been rendered by the appellant to the passengers on behalf of IRCTC/Indian railways - such services are more appropriately classifiable under business auxiliary services under the category of “Customer care services provided on behalf of the client" under section 65(11) of the Finance Act 1994 - appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 230
  Outdoor Catering Service - Respondent are engaged, in terms of agreement with NMDC, to provide food and other items to the employees in the premises provided by the clients - Held that: - The terms of the agreement, as explained in the impugned order itself, shows that the work carried out by the respondent is squarely covered by the statutory scope of “Outdoor Catering Service” in terms of Section 65(76a) read with Section 65(24) of the Finance Act, 1994 - The Hon’ble Allahabad High Court in case of Indian Coffee Workers’ Co-op. Society Ltd. [2014 (4) TMI 407 - ALLAHABAD HIGH COURT], examining the appeal filed by the respondent against confirmation of service tax demand held that the respondent are liable to pay service tax as an outdoor caterer, but set aside the penalty. The respondent are liable to pay service tax as “Outdoor Caterer” during the material period - there are reasonable causes for non-payment of service tax during the material time. Accordingly, it is fit case for invoking Section 80 for non-imposition of penalties under Section 76 and 78 - appeal allowed - decided partly in favor of assessee.

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• 2017 (9) TMI 229
  Valuation - includibility - Department entertained the view that the amount towards such statutory payments, like amount deposited towards P.F., E.P.F. and E.S.I. contribution into the Central Government account in the capacity of principal employer, should be included in the gross value of the appellant - Held that: - in compliance of Employees Provident Fund & Miscellaneous Provisions Act, 1952 and the Employees State Insurance Act, 1948, the service receiver M/s HNGIL had contributed to such funds, the amount towards the workmen deployed by the appellant. The fact is not under dispute that such contributed amount was never given by such service receiver to the appellant - the gross value for the computation of service tax liability in the hands of the appellant will not take into consideration the amount of contribution made by the service receiver M/s HNGIL directly into the respective heads of account - demand set aside. Extended period of limitation - Held that: - Since, the issue involved in these cases relates to interpretation of the statutory provisions with regard to addition of the contributed amount into the gross value under Section 67 ibid, it cannot be said that the appellants had indulged into the activities concerning fraud, collusion, suppression, misstatement etc. to defraud the Government Revenue - extended period cannot be invoked. Appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 228
  Business Support Services - non-compete agreement - Held that: - there cannot be any doubt that the appellant’s action and activity of ‘entering into non-compete agreement with JSSL’ is nothing but a service covered by ‘support service of business and commerce’ as defined under Section 65(104c) read with Section 65(105) of Finance Act, 1994 and therefore, the consideration received for the said services is accordingly taxable - appeal dismissed - decided against appellant.

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• 2017 (9) TMI 227
  Cargo handling services - composite services - appellants were to conduct unloading/stacking of various raw materials from trucks/wagons, by mechanical device as well as manually - Held that: - the Tribunal in the case of CCE, Udaipur Vs. M/s Balaji Builders & Contractors [2017 (8) TMI 903 - CESTAT NEW DELHI] held that loading and shifting of goods etc. within the factory premises is not to be covered under ‘cargo handling service’ as defined under Section 65(23) of Finance Act - the subject demands of service tax against the appellants hereby are set aside - appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 226
  Whether the Custom, Excise & Service Tax Appellate Tribunal is justified in confirming levy of Service Tax, interest and penalties under the Finance Act, 1994 against the appellant by covering the activities under the category of business/service irrespective of the N/N. 25/2004, dated 10-9-2004 issued by the Government of India exercising powers conferred by sub Section (1) of Section 93 of the Finance Act? Held that: - the notification aforesaid has not been taken into consideration by the authorities referred above. It is also relevant to mention that under the N/N. 14/2004, the Government of India further exempted taxable services provided to a client by a commercial concern in relation to Business Auxiliary Service under various heads including procurement of goods or service which are inputs for the clients. This notification too has not been taken into consideration by the Adjudicating Authority and both the Appellate Authorities - we deem it appropriate to remit the matter to the Adjudicating Authority to examine the Service Tax liability of the petitioner-appellant afresh by taking into consideration the Notification bearing N/N. 14/2004, 25/2004 - appeal allowed by way of remand.

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• 2017 (9) TMI 225
  Man Power Recruitment or Supply Agency Service - case of appellant is that the recipient of service i.e. Bhopal Sahakari Dugth Sangh Maryadit cannot be considered as client of the appellant, in order to fall under the purview taxable service - time limitation - Held that: - Since the said recipient of service had engaged the services of the appellant for providing the man power for accomplishing its business purpose, such recipent should be termed as “client” for the purpose of the definition under “Man Power Recruitment or Supply Agency Service” - Further, the appellant provided such service to others namely, M/s. B.H.E.L. and the Service Tax on such services were collected and deposited by the appellant into the Government Account. Thus, the appellant cannot decide its tax liability differently in respect of the same services provided to different recipient of service. Time limitation - Held that: - it cannot be said that the appellant had not suppressed the material facts from the Department in disclosing the particulars regarding the services provided to Bhopal Sahakari Dugth Sangh Maryadit - the extended period invoked for confirmation of the adjudged demand is in conformity with the statutory provisions. Appeal dismissed - decided against appellant.

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• 2017 (9) TMI 224
  Royalty - benefit of N/N. 17/2004-ST dated 10.09.2004 - IPR services - cess paid & R&D Cess Act - department entertained the view that the benefit of Notification dated 10.09.2004 is not available to Respondent, as the same applies only to service provider and not to the service receiver, who pays the service tax as a recipient of service under reverse charge mechanism - Held that: - the provisions of Chapter V of the Finance Act should also be applicable in respect of the service tax paid under Section 66A ibid - In the present case, since the appellant is liable to pay service tax as a recipient of the taxable service, the provision of Section 66 ibid should also be applicable to it. In other words, upon fixing the responsibility for payment of service tax under reverse charge mechanism, no distinction can be placed between the service receiver and service provider for the purpose of Section 66 ibid. The benefit of exemption N/N.17/04-ST dated 10.09.2004 should also be available to the respondent - appeal dismissed - decided against Revenue.

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• 2017 (9) TMI 223
  Reverse charge mechanism - whether the appellant in the capacity of recipient of service is liable to pay service tax when the entire services were performed outside India? - Held that: - The Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 was enacted to identify which services could be taxable under Section 66A of the Finance Act, 1994 - Rule 3(ii) of the Rules, 2006 will not be applicable to the services in question, which were rendered outside India. Thus, service tax demand cannot be fastened on the appellant for such services provided from the foreign country - appeal allowed - decided in favor of appellant.

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• Central Excise

• 2017 (9) TMI 222
  Classification of goods - PP bags & rolls, LD/LLD bags & rolls and HM bags - extended period of limitation - Held that: - It is correct that there was an increase in the duty of the products mentioned in CSH 39.17 and respondent had continued to pay the duty in the earlier rate. But undisputedly, they have paid the differential duty immediately on coming to know of the error. However, the department has chosen to issue a show cause notice invoking the extended period. Further, the issue of classification on the impugned products was under litigation before various forums and therefore being an interpretational issue, the respondents cannot be imputed with the intention to evade payment of duty - demand set aside on the ground of limitation - appeal dismissed - decided against Revenue.

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• 2017 (9) TMI 221
  MODVAT/CENVAT credit - sale of capital goods on which MODVAT credit availed - Rule 57AB of Central Excise Rules, 1944 - Held that: - When capital goods are removed from the factory, the manufacturer has to pay appropriate duty of excise as if such capital goods have been manufactured in the said factory and such removal shall be made under the cover of an invoice prescribed under Rule 52A. The law in the relevant Explanation does not use the word sale or transfer of capital goods but instead uses the word removal as capital goods from the factory - The Hon’ble Apex Court in the case of JK. COTTON SPINNING AND WEAVING MILLS LTD. AND ANOTHER Versus UNION OF INDIA AND OTHERS [1987 (10) TMI 51 - SUPREME COURT OF INDIA], held that removal contemplates physical removal of goods - appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 220
  CENVAT credit - inputs - duty paying documents - it was alleged that the inputs brought by them into their factory on the strength of certain documents issued by the registered dealers were not the same on which the Central Excise duty was originally paid - Held that: - the quality and description of the goods have been admitted to be different in the statement given by the Director of the company. The said statement has not been retracted. In these circumstances, even without relying upon the statement of the dealer and their agents, charges are proved against the appellants and thus statement of dealers and agent become irrelevant - this was not a case which required cross-examination. The Directors themselves admitted the guilt. So, almost all allegations stood proved - appeal dismissed - decided against appellant.

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• 2017 (9) TMI 219
  CENVAT credit - duty paying documents - whether the appellants are entitled to CENVAT credit availed on the debit notes relating to reimbursement of expenses? - Held that: - though said services availed by M/s Laffans Petrochemicals Ltd. in terms of Logistics Agreement, the same can not be made cenvatable in as much as M/s Laffans Petrochemicals Ltd. quoting their own Service Tax Registration No. along with particulars of service tax & Invoice Nos. of respective service providers cannot be considered as valid duty paying document in terms of provisions of Rulem9(1) of Cenvat Credit Rules, 2004 - service tax amount shown in the debit notes representing reimbursable expenses is inadmissible to credit - appeal dismissed - decided against appellant.

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• 2017 (9) TMI 218
  Valuation - job-work - Rule 4(5)(a) of the CCR - liability of principal manufacturer or job-worker - Held that: - the respondent were working in terms of the provisions of Rule 4(5)(a) of the Cenvat Credit Rules which allows the job worker to clear the final product to the principal manufacturer, without payment of duty, subject to following the requisite procedure. In such a situation it is the liability of principal manufacture to pay the duty - There is no allegation that the principal manufacturers have not discharged the duty burden - job-worker not liable to pay - appeal dismissed - decided against Revenue.

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• 2017 (9) TMI 217
  Deemed export - Clearances to 100% EOU - recovery of CENVAT credit - non-maintenance of separate set of books for exempted and dutiable goods - Held that: - the goods supplied against CT-1 to EOU are specified in exception to Rule 6(6) itself - the benefit of Rule 6(6) of Cenvat Credit Rules, 2004 is allowed to the appellant in respect of the goods exported under LUT and CT-1. In respect of the sales to the domestic tariff area, the appellant would be entitled to adjustment of duty paid against the reversal of Cenvat Credit on inputs used in manufacture of exempted products - In respect of exports against rebate, the matter is remanded back to the adjudicating authority to verify whether the rebate claimed has been returned back by cash by the appellant and if so, the amount paid back in cash be adjusted against 10% of value of exempted goods. Goods cleared for export - mode of export - Held that: - neither in their submissions before the Ld. Commissioner (Appeals) nor elsewhere is it mentioned whether the export was against LUT/CT-1/rebate, hence, these facts needs to be verified by the adjudicating authority - matter is remanded back to the adjudicating authority for verification as to the mode of export (whether under CT-1/LUT/rebate) and to pass a fresh order in accordance with law. Appeal allowed by way of remand.

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• 2017 (9) TMI 216
  Clandestine removal - Confiscation of goods - Held that: - Though, Ld. Commissioner (Appeals) has dropped the demand of duty, interest and penalty for the period prior to 01.03.2008, however, directed confiscation of the goods seized which were cleared from the factory prior to 01.03.2008, and found in the premise of the trader and seized under the reasonable belief that appropriate duty has not been paid on the said goods. The said confiscation and personal penalty on the trader, in my opinion is erroneous and cannot be sustained - since the total demand of duty has been reduced from 30,31,383/- to ₹ 4,93,093/-, appellant are entitled to discharge 25% of the penalty equal to the duty, subject to the fulfilment of conditions laid down under section 11AC of CEA 1944 - appeal allowed - decided partly in favor of appellant.

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• 2017 (9) TMI 215
  SSI exemption - N/N. 8/2003-CE dt.01.02.2003 - excess payment made by appellant of ₹ 89,700/- - penalty - Held that: - against the total demand of ₹ 6,50,962/- the adjudicating authority appropriated ₹ 89,700/- paid through cash and remaining amount of ₹ 5,61,262/- was appropriated, which was debited in Part-II thus there is excess reversal of ₹ 89,700/- for this amount the Commissioner (Appeals) has already granted the relief, that appellant to seek redressal before the appropriate authority - no further relief is due to the appellant on this account. As regard the penalty imposed under Section 11AC, I am in the agreement with submission of the Ld. AR that after crossing the limit of ₹ 1.50 Crores. The appellant have not taken the reasonable steps for registering themselves and discharging the excise duty. Even though the appellant have been issuing invoices but the details of clearances were not known to the department as neither any registration was obtained nor any periodical returns were filed to the department. Accordingly, there is a clear suppression of fact on the part of the appellant therefore the penalty under Section 11AC was legally imposed by the lower authority which cannot be interfered. Appeal dismissed - decided against appellant.

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• 2017 (9) TMI 214
  Withdrawal of appeal - Manufacture - CENVAT credit - Held that: - when the Revenue wants to add the value of all the bought out items into whole value of the plant on which they asked duty, the assessee is entitled to take cenvat credit of duty paid on the bought out items. If the same is taken into consideration, the duty liability works out of ₹ 59,227,511/- whereas, the cenvat credit is available to the assessee is ₹ 62,790,745/- which is more than the duty demand. In that circumstance, we note that as it is a Revenue neutral situation - assessee’s appeal is dismissed as withdrawn and the Revenue’s appeal is dismissed on merits.

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• 2017 (9) TMI 213
  Demand of duty - Goods supplied to defence installation through National Co-operative Consumer Federation of India Ltd. (NCCF), Jammu - case of appellant is that the appellant was not engaged in the manufacturing of the goods. There was no machinery in the so called factory. He submitted that the goods were manufactured by Shri Ravi Gupta, M/s. Gee Industries, who supplied the impugned goods to NCCF, so they were not required to pay the duty - Held that: - After perusal of the record, it appears that the goods were supplied to the defense establishment through the NCCF. The Director of the NCCF in his statement clearly stated that he had visited the factory and saw the manufacturing activity before placing the order to the appellant. The appellant has supplied the goods to NCCF as a manufacturer, and not as a trader. Payment was received through pay cheques and bills were raised as a manufacturer - It is seen from the NCCF record, that the appellant had manufacturing facilities during the relevant time and they had supplied the impugned goods, Ld. DR had already submitted that in due course the factory was dismantled and machinery loss sold. At the relevant time, the appellant was engaged in manufacturing of the impugned goods which were supplied to the NCCF as a manufacturer - demand upheld - appeal dismissed - decided against appellant.

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• 2017 (9) TMI 212
  Valuation - related party transaction - part of production was cleared to the independent wholesale parties and only a part was being sold to the alleged related person - applicability of Rule 9 of the Valuation Rules - Held that: - The Larger Bench of the Tribunal in the case of Ispat Industries Ltd. [2007 (2) TMI 5 - CESTAT, MUMBAI] has held that Rule 9 of the Valuation Rules would require an assessee to adopt assessable value equivalent to 115% only where the entire production i.e. 100% is being sold to the related parties - In the present case, there is neither any allegation nor any finding in the impugned order by the authorities below that the appellant was clearing their entire 100% production to the said alleged related persons. Extended period of limitation - demand for the period 2001-02 was being raised in 2005 - penalties - Held that: - The impugned order has nowhere alleged or given a finding that the appellant was not filing the statutory returns or was not disclosing the said fact to the Revenue or were not maintaining the statutory records. In such a scenario, no malafide can be attributed to the appellant so as to justify invokation of longer period of limitation and penalties. Appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 211
  CENVAT credit - input services used for dutiable as well as exempt service - whether the appellant are required to pay 6% of value of the Marble Lumps sold after screening the input marble powder, as they had availed credit on various input services that were used in the manufacture of Calcium Carbonate? - Held that: - Undisputedly the process carried out by the appellant in their factory is that the appellants bring Marble Lumps/ powder etc., subjected it to its process of screening and unsalable marbles were sold, whereas the marble powder, which are to be used in the process of manufacture are accordingly used in the factory. Such an activity, cannot be considered as a trading activity and an exempted service - appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 210
  CENVAT credit - input service - transportation service - place of removal - whether the service of transportation upto the customer's doorstep i.e. "FOR destination" sales where the entire cost of freight is paid and borne by the manufacturer, would be "input service" within the meaning of Rule 2(1) of the CC Rules, 2004? - Held that: - the identical issue has come up before the Tribunal in the case of RCL Cement Limited Vs. CCE, Shillong [2016 (9) TMI 45 - CESTAT KOLKATA], where it was held that credit of service tax paid on the outward freight during the relevant period was correctly taken by the appellant - the claim of cenvat credit on outward freight of the appellants is allowed - appeal dismissed - decided against Revenue.

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• 2017 (9) TMI 209
  Refund - Valuation - includibility - freight - area based exemption - N/N. 56/02-CE dt.14.11.2002 - whether the inclusion of outward freight in assessable value for purposes of section 4 of Central Excise Act, 1944 is in accordance with law? - Held that: - the purchase orders placed on record are on FOR destination basis - The period involved is after 14.5.2003 when the definition of “place of removal” was amended to reintroduce the concept of extended place of removal in Section 4(3) (c) (iii) of the Act. That being so, the place of removal in this case is the premises of the buyers and outward freight has therefore been rightly included in the assessable value - similar issue decided in the case of Krishi Rasayan Exports (P.) Ltd. Versus Commissioner of Central Excise, Jammu & Kashmir [2015 (3) TMI 202 - CESTAT NEW DELHI], where it was held that where an assessee was required to pay duty on FOR price which would include the element of freight from the factory gate to the customers' premises, the provisions of Section 4(3)(c) would apply, to identify the place of removal as the place of delivery to the customer's place on FOR price of the transaction - appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 208
  Service of order - Section 37C of the Central Excise Act, 1944 - Appellant's serious grievance is that the order alleged to have been served on the appellant was not delivered to it which has caused delay in filing appeal before the learned Commissioner (Appeals) - Held that: - Record reveals that the date on which the appeal came to the Commissioner (Appeals) has not been recorded by him. In absence of the date on which appeal was filed, computation of period of limitation is not possible - Law is specific that an order can be issued by Registered Post with acknowledgement due to the person or to its authorized person. Ld. Commissioner (Appeals) has verified the status of the Registered Post sent by the adjudicating authority and found that the same was served on 04.01.2008 as per the letter dated 23.06.2008 of Sr. Superintendent of Post Offices. We find difficulty as to ascertain whether the envelope containing order carried the address properly. That needs verification - the learned Commissioner (Appeals) shall consider the date of filing of the appeal for computing the limitation - appeal allowed by way of remand.

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• 2017 (9) TMI 207
  Valuation - includibility - transportation, laying, joining, testing charges - place of removal - When the respondent claimed deduction relating to transportation, laying, joining, testing charges from the invoice value received from the main contractor, revenue did not allow deduction thereof but alleged undervaluation of the pipes - Held that: - When the notice issued by the authority below has brought clearly the facts of the contract and also place of removal where the respondent carried out certain activity over the goods cleared from the factory, there is no scope for the respondent to claim deduction since transfer of property of the goods did not pass at the factory gate but transfer thereof occurred after value addition made thereto at the site - appeal allowed - decided in favor of Revenue.

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• 2017 (9) TMI 206
  CENVAT credit - input service - appellants are manufacturer of excisable goods and utilized the Courier Services in sending the Samples, Documents and Finished Goods to their customers - whether the appellants are eligible to CENVAT credit of the Service Tax paid on Courier Services? - Held that: - It cannot be denied that Courier Service involves a host of uses relating to the activity of manufacture and sale of goods. For example, the documents relating to technical expert's opinion, sample testing report, sending of samples, machine catalogue etc., are received and dispatched by utilizing the services of Courier and it cannot be said that these are de hors of the activities of manufacturing business - Tribunal in the case of Long Meditech Ltd [2016 (7) TMI 468 - CESTAT CHANDIGARH] opined that credit avail on Service Tax paid on Courier Serves is eligible to Cenvat Credit. CENVAT credit - Rent-a-cab services - Held that: - The credit of the service tax paid on rent-a-cab for the said purpose has been held to be admissible by the Hon’ble Gujarat High Court, in the case of Principal Commissioner vs Essar Oil Ltd [ 2015 (12) TMI 1062 - GUJARAT HIGH COURT] - credit allowed. Appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 205
  CENVAT credit - Place of removal - various input services - scope of Rule 2 (l) of Cenvat Credit Rules, 2004 - Rent - Common Area Maintenance Charges and Amenities Charges - Freight & Cartage - Postage & Courier - Security - Legal & Professional - Advertisement - Insurance - Software & Website maintenance and development - Commission charges - Service provided by Commission Agents from State of J&K - Input Service Distributor - the main point of dispute in these appeals is the determination of ‘place of removal’ of excisable goods - Held that: - The main appellant-assessee categorically stated that they transfer their goods to their warehouses from where they further transport them to the retail outlets or warehouses of their commission agents, from where the goods were sold. Hence, it was pleaded that place of removal in terms of Section 4 of Central Excise Act 1044 should be retail outlet/warehouses of commission agents. The goods remain in their ownership, till the time of sale from these retail outlets owned by them or up to the warehouses of commission agents, as the case may be. Freight also is paid by the main appellant-assessee up to the retail outlets/commission agents warehouses. We note that the original adjudicating authority fell in error in arriving at the correct factual position regarding ‘place of removal.’ The Revenue presumed that the services should be in or in relation to manufacture of ready-made garments, whereas Rule 2(l) clearly talks about services used by manufacturers, whether directly or indirectly in or in relation to the manufacture of final products and clearance of final products up to the place of removal. A plain reading of the said statutory provision will indicate that the presumption of the Revenue is not sustainable. Registration of the main appellant assessee as ISD - Held that: - On examination of provision of Rule 2(m) of the Cenvat Credit Rules, 2004, the Commissioner (Appeals) clearly recorded that, a manufacturer who wants to avail benefit of Service Tax should get registered himself as service provider and then he will be able to account for all the input Service Tax paid in the headquarters and distribute the same to various units. After examining the provisions of Rule 7 of Cenvat Credit Rules, the Commissioner (Appeals) concluded that as the manufacturer was having various retail outlets and office besides the factory for manufacture, in order to utilise the credit of input service got registered with the department as ISD. CENVAT credit - duty paying invoices - debit notes - Held that: - the appellant-assessee issued challans under Rule 4A of Service Tax Rule, 1994 which contain all the required details. Even in case certain particulars were found missing in the relevant documents, we note that substantial benefit of Cenvat credit cannot be denied on this ground - mention of wrong address of the Service Tax Department on the documents is not a bar to avail the credit. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2017 (9) TMI 199
  Revision of assessment - review power of VATO - Held that: - There was no occasion whatsoever for the exercise of review powers suo motu and that too after nearly 8 years and without notice to the Petitioner. Also, with the AT having already set aside the earlier orders of the VATO by its judgment dated 16th June 2017, the VATO was on 1st July 2017 reviewing non-existent orders of assessment - the Court is unable to sustain the validity of the 24 impugned orders passed by the VATO; 12 in regard to default assessment of tax and interest under Section 32 and 12 in relation to penalty under Section 33 of the DVAT Act - petition allowed - decided in favor of petitioner.

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• 2017 (9) TMI 198
  Rejection of returns filed by the petitioner - input tax credit - it is noticed that the petitioner issued invoices from C2H001 to C2H155, and not reported in the Annexure II filed by them - it is also alleged that, on verification of the sales details filed in Annexure II with other dealer purchase details, it is seen that the petitioner has effected sales using the same tax invoice to different buyers, and thereby, maintained two sets of parallel bill books. Therefore, the respondent proposed to reject the returns filed by the petitioner as incorrect - Held that: - According to the petitioner, whatever sales effected by them, i.e. substantial portion of the sales, which were in the form of DVDs have been returned to the petitioner, for which, the petitioner has given credit notes. The said credit notes have been placed in the typed-set of papers filed in support of this Writ Petition, to substantiate the case of the petitioner. Therefore, it is the case of the petitioner that the turnover, which was reported in the month of March, 2015, vide their returns, is the turnover, which was determined after giving due credit to the sales returns. The petitioner sought to demonstrate the factual position by referring to a tabulated statement filed in page No.22 of the typed-set of papers. However, even the tabulated statement was not placed before the Assessing Officer, and this fact is even admitted by the petitioner. In any event, since the legal position is in favour of the petitioner, this Court is of the view that, an opportunity can be granted to the petitioner to go before the Assessing Officer and contest the matter on merits by placing all records - petition allowed by way of remand.

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• 2017 (9) TMI 197
  Levy of purchase tax - Sale of sugar and other allied products - The Excise and Taxation cum Designated officer, Jalandhar while completing the assessment determined the purchase price of sugarcane for the purpose of levy of purchase tax at ₹ 4,75,60,337/-. The appellant had declared the purchase price at ₹ 4,66,76,828/- being the statutory minimum price fixed by the Government of India for the year under consideration - According to the appellant, although the Assessing officer admitted availability of ITC at ₹ 20,95,351/- yet allowed ITC at ₹ 29,964/-. The Assessing officer allowed net ITC at ₹ 1,85,875/- and created additional demand of ₹ 38,85,333/- inclusive of penalty under Section 53 of the PVAT Act at ₹ 16,10,307/- and interest under Section 32 of the PVAT Act at ₹ 4,02,576/- - Held that: - similar issue decided in the case of THE MORINDA COOPERATIVE SUGAR MILL LTD MORINDA Versus STATE OF PUNJAB & ORS [2016 (9) TMI 1315 - PUNJAB AND HARYANA HIGH COURT], where it was held that There is no justification for levy of penalty for the period recovery of tax remained stayed by this Court - following the said decision, there is no merit in the appeals and the same are hereby dismissed.

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• Indian Laws

• 2017 (9) TMI 255
  Allegations levelled against the counsel appearing on behalf of the Revenue Department - Contempt of Courts - Mr. Rakesh Kumar Gupta states that although he is willing to withdraw some allegations on his own, and has already done so, he is not willing to withdraw all the allegations levelled against the lawyers representing the Revenue Department - Held that:- Mr. Rakesh Kumar Gupta having addressed us for an hour and a half on the 28th July, 2017 before the order referred to hereinabove came to be recorded and having further addressed us for twenty minutes today, expresses his inability to conclude his submissions on account of his illness, characterised as pain in his left eye. Mr. Rakesh Kumar Gupta further articulates in Court that he feels his blood pressure has shot up and he feels the need to use the wash room frequently and is, further, unable to continue his arguments today. He, therefore, requests that the matter be adjourned for a month and a half in order to enable him to recoup his health and address this Court. We are constrained to observe that the conduct of Mr. Rakesh Kumar Gupta in the present proceedings, as well as, in the Court has been unreasonable and dilatory. Even as we were dictating this order he has interrupted us a few times. However, in the interest of justice, as a final opportunity, at the request of Mr. Rakesh Kumar Gupta, we are adjourning the matter to 18th August, 2017. It is, however, made clear to Mr. Rakesh Kumar Gupta that no further opportunity shall be granted in this behalf.

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