TMI Tax Updates - e-Newsletter
September 6, 2018

Case Laws in this Newsletter:

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

TMI SMS

• Charitable Trust for advancement of religion, spirituality or yoga will be liable to GST if engaged in sale of goods / business activity.

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• Disciplinary Proceedings against CA - failure to make proper disclosure regarding TDS default - punishment to Reprimand awarded.

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Articles

1. APPROVAL COMMITTEE UNDER SPECIAL ECONOMIC ZONE ACT

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. GST – CONCEPT & STATUS (Updated as on 01st September 2018)

2. CCI orders widening the scope of investigation by the Director General in the matter relating to alleged unfair pricing by super-specialty hospitals in and around Delhi

3. GeM transactions to touch USD 100 billion in 3 years: Suresh Prabhu

4. Final Round of “Pitch to MOVE”, A Mobility Pitch competition for budding start-up

5. India to generate 100 GW solar energy by 2022: Suresh Prabhu

6. Suresh Prabhu Launches Technology Initiatives for Coffee Stakeholders

Notifications

FEMA

1. 22(R) (1)/2018-RB - dated 31-8-2018 - FEMA

Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) (Amendment) Regulations, 2018

2. 20(R) (3)/2018-RB - dated 30-8-2018 - FEMA

Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Second Amendment) Regulations, 2018

Circulars / Instructions / Orders

GST - States

1. CCW/GST/74/2015 - dated 23-8-2018

APGST Act, 2017- Intelligence based Enforcement action- Tax payers allotted to Central Tax Authorities - GST Council decisions on Cross –Empowerment

2. CCW/GST/74/2015 - dated 21-8-2018

Notifies the dates for furnishing the return in form GSTR 3B for the months form July,2018 to March, 2019.

3. CCST GST/36/2018 - dated 13-8-2018

Commercial Taxcs Department - Addressing Tax Payers Grievances - Mechanism to deal with High-pitched / Un-reasonable demands - Certain instructions issued.

4. CCW/GST/74/2015 - dated 10-8-2018

Notifies the dates for furnishing the return in form GSTR 3B for the month of July,2018.

5. CCW/GST/74/2015-A - dated 1-8-2018

Andhra Pradesh Goods and Services Tax Act. 2017 - Proper Officers for exercising powers Under Section 130 of APGST Act, 2017 Regarding.

DGFT

6. 33/2015-20 - dated 4-9-2018

Inclusion of Paragraph 2.79 C in the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20 to notify the procedure for export of SCOMET items for repair/replacement purposes.

7. 34/2015-20 - dated 4-9-2018

Inclusion of Paragraph 2.79 D in the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20 to notify the procedure for export of SCOMET items for display/exhibition/tenders/RFP/RFQ/NIT purposes.

8. 35/2015-20 - dated 4-9-2018

Allocation of quantity for export of preferential quota sugar to EU under CXL quota

9. 36/2015-20 - dated 4-9-2018

Amendments in Appendices & Aayat Niryaat Forms pertaining to Chapter 6 of FTP/HBP 2015-20 - reg.

10. 37/2015-20 - dated 4-9-2018

Amendments in Appendices & Aayat Niryaat Forms pertaining to Chapter 7 of FTP/HBP 2015-20 - reg.

Customs

11. 31/2018 - dated 5-9-2018

24x7 Clearance - regarding

Highlights / Catch Notes

GST

• Pay Tax and Interest to Halt Registration Cancellation u/r 22, CGST Rules 2017.

  Act-Rules : Cancellation of registration - Rule 22 of the CGST Rules, 2017 - where person pays tax with interest and fee, the proceedings for cancellation of registration shall be dropped.
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• CGST Rule 36: Input tax credit valid if key info is on invoice, despite other document errors.

  Act-Rules : Documentary requirements and conditions for claiming input tax credit - Rule 36 of the CGST Rules, 2017 - In case certain information is available on duty paying document (Invoice) then credit cannot be denied for other discrepancies in the Invoice / duty paying document.
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• Amendment to Rule 55: New Provisions for Transporting Goods in Batches Without an Invoice Under GST Rules 2017.

  Act-Rules : Transportation of goods without issue of invoice - Rule 55 of the Central Goods and Services Tax Rules, 2017 - Rule 55(5) amended to include Transportation in batches or lots
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• Central Goods & Services Tax Rule 89(4) Update: New Definition of "Adjusted Total Turnover" Affects ITC Refunds for Zero-Rated Supplies.

  Act-Rules : Refund of input tax credit (ITC) in case of Zero Rated supplies - Rule 89(4) of the Central Goods and Services Tax Rules, 2017 - Meaning of scope of "Adjusted Total Turnover" modified for the purpose of calculation.
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• Amended Rule 96 of CGST Rules 2017: Exporters must meet new conditions for IGST refund eligibility on exports.

  Act-Rules : Refund of IGST paid on goods or services exported out of India - Rule 96 of the CGST Rules, 2017 - Rule 96(10) amended retrospectively w.e..f 23-10-2017 - The person claiming refund should not availed the benefit under certain notifications - or - no benefit on inward supplies have been availed under certain notifications.
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• Transporters Must Carry Bill of Entry Copy and File Serial Number in EWB-01 per Rule 138A CGST Rules.

  Act-Rules : Copy of Bill of Entry to be carried by the transporter in case of Import and sr. no. of the BE is to be duly filed in EWB-01 - Rule 138A of the Central Goods and Services Tax Rules, 2017
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• GST Registration Cancellation Proceedings Terminated with New Form REG-20 Update for Tax Compliance Procedures.

  Forms : FORM GST REG-20 - Order for dropping the proceedings for cancellation of registration - Goods and Services Tax - New Form REG-20 substituted.
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• New Version of Form GST ITC-4 for Reporting Goods Sent to Job Workers Now Available for Compliance.

  Forms : FORM GST ITC-4 - Details of goods/capital goods sent to job worker and received back - Goods and Services Tax - New Form ITC-4 substituted.
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• GSTR-9: Essential Annual GST Return for Summarizing Tax Transactions and Ensuring Accurate Reporting for Compliance

  Forms : FORM GSTR-9 - Annual Return - Goods and Services Tax
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• Annual GSTR-9A Form: Simplified Tax Filing for GST Composition Taxpayers, Summarizing Transactions and Compliance.

  Forms : FORM GSTR-9A - Annual Return (For Composition Taxpayer) - Goods and Services Tax
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• Amendment in FORM GST EWB-01: Updated Options for Selecting Transportation Reason in E-Way Bill Item 7.

  Forms : FORM GST EWB-01 - E-Way Bill - Reason for Transportation shall be chosen from the list - Amendment in the item no. 7
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• Affordable Housing Construction Services Under 12% GST; Standard Rate Applies for Flats Over 60 Sqm (Heading 9954.

  Case-Laws - AAR : Rate of GST - construction services - Affordable Housing - The applicant’s case is covered under the tax rate of 12%, under Heading 9954 (Construction Services) - In case of other flats which have carpet area more than 60 sq.mtrs. the applicant would be required to pay GST at normal applicable rate.
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• Charitable trust's religious activities deemed "business" under Central and Maharashtra GST Acts, subject to tax provisions.

  Case-Laws - AAR : Charitable Trust - scope of the term 'Business' - Whether the applicant which is a charitable trust with the main object of advancement of religion, spirituality or yoga can be said to be in business so as to attract the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017? - Held Yes.
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• GST Regime Transition: No Input Tax Credit for Unutilized CENVAT Credit, Including Education and Krishi Kalyan Cess.

  Case-Laws - AAR : Input Tax Credit - transition to GST Regime - The input tax credit against unutilised cenvat credit such as Education cess, Secondary & Higher secondary Education cess & Krishi Kalyan cess lying in our books of Accounts is not available.
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Income Tax

• Assessment Order Fails to Follow Dispute Resolution Panel Directions, Appeals Allowed u/s 143(3) to Commissioner (Appeals.

  Case-Laws - HC : The impugned assessment order though stated as an order under Section 143(3) r.w.s. 144C(13) is not an order in pursuance of the directions of the Dispute Resolution Panel, but an order of assessment simplicitor under Section 143(3) from which an appeal would lie to the Commissioner (Appeals).
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• Software License and Maintenance Costs Treated as Revenue Expenditures, Not Capital Expenditures, Due to Limited Use Rights Transfer.

  Case-Laws - HC : Expenditures on procuring license for software and routine maintenance - capital expenditure or revenue expenditure - The expression ‘license’ itself denotes transfer of limited use to the acquirer thereof and there is no contrary evidence which could demonstrate that title of the software had been transferred or shifted to the assessee.
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• Transaction Value in Intra-Associated Enterprise Sales Not Uncontrolled; Original Terms Irrelevant for Arm's Length Price. TPO Approach Flawed.

  Case-Laws - AT : In an intra AE situation, the transaction value of sale of shares cannot be said to be an uncontrolled price at all. Nothing, therefore, turns on the original agreement terms and it has no relevance in determination of arm’s length price. The very approach of the TPO is thus vitiated in law.
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• Annual Lettable Value Not Applicable to Entire Property When Part Used for Personal Residence.

  Case-Laws - AT : Income from House property - the assessee has occupied part of the house for his residential purposes during the year under consideration and, therefore, the ALV for the last year for entire house cannot be adopted as ALV of the part portion of the house let out by the assessee.
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• Chartered Accountant Reprimanded for Not Disclosing Transaction Without TDS Deduction in Disciplinary Proceedings.

  Case-Laws - Other : Disciplinary Proceedings against CA - failure to make proper disclosure / reporting of the transaction on which no TDS has been deducted - punishment to “Reprimand” awarded.
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Customs

• New 24/7 Seaport Opens to Boost Trade and Streamline Customs, Enhancing Maritime Infrastructure and Reducing Delays.

  Circulars : 20th Sea port in the country where 24x7 facility would be in operation.
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• Customs Duty Recovery Confirmed for Non-Compliance with Notification 12/2012 on Rig Deepsea Treasure's Use Conditions.

  Case-Laws - AT : Recovery of customs duty forgone with Interest - actual use condition - by not putting into use the imported Rig Deepsea Treasure for petroleum operation/exploration at the Licensed oil block of ONGC, irrespective of the reasons for such non-use, there has been violation of the condition of Notification 12/2012 - demand of duty, penalty and redemption fine confirmed.
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• Amendments to Shipping Bills Allowed Post-Export for Exporter Name Changes u/s 149.

  Case-Laws - AT : Amendment in shipping bills - after export of goods - change in the name of exporter - The shipping bills issued made in the name of M/s Jyoti Structures Ltd (Exporter) and bill of lading in the name of appellant with remarks on behalf of M/s Jyoti Structures Ltd. - the amendment in the shipping bill is clearly governed by section 149 and there is no reason why amendment cannot be allowed as per section 149.
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PMLA

• Properties Not Subject to Attachment Under PML Act Section 5 Due to Lack of Crime Proceeds Involvement.

  Case-Laws - AT : The properties attached cannot be attached under Section 5 of the PML Act because the properties are not purchased from the alleged proceeds of crime. As per the provisions of Section 5(1) (c) the primary requirement for the attachment is that the proceeds of crime are likely to be concealed, transferred or dealt with in any manner.
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Service Tax

• Restoration, painting, and logo application on cylinders not taxable as 'Maintenance and Repair Service' for service tax.

  Case-Laws - AT : Classification of Services - activities of restoration and painting of cylinders and affixing logo on cylinders - the appellants cannot be held to be undertaking the services chargeable under ‘Maintenance and Repair Service’ .
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• Salt Packaging as a Service, Not Manufacturing: Liable for Service Tax.

  Case-Laws - AT : The only activity is packing of salt in retail pack not the complete manufacturing of salt by the appellant - it is liable for service tax being not a manufacturing activity.
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• SEZ Unit Wins Refund of Accumulated CENVAT Credit Despite Initial Rejection u/s 109, Finance Act 2013.

  Case-Laws - AT : SEZ Unit - Refund of accumulated CENVAT of input service - rejection on the ground that since the amount of service tax on which CENVAT credit was availed was paid under VCES Scheme, in terms of Section 109 of Finance Act, 2013, any amount paid in pursuance of declaration made under sub section 1 of section 107 was not refundable under any circumstances - Restriction in applicable in case of SEZ unit - refund allowed.
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Central Excise

• CENVAT Credit Not Denied for Hand-Written Serial Numbers on Invoices Under Central Excise Regulations.

  Case-Laws - AT : CENVAT Credit - duty paying invoices - Serial numbers instead of printed, were hand-written - Credit cannot be denied.
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• CENVAT Credit on Carbon Black Feed Stock: No Reversal Needed for Non-Dutiable Electricity Production Under Tariff Heading 27160000.

  Case-Laws - AT : Reversal of CENVAT Credit - input Carbon Black Feed Stock is a common input which is used to manufacture dutiable final product namely, Carbon Black and Electricity which falls under Central Excise Tariff Heading 27160000 on which no rate of duty is prescribed - Credit not required to be reversed.
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• CENVAT Credit Restriction of 2% CVD Applies Only to Indigenous Goods, Not Imported Coal Under Notification No. 12/2012-CE.

  Case-Laws - AT : CENVAT credit of 2% CVD - Import of Coal - the restriction is applicable only in case of indigenous goods on which the excise duty @ 2% was paid availing Notification No. 12/2012-CE, which is not a case here. - Credit allowed.
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VAT

• Court Expands Definition of "Resell" Under CST Act Section 8(3)(b); Dealers Benefit from Broader Interpretation.

  Case-Laws - HC : Mis-use of C-Form - Exemption under CST Act - The word ‘resell’ or the provisions as appearing in Section 8(3)(b) if read jointly, the word ‘resell’ would take an expansive meaning. Thus, when there can be two interpretations viz. (i) the strict interpretation of ‘resell’ and (ii) the expansive interpretation of ‘resell’, the benefit must go to the dealer - no further tax is required to be paid.
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Case Laws:

• GST

• 2018 (9) TMI 236
  Rate of GST - construction services - Affordable Housing Project - Whether the construction services provided under the project “Prajapati Magnum” qualifies for the reduced CGST Rate of 6% as provided in Sl. No 3 - item (v)- sub item (da) vide Notification 01/2018- CT (Rate) dated 25.01.2018? Held that:- The applicant’s case is covered under the tax rate of 12%, under Heading 9954 (Construction Services), (v) (da) of above mentioned Notification No, 11/2017, as amended since the project undertaken by them falls under the definition of “Affordable Housing” as stated by them in the application - The benefit of reduced rate would be available to them only in the cases of supply effected after 25.01.2018 i.e. the date on which Notification 1/2018-CentraI Tax (Rate) was issued and the benefit of this reduced rate would be applicable in case of only those flats which are of carpet area upto 60 sq mtrs. In this scheme which is covered in the category of affordable housing - In case of other flats which have carpet area more than 60 sq.mtrs. the applicant would be required to pay GST at normal applicable rate. Ruling:- The applicant’s case is covered under the tax rate of 12%, under Heading 9954 (Construction Services) - In case of other flats which have carpet area more than 60 sq.mtrs. the applicant would be required to pay GST at normal applicable rate.

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• 2018 (9) TMI 235
  Charitable Trust - scope of the term Business - Whether the applicant which is a charitable trust with the main object of advancement of religion, spirituality or yoga can be said to be in business so as to attract the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017? Whether the applicant which is a charitable trust with main object of the advancement of religion, spirituality or yoga is liable to registration under the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017? Whether sales of spiritual products which is incidental / ancillary to main charitable object of the applicant can be said to be business of the applicant in terms of the definition in Section 2(17) of the Central Goods and Service Tax Act 2017 and option provision Of Maharashtra Goods and Service Tax Act 2017? Whether the sale of spiritual products can be said to be supply under Section 7 of the Central General Sales Tax Act, 2017 and equivalent provision of the Maharashtra Goods and Service Tax Act, 2017 so as to attract GST? Held that:- There is no doubt that applicant Trust is a person as defined u/s 2(84) of the GST Act - the applicant is engaged in Trade and Commerce by way of selling of goods and services and are very well covered under the definition of business as given under Section 2(17) of the CGST Act and in view of this, their activities are very well covered within the scope of supply as given in Section 7 of the CGST Act, 2017 and are therefore liable to tax as applicable in respect of goods supplied or services rendered. The applicant is registered under Section 12AA of the Income Tax Act but the activities being undertaken by the applicant in respect of services being provided by them are not covered under the definition of charitable activities - From the information provided by the concerned Officer/ Jurisdictional officer, we see that applicant trust generates income from sale of goods, provides for accommodation and foods in various Shibir/Satsang on payment/ chargeable basis, The Charitable Trust organize Shibir/Satsang for participant and they are not free for the participants, as the trust charge some amount from the participants in the name of accommodation or participation. Satsang is the only activity provided by the applicant free of cost to the participant. As such arranging residential or non-residential Satsang /Shibir/yoga camps by accepting/charging some amount from the participants will not be covered under charitable activities within the meaning of definition provided at Definitions at 2 (r) of notification No. 12/2017 Central Tax (Rate) dated 28/06/2017 of the expression charitable activities and in particular advancement of religion, spirituality or yoga. Ruling:- The applicant is a charitable trust with the main object of advancement of religion, spirituality or yoga can be said to be in business so as to attract the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017. The applicant is liable to registration under the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017. The sales of spiritual products which is incidental / ancillary to main charitable object of the applicant can be said to be business of the applicant in terms of the definition in Section 2(17) of the Central Goods and Service Tax Act 2017 and option provision of Maharashtra Goods and Service Tax Act. The sale of spiritual products can be said to be supply under Section 7 of the Central General Sales Tax Act, 2017 and equivalent provision of the Maharashtra Goods and Service Tax Act, 2017 so as to attract GST.

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• 2018 (9) TMI 234
  Input Tax Credit - transition to GST Regime - transitional provisions u/s 140 - Whether input tax credit is available against unutilised cenvat credit such as Education cess, Secondary Higher secondary Education cess Krishi Kalyan cess lying in our books of Accounts? - Sub-rule (5B) of Rule 3 of the CCR. Held that:- Education Cess (EC) was levied under the provisions of the Finance Act, 2004 with effect from 10.9.2004 and the CCR vide Rule 3(1) notified that the manufacturer or provider of taxable (output) service shall be allowed to take credit of EC. The CCR also mandated that such credit of EC could be utilized only for payment of EC on excisable goods or taxable services. Under both, the service tax laws and the central excise laws, EC was not supposed to be used for making duty/ tax payments - Similarly, Secondary and Higher Education Cess (SHEC) was levied by the Finance Act, 2007 and the CCR vide Rule 3(1) notified that the manufacturer or provider of taxable (output) service shall be allowed to take credit of SHEC. The CCR also mandated that such credit of SHEC could be utilized only for payment of SHEC on excisable goods or taxable services. Under both, the service tax laws and the central excise laws, SHEC was not supposed to be used for making duty/ tax payments. The express provisions have been made in the Cenvat Credit Rules from time to time that credit availed in respect of EC, SHEC and KKC can be used for making tax/duty payments only against ECT SHEC and KKC, respectively. The CCR has also expressly provided that items in respect of which CENVAT credit is available, would not be utilized for payment of EC SHEC and KKC. Thus, there was a clear demarcation of the credit in respect of EC, SHEC and KKC. Under GST, there is no levy of the three types of cesses - all the three types of cesses cannot be treated as excise duty or service tax. In view thereof, the CENVAT credit as referred to in subsection (1) of section 140 would not include the credit in respect of KKC. Therefore, the credit of taxes which are not covered in the definition of eligible duties in Section 140 cannot be availed. Ruling - The input tax credit against unutilised cenvat credit such as Education cess, Secondary Higher secondary Education cess Krishi Kalyan cess lying in our books of Accounts is not available.

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• 2018 (9) TMI 233
  Liability of GST - construction work done under the contract - who is liable to pay GST? - Held that:- The dispute is one concerning the agreement between the petitioner and the respondents, which vide Clause 24 provides for resolution of such disputes by Arbitration - In view of the aforesaid remedy available to the petitioner for seeking an arbitration, we are not inclined to interfere in the matter - petition dismissed on the ground of alternative remedy.

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• 2018 (9) TMI 232
  Correction in the order dated 31st July, 2018 - On 31st July, 2018, the respondents were granted time for filing counter affidavit, but there arose error due to inadvertence - Held that:- The error is typographical, apparent on record - The application is allowed.

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• Income Tax

• 2018 (9) TMI 231
  Permanent Establishment in India - AO non discharging the burden of proving that the Appellant had a PE in India - Held that:- Permanent establishment for the purpose of convention meant a fixed business through which the business of the enterprise was wholly or partly carried on. Assessee was not having fixed place of business in India. Hence, the First Appellate Authority rightly held that the provisions of Article 5 (1) were inapplicable. Tribunal still deems it fit and proper to remand the case. If there was indeed no material on record, then, the above conclusion was impossible to be reached. There ought to be some predictability and when given facts and circumstances give rise to certain legal principles which parties assert are applicable, then, as a last fact finding authority, the Tribunal could have summoned all records and thereafter should have arrived at a categorical conclusion whether the First Appellate Authority was right or the Assessing Officer. Admittedly not been done, we are of the firm opinion that the Tribunal failed to act as a last fact finding authority. It failed to discharge its duty and function expected of it by the law. Answering question nos.1 and 2 as reproduced above in favour of the Assessee and against the Revenue.

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• 2018 (9) TMI 230
  Addition u/s 41 - Profits chargeable to tax - Held that:- In the present case there was no unilateral act by way of remission or cessation by the assessee, for the respondent-assessee had not written off the outstanding amount of Rs. 2,61,72,160/- payable to M/s. P.T. Polysindo. This is also not a case where benefit in any form or in cash was received by the respondent-assessee. Hence, the first part of Clause (a) to Section 41(1) of the Act, would not apply. In the present case the respondent-assessee has not obtained any money or benefit under the first part or the deeming part of Clause (a) to Sub-section 1 to Section 41 of the Act. There was no remission or cessation of liability. - decided in favour of assessee

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• 2018 (9) TMI 229
  Settlement Commission order u/s 245D(2C) - petitioner seeks for a direction to the 1st respondent to reconsider the said application and to pass fresh orders under Section 245D(2C) - whether the order passed by the Settlement Commission u/s 245 D(2C) needs any interference by exercising this Court's discretionary jurisdiction under Article 226 of the Constitution of India - Held that:- The phrase at any stage of a case relating to him used under section 245C is significant, which would only indicate that the case relating to the assessee in respect of a particular assessment year, in which, a full and true disclosure of income has not been disclosed before the AO etc. The bar provided under section 245K(2) for making subsequent application under section 245C is to be construed as a bar in respect of such assessment year, which is already the subject matter in the earlier application, and not in respect of any future application in respect of any other assessment year/years, being not the subject matter of the application already filed under section 245C, which was allowed to be proceeded with under sub-section (1) of Section 245D. Section 245K(2) is not imposing total bar on subsequent application, as apprehended by the petitioner in this case. On the other hand, such total bar is applicable only in respect of cases falling under Section 245K(1). As already stated supra, the bar under Section 245K(2) is against an application in respect of the same assessment year, so long as the applicant has not suffered any such disqualifications as stated u/s 245K(1). Thus, find that the apprehension of the petitioner about the anticipated total bar in approaching the commission in future is not well- founded. Settlement Commission, impugned in this writ petition, does not warrant any interference, more particularly, by exercising the discretionary jurisdiction of this Court under Article 226 of the Constitution of India.

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• 2018 (9) TMI 228
  Reopening of assessment - referral fees being paid by the assessee to doctors - Held that:- The assessee is a private hospital. It is paying fees to doctors for referring patients to it. Prima facie, it appears that, such a payment could not have been made in law. However, strictly on the provisions an AO need not address itself on the ethics of the payments made. There is public interest involved. Apparently, the transactions disclose that, a private hospital is paying doctors fees for referring patients to it and claiming such payments as expenditure. Whether such payments vitiate any code of ethics for doctors and a private hospital should also be considered. Without entering in the ethics of the payments, it would be appropriate to hear the State Government on the subject as it has promulgated the West Bengal Clinical Establishments (Registration, Regulation and Transparency) Act, 2017. The accounts disclosed in the writ petition also allow one to take a prima facie view that, payments made by the assessee to the doctors are in contravention of the provisions of the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002. Learned Advocate General for the State is requested to take instructions as to whether the payments made by a hospital to doctors for referring patients to the hospital are permissible under the provisions of the Act of 2017 and under the Regulations of 2002, or not.

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• 2018 (9) TMI 227
  Valuation being made on incomparable basis - method of valuation - Tenancy rights - Did the authorities take extraneous materials into consideration while passing the impugned order ? - To what relief or reliefs are the parties entitled to ? - Held that:- None of the authorities cited with regard to valuation postulates that, the appropriate authority must value a property on rental basis when it doubts the tenancy. In the present case, the tenancy itself has been doubted in the impugned order. There are good reasons for doubting the tenancy. The respondent no. 4 and 5 are the owners. As owners they had entered into an agreement to sell the flat to the petitioner. The petitioner was and still is in possession and occupation of the flat. At the time of the agreement for purchasing the flat, the petitioner was in employment of the respondent no. 6. The respondent no. 6 is the tenant. The petitioner had superannuated from service with effect from January 1, 2007. In the event the petitioner is allowed to purchase the flat, then, it will remain in possession. The flat will have a tenancy without the tenant being in possession. The petitioner is no longer the employee of the respondent no. 6 since January 1, 2007. Appropriate authority had sufficient reasons not to recognize the tenancy. An impugned order is required to be adjudged on the basis of the reasons contained therein. However, it is permissible to consider the materials placed before the appropriate authority to decide whether the view expressed in the impugned order is sustainable or not. A Writ Court needs not interfere with the view expressed in an impugned order, if such view is plausible on the basis of the materials made available. It is not called upon to be an appellate authority even if there is no provision for appeal against the impugned order. As discussed above, I find no infirmity in the view expressed by the appropriate authority questioning the tenancy. No infirmity in the view expressed by the appropriate authority questioning the tenancy. at the time of valuing the property, the appropriate authority can consider an encumbrance to have been created for the purpose of defeating the provisions of Chapter XX-C of the Act of 1961 and value the property as if the same was without such encumbrance. None of the authorities cited, disallows such a course of action. All the authorities cited with regard to deployment of the rental method for the purpose of valuation are on a fact situation where, the tenancy was not doubted. Authorities of Court are not be read as statues. Deviation of any fact scenario can affect the applicability of the ratio of the cited authority on the subject matter to be decided. In view of the discussions above, it cannot be said that the appropriate authority took extraneous materials into consideration while passing the impugned order. The second issue is answered in the negative and against the petitioner.

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• 2018 (9) TMI 226
  Penalty u/s 271C - failure to deduct and pay to the Government TDS - Held that:- On the question of hire and rental charges, the learned Senior Counsel points out that the rent on machinery or plant or equipment was introduced first with the Finance Act, 2007 with effect from 1.6.2007. Hence, we are of the opinion that between financial years 2003-04 to 2006-07, there can be no allegation raised of failure to deduct tax at source. For the hire charges and the rental charges are concerned, the issue assumes relevance only for the financial year 2007-08 which has to be looked at. On the question of TDS, the learned Senior Counsel also has a case that even before the present amendment bringing in the proviso to Section 201(1), there was a circular issued by the Central Board of Direct Taxes, which was referred in Hindustan Coca Cola Beverage P. Ltd. v. Commissioner of Income Tax [2007 (8) TMI 12 - SUPREME COURT OF INDIA]. With respect to the payments of uplink charges and backhaul link usage charges, the Tribunal shall examine an expert as produced by the assessee and the Department shall be permitted to cross examine the expert as also produce any further evidence or witnesses on their behalf. The issue shall be decided on the basis of the decision in Bharati Cellular Ltd. [2010 (8) TMI 332 - SUPREME COURT OF INDIA]. It is made clear that there can be no liability on hire charges and camera rental payments for the financial years 2003-04 to 2006-07. The order of the AO as confirmed by the appellate authority is deleted for the said years. The Tribunal shall pass appropriate orders as per the directions issued. The Income Tax Appeals are remanded for fresh consideration as per the directions hereinabove. The rental charges and hire or equipment charges shall be sustained only for the financial year 2007-08, the assessment year of which is 2008-09. However, the assessee shall be given an opportunity to produce sufficient evidence as per the circular aforementioned on which appropriate orders shall be passed on the liability of the assessee.

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• 2018 (9) TMI 225
  Disallowance of expenditure for security at tea gardens - Held that:- If less expenditure has been disallowed or the entire expenditure has not been disallowed, it is, in our opinion, a plain and simple question of fact. On the alleged failure to make disallowance, we do not find any perversity involved. A remedy if, at all, lay in a further appeal on a question of fact. But the law does not allow any such further appeal. Under Section 260A, we cannot allow this question to be raised. Payment of alleged rent to Dakorji Properties Pvt. Ltd - premises not been transferred to Dakooji Property Pvt. Ltd. by the actual owners of the property, a dispute was going on and the keys of the premises were lying with the police ? - Held that:- We find on an examination of the order of the Tribunal that all these factual issues have been answered in favour of the assessee. Now, when these facts are in favour of the assessee, it is not within the domain of a Court exercising jurisdiction under Section 260A to enquire into the correctness of that fact finding and return a contrary finding that the assessee was not a tenant, and was not in using the premises for business purposes, overturning the ruling of the Tribunal. Benefit conferred on the employees on superannuation or was a retirement benefit:- We find on examination of the order of the Tribunal that its decision was based on BHARAT EARTH MOVERS VERSUS COMMISSIONER OF INCOME-TAX [2000 (8) TMI 4 - SUPREME COURT] where held that the liability was not a contingent liability. In that case, the Supreme Court was concerned with beneficiary schemes for encashment of leave of the assessee company Bharat Earth Movers. In this case a scheme for medical benefit post retirement was involved. The tribunal treated the liability as accrued and to be discharged in the future, based on the above Supreme Court decision. In our opinion, this finding of the tribunal is based on standard accounting principles and consequential application of the law - no infirmity in the reasoning or conclusion reached by the Tribunal.

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• 2018 (9) TMI 224
  Claim of the appellant for write off bad debts relating to rural branches denied - Held that:- In the present case, it is clear that the bank had made a provision insofar as the rural advances which evidenced from the books of accounts itself was Rs. 117, 86, 00, 000/-. The claim for actual write off for the subject assessment year is Rs. 24, 53, 000/-, which is far lesser than the provision. Hence, the proviso definitely becomes applicable and the claim has to be restricted only to such amounts exceeding the provision. In the present case since the provision exceeds the actual written off amounts, there could be no claim raised. FAA and the Tribunal to have correctly disallowed the claim under clause (vii) of Section 36(1) for reason of the provision made under clause (viia) of Section 36(1), relating to the business of rural branches being in excess of the claim for actual write off made for the previous year to the assessment year. Decided in favour of the revenue and against the assessee.

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• 2018 (9) TMI 223
  Disallowance being the liabilities for business expenditure on the ground that they relate to earlier previous year - Held that:- Assessing officer had spoken about crystallising of expenditure during the year previous to the relevant previous year. This was on the basis of the accounting practice followed by the assessee. The factum of receipt of bills did not matter according to the tribunal. We are of the view that the tribunal had taken a plausible view. The issue involves more questions of fact and principles of accounting than law Addition u/s 14A - investment of the assessee’s surplus fund in securities, stocks, specified bonds etc - Held that:- It does not seem that the point the income from shares, securities etc., was business income was raised before the tribunal. At least, the order of the tribunal does not discuss this point at all. It has been raised before us. We can distinguish the two cases cited by stating that in those cases the shares, securities etc. were used for trading. They were used as trading assets. We reject the contention of the assessee. In this case, these shares, securities etc. on which dividend income was earned, were purchased compulsorily by the assessee in obedience to the direction of the Reserve Bank of India and were different from those which are bought and sold for the purpose of profit making. These assets of the assessee could not be considered as its trading assets. None the less investment in shares, securities etc. was so much an integrate part of the business of the assessee, that the business expenditure could not be segregated into parts representing expenses for earning dividend and other expenses. If for convenience and speedy disposal of cases one per cent of the expenses is deducted as attributable to earning exempted income it cannot be said that it is a bad practice. At times, even damages are computed on the basis of approximation and accepted by the Court. The calculation of the exact expenses incurred for earning dividend may not be theoretically possible. Therefore, computation on the basis of one per cent of the total business expenditure is reasonable in our view. This point fails. Provident fund contribution by assessee beyond the due date but before filing their return - Held that:- Under Section 43B any sum payable by the assessee as an employer by way of his contribution to any provident fund can be claimed as a deduction in the previous year in which the sum was actually paid by him by the first proviso. Time to make such payment is extended by the first proviso till the filing of the return of income tax under Section 139(1) of the said Act in respect of the previous year in which the liability to pay such sum was incurred. Hence, by using the expression liability incurred the legislature permitted the assessee to deposit the money with the return for the year in which the liability was incurred irrespective of the fact whether payment was made or not in that previous year. In Commissioner of Income-Tax, Circle –I, Kolkata Vs. Vijay Shree Ltd. [2011 (9) TMI 30 - CALCUTTA HIGH COURT]the Court has allowed the deduction on provident fund contribution made beyond the due date for its deposit but made before the due date for filing the assessee’s return for the previous year when the liability was incurred. Thus, the order of the tribunal relating to the above questions is erroneous and is set aside. The matter is remanded to the assessing officer to make a computation in terms of the observations made in this judgment and order and determine the income of the appellant for the assessment year 1999- 2000, within three months of this order

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• 2018 (9) TMI 222
  Order of assessment in pursuance of directions of the Dispute Resolution Panel - variations proposed in the draft order - Objection filled within period of limitation - appeal-able order u/s 246(1)(a) - Held that:- In a case where objection is received, the Dispute Resolution Panel might issue such directions as it might think for the guidance of the Assessing Officer to enable him to complete the assessment [Section 144C(5)]. The Dispute Resolution Panel may also make such further enquiry as it thinks fit or cause any further enquiry to be made by any Income Tax Authority and report the result of it to the Dispute Resolution Panel before issuing any directions, referred to in Section 144C(5). As found by the Dispute Resolution Panel, an objection is to be filed by an aggrieved assessee within thirty days from the date of receipt of the draft assessment order. Dispute Resolution Panel has no power and/or authority and/or jurisdiction to condone the delay in filing the objection. When an objection is filed before the Dispute Resolution Panel beyond the stipulated time of thirty days from the date of receipt of the order, there is no objection before the Dispute Resolution Panel in the eye of law. An order of rejection of an objection on the ground of the same being barred by limitation is not a direction under sub-section 5 read with sub-section 6 to Section 144C. Though the impugned order dated 10.11.2016 rejecting the objection on the ground of the bar of limitation is captioned as a direction under Section 144C(5)is not in fact a direction under Section 144C(5). The quoting of a wrong provision in an order is a mistake apparent on the face of the record and, therefore, inconsequential. The impugned assessment order though stated as an order under Section 143(3) r.w.s. 144C(13) is not an order in pursuance of the directions of the Dispute Resolution Panel, but an order of assessment simplicitor under Section 143(3) from which an appeal would lie to the Commissioner (Appeals). The learned Single Judge rightly dismissed the writ petition and remitted the appellant to his remedy of appeal before the first appellate authority. The time granted to the appellant by the learned Single Bench to file an appeal before the First Appellate Authority as against the impugned order passed by the second respondent is extended for a further period of four weeks from date. The appeal is, accordingly, dismissed.

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• 2018 (9) TMI 221
  Penalty proceedings u/s 271(1)(c) - passing of specific order - whether noting in the file would not be sufficient for dropping a penalty proceeding, which is proposed by the assessing officer? - Held that:- There is no dispute on the question that penalty proceeding is an independent proceeding under the Income Tax Act, 1961 and the proposal for initiating such proceeding does not by itself constitute initiation of such proceeding. In this case what we find is a noting by the assessing officer, which we have quoted in the preceding part of this judgment. This noting suggests dropping of the proceeding itself. But the commissioner’s view was that no formal order was passed in dropping the proceeding for initiation of the same. This noting, in our opinion, has all the attributes of a formal order. Since the assessing officer has taken a conscious decision not to proceed with the penalty proceeding and the Tribunal did not find any error in the course which was taken by the assessing officer, we do not find any substantial question of law to be involved in this appeal.

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• 2018 (9) TMI 220
  Expenditures incurred by the assessee towards procuring license for software and routine maintenance - capital expenditure or revenue expenditure - Held that:- In this appeal the actual agreement between the assessee and supplier of software packages is not before us. The Tribunal, however, opined that the expenditure incurred towards procuring license of software could not create new assets. The expression ‘license’ itself denotes transfer of limited use to the acquirer thereof and there is no contrary evidence which could demonstrate that title of the software had been transferred or shifted to the assessee. The Tribunal, came to finding of fact while holding that expenditure incurred towards routine maintenance and procuring license of software could not be treated as capital assets. There is no perversity involved in such finding. No substantial question of law involved in this appeal.

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• 2018 (9) TMI 219
  Discrepancies in valuation of stock - stock valuation was lower in the tax audit report, but the assessee wanted the Revenue to go by the tax audit report only - Held that:- No explanation was given and no attempt was made to reconcile the differences. The stock registers were not produced except claiming that there is a variation due to lack of knowledge of operating computer software by the accountant. No variation statements were filed before A.O. or the ld. CIT(A) or before us. Illustrations were sought to be given to demonstrate the as to the inappropriateness of valuing the stock as Average cost method. In our considered view the burden of proof lay on the assessee to explain the variation and this was no discharged. The assessee filed a printout of the stock journal register and item register for the relevant period before the First Appellate Authority and has sought to explain the differences by way of examples. This, in our opinion, does not prove the case of the assessee. The assessee could not controvert the finding of the First Appellate Authority that he has not maintained carat wise details of the stock. In any event, opening stock as well as the closing stock for all the three assessment years have been valued on the same principles i.e. average stock method. - Decided against assessee.

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• 2018 (9) TMI 218
  Deemed dividend addition u/s 2(22)(e) - as argued on behalf of the assessee that computation of accumulated profit of the two companies was not done in a proper manner - Held that:- We find from the order of the assessing officer that he had arrived at the figures upon going through the assessment records of these two companies. We are of opinion that the assessee may be given chance once more for determination of this limited issue. AO ought to undertake a fresh exercise and verify if the said sum exceeds the accumulated profits of the respective companies or not. We accordingly confirm the finding of the assessing officer, subsequently sustained by the two appellate fora that the sums representing loan in the books of the assessee received from the two corporate entities ought to be added as deemed dividend to the assessee’s income but this shall be subject to computation of accumulated profit of the two companies - remand the matter to the assessing officer for the limited purpose of determining as to whether the sums directed to be added as deemed dividend in his order exceeds the accumulated profit of the respective companies or not

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• 2018 (9) TMI 217
  Addition of interest on share application while computing book profit under section 115JA - Interest on share application voluntarily disclosed as income by the assessee under VDIS - Held that:- As per the provisions of section 68 of the Finance Act, 1997, the amount of income voluntarily disclosed under VDIS shall not be included in the total income of the declarant assessee for any assessment year under the Income Tax Act - since the said provisions are overriding as a result of non-obstante clause contained in section 64 of the Finance Act, 1997, we find merit in the contention of assessee that the interest on share application voluntarily disclosed as income by the assessee under VDIS for A.Y.1994-95 could not be included in the total income of the assessee for the year under consideration even for the purpose of computing book profit under section 115JA whereby an amount equal to 30% of the book profit is deemed to be the total income of the assessee chargeable to tax for the relevant previous year. We, therefore, find no infirmity in the order of the ld.CIT(Appeals) deleting the interest on share application while computing book profit under section 115JA

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• 2018 (9) TMI 216
  Bogus purchases - estimation of profit - Held that:- The notices were issued by the AO u/s. 133(6)of the Act. One notice returned unserved and from the remaining two no reply was received by the AO. AO had issued these notices in the address given by the assessee. Also we find that the AO does not dispute the sales made by the assessee. In such a context, only the profit embedded in such bogus purchases has to be estimated and brought to tax. In the case of CIT vs. Simit P. Sheth (2013 (10) TMI 1028 - GUJARAT HIGH COURT) has held that where purchases were not bogus but were made from parties other than those mentioned in the books of account, not entire purchase price but only profit element embedded in such purchases can be added to income of the assessee. Set aside the order of the Ld. CIT(A) and direct the AO to estimate the profit @ 12. 5% on the disputed purchases of Rs. 36, 73, 217/- and bring to tax Rs. 4, 59, 150/- in place of Rs. 36, 73, 217/- done by him.

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• 2018 (9) TMI 215
  Short Term Capital Gain on sale of debt securities - Benefits of Article 13(4) of the India-Singapore DTAA could not be denied on account of limitation prescribed under Article 24 of the DTAA Income in question is held to be exempt and not taxable, the aspect raised in this appeal pertaining to quantification of such income becomes academic in nature. Since we have upheld the order of the CIT(A) treating such income to be in the nature of Capital Gains and falling within the beneficial provisions of Article 13(4) of the India-Singapore DTAA, the dispute relating to quantification of such income is rendered infructuous and accordingly, the Ground raised by the assessee is dismissed as infructuous. In the result, appeal of the assessee is dismissed.

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• 2018 (9) TMI 214
  Disallowance of expenses relatable to exempt income u/s 14A r.w.r. 8D to the extent of dividend income earned from Mutual Funds - disallowance to the extent of dividend income earned from Mutual Funds only - Held that:- Disallowance of interest pertaining to investment in PGL deleted by the CIT(A) on the ground that section 14A does not apply in respect of strategic investment. We find that the CIT(A) excluded the strategic investment made by assessee in PGL to the extent of Rs. 5.16 crores and expenses relating to this investment i.e. interest under Rule 8D(2)(ii). The assessee agreed that the relief granted by the CIT(A) as regards to the disallowance pertaining to investment in PGL shall be reversed in the light of the decision of the Hon’ble Supreme Court in the case of Maxopp Investment Ltd. vs. CIT (2018 (3) TMI 805 - SUPREME COURT OF INDIA). Disallowance to exempt income earned by the assessee to the extent of dividend income earned from mutual fund - Held that:- We find that this issue is squarely covered in favour of the assessee by the decision of Cheminvest Ltd. vs. CIT (2011 (11) TMI 267 - DELHI HIGH COURT) the expression "does not form part of the total income" in Section 14A of the envisages that there should be an actual receipt of income, which is not includible in the total income, during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income. In other words, Section 14A will not apply if no exempt income is received or receivable during the relevant previous year. CIT(A) has rightly decided the issue that the disallowance under section 14A read with Rule 8D of the Rules cannot exceed the amount of exempt income and respectfully following the Hon’ble Delhi High Court, we affirm the order of CIT(A) on this issue. Disallowance of interest expense - Held that:- We find that the AO has computed the disallowance as is clear from the above chart, which clearly shows that this is double disallowance of interest for the reason that once the entire interest expense is disallowed in respect of investment in PGL, the AO cannot disallowed the part of the same interest in respect of dividend earned on mutual funds. It is settled law that for the purpose of disallowance of interest expense under Rule 8D(2)(ii) of the Rules, the interest expenses is to be taken as net interest and not gross interest. We direct the AO to restrict the disallowance to the extent of net interest only. The AO recompute the disallowance - Appeal of Revenue is partly allowed.

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• 2018 (9) TMI 213
  Revision u/s 263 - eligible for deduction under section 54F - Held that:- AO had enquired about the source of income of the assessee and assessee had replied regarding each and every source of income and it cannot be said that on this share trading business no enquiry was conducted by the Assessing Officer. Facts available on record on the contrary spell out that adequate enquiry was conducted by AO and entire source of income was in the knowledge of the Revenue. Assessee has not only stated that he was into share trading but also stated that for the last eight years he is not doing share trading business and he has also provided address of the trading office which he agrees that is still in existence at Ahmedabad. These evidences clearly show that factual verifications were conducted by the Assessing Officer. Even after insertion of Explanation 2(a) to section 263 of the Act, the wisdom enshrined in various judicial pronouncements shall still hold good, that is to say that even now also the Commissioner of Income Tax cannot have unfettered power or unlimited power under section 263 of the Act. If such power is allowed, then Assessing Officer shall never be applying his mind in a free and judicious way which he is required to do. Furthermore, if unlimited power is assigned to the Commissioner of Income Tax through Explanation 2 to section 263 of the Act, that would lead to innumerable litigations. So far as deduction under section 54F is concerned, the order of the Pr. Commissioner of Income-tax passed under section 263 is valid in view of the proviso to section 54F whereas regards the other issues are concerned, they have been already examined by the Assessing Officer and for them there is no applicability of revisional jurisdiction under section 263 by the Pr. Commissioner of Income-tax and to that extent i.e. share trading business of the assessee and the loan transaction from brother of the assessee, for these issues, we quash the order under section 263 of the Act.

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• 2018 (9) TMI 212
  Arm’s length price adjustment in respect of consideration for sale of shares in an Indian company - assessee company to another non-resident entity, is unsustainable in law - Held that:- On a technical note, a price decided, even if that be so, between the associated enterprises-as the assessee and the buyer of shares are, can never be a valid CUP input for the simple reason that it is only the transaction value for transactions between the independent enterprises that the transaction value can be considered as a comparable uncontrolled price. - In an intra AE situation, the transaction value cannot be said to be an uncontrolled price at all. Nothing, therefore, turns on the original agreement terms and it has no relevance in determination of arm’s length price. The very approach of the TPO is thus vitiated in law. In the present case, the company in which shares were transferred was not in the winding up nor was there any reasonable prospect of its going into liquidation. In these circumstances, the adoption of Net Asset Value or book value was not really warranted. We reject the same. Given the fact that it was treating as a going concern, the valuation on the basis of future earnings was quite justified. To this extent, we disapprove the stand of the authorities below. However, since the TPO has not examined that aspect of the matter at all and simply proceeded on the basis of net asset value, we also deem it fit and proper to remit the matter at the assessment stage in the light of fresh determination of arm’s length price in the light of our directions above. TPO shall discard the computations based on Net Asset Value and adopt an appropriate method of determining the ALP of shares sold by the assessee to its AE, and if such an ALP is found to be more than the transaction value of US $ 35,08,000, the ALP adjustments will be required. The matter is thus required to be adjudicated afresh in a fair and reasonable and legally sustainable manner. While doing so, he will decide the matter in accordance with the law, by way of a speaking order and after giving a fair and reasonable opportunity of hearing to the assessee.

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• 2018 (9) TMI 211
  Invoking section 79 - loss cannot be carry forward and set off against the income of the subsequent year - Held that:- So far as the instant assessment year is concerned, the Assessing Officer is not competent to give a finding that the loss cannot be carry forward and set off against the income of the subsequent year. Accordingly, the matter is remanded back to the file of the Assessing Officer to remove the direction relating to denial of carry forward and set-off of loss. However, our direction should not be interpreted to be any reflection on the merits of invoking section 79 of the Act, which prohibits carry forward and set off of loss in specified situations. The same shall be open to be considered by the Assessing Officer in the subsequent year of actual set-off while evaluating the claim of the assessee for set off of the impugned business loss. We set aside the order of the CIT(A) and direct the Assessing Officer to expunge the directions so far as it relates to denial of carry forward and set off of loss. Thus, on this aspect the assessee succeeds for statistical purposes only. Disallowance u/s 14A - Held that:- We find that before the Assessing Officer also, assessee had asserted that it has neither earned any tax fee income and nor debited any expenditure relating to equity investment of Rs. 10,00,00,030/- made in the shares of Ginger Enterprises P. Ltd. See case of Cheminvest Limited vs. CIT [2015 (9) TMI 238 - DELHI HIGH COURT].We also find no error on the part of the CIT(A) in directing the AO to retain the suo moto disallowance made by the assessee in this regard if any. Therefore, in our view, the ground raised by the assessee as well as the Revenue is liable to be dismissed. Addition earned by the assessee on account of providing common amenities and maintenance charges from the tenants - Held that:- At the time of hearing, it was put across before the learned representative to establish that the impugned receipts by way of provision of amenities, etc. was contracted with the respective tenants by separate agreements. There was no material on record to establish the same and, therefore, factually speaking the amounts received by the assessee towards such amenities is to be taken as a part of rental arrangement. Thus, the ratio of the decision of Delhi Bench of the Tribunal, in the case of Sir Sobha Singh & Son (P.) Ltd (2013 (10) TMI 1491 - ITAT DELHI), is not attracted to the facts of the present case. In our view, the disallowance made by the Assessing Officer has been rightly sustained by the CIT(A) which we hereby confirm. Thus, on this aspect the assessee fails.

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• 2018 (9) TMI 210
  Addition under the head Income from House property - AO has made the addition in the ALV of the property in question on the ground that in the immediately preceding year the assessee has declared the rental income as against the annual rental income during the year under consideration - Held that:- CIT (A) has given the finding that the ALV of the last year was determined for the entire house whereas the assessee has occupied part of the house for his residential purposes during the year under consideration and, therefore, the ALV for the last year for entire house cannot be adopted as ALV of the part portion of the house let out by the assessee. Hence we do not find any error or illegality in the order of the ld. CIT (A). Disallowance under section 14A - Held that:- Though we find merits in the contention of the ld. D/R that the quantum of exempt income is relevant only for the indirect expenditure apportioned for earning the exempt income and not the interest expenditure which has been incurred for making the investment in the shares and security yielding exempt income. Addition on the value of excess stock found during search and survey operation - accepting the less valuation of excess stock as on 31st March, 2013 - whether the entire stock which was found excess at the time of survey remained as unsold till 31st March, 2013 so that the assessee can take the benefit of reduction in the prevailing price of gold against the surrendered income on account of unexplained investment in the stock? - Held that:- So far as the applicability of amended provisions of section 115BBE of the Act is concerned, the same is applicable with effect from 1.4.2017 and not prior to that. Since this issue was not considered by the authorities below as the AO disallowed the claim of the assessee by placing reliance on the provisions of section115BBE and the ld. CIT (A) has accepted the prevailing price of gold as on 31st March, 2013 without verifying the actual details of the remaining stock out of the excess stock found at the time of survey, therefore, this factual aspect of the matter is required to be verified and examined by considering all the relevant details at the level of the AO. Accordingly, we set aside this issue for limited purposes of verification and examination of the quantity of stock which was remained unsold as on 31st March, 2013 out of the total excess stock found at the time of survey.

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• 2018 (9) TMI 209
  Addition towards undisclosed income relating to alleged deposits made in all the three years under consideration in a co-operative society - Held that:- The manner of repayment of money, if any, has also not been examined. Since the deposits do not stand in the name of the assessee, effectively the assessee will not have control over the deposits. However, in respect of loan taken, the borrowers would be liable to repay the loans, since the society/bank can always initiate legal action against the borrowers for recovery of loans. A prudent man cannot be expected to enter into such kind of deals. The loans taken through accounting channels can be repaid only through accounting channels only. We have noticed that the loans taken by the relatives have been repaid by them. Neither Shri S.K. Tardale nor the Assessing Officer has brought on record any material to show that the loan amounts have been repaid out of the deposits alleged to have been received from the assessee. Hence the presumption drawn by the AO that the assessee has indulged in the practice of converting the black money into white may not be correct in the facts and circumstances of the case. Apart from the loan transactions, the AO has relied upon the statements given by Shri S.K. Terdale. We have noticed earlier that the statements given by him were not substantiated and hence not reliable. We have also noticed that the assessee cannot be expected to prove a negative fact. Accordingly we are of the view that the statements given by Shri S.K. Terdale cannot be taken support by the Assessing Officer. The assessee has not accepted the statements of Shri S.K. Terdale. D.R mentioned about the failure of the assessee to avail cross-examination. We agree with the contentions of the ld A.R that there was no requirement to make any cross examination, since the assessee was not required to prove any negative fact. Hence, for the detailed reasons, discussed in the preceding paragraphs, we are of the view that none of the evidences support the case of the Assessing Officer. Accordingly we set aside the orders passed by ld CIT(A) on this issue in all the three years under consideration and direct the AO to delete the impugned additions made in all the three years under consideration.

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• 2018 (9) TMI 208
  Disciplinary Proceedings against CA (member of ICAI) - guilty of professional misconduct - failure to make proper disclosure / reporting of the transaction on which no TDS has been deducted - new reporting requirements imposed by the CBDT from 10th August, 2006 - Section 194J r.w.s. 40(a)(ia) - consultation charges paid to doctors from whom no tax was deducted - Held that:- As observed that in the Impugned Order, there is reference of Section 40(a) (ia) while discussing the said default under section 194J as well as in terms of the requirements of Guidance Note on Tax Audit. However, no specific finding has been given on the same in this regard in the Order passed by the Disciplinary Committee of the Institute. Additionally, on examination of the complaint, we found that there was no complaint by the complainant about not reporting of transactions falling under Section 40(a)(ia) and also no show cause was given to the Appellant in this regard. No specific charge was framed on this. No specific finding has been given by the Disciplinary Committee on this count, we understand that the same was mentioned for discussion only and the same is not relevant for the purpose of examining final decision of the Disciplinary Committee on the issue of the said default of non-reporting of transactions on which TDS was not deducted u/s 194J as complained by the complainant. Accordingly, we are not giving any finding on the issue. Looking to all we feel that the “ends of justice” would meet, if the Appellant is awarded punishment to “Reprimand”. We, accordingly modify the Impugned Order of the Disciplinary Committee to this extent. Though, further, we direct the Appellant to be more cautious in future while dealing with such situations.

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• 2018 (9) TMI 155
  Rectification application - Held that:- In view of the pending rectification application at the request of the Appellant, the appeal was adjourned to 9th July, 2018. Incidentally, in the above letter dated 18th June, 2018, addressed to the Registry of the Tribunal, the next date being of 9th July, 2018, is not mentioned. It appears that the Appellant is not serious about prosecuting its application before the Tribunal. At the request of Mr. Jasani, we give one more opportunity to have the rectification application before the Tribunal disposed of before the next date. In the absence of an order from the Tribunal before the next date, we would be constrained to decide the Appeal Memo on the basis of the challenge contained herein. No further adjournment on this ground, would be granted.

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• Customs

• 2018 (9) TMI 202
  Jurisdiction - power to issue SCN - validity of remand order - Held that:- The order of remand passed by the Tribunal was not required, as the issue involved is pending consideration before Hon'ble the Supreme Court against the views expressed by the Delhi High Court in Mangali Impex Limited Vs. Union of India [2016 (5) TMI 225 - DELHI HIGH COURT] - Once the legal issue, which is subject matter of appeal before the Tribunal, is pending consideration before Hon'ble the Supreme Court, the Tribunal itself should have decided the cases on merits after the decision of Hon'ble the Supreme Court instead of remanding those cases back to the Adjudicating Authority - The process adopted by the Tribunal apparently is to dispose of the cases pending before it without application of mind. The matter is remitted back to the Tribunal to be decided on merits after decision of Hon'ble the Supreme Court in Mangali Impex Limited's case - appeal allowed by way of remand.

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• 2018 (9) TMI 201
  Penalty u/s 114A of CA - Whether the doctrine of Caveat Emptor would deem a victim of fraud, to be guilty of fraud and liable to penal consequences under Section 114A of the Customs Act, 1962? - Held that:- The Investigating Agency as well as the Adjudicating Authority have recorded a clear factual finding that there is sufficient material to show that fake TRAs were presented and clearance of imports were made without genuine DEPB. However, the Tribunal, after recording such a finding, has set aside the penalty against such importers/appellants. We are not fully convinced by the reasons assigned by the Tribunal for setting aside the penalties presumably because, the Tribunal pointed out certain negligence on the part of the officers - the appeals are allowed in part, insofar as it levies penalty on the appellants and set aside the same - appeal allowed in part.

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• 2018 (9) TMI 199
  Maintainability of petition - breach of principles of natural justice - It is the contention of the petitioner that, the operative portion of the impugned order is a replica of the show cause notice - Held that:- In a given case, the adjudication authority may agree with the show cause notice. It can arrive at a finding which was held prima facie while issuing the show cause notice. That, per se, does not vitiate the impugned order on the touchstone of either breach of principles of natural justice or the impugned order being perverse - The Court is informed that the petitioner had already made a pre-deposit for the purpose of preferring an appeal. Petition dismissed.

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• 2018 (9) TMI 198
  Detention of goods - time period - In the present case, the petitioner claims that, time period fixed under sub-Section (2) of Section 110 of the Customs Act, 1962 must commence from October 13, 2017. The view of the DRI and the Customs is otherwise - Held that:- The date of commencement period of six months under Section 110(2) is disputed. In the present case, the parties are at variance on the date of seizure. The respondents have a particular view on the subject. They should, therefore, be afforded one opportunity to file affidavits to substantiate their point of view on the issue concerned. It would not be proper to grant an interim order directing the release of the goods. The balance of convenience and inconvenience is not in favour of the petitioner in granting an interim order of release of the goods, in the facts of the present case - Interim order as prayed for, therefore, is refused.

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• 2018 (9) TMI 197
  100% EOU - levy of anti-dumping duty - import of polyester yarn and the same was cleared clandestinely in the domestic market - Held that:- The bills of entry/ invoices in respect of imports clearly shows that the goods imported are not Partial Oriented Yarn but Polyester Fully Drawn Yarn vide bill of entry No. 784274 dated 10.10.2004. The anti-dumping duty demanded from the appellant is under Notification No. 15/2002-Cus dated 08.02.2002 by which the anti-dumping duty is leviable on POY. Therefore, there was no duty liable on Polyester Fully Drawn Yarn - appeal allowed in part.

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• 2018 (9) TMI 196
  Recovery of customs duty forgone with Interest - actual use condition - Confiscation - import of rig Deep Sea Treasure - non-deployment of the Rig due to cancellation of the LOA/ contract - end use exemption - N/N. 12/2012-Cus dated 17.03.2012. Whether any of the conditions of the Notification No. 12/2012 Cus. dated 17.03.2012 (Serial no.356 read with condition No. 41) has been violated and consequently, M/s Jagson is required to pay confirmed duty, interest, penalty fine, and in default, the liability to pay such confirmed duty, fine and penalty, etc. be shifted to M/s ONGC.? Held that:- There is no dispute of the fact that the Rig Deepsea Treasure which was imported for the purpose of oil exploration at licensed Oil blocks of ONGC has not been put to use for the said purpose. The department has seized the said Rig on 19.12.2014 and after adjudication, the same was confiscated and duty forgone was confirmed with interest and also penalty imposed on M/s Jagson. It is also ordered that in default of payment of said duty, fine and penalty by M/s Jagson, the same would be paid by M/s ONGC. It is informed by both sides that the Rig Deep Sea Treasure has been still lying idle, and in the custody of customs, as M/s Jagson has not cleared the same on payment of appropriate fine, duty, penalty etc. nor the ONGC has paid the said confirmed liability - On a simple reading of the said entry 356, it is clear that the goods specified in list 13, required in connection with petroleum operations, undertaken under petroleum exploration licenses or mining leases, as the case may be, which are issued or renewed after 01.4.1999, and granted by the Government of India or State Government to Oil Natural Gas Corporation or Oil India Limited, on nomination basis, would be eligible to be imported duty at Nil rate. In the present case, the imported Rig Deepsea Tressure has been imported by M/s Jagson for the purpose of petroleum operation/ exploration in the blocks allotted to M/s ONGC, as per LOA awarded to them for a period of 3 years, but the said rig has never been put to use on cancellation of the LOA by the ONGC. Thus, it is not the case of the appellants that duty foregone was demanded denying the benefit of exemption notification, even if the rig Deepsea Treasure was put to use for petroleum operation/exploration for a certain period but less than the contract period of 3 years - there is no specific user of the goods mentioned thereunder, but its use and user are general in nature; thus requirement of end use certificate so as to be eligible to the benefit of the exemption notification, could have been stipulated thereunder and the same is considered not relevant with regard to entry 356. There is no difficulty to conclude that by not putting into use the imported Rig Deepsea Treasure for petroleum operation/exploration at the Licensed oil block of ONGC, irrespective of the reasons for such non-use, there has been violation of the condition of Notification 12/2012 Cus. dt.17.3.2012 (entry 356), consequently, the said Rig Deepsea Treasure has been rightly confiscated by the adjudicating authority, under Sec.111(o) of Customs Act, 1962 - penalty also justified - the redemption fine and penalty is disproportionate and highly excessive in the facts and circumstances of the case, and is reduced. Time Limitation - Held that:- Since there has been violation of the conditions of the Notification, subsequent to import of the Rig Deep sea Treasure, by not deploying the same for petroleum operation/ exploration, time limit prescribed under Section 28(1) of the Customs Act, 1962 is not applicable. Appeal disposed off.

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• 2018 (9) TMI 195
  Amendment in shipping bills - after export of goods - change in the name of exporter - The shipping bills issued made in the name of M/s Jyoti Structures Ltd (Exporter) and bill of lading in the name of appellant with remarks on behalf of M/s Jyoti Structures Ltd. Held that:- It is clear the appellant is the exporter of the goods, particularly to the extent of invoices issued by the appellant. No benefit can be claimed by M/s Jyoti Structures Ltd. after the amendment is not allowed. The export benefit which is legally available to the appellant cannot be denied. All the export benefits should be extended to the exporter of goods in the present case undisputedly to the appellant. Section 149 of CA, states that even after export of the goods, the amendment of the document could be made if the details are existing in the documents of exports - In the present case as per the contract, bill of lading, invoice detail mentioned in the shipping bill, NOC given by M/s Jyoti Structures Ltd. it is clear that the actual exporter is the appellant. Therefore on the basis of these existing documents, the amendment in the shipping bill is clearly governed by section 149 and there is no reason why amendment cannot be allowed as per section 149. Appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 194
  Whether, in respect of differential duty payment at the time of final assessment, in a case of imports, clearances made under advance authorization by debiting from the DEPB scrips, is permissible or otherwise? Held that:- Identical issue decided in the appellant own case, C.C. JAMNAGAR VERSUS RELIANCE INDUSTRIES [2018 (8) TMI 1027 - CESTAT AHMEDABAD], where it was held that The only requirement is that at the time of payment of duty, the DEPB scrip should be produced for debit therein - appeal dismissed - decided against Revenue.

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• Corporate Laws

• 2018 (9) TMI 207
  Suspicious transaction - Held that:- Appellant makes out a case that he has not transferred/sold the shares to anyone, therefore, he has right on his shares and also the bonus shares issued and the dividend declared during the past years. He needs to execute indemnity bond in favour of 1st Respondent, in case later on any other claimant comes forward and proves his title. It is admittedly on record that the 3rd respondent was appointed as Registrar & Transfer Agent of 1st Respondent on 1. 3. 2010 and his services were terminated on 11. 6. 2016 by 1st respondent. It is admitted by the 1st respondent that 3rd respondent has done the suspicious transaction and these suspicious transaction has taken place during the period the services of 3rd respondent were being utilised. Therefore, the 1st respondent, who had appointed 3rd respondent as its Registrar and Transfer Agent, is liable for the suspicious transaction which have been committed by 3rd respondent. 1st respondent should protect the shareholder and should take action against the 3rd respondent and its officials for their wrong doings due to which the 1st respondent has been put to loss. 1st respondent cannot escape the responsibility saying that the other person has done misconduct so the shareholder may suffer. Appeal is allowed

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• 2018 (9) TMI 203
  Winding-up petition - C-Forms being belatedly filed - Held that:- C-Forms of total value of Rs. 7,44,027/- have been carried by the appellant to this Court, the appellant is permitted to make over the same to advocate for the respondent. It is recorded that the C-Forms have been made over to advocate for the respondent in Court. The respondent will now apply before the appropriate authorities for refund of any amount that the respondent may have paid. It will also be open to the respondent to rely on such C-Forms as made over by the appellant today before the appellate authority where the appeal is pending. The respondent will be entitled to cite this order, whether before the appellate authority or before the sales-tax authorities, for the purpose of an early resolution of the respondent’s claim for refund or adjustment based on the C-Forms being belatedly filed. If the refund is allowed, the quantum of security furnished by the appellant in terms of this order with the Registrar, Original Side will stand reduced to such extent and such amount will be refunded by the Registrar to the appellant herein on the basis of this order. Since the company petition is returnable before the company Court on August 28, 2018 in terms of the advertisements published, the company Court will be free to direct the appellant herein to make payment of the admitted amount in respect of the eight undisputed bills to advocate for the respondent herein on the returnable date, if no other creditor supports the winding-up or is represented.

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• 2018 (9) TMI 156
  Winding up of the company for non-payment of its dues - Held that:- It is interesting to note that none of the purported debit notes of the company does not mention any particular invoice of the petitioner. When the petitioner’s claim against the company in this application relates to the eleven invoices dated from September 25, 2014 the minutes of the meeting held between the representatives of the respective parties on September 06, 2014 relied upon by the company is of no significance. Even the invoices mentioned in the electronic mail dated March 28, 2015 disclosed by the company as Annexure-“D” to its affidavit are different invoices and do not form part of the petitioner’s claim in this application. But for the said purported debit notes, the liability of the company to pay Rs. 7,44,027 for non issuance of the Sales Tax C-Form to the petitioner as claimed in this application is not in dispute. Now, I have already found that the company has not been able to prove receipt of any of the said purported debit notes by the petitioner. Therefore, the company has to pay the claim of the petitioner for not issuing the “C” Forms. Winding up application against the company is admitted for Rs. 83,29,206/- (Rs. 75,85,179/- on account of the outstanding eleven invoices plus Rs. 7,44,027/- on account of non-furnishing of C-Forms) with interest thereon, at the rate of 8 per cent, per annum from the date of the statutory notice, that is, April 09, 2015 till payment is made. The petitioner is directed to publish the advertisement of this application once, in the English newspaper ‘The Statesman’ and once, in the Bengali newspaper ‘Bartaman’. The advertisements should indicate that the matter will appear before Court on the first available working day after the expiry of a period of three weeks from the date of the publications being made. However, publication in the official gazette will stand dispensed with.

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• Insolvency & Bankruptcy

• 2018 (9) TMI 206
  Corporate insolvency process - approval or rejection of the resolution plan, which was accepted by the committee of creditors with the requisite voting share - Held that:- One of the contention raised by the learned senior counsel for ICICI Bank that the applicant Bank was forced to give assent to the resolution plan otherwise assent would have lead to the nil payment to the applicant bank in case of approval of the plan. This contention cannot be accepted as there are as many as 95 financial creditors being members of the COC and the voting share of ICICI Bank is only 1. 108%. The claim made by ICICI Bank was Rs.166. 66 crores whereas the Resolution Professional accepted the claim to the tune of Rs.139. 66 crores. So, even acceptance of the rest of the amount of claim to the tune of Rs.27 crores would not bring any change in the voting pattern, the total amount of financial debt being Rs.12, 604. 60 crores as is evident from the document Annexure A-8 attached with CA No. 114 of 2018. The resolution professional has also filed the compliance certificate under regulation 39 (4) of the Regulations by diary No. 2159, dated 13. 06. 2018. We allow CA and the resolution plan submitted by LHG Pte Limited is found to be in conformity with sub-section (2) of Section 30 of the Code and the same is approved with the modification that the timelines given in the resolution plan shall stand extended during the period, CA No. 114 of 2018 remained pending i. e. from 16. 04. 2018 upto the date of decision of the application. The application bearing CA which has been filed by the resolution professional for seeking clarification from this Tribunal stands disposed of as the non-disclosures of the associate companies by the Resolution Applicant in this case, has not been found to be fatal to the validity of the resolution plan and its implementation. It is further directed that the resolution plan so approved shall be binding on the Corporate Debtor, its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan. With the approval of the resolution plan, the moratorium order passed by this Tribunal under Section 14 of the Code shall cease to have effect. The Resolution Professional is directed to forward all the record relating to the conduct of the corporate insolvency resolution process and the resolution plan to the IBBI to be recorded on its database.

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• 2018 (9) TMI 205
  Initiation of corporate insolvency resolution process by financial creditor - Held that:- A conjoint reading of the aforesaid provision would show that form and manner of the application has to be the one as prescribed. It is evident from the record that the application has been filed on the proforma prescribed under Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of IBC. We are satisfied that a default has occurred and the application under sub-section (2) of Section 7 is complete; and no disciplinary proceedings are pending against the proposed Interim Resolution Professional. Thus, the application warrant admission. As a sequel to the above discussion, this petition is admitted and Mr. Kuldeep Kumar Bassi, 410, Level IV, Centrum Plaza, Golf Course Road, Sector 53, Gurgaon, Haryana-122011, Mobile No. 9417027233, e-mail id [email protected], Registration No. IBBI/1PA-001/IP-P00280/2017-2018/10524 is appointed as an Interim Resolution Professional. In pursuance of Section 13(2) of the Code, we direct that Interim Insolvency Resolution Professional shall immediately make public announcement with regard to admission of this application under Section 7 of the Code. The expression ‘immediately’ means within three days as clarified by Explanation to Regulation 6 (1) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

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• 2018 (9) TMI 204
  Corporate Insolvency Resolution Process - Period of limitation - Held that:- The right to apply under Section 9 accrued to Respondent only after the Insolvency and Bankruptcy Code, 2016 came into force, i.e. 1st December, 2016, the application under Section 9 was preferred within three years, therefore it was not barred by limitation. There was another issue raised by the Corporate Debtor that the goods supplied was of inferior quality, but no such dispute was raised by the Appellant prior to issuance of notice under Section 8(1). The question of quality was raised by the Appellant only when reply under Section 8(2) was filed by the Corporate Debtor. Therefore, that cannot be taken into consideration to annul the initiation of Corporate Insolvency Resolution Process. Hon’ble Supreme Court has set aside earlier order passed by this Appellate Tribunal on 13th October, 2017, the Corporate Insolvency Resolution Process initiated against ‘M/s Jord Engineers India Ltd.’ revived. The Resolution Professional has taken charge of the same as ordered by the Adjudicating Authority and the Moratorium order etc. passed by the Adjudicating Authority is continuing. However, we make it clear that the period of pendency of the appeal before this Appellate Tribunal and then before the Hon’ble Supreme Court, till its disposal i.e. from 30th August, 2017 till today (date of order) cannot be counted and therefore should be excluded from counting of the period of 180 days or 270 days. The Adjudicating Authority will now ensure that the Corporate Insolvency Resolution Process concludes as per the I&B Code. The appeal stands disposed of. No costs.

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• FEMA

• 2018 (9) TMI 193
  Penalty u/s 50 of erstwhile FERA, 1973 for violation of the provisions - non service of the show cause notice upon the appellant prior to 1st June, 2002 under FEMA, 1999 - Held that:- The Adjudicating Officer was obliged to examine the steps taken by the respondent before concluding that the appellant did not comply with the obligation of producing exchange control copies. He ought to have appreciated that a show cause notice or letter of enquiry would have been issued to the appellant by the Enforcement Directorate and if only he had called for examined the record, the non-compliance alleged by the Enforcement Directorate would have been found to be incorrect. Since there was no service of the show cause notice upon the appellant prior to 1st June, 2002 under FEMA, 1999, the entire proceedings based on the show cause notice against the appellant is null and void and ab-initio. Therefore, the penalty imposed by the impugned order dated 8.9.2004 is untenable. Under these circumstances, the appeal filed by the appellant is allowed by setting aside, the impugned order dated 8.9.2004.

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• 2018 (9) TMI 192
  Guilty of contravention of Section 16(1) of the Foreign Exchange Regulation Act, 1973 - failure to realize amount receivable by them from M/s. Erman Electro Echnik (M/s. EEE) during the period 1990-91? - Held that:- Dy. Director, Enforcement Directorate failed to appreciate that such statement ought not to be relied upon, unless there is independent corroboration of certain material aspect of the said statement, through independent sources is present. There is no evidence with respect to the alleged transaction which was ever produced by Shri Vinod Kumar and or relied upon by the Respondent. Such statement made by Late Shri Ashok Kumar ought not to be relied upon by the Respondent during the adjudication proceedings in the absence of back-up evidence to some extent. Merely on the complaint by the rival party, no penalty can be imposed unless the admission based on some evidences as it is the practice that accuse always alleged that admissions are obtained under threat and pressure. In such situation, proper investigation is required in order to prove guilt of accused party. The statements of Shri Vinod Kumar are contradictory and self-defeating. Shri Vinod Kumar in his statement dated 09.04.2002 before the Respondent states that he does not have any role to play in the affairs of Appellant No.1, whereas before the Company Law Board, at para 2 of the Judgement dated 18- 04-1999, he takes a completely contrary stand. The benefit of doubt goes in favour of the appellant. The adjudication Order is not sustainable for the lack of evidences. There is no clear and cogent evidence available on record to show that Shri Ashok Kumar has received any payment pertaining to the transaction in question.

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• PMLA

• 2018 (9) TMI 191
  Prevention of Money Laundering - provisional attachment - no notice under section 8(1) or 8(2) has been issued - right of the bank as involved already initiated action under the SARFAESI Act - Held that:- There is no denial that the Respondent No. 1 and the Adjudicating Authority failed to issue notice to the Appellant or to afford a hearing to her, during the adjudication proceedings. Thus, the Respondent No. 1 and the Adjudicating Authority have failed to comply with the mandatory statutory requirement of the Proviso to Section 8(2), PMLA. It is not understood why the requisite notice was not issued by the respondent no. 1 and Adjudicating Authority. Despite being Appellant’s claim, Respondent No. 1 failed to fulfill its statutory duty. In the present case, admittedly, no notice under section 8(1) or 8(2) has been issued. No opportunity was given to the appellant bank who was also not made party in the complaint under section 5(5) of the Act despite of having the knowledge by the respondent as well as the adjudicating authority. The provisional attachment order would show that the respondent was fully aware that the said property is mortgaged with the appellant bank. It is immaterial if the borrower bank in the SARFAESI Act proceeding has informed that the bank was aware about the attachment order in 2010. As a matter of fact, as per the mandatory provision, it was the duty by the respondent to inform the joint owner or the complainant about the proceeding initiated against the borrower so that the claimant or the joint owner can take his stand and clarify the position before the authority. This thing has not happened in the present case. The substantial right of the bank is involved as the bank has already initiated action under the SARFAESI Act and order under section 13(4) has been passed, it has become necessary to hear the appeal on merit. Such delay, in fact, has happened due to non-compliance of the provisions by respondent no. 1. The same cannot be attributed to the appellant.

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• 2018 (9) TMI 190
  PMLA - provisional attachment orders - Properties mortgaged with the Appellant Bank are “proceeds of crime” as defined u/s 2(1)(u) of PMLA - PMLA priority over SARFEASI and RDDB & FI Act - Held that:- The property of the Appellant Bank cannot be attached or confiscated if there is no illegality in the title of the appellant and there is no charge of money laundering against the appellant. The mortgaged of property is the transfer under the Transfer of Property Act. Even the respondent is not denying the fact that the Bank is a victim party who is also innocent and is entitled to recover the loan amount. It is also not disputed by the respondent that the properties in dispute are mortgaged with Bank and it has to go to the Bank ultimately. No agree with the argument in this regard in view of amendments in the two statutes. Even otherwise the trial would take number of years. The public money cannot be stalled otherwise Banking system would collapse. The Adjudicating Authority has failed to consider that the ED has attached the properties without examining the case of the bank. The evidence on record suggests that the properties were acquired by the borrower/guarantors much before the alleged date of crime. No money disbursed by the Bank from its loan account, has been invested in acquiring these properties. Furthermore, the Appellant Bank had created charge over the property prior to the date of the crime. The Bank has already filed the suit for recovery and has also taken the action under SARFAESI Act. The Adjudicating Authority failed to appreciate that depriving the Appellant Bank from its funds/property, without any allegations or involvement of the Bank in the alleged fraud, would be legally unjustified. The properties attached cannot be attached under Section 5 of the PML Act because the properties are not purchased from the alleged proceeds of crime. As per the provisions of Section 5(1) (c) the primary requirement for the attachment is that the proceeds of crime are likely to be concealed, transferred or dealt with in any manner. In this case there was absence of such requirement. The said properties are already in the symbolic possession of the Appellant Bank under the SARFAESI Act. There is no nexus whatsoever between the alleged crime and the Appellant Bank who is the mortgagee of the properties in question which were purchased before sanctioning the loan. Thus, no case of money-laundering is made out against Appellant Bank who has sanctioned the amount which is untainted and pure money. They have priority right to recover the loan amount/debts by sale of assets over which security interest is created, which remains unpaid. The Adjudicating Authority has not appreciated the facts and law involved in the matter. The primary objective of section 8 of PMLA is that the Adjudicating Authority to take a prima facie view on available material and facts produced. The contentions raised by the Respondent's Advocate have no substance. The provisional attachment in the present matter is bad in law hence liable to be set aside. The loan was given by the bank in good faith who has suffered a loss because of non-return of money by the borrower. The borrower is also arrayed as respondent in the appeal filed by the bank. It has acted in good faith and suffered the loss despite of having taken all the reasonable precautions and is also not involved in the offence of money laundering. Even the stand of the respondent in almost in all the cases where it was found that the attached properties are mortgaged properties which were not purchased from proceeds of crime, the Bank is victim and innocent party who is entitled to recover the loan amount from the said mortgaged properties, but the bank be allowed to dispose the properties after the trial and final out- come of criminal complaints filed against the borrowers under schedule offence and prosecution complaint, the said argument cannot be accepted in view of settled law and new amendment in sub-section 8 of section 8 of the Act. Thus, the stand earlier taken by the respondent no. 1 is wholly vague and without any substance. The provisional attachment order thus apparently bad and against the scheme of the Act. Once it was found that the appellant is a innocent party who is not involved in the money laundering directly or indirectly or assist any party and the mortgaged property is also not purchased from the proceeds of crime, then the question of provisional attachment order and confirmation thereof does not arise and the victims/innocent party i.e. innocent party would be entitled to disposed of the said property. Thus set aside the Impugned Order dated 19.6.2015 and the Provisional Attachment Order dated 9.1.2015.

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• Service Tax

• 2018 (9) TMI 188
  Refund of Service tax paid - rejection on the ground that the appellant himself is the manufacturer of the liquor and the contractor was not manufacturing the liquor on behalf of the appellant - whether the services provided by the contractor were Manpower Supply Services or Bottling Services ? Held that:- The said scope of the work required to be done by the persons supplied by the contractor clearly brings out the fact that the basic work of the contractor is to provide manpower to the manufacturing unit for carrying out various activities relatable to bottling of IMFL liquor. As such work is required to be carried out by the various persons supplied by the contractor under the supervision of the assesse s agents or their authorized persons. The same does not amount to carrying out job-work activity by the contractor - We have also scrutinized the contract and the rate list entered into between the appellant and their contractor. The same prescribes rates on per shift basis, though the expected standard production in that shift also stands mentioned in the said contract. Further the overtime rates also stands mentioned in the said list, thus indicating that if the manpower supplied by the contractor works overtime, he would be given further wages for the same. This only establishes that the essence of the contract is for supply of labour, who is expected to perform a particular task in the particular period. Appellant was receiving Manpower Supply Services from the contractor and has correctly discharged the Service Tax, on reverse charge basis - appeal dismissed - decided against appellant.

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• 2018 (9) TMI 187
  Classification of Services - activities of restoration and painting of cylinders and affixing logo on cylinders - Technical Testing and Analysis Services or maintenance and repair service? - whether the activity undertaken by the appellants amounted to ‘maintenance and repair service’ during the period 1.7.2003 to 31.3.2005? Held that:- Going by the activity undertaken by the appellants as per the tender agreement, it is seen that he cannot be said to be any person under a maintenance contract or agreement. Moreover, he is not a manufacturer of cylinders or he is not any person authorized by a manufacturer. It is not understood as to how the Revenue felt that the services undertaken by the appellants are covered under ‘Maintenance or Repair Service’ during the relevant period - the Department of Explosives have categorically declined permission for hot repairs of LPG cylinders as he was not a manufacturer. Therefore, the appellants cannot be held to be undertaking the services chargeable under ‘Maintenance and Repair Service’ as an agent of manufacture also. The issue is no longer res integra as it was held by the Tribunal in the case of Harshitha Handling vs. CCE [2010 (4) TMI 122 - CESTAT, NEW DELHI] that the appellants are undertaking periodical test and upkeeping of cylinders in terms of Indian Explosives Act, 1884. Appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 186
  Scope of SCN - Construction Services - whether the demand confirmed under Works Contract Service and under Site Formation and Clearance Excavation and Earthmoving and Demolition Service is sustainable despite that the said demand was not raised vide the impugned Show Cause Notice? - Held that:- irrespective that the concept of Works Contract Service got introduced during the impugned period of demand but demand was not raised under the said service. Law has been settled that when no demand was made from the appellant under the category of Works Contract in the Show Cause Notice, the Adjudicating Authority could not have confirmed the demand under said category. The Adjudication Order was held to have travelled beyond the scope of Show Cause Notice and the demand was held as being not sustainable under Works Contract which otherwise was raised in the Show Cause Notice under another category. The Adjudication Order was held to have travelled beyond the scope of Show Cause Notice and the demand was held as being not sustainable under Works Contract which otherwise was raised in the Show Cause Notice under another category - appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 185
  Refund of excess Service Tax paid - Goods Transport Agency Service - Held that:- In the case of Brindavan Phosphates Pvt. Ltd. [2017 (6) TMI 328 - CESTAT BANGALORE] wherein the identical issue was involved this Tribunal has held that the declaration contained in the rubber stamp affixed on bills and the consignment notes issued by GTA are valid declaration by GTA and it satisfies requirement of Notification because in Notification no specific format has been prescribed for declaration and it is only the CBEC circular which prescribed such kind of enforcement. The appellants are entitled to the refund of Rs. 88,469/- along with interest in terms of Section 11AB of the Central Excise Act 1944 from the date of expiry of three months from the date of submission of the application for refund on 31.03.2008 till the date of payment of the refund amount - appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 184
  Maintenance & Repair Services - extended period of limitation - penalty u/s 76 and 78 of FA - appellant contended that he being an illiterate was not aware of the fact that the services provided by him which were primarily in the nature of manpower for doing the given work, was taxable under the category of ‘Maintenance & Repair Services' - Held that:- In the absence of any mala fide, the longer period of limitation was not available - demand beyond the period of limitation is not sustainable. Consequently, penalties imposed under Section 76 and 77 are also not sustainable. Matter remanded to Original Adjudicating Authority for re-quantification of the demand falling within the limitation period - appeal allowed by way of remand.

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• 2018 (9) TMI 183
  Penalty u/s 76 and 78 - the appellant have admittedly paid the same along with interest - Held that:- Even before initiation of the investigation already paid major amount of 1.71 Lakhs remaining amount along with interest was also paid before issuance of SCN. In this fact there was no need to issue any SCN in terms of Section 73(3) of Finance Act, 1994 - Consequently, no penalty was imposable - demand with interest upheld - appeal allowed in part.

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• 2018 (9) TMI 182
  Advertising Service - suppression of facts - extended period of limitation - penalty - Held that:- During the relevant period the service tax was chargeable only on the actual receipt of the gross value towards the service provided. In the balance sheet the total income on the basis of billed amount is booked, even if the billed amount though recorded in the books of accounts but out of which a part amount is not received, the same cannot be charged to service tax. However, this aspect has not been properly considered by lower authority - matter requires reconsideration. Penalty u/s 76 and 78 - Held that:- It is a settled law that the penalty under both the sections cannot be imposed simultaneously - Penalty u/s 76 set aside. Appeal allowed by way of remand.

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• 2018 (9) TMI 181
  Business Auxiliary Services - non-payment of service tax - extended period of limitation - Held that:- The transaction is not purchase or sale of the space in Air Cargo Plane but the appellant is booking the space on behalf of shipper for particular consignment, for this arrangement the appellant is charging to the shipper and after retention certain percentage of commission remaining amount is remitted to Airlines towards booking of space. Therefore, the appellant is providing the service to the Airlines which falls under Business Auxiliary Service. Therefore, it is clearly taxable. Extended period of limitation - Held that:- Ld. Commissioner (Appeals) has endorsed that the matter involved is of interpretation of law and the same was not free from doubt, therefore, the appellant were having the bonafide doubts - demand of extended period could not have been confirmed. Appeal allowed in part.

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• 2018 (9) TMI 180
  Valuation - inclusion of certain amounts recovered by them from the service recipients - reimbursements or not? - Held that:- Admitted the period in dispute is prior to the introduction of the Service Tax Valuation Rules. However, as per Section 67, the Service Tax is liable to be paid on gross amount charged for providing these services. None of these expenditures are a liability of service recipient. All of them are essential ingredients necessary to provide the service. Thus, the same cannot be termed as ‘reimbursements’. The impugned order is upheld on merits. However, benefit of limitation is extended to the appellant. The penalties are also set aside - appeal allowed in part.

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• 2018 (9) TMI 179
  Levy of service tax - rent a cab service - business of renting of jeeps/ cabs to M/s ONGC Ltd. Ankleshwar - Held that:- There is no dispute that the appellant have provided vehicles on rent basis under a contract to M/s ONGC Ltd., therefore, it clearly falls under the head of rent a cab service. Moreover, the appellant on their own started paying service tax from 2002 onwards. The levy of service tax on rent a cab is legal and proper. Extended period of limitation - Held that:- The appellant could not pay the service tax under a bonafide belief - the demand for the extended period is not sustainable. Appeal allowed in part.

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• 2018 (9) TMI 178
  Extended period of limitation - Man Power Recruitment and Supply Agency Service - period 2005 to 2006 - penalty u/s 76 and 78 - Held that:- In view of fact that initially taken registration and surrendered the same is more reason to establish the charge of suppression as the appellant was aware about the Service Tax law and despite that they have not complied with the payment of Service Tax - demand invoking extended period justified. Penalty u/s 76 78 - Held that:- It is a settled law that penalty under both the section should not be imposed simultaneously, accordingly, the penalty imposed under Section 76 is set aside - the penalty imposed under Section 78 which is equal to the service Tax amount, thr adjudicating authority in the order in original has not given option for 25% of penalty which is available under the proviso to Section 78 - penalty reduced to 25% under Section 78 subject to condition that the total demand of Service Tax, interest and 25% of penalty stand paid within one month from the date of receipt of this order. Appeal allowed in part.

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• 2018 (9) TMI 177
  Packaging service or Manufacture? - packing of salt in retail pack - Held that:- In the present case, the only activity is packing of salt in retail pack not the complete manufacturing of salt by the appellant - it is liable for service tax being not a manufacturing activity - appeal dismissed - decided against appellant.

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• 2018 (9) TMI 176
  Banking and Financial services - appellant was working as an agent of SBI Life and receiving commission of such sells - N/N. 30/2012-ST dated 20.06.2012 read with Section 68(2) of the Finance Act, 1994 and Rule 2(1)(d)(i)(A) of Service Tax Rules, 1994 - Held that:- The appellant was not required to pay service tax on Insurance Agent service in terms of N/N. 30/2012-ST dated 26.02.2012. However, the service recipient i.e. SBI Life is liable to pay service tax on reverse charge mechanism. CENVAT Credit - input service - Insurance Agent service provided by the appellant in the capacity of service provider - Held that:- The service tax was paid on the output service therefore, the credit in respect of output service cannot be taken as per CENVAT Credit Rules. Therefore, the appellant are not entitled for Cenvat credit since they were not liable to pay service tax. Extended period of limitation - Held that:- Since the appellant have paid the service tax on 100% value and availed 50% credit, even though they were not liable to pay, no malafide intention on the part of the appellant. In such a case, demand for the longer period and penalties are not sustainable. Appeal allowed in part.

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• 2018 (9) TMI 175
  SEZ Unit - Refund of accumulated CENVAT of input service - rejection on the ground that since the amount of service tax on which CENVAT credit was availed was paid under VCES Scheme, in terms of Section 109 of Finance Act, 2013, any amount paid in pursuance of declaration made under sub section 1 of section 107 was not refundable under any circumstances - Held that:- Any service tax paid of the input service whether under VCES Scheme or otherwise the same is available as CENVAT credit to the assessee. Once the CENVAT credit is legally admissible it is available either for utilization for payment of service tax/excise duty - In the present case the appellant being SEZ Unit is entitled for the refund of CENVAT credit under N/N. 12/2013-ST. - the case of the respondent does not fall under section 109 of the Finance Act, 2013, accordingly, the respondent is rightly entitled for the refund of CENVAT credit availed by them under N/N. 12/2013-ST. - appeal dismissed - decided against Revenue.

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• 2018 (9) TMI 174
  Waiver of penalties in section 77 and 78 - appellant had paid the entire confirmed service tax along with interest before passing the order in original - Held that:- The appellant have not produced the reconciliation before the lower authority. Therefore, for deciding the quantum of penalty, first it is to be established the correct liability of Service Tax - the matter should go back to the original authority to ascertain the fact whether the Service Tax liability is Rs. 1,83,244 or the amount which confirmed the order in original and upheld in the order in appeals - appeal allowed by way of remand.

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• Central Excise

• 2018 (9) TMI 200
  CENVAT Credit alongwith Education Cess - Section 11A(1) of the Central Excise Act, 1944 - Capital Goods - it was pointed out that depreciation of capital goods availed under Section 32 of the Income Tax Act, 1961 cannot be availed as Cenvat credit and therefore, the said amount should be reversed - Rule 14 of the CCR, 2004 - extended period of limitation. Held that:- Firstly, the Revenue did not dispute the fact that the assessee is an S.S.I. and has not availed the Cenvat credit and the credit remains as an entry in the books. Therefore, on facts, it will be a very hard case for the Court to reverse the decision of the Tribunal, especially when the Revenue does not dispute the factual position. Amendment to Rule 14 of the CCR, 2004 - Held that:- The amendment can have no impact on the present proceedings, as admittedly, the period in question is between July, 2008 to March, 2009. In any event, the amendment cannot be treated to have retrospective effect and an amendment to a statute, which has been given prospective effect, cannot be used as an aid to interpret the statutory provision, which existed prior to the amendment, unless and until it is held to be clarificatory - No such argument was advanced to state that the amendment to Rule 14 of the CCR, 2004 was clarificatory in nature. Appeal dismissed - decided against Revenue.

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• 2018 (9) TMI 173
  Rectification application - rejection of rectification application on the ground that the assessee had not raised such a contention before the Tribunal, or even before the lower authorities earlier and any exercise by the Tribunal to entertain such a contention to modify the order would amount to review- a power which the Tribunal does not possess. Held that:- In the present case, judgment of the Tribunal was passed on 29th June 2015. The Appeal was filed before the High Court sometime thereafter. Even after the High Court dismissed the appeal on 28th January 2016, it appears from the record that the rectification application was filed nearly six months later. Therefore, only on the question of limitation, rectification application could have been dismissed by the Tribunal; though Tribunal did not advert to this aspect of the matter. When the High Court dismissed the appeal of assessee in the earlier round of litigation, it merely kept liberty open to the assessee to approach the Tribunal by filing rectification application; if it was open for the appellant to do so. The High Court did not mandate the Tribunal to either entertain such an application or open an avenue; which otherwise may have been closed. Tax appeal dismissed.

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• 2018 (9) TMI 172
  Condonation of delay in filing appeal - power of Commissioner (Appeals) to condone delay beyond statutory period - proviso to sub section (1) of Section 35 of the Central Excise Act, 1944 - Held that:- Though reasons assigned, may appear to be sufficient, statute does not provide condonation beyond the period provided therefor. If the prayer is accepted, then it would be amounting to adding words to the enactment - there is no error in rejecting the appeals filed beyond the statutory period therefor. Substantial questions of law raised are answered against the appellant - appeal dismissed for having filed beyond condonable period.

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• 2018 (9) TMI 171
  Manufacture - process of galvanization of seamless steel tubes and parts of steel structure, on job work basis - assessee paid Service tax on the above activity - Revenue entertained a view that the appellants are required to pay duty of excise on the galvanized pipes, inasmuch as galvanization amounts to manufacture in terms of the Chapter note 4 of Chapter 73 of CETA, 1985 - malafide intent or not? - Extended period of limitation. Held that:- The appellants were admittedly paying service tax on the said process and were reversing the credit of Zinc and Furnace Oil, which facts was being reflected by them in the ER-1 Returns - When admittedly the appellant was paying service tax and was reflecting said payment in the returns filed by them and was also reversing the Cenvat credit, it cannot be said that such an act of the assessee was with a mala fide mind to evade payment of duty of excise - extended period not invocable. The Tribunal in the case of M/s K. R. Packaging vs. Commissioner of Central Excise & Service Tax, Meerut-I, [2017 (2) TMI 893 - CESTAT NEW DELHI] has dealt with an identical issue and has held that where the activity amounted to manufacture and was required to pay duty of excise but the assessee paid the service tax and regularly filed the service tax returns without any objection by the Revenue, the demand of duty of excise would not be sustainable. The demand of duty is not sustainable as the same is barred by limitation - appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 170
  Application for deregistration in terms of Rule 16 of Pan Masala Packing Machine (Capacity Determination and Collection of Duty)” Rules, 2008 and “Chewing Tobacco and unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty)” Rules, 2010 - rejection of application on the ground that the amount of Rs. 36,968/- stands confirmed against the appellant vide another Order dated 10.02.2016 and further an amount of Rs. 2432.38 lakhs is pending against their Unit No.I and Unit No.II, which are Units of the said assessee. Held that:- The respondent is a separately registered unit with Central Excise department and admittedly has no dues pending recovery by the Revenue. In reference to the pending dues against the other separate Central Excise units, is no ground for denial of deregistration to the present assessee in terms of Rule 16 of the said Rules - Rule 16 talks about the assessee only and not to any other unit of assessee. In any case, whatever demands was there in respect of other units, the same stands set aside by the Higher Appellant Forums and as such there is no pendency of any dues even against the other two units. Appeal dismissed - decided against Revenue.

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• 2018 (9) TMI 169
  CENVAT Credit - capital goods - goods manufactured by them was cleared by availing the exemption under N/N. 30/2004-CE dated 09/07/2004 - Department was of the view that the appellant will not be entitled to the benefit of the credit on capital goods in view of the Rule 6 (4) of the Cenvat Credit Rules, 2004 which bars the availment of credit on capital goods used exclusively in the manufacture of exempted goods. Held that:- Admittedly, such capital goods have been predominantly used for manufacture and clearance of finished products without payment of duty by availing the exemption as per N/N. 30/2004 ibid. But the fact remains that a small portion of the finished products has in fact been cleared on payment of duty without availing said exemption. The Tribunal in the case of Commissioner of Central Excise, Maduari V/s Eastman Spinning Mills Pvt. Ltd [2010 (11) TMI 815 - CESTAT, CHENNAI] had occasion to consider a similar case in which the Tribunal has held that there was no bar to the availment of exemption under Notification No. 30/2004 by a manufacturer availing capital goods credit. Thus, it cannot be said that the capital goods have been exclusively used in the manufacture of exempted goods. Consequently, the bar specified Rule 6 (4) will not be applicable - appeal dismissed - decided against Revenue.

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• 2018 (9) TMI 168
  Valuation - inclusion of loading and levelling cost incurred by the appellants’ buyer i.e. M/s N.S. Shetty in transporting gypsum further to his buyers - period August 2004 to October 06 - Held that:- In the instant case, the appellants are selling the gypsum as-is-where-is-basis to the contractor i.e. M/s. N.S. Shetty himself who is selling the same to the cement manufacturers. In the instant case, therefore, no expenses are incurred by the appellants in the sale of cement to the contractor. Therefore, there is no question of includibility of such amount in the assessable value of cement sold by the appellants to M/s N.S. Shetty. No expenses are incurred by the appellants. As no flow back is alleged or evidenced, proposal to include the charges incurred by the buyer in respect of gypsum sold by the appellants to the contractor is by no stretch of imagination legally tenable. Appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 167
  Rectification of Mistake - applicant submits that in this Tribunal's order, there is no finding regarding the penalty whereas, they have made the submissions in the grounds of appeal for setting aside the penalty - Held that:- The ld. Counsel is correct in pointing out that this Tribunal in the order dated 12.02.2018 did not give any finding as regards imposition of penalty under Rule 25(1)(a) ordered by the original authority. We find that in the same order, the Tribunal has categorically held that there is no suppression of facts on the part of the appellant - Since the penalty imposed under Rule 25(1)(a) is subject to the provisions of Section 11AC, the ingredients of Section 11AC must exist for imposition of penalty under Section 25(1)(a). Penalty under Section 11AC can only be imposed when demand notice under Section 11A(1) is issued - Penalty under Rule 25(1)(a) is not sustainable. The order of the Tribunal dated 12.02.2018 stand rectified - ROM Application allowed.

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• 2018 (9) TMI 166
  CENVAT Credit - duty paying invoices - it was alleged that appellant have wrongly availed Cenvat Credit on the strength of invoice/bills bearing hand written Serial No. issued by service providers - Held that:- The service tax has been paid by the service providers has not been challenged. The fact that the invoices were issued by the Service Providers has also not been challenged. In that prospect, the allegation is merely technical in so far as the Serial numbers instead of printed, were hand-written. Tribunal in the case of Dhanvridhi Commercial Pvt. Ltd. [2013 (3) TMI 161 - CESTAT KOLKATA] held that there is no such requirement of printing of Serial numbers. Appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 165
  Demand alongwith penalties - it was alleged that appellant have recovered certain freight amount which was not shown in their invoices - Held that:- There is not dispute about the head under which the said amounts were recovered by the appellant from their customers. The amount has undisputedly being recovered as charges for return of empty truck from buyer’s premises which has no relation with the manufacturing activity. Moreover being freight charges they are not includable in the assessable value as held by Hon’ble Apex Court in the case of Ispat Industries [2015 (10) TMI 613 - SUPREME COURT] - appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 164
  CENVAT Credit - common inputs used in manufacture of taxable as well as exempt goods - electricity - case of the department is that input Carbon Black Feed Stock is a common input which is used to manufacture dutiable final product namely, Carbon Black and Electricity which falls under Central Excise Tariff Heading 27160000 on which no rate of duty is prescribed - Rule 6 of CENVAT Credit Rules, 2004. Held that:- Very same issue in the appellant’s own case has been decided by this Tribunal in M/S PHILIPS CARBON BLACK LTD VERSUS COMMISSIONER OF CENTRAL EXCISE-RAJKOT [2015 (10) TMI 338 - CESTAT AHMEDABAD], where it was held that appellant not liable to pay the amount 8% / 10% on value of the electricity under Rule 6 of the Cenvat Credit Rules - credit allowed - appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 163
  Valuation - sale of goods through Depot - case of the department is that the value which was charged to the customer for sale of goods from depot shall be taken as transaction value - Held that:- Since the Ld. Counsel does not press on the issue of cum duty price, the demand of differential duty upheld by the Ld. Commissioner (Appeals) is upheld. Penalty u/s 11AC - benefit of reduced penalty - Held that:- The board in the CBEC Circular No. 208/07/2008-CE-6 dated 22.05.2008 directed the adjudicating authority that it is necessary to give option in writing in the order in original, as regard reduced penalty of 25% in terms of proviso of Section 11AC - penalty reduced to 25% under Section 11AC subject to payment of differential duty, interest and 25% penalty within a period of 30 days from receipt of this order. Penalty u/r 26 on director Sh. K.K. Choudhary - Held that:- The director Sh. K.K. Choudhary could not have been implicated as the issue involved is interpretation of valuation provision - Penalty set aside. Appeal allowed in part.

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• 2018 (9) TMI 162
  NCCD - whether the appellant is liable to pay National Calamity Contingent Duty (NCCD) when the goods are supplied to 100% EOU? Held that:- This Tribunal in the case of JBF Industries Ltd. [2009 (2) TMI 653 - CESTAT, AHMEDABAD] considering with identical issue that whether clearances made to EOU will attract NCCD or otherwise has held that the NCCD is not leviable on the goods cleared to 100% EOU - the appellant is not liable to pay NCCD on the goods cleared to 100% EOU - appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 161
  Valuation - Job-Work - valuation of the goods adopted is on the basis of cost data provided by the principal - time limitation - Held that:- There is no dispute on the fact that the goods impugned in the present case were undervalued as the cost of raw material was wrongly intimated by the principal to the appellant. Time limitation - Held that:- In this case, the appellant were very much in the knowledge regarding the actual cost of the raw material which is appearing in the bills of entry. Therefore, even if the principal have intimated the wrong figures of raw material cost, the appellant by taking reasonable steps, could have found out the correct cost of the raw material and the mistake could have been avoided. Therefore, it cannot be said that the appellant was unaware of the cost of the raw material used in the manufacture of goods on job work basis for their principal - extended period was rightly invoked. Appeal dismissed - decided against appellant.

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• 2018 (9) TMI 160
  Whether the demand under Rule 6 is sustainable in case CENVAT credit is availed in respect of input, input services and capital goods against the manufacturing of goods on job work basis under Notification No. 214/86-CE dated 25/03/1986? Held that:- Even as per explanation of Rule 3 of Cenvat Credit Rules, 2004, there is specific provision that even though goods are manufactured under Notification No. 214/86-CE and no duty is paid by job worker, job worker is allowed to avail the cenvat credit. Demand do not sustain - appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 159
  CENVAT credit of 2% CVD - Import of Coal - applicability of N/N. 12/2012-Cus dated 17.03.2012 - Rule 3 of Cenvat Credit Rules - Held that:- Admittedly, the appellant have imported Coal and CVD of 2% is leviable in terms of Customs N/N. 12/2012-Cus. There is no restriction provided in Rule 3 as regards duty paid under Customs notification - This restriction is applicable only in case of indigenous goods on which the excise duty @ 2% was paid availing Notification No. 12/2012-CE, which is not a case here. Even if the importer wants to avail the exemption of N/N. 12/2012-CE for payment of CVD, the same will not be available to the importer - Credit allowed - appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2018 (9) TMI 158
  Cancellation of registration with retrospective effect - GVAT Act - Held that:- Even if the cancellation of registration was to be upheld, the question is, should the same has been ordered with retrospective effect providing for cancellation of registration from inception. Even if such registration is cancelled, the purchasing dealers in their assessments can always argue that their transactions with the petitioner were genuine and that therefore they cannot be deprived of the input tax credit concerning such transactions. The cancellation of registration from the date of the order would continue to operate - petition allowed.

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• 2018 (9) TMI 157
  Penalty under Section 10(b) read with Section 10-A of the CST Act - mis-use of C-Form - presence of mens rea - Whether the petitioners have falsely represented while using the C-form against the said purchase of the JCB excavators? - Held that:- In proceedings for levy of penalty under Section 10-A of the CST Act, the burden would be on the Revenue to prove the existence of circumstances constituting the said offence - In the light of the language employed in Section 10-A and the nature of penalty contemplated therein, it cannot be held that all types of omissions or commissions in the use of Form C will be embraced by the expression “false representation.” - a finding of mens rea is a condition precedent for levying penalty under Section 10(b) read with Section 10-A of the CST Act - penalty not warranted. Whether the order passed by the respondent No.4 is a simple order of penalty or the assessment in terms of Section 31 of the TVAT Act or is it a composite assessment of the tax and penalty being in the nature of assessment and whether in the circumstances, the limitation for 5(five) years would apply? - Held that:- In the manner in which the assessment has been made it clearly appears to have been made under Section 31 of the TVAT Act and as such the limitation under Section 33 of the TVAT Act would apply. Therefore, the impugned notice dated 07.05.2014 and the order are without jurisdiction being barred by limitation under Section 33 of the TVAT Act. But the said bar is not applicable so far the impugned notice - if the jurisdiction under Section 10(a) is exercised by the authority on conforming to the conditions laid down therein, the limitation as prescribed by Section 33 of the TVAT Act will have no manner of application in such cases. Whether the petitioner is liable to pay further tax as the situs of sale falls within the jurisdiction of the State of Haryana? - Held that:- The purchase took place at Haryana and ‘C’ form has been used to get the benefit of reduced rate of tax under Section 8(1) of the CST Act. The word ‘resell’ or the provisions as appearing in Section 8(3)(b) if read jointly, the word ‘resell’ would take an expansive meaning. Thus, when there can be two interpretations viz. (i) the strict interpretation of ‘resell’ and (ii) the expansive interpretation of ‘resell’, the benefit must go to the dealer - no further tax is required to be paid. The impugned orders are not sustainable in law - petition allowed.

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• Indian Laws

• 2018 (9) TMI 189
  Illegal occupants - the petitioners presently dispute the right of the APSFC to proceed against their house properties on the ground that their title would prevail over that claimed by Kusam Eshwaraiah and Kusam Ramesh, the guarantors, who created a security interest in the property allegedly purchased by them in the year 1995 - Whether the APSFC can claim to have a security interest in the subject house properties or claim to be a secured creditor in the context thereof? - SARFAESI Act. Held that:- Though Section 5 of the RDDB Act prescribes that a person shall not be qualified to be appointed as a Presiding Officer of a Tribunal unless he is, or has been, or is qualified to be, a District Judge, the recent change brought about by the Government of India allows persons with no legal background whatsoever also to be appointed as Presiding Officers. Matters of complicated civil nature, such as the cases on hand, cannot be relegated to someone who has no legal wherewithal - Another aspect that requires to be noted is that, though Section 17(5) of the SARFAESI Act prescribes the outer time limits for disposal of securitization applications filed under Section 17(1), Tribunals have not lived up to this statutory mandate. It is rare, if at all, to find a securitization application filed under Section 17(1) being disposed of in terms of the temporal mandate of Section 17(5) thereof. The writ petitions are disposed of permitting the petitioners to invoke the jurisdiction of the competent civil Court within four weeks from the date of receipt of a copy of this order.

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