TMI Tax Updates - e-Newsletter
September 8, 2017

Case Laws in this Newsletter:

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

TMI Short Notes

• Income Tax:

  ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific disclosures. Where is the taxpayer required to make such disclosures specified in ICDS.

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• Income Tax:

  In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, which would prevail over the other.

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• Income Tax:

  Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation avoidance agreement (DTAA).

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Articles

• SPECIAL ECONOMIC ZONES UNDER GST
• GST on E-Commerce Operators (ECO)

News

• FAQs on GST on Services

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• Exchange Rate of Foreign Currency Relating To Imported and Export Goods Notified

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• RBI Reference Rate for US $

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• Commerce & Industry Minister Shri Suresh Prabhu's Message to startup community in India

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• Task Force on Employment and Exports and its Terms of Reference

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Notifications

Companies Law

• F. No. 1/06/2014-CL-V - dated 6-9-2017 - Co. Law
  Delegation of powers to RDs under section 458 of CA 2013 dt 06.09.2017

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Customs

• 84/2017 - dated 7-9-2017 - Cus (NT)
  Rate of exchange of conversion of the foreign currency with effect from 8th September, 2017

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GST - States

• 71/ST-2 - dated 18-8-2017 - Haryana SGST
  The Haryana Goods and Services Tax (Fifth Amendment) Rules, 2017.

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• 68/ST-2 - dated 10-8-2017 - Haryana SGST
  Notification for Facilitation Centres under the HGST Rules, 2017

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• EXN-F(10)-22/2017-Loose - dated 5-9-2017 - Himachal Pradesh SGST
  Screening Committee on anti-profiteering.

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• EXN-F(10)-25/2017 - dated 1-9-2017 - Himachal Pradesh SGST
  The Himachal Pradesh Goods and Services Tax (Sixth Amendment) Rules, 2017.

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• EXN-F(10)-28/2017 - dated 30-8-2017 - Himachal Pradesh SGST
  The Himachal Pradesh Goods and Services Tax (Fifth Amendment) Rules, 2017.

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• EXN-F(10)-28/2017 - dated 30-8-2017 - Himachal Pradesh SGST
  Amendment in the Notification No. 1/2017-STATE TAX (RATE), dated 30th August, 2017- EXN-F(10)-14/2017-Loose.

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• EXN-F(10)-28/2017 - dated 30-8-2017 - Himachal Pradesh SGST
  Last date for furnishing of return in FORM GSTR-3B

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• EXN-F(10)-22/2017 - dated 26-8-2017 - Himachal Pradesh SGST
  Date for filing of GSTR-3B

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• EXN-F(10)-18/2017 - dated 22-8-2017 - Himachal Pradesh SGST
  Corrigendum - Notification No. 1/2017-State Tax (Rate) EXN-F(10)-14/2017-Loose dated 30th June, 2017,-

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• EXN-F(10)-18/2017 - dated 22-8-2017 - Himachal Pradesh SGST
  Corrigendum - Notification No. 2/2017-State Tax (Rate), EXN-F(10)-14/2017-Loose dated 30th June, 2017.

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• Va Kar/GST/07/2017-S.O. No. 069 - dated 26-8-2017 - Jharkhand SGST
  Registered persons who shall not be eligible for refund of ninety per cent. of the total amount.

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• 24/2017-State Tax (Rate) - S.O. 068 - dated 26-8-2017 - Jharkhand SGST
  Amendments in the Notification No. S.O. 62, dated 18th August, 2017

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• 23/2017-State Tax (Rate) - S.O. 073 - dated 26-8-2017 - Jharkhand SGST
  Amendments in the Notification No. 17/2017- State Tax (Rate), dated 29th June, 2017- S.O. 47.

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• 22/2017-State Tax (Rate) - S.O. 072 - dated 26-8-2017 - Jharkhand SGST
  Amendments in the Notification No.13/2017- State Tax (Rate), dated 29th June, 2017 - S.O. 43

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• 21/2017-State Tax (Rate) - S.O. 071 - dated 26-8-2017 - Jharkhand SGST
  Amendments in the Notification No.12/2017- State Tax (Rate), dated 29th June, 2017 - related to exemption FIFA.

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• 20/2017-State Tax (Rate) - S.O. 070 - dated 26-8-2017 - Jharkhand SGST
  Amendment in the Notification No. 11/2017- State Tax (Rate), dated 29th June, 2017,

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• Va Kar/GST/4/2017-S.O. 067 - dated 18-8-2017 - Jharkhand SGST
  Time period for filing of details in FORM GSTR-3

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• Va Kar/GST/4/2017-S.O. 066 - dated 18-8-2017 - Jharkhand SGST
  Time period for filing of details of inward supplies in FORM GSTR-2

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• Va Kar/GST/4/2017-S.O. 065 - dated 18-8-2017 - Jharkhand SGST
  Time period for filing of details of outward supplies in FORM GSTR-1.

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• Va Kar/GST/07/2017-S.O. 064 - dated 18-8-2017 - Jharkhand SGST
  The Jharkhand Goods and Services Tax (Fifth Amendment) Rules, 2017.

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• 04-D/2017 - dated 30-8-2017 - Karnataka SGST
  The Karnataka Goods and Services Tax (Fourth Amendment) Rules, 2017 - Rules relating to E-Way Bills and others.

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• 04-C/2017 - dated 29-8-2017 - Karnataka SGST
  The Karnataka Goods and Services Tax (Third Amendment) Rules, 2017.

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• FD 47 CSL 2017 - dated 28-8-2017 - Karnataka SGST
  State Level Screening Committee on Anti-Profiteering

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Circulars / Instructions / Orders

DGFT

• Trade Notice No. 17 - dated 6-9-2017
  Establishing, "Contact@DGFT" service as single point contact for all foreign trade related issues

Companies Law

• 09/2017 - dated 5-9-2017
  Exemptions given to certain unlisted public companies under the Companies (Appointment and Qualification of Directors) Rules, 2014 from the appointment of independent directors – reg.

Highlights / Catch Notes

Income Tax

• Scope of the term legal representative - Tax Recovery proceedings - It may be a person who may or may not be the heir, competent to inherit the property of the deceased - It includes heirs as well as persons who represent the estate even without title either as executors or administrators in possession of the estate of the deceased - HC
  Visit to Get Source

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• TDS u/s 192 or 194J - professional doctors / Honorary Consultants - the real intention of the parties in the present case is appointment of consultants and not to create employer-employee relationship and accordingly TDS is liable to be deducted u/s 194J
  Visit to Get Source

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• Penalty levied u/s 271B - failure to get accounts audited u/s 44AB - books of account and other relevant documents were destroyed by natural calamity, i.e. flood - No penalty
  Visit to Get Source

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Corporate Law

• A “joint venture” would mean a joint arrangement, entered into in writing, whereby the parties that have joint control of the arrangement, have rights to the net assets of the arrangement.
  Visit to Get Source

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Central Excise

• CENVAT credit - capital goods - The definition of capital goods in the Companies Act would determine which goods can be capitalized. The definition of capital goods in the Central Excise Act would determine the availability of credit on the goods.
  Visit to Get Source

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Case Laws:

• Income Tax

• 2017 (9) TMI 387
  Validity of assessment order in the name of the amalgamating company - assessment framed in the name of the non-existent company - procedural defect - successor-in-interest - Held that:- The amalgamation is a blending of two or more existing undertakings into one undertaking, the share holders of each blending Company become substantially the share holders in the Company which is to carry on the blended undertakings. There may be amalgamation either by the transfer of two or more undertakings to a new Company, or by the transfer of one or more undertakings to an existing Company. Strictly amalgamation does not cover the mere acquisition by a Company of the share capital of other Company which remains in existence and continues its undertaking but the context in which the term is used may show that it is intended to include such an acquisition. See Halsburys Laws of England 4th Edition Vol. 7 Para 1539. Two companies may join to form a new Company, but there may be absorption or blending of one by the other, both amount to amalgamation. When two companies are merged and are so joined, as to form a third Company or one is absorbed into one or blended with another, the amalgamating Company loses its entity. See Spice Infotainment Ltd. v. CIT [2011 (8) TMI 544 - DELHI HIGH COURT] In Spice Infotainment (supra) where it was held: “once it is found that the assessment is framed in the name of a non-existent entity it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292-B of the Act. - Decided in favour of the Assessee

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• 2017 (9) TMI 386
  Scope of the term legal representative - Tax Recovery proceedings - legal representative of the deceased - Held that:- Section 2(29) of the Act of 1961 stipulates that the meaning of legal representative assigned to it in Clause (11) of Section 2 of the Code of Civil Procedure 1908 would apply to the Income Tax Act, 1961. Section 2 (11) of the Code of Civil Procedure 1908 stipulates that a legal representative means a person who in law represents the estate of a deceased person and includes any person who intermeddles with the estate of the deceased. It also includes a party who sues or is sued in a representative character on whom the estate devolves on the death of the party so suing or sued. Nolini Bai (1989 (4) TMI 327 - SUPREME COURT OF INDIA) is of the view that, the definition of legal representative given in the Code of Civil Procedure, 1908 is inclusive in character and its scope is wide. It is not confined to legal heirs only. It may be a person who may or may not be the heir, competent to inherit the property of the deceased. However, such person is representing the estate of the deceased. It includes heirs as well as persons who represent the estate even without title either as executors or administrators in possession of the estate of the deceased. Such persons are covered by the expression legal representative. Viewed from such perspective, the petitioner is one his heirs and legal representatives of the deceased. W.P. dismissed.

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• 2017 (9) TMI 385
  Deduction under Section 43B - payment of excise duty - no evidence for payment of excise duty was produced for verification - Held that:- As one of the mandatory requirement of the proviso to Section 43B(a) of the Act was not satisfied so as to permit any deduction under the said provision. In view of the above, the question formulated above is answered in favour of the Department and it is held that the Tribunal is not justified in conforming the order of the CIT (Appeals) in allowing the deduction in respect of excise duty of ₹ 2,65,35,000/- under Section 43B of the Act without any evidence being produced to establish the payment for the purposes of verification. We direct the CIT (Appeals) to consider it afresh in the light of the observations made herein above

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• 2017 (9) TMI 384
  Validity of reopening of assessment - non-application of mind to the objections raised by the Petitioner - non-genuine accommodation entries taken by assessee - Held that:- The Court finds that the order dated 26th July 2017 rejecting the Petitioner’s objections has not in fact dealt with the objections at all. It merely reiterates that the DDIT (Investigation) had intimated that the Petitioner had taken non-genuine accommodation entries from one of the dummy companies including M/s. JMD International. It then sets out Section 147 of the Act. The order proceeds to assert that the AO has in the reasons recorded, formed his opinion in writing and that “this belief has been made after due diligence and considering the fresh material, evidences and facts available on the record.” There is no basis for this bald assertion considering that the only material available with the AO was the letter sent by the DDIT (Inv). The order then sets out the summary of certain decisions and then simply concludes that “keeping in view of above, the objections filed are not acceptable and stand disposed of.” Thus the impugned order stands vitiated in law for non-application of mind to the objections raised by the Petitioner. It does not discuss any of the objections. It does not deal with the documents enclosed along with the objections. The impugned order fails to address the principal objection that the so-called entries found in the bank account of M/s. JMD International were in fact entries signifying the payment made to the Assessee for the sales made by it to M/s. JMD International. The genuineness of these transactions should easily have been verified by the AO even at this stage. AO is directed to again consider the objections of the Assessee

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• 2017 (9) TMI 383
  Condonation of delay - reasons for delay - removal of office onjection - whether Revenue/ Department was not aware of the objections? - Held that:- It is obvious that though aware of the conditional orders after lodging of the subject Appeal, the Revenue's Advocate and the Revenue officials did not take the requisite steps. They cannot now come out with such a version for seeking restoration of a dismissed Appeal. The cause shown is, therefore, not sufficient and lacks in bona fides. It is a case of gross negligence and utter callousness on the part of the Revenue/Department. In two similar Motions, we had deprecated the tendency of the Revenue to either blame it's Advocate or the procedural rules for the dismissal of their Appeals. The Appeals are dismissed for nonremoval of office objections. This Court and it's Registry derives no pleasure in dismissing the Appeals without adjudication on merits. There is a certain sanctity attached to the procedural rules. Even in the present case, more than one opportunity was granted to remove the office objections. This Court, on its judicial side cannot routinely set aside the orders of the Registry. The proceural rules cannot be set at naught or rendered redundant merely because the Government or Revenue is the litigant. The office objections being not removed within the time specified, all consequences under the rules follow. Pertinently, neither the procedural rules, nor the power of the Prothonotary and Senior Master to dismiss the Appeal as above or refuse it's registration are challenged. Hence the Notice of Motion is dismissed.

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• 2017 (9) TMI 382
  Refund inclusive of interest - delay in granting the refund - Held that:- It is stated that the refund inclusive of interest has now been granted to the Petitioner on 28th June 2017 by way of cheque. Considering the delay in granting the refund, the Department will pay costs of ₹ 10,000/- to the Petitioner within four weeks.

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• 2017 (9) TMI 381
  Bogus purchases - assessee having made alleged purchases from accommodation entry providers i.e. hawala dealers - bogus bills with no actual purchases - Held that:- The said party Nutan Metals has confessed before sales tax authorities that they are engaged in providing accommodation entries without supplying any material physically wherein only bogus bills are issued. The said party has allegedly issued bills to the tune of ₹ 56,55,569/- to the assessee. The said information was received by Revenue from Sales Tax Department wherein the assessee is stated to be beneficiary of the accommodation entry provided by Nutan Metals. Notices u/s 133(6) by the AO to the said party remained uncomplied with by Nutan Metals and the assessee could not produce the said party before the authorities below. The assessee is not able to discharge the onus lay on it under provisions of the 1961 Act in this case. Thus as the assessee has obtained actual material from grey market at lower price and to save on VAT, grey market profits etc. has obtained bogus invoices from the said party namely Nutan Metals. The consumption/utilization of the material reflected by the said bogus invoices stood proved while the GP already declared is 31.91% which included these alleged purchases, which has already suffered tax. End of justice in this case will be best served in this if addition is sustained to the tune of 6% of the purchases to the tune of ₹ 56,55,569 so made from Nutan Metals, which will lead to confirmation/upholding of addition to the tune of ₹ 3,39,334/-

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• 2017 (9) TMI 380
  Validity of notice under Section 158BC - valid service of notice - authorization to issue notice - Held that:- The notice under Section 158BC of the Act is said to have been served upon the counsel representing the respondent-assessee. However from the findings as returned by the Tribunal, it is apparent that the counsel upon whom, the said notice is said to have been served, was never authorized or engaged by the respondent-assessee and he had never represented the respondent-assessee even earlier. The Third Member categorically returned a finding that there was no valid service of notice. We do not find any error of law in the findings so returned by the Tribunal. In view of the aforesaid finding when there was no valid service of notice, we are of the opinion that there is no substantial question of law in this connection and the appeal does not even require adjudication on merits.

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• 2017 (9) TMI 379
  Disallowance made u/s. 14A - expenses related to earning of income on which tax is not payable in the eyes of law - Held that:- Disallowance out of expenses incurred by the assessee in the course of his practice as a Senior Advocate is not sustainable as at no stage it has been said that the authorities found any dissatisfaction as regards the correctness of the claim made by the assessee. In view of above, no disallowance under section 14A is sustainable in the eyes of law. We further find considerable cogency in the assessee’s counsel submission that the issue in dispute is squarely covered by the ITAT, ‘G’ Bench, New Delhi decision passed in assessee’s own case for the AY 2008-09 [2016 (12) TMI 864 - ITAT DELHI] wherein same held. - Decided in favour of assessee.

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• 2017 (9) TMI 378
  Addition u/s 14A - Held that:- If there is no exempt income, disallowance u/s 14A not to be made. See Cheminvest Ltd. Vs CIT [2015 (9) TMI 238 - DELHI HIGH COURT]. Loss on sale of mutual funds - capital loss OR business loss - mutual funds held as stock in trade - Held that:- It is undisputed fact that the loss has been incurred during the normal course of the business. Since the assessee's only source of income was his interest and in this view the loss incurred on the sale of mutual fund has to be held as business loss. Therefore, this issue is covered by the judgment of the Hon'ble Supreme Court in the case of CIT vs Cocanada Radhaswami Bank Ltd. (1965 (4) TMI 11 - SUPREME Court) wherein it was held that since the entire income of the assessee include interest on securities, the assessee was entitled to set off such losses out of its business income. We also note that AO cannot dispute that the loss arising from sale of investment will be capital gain as against business loss claimed by the assessee. The same stand was followed by the assessee in the earlier years and there is no addition made by the AO in the earlier and succeeding years. Thus addition deleted. Assessee appeal allowed.

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• 2017 (9) TMI 377
  Claim u/s 54EC - making investment in RECL Bonds of ₹ 50,00,000/- each in 2 financial years - investment of ₹ 50 lakhs each were made in the month of March 2013 and May, 2013 falling within the stipulated period of six months but in two different financial years - AO disallowed the deduction under section 5 EC by making an investment cannot exceed ₹ 50 lakhs in the assessment year Held that:- From the provisions of Sec. 54EC we noted that the limit of ₹ 50,00,000/- as given under the proviso is per person per financial year. The plain reading of the section as well as the proviso clearly suggests the same interpretation. There is no ambiguity in the interpretation. Had there been an intention of the legislature to restrict the exemption to ₹ 50,00,000/-, the legislature would have provided the embargo in this regard. Making of the investment is a condition for availing of the exemption. Condition for availing of the exemption requires that the investment can be made within a period of 6 months. If 6 months falls within a different financial year, as has happened in this case, in our opinion, this Tribunal cannot add the embargo that the assessee cannot make the investment to avail of the exemption under Section 54EC in the different financial year if he had already made the investment in the financial year in which the capital asset is transferred. In our opinion, the language of Section 54EC is clear and unambiguous and it leads to the interpretation that the assessee can make the investment in two different financial years provided in a financial year the investment made did not exceed ₹ 50,00,000/-. Also gone through the circular no. 3/2008 dtd. 12.3.2008 issued by the CBDT being an explanatory note on the provisions relating to direct taxes in Finance Act, 2007 , it is apparent that the Government only intended to restrict the investment in a particular financial year and accordingly has fixed the limit of ₹ 50,00,000/- as permissible limit in a particular financial year. The Government did not intend to restrict the maximum amount of exemption permissible under Section 54EC. Legislature in our opinion has consciously used the words “in a financial year” in the proviso to Sec. 54EC of the Act. If the legislature wanted to restrict the exemption itself to ₹ 50,00,000/-, it could have have simply dispensed with using the words ‘in a financial year’. CIT(A) has rightly deleted the addition made by the Assessing Officer. CIT(A) has rightly deleted the addition - Decided against revenue.

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• 2017 (9) TMI 376
  Transfer pricing adjustment on Advertisement, Marketing and Promotion (AMP) expenses - determination of the existence or otherwise of an international transaction on account of AMP expenses incurred by the assessee - TPO treated the AMP spend as a separate international transaction - Held that:- We do not find any logic in applying 5% as a benchmark mark-up, which is not emerging from any discussion in the order. In other words, there is no attempt to find out the mark-up of comparables by analyzing the AMP functions carried out by the assessee vis-à-vis the comparables. To put it straight, neither the assessee nor the TPO have followed the prescription of the judgment in the case of Sony Ericsson (2015 (3) TMI 580 - DELHI HIGH COURT) for benchmarking. Further, we note that no detail of the AMP functions performed by the assessee is available on record. Similarly, there is no reference in the order of the TPO to any AMP functions performed by comparables. In fact, no such analysis or comparison has been undertaken by the TPO. The ld. AR also failed to draw our attention towards any material divulging the AMP functions performed by the assessee as well as comparables. As such, we are handicapped to determine the ALP of AMP expenses at our end, either in a combined or a separate approach. Since the orders of the authorities below are not in conformity with the ratio laid down in Sony Ericsson (supra) as discussed above and further necessary details for doing this exercise at our end are also not available, we set aside the impugned order and send the matter back to the file of the TPO/AO for determining the ALP of the international transaction of AMP spend afresh in accordance with the manner laid down by the Hon’ble High Court in Sony Ericson Mobile (supra). Before parting, we consider it relevant to record that similar issue was raised by the assessee before the Tribunal for the immediately preceding two assessment years. The Tribunal in both the years, by its separate orders, has restored the matter to the Assessing Officer/TPO for a fresh adjudication. Not allowing deduction towards interest on Customs Duty - Held that:- We are convinced with the view canvassed by the DRP as followed in the impugned order. Obviously, the assessee paid interest on Customs Duty in the financial year 2015-16. The liability towards such interest got crystalised and paid during such later year only. By no standard, the assessee can claim deduction for a part of such interest in the year under consideration. As the claim pertains to a subsequent period, the assessee may take necessary action for getting the deduction in such later year as per law.

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• 2017 (9) TMI 375
  Bogus purchase - hawala transactions - CIT(A) after considering the detailed submissions of the assessee restricted the disallowance to 12.5% of these purchases, from the 100% disallowance made by the A.O - Held that:- We have observed from the orders of authorities below that large number of additional evidences were filed by the assessee to support its contentions before learned CIT(A) which were not before the AO as is emanating from the records. We have observed that learned CIT(A) has not specified the reasons/justification for admitting these additional evidences as is contemplated by Rule 46A of the Income-tax Rules, 1962. We have observed that the ld. CIT(A) has not called for any remand report from the A.O. nor additional evidences filed by the assessee before learned CIT(A) for the first time were forwarded by learned CIT(A) to the AO for necessary verification/examination by the AO . Thus, the learned CIT(A) did not follow the mandate of Rule 46A of the Income-tax Rules, 1962 . Rule 46A of the 1962 Rules is not an empty formality as it contemplate the learned CIT(A) to record reasons for admitting additional evidences filed by the assessee and then it also contemplate forwarding of these additional evidences by learned CIT(A) to the AO for his necessary verifications/examination. Thus, we are of the considered view that the appellate order of ld. CIT(A) cannot be sustained, hence, we set aside this matter back to the file of the A.O. for de-novo determination of the issue on merits in accordance with law

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• 2017 (9) TMI 374
  Levy of penalty u/s 271D and 271E - violation of provisions of section 269SS and 269T - Held that:- The initial onus lies on the assessee and not on the Revenue. The assessee has merely contended that these are advances to staff and its contractors for meeting the site expenses and repayment thereof, however it has failed to demonstrate the same with verifiable evidence. There is nothing on record to support the contention of the assessee that 13 persons in respect of whom provisions of section 269SS and 269T have been invoked by the Add CIT are assessee’s employees and/contractors and transactions with them are in the regular course of business for meeting site expenses. CIT(A) has merely endorsed the contentions of the assessee without any credible evidence on record to support the said contentions. Unless and until, the assessee discharge the initial onus placed on him, the onus cannot shift to the Revenue. CIT(A) has further held that the Addl. CIT during the proceeding u/s 269SS or 269T has not cross examined the above version of the assessee by issuing summons u/s 131 or commission u/s 133(6) to any of the persons whose names are mentioned in the annexure and the fact that all these cash payments being only for loan and advances is not established beyond doubt and no presumption based financial liabilities can be levied upon the assessee. CIT(A) has further highlighted certain contradictions in the findings of the Add CIT. As we have held above, the initial onus is on the assessee and once the assessee discharges its initial onus, the onus thereafter shift on the Revenue. In the instant case, it is also a fact that Section 271D and Section 271E being the penal provisions which have been invoked, it is to be seen that the conditions specified in the provisions are strictly fulfilled before the levy of penalty which is equal to the value of the transactions. It has to be established that there are transactions in the nature of loans and advances and their repayment, both in cash, which have clearly violated the provisions of section 269SS and 269T of the Act without any reasonable cause. On perusal of records, we find that there is not enough material on record for us to take a view in the matter. In the interest of justice and fair play, we are setting aside the matter to the file of the ld CIT(A) to examine the same afresh taking into consideration the above discussions. Appeals filed by the Revenue are allowed for statistical purposes

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• 2017 (9) TMI 373
  Depreciation claim on assets of trust - assessee had claimed depreciation allowance on the cost of fixed assets, whereas such cost of fixed assets has also been taken as an application of income while computing the total income - double deduction - Held that:- Indraprastha Cancer Society, (2014 (11) TMI 733 - DELHI HIGH COURT) wherein it has been opined that the allowance of depreciation in similar situation would not amount to a double deduction. There is no error on the part of the CIT(A) in following the decision of the Hon'ble Bombay High Court in the assessee’s own case and in the case of Institute of Banking Personnel Selection (2003 (7) TMI 52 - BOMBAY High Court ) and allowing the stand of the assessee. - Decided against revenue

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• 2017 (9) TMI 372
  Re-determination of the profits from business - net profit determination - CIT(A) compared the results of Gokuldas Exports Ltd. and found as assessee’s business being similar, the net profit determination could be justifiably made at 10% of the sales - Held that:- The methodology adopted by the CIT(A) is far from reasonable because, there is no material brought out by him to show how the Gokuldas Exports Ltd. was comparable to the operations carried out by the assessee. Therefore, under these circumstances, in our considered opinion, the manner of estimation made by the CIT(A) cannot be sustained. Also observed that before the CIT(A) assessee furnished an unaudited P&L Account, which formed the basis for the CIT(A) to apply the profit percentage on the declared sales. In our view, before taking into account such unaudited P&L Account, it was imperative to examine its authenticity and in that respect we do not find any particular finding by the CIT(A). Pertinently, this unaudited P&L Account was not before the Assessing Officer in the course of the assessment proceedings. Thus, we deem it fit and proper to set-aside the order of CIT(A) and restore the assessment for the two captioned assessment years back to the file of Assessing Officer for determination afresh in accordance with law. - Decided in favour of assessee for statistical purposes.

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• 2017 (9) TMI 371
  Discrepancy in receipt as per TDS certificates and receipts booked by the assessee - Revision u/s 263 - CIT(A) granted relief to the assessee on the ground that the A.O. has not pointed out any discrepancy in the audited accounts which were audited u/s 44AB as well as the A.O. failed to make any enquiry with Provogue India Limited as no notice/summons u/s 133(6)/131 respectively were issued by the AO - Held that:- As observed that the power of ld. CIT(A) is co-terminus with the power of A.O. and the ld. CIT(A) under these circumstances should have directed the A.O. to issue summons/notices u/s 131/133(6) of the Act to the M/s Provogue (I) Ltd. to verify this discrepancy in income or could have himself issued such notices/summons to Provogue India Limited for necessary verifications, the objective being to compute correct income chargeable to tax which is mandate of the 1961 Act. The primary onus is on the assessee to reconcile the income as is reflected in TDS certificates with books of accounts, as the said income stood credited in assessee’s books of accounts which onus was not discharged by the assessee in the instant case. Hence, keeping in view the factual matrix of the case, we are inclined to set aside and restore this matter to the file of the A.O. for de novo determination of the issue on merit in accordance with law. The assessee is directed to file necessary evidences/explanations before the A.O. in the de novo proceeding to reconcile the difference between the income as is reflected in the books of accounts and TDS certificates w.r.t. Provogue India Limited. Infringement of Section 194C - payments being made without deduction of tax at source from labour payments - Held that:- The assessee had made payments to the tune of ₹ 1,01,04,662/- and Rs. ₹ 7,64,497/- to various persons which was claimed by the AO to have exceeded threshold limits as stipulated u/s 194C of the 1961 Act and the assessee had made payments without deducting tax at source as stipulated u/s 194C which as per AO infringed provisions of Section 40(a)(ia). We find that the assessee had claimed that these payments were made to supervisors who distributed payment to labourers without retaining any income for themselves and hence no violation of Section 194C r.w.s. 40(a)(ia). The assessee set up this plea of making payment to supervisors who in turn made payments to labourers without retaining any profit for themselves, for the first time before ld. CIT(A) and learned CIT(A) did not called for any remand report from A.O. but accepted the plea of the assessee while granting relief to the assessee without any verification/ examination of the claim of the assessee. This new plea of the assessee that payments were made to supervisors who in turn distributed payments to labourers without keeping any income for themselves and hence no infringement of Section 194C r.w.s. 40(a)(ia) need verification by the AO. Thus, this matter needs to be set aside and restored to the file of the A.O. for denovo determination of this issue on merits, who will evaluate the contention of the assessee on merits in accordance with law.

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• 2017 (9) TMI 370
  TDS u/s 192 or 194J - TDS on payment to Full Time Consultants (‘FTS’) - ‘assessee in default' - real intention of the parties in the present case is appointment of consultants OR to create employer-employee relationship - Held that:- The assessee being a hospital, it is expected to maintain its image the reputation and image and this expectation of the hospital cannot be construed as exercising control and supervision over the doctors in their professional activities and thereby cannot lead to the conclusion that an employee-employer' relationship exists. We also find that the AO has merely compared the appointment letter in case of Honorary Consultants and independent professional doctors and brought out differences to hold that the independent professional doctors are employees. In doing so, he has overlooked the similarities in the two which essentially is necessary to draw the point that both are professionals. He chose to ignore assessee's submissions on the comparison between the assessee's employees entitled to provident fund, different categories of leave, gratuity, HRA, etc. benefits which the independent doctors were not entitled to. Apart from the above, we are of the opinion that the real intention of the parties in the present case is appointment of consultants and not to create employer-employee relationship and accordingly TDS is liable to be deducted u/s 194J of the Act. Another aspect in this matter is that the fact that the TDS is liable to be deducted u/s. 194J of the Act on payment to the independent professional doctors, the AO has ignored the excess of TDS amount deducted u/s. 194J of the Act in certain cases, in comparison with the TDS liability determined u/s 192 of the Act, thereby raising a demand u/s 201(1). Further, these doctors have filed their return of income and declared the receipts from the assessee hospital and have paid taxes thereon. Accordingly, interest u/s. 201(1A) is not chargeable - Decided in favour of assessee.

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• 2017 (9) TMI 369
  Penalty levied u/s 271B - failure to get accounts audited u/s 44AB - reasonable and sufficient cause for not getting the accounts audited - Held that:- Assessee claims that there is sufficient and reasonable cause for not getting its accounts audited as its books of account and other relevant documents were destroyed by natural calamity, i.e. flood on 30-06-2007 because of which it could not prepared its books of accounts to be produced to the auditor for audit of accounts. The assessee has furnished relevant documents in support of its claim that there was flood which destroyed its books of account. We find that the assessee has filed details of insurance claim made for loss of stock and other assets on account of flood on 30-06-2007. We find that the assessee claims to have maintained books of account, however those books of account were destroyed in flood because of which the assessee could not produce the books of account to the auditor to get its books of account audited u/s 44AB of the Act. In this case, the assessee has proved beyond doubt with necessary evidence that there was sufficient and reasonable cause for not getting its accounts audited u/s 44AB of the Act. Therefore, we are of the view that the AO was erred in imposing the penalty u/s 271B of the Act. The CIT(A), without appreciating the facts, simply upheld penalty levied by the AO. - Decided in favour of assessee.

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• 2017 (9) TMI 368
  Bogus purchases - Addition under section 69C - estimating G.P. @ 25% - Held that:- The addition at the rate of 4% would be reasonable and justified in the present circumstances while upholding the rejection of books of accounts. Accordingly, the order of the ld.CIT(A) is modified as above and the AO is directed accordingly. Reopening of assessment u/s 147/148 - Held that:- We find that the reopening was based on valid reasons as the AO has received information from the Sales Tax Department, GOM and there was no doubt that the assessee was availing bogus entries for purchases from four parties as stated herein above without purchasing any actual material. Only thereafter recording due satisfaction, the AO reopened the case u/s 147/148 of the Act. Under we are of the considered view that the reopening in such circumstances is quite valid as there were several reasons to justify the reopening. Accordingly, ground of reopening of the assessment taken by the assessee is dismissed.

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• 2017 (9) TMI 367
  Assessment u/s 153A - no search u/s 132 - Held that:- Assessing Officer wrongly assumed jurisdiction u/s 153A of the Act without there being any initiation of search on the assessee u/s 132 of the Act. Resultantly, all the proceedings flowing from such invalid notice u/s 153A, including the passing of the assessment order, have been quashed. Addition u/s 68 - genuineness of the transaction - Held that:- Mere fact that the assessee placed on record bank statements, confirmations, certificates of incorporation, memorandums of association, etc. of the companies who allegedly invested in the assessee’s shares at a huge premium, does not in itself justify the genuineness of the transaction. Apart from the paper trail, the assessee is supposed to satisfy the Assessing Officer about the genuineness of the transaction. It can be seen that the ld. CIT(A) has deleted the addition to the tune of ₹ 15 lac being the amount received as share capital with share premium for M/s Startrans Logistics Pvt. Ltd., simply on the ground that the letter sent to this party was not returned by Postal Department. This, in our considered opinion, is hardly sufficient enough to prove the necessary ingredients u/s 68 of the Act. The impugned order cannot be countenanced. Considering the totality of facts and circumstances of the instant case, we are of the considered opinion that the ends of justice would meet adequately if the impugned order is set aside and the addition of ₹ 75 lac is restored to the file of Assessing Officer for a fresh adjudication. The ld. AR, in all fairness, candidly accepted the course of restoration to the AO for a fresh decision as per law. Unexplained share capital along with share premium - Held that:- When complete information was not admittedly submitted before the Assessing Officer, how he could have proceeded to examine the genuineness of the depositors, is anybody’s guess. In our considered opinion, the impugned order deleting the addition cannot be affirmed. Considering the totality of facts and circumstances of the instant case, we are of the considered opinion that the ends of justice would meet adequately if the impugned order is set aside and the matter is restored to the file of Assessing Officer. We order accordingly and direct the de novo consideration of the issue at the Assessing Officer’s end in respect of receipt of share capital and share premium amounting to ₹ 40 lac.

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• Customs

• 2017 (9) TMI 332
  Natural justice - whether the Petitioner was provided an adequate opportunity of representing against the Show Cause Notice (‘SCN’) dated 28th November 2013 issued to the Petitioner? - Held that: - The notice of hearing was received by the Petitioner on the very date of hearing at 4 pm, making it impossible for the Petitioner to appear before the AA. In the circumstances, the AA ought to have permitted one more opportunity of hearing to the Petitioner in the SCN proceedings - matter is restored to the file of the AA for a fresh disposal in accordance with law - petition allowed being matter restored.

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• 2017 (9) TMI 331
  Rejection of application for settlement of case - levy of penalty on licence broker / CHA - seeking relief when importer got the relief - DFRC licence - import of leather chemicals - Held that: - this Court is not convinced with the order passed by the first respondent, not in purview with Section 127(B) of the Customs Act. Hence, the impugned order, dated 25.11.2003 passed by the first respondent is set aside to the limited extent with a direction to the first respondent to entertain the application submitted by the petitioner on par with other importers who have got the benefit of settlement Commission, without being influenced by any of the observation made by this Court - petition allowed - decided partly in favor of petitioner.

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• 2017 (9) TMI 330
  Penalty u/s 112(a) and 112(b) of the Customs Act, 1962 - The petitioners have contended that, they will prefer an appeal if the portion of imposition of penalty u/s 112(a) and Section 112(b) of the Customs Act, 1962 are set aside - Held that: - There is some substance in the contention of the petitioners so far as the imposition of penalty under Section 112(a) and Section 112(b) of the Customs Act, 1962 in the facts of the case are concerned. The provisions of Sections 112(a) and 112(b) of the Customs Act, 1962 are sought to be attracted in the present case by the impugned order. As the petitioners had allegedly successfully smuggled goods into India on other occasions, the adjudicating authority assumes that the petitioners are guilty of smuggling of the value as indicated in the impugned order. The penalty is imposed on an assumption. Such assumption is not supported by any material. Therefore such imposition of penalty on the three petitioners cannot be sustained - petition allowed.

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• 2017 (9) TMI 329
  Jurisdiction - power of DRI to issue SCN - whether DRI is competent to issue show-cause notice? - Held that: - w.e.f. July 6, 2011, the Additional Director General, DRI was prospectively appointed as proper officer for the purpose of Section 28 of the Customs Act. Hence, from 06.07.2011 ADG-DRI has been empowered to issue demand notice under Section 28. Subsequently, sub-section 11 was inserted under section 28 of the Customs (Amendment and Validation) Act, 2011 dated 16.9.2011, assigning the functions of proper officers to various DRI officers with retrospective effect - Later on, i.e. for the period subsequent to the amendment, the matter i.e. the DRI officers having the proper jurisdiction to issue the SCN or not had came up before the Hon’ble Delhi High Court in the case of Mangali Impex vs. Union of India [2016 (5) TMI 225 - DELHI HIGH COURT], and the High Court inter alia, held that even the new inserted section 28 (11) does not empower either the officers of DRI or the DGCEI to issue the SCN or adjudicate for the period prior to 8.4.2011. Recently, the Hon’ble High Court of Delhi in the case of BSNL Vs. UOI [2017 (6) TMI 688 - DELHI HIGH COURT] has dealt with the identical issue where the notice was also issued by DRI. The Hon’ble High Court of Delhi has considered the judgment in the case of Mangli Impex Vs. UOI which is stayed by the Hon’ble Supreme Court. Finally the Hon’ble High Court has granted liberty to the petitioner by observing that petitioner is permitted to review the challenge depending on the outcome of the appeals filed by the UOI in the Supreme Court against the judgment of the Court in the case of Mangli Impex Ltd. Appeal allowed by way of remand.

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• 2017 (9) TMI 328
  Jurisdiction - power of DRI to issue SCN - Held that: - the notice issued by the DRI who was not a competent authority as per the ratio laid down in the case of Mangali Impex Ltd. Vs. UOI [2016 (5) TMI 225 - DELHI HIGH COURT] - In this connection, we note that similar issues have been dealt with in various cases by the Tribunal recently. It is held that the matters have to be remanded back to the original authority for a decision - appeal allowed by way of remand.

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• 2017 (9) TMI 327
  Jurisdiction - power of DRI to issue SCN - Held that: - the notice issued by the DRI who was not a competent authority as per the ratio laid down in the case of Mangali Impex Ltd. Vs. UOI [2016 (5) TMI 225 - DELHI HIGH COURT] - In this connection, we note that similar issues have been dealt with in various cases by the Tribunal recently. It is held that the matters have to be remanded back to the original authority for a decision - appeal allowed by way of remand.

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• Corporate Laws

• 2017 (9) TMI 324
  Illegally and wrongfully shown as the Director - Power of Registrar to call for information or explanation - action of the Directors of the Company in including his name as a Director of its Board though he is not the share holder or the Director - deliberate manipulations - Held that:- The submissions made on behalf of respondents 1 and 2 herein, recorded above, would clearly indicate that the allegations of the petitioner that large scale manipulations have been done in the records of the Company appear to be more or less established. It is, therefore, up to the second respondent now to cause such scrutiny and enquiry, as is warranted under the Companies Act and Regulations, to ensure that such mistakes and deliberate manipulations are rectified and unearthed in and from the books and documents of the Company. In such circumstances, direct the second respondent to take immediate action to cause a scrutiny and an enquiry into the statutory books and documents of the Company and to issue such orders as may be warranted for rectification of the same and to follow up with all appropriate action as is warranted under the mandate of law. The exercise as directed herein shall be completed by the second respondent as expeditiously as possible but not later than four months from the date of receipt of a copy of this judgment. Merely because the petitioner's name has been included as a Director in the Company's records between 2005 and 2014, no action will be taken against him in such capacity until such time as the scrutiny and enquiry as ordered herein is completed by the second respondent and any such action, if required, will adhere to the order to be issued by the second respondent after such an exercise.

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• Service Tax

• 2017 (9) TMI 365
  Validity of challenge made against order-in-original - the appellant chose to take recourse to an appellate remedy against the order-in-original, albeit, after the prescribed period of limitation had expired - the decision in the case of M/s. Days Inn Deccan Plaza Versus Commissioner of Service Tax (Appeals) -I, Additional Commissioner of Service Tax [2017 (4) TMI 859 - MADRAS HIGH COURT] contested, where it was held that It is settled law that statutory forums and/or Courts, can and/or do decide matters both rightly and wrongly, albeit, within the limits of their respective jurisdictions - Held that: - the decision in the above case upheld - SLP dismissed.

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• 2017 (9) TMI 364
  Condonation of delay - Turn Key Contract - classification of services - the decision in the case of M/s Aspinwall & Company Limited Versus C.C.E., Cochin [2017 (5) TMI 149 - CESTAT BANGALORE] contested - Held that: - delay condoned.

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• 2017 (9) TMI 363
  Survey and Exploration of Mineral services - Non-payment of service tax - penalty - Held that: - the issue whether the subject services of drilling of shot hole would come within the ambit of survey and exploration of mineral services was subject matter of doubt and dispute - There is no specific allegation of fraud or willful suppression in the show cause notice. We find that the department has failed to establish the deliberate attempt to evade payment of service tax by suppressing or mis-declaring facts - the issue was subject matter of litigation before the Tribunal and being an interpretational issue, the penalty imposed is too harsh on the appellant - the penalty of ₹ 2.75 crores imposed, is unjustified and requires to be set aside - matter requires verification as regards the contentions of the appellant that the amount that has been already discharged by them has not been properly taken note of - appeal allowed by way of remand.

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• 2017 (9) TMI 362
  Manpower recruitment service - case of appellant is that as per the definition of manpower recruitment services upto 15/06/2005, the supply of manpower was not covered under the definition, therefore, till this date no service tax demand is sustainable - time limitation - Held that: - the period of demand is 2005-2006 and 2006-2007, whereas the show-cause notice was issued on 21/10/2010. The appellant in their ST-3 return clearly declared the amount of provident fund and ESI on which no service tax was shown to have been paid under the belief that the reimbursement is not taxable. The department was not prevented from raising the issue that such amount is also liable to be taxed - there is neither any suppression of fact nor any malafide intention on the part of the appellant - the demand is clearly time barred - appeal allowed only on limitation.

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• 2017 (9) TMI 361
  GTA services - failure to take registration and pay Service Tax - The department entertained the view that the appellant was liable to pay Service Tax on the amounts received by them from Army/GREF for use of the vehicles under the category of Goods Transport Agency - penalty - Circular No.89/7/2006-ST dated 18.12.06 - Held that: - The CBEC has clarified vide above Circular that activities performed by Government and its wings which are in public interest and is undertaken as mandatory and statutory function are not to be charged to Service Tax even if some amount is charged by way of for the provision of such activity. The appellant has made available vehicles for army and GREF in the state, such activity was in pursuance of public interest. Keeping in view the fact that Sikkim is a state bordering China we appreciate that the Government was bound to reach the necessities including food to people of Sikkim at the time of dislocation of traffic and when private crushers and trucks are taken away from the road - the activity performed is part of the statutory function of the State and hence in the light of the CBEC's Circular, cannot be considered as provision of taxable service. Appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 360
  Refund claim - the subject refund claims of the appellant have been filed beyond the period of one year from the date of export of the relevant goods - rejection on the ground of time limitation - Held that: - clause 2(f) of the N/N. 17/09-ST clarifies that the refund claim is to be filed within one year from the date of export of the goods, and in the face of the Explanation that for this purpose date of export shall be the date on which the proper officer of the Customs make an order permitting clearance and loading of the said goods for exportation under Section 51 of the Customs Act, 1962, the subject claim of refund appears to be not admissible - appeal dismissed - decided against appellant.

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• 2017 (9) TMI 359
  Business auxiliary service - reverse charge mechanism - considerations paid to the foreign telecom service provider who provides telecom service to the subscriber of the appellant during their visit outside India - Held that: - There is no dispute that the services provided by the foreign telecom Co. is squarely covered by the tax entry 'telecommunication service'. However, the tax liability could not be brought in only for the reason that the said provider of service in foreign country is not a Telegraph Authority as required under Finance Act - the telecommunication service liable to tax has been exhaustively defined and admittedly, the services now under consideration are specifically covered in the said tax entry. The Board has examined the international practice with reference to roaming services vide Circular dated 03.01.2007. It was held that services to inbound roamers is delivered and consumed in India and hence, it is not an export of service. It was further clarified that international practice treats the telephone service provided to an inbound roamer by the visited network, for purpose of taxation, in the same manner as a telephone service provided to any home subscriber. Appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 358
  Business Auxiliary Services - export of services or not - whether or not the appellant received the consideration for service, in convertible foreign exchange? - Held that: - It is relevant to note that when a service is provided to a person located abroad and the conditions is payment of consideration in convertible foreign exchange, the same shall stands satisfied, if the recipient of service transfers the money from his account which is in convertible foreign currency and remitted to Indian provider of service. The credit to account of Indian recipient of money at the bank of Indian recipient, will necessarily be in Indian rupees. It is apparent that no foreign exchange amount can be credited in bank located in India. The transactions are in Indian rupees - In Sun Area Real Estate Pvt. Ltd. [2015 (5) TMI 885 - CESTAT MUMBAI], it was held that the FIRC issued certifying that the payment not received in non-convertible rupees establishes payment in foreign exchange. Such payment in rupees is equal to foreign exchange - appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 357
  CENVAT credit - job-work - security services - Held that: - Since the service tax in respect of security service was paid by the appellant for ensuring proper security at its job workers premises, in respect of the job worked goods belonging to the appellant, we are of the view that credit taken on such service cannot be denied by the department on the ground that the said service has not been utilized within factory of manufacture of the final product - credit allowed. CENVAT credit - testing charges - denial on the ground that there is no evidence to show that such testing charges were in relation to goods manufactured by the appellant - Held that: - Tribunal in the case of Commissioner of Central Excise Nagpur Vs Ultra Tech Cement Ltd. [2010 (7) TMI 302 - CESTAT, MUMBAI], in an identical situation, has allowed the cenvat credit in respect of the services used/ utilized at a place which is situated outside the factory premises - credit on the testing charges cannot be denied to the appellant. Cargo Handling Services - activities of unloading of transformers by the appellant at the customer’s premises - Held that: - the appellant has only arranged the labour for unloading of goods at the customer’s site. Thus, the requirement of the definition of cargo handling service is not satisfied in this case - the Tribunal in the case of N. Rajshekara & Co. Vs CCE Maysore [2008 (7) TMI 66 - CESTAT Bangalore] has set aside the demand holding that the assessee had not handled the goods by loading from one place to unloading at another place; thus, the demand confirmed under cargo handling service will not be sustainable. Appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 356
  Business Auxiliary Services - bill printing activity - Held that: - in an identical issue, this Tribunal in the case of appellant itself CCE, Delhi Versus M/s Ricoh India Limited And Vice-Versa [2017 (3) TMI 1159 - CESTAT NEW DELHI], where it was held that printing activity undertaken by the appellant will not liable to payment of service tax under the category of BAS - appeal allowed - decided in favor of appellant.

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• Central Excise

• 2017 (9) TMI 355
  Refund claim - claim submitted by the buyer / purchase of goods and not by the manufacturer - developer/co-developer of SEZ - jurisdiction - Held that: - an identical issue has come up before this Tribunal in the assessee-Appellants own case M/s Adani Power Limited vs CCE, Bhubaneswar [2017 (7) TMI 891 - CESTAT KOLKATA], where it was held that the appellant, who had paid the Excise duty to the manufactuer, had the locus-standi, to file the application claiming the refund of duty - matter remanded to the jurisdictional authority to examine the claim and pass the order along with the earlier order, which is still pending, but by providing a reasonable opportunity to the assessee-Appellants - appeal allowed by way of remand.

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• 2017 (9) TMI 354
  Rejection of Settlement Application - assessment under Sections 4 and 4A of the CEA - N/N.10/2010-CE (N.T.) dated 27th February, 2010 - packing machines - Petitioner approached the Settlement Commission under Section 32 E of the CEA with a prayer to admit the application and settle the SCN issued to it. The Settlement Commission then directed the application to be proceeded with under Section 32 F (1) on 2nd July, 2012 and called for a report from the Additional Commissioner under Section 32 (F) (3), which was submitted on 8th August, 2012 The Settlement Commission, after considering the same and after hearing the parties, by the impugned order dated 3rd September, 2012, by a 2:1 majority sent the matter to the adjudicating authority and did not entertain the application of the Petitioner - Held that: - if there is a complex question of fact or law or a mixed question requiring adjudication, then the Settlement Commission, may, depending on the facts of each case, refer the matter to the adjudicating authority, more so in a situation where it is of the opinion that a settlement is unlikely. The powers of the Settlement Commission under Section 32L (1) of the CEA to send the matter to the adjudicating authority, if the applicant does not cooperate with the Settlement Commission, is in addition to the powers under Section 32F (5) of the CEA. If in a settlement proceeding, any party refuses to cooperate with the authority, which is dealing with the dispute, it cannot expect it to proceed further. In any Alternate Dispute Resolution mechanism namely mediation, conciliation etc., cooperation of the parties is a pre-requisite and an essential condition. Thus, Section 32 L of the CEA merely states the obvious i.e. if there is noncooperation, the matter would be sent to the adjudicating authority. In any process of settlement, it cannot be expected that the Settlement Commission would force any party into a settlement. The power of granting immunity from prosecution and penalty, vested with the Settlement Commission, is a consequence being provided to any applicant before the Settlement Commission, only to ensure the speedier disposal and resolution of the disputes and is not a tool for delaying adjudication. Whenever the Settlement Commission comes to the conclusion that the dispute cannot be resolved by it, it must refer the matter to the adjudicating authority. Any other interpretation to the contrary, defeats the fundamental purpose for constitution of the Settlement Commission namely speedier resolution. The writ petition is dismissed and the matter is sent to the adjudicating authority to proceed from the stage of the issuance of the SCN dated 21st July, 2011, in accordance with law - petition allowed by way of remand.

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• 2017 (9) TMI 353
  Validity of SCN - Time limitation - Section 11A(4) of the Central Excise Act, 1944 - Held that: - the impugned show cause-cum-demand notice is dated March 31, 2016 and it relates to the period from April 2011 to May 2015. It is within the time span of five years stipulated under Section 11A(4) of the Act of 1944. The present writ petition appears to be an attempt by the petitioner to stall the adjudication proceedings on specious pleas. The instant writ petition is casuistic. It would be appropriate to dismiss the writ petition and put the writ petitioner on terms - petition dismissed.

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• 2017 (9) TMI 352
  Clandestine removal - cone yarn as hank yarn - non-speaking order - Whether the Tribunal is justified in holding clandestine removal of final products without any corroborative evidences such as unaccounted purchase of raw materials, transportation of raw materials to the factory and transportation of final products from the factory and suppression of production with electricity consumption? - Principles of Natural Justice - Held that: - Going through the materials on record, we are of the view that the order of the Tribunal is a non-speaking order, with reference to what is claimed by the appellant and denied by the Department - the appellant has made out a case, for interference, on the aspect that the Tribunal has failed to address the issue regarding cross examination of witnesses. Decision in NGA Steels (P) Limited's case [2016 (7) TMI 127 - MADRAS HIGH COURT], squarely applies to the case on hand, where it was held that When a specific plea regarding violation of principles of natural justice is raised, CESTAT, Chennai, is bound to record a specific finding, which is conspicuously absent. Matter remanded to CESTAT, Madras to consider and record a specific finding, on the issues regarding cross examination - appeal allowed by way of remand.

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• 2017 (9) TMI 351
  Condonation of delay in filing appeal - Section 35G of the Central Excise Act, 1944 - rejection to condone delay on the ground of jurisdiction and also on the ground that no explanation was given for the delay in filing the appeal after December, 2015 - Held that: - Sub-Section (3) of Section 35B of the Act provides that every appeal under this section shall be filed within 3 months from the date on which the order sought to be appealed against is communicated to the party concerned - The aforesaid provisions do not lay down any limitation on the power of the CESTAT to condone the delay of more than 30 days in filing the appeal rather it is open to the CESTAT to condone the delay in filing the appeal irrespective of the length of delay. - In view of the conjoint reading of Sub-Sections (3) and (5) of Section 35B of the Act it is implicit that the CESTAT does not lack in jurisdiction to condone the delay even of more than 30 days in the filing of the appeal - answered in favor of assessee. Reason for delay not given - Held that: - as there is no dispute to the fact that the ownership of the appellant was in transition, the new management had filed the appeal promptly without wasting unnecessary time and that the delay if any on its part is not deliberate or smacks of mala fides, the CESTAT probably took too technical a view in refusing to condone the delay - The facts and circumstances of the case establishes a sufficient good cause for condoning the delay as it is not necessary to explain even each days delay - decided in favor of assessee. Appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 350
  Refund claim - unjust enrichment - assessee-Appellants had paid the duty on the said items, but later gave discount to the customers - denial of refund on the ground that the assessee-Appellants had failed to establish and prove that the incidence of duty has not been passed on to the buyers - Held that: - the principle of unjust enrichment is applicable in the instant case under Section 11-B of the Central Excise Act, 1944. It is evident from the record that the assessee-Appellants had failed to submit such documentary evidence on record with the refund claims to establish that the duty incidence claims for refund has not been passed on to the buyers - the assessee-Appellants have not submitted the relevant documents pertaining to the unjust enrichment - the bar of unjust enrichment is applicable in the instant case - appeal dismissed - decided against appellant.

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• 2017 (9) TMI 349
  Clearance of inputs without payment of duty - whether the inputs on which Cenvat credit has been availed can be cleared without payment of duty against CT-3 Certificate under the exemption under N/N. 22/2003-CE dated 31/03/2013? - Held that: - inputs received in factory on which Cenvat credit has been availed can be cleared without payment of duty against CT-3 Certificated under the benefit of N/N. 22/2003-CE dated 31/03/2013 - Tribunal in the case of Matrix Laboratories Ltd. [2014 (6) TMI 685 - CESTAT BANGALORE] has very clearly observed that the inputs can be considered as excisable goods and the clearance of the same can be placed on par with clearance of excisable goods and also held that clearance of the said goods under Rule 19(2) of Central Excise Rules provided for clearance of goods without payment of duty irrespective of the fact that they were manufactured by the assessee or otherwise - appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 348
  CENVAT credit - duty paying documents - it was alleged that appellant is engaged in fraudulent availment of Cenvat Credit. Appellant was fabricating document to show paper transaction by which they have availed wrong Cenvat credit and also passed on the same without actual payment of duty - Held that: - appellant was admittedly engaged in the fraudulent activity for supplying fabricated Central Excise invoices, offence was clearly admitted by Shri. Ashish Goradia in his statement - demand upheld - appeal dismissed - decided against appellant.

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• 2017 (9) TMI 347
  Non-payment of excise duty - CENVAT credit - case of Revenue is that the cenvat credit cannot be allowed as the appellant have not periodical filed returns - Held that: - appellant have produced all the documents before the adjudicating authority such as purchase, invoices etc. In such a situation, the adjudicating authority after verifying the documents should have allowed the cenvat credit which could have been adjusted against the duty demand of the relevant period - the adjudicating authority directed to conduct a proper verification of the cenvat documents and if it is found correct the same should be adjusted against the demand of duty as a consequence the appellant will not be required to pay the duty equal to cenvat credit from cash/PLA - appeal allowed by way of remand.

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• 2017 (9) TMI 346
  Classification of goods - Chewing Tobacco - N/N. 8/2003-CE dated 01/03/2003 - compounded levy scheme - whether the product would be classified under CTH 24039910 or otherwise? - Held that: - Admittedly, the scope of the term “Chewing Tobacco” has not been statutorily defined in the Central Excise provisions. The claim of the appellant is that the product manufactured by them is lime mix tobacco and not Chewing Tobacco. The Original Authority relied on the appellant’s declaration made to the Department on 18/12/2007. A reference had also been made to a letter dated 29/11/2010 of the appellant explaining the process of manufacture. Tobacco powder/dust/refuse and the lime combined with water in pre-determined proportion are fed into power operating mixing machine to obtain tobacco mix with lime, which is their final product. We note that relying on the explanatory notes under Chapter 24 of HSN, the Original Authority correctly rejected the contention of the appellant that the product, in question, should be considered as “homogenized” or “reconstituted” tobacco. It is clear that the product manufactured by the appellant cannot fall under that category which are classified under Central Excise Tariff Heading 24039100. Compounded Levy scheme - the appellants contested that the rate of duty as determined by the 1st Schedule to Central Excise Tariff Act readwith notification for SSI Notification No.8/2003-CE should apply to them. In fact, they contested that Chewing Tobacco cannot be brought under the 2010 rules for compounded levy - Held that: - The compounded levy scheme is framed in terms of the statutory powers provided under Section 3A of the Central Excise Act, 1944. The said section clearly stipulates that notwithstanding anything contained in Section 3, the Central Government can notify in respect of specific goods that the duty shall be levied and collected in accordance with the provision of Section 3A. The Original Authority has correctly examined the applicability of compounded levy scheme w.e.f. 08/03/2010, to the products manufactured and cleared by the appellant and confirmed the duty liability accordingly. Use of brand name in the product - It is claimed by the appellant that the name appearing in the pouches is only to show the manufacturer and there is no branding of the product - Held that: - On perusal of the sample packages, we are satisfied that there is an identifiable distinct branding of these products which have the effect of linking the product to a particular person, among the consuming public. As such, we find no merit in the claim of the appellant that these are not branded Chewing Tobacco. It also noted that the packages clearly carried a warning that Chewing Tobacco is injurious to health. Such endorsement clearly discounts the argument of the appellant that their product cannot come under the general category of Chewing Tobacco. Regarding the claim of the appellant for exemption under N/N. 8/2003-CE available to small scale units we note Chewing Tobacco bearing a brand name is excluded from the products listed in annexure of notification for such exemption. Appeal dismissed - decided against Appellant.

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• 2017 (9) TMI 345
  Clandestine manufacture and removal - Pan Masala/Gutkha - impugned order relied on various documentary and oral evidence to arrive at the findings - Reliance was also placed on various statements given by proprietor of the main appellant, railway booking agents, transporters, dealers of the impugned goods - Held that: - summary denial of cross-examination and relying on all these statements to arrive at the findings is not legally justifiable. Accordingly, without going into the merits of the case, we find that on this legal objection, the impugned order cannot be sustained - reliance placed in the case of M/s Jindal Drugs Pvt Ltd and Anr. Vs Union Of India [2016 (6) TMI 956 - PUNJAB & HARYANA HIGH COURT], where it was held that the adjudicating authority has to mandatory comply with the legal requirement of Section 9D and if he fails the order passed is vitiated. Matter remanded back to the original authority for a fresh decision after complying with the provisions of Section 9D and also for re-verification of quantification of demand that may arise on re-adjudication - appeal allowed by way of remand.

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• 2017 (9) TMI 344
  CENVAT credit - input service distributor - distribution of credit received at the Headquarters of the assessee-Appellants which is registered as input service distributor to its duty paying units - Held that: - an identical issue in the assessee-Appellants’ own case has come up before the Allahabad Bench of this Tribunal in the case of M/s Dabur India Limited Versus Commissioner of Central Excise & Service Tax, Ghaziabad [2017 (5) TMI 599 - CESTAT ALLAHABAD], where it was held that Clause (b) of Rule 7 of the CCR, 2004 that existed during material time provided that such Cenvat credit of Service Tax paid was not admissible to be distributed which was exclusively used in unit engaged in the manufacture of exempted goods - appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 343
  100% EOU - Valuation - includibility - loading charges recovered from the buyers - place of removal - Whether loading charges recovered by the Appellants from the buyers of the goods is required to be added to the assessable value for the purposes of levy of Central Excise duty payable by the EOU in terms of Section 3 of the Central Excise Act, 1944? - Held that: - the value for the purposes of charging Customs duty is a transaction value for delivery at the time and place of clearance of importation - As per the terms of the contract entered between Appellants and the buyers, the Appellants are required to deliver the goods at the railway wagon. Since the transaction value is for delivery at the railway wagon, the duty is to be charged on the said transaction value at this point - appeal dismissed - decided against appellant.

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• 2017 (9) TMI 342
  CENVAT credit - MS Channel, Angle, Beam, Structural Steel Round, Square Bars, MS Bright Bars, MS Ingots etc. used in fabrication of capital goods within the factory - Held that: - reliance placed in the case of M/s. Singhal Enterprises Private Limited Versus The Commissioner Customs & Central Excise, Raipur [2016 (9) TMI 682 - CESTAT NEW DELHI], where it was held that applying the “User Test” to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of ‘Capital Goods’ as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat Credit. The matter is remanded to the adjudicating authority to examine the claim of the appellant on the eligibility of credit on the aforesaid items and the Appellants are free to adduce evidence including the certificate from a Chartered Engineer on its use - appeal allowed by way of remand.

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• 2017 (9) TMI 341
  Refund claim - Area Based Exemption - extension of the installation capacity - N/N. 33/99 dated 8/7/1999 - denial of refund on the ground that the claim was availed after a period of six years from the date from which respondent became eligible - Held that: - the identical issue came up before the Tribunal in the case of Vernerpur Tea Estate Vs. Commr. of Central Excise & Service Tax, Shillong [2016 (4) TMI 17 - CESTAT KOLKATA], where it was held that refund claims, filed after more than 5 to 6 years of such duty payment, are clearly time barred - refund rightly rejected - appeal dismissed - decided against appellant.

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• 2017 (9) TMI 340
  Refund claim - payment of duty in their code of Mumbai - rejection of refund on the ground of time limitation - case of appellant is that limitation is not applicable to something which is not a tax but a deposit made - Held that: - There were no clearances from Mumbai unit. The entire amount deposited remains to the credit of the appellant until it is utilized for the purpose of payment of duty. The refund of the amount deposited cannot be claimed under Section 11B of the Central Excise Act, as the same is not a duty but a deposit - The claim of the appellant may be considered under the provisions of the law other than Section 11B, if any, applicable - appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 339
  Penalty - rule 25 or 26 or 27 of Central Excise Rules, 2002 - default in payment of duty - Held that: - A consistent default in payment of duty by the respondent is noticeable from record. Added to this, it was also attempted to clear the goods without making entry of clearance paying duty in the statutory records. Mere discharging of duty at a subsequent date shall not be consolation to the exchequer that it discharged duty. The delay in discharge of duty is a deprivation to the state to use of such revenue for public welfare. Penalty deters violation of law - It may be appreciated that hardship and loss of benefit to an assessee is not relevant consideration in fiscal jurisprudence. Ld. Adjudicating authority should have appreciated the conduct of the respondent from show-cause notice that it was a wilful defaulter in paying duty. But, she failed to justify non-application of Rule 25, 26 of the Central Excise Rules, 2002 as invoked in the show-cause notice. It may be stated that power is vested with the authority to carry out the mandate of law - matter is remanded to the adjudicating authority for re-adjudication - appeal allowed by way of remand,

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• 2017 (9) TMI 338
  CENVAT credit - capital goods - denial for the reason that these items have not been capitalized in the balance sheet of the appellant and also on the ground that these items are not used as component, spare and accessories of capital goods or pollution control equipment nor were they used for spare accessories or capital goods - Held that: - there is no requirement of capitalizing in balance sheet expenses on capital goods in the Central Excise law. The definition of capital goods in the Companies Act would determine which goods can be capitalized. The definition of capital goods in the Central Excise Act would determine the availability of credit on the goods - there is no doubt from the description given by the appellant that these goods had qualified as component and accessories of the capital goods and hence credit on these goods would be admissible - credit allowed - appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 337
  Reversal of CENVAT credit - inputs - Rule 6(3) (a)/Rule 57 AD - case of the department is that since part of supplies were made claiming exemption N/N. 10/97-CE, they are required to pay 8%/ 10% of the total price in terms of Rule 6(3) (a)/Rule 57 AD - Held that: - the appellant have manufactured P.D. Pump, which is per se not exempted goods. However, they have cleared part of their manufactured goods i.e. P.D. pump under Notification No.10/97-CE and 3/2004-CE, where supplies made to Indian Navy - Rule 6(3) shall be applicable only when manufacturer of the goods manufacture goods of two types, one is excisable and another is exempted. However, in case where goods manufactured are dutiable at the time of manufacture, Rule 6(3) will not be applicable. Similar issue decided in the case of COMMISSIONER OF CENTRAL EXCISE, THIRUNELVELI Versus DCW LTD. [2008 (10) TMI 380 - MADRAS HIGH COURT], where it was held that For the provisions of Rule 57CC(1) to apply, there should be one final product which is dutiable and another final product which is exempted from payment of duty or chargeable to “Nil” rate of duty. Appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 336
  Valuation - footwear - MRP based valuation - non marking of the MRP on the footwear - whether non compliance of this condition specified in the N/N. 12/2012-CE can be considered as a technical violation? - Held that: - non compliance of this condition specified in the notification no.12/2012-CE cannot be considered as a technical violation - however, the non-compliance of the conditions of the notification in respect of the second factory of the appellant cannot disentitle the footwear cleared from the first factory to the benefit of the exemption. Consequently, we are of the view that the adjudicating authority has erred in sustaining the demand for the entire period of January 2011 to March 2013 in respect of footwear cleared from both the factories. The demand to be confirmed for the violation of the condition of the notification will need to be restricted to the clearance made from the appellant’s factory situated at T-I/110, Mangolpuri, Industrial Area, Phase – I, New Delhi, for the period upto 19.07.2012. For the purpose of re-quantification, the case is remanded back to the adjudicating authority - appeal allowed by way of remand.

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• 2017 (9) TMI 335
  Classification of goods - Special Steel Bone Screws and plates - Held that: - The goods manufactured by the appellant include various implants used in surgical interventions which are basically used in ortho surgery. The items which are commonly known as rehabilitation aids for the handicap can be understood to refer to the items such as wheelchair, etc. which are needed for the rehabilitation of handicapped persons - the items manufactured by the appellant cannot be considered under the term rehabilitation aids" for the handicapped covered by Sl. No.11 of the N/N. 71/86-CE. - the items manufactured would no doubt be classifiable under CTH 9021, but will not be covered within the Sl. No.11 of the N/N. 71/86 and hence will not be eligible for clearance at ‘nil’ rate of duty. SSI exemption - use of brand name of others - brand name of foreign collaborator used - Held that: - the goods have been cleared with brand name ‘SYNTHSES" and "AO/ASIF". A letter / certificate submitted by the appellant on the letter head of foreign collaborator supports the view of the Revenue that these are the brand names of the foreign collaborator - appellant not eligible for SSI exemption. Appeal dismissed - decided against appellant.

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• 2017 (9) TMI 334
  Benefit of N/N. 06/06 dated 01.03.2006 (Sl. No.7) - manufacture of PS CC Pipes and MS Specials - duty demand has been confirmed on the ground that the MS Special supplied by availing the full duty exemption are not mentioned in the District Collector’s certificate - Held that: - out of the 8 certificates in 4 certificates MS special has been mentioned. The Department has already granted exemption. When the exemption has been granted in 4 certificates it can be granted in the remaining 4 certificates also - It is not the case of the Department that MS Special were supplied somewhere other than projects in hand. The MS special are connected with the water pipes before they are used, sometimes as a bend to divert the flow. When the MS Specials were used in the project pertaining to the water supply then the same is allowable as Department has already allowed in 4 certificates - appeal allowed - decided in favor of appellant.

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• 2017 (9) TMI 333
  Clandestine manufacture and removal - MS Ingots - demand on the ground that on the basis of a small quantity of 36.49 MTs of M.S. ingots shown to have been cleared by M/s. Nirmal Inductomelt Pvt. Ltd. to the main appellant and not shown in the accounts of the main appellant and also on the ground that estimated production by the main appellant based on average power consumption, as arrived at in another unit manufacturing M.S. items. Held that: - the discrepancy in the receipt of raw materials and M.S. ingots was alleged on the basis of purported records maintained by M/s. Nirmal Inductomelt Pvt. Ltd. There is no other corroborative evidence for unaccounted receipt of such materials and use of material in further manufacture by the main appellant - There are many other substantial distinction between the main appellant and SSSRM. Even otherwise, we note that no examination or technical test has been conducted in the main appellant’s unit, to arrive at the correctness of power consumption and also to get additional corroborative evidence with reference to possible unaccounted manufacture and clearance of dutiable items. Merely on the basis of power consumption of the appellant unit, allegation of unaccounted production of M.S. ingots and its clandestine removal could not be sustainable. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2017 (9) TMI 326
  Classification of goods - leaf springs - whether leaf springs are classifiable under Schedule-II Part-IV of the M.P. VAT Act liable to tax @12.5% or as iron and steel under Entry 30 (v) of Part II of Schedule II? - jurisdiction of the authority to reassess merely on the basis of change of opinion - sub-section (3) of Section 21 of M.P. VAT Act - obligation on the part of Assessing Authority to pass an order within one year from the date of initiation of proceedings - Held that: - in view of the provisions of sub-section (3) of Section 21 of M.P. VAT Act, it can be said that impugned order of re-assessment does not get invalidated even if it is passed beyond the period of one year from the date of initiation of proceedings with the issuance of show cause notice - contention made on behalf of the petitioner that it was beyond jurisdiction of the Assessing Authority to have passed the order of re-assessment after expiry of one year from the date of issuance of show cause notice is answered in the negative. Whether the change of opinion can be the basis for re-assessment? - Held that: - the law is settled that mere change of opinion in absence of any other material will not be sufficient for reassessment - re-assessment of tax is permissible only when it has been under assessed or has escaped assessment, or has been assessed at a lower rate, or any wrong deduction has been made while making the assessment or a rebate of input tax has incorrectly been allowed, while making the assessment or is rendered erroneous and prejudicial to the interest of revenue. Consequent to or in the light of any judgment or order of any Court or Appellate Board, which has become final. Thus, except these circumstances no other grounds available for the Commissioner to reassess the tax - in the present case, it was only on the basis of opinion formulated by order dated 5.6.2007 the Commissioner has re-assessed the tax of the period 2006-07 which cannot be upheld. Therefore, the demand raised for additional sum being the difference i.e. 8.5% amounting to ₹ 47754454/- is set aside. Consequently the demand carried for said amount is also quashed. Sub section (3) stipulates that any order passed by the Commissioner under sub-section (1) and (2) shall have a prospective effect and shall be binding on the authorities referred to in Section 3 in all proceedings under this Act except appeals - the order passed on 5.6.2007 was applicable for next financial year i.e. 2007-2008 and not 2006- 2007 - For this reason also the impugned order cannot be upheld. Petition allowed - decided in favor of petitioner.

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• 2017 (9) TMI 325
  Validity of assessment order - Central Sales Tax Act, 1956 - The respondent has doubted the transactions done by the petitioner, suspecting it to be 'bill trading'. Therefore, the respondent has insisted upon the proof to show movement of goods - Held that: - When the petitioner has taken a stand that they do not maintain any log book / trip sheets for local movement and they use their own vehicles for movement of goods and as per the trade practices, they do not avail insurance coverage, the respondent should have directed the petitioner to produce oral evidence or affidavits substantiate their plea, in the absence of documentary evidence. If this had been done, the truth would have been established and the respondent would have been in a position to pass a reasoned order. However, the respondent, in a hurried manner, has completed the assessments, by passing such cryptic orders. Thus, for the above reasons, the impugned orders are liable to be set-aside - matters are remanded back to the respondent with a direction to furnish the documents sought for by the petitioner - petition allowed by way of remand.

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• 2017 (9) TMI 322
  Validity of circular dated 5.6.2000 - encouraging and developing Khadi and Village Industry. - circular is challenged on the ground that it is discriminatory in nature and it violates the provisions of Articles 14, 19 (1) (g) of Constitution of India - direction is also claimed to strike down notification dated 7.6.2001 by which amendment in Bombay Sales Tax Act concerning the hand made paper industry is made - Held that: - In view of coming in to force of Goods and Service Tax, the provisions of Sales Act etc. will not be used against the petitioner and further, for the applicability of GST, there are different conditions/requirements and those conditions/requirements will be considered for taxing now. Thus, nothing survives in the present matter - petition dismissed.

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• Wealth tax

• 2017 (9) TMI 366
  Payment of Wealth Tax - remedy of appeal to the High Court - whether the High Court was justified in allowing the appeals filed by the Revenue and thereby was justified in setting aside the orders passed by the Tribunal? - Held that:- The interpretation made by this Court of Section 100 in Santosh Hazari’s Case (2001 (2) TMI 131 - SUPREME Court), would equally apply to Section 27-A of the Act because firstly, both Sections provide a remedy of appeal to the High Court; Secondly, both Sections are identically worded and in pari materia ; Thirdly, Section 27-A is enacted by following the principle of “legislation by incorporation”; fourthly, Section 100 is bodily lifted from the Code and incorporated as Section 27-A in the Act; and lastly, since both Sections are akin to each other in all respects, the appeal filed under Section 27-A of the Act has to be decided like a second appeal under Section 100 of the Code. Now coming to the facts of the case, we find that the High Court proceeded to decide the appeals without formulating the substantial question(s) of law. Indeed, the High Court did not make any effort to find out as to whether the appeals involved any substantial question(s) of law and, if so, which is/are that question(s) and nor it formulated such question(s), if in its opinion, really arose in the appeals. The High Court failed to see that it had jurisdiction to decide the appeals only on the question(s) so formulated and not beyond it. [Section 27(5)]. The impugned orders are not legally sustainable and thus liable to be set aside.

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• Indian Laws

• 2017 (9) TMI 323
  Holding elections to the State Bar Councils - necessary steps - Held that:- All the steps be taken by all the parties concerned in the matter for the purpose of elections in respect of all the Bar Councils where the term of the existing members have already expired or to be expired. We further make it clear that although this order has been passed in favour of the verification only for the purpose of the election but it would also include for the purpose of the verification of all other learned lawyers who have already applied within the time stipulated by this Court. We direct all the State Bar Councils to take necessary steps and to conclude all proceedings by 31.12.2017 and send a reply to the Bar Council of India. Thereafter, the Bar Council of India, after receiving all the replies from the State Bar Councils, would file a status report. We, hereby, authorize the Bar Council of India to notify all the State Bar Councils, by way of publication in two leading newspapers, that they must take all steps to complete the process before 31.12.2017. The Bar Council of India is directed to request a retired Judge of the Supreme Court in order to control and supervise the verification process and preparation of Electoral Rolls. We direct the Bar Council of India to take all steps in this regard immediately in order to do the needful. All concerned are directed to render full assistance and cooperation to the Verification Committee. List the matter in the second week of January, 2018 on a Non-Miscellaneous Day.

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