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Showing 101 to 120 of 1658 Records
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2024 (10) TMI 1558
LTCG - Exemption u/s 54F - transaction of the flat related to sale and purchase was done in his wife’s name and assessee was not holding any property - Income of individual to include income of spouse, minor child, etc - AR stated that the assessee’s wife is dependent, and the spouse’s income is declared in the husband’s return filed under section 139(1) and assessee is the beneficial owner of the property - whether the assessee can declare the income of capital gain of his wife in his return u/s 64? - HELD THAT:- The section 64(1) prevails that the inclusion of the dependent’s income u/s 64 of the Act is justified.
In other issue the investment of new assets in the name of the wife is fully covered by the order of Simran Bagga [2024 (1) TMI 271 - ITAT DELHI] We respectfully follow the order of Simran Bagga (supra).
Contravention of section 54F relating to investment of capital gain in two flats not in single flat - As related to investment in two flats, which contravened the provisions of section 54F the said amendment of “one house” is implemented with effect from 01/04/2015, so the relevant section 54F is not application for the A.Y. 2014-15. AR placed purchase deeds of two flats, wherefrom it is clear that both the flats are adjacent flats and not in the open sky. So, both the units are taken as a single unit which is not contrary to section 54F of the Act.
We respectfully relied on the order of D. Ananda Basappa [2008 (10) TMI 99 - KARNATAKA HIGH COURT] We find that the assessee is eligible for deduction u/s 54F for purchasing two new flats in the name of his wife. We note that the sale and purchase of the flats are executed in the name of assessee’s wife. DR has not pointed out any contrary decision against the proposition laid down above. We find no justification in rejection of claim u/s 54F - addition amount is deleted.
Assessee appeal allowed.
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2024 (10) TMI 1557
Assessment of trust - Claim of depreciation of assets - HELD THAT:- AR wants a direction to the AO to allow depreciation as application of income. After analysing the entire facts and circumstances and particular facts of the present case more particularly taking into consideration the documents in the shape of balance sheet, income and expenditure account and depreciation chart, it was found that the huge amount has been spent by the Appellant trust in previous year with effect from financial year 2009-10 to 2011-12, but these documents were neither having signatures of auditors nor chairman or Accountant of appellant trust.
Since the issue of claim of depreciation is a factual issue and requires verification and checking of the records which are filed and available with the AO, therefore in the fitness of things, it is appropriate to restore this issue to the file of AO with a direction to verify from the records as to whether such assets have been taken into account while determining the application of such assets in the income earned or not. Accordingly the Appellant trust should be given the benefit as per the provisions of section 11 - As further directed that the AO while doing this check and verification of the records would also grant reasonable opportunity of hearing to the Appellant before taking any decision. Accordingly this ground No. 1 raised by the appellant stands allowed for statistical purposes.
Payment of Specified person - There is no provision under the Act which provides that if advance is given to the specified person it would be added to the income. Reliance in this connection is placed on the decision of Vels Institute of Science, Technology & Advanced Studies [2015 (11) TMI 857 - ITAT CHENNAI] - In this case assessee, a charitable educational institution, was registered u/s 12AA. It intended to establish a medical college. It entered into an agreement with managing trustee for purchase of his land and paid certain amount to him in advance. Subsequently said agreement was cancelled and managing trustee returned principal amount along with interest. Assessee claimed exemption u/s 11.
AO denied exemption holding that payment of advance to managing trustee was in excess of market value of land and money was advanced without any adequate security and therefore, there was violation of section 13(1)(c). It was held that since it was nobody’s case that the price agreed between the managing trustee and assessee was not actually the agreed price, observation of the AO that the value of the land was much less than what was agreed between the parties cannot stand in the eye of law. When money was advanced to managing trustee in pursuance of agreement for sale and after cancellation of agreement entire principal amount along with interest was returned, it could not be said that money was diverted for interest of managing trustee. Therefore, there was no violation of section 13(1)(c). Hence, in this view of the matter, the Ground No. 2 raised by the assessee stands allowed.
Additions on account of interest free advances given to the various persons were confirmed - Where income has, in fact, been received and is subsequently given up in such circumstances that it remains the income of the recipient, even though given up, the tax may be payable. Where, however, the income can be said not to have resulted at all, there is obviously neither accrual nor receipt of income, even though an entry to that, effect might,, incineration circumstances, have been made in the books of, account. The agreements within the previous year replaced the earlier agreements, and altered the rate in such a way as to make the income different from what had been entered in the books of account - A mere book-keeping entry cannot be income, unless income has actually resulted, and in the present case, by the change of the terms the income which accrued and was received consisted of the lesser amounts and not the larger. This was not a. gift by the assessee firm to the manager companies. The reduction was a part of the agreement entered into by the assessee firm to secure a long-term managing agency arrangement for the two companies which it had floated. Therefore considering the entire facts and circumstances as well as discussion made in the above Paras and also taking into consideration the legal preposition.
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2024 (10) TMI 1556
Levy of Anti-Dumping Duty on the PVC Suspension Resins - petitioner is an end user of PVC Suspension Resins which is the product under consideration in the investigation initiated - HELD THAT:- It is not in dispute between the parties that respondent No. 3 is in process of the investigation as contemplated under Rules 4, 5 and 6 of the Rules 1995 and the contentions raised by the petitioner is at premature stage which would jeopardize the entire process initiated by the respondent No. 3.
We are therefore of the opinion that we would not like to interfere at this stage on merits of the matter. The petition therefore being premature is accordingly dismissed at this stage.
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2024 (10) TMI 1555
Classification as "Naphtha" under Tariff Item 27101290 or as "Natural Gasoline Liquid (NGL)" under Tariff Item 27101220 - Department responsibility to discharge burden cast on it to establish their claim for classification of goods - onus cast upon the Revenue to establish that the imported goods were classifiable under TI 2710 1220 of the Customs Tariff Act, 1975 as NGL has not been discharged - whether, even if the imported goods considered as Natural Gasoline Liquid (NGL) as claimed by the revenue, the same falls under the broad description of Naphtha and consequently the clearance of goods under advance authorization which mentioned the imported goods as “Naphtha” is correct and legal or otherwise.
HELD THAT:- It is settled law that in case the department does not discharge the onus cast upon it for its claim of classification of goods the entire proceeding is vitiated. As discussed above the facts of this case, the department did not discharge the onus to prove the claim of the classification of goods as NGL under tariff item 2710 1220 as correct. Therefore, the classification of goods as Naphtha under Tariff item 27101290 as declared by the appellant is held to be correct.
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2024 (10) TMI 1554
Denying exemption under Sr.No.108 (1) of Notification No.23/98-Cus. dated 02.06.1998 - non-submission of end use certificate and where there is no condition stipulated against Sr. No.108 (1) for production of end-use certificate unlike in Sr. No.108 (2) - HELD THAT:- We find that the appellant have availed the exemption Notification No.23/98-Cus Dated 02.06.1998 under Sr. No.108 description Serial No.1.
From the above exempted entry at description Sr. No.1 of entry Sr. No. 108, it is found to be unconditional. Accordingly, there is no need of any production of end use certificate. The department has relied upon CBIC’s circular No.74/1998-Cus dated 06.10.1998. However, it is a settled law that any condition which is not prescribed in the Notification the same cannot be read in the application of the Notification by issuing a board circular. We are completely agreed with this preposition as notification is a statute enacted by the Parliament which cannot be flouted by mere issuing a circular. Therefore, the board circular No. 74/1998-Cus dated 06.10.1998 is ultra vires to the Notification 23/98-Cus. dated 02.06.1998 in Sr. No.108 which does not prescribes the condition of end use certificate.
We are of the clear view that in absence of any condition of end use certificate in the Notification, the same cannot be imposed and for that reason exemption cannot be denied. We set aside the impugned order and allow the appeal.
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2024 (10) TMI 1553
Benefit of exemption under Notification No. 46/2011-Cus. denied by Customs on re-assessment - Refund claim hit by limitation and issue of unjust enrichment not raised in Show Cause Notice - unjust enrichment - HELD THAT:- We find that the Appellant has filed the above said Bills of Entry by claiming the benefit of Notification No. 46/2011-Cus. dated 01.06.2011. While re-assessing the said Bills of Entry in RMS, the benefit of exemption as envisaged in the said Notification was not allowed. This mistake was rectified by the Commissioner (Appeals) in the Order-in-Appeal dated 02.03.2017, as per Section 154 of the Customs Act, 1962. The stay application filed by the department against this order has also been rejected by the Tribunal. Further, we observe that the Appeal filed by the Department against the Order dismissed vide Final Order.
Consequent to the Tribunal’s Order rejecting the stay against the order dated 02.02.2017 passed by the Commissioner (Appeals), the refund amount of Rs.4,87,208/- was sanctioned and paid to the Appellant on 23.12.2019. We observe that the Assistant Commissioner has sanctioned the refund as per the order dated 02.03.2017 passed by the Commissioner (Appeals), which he is legally bound to implement. Thus, we observe that there is no infirmity in sanctioning the refund by the Assistant Commissioner.
Show Cause Notice dated 11.07.2018 was issued to reject the refund claim already sanctioned. On appeal, the Commissioner (Appeals) brought in the unjust enrichment angle and vide the impugned order, directed the adjudicating authority to re-examine the issue and remanded the matter back to the adjudicating authority.
We observe that the issue of unjust enrichment was never raised in the Show Cause Notice dated 11.07.2018. Commissioner (Appeals) has gone beyond the scope of the Show Cause Notice and set aside the Order-in-Original and remanded the matter back to the adjudicating authority to re-examine the issue afresh. Assistant Commissioner has sanctioned the refund claim as per the Order-in-Appeal passed by the Ld. Commissioner (Appeals) who has allowed re-assessment within the meaning of Section 154 of the Customs Act, 1962.
This would mean that the benefit of Notification No. 46/2011 existing at the time of the Bills of Entry is available to the appellant and hence the excess payment made by them is liable to be refunded. We also observe that the stay application filed by the Department against the order dated 02.03.2017 has been rejected by the CESTAT. Thus, there was no bar in implementation of the order of the Commissioner (Appeals). Thus, we do not find any infirmity in the order passed by the Assistant Commissioner sanctioning the refund claimed by the Appellant.
Show Cause Notice was issued to the appellant on 11.07.2018 alleging that the refund claim filed by them on 27.04.2018, on the basis of the Order-in-Appeal dated 02.03.2017 was hit by limitation. The unjust enrichment issue was not raised in the Notice. We find that in the Order-in-Original dated 24.09.2019, the Ld. Assistant Commissioner has examined the issue of unjust enrichment and given a finding that there was no unjust enrichment existing in this case. We observe that the Ld. Commissioner (Appeals) has not given any observation against the finding on the issue of unjust enrichment given by Assistant Commissioner in the said Order-in-Original.
Since the Ld. Assistant Commissioner has already examined the issue of unjust enrichment and given a finding on the issue and there is no contrary finding given by the Ld. Commissioner (Appeals) in the impugned order, we are of the view that there is no need to re-examine the issue again by the Assistant Commissioner. Accordingly, we hold that the impugned order passed by the Commissioner (Appeals) is legally not tenable and hence we set aside the same.
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2024 (10) TMI 1552
Dissolution of the Corporate Debtor - direction for conducting a transaction audit - It is submitted that CoC, who resolved to file application for dissolution instead of a liquidation, since neither the CD has the assets, nor there are any amount available to bear the cost of liquidation - HELD THAT:- In the present case, the Adjudicating Authority has not exercised its jurisdiction in allowing the application filed by the CD for dissolution referring to Section 54 of the IBC and Regulation 14 of the Liquidation Regulations. The scheme of the IBC clearly provides that dissolution is a step subsequent to the Corporate Debtor having been completely liquidated. In the present case, the liquidation proceedings have not been undertaken and resorting to Section 54 could not have been taken as per the scheme of the IBC. The facts of the present case indicate that CIRP has been completed without any Plan having been received, inspite of Form- G published twice. The Adjudicating Authority did not pass any order for liquidation, which could have been passed under Section 33, sub-section (1). Thus, the CIRP having been unsuccessful and no liquidation order having been passed, recourse to Section 54, could not have been taken by the RP.
In the present case, the RP could have intimated the Registrar of Companies for striking off the name of the Company. In the facts of the present case, where company is not carrying on any business and there are no assets of the Company, dissolution of the Company under Section 54, is a step, which could have been taken as per the statutory scheme of the IBC. This Tribunal’s judgment in Shyson Thomas [2023 (6) TMI 102 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI] was a case where Adjudicating Authority exercising its jurisdiction has directed for dissolution by allowing the application - In the present case, the Adjudicating Authority had rejected the application, relying on the provisions of Section 54 of the IBC and Regulations 14 of the Liquidation Regulations.
CoC has decided not to make any contribution towards the liquidation process and liquidation, hence, was not directed. In the present case, CoC consisted of sole Financial Creditor, who had initiated the CIRP against the CD. When the entity, who has initiated the CIRP is not ready to proceed any further and CIRP period having already come to an end, no further steps were required in the CIRP of the Corporate Debtor and RP could have closed the matter by intimating the Registrar of Companies for striking off the name of Company from the Register of the Companies.
The impugned order dated 11.06.2024 directing for carrying out transaction audit, is set aside - Appeal disposed off.
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2024 (10) TMI 1551
Handing over of physical possession of the land - Resolution Professional could not place on record the evidence to show that physical possession of the land in question was handed over to him - sufficient materials on record to come to the conclusion that the Resolution Professional/ Corporate Debtor is in possession of area admeasuring 10.81 acres i.e. land in question - possession of subject land in which development rights was claimed by the corporate debtor - adjudication by a Civil Court - exclusion from the CIRP of the Corporate Debtor as prayed by owners - whether the Resolution Professional is in possession or actual possession of the land could have been incidence?
HELD THAT:- The Development Agreement as amended contemplated in the group housing project 50% shares to the owners and 50% shares to the developer. 50% shares which came to the developer share was 10.81 acres on which project Canary Greens was constructed by the corporate debtor which project was taken possession after initiation of the CIRP by the IRP and thereafter by the Resolution Professional. The Sole Arbitrator in its proceedings dated 12.10.2010 has already noted that the possession has been given to the developer of the said land. Corporate Debtor having commenced the project Canary Greens on the subject land, the possession of the corporate debtor of the project could not have been doubted.
The definition under Section 3(27) of the Property is an inclusive definition which obviously includes the Development Rights which was obtained by the Developers from the Owners by Development Agreement dated 03.03.2007 were subsequently assigned to the Corporate Debtor by an Agreement dated 30.07.2010.
The Hon’ble Supreme Court has clearly laid down in the case of Victory Iron Works Ltd. Vs. Jitendra Lohia & Anr. [2023 (3) TMI 699 - SUPREME COURT] that Development Rights are Rights which can be taken control by the RP. Hon’ble Supreme Court in the above case had occasion to consider provisions of Sections 18, 25 & 3(27) of the IBC. Hon’ble Supreme Court has also examined the jurisdiction of NCLT and NCLAT in cases to grant Orders protecting possession of the Corporate Debtor at instance of RP. It was held by the Hon’ble Supreme Court that Development Rights making in favour of the Corporate Debtor constitute Property.
The materials on record fully prove that on the land 10.81 acres, the Project Canary Green was constructed which Project was the Project of the Corporate Debtor. Corporate Debtor having Development Right in subject land RP was entitled to have possession and take possession. Thus, the observations of the Adjudicating Authority that the RP was not in possession of the land in question is erroneous and without considering the relevant materials on the record which fully proves that it was Corporate Debtor who was in possession of the Project land and the Project.
The observation of the Adjudicating Authority in Order dated 05.12.2023 that the RP could not place on record the evidence to show that physical possession of land in question was handed over to him is unsustainable - There are sufficient materials on record to come to conclusion that RP/Corporate Debtor is in possession of area admeasuring 10.81 acres, i.e., land in question - Adjudicating Authority was competent to decide the question of possession of subject land in which Development Rights was claimed by the Corporate Debtor and subject question was not required to be relegated to be adjudicated by the Civil Court - The subject land i.e.,10.81 acres was not required to be excluded from the CIRP of the Corporate Debtor as prayed by the Owners.
Application allowed.
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2024 (10) TMI 1550
Money Laundering - predicate offence - delay in trial proceedings - hamper to right to life and liberty of the applicants, who have been in custody since 24 months and 25 months respectively - applicability of Section 45 of the PMLA - HELD THAT:- Bail is the rule and jail is the exception. This principle is nothing but a crystallisation of the constitutional mandate enshrined in Article 21, which says that that no person shall be deprived of his life or personal liberty except according to the procedure established by law.
Section 45 of the PMLA while imposing additional conditions to be met for granting bail, does not create an absolute prohibition on the grant of bail. When there is no possibility of trial being concluded in a reasonable time and the accused is incarcerated for a long time, depending on the nature of allegations, the conditions under Section 45 of the PMLA would have to give way to the constitutional mandate of Article 21. What is a reasonable period for completion of trial would have to be seen in light of the minimum and maximum sentences provided for the offence, whether there are any stringent conditions which have been provided, etc. It would also have to be seen whether the delay in trial is attributable to the accused.
The issue of long incarceration and right of speedy trial also cropped up in MANISH SISODIA VERSUS CENTRAL BUREAU OF INVESTIGATION [2023 (11) TMI 63 - SUPREME COURT] wherein it has been held by the Supreme Court that the right to bail in cases of delay in trial, coupled with long period of incarceration would have to be read into the Section 439 CrPC as well as Section 45 of PMLA while interpreting the said provisions.
PREM PRAKASH VERSUS UNION OF INDIA THROUGH THE DIRECTORATE OF ENFORCEMENT [2024 (8) TMI 1412 - SUPREME COURT] is another recent decision where it has been reiterated that the fundamental right enshrined under Article 21 cannot be arbitrarily subjugated to the statutory bar in Section 45 of the Act and the constitutional mandate being the higher law, the right to speedy trial must be ensured and if the trial is being delayed for reasons not attributable to the accused, his incarceration should not be prolonged on that account.
The prosecution has named 10 accused persons and cited 108 witnesses. There are 5172 pages of documents which need to be analysed. Moreover, it is noted that the Trial is still at the stage of arguments on charge. In addition, this Court has also been informed that the Presiding Officer of the Trial Court hearing the matter on charge has demitted office on 30.09.2024 and a replacement has not yet been appointed to take over the said Court. There is also likelihood of supplementary challan being filed. It is thus observed that the delay at present cannot be said to be attributable to the present applicants - In a situation such as the present case, where there are multiple accused persons, thousands of pages of evidence to assess, scores of witnesses to be examined and the trial is not expected to end anytime in the near future and the delay is not attributable to the accused, keeping the accused in custody by using Section 45 PMLA a tool for incarceration or as a shackle is not permissible. Liberty of an accused cannot be curtailed by Section 45 without taking all other germane considerations into account.
As held in the Catena of judgements discussed hereinabove, Constitutional Courts have the power to grant bails on the grounds of violation of Part III of the Constitution and Section 45 does not act as an hindrance to the same. The sacrosanct right to liberty and fair trial is to be protected even in cases of stringent provisions present in special legislations - No evidence has been led to show that the present applicants are a flight risk. In fact, records would show that both the applicants have joined investigation on multiple occasions. Both the applicants have been released once on interim bail and during that period no incident has been alleged by the respondent to have occurred wherein the applicants have tried to tamper with evidence or influence witnesses.
Considering the totality of the facts and circumstances, the fact that the main accused is out on bail, the period of custody undergone, likelihood of supplementary challan being filed and that the trial is yet to commence, keeping in mind the import of the Catena of decisions of Supreme Court discussed hereinabove, it is directed that both the applicants be released on regular bail subject to them furnishing respective personal bonds in the sum of Rs. 1,00,000/- with one surety of the like amount each to the satisfaction of the concerned Jail Superintendent/concerned Court/Duty J.M./link J.M. and subject to the further fulfilment of conditions imposed - bail application allowed.
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2024 (10) TMI 1549
Service tax on Merchant Discount Rate (MDR) and interchange fee - As per revenue Acquiring bank should have paid service tax on the Merchant Discount Rate [“MDR”] minus the interchange fee, and the issuing bank should have paid service tax on the interchange fee - use of the word ‘and’ in conjuncture - HELD THAT:- We are of the view that the judgment and reasoning given by S. Ravindra Bhat, J. is acceptable and it is in accordance with the provisions of Clause (iii) of Section 65 (33a) of the Finance Act, 1994
S. Ravindra Bhat, J. rightly observes that as per Section 65 (33a) of the Act, seven distinct heads of credit card services were sought to be taxed, the idea being to broaden the coverage of the species of services into taxation net. Clause (iii) thereof applies to service by any person, which includes service by the issuing bank and the acquiring bank.
The use of the word ‘and’ in conjuncture is indicative of the legislative intent. MDR is charged/levied by the acquiring bank at the first point in time and subsumes both the acquiring bank fee and the interchange fee of the issuing bank, as well as the platform fee. It is the sum total of the three. The aforesaid charge occurs first in point of time and deduction and payment of service tax at this stage is beneficial to the Revenue. It is not the case of the Revenue that payment by the acquiring bank to the issuing bank, known as interchange fee, is separately chargeable, in addition to the service tax on the MDR.
We wonder whether the Revenue would have accepted the bifurcation as argued by them in case the acquiring bank and the issuing bank had taken the stand which is now taken by them. While interpreting a tax provision, one must keep in mind that the legislature ennobles the ease of collection of tax and payment of tax. These principles, especially when there is no loss of revenue, can be taken into consideration for interpreting a provision in case of doubt or debate.
Entire data and details are available with the Service Tax Department and could have been easily ascertained before issuance of the show cause notice. Interestingly, the show cause notice proceeds on the basis that, regardless of the service tax paid by the acquiring bank on the full MDR, the issuing bank would be liable to pay service tax on the proportion of its share in the MDR, which is the interchange fee.
We find that the entire amount of the service tax payable on the MDR has been paid to the Government and there is no loss of revenue. Recording the aforesaid, the Reference and appeals are disposed of, holding that service tax is not separately payable on the interchange fee, as service tax has been paid on the MDR.
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2024 (10) TMI 1548
Levy of service tax - bowling alley income - to be included in the Negative List under section 66D(j) of the Finance Act or not - scope of ‘amusement facility’ - As decided by CESTAT [2024 (4) TMI 35 - CESTAT NEW DELHI] the income received by the appellant from bowling alley would be covered under section 66D(j) of the Finance Act and, therefore, would not be leviable to service tax - HELD THAT:- After having perused the impugned judgment, we find that in the facts of the case, the view taken by the Tribunal is correct. Hence, there is no reason to interfere in the Civil Appeal.
Accordingly, the appeal is accordingly dismissed.
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2024 (10) TMI 1547
Refund of service tax paid under the reverse charge mechanism on the transportation of raw material rock phosphate - entitlement to exemption notification no. 3/2013 [S.No.21(e)] claimed - appellant had self-assessed service tax and filed returns which have not been modified through any appeal proceedings and appellant directly filed refund claims which can be sanctioned only if the assessments are modified - HELD THAT:- The settled legal position is that the refund proceedings are in the nature of execution proceedings and cannot be used to modify the assessment already made. Just as in an execution proceeding the decree cannot be modified, in a refund proceeding, the assessment cannot be modified as held by the Supreme Court in ITC Limited. [2019 (9) TMI 802 - SUPREME COURT] Also In BT (India) Pvt. Ltd, [2023 (11) TMI 478 - DELHI HIGH COURT] held that ITC Ltd case would apply to service tax refunds also.
This case is identical to BT (India) Pvt. Ltd.[supra] inasmuch as the question is whether refund of service tax paid can be sanctioned or denied so as to modify the self-assessments already made and it has been answered in the negative by the Delhi High Court. The only difference between this case and that of BT (India) Pvt. Ltd. is that the assessee would have been entitled to refund and in this case, the appellant would not be entitled to refund if the refund is processed as per the assessments. But that is immaterial.
In view of the judgment of ITC Ltd and BT (India) Pvt. Ltd. [supra] it is held that since the appellant had not assailed the self-assessments and as per the assessments the appellant is not entitled to any refund, the appellant would not be entitled to refund and it has been correctly rejected. Appeal dismissed.
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2024 (10) TMI 1546
Liability of the appellant under ‘mandap-keeper’ service - invocation of extended period of limitation - it is the case of the Revenue that the appellant had not only made available the food and beverages, but had also made available lights, fans, their own staff used in rendering catering service to the guests, etc. and therefore, the charges for sale of food was inclusive of these service elements - extended period of limitation - suppression of facts or not - interest - penalties - HELD THAT:- N/N. 19/97 issued by the government whereby the ‘appointed day’ was notified, followed by the issuance of a Trade Notice No.9/97 dated 01.07.1997, which stated that the scope of the said Notice was very wide to include within its scope, places like Kalyan mandap, marriage halls, banquet halls, conference halls, etc., and hotels and restaurants providing any such facilities would also be included in the coverage of service tax.
Wide range of services are included in the definition of taxable services as far as ‘mandap-keeper’ is concerned. The said definition includes services provided in relation to use of mandap in any manner and includes the facilities provided to the client in relation to such use and also services rendered as a caterer. In fact, making available a premises for a period of few hours for the specific purpose of being utilized as a mandap, whether with or without other services would itself be a service and cannot be classified as any other kind of legal concept - U/s 65(66) of the Finance Act, 1994, Mandap means any immovable property as defined in section 3 of the Transfer of Property act, 1882 and includes any furniture, fixture, light fittings, and flour covering therein, let out for consideration for organizing any official, social or business function - the Commissioner (Original Authority) was correct in confirming the demand under Mandap-Keeper Service on the appellant.
Extended period of limitation - suppression of facts or not - interestt - penalties - HELD THAT:- The reliance placed on the decision of Apex court in Commissioner of Service Tax, Mumbai Vs. M/s. UFO Moviez India Ltd [2021 (1) TMI 930 - SC ORDER] by the appellant is apt, wherein the Hon’ble court has held that suppression means failure to disclose full information with the intent to evade payment of duty - But here, in the case on hand, suppression cannot be alleged since the bonafides insofar as remittance of sales tax are not doubted. Hence, the demand confirmed which stands upheld shall be limited to the normal period alone, since there is no case of suppression whatsoever, that too, to evade payment of duty - The interest charged u/s 75 of the Act ibid also stands confirmed to the normal period alone - penalties imposed under sections 77 and 78 of the Act ibid on the appellant set aside.
Appeal allowed in part.
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2024 (10) TMI 1545
Service tax demand and interest - demand of service tax on the amount towards provident fund - Imposition of penalties under Sections 76, 77, and 78 of the Finance Act, 1994 - Invocation of the extended period of limitation under Section 73(1) of the Finance Act, 1994 - HELD THAT:- As the appellant was well aware that he was providing taxable services and short paid the service tax, even after issuing invoices indicating the services tax payable and collecting the same from the service recipient. They were not filing the ST-3 returns on time in the manner as specified in law. They have suppressed the information with intend to evade payment of taxes. Accordingly, the demand by invoking the extended period of limitation and penalty imposed cannot be disputed with.
As it is evident that appellant is not even consistent in his own submissions in these proceedings. While before adjudicating authority he has specifically asserted that he do not wish to contest the show cause notice on merits but only on quantification by claiming certain deductions from the taxable value determined by the revenue in show cause notice, his stand before the appellate authority is contrary to his own submissions and is challenging the rate applicable at different period of time. He has not substantiated his claim towards the application of different rates for the different period of demand. Appellant authority having found that said claim has not been substantiated rejected those submissions. We do not find any merits in the challenge made by the appellant to the order of the First Appellate authority.
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2024 (10) TMI 1544
Service tax on the bond amounts secured by them from their employees - incident of recovering amount (notice pay from the employees) is covered under category of the declared service - department is of the view that as per Clause (e) of the section 66E of the Finance Act, 1994 this fact is covered by the category of ‘Agreeing to an obligation to refrain from an act, or to tolerate an act or a situation or to do an act.
HELD THAT:- We have heard both the sides, we find that the issue it hand is no longer res integra as the matter has already been decided by this Tribunal in case of Rajasthan Rajya Vidhyut Prasaran Nigam Limited [2022 (1) TMI 909 - CESTAT NEW DELHI] employee who is the service provider and the service provided by him in the course of employment is excluded from the definition of service. Where the employer recovers any amount, the service provider will be the employer and his services are not excluded from the definition of service. Therefore, a distinction needs to be made on this count. On a specific query from the bench, he fairly submits that there are no case laws to support this argument nor is there any case law contrary to the judgment in the GE T&D [2019 (12) TMI 1566 - MADRAS HIGH COURT]
In view of our finding that compensation for failure under a cannot is NOT consideration for service under the contract and also following the law laid down by Madras High Court in GE T&D that Notice pay in lieu of termination, however, does not give rise to the rendition of service either by the employer or the employee, the impugned order upholding confirmation of a demand of service tax on the notice pay received/recovered by the appellant from its employees for premature resignation cannot be sustained and needs to be set aside.
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2024 (10) TMI 1543
Condonation of delay of 282 days in filing the special leave petition - sufficient cause for delay or not - Seeking refund of amount paid under threat or duress in pursuance of an investigation - it was held by High Court that 'Though the original issuance of the show-cause notice may be in terms of the directions of the writ Court, any further contemplation of proceeding with the show-cause notice, would be without any authority, in view of the subsequent order passed.' - HELD THAT:- There is a delay of 282 days in filing the special leave petition for which we do not find any plausible explanation in the averments made in the application seeking condonation of delay. The special leave petition is dismissed on the ground of delay.
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2024 (10) TMI 1542
Interpretation of Rule 6 of the Cenvat Credit Rules 2004 thereby equating the “automobile cess” under a different enactment to be part of excise duty - HELD THAT:- Rule 6 of the CENVAT Credit Rules 2004 inter alia provides that CENVAT Credit shall not be allowed on such quantity of input as is used in or in relation to the manufacture of the exempted goods or for provisions of exempted services.
In M/s Mahindra and Mahindra Ltd [2019 (12) TMI 230 - BOMBAY HIGH COURT], the controversy was whether auto cess and education cess could be regarded as duties of excise and based upon the same, the manufactured goods or the services provided could be regarded as exempted goods or exempted services - In M/s Mahindra and Mahindra Ltd, the Coordinate Bench held that having regard to the nature of the various duties or cesses, which are in addition to the duty of excise leviable under the Act or additional duty of excise leviable under Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act 1957 which are nothing but levies of excise - The Court held that once it is seen that these cesses and duties are also excise duties and, on that basis, are included in the CENVAT credit scheme, as indicated by Rule 3 itself, the fact that these are referred to as cesses or duties loses its significance altogether. This was hardly determinative for construing the expression ‘duty of excise”. Thus, it was held that where cesses were paid on goods or services, such goods or services could not be regarded as exempted goods or services.
Incidentally, Unicorn Industries [2019 (12) TMI 286 - SUPREME COURT] was not even relied upon before the Tribunal, possibly realising the controversy in Unicorn Industries was not the same as the controversy involved before the CESTAT in the present case. There, the assessee insisted that there was no requirement to pay any cess or other duties like cess. Here, the Respondent has paid the cesses. Accordingly, we find no error in the impugned order made by the CESTAT, which, as noted earlier, is entirely based on the decision of this Court in M/s Mahindra and Mahindra Ltd.
None of the substantial questions of law as urged arise in this appeal - appeal dismissed.
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2024 (10) TMI 1541
Entitlement for the benefit of N/N. 20/2007 dated 25th April, 2007 which allow exemption to a new unit for a period of ten years - factual issues not addressed properly - violation of principles of natural justice - HELD THAT:- The Tribunal in setting aside the orders of two adjudicating authorities, i.e. the order-in-original and the order of the Commissioner (Appeals), did not address itself properly to the factual issues which needed a detailed and threadbare determination - Prima facie it has not considered some vital and material evidence and has acted upon irrelevant materials to hold in favour of the respondent.
This is the the highest Appellate authority to interfere with the order of the Tribunal only if there is a substantial question of law involved. No doubt as stated above, a substantial question of law is involved. But it would be in the fitness of things if this factual determination is made by the learned Tribunal.
The impugned order of the Tribunal dated 31st March, 2023 set aside - entire matter remanded to CESTAT to consider the case de novo upon hearing the parties and decide the same by a reasoned order within three months from the date of communication of this order - appeal disposed off by way of remand.
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2024 (10) TMI 1540
CENVAT Credit - inputs/capital goods - dumpers falling under Chapter 87 of the Central Excise Tariff Act, 1985 - Extended period of limitation - HELD THAT:- It is not in dispute that the appellant had accounted the said dumpers under the head ‘Fixed Assets’ in their balance sheet and have claimed depreciation on the same, thus declaring the dumpers as capital goods and hence, they cannot be construed as inputs under the Cenvat Credit Rules, 2004.
The dumpers which are classifiable under Chapter 87 of the Central Excise Tariff Act, 1985 are clearly excluded from the definition of ‘Capital Goods’. Therefore, appellant is not eligible for the benefit of cenvat credit on the dumpers which are used in the mining area away from the factory premises either as inputs or capital goods.
Whether the appellant is eligible for the benefit of cenvat credit on the dumpers as ‘Capital Goods’? - HELD THAT:- In view of the definition of the ‘Capital Goods’, the appellant is clearly not eligible for the benefit of the cenvat credit treating the dumpers as ‘Capital Goods’. The decisions of M/S. ADITYA CEMENT VERSUS CCE, JAIPUR-II [2016 (9) TMI 1127 - CESTAT NEW DELHI] and BHARATHI CEMENT CORPORATION PVT LTD. VERSUS COMMISSIONER OF CENTRAL TAX, TIRUPATI – GST [2022 (9) TMI 850 - CESTAT HYDERABAD] is not relevant in view of the fact that the appellant himself has considered the dumpers as capital goods and they have also admittedly claimed depreciation on these assets. The decision in the case of VIKRAM CEMENT VERSUS CCE, INDORE [2006 (2) TMI 1 - SUPREME COURT] is also not applicable since the mines where the dumpers are used are not captive mines.
Thus, the dumpers are not eligible for cenvat credit neither as ‘inputs’ nor as ‘capital goods.
Extended period of limitation - HELD THAT:- The original authority in the impugned order has only stated that the appellant after realising that they were not eligible for credit on dumpers as capital goods, they availed cenvat credit on the same declaring them as ‘inputs’ and this itself is a deliberate act with an intent to avail irregular cenvat credit. The Commissioner (Appeals) in the impugned order has not given any finding with regard to limitation. Neither the show cause notice nor the impugned orders have specified any factors to confirm suppression or misstatement of facts to invoke the extended period of limitation - unless there are specific allegations or averments for wilful mis-statement or suppression of facts, the demand cannot be sustained for the extended period. Therefore, the entire demand being beyond the normal period the same is set aside.
Appeal allowed.
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2024 (10) TMI 1539
Process amounting to manufature - undertaking several activities on bought out items - levy of excise duty on the activities performed on bought-out items - HELD THAT:- The customers get a complete finished product in un-assembled/ dis-assembled form under the brand name “KOHLER” which has a different identity, end use, nomenclature different from the individual parts going into the finished product with the names of “EOLIA SHOWER ONLY TRIM”, “HEALTH FAUCET W/WHITE SDSPRAY, M HOSE” and ‘INLINE STOP VALVE TRIM” or other similar products falling in these group categories. The process undertaken by the appellant falls within the expression “incidental and ancillary” to the manufacture of final products and amounts to manufacture within the scope of Section 2(f) of the Central Excise Act, 1944.
As regards “BOTTLE TRAP” “FLOOR DRAIN” and similar items, the appellant has claimed that PVD process undertaken in the appellant’s factory by which “parts are cleaned, preheated and coated with zirconium nitride through Vacuum Chamber with the help of specific amount of gases and as a result of these process the colour of parts get changed to yellow alike the process of gold plating, Brand name i.e. "KOHLER" is then embossed/laser marked on these items” dos not amount to manufacture as PVD coating constitutes merely makes products rust-free and this process does not change any function of the product except colour does not bring into existence a new product.
While applying the ratio laid down by the Hon’ble Apex Court in UNION OF INDIA VERSUS JG. GLASS INDUSTRIES LTD. [1997 (12) TMI 110 - SUPREME COURT], it is found that the process of PVD is not merely a colour changing or making the product rust-free. Without undertaking the process, the articles in dispute cannot be used as they will be highly corrosive and rust prone being always in contact with the water and will have practically no shelf life. The process of PVD is not applied merely to enhance the visual appeal but is necessary to make the product worth of its use. The process clearly falls within the definition of “manufacture” under Section 2(f) of the Central excise Act being incidental and ancillary to the manufacture of the finished goods.
The appeal is partly dismissed and partly allowed.
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