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Showing 361 to 380 of 1570 Records
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2024 (5) TMI 1210
Violation of principles of natural justice - cryptic order - improper handling of reply by the petitioner - order u/s 73 of this Central Goods and Services Tax Act, 2017 - HELD THAT:- Perusal of the impugned order shows that the impugned order records that no proper reply has been submitted and the reply stated to be improper was not found to be satisfactory. It is noted that the order is cryptic order without any reasons and without taking into account the reply filed by the petitioner.
The case of the petitioner is that on account of an error, details of Impugned Tax Credit were inadvertently mentioned in column IV (A) (3) instead of column IV (A) (5). None of the averments of the petitioner have been taken into account while passing the impugned order dated 05.12.2023. Accordingly, the said order cannot be sustained and the matter calls for a remit.
The impugned order dated 05.12.2023 is set aside. The matter is remitted to the proper officer to pass a fresh speaking order taking into account the reply filed by the petitioner. An opportunity of personal hearing shall also be granted to the petitioner - Petition disposed off by way of remand.
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2024 (5) TMI 1209
Non-Payment of Required Fee for Filing an Appeal - Appeal against the order of AAR - Classification of services - licensing services received by the applicant from SIBV, under the MLA and the TLA - Whether with effect from 1 October 2021, licensing services received by the Appellant from SIBV, under the MLA and the TLA will be taxable at 18% under Entry 17 (ii) of the Service Rate Notification or continue to be taxable at 12% under Entry 17 (iii) of the Service Rate Notification? - HELD THAT:- The Appellant was mandated to deposit a total of 20,000/- as fee under IGST Act as a mandatory statutory precondition for filing appeal against the order of the Authority for Advance Ruling, Haryana. However, it is found that vide challan No. 22020600173423 dated 23-02-2022, the Appellant has paid only 10,000/- as Tax under IGST head and not the required fee. Since the application of the Appellant is incomplete for want of deposition of requisite fee (which is to be deposited in the manner specified in Section 20 of the IGST Act read with Section 49 of the CGST and HGST Act respectively), the appeal of the Appellant is not admitted.
The appeal of the Appellant, being incomplete for want of deposition of requisite fee as mandated under the GST law, deserves to be rejected. Therefore, the appeal filed by M/s. Subway Systems India Private Limited (Now Eversub India Pvt. Ltd.,) Gurugram-122002, Haryana, is not admitted.
Appeal disposed of.
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2024 (5) TMI 1208
Foreign Tax Credit (FTC) - denial of claim on late filling of form 67 after due date of filling/ of ITR - as submitted that section 90 of the Act read with Article 25(2)(a) provides that USA tax paid shall be allowed as a credit against the Indian tax but limited to proportion of Indian tax - HELD THAT:- Rule 128(9) provides that Form 67 should be filed on or before the due date of filing the return of income as prescribed u/s 139(1) of the Act, which is recently amended and provided for filling before the end of assessment year.
The Rule nowhere provides that if the said Form 67 is not filed within the above stated time frame or incorrectly filed within time frame and rectified later on, the relief as sought by the assessee u/s 90 of the Act would be denied. It was not the legislative intention to deny the FTC, either under the Act or Rules. Filing of Form 67 is a procedural/directory requirement and is not a mandatory requirement. It was submitted that violation of procedural norm does not extinguish the substantive right of claiming the credit of FTC.
Thus JAO is directed to allow the foreign tax credit limited to proportion of Indian tax payable. Decided in favour of assessee.
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2024 (5) TMI 1207
Addition u/s 68 - taxability of unsecured loans - Burden of Proof - HELD THAT:- AO did not make any independent inquiry as no such details were made available by the assessee however the CIT(A) before whom certain details were furnished did neither carry out investigation nor allowed the AO to do so by providing reasonable & sufficient opportunity to the AO to carry out the investigation for verifying the creditworthiness of the parties, the source of funds and the genuineness of transaction.
This view was further held in the case of Nemi Chand Kothari [2003 (9) TMI 62 - GAUHATI HIGH COURT] wherein it was held that it cannot be said that a transaction, which takes place by way of cheque, is invariably sacrosanct. Once the assessee has proved the identity of his creditors the genuineness of the transactions, and the creditworthiness of his creditors vis-à-vis the transactions which he had with the creditors, his burden stands discharged and the burden then shifts to the revenue to show that though covered by cheques, the amounts in question, actually belonged to, or was owned by the assessee himself. Similar findings have been given in case of N. R. Portfolio Pvt. Ltd. [2012 (12) TMI 762 - DELHI HIGH COURT]
We are of the considered opinion that the details/documents filed by the respondent/ assessee to discharge its primary onus of explaining the loans before the CIT(A) have not subjected to the requisite enquiry/examination/investigation. Thus, the respondent/assessee deserves reasonable opportunity of being heard to make shortcomings or non-compliances. Appeal of Revenue is allowed for statistical purposes.
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2024 (5) TMI 1206
Income deemed to accrue or arise in India - ‘fee for included services’ - nature of services - sales commission received by assessee as accrued to the assessee in term of section 9(1) of the Act and taxable in India - assessee is a non-resident company in India and resident of USA - what is the nature of services, whether these services falls within the definition of included services in term of section 9(1) of the Act and can be held as ‘fee for included services’
HELD THAT:- These services rendered by assessee in no way can be called as ‘fee for included services’ whereas these payments are for marked services - assessee has entered into a contract with SPI Technologies India Pvt. Ltd., who consequently entered into contract with end customers located in USA. However, assessee is not party to the master service agreement with the customers.
All service contracts with customers in USA are entered by SPI Technologies India Pvt. Ltd., and it is SPI Technology India Pvt. Ltd., who is solely responsible for undertaking and executing the e-publishing work. Here, it is to be clarified that the role of the assessee is limited to liaising with the customers, understanding their workflow requirements and communicating the same to SPI Technologies India Pvt. Ltd., who undertakes the project execution.
DRP and the AO wrongly noted that the amalgamation with the assessee and SPI Technologies India Pvt. Ltd., w.e.f. 01.04.2014 whereas actual facts are that the Laser words Pvt. Ltd., merged with SPI Technologies India Pvt. Ltd., w.e.f. 01.04.2014 and McGraw-Hill Companies Inc., w.e.f. 27.04.2010, who is the end customer of SPI Technologies India Pvt. Ltd.
It is not a disputed fact that assessee receives sales commission as percentage of sales from new customers as well as existing customers on monthly basis. The role of assessee is not limited to identification of prospective / new customers in USA and once customer is onboard, the assessee interacts with the customer on a regular basis to understand the customer requirements. Hence, customer acts as a front-end contact point for the customers and the role of the assessee to understand the workflow requirements of the customers and communicate these requirements to the executives located in SPI Technologies India Pvt. Ltd., and for this, assessee charge commission on total sales and disclose this as sales commission.
Nature of work executed on activities carried out cannot be equated with ‘fee for included services’ as mentioned in 12(4) clause (b) of Indo-USA DTAA and hence, it cannot be taxed in India. It is to be considered as sales commission only. Hence, we delete the addition and allow the appeal of assessee on this issue.
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2024 (5) TMI 1205
Scrutiny assessment - Jurisdiction of AO over corporate assessee with income of Rs. 30 Lakhs and above in metro cities - Jurisdiction of the DCIT/ACIT to issue notice u/s 143(2) - assessee had disclosed loss - HELD THAT:- The definition of income in Section 2(24) of the Act is an inclusive definition and it is a settled principle that under the provision of Income Tax Act, income includes loss. The Hon’ble Supreme Court had held in the case of CIT v. Harprasad & Co. P. Ltd. [1975 (2) TMI 2 - SUPREME COURT] that the words ‘income’ or ‘profits and gains’, should be understood as including losses also.
In the subsequent decision of CIT vs. Gold Coin Health Food Pvt. Ltd. [2008 (8) TMI 5 - SUPREME COURT] it was reiterated by the Apex Court that in view of the decision of CIT v. Harprasad & Co. P. Ltd. [1975 (2) TMI 2 - SUPREME COURT] there was irresistible conclusion that income also includes losses. As the income as defined under the Income Tax Act includes losses, the CBDT Instruction regarding jurisdiction of corporate assessee in metro cities being with ACIT/DCIT was in respect of both the cases of income as well as losses over Rs. 30 Lakhs. Therefore, the notice u/s. 143(2) of the Act was correctly issued by the DCIT in this case. As the objection of the assessee on the issue of jurisdiction is devoid of merit, the ground No.3 as taken by the assessee is dismissed.
Rejection of books of account and estimation of profit @10% of total receipts - The assessee didn’t respond to the opportunity provided by the AO for rejection of accounts and estimation of income. It was the assessee itself who was to be blamed for rejection of accounts as it didn’t submit proper accounts as called for by the AO. Having failed to provide the primary evidences and to provide the other details as required by the AO, the assessee can’t blame the AO for rejection of accounts. The assessee can’t be absolved from its responsibility of supporting the accounts with proper evidences and explaining the huge loss incurred during the year.
Once the books of account are rejected and the assessee is not co-operating, the only option left with the Assessing Officer was to estimate reasonable income after taking into account the total receipts of the year. The AO estimated the income of the assessee @ 10% for the reason that net profit disclosed by the assessee in the preceding year was 17.82%. The rate of estimate of 10% as applied by the AO is found to be reasonable. The work of the assessee is mostly in the nature of civil construction and estimation rate of 10% is prescribed u/s. 44BBB of the Act to compute the profit and gain of the foreign companies engaged in the business of civil construction. Considering the presumptive rate of taxation as prescribed under the Act, the estimation as made by the AO is found to be reasonable. Therefore, we are not inclined to interfere in the quantum aspect as well and disturb the estimation of income as made by the AO and as upheld by the CIT(A).
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2024 (5) TMI 1204
Penalty u/s 271(1)(c) - accruals/interest on foreign bank account balance in alleged HSBC Bank, Geneva - concealment of particulars of income/furnishing inaccurate particulars of income qua the said addition - HELD THAT:- Hon’ble Delhi High Court [2024 (2) TMI 401 - DELHI HIGH COURT] has held that notional interest on the addition originally made in AY 2006-07 by the AO could not be made in AY 2008-09 to 2011-12.
The facts, circumstances and prevailing law admittedly remain the same in AY 2012-13 as well. Respectfully following the order (supra) we delete the impugned addition made by the AO which has been sustained by the Ld. CIT(A) and decide the appeal of the assessee in his favour.
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2024 (5) TMI 1203
Addition u/s 68 - identity, creditworthiness and genuineness of the loan creditors not proved - burden to prove - Disallowance of Interest Expenditure
HELD THAT:- Once, the assessee has discharged the burden to prove prima-facie “nature and source’’ of the credit entries, onus shifted to the AO to rebut it with cogent evidence. In this case, the AO based on the statement of Shri Vipul Vidur Bhatt has disbelieved the transaction of loan taken from M/s. Shipra Fabrics Pvt. Ltd., and M/s. Lunkad Textile Pvt. Ltd., because, Shri Vipul Vidur Bhatt had admitted before the search team that these two entities were his paper companies.
Assessee has brought to the notice of the AO as well as the CIT(A) that Shri Vipul Vidur Bhatt has retracted his statement by filing Affidavit alleging coercion and duress for eliciting such a statement. In such a scenario, the AO ought to have summoned Shri Vipul Vidur Bhatt and cross-examined him; and in that process ought to have elicited from him about the genuineness of the lenders viz M/s. Shipra Fabrics Pvt. Ltd. and M/s. Lunkad Textile Pvt. Ltd. i.e, whether these companies actually conducted any business or were only his paper companies engaged in providing accommodation entries.
AO, however, has not endeavored to take such a course of action and instead has brushed aside the Affidavit of retraction on the specious plea that the DDIT Investigation Report is silent about it. Such action of the AO cannot be accepted and since, the assessee has discharged his burden to prove the identity, creditworthiness and genuineness of the loan creditors, and the assessee has shown to have re-paid loan the loan in question the addition made u/s 68 of the Act cannot be sustained.
Moreover, the only material on the basis of which Assessing Officer has taken adverse view against assessee was the untested statement of Shri Vipul Bhat, who admittedly has not been allowed to be cross-examined by assessee, so in view of retracted statement (Affidavit), it would be unsafe to draw adverse view against assessee. Therefore, the additions made deserves to be deleted. For taking such a view, we rely on the decision of case of PCIT v. Paradise Inland Shipping (P.) Ltd. [2017 (11) TMI 1554 - BOMBAY HIGH COURT] and direct deletion of the addition to the tune and it would be gainful to refer to the decision in the case of PCIT v. Paradise Inland Shipping (P.) Ltd. [2017 (11) TMI 1554 - BOMBAY HIGH COURT]
Thus we direct deletion of the addition made by the AO u/s 68 ; and the interest expenditure claimed by assessee given to the two entities in AY 2014-15 & for AY 2015-16 after duly deducting TDS, need to be allowed
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2024 (5) TMI 1202
Penalty u/s 271(1)(c) - defective notice issued u/s 274 - concealment of income OR furnishing of inaccurate particulars of income - Disallowance of leasehold improvements and Addition on account of straight lining of rent expenditure.
HELD THAT:- Whether there was concealment of income or furnishing of inaccurate particulars of income”. In the absence of such clear-cut findings, the penalty order is liable to be struck off.
We are of the considered view that where there is confusion in recording the satisfaction for initiation of penalty proceedings or levy of penalty on the limb for which no satisfaction was recorded and no penalty proceedings were initiated in the assessment order, then the penalty levied is un-sustainable, hence we answer the issue no. 1 accordingly.
Coming to the claim of the Ld. D.R. that the additions made by the AO as affirmed by the Ld. Commissioner and not further appealed by the assessee before higher courts, have attained finality, therefore penalty is liable to be levied. We are not in agreement with such claim of the assessee, as the Hon’ble Apex Court in the case of CIT Vs. Reliance Petro Products Pvt. Ltd [2010 (3) TMI 80 - SUPREME COURT] has clearly laid down the dictum “that merely making an incorrect claim does not tantamount to furnishing of inaccurate particulars”.
We are also of the considered view that rejection of claim does not ipso facto leads to levy of penalty. Even otherwise in this case the penalty levied failed to pass the legal tests, as determined by the Higher Courts and therefore on the aforesaid analyzations and peculiar facts and circumstances in cumulative effects, the decision of the Ld. Commissioner for deletion of the penalty does not require any interference, as the same is neither perverse nor suffers from any impropriety and/or illegality. Consequently, deletion of penalty is sustained and Revenue’s appeal is dismissed.
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2024 (5) TMI 1201
Denial of registration u/s. 80G(5) - application was filed after the mandatory timeline prescribed by the statute - as noted assessee trust was an old trust continuing to exist much before commencement of new regime of registration effective from 01.04.2021 and therefore, it could seek registration under new regime in Form No. 10A u/s 80G(5)(i) itself under which it would have got registration for five years - Instead, the assessee wrongly made an application in Form No. 10A u/s 80G(5)(iv) and received provisional approval for 3 years..
HELD THAT:- It is admitted fact that the assessee is an old trust and it has already commenced its activities on 17.01.1992. It could further be noted that the assessee has already received provisional approval u/s 80G(5)(iv) for a period commencing from 21.10.2022 to AY 2025-26. It sought approval u/s 80G(5)(iii) by filing Form No. 10AB on 30.03.2023 which has been rejected by CIT(E) on the ground that the assessee had violated the mandatory time lines as statutorily provided.
We find that this issue has been decided by co-ordinate bench in bunch of appeals titled as M/s CIT-1982 Charitable Trust & Ors [2024 (3) TMI 1201 - ITAT CHENNAI] held that the extended time limit of 30.09.2023 as per CBDT Circular would apply to Form No. 10AB as well.
The respondents are directed to consider the applications submitted by the petitioners as to the recognition/approval in respect of clause (i) of the first proviso to sub-section (5) of section 80G of the Act as within time and consider the same and pass orders thereon on merits, in accordance with law within six months from the date of receipt of a copy of this order.
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2024 (5) TMI 1200
Condonation of delay in filing appeals - delay of 1158 days - Recovery of Refund already granted - Validity of Chartered Accountant's Certificate - HELD THAT:- The facts show that the appellants were deligent in prosecuting the matter, more particularly taking effective steps to bring the wrongdoers within the framework of law. Therefore, we are of the view that the delay though being inordinate has been properly explained.
Thus, the applications are allowed and the delay in filing the appeal is condoned.
Refund - Validity of Chartered Accountant's Certificate - Though the adjudicating authority and the appellate authority held the appellants responsible for producing such a false certificate, there is nothing on record to show that the appellants with knowledge and deliberately produced a fake document. In the absence of any material to the said effect, the adjudicating authority as well as the appellate authority should not be recorded such a finding. Thus, rending the finding to be perverse.
Remand for Fresh Consideration - Though the assessee produced a certificate issued by the chartered certificate yet the adjudicating authority is entitled to verify the aspect as to whether the duty has been passed on or not. Even assuming the certificate issued by the chartered accountant is either defective, false or not acceptable for certain reasons nothing prevents the assessee from producing another certificate from the chartered accountant since it is the adjudicating authority, who will consider not only the certificate issued by the chartered accountant but other records which the assessee may be called upon to produce to examine as to whether refund can be sanctioned.
As observed earlier, there is nothing on record to indicate that the appellants with certain ulterior motive and with full knowledge produced a false document stating the same to be true.
Thus, we are of the view that the matter can be remanded back to the adjudicating authority for a fresh consideration. The appeals are allowed with the above direction.
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2024 (5) TMI 1199
Seeking release of seized goods u/s 110A - Non-issuance of a show cause notice within the stipulated time - valuation and duty discrepancies - Imports cutting blades - HELD THAT:- The respondent argued that the Circular from 2017 was superseded by an amendment in 2018, exempting cases with provisional release from the six-month time limit for issuing show cause notices. The Tribunal held that this exemption applied to the present case.
We hold that the order passed by the learned Tribunal calls for interference. Accordingly, the appeal is allowed and the order passed by the learned Tribunal is set aside.
As mentioned, two conditions were imposed for grant of provisional release. So far as the first condition of execution of bond is concerned, we find there is no ground to interfere with the same and the said condition is affirmed. So far as the second condition is concerned, the bank guarantee of Rs. 65,00,000/- is to cover the estimated differential duty probable fine and penalty. We prima facie find that in the order passed by the adjudicating authority or the appellate authority there is no indication as to how the value of goods have been arrived at on a provisional basis. Therefore, we are of the view that the interest of the revenue will be protected if the respondent is directed to furnish a bank guarantee for Rs. 25,00,000/- and a bond for the remaining Rs. 40,00,000/- in respect of the second condition.
The respondent in compliance of the above three conditions to the satisfaction of the department, the seized goods shall be provisionally released within a period of 10 days from the date on which the conditions are complied with.
Thus, the appeal is disposed and the connected application stands closed.
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2024 (5) TMI 1198
Fraudulent Registration and Utilization of Duty-Free Scrips - Bonafide Purchase and Verification of Scrips - Exemption Notifications and Foreign Trade Policy - Penalty - Extended Period of Limitation - DRI received an intelligence that some people gained access to Electronic Data Interchange (EDI) System of Indian Customs (ICES) and fraudulently tempered with details of duty free scrips -
HELD THAT:- Since admittedly the appellant has failed to comply with the notification, the benefit of duty exemption even on the genuine scrip is not permissible to the appellant. Present is the case of forged and fraudulent scrip though the appellant has denied the fraudulent nature thereof, but there is no denial to the fact that the date and value of the scrip which was originally issued in the name of M/s Ranbaxy Laboratories had got changed while purchasing the said scrip. The liability of appellant was to verify the same. Central Board of Excise and Customs issued a Circular No. 05/2010 dated 16.03.2010 regarding verification of genuineness of duty credit scrip issued under Chapter 3 of Foreign Trade Policy, before registration.
Thus, the Foreign Trade Policy and the Handbook of procedures under which the duty free scrips were issued required the physical copies of the licences to be verified before allowing clearances. The corresponding exemption notifications issued under the Customs Act also required such verification. Various circulars issued by the Board from time to time and the Standing Orders issued by the Commissionerate from time to time also required not only verification of the scrips but also the shipping bills and bills of export under which the goods have been exported against the licence/scrip.
Resultantly, there was never any room for the importer to presume that the goods could be cleared without paying duty without possessing and presenting a valid scrip, not only did the appellant not have a scrip in its possession, but it was also not aware as to which scrip it was buying. All the appellant did was ask that its customs broker to clear its goods without paying duty. Thus, there is nothing in the entire documents to show good faith or genuine belief on the part of the appellant.
Thus, I hold that there was a mandatory responsibility with the appellant due to the exemption notifications and the Foreign Trade Policy provision, to produce the physical scrip before the proper officer at the time of clearance. The said responsibility has neither been diluted nor extinguish the system of registration of scrips/ licences under the Customs EDI System. The conditions of exemption notification are to be construed strictly as it has been held by Hon’ble Supreme court in the case of Commissioner of Customs (Import), Mumbai versus Dilip Kumar [2018 (7) TMI 1826 - SUPREME COURT]. It has been clarified that incase of any doubt, the benefit of doubt must go in the favour of revenue and against the assessee.
Bonafide purchaser - Though the appellant has talked about the invoice No. 280 dated 18.09.2013 regarding sale of the impugned scrip from Shri Ashish Jain of M/s Connect India to whom the payment of Rs. 52,55,224/- was made through RTGS, but as already observed that DGFT issued the impugned licence/scrip in favour of M/s Ranbaxy Laboratories at ICD, Dhar the contents of invoice are, therefore, contrary to the contents of licence mentioned to have been purchased vide the said invoice.
In the light of above discussion of verification about the scrip to be received by transfer and about producing the same to the proper customs officer at the time of clearance it becomes absolutely clear that the appellant has failed to verify the same as well as to produce the same at the time of clearance. Had the scrip being produced before the proper officer at the time of clearance, the manipulating/tempering/forgery of the scrip, by whomsoever, would have been unearthed. Hence, mere placing on record the invoice about purchase of impugned scrip or licence do not come to the rescue of the appellant.
Thus, I do not find any infirmity in the order under challenge, whereby the impugned demand has been confirmed.
Penalty - No evidence of appellants‟ knowledge of fraud or forgery of the scrips/licences in this case. However, as far as the question of responsibility to take precautions and if such precautions were taken are concerned, I agree with the learned AR that caveat emptor (Buyer Beware) is a well established principle and it requires the buyer of any goods to take reasonable precautions with respect to what he is buying. When one is buying an instrument for lakhs of rupees and claiming benefit of exemption from customs duty from it and such an instrument is numbered and is issued by any authority, it would be reasonable to expect that the buyer would know what instrument it is buying; from whom and in whose name it was issued originally. The invoices show that the appellant bought the benefit of exemption which is not transferable and it had not bought the licences/scrips which were transferable due to which the appellant never received physical licences/scrips. Hence scrips could not be produced at the time of claiming the benefit of the exemption.
In my considered view, this does not meet the requirement of caveat emptor even remotely. Thus even if the appellant was a genuine buyer of licences/scrips but he has failed to make the bonafide enquiries and has failed to produce the scrips to proper officer while seeking exemption of customs duty based on these scrips. The act of appellant is, therefore, in violation of the respective notifications as mentioned above.
Since I have upheld the confirmation of the demand invoking extended period of limitation, I also uphold the imposition of penalty u/s 114A. Hence no infirmity is found in the order under challenge w.r.t. penalties imposed under different sections.
With these findings, the order under challenge is hereby upheld. Consequent thereto both the appeals are hereby dismissed.
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2024 (5) TMI 1197
Liability of promoter / builder / developer to pay service tax - construction of residential complexes - period January 2009 to September 2009 and October 2009 to September 2010 - benefit of abatement.
Liability of promoter / builder / developer to pay service tax - construction of residential complexes - period January 2009 to September 2009 and October 2009 to September 2010 - HELD THAT:- The appellant is a builder / promoter. The issue as to whether builder / promoter is liable to pay service tax prior to 1.7.2010 was considered by the Tribunal in the case of Krishna Homes [2014 (3) TMI 694 - CESTAT AHMEDABAD]. The Tribunal referred Board’s Circular No.108/02/2009-ST dt. 21.09.2009 and also considered the Explanation added to Section 65 (105) (zzzh) which was introduced with effect from 1.7.2010 and held that promoter / builder / developer is not liable to pay service tax under construction of Residential Complex for the period prior to 1.7.2010.
Benefit of abatement - HELD THAT:- The works executed are composite in nature which involves use of materials as well as rendition of services. The Tribunal in the case of Jain Housing & Construction Ltd. 2023 (2) TMI 1044 - CESTAT CHENNAI] had followed the decision in the case of Real Value Promoters Pvt. Ltd. Vs CGST & CE, Coimbatore [2018 (9) TMI 1149 - CESTAT CHENNAI] and held that contracts of composite nature cannot be subjected to levy of service tax under RCS prior to 1.7.2010. The decision in the case of Jain Housing & Construction Ltd. was maintained by the Apex Court in [2023 (9) TMI 816 - SC ORDER] - the demand for the period upto 1.7.2010 cannot sustain and requires to be set aside.
Thus, the demand has been confirmed only for the construction activities undertaken by appellant for the period prior to 1.7.2010. Therefore, the demand for the period prior to 1.7.2010 cannot sustain - the order of appropriation of Rs.67,77,193/- paid for the period after 1.7.2010 need not interference. The appellant does not contest this.
The demand of service tax, interest and penalties for the period upto 1.7.2010 set aside - appeal allowed.
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2024 (5) TMI 1196
Entitlement of Cenvat credit on service tax for hotel charges and event management services - GTA services, under Rule 9(5) of the CENVAT Credit Rules 2004 - HELD THAT:- It is the case of the appellant that these services were used by them for organizing events for promotion/planning strategies for their sales activities. Authorities below have ignored the said submissions and have disallowed the credit by taking the view that these were not utilized directly or indirectly in relation to manufacture of finished products by doing so they have ignored the inclusive part of the definition whereby services received for sales promotion are defined to be eligible as input services for cenvat credit.
Similar view has been held by the Tribunal in the case of Honda Motorcycles & Scooter India Pvt Ltd.[2019 (4) TMI 927 - CESTAT CHANDIGARH].
Thus, I do not find any merits in the impugned order and the same is set aside. Appeal is allowed.
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2024 (5) TMI 1195
Demand of service tax - Classification of Services under GTA - Double Taxation and Refund - Period from April 2015 to June 2017 - HELD THAT:- We find that for the earlier period i.e. from October 2010 to March 2015, in the Appellant’s own case 2023 (11) TMI 723 - CESTAT ALLAHABAD, on the self same issue, this Bench of the Tribunal, in Service Tax Appeal allowed the appeal of the Appellant.
Admittedly, in the present case entire tax due has been paid in respect of these transactions between the Appellant and his client. That being so, we are of the view that the same transaction could not be levied to service tax both at the hands of the service recipient and the service provider under different category of services.
In this case, if these transactions were to be taxed under the category of SOTG, as has been held by the impugned order, entire amount paid by the service recipient under the category of GTA services on the reverse charge basis should have been refunded. There is no scope of double taxation under the statute. The demand made in the present case after noting the payment of tax at the hand of service recipient, the same transaction goes contrary to Article 265 of the Constitution and hence cannot be sustained.
The Tribunal set aside the impugned order and allowed the appeal filed by the appellant with consequential relief, noting that the demand of service tax on merits could not be sustained. Issues of extended period of limitation, demand of interest, and penalties imposed were deemed irrelevant.
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2024 (5) TMI 1194
Scope of SCN - Extended period of Limitation - process of manufacture was not disclosed and that it came to the knowledge of the Department only when the officers visited the premises of the Appellant - around half of the processes undertaken were by machinery and were not manual, which was never the case made out in the SCN - suppression of facts or not - HELD THAT:- When the issue is to be decided in this appeal is not with reference to valuation per se but with reference to the validity of the show-cause notice the order-in-original as well as the decision of the Tribunal, this Court is not precluded from entertaining this appeal as the grounds canvassed before the adjudicating authority as well as the Tribunal was not on the valuation issue per se but with regard to the scope of the show cause notice, whether the extended period of limitation could have been invoked and the correctness of the decision arrived at by the adjudicating authority. Therefore, this appeal is maintainable before this Court.
In no uncertain terms, the appellant/assessee informed the department that they will be availing exemption under notification dated 10.02.1986 in respect to the products manufactured by them, which are handicrafts in the light of the circular issued by the Board. On receipt of the said communication, the department addressed a letter to the appellant/assessee dated 25.03.2004 seeking certain clarification as regards applicability of the circular issued by the Board. The assessee by reply dated 13.04.2004 set out in detail as to how their stand taken in their letter dated 16.03.2004 was justified. There was no further response from the department and the assessee appears to have been availing the benefit of the exemption notification.
However, on a perusal of the order-in-original dated 29.01.2007, it is seen that adjudicating authority proceeded beyond the scope of show-cause notice. In fact, the allegations contained in the show-cause notice have not been the basis for the decision arrived at and the decision was solely based upon an inspection stated to have been conducted in the business premises of the assessee that to after the reply was submitted by the assessee.
Extended period of limitation - suppression of facts or not - HELD THAT:- The department should have material to come to a conclusion that there has been a misdeclaration or a willful misstatement which should be coupled with the intention to evade payment of duty. In the absence of material to establish the same, would not entitle the department to invoke the extended period of limitation. In other words, mere use of these expressions would not be sufficient as there should be material available with the department which should be manifest in the show cause notice as to how in the prima facie view of the department there was misdeclaration, misstatement with intention to evade payment of duty. This being conspicuously absent, it has to be necessarily held that the department could not have been invoked the extended period of limitation.
The order passed by the learned Tribunal as well as the adjudicating authority and the show-cause notice are set aside and the substantial questions of law are answered in favour of the appellant/assessee - Appeal allowed.
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2024 (5) TMI 1193
Interpretation of statute - section 2(f) of the Central Excise Act, 1944 - activities incidental and ancillary to completion of manufacture of products - levy of penalty - HELD THAT:- The assessee was able to explain before the learned Tribunal by placing voluminous records which have been taken note of by the learned Tribunal and carefully appreciated. The learned Tribunal, has referred to in detail the documents and records which were placed before the learned Tribunal by the respondents to establish their cases.
The learned Tribunal proceeded to deal with the crucial issues of the matter, namely co-relatable purchases and sales; duty paid on purchases; job work; testing at third party premises; demand on sale of materials to private parties and sale of wires, channels, angles etc. and non-existence of alleged four suppliers; physical movement of goods.
The learned Tribunal has allowed the respondents’ appeals on appreciation and re-appreciation of all the documents placed before it which admittedly were voluminous.
Appeal dismissed.
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2024 (5) TMI 1192
Clandestine removal of several metric tons of wire rods - Levy of penalty u/r 26 of the Central Excise Rules, 2002 - corroborative evidences or not - not holding any exercisable goods as confiscable under the Central Excise Act, 1944 or Rules made thereunder - failure to arrive at specific finding about the prior knowledge and/or reasons to believe about confiscable nature of any exercisable goods under the Central Excise Act, 1944 - Failure of the Tribunal to follow its own previous order in a similar case M/s. Jai Balaji Industries Limited v. Commissioner of CGST and CX, Bolpur Commissionerate [2020 (11) TMI 549 - CESTAT KOLKATA] - rule of judicial discipline - onus to prove the allegation.
HELD THAT:- The show-cause notice was issued to the appellant pursuant to investigation being carried out at the premises of SPRML, which has ultimately led to the imposition of penalty which has been confirmed by the appellate authority as well as the Tribunal. In this appeal filed under Section 35G the Court is required to consider as to whether any substantial questions of law arises for consideration. While doing so, the Court will also have to consider as to what would be the effect of the decision of the learned Tribunal in the case of Jai Balaji Industries Limited [2020 (11) TMI 549 - CESTAT KOLKATA] on which heavy reliance was placed by the learned Advocate for the appellant and also on the ground that the said order of the Tribunal has attained finality in favour of those assesses and there are other similar orders where the assesses who have alleged to be involved with SPRML were all successful before the Tribunal.
Further the appellant furnished the details of brokers and transporters of SPRML through whom such deals were facilitated. There are other voluntary statements recorded from the brokers Narender Agarwal and Surender Kumar Jain. The tribunal after referring to Rule 26 of the Central Excise Rules, 2002 observed that it is an admitted position that the assessee in their statement which has not been retracted, admitted that they had procured wire rods without cover of duty paid invoices from SPRML which was evident and established from the computerized ledgers which were seized by the department. The learned tribunal posed a question to itself as to whether the appellant can be held liable on the basis of the statement tendered by the co-accused - on facts the tribunal held that penalty was imposed on the assessee not solely based upon any statement of the co-accused but along with the statement of the proprietor of the appellant as well as the other records much of which are computerized records where the dates and other details cannot be altered.
The appellate authority has re-appreciated the factual position, apart from other things noted that the proprietor of the appellant was confronted with the computerized ledger account maintained for the relevant period and he was asked to produce the relevant purchase invoices as reflected in the computerized ledger however, he failed to produce any invoice for the relevant period. The proprietor had no details of the total quantity of MS wire rods purchased during the relevant period, payment for which has been made in cash in the Kolkata office of the SPRML through brokers.
The Commissioner Appeals also considered the plea of retraction raised by the appellant at the appellate stage and, noted that such a plea of retraction made after three years and nine months after the statement was recorded that too in the grounds of appeal filed within the year 2018 cannot in any manner dilute the veracity of the voluntary statement recorded on 11.03.2014 - the alleged retraction in the grounds of appeal filed before the Commissioner after a period of three years and nine months was rightly rejected by the Commissioner of Appeals.
In the facts and circumstances, the appellate authority was right in applying the decision of the Hon’ble Supreme Court in K.I. Pavunny Versus Assistant Collector (HQ) Central Excise Collectorate, Cochin [1997 (2) TMI 97 - SUPREME COURT] wherein it was held that the confessional statement of the accused, if found to be voluntary, can form the sole basis for conviction. Thus, in the absence of any valid retraction, the statement recorded from the proprietor of the appellant was admissible and if that be so, the admitted facts need not be proved.
The learned tribunal has also re-appreciated the factual position and has rendered its findings affirming the view taken by the appellate authority and the adjudicating authority. So far as the decision in the case of Jai Balaji Industries and Others the facts of the case were gone into and the learned tribunal concluded that the department has not attempted to investigate in the direction, they ought to have done to prove the alleged clandestine removal - the decision in the case of Jai Balaji Industries Limited is factually distinguishable and cannot be applied to the facts and circumstances of the case on hand.
The matter is entirely factual and no question of law much less substantial questions of law arises for consideration in this appeal - Appeal dismissed.
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2024 (5) TMI 1191
Recovery of CENVAT Credit - Applicability of Rule 6 of the CENVAT Credit Rules, 2004 to Bagasse and Press Mud - period December , 2016 to June, 2017 - HELD THAT:- The Hon’ble Supreme Court in the case of UNION OF INDIA VERSUS DSCL SUGAR LTD. [2015 (10) TMI 566 - SUPREME COURT] has held that In the present case it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the Section or in the Chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of Section 2(f) of the Act and the absence of manufacture, there cannot be any excise duty.
There are no merits in this appeal filed by the revenue - appeal dismissed.
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