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Showing 121 to 140 of 1466 Records
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2024 (6) TMI 1346
Addition of long-term capital gain u/s 50C - reference to the DVO - FMV determination by DVO - DVO valued the same below the Jantri rates - HELD THAT:- We note that DVO in determining the FMV of the property has considered only two special observations/qualifications i.e. the agriculture land being deep from the village main road and about 1 to 2 kilometers on kachcha village road and it is adjacent to Sugar factory giving fall smell and affecting crop production. According to assessee, there is water logging on the land during monsoon, due to dyeing and printing units in the close proximity results in chemical contamination of the land making it useless for agriculture or residence has not been considered by DVO.
We note that above factors were considered by the DVO only partly and most of the above factors were ignored by the DVO. Assessee has submitted that the DVO has not considered all the objections filed by the assessee, hence the fair market value (FMV) determined by the DVO is an estimate which is not based on full facts of the case.
As fairly well known that the valuation of property involves some kind of guess work and estimation and this fact is very much evident from the valuation report of DVO. It is also a fact that the rate of property even in the same locality differs depending upon locational advantages and other factors.
In the instant case, the DVO has not accepted the entire factors of the assessee`s case, as noted by us in above para. We note that determination of fair market value, after all, is an estimate only and therefore, considering the facts and circumstances of the assessee`s case, as noted above, we are of the view that ends of justice would be meet if an addition of Rs. 50,00,000/- is sustained in the hands of the assessee, as the same would take care of the inconsistencies between DVO report and price of property adopted by the assessee. Therefore, we direct the assessing officer to make/sustain the addition in the hands of the assessee - Appeal filed by the assessee is allowed partly
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2024 (6) TMI 1345
Refusal to grant approval u/s 80G(5) - cancelling the provisional approval granted by CPC u/s 80G(5) - assessee society is granted with the registration u/s 12AA - claim denied as objects of the assessee were religious in nature and expenses incurred during the last three years exceeded 5% of the total income, violating Section 80G(5B) - HELD THAT:- In the present case the assessee society is found to be formed with certain objectives. Though the assessee society as admitted being involved in certain religious activities also but on perusal of the financials of the society it is not emanating that it had incurred any expenditure on such activities for more than 5% of the total income in the relevant period.
As in the present case the assessee society was formed with the objects to provide education, research, training, support to orphans, moral education, literature, environmental safety, employments to deprived, Human welfare, animal kindness, scholarship, library, hostels for meritorious students etc. It is also an admitted fact that the assessee society is granted with the registration u/s 12AA by the Ld CIT(E).
The expenditure incurred by the assessee society are not found to be religious in nature, as per the financials statements submitted by the assessee society, though, CIT(E) has commented in the order that the expenses incurred by the assessee during last three years also exceeds 5% of the total income but have not clarified or commented, which are those expenses and how the said expenses are religious in nature.
Thus we are of the considered view that the assessee society is eligible for grant of approval u/s 80G(5) of the Act, thus, set aside the order of Ld. CIT(E) and direct to grant exemption/approval to the assessee society, accordingly. Appeal of assessee allowed.
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2024 (6) TMI 1344
Denial of Exemption u/s.11 - assessee was not holding any registration u/s.12A/12AA - Denial of deduction of expenditure incurred towards educational purposes - as claimed that since the turnover of the assessee is less than Rs.1 Crore and the assessee is engaged in the educational activities by running Educational Institution, the assessee is eligible for deduction u/s.10(23C)(iiiad) - CIT(A) observed that the assessee has claimed expenses for which no proper evidences are available and claim of deduction of the expenses have been made merely on the basis of self-made vouchers , as was adversely reported by the auditors in their audit report by way of adverse comment/remarks about the claim of deduction of expenditure based on self made vouchers instead of evidence in support of expenses, and based on that Ld.CIT(A) disallowed the claim of deduction of expenses as the genuineness of these expenses could not be proved by the assesse
HELD THAT:- Assesse had submitted before us that one more opportunity be provided to the assessee , and the assessee will produce all the relevant documents/evidences to prove that the assessee is genuinely engaged in the educational activities of running of the educational institution and holding the necessary evidences to support the expenses being incurred for the purposes of the educational activities of the assessee. It was submitted by ld. Counsel for the assessee that the auditors had given a general remarks about non availability of evidences in support of the expenses incurred. The ld. Counsel for the assessee had submitted that the assessee has filed paper book containing 15 pages in which audited accounts with auditors report is placed.
Also assessee submitted that the expenses incurred included salaries to the tune of Rs. 26,53,200/- which is paid to staff who is engaged by the educational institution run by the assessee for educational activities such as faculty members, administrative staff etc, and there are other expenses such as seminar expenses, uniform expenses , communication expenses , vehicle expenses, postage expenses etc. which were also incurred for educational activities of the assesse in running the educational institution, for which it is submitted by ld. Counsel that the assessee will submit all the evidences to substantiate the genuineness of expenses being incurred for the educational activities of the assessee.
Department has no objection if the matter is restored back to the file of Ld.CIT(A) for fresh adjudication. Therefore we set aside the appellate order passed by ld. CIT(A) and restore the matter back to the file of ld. CIT(A) for deciding afresh appeal filed by the assessee with ld. CIT(A) on merits in accordance with law - The assessee is directed to co-operate with Ld.CIT(A) , and submit all the explanations and information sought for by ld. CIT(A) in order to adjudicate appeal filed by the assesse on merits - Appeal of the assessee is treated as allowed for statistical purposes.
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2024 (6) TMI 1343
Settlement of disputed tax arrears under the Direct Tax Vivad Se Vishwas Act, 2020 - assessee did not finally pursue the remedy under the Direct Tax Vivad Se Vishwas Act, 2020, though the competent authority had issued Form No. 3 - AR pointed out that the order of the CIT( A) is wholly unsustainable, in as much as the appeal of the assessee has been dismissed by treating the same “as withdrawn by the appellant”, whereas no such fact-situation persisted before the CIT( A) - As argued since the taxes were not paid as per the determination made by the PCIT in Form No. 3, the mandatory condition of Section 5 (2 ) of the Direct Tax Vivad Se Vishwas Act, 2020 remained uncomplied and therefore, in such a situation, the CIT( A) grossly erred in treating the appeal pending before him as “withdrawn by the appellant”.
HELD THAT:- As DR has not contested any of the factual assertions made by the Ld. AR, and contended that the CIT( A) has referred to Form Nos. 1 , 2 , & 3 issued under the Direct Tax Vivad Se Vishwas Act, 2020 which were appearing in ITBA system, and therefore, he has dismissed the appeal as withdrawn, though he conceded that Form Nos. 4 & 5 were not available on the ITBA system. Be that as it may, according to the Ld. DR the merits of the issue can be examined only at the level of the ld. CIT( A) and pleaded for restoring of the matter to ld. CIT( A) for adjudication for afresh.
Keeping in view, the facts narrated above and the arguments of both the parties, the matter is being restored to the file of the ld. CIT(A) for adjudication denovo - Appeals of the assessee are allowed for statistical purpose.
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2024 (6) TMI 1342
Condonation of delay in filing appeal before CIT(A) - delay of 335 days - HELD THAT:- It appears that the plea taken by the assessee to explain for not been able to prefer the appeal before the CIT (A) in time, is sufficient enough to prove that there was no intentional latches on the part of the assessee in doing so. The documents in regard to payment of tax in Norway and other details in support of such payment was the main documents to be considered by the assessee’s advisor in preferring the appeal before the FAA, fact whereof needs consideration. It naturally took time particularly considering the situation emancing from covid 19 which was still persistent during the period when the assessee was required to get the details from Norway. Thus no negligence on the part of the assessee is found in preferring the appeal before the First Appellate Authority.
With our humble understanding, find that the sufficient cause pleaded by the assessee before the First Appellate Authority and before us is in affirmity, in favour of the assessee without finding any deliberate delay or gross negligence on the part of him and therefore infact relying upon the judgment and the observations made by the Hon’ble Supreme Court in its proper perspective declined to accept the reason given by the First Appellate Authority in rejecting the explanation rendered by the assessee in preferring the appeal before it.
In fact, the explanation was not taken into consideration by the First Appellate Authority in its proper perspective and/or judiciously. We, therefore, condoning such delay in preferring the appeal before the Ld.CIT(A), remit the issue to the file of CIT (A) to adjudicate the issue afresh upon giving an opportunity of being heard to the assessee and upon considering the relevant evidence on record or which the assessee may choose to file at the time of hearing of the matter. The Ld.CIT (A) is directed to pass order strictly in accordance with law. Appeal filed by the assessee stands allowed for statistical purposes.
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2024 (6) TMI 1341
Revision u/s 263 - Deduction u/s 80P - Interest Income earned from deposits made with co-operative and other banks - assessee has considered interest income earned from SCDCC Bank Ltd./Syndicate Bank and Co-operative Societies, Dividend from SCDCC Bank Ltd. and Dividend from Co-operative Bank as income from other sources - HELD THAT:- PCIT without understanding that the assessee is not claiming deduction u/s 80P(2)(a)(i) or 80P(2)(d) of the Act on the income shown in Schedule 7, he directed the AO not to grant deduction u/s 80P(2)(a)(i) & 80P(2)(d) of the Act on the above income of Rs. 1,54,05,706/-, which is shown as “income from other sources” by assessee in Schedule 7 to computation of income.
Being so, in our opinion, the order passed by ld. AO vide order dated 19.4.2021 is not prejudicial so far as erroneous to the interest of revenue, when there was no claim by assessee u/s 80P(2)(a)(i) or 80P(2)(d) of the Act in respect of income shown by assessee in schedule 7 as discussed above. Accordingly, we annul the revision order passed by ld. PCIT u/s 263 of the Act. Appeal of the assessee is allowed.
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2024 (6) TMI 1340
Taxability of software license receipts as royalty under India-US Tax Treaty - case involved a foreign company selling software licenses to its distributor in India, who then sells to end-users -HELD THAT:- In light of categoric finding by the CIT (A) that end-users in the instant case have been only granted a non-exclusive / non-transferrable and a non-sub licensable licence, payment received by the assessee from Math Work India Pvt. Ltd., on sale of software to the end-users cannot be termed as “royalty” under the relevant DTA.
Taxability of amount received by the assessee towards maintenance services - CIT (A) had held the same is inextricably linked to the supply of software licence and when the software licence itself is not taxable as “royalty”, the provisions of Article 12(4)(a) of the India-US DTAA would not apply.
CIT (A) had relied on various ITAT Orders to hold that when receipts are on account of maintenance which is inextricably linked to the supply of software licence and when the supply of the software itself is not taxable as “royalty”, the receipts cannot be termed as “fees for included services”. In view of aforesaid reasoning we see no reason to interfere with the order of the CIT (A) and we uphold the same.
Appeal filed by the Revenue is dismissed.
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2024 (6) TMI 1339
Addition u/s 69A - addition of cash deposits during demonetization period - HELD THAT:- Considering the rival submissions, we note that the assessee is an agriculturist and did not file return of income as he had no taxable income. The explanation of the assessee regarding substantial amount of cash deposits made in the bank accounts during demonetisation period has not been considered by the AO as well as CIT(Appeals).
Further since the issue involved in this case relates to the demonetization period the issue has to be examined in the light of the instructions issued by the CBDT in regard to the cash deposited during the demonetization period.
As relying on M/S. BHOOPALAM MARKETING SERVICES PVT. LTD. [2022 (11) TMI 331 - ITAT BANGALORE] we deem it fit to remit the issue to the file of AO to decide the issue afresh in the same terms. AO will consider the explanation furnished by the assessee in respect of the cash deposited during the demonetization period and in light of the CBDT instructions, if applicable to the assessee being an agriculturist.
AO is directed to give reasonable opportunity of being heard to the assessee and decide the issue as per law. The assessee is also directed to produce evidence/documents in substantiating his case. The assessee is directed not to seek unnecessary adjournments for early disposal of the case. Assessee’s appeal is allowed for statistical purposes.
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2024 (6) TMI 1338
Refund claim - provisional release of seized goods under Section 110A of the Customs Act 1962 - betelnuts - HELD THAT:- This issue on an earlier occasion had been deliberated upon by this Court and by order dated 24.04.2024, had directed the learned DSGI to obtain instructions on the amount that would be acceptable to the respondents. However, as no specific instructions were forthcoming, and the respondent No. 2 maintaining their stand, without further dwelling on any other aspect, the order dated 24.04.2024 will serve to dispose of this matter.
In terms of the order dated 24.04.2024, the respondent No. 2 is directed to refund the amount of Rs. 60 Lakhs to the writ petitioner on sufficient proof of identity being provided, within a period of 8(eight) weeks from the date this order is presented before the respondent No. 2, and if the respondent No. 2, fails to comply, interest on the expiry of the said 8(eight) weeks shall be payable on the refund amount at the rate of 12% per annum.
The petition is allowed.
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2024 (6) TMI 1337
Seeking grant of bail - false declaration of the consignment as Fabric Glue/Radiators/Assorted Colours for smuggling of Red Sanders - submitting forged/false documents of the companies situate at Special Economic Zones - evasion of duty - proceeds of crime - scheduled offences - HELD THAT:- Indubitably, investigation by the Ed is in respect of money laundering of Rs. 51.12 crores which relate to the period from 20th August, 2014 to 14th November, 2015. However, scope and ambit of investigation under the PML Act is wider in nature which can take into account the period even before the date and time of commission of the scheduled offence. As already stated, the criminal activity had been committed even before the same has been notified as a scheduled offence for the purpose of PML Act.
The ED was well within it’s jurisdiction to investigate continuing offence/s, irrespective of the date and time of commission of the scheduled offence as observed by the Hon’ble Supreme Court in the case of Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT]. It is crystal clear that a criminal activity may have been committed before the same had been notified as a scheduled offence for the purpose of PML Act, but if a person has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notified as scheduled offence, may be liable to be prosecuted for offence of money laundering under the PML Act for continuing to possess or conceal the proceeds of crime (fully or in part) or retaining possession thereof or uses it in trenches until fully exhausted. The Supreme Court has made it very clear that the offence of money laundering is not dependent on or linked to the date on which the scheduled offence or if we may say so the predicate offence has been committed.
The relevant date is the date on which the person indulges in the process or activity connected with such proceeds of crime. As already stated hereinabove and the details of period unearthed by the Investigating Agency, the applicant had already indulged in the process connected with proceeds of crime - The Ed has a power to investigate a continuing offence of money laundering as the said offence is not dependent on the date on which the scheduled offence or predicate offence has been committed. The E.D, by clinching material placed on record, has shown that the applicant has been in continuing possession of proceeds of crime.
The broad parameters which are required to be considered are the nature of accusation, the nature of material and evidence collected by the Investigating Agency in support of the allegations, severity of the punishment prescribed for the offence, character and antecedents of the accused, circumstances which are peculiar to the accused and last but not least, possibility of securing his presence during trial as well as reasonable apprehension of witnesses being hampered or tampered - The applicant has not discharged onus of satisfying this Court as regards reasonable grounds for believing that he is not guilty of such offence and he is not likely to commit any offence while on bail, more particularly in the light of the fact that in the past, he had indulged in similar activities of smuggling red sanders by using fake documents.
The application is devoid of merits - Application dismissed.
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2024 (6) TMI 1336
Valuation/undervaluation - ship spares received through the courier mode - eligibility for exemption from duty as per N/N. 12/2012 - Confiscation - redemption fine - penalty - HELD THAT:- This case relates to the low valuation of ship spares received through the courier mode, in the name of the appellant who was the Agent for the vessel, during a breakdown of the vessel MV Samsun which required urgent repairs. When Customs asked for a commercial invoice the same was subsequently submitted by the appellant.
It is found that though there was a technical breach of the Act and Rules there was no intention to evade payment of duty. Nor was the appellant involved in any fraudulent activity that invited harsh penalties. The goods were also statedly exempt from payment of duty as per Notification 12/2012, as the vessel carrying a foreign flag was registered in India during its contract period as per the tender conditions issued by the Directorate of Shipping.
Confiscation of goods - imposition of a personal penalty - HELD THAT:- Confiscation of goods and imposition of a personal penalty is meant to be remedial and hence coercive in its nature so as to serve as a deterrent. It can be imposed for a tax delinquency. However, the amounts imposed in this case are not commensurate with the degree of contravention of law involved. The charge is for a procedural lapse which is technical in nature and happened during an emergency which does not involve an act of intentional duty evasion.
The ends of justice will be served after this long period, by setting aside the fine and penalties imposed by the impugned order - The eligibility of the goods for clearance free of duty as per the conditional exemption, if desired by the importer or his agent, may be verified by the proper officer and decided on merits - Appeal disposed off.
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2024 (6) TMI 1335
Penalty u/s 112(a) and 112(b) of the Customs Act, 1962 - absolute confiscation - Smuggling of foreign origin gold - recovery of Gold from the body of appellant no.2 - non-compliance with section 138B of CA, 1962 - no cognizance can be taken of the statements recorded during the course of investigation which have been relied upon by the ld. adjudicating authority - onus to prove u/s 123 of the Customs Act - HELD THAT:- In the case of COMMISSIONER OF CUSTOMS, AIRPORT AND ADMN. KOLKATA VERSUS SHRI HIMADRI CHAKRABORTY, RAHUL RANJAN, SHRI KISLAY, GIRISH SHARMA, SUJAY KUMAR SARKAR, M/S. AAI CARGO LOGISTIC AND ALLIED SERVICES COMPANY LIMITED [2023 (6) TMI 557 - CALCUTTA HIGH COURT], the Hon’ble Calcutta High Court has held that if an opportunity of cross-examination of persons from whom statements are recorded is refused by an adjudicating authority, then such statements cannot be relied upon by the adjudicating authority - the Hon’ble Calcutta High Court has held that if an opportunity of cross-examination of persons from whom statements are recorded is refused by an adjudicating authority, then such statements cannot be relied upon by the adjudicating authority.
It is observed that an adjudicating authority should allow cross-examination of the person(s) making the statements before relying on such statements against the appellants. In the present case, the ld. adjudicating authority has denied the opportunity of cross-examination of the Pancha witnesses sought by the appellant - By not allowing the cross-examination, the Department could not conclusively establish that the nine gold bars were seized from the appellant. There is no evidence available on record to dispute the claim made by the appellant. In view of the above, we hold that the benefit of doubt should be given to the appellant no. 2.
Penalty imposed on the appellant no. 2 - HELD THAT:- It is observed that the appellant no. 2 has not claimed ownership of the gold. Penalty under section 112(a) and 112(b) can be imposed only when the active involvement of the appellant is established in the smuggling of gold - In the present case, the evidence available on record does not establish that appellant no.2 was actively involved in the smuggling of the gold. Accordingly, the penalty imposed on the appellant no. 2 under Section 112(a) and 112(b) of the Act is not sustainable in the facts and circumstances of this case.
Penalty imposed on the appellant no. 1 viz. Shri Birendra Kumar Gupta - HELD THAT:- It is observed that the appellant no. 2 implicated him in his Statement dated 16.08.2015, as the person who handed over the gold to him. However, there is no corroborating evidence available on record to substantiate this allegation. Later, after four months, Shri Birendra Kumar Gupta was arrested in another case. While recording his Statement dated 13.01.2016 in that case, he admitted that he has earlier sold the said 9 kgs gold to Shri Bharat Sonar - the provisions of Section 138B of the Customs Act have not been followed by the ld. adjudicating authority before taking cognizance of the statement given by appellant no.1. Since the provisions of Section 138B have not been followed, the statements recorded from appellant no.1 and 2 cannot be relied upon to implicate them in the offence - the penalty imposed on the appellant no. 1 is not sustainable.
As per Section 123 of the Customs Act, 1962, the burden of proving that gold is not smuggled in nature lies on the person who claims ownership of the said gold. In the present case, both the appellants have not claimed ownership of the gold and hence the provisions of sections 123 of Customs Act, 1962 are not applicable to them - the ingredients available in Section 112(a) and 112(b) of the Customs Act, 1962 are not existing in this case to impose penalty on both the appellants. Accordingly, the penalty imposed on both the appellants under Section 112(a) and (b) of the Customs Act, 1962 is not sustainable and hence the same is set aside.
The penalties imposed on the appellant no. 1 and appellant no. 2 is set aside - appeal allowed.
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2024 (6) TMI 1334
Entitlement for conversion of Ex- Bond Bill of Entry into Into-Bond Bill of Entry or not - Section 46 (5) of Customs Act - HELD THAT:- In this case, it is not disputed that initially, the appellant has filed Bills of Entry for warehousing, if the Bills of Entry has been filed for warehousing, then Section 68 of the Act shall come into force for clearance of the said goods for home consumption. In terms of Section 68, the conditions are to satisfy that the duty, interest and penalty should be paid and an order of clearance of such goods for home consumption has to be made by the proper officer - Admittedly, in this case, the appellant filed the Bills of Entry for home consumption, but neither the duty was paid nor any order for clearance of such goods for home consumption was made by the proper officer and in the meantime, the appellant filed an application for withdrawal of Ex-Bond Bills of Entry and reinstatement of Into Bond Bills of Entry.
The provisions of Section 46 (5) of the Act are applicable in a case where Ex-Bond Bill of Entry, Into Bond Bill of Entry or vice versa, can be permitted if there is no revenue loss or there is no fraudulent intention - it is a fit case for consideration of the request made by the appellant on 08.10.2021 in the light of the provisions of Section 46 (5) of the Act.
Admittedly, on 08.10.2021, there is no change of rate of duty and till three months, in terms of Section 61 (2) of the Act, the appellant is not required to pay any interest.
Admittedly, for clearance of goods under Section 68 of the Act, the provisions of Section 47 (2) are not attracted. We hold that the provisions of Section 47 of the Act, are not applicable in the present case as the appellant has initially filed in to Bond Bills of Entry for warehousing. Section 68 of the Act is applicable in this case. As after filing Ex-Bond Bill of Entry on 21.09.2021 & 28.09.2021, the condition of Section 68 of the Act, were not satisfied and as no assessment was done for clearance of goods in question, therefore, the application dated 08.10.2021 is required to be disposed off - Admittedly, on 08.10.2021, there is no change in rate of duty and if the said application filed by the appellant would have been considered and disposed off on the same date, in that case, the appellant was entitled for withdrawal/cancellation of Ex-Bond Bill of Entry and reinstatement of Into Bond Bills of Entry.
It is concluded that the application for withdrawal/cancellation of Ex-Bond Bill of Entry and reinstatement of Into-Bond Bill of Entry, was required to be considered by the authorities below in terms of Section 46 ( 5) of the Act immediately i.e on the date of filing of the said application. Further, on the said date i.e. 08.10.2021, there was no revenue loss and the interest of revenue has not been affected. Further, no fraudulent act is proved against the appellant - the appellant is liable to pay duty on applicable rate at the time of clearance of goods for home consumption and required to pay interest, if any, in terms of Section 61 (2) of the Customs Act , 1962.
The duty is to be calculated accordingly and the same is liable to be paid along with interest if applicable at the time of clearance of goods and accordingly, the liability of the appellant is to calculate. If any excess duty has been paid by the appellant, the same is refundable to the appellant along with interest.
Appeal disposed off.
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2024 (6) TMI 1333
Maintainability of appeal against order in original - Jurisdiction to pass order in appeal - HELD THAT:- The Order-in-Original was passed by the Adjudicating Authority in exercise of powers conferred under Section 73 [2] of the Finance Act, 1994 whereas the Order-in-Appeal has been passed by the Appellate Authority in exercise of powers conferred on it under Section 85 of the Finance Act, 1994. The learned counsel for the parties are not in disagreement on the fact that against the Order-in-Appeal, an appeal lies under Section 86 of the Finance Act, 1994 - The Order-in-Appeal has also mentioned that an appeal against the Order-in-Appeal would lie under Section 86 of the Finance Act, 1994 to the Customs, Excise and Service Tax Appellate Tribunal [CESTAT] within three months from the date on which the Order sought to be appealed against is communicated. It is in such backdrop, the rival contentions made by the parties are to be considered in the present writ petition.
Availability of an alternative remedy does not operate as an absolute bar to the ‘maintainability’ of a writ petition. It has, thus, been observed that ‘entertainability’ and ‘maintainability’ of a writ petition are distinct concepts. While an objection to the ‘maintainability’ goes to the root of the matter, the question of ‘entertainability’ is entirely within the realm of discretion of the High Courts.
The issue involved in MAHARASHTRA CHESS ASSOCIATION VERSUS UNION OF INDIA (UOI) AND ORS. [2019 (7) TMI 1755 - SUPREME COURT] was whether a private agreement entered into between the appellant and the second respondent in the form of the constitution and bye-laws of the later could, by conferring exclusive jurisdiction on the courts of a particular place, oust the writ jurisdiction of a High Court which does not have territorial jurisdiction over the courts of that particular place, under Article 226 of the Constitution of India. It has been observed that the existence of an alternative remedy, whether adequate or not, does not alter the fundamentally discretionary nature of the High Court’s writ jurisdiction and therefore, does not create an absolute legal bar on the exercise of the writ jurisdiction by a High Court.
Whether in the fact situation obtaining in the present case and on the basis of the contentions advanced by the parties, an exceptional case has been made out for entertaining the writ petition? - HELD THAT:- The petitioner has, in the present writ petition, raised a ground that despite raising the issue of non-receipt of the Letter dated 04.09.2020 in the appeal, the Appellate Authority in the Order-in-Appeal did not give any consideration on it. It is trite to observe that this Court in writ proceedings does not determine any question of fact. Whether the Letter dated 04.09.2020 was issued or not and if issued, whether it was served upon or received by the petitioner or not; etc. are questions of fact and in the fact situation obtaining in this case due to claim and contrary claim, these are disputed questions of facts. It is settled that all questions of facts are to be decided by the Adjudicating Authority or the appellate authorities in the hierarchy, constituted by the statute, as such authorities are competent to deal with and decide on disputed questions of facts. The determination of such disputed questions of facts and to correct errors of fact fall within the province of the appellate authorities. As the said aspect is a disputed question of fact, this Court in writ jurisdiction is not required to embark on a fact-finding exercise on the said aspect.
In the case in hand, the concerned Financial Year was 2015-2016 in respect of which the allegations regarding suppression of actual value of services provided and short-payment of Service Tax dues are made. The Demand-cum-Show Cause Notice dated 26.04.2021 was issued invoking the power under the proviso to sub-section [1] of Section 73 of the Finance Act, 1994. According to the petitioner, it had duly filed its returns in Form ST-3 for the Financial Year : 2015-2016.
It is a settled proposition that the extra-ordinary and discretionary jurisdiction to issue a writ in the nature of certiorari under Article 226 of the Constitution of India is different from appellate jurisdiction. The writ jurisdiction extends only to cases where the orders are passed by tribunals or authorities without jurisdiction or by assuming jurisdiction where their exists none or in excess of their jurisdiction by crossing the limits of jurisdiction or by refusing to exercise jurisdiction vested in them or acting illegally or improperly in exercise of their jurisdiction causing grave miscarriage - It is not the case of the petitioner that the Demand-cum- Show Cause Notice was issued beyond the period of five years from the relevant date, thereby, making it a case as one without jurisdiction. Rather, it is the case of the petitioner that the Adjudicating Authority had issued the Demand-cum-Show Cause Notice by illegally extending the period of thirty months to five years.
Having regard to the fact situation obtaining in the case in hand, the Appellate Tribunal can very well examine whether the petitioner was given adequate notice or was afforded adequate opportunity or a fair hearing in the proceedings before the Adjudicating Authority and/or before the first Appellate Authority. The contention of the petitioner as regards non-consideration of its Letter dated 15.09.2023 is also to be considered from the above perspective. Since this Court is of the considered view that neither the Order-in-Original nor the Order-in-Appeal has been passed in total violation of the principles of natural justice, the petitioner has not been able to make out an exceptional case on this point for entertaining the present writ petition.
In view of the fact that a statutory, adequate and efficacious remedy of appeal has already been provided for to assail an order like the Order-in-Appeal before the Appellate Tribunal having the power to condone any delay, this Court is of the considered view that the writ petition preferred under Article 226 of the Constitution of India is not to be entertained at this stage, reserving the liberty to the petitioner to avail the statutory remedy of appeal provided under Section 86 of the Finance Act, 1994. It is accordingly observed. Consequently, the interim order passed earlier stands recalled.
Petition disposed off.
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2024 (6) TMI 1332
Levy of service tax - Erection, Commissioning and Installation Service - providing services of laying of pipelines for water supply and drainage to Surat Municipal Corporation and others - HELD THAT:- he matter is no longer res-integra as it has already been decide in the case of SHREE HINDUSTAN FABRICATORS VERSUS C.C.E. & S.T. -SURAT-I [2020 (2) TMI 110 - CESTAT AHMEDABAD] that 'the activities under taken by the appellant cannot be classified under ECIS.'
Since the present appeals appears to be part of the investigation which have been carried out against M/s. Shree Hindustan Fabricators and the present appellants are only the sub-contractor of the main contractor M/s. Shree Hindustan Fabricators and were engaged in providing service of laying pipelines for water supply and drainage to the Surat Municipal Corporation - Since the demand of service tax has been made in these appeals under service tax category of ‘Erection, Commissioning and Installation Service’ however, in the similar matter of M/s. Shree Hindustan Fabricators, this Tribunal has held that the correct classification of such services should be under Commercial and Industrial Construction service as per Section 65 (25b) of the Finance Act, 1994.
The impugned orders-in-appeal are without any merit - appeal allowed.
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2024 (6) TMI 1331
Levy of service tax - remuneration to Vice-Chairman cum Managing Director (VCMD) - reverse charge mechanism - whether Mr. Jayadev Galla, VCMD is an employee of the Appellant or whether he is providing services to the Appellant? - HELD THAT:- Mr. Jayadev Galla, who also happens to be a Co-Promoter and holding majority share along with his father in the company, was duly appointed by the Board on the basis of recommendation of the Nomination & Remuneration Committee after due approval in the AGM. The Appellants have deducted TDS under Section 192 of Income Tax Act considering the remuneration/commission paid to Mr. Jayadev Galla as salary. There is no dispute that Mr. Jayadev Galla has not at all discharged his duty and functions as Managing Director towards the Appellant company, whether in part or full, because of his being otherwise as a Member of Parliament.
A holistic evaluation would lead to the conclusion that a Managing Director is a “key managerial person” as envisaged under Companies Act, 2013, who is entrusted with certain functions and activities for running the company under the overall control of the Board and for which he is entitled to get certain remuneration as well as commission as provided under Companies Act, 2013 and Rules made thereunder.
A Managing Director, as is defined under the Companies Act, will be an employee of the company and he may have other roles like Co-Promoter, Chairman, Vice Chairman, Director, etc., on the Board of the same company or on the board of other companies, as per the provisions of Companies Act, but his role as Managing Director, vis-à-vis, company will be that of an employee and employer and therefore, any service provided by him in his capacity as Managing Director will not be covered by definition of “service” in terms of Section 65B(44) of Finance Act, 1944 - In this case, there is nothing on record that remunerations paid to him in his capacity as Managing Director included any amount paid or payable to him as Vice Chairman separately.
The impugned order is set aside - appeal allowed.
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2024 (6) TMI 1330
Liability of subsidiary company to pay service tax - whether DCIPLP, Hyderabad is liable to pay Service Tax for the services rendered by its parent company in the USA, who had entered into a contract for providing services to DTTIPL, Gurgaon in connection with providing services to another company or otherwise? - HELD THAT:- It is an admitted fact that DTTIPL was to provide certain professional services to RCITPL and thereafter, DTTIPL sub-contracted the work of impugned services to DCL, USA, which in turn engaged DCIPLP, USA for provision of impugned services. The case of the department is that since the services will be deemed to have been provided by DCIPLP, USA’s representational office at Hyderabad, therefore, latter is required to discharge Service Tax on the services rendered to DTTIPL.
The admitted fact, which has not been disputed by the Revenue, is that it is DTTIPL, Gurgaon which has to provide service to RCITPL and for which it has outsourced the work to DCL, USA, who further outsourced to DCIPLP, USA. The service provider to RCITPL in this context would be DTTIPL, Gurgaon which, in fact, needed certain services to provide those impugned services for which it sub-contracted to DCL, USA, who in turn outsourced to DCIPLP, USA. DCIPLP, USA has raised the bill in US dollars for the services provided to DTTIPL and the amounts were paid in US dollars by DTTIPL to DCIPLP, USA. It is also not disputed by the Revenue that DTTIPL, Gurgaon has not discharged the Service Tax liability under RCM on this import of service for rendering services to RCITPL.
The Adjudicating Authority has dealt with all aspects of the case based on the facts and evidence on record and has rightly came to the conclusion that there has been no service provided by the Respondents to DTTIPL and no consideration has been received by them. The stand of the Revenue, by merely relying on the fact that both DCIPLP, USA and the Respondents are to be treated as one single entity and therefore, whatever services provided by DCIPLP, USA to DTTIPL, it has to be treated as services provided by their representational office and consideration received by them has to be treated as consideration received by Respondent, would not be correct interpretation of the deeming provisions relied upon by the Revenue.
There are no infirmity in the Order of the Adjudicating Authority - appeal of Revenue dismissed.
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2024 (6) TMI 1329
Demand of differential service tax - non-payment of service tax - Booking Cancellation Charges - Price difference & Corporate Discount - Balance Written Back - Interest on Income tax refund - Warranty Claims (Parts) - Procurement charges (Volume Discount-Paint) - denial of CENVAT Credit without considering copies of invoices and documents to the Commissioner during personal hearing - interest and penalties.
CENVAT Credit - HELD THAT:- If SCN is issued and Revenue seeks to deny CENVAT credit taken on the strength of any invoice, it is for the Revenue to specify as to why CENVAT credit against each of the invoices is being denied and the legal basis for such denial. Sadly, none of the details are available and, therefore, the matter insofar as the denial of CENVAT credit is concerned, has to remanded to the Commissioner to re-examine the invoices and indicate the invoices on which she decides to deny CENVAT credit giving specific reasons - thus, no ground for denial of credit is established on any invoice, CENVAT credit cannot be denied.
Booking Cancellation Charges - HELD THAT:- The booking cancellation charges being in the nature of damages are not a consideration for the contract. Section 66E(e) of the Act covers such cases where an agreement is entered into to refrain from an act or to tolerate an act, i.e. where the consideration is to refrain from an act. Here, there is no agreement to cancel the booking. The agreement is to book the car and subsequently buy it. By cancellation, the buyer goes back on his promise to buy the car and the cancellation charges are in the form of compensation - the demand of service on the amounts received on this account needs to be set aside.
Price difference & Corporate Discount - HELD THAT:- It is a well settled legal principle that any amount received by an automobile dealer from the manufacturer as trade discount including quantity discount (which is a trade discount given on the basis of volume of purchase) are not amounts received for providing any taxable service but purely discounts received on account of the trade and meeting certain sales targets. Such amounts cannot be charged to service tax and, therefore, the demand on this account needs to be set aside.
Balance Written Back - HELD THAT:- What is important is to see as to why these amounts were received back. If these amounts were due from the debtors for providing taxable services and if no tax was paid on those amounts and, service tax has to be paid. On the other hand the service tax was already paid before these debts were written off no service tax needs to be paid. If any amount is received towards the sale of goods or for any purpose other than providing a taxable service no service tax can be charged on that amount - this issue needs to be remanded to the Commissioner to give full opportunity to the appellant to provide details of the amounts received in each year and the purposes for which they were due in the first place and if any taxable service was rendered.
Interest on Income tax refund - HELD THAT:- Clearly, no service tax can be charged on this interest as no taxable service was provided. The demand on this account needs to be set aside.
Warranty Claims (Parts) - HELD THAT:- It is found that no service tax could have been demanded on the value of spare parts received by the appellant from manufacturer as it was only a sort of reimbursement of the cost incurred by the appellant while servicing the cars during warranty service. The demand on this account needs to be set aside.
Procurement charges (Volume Discount-Paint) - HELD THAT:- The manufacturers of paints offer the appellant volume discount if it purchases large quantity of paints in a year. The amounts so received have been credited by the appellant as procurement charges (volume discount-paints). Clearly, no service tax could have been charged on this volume discount which the appellant had received from the paint manufacturers. The demand on this account needs to be dropped.
The matter needs to be remanded to the Commissioner to re-determine the service tax demand - Appeal allowed in part and part matter on remand.
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2024 (6) TMI 1328
Levy of service tax - educational services rendered by the appellant to the students undertaking the course of BS - period of dispute is from April 2013 to June 2017.
Appellant has submitted that the degree of BS leading to degree of MD awarded by DMSF is an approved course and is covered under the negative list given under Section 66B of Finance Act, 1994 and is exempted under Entry No.9 of Notification No.25/2012-ST dated 20.06.2012.
HELD THAT:- It is undisputed fact that the appellant is engaged in providing educational service to students who have enrolled for BS course with the appellant and the appellant has collected tuition fee from the students. It is also undisputed fact that BS course is prerequisite for obtaining degree of MD which is equivalent to MBBS degree in India and that MD degree is offered by an institute in Philippines where students completing BS course with the appellant take admission in Davos Medical School Foundation, Philippines. It is noted that Schedule 3 issued under Section 13 of Indian Medical Council Act, 1956 in its Part II has included MD degree offered by Davos Medical School Foundation, Philippines as recognized medical qualification under Section 13 of Indian Medical Council Act, 1956. It is also undisputed fact that the appellant is not receiving any consideration from any other source than the tuition fee collected from the students enrolled for BS course.
During the entire period of dispute if a service is provided in respect of education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force, then such service either did not attract service tax under negative list till 14.05.2016 or was exempted from payment of service tax under Notification No.25/2012-ST dated 20.06.2012 under Entry No.9 with effect from 14.05.2016. The appellant was providing educational service for a course called BS which was pre-requisite for a course for MD and MD qualification is recognized by Indian Medical Council Act, 1956.
It is noted that in the relied upon interim order in the case of ITM INTERNATIONAL PVT LTD VERSUS CST, DELHI [2017 (7) TMI 689 - CESTAT NEW DELHI], the third Member to whom the matter was referred has clarified in para 5 that degrees and diplomas are issued by universities and the colleges affiliated to such universities provided educational service and such colleges who themselves are not issuing degree certificate are not being subjected to levy of service tax. In similar manner, here the degree of MD which is the qualification recognized by Indian Medical Council Act, 1956 is awarded and a part of the said qualification requires study of BS course which is provided by the present appellant. Therefore, the educational service provided by the present appellant is a part of a curriculum for obtaining MD qualification which is recognized by law for the time being in force.
Therefore, all such services which were provided by the appellant to students for arranging visa and air tickets are exempted under the said Entry No.9 of the said Notification No. 25/2012-ST dated 20.06.2012. It is held that during the entire period of dispute, the appellant was not liable to pay service tax on the activity of imparting education and also on any other services provided to their students.
The impugned order is set aside - appeal allowed.
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2024 (6) TMI 1327
Eligibility to avail the CENVAT Credit on various input services for providing output services - Short term accommodation in Hotel services - Air-conditioned Restaurant Services - Rent-a-Cab services - Management Consultancy Services’ - extended period of limitation - penalty - HELD THAT:- It is an undisputed fact of the case that applicable service tax has been paid on the input services. There is also no dispute that the appellants are eligible to avail CENVAT Credit. The dispute is relating to whether certain disputed services are used in or in relation to the provision of output service. The services which are in dispute are security service, professional service in assisting the business.
It can be seen from the factual matrix of the case that both the security service and professional service were utilized by the appellants during the course of conducting certain activities which forms a part of providing output service - prima facie, when the service tax has been duly paid on the input services and the when such services were utilised in provision of output service, then taking of CENVAT Credit cannot be objected to inasmuch as Rule 3 of CENVAT Credit Rules, 2004 specifically state that a provider of output service to avail such credit of tax paid on input service.
The grounds for rejection of CENVAT Credit on input services in the order of the adjudicating authority which was upheld by the learned Commissioner (Appeals) is that the input services have not been specifically used in the premises which have not been registered with local authorities. From the facts of the present case, it clearly transpires that all output services have been provided by the appellant by duly discharging the service tax applicable thereon. Wherever separate service tax registration having been for provision of service from a particular facility or premises, the output service tax in respect of such facility or premises is duly discharged, and the input services with specific reference to such facility have been availed by the appellants. However, where there is no such separate facility or premises for which separate registration has been taken, the central registered office providing output service was discharging the service tax liability as well as taking the CENVAT Credit on eligible input services.
Since, there is no legal requirement or any embargo in Rule 3 of CCR on availing inputs service only in respect of particular place or premises of an output service provider, there is no ground for restricting or denying an output service provider in taking credit of eligible input CENVAT Credit. In view of the above, the grounds on which the inputs service credit was disallowed in the original order, which was upheld by the impugned order, have no legal basis and accordingly is liable to be dismissed as being not legally sustainable.
Vehicle hire charges - vehicle expenses - club membership charges - HELD THAT:- The definition of ‘capital goods’ provided for motor vehicles, under clause (A) excludes motor vehicles falling under tariff headings 8702, 8703 which covers under its scope(i) motor vehicles for the transport of 10 or more persons, including the driver (ii) motor cars and other vehicles principally designed for the transport of persons, including station wagons and racing cars. In the present case, from the argument advanced by the consultant for the appellants, that whenever the vehicles owned by the appellants is in full use, the customers/clients using the hotel accommodation had to be provided with alternative vehicle/transport facility and thus the input services availed on Rent-a-Cab operator vehicle service is used in providing output service - the second limb of this requirement that the motor vehicle should be a capital goods is unable to be fulfilled, and thus under clause (B) of Rule 2(l) ibid, the input services availed in respect of such Rent-a-Cab operator vehicle service or such other motor vehicles is excluded from the scope of definition of ‘input services’ in the present case - Similarly, the club membership services when used primarily for personal use has been excluded from the scope of input service by clause (C) of Rule 2(l) ibid in specific terms. In view of the above, the appellants are not eligible to avail CENVAT Credit for an amount of Rs. 14,231/- in respect of the above services as an input service.
Determination of excess availment is with respect to ST-3 returns - HELD THAT:- Once, the credit has been allowed to the appellants without raising any objection, then excess CENVAT Credit cannot be calculated on account of periodical ST-3 returns, as these are only declarations in the prescribed format filed by the appellants. The mistakes or errors, if any, in such incorrect declaration of ST-3 returns have to be identified and the excess credit taken, arising on account of ineligible or incorrect credit amount having been taken has to be worked out. Obviously in the present case, neither there is any such explanation nor there is any discussion in the original order or impugned order, to justify the case of demand of excess availment of CENVAT Credit - In the absence of any specific grounds and the evidences leading to such CENVAT Credit being ineligible not produced in the adjudication stage, it is not feasible to fasten such liability on the appellants - there is no justification for demand of excess CENVAT Credit taken by the appellants for Rs.26,449/-, and the same is liable to be dismissed as legally not sustainable.
Extended period of limitation - penalty - HELD THAT:- As rightly held in a number of decisions by the higher judicial forum, in respect of issues concerning interpretation of law, extended period of limitation cannot be invoked and penalty for evasion or for violation of law cannot be imposed. Therefore, in the present case, the adjudged demands having been held as not sustainable on merits, the imposition of penalty against the appellants by invoking extended period of demand is also not legally sustainable.
The impugned order is liable to be set aside to the extent of denial of CENVAT Credit in respect of security services, Commission/service charges for a total amount of Rs.3,51,394/- and for denial of CENVAT Credit of Rs.26,449/- claiming as excess CENVAT Credit availed - In respect of CENVAT Credit of Rs.14,231/- being inadmissible CENVAT Credit on vehicle hire services, vehicle expenses, club membership charges which is held that being inadmissible in terms of Clause (B) and (C) of Rule 2(l) ibid, the impugned order upholding such confirmation in the original order is sustained.
Appeal allowed in part.
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