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Showing 481 to 500 of 18686 Records
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2022 (12) TMI 1084
TP adjustment - upward adjustment on notional interest on advance made to wholly subsidiaries/associated enterprises of the assessee - HELD THAT:- We noted that this issue is covered in the case of CIT v. Everest Kanto Cylinder Ltd. [2015 (5) TMI 395 - BOMBAY HIGH COURT] wherein, the Libor + 200 bps point is accepted at the bench mark and hence, respectfully following the same, we upheld the order of the AO/TPO. This issue of the assessee is dismissed.
Disallowance of expenses relatable to exempt income by invoking provisions of Sec.14A r.w.r.8D and making disallowance of interest u/r.8D(2)(ii) and u/r.8D(2)(iii) - HELD THAT:- We noted that the AO simpliciter given his findings that the disallowance computed by the assessee is not correct, but he has not examined the accounts of the assessee and disallowance made even though offered by the assessee. We noted that the AO could not find any fault as to how this disallowance is not correct. There is no satisfaction recorded by the AO in regard to this disallowance and hence, there is no satisfaction recorded by the AO in terms of sec.14A of the Act. This issue of the assessee is allowed.
Disallowance of claim of deduction u/s.80JJAA - AO required the assessee as to whether any of the regular workmen as mentioned in Column No.7 was employed for a period of less than 300 days during the previous year - HELD THAT:- The Hon'ble High Court of Karnataka in the case of Texas Instruments India (P.) Ltd. [2021 (4) TMI 1049 - KARNATAKA HIGH COURT] has considered the issue of amendment brought in Sec.80JJAA of the Act, by bringing proviso which has relaxed condition in regard to number of days of employment of new employees. Once, one has interpreted the provision and held the same as retrospective, no contrary decision was pointed out by the Revenue before us. We in principle allow the claim of the assessee, but subject to verification by the AO. The AO will carry out the verification in terms of amendment bringing the provisions of Sec.80JJAA and then will consider the eligibility of claim of deduction. Accordingly, appeal is allowed, but for verification purpose remanded back.
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2022 (12) TMI 1083
Calculation of exact amount of interest payable to the assessee on the amount of refund granted under section 244A - HELD THAT:- The amount of refund granted to the assessee, first, has to be adjusted against the interest payable to the assessee in the given facts and circumstances.
We are also conscious to the fact that the AO has made a reference in his order to the judgment of Gujarat Flouro chemicals [2012 (8) TMI 740 - SUPREME COURT] in the case on hand before us, the facts are altogether distinguishable from the facts of the case which were there before the Hon’ble Supreme Court as discussed above. In our humble understanding, we find that there was no question before the Hon’ble Supreme Court whether the amount of refund granted by the Revenue first has to be adjusted against the interest or the principal.
Accordingly, no benefit can be derived by the revenue based on the judgment of Hon’ble Supreme Court cited above. As such, the issue on hand is identical to the controversy which was there before the Mumbai tribunal in [2016 (8) TMI 688 - ITAT MUMBAI] and the same has been resolved. The relevant extract of the order of the ITAT has already been reproduced somewhere in the preceding paragraph. In view of the above and after considering the facts in totality, we set aside the finding of the learned CIT (A) and direct the AO to allow the amount of interest to the assessee in the light of the aforesaid discussion and as per the provisions of law. Hence, the ground of appeal of the assessee is allowed.
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2022 (12) TMI 1082
Foreign Tax Credit - Denial of deduction on the ground of belated filing of Form 67 - whether mere late fling of Form 67 would result incomplete denial of tax which has been deposited by the assesse in USA where services were rendered? - HELD THAT:- We have perused the Article 25 in the applicable DTAA between India and USA and also Rule 128 of the rules and provisions of Section 90(2) of the Act. Rule 128(9) of the rules provides that Form 67 should be filed on or before the due date of return of income however we also observe that the said Rule nowhere states that in case of late filing of Form 67 the credit of FTC which is deposited by the assesse in foreign country would be denied.
In our considered view the FTC can not be denied to the assesse merely for late filing of Form 67 as the it is procedural formality on the part of the assesse.We have also perused the various decisions filed before us by assesse in defence of his argument that FTC cannot be denied merely on the basis of late filing of Form 67.
We have perused the decision of Co-ordinate Bench of Bangalore in the case of M/s Brinda Rama Krishna [2022 (2) TMI 752 - ITAT BANGALORE] and find that similar issue has been decided in favour of the assessee.
We also note that similar issue also has been decided [2022 (9) TMI 926 - ITAT JAIPUR] wherein the Co-ordinate Bench has allowed FTC by holding that the filing of form 67 is a procedural formality and could not the basis for denial of FTC to the assessee. Appeal of the assessee allowed.
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2022 (12) TMI 1081
TDS u/s 195 - disallowance u/s 40(a)(i) - payments were made to US and Australia based entities as commission towards procurement and solicitation of business - HELD THAT:- The impugned payments made by the assessee are in the nature of selling commission for procurement of orders outside India for the assessee. Upon examination of contractual terms, these payments could not be termed as ‘fees for technical services’. Further, none of the payee is shown to have any PE in India. Therefore, the findings of Ld. CIT(A), in that regard, could not be faulted with.
AO has invoked Explanation-2 to Sec.195(1) as inserted by Finance Act, 2012 w.r.e.f. 01.04.1962. However, the assessee could not be expected to deduct tax at source in this year by foreseeing such a future amendment to law. In the impugned year, there was no such obligation on the assessee to deduct TDS but such obligation has arisen out of subsequent amendment to law which assessee could never anticipate.
As relying on M/S RANE ENGINE VALVES LTD. case [2022 (3) TMI 1022 - ITAT CHENNAI] assessee could not be expected to deduct Tax at source on payment made to non-residents on the basis of subsequent amendment to the law with retrospective effect from earlier date because the assessee cannot foresee the amendment and deduct TDS. Therefore, the disallowance made u/s 40(a)(i) would be unwarranted. Similar is the situation before us. No contrary decision is on record. Therefore, following this decision, we confirm the stand of Ld. CIT(A). The corresponding grounds raised by the revenue stand dismissed.
Disallowance u/s 14A - AOapplying Rule 8D(2)(iii), computed indirect expense disallowance - CIT(A) directed Ld. AO to consider those investments which actually yielded exempt income during the year - HELD THAT:- We find that the directions of Ld. CIT(A) are in accordance with the decision of Vireet Investment (P.) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] - Therefore, the impugned order could not be faulted with. We order so. The corresponding grounds raised by revenue stand dismissed.
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2022 (12) TMI 1080
Validity of assessment - non issuance of notice u/s 143(2) - Whether curable defect u/s 292BB? - HELD THAT:- As decided in Laxman Das Khandelwal case [2019 (8) TMI 660 - SUPREME COURT] for section 292BB to apply, section 143(2) notice must have emanated from the department and it is only infirmities in the manner of service of notice that the section seeks to cure and it is not intended to cure the complete absence of notice under section 143(2) of the Act itself.
Thus the entire reassessment proceedings under section 143(3) read with section 147, in the present case, stood vitiated as the AO lacked jurisdiction in absence of notice u/s 143(2) of the Act. Hence, the assessment order passed under section 143(3) read with section 147 of the Act is quashed. - Decided in favour of assessee.
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2022 (12) TMI 1079
Penalty u/s. 271D - assessee has repaid loans/ deposits from various sister concerns through journal entries, i.e., otherwise than account payee cheques/draft, thereby violating the provisions of section 269T - assessee has not shown the reasonable cause u/s. 273B of the Act for entering into such transactions through journal entries - CIT-A deleted the penalty levy - HELD THAT:- As decided in assessee’s group company i.e. Lodha Builder Pvt. Ltd [2021 (12) TMI 1174 - ITAT MUMBAI] there is no adverse finding by the AO in the regular assessment. AO has not made out in the -assessment that any of the impugned transactions is aimed at non commercial reasons and outside the normal business’ operations? As such, the provisions of ss. 269SS and 269T of the Act shall not be attracted where there is no involvement of the ‘money’.
Therefore, in the fact of the present case, in our opinion, though the assessee has violated the provisions of ss. 269SS/269T of the Act in respect of journal entries, the assessee has shown reasonable cause and, therefore, the penalty imposed u/s 271D/271E of the Act are not sustainable. Regarding an amount of 'money' said to have been paid in violation of the said provisions, the same needs to be deleted. Appeal filed by the Revenue is dismissed.
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2022 (12) TMI 1078
TP adjustment on AMP expenditure - TPO show caused the assessee as to why 1% of gross sales be not considered as brand building exercise for AE as done in last year - HELD THAT:- From the facts, it emerges that this adjustment made by Ld. TPO is primarily guided by adjustment made in the earlier years. Similar issue, in AY 2012-13, has been adjudicated by this Tribunal in assessee’s favor for the reason that determination as done by Ld. TPO at 1% of gross sales is adhoc figure and not a figure arrived by calculation or method as provided in Sec. 92C(1) much less Rule 10AB of Income Tax Rules, 1962. Therefore, the adjustment so made without following any prescribed method is not sustainable and accordingly, deleted.
We find that similar factual matrix exist in this year. TPO has merely presumed that there exist an arrangement between the assessee and its AE for promotion of the brand. No such arrangement has been shown to us. Therefore, taking a consistent stand in the matter, the impugned adjustment stand deleted. The corresponding grounds stands allowed.
Disallowance u/s. 14A u/r 8D(2)(iii) - AO rejecting assessee’s plea that it had not availed any loan for investment and the investments were out of own funds - HELD THAT:- We find that similar issue in AY 2012-13 thus the issue of disallowance u/r 8D(2)(ii) as well as u/r 8D(2)(iii) stand restored back to the file of Ld. AO on similar lines - AO shall take consistent view as taken on AY 2012-13 on this issue. This ground stand allowed for statistical purposes.
Disallowance u/s. 40(a)(ia) - short deduction of tax - assessee paid connectivity expenses for dedicated leased lines provided by various vendors and deducted TDS @ 2% - A.O opined that the tax should have been deducted at 10% - HELD THAT:- The Tribunal, in latest decision for AY 2012-13 relying upon decision for AY 2009-10 [2015 (12) TMI 1328 - ITAT CHENNAI] held that disallowance u/s 40(a)(ia) is not attracted in case of short deduction of tax at source. Respectfully following the consistent view of Tribunal, the impugned disallowance stand deleted.
Disallowance of provision for inventory - assessee created provision towards provision for inventories which was stated to be towards slow moving and obsolete traded goods on account of diminishment in the value of stock held in the course of business - HELD THAT:- From the financial statements of the assessee, it could be ascertained that the assessee is valuing the inventories at lower of cost price or net realizable value which is prescribed method of valuation of inventories.
When the valuation is done on lower of cost or net realizable value then any decrease in value of obsolete or slow moving stock on valuation date would automatically take care of the loss suffered by the assessee on this account. Accordingly, a separate provision made, in this regard, could not be allowed to the assessee. The Ld. AR has cited many case laws to support this deduction. However, in the given factual matrix, the same are not applicable. Therefore, the adjustment made by Ld. AO, in this regard, could not be faulted with. The corresponding grounds raised by the assessee stand dismissed.
Depreciation on software - @60% or 25% - HELD THAT:- The bench, noticing the entries in Appendix I of Income Tax Rules, 1962, held that the rate of depreciation mentioned at III(5) for computers including computer software would be 60%. Considering the same, we direct Ld. AO to allow depreciation of 60% on software.
Provision for VAT assessment demand - HELD THAT:- From the fact, it emerges that this liability pertains to earlier years. In such a case, the same could be allowed to the assessee only upon crystallization of the liability. From assessee’s submissions, it is quite clear that the liability has been crystalized only on 04.04.2013 and therefore, the deduction of mere provision in this year could not be allowed to the assessee. It is very clear that this is a prior period item and the liability, in this respect, has not crystallized during this year. Therefore, the corresponding grounds stand dismissed. No other ground has been urged in the appeal.
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2022 (12) TMI 1077
Estimation of income - bogus purchases - HELD THAT:- There is always an element of guesswork on the quantum of disallowance that should be made in case in the case of purchases made from parties whom the assessee is unable to identify.
It would not be justifiable to disallow the entire purchases when the corresponding sale of finished product (in which such which the purchases so made were utilised for making the final finished product) have been subject to tax. Accordingly, in light of the judicial precedents cited above, a certain percentage of such alleged bogus purchases may be disallowed, keeping into consideration the profit offered to tax by the assessee.
Accordingly, in the interest of justice, we are of the view that in the instant set of facts 10% of the above purchases may be disallowed and added back to the income of the assessee.
Unexplained deposit on the basis of a AIR information - HELD THAT:- In light of the facts placed before us, in the interests of justice, the matter is being restored to the file of the Ld. Assessing Officer to verify the correctness of the claim made by the assessee. The assessee may file the necessary confirmation given by the Bank of India, the assessee’s banker, to the effect that the deposits made with the bank are duly tallying with the assessee’s books of accounts.
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2022 (12) TMI 1076
Nature of receipt - amount received by the assessee firm as a compensation for pre-closure of its BOT projects - Revenue or capital receipt - whether taxable as a revenue receipt in the hands of the assessee firm since it represented the net present value of the future cash flows to be received by the assessee? - HELD THAT:- Revenue’s vehement arguments supporting the learned lower authorities’ action treating the impugned compensation as a revenue receipt fail to evoke our acceptance. This is for the reason that the Government of Maharashtra herein had acquired the assessee’s BOT project(s); lock, stock and barrel by way of gazette notification(s) dated 27.06.2014 thereby rescinding it’s earlier notification dated 08.04.2000 introducing the toll scheme in issue.
We conclude in the light of these clinching facts and settled legal proposition that the hon’ble Calcutta high court’s view [1989 (12) TMI 362 - CALCUTTA HIGH COURT] would squarely apply since not only the assessee’s business stood closed but also it’s intangible asset(s) by way of right to collect the toll u/s.32(i)(ii) and building, plant and machinery, as the case may be, vested with the government.
Legislature has also inserted clause (e) in section 28(ii) of the Act by the Finance Act 2018 w.e.f. 01.04.2019 wherein any compensation or such payment received “at or in connection with termination or the modification of the terms and conditions, if any, contract relating to his business” is assessed has seem held taxable as profits and gains of business or profession. This latter amendment is applicable w.e.f. 01.04.2019 whereas we are in AY 2015-16 only.
We also take note of the explanatory memo thereof that this latter amendment proposes to invoke section 28 of the Act qua any compensation; including both revenue as well as capital u/s.28 of the Act. We thus conclude that both the learned authorities have erred in law and on facts in invoking section 28(ii)(d) qua assessee’s impugned compensation thereby holding it as a revenue receipt. The assessee succeeds.
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2022 (12) TMI 1075
Levy of penalty u/s 271 (1 )(b) - non compliance of notice issued u/s 142(1) - HELD THAT:- As is not in dispute that notice under section 142(1) of the Act along with the questionnaire has been issued, but the assessee has failed to file any reply in response to the said notice. It is also not in dispute that the assessment order has been passed under section 142(1) of the Act not under section 144 of the Act, wherein the Ld. A.O. considering the subsequent compliance made by the assessee and by considering the said compliance as good compliance, ignored the default committed earlier. The said fact has been corroborated with the assessment order dated 22.11.2018 passed under section 143(3) of the Act by the A.O. See case of Akhil Bhartiya Prathmik Shamshak Sangh Bhawan Trust [2007 (8) TMI 386 - ITAT DELHI-G] - Penalty order set aside - Decided in favour of assessee.
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2022 (12) TMI 1074
TP adjustments - adverse effect of forex due to depreciation of Indian Rupees resulting in incremental import costs which is not attributable to the transfer pricing of its purchase of raw materials from its AEs - HELD THAT:- As relying on assessee’s own case for AY 2011-12 [2022 (10) TMI 474 - ITAT BANGALORE] this issue is remitted to the AO/TPO with a direction to consider the foreign exchange fluctuation adjustment for computing the ALP.
Excluding the additional custom duty costs as a result of increased import costs of raw materials due to forex impact of depreciation of the Indian Rupee - As relying on assessee’s own case for AY 2011-12 [2022 (10) TMI 474 - ITAT BANGALORE] to bring uniformity, the customs duty was to be eliminated from the comparable price also to arrive at correct PLI. Accordingly, we remit the issue to the file of AO for fresh consideration.
TP Adjustment - international transactions of the Assessee - HELD THAT:- We notice that the coordinate bench of the Tribunal in the case of IKA India (P.) Ltd [2018 (10) TMI 49 - ITAT BANGALORE] considered a similar issues and held that section 92 of the Act can be applied only in respect of international transactions i.e., transactions with AE.
Recomputation of operating profit margin pursuant to the MAP resolution - This issue was considered in assessee’s own case for AY 2011-12 [2022 (10) TMI 474 - ITAT BANGALORE] thus we remit this issue to the AO with a direction to re-compute the operating margins pursuant to the MAP resolution.
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2022 (12) TMI 1073
TP adjustment - Selection of MAM - rejecting RMP - value of international transactions pertaining to the import of spare parts and cranes/ machines for trading purpose entered - Non granting the excise duty adjustment and closing stock adjustment sought - HELD THAT:- Appellant had received service commission from AEs in Austria, Germany, France and Switzerland under separate contracts. The international transactions under consideration are of different nature. In the two immediately preceding assessment years the appellant had furnished segmental working for commission segment, service segment and trading segment, and the International Transactions pertaining to trading segment were benchmarked using RPM. Vide Letter, dated 28.10.2015, filed during the assessment proceedings the Appellant has expressed the apprehension that reliable data may not be available from publicly available database to facilitate application of RPM and that hidden differences in accounting of direct costs can lead to distorted results.
Given the fact that the Appellant had adopted RPM in the immediately two preceding assessment years and not faced such hindrances, we are not persuaded to accept the aforesaid apprehension of the Appellant as a genuine reason for rejecting RMP
Trading segment of the Appellant involves import of spares and machinery from AEs for sale to customers in India without making any value addition. The Appellant had adopted RPM as most appropriate method for benchmarking international transactions pertaining to trading segment during the Assessment Year 2010-11 and 2011-12. It is admitted position that there is no change in the facts and circumstances during Assessment Year AY 2012-13 as compared to AY 2010-11 and 2011-12. Revenue was justified in rejecting the aggregation approach adopted by the Appellant and in adopting RPM to benchmark international transactions pertaining to trading segment.
Economic adjustments sought by the Appellant - We are of the view that the TPO/AO/DRP were correct in rejecting the same as the Appellant has failed to establish how the economic adjustments claimed by the Appellant could “materially affect‟ the amount of gross profit margin in the open market as per the requirements of Rule 10B(1)(b) of the Income Tax Rules, 1962.
Impact of the custom duty adjustments and closing stock adjustment sought by the Appellant can be discerned on the basis of the standalone computation provided by the Appellant. Further, as rightly noted by the DRP, closing stock adjustment claimed by the Appellant was not required in view of the fact that the financials of the Appellant as well as the comparable companies were prepared in accordance with the Accounting Standard – 2.
Where the higher import content is reflective of the difference in business models of the assessee and the comparables, adjustments can be made for functional differences. Therefore, in our view, the DRP was justified in not granting the excise duty adjustment and closing stock adjustment sought by the Appellant.
Deduction as travelling and conveyance expenses - We note that during the assessment proceedings for relevant assessment year disallowance of 100% of travelling and conveyance expenses has been made in identical facts and circumstances. In appeal for the earlier years such disallowance has been restricted to 10% of the travelling and conveyance expenses by the Tribunal - Thus we restrict the disallowance of travelling and conveyance expenses to 10% of the amount debited to Profit & Loss account during the relevant previous year.
Appeal filed by the Appellant is partly allowed.
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2022 (12) TMI 1072
TP Adjustment - selection of MSM - RPM or TNMM - Transaction pertaining to purchase of goods for the purpose of resale in India - TPO objected to the arm’s length margin computed in relation to trading segment, by rejecting RPM adopted by the assessee for the trading segment and applied Transactional Net Margin Method (‘TNMM’) to benchmark the trading segment - HELD THAT:- We have no hesitation to hold that the assessee is a pure trading company involved in the distribution activity without adding any value to the purchased product and hence the RPM is the most appropriate method. We, accordingly, direct the Assessing Officer/TPO to accept RPM as the most appropriate method and decide the issue accordingly.
Since we have held that RPM is the most appropriate method, on the facts of the case in hand, all the other issues raised by the assessee will be decided accordingly.
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2022 (12) TMI 1071
Maintainability of appeal before ITAT - Commissioner (Appeals) need to be approached first - as pointed this appeal is filed against the penalty order u/s 270A of the Income Tax Act, 1961, passed by the AO directly before us whereas the assessee ought to have approached Commissioner (Appeals) first - assessee, submits that Section 246A, which lists out the appealable orders before the CIT(A) does not refer to an order passed by the Assessing Officer under section 270A, whereas Section 253(1)(a), which sets out provisions for appeals before the Income Tax Appellate Tribunal, does specifically refer to the orders passed under section 270A.HELD THAT:- The objection taken by the learned Departmental Representative is indeed correct. Section 246A(1)(q) specifically includes, in orders appealable before the learned Commissioner (Appeals), “an order imposing a penalty under chapter XXI”, and chapter XXI of the Income Tax Act, 1961 covers Sections 270 to 275- Section 270A, dealing with underreporting and misreporting of income, is thus covered by the said provision. Clearly, therefore, the appeal against an order imposing penalty under section 270A, as passed by the AO, is appealable before the Commissioner (A). As for the reference to the order passed under section 270A being appealable before this Tribunal, u/s 253(1)(a), is specifically with reference to such orders being passed by the Commissioner (Appeals), and that is the limited extent to which general provisions of the Section 246A(1)(q) must make way for the specific provisions of the Section 253(1)(a). The order sought to be impugned in this appeal is passed by the AO and, therefore, this exception does not come into play. Learned counsel’s understanding of the legal position, even if bonafide- particularly considering his young age and limited experience, is clearly incorrect. The appeal filed before us is thus indeed not maintainable in law.
Thus learned counsel to file the appeal, alongwith condonation petition setting out the requisite details resulting in the delay in filing of appeal before the CIT(A), as soon as possible now, and it is for the learned CIT(A) to take a call thereon in accordance with the law, by way of a speaking order and after giving a due and reasonable opportunity to the assessee.
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2022 (12) TMI 1070
TP Adjustment - adjustment on account of TP study pertaining to interest on outstanding receivables - TPO returned a finding that the outstanding receivables in the case of the assessee constitute an international transaction which is liable to be benchmarked separately - argument was advanced on behalf of the assessee was that the outstanding receivables arising from intercompany services transactions (included in the definition of ' international transaction' vide Finance Act 2012) was duly benchmarked by the assessee by undertaking working capital adjustment during assessment proceedings and the same is subsumed in the working capital adjustment - HELD THAT:- In view of the sequence of events, it would be noted that the decision of Hon’ble Delhi High Court in the case of Kusum Healthcare [2017 (4) TMI 1254 - DELHI HIGH COURT] is still the binding precedent on the issue of interest on outstanding receivables. Needless to mention that the law laid down by the Hon’ble High Court in the case of Kusum Healthcare was followed by the ITAT in case of Global Logic India Ltd.[2021 (11) TMI 1090 - ITAT DELHI], [2020 (6) TMI 712 - ITAT DELHI], [2020 (9) TMI 572 - ITAT DELHI] and [2017 (12) TMI 1052 - ITAT DELHI]
Hence, keeping in view, the established position, we hereby deleted the addition made by the Assessing Officer. Appeals of the assessee are allowed
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2022 (12) TMI 1069
Detention order - Smuggling - illicit import of foreign origin gold into India via air cargo - prohibited item or not - whether supply of illegible RUDs vitiates the ‘subjective satisfaction’ of the Detaining Authority thereby rendering the impugned detention order invalid? - whether detenu’s constitutionally secured right of making an effective representation has been jeopardized, by the non-supply of relevant documents, in a language which the detenu understands; thereby rendering the order of detention illegal and bad?
HELD THAT:- It is well settled and not in dispute that under the provisions of Section 3 of COFEPOSA, it is only the Detaining Authority, which can ultimately decide to pass or not, a detention order against any person, and that too, after perusing each and every document and material placed before it. It is also not in dispute that the ‘subjective satisfaction’ of the Detaining Authority itself is to be arrived at after perusing all the relevant documents and material produced. This is a constitutionally provided condition precedent for passing a valid order of detention.
The issue, as to whether the non-supply of certain RUDs and the supply of illegible RUDs, vitiates the ‘subjective satisfaction’ arrived at by the Detaining Authority; and whether the detention order resultantly passed is vitiated on the ground of non-application of mind, is concerned; we have considered the rival submissions, as well as the material placed before us in the present proceedings. It was observed by this Court from a perusal of the relevant original record that several RUDs; including not only those supplied to the Detenu; but also those on the record with the Detaining Authority, are illegible i.e., not readable.
The RUDs supplied to the detenu, as well as, relied upon by the Detaining Authority in arriving at its ‘subjective satisfaction’ were admittedly illegible, therefore, grossly violating the constitutional right of making an effective representation, guaranteed to the detenu under Articles 14, 21 and 22(5) of the Constitution of India.
Keeping in mind the constitutional mandate of Article 22(5) as well as the dictum in the plethora of Supreme Court decisions, we consider it incumbent to emphasize on the legal necessity of furnishing the grounds of detention to the detenu in a language that the latter understands. More specifically, the Supreme Court has observed that oral explanation or oral translation of the grounds of detention would not amount to communicating the grounds to a detenu because communicating the grounds of detention, effectively and fully to a detenu implies that the grounds must be furnished to him in a language which the detenu understands; and if that entails translation of the grounds into such language, then that is unquestionably a part of the Constitutional mandate.
The failure and non-supply of legible/translated copies of all RUDs despite a request and representation made by the detenu for the supply of the same, renders the order of detention illegal and bad in law; and vitiates the ‘subjective satisfaction’ arrived at by the Detaining Authority - the Detaining Authority gravely erred in relying upon the illegible documents which is equivalent to non-placement of translated-RUDs in a language which the detenu understands; by the act of omitting them from due consideration, which consequently vitiates the ‘subjective satisfaction’ arrived at by the Detaining Authority.
The impugned detention order stands invalidated - petition allowed.
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2022 (12) TMI 1068
Duty Drawback - whether the goods exported under the Shipping bill would fall under S.S.No. 85.37 or not - HELD THAT:- The grievance of the Petitioner that the order in Appeal dated 31 December 1997 has not been considered at all is justified. Though this order is noted in the impugned order there is no discussion as to what is the implication of the said order, which according to the Petitioner is inter parte binding. There is no discussion as to why the said order should not be taken into consideration or if taken into consideration what is the implication thereof.
In the light of the fact that there was a pre-existing order of the Commissioner (Appeals) inter parte regarding the same product, where different classification and impugned order has been arrived at and which supports the claim of the Petitioner, the same should have been considered and the Petitioner is right in contending that failure to do so has caused serious prejudice to the Petitioner - the proceedings need to be remanded to the Appellate Authority for considering the effect and implication of the order in Appeal dated 31 December 1997.
The impugned order dated 31 December 1997 passed by the Commissioner of Customs (Appeals) and order dated 13 June 2012 passed by the Revisionary Authority, are quashed and set aside. Proceedings are restored to the file of the Commissioner of Customs (Appeals).
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2022 (12) TMI 1067
Confiscation of imported goods - vessel - whether MEA S.O. 2158(E) dated 20.06.2016 prohibited the subject vessel imported for breaking purpose? - case of the department is that S.O. dated 20.06.2016 is issued in order to implement the UNSC resolutions and prohibited the subject vessel for entry into India and since it is imported contrary to the said S.O. dated 20.06.2016; the same was liable for confiscation under section 111 (d) of the Act.
HELD THAT:- It can be seen that the S.O. only provides for enabling provisions for the purpose of prevention of the designated vessels for entry into Indian Port. In exercise of such powers, and to give effect to S.O. subject vessel could have been notified as prohibited for imports or to say least the entry could have been prevented by executive action in exercise of powers under the S.O. It, however, appears that no such steps appear to have been taken to give effect to the said S.O. for prevention of entry of vessel which was granted entry by various concerned authorities and it was only when the vessel was part-broken; the same was placed under seizure by the officers of DRI. In absence of any mechanism or modalities framed viz. to bring prohibition in force or notification issued under section 11 of the Act; Section 111(d) of the Act cannot be pressed into service particularly when the S.O. dated 20.06.2016 by itself does not expressly prohibit the entry of the vessel.
It can be seen that the S.O. dated 20.06.2016 applied to the resolutions upto 2214 (2015) adopted by the Security Council of the United Nations as provided in para 2(1)(a) of the said S.O. The base resolution 2146 (2014) provides for its termination one year from the date of adoption unless extended. The said base resolution dated 19.03.2014 was set to expire on 19.03.2015 unless extended. On 27.03.2015 the said base resolution 2146 was extended till 31.03.2016 by resolution 2213(2015), and further extended upto 31.07.2017 by resolution 2278(2016) - the subject vessel even when designated by committee, was entered into India for the breaking/recycling purposes only and it is nobody’s case that when it entered India, it carried crude oil, petroleum etc loaded from Libya; as per the perusal of the available records, it is not disputed fact that the vessel was, after due clearances from UAE port authorities, brought to India without cargo for breaking/recycling purposes on 10/14.02.2018; during that period and for the said purpose, there appears to be no contravention of any UNSC resolutions in force. In view of above, the case of the department in the impugned order that the subject vessel was prohibited for importation cannot be sustained.
The issue of mis-declaration before the customs, upon perusal of available records, it appears that IMO 8900878 of the vessel is correctly mentioned in the Bill of Entry, further, name of the vessel at the time of filing bill of entry was MT Capricorn as can be seen from the certificate of ownership dated 12.02.2018 issued by Maritime Administration of Union of Comoros. In the circumstances, there is no sufficient material to substantiate the case of mis-statement much less any such acts wilfully done by the appellants. In any event, since the vessel cannot be said to have been imported contrary to any prohibition in force, redemption fine and penalties upon the appellants imposed by the impugned order are liable to be set aside.
Appeal allowed.
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2022 (12) TMI 1066
Confiscation of the imported machinery under the EPCG scheme (Export Promotion Capital Goods Scheme) with option to pay redemption fine - levy of penalty - It appeared to Revenue that the appellant have not fulfilled the export obligations and have not complied with the undertaking given in the bond, accordingly, the duty foregone at the time of import of the capital goods seems to be recoverable - HELD THAT:- There was a disruption in business both due to fire and due to shifting of the machinery to the new address, for a period of more than 2 years. Further, I find that the DGFT, by granting extension for fulfilment of export obligation, have condoned the delay in achieving the export obligations and have also regularised the shifting of the machinery to the new address. However, such extension remained mere formality or an eye wash, as the appellant did not have any opportunity to manufacture and export pursuant to granting of extension in March, 2018, as the machines were admittedly lying sealed by the Customs Department since 2016.
The impugned orders are set aside - appeal allowed.
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2022 (12) TMI 1065
Maintainability of appeal - appeal filed without making the statutory deposit contemplated under section 129E of the Customs Act, 1962 - HELD THAT:- It is seen that the earlier appeal filed by the appellant was dismissed by the Tribunal on 10.01.2019 for the reason that the mandatory requirement of section 129E of the Customs Act had not been complied with by the appellant and the writ petition filed by the appellant before the High Court was dismissed by a detailed order. Similar factual position arises in this appeal. The appellant, even during the last three years, has not deposited the statutory amount.
The appeal, therefore, deserves to be dismissed for non-compliance of the statutory requirement and is, accordingly, dismissed.
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