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Showing 1 to 20 of 1457 Records
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2024 (11) TMI 1458
Rejection of appeal on the ground that the Tribunal had no statutory power to condone the delay in filing the appeal before the Commissioner (Appeals) - HELD THAT:- It is to be noted that the Commissioner (Appeals) dismissed the appeal of the appellant herein, as the same had been filed after an inordinate delay of about three years. As held in the judgement of the Supreme court in Singh Enterprises v. Commissioner of C.Ex., Jamshedpur [2007 (12) TMI 11 - SUPREME COURT], the appeal is required to be filed within the period as provided under the Act and there is no application of Section 5 of the Limitation Act, 1963 to such appeals. In light of the same, the Supreme Court has held that no power exists with the Commissioner (Appeals) or the Tribunal to condone the said delay.
Since the present appeal is with regard to the limitation period, it cannot be intervened in the matter in any manner. The explanation of the counsel appearing on behalf of the appellant that the appellant was suffering from Tuberculosis though may give rise to a right in equity, but the same cannot percolate to right under the statute.
Appeal dismissed.
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2024 (11) TMI 1457
Rejection of application for registration u/s 12AA - selection of wrong section code by the assessee pertaining to renewal of regular registration as filed u/s 12A(1)(ac)(ii) instead of section 12A(1)(ac)(iii) - HELD THAT:- We are of the opinion that the ld. CIT(E) ought to have given an opportunity to the assessee to rectify the defect.
Wrong selection of section code/clause would not disentitle the assessee to its rightful claim. Selection of wrong clause by the assessee cannot be treated as fatal to the proceedings initiated after the filing of the application.
We therefore in the interest of natural justice being fair to both the parties deem it appropriate to grant one more opportunity to the assessee society, setting aside the impugned order to the file of CIT(E).
CIT(E) shall give an opportunity to the assessee to file the correct application and then decide the case on merits denovo after granting reasonable and proper opportunity to the assessee.Appeal of the assessee is allowed for statistical purposes.
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2024 (11) TMI 1456
Seeking grant of bail (second bail application) - applicant is in jail since 4.11.2023 - trial of the case has not been concluded so far - statement u/s 244 CrPC has not been recorded as yet - HELD THAT:- The case in hand relates to economic offence, which forms a separate category of criminal offences. Economic Offences not only victimize individuals with pecuniary loss but also have serious repercussions on the national economy. Hence, there are no ground to enlarge the present accused-applicant on bail.
The second bail application of the accused-applicant is hereby rejected.
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2024 (11) TMI 1455
Invalid notice issued u/s 143 - HELD THAT:- We find that the notice issued u/s 143(2) dated 9th August, 2017 was not in any of the formats as provided in the CBDT-II dated 23.06.2017.
We have examined the notice and find that the same is not as per the format of CBDT Instruction F. No. 225/157/2017/ITA-II dated 23.06.2017 as stated above. In our opinion, the instruction issued by the CBDT are mandatory and binding on the Income tax authorities failing which the proceedings would be rendered as invalid. Hon'ble Apex Court in case of UCO Bank [1999 (5) TMI 3 - SUPREME COURT] held that the circular issued by CBDT in exercise of its statutory powers u/s 119 of the Act, are binding on the authorities.
Therefore case of the assessee is therefore squarely covered by the ratio laid down in the above decisions and respectfully following the same, we are inclined to hold the assessment as invalid being based on the invalid issue of notice u/s 143(2) of the Act. The first additional ground raised by the assessee is allowed.
Since we have held the notice issued u/s 143(2) as invalid and so the consequential assessment framed. Ground raised by the assessee is allowed.
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2024 (11) TMI 1454
Addition made u/s 43B as MVAT paid under protest by the assessee during the year - HELD THAT:- Supreme Court in case of Kedarnath Jute Mfg. Co. Ltd.[1971 (8) TMI 10 - SUPREME COURT] allowed deduction for sales tax demand as a business expense even in the absence of entries recording the demand as a liability in the books of account of the assessee. The Supreme Court held that statutory liability for sales-tax incurred by issue of notice by the authorities is deductible notwithstanding the fact that the liability is disputed by the assessee and no provision for the same has been made in the accounts, which is maintained as per mercantile system. An assessee who follows the mercantile system of accounting is entitled to deduct from the profits and gains of the business such liability which had accrued during the period for which the profits and gains were being computed. Whether the assessee is entitled to a particular deduction or not will depend on the provision of law relating thereto and not on the view which the assessee might take of his rights nor can the existence or absence of entries in the books of account be decisive or conclusive in the matter. The assessee who was maintaining accounts on the mercantile system was fully justified in claiming deduction of the liability to sales-tax which it was liable under the law to pay during the relevant accounting year.
Apart from the cited decisions of Hon’ble Supreme Court, we find that in the case of Maruti Suzuki in [2024 (3) TMI 1115 - ITAT DELHI] and plethora of other decisions in the same case, it has been consistently held that service tax liability alongwith the interest paid on the basis of the show cause notice issued by the service tax authorities, is allowable deduction under section 43B of the Act in the year in which the payment was made irrespective of the fact that such demand was paid under protest and the matter was subjudice before the authorities.
Deduction u/s 80G - deny deduction for CSR expenses incurred by companies - HELD THAT:- It may be stated here that in the case Allegis Services (India) (P.) Ltd. [2020 (5) TMI 378 - ITAT BANGALORE] wherein AR submitted that all payments forming part of CSR does not form part of profit and loss account for computing Income under the head, "Income from Business and Profession". It has been submitted that some payments forming part of CSR were claimed as deduction under section 80G of the Act, for computing "Total taxable income", which has been disallowed by authorities below. In our view, assessee cannot be denied the benefit of claim under Chapter VI A, which is considered for computing 'Total Taxable Income". If assessee is denied this benefit, merely because such payment forms part of CSR, would lead to double disallowance, which is not the intention of Legislature.
In our view, authorities below have erred in denying claim of assessee under section 80G of the Act. We also note that authorities below have not verified nature of payments qualifying exemption u/s 80G of the Act and quantum of eligibility as per section 80G(1) of the Act. We are remitting the issue back to Ld.AO for verifying conditions necessary to claim deduction under section 80G of the Act.
Deduction claimed u/s 35AC and Trait fee - Admission of additional evidences - HELD THAT:- As the documents furnished by the assessee are vital which go to the root of the present controversy, so these are to be admitted in the interest of natural justice but these documents are required to be examined and considered at the level of the AO. We, therefore, set aside the impugned order and remand the present issue back to the file of the AO to be decided afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.
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2024 (11) TMI 1453
Condonation of gross delay of 312 days in filing the Civil Appeals - no satisfactory reasons for delay - Classification of imported goods - Metal Clad Printed Circuit Boards (MCPCBs) for manufacturing of LED Lamps - to be classified under tariff item 8534 00 00 of First Schedule to the Customs Tariff Act, 1975 or under tariff item 9405 99 00? - the Tribunal allowed the appeals in favor of the appellants by setting aside the impugned orders - HELD THAT:- There is a gross delay of 312 days in filing the Civil Appeals which has not been satisfactorily explained by the appellant - Even otherwise, there are no good ground to interfere with the impugned order passed by the Customs, Excise & Service Tax Appellate Tribunal, Mumbai.
The Civil Appeals are, accordingly, dismissed on the ground of delay as well as on merits.
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2024 (11) TMI 1452
MAT Applicability of section 115JB to the assessee bank - HELD THAT:- Insofar as the assessee bank is concerned, it is not in dispute that it is a public sector bank came into existence during the year 1969 by way of the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 and in the said Act, the assessee bank was termed as corresponding new bank.
As relying on Union Bank of India [2024 (9) TMI 789 - ITAT MUMBAI] the assessee is not a company and therefore the section 115JB would not be applicable to all the assessment years in dispute. Therefore, we set aside the orders of the AO as well as the CIT (A) insofar as the applicability of section 115JB of the Act is concerned and decide the issue in favour of the assessee.
Disallowance of CSR expenditure, disallowance of penalty levied by RBI and disallowance of sundry assets written off - HELD THAT:- We were informed by the Ld.AR that the issue is no longer a dispute and the issue was already settled by the judgment of Gujarat Narmada Valley Fertilizers and Chemicals [2019 (8) TMI 1288 - GUJARAT HIGH COURT] now a line of demarcation between the expenses incurred by the assessee on discharging corporate social responsibility under such a statutory obligation and under a voluntary assumption of responsibility. As for the former, the disallowance under Explanation 2 to Section 37(1) comes into play. but, as for latter. there is no such disabling provision as long as the expenses, even in discharge of corporate social responsibility on voluntary basis, can be said to be "wholly and exclusively for the purposes of business". There is no dispute that the expenses in question are not incurred under the aforesaid statutory obligation. For this reason also. as also for the basic reason that the Explanation 2 to Section 37(1) comes into play with effect from 1st April 2015. we hold that the disabling provision of Explanation 2 to Section 37(1) does not apply on the facts of this case.
Thus allow the CSR claim made by the assessee as allowable expenditure for AY 2016-17 and 2017-18.
Allowable expenditure u/s. 37 - penalty imposed by the Reserve Bank of India for the deficiencies in exchange of notes and coins/remittances sent to RBI for operations of currency chest etc. which is a civil liability under the RBI Act - HELD THAT:- As relying on IDBI BANK LTD [2021 (2) TMI 608 - ITAT MUMBAI] accepting the case of the assessee and allow the penalty imposed by the Reserve Bank of India as eligible for deduction u/s, 37 of the Act for AY 2016-17 and 2017-18.
Disallowance of sundry assets written off by the assessee bank by debiting the profit and loss account and squaring off the individual items in the books and claimed the same as allowable expenditure - CIT (A) had given a finding that the assessee had not furnished any evidence to prove that the findings of the AO is incorrect and therefore confirmed the disallowance made by the AO - HELD THAT:- As considered the submissions made by the Ld.AR that the small value of the assets were written off by the assessee by debiting their P&L account and finally they have also squared off the said items in the books of accounts.
This fact was not verified by the Ld.AO as well as by the Ld. CIT (A). We therefore set aside the order of both the authorities insofar as the above issue is concerned and remit the issue to the assessing officer for denovo consideration.
We also made it clear that in the event, the AO finds that the submission made by the assessee is correct, to allow the said written off as allowable expenditure.
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2024 (11) TMI 1451
Non-issue and service of the notice by the AO u/s 143(1)(a) - violation of statutory provision of Sec 143(1)(a) - HELD THAT:- As per the provisions of the Act, an intimation has to be given to the assessee whether in writing or in electronic mode before making such adjustments. The revenue authorities have been asked in the earlier hearing to submit the proof of issue of notice to the assessee which the revenue authorities failed to produce. Hence, in the interest of speedy justice, the appeal of the assessee is hereby allowed, granting liberty to the Revenue to approach the Tribunal in case the right proof of issue of notice could be found. Assessee appeal allowed.
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2024 (11) TMI 1450
Rejection of refund claim - appellant is a membership club paying service tax under the category of club or association services - violation of principles of unjust enrichment - HELD THAT:- Both the lower authorities have not touched upon the vital issue of unjust enrichment that whether in the fact of the present case, the unjust enrichment is applicable and if yes whether the respondent have discharged the burden to prove that the incidence of the service tax paid by them was not passed on to any other person.
Both lower authorities had no occasion to see the light of the Hon’ble Supreme Court judgment in the case of STATE OF WEST BENGAL & ORS. VERSUS CALCUTTA CLUB LIMITED [2016 (6) TMI 476 - SUPREME COURT], therefore, the matter needs to be remanded to the adjudicating authority.
Revenue’s appeal is allowed by way of remand to the adjudicating authority to decide a fresh on all the issues.
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2024 (11) TMI 1449
Deduction u/s 80P(2)(a)(i) - interest earned by the cooperative society on surplus funds invested in deposits with bank and Govt. securities - HELD THAT:- In the decision of Gunja Samabay Krishi Unnayan Samity Ltd. [2023 (1) TMI 783 - CALCUTTA HIGH COURT] held that interest earned by the cooperative society on surplus funds deposited in bank and Govt. securities is qualified for deduction u/s 80P(2)(a)(i) of the Act.
Similarly, in the case of ITO vs. Yendagandhi Large Sized Co-operative Society Ltd [2023 (12) TMI 61 - ITAT VISAKHAPATNAM] allowed the deduction for interest income from deposits with the cooperative society and nationalised banks.
Following above we hold that interest income earned by the assessee from its surplus funds deposited with Banks are held to be qualified for deduction u/s 80P(2)(a)(i). Appeal of assessee is allowed.
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2024 (11) TMI 1448
Income deemed to accrue or arise in India - marketing and reservation contribution received is taxable as Royalty under India-US DTAA or not? - Assessee submits that the issue involved in the present appeal is covered by several decisions of this Court, as well as the decision of the ITAT in Assessee’s own case, which has been accepted by the Revenue - HELD THAT:- Assessee drawn the attention of this Court to the finding of the learned ITAT in the impugned order to the effect that a similar view, in the Assessee’s own case in respect of earlier assessment years (AYs), has been accepted and not appealed by the Revenue. He has also handed over a tabular statement showing that no appeal was preferred in respect of the decision of the learned ITAT in respect of AYs 1997-98, 2002-03 to 2005-06 as well as AYs 2012-13 to 2015-2016. In addition, it is stated that the Assessing Officer had for the AYs 2002-03 and 2006-07 to 2011-12 accepted the Assessee’s contention.
Revenue seeks time to examine the decisions in the Assessee’s own case in respect of previous AYs. Respondent is also at liberty to file his written submissions along with the authorities relied upon with an advance copy to the learned counsel appearing for the appellant.
List on 12.12.2024.
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2024 (11) TMI 1447
Disallowance of claim of deduction of expenditure against the unaccounted cash receipts from sale of spent solvents / scrap - HELD THAT:- This issue is squarely covered in favour of the assessee by the decision of MSN Pharmachem Private Limited [2024 (11) TMI 499 - ITAT HYDERABAD] where the Tribunal has directed the AO to allow 60% of expenditure against unaccounted cash receipts from sale of spent solvents / scrap for the year under consideration.
Thus we direct the AO to allow 60% of the receipts as expenditure against unaccounted cash receipts from sale of spent solvents / scrap and sustain 40% of addition towards unaccounted sale of spent solvents and scrap. Appeal of assessee is partly allowed.
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2024 (11) TMI 1446
Money laundering - Seeking grant of bail - misappropriation of scholarship funds - scam involving the allocation of scholarships to SC, ST and OBC students, under the Post Matric Scheme - non-supply of the copy of the ‘reasons to believe’ - HELD THAT:- When, the arrest of the applicant has been challenged and the matter is sub judice before the Court, then, adjudication upon this issue, by this Court, is nothing, but, over-reaching the jurisdiction of the writ Court - Hence, the applicant cannot take advantage of the judgment of the Hon’ble Supreme Court in Arvind Kejriwal versus Directorate of Enforcement [2024 (7) TMI 760 - SUPREME COURT].
The applicant has earlier also sought the similar relief, by filing HITESH GANDHI VERSUS DIRECTORATE OF ENFORCEMENT OFFICE [2024 (1) TMI 1454 - HIMACHAL PRADESH HIGH COURT], which was dismissed, by this Court, vide order, dated 12th January, 2024, whereby, this Court has specifically held that it cannot be said that the mandatory provisions of Section 19 of the PMLA have not been complied with, by the ED, in this case - So far as the plea of the applicant, regarding delay in trial, is concerned, at this stage, it cannot be said that there is any delay in trial.
The applicant has also placed on record the zimni orders, passed by the learned Special Judge, Shimla, according to which, the charges have not been framed. However, it cannot be said that there is inordinate delay, as, before, putting the charge, the Special Judge is duty bound to comply with the mandatory provisions of BNSS. Perusal of order, dated 22nd July, 2024, passed by the learned Special Judge, Shimla, shows that the case was adjourned for checking of copies.
Thus, it cannot be said that the twin conditions, as enumerated in Section 45 of the PMLA, are existing in favour of the applicant, at this stage.
Conclusion - The applicant failed to demonstrate sufficient grounds for bail at this stage. The Court's decision is based on the ongoing investigation, the nature of the allegations, and the unsatisfied twin conditions under Section 45 of the PMLA.
In the considered opinion of this Court, the applicant is not able to make out a case for grant of bail, at this stage. Consequently, the bail application is dismissed.
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2024 (11) TMI 1445
Liability to pay service tax - support services - reimbursement of salaries paid to the State Police Department for services rendered - reverse charge mechanism - amount collected by the appellant on account of inspection charges, tender cost and vendor registration charges - vender registration charges and tender cost - pre-term resignation of the employees and the penalty for non-compliance with terms and conditions of tender.
Liability to pay service tax - support services - reimbursement of salaries paid to the State Police Department for services rendered - reverse charge mechanism - HELD THAT:- From July, 2012 onwards the negative list regime came into existance and the activity undertaken by the appellant if taxable, the demand can be raised under Section 65B (49) of the Act. The said provisions has not been invoked to demand service tax from the appellant. Moreover, for support services of business, the service tax is required to be paid by the service provider not by the service recipient and the appellant is before us is a service recipient, therefore, no demand can be raised in the hands of the service recipients under support services of business. In that circumstances, the recovery of the said amount if payable, cannot be levied on the appellant. Moreover, the issue whether reimbursement of salaries of Policemen by the appellant is chargeable to tax under business support service or not. The said issue has been settled by this Tribunal in the case of Superintendent of Police vs. Commissioner of Central Excise, Jaipur [2019 (11) TMI 250 - CESTAT NEW DELHI] wherein this Tribunal observed that 'no service tax chargeable under Security Agency Services upon the Appellant. The CBEC circular being binding on the department, a demand to the contrary is not sustainable and needs to be set aside.' - thus, on merits as well as on technical grounds, the appellant is not liable to pay service tax for support services amounting to Rs. 2,43,67,998/-. Accordingly, the said demand is set-aside.
Levy of service tax - amount collected by the appellant on account of inspection charges, tender cost and vendor registration charges - HELD THAT:- The activity of meter inspection charges is related to the distribution of electricity of the appellant and the said activity is exempt from payment of service tax, in that circumstances, on inspection charges of the electric meter, the appellant is not liable to pay service tax. Accordingly, the said demand is also set-aside.
Levy of service tax - vender registration charges and tender cost - HELD THAT:- These are the charges recovered by the appellant from persons who are getting registration and a part of bidding process that cannot be termed as any service provided by the appellant, therefore, on this vendor registration charges and tender cost, the appellant is not liable to pay service tax.
Levy of service tax - pre-term resignation of the employees and the penalty for non-compliance with terms and conditions of tender - HELD THAT:- These are not consideration for providing any service by the appellant. The said amount has been collected in compensation of the loss incurred by the appellant and not towards condition of any service, therefore, no service tax is payable by the appellant on the said amount. The said issue has been settled by the Hon’ble Madras High Court in the case of GET & D India Limited vs. Deputy Commissioner of Central Excise, [2020 (1) TMI 1096 - MADRAS HIGH COURT] Madras High Court wherein the High Court has observed that 'No, such amounts paid by the employer to the employee for premature termination of a contract of employment are treatable as amounts paid in relation to services provided by the employee to the employer in the course of employment. Hence, amounts so paid would be chargeable to service tax However any amount paid for not joining a competing business would be liable to be taxed being paid for providing the service of forbearance to act.' - the appellant has received tender cost for non-fulfilment of conditions of tender which is towards the said amount is collected for damage or loss incurred by the appellant and not for providing any service, in that circumstances no service tax can be demanded from the appellant by invoking the provisions under Section 66E (e) of the Act.
Conclusion - i) The demand under support service amounting to Rs. 2,43,67,998/- is set-aside. ii) The demand of service tax on account of vendor registration charges, tender cost and inspection charges of meters are also set-aside. iii) The demand of service tax of Rs. 51,16,796/- for the amount recovered on account of pre-term resignation of the employees and penalty for non-compliance with terms and conditions of tender are set-aside. iv) No penalty can be imposed on the appellant. Accordingly, the penalties imposed on the appellant are set-aside.
Appeal disposed off.
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2024 (11) TMI 1444
Validity of assessment order as violated the principles of natural justice by not providing the petitioner an opportunity to respond to information relied upon in the assessment - HELD THAT:- As respondent is incorrect in stating there is no violation of Natural Justice. For the assessment proceedings u/s 143(2) the respondent had granted personal hearings . Thereafter the petitioner was directed to file various details and the petitioner had filed through e-portal. After filing the same the respondent ought to have granted personal hearing, but the respondent failed to do so. The contention of the respondent after filing the various details, personal hearing is not necessary is erroneous and unacceptable. Therefore, there is clear violation of principles of natural justice.
Having held there is violation of principles of natural justice, then the contention of the respondent that there is alternative remedy of statutory appeal ought to be rejected. Since if there is any violation of principles of natural justice, then the petitioner is having right to invoke writ jurisdiction.
Addition u/s 68 - section 115BBE applied in this case - contention raised by the Learned Senior Counsel is that the u/s 115BBE the rate of tax imposed is increased from 30% to 60% and the same is applicable with effect from 01.04.2017 onwards as per the amendment - HELD THAT:- Nowhere it is stated that due to “demonetization” the unaccounted money ought to be charged 60% rate of tax. It only states that step had been taken to curb black money by withdrawing Specified Bank Notes of denomination of Rs. 500 and Rs. 1000. And also states the people may find illegal ways of converting their black money into black again, hence as per experts advice heavy penalty ought to be levied. From the language of the object “that instead of allowing people to find illegal ways of converting their black money into black again”, it is evident that the government is intended to impose the same for future transactions. Especially the use of word “again” in the object would clearly indicate it is for future transactions i.e. from 01.04.2017. Therefore this Court is of the considered opinion that the revenue is empowered to impose 60% rate of tax for the transactions from 01.04.2017 onwards and not prior to the said cut-off date. And for prior transaction the revenue is empowered to impose only 30% rate of tax.
Petitioner as deposited the cash available with it and the cash collected for the repayment of loan, wherein the said depositors had deposited the Specified Bank Notes - There was a plea by the writ petitioner that they had collected only repayment from the borrowers during the window period for the particular month alone. If the previous year collections are compared then there will not be any variation. On perusal of the assessment order, it is seen that the respondent has not compared the statement with the previous year. When there is a plea to compare the same with the previous year, failing to consider the said plea, then it is an erroneous order.
Therefore, the matter is remitted back for comparing the earlier statement of accounts. The respondent shall grant personal hearing. Hence, the impugned assessment order is set aside. The matter is remitted back to the respondent to consider the plea of the petitioner thereafter pass an order. The said exercise shall be completed within a period of 12 weeks. The petitioner shall cooperative with the revenue.
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2024 (11) TMI 1443
Validity of reopening of assessment - reasons to believe - HELD THAT:- Prima facie it appears that the reopening of the assessment was justified. It is noticed that the reasons stated in the letter dated 19.08.2021 also brings out the same. Therefore, there is no merits in challenge to impugned notice dated 30.03.2021 or the speaking order dated 24.01.2022, as the petitioner has not given the true and full disclosure of all material information before the assessment was passed on 29.01.2018. Therefore, the Writ Petition is liable to be dismissed.
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2024 (11) TMI 1442
Clandestine removal - failure to provide the copy of relied upon documents to the appellant, despite the direction of this tribunal - availment of irregulat CENVAT Credit - Admissibility of statements - Violation of principles of natural justice - extended period of limitation - penalties - HELD THAT:- The Ld. Commissioner by relying the letter dated 05.01.2018 of DGGI, MZU held that relied upon documents have been provided to the appellant alongwith SCN on 07.01.2009 and the same were duly acknowledged by the authorized signatory of appellant. The said disputed acknowledgement of relied upon documents with SCN has already been disputed by the appellant before this Tribunal in first round of litigation and after that considering all the facts and correspondences, this tribunal has remanded the matter to adjudicating authority with the specific direction to supply the relied upon documents to the appellant. It is undisputed that the said dispute related to acknowledgment of relied upon document on 07.01.2019 was considered by the AJAY F GARG AND ND METAL INDUSTRIES LTD VERSUS C.C.E. & S.T. -DAMAN [2021 (10) TMI 584 - CESTAT AHMEDABAD], whereby this Tribunal remanded the matter to the Ld. Adjudicating Authority with specific directions to provide the copies of relied upon documents to the appellant and which was accepted by the department and thus became final. Therefore, it was not open for the Ld. Commissioner to pass the order ignoring the remand direction of their higher authorities and confirming the demand on the same grounds as taken in the first round which was set aside by the Tribunal.
On perusal of the adjudication order and correspondences on various dates between appellant and department, it is found that in the present matter appellant have made several correspondences with department and adjudicating authority even then the documents were not supplied to them. Even the direction of this tribunal to adjudicating authority to provide the copy of relied upon documents, who has not supplied the documents to Appellant. But the Ld. Commissioner observed that the documents were supplied with the show cause notice, which is totally misconceived, inconsistent and contradicting. The entire Cenvat demand without supply of relied upon documents is against the principles of natural justice and hence the show cause notice stands vitiated. For this reason itself, the Cenvat demand and penalty cannot sustain.
In Tribhuvandas Bhimji Javeri v. Collector of Central Excise, [1997 (1) TMI 86 - SUPREME COURT], the Hon’ble Apex Court held that non-return of the documents by the authorities may severely prejudice the right of the party to offer the proper explanation and to that extent the principles of natural justice may stand violated. In absence of supply of the copies of the documents a party may be deprived of from leading proper evidence and he may not be able to give proper answer of the case against him by adducing positive evidence in support of his own case together with the right to contradict all other allegations.
The entries made in the DLR/MLR do not prove that the container/ imported inputs were transported only up to the destination given in such DLR/MLR. It is not the entry in the DLR/MLR but the transportation charges which are relevant as these indicate the actual transportation. As observed the above, the veracity of the said documents recovered from the premises of the third party i.e. M/s PSTC, is not known. Hence, it cannot be the sole basis for alleging diversion of imported inputs by Appellant. Additionally, it is important to note that the basis of preparation of said documents has not been made available to the Appellant, therefore, it would be a miscarriage of justice if such unsubstantiated documents are used as evidence against the Appellant - Merely because the drivers have not accurately maintained the MLRs, no adverse inference can be drawn on against the Appellant on the basis of such third-party records.
If the allegation of department accepted and appellant has availed the Cenvat credit without receipts of the goods, than the duty payment on finished goods during the disputed period by the appellant could not be made from the PLA/cash. In such cases where the Cenvat credit was availed without receipt of the goods the Cenvat Credit should be accumulated in Cenvat credit ledger. However in the present case this is not a situation. Copy of PLA, Excise duty payment ledger submitted by the Appellant clearly show the duty payment by cash during the disputed period. In such circumstances huge Cenvat credit demand only on the basis of third party documents and statement of persons without corroborative evidence is clearly not sustainable.
It is clear that in adjudication, the adjudicating authority is required to first examine the witness in chief and also to form an opinion that having regard to the facts and circumstances of the case, the statements of the witness are admissible in evidence. Thereafter, the witness is offered to be cross-examined. In the present matter Ld. Adjudicating Authority failed to do such exercise. Therefore, none of the statements were admissible evidence in the present case and no Cenvat demand is sustainable on the basis of statements of persons.
Conclusion - i) The failure to provide relied upon documents constituted a violation of natural justice, rendering the adjudication order unsustainable. ii) The Cenvat credit demand was not supported by reliable evidence, as the department failed to prove the alleged diversion of inputs. iii) Third-party records, without corroboration, cannot be relied upon to substantiate claims of diversion or clandestine removal. iv) Statements not admitted as evidence under Section 9D cannot be used to confirm demands. v) The extended period for demand was inapplicable due to the absence of fraud or willful misstatement. vi) Penalties were unjustified due to the lack of cogent findings.
The impugned order is set aside - appeal allowed.
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2024 (11) TMI 1441
Rejection of petitioner’s appeal for want of the necessary pre-deposit - transactional value of the goods imported against the aforesaid Bill of Entries was enhanced significantly - HELD THAT:- Admittedly, the petitioner did not make the necessary pre-deposit. The petitioner wants to make good of the said payment by requesting that the bank guarantee of ₹15,00,000/- which was furnished at the time of the provisional release of the goods, be encashed. The petitioner also contended that since the goods have not been cleared and are lying with the Customs Authorities, the value of the goods be also reckoned towards the pre-deposit.
The said contention was not accepted by the Customs Authorities and rightly so. The bank guarantee, was furnished by the petitioner for a specific purpose of release of the goods and cannot be used at the instance of the petitioner, for a completely different purpose. However, even if it is accepted that the bank guarantee could be invoked for making the pre-deposit, admittedly the amount available would be insufficient to satisfy the requirement of the pre-deposit. Thus, undisputedly, the petitioner has defaulted in making the necessary deposit for maintaining the appeal. Thus, the decision not to entertain the petitioner’s appeal cannot be faulted.
Conclusion - The bank guarantee, meant for the provisional release of goods, could not be repurposed for the pre-deposit, and even if it could, the amount was insufficient.
Petition dismissed.
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2024 (11) TMI 1440
Maintainability of a writ petition under Article 226 of the Constitution of India in the case at hand - Challenge to proceedings by which the dealership should be terminated - petitioner was not the person running the retail outlet - violation of the principles of natural justice.
Is the petitioner entitled to maintain a writ petition under Article 226 of the Constitution of India in the case at hand? - HELD THAT:- In N.G.Projects Ltd. [2022 (3) TMI 1589 - SUPREME COURT], the Apex Court was considering the rejection of a bid pursuant to a tender invited by the Road Construction Department, Jharkhand. Considering the afore situation, the Apex Court held that the writ court should refrain itself from endorsing the decision over the decision taken as to whether or not to accept the bid of a tenderer, especially when the courts do not have the expertise to examine the terms and conditions of the present day economic activities of the State. The Apex Court also cautioned that the courts should not find fault with a magnifying glass in its hand; rather, the courts are only to examine whether the decision-making process is correct. In my opinion, the afore judgment cannot be applied to the facts and circumstances of the case at hand, insofar as, here, the petitioner is complaining of the absence of procedural fairness since, according to her, there is violation of the principles of natural justice. The Apex Court, in the afore judgment, has also held that the High Court can examine whether the decision-making process is one in tune with the known principles of administrative law.
Insofar as the allegation raised by the petitioner is with reference to the violation of the principles of natural justice at the hands of the 1st respondent herein, which is admittedly an instrumentality of the State, the petitioner is justified in approaching this Court under Article 226 of the Constitution of India.
Is there any violation of the principles of natural justice in the case at hand? - HELD THAT:- The fundamental rule that the “one who decide must hear” may not be strictly applied to “institutional hearing”. In that case, ultimately this Court found that a hearing to be provided by the Commissioner of Commercial Taxes with reference to Section 59A(2) of the KGST Act was not institutional but personal. It is in the afore circumstances that this Court interfered with the impugned order therein and directed reconsideration of the issue.
A reference to the agreement entered into between the petitioner and the respondent Corporation is also to be made. The petitioner has produced the said agreement as Ext. P1 along with this writ petition. It is seen that the agreement is entered into between the “Indian Oil Corporation” and the petitioner herein. A reading of the said agreement would also show that the appointment of the petitioner as the dealer is effected by the “Corporation.” It is only that on behalf of the Corporation, a designated Manager is signing the agreement. The petitioner, being the dealer, is to act according to the said terms and conditions, not to the detriment of the Corporation and also not against the terms and conditions thereof. Under clause 56 of the agreement, the respondent Corporation is granted liberty to terminate the agreement in question. Thus, it is seen that the petitioner is entering into the agreement with the respondent Corporation and is also continuing to act on the basis of the covenants of the said agreement, set out by the Corporation. Ultimately, the termination also takes place at the hands of the “Corporation”, and it is only that the Corporation is being represented by its officials.
This Court notices that the impugned order at Ext. P2 is issued for and on behalf of the Indian Oil Corporation Limited and it is only that the same is communicated/signed by the State Head. A detailed procedure has already been noticed and is provided with respect to the hearing granted and the manner in which the decision is arrived at. In my opinion, it is a case of institutional hearing and the rules of natural justice, to the extent applicable, have been followed in the matter. Merely because the hearing has been extended by the then State Head and the impugned order issued by the current State Head that may not be a reason for upsetting the impugned order.
Is any prejudice caused to the petitioner on account of the violation of principles of natural justice, if there is any? - HELD THAT:- There is no violation of the principles of natural justice in the case at hand. On account of the above, there is no requirement to consider this question posed.
Conclusion - The writ petition was maintainable under Article 226 of the Constitution of India due to the alleged violation of natural justice. However, the Court found no violation of natural justice in the issuance of the termination order, as the hearing process was institutional. The Court emphasized that in institutional decision-making, the rule that the one who hears must also decide does not strictly apply.
Petition dismissed.
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2024 (11) TMI 1439
TP Adjustment - allowability of working capital adjustment - HELD THAT:- We are of the considered view that the CIT(A) has erred in confirming the rejection of adjustment on account of working capital and hence we allow this ground of the assessee.
Disallowance of Foreign exchange gain / losses arise due to uncertainties such as fluctuations in the currency market rate - HELD THAT:- Tribunal has considered the similar issue of treating the foreign exchange loss as operating in nature for the purpose of computing PLI, in the case of sister concern of the assessee in Doowon Automotive Systems India Private Limited [2021 (11) TMI 1147 - ITAT CHENNAI] as rightly pointed out by the ld. D.R that earlier year the assessee claimed foreign exchange loss as operating expenditure. This year assessee has shifted its stand and claimed it as non-operating expenditure. There is no consistency in its approach and also no reason has been given for such a change. Being so, in our opinion, foreign exchange loss is to be treated as operating nature only. Hence, this ground is dismissed.
Allowance of custom duty adjustment while computing the margin of the Appellant - HELD THAT:- As perused the material available on record and gone through the orders of the lower authorities. We note that the Tribunal has considered the similar issue of customs duty adjustment and allowed in favour of the assessee, in the case of sister concern of the assessee in Doowon Automotive Systems India Private Limited [2021 (11) TMI 1147 - ITAT CHENNAI] we are of the considered view that the customs duty adjustment need to be given to assessee and hence, we direct the AO to give suitable adjustment against the customs duty component while determining the ALP and dismiss the ground of the revenue.
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