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Showing 181 to 200 of 1658 Records
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2024 (10) TMI 1478
Rejection of Condonation of delay in filing income tax returns - as per petitioner reasons such as the impact of Covid-19 on operations, loss leading to non-payment of electricity charges, and corruption of computer data lead to delay - HELD THAT:- On perusal of records, it is seen that due to outbreak of Covid-19 and lock down throughout the Country since March 2020, the petitioner- Company's operations were stopped abruptly, therefore, the petitioner- Company faced with a huge loss, resulting in non-payment of the electricity charges, due to which, power connections were also cut in the Factory, apart from the same, due to non-usage of the Computer, the server of the Computer, where, the petitioner used to maintain accounts got corrupt and hence, all the Computer data backups were lost, hence, the petitioner was not in a position to file Income Tax Returns in time, however, as and when, the petitioner was able to reconstruct the lost records, they filed returns for the AY 2021-22 and that since there happened to be delay of nine months in filing the returns, (as the due date for filing the returns was on or before 15.03.2022), the petitioner has rightly taken out an Application for condonation of the delay, clearly setting out the reasons for the delay.
Thus, the delay on the part of the petitioner in filing the returns is neither willful nor wanton, but, purely owing to unforeseen circumstances, therefore, the respondent before rejecting the application ought to have taken into consideration of all the aforesaid aspects.
Respondent also failed to consider the vital factor that the petitioner is not a habitual offender, to file returns with a delay and that excluding the subject AY (i.e. 2020-21) the petitioner has been prompt in filing the returns in respect of the past Assessment Years and subsequent Assessment Years. Hence, this Court is of the considered view that the reasons assigned by the petitioner for the delay is genuine and reasonable, and is inclined to condone the delay, however, subject to payment of costs, as agreed by the petitioner.
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2024 (10) TMI 1477
Bogus purchases - information received from the Sales Tax Department, Maharashtra - CIT(A) deleted part addition - HELD THAT:- As regards the submission of the DR that the amount continues to represent unsubstantiated and non-genuine purchases which remain unexplained and unverifiable, it is pertinent to note that the assessee furnished detailed documents, as noted in the foregoing paragraph and also taken note of by CIT(A) of its order, which as evident from the record were neither been controverted by the AO nor stated to be false and bogus.
The fact that the assessee failed to furnish the information in the format required by the AO cannot be the sole basis for treating the purchases as bogus. We agree with the findings of the CIT(A) in deleting the addition of the balance amount. As a result, the impugned order on the issue under consideration in the present appeal before us is upheld and the ground raised by the Revenue is dismissed.
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2024 (10) TMI 1476
Estimation of income - bogus purchases - AO has only estimated the profit from the alleged bogus purchases @ 12.50% - contention of the assessee that it has furnished the details relating to purchases, payments made to the supplier, confirmation from the supplier and also the details of sale of products to various persons - HELD THAT:- The assessee herein has furnished all details evidencing the purchases, confirmation from the suppliers, the details of sales made out of those purchases. There is no evidence to show that the money given towards purchases was flown back to the assessee. AO has accepted the sales. Accordingly, we are of the view that the impugned addition cannot be sustained, in the facts and circumstances of the case.
Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the addition relating to alleged bogus purchases. Appeal filed by the assessee is allowed.
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2024 (10) TMI 1475
FTS/FIS/Royalty receipt - Taxability of the amounts received by the assessee from the Indian customers towards supply of software updates and patches and on-call support services - Fee for Technical Services (FTS)/Fee for Included Services (FIS) under the Income Tax Act as well as under India – USA Double Taxation Avoidance Agreement (DTAA) - as submitted by the assessee that on-call support services cannot be treated as FIS either u/Article 12(4)(a) of India – USA tax treaty as it is not ancillary to any royalty income or u/Article 12(4)(b) as no technical knowledge, know-how, skill etc. was made available to the service recipient while providing on-call support services.
HELD THAT:- Being conscious of the fact that the receipts can no more be treated as royalty income in view of change in legal position due to the ratio laid down in case of Engineering Analysis Centre of Excellence Pvt. Ltd. [2021 (3) TMI 138 - SUPREME COURT] and secondly, it cannot be treated as FIS under Article 12(4)(a) of India – USA DTAA, the AO has taken a conscious decision not to invoke Article 12(3) and Article 12(4)(a) of India – USA DTAA to tax the receipts.
Thus, the only course left open with the AO to rope in the receipts within tax net is to invoke Article 12(4)(b) of India – USA DTAA. However, the said provision requires fulfillment of the ‘make available’ condition.
A reading of the assessment orders should reveal that except making general observations that while rendering services the assessee has made available technical knowledge, know-how, skill etc. to the recipient of services, the Assessing Officer has not brought on record any cogent material/ evidence to establish such fact. Even, same is the position with learned DRP as no effort has been made by learned DRP to establish that ‘make available’ condition stands satisfied.
Now, it is fairly well settled that technical knowledge, knowhow, experience, skill etc. are made available to a service recipient when the service recipient is capable of performing such services independently on its own without requiring the aid and assistance of the service provider. No material has been brought on record by the Revenue Authorities to establish that the service recipients, while availing service from the assessee, have also acquired technical knowledge, know-how, skill etc. concerning such services, which enabled them to perform such services independently in future.
Assessee continues to provide on-call support services year-after-year goes to prove that the technical knowledge, know-how, skill etc. relating to such services have not been transferred to service recipients. It appears that being conscious of the fact that the receipts cannot be made taxable as royalty income under Article 12(3) or as FIS under Article 12(4)(a) of India – USA treaty, the Assessing Officer has made a futile attempt to make the receipts taxable under Article 12(4)(b) by adopting trial and error method.
In view of the aforesaid, we hold that the receipts are not taxable as FIS under Article 12(4)(b) of India – USA DTAA.
Computation of interest on refund u/s 244A - it is the contention of the assessee that interest u/s 244A of the Act has to be computed up to the date of issuance of refund voucher - HELD THAT:- Having considered rival submissions, we direct the Assessing to verify assessee’s claim and compute interest in accordance with law.
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2024 (10) TMI 1474
Revision u/s 263 - as per CIT assessment order passed by AO u/s 143(3) r.w.s 153A is found to be erroneous in so far as it is prejudicial to the interest of the revenue - addition made by AO towards the undisclosed cash sales should be taxed as unexplained money u/s 69A r/w section 115BBE - HELD THAT:- PCIT did not find error or prejudiced with the quantum and the manner the assessment proceeding is carried out by the ld. AO. PCIT merely initiated proceeding just to amend the rate of tax to be charged on the disputed addition. As we note that the addition has been made by making the extrapolation and no clear finding on facts of undisclosed amount. As there is no clear material which is to be charged at special rate merely the inference about the sales based on the those seized record taking weighted average will not suggest that the amount as unexplained money.
It is not the case of the revenue that the assessee is found in possession of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the AO satisfactory.
As is not disputed about the source of money wherein the revenue contended that the same whatsapp chat suggest part of the money reflected in the books and part not. Thus, the source of addition made is explained by the assessee and ld. AO has taken a plausible view on the matter.
Not only that the amount of addition is disputed and as supported by the seized material it is merely mathematical calculation which is disputed by the assessee and therefore, the case of the assessee is squarely covered by the decision of our High Court in the case of Manna Trust [2022 (1) TMI 693 - RAJASTHAN HIGH COURT]
Not only that as regard the chargeability of disclosed income the Gujarat High Court in the case of PCIT Vs. Dharti Estate [2024 (1) TMI 1197 - GUJARAT HIGH COURT] has held that when the assessing officer has made sufficient inquiry and as such during the course of assessment included. The Hon’ble Gujarat High Court also held that there was nothing stated in either pre-amended or post amended provisions of section 115BBE that when the assessee surrendered undisclosed income during the search action for the relevant years, higher tax rate is required to be charged.
When the order passed by the ld. AO is perfectly dealing with the issue and there is no error or prejudice as such ld. PCIT cannot invoke the provision of section 263 just to say different rate of levy of the tax when ld. AO was already aware about the issue on hand of cash sales.
Provisions of explanation 2 of section 263 PCIT should have at list satisfied herself before invoking the provisions, that in fact the assessee is found to be the owner of any money, bullion, jewellery or other valuable article the answer is no even the quantification of cash sales is on extrapolation of taking weighted average of sales based on the instances found at the time of search and the assessee challenged the finding of the ld. AO. Thus, the addition made by the ld. AO being under disputed and while making the addition the ld. AO has not discussed or referred the section 69A of the Act the ld. PCIT cannot hold here view when that of the view of the ld. AO when the ld. AO has consciously added the said sum as business income.
AO made the addition after giving a specific show-cause notice to the assessee wherein the ld. AO based on the seized material extrapolated the income on weighted average and considered the cash sales. Thus, it was not the case of revenue for undisclosed income apparen and evident. The assessee challenged that addition before the ld. CIT(A) and therefore, the matter is under dispute. On that disputed addition ld. CIT(A) intend to levy the rate of addition for section 68, 69, 69A,B, C&D of the Act. When the addition is under dispute and while making that addition ld. AO did not invoke those provisions consequent thereupon, ld. PCIT cannot impose upon her view on the ld. AO when the ld. AO with his open eyes considered the addition as unrecorded cash sales as business income of the assessee. On that pages it is apparent that he intend to tax cash sales which was in part cheque and part in cash so one transaction cannot be considered for separate two treatment under the Act.
We also note that it was not the case of the revenue on the variation in stock was found, variation in the investment in the assets, no loan taken or given out of books were found and no proof of unaccounted purchase were found. Thus, merely on sum slip found in the whatsapp, addition were made and that cannot be considered as unexplained credit in the hands of the assessee company. It is not a cash of revenue that ld. AO was not aware about the provision of section 115BBE, AO was conscious about the provision of section 115BBE of the Act, because while dealing with the addition of unaccounted cash found for an amount was added and while doing so he invoked the provision of section 115BBE of the Act while dealing with the subsequent year case. Here also while invoking the provision of section 263 there is no variation was proposed in the computation of income of the assessee, but only for rate of tax and that with the facts already on record being disputed and not crystallized the order is neither erroneous nor prejudicial to the interest of the revenue.
Not only that as argued by assessee their case is also covered with the decision of M. P. High Court in the case of PCIT Vs. Prakhar Developers P. Ltd. [2024 (4) TMI 498 - MADHYA PRADESH HIGH COURT] as held that once order has been passed taking prior approval then again invoking the provision of section 263 was not correct. Similar view was taken by Patna High Court in Gyan Infrabuild P. Ltd. [2024 (5) TMI 732 - ITAT PATNA]
Ld. PCIT on the same very issue out of other year selected only for two year and other order on the same very issue could not found the order erroneous and has not proposed any action when the nature of addition being same. AO has already invoked the provision of section 11BBE for A. Y. 2020-21 while dealing with the addition and while making cash sales addition he has taken a conscious decision not to invoke that provision. Even the view and the addition being debatable and the matter was under dispute before ld. CIT(A) ld. PCIT should not considered merely on the charge of rate of tax order as prejudicial and that too without proving that it was in fact erroneous or prejudicial to the interest of the revenue. In the search no corresponding assets was found and the addition was made merely on slip found to be recorded in the iphone and the working of sales made based on the weighted average. Ld. AO consciously not invoked the deemed provision and not charged the income under the other income head and has added cash sales.
Thus, we do not agree with PCIT as the order has been passed without proving that order of the ld. AO is erroneous and prejudicial to the interest of revenue and therefore we see not reasons to sustain the same. Assessee appeal allowed.
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2024 (10) TMI 1473
Ex parte order of CIT(A) - denial of principle of natural justice - Penalty u/s 271B imposed - As argued that assessee could not get reasonable opportunity of being heard from the CIT (A) -
HELD THAT:- As first notice was given to the assessee in the month of December, 2020 which was complied with by the assessee, but thereafter there were long gap of almost 22 months when another notice on 3rd November, 2022 was issued for enablement of Window, which did not require any response neither there was any such option. Again, thereafter there was complete silence for around 19 months before issuing notices on 11.06.2024, 28.06.2024 and 09.07.2024 which shows that within a short span of time three notices were issued to the assessee but was not sufficient to collect all the documents and other required information for furnishing before Ld. CIT (A).
Thus, the opportunity of hearing means opportunity of proper hearing and a reasonable time is to be granted to the respective party and even otherwise, CIT (A) has passed an ex parte order - Therefore, without commenting anything on merits, we feel it proper and appropriate to restore the matter back to the file of ld. CIT (A) for afresh decision.
Appeal of the assessee is restored back to the file of the ld. CIT(A) for afresh decision.
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2024 (10) TMI 1472
Fraud practised by the defaulter and his brother only to obstruct the government from recovering its legitimate dues - Petitioner’s brother was declared a defaulter regarding payment of the customs dues and after receipt of this order, the defaulting brother purported to gift his share to his brother by a registered gift deed - main argument is that the attachment order under the Customs (Attachment of Property of Defaulter for Recovery of Government Dues) Rules, 1995 (said Rules) was made only on 26 June 2013; therefore, there was nothing wrong with the registered gift deed dated 6 May 2006
HELD THAT:- The fact that the gift deed was executed soon after the original order was made declaring the Petitioner’s brother a defaulter is not a circumstance that can be lightly ignored. The defaulting brother has purported to transfer 50% of his share to the Petitioner. This is a case where an apparent attempt was made by the defaulting brother and the present Petitioner to obstruct the recovery of legitimate dues.
The Petitioner's conduct has not been above board. The vital document, the order dated 30 November 2005, was not enclosed along with the Petition. In fact, it was suppressed. This document was extremely vital to test the Petitioner’s case, yet it was suppressed.
Further, on the transaction, at least a very strong prima facie case is made out that the Petitioner and his brother executed the sale deed dated 6 May 2006 after it was clear the brother would have to pay the government dues, if necessary, through the sale of the said flat. This transaction was entered into solely to obstruct such sale and, consequently, the recovery of legitimate government dues.
Such a Petitioner does not deserve any assistance from the Writ Court exercising equitable and extraordinary jurisdiction under Article 226 of the Constitution. It is well settled that the equitable and extraordinary jurisdiction of this Court is not to be exercised merely upon the Petitioner making out some legal point. This jurisdiction is essentially discretionary, and the Petitioner’s conduct is a factor for considering the exercise of discretion.
The Affidavit also refers to the registered gift deed and all clauses there stating that from the date of execution of the gift deed, the donee, i.e., Petitioner herein, shall pay ‘other legitimate government and society dues’. In this case, though interim relief was explicitly denied long ago, we are surprised that the respondents took no action to recover dues.
We dismiss this Petition at Rs 25,000/-. The petitioner should pay the cost to the Maharashtra State Legal Services Authority within four weeks from today.
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2024 (10) TMI 1471
Provisional release of the goods being tyres under consideration on the conditions - as argued Tribunal has not considered the test reports issued by IRMRA and no opportunity of hearing was afforded to the investigating agency and, therefore, there is violation of principles of natural justice - HELD THAT:- Revenue’s representative conceded before the Tribunal that although during the course of the hearing of the main appeal, a specific question was put by the Bench on the test reports, the said representative replied specifically that there were no such test reports available. However, during the course of the hearing for rectification application, the said representative conceded the fact that the IRMRA reports were not filed earlier and also same was not brought to the notice of the Bench at the time of the hearing and same have been made available to the Bench in the course of the rectification hearing.
It is important to note that the representative who appeared in the main appeal for the Revenue and the representative who appeared for the Revenue for the rectification application hearing is the same representative, Mr. Deepak Sharma, Assistant Commissioner for Revenue.
We fail to understand as to on what basis when the main appeal was being argued and on a specific question being raised by the Bench, the said representative stated that there are no such reports available and if the said representative was not sure, he ought to have requested the Tribunal for some time to verify and ascertain the correct position. Having not done so, now the said representative has conceded in the course of the rectification hearing that although these reports were available, the same were not filed and the same was not brought to the notice of the Bench.
This is a serious matter that requires consideration by the highest officer of the department as to how such a thing could happen. This is a case where there were a series of appellants before the Tribunal and the financial stakes were high.
Therefore, we direct the Joint Chief Department Representative, Mumbai Bench CESTAT, to conduct a detailed enquiry and report to this Court on how this was possible and who was responsible for such an incident. The said authority should investigate all the persons involved and report to this Court what disciplinary action (if any) is taken or proposed to be taken against the persons responsible if they are from the Revenue Department and if some private persons are involved, what action is proposed to be taken against them.
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2024 (10) TMI 1470
Validity of Order in Original imposing penalties upon the Petitioner under Sections 112 (b) and 114AA of the Customs Act - allegation of denial of the opportunity to cross-examine the persons given statements in the adjudication proceedings - HELD THAT:- In the case of Manjeet Singh vs Union of India and others [2022 (10) TMI 893 - BOMBAY HIGH COURT] a Co-ordinate Bench of this Court in similar circumstances declined to deviate from the self-imposed restriction regarding exhaustion of alternate remedies. Even in that case, the complaint was about not granting cross-examination opportunities. The Co-ordinate Bench relied upon the decision of this Court in Haresh Nagindas Vora [2017 (6) TMI 964 - BOMBAY HIGH COURT] to hold that the Petitioner cannot easily bypass the statutory remedy of appeal and insist upon the matter being considered on merits in the Writ Petition.
From the perusal of the impugned order, at least prima facie, we find that this is not a case of “no notice” or no opportunity to defend the allegations in the show cause notice. At the highest, this is a case where the allegation is of insufficient opportunity because of the denial of cross-examination of some of the persons who made statements in the adjudication proceedings. Therefore, prima facie proof of prejudice may be necessary. All these are matters that can be looked into by the Appellate Authority.
We decline to entertain this Writ Petition but leave it open to the Petitioner to pursue the remedy of appeal by complying with the mandatory conditions prescribed under the law.
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2024 (10) TMI 1469
Quashing the Impugned Action of the Respondent Bank by which it has arbitrarily, unfairly and unreasonably invoked the Fraud Circular against the Petitioner and declared his account as fraud - no event of wilful default or fraud qua the account of MBSL - HELD THAT:- The counter-affidavit by the respondent-bank contains no indication that any SCN was issued to the petitioner proposing his classification or categorization as ‘fraud’, nor was he informed about the uploading of his name on the Central Fraud Registry of the RBI. There is no iota of an averment that any relevant documents, including the copy of the forensic audit report, were ever supplied to him. Evidently, no hearing was afforded to the petitioner, nor was he ever communicated of the decision of the respondent-bank dated 20.06.2019.
In the causa célébere STATE BANK OF INDIA & ORS VERSUS RAJESH AGARWAL & ORS [2023 (3) TMI 1205 - SUPREME COURT], the Supreme Court was dealing with a matter where the petitioner had been classified or categorized as ‘fraud’ under the same ‘Master Directions on Fraud’ by the RBI and after examining a plethora of case laws on the subject, it was held that the principles of natural justice have to be read, while interpreting and enforcing ‘the Master Directions on Fraud’ by the RBI.
There is no gainsaying that the civil consequences jeopardize the future of the business of the borrower, and the principles of natural justice necessitate providing an opportunity for a hearing before declaring the borrower ineligible to access institutional finance under Clause 8.12.1 of the Master Directions on Frauds.
The present writ petition is allowed and the impugned order dated 20.06.2019 passed by the respondent-bank and the consequential action declaring, classifying or categorizing the petitioner as ‘fraud’ is hereby set aside/quashed.
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2024 (10) TMI 1468
Oppression and Mismanagement - Maintainability of the present writ petition preferred by the petitioner company invoking Article 226 of the Constitution of India, 1950 - seeking issuance of directions to respondent No. 1/RBI to initiate action against respondent No. 2 company i.e. Exclusive Capital Limited in terms of the provisions contained in Chapter IIIB of the Reserve Bank of India Act, 1934 - HELD THAT:- It is well ordained in law that a writ of mandamus lies where there is shown a failure to exercise the powers vested in statutory authorities and delay in exercise of its powers might bring about irreparable injuries to statutory rights.
Despite repeated reminders, the present management of respondent No. 2 company has not shared several details in the nature of organizational structure of the respondent No. 2 company, list of secretarial records, statutory compliances, detailed particulars of all the managerial personnel (current and former) scope of their respective roles/responsibilities along with the details of their remuneration/perks and benefits, in particular the copies of the audited and unaudited financials of the company with schedule and trial balances besides the list of list of receivables and payables besides list of secured and unsecured creditors, and such non-compliances assumes significance that all is not well in running the affairs of respondent no. 2 company by the present management.
It would be expedient to point out that the respondent No. 2 company in its reply-cum-affidavit through Mr. Achal Kumar Jindal dated 25.09.2024, filed in response to the Status report filed by the respondent No. 1/RBI dated 13.08.2024, has simply made bald denial with regard to the issues and concerns which have been raised by the respondent No. 1/RBI. It is stated that in order to restore the leverage ratio, the OCDs were converted into the CCPS vide the resolution dated 27.09.2022. As regards the OCDs of Rs. 315 crores, having been received without permission, it is sought to be canvassed that it neither qualifies to be a ‘public fund’ nor Regulation 61 of 2016 of the RBI Master Directions are applicable.
The decision in the case of Krishnakrupa Owners Association v. Reserve Bank of India was rendered in the context of decision taken by the RBI under Section 39A of the Banking Regulation Act, 1949, whereby certain conditions had been imposed on the petitioner including the restrictions, which restrained the respondent No. 3 from paying more than Rs. 10,000/- to its depositors. The High Court refused to exercise its jurisdiction and interfere in the banking affairs of the respondent No. 3 since it was held that the RBI, which was an expert body, was already seized of the matter.
Thus, finding no legally sustainable challenge to the maintainability of present writ petition, and given that it is evident that respondent No. 1/RBI has thus far failed to exercise its supervisory powers, it becomes imperative that certain directions be issued to respondent No. 1/RBI to intervene in the matter and to ensure the enforcement of binding regulations provided under the RBI Act. There are cogent and ample material on the record that warrant full and thorough inquiry into the affairs of the respondent No. 2 company.
It is hereby directed that the Board of Directors of respondent no. 2 company shall remain suspended with immediate effect till further orders - Re-notify for compliance on 02.12.2024.
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2024 (10) TMI 1467
Principle of res judicata - Department of Expenditure (DOE) is an 'enterprise' under Section 2(h) of the Competition Act, 2002 - Office Memorandum (OM) issued by DOE constitutes an agreement under Section 3(4) and Section 3(1) of the Act or not - HELD THAT:- The issue as to whether the Respondent No. 2 is an enterprise and OM 1 is an agreement has already been decided by the Respondent No. 1 in case no. 39 of 2010 decided on 15.09.2010 holding that neither the Respondent No. 2 is an enterprise within the meaning of Section 2(h) nor OM1 is an agreement between Respondent No. 2, 3 and 4.
It is pertinent to mention that the Hon’ble Supreme Court in CCI Vs. Co-Ordination Committee of Artists and Technicians of W.B. Film and Television and Ors. [2017 (3) TMI 1692 - SUPREME COURT] has held that the Department of Expenditure, Ministry of Finance, Government of India, cannot be considered or regarded as an enterprise in terms of Section 2(h) of the Act, 2002 in relation to the Office Memorandum dated 24.03.2006.
Thus, it is very well proved that the Appellant has approached the Respondent No. 1 by filing second information on the same facts and circumstances against the same opposite parties with the same prayer which has already been declined in the first information filed by the Appellant and the order of the CCI was tested and upheld by the Appellate Authority when the appeal of the Appellant was dismissed and no further appeal by the Appellant was carried to the Hon’ble Supreme Court which seal the fate of the Appellant in so far as this litigation is concerned.
In this view of the matter the salutary principle / legal maxim that nemo debet lis vexari pro una et eadem causa would spring in to the action that no man should be vexed twice for the same cause which has been adjudicated in the present case by the Appellant because even if it is presumed that the economic activities are dynamic, as stated by the Appellant, the fact remains that the two courts have already held that the Respondent No. 2 is not an enterprise and OM1 is not an agreement inviolation of Section 3(4) of the Act, therefore, these issues cannot be reagitated and the court cannot be called upon to decide the same by passing a lengthy judgment and the wasting time which may be used for disposal of a genuine case, therefore, the present appeal is found without any merit.
Appeal dismissed.
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2024 (10) TMI 1466
Approval of the resolution plan - wrongful allocation of Rs. 79 lakhs as the liquidation value - HELD THAT:- The Hon’ble Supreme Court in M/s Amit Metaliks Limited & Anr. [2021 (6) TMI 684 - SUPREME COURT] while taking into consideration Section 30(4)(2) and Section 53 held that the NCLAT was right in observing that such amendment to sub-section (4) of Section 30 only amplified the considerations for the CoC while exercising its commercial wisdom so as to take an informed decision in regard to the viability and feasibility of resolution plan with fairness of distribution amongst similarly situated creditors and the business decision taken in exercise of the commercial wisdom of CoC does not call for interference unless creditors belonging to a class being similarly situated are denied fair and equitable treatment.
In the case of Paridhi Finvest Pvt. Ltd. [2024 (2) TMI 557 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI], the case of the Appellant was that he was not paid the amount as per the liquidation value though the Appellant being a dissenting financial creditor was entitled for payment of amount as per liquidation value. In this case, the Court relied upon the decision in the case of Amit Metaliks and the decision in the case of Paridhi Finvest Pvt. Ltd. was upheld by the Hon’ble Supreme Court and the appeal was dismissed.
Although, the interpretation of Section 30(2)(b)(ii) of the Code is pending by a larger bench but at present the decision of the Hon’ble Supreme Court in the case of Amit Metaliks is subsisting, therefore, relying upon the said decision, we hold that there is no error in the order of the Tribunal which calls for any interference by this Court and hence, the appeal is hereby dismissed.
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2024 (10) TMI 1465
Wilfull failure to pay tax and suppressed the value of service in the returns filed in ST-3 - Suppression for mere non-declaration of details - Invocation of extended period of limitation in terms of proviso to Section 73 of the Finance Act, 1994 - whether the appellant can be fastened with a liability to pay service tax and penalty?
HELD THAT:- The service tax of banking and financial service was altered with effect from Finance (No.2) Act, 2004 dated 10.09.2004 by Substituting the definition of “banking and other financial services”. Prior to the aforesaid period, the definition read differently.
The petitioner has paid the Service Tax on 03.07.2008 i.e. within 115 days from the date of receipt of Show Cause Notice.
We are of the view that the appellant was entitled to take a bonafide stand that no service tax was payable in the context of collection of penal charges although it could be concluded that it was liable to pay service tax. There is no record to show that failure to pay service tax was wilful and deliberate as held in Pushpam Pharmaceuticals Co. [1995 (3) TMI 100 - SUPREME COURT]
Hon'ble Supreme Court in Uniworth Textiles Ltd.,[2013 (1) TMI 616 - SUPREME COURT] has held that if non-disclosure of certain items assessable to will not invite the wrath of the proviso for the non-payment of duty on disclosed items, after inquiry from the department concerned and does not attract the proviso.
Thus, we are inclined to hold no penalty is payable by the appellant under any of the provisions of the Act. Since tax payable has been accepted by the appellant, appellant shall also pay interest on belated payment of tax under Section 75 of the Finance Act, 1994.
We therefore, partly allow the appeal and answer the substantial questions of law partly in favour of the appellant by holding no penalty is imposable on the appellant. The appellant shall pay interest under Section 75 of the Finance Act, 1994 within a period of thirty days from the date of receipt of a copy of this order, if same has not been already paid.
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2024 (10) TMI 1464
Demand of Service Tax dropped by the CESTAT on the income shown as non-taxable in Financial Data Summary Sheets (FDSS) - Whether the Respondent / Assessee is liable to pay Service Tax on difference in figure of 'Income' in Form ST-3 and Form 26AS? - HELD THAT:- As functioning of the respondent as a Multi-Modal Transport Operator and who is stated to have made payments toward customs duty, air freight, ocean freight and surcharges for and on behalf of various clients.
From the material which was gathered in course of the enquiry as well as the verification details provided, the authorities had found that the payments made by the respondent were being reimbursed by the individual clients and the issue was thus clearly confined to that of a reimbursement of expenses incurred for and on their behalf. The respondent also did not place reliance on any material which may have indicated that the reimbursements were subject to a mark up that may have been charged by the respondent.
CESTAT has ultimately observed non-taxable amount includes amounts like customs duty, BAF & CAF charges, ocean freight and air freight. All these amount are paid by the appellant on behalf of the client and later on are reimbursed. Thus, same cannot be taxed as they are in nature of reimbursements. Bearing in mind the aforesaid, we find no substantial issue of law that can be said to arise in this appeal.
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2024 (10) TMI 1463
Reversal of CENVAT Credit - 'total Cenvat credit taken' instead of 'common Cenvat credit taken' for the purpose of reversal of credit under Rule 6(3A) (c) (iii) of the Cenvat Credit Rules, 2004 - the term 'total Cenvat Credit taken' used in the provision of Rule 6(3A)(c)(iii) of Cenvat Credit Rules, 2004 is unambiguous or not - Whether the 2nd respondent is correct in placing reliance on the Stay Order of the Hon'ble Tribunal in the case of Thyssenkrupp Industries [2014 (10) TMI 476 - CESTAT MUMBAI] to hold that only 'total Cenvat credit taken' should be considered in the formula under Rule 6(3A)(c)(iii) of Cenvat Credit Rules, 2004? - failure of the appellant to maintain separate account as is contemplated under Rule 6(2) of the CENVAT Credit Rules, 2004.
HELD THAT:- It is evident that it is the common input services taken during financial year and not the total CENVAT credit which has to be considered for reversal under Rule 6 (3A)(c)(ii) of the CENVAT Credit Rules, 2004. The distortion in the old Rules as it stood during the period in dispute in Rule 6 (3A)(c)(ii) of the CENVAT Credit Rules, 2004 was cured to ensure both manufacturers/service providers do not pay reverse/pay the amount under Rule 6 (3A)(c)(ii) of the CENVAT Credit Rules, 2004 in excess - the trading activities carried out by the appellant were “exempted service” within the meaning of the provisions of the CENVAT Credit Rules, 2004. The trading activities carried out by the appellant were “exempted service” both before and after amendment to the Rules.
As far as the present dispute is concerned, Rule 2(e) of the CENVAT Credit Rules, 2004 is relevant as it stood prior to 2016. It has not undergone any change for the purpose of this inquiry. Similarly, Rule 6 of the CENVAT Credit Rules, 2004 also underwent few changes - During the period in dispute between April 2013 to March 2015, the Rule 6 of the CENVAT Credit Rules, 2004 read slightly different from how it read after the amendment vide Notification No.13/2016-CE (NT) dated 01.03.2016.
The “traded goods” became “exempted goods” defined in Rule 2(d) of the CENVAT Credit Rules, 2004 and included “non-excisable goods” cleared for a consideration from the factory under the new dispensation.
All through the period right from inception till 2016, the provisions read identically. For the Assessment Years 2011-2012, 2012-2013 and 2015- 2016, the appellant's appeal was also allowed by the Tribunal. The dispute in these two cases pertain to the Assessment Years 2013-2014 and 2014-2015 which prior to 2016. Since, the provisions have been amended to remove distortion arising out of strict application of the old format, we see no reasons to take a different stand in this appeal.
The appellant shall be entitled for consequential relief if any - the Impugned Order deserves to be set aside and is accordingly set aside - Appeal allowed.
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2024 (10) TMI 1462
Non-payment/ short payment of service tax - demand of service tax + Education Cess+ Secondary & Higher Education Cess - HELD THAT:- Appellant in the present case even before the Original Authority did not contested anything in the show cause notice except for certain computations - The findings or facts rendered by both the authority no nonpayment/ short payment of service tax cannot be faulted with. Even as per the calculation chart submitted by the appellant they have admitted that short payment of service tax to the tune of Rs 5,44,492/-
That being so, the quantum of short payment needs to be re-determined after allowing the deduction of the amount claimed by the appellant to be towards service tax paid by Hindalco. For the limited purpose of re-computing the demand after allowing this deduction from the gross value matter is remanded back to the original authority.
The findings recorded by the authorities below cannot be disputed in respect of limitation, as the appellant was well aware that he was providing taxable services and short paid the service tax, even after issuing invoices indicating the services tax payable and collecting the same from the service recipient. Before the original authority appellant have specifically admitted and has stated that they do not intend to contest the demand made on any ground other than the quantification. In view of the specific averments made by the appellant to this effect in their submissions to the adjudicating authority and during the course of hearing before him, we are not inclined to admit any such plea at this stage. These pleas have been subsequently raised by the counsel for the appellant at the time of hearing before us.
Thus, we uphold the penalties imposed upon the appellant under Section 77 & 78. However the quantum of penalty under Section 78 shall have to be determined after re-computation of the demand in the remand proceedings. We remand the matter to original authority for the limited purpose.
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2024 (10) TMI 1461
Interpretation of N/N. 01/2006-ST for availing abatement on services provided - Department has entertained a view that the service of the insulation provided by the appellant falls outside the preview of the eligibility criteria for the abatement as per Notification No. 01/2006-ST dated 01.03.2006 as amended - HELD THAT:- The matter is no longer res Integra as the issue at hand has already been decided by the Tribunal in the similar circumstances in favour of the appellant.
The relevant extract of the order in case of RUDRA ENGINEERING VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, VADODARA-I [2024 (2) TMI 1450 - CESTAT AHMEDABAD] has held that 'From the definition of Works Contract Service, it is clear that only specified categories of works contract are considered for levy of Service Tax under the said definition. These are enumerated in clauses (a) to (e). We find that in clause (a) thermal insulation also mentioned and in the present matter appellant had also paid VAT/ sales tax on goods which is used in installation of thermal insulation. We find that the impugned activity of the assessee was nothing but “works contract service”.'
The facts of the present matter are similar to the matter decided by the Division Bench of this Tribunal - the impugned order in appeal without any merit and therefore the same is set aside - appeal allowed.
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2024 (10) TMI 1460
Justification of reduced penalty - setting aside refund sanction by Assistant Commissioner due to penalty reduction - HELD THAT:- A perusal of section 11AC of the Central Excise Act shows that the section itself provides for penalty equal to 100% and further provides that if the demand is paid along with penalty within 30 days of the order, the penalty shall be only 25%. Thus, both the penalty of 100% and its reduction to 25% on fulfilment of some conditions are mandatory. Even if penalty of 100% is imposed and it is not mentioned in the order in original that the penalty shall stand reduced to 25% if the duty, interest and penalty were paid within 30 days, if the assessee pays within 30 days and thereby fulfils the requirements for reduction of penalty, it will be entitled to that reduction.
In this case, the Commissioner did indicate in his order about reduction of penalty but the Tribunal did not mention it in its order. However, that does not mean that the Tribunal has enhanced the penalty to 100% even though the appellant had fulfilled the conditions for reduced penalty. The Commissioner (Appeals) clearly mis-read the Tribunal’s order and on that ground set aside the refund sanctioned by the Assistant Commissioner.
The impugned order is set aside - the order of the Assistant Commissioner is restored - appeal allowed.
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2024 (10) TMI 1459
Confiscation of boxes of branded ceramic floor / wall tiles seized at the premises[693 boxes] - boxes of ceramic glazed wall tiles cleared from the factory without payment of appropriate Central Excise duty and without declaring correct MRP - imposed a fine and penalty in lieu of confiscation - imposition of personal penalty of Rs.15,000/ under Rule 26 of Central Excise Rules, 2002 on Managing Partner -
Whether MRP could be revised in regard to ceramic tiles which were manufactured and cleared from the factory of the manufacturer prior to 28/02/2008? - HELD THAT:- As there has been enough litigation as stated by the appellant and appeal of the department is pending in Supreme Court without stay. This Court also finds that the legal proposition about alteration of MRP as laid down in the case of Acme Ceramics[2014 (10) TMI 14 - CESTAT AHMEDABAD] is clear on this aspect which has been followed even in number of cases as cited (supra) and which concludes that absence of provision relating to demand of duty in case of change of MRP and from whom for the period 01.03.2008 is fatal to the Revenue’s case.
In view of consistent decisions of this bench this court is inclined to follow the aforesaid decisions in this case also and holds that the lack of provision at the relevant time goes against the Revenue.
This court also finds that the case law cited by the learned Advocate cited above that if there is no demand of duty there cannot be any imposition of penalty and fine is relevant for setting a side penalties. The appeals filed by the appellants are therefore, liable to succeed and same are allowed with consequential relief.
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