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Showing 21 to 40 of 406228 Records
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2024 (5) TMI 343 - ITAT PUNE
Income from Other Sources u/s 56(2) - interest received u/Sec. 28 of the Land Acquisition Act, 1894 granted by the learned Reference Court - HELD THAT:- As decided in Raghunath Budhaji Patil, Uran [2023 (4) TMI 1323 - ITAT PUNE] has already settled the issue in assessee’s favour and against the department wherein as held that taxability of the assessee’s interest income received under section 28 of the Act is covered in assessee’s favour as per the hon’ble high court’s Bombay bench [2019 (8) TMI 518 - BOMBAY HIGH COURT] holding that the same is not taxable under section 56(2)(viii) of the Act as against the Revenue’s contentions that the Aurangabad bench of the very hon’ble jurisdictional high court has taken a divergent view against the taxpayer in Shivajirao and Others [2013 (8) TMI 1160 - BOMBAY HIGH COURT] - Decided in favour of assessee.
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2024 (5) TMI 342 - ITAT DELHI
Loss on valuation of foreign exchange contract on M2M basis - addition has been made with regard to loss in the forward contract for foreign currency due to the fall in value on the date of balance sheet i.e. 31/03/2009 - AO while making the addition observed that claim of deduction on account of losses computed on Mark to Market basis cannot be allowed as the losses have not crystallized - CIT(A) deleted the above said disallowance - HELD THAT:- In the case of VS Dempo & Co. Pvt. Ltd [1993 (7) TMI 63 - BOMBAY HIGH COURT] held that loss arising in the process of conversion of foreign currency is a trading loss. As the case of the assessee before the authorities that the assessee booked forward contracts to hedge against the foreign currency fluctuation risk to business transaction viz export orders undertaken by the assessee and hence the taking of the aforesaid hedge cover was incidental to the business. Forward contracts were related to the exports proceeds expected to be received in the course of the business and not for acquisition for any capital asset and hence the loss is arising on revenue account, thus the same is allowable. Contracts entered by the assessee are binding and enforceable in law and hence the loss incurred on the date of balance sheet, due to the adverse exchange fluctuations would be allowable under the mercantile system of accounting entered that the same had not been actually paid, thus the same cannot be termed as notional loss in view of the decisions of Woodward Governor [2009 (4) TMI 4 - SUPREME COURT]
Thus we find no error in the order of the CIT(A) in deleting the subject addition and find no merit in the Ground No. 1 of the Revenue.
Loss on forward contracts - As per the assessee, the losses suffered by the assessee are normal business losses and therefore deductable - speculative loss - - AO made addition on the ground that since the transaction entered into Forex Directive by the assessee Company do not fall in the exclusionary clauses of Section 43(5) - CIT(A) deleted addition - HELD THAT:- The assessee is not a dealer of Foreign Exchange and contract in foreign exchange were to safeguard the business interest of the assessee and conducted in regular course of business, therefore, it cannot be termed as speculative in nature as no motive or action in this regard is in exist. It is not in dispute that there has been no delivery of foreign exchange, but the Forex Company being not a traded commodity as held in the case of Munjal Showa Ltd. [2003 (6) TMI 188 - ITAT DELHI-E] and Soorajmull Nagarmull [1980 (9) TMI 69 - CALCUTTA HIGH COURT] - CIT(A) while deleting the addition has relied on the above judicial precedents. In the absence of any contrary facts or the ratio brought to the notice of the Bench, we find no error or infirmity in the order of the Ld. CIT(A) in deleting the addition, accordingly we dismiss the Ground No. 2 of the Revenue.
Deduction under the forward premium account which represents the amortized loss, computed as the difference between the forward rate and the spot rate at the date of the inspection of the forward exchange contract - A.O. disallowed the same holding that expenditure claimed by the assessee is speculative in nature and hence not allowable as business expenditure - HELD THAT:- We have already dealt with the issue in Ground No. 2 and held that the CIT(A) has committed no error in deleting the addition observing that the forward mark contracts on foreign currency is incurred during the normal course of business and the losses incurred are the part and parcel of the business activity of the assessee, which are allowable as business expenditure and not speculative in nature, thus any expenditure incurred for such premium account computed as difference between the forward rate and the spot rate in such contract is also to be treated as business expenditure incurred in the course of business by the assessee. We find no error in the order of the Ld. CIT(A) in deleting the addition.
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2024 (5) TMI 341 - ITAT AHMEDABAD
Disallowance being 25% of Material Purchase and Indirect Expenses - assessee could not submit any documentary evidence except for the ledger, which can prove the genuineness of the purchase of Material - HELD THAT:- We find that the assessee had not produced the complete books of accounts along with bills and vouchers and other documentary evidence to substantiate the claim of the assessee before the AO. It is quite evident that the material referred by the assessee is relevant to determine the total income and tax liability of the Assessee correctly.
Since the Assessee has produced the documents before the Tribunal in support of his claim, in the facts and circumstances of the case and as the lower authorities had no opportunity to verify the documents produced before us, without commenting anything on the merit of the case, we admit the additional documents produced by the Assessee and in the interest of justice, restore the matter to the file of the AO with a direction to consider the documents produced by the assessee and adjudicate the issues, after giving due opportunity of being heard to the assessee. Accordingly, we partly allow the appeal filed by the assessee. Appeal filed by the assessee is treated as allowed for statistical purposes.
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2024 (5) TMI 340 - ITAT BANGALORE
Validity of reassessment proceedings - Reason to believe - sworn statement recorded from the partner in view of the bogus purchase as later retracted - as per assessee statement recorded u/s 132(4) of the Act which was retracted cannot be relied upon to reopen the assessment u/s 148 of the Act when the department has accepted the retraction - HELD THAT:- As in the present case, the department never accepted the retraction statement filed by the assessee. Being so, at the stage of reopening of assessment by the AO, it is not necessary to have conclusive opinion of escapement of income. On the other hand, he must have prima facie of the opinion that income has escaped from the assessment in these assessment years. To that extent, in our opinion, at the time of reopening of assessment, the AO has reason to believe that income has escaped from assessment on the basis of the sworn statement recorded from the partner in view of the bogus purchase said to be recorded by the assessee in its books of accounts. Being so, we do not find any merit in this ground of the assessee raised before us. This ground of assessee is rejected.
Addition towards bogus purchase - sworn statement recorded in survey proceedings from the partner as later retracted - HELD THAT:- Once a statement is retracted, the contents stated in the retracted statement must be substantially corroborated by other independent and cogent evidence. It has been consistently held by various courts that a sworn statement cannot be relied upon for making any addition and must be corroborated by independent evidence for the purposes of making assessments.
In view of the above, in our opinion, the lower authority erred in holding that the assessee has inserted bogus purchase into his accounts without bringing on any evidence to hold that entire transactions are not genuine and they relied upon only the statement of one of the partner Shri Uday Kumar Salian recorded on 8.2.2018, which was later retracted by all partners vide letter dated 14.2.2018 within short date of 6 days. This has been filed by assessee with department on 15.2.2018, which is not at all considered by the AO.
It is noted that the ld. AO/CIT(A), never mentioned about this retraction statement in their order and this action of lower authorities cannot be appreciated. It is the duty of ld. AO to consider the letter in true perspective and to comment on it which he failed to do so.
For statement recorded from employee of the assessee, who has confirmed bogus purchase from 1.4.2017 to 31.1.2018 for the financial year 2017-18 relevant to assessment year 2018-19 and not for the all-assessment years involved herein - Being so, it cannot be considered that Ms. Amitha given any statement related to bogus purchases relating to all assessment years. This being the position, framing assessment by AO without considering the retraction of statement filed by the assessee, in our opinion, the addition cannot be sustained.
Only argument of D.R. is that assessee has accepted the bogus purchase in the assessment year 2018-19 and settled the issue by VSV Scheme 2020 and also accepted the bogus purchase in the assessment year 2016-17, the addition to be sustained - In our opinion, the acceptance by assessee in one assessment year cannot lead to conclusion that in all these assessment years, the assessee has inserted bogus purchases in a similar way. It cannot be said that the principle of estoppel to be applied. In our opinion, the case of assessee is to be examined in the light of evidence brought on record and in the present case, there was no evidence brought on record with regard to bogus purchase or creation of any undisclosed assets by the assessee in all these assessment years.
Addition could be made only when it is shown by the evidence brought on record that the books of accounts are not reliable as there are material errors and omissions existed therein. In order to support this proposition, we place reliance on the judgment of Umacharan Shaw and Brothers [1959 (5) TMI 11 - SUPREME COURT] wherein it was held that “there was no material on which the ITO could come to the conclusion that the firm was not genuine. There were many surmise and conjectures and if the conclusion is the result of suspicion, which cannot take place of proof in this matter.”
Thus there should be concrete evidence for considering the purchase entries in the books of accounts as bogus. In the present case, sales and purchase shown by the assessee leading to profit and that the profit declared by assessee is progressively increasing from year to year and it cannot be said that purchases were bogus without having any material to suggest that it is a bogus.
Thus once the statement recorded u/s 131 or 131(1A) or 133A of the Act or 133A of the Act is retracted by assessee, AO without rejecting the books of accounts cannot make any additions towards bogus purchases. Accordingly, the addition made on the premise of bogus purchase in all these assessment years is deleted and we allow the ground taken by the assessee in all these appeals.
Addition of personal expenses of partners - Since we have already held that there was no corroborative material to support this addition and the statement has already been retracted, this addition based on no supporting evidence cannot be made.
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2024 (5) TMI 339 - SC ORDER
Maintainability Of Appeal - Bar on monetary limit - Evasion of custom duty - HELD THAT:- It is stated at the Bar that in terms of the latest Circular dated 02.11.2023, the monetary limit has been enhanced to Rs.2 crores. The appeal would have to be disposed of having regard to the said threshold limit as the amount in dispute in the instant cases is only Rs.1,28,73,481/- (Rupees One Crore, Twenty Eight Lakhs, Seventy Three thousand, Four Hundred and Eighty One Only).
In the circumstances, the appeals are dismissed owing to low tax effect.
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2024 (5) TMI 338 - CESTAT AHMEDABAD
Classification of imported goods - Import of branded nutrition/ dietary supplements - liable to IGST at 28% under Sr.No.9 of Schedule IV of Notification No.1/2017-IGST-Rate or at 18% under Sr. No.453 of Schedule III of the said Notification - demand barred by time limitation or not - suppression of facts or not - HELD THAT:- As regard demand being time barred, it is submitted that this is not a case of mis-declaration or mis-classification. The dispute is only regarding applicable rate of IGST. It is settled law that the applicable rate of tax is the function of department. Appellant had claimed one rate as per its understanding and belief. If the department have any objection in the claim of the appellant, nothing prevented the department to make appropriate changes this does not involve any suppression. The department’s view is also based on data and facts, which were on record available at the time of assessment. Since, there is no suppression of fact, the entire demand is time barred.
From the reading of Sr. No. 9, it is seen that the description of goods covers food preparations not elsewhere specified or included i.e. Protein concentrates and textured protein substances, etc. From the description of the goods imported by the appellant, clearly do not fall under the description Protein concentrates and textured protein substances. Since, in the entry the word “i.e.” is prefixed that means only the description mentioned after “i.e.” are covered because i.e. denotes the specific item. Therefore, as per the list of the item imported by the appellant, none of the goods is covered under Protein concentrates and textured protein substances.
Therefore, the aappellant’s imported goods are not covered under Sr. No. 9. The appellant claimed the IGST rate @ of 18% as per Sr. No. 453 of Schedule III, which reads as goods of any chapter which are not specified in schedule I,II,IV,V or VI. As discussed, the appellant’s goods is not specified in schedule IV which is claim of the department. The same will fall under Sr. No. 453. Accordingly, the correct rate of IGST applicable is 18% under residuary entry Sr. No. 453 of schedule III of IGST Notification 01/2017- Integrated Tax (Rate) dated 28.06.2017, as amended. The very issue has been considered by this Tribunal in the case of Neuvera Wellness Venture 2023 (10) TMI 964 - CESTAT AHMEDABAD.
Thus, it can be seen, the facts of the said decision and that of the present case are absolutely identical. Therefore, the ratio of the above decision is directly applicable in the fact of the present case. Accordingly, impugned order is not sustainable.
Hence, the same is set aside. Appeal is allowed.
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2024 (5) TMI 337 - CESTAT BANGALORE
Seeking extension of the warehousing period due to COVID-19 pandemic and to permit re-export - without insisting for payment of duty, interest and without imposing fine and penalty - Import of insulated Glass Unit with accessories for a multi-storied office building project - HELD THAT:- The issue in the present appeal is limited to illegality in clearance of bonded warehouse goods within the stipulated period of time. As per the impugned order, it is evident that the appellant made a request for extension of period and pleaded that there is no willful negligence on the part of appellant to clear the goods during the warehousing period and it is only due to the COVID-19 situation. As per the Circular issued by the Board circular 3/2003 dated 14.01.2003.
From the above Circular and considering the ratio of the judgment of Hon’ble Supreme Court in Cognizance for extension of Limitation [2022 (1) TMI 385 - SC ORDER], when a request is made especially in a situation like COVID-19 and where there is no allegation of any fraud of willful omission on the part of importer, the respondent ought to have allowed re-export of goods without insisting for payment of duty, interest and without imposing fine and penalty.
Thus, the appeal is allowed and the impugned order is set aside. The respondent is directed to allow re-export of goods within a period of 3(three) months from the receipt of the Final Order without insisting for payment of duty, interest, fine and penalty.
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2024 (5) TMI 336 - CESTAT AHMEDABAD
Re-Classification of "Hot/Cold Rolled Stainless Steel Coils Grade 13" ("subject goods") - Denial of exemption under Sr. No. 734 of customs Notification No. 50/2018- Cus - Extended period of limitation - duty demand - Interest - Penalty - Change of classification on the basis that the 1% Nickel content in the product - HELD THAT:- The whole case was made out for change of classification on the basis that the 1% Nickel content in the product will not qualify the imported goods as ''Nickel Chromium Austenitic Stainless Steel''. The important point to be examined is to qualify the product namely, Nickel Chromium Austenitic Stainless Steel whether it is mandatory to have Nickel content of 4.5% to 12% or otherwise.
We find that department's reliance on the websites of M/s Aalco metals ltd. (England and Wales) and M/s ASM international Limited cannot be a conclusive factor to classify the product as other than Austenitic Nickel Chromium Stainless Steel for the reason that from the said evidence it is clear that not only those products which contain 4.5% to 12% Nickel will fall under Austenitic Stainless Steel but even the low content Nickel in Stainless Steel will also fall under Austenitic Stainless Steel. Therefore, the mere reliance on the websites of M/s Aalco metals ltd. (England and Wales) and M/s ASM international Limited is incorrect for arriving at classification. Therefore, on the fact of the case which is not under dispute and on the authority mainly Indian Standards, the goods imported by the appellant are correctly classifiable under Chapter Tariff Heading 7220 9022 as Nickel Chromium Austenitic Type.
Without prejudice to the above, we also find that the adjudicating authority has not confirmed the classification proposed in the show cause notice. The department in the show cause notice in respect of Hot Rolled Nickel Chromium Austenitic Type was proposed to be classified under 7220 1090 and Cold Rolled Nickel Chromium Austenitic Type was proposed to be classified under 7220 9090 whereas the adjudicating authority decided the classification of both the product under 7220 1229 and 7220 2029 respectively. It is a settled legal position that if the goods cannot be classified under a classification which has been proposed in the show cause notice, then even if its correct classification is different than the classification claimed by the assessee, the entire show cause notice fails on this point itself.
It is settled that the department cannot travel beyond the proposals made in the show cause notice. In the present case the impugned order travelled completely beyond the classification proposed in the show cause notice. Therefore, on this ground also, the impugned orders are not sustainable.
We find that the entire case is based upon Mill Test Certificate or the documents produced by the appellant. The Nickel content was very much available in the Mill Test Certificate, therefore there is no suppression on the part of the appellant. Since the case was made out on the basis of Nickel content which was available before the department, the department could have taken the action within the normal period. In these facts, since no suppression of fact is there and the show cause notice was issued beyond two years from the import, the entire demand is time barred. In this regard, the judgments cited by the appellant support their case on limitation also.
Thus, we are of the view that the demand is not sustainable on limitation also.
As per our discussion and finding made herein above, the impugned orders are not sustainable, hence, the same are set aside. Appeals are allowed with consequential relief, if any, in accordance with law.
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2024 (5) TMI 335 - CESTAT NEW DELHI
Appealable order - Communication for fixing the next date - Seeking grant of permission to cross examination of the officers and witnesses to be reviewed - Whether the impugned communication addressed by the Superintendent (Adjn.) to the appellant would be considered as an ‘order’ for filing of appeal before the Tribunal, in terms of section 129A - Without disposing the request application made by the appellant for cross examining the witnesses, whether the adjudicating authority can proceed to decide the SCN by granting the date of personal hearing to the appellant? - HELD THAT:- Section 129A ibid provides various decisions and orders passed by different authorities for filing of appeal before the Tribunal. Clause (a) of sub-section (1) of section 129A ibid provides that a decision or order passed by the Commissioner of Customs may be appealed against before the Appellate Tribunal. In this case, the impugned communication dated 25-09-2023 has conveyed the date of personal hearing fixed before the adjudicating authority in respect of the SCN dated 20.10.2022 issued by him. The notice for personal hearing issued by the Superintendent is only a communication of the date fixed by the Commissioner of Customs and is not a decision of the Superintendent himself. Normally, it is for the Commissioner to fix or re-fix the dates of personal hearing. However, the grievance of the appellant is that no decision has been taken by the Commissioner on its request for cross examination. In our considered view, for this reason, this should be construed as an ‘appealable order’ for filing of appeal before the Tribunal, in terms of the above statutory provisions.
The views of the DRI on the cross examination neither give it an opportunity to appeal (because DRI is not the adjudicating authority) nor allow it for cross examination. Therefore, we conclude that the appellant has correctly filed the appeal before the Tribunal against the impugned communication dated 25.09.2023 addressed by the Superintendent (Adjn.).
On perusal of the letter dated 12.09.2023 and the impugned communication dated 25.09.2023, we are of the view that the adjudicating authority was simply carried away by the views of the Deputy Director of DRI that the request for cross-examination of various persons should not be accepted and he simply got a copy of the DRI’s letter sent to the noticee and has not taken a decision on the question of allowing cross-examination.
It is incumbent upon the adjudicating authority to decide on the request independently and in a just and fair manner, and communicate it with reasons to the appellant and then he can fix the personal hearing. We are of the view that fixing the personal hearing in the matter without considering and deciding on the application for cross examination and instead sending a copy of the letter of DRI on the request is not correct.
Thus, we find that the impugned communication dated 25.09.2023, fixing personal hearing without deciding on the request for cross examination and instead sending a letter from DRI on the question of cross-examination (although it does not explicitly say that DRI’s views have been adopted by the Commissioner) deserves to be set aside and is accordingly, set aside. We cannot countenance any difficult in the Commissioner taking an independent view on this application and conveying it to the appellant before fixing the personal hearing.
In the result, the appeal is allowed. The Commissioner may take a decision on the request for cross-examination independently and communicate it to the appellant and then proceed further. The miscellaneous application also stands disposed of accordingly.
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2024 (5) TMI 334 - SUPREME COURT
Disqualification from participating in the tender - Scope of the Balance Sheet Prepared under the Companies Act - Importance of explanatory notes to the Balance Sheet - rejection of technical bid on the premise that it has not complied with the necessary pre-requisite qualification in filing the explanatory notes of account being an integral part of the Balance Sheet - HELD THAT:- The Balance Sheets can only be understood by going into the factual narrations made in the explanatory notes of accounts. When one speaks about Balance Sheet, it takes along with it the explanatory note. To be noted, all the other bidders have complied with this part, even M/s. BVG India Ltd. was quite conscious of the said compliance as could be seen from one of the communication made by it. Thus, it is held that the reasoning of the High Court, finding fault with disqualification of the technical bid of M/s. BVG India Ltd. cannot be sustained in the eye of law.
The only other issue to be considered is with respect to disqualification of M/s. Pashupatinath Distributors Private Limited. All the bidders had been called for a meeting and their queries have been answered by the tendering authority. As rightly pointed out by the learned senior counsel appearing for the respondent No.1, the document concerned would clearly show that even the technical committee was of the view that the request made by M/s. Pashupatinath Distributors Private Limited to dilute Clause 2.2 and 2.3 is not feasible of consideration. While interpreting the terms of a tender, a simple interpretation is to be followed.
Thus, both M/s. BVG India Ltd. and M/s. Pashupatinath Distributors Private Limited are disqualified from participating in the tender concluded. In view of the aforesaid conclusion, the ultimate decision of the High Court in remitting matter back for a fresh consideration by the State is upheld while clarifying that the aforesaid two entities cannot be permitted to participate with the existing disqualification as discussed above, unless they are otherwise qualified in the light of the interpretation of the notice inviting tender.
Appeal disposed off by way of remand.
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2024 (5) TMI 333 - NATIONAL FINANCIAL REPORTING AUTHORITY
Professional misconduct by CA - Liability of the Engagement partner with audit firm - Failure to submit requisite information and non-cooperation with NFRA - Penalties and sanctions - HELD THAT:- It is established that M/s PCN & Associates, and CA Gopala Krishna Kandula committed professional misconduct by not submitting the requisite information to NFRA; not attending personal hearing; and submitting false affidavit. We conclude that the following failures on their part, as contained under the Articles of Charges in the SCN, stand established:
a) Failure to exercise due diligence and being grossly negligent in the conduct of professional duties as defined by clause 7 of Part I of the Second Schedule of the Chartered Accountants Act 1949.
b) Failure to supply the information called for, and non-compliance with the requests of NFRA, as defined in clause 2 of Part-II of First Schedule of The Chartered Accountants Act, 1949.
Considering the professional misconduct by the Firm and the EP; and considering the nature of the violation, in exercise of powers under section 132(4)(c) of the Companies Act, 2013, it is ordered as follows:
a) Imposition of a monetary penalty of Rupees Fifty Lakhs upon. M/s PCN & Associates (FRN: 0160168), the Audit Firm and Rupees Thirty Lakhs upon CA Gopala Krishna Kandula (ICAI Membership No. — 203605), the Engagement Partner.
b) In addition, M/s PCN & Associates and CA Gopala Krishna Kandula are debarred for a period of Two years and Ten years respectively from being appointed as an auditor or internal auditor or from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate.
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2024 (5) TMI 332 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI
Rejection of claim filed by appellant - Role of the Liquidator - Appellant states that the Respondent / CD, did not perform its part of the contract from its inception and did not establish the letters of credit as contemplated - HELD THAT:- It is the Appellant’s case that the CD having awarded the purchase order and the work order failed to honor its obligations and therefore, the Appellant could not get the expenditure incurred by it on these accounts to the tune of Rs.31.71 crore from the CD and therefore, it should be considered a debt due to be repaid by the CD and that the RP having admitted an amount of Rs.13.47 crore, payable by CD, to the Appellant, later changed his position to Rs.1.51 crore, as receivable from the Appellant to CD in contravention of the provisions of Insolvency and Bankruptcy Code, 2016 and the Liquidation Regulations.
The Respondent / Liquidator fairly addresses these points by stating that the items of claim not admitted by her as ‘due payable’ are those for which no documents such as invoice / dispatch documents were available in the records of CD and which were not also provided by the Appellant. She has also fairly answered the point by stating that the disallowed claims could be due to non-performance of CD which will require adjudication by a competent Civil Court / Arbitrator, before they can be translated into ‘Dues’ within the framework of IBC and has cited the relevant law in form of a decision by the Hon’ble Apex Court to support her assertion. It is also seen that the Respondent / Liquidator has given sufficient reasons for disallowing the claim of the Appellant in her letter to the Appellant.
It is also seen that the AA / NCLT, Hyderabad have dealt on these issues in detail and given succinct reasons as to why they have accepted the submission and reasoning of the Liquidator as to why she has rejected the claim of the Appellant. They have rightly held that when claim and counter claims are involved Liquidator cannot decide the same and therefore the Liquidator rightly rejected the claim.
The appeal is devoid of merits and deserves to be dismissed and is accordingly dismissed.
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2024 (5) TMI 331 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI - LB
Seeking to Condone Delay of 14 days in filing the Appeal - Sufficient cause for delay or not - HELD THAT:- It is seen that the Respondent has at least offered the index of the typed set of papers annexed to the Appeal before NCLAT and the Application filed before NCLT to support his contention. On the other hand, the Appellant has not shown a single document which as per his claim took a long time to trace and collect. This makes to come to the conclusion that ‘sufficient cause’ has not been demonstrated to merit condonation of delay of 14 days beyond the 30-day period.
The Appellant has cited a number of decisions of Hon’ble Supreme Court to support his plea that a liberal approach be adopted for condonation of delay even in matters arising under the IBC. In this matter, it is said that the objective of IBC is to ensure timely resolution of insolvency and accordingly provisions have been put in place including strict timelines for the legal and administrative processes and therefore, adopting a liberal approach, needless to say, will defeat the objectives of the Code and will run counter to the view expressed in V NAGARAJAN VERSUS SKS ISPAT AND POWER LTD. & ORS. [2021 (10) TMI 941 - SUPREME COURT].
The Company Appeal is not ‘entertained’, and hereby ‘Rejected’.
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2024 (5) TMI 330 - CESTAT CHENNAI
Exemption from service tax - Business Auxiliary Service - providing transportation of agricultural produce - Exemption as per Sl.No.21, 22 of the Mega N/N. 25/12 dt. 20.06.2012 - De-novo order passed by the adjudicating authority during the pendency of the appeal - HELD THAT:- The Commissioner (Appeals) vide order impugned in this appeal had remanded the matter. It is to be noted that the present appeal has been filed by the appellant after complying with the mandatory predeposit. Prior to 06.08.2014, the Section 35F of Central Excise Act as made applicable by Section 83 of Finance Act, 1994 included the procedure to file stay application along with appeal. The Tribunal then had to consider the stay applications and direct to make predeposit in order to grant stay of recovery of the demand by the department. After introduction of new Section 35F w.e.f 1.8.2014, the assessee has been cast with the responsibility of making a mandatory predeposit. The procedure of filing stay application has been given away with. The requirement to make mandatory predeposit implies that the recovery proceedings are stayed during pendency of the appeal before the Tribunal.
Coming to the merits of the case, the Commissioner (Appeals) has analysed the issue and after considering the submissions made by the appellant that they are eligible for exemption under Sl.No.21, 22 of Notification No.25/2022 has remanded the matter to verify whether the transportations were made for agricultural produce. Taking note of this fact as well as the submissions made by the learned counsel at the time of hearing, the matter requires to be remanded to the adjudicating authority who is directed to look into the documents produced by the appellant with regard to transportation of goods. In case, the transportation is for agricultural produce, the appellant is eligible for exemption.
The matter requires to be decided on merits as well as on limitation and is remanded to the adjudicating authority leaving all issues open - appeal is allowed by way of remand to the adjudicating authority.
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2024 (5) TMI 329 - CESTAT ALLAHABAD
Benefit of exemption from service tax - Vehicle Hire Charges - Rent received for their trailers (vehicles) rented to M/s Kataria Carriers, Kanpur - Supply of transport vehicles to Goods Transport Agency - availability of CENVAT Credit on Document Charges, terminal handling charges and bill of lading charges - invocation of extended period of limitation - levy of penalty u/s 76 & 78 of FA.
Whether the appellant was liable to pay service tax under the category of “Supply of Tangible Goods Service” on the rented received for their trailers (vehicles) rented to M/s Kataria Carriers, Kanpur? - HELD THAT:- Commissioner has denied the benefit of the said exemption as per N/N. 29/2008-ST dated 26/06/2008, 01/2009-ST dated 05/06/2009 and clause 22(b) of Mega- exemption Notification No. 25/2012-ST, only by stating that appellant has failed to produce the documentary evidence to show its eligibility to the said notification. They have failed to produce the documents as specified in Notification No 01/2009-ST. There are no hesitation in accepting the contention of Commissioner, to the effect that the exemption notifications need to be strictly construed and it is for the person claiming the benefit of exemption to satisfy with regards to his eligibility to the exemption.
From perusal of the invoices it is quite evident that the name of the recipient of services is clearly mentioned as “Kataria Carriers, H O 133/198 T P Nagar, Kanpur -208023” and description is stated as “Goods Transport Vehicle (Trailers) Hire Charges”. Appellant has substantially complied with the conditions as laid down by the Notification No 1/2009-ST and the benefit of this notification cannot be denied to them. For other periods for which this demand has been confirmed even the notification do not lay down this condition and hence the benefit of same cannot be denied. Thus, the demand made in the impugned order on this ground needs to be set aside.
Whether the CENVAT Credit was admissible to them on the Document Charges, terminal handling charges and bill of lading charges? - HELD THAT:- Undisputedly appellant is a provider of taxable service and is registered with the department for providing output services - Having satisfied the conditions as laid down by the main clause of the definition of output services, the appellant would be eligible for CENVAT Credit in respect of these services, even without reference to the inclusive part of the definition. Appellant has contested the denial of CENVAT Credit before the adjudicating authority by referring to the inclusive part of definition and the said challenge was not accepted. Similar view has been expressed by Hon’ble Gujarat High Court in the case of Excel Crop Care Ltd [2008 (7) TMI 160 - HIGH COURT GUJARAT] where it was held that 'The definition of the term ‘output service under Rule 2(p) of the Rules means any taxable service provided by the provider of taxable service, to a customer, client, subscriber etc. The Explanation to the said clause makes it clear that if a person liable for paying Service tax does not provide any taxable service or does not manufacture final products, the service for which he is liable to pay service tax shall be deemed to be the output service. Similarly, the definition of the phrase provider of taxable service’ appearing in Rule 2(r) includes a person liable for paying Service tax.' - thus, there are no merits in this part of the order seeking to deny the credit in respect of these input services used by the appellant for providing the output services.
Whether extended period of limitation is available for making this demand? - Whether penalty under Section 76 & 78 can be imposed on the appellant? - HELD THAT:- As the demands set aside on merit, these issues are not relevant and no findings recorded in respect of these issues.
There are no merits in the impugned order and the same is set aside - appeal allowed.
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2024 (5) TMI 328 - CESTAT BANGALORE
Reversal of CENVAT Credit - common facilities used in providing taxable and exempted services - non-maintenance of separate accounts as per Cenvat Credit Rules (CCR), 2004 - short payment of service tax which occurred due to utilisation of ineligible CENVAT credit - HELD THAT:- The issue on hand can be analysed separately for two periods (a) upto March 2008 and (b) after April 2008, when Rule 6 of CCR, 2004 was amended. - (a) For the period upto March 2008, there was no provision for proportionate reversal of the credit already taken and if entire credit is availed, they could utilise only 20% of the output tax of a month through cenvat credit - (b) For the period after April 2008, a procedure has been prescribed under Rule 6(3A) to provisionally reverse the credit every month based on a calculation/ formula prescribed therein and to finally pay difference in reversal after completion of annual calculation by 30th June of the succeeding year.
The appellant submitted the certificates issued by Chartered Accountant(CA) to prove that they have maintained separate accounts. However, adjudication authority has not considered the certificates issued by CA, since it does not report that it is maintained from receipt stage and also do not state that they are in conformity with the statutory provisions viz., Rule 6 of CCR, 2004.
On a combined reading of the report of Range officer, findings of the Adjudication authority as stated above and considering the report of Chartered Accountant(CA), which categorically certified that the appellant is maintaining separate records and have been making reversal of balance amounts at end of every month, the appellant has complied with the provisions of rule 6 of CCR, 2004 and hence findings in the impugned orders are not sustainable.
However, it is found that there is an amount of 29,24,565/- which remains to be reversed by them. Thus, this amount is required to be reversed along with interest.
Appeal allowed.
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2024 (5) TMI 327 - CESTAT NEW DELHI
Levy of service tax - act of providing ‘corporate guarantee’ to the respondent for grant of loan from the banks without any consideration - HELD THAT:- There has been a consistent finding in all the decisions that the party had provided corporate guarantee on behalf of its sister concern to its lenders, who had not charged any commission or fee for providing guarantee and hence such activity is not chargeable to service tax.
The observations made by this Tribunal in the latest decision in M/s.Pharmax Corporation Ltd. [2024 (3) TMI 1179 - CESTAT NEW DELHI] where it was held that 'The service provider shall be liable to pay service tax on the consideration which it receives for providing a taxable service. Any amount which is received but which is not a consideration for providing a taxable service is not exigible to service tax. Similarly, if a service is rendered, but no consideration is received no service tax can be charged. It is for the reason that if the consideration received is zero any percentage will be zero itself.'
In the present case, it is found from the show cause notice, order-in-original and the impugned order that no consideration has been paid by the respondent in lieu of the corporate guarantee and in view of the judicial pronouncements, there are no reason to distinguish the same in the facts of the given case. Consequently, no service tax is leviable on the respondent on account of ‘corporate guarantee’.
The impugned order deserves to be upheld - appeal of Revenue dismissed.
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2024 (5) TMI 326 - CESTAT NEW DELHI
Levy of service tax - water charges paid by the appellant to the department in lieu of supply of water under the Agreement dated 05.01.2013 - transfer of right to use the water by the Government to the appellant - deemed sale - HELD THAT:- A perusal of the Agreement executed between the government of Madhya Pradesh and the appellant would indicate that the appellant had applied to the government for permission to draw water from the Rihand Reservoir for use in the power project and the government had agreed to grant the said permission on certain terms and conditions in consideration of the appellant making payment to the government. The said permission was granted for a term of 30 years subject to the provisions of the Madhya Pradesh Irrigation Act 1931 and the Madhya Pradesh Irrigation Rules 1974 as is clear from clause 1 of the Agreement.
The Title of the Agreement shows that it was for supply of water to the industrial power plant. The appellant was required to pay water charges to the government for the water drawn by it from the government water source at the rates fixed by the Water Department which would be Rs. 5.50/- per cubic meter. In addition, the appellant was also required to pay local fund cess or any other tax as may be fixed by the government. The appellant was required to make its own arrangement at its own cost for drawl of water from the water resource of the government to the plant - The appellant has to pay water rates/water charges depending on the quantity of water drawn by the appellant. The Agreement also deals with a situation where there can be reduction or shortage in the water supply. This clearly means that the Agreement is for supply of water and not mere access to water source.
It is, therefore, more than apparent that the Agreement is for supply of water by the government to the appellant and is not for assignment of any right to the appellant to use the natural resources of the government.
The appellant is justified in asserting that the Agreement executed between the appellant and the government is for supply of water for which charges are paid by the appellant on the basis of volume of water drawn and it is not a case of assignment of right to use natural resources of the government - no service was provided by the government to the appellant. The impugned order, therefore, deserves to be set aside on this ground alone.
Appeal allowed.
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2024 (5) TMI 325 - CESTAT AHMEDABAD
Entitlement to Cenvat credit on the entire credit distributed by their head office despite the fact that the appellant company having three units - period April 2008 to March 2012 - HELD THAT:- In view of strict interpretation of Rule 7 prevailing prior to 01.04.2012, the entire credit distributed by the head office of the appellant to the appellant’s unit alone is absolutely in the order and the same cannot be disputed.
This issue has been considered by the Hon’ble Bombay High Court in the case of THE COMMISSIONER, CENTRAL TAX, PUNE-I COMMISSIONERATE VERSUS M/S. OERLIKON BALZERS COATING INDIA P. LTD. [2018 (12) TMI 1300 - BOMBAY HIGH COURT] wherein it was held that 'our attention is invited to Rule 7 of the CENVAT credit Rules, 2004 as substituted w.e.f. 1.4.2016 which has made it mandatory for distribution of input services to the various units providing output services. This is evidence by the use of words “shall distribute the Cenvat Credit” in the substituted Rule 7 as Cenvat Credit Rules 2004 w.e.f. 1.4.2016. Therefore, on plain reading of Rule 7 as existing both pre and post amendment 2012 covering period involved in these proceedings, the respondent - assessee was entitled to utilize the CENVAT credit available at its Pune unit.'
Thus, the entire demand which is contrary to the Provision of Rule 7 and the various judgments given on this issue, the demand is not sustainable - the impugned order is set aside - appeal is allowed.
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2024 (5) TMI 324 - CESTAT BANGALORE
Recovery of the cenvat credit wrongly availed along with interest and penalty - input services or not - Management Consultancy or Business Services - credit availed based on the invoices issued by M/s. Biocon Ltd. for mark-up fees / milestone fees against permanent services agreed to be provided - January 2009 to November 2012 - burden to prove on manufacturer.
The adjudicating authority has held that the permanent services include ineligible services like supply of electricity, back-up power, steam, supply of water, extending canteen facilities, Effluent Treatment Plant(ETP) charges, potable water supply charges, etc.; hence not input service; accordingly the mark-up fees / milestone fees paid to the Biocon Limited in connection with ineligible permanent services are not covered under the scope of Rule 2(l) of the Cenvat Credit Rules, 2004.
HELD THAT:- The reasoning of the adjudicating authority deserves to be rejected on two grounds: on going through the individual services i.e. supply of electricity, back-up power, steam, supply of water, extending canteen facilities, Effluent Treatment Plant(ETP) charges, potable water supply charges, etc. necessary for manufacturing activities and it cannot be said to have not been used in or in relation to the manufacture of finished excisable goods from the same premises, which was taken over by the appellant from Biocon Limited. Secondly, putting all these individual services under the taxable category of ‘Management Consultancy Services’ on which service tax paid by Biocon Limited and not objected to by the Department for the relevant period from 2009 to 2012 cannot be questioned in the hands of the receiver i.e. appellant while availing cenvat credit on the said taxable services.
This principle has been upheld by the Hon’ble Supreme Court in the cases of SARVESH REFRACTORIES (P) LTD. VERSUS COMMISSIONER OF C. EX. & CUSTOMS [2007 (11) TMI 23 - SUPREME COURT] and COMMISSIONER OF CENTRAL EXCISE & CUSTOMS VERSUS MDS SWITCHGEAR LTD. [2008 (8) TMI 37 - SUPREME COURT] which has been followed subsequently by this Tribunal in a series of cases - it was held in the case of MDS SWITCHGEAR LTD. that 'A quantum of duty already determined by the jurisdictional officers of the supplier unit cannot be con tested or challenged by the officers in charge of recipient unit.'
There are no reason to deny the cenvat credit availed by the appellant on Business Support Services received against Support Services Agreement dated 18.07.2007 on which service tax paid by M/s. Biocon Limited under the Management Consultancy Services during the said period - the impugned order is set aside.
Appeal allowed.
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