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Showing 201 to 220 of 2028 Records
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2019 (5) TMI 1828
TP Adjustment - comparable selection - HELD THAT:- Assessee is mainly engaged in provision of software development services related to design, implementation, maintenance with respect to ICs as per the specifications prescribed by the AEs, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Exclude Persistent Systems Ltd., Thirdware Solutions Ltd, Wipro Technology Services Ltd, E-Zest Solutions Ltd, Tata Elxsi Ltd,Acropetal Technologies Limited (Seg.),E-Infochips from the list of comparables on account of functional dissimilarities.
Larsen & Toubro Infotech Ltd. (L&T) - We find the Tribunal in assessee’s own case for assessment year 2010-11 has discussed the issue of exclusion of L&T as a comparable and has restored the issue to the file of Assessing Officer/TPO for deciding the issue afresh. Respectfully following the above we deem it proper to restore this issue to the file of the TPO for considering the exclusion of this company from the list of comparables.
Persistent Systems Ltd excluded from the list of comparables on account of FAR differences.
Persistent Systems and Solutions Ltd. is concerned, we find this company is functionally different since it provides support in software development, consultancy and systems integration services to Persistent group of companies and also enjoys the benefit being a part of the Special Economic Zone Scheme in India. It has incurred huge expenditure on account of Research &Development activities and has abnormal profit during the year since its turnover has increased by 184% and the net profit has increased by 250% for the year ending 2011.
Sankhya Infotech Ltd. , Sasken Communication Technologies Ltd. (Sasken) is functionally different from that of the assessee company.
R. Systems International Ltd on the ground of its financial year being calendar year - We find the Tribunal in assessee’s own case for assessment year 2010-11, has held that the comparables cannot be rejected merely on the ground that financial year followed is different. We, therefore, restore this issue to the file of A.O./TPO with a direction to include R. Systems International Ltd. in the list of comparables after extrapolation of the financial results. While doing so the TPO shall give due opportunity of being heard to the assessee.
CG VAK Software & Exports Ltd. - We find the TPO rejected this company as it is making persistent losses in software services segment. It is the submission of the ld. counsel that this company is not making persistent losses and has earned profit in one of the two preceding years. Further, this company was accepted by the TPO as a comparable for assessment yea₹ 2009-10 and 2013-14. We, therefore, restore this issue to the file of the A.O./TPO to examine the record and decide the issue afresh and as per law after giving due opportunity of being heard to the assessee.
CAT Technologies Ltd. company earned revenue from information technology services and, therefore, should be accepted as a comparable.
Thinksoft Global Services - Assessee is not engaged in high end activity and is a routine and intermediary as it provides software development and design services as per the specifications provided by the AE. Therefore, this company should be considered as a comparable.
Caliber Point Business Solutions Ltd. - This company does not pass the different financial year ending filter. We find the Tribunal in assessee’s own case for assessment year 2010-11 has held that the comparable cannot be rejected merely on the ground that financial year followed is different - restore this issue to the file of the A.O./TPO to decide the issue afresh by extrapolating the result after giving due opportunity of being heard to the assessee.
Maveric Systems Ltd. - TPO has not demonstrated that any indirect cost is involved and its impact on the net margin. It is his submission that the revenue of the company has increased in the year over the previous year. Further, the company passes all the filters applied by the TPO himself and, therefore, this company should be taken as a comparable. It is also his submission that the TPO himself in assessee’s own case for assessment year 2010-11 has accepted Maveric Systems Ltd. as a comparable. We, therefore, restore this issue to the file of the A.O./TPO with a direction to adjudicate the issue afresh as per fact and law after giving due opportunity of being heard to the assessee.
Computation of operating margin of the assessee and comparable companies - whether bank charges, provision for doubtful debts and provision no longer required written back cannot be considered as non-operating expenditure/income - HELD THAT:- TPO held that bank charges are usually not separately reported by the company and are clubbed along with the interest charges and, hence, these are to be treated in the same manner as interest. Similarly, provision for bad debt being in the nature of unascertained liability, has to be treated as non-operating income. The DRP simply upheld the action of the Assessing Officer/TPO. It is the submission of the ld. counsel for the assessee that bank charges and interest can be separately computed. Relying on various decisions it is his submission that the lower authorities have not given any valid reason to negate the claim of the assessee. We find the facts are not coming out clearly from the orders of the TPO/DRP. We, therefore, remit this issue back to the file of the Assessing Officer/TPO with a direction to adjudicate the issue afresh after giving due opportunity of being heard to the assessee.
Risk adjustment - HELD THAT:- We are of the considered view that the assessee is entitled for risk adjustment to the net margin of the comparables for bringing them at par with the taxpayer on supplying the complete data by the assessee - Respectfully following the decision of the Tribunal in assessee’s own case for the immediately preceding assessment year, this ground is restored to the file of the A.O./TPO for deciding this issue afresh and in accordance with the law, after giving due opportunity of being heard to the assessee
Treatment of software expenses - Revenue or capital expenditure - addition as capital expenditure after allowing depreciation - HELD THAT:- Tribunal in assessee’s own case for assessment year 2010-11 has treated the software expenses as revenue in nature. Therefore, following the decision of the Tribunal in assessee’s own case for assessment year 2009-10 and 2010-11 and in absence of any distinguishable feature brought before us by the Revenue, we direct the Assessing Officer to treat the expenses on rental of time based software licence as revenue in nature. The ground raised by the assessee is accordingly allowed.
Expenditure on training of employees - Revenue or capital expenditure - HELD THAT:- Respectfully following the decision of the Tribunal in assessee’s own case and in absence of any contrary material brought to our notice against the order of the Tribunal, this ground of the assessee is allowed.
Depreciation on goodwill - DRP, relying on the decision of the Hon'ble Supreme Court in the case of Goetze (India) Ltd [2006 (3) TMI 75 - SUPREME COURT] rejected the claim of the assessee on the ground that the assessee has not made such claim in the return of income - HELD THAT:- Respectfully following the decision of the Tribunal in assessee’s own case for assessment year 2010-11, we restore this issue to the file of the Assessing Officer with a direction to decide the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee.
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2019 (5) TMI 1827
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of dispute or not - HELD THAT:- Appellant submits that pursuant to another application filed under Section 9 of theI&B Code by another person Corporate Insolvency Resolution Process has been initiated against M/s. Vijay Home Appliances Ltd. (Corporate Debtor). In view of such development, the Appellant is allowed to raise the claim before the Resolution Professional who will consider the claim uninfluenced by the impugned order dated 21st January, 2019.
Appeal disposed off.
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2019 (5) TMI 1826
Permission for withdrawal of application - settlement of the outstanding Debt - HELD THAT:- Under section 12A an Adjudicating Authority can allow the withdrawal of Application admitted u/s. 7 on an Application made by the Applicant with the approval of 90% voting share of the Committee of Creditors. Since in this case only one Financial Creditor i.e. the Petitioner himself, is on record hence entitled to move this Application for withdrawal of his own Application moved against the Corporate Debtor.
As well as the provisions of Section 12A read with Regulation 38 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016, the Application for withdrawal of the Insolvency Proceedings is hereby "allowed" - Petition filed under section 7 of the IBC by the Petitioner stood "withdrawn" without proceeding for Insolvency, as prayed for, therefore, to be consigned to records.
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2019 (5) TMI 1825
Fixed deposit interest income - correct head of income - Income from Business & Profession or Income from Other Sources" - CIT(A) directed the AO treat the interest income earned from fixed deposits by the assessee under the head income from business and profession - as per revenue assessee has itself described "interest on film loan" in Profit and Loss account separately which could be categorized as income from Business and Profession - HELD THAT:- CIT(A) has held that in case of the assessee it is not a simple case of making investments in FDRs with a view to earn interest income. The assessee used to receive advances for various jobs and the advances and it is not possible to utilise the advances so received immediately. As the production of films requires formulation, ideas, concept of theme approval from the respective department, the assessee deposits the money received in advance for short duration.
CIT(A) further pointed out that the duration of deposit reveals the fact that the FDRs were not deposited for longer period and the same were made as a time gap arrangement - we agree with the Ld. CIT(A) that the interest income earned by the assessee from FDRs cannot be treated as the income from other sources. CIT(A) has passed the order in the present case by following the order of his predecessor passed in assesses own case for the AY 2011-12. No infirmity in the order of the Ld. CIT(A). - Decided against revenue.
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2019 (5) TMI 1824
Approval of the Scheme of Amalgamation - Sections 230 to 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and the National Company Law Tribunal Rules, 2016 - HELD THAT:- Upon considering the approval accorded by the members and creditors of all the Petitioner companies to the proposed Scheme and the affidavits filed by the Regional Director, Northern Region, Ministry of Corporate Affairs including the report of official liquidator, Income Tax Department and RBI and also as no objection from any quarter against the Scheme has been received; there appears to be no impediment in sanctioning the present Scheme.
Sanction is hereby granted to the Scheme under Section 230 to 232 of the Companies Act, 2013 - Application allowed.
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2019 (5) TMI 1823
Withdrawal of the application under Section 12A of the Code - It is stated that the application was not accompanied by bank guarantee towards estimated costs incurred for the purposes of Clause (c) and Clause (d) of Regulation 31 till the date of application as per the mandatory provisions of the Regulations and that the corporate debtor has undertaken to pay outstanding CIRP expenses through post-dated cheques - HELD THAT:- The relevant Regulation 30 A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (Regulations) provide that the application for withdrawal under Section 12A shall be submitted before issue of invitation for expression of interest under Regulation 30 A - The Hon'ble Supreme Court in Brilliant Alloys Pvt. Ltd. Vs. Mr. S. Rajagopal & Ors., [2019 (3) TMI 1016 - SC ORDER] has stated that Regulation 30A (1) is not mandatory but is directory for the simple reason that on the facts of the given case, application for withdrawal may be allowed in exceptional cases even after issue of invitation for expression of interest under Regulation 30A.
In the present case, the minutes of the 6th meeting of the COC held on 31.03.2019 state that the RP informed COC that the Corporate Debtor has already made very serious and earnest efforts and cleared significant part of the debt even without any support from its own debtors who are not clearing the debts under the garb of ongoing CIRP and that after a lot of deliberation, understanding was reached with reference to the dues of four financial creditors being plot buyers including the applicant Shri Sandeep Bidani. Thereafter, the resolution for withdrawal of the CIRP Process under Section 12-A of the Code was approved by the COC with 100% voting share.
As regards compliance of Regulation 30A (2) for providing bank guarantee towards estimated costs incurred for purposes of clause (c) and (d) of Regulation 31, it is noted that the no objection of the RP for payment through postdated cheques has been filed as Annexure A-2 of the application.
The application for withdrawal under Section 12A being approved by the COC with 100% voting share, we approve the application for withdrawal of the petition - Application disposed off.
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2019 (5) TMI 1822
Approval of the Scheme of Arrangement by way of Demerger - Sections 230 to 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and the National Company Law Tribunal Rules, 2016 - HELD THAT:- Certificates of respective Statutory auditors of both the petitioner companies have been placed on record to the effect that Accounting Treatment proposed in the Scheme of Amalgamation is in conformity with the Accounting Standard notified by the Central Government as specified under the provisions of Section 133 of the Companies Act, 2013 - The shareholders of the applicant companies are the best Judges of their interest, fully conversant with market trends, and therefore, their decision should not be interfered with by Tribunal for the reason that it is not a part of judicial function to examine entrepreneurial activities and their commercial decisions. It is well settled that the Tribunal evaluating the Scheme of which sanction is sought under Section 230-232 of the Companies Act of 2013 will not ordinarily interfere with the corporate decisions of companies as approved by shareholders and creditors.
Right to apply for the sanction of the Scheme has been statutorily provided under Section 230-234 of the Companies Act, 2013 and therefore, it is open to the applicant companies to avail the benefits extended by statutory provisions and the Rules - It has also been affirmed in the petition that the Scheme is in the interest of both the demerged company and the resulting company including their shareholders, creditors, employees and all concerned.
Upon considering the approval accorded by the members and creditors of both the Petitioner companies to the proposed Scheme, and the no objection affidavits filed by the Regional Director, Northern Region, Ministry of Corporate Affairs, Official Liquidator and Income Tax Department and also as no objection from any quarter against the Scheme has been received; there appears to be no impediment in sanctioning the present Scheme.
Scheme sanctioned - application allowed.
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2019 (5) TMI 1821
Sanction of the Scheme of Amalgamation - Section 230 to 232 of the Companies Act, 2013 - HELD THAT:- The Scheme in question is framed in accordance with law and the instant petition is filed by disclosing all material facts which includes latest financial position, Auditor report and the statutory Authorities also reported that the affairs of Company are being conducted in accordance with law. So far as the observations/objections as raised by the Statutory Authorities as mentioned supra, any scheme under Section 230-232 of Companies Act, 2013, is to be prepared first basing on parameters in the interest of business, subject to Compliance of extant statutorily Compliance under Companies Act, 2013. A scheme cannot be in violation of any provisions of Articles of Association of a Company and extant provisions of Companies Act, 2013. Any scheme can be approved subject to complying all the terms and conditions mentioned in it and it cannot waive/override any statutory stipulation and the Authorities are at liberties to take appropriate action in accordance with law for any violation committed by the Companies involved in Scheme.
It is settled position of law that Companies involved in the scheme have right to evolve their suitable schemes in accordance with their business interest and public interest, after duly complying with their respective Memo and Articles of Association, however, subject to overall compliance of extant provisions of Companies Act, 2013 and the Rules made thereunder. At the same time, the Tribunal is under obligation to scrutinize the schemes in question, in the light of law on the issue before it is approved. Apart from framing scheme in question, it is duly approved by the Board of Directors of the respective Companies, and it was duly approved by respective stake holders with requisite majority - After analyzing the issue in detail, the Tribunal is convinced that the scheme in question would broadly confirm to the general principles of law as enunciated under provisions of Sections 230 to 232 of Companies Act, 2013 and the rules made thereunder.
Therefore, it is a settled position of law that Tribunal shall exercise only supervisory but no appellate powers shall be applicable to the Tribunal for Schemes framed under Section 230 to 240 of the Companies Act, 2013 - The scheme is sanctioned.
Application allowed.
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2019 (5) TMI 1820
Restraint Order on calling of EOGM - temporary injunction sought in any manner introducing, considering or passing the proposed resolution mentioned at Item No.1 of the notice dated 12.4.2019 at the proposed Extra Ordinary General Meeting convened on 8.5.2019 or any other subsequent date - HELD THAT:- Calling of the EOGM may be done and EOGM cannot be restrained by any shareholder of the Company.
In this case, the applicant as a minority shareholder has sought to restrain on the EOGM which is not permissible, given the law laid down by Hon'ble Supreme Court - Since the applicant has raised a point that the proposed amendment will affect the minority shareholder's right and if the company is converted into a full-fledged public limited company, then its character of HYBRID company within the company is distinguished and the right of preemption which is available to the applicant, will not be available to the applicant.
However, at this stage, we cannot give any finding regarding the right of the preemption about the validity of the said meeting regarding the permissibility of such amendment and EOGM cannot be stayed since the matter is sub-judice.
List on 3.6.2019 for hearing.
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2019 (5) TMI 1819
TDS u/s 195 - tds on foreign remittances - HELD THAT:- Services rendered by the non-resident agent could at best be called as a service for completion of the export commitment and would not fall within the definition of "fees for technical services" and, therefore, section 9 was not applicable and, consequently, section 195 did not come into play. Therefore, the disallowance made by the Assessing Officer towards export commission paid by the assessee to the non-resident was rightly deleted.
Judgment of Hon‘ble Madras High Court in the case of Farida Leather Company [2016 (2) TMI 798 - MADRAS HIGH COURT]directly covers the dispute between rival parties. The Hon‘ble Madras High Court was seized for AY 201011 in the above case. Thus, based on our detailed discussions and reasoning, we hold that under factual matrix of the case no additions u/s 40(a)(i) of the 1961 Act read with Section 195 are warranted in the instant case on payments made by assessee to four overseas agents towards commission expenses for generating export orders or facilitating import for the assessee. We affirm the decision of learned CIT(A) and Revenue fails in this appeal.
Addition u/s 68 - CIT(A) relying on the additional evidences filed by the assessee accepted the contention of the assessee and allowed relief to the assessee - HELD THAT:- In terms of Rule 46A(3) of the 1962 Rules, it was incumbent upon Ld. CIT(A) to have forwarded additional evidences to AO for necessary verifications/ comments . The Principles of Natural justice are clearly breached by learned CIT(A) by non affording AO to rebut additional evidence filed by assessee for the first time before learned CIT(A). Rule 46A(3) of the 1962 Rule is not merely an empty formality as principles of natural justice are embedded in it as clearly Revenue is entitled to rebut any additional evidence filed by the taxpayer for the first time before learned CIT(A) and violation thereof will clearly vitiate the order. It is also observed that learned CIT(A) accepted this additional evidence filed by the assessee for the first time before learned CIT(A) without making any enquiry or verification itself as to the veracity of this additional evidences filed by the assessee for the first time before learned CIT(A). - we are inclined to set aside and restore this issue to file of the AO for fresh adjudication. - Decided in favour of revenue for statistical purposes.
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2019 (5) TMI 1818
Oppression and Mismanagement - absolute and unconditional right to ask for an unconditional withdrawal - HELD THAT:- It is a settled position of Law that when a Petitioner seeks for a withdrawal simpliciter, the Tribunal will not continue with the said Petition and in order to put an end to the matters complained of it would be in the interest of all the parties involved that such withdrawal simpliciter be allowed - It is also pertinent to note that the main Company Petition has been filed citing various acts of oppression and mismanagement in the affairs of R1 Company. However, both the Petitioner and R1 have entered into a Settlement Agreement dated 27.04.2019 and have put to rest all their differences.
This Tribunal has observed that none of the parties except R5 has raised any objection for withdrawal. The objections raised by R5 mostly revolve around the internal disputes in R4 Company relating to the acts of Alanda media and Entertainment Pvt Ltd and four others in taking over R4 Company and removal of R5 & other directors from R4. Those disputes cannot be raised in the present Company Petition and also do not form any valid ground for rejecting the instant Application for withdrawal of main Company Petition.
It is the statutory duty imposed on Tribunal to ensure that the Tribunal puts an end to the Litigation by passing appropriate orders, considering the facts and circumstances of the Case. In the instant case, it is the main litigating parties who have put an end to the disputes among themselves and have come before the Tribunal praying to permit the withdrawal of the Company Petition which would ultimately result in putting an end to the Litigation between the parties - Application allowed.
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2019 (5) TMI 1817
Validity of Restaurant Sale partial assignment of the Brand - forensic audit of the affairs of the Corporate Debtor including the Restaurant Sale - partial assignment of the Brand to examine whether the Restaurant Sale and partial assignment of the Brand are undervalued or preferential - HELD THAT:- In pursuant to the initiation of CIRP in respect of the Corporate Debtor, IRP/RP has initiated steps in accordance with law and conducted 7th COC meetings and finally 3 (three) Resolution Plans were received in pursuant to the expression of interest as sought for, namely M/s.Akashika Foods Private Limited ("Akashika"), Mr.Kamal Agarwal, and M/s.MTR Foods Private Limited collectively called as "Final PRAs". Accordingly, the RP evaluated the plan and on instructions from the CoC, sent his evaluation report and the resolution plans to BDO, an Internationally reputed agency for obtaining an independent report of the bids received viz. a viz. the evaluation matrix put forth in the RFRP document, both on quantitative and qualitative parameters. The Resolution Professional has also gave sufficient time to all the Resolution Applicants for personal instructions of the CoC Members. And facts shows that all the 3 (three) Resolution Applicants have participated in the consolidation and finalized of Resolution Plan.
It is settled position of law that IRP/RP alone will conduct CIRP of Corporate Debtor with supervision and guidance of COC at the helm of affairs subject to overall jurisdiction of Adjudicating Authority under the provisions of Code. As rightly claimed by the Respondents, relying on the law as cited supra, the Adjudicating Authority hardly has jurisdiction to entertain Interim Application(s) while CIRP is on, which is to be completed in a time bound manner. After the CIRP is over, it is for the Adjudicating Authority to scrutinize the entire process of CIRP before approving/rejecting the Resolution plan finally decided by the CIRP. Therefore, the Adjudicating Authority has examined the final Resolution plan as approved by the COC and after satisfying various parameters as laid down under the Code and the Rules made thereunder, has approved the Resolution plan - the allegations made and the information sought for by the applicant are baseless and not tenable and the applications themselves are not all maintainable.
Application dismissed.
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2019 (5) TMI 1816
Principles of Natural Justice - impugned order decided against the assessee ex parte - it is argued that the respondents were unaware of the revision petition filed by the petitioner, and therefore, if two revision petitions have not been decided together, they cannot be blamed for the same - HELD THAT:- Though the correct address of the petitioner has been given in first page in the order passed in appeal by the appellate authority, but on the last page of the said order, the old address of the petitioner has been mentioned. Thus, it appears that the notices of revision petition, if at all, issued were not sent on the correct address of the petitioner.
Another important aspect of the matter is that the petitioner has also challenged the same order passed by the Commissioner, Customs Central Excise (Appeals), Jaipur dated 23-2-2015 before the same revisional authority. This is substantiated from the notice of hearing received by the communication dated 13-12-2017 received by the petitioner informing that his revision petition has been accepted and listed wherein on the top of the said letter reference number was mentioned - The revisional authority was therefore, required to decide both the revision petitions together after notice to petitioner on his correct address.
Matter remanded back to the revisional authority for clubbing the revision Petitions filed by the assessee - petition allowed by way of remand.
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2019 (5) TMI 1815
Removal of Shri Ashish Kanodia as the Resolution Professional of the Corporate Debtor - appointment of fresh Resolution Professional in his place; to initiate CIR Process of the Corporate Debtor afresh, etc. - HELD THAT:- It is a settled position of law that proceedings are under provisions of Code are summary in nature, and those proceedings would not dwell upon/enter into serious disputed questions of fact of the case. It is not in dispute that the Adjudicating Authority, after considering various parameters as prescribed under the Code, has admitted the main Company petition by initiating CIRP, appointing IRP, imposing moratorium etc., and the same is admittedly not in dispute as it was not questioned before the Hon'ble NCLAT. Therefore, CIRP of Corporate Debtor was conducted in accordance with law. As per law, CIRP of Corporate Debtor would be conducted by IRP/RP appointed by the Adjudicating Authority, however, subject to consideration of all issues by the Committee of Creditors and final supervising power conferred on the Adjudicating Authority. It is also settled position of law that Court/Tribunal, in the normal circumstances, would not interfere over the decision taken by the concerned authority, basing on their commercial wisdom.
The Resolution Plan submitted by the Akashika Foods Private Limited is eligible to be approved, and thus the Resolution Plan was approved - The Applicant cannot seek any special treatment in comparison with other Resolution Applicants and the Applicant was admittedly given all the information uniformly to all those participating Resolution Applicants. The Applicant has not offered higher bid than the successful Resolution Applicant except raising un-tenable grounds. And the facts and circumstances as mentioned above shows that the applicant was afforded reasonable opportunity.
Application disposed off.
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2019 (5) TMI 1814
Levy of Service Tax - income derived from supply of cranes and mobilization/transport of labour - case of the appellant is that for erection of plants, specific work orders are issued, but when a client requires cranes or labour, different work orders are issued and, therefore, the income derived from these separate work orders cannot be clubbed with the income derived from the erection of plants for the purpose of levy of Service Tax - extended period of limitation - HELD THAT:- This Section 67 of the Act deals with valuation of taxable services for charging Service Tax. Sub-section (1) of Section 67 provides that where Service Tax is chargeable on any taxable service with reference to its value, then such value shall where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by the service provider. It is, therefore, clear that only such amount is subject to Service Tax which represents consideration for provision of service and any other amount which is not a consideration for provision of service cannot be subjected to service tax.
The appellant therein was providing consulting engineering services. It received payment not only for the services provided by it but was also reimbursed for the expenses incurred by it on air travel, hotel stay, etc. It paid Service Tax on the amount received by it for services rendered to its clients but did not pay any Service Tax in respect of expenses incurred by it which were reimbursed by the clients. A show cause notice was issued to it to explain why Service Tax should not be charged on the gross value including reimbursable and out of pocket expenses. The provisions of Rule 5(1) of the Rules were resorted to for this purpose.
Reliance placed in the impugned order on Rule 5(1) of the 2006 Rules for including the cost of cranes/mobilization of labour in the value of taxable services under Rule 5(1) of the 2006 Rules is not justified.
Extended period of limitation - HELD THAT:- As it is not possible to sustain the demand under the impugned order, it will not be necessary to examine the contention raised by Learned Counsel for the appellant that the extended period of limitation under Section 73 of the Act could not have been invoked in the present case.
Appeal allowed - decided in favor of appellant.
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2019 (5) TMI 1813
Refund of accumulated CENVAT credit in cash - Ld. Commissioner (Appeals) came to the conclusion that since the respondent fit into the definition of ‘ intermediary ’ therefore, the services provided by the appellant do not fall within the scope ‘export service’ - period April, 2015 to March, 2016 - HELD THAT:- The facts are not in dispute are that the appellant are engaged in providing ‘man power recruitment/supply agency’ services to their overseas client Seaspan Canada under an agreement with them.
There is no stipulation either under Article 2 or under any of the clauses of the agreement, whereby it could be inferred that the Printed by Bolt PDF (c) NCH Software. Free for non-commercial use only. the finding of the Ld. Commissioner (Appeals) at para 6 of the impugned order that they were supplying man power on behalf of their overseas client is factually incorrect and not supported by any evidence. This is the only reasoning advanced by the Ld. Commissioner (Appeals) in setting aside the refund order where under the original authority after verification of all other conditions prescribed under the said notification 27/2012 CE(NT) dated 19/06/2012 issue d under Rule 5 of the Cenvat Cred it Rules, 2004 sanctioned the refund - The allegation of the department as observed above that the appellant is a n ‘intermediary’ is without any basis, hence, cannot be sustained.
Appeal allowed - decided in favor of appellant.
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2019 (5) TMI 1812
Demand of differential GST - Amount arising as a result of error in GST Return-3 for the month of July wherein the Service Tax liability was shown as ₹ 33,88,979/- instead of ₹ 3,88,979/- - HELD THAT:- Since the petitioner is fair to deposit the difference amount under protest, it is directed that the petitioner may deposit the difference of tax amount under protest within a period of two weeks before respondents No. 2 & 3 then in such case, petitioner’s application for re-registration may be considered within a further period of two weeks keeping in view the factual aspect which has happened in this case. It is further directed that the amount so deposited shall be subject to the order which may be passed by respondent No. 2.
Petition disposed off.
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2019 (5) TMI 1811
Demand of Interest and penalty - entire service tax liability was discharged by making use of available/accumulated Cenvat credit before issuance of SCN - HELD THAT:- There is no provision in the Finance Act, 1994 read with Service Tax Rules enabling the adjudicating authority to assume the date of filing returns as the date of adjustment of Cenvat credit with tax paid. Accordingly, the order of Court below is illegal.
The demand of interest under Section 75 and penalty under Section 78 are set aside - penalty under Section 70 read with Rule 7C is upheld - Appeal allowed in part.
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2019 (5) TMI 1810
Refund claim on account of excess Cenvat credit - Adjudicating Authority has rejected a refund claim of ₹ 3,06,785/- by restricting the input under CGST Act, 2017 for the month of November, 2017 - HELD THAT:- To ascertain any rationality in the contention of the appellant, the inspecting authority has been asked to submit Para-wise remarks against the grounds of the appellant and the AA has submitted para-wise remarks by strongly reiterating the findings as in the assessment order - The A.A also remarked that any excess credit available under Central Excise shall be claimed through Tran-01 only, but the appellant attempted to claim as a refund of excess CENVAT credit. The A.A observed that such excess credit of any existing law pertaining to the period before appointed day i.e. 1-7-2017 shall be disposed off in accordance with the provisions of existing law i.e. Central Excise Act & Rules. These remarks of A.A strongly advocating that claim of excess CENVAT credit pertaining to Central Excise Act cannot be allowed as refund under GST Act.
In view of the discrete and relevant instructions to the present dispute, contemplating for not sanctioning refund of excess Cenvat credit during GST period. Hence, it is held that the refund rejection orders of A.A are legally sustainable and in tune with the provisions of CGST Act.
Appeal dismissed.
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2019 (5) TMI 1809
CENVAT Credit - receipt of input services, under common invoice, wherein service is also provided to other offices of the appellant which are separately registered - Revenue Neutrality - HELD THAT:- Admittedly the appellant company is one entity which is running radio stations at four places and providing output services being sale of time slot, etc. on which they are paying output service tax. The invoices for input services are not disputed by the Revenue and it is also admitted that appellant had paid to the service provider on the common bills for more than one centre of the appellant, along with the service tax - The Court below has observed in the impugned order, that had the appellant taken registration as an ISD distributor, the credit taken for the other centre, at the Jaipur office, service tax would not be attracted. Admittedly, for procedural deficiency, it has been held in several cases that the substantial benefit of the Cenvat credit provision, should not be denied.
Revenue Neutrality - HELD THAT:- The situation is wholly Revenue neutral as all the four centres had paid service tax, also in cash and the Cenvat credit could have been distributed and thus availed by the other centres, and hence no gain.
Appeal allowed - decided in favor of appellant.
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9911796707
