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Showing 221 to 240 of 1557 Records
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2025 (1) TMI 1338
Estimation of income - bogus purchases - HELD THAT:- AO has accepted the sales recorded by the assessee. The assessee could not have affected sales without purchasing the goods. The assessee could match the sale with corresponding purchases. Hence, we are of the view that the disallowance of entire amount of purchases is not justified
As held in M/s Mohammad Haji Adam & Co [2019 (2) TMI 1632 - BOMBAY HIGH COURT] the addition should be limited to the extent of bringing the GP rate on alleged bogus purchases to the same rate of other genuine purchases.
In the instant case, the assessee has shown that the GP rate on sale of alleged bogus purchases is more than the GP rate of other purchases. Hence, no addition by way of disallowance of alleged bogus purchases is warranted in the facts of the present case. Decided in favour of assessee.
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2025 (1) TMI 1337
Disallowance made u/s 14A r.w.r. 8D - scope of amendments to Section 14A - HELD THAT:- The contention raised by the Revenue stand decided against the Revenue and in favour of the Assessee by decision of the Tribunal in the case of Deputy Commissioner of Income Tax Vs. M/s. Welspun Steel Ltd. [2022 (8) TMI 430 - ITAT MUMBAI] wherein as rejected the contention of the Revenue that amendments to Section 14A introduced by the Finance Act 2022 shall have retrospective effect.
Computation of book profits u/s 115JB - Disallowance made under Section 14A of the Act the tax liability computed under the normal provisions of the Act would be much more than liability under Section 115JB of the Act, and the Assessee would be assessed under normal provisions of the Act. Therefore, Ground No.2 raised by the Revenue has been rendered academic in nature.
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2025 (1) TMI 1336
Unexplained cash credits - addition being loan taken from the Directors of the assessee company u/s.68 - Onus to prove - HELD THAT:- One very important fact here in this case which proves the genuineness of the loan is that, these are not direct loan given to the assessee company but payment was made to various persons on behalf of the company in respect of the property to be purchased in the name of the company. These details of payments made to 169 people were filed alongwith their confirmations.
Thus, it is not a case of direct loan been given to the assessee company, albeit all the Directors have made payment to various persons for the purchase of the property to start the project of the company and the company has shown this as liability in the balance sheet in the name of the Directors.
Accordingly, it cannot be said that the onus cast upon the assessee has not been discharged.
Once all these facts have been brought on record, then simply because these Directors have taken unsecured loan for making payments to various parties for purchase of land in the name of the company cannot be added u/s.68 once all these documents have been furnished. Accordingly, addition made by the ld. AO and as confirmed by the ld. CIT (A) is deleted. Decided in favour of assessee.
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2025 (1) TMI 1335
Additions u/s 56(2)(viib) - valuation of shares issued by the assessee company - Onus to prove - CIT(A) directed Ld. AO to obtain FMV of the shares either from IEPL or from IBBI Registered Valuer or from both of them, at the option of the assessee - HELD THAT:- In terms of the extant provisions of Sec.56(2)(viib), it was the onus of the assessee to justify the valuation of shares. The report furnished by the assessee during regular assessment proceedings has not considered the loan liabilities and therefore, the same is clearly flawed.
CIT(A) directed Ld. AO to carry out valuation from two valuers, at the option of the assessee and restricted the scope of enquiry which cannot be held to be justified. No option was given to Ld. AO to carry out valuation from independent valuers.
It is quite clear that the valuation made by two valuers is much higher than the issue price of shares and the impugned addition has practically been deleted giving no option to Ld. AO.
As rightly pointed out by Ld. CIT-DR, the report of CS Suresh has not considered the outstanding liability and the liabilities have been treated as share capital advance / share application money which is contrary to facts on record.
CIT-DR also questioned the valuation of IEPL on the ground that DCF based valuation was erroneous since the assessee had not carried out any business activities in subsequent there years viz. AYs 2017-18 to 2019- 20 whereas this fact was much known to that valuer at the time of valuing the shares.
As respectfully following the directions of M/s Vaani Estates Pvt. Ltd. [2019 (5) TMI 952 - MADRAS HIGH COURT]we would hold that Ld. AO would be required to undertake the exercise of fact finding by determining the FMV of shares in terms of Explanation to Sec. 56(2)(viib). This exercise not having been done, the matter deserves to be remanded back to Ld. AO for undertaking the said fact-finding exercise - Appeal stand allowed for statistical purposes.
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2025 (1) TMI 1334
Addition u/s. 69A - unexplained cash deposit in bank account - HELD THAT:- As based on the information of PAN in the data base of the income tax, attached to the bank account in the name of Seva Kendra, AO was provided with the information of the alleged cash deposit.
We are thus, satisfied that the alleged cash deposit transactions are not at all related/pertain to the assessee but are of another assessee M/s. Seva Kendra which is duly assessed to tax.
We are aware of the fact that assessee did not appear before the lower authorities but considering the smallness of the issue and the facts duly established on record, we set aside the finding of the Ld. CIT(A) and delete the impugned addition.
Levy of penalty u/s. 271AAC(1) also be deleted as it is consequential to the addition for the unexplained deposit in the bank account and since the addition has itself been deleted the impugned penalty has no legs to stand.
Appeal Decided in favour of assessee.
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2025 (1) TMI 1333
Benami Property Transactions - orders under Section 26 (3) of Prohibition of Benami Property Transactions Act - provisional attachment orders - Interpretation of Section 24(1) - HELD THAT:- Writ petition was initially filed at the stage when the orders u/s 26 (3) of the Act were yet to be passed.
After the said orders were passed, an application under Order 6 Rule 17 of Civil Procedure Code was filed by the Petitioners seeking amendment of the writ petition and to seek further relief for quashing of the said orders under Section 26 (3) of the Act.
This application also sought to place on record the orders passed u/s 26 (3) of the Act. Notice was issued in this application on 16th May, 2023 and the said amendment application is still pending adjudication before this Court.
Petitioners, for whatever reason, have sought to raise very broad challenges to the provisions itself in this writ petition. They have also brought on record the orders passed by the Adjudicating Authority under Section 26 (3) .
Petitioners, under normal circumstances, would have been entitled to file the appeals before the Appellate Tribunal, however, the Petitioners did not avail of the said remedy when available, and had chosen to dispute the vires of the foundational provisions of the Act before this Court.
Ill-advised the said remedy i.e., to place the orders on record and file a writ petition before this Court challenging the provisions of the Act and the orders under Section 26 (3) of the Act, may have been, it cannot be said that the same is not a good faith proceeding.
As noted by this Court that the appeals, as per Section 46 of the Act, have to be filed within forty-five days, however, the delay, if sufficient cause is shown, is condonable,
This Court is of the opinion that the Petitioners ought to be relegated to the appellate remedy, as they no longer press the challenge to the validity of the provisions of the Act. The Petitioners may accordingly file appeals under Section 46 of the Act challenging the orders under Section 26 (3) of the Act, before the Appellate Tribunal.
Period during which the present writ petition remained pending would be liable to be excluded from the limitation period in terms of Section 14 of the Limitation Act.
As made clear that this liberty is subject to the condition that the Petitioners prefer the appeals before the Appellate Tribunal by 28th February, 2025. If the said appeals are filed by 28th February, 2025 before the Appellate Tribunal, the appeals shall not be dismissed on the ground of being barred by limitation or delay.
Confiscation proceedings - Confiscation proceedings are listed before the Adjudicating Authority on 28th January, 2025 at 2.30 p.m. On the said date, the pleadings have to be completed before the Adjudicating Authority. The Petitioners are permitted to place today’s order of this Court permitting them to file the appeals before the Adjudicating Authority in which case, the Adjudicating Authority shall afford time to the Petitioners before proceeding further - in terms of the Proviso to Sec. 27 (1) of the Act.
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2025 (1) TMI 1332
Prohibition of Benami Property Transactions - Provisional Attachment Order - real owner - relationship between the alleged Benamidar (Sh. Onkar Singh) and the Beneficial Owner (Sh. Dwarika Gupta) - only contention advanced on behalf of the Appellants is the existence of a fiduciary relationship between the alleged Benamidar and him, thus bringing it under exception provided u/s 2(9)(A)(ii) of the PBPT Act, 1988, as amended by the Act of 2016.
HELD THAT:- In the present case, it is categorically asserted by the Appellant in all the pleadings that the properties had been bought in the name of the Benamidar by the Beneficial Owner because of the prohibition under the Chhattisgarh Land Revenue Code on purchase land of Scheduled Tribe by non-ST person as per section 165(6). Thus, the entire transaction of the appellant was to contravene the provisions of a law.
We are of the view that the "agreement"/ "authority letter" placed by the Appellants on record cannot be relied upon. The Ld. AA noted certain discrepancies. Furthermore, it is clearly evident from the facts on record that the two appellants in these two appeals were hand-in-glove with each other in the entire set of transactions.
As such, it would not have been difficult for them to create a self-serving document of this nature to justify their actions which were in defiance not only of the Chhattisgarh Land Revenue Code, but also the letter and spirit of the PBPT Act, 1988 (as amended in 2016).
In the present case not only was there a transfer of title to the property in the name of the Benamidar, Sh. Onkar Singh but also the same was for the unlawful purpose of circumventing the law regarding purchase of tribal land by non-tribals. On both counts, therefore, the exception under Section 2(9)(A)(ii) is not available to the appellants in the present case.
The relevant facts are that the said properties were owned by persons belonging to ST community and Sh. Dwarika Gupta has asked Sh. Onkar Singh to purchase the same on his behalf and also provided him with Sh. Onkar Singh to purchase the same on his behalf and also provided him with the necessary funds. The initial sale deeds were transferred in favour of Sh. Divya deep Gupta, son of Sh. Dwarika Gupta. From these facts, it is evident that not only the lands were purchased in the name of the benamidar (Sh. Onkar Singh) for consideration provided by the beneficial owner (Sh. Gupta), but the same were held by the former for the benefit of the latter. The subsequent transfer by Sh. Onkar Singh to Divya deep Gupta, s/o Dwarika Gupta would therefore, be direct contravention of Section 6 of the Act and, as such, null and void. Accordingly, the same has rightly been attached as benami property. The appellant's contention in this regard is, therefore, rejected.
Matter be remitted back to the Ld. Adjudicating Authority for a factual verification as to whether the properties at serial no. 4 to 10 belonged to or stood in the name of Shri Onkar Singh Gond and to record a fresh finding whether they constituted benami properties within the meaning of the PBPT Act, 1988 (as amended by the Act of 2016). The Ld. AA would afford the Appellant a reasonable opportunity to be heard and to adduce necessary documentary evidence in this regard. The needful would be done within a period six months from the date of communication of this order. It is made clear that the matter is remanded back to the Ld. AA only for the limited purpose as stated in the preceding paragraph.
In reference to the other properties constituting the subject matter of this appeal, namely, the properties listed at Sl. Nos. 1-3, 11& 12, 13-15,16 & paragraphs 3 to 57, the appeal shall stand dismissed.
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2025 (1) TMI 1331
Imposition of penalty and forfeiture of security deposit - order passed without giving any reasons - non-application of mind - principles of natural justice - HELD THAT:- The Tribunal has clearly come to the conclusion that the only argument of the adjudicating authority (Respondent No. 2) was that the Appellant was aware of the port of discharge and this was based on the contradictory statements of the exporter and the investigation conducted against the exporter. The Tribunal came to the conclusion that while the investigation conducted may or may not lead to the confirmation of the offenses by the exporter, it would not be conclusive evidence to establish gross negligence or misconduct on the part of the Appellant.
It is difficult to understand how the forfeiture of security deposit and imposition of penalty could be upheld when the Tribunal itself comes to the conclusion that there is no evidence to establish that there is any gross negligence or misconduct on the part of the Appellant and neither has the adjudicating authority been able to prove that the Appellant was in the knowledge of the actual port of discharge, which was different from the final destination.
Conclusion - The penalties and forfeitures cannot be sustained without clear evidence of negligence or misconduct.
The forfeiture of security deposit and the imposition of penalty is unsustainable in law and is hereby set aside - Appeal disposed off.
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2025 (1) TMI 1330
Jurisdiction to issue SCN - entitlement to the release of duty drawback and other export incentives withheld by the respondent authorities.
HELD THAT:- The respondent authorities have adopted an arbitrary and capricious approach in dealing with the issue of claim of the duty drawback and have been annoyed by the petitioner’s action of allegation of demand Rs. 75,000/- for clearance of the goods consignment by the respondent no. 6 and the action of the petitioner to approach to this Court for claim of the duty drawback by issuing the impugned show cause notice after a gap of 9 months on service of the notice issued by this Court.
It is not in dispute that that goods have been permitted to be exported on final assessment made by the respondent authorities on 21.06.2018 and thereafter, the Manifest was also filed by the petitioner. The petitioner also furnished the Export Realization Certificate from the concerned bank to the effect that the foreign exchange has been received on the export made by the petitioner. Therefore, in the facts of the case, the petitioner is entitled to the claim of duty drawback and in accordance with the duty drawback rules as there is no other deficiency found by the respondent authorities. So far as the issuance of the impugned show cause notice is concerned, the only reliance is placed on Section 14 of the Customs Act, 1962 read with Rule 8 of the Valuation Rules, 2007 to invoke the provisions of Section 113 (i) (ia) of the Customs Act, 1962. On perusal of Section 14 of the Customs Act, 1962, it mandates that the respondent authorities are bound to accept the transaction value and only recourse to the valuation rules can be made pursuant to Clause (iii) of the proviso if the proper officer has reason to doubt the truth or accuracy of such value. It appears that the valuation done by the valuer as per Rule 8 of the Valuation Rules, 2007 was available since July, 2018, however, no action was taken by the respondent authorities till the notice issued by this Court is served by the petitioner to the respondents. In such circumstances, in absence of any further allegations of irregularities in furnishing the material particulars with an information furnished by the petitioner for the purpose of claim for drawback, the respondents could not have assumed the jurisdiction to issue the impugned show cause notice.
Considering the facts of the case, there is nothing on record to show that the goods, which were exported by the petitioner, the petitioner has failed to provide information, which do not correspond in material particular with the exported goods and the information has nothing to do with the valuation of the goods for the purpose of claim of the drawback - the contention raised by the respondent authorities that the goods were provisionally assessed, which were tried to be justified by the screenshot appearing on the EDI system is nothing but an eye wash so as to see that the petitioner is again relegated back to the respondent authorities for adjudication of the show cause notice, which is apparently issued without jurisdiction.
The Hon’ble Supreme Court in the case of Commissioner of Central Excise and Service Tax, Noida vs. M/s. Sanjivani Non-Ferrous Trading Pvt. Ltd. [2018 (12) TMI 738 - SUPREME COURT], while considering valuation of the goods as per Section 14 of the Customs Act, 1962 has held that assessable value has to be arrived at on basis of price which is actually paid, which is the basic principle enshrined in the provisions of Section 14 of the Customs Act, 1962.
Conclusion - The administrative actions must be fair, just, and within jurisdiction. The valuation of goods should reflect the transaction value unless substantial evidence suggests otherwise. The petitioner was entitled to duty drawback, and the respondents' actions were deemed arbitrary.
The impugned show cause notice dated 16.04.2019 is hereby quashed and set aside. The respondents are directed to adjudicate the claim of the duty drawback of the petitioner in accordance with the duty drawback rules within a period of 4 weeks from the date of receipt of the copy of this order - Petition allowed.
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2025 (1) TMI 1329
Jurisdiction to issue SCN - SCN issued u/s 28 of the Customs Act, 1962 by different DRI authorities, on the ground that they are not proper and competent officers to issue show cause notices - HELD THAT:- Hon’ble Supreme Court in the case of M/s Canon India Private Limited [2024 (11) TMI 391 - SUPREME COURT (LB)] held that the show cause notices in all the matters are invalid, without any authority of law and liable to be set aside and the ensuing demands are also set aside.
Since in the impugned notices in the present writ petitions the period of 30 days was granted to file reply and further proceedings were stayed by this Court, therefore, all the petitioners are directed to file reply within a period of 30 days. The time limit of 30 days granted to all the petitioners for filing reply in the impugned notices would start from the date of receipt of copy of this judgment. The respondents are further directed to adjudicate the matter in accordance with law.
Application disposed off.
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2025 (1) TMI 1328
Appellant's liability for customs duty and penalty - pilferage of goods while in the custody - whether the appellant can be held liable for payment of customs duty and penalty under the provisions of Section 45 of the Act read with Regulation 6 of Handling of Cargo in Customs Areas Regulations, 2009 - time limitation - HELD THAT:- For considering the said issue, reference is invited to a recent decision of the Delhi High Court in CONTAINER CORPORATION OF INDIA VERSUS THE COMMISSIONER OF CUSTOMS [2024 (9) TMI 1503 - DELHI HIGH COURT], where the learned Division Bench upheld the order of the Tribunal in CONTAINER CORPORATION OF INDIA LTD. VERSUS COMMISSIONER OF CUSTOMS (EXPORTS) , NEW DELHI [2023 (10) TMI 758 - CESTAT NEW DELHI] holding that the goods got pilfered and container seal found tampered when the goods were not still cleared. It was held that as per Section 45, the custodian is burdened with the responsibility of safe custody of imported goods, unless and until the goods are cleared either for home consumption or for being warehoused.
After the first check was ordered by the appraising officer, the shed officer had raised the objection in respect of the goods contained in the container in question that import of Refrigerant Gas in cylinders requires NOC/Approval from the Chief Controller of Explosives, which is evident of the fact that the impugned goods arrived in the said container and were pilfered while in the custody of the appellant - The appellant has been held to be the custodian of the imported goods and, therefore, in terms of Section 45 of the Act read with Regulation 6, they are liable to pay the customs duty and penalty as ordered by the Adjudicating Authority.
Time limitation - HELD THAT:- On the issue of time limit as prescribed under Section 28 of the Act, it is seen that the appellant vide their letter dated 27.06.2013 had informed the Department that the container was found empty during the joint survey for which, FIR has been lodged. Taking the date of the said letter, the show cause notice issued on 18.12.2013 is well within the time.
Penalty - HELD THAT:- No interference is called for in imposition of penalty under Section 117 of the Act as it was the responsibility of the appellant to keep the goods in safe and secure condition so long as they remain in their custody. Here, the goods have been pilfered while they were in the custody of the appellant.
There are no reason to interfere with the impugned order, which is hereby affirmed - appeal dismissed.
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2025 (1) TMI 1327
Classification of imported goods - drawings and designs - to be classified under CTH 49.06 or not? - submission of the Revenue is that the imported item pertains to a "Pre Import Activity" as reflected in the agreement of supply of ETP and DDGS - HELD THAT:- CTH 49.06 would cover plans and drawings for architectural, engineering, industrial commercial, topographical or similar purposes, being originals drawn by hand; hand-written texts: photographic reproductions on sensitized paper and carton copies. This heading covers industrial plans and drawings the purpose of which, generally, is to indicate the position and relation of parts or features of buildings, machinery or other constructions either as they exist, or for the guidance of builders or manufacturers in their construction (eg., architects' or engineers plans and drawings). The plans and drawings may include specifications, directions, etc. printed or not.
In the instant case, the supplier, M/s Ventilex B. V. confirmed that these drawings are original, taken print out from computer and solely prepared in accordance to the contract no. IFBFAG/PO/PROJ-CMG/2013-14/017 dated 09.07.2013; in other words, the impugned drawings are original print outs, supplied separately and not as a part of the ETP.
The impugned drawings are original print outs, supplied separately and not as a part of the ETP. Therefore, the import of impugned drawings and designs are related to post import activity and not related to pre-import activity, as contended by the Revenue.
The Department had also erroneously proceeded on the incorrect premise, that since the value of the impugned drawings was to be included in the assessable value of the equipment imported and/or to be imported subsequently in terms of provisions laid down under Rule 10(1)(b)(iv) of the Valuation Rules, therefore, the impugned goods were classifiable under CTH 84.19 instead of CTH49.06, since ETP was classifiable under CTH 84.19. The above said contention of the Department is clearly misplaced, inasmuch as the sub clause (iv) of clause (b) of Rule 10(1) of the Valuation Rules seems to have been read in isolation.
Conclusion - i) The imported drawings and designs are rightly classifiable under CTH 49.06, not CTH 84.19. ii) The value of the drawings should not be included in the assessable value of the ETP under Rule 10(1)(b)(iv) of the Customs Valuation Rules, as they were supplied by the foreign supplier. iii) The drawings pertain to post-import activity, not pre-import activity. iv) The exemption under Notification No. 12/2012-Cus. is applicable, allowing a 'nil' rate of duty.
There are no reason to disagree with the reasoned findings given by the ld. Commissioner (Appeals) in the impugned order - appeal dismissed.
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2025 (1) TMI 1326
Levy of penalties u/s 112 (a) and 114AA of the Customs Act, 1962 - Delivery Agents - Allegation that appellants have aided and abetted the smuggling of cigarettes - HELD THAT:- The appellants are only a Delivery Agent of the Principal and acted in a proper manner and ensured that the FCL and sealed container landed properly at Haldia with its seal intact. The FCL sealed container was carried from Jebel Ali to Haldia and this being a FCL sealed container. Therefore, as the Delivery Agents were not aware of the contents inside the container or what was carried inside the container and as a reason of which the Bill of Lading of this consignment/container was clause “Particulars of goods as declared by Shipper-Carrier not responsible /Shipper’s Load Stow, Count, Seal & Weight, Said to contain”. It was only at the time of opening of the container. It came to the knowledge of the appellant that these containers are carrying cigarettes.
Conclusion - The fact that being the appellants were not known the contents inside the container and they are only Delivery Agent, in that circumstances, the provisions of Section 112 (a) of the Customs Act, 1962, is not applicable on the appellants. The appellants have no knowledge and the appellants have not aided and abetted the smuggling of cigarettes, in that circumstances, no penalty is imposable on the appellants.
Appeal disposed off.
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2025 (1) TMI 1325
Application for withdrawal of the Company Petition - settlement agreement and Form FA were obtained under force, coercion and threat - HELD THAT:- The present appeals are disposed off without adjudication on merits in view of the appellant’s stand and claim based upon the settlement agreement dated 02.01.2025. Form FA dated 02.01.2025, being the application for withdrawal of the Company Petition, signed on behalf of respondent No. 1, M/s. K. Computers, addressed to the Interim Resolution Professional is placed on record by the appellant, Kalyan Muppaneni, the erstwhile Director of the corporate debtor.
Appeal disposed off.
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2025 (1) TMI 1324
Seeking permission to applicant to manage the operations of the corporate debtor as a going concern and also permit the applicant to perform all the duties under section 18 of IBC - Appointment of a new Resolution Professional (RP) and the associated financial management of the corporate debtor - HELD THAT:- It is disputed by Counsel for the Central Bank of India and Arrow Engineering Ltd. that Corporate Debtor is not running as a going concern, hence no payment be directed towards the salary as claimed by the RP. Learned Counsel has also relied on the Judgment of the Hon’ble Supreme Court in the matter of Sunil Kumar Jain & Ors. Vs. Sunaresh Bhatt & Ors. [2022 (4) TMI 888 - SUPREME COURT] to support his submission that unless the employees have worked during CIRP period, no CIRP cost be paid.
The new RP may incur expenses which are absolutely necessary for maintaining the Corporate Debtor i.e., security expenses, expenses which are incurred towards payment to Statutory Auditors, Practicing Company Secretary and as well as the RP which was permitted by the Adjudicating Authority itself, this shall be in addition to necessary payments towards the statutory compliances.
It is directed that all payments which are to be made in pursuance of this Order shall be upon undertaking that the payments are subject to ratification by reconstituted CoC and in event of CoC not approving the payment, payments are to be refunded.
Conclusion - i) RP is permitted to incur expenses towards statutory compliances. Payments towards Statutory Auditor, Practicing Company Secretary and RP shall be paid in accordance with the Order as approved by the Adjudicating Authority on 13.05.2024. The above payments shall be subject to ratification by the reconstituted CoC and shall be undertaken after undertaking from the Parties to whom the payments are being made that in event of payments not being approved, the said shall be refunded. ii) With regard to other claims of payment, including payment of salary to the employees, the same shall be placed before the reconstituted CoC for consideration and approval. iii) Payment to security agencies who have been appointed to securing the assets of the Corporate Debtor shall also be paid. iv) It is further directed that new RP shall not engage any new Professional in the CIRP process, for the time being.
Application disposed off.
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2025 (1) TMI 1323
Levy of service tax - Commercial Training and Coaching Centers services - appellants are facilitating the conduct of classes and award of degree by IIM, XLRI etc - principles of natural justice - HELD THAT:- On going through the Clauses/ Articles of different Agreements, it is clear that the appellants are providing and maintaining infrastructure like classrooms, uninterrupted communication and are marketing the programs; they provide and maintain the facilities under an Agreement with the institutions; the coaching methodology (Pedagogy) is decided by the institutions themselves; the institutions conduct examinations and award certificates; the appellants are also associated with the conduct of the examinations inasmuch as providing invigilators their own or hired; there is a revenue sharing between the appellant and the institutions.
Undisputedly, the appellants are involved in providing the infrastructure required for conduct of classes and examinations; they are associated in the activity of the imparting education and award of degrees with the institutions like IIM/ XLRI. At the same time, it cannot be said that the appellants are imparting education and it also cannot be said that they are a commercial coaching or training institute - in a typical Commercial Coaching or Training Center, the Centre has no connection with those who conduct the examination; the respective authorities like universities/ colleges/ institutes/ professional bodies conduct the examinations and the coaching centers trained students/ candidates for the examinations. In the instant case, the services rendered by the appellants are not at all akin to those rendered by the coaching centers.
In view of the findings of the learned Commissioner, the appellants are providing support services to the institutions who are engaged in providing education service. This being so, it cannot be held that the appellants have a joint venture with the institutions and are providing the services of a Commercial Training and Coaching Center. Understandably, the institutions referred are not preparing the students for any examination conducted by any other university or authority. The institutions design their own courses and use their own pedagogy and conduct the courses. The role of the appellants is limited to providing the necessary infrastructure and to help the institutions in marketing the courses - there is a contradiction in the findings of the learned Commissioner. It is not the case of the Department that the courses conducted by the institutions do not result in award of a recognized degree/ diploma. Therefore, the appellants are not providing services akin to that of Commercial Training and Coaching Centers. Therefore, the appellants can be held to be providing auxiliary or support services in relation to education. Thus, the services rendered by the appellants should necessarily fall under the exempted services.
The learned Commissioner (Appeals) clearly observed that the issue whether the appellants were providing services under Commercial Training and Coaching Centers was not the subject matter of the appeal as neither the appellants nor the adjudicating authority have raised the issue and the impugned order therein has rejected the refund claim of the appellant on the grounds that the appellants have not borne the incidence of tax in terms of Section 11D. On going through the Order-in-Original dated 19.04.2006, it is found that the original authority has rejected the refund claim filed by the appellants mainly on the ground of unjust enrichment.
Conclusion - It is established that providing infrastructure and support services to educational institutions does not constitute a commercial training and coaching center liable for service tax.
Appeal allowed.
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2025 (1) TMI 1322
Valuation of service tax - Inclusion of waiver from payment of telephone charges, given by the appellants to their employees, referred to as CFA is to be included for the purpose of calculating the service tax payable by the appellants - HELD THAT:- The telephone service providers are required to pay service tax on the consideration received by them, the consideration being the gross amount charged; in this case, the gross amount charged by the appellant is the amount they collected from their employees and not the discount given to the employees in the form of CFA.
The appellants relies on a number of cases, including that of M/S BHAYANA BUILDERS (P) LTD. & OTHERS VERSUS CST, DELHI & OTHERS. [2013 (9) TMI 294 - CESTAT NEW DELHI-LB] wherein the principle of law was settled to state that the value of goods or material supplied free of cost would not be included in the gross amount charged under Section 67. This particular submission is not relevant to the facts of the case as there is no goods or material supplied free of cost by the service receivers to the service provider i.e the appellant. What is to be seen in the present case is whether the discount or free allowance extended by the appellants to their employees is includable in the assessable value. In the scheme of the service tax taxation, includability of any amount in the gross amount charged for service requires to be the consideration flowing from the service receiver to the service provider.
In the instant case, it is the service recipient that is getting benefitted monetarily in the form of free allowance or discount and there is no flow of consideration from the service recipients to the service provider.
For the purpose of valuation of service tax, the goodwill cannot be taken into consideration. It is found that learned Commissioner did not arrive at the value of the goodwill for the purpose of taxation, even if goodwill is considered to be an additional consideration. It is incorrect to take the entire free allowance given to the employees as monetary value of goodwill.
Conclusion - (i) Service tax cannot be levied when there is no consideration received. Free allowance given to the employees by the appellant is in the nature of discount/ concession and as the same has not accrued to the service provider-appellant, the same cannot form part of the consideration for the purpose of levy of service tax. (ii) Under the facts and circumstances of the case, Department has not made out any strong argument in favour of best judgment method. (iii) Computation of service tax cannot be on the basis of assumptions and presumptions. (iv) The Show Cause Notice is vague and does not specify the service which is rendered by the appellant; moreover, the benefit of discounts/ free allowance is accruing to the employees rather than the appellant who is the service provider. Consideration flowing towards the service recipient cannot be included for the purpose of taxing the service provided by the appellant.
Appeal allowed.
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2025 (1) TMI 1321
Levy of service tax - Erection, Commissioning and Installation service - invocation of extended period of limitation - suppression of facts or not - HELD THAT:- Though the appellant contends that it had made submissions verbally/orally in response to the letter, however, it is not proposed to accept the same for want of any supporting evidence. But in any case, the fact remains that the above intimation was followed by reminders of various dates and hence, there is no dispute as to the starting point, which is 21.02.2007. The Show Cause Notice issued on 22.10.2012 is undoubtedly beyond the normal period, rather extending the larger period of limitation and hence, it was incumbent on the Revenue to prove that the appellant had suppressed facts with an intent to evade payment of tax. From a reading of SCN, the allegation against the appellant is that there was no voluntary compliance on its part despite several reminders and that the non-payment of service tax would have gone un-noticed but for the detection at the time of conducting audit by the departmental officers.
Conclusion - The allegations ipso facto would not suffice the invoking of larger period of limitation and nor would the same in anyway amounts to suppression or fraud or even misstatement and hence, the demand of service tax by invoking the extended period of limitation itself stands disproved.
Appeal allowed.
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2025 (1) TMI 1320
Recovery of service tax with interest and penalty - Insurance Commission - Finance Payouts - Incentive received from MUL - Handling & Logistic Charges - Repairing, reconditioning, restoration service - Reimbursement of Expenses from MUL - Reverse Charge Mechanism on entire expenses appearing in the audited Profit & Loss Account - violation of principles of natural justice - HELD THAT:- In the case of M/S ANAND MOTERS AGENCIES LTD. VERSUS COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, LUCKNOW [2024 (12) TMI 1524 - CESTAT ALLAHABAD] it is considered the Hon’ble High Court in remanding the matter, and the present appeal have to be considered in terms of the order passed in that appeal.
Since demands in this response have been admitted and paid by the Appellant the Tribunal should have in the first stage itself confirmed the demand and appropriated the said demand against the confirmed demand which has not been done in the earlier round which we do now in the remand proceeding as per the directions of the Hon’ble High Court.
As the amount due have been paid even prior to the issuance of Show Cause Notice, the penalties could not have been imposed in respect of these demands which are confirmed as per para 4.5. Thus it is not required to interfere with the earlier order, to the extent of setting aside the entire penalties as on all other demand, the earlier order of this Bench in these appeals setting aside the demand and penalties, agreed upon.
Conclusion - The amount due have been paid even prior to the issuance of Show Cause Notice, the penalties could not have been imposed in respect of these demands.
Appeal disposed off.
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2025 (1) TMI 1319
CENVAT Credit - input service - Goods Transport Agency (GTA) service for outward transportation during the period April, 2017 to June, 2017 - HELD THAT:- The authorities below have recorded that they did not find any documentary evidence to establish that the transfer of property had taken place on reaching premises of buyer. The purchase orders and tax invoices placed on record by the appellant as annexures to the appeal and noticed that no separate amount has been charged by the appellant from its customer for delivery of the goods upto the customer’s place. Purchase orders contained terms like ‘Freight: paid by the supplier’, ‘Freight: inclusive’ or ‘Freight:N.A;. In the tax invoices and the challans, the mode of despatch has been mentioned as ‘by road’ without reference to any separate amount of freight or transportation.
Conclusion - In the facts of the case herein, ‘place of removal’ is the premises of buyer and not the factory gate of the appellant. Therefore, the appellant is entitled to take credit of Service Tax paid on GTA service for outward transportation of the goods.
Appeal allowed.
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