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Showing 221 to 240 of 1733 Records
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2019 (6) TMI 1515
Principles of Natural Justice - reasonable opportunity of being heard not being given to the writ petitioner - Section 22(4) of TNVAT Act - HELD THAT:- There is no material before this Court to demonstrate that notice has been duly served on the writ petitioner.
This Court is convinced that the impugned order has to be set aside on the ground of reasonable opportunity of being heard not being given to the writ petitioner i.e., personal hearing not being given to the writ petitioner - impugned order set aside - respondent is directed to issue notice afresh to the writ petitioner, give a reasonable opportunity of being heard to the writ petitioner and pass orders afresh within a period of eight weeks from the date of receipt of a copy of this order - petition disposed off.
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2019 (6) TMI 1514
Exemption u/s 10A - total turnover for the purpose of Section 10A - Tribunal held that the expenditure incurred in foreign exchange which have even specifically excluded from export turnover by explanation 2(iv) to Section 10A would also not form part of the total turnover for the purpose of Section 10A - HELD THAT:- Issue covered against the Revenue in the light of the decision of HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT]. Accordingly, substantial question of law decided against the Revenue.
Entitlement of deduction u/s 10A - Nodistinguish between STPI and non-STPI as the employees with both the units are same, the products and services are also same and the infrastructure is also similar - HELD THAT:- CIT(A) after going through the entire factual matrix, held that the assessee has furnished sufficient material to show that there is a separate and distinct STPI formed which has engaged itself in export and development of software involving substantial investment in infrastructure including computers and software and employees and the Assessing Officer's conclusion that there is a splitting up of the existing unit is not correct and such finding has been given without analysing and appreciating all the relevant facts. CIT(A) proceeds to elaborately take note of the factual position, the profit and loss account, the amount of expenditure incurred etc., and record the factual finding that there is no splitting up of existing business and the assessee has fulfilled the relevant conditions under Section 10A
Tribunal once again does a fact finding exercise and concludes that the case that same machinery as that of the old unit were used by the STPI is only based upon suspicion and not tenable as the assessee has acquired total assets worth ₹ 1.43 Crores for the STPI Unit for the financial year 2000-01. This order passed by the Tribunal was followed for the assessment year 2002-03.
Following fact finding exercise was done by CIT(A) by assigning independent reasons and thus, we find that there is no question of law much less substantial question of law arising for consideration in these appeals - Decided against revenue.
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2019 (6) TMI 1513
Applicability of Section 115BBE - statute book to clarify the ambiguity prevailed in respect of unexplained expenditure - addition of expenditure made u/s 69C based on a perverse finding of fact - HELD THAT:- What weighed in the mind of the Tribunal was with regard to the expenditure, which according to the assessee, was recorded in the books of accounts maintained in the course of regular business. The assessment was reopened solely on the ground that under Section 115BBE of the Act having been brought into the statute book, the expenditure under Section 11BBE., etc. should be assessed separately.
Assessee referred to a decision rendered by Division Bench of this Court in Commissioner of Income Tax Vs. Chensing Ventures [2007 (4) TMI 204 - MADRAS HIGH COURT] wherein, the loss sustained by the assessee, in any year under, the heads of income was permitted as set off against income under any other head. Learned counsel for assesssee also referred to a decision of Division Bench in High Court of Gujarat in Commissioner of Income Tax -II Vs. Shilpa Dyeing & Printing Mills (P) Limited [2015 (7) TMI 691 - GUJARAT HIGH COURT]
Matter requires reconsideration by the Tribunal for the reasons, which we have indicated in this judgment. Furthermore, the CBDT has issued Circular No.11 of 2019 dated 19.06.2019 also needs to be looked into as regards the effect of the introduction of Section 115BBE of the Act. - Decided in favour of revenue.
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2019 (6) TMI 1512
Irregular availment of CENVAT Credit - allegation that no service has been rendered by the SPPL - denial of credit mainly based on the assessment orders passed by the Income Tax Department on SPPL and the statement of Sri Gupta, Director of SPPL, which provided the subject sales promotion service - HELD THAT:- It is found that no independent investigation has been carried out by the department to produce any evidence whatsoever to show that the appellant has not received any service. The statement of Sri Gupta, on which the department has placed heavy reliance to deny CENVAT credit has not even been relied in the SCN and hence cannot be entered into evidence as required under Section 9D of the Central Excise Act and therefore no credence can be given to the said statement to decide the case against the appellant - It is a settled legal position that onus to prove the allegations is on the department with corroborative evidence which has not been done in the present case.
Moreover, from the records, it is amply clear that the statements made by Sri Gupta of SPPL specifically pertained to the invoices issued by them to one M/s. Akhsay Steel which in any case, cannot deprive the appellant assessee herein of their legal entitlement of CENVAT credit.
Appeal allowed - decided in favor of appellant.
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2019 (6) TMI 1511
Validity of issuance of SCN - entire amount of service tax along with applicable interest was deposited before issuance of SCN - Reverse charge mechanism - Business Auxiliary Service - software service and patent related expenses - legal charges - period 2013-14 and 2014-15 - HELD THAT:- The present issue involved in this appeal is no more res-integra in view of the decision of the Tribunal in the case of M/S BHORUKA ALUMINIUM LIMITED. VERSUS THE COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, MYSORE [2016 (11) TMI 1292 - CESTAT BANGALORE] where it was held that Section 73(3) is very clear as it says that if tax is paid along with interest before issuance of the show cause notice, then in that case, show cause notice shall not be issued.
There is no requirement to issue SCN - Appeal allowed - decided in favor of appellant.
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2019 (6) TMI 1510
Taxability - Works Contract - use of dyes and chemicals by the assessee - whether transfer of property to the customers or not - HELD THAT:- Coordinate Bench of this Court has already decided similar revision petition in favour of the Revenue and placed before us, one such judgment in State of Tamil Nadu Vs Tex-in Printers [2013 (10) TMI 1279 - MADRAS HIGH COURT], in which a Coordinate Bench of this Court, in similar circumstances, held that after introduction of section 3B and after amendment made to the definition of "sale" under section 2(n)(ii), the contention raised by the learned counsel for the assessee cannot be accepted, since by the operation of law, the transfer of goods involved in works contract would amount to "sale" taxable under section 3B. The assessee therein had purchased the dyes and chemicals from outsaid the State. Consequently, this court held that the entire turnover was assessable to tax.
None has appeared on behalf of the respondent assessee despite service, to controvert the aforesaid submissions made by the learned counsel for the Revenue - the present Tax Case Revision in favour of the Revenue in the same terms as was held in the case cited.
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2019 (6) TMI 1509
Export of services or not - Business Auxiliary Service - services in India in respect of marketing, procurement of order, sales, realization and remitting the same proceed, on which they have received the commission - place of provision of services - period April, 2008 to October, 2008 - HELD THAT:- The appellants have received commission from its parent entity, M/s Stollberg, GMBH, Germany for rendering their services in India in respect of marketing, procurement of order, sales, realization.
The services in the instant case have been delivered outside India and used outside India and since payment for the service has been received in convertible foreign exchange, the same would have to be treated as exported out of India - the services provided by the appellant, qualify as the export of services and accordingly, the service tax is not payable on the commission earned on such services.
The issue is decided in the case of M/S GAP INTERNATIONAL SOURCING (INDIA) PVT. LTD. VERSUS CST, DELHI [2014 (3) TMI 696 - CESTAT NEW DELHI] where it was held that The performance of such service in India, would not make them received/consumed in India, if beneficiary user/recipient of said service provided in relation to business or commerce, who has paid for these service and has used the service in his business, is located abroad.
Appeal allowed - decided in favor of appellant.
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2019 (6) TMI 1508
Capitalization of expenses incurred by the assessee to earn interest income as pre-operative expenses - Non commencement of hotel business by assessee - AO observed that since the assessee has been deploying funds raised by it in short term lending operations till the time it commences business, the receipt of interest income has to be assessed under the head 'income from other sources' - HELD THAT:- As decided in own case [2018 (8) TMI 1965 - ITAT CHENNAI]Ancillary objects in the Memorandum of Association also permitted the assessee company to carry on the business of financial services. In the process the assessee company had deployed its fund towards earning interest income because during the relevant assessment year the assessee company did not commenced activities with respect to Hotel Business.
Since the business of the assessee company during the relevant assessment year was only financial services, the income earned during the relevant assessment year ought to be assessed as business income and the entire expenditure incurred by the assessee for earning such income has to be allowed as deduction - Nothing on record is before us to suggest that the assessee company was indulging in any other business activity during the relevant assessment year - expenditure incurred by the assessee towards salary has also to be allowed as deduction while computing the business income of the assessee for the relevant assessment year - Decided in favour of assessee.
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2019 (6) TMI 1507
Validity of reopening of assessment - notice u/s 148 on a dead person - notice in name of wife - HELD THAT:- In the instant case, there is no dispute that the assessee had expired and notice was issued on dead person. Though subsequently, notice u/s 143(2) was issued in the name of his wife and the same cannot validate the invalid notice. The notice issued on a dead person is held to be invalid as discussed earlier in this order. Once the notice issued u/s 148 is invalid, subsequent proceedings also become invalid and renders the assessment infructuous. Hence,we quash the notice u/s 148 and cancel the assessment made u/s 143(3) r.w.s.147 . See Sri Aemala Venkateswara Rao Versus Income Tax Officer, Ward-2 (1) , Guntur - 2019 (5) TMI 767 - ITAT VISAKHAPATNAM - Decided in favour of assessee.
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2019 (6) TMI 1506
Jurisdiction - Time Limitation for issuance of SCN - case of appellant is that the appellant’s place of business and residence for all practical purposes is Raipur (Chhatishgarh) whereas the Adjudication Order has been passed by The Joint Commissioner, Central Excise, Patna - non-disposal of the perishable goods by the Department - Confiscation.
Time Limitation for issuance of SCN - SCN served after 6 months from the date of seizure - Section 110 (2) of the Customs Act, 1962 - HELD THAT:- From the Adjudication order, it is found that only one notice was issued and the legible copy of the same was served on the appellant on 12.06.2014 under dated acknowledgement. It is observed by the Adjudicating Authority that the acknowledgement receipt sent by DGCEI proves that the notice was served on 12.06.2014, hence the notice is not barred by time. But the appellant disputed the above fact before the Commissioner (Appeals) as well as the Tribunal - the appellant should be given an opportunity to examine the records in respect of receipt of Show Cause Notice as on 12.06.2014 as revealed from the adjudication order.
Non-disposal of the perishable goods by the Department - HELD THAT:- It is found that 24,25,000 Nos. of filtered and unfiltered cigarettes of various brands were seized on 13.12.2013, valued at ₹ 38,15,800/- on the reasonable principle that the above mentioned stock of cigarettes has not suffered Central Excise duty.
Jurisdiction of the adjudicating authority - HELD THAT:- The Tribunal and the High Courts observed in various decisions that the plea of jurisdiction can be raised even at the Appellate stage. It appears that the Revenue proceeded on the basis that the seized goods are manufactured by the manufacturer M/s Ankit Tobbacco Pvt. Ltd, Patna. The issue of jurisdiction is to be decided on the basis of clear facts of the case, which is not available on record. Hence, this issue is required to be examined by the lower authorities.
Matter remanded to the adjudicating authority to decide afresh after considering the submissions of the appellant and pass a reasoned order in accordance with law - Appeal allowed by way of remand.
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2019 (6) TMI 1505
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- In this case, the Corporate Debtor denied the fact that Financial Creditor has really disburse loan amount to them. To prove the fact that loan was actually disbursed to the Corporate Debtor, the Financial Creditor produced on record certified copy of Statement of Bank Account bearing no. 200998962032maintained by Induslnd Bank. Sl. No. 1 in the Bank Statement, Annexure F-2 to the Petition shows that a sum of ₹ 1,00,00,000/- was transferred to the Corporate Debtor's account by the Financial Creditor by way of RTGS dated 03.04.2018. It proves the Financial Creditor gave corporate loan to the Corporate Debtor as contemplated under Section 186 of the Companies Act, 2013.
In view of this, evidence on record, it was for the Corporate Debtor to explain as to how and in relating to what transaction they received sum of ₹ 1,00,00,000/- from the Financial Creditor. They did not explain. In view of evidence on record, it is held that Financial Creditor proves that there is a financial debt of more than Rupees One Crore due and payable by the Corporate Debtor which they did not pay and committed default. This application is referred to be admitted.
Application admitted - moratorium declared.
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2019 (6) TMI 1504
Claim of deduction u/s 35(1)(ii) - Disallowance holding that donation made to School of Human Genetics & Research health, Kolkata as bogus - HELD THAT:- The issue of allowability of deduction in respect of donation to School of Human Genetics and Population Health is squarely covered by the decision of the Coordinate Bench in the case of M/s P.R. Rolling Mills Pvt. Ltd. Vs DCIT [2018 (7) TMI 737 - ITAT JAIPUR] AND DCIT Vs Maco Corporation (India) [2018 (3) TMI 811 - ITAT KOLKATA] as considered the issue in regard to very same trust i.e. SGHPH and holds that prior to the date of donation under cancellation of registration has happened and there is absolutely no provision of withdrawal of recognition under section 35(1)(ii).
Provisions of the Act are very clear that the payer (the assessee herein) would not get affected if the recognition granted to the payee had been withdrawn subsequent to the date of contribution by the assessee. Hence no disallowance u/s 35(1)(ii) - Decided in favour of assessee.
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2019 (6) TMI 1503
Delay in payment of TDS - Direction to Liquidator to pay the outstanding TDS in relation to the salary of the Applicant - issuance of Form 16 to the Applicant - direction to respondent to restrain from taking any coercive steps for payment of TDS amount, pending adjudication of the present Application - CIRP process - HELD THAT:- The TDS deducted from the salary of Applicant is to be credited to the account of IT Department. However, it is an undisputed fact that the TDS deducted from the salary was not credited to the IT Department. Therefore, notice was issued to the Applicant by the IT Department. The fault lies with the Corporate Debtor. It is the Corporate Debtor which failed to deposit TDS collected from the Applicant. He cannot be held responsible for default committed by the Corporate Debtor which is under Liquidation. The liability to pay TDS continues to lie on the Corporate Debtor whether liability is related to the period prior to CIRP or after starting of CIRP against Corporate Debtor. It is immaterial that whether default occurred prior to CIRP or after starting of CIRP. The question is who is at default. Indisputably Corporate Debtor should have remitted TDS collected from the Applicant to the IT Department. The Corporate Debtor failed to deposit the TDS amount. The Liquidator has also admitted that not only in the case of Applicant but also in the case of other employees, TDS was not deposited and therefore Form-16 could not be issued.
It is the Corporate Debtor Company which committed default in not depositing TDS. Therefore, the liability if any is to be discharged by the Corporate Debtor. The Corporate Debtor is under Liquidation. Therefore, Liquidator has to pay the tax to the IT Department in respect of TDS collected from the Applicant - Application is allowed directing the Liquidator to pay the TDS and other charges if any in respect of amounts collected from the Applicant towards TDS to the IT Department.
Direction to liquidator to keep on priority, the funds required for payment of compounding fees on behalf of the Corporate Debtor - It is the case of Applicant, the case is still pending and if offence is compounded before the court, then compounding fee to be paid and the same to be paid by the Liquidator as Corporate Debtor is under Liquidation - HELD THAT:- The criminal case was filed against Corporate Debtor for its default. Though Applicant in the capacity as the then Managing Director is attending the court but proceedings were initiated against the Corporate debtor. The proceedings are pending during CIRP as well as during Liquidation. When criminal prosecution was launched against the Corporate Debtor, which is under Liquidation, the compounding fee if any payable is to be paid by the Liquidator. The default was committed by the Corporate Debtor. Whether it relates to the period prior to CIRP or after starting of CIRP, the responsibility nevertheless lies with the Corporate Debtor. Section 35 (1) (k) of IBC provides that if proceedings are initiated against Corporate Debtor, it is the duty of the Liquidator to defend any suit, prosecution or other legal proceedings, civil or criminal, in accordance with the provisions of the Code. So it is very clear, under Section 35 (1) (k), the Liquidator is to defend the proceedings whether civil or criminal since proceedings are already started against Corporate Debtor and the then Managing Director, the Applicant herein is attending the court in connection with prosecution launched against the Corporate Debtor, the expenses if any incurred for payment of compounding fee shall be made by the Liquidator.
The Applicant in the alternative is seeking a direction to the Liquidator to make a provisions for reimbursement of any compounding fee paid by the Applicant since it is the duty of the Liquidator during Liquidation to defend the Corporate Debtor and if Applicant pays compounding fee, the Liquidator has to reimburse the compounding fee to be paid by the Applicant and for this purpose the Liquidator is directed to make sufficient provision for payment on priority basis. Therefore, the Liquidator cannot avoid the liability on the ground proceedings were initiated against the Corporate Debtor prior to CIRP. The fact remains proceedings are still pending against the Corporate Debtor even during Liquidation - Application is allowed, directing the Liquidator to reimburse to the Applicant, the amount incurred towards payment of compounding fee levied by the Court in connection with criminal case filed against Corporate Debtor pending before the Additional Chief Metropolitan Magistrate (Special Acts), Tis Hazari Court, New Delhi and the payment shall be attended on priority basis and 19 necessary provisions to be made to meet this expenditure.
Direction to refund a sum of to the applicant - direction to Resolution Professional not to include the sum of Rs. as part of assets of the corporate debtor - HELD THAT:- Counsel for Applicant reported no instructions to the applicant. Hence petition is dismissed for default.
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2019 (6) TMI 1502
Permanent Establishment (PE) of the assessee in India - assessee is a Limited Liability Partnership and is a tax resident of United Kingdom (UK) and offers legal consultancy services to its clients all over the world including India - India-U.K. Tax Treaty - HELD THAT:- Departmental Representative has made an attempt to make out a case by interpreting the expression "any twelve months period" as used in Article-5(2)(k)(i) of the India-U.K. Tax Treaty in a different manner, however, we are not impressed with the same. In our considered opinion, the issue is squarely covered by the decision of the Co-ordinate Bench in assessee's own case for the assessment year 2012-13 in Linklaters LLP's case [2018 (9) TMI 1741 - ITAT MUMBAI] as per the provisions of domestic law, the 12 month period would mean the previous year or the financial year which is the unit for which the income of a person is taxable. If the provisions of Article 5(2)(k)(i) of the India-UK DTAA is read harmoniously with the provisions of the Act referred to above, it will be fair and reasonable to conclude that the expression “any 12 month period” mentioned in Article 5(2)(k)(i) of the India-U.K. DTAA has to be construed to mean the previous year or financial year as per section 3 of the Act, since, the income is sought to be taxed in India.
It has to be seen whether the employees or personnel of the assessee have rendered services in India for a period aggregating to 90 days or more in financial year 2011-12 to constitute a PE. As per the chart submitted by the assessee it is claimed that the employees and personnel of the assessee were situated in India for rendering services for a period aggregating to 77 days. Since, the aforesaid factual aspect has not been verified by the Departmental Authorities as the assessee did not raise this issue before them, we are inclined to restore the issue to the Assessing Officer for adjudication keeping in view of our observations hereinabove and only after due opportunity of being heard to the assessee. This ground is allowed for statistical purposes.
Denial of India-U.K. Tax Treaty benefit - denial on the ground that income of the assessee is not taxable in U.K., hence, it cannot be treated as a resident of U.K. under Article-4(1) of the India-UK Tax Treaty - HELD THAT:- As relying on assessee's own case for the assessment year 2012-13 in Linklaters LLP's case [2018 (9) TMI 1741 - ITAT MUMBAI] we hold that the income received by the assessee not being in the nature of FTS as envisaged under Article-13 of the India-U.K. DTAA, cannot be brought to tax by applying the provisions of section 9(1)(vii) of the Act, since, the assessee is entitled to claim the benefit of India-U.K. DTAA.
Applicability of Article-15 of the India-U.K. Tax Treaty - HELD THAT:- As relying on own case we hold that income received by the assessee will not be taxable under Article-15 of the India-U.K. Tax Treaty. This ground is allowed.
As we have held that the amount received by the assessee cannot be treated as fee for technical services. That being the case, it can only be treated as business profit of the assessee. However, since we have held that the assessee did not have any PE in India during the year under consideration, the business profit cannot be brought to tax in India.
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2019 (6) TMI 1501
Deemed Assessment - ITC Claims - mismatch of purchases - Section 22(2) of TNVAT Act - HELD THAT:- It follows as an inevitable sequitur that the writ petitioner is entitled to have the impugned orders set aside on the ground that it is in violation of M/S. JKM GRAPHICS SOLUTIONS PRIVATE LIMITED VERSUS THE COMMERCIAL TAX OFFICER [2017 (3) TMI 536 - MADRAS HIGH COURT], where it was held that this Court is fully convinced that the procedure adopted by the respondent, Assessing Officers in all these cases are half baked attempts, which have not yielded results and these cases are before this Court or before the Appellate Authorities and all that the Assessing Officers can record is that they have issued show cause notices or passed orders reversing the Input Tax Credit with no appreciable impact on the revenue collection.
Impugned orders set aside - petition allowed.
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2019 (6) TMI 1500
Oppression and Mismanagement - prayer of the Petitioner is to change the date of valuation of Petitioner’s shares from 31-3-1998 “to the current date” - HELD THAT:- This Bench is of the opinion that the valuation report of M/s Natu and Phatak dated 27.06.2016 is required to be adopted for the purpose of calculation of valuation of the shares of the Company held by the Petitioner. The said Valuer has computed the share valuation as on 17.09.2008. The Valuer has given a reason that the Hon’ble Bombay High Court vide Order dated 15.10.2015 has so opined, hence in accordance to the said Order completed the valuation. The Valuer has pointed out that opportunities were granted to both the sides for their respective representations but only attended by one director Mr. Anshul Kumar, and not attended by Mr. Vinod Kumar. Mr. Vinod Kumar has only informed that one SLP is filed before the Supreme Court challenging the said appointment of the Valuer.
The Applicant has not accepted the verdict of the Hon’ble Supreme Court dated 17.09.2008 which in absolute term have held that events were to be taken into account "till now" i.e. up to the date of Order 17.09.2008 (relevant portion already reproduced supra). No ambiguity was left, hence the Hon’ble High Court has also given the direction on the same lines. It is not possible to keep on changing a cut-off date relevant for the purpose of fixation of valuation on a particular date. The Applicant has coined a terminology "changed circumstances", without giving any specific date. Circumstances keep on changing in business-world every day. Therefore, a cut-off date has to be determined. The valuer has rightly adopted 17.09.2008 as the cut-off date for the purpose of valuation by following the instructions of the Hon’ble Bombay High Court decisions dated 27.07.2015 / 15.10.2015. No interference is possible by this Bench because the superior Hon’ble Courts have given their respective verdict on number of occasions in unambiguous terms.
If a dispute is to be resolved and litigation is to be settled, then both the sides are required to take a pragmatic approach. This case has a chequered history of about two decades, therefore, there should be an end to a litigation. To settle a dispute a thumb rule is that both the sides have to sacrifice some of their rights. Simultaneously both the sides have to forget about the past especially the events triggering the dispute or may be hurting each other's repute. Particularly, in such cases where the rival parties are brothers or closely related to each other. Keeping this benevolent approach in mind this Bench is of the view that on one hand the Petitioner be directed to surrender the shareholdings in favour of the Respondents and on the other hand the price duly determined by the Valuer be paid to the Petitioner. Additionally, the Petitioner should also be paid salary and perquisites for a reasonable period, already been discussed on several occasions in the past.
The Statute is absolutely clear that the Power of Review of its own Order is not enshrined upon NCLT. At the most, power of rectification is enshrined under Rule 154 of National Company Law Tribunal Rules, 2016, i.e. Rectification of Order. Rectification is defined i.e. any clerical or arithmetical mistake, any accidental slip, omission can be rectified even on its own motion by the Tribunal or on an Application by any of the Parties. A correction of an apparent mistake is not to that extent which may substitute a judicial view already taken in an earlier Order. If a judicial view expressed in an Order is not acceptable to any of the Parties, the same is always subject to Appeal. But in the guise of review or clarification ; power of Appeal must not be demanded by an Applicant.
If a litigant is not satisfied with the judicial view adopted by NCLT Bench, is at liberty to challenge the same before NCLAT (National Company Law Appellate Tribunal). Sometimes rectification is carried out if in the opinion of the Bench is that what was intended to have been done was not done in the order, as it ought to have been done, hence it would mean that an apparent error committed which is rectifiable at a first glance. All the decisions as referred by the Applicant are well discussed and well-reasoned orders therefore completely out of the purview of rectification.
Application allowed in part.
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2019 (6) TMI 1499
Process amounting to manufacture or not - job-worker - Benefit of N/N. 214/86-CE dated 25.03.1986 - only allegation in the show cause notice is that supplier of raw material ROL does not have factory of their own although the Central Excise department has issued them registration - HELD THAT:- The basis for allegation is that the supplier ROL has no factory on their own as per the statement before Commercial Tax department etc. There is no allegation that ROL have not fulfilled responsibilities given in their undertaking or that there is any loss of revenue on that count. When the Central Excise department themselves have given registration has manufacturers to ROL, and after citing such registration number, issued an undertaking to the jurisdictional Asst. Commissioner of appellant. The appellant could not have been expected to take any further precautions to ensure that notification 214/86 has been correctly availed. There is also no allegation whatsoever that there is any loss of revenue.
The demand of duty as well as proposition to impose penalties upon appellant are not sustainable - Appeal allowed - decided in favor of appellant.
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2019 (6) TMI 1498
Reversal of CENVAT Credit - services used in relation to abandoned project - even one ounce of product was not produced - extended period of limitation - penalty - HELD THAT:- The appellant availed CENVAT Credit on the services used in relation to setting up of Seemless Tube Mill Project which was abandoned without even producing one ounce of product. Input services or services which are used in or in relation to manufacture of final products including the business related to the final products, the entire project has been abandoned and there is no manufacture whatsoever. It would have been a different case if the project had run for some time and some goods were manufactured and thereafter the project was abandoned. In this case the appellant decided to abandon the project before it is even set up - Under these circumstances, it is found that by no stretch of imagination can the services on which CENVAT Credit has been availed, be related to the manufactured final products either directly or indirectly or any business related to such manufactured products.
Extended Period of Limitation - penalty - HELD THAT:- The assessee cannot plead ignorance. They are a very large Public Sector Undertaking in operation for several decades and have been handling the matters of indirect taxation. Under these circumstances, the assessee has suppressed the information that they have abandoned the Seemless Tube Mill Project on which they have already availed the CENVAT Credit -The extended period of limitation has been rightly invoked in this case and penalty has been correctly imposed.
Appeal dismissed - decided against appellant.
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2019 (6) TMI 1497
Disallowance of expenditure - Addition of 1/3rd of the expenditure claimed under the heads ‘purchases, salaries and administrative expenses’ - CIT-A allowed telescoping of ₹ 30 lakhs offered by the assessee against the disallowance of expenditure made by him - HELD THAT:- As purchases are of vegetables for the daily requirement of the assessee company and as rightly pointed out by assessee, it is not possible to maintain vouchers and bills for each of the purchases such as vegetables, fruits etc. However, inflation of purchases or expenditure cannot be ruled out as assessee itself had agreed for the disallowance on estimation basis at 10% of the turnover. Therefore, disallowance of 10% of the purchases on account of possibility of inflation is to be confirmed.
As regards salaries are concerned assessee company being registered with ESI, cannot inflate the expenditure on account of salaries because number of employees and the salaries claimed by the assessee have to tally with the ESI returns filed by the assessee. Therefore, AO is directed to verify the same and if the claim made by the assessee on number of employees to whom salary is allegedly paid is matching with the number of employees mentioned in ESI return, no disallowance is to be made.
As regards other administrative expenses all such expenses cannot be disallowed @ 10% without pointing out the defects in the books of the assessee, but, inflation of the expenses also cannot be ruled out. Therefore direct the AO to restrict the disallowance only to 5% of the administrative expenses - Appeal of the assessee is partly allowed.
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2019 (6) TMI 1496
Clearing and Forwarding Agents services - non-inclusion of certain expenses in the total taxable value while discharging service tax liability - period 2005-06 to 2009-10, and April 2010 to March 2011 - HELD THAT:- The demand is raised on the expenses which are reimbursed by the principal to the appellant herein. It is undisputed that the appellants have discharged service tax on the entire commission received by them. Apart from such commission, they are also receiving amounts in the nature of reimbursement of expenses. Such amount is not in the nature of consideration for any services provided by the appellant. These are the expenses incurred by the appellant and have been reimbursed by the principal pursuant to the agreement. Such reimbursable expenses cannot form part of the assessable value during the relevant period because service tax can only be levied on the gross amount charged for rendering services as has been held by the Hon’ble Apex Court in the case of UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT].
In the present case, the show-cause notice clearly indicates that the disputed amounts are reimbursable expenses, therefore no service tax can be levied on such reimbursable expenses. In view of the above, the impugned orders are not sustainable and need to be set aside - Appeal allowed - decided in favor of appellant.
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9911796707
