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Showing 281 to 300 of 1464 Records
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2021 (10) TMI 1185
Seeking approval of Resolution Plan - mandatory requirements of Section 30(2) of IBC, met or not - HELD THAT:- The Resolution Plan should conform to all such requirements which may be specified by the IBBI. A statement to this effect has been made by the RP in the Revised Form H.
The resolution plan fulfills all the requirements of Regulation 38 and 39 of the CIRP Regulations. A perusal of Regulation 38 would clearly show that by virtue of mandatory contents of resolution plan as discussed, in relation to Section 30 and Section 31 of the Code, the requirement of Regulation 38 also stands fulfilled. Even the requirement of Regulation 39 has been satisfied, as the RP has submitted that the resolution plan of Resolution applicant, as approved by the Committee of Creditors, to this Tribunal along with the compliance certificate in Revised Form H, as per the requirements of Regulation 39(4) of the CIRP Regulations meets all the requirements of the Code and the CIRP Regulations and that the resolution plan has been duly approved by the Committee of Creditors.
The resolution plan as approved by the COC satisfies all the requirements of the Code and Regulations made thereunder - application allowed.
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2021 (10) TMI 1184
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and default or not - time limitation - HELD THAT:- There are force in the submissions made on behalf of the petitioner, since the respondent-corporate debtor failed to show any valid proof that the debt due and payable to the petitioner in his individual capacity is paid to him in his individual capacity.
The facts of the case further shows that the CP is filed within the period of limitation.
The present petition being complete and having established the default in payment of the financial Debt for the default amount being above ₹ 1,00,000/-, the petition is admitted in terms of Section 7(5) of the IBC and accordingly, moratorium is declared in terms of Section 14 of the Code.
Application allowed.
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2021 (10) TMI 1183
Seeking approval of Resolution Plan - mandatory requirements of Section 30(2) of IBC, met or not - HELD THAT:- The Resolution Plan should conform to all such requirements which may be specified by the IBBI. A statement to this effect has been made by the RP in the Revised Form H.
The resolution plan fulfills all the requirements of Regulation 38 and 39 of the CIRP Regulations. A perusal of Regulation 38 would clearly show that by virtue of mandatory contents of resolution plan as discussed, in relation to Section 30 and Section 31 of the Code, the requirement of Regulation 38 also stands fulfilled. Even the requirement of Regulation 39 has been satisfied, as the RP has submitted that the resolution plan of Resolution applicant, as approved by the Committee of Creditors, to this Tribunal along with the compliance certificate in Revised Form H, as per the requirements of Regulation 39(4) of the CIRP Regulations meets all the requirements of the Code and the CIRP Regulations and that the resolution plan has been duly approved by the Committee of Creditors.
The resolution plan as approved by the COC satisfies all the requirements of the Code and Regulations made thereunder - application allowed.
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2021 (10) TMI 1182
Seeking dissolution of the Corporate Debtor - sections 54(1) of the Insolvency & Bankruptcy Code, 2016 r/w Regulation 45(3) IBBI (Liquidation Process) Regulations, 2016 - HELD THAT:- After completion of sale of assets by ARCIL, a letter dated 05.09.2019 was sent to ARCIL by the liquidator requesting for submission of asset sale report as required under Regulation 36 of the regulations along with the documents relating to the sale of assets. By the said letter, ARCIL was requested to transfer the amount of insolvency resolution process cost and liquidation cost incurred by the IRP, RP and Liquidator from the sale proceeds of the assets before applying the same towards recovery of debts.
ARCIL deposited the amount of ₹ 13,08,403/- in the account of Kokama International Private Limited. (In Liquidation) on 12.12.2019 and the balance amount was adjusted against the recovery of its secured debt by ARCIL - the entire cost of insolvency resolution process and liquidation process was met by ARCIL as the company did not have any funds to meet the said costs. The Liquidator on the request made by ARCIL by letter dated 23.12.2019 reimbursed the said cost to ARCIL from the account of Kokama International Private Limited (In Liquidation).
Kokama International Private Limited, the Corporate Debtor, is hereby dissolved with immediate effect - application allowed.
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2021 (10) TMI 1181
Waiving/relaxing the compliances as stipulated in detail in Annexure-3 - Section 29 and Section 39 of the Code and Regulations 27, 36(1), 36A, 36B, 37, 38 and 39 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulation, 2016 - treatment of claims of the existing operational creditors - Payment to Operational Creditors (Existing) - Section 25 (2) (c), (g), (h) & (i) of the Act of 2016 and Regulation 27 of the Regulations of 2016 - Section 29 of the Code and Regulation 36(1) of Regulations of 2016-Submission of Information Memorandum (IM) to CoC - Section 31 of the Code and Regulations 36A, 36B, 37, 38 and 39.
Payment to Operational Creditors (Existing) - HELD THAT:- As the treatment of operational creditors is entirely different under the Act of 2016 and regulations thereunder, and as such there is no provision to clear the existing operational creditors during CIRP, appropriate directions are required on this aspect - the RP is directed to look into hiring new suppliers or service providers, if needed, for the purpose of completion of the project as directed by this Authority vide order dated 25.11.2020 and the cost of the same shall be included in CIRP cost. Further, the treatment of the existing operational creditors be done according to Section 53 of the Code.
Section 25 (2) (c), (g), (h) & (i) of the Act of 2016 and Regulation 27 of the Regulations of 2016 - HELD THAT:- Since it is a case of Reverse CIRP, the same is not required as there would be no occasion for the Project going into liquidation. Hence, the RP is seeking the direction that the appointment of valuer and CoC to evaluate any resolution plan as being required to be done may kindly be waived - As per the seventh status cum progress report, the erstwhile director of the Corporate Debtor Mr. Mahendra Kalla had shown interest in financing the project as independent financers. In furtherance to this, the financing plan submitted by him in the 4th CoC meeting dated 26.02.2021 was agreed upon by the members of the CoC. It is also stated that Mr. Kalla has deposited ₹ 21,00,000/- for the purpose of construction of Project CRK. In view of these developments, appointment of registered valuers for the purpose of valuation of the project and need for CoC to evaluate Resolution Plan have become redundant and thus, the RP is granted waiver from complying with these provisions.
Section 29 of the Code and Regulation 36(1) of Regulations of 2016-Submission of Information Memorandum (IM) to CoC - HELD THAT:- The relevant information with respect to the Project CRK shall be collated and provided by the RP as was directed vide order dated 25.11.2020. Since, the RP is not required to prepare the IM, there is no need to obtain NDA from the Allottees/Home buyers/their Authorized Representative. In view of the same, the RP is granted waiver from complying with these provisions.
Section 31 of the Code and Regulations 36A, 36B, 37, 38 and 39 - HELD THAT:- Since this is a case of reverse CIRP where this Authority has already directed the CIRP to get the project completed on priority basis, repay the loan of Financial Creditor and handover the possession of flats to respective allottees and homebuyers and make efforts to sell the flats which are not booked. For the same, the RP has been directed to obtain finances from 3 mechanisms i.e., promoters or Financial Creditor or 3rd party private lender. Therefore, the RP is not required to perform the above functions and so this requirement may be waived - In the present case, vide order dated 25.11.2020, this Authority had directed the RP to complete the project on priority basis through existing promoters acting in the capacity of independent financiers and not promoters or Financial Creditor or 3rd party private lender to ensure that CIRP reaches success. And it is seen that erstwhile director of the Corporate Debtor has come forward as an independent financier for the purpose of completion of the project CRK. In view of this, there is no requirement for inviting EOI for resolution plan and subsequent provisions in respect of contents of resolution and approval thereof become redundant.
Application disposed off.
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2021 (10) TMI 1180
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Service of demand notice - HELD THAT:- The Bench notes that the Operational Creditor had supplied Furnishing Fabrics which the Corporate Debtor had duly received. It is also observed that the contentions raised by the Corporate Debtor with respect to discrepancy and incorrect debt amount are not supported by any documentary evidence. The Bench further notes that the Corporate Debtor vide its reply has also admitted that it was facing working capital issues, however, it is still committed to pay its outstanding debts legally payable after necessary adjustments which amounts to admission of debt and default by Corporate Debtor. Further, the Corporate Debtor also failed to reply to the Demand Notice within statutory period and has not raised any disputes before the filing of Reply to the present application. Therefore, no credence can be given to the contentions raised by the Corporate Debtor in the reply filed in this Company Petition.
There are no valid grounds warranting the rejection of the above Company Petition as the debt and default are clearly established and the debt is also within limitation. The Operational Creditor has also suggested the name of proposed Interim Resolution Professional in part-3 of the Petition along with his consent letter in Form-2. Thus, the present Company Petition satisfies all the necessary requirements for admission.
Petition admitted - moratorium declared.
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2021 (10) TMI 1179
Seeking initiation of liquidation proceedings against the Corporate Debtor - Section 33 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In the present case, the Application under Section 9 of the Code was admitted on 30.01.2020 and the period of 180 days was ending on 28.07.2020. It is noted that the CoC resolved to liquidate the Corporate Debtor on 04.08.2020 and as a consequence thereof, the instant application is filed by the RP on 21.08.2020.
As per Notification No. IBBI/2020-21/GN/REG059 dated 20.04.2020, the period of lockdown is excluded for the purpose of calculating the timelines in CIR Process. Hence, after considering exclusion of lockdown period till 30.06.2020, the present application is filed within the prescribed period. In view thereof the Application under consideration is taken up under Section 33(2) of the Code.
Assessment of Sale as a going concern - Regulation 39C of CIRP Regulations, 2016 - HELD THAT:- The RP apprised the CoC in its 4th meeting about Regulation 39C of CIRP Regulations, 2016. The members of CoC discussed and resolved to sell the Corporate Debtor as a going concern, as first option, or sell the business(s) of the Corporate Debtor as a going concern, as second option, before exploring other options as per Regulation 32 & 32A of IBBI (Liquidation Process) Regulations, 2016 and Regulation 39C of CIRP Regulations, 2016, if an order of liquidation is passed by the Adjudicating Authority.
In view of the satisfaction of the conditions provided under Section 33 of the Code, the Corporate Debtor, M/s. Kishori Lal Sudesh Kumar Metals Private Limited is directed to be liquidated in the manner as laid down in Chapter III of the Code - Application allowed.
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2021 (10) TMI 1178
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors/Homebuyers - existence of debt and dispute or not - HELD THAT:- In order to attract the provisions of IBC, a homebuyer must qualify as an ‘Allotee’ under the Section 2 (d) of the RERA Act. As the “Wing E” itself was not complete and registered, thus, the provision of RERA Act shall not apply to the Petitioner in this case as was held by Hon’ble Bombay High Court’s in MACROTECH DEVELOPERS LIMITED (EARLIER KNOWN AS LODHA DEVELOPERS LTD.) VERSUS THE STATE OF MAHARASHTRA, SANJAY PHULWARIA, PAROMITA PHULWARIA [2021 (3) TMI 1266 - BOMBAY HIGH COURT] where it was held that it is apparent that the Act cannot have any retrospective operation and will only apply to those projects which have been completed and registered either prior to commencement of the Act or in the case of ongoing projects, the project or a phase thereof have been completed and received the occupancy certificate/part occupancy certificate within the window of three months from the date of commencement of Section (3) of the Act.
The petitioner has failed to provide substantial proof of his intent to take possession of the flat. Merely, showing receipts of the transaction amount could not be considered as a surety that the person shall necessarily take possession of the Flat/Apartment, even if that person is considered as an allotee.
The relief as sought by the Petitioner under the provisions of the Indian Contract Act, 1872 are to be presented in front of appropriate Authority as it falls out of the scope of this court - Petition under section 7 of the Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP) against Akshar Shanti Realtors Private Limited, the Respondent, is Rejected.
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2021 (10) TMI 1177
Seeking grant of regular bail - Money Laundering - secret banking - acts of cheating and forgery in Netherlands by transferring of money of other persons through Hawala operations and earned commissions in the shape of cash - Section 45 of PMLA Act - HELD THAT:- Section 45 (1) (ii) is akin to Section 37 of the NDPS Act, wherein the Court, while granting bail, has to form an opinion. In a case under the NDPS Act, it is easy for an accused who has been released on bail to repeat such offence, however, in a case under the PMLA like the present case, it is not easy for an accused to commit the offence again while on bail while staying in India - there was no request on behalf of the Netherlands authorities to register a case under Section 44/45 or 65 of the PMLA as at the first instance, a mutual legal assistance was called in 2017 and it is not the case of the ED that by way of any further correspondence, it was communicated to corresponding authorities in Netherlands that the petitioner, who is a Dutch National, is being prosecuted in India, for which he has already been convicted by the Courts at Netherlands.
It is well settled principles of law that when the investigation is complete and charge sheet is filed in the Court, conclusion of trial is likely to take a long time, a person/accused like the present petitioner, who is aged about 63 years old, can be released on bail, subject to his furnishing bail/surety bonds and with a condition that his passport shall remain deposited with the Court/Prosecuting Agency and he will not leave the country without seeking prior permission of the Court.
It is held that the petitioner qualifies the test under Section 45 of the Act and therefore, the present petition is allowed.
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2021 (10) TMI 1176
Freezing of petitioner's Bank Account - allegations of corruption and money laundering were levelled - diversion of funds - reasons to believe - procedure to be followed by the ED when letters of request are received under Section 60 of the Act from a contracting state - requirement to provide ‘reasons to believe’ while passing orders under Section 17 of the PMLA - procedure to be followed by the ED while forwarding the ‘reasons to believe’ and the application under Section 17(4) of the PMLA - requirement to transmit all documents - procedure to be followed by the Adjudicating Authority, upon receipt of the application under Section 17(4) of the PMLA - level of satisfaction to be recorded by the Adjudicating Authority prior to issuance of show cause notice under section 8(1) of the PMLA - requirement to supply Relied Upon Documents while issuing SCN - procedure to be followed for providing inspection of records, and for giving a reasonable hearing to the parties, prior to passing of orders by the Adjudicating Authority under the PMLA.
Procedure to be followed upon receiving letters of requests from a contracting state, under Section 60 of the PMLA - HELD THAT:- Under Section 60 of the PMLA, the Director, ED upon being forwarded a letter of request by the Central Government, has to direct an authority under the PMLA (person authorized) to take steps necessary for tracing and identifying the property, of which freezing/seizure is sought. The person authorized has wide powers, including to inquire, investigate and survey under 60(4) of the Act. However, Section 60 (6) of the Act specifically provides that the provisions contained in Chapter V of the Act for surveys, searches and seizures would apply to all letters of request received from a contracting state.
The requisite safeguards contained in the provisions of Chapters III and V of the Act, for the purpose of attachment, confiscation, search, freezing/seizure etc., would undoubtedly apply even in respect of requests received from contracting states under Section 60 of the Act. Thus, requests from contracting states cannot be treated at a higher threshold - the ED/ Adjudicating Authority, would have to adhere to all the provisions in respect of recording the ‘reasons to believe’, supplying the ‘Relied Upon Documents’ etc., as is required to be done in the case of domestic enquiries, investigations, surveys, searches and seizures under the provisions of the PMLA, and the Rules and Regulations.
Procedure to be followed while passing orders of search and seizure under Section 17 of the PMLA, when letters of request are received under Section 60 of the PMLA - HELD THAT:- The specific procedure that is contemplated under the Act, in respect of investigations, seizures and freezing of assets/property/ bank accounts, ought to be strictly and scrupulously followed, in the manner prescribed under the Act.
The material in possession would mean and include all material in possession, in respect of the investigation, which is to be forwarded by the ED to the AA, irrespective of whether the same have been referred to in the ‘reasons to believe’ or not - On the basis of these “reasons to believe” and the “material in possession” of the ED, the ED has to then move an Application under Section 17(4) of the PMLA before the Adjudicating Authority, for retention of the record or the property seized, or for continuation of the freezing order, as applicable.
Procedure to be followed by the Adjudicating Authority, upon receipt of an Application under Section 17(4) of the PMLA from the ED - HELD THAT:- As the hearing before the Adjudicating Authority is not merely a procedural hearing, but an adjudicatory hearing, the Adjudicating Authority has to, as per Section 8(2) of the PMLA, first consider the reply to the show cause notice filed by the defendants; secondly, hear all the parties in a meaningful manner; and thirdly peruse all the relevant material placed on record before it, and only then record a finding confirming the search or seizure/ confiscation/ freezing, after reaching a conclusion that the defendant(s) is involved in the offence of money laundering under Section 3 of the Act, or is in possession of proceeds of crime - It would not be permissible for the complainant-ED to show any documents or material to the Adjudicating Authority outside of the hearing being given, or behind the back of the parties concerned. The hearing has to also be transparent and in the presence of the parties concerned. Unilateral hearings in the absence of the opposing party would not be permissible before the AA.
If the Adjudicating Authority comes to the conclusion that the party(s) concerned is involved in money laundering, an order would have to be passed in writing under Section 8(3) of the Act - The order passed by the Adjudicating Authority would then be communicated to all the parties concerned. Thereafter, remedies can be availed of by the parties concerned, in accordance with law.
Procedure to be followed for inspection of records - HELD THAT:- he provisions relating to inspection and fees for inspection and copying, are in respect of records which are beyond the ‘Relied Upon Documents’ which may be part of `material in possession’. Inspection of such documents can only be given to the party concerned and not to any third parties. Strict confidentiality ought to be maintained. No fee can be charged for supplying the ‘Relied Upon Documents’ by the Adjudicating Authority directly, or through the ED.
What is the level of satisfaction to be recorded by the Adjudicating Authority prior to issuance of show cause notice under section 8(1) of the PMLA? - HELD THAT:- The Adjudicating Authority cannot mechanically go by the reasons recorded by the ED, and has to have separate and independent grounds to believe that such an offence has been committed. The fact that the Adjudicating Authority is again required to have ‘reason to believe’ as per the provisions of the Act shows that there is a two-tier process which is to be followed prior to the issuance of the show cause notice, namely- satisfaction by the ED and thereafter, independent satisfaction by the Adjudicating Authority.
Whether while issuing the show cause notice, all the ‘Relied Upon Documents’ have to be supplied to the parties concerned? - HELD THAT:- A conjoint reading of Section 8(1) of the PMLA and Regulation 13(2) of the Adjudicating Authority (Procedure) Regulations, 2013, leaves no doubt that the Adjudicating Authority is duty bound to serve all the documents, that it has ‘relied upon’ i.e., the ‘Relied Upon Documents (RUDs)’, while coming to its ‘reason to believe’ to the party concerned, in a bound paper book. The said service of documents can be effected through the ED, and the Adjudicating Authority has to ensure that the said service has been effected. A simple service of the show cause notice, without the RUDs would not be sufficient. The 30-day period notice would naturally have to be thus counted from the date when the complete RUDs are supplied to the parties concerned/ Defendants, as no effective opportunity to reply would be possible unless all the RUDs are received.
What is the procedure to be followed for providing inspection of records, and for giving a reasonable hearing to the parties, prior to passing of orders by the Adjudicating Authority under the PMLA? - HELD THAT:- The Adjudicating Authority has to, as per Section 8(2) of the PMLA, first consider the reply to the show cause notice filed by the defendants; secondly, hear all the parties in a meaningful manner; and thirdly peruse all the relevant material placed on record before it, and only then record a finding confirming the search or seizure/ confiscation/ freezing, after reaching a conclusion that the defendant(s) is involved in the offence of money laundering under Section 3 of the Act, or is in possession of proceeds of crime. It would not be permissible for the complainant-ED to show any documents or material to the Adjudicating Authority outside of the hearing being given, or behind the back of the parties concerned. The hearing has to also be transparent and in the presence of the parties concerned. Unilateral hearings in the absence of the opposing party would not be permissible before the AA.
The impugned order under Section 17(1A) of the PMLA in all these petitions, as also the orders passed by the Adjudicating Authority under Section 8 of the PMLA dated 28th December 2020, are set aside - Petition allowed.
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2021 (10) TMI 1175
Denial of partial refund - Works Contract Service - Sponsorship Service - denial of the cenvat credit on works contract service on the ground that the cenvat credit claimed related to the service tax paid on construction of commercial buildings and civil works that are specifically excluded in the definition of input services as defined under Rule 2(l) of the CENVAT Credit Rules, 2004 - HELD THAT:- The work undertook by the appellant was only in the nature of modernisation/renovation/repairs by which no new structure or complex has come into existence and accordingly, the denial cannot sustain.
Denial of cenvat credit on the sponsorship services is made alleging that the cenvat credit availed on this input service had no nexus with the output service exported - HELD THAT:- This Bench in the case of SAMSUNG R AND D INSTITUTE INDIA BANGALORE PVT. LTD. VERSUS COMMISSIONER OF CENTRAL TAX, BENGALURU EAST [2021 (3) TMI 1002 - CESTAT BANGALORE] wherein a reference is drawn to the letter of the CBEC dt. 16/03/2012 that has done away with the nexus test and hence denial for want of nexus cannot sustain. Moreover, it has also been held in the above order that the Department having not questioned the cenvat credit availed by the appellant at the initial stage, the same could not be questioned when the claim for refund was made - the denial of cenvat credit on sponsorship services cannot sustain.
It is deemed proper to remit this issue in these two appeals to the file of adjudicating authority before whom the appellant shall furnish the challan copies for the satisfaction of the Officer and upon being satisfied, the adjudicating authority shall thereafter follow the above ratio without insisting for nexus and issue the refund - appeal allowed by way of remand.
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2021 (10) TMI 1174
Levy of service tax - Recruitment Services - Office Services - activity of arranging or facilitating recruitment of student in India - services naturally bundled in the ordinary course of business or not - HELD THAT:- It is undisputed that the appellant has an agreement only with IDP Australia. The appellant recruits or facilitates students in India, but does not get any remuneration from Australian universities. For the students who are recruited or admitted by the university in Foreign Country, recommended by appellant in India, IDP Australia gets paid by the Australian/Foreign universities. A share of that commission is given to the appellant by IDP Australia. This scheme of arrangement clearly shows that the IDP Australia is providing services to the foreign universities and is receiving consideration for the same.
Recruitment of students in India - HELD THAT:- IDP Australia has created the appellant as a fully owned subsidiary, and has sub- contracted this work to the appellant. Nothing has been brought on record in the show cause notice or in the order to show that the appellant has a direct contract with the foreign universities. There is nothing on record to show that the appellant is liasioning or acting as intermediary between the foreign universities and IDP Australia. All that is evident from the records is that the appellant is providing the services which have been sub-contracted to it by M/s IDP Australia. As a sub contractor, it is receiving commission from the main contractor for its services. The main contractor, IDP Australia, in turn, is receiving commission from the foreign universities who pay a percentage of the tuition fee to IDP Australia - Revenue has not established that the appellant is acting as an intermediary between M/s IDP Australia and the foreign universities, as alleged or held in the impugned order and the show cause notice.
Appeal allowed - decided in favor of appellant.
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2021 (10) TMI 1173
Refund of service tax paid on Ocean Freight - constitutional validity of such levy - period April 2017 to June 2017 - HELD THAT:- It is a clear case where the service tax has been held to be unconstitutional hence, the tax which is paid would amount to the one paid under mistake of law. In a similar situation, the jurisdictional Hon’ble High Court of Karnataka in one of its decisions in the case of COMMISSIONER OF CENTRAL EXCISE (APPEALS), BANGALORE VERSUS KVR CONSTRUCTION [2012 (7) TMI 22 - KARNATAKA HIGH COURT] where it was held that once it is not payable in law there was no authority for the department to retain such amount. By any stretch of imagination, it will not amount to duty of excise to attract Section 11B. Therefore, it is outside the purview of Section 11B of the Act.
There are no justification in the reasons adopted for rejection of the refund claim by the lower authorities and hence, the impugned order is not sustainable in the eye of law - appeal allowed - decided in favor of appellant.
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2021 (10) TMI 1172
Refund of service tax paid - appellant had exported goods during the said period without payment of duty but they were also not in a position to use the CENVAT credit of service tax liability - N/N. 27/2012-CE (NT) dated 18.06.2012 - period October 2016 to December 2016 - HELD THAT:- The jurisdictional Hon’ble High Court of Karnataka in one of its decisions in the case of COMMISSIONER OF CENTRAL EXCISE (APPEALS), BANGALORE VERSUS KVR CONSTRUCTION [2012 (7) TMI 22 - KARNATAKA HIGH COURT] where it was held that once it is not payable in law there was no authority for the department to retain such amount. By any stretch of imagination, it will not amount to duty of excise to attract Section 11B. Therefore, it is outside the purview of Section 11B of the Act.
There are no justification in the reasons adopted for rejection of the refund claim by the lower authorities and hence the impugned order is not sustainable in the eye of law - appeal allowed - decided in favor of appellant.
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2021 (10) TMI 1171
Levy of penalty u/s 78 of FA - Non-payment of service tax - services received from abroad, but service tax not paid - Online Information Database Access and Retrieval service - Consulting Engineer services - demand of service tax on Manpower Recruitment or Supply Agency Service - Management, Maintenance and Repair service - reverse charge mechanism - Section 66A of the Finance Act, 1994 - HELD THAT:- The question as to whether service tax has to be paid under reverse charge mechanism prior to the introduction of Section 66A in the Finance Act, 1994 was debated before various forums. In the case of INDIAN NATIONAL SHIPOWNERS ASSOCIATION VERSUS UNION OF INDIA [2008 (12) TMI 41 - BOMBAY HIGH COURT], the Hon’ble Bombay High Court held that only with effect from 19.04.2006, service recipients are liable to service tax under reverse charge mechanism. It is also to be noted that even if the appellant pays service tax, they would be eligible for the credit and the situation is entirely revenue-neutral. The appellant has paid service tax along with interest - Taking into consideration all these aspects, it is opined that the penalties cannot sustain and the same require to be set aside - penalties set aside.
Demand of service tax - Manpower Recruitment or Supply Agency Service - HELD THAT:- The parent company has deputed its employees to work in the appellant’s factory for doing after-sales work and other related works. It is seen in para 2.3 of the agreement that the payment made by the appellant to the parent company is nothing but part of the salary. We do not find any payment of consideration towards rendering of Manpower Recruitment or Supply Agency Service. The appellant company and the parent company being of same group, the secondment employees cannot be said to have been recruited by the parent company to the appellant company. Once the employees are deputed to the appellant, the appellant would enter into individual contract for employment with such employees. A part of the salary that is to be paid to these employees is paid to the parent company in foreign currency for payment to their families. The said amount is not a consideration for services of man power recruitment - the payment made to the foreign company which has been subjected to service tax under Manpower Recruitment or Supply Agency Service cannot sustain - demand set aside.
Demand under Management, Maintenance and Repair service - HELD THAT:- From the agreement, it can be seen that agreement is entered between parties for marketing, sales promotion and products support service activities undertaken by KIPL for Komatsu Construction and Mining Equipment sold in Indian market by the foreign company - since the essential character of the agreement is marketing and sales promotion, the activity has to be classified under ‘Business Auxiliary Service’. In the case of BAS, as the recipient is situated outside India, such services are to be treated as ‘Export of Service’ - the demand under Management, Maintenance and Repair Service cannot sustain.
The impugned order is modified to the extent of setting aside demands under the category of “Manpower Recruitment or Supply Agency Service”, “Management, Maintenance and Repair Service” - demands under “Consultancy Engineering Service” and “Online Database Access and Retrieval Services” are upheld along with interest. However, penalties imposed under these services are set aside - Appeal allowed in part.
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2021 (10) TMI 1170
Refund of CENVAT Credit - applicability of time limitation - Section 11B of the Central Excise Act,1944 - claim for quarter October-December 2016 was filed on 05.01.2018 and in respect to the quarter January-March-2017 it was filed on 27.03.2018 - Department’s contention is that since from the specified date the appellant filed the refund claim after one year, therefore, the refund is time barred - N/N. 14/2016-CE (N.T.) dated 01st March, 2016 - HELD THAT:- The appellant in respect of the refund claim for the quarter October-December-2016 has filed on 05.01.2018 even though it was sent by post on 02.01.2018. In respect of refund claim for the quarter January-March-2017 it was filed on 27.03.2018. Since the condition in Para 2 of the Notification No. 14/2016-CE (N.T.) is that the assessee is required to file refund claim under Rule 5 not more than one in a particular quarter, the assesssee is barred to file refund claim more than one in a particular quarter, therefore, the period of one year should be reckoned from the end of the quarter for which the refund is sought for - In the present case for the quarter October-December- 2016 the one year period expired on 31st December, 2017. However, the refund was filed on 05.01.2018 ,therefore, it is clearly beyond one year hence this refund amounting to ₹ 1,25,449/- for the quarter October-December-2016 is clearly time barred, hence, the rejection of the same is maintained.
Refund claim amounting to ₹ 1,45,736/- pertaining to quarter January-March-2017 - HELD THAT:- Claim was filed within one year from end of the quarter i.e. 27.03.2018 is held within time. Accordingly, the refund of Rs. ₹ 1,45,736/- is not time barred.
Appeal allowed in part.
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2021 (10) TMI 1169
CENVAT Credit - demand based on statements only and is not supported by any documentary evidence - reliability of statements - section 9D of Central Excise Act, 1944 - HELD THAT:- The case of the department is merely based on the statements given by G. Baskaran, proprietor of M/s. Sri Amman Steels and A. Veluchamy of M/s. Kamaraj Steels. These persons have not been examined under sec. 9D of the Central Excise Act, 1944 and therefore their statements cannot be admitted or relied in evidence.
The Hon'ble High Court of Punjab and Haryana in the case of M/S G-TECH INDUSTRIES VERSUS UNION OF INDIA AND ANOTHER [2016 (6) TMI 957 - PUNJAB & HARYANA HIGH COURT] has held that the procedure under section 9D of Central Excise Act, 1944 has to be followed in adjudication proceedings. If the procedure of examining the witnesses is not done, the statement becomes irrelevant and no reliance can be placed on such statements.
The content of the document (lab test report) has to be proved by primary evidence i.e., document itself. Document when reduced in writing are considered to be best evidence and is placed on a higher footing than the oral evidence. The very object of documenting something is to perpetuate the memory of what has been written down so as to furnish prove of itself. If the department relies upon the difference in the chemical composition of the raw materials used by the appellant and the goods cleared by the manufacturer as waste from their factory to be different, then they have to produce both these lab test reports. The difference is comprehended by the department on the basis of the statement of Shri P. Periyannan which is not admissible in law. None of these persons have been examined at the time of adjudication and only the statements are relied to confirm the demand.
There are no hesitation to conclude that the department has miserably failed to establish the allegations raised in the Show Cause Notice - demand cannot sustain - appeal allowed.
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2021 (10) TMI 1168
Refund claim by carry forward of the same to the next tax period - transitional ITC to the electronic credit ledger - Section 5 (3) and Sections 6 and 8 of the CST Act, 1956 - HELD THAT:- It is an undisputed case between the parties that the application for refund alongwith interest filed by the Petitioner is pending consideration with the Respondents, despite a reminder application dated 23.07.2021. It is incumbent upon the Respondents to take a decision on the application for refund.
The concerned Respondent(s) are directed to decide the claim of the Petitioner for refund for the relevant period, in accordance with law and also keeping in mind the principle of “unjust enrichment” - petition disposed off.
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2021 (10) TMI 1167
Reversal of ITC - the assessment are sought to be re-opened and the ITC availed by the dealers are directed to be reversed, when a mismatch occurs - whether the instructions given by the first respondent through his letter in turn has been acted upon by the second respondent, by giving any direction to the third respondent? - HELD THAT:- If such an instruction has already been given, it is the duty of the Assessing Officer to revisit the assessment for the two assessment years, and in this regard, if any further inputs or documents are required to verify the alleged mismatch, summons can be issued to the petitioner to get those documents and if any such summon is issued, it is open to the petitioner to make response to the said summons and accordingly, the exercise of revisiting the assessment order can be completed by the third respondent.
There shall be a direction to the second respondent that, if the second respondent has not acted upon by giving any suitable direction to the third respondent in respect of the petitioner's case for the assessment years, an instruction can immediately be given to the third respondent, who on receipt of such instructions or already received the instructions, shall act upon by revisiting the assessment for the respective years and accordingly, complete the reassessment process - Petition disposed off.
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2021 (10) TMI 1166
Applicability of RBI circular No. RBI/2009-10/231 dated 24th November, 2009 - opening and operation of accounts and settlement of payments for electronic payment transactions involving intermediaries and the same applies to the Petitioner - e-commerce entity - transaction between natural persons or not - intent of petitioner - HELD THAT:- Admittedly, herein the transaction is not between two natural persons. Petitioner operates e-commerce entity to provide information on digital network and acts as a facilitator between buyer and seller. Petitioner does not own the product and sell the goods to the customer directly. Since Petitioner is not following inventory based model, it has no control over the transaction between two parties i.e. buyer and seller. Petitioner simply, receives and stores the information on behalf of the seller and buyer and acts as a facilitator. In the order issuing process, the learned Magistrate has clearly understood that it was not conventional transaction and human contact is minimal.
The allegations do not constitute an offence of cheating, nor the allegations disclosed the fraudulent intention of the Petitioner, when Complainant placed an order of the product in question. The Petitioner being a mere facilitator, Complainants’ allegations that he was induced to buy a product with intention to cheat him, is wholly absent. There is no material on record to even suggest that the Petitioner had a direct involvement and inducing the Complainant to place an order with intention, not to deliver it, even after receiving the consideration for the same. Thus, neither the complaint, nor inquiry report submitted by the Investigating Officer constitute the offence of cheating against the Petitioner.
In the case in hand, the allegations do not imply or suggest that any point of time, the Petitioner induced the Complainant to part with property (consideration for a product) with a dishonest intention, not to deliver the same. On the contrary, facts of the case show that the Complainant volunteered to purchase the product through the e-commerce market platform of the Petitioner from the seller. Thus, the ingredients to constitute offence of the cheating are wholly absent. The learned Magistrate failed in appreciating the facts of the case and thereby committed an error in concluding that prima-facie case of cheating has been made out.
Petition allowed.
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