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Showing 321 to 340 of 1456 Records
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2024 (1) TMI 1136
Benefits under the VsV Act [Vivad Se Vishwas Act] denied - Petitioner made a short payment, due to which the Petitioner's declaration was not accepted - Respondents closed their old website and migrated to a new website and Petitioner has pleaded that, as a result, there were several technical glitches in accessing the new website - HELD THAT:- Respondents should have either accepted the Petitioner's payment made within 15 days from the receipt of Form 3 or at least informed the Petitioner that she was required to pay an additional amount on or before 31.10.2021. The Respondents did neither.
Even the requirement of paying an additional amount was informed to the Petitioner only by communication dated 01.04.2022, long after the extended date of 31.10.2021 had lapsed. Suppose the object of the VsV Act is to reduce the pending tax litigations, grant relief to eligible declarants and generate substantial revenue for the Government. In that case, such an approach cannot be said to be in furtherance of such an objective. Such an approach almost amounts to frustrating the provisions of the VsV Act, and the scheme made thereunder.
In this case, the delay alleged on the part of the Petitioner is hardly 11 days. The alleged deficit payment, if any, is of hardly Rs. 2,21,862/-. From the facts borne out of the record, it is difficult to hold that there was any such delay. Even if it is assumed that there was some marginal delay, this delay is attributable to the technical glitches referred to by the Petitioner and also the mistakes of the Respondents in processing the Petitioner's declaration.
As noted even if the contention about technical glitches is kept aside, this is a matter where the Respondents themselves committed several errors in processing the Petitioner's declaration in Form l, which was made within the prescribed period and by due compliance with the prescribed procedure. This is a matter where the Petitioner withdrew her pending appeal and where the Petitioner, in the first instance, determined the amount payable under the VsV Act correctly but had to struggle to get the Respondent's determination corrected.
Even though the Petitioner had filed Form 4 and made a payment on 12.10.2021, i.e. much before the extended date of 31.10.2021 still, the impugned communication dated 22.01.2022 erroneously alleged that the Petitioner had not filed Form 4 or that the Petitioner had made no payments before the extended date
Thus we think that the petitioner should not have been denied the benefits under the VsV Act. We direct the Respondents to accept the Petitioner's declaration in Form 1 under the VsV Act and process the same by issuing the final certificate in Form 5 subject Petitioner must pay the balance amount with interest at the rate of 12% per annum from 31.10.2021 till the date of payment, which shall be within 21 days from today; and shall pay an additional amount of Rs. 2,00,000/- to the Respondents within 21 days from today.
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2024 (1) TMI 1135
Reassessment proceedings against dead person - HELD THAT:- As reopening notice u/s 148 issued in the name of a dead assessee is null and void being without jurisdiction. Recently, this Court in MEET LALWANI LEGAL HEIR OF LATE MRS AMITA LALWANI Versus INCOME TAX OFFICER WARD 2 (1) INDORE, PR. COMMISSINOER OF INCOME TAX. [2023 (11) TMI 1196 - MADHYA PRADESH HIGH COURT] has also held that notice and all consequential proceedings arising therefrom in the name of deceased assessee are not sustainable. Assessee appeal allowed.
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2024 (1) TMI 1134
Disallowance of depreciation on wind mill - sequence of events to show that the assessee is the beneficial owner of the asset - AR submitted that depreciation is claimed by the transferor of the assets and therefore not allowed in the hands of the assessee in the same year - AO did not accept the explanation of the assessee that it had purchased the wind mill during the FY relevant to A.Y. 2015-16 due to lack of any supporting document and the fact that enquiry by the Ld. AO revealed that no sale of wind mill was recorded in the books of the seller APIL for Financial Year 2014-15
HELD THAT:- Admittedly, seller company APIL has claimed depreciation on wind mill during the A.Y. 2015-16. Therefore denial of impugned depreciation in the hands of the assessee is justified. The contention raised during appellate proceedings have been dealt with by the Ld. CIT(A) by recording cogent reasons. The decision in the case of Smt. Sivakami [2009 (11) TMI 127 - MADRAS HIGH COURT] will not render assistance to the assessee as in that case the assessee established ownership of buses by documentary evidence whereas in the case at hand purchase of wind mill in the Financial Year 2014-15 could not be proved with documentary evidence. The twin conditions precedent, namely ownership and use of the asset i.e. wind mill, for purposes of assessee’s business during the Financial Year 2014-15 relevant to A.Y. 2015-16 are not satisfied in the case of the assessee. We, therefore decline to interfere and decide ground No. 1 against the assessee.
Addition u/s 56(2)(viib) - shares being issued at excessive rate - adopting a different method i.e. Net Asset Value method of valuation - HELD THAT:- As not in dispute that the assessee issued 12,03,000/- equity shares to its 100% holding company, at a premium of Rs. 40/- each. It is also not in dispute that shares have been issued at premium based on fair market value as computed and certified by Chartered Accountant who determined the fair market value in accordance with Discounted Cash Flow method which is a well recognised method of valuation under Rule 11UA of the Income Tax Rules, 1962. In this view of the matter, in our humble opinion, AO/ CIT(A) are not justified in adopting a different method i.e. Net Asset Value method of valuation resulting in the impugned addition u/s 56(2)(viib) of the Act.
In an identical case of KBC India Pvt. Ltd [2022 (11) TMI 1362 - ITAT DELHI] equity shares were allotted by the assessee to its holding company at premium and the Tribunal held that in such a scenario no addition can be made u/s 56(2)(viib).
Thus we hold that the objective behind the provisions of section 56(2)(viib) of the Act is to prevent unlawful gain by issuing company in the garb of capital receipts. In the transaction between holding and its subsidiary company no income can be said to accrue to the ultimate beneficiary i.e. holding company. The chargeability of deemed income arising from transactions between holding and subsidiary or vice-versa militates against the solemn object of section 56(2)(viib) - Decided in favour of assessee.
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2024 (1) TMI 1133
Capital gain computation - reselling of asset - Stamp Duty Valuation - year of transfer - AO had received an information that assessee has sold an immovable property whose sale value did not match with the Stamp Duty Valuation, vis-à-vis shown by the assessee - addition made with the aid of Section 50C(1)
HELD THAT:- As per Section 50C and its first proviso if an assessee has received a consideration or such consideration has accrued to the assessee on sale of a capital assets/ building is less than the value adopted or assessed for the purpose of charging Stamp Duty on such transaction, then, full sale consideration would be deemed equal to the amount on which Stamp Duty has been charged.
In this present case assessee has purchased a plot at Indirapuram, Gaziabad and sale deed was executed in favour of the assessee. Later on assessee sold this plot for a consideration as received by the assessee through Bank Draft. The assessee has further executed Power of Attorney in favour of Shri Manoj Kumar Sharma who resold this plot on 18th November, 2011 to one other.
Therefore, in the hands of the assessee the Stamp Duty Valuation ought to have been determined in the year 2000 and not 2011. Gaziabad Development Authority must have executed the Conveyance Deed in favour of the assessee more than the value determined by the Registering Authority for the purpose of Stamp Duty. Therefore, a deeming sale consideration cannot be assumed in the hands of the assessee in A.Y. 2011. The proviso appended to Section 50C duly protects the assessee from considering the Stamp Duty value as full sale consideration in the hands of the assessee in 2011. Therefore, both the authorities have erred in computing the alleged long-term capital gain in the hands of the assessee. We allow this ground and delete the addition made by AO. Decided in favour of assessee.
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2024 (1) TMI 1132
Taxability of unutilized accumulated funds under section 11(2) as on 01.04.2008, as income under section 11(3) on the ground that the appellant did not claim exemption under section 11 of the Act during the year under consideration - Pursuant to the order u/s 263 AO reframed the assessment order and held that the assessee is not eligible for exemption u/ss 11/12 of the Act under the Principles of Mutuality and unutilized amount accumulated u/s 11(2) of the Act in the preceding years ceased to be for the objects of the assessee and is taxable u/s 11(3) of the Act - CIT(A) dismissed the appeal of the assessee holding that the directions of the DIT(E) have attained finality.
HELD THAT:- We have carefully perused the order of the Hon'ble High Court of Delhi [2018 (3) TMI 2025 - DELHI HIGH COURT] preferred by the assessee against the order of this Tribunal [2017 (1) TMI 1826 - ITAT DELHI] by which the Tribunal dismissed the appeal of the assessee preferred against the order of the DIT(E) u/s 263 of the Act wherein as clarified that the ITAT should consider the substantive merits of the appeal with respect to the assessee's taxability of amounts under Section 11(3) of the Act without in any manner holding adversely against it, for the withdrawal of the previous appeal (which was concerned only with the question of assumption of taxability under Section The appeal is disposed of in the above terms.
It can be seen from the above findings of the Hon'ble High Court [supra] that the contention of the assessee has to be considered within the provisions of section 11(3) of the Act. Therefore, in the interest of justice and fair play and in line with the directions of the Hon'ble High Court of Delhi [supra], we restore this appeal to the file of the ld. CIT(A). The ld. CIT(A) is directed to decide the appeal afresh considering the claim of the assessee in light of provisions of section 11(2) and 11(3) of the Act after affording reasonable and adequate opportunity of being heard to the assessee. Appeal of the assessee allowed for statistical purposes.
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2024 (1) TMI 1131
Credit of Dividend Distribution Tax u/s 115-O not granted - CIT(A) has upheld the order of the AO as per section 115O(4) of the Act, the tax on distributed profits shall be treated as the final payment of tax against the dividend declared and distributed and no further credit in respect of the amount of tax paid shall be claimed by the company or any other person - HELD THAT:- From the said observations of the CIT(A), it is clear that the credit is denied on the incorrect understanding of fact that the assessee is claiming credit for the Dividend Distribution Tax against regular tax payable by the assessee. During the course of assessment, the ld. AR drew our attention to the tax challans and the extract from Form 26AS in order to substantiate the claim that Dividend Distribution Tax has been paid by the assessee for which the assessee is claiming credit against the Dividend Distribution Tax shown as payable in the tax computation form of the assessment order.
For the year under consideration from the evidences submitted by the assessee it is clear that the assessee had paid the Dividend Distribution Tax and that the Revenue has denied the credit based on the misunderstood fact that the assessee is claiming credit for the Dividend Distribution Tax against regular tax payable. This in our considered view is factually incorrect, since the assessee is seeking to adjust the Dividend Distribution Tax paid against the Dividend Distribution Tax payable computed by the AO.
Thus we direct the AO to given credit to the extent of the Dividend Distribution Tax actually paid by the assessee as per the documentary evidences submitted by the assessee after giving a reasonable opportunity of being heard to the assessee.
Levy of interest u/s 115P on the amount of Dividend Distribution Tax payable - AO has levied the interest u/s 115P on the Dividend Distribution Tax payable without giving credit for the Dividend Distribution Tax actually paid by the assessee - HELD THAT:- As we have already directed the AO to give credit for the Dividend Distribution Tax actually paid by the assessee while adjudicating Ground No.1. Accordingly the AO is directed to examine levy of interest under section 115P which is consequential, after giving credit to the Dividend Distribution Tax actually paid in accordance with law.
Mismatch between form 26AS and the return of income - assessee submitted before the AO that receipts do not pertain to the assessee and therefore, the same is not accounted as income and that no credit is claimed against the TDS deducted on the said amount which is wrongly shown as the receipts of the assessee - AO did not accept the submissions of the assessee stating that there seems to no reason to suspect that 10 parties altogether will wrongly credit any amount to the assessee - HELD THAT:- Since, the assessee has denied the transactions, onus was on the Revenue to show that TDS reflected in Form 26AS is in respect of the amounts that have been received by the assessee during the relevant period.
Nothing is brought on record by the revenue to this effect. As decided in the case of RBNJ Naidu [1955 (2) TMI 12 - NAGPUR HIGH COURT] has held that when an assessee denies that he is in receipt of income from a particular source, it is for the ITO to prove that the assessee received income and that the assessee cannot prove the negative. We see merit in the contentions of assessee cannot prove a negative. Since the Revenue did not bring anything to lead positive evidence with regard to the impugned amounts, the addition is hereby deleted.
Refund of Excess Dividend Distribution Tax - HELD THAT:- AR fairly conceded that the issue is held against the assessee in view of the decision of the Hon'ble Supreme Court in the case of AO Vs. M/s Nestle SA [2023 (10) TMI 981 - SUPREME COURT] Therefore respectfully following the above decision additional ground raised by the assessee claiming refund of refund of excess DDT paid on dividend to non-residents.
Provision for warranty claims denied - Reasons why provisions should not be allowed as deduction - AO held that the utilization to provision ratio of the assessee comes to only 38.5% which goes to prove that the assessee has failed to make a reliable estimation of the future obligations with respect to warranty expenses and therefore disallowed the entire amount of provision made that is debited to the P&L A/c of the assessee - CIT(A) allowed assessee claim - HELD THAT:- The assessee is in the business of trading and servicing medical equipments and provides standard warranty to its customers that is in the nature of basic warranty or extended warranty that may vary from 12 to 15 months. The assessee has been consistently following the practice of making provision towards the warranty and the same is claimed as a deduction. It is also noticed that at the ends of the warranty period the unutilized portion of the provision of warranty is reversed and credit to the P& L A/c thereby offering the same to tax. The reason for the disallowance by the revenue is that the basis of estimation for making the provision is not reliable since the utilization is only 38.5% for the year under consideration.
As decided in own case [2016 (8) TMI 1593 - ITAT MUMBAI] assessee has a present obligation as a result of past event and a reliable estimate has been made towards the amount of obligation and accordingly held that the deduction under section 37 should be allowed. On the perusal of the fact we noticed that the assessee have been claiming the warranty provision as expenditure and has been reversing the excess provision periodically and offering the same to tax. It is also noticed that there are years in which the amount utilized is for than the amount of provision made and therefore, we see merit in the contention that the provision cannot be disallowed on the ground of under utilization - no infirmity in the decision of the CIT(A) in allowing the provision of warranty as a deduction under section 37(1) of the Act.
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2024 (1) TMI 1130
FIR against the Revenue officer and unknown persons pursuant to PIL - Smuggling of substandard, unsafe and unfit betel nuts/areca nuts by fake persons with fake and forged documents in connivance with public servants - the Appellate Tribunal on merits has set aside the order of adjudication which was in term of confiscation and imposition of penalty. - HELD THAT:- The petitioner has been served with a notice under Section 160 of the Code of Criminal Procedure, which the petitioner has positively responded. It is the contention of the CBI that in pursuance of the directions in Criminal Public Interest Litigation, the first information report has been registered and investigation is in progress. The issue involved is having vast magnitude having effect on public health, and therefore, at this initial stage the first information cannot be quashed.
It is not in dispute that the first information report is against unknown persons, and since last three years the investigation is going on. The petitioner has appeared in pursuance of the notice from the office of CBI. Since yet the petitioner has not been arrayed as an accused, there is no question of quashing of the first information report. However, at present there is no material, rather the investigation is still going on therefore, we refrain ourselves in examining the case of the petitioner on merits.
Criminal Writ Petition is allowed and disposed of.
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2024 (1) TMI 1129
Duty Drawback - Levy of penalties u/s 114(i) and 114 (ii) as well as under section 114AA of the Customs Act, 1962 for abetment - Rejection of duty Drawback claim - gross over-valuation of the export goods for the purpose of claiming unintended and highly inflated drawback amounts - HELD THAT:- It is found from the statement of Anupam Mondal, Proprietor of M/s. East India Impex that he has admitted to his role as an abettor to Ajay Madan alias Jassi alias Ashutosh Birla, the real exporter of this case, and in enabling by creation of a fake identity for him, by helping him open a bank account and handing it over to Debasis Mukherjee for the purpose of the subject exports of neckties and kept in hiding the vital export documents with him. The appellant therefore is guilty of culpability in the matter. He has not been able to dismiss his role in the entire fraudulent activity with a degree of conviction. The fact that concerned incriminating documents, blank signed papers were found from his possession are sufficient enough to fasten the needle of suspicion at his involvement. The appellant had further admitted to his support in the fraud though later retracted his version. If the appellant was not involved, as claimed by him, he has not been able to satisfactorily respond to the query about receipt of money from Jassi and paying it over to Debasis Mukherjee. It be noted that the appellant has continued to do so, even after the case was booked by the department.
The case does not warrant imposition of harsh penalties on the appellant, as would require stronger evidence in the matter - the penalty imposed on the appellant are disproportionate to his role as made out from whatever evidence the department has been able to muster and the ends of justice would be met by reducing the same from Rupees Three Lakh to Rupees Fifty Thousand only - Appeal disposed off.
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2024 (1) TMI 1128
Fraudulent availment of higher drawback or not - export of sub-standard readymade garments at highly overvalued prices - rejection of transaction value under rule 8 - reason to doubt - HELD THAT:- Rule 8 clearly provides that if the proper officer has “reason to doubt” in the first place, he can call for further information and documents and after examining them or if they are not provided if he still has reasonable doubt that the declared transaction value is not true and accurate, it can be rejected. In this case the proper officer had no doubt at all. The officers of DRI, based on intelligence and their subjective opinion and the opinion of another trader, doubted the transaction value and proceeded to seize the consignment and issued the show cause notice. Therefore, there was neither any reason to doubt under rule 8 by the proper officer nor a reasonable doubt at the time of issue of show cause notice.
An exporter declares the transaction value and self-assesses the shipping bill as per his understanding which must be accepted unless there is reasonable doubt by the proper officer. And this reasonable doubt cannot be based on the mere opinion of some DRI officers who physically examined the goods. It is surprising that the Joint Commissioner adjudicated the matter solely based on the subjective opinion of the DRI officers ignoring all the documents on record produced by the appellant in support of transaction value.
The entire case of the Revenue is that the opinion of the officers of DRI who inspected the goods that they were over-valued is sufficient to form a reasonable doubt regarding the transaction value in the shipping bills and reject it under rule 8, regardless of all the documents produced by the appellant including the bank realization certificates which reflect the transaction value. Nothing in the Act or the Export Valuation Rules provide for rejection of the transaction value based on the intelligence received by the officers of DRI or their subjective opinion rejecting the value of the goods. Needless to say, such an order cannot be sustained.
Once the rejection of the transaction value under rule 8 is found to be not tenable, its re-determination, consequential confiscation of the export goods and imposition of redemption fine or penalties cannot be sustained.
The declared transaction value was wrongly rejected under Export Valuation Rules 8. The impugned order is, therefore, set aside - Appeal allowed.
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2024 (1) TMI 1127
Suppression of facts - Confiscation - redemption fine - penalty - Claim of exemption which was not available - GSL Artemia Brine Shrimp Foods - to be classified under CTH 05119911 or not? - eligibility to avail the preferential rate of IGST under Sl. No. 33 of the Notification No. 002/2017-Cus dated 28.6.2017 - HELD THAT:- It is found that a penalty can be imposed and goods confiscated only if there is a breach of any specific provisions of the Act or law framed there under. What is made punishable under the Customs Act is the 'blameworthy' conduct of the importer. A mere claim of exemption by the importer cannot be visited by confiscation of goods along with fine and penalty. Further, charge of suppression could not have been brought against an importer if he has correctly described the goods in the Bill of Entry as held by the Apex Court in NORTHERN PLASTIC LTD. VERSUS COLLECTOR OF CUSTOMS & CENTRAL EXCISE [1998 (7) TMI 91 - SUPREME COURT]. Since the description of goods and classification done by the importer has been found correct and accepted by the department, it is found that the confiscation of the goods and imposition of fine was improper and merits to be set aside.
The question of confiscation of the goods hence does not arise. Having found that the importer-appellant has not violated any provisions of the Act or rules, the penalty imposed upon them is set aside. The Hon’ble Apex Court in ASSOCIATE BUILDERS VERSUS DELHI DEVELOPMENT AUTHORITY [2014 (11) TMI 1114 - SUPREME COURT] held that the principle of judicial approach demands a decision to be fair, reasonable and objective. On the obverse side, anything arbitrary and whimsical would not satisfy the said requirement.
The classification of ‘GSL artemia Brine Shrimp Eggs’ under CTH 05119911 along with duty as finalized with respect to Bill of Entry No. 3450978 dated 3.10.2017 is not disturbed - confiscation of the goods and the fine imposed on the goods imported by the said Bill of Entry is set aside - the differential duty demand is set aside - Since no violation of law has been established the penalty imposed on M/s. Priyanka Enterprises is quashed - appeal disposed off.
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2024 (1) TMI 1126
Refund of Customs duty - denial on the ground of unjust enrichment - duty burden passed on to buyer or not - HELD THAT:- As the law, on unjust enrichment, it is a settled that unless and until the importer proves that incidence of duty has not been passed on to the buyer, the question of refund does not arise.
The Hon’ble Supreme Court in the case of UNION OF INDIA VERSUS SOLAR PESTICIDE PVT. LTD. [2000 (2) TMI 237 - SUPREME COURT] observed that Section 27 of the Act has been re-cast with the amendments made in 1991 and the said section does not necessarily have to be read in conjunction with Sections 27C and D of the Act. If the incidence of duty paid on the imported raw material has not been passed on to any other person, then by virtue of proviso to Section 27 (2) of the Act in the case where application for refund had been made prior to 1991, refund due on the duty paid would be given to the applicant.
There are no reason to interfere with the impugned order - appeal dismissed.
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2024 (1) TMI 1125
Smuggling - recovery of 12 gold bars of foreign origin - onus on the appellant to establish legitimacy of the seized gold - HELD THAT:- Once the appellant has submitted evidence towards licit procurement of gold from local sources, paid through banking channels, evidence thereto duly recorded in the books of account, it was incumbent on the department to have verified the same. Furthermore, it is categorically placed on record by the appellant that the said documents were anterior to the date of search and seizure and their veracity can also not be doubted as most of them were taken over by the DRI officers and were in their custody at the time of seizure or have been tendered to the department duly authenticated by the banks issuing the same. The authentication by the bank, the document being anterior to the date of seizure, and the documents most of which were taken possession of at the time of seizure by the authorities, therefore clearly discharge the onus on the appellant to establish legitimacy of the seized gold, cast upon the appellants and we find the same to have been satisfactorily complied with. The onus therefore, is now on the department to sustain the legality or denounce the evidence tendered for justifiable reasons in law.
It therefore appears that the department has proceeded solely on the basis of surmises and conjectures and did not possess a shred of evidence to bring home the charges levelled. It is settled law that suspicion, no matter how strong, cannot take the place of evidence. In the instant case there are no evidence to nail the appellants. On the contrary the department has not cared to investigate the evidence tendered by the accused or have remained deliberately silent about its outcome.
The department has failed to carry out proper investigations into the case and not having examined the evidence of alleged licit acquisition of gold by Narendra Kumar Jain, tendered to them/recovered by them during search and seizure operations does not lead their case any further. Under the circumstances confiscation of the seized 89.820 gms of gold is not merited. In view of the said finding no penalties are also imposable on the appellants. We therefore while upholding confiscation of 6000 gms of gold set aside the remaining part the order under challenge, lift the confiscation of 89.820 gms gold and imposition of penalty on the appellant- Narendra Kumar Jain.
As for imposition of penalty on Ramjanam Ray we note that the show cause notice and the adjudication order do not bring about any specific charge against him, other than mere here say evidence and that denial of cross-examination to him have definitely impacted the opportunities of natural justice being offered to the appellant. The fact that no enquiry whatsoever was conducted at the premises of Shankar Jewellery where in Ramjanam Ray was said to be employed (as per the version of the carriers) therefore fails to establish his role, if any into the matter.
Appeal disposed off.
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2024 (1) TMI 1124
Levy of penalty u/s 112(a)(i) of the Customs Act, 1962 - Smuggling - parts of wild animals - Prohibited goods or not - allegation based on uncertain/inconclusive remarks of an inspector attached to the Forest Department based on visual examination that the above consignments in question “could be Elephant Tail Hair” and “could be Leopard Claws” - HELD THAT:- The said inspector is not an expert in the field, there is no written opinion placed on record or made available, and nor is there any definite conclusion as to the nature of the consignments in question. There is a mention about the collection of samples in the impugned order from the consignments in question, but however, nothing is placed on record as to the further investigation and the result thereof, if any, by the Revenue. Hence, at the threshold itself, the Revenue has not been able to establish that the goods in question were the same as alleged and the import of which into India was/is prohibited.
The appellant, though has denied being involved in any way and claimed to be ignorant of the alleged import, etc., but however, he has nowhere explained as to why he went to the DHL Office at Air Cargo Complex and why did he furnish his photo-identity proof/driving licence to M/s. DHL, but however, the above is insufficient to hold that the appellant was in fact the importer and that the impugned goods were prohibited items. The primary responsibility of proving that the goods were prohibited goods was on the Revenue, in which they have failed.
The penalty imposed on the appellant is clearly unsustainable in the eye of law - Appeal allowed.
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2024 (1) TMI 1123
Claim of duty drawback, refund of IGST and state levies - Valuation of export goods - determination of the fact whether it amounted to over valuation or not - proper determination of consequential benefits available to the exporter upon exportation of such goods - whether the export goods are liable for confiscation and whether the appellants are liable for imposition of penalties under the Customs Act, 1962? - HELD THAT:- The appellants have declared the FOB value of export goods as given in their commercial invoices, which is the transaction value. Further, submitting the declaration form in terms of Rule 7 above, is primarily the responsibility of the exporter. In the present case, it is not in dispute that the values indicated in the Shipping Bills were matching the value particulars declared in the commercial invoices. Further, any exercise in re-determination of value other than the transaction value has to be adopted step-by-step approach on the basis Rule 3 ibid, and after rejection of transaction value as per Rule 8 ibid. In order to establish the allegation of over-valuation of export goods, it is required to go by an evidence or fact indicating that there was a mis-declaration of value at the time of exports in the shipping bills and the value was re-determined as per the above legal provisions. It is not the case of Revenue that the FOB value of export goods declared in the shipping bills was different from the prices indicated in the invoices. The FOB value and the invoice value of the export goods are same and there is no mismatch. There is not even an iota of evidence produced, either in the form of data relating to value of exports of goods of like kind and quality from the data base maintained by the department, to establish prima facie case of over valuation to reject the transaction value.
There is no discussion in the order of the original authority or in the impugned order of the Commissioner (Appeals) as to whether in valuation of export goods each of the Rules have sequentially been approached as provided therein and how they adopted the Rule 6 as a last resort and how the other methods of valuation under other Rules were not feasible. Despite the submission of the appellants that they had received the entire FOB value of export proceeds in the form of foreign exchange remittances though the banking channel and submitted the e-BRCs, the original authority in disregard to this factual evidence had simply concluded that the exporter had not produced any documentary evidence in the form of purchase order or contract with overseas buyer; the exporter had admitted in his written submission dated 24.02.2021 that they had received only part payment for six S/Bs so far; and the goods were mis-declared for size and composition.
In the present case, none of the instructions, either with respect to determination of value in terms of the extant Rules, or with regard to issue a query memo specifying reasons for raising a doubt about truth or accuracy of the declared value in terms of Rule 8 was raised; further, the instruction for allowing/release of the goods for export against a simple undertaking after drawl of representative sample was also not followed. Even in case warranting seizure or detention of export goods, the provisional release of such goods were not allowed within the prescribed time for allowing it to be exported. In fact, in the present case, the goods had already been exported out of the country and subsequently, the same were brought back into the country, for examination of the export goods and to establish the case of overvaluation.
The conclusion arrived by the learned Commissioner of Customs (Appeals) on this valuation issue in the impugned order is not supported by any evidence or factual detail, to fasten the penal liability for such over valuation on the appellants and thus the impugned order rejecting the transaction value by confirming the re-determination of assessable value of export goods arrived at by the original authority in his order dated 27.02.2021, is contrary to the legal provisions and the manner provided under Customs Valuation (Determination of Value of Export Goods) Rules, 2007, and thus the same is not legally sustainable.
It is also on record that the Customs authorities did not seize the goods during its examination and panchnama proceedings conducted on 10.04.1019; however they drew representative samples in order to determine the alleged over-valuation and mis-declaration of export goods. It is already seen that in the earlier round of litigation, the appellants had prayed for provisional release of the export goods covered under detention by the Customs authorities, and they filed an appeal on the ground that the order of provisional release under Section 110A ibid, was too harsh on them.
On perusal of the Circular No 01/2011-Customs dated 4th January 2011, it is found that the Government had intended to alleviate the difficulties faced by exporters which was arising on account of detention of export goods and consequential delays in fulfillment of export order, payment of demurrage charges by exporters to the Custodians, reducing the period of detention to the minimum, by streamlining the customs procedure of provisional release/exportation of seized goods/goods under investigation on account of mis-declaration in terms of quantity and value etc. We find that by applying the above instructions to the facts of the present case, it is clear that the export goods which were suspected of mis-declaration and where such declaration is to be confirmed and further enquiry/confirmatory test is required (as it is the case textiles materials), the goods should have been allowed for exportation provisionally, in order to safeguard the interest of the genuine exporters as well as the revenue.
Further, in the absence of any document or other evidence proving overvaluation of export goods, the claim of the Revenue that the appellants have mis-declared the description of the goods to claim higher ineligible export benefits does not sustain. Thus, the action taken by the department in the impugned order for confirmation of the adjudged demands along with confiscation of goods and imposition of penalty on the appellants is not legally sustainable.
Thus, the impugned order upholding the order of original authority in confirmation of adjudged demands, confiscation of goods and imposition of penalty on appellants, is not legally sustainable and hence the same is set aside. Further, for the limited extent of determination of eligible amount of drawback, arising on account of change in drawback rate alone and not on account of redetermination of the FOB value, we remand the case back to the original authority for this limited purpose. Needless to say that adequate opportunity for personal hearing is given to the appellants, so that all the relevant facts are taken into consideration while arriving at such re-determination of eligible amount of drawback in this case.
Appeal allowed.
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2024 (1) TMI 1122
Seeking direction to respondent to accept the Bank Guarantee furnished by the petitioner in lieu of Fixed Deposits - HELD THAT:- It is not in dispute that the Fixed Deposits submitted by the respondent have been encashed by the appellant and the entire amount covered by the Fixed Deposits has been invested by the appellant in a Fixed Deposit.
The impugned interim order is modified by directing that the Bank Guarantees furnished by the respondent be returned to the respondent. We direct that the appellant will continue to renew the Fixed Deposit till the final disposal of the appeal before the High Court. At the time of finally disposing of the appeal, the High Court will consider the prayer made by the respondent regarding entitlement of the respondent to receive the interest accrued on the Fixed Deposit.
Appeal disposed off.
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2024 (1) TMI 1121
Classification of service - rent-a-cab service or not? - providing vehicles to the Government Departments, Sister concerns and private parties - appellant is a 100% owned undertaking of Government of Tamil Nadu - HELD THAT:- The appellant is a State Trsnport Corporation owned by Tamil Nadu Government and they do not fall under the definition of Rent-a-Cab Scheme Operator.
Further, the issue is no more res integra and has been settled by decisions of the co-ordinate Bench of the Tribunal in the case of BANGALORE METROPOLITAN TRANSPORT CORPORATION VERSUS COMMISSIONER OF SERVICE TAX [2015 (2) TMI 100 - CESTAT BANGALORE]. It is also found that the said judgement of the Tribunal has been upheld by the Hon’ble Supreme Court in COMMISSIONER OF SERVICE TAX, BANGALORE VERSUS BANGALORE METROPOLITAN TRANSPORT CORPORATION [2015 (2) TMI 148 - SC ORDER], where it was held that The business undertaken by BMTC is to provide bus facility/transport facility to the citizens of Bangalore city and the main activity is running the buses in the city for the convenience of citizens and not a rent-a-cab scheme operation. We find that the definition itself excludes BMTC from the category of service providers.
The impugned order is not sustainable in law - Appeal allowed.
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2024 (1) TMI 1120
Eligibility of CENVAT Credit - credit was not mentioned in the ST-3 Returns filed - credit has been taken after the prescribed period of six months or one year (from 01.03.2015) - Extended period of limitation - HELD THAT:- The learned Commissioner finds that CENVAT credit on input and input services can only be availed within a period of six month or one year (w.e.f. 01.03.2015) from the date of invoice and in the instant case, time period of one year has already elapsed and moreover, the appellants have not claimed the CENVAT credit in the ST-3 Returns. It is found that the Tribunal in the case of Origin Learning Solutions Pvt. Ltd. [2021 (7) TMI 898 - CESTAT CHENNAI] held that CENVAT credit cannot be denied for the reason that such availment was not reflected in ST-3 Returns. It is also found that Tribunal and High Courts have been consistently holding that a substantial rate of eligibility to CENVAT credit cannot be denied on the basis of procedural violations.
The credit cannot be denied only because it has been utilized late. Moreover, it is found that the show-cause notice has been issued on the basis of third-party information.
Extended period of limitation - HELD THAT:- Though extended period has been invoked, no evidence of suppression, mis-statement, fraud, collusion etc., has been put forth. In the absence of the same, extended period cannot be invoked. It is found that the Tribunal in the case of Balaji Machinery [2022 (8) TMI 704 - CESTAT KOLKATA] held that where the demand is merely on the basis of data obtained from Income Tax Department, it cannot be alleged that there was suppression etc. to justify the invocation of extended period. Therefore, it is found that the impugned order is not legally sustainable.
The appeal is allowed both on merits and limitation.
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2024 (1) TMI 1119
Classification of services - commission amount received from General Sales Agent (GSA) - Service tax on Receiving commissions from other than the airlines - commission received from their own branches.
Classification of services - commission amount received from General Sales Agent (GSA) - incentives received from the airlines - Air Transport Agent services or Business Auxiliary Service? - HELD THAT:- The issues raised with regard to the classification of the services under the category of Air Travel Agent service is no longer resintegra and has been decided in favour of the appellant and against the revenue - the contention of the Revenue that the amount received as airline incentive, productivity linked bonus (PLB) and Boarding incentives received by the appellant from the airlines are in the nature of promotion of the activities of the airlines and would therefore be taxable under the heading Business Auxiliary Service deserves to be rejected in view of the law settled by the Larger Bench in Kafila Hospitality & Travels Pvt. Ltd. [2021 (3) TMI 773 - CESTAT NEW DELHI (LB)] where the Tribunal considered the issue as to whether the amounts received by the appellant as incentives were towards promotion of their business and not the business of the airlines so as to be taxable under the category of ‘Business Auxiliary Service’.
Reference was made by the Larger Bench to the decision in Airlines Agents Association vs Union of India [2001 (4) TMI 9 - HIGH COURT OF JUDICATURE (MADRAS)], where the Madras High Court held that the commission paid to the Air Travel agents had a direct nexus to the “air travel agent” services rendered to the passengers even if it indirectly benefited the business of the airlines. It was, therefore, concluded that “air travel agent” were not promoting or marketing the business of the airlines.
Similarly, in the case of Commissioner of Central Excise versus Shabeer Travels [2010 (3) TMI 818 - KERALA HIGH COURT], the Kerala High Court rejected the contention of the department that the subagent was rendering BAS to IATA agent and held that when an assessee is in the business of booking air tickets through another air travel agent, the assessee essentially renders Air Travel Agent services to the main travel agent, and would, therefore, not be liable to pay service tax under the category of BAS. The Larger Bench, accordingly held that by rendering services connected to travel by air, a travel agent would render “Air Travel Agent” services and which services cannot be said to be for promotion or marketing for the airlines.
Thus having considered the decision of the Larger Bench at length, no service tax can be levied on the appellant under the category of “Business Auxiliary Service”.
Receiving commissions from other than the airlines - HELD THAT:- The reliance placed by the learned Counsel for the appellant on the decision in M/s. Zuari Travel Corporation [2013 (7) TMI 911 - CESTAT MUMBAI] squarely covers the said issue. The Tribunal dealt with the question as to whether the sub-agent of an IATA Agent who books the tickets of air for customers and get commission from IATA Agent is rendering services under the category of “Business Auxiliary Services” or the category of “Air Travel Agent” and held The activity undertaken by respondent herein, who is a sub-agent of the IATA agent comes under ‘Air Travel Agents Services’ or ‘Business Auxiliary Services’. The ratio of the decision of the Hon’ble High Court of madras in the case of Airlines Agents Association [2001 (4) TMI 9 - HIGH COURT OF JUDICATURE (MADRAS)] would squarely apply to the facts of the present case. If the services rendered by the IATA agent is ‘Air Travel Agents Services’, the services rendered by a sub-agent is also the same and it cannot be different from that if ‘Air Travel Agents Services’.
Demand pertaining to the commission received from their own branches - HELD THAT:- Though the appellant and the branches are having separate service tax registration numbers but they are one and the same person and the transaction does not involve two separate entities. The branch has been set up for serving the appellant companies customers in and around Jaipur and the commission received by Jaipur office from other branch office is not for any taxable services rendered. The said commission is not received from any other person but by the appellant himself, which in essence is only on account of transfer of tickets from the branch to the appellant - The said issue has also been considered in Riya Travel & Tours (I) Pvt. Ltd. [2018 (11) TMI 1804 - CESTAT MUMBAI], where the Tribunal held that the commission received by the head office from the branch office of the same entity is not taxable as both cannot be treated as separate entity.
The demand raised by the revenue under the category of “Business Auxiliary Service” is unsustainable - the impugned order is set aside - appeal is allowed.
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2024 (1) TMI 1118
Refund claim of unutilized cenvat credit - manufacture of diamonds which were exempted from central excise duty - export of goods without bond or letter of undertaking - neither any show cause notice was issued nor an adjudication process was carried out - violation of principles of natural justice - HELD THAT:- In the present case the adjudicating authority though given some observation but held that the refund claim is not admissible. However, the refund claim was returned back to the appellant, this approach of the Assistant Commissioner is clear in violation of principle of natural justice in as much as neither any show cause notice was issued nor an adjudication process was carried out.
From the impugned order passed by the learned Commissioner (Appeals), it is found that learned commissioner appeal has observed that the appellant have taken Cenvat Credit without having registration. In this regard, it is found that availment of Cenvat Credit and / or for refund under Rule 5 of Cenvat Credit Rules registration is not mandatory as per Well Known Polyesters Ltd. Vs. Commissioner of C. Ex., Vapi [2011 (1) TMI 664 - CESTAT, AHMEDABAD] - In view of the above judgment it is settled that Cenvat Credit and /or refund thereof cannot be denied merely because the claimant has not taken the registration of Service Tax/ Central Excise.
The other issue dealt with by the Commissioner (Appeals) is that the refund of input duty /input service tax when appellant’s goods which was exported is exempted from Central Excise Duty and Service Tax and the export of the goods was made without bond /LUT - this issue is also settled in various Judgments like The Commissioner of Central Excise Drish Shoes Limited [2010 (5) TMI 334 - HIMACHAL PRADESH HIGH COURT] and Well Known Polyesters Ltd. Vs. Commissioner of C. Ex., Vapi [2011 (1) TMI 664 - CESTAT, AHMEDABAD].
In view of the above Judgments given by this Tribunal as well as various High Courts, it is settled legal position that even though manufactured goods/ output services is exempted, refund of Service Tax against export of the same cannot be denied. Therefore, in the present case denial of refund claim on the ground that the goods exported is exempted is not sustainable. From the above discussion which is supported by various Judgments - denial of refund, on the ground that the appellant did not possess the registration and the goods exported is exempted, is not sustained.
Having held as above since, the Adjudicating Authority has not verified refund documents related thereto, the matter needs to be remanded for reprocessing refund only for limited purpose of verification of documents - appeal allowed by way of remand.
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2024 (1) TMI 1117
Refund of duty paid - reversal of CENVAT credit availed on the basis of “diverted invoice” - endorsed invoices - proper document for claiming Central Excise refund under Rule 9(1)(a)(i) of the Rules - HELD THAT:- The Bombay High Court in the case of MARMAGOA STEEL LTD. VERSUS UNION OF INDIA [2005 (4) TMI 89 - HIGH COURT OF JUDICATURE AT BOMBAY] had held that input credit was not deniable to assessee endorsed in the name of the person claiming the credit. This case law was however in the context of Bill of Entry endorsement, and not that of the invoices issued by a manufacturer, as it was a case pertaining to import. Nonetheless what is material is the said difference in the nature of document would not alter the situation about the duty paid character of the goods as well as their utilization in the finished product. The Hon’ble Bombay High Court therein had distinguished the Larger Bench’s decision in the case of BALMER LAWRIE & CO. LTD. VERSUS COMMISSIONER OF C. EX., KANPUR [2000 (1) TMI 74 - CEGAT, NEW DELHI] where it was held that The very object of issuance of Notification No. 32/94 referred to above and insertion of Rules 57GG and 174 requiring the registration of the dealer dealing with the excisable goods, would stand defeated and nullified if these are taken to be only procedural and not mandatory/ imperative in character and enforcement.
Distinguishing, the said LB decision of the Tribunal, the Hon. High Court in the case of MARMAGOA STEEL LTD. VERSUS UNION OF INDIA [2005 (4) TMI 89 - HIGH COURT OF JUDICATURE AT BOMBAY], while recording its findings had held that In the absence of any provision regarding endorsement on the bill of entry, the credit of duty cannot be denied on the ground that the bill of entry is not endorsed in the name of the claimant. As stated hereinabove, what is required to be established for taking credit of duty is that the goods used as inputs are duty paid and that the credit of duty paid on the said goods has not been taken.
As long as various ingredients regarding duty paid character of the goods are clearly established and there is no dispute about their utilization in the manufacture of finished goods, thereby indicating the necessary compliance of the act and the rules, no offence can be taken to the legitimate availment of credit. It is further noticed that there are slew of case laws GAUTAM WEAVING MILLS VERSUS COMMISSIONER OF C. EX., BELAPUR [2008 (1) TMI 771 - CESTAT, MUMBAI], SIMPLEX MILLS CO. LTD. VERSUS CCE [2007 (6) TMI 513 - BOMBAY HIGH COURT], allowing credit on the basis of endorsed duty paid document as long as all material particulars required to be incorporated in terms of erstwhile Rule 52A of the Central Excise Rules and the physical receipt of the said goods were clearly established and not in dispute.
Thus, the substantial benefit cannot be disallowed for an alleged irregularity as may have been pointed out by the department in the impugned Show Cause Notice. Mere endorsement of an invoice does not amend or alter the key essentials and characteristics of a validly issued invoice.
The order of Commissioner (Appeals) is set aside and the appeal is allowed.
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