Exemption u/s 11 - pharmacy shop in hospital premises - activity of running a pharmacy shop as incidental to attainment of the objects of the trust - charitable trust - Held that:- Identically, Hon’ble jurisdictional High Court in Baun Foundation Trust vs Chief Commissioner (2012 (4) TMI 172 - BOMBAY HIGH COURT ) wherein, identically, the activity of chemist of was held to be incidental or ancillary to the dominant object and purpose to run a hospital. The Hon’ble Court held that running a chemist shop is not the dominant object for the purpose trust, therefore, the assessee’s application was allowed u/s 10(23C) (via) of the Act, by holding that application of approval cannot be rejected on the ground that running of a shop in the hospital is incidental for the purposes of the hospital.
In the present appeal also, the chemist shop is part and partial of the hospital being incidental/ancillary to achieve the objects of the hospital, therefore, following the aforesaid decisions and also the case of Franciscan Sisters of St. Joseph’s Society (2014 (1) TMI 1754 - ITAT CHENNAI) wherein, running of pharmacy by the assessee society as integral part of running a hospital, ratio laid down in DIT (E) vs Agri-horticulture Society (2004 (7) TMI 44 - MADRAS High Court) we find no infirmity in the conclusion drawn by the ld. Commissioner of Income Tax (Appeals), more specifically when Karuna Medical Society the pharmacy shop is integral part and partial of the hospital. - Decided in favour of assessee.
Demand - transportation of goods by road - "Business Auxiliary Services" - reverse charge mechanism - Held that: - the demand pertains to the period 2007-08 to December, 2009. The dispute on the taxability on the foreign services on reverse charge basis was under dispute only for the period prior to 18/4/2006, however, thereafter there was no doubt about taxability of services therefore the plea of the Ld. Counsel that the matter was under dispute is of no relevance for the period 2007-08 to December, 2009. I also note that Ld. Commissioner, considering the fact that the transaction was recorded in the books of account of the appellant, reduced the penalty to 50% invoking new Section 78. In view of the facts and circumstances of the case, I find that appellant could not make out a case of reasonable cause for non payment of service tax in time. I do not find any infirmity in the impugned order, hence the same is maintained - Appeal dismissed - decided against appellant.
Provisional Assessment - Demand of interest on payment of differential duty before formal finalization of assessment - Held that:- We do not find any merit in this petition. HC order confirmed [2015 (2) TMI 794 - BOMBAY HIGH COURT] saying the liability to pay interest arises on any amount payable to Central Government and consequent to order for final assessment under Rule 7 subrule (3). We are in agreement with the Assessee in the present case that the later part of sub-rule (4) is not attracted. The liability to pay interest on any amount payable to Central Government consequent to order for final assessment is not a situation to be found in the present case.
Assessee’s claim of relief u/s 90 - CIT(A) erred in restricting the assessee’s claim of relief u/s 90 to the extent of tax payable in India on net income i.e difference between interest earned from M/s AHPL and interest paid on borrowings made for advancing the loans to M/s AHPL - Held that:- The provisions of sec. 90 of the Act and clauses of DTAA between India and Singapore clarify that tax credit to the extent of income derived in Singapore and offered to tax in India should be granted. Relief from double taxation is provided by abatement on the basis of mutual agreement between the two States concerned whereby the assessee is given relief by credit in a particular manner even though he is taxed in both the countries. Relief can be in the form of credit for tax payable in another country or by charging tax at lower rate. The procedure to be adopted by the Assessing Officer for granting relief is to determine in the first place, the total income of the person liable to tax in India in accordance with the provisions of the Act, and then allow relief as per the terms of the tax treaty entered with the other contracting country where the income has suffered double taxation. Article 25 of the DTAA between India and Singapore deals with relief to be granted in respect of double taxed income. The said Article restricts the allowability of credit to an amount not exceeding the tax payable in India in respect of such income from Singapore. In similar circumstances, the Mumbai Bench of the Tribunal in the case of JCIT vs Digital Equipments India Ltd [2004 (3) TMI 711 - ITAT MUMBAI ], has observed that credit of tax paid in USA cannot exceed the income tax liability payable in India in view of clause 25(2)(a) of DTAA between India and USA. Thus we remit this issue in dispute to the file of the Assessing Officer for reconsideration.
Addition towards loss on foreign exchange derivatives transactions - Hel that:- We remit this issue back to the file of the Assessing Officer. The Assessing Officer shall reconsider the issue afresh in the light of the above order of this Tribunal in Deputy Commissioner Of Income Tax Company Circle-I (1) , Chennai Versus M/s Asvini Fisheries Pvt Ltd [2016 (1) TMI 538 - ITAT CHENNAI] after giving adequate opportunity to the assessee wherein held Assessing Officer has to consider the foreign exchange derivative in proportion to export turnover as regular business transaction of the assessee. If the derivative transaction undertaken by the assessee is in excess of export turnover then that loss suffered in respect of that portion of excess transaction has to be considered as speculative loss only and that excess derivative transaction has no proximity with export turnover and the Assessing Officer is directed to compute accordingly. Further, the Assessing Officer has to see whether there is any premature cancellation of forward contract of foreign exchange and that transaction should be taken out for the purpose of considering the business loss and only the transactions which are completed to be considered for the purpose of determining the business loss from these foreign exchange forward contract. With this observation, we remand this issue to the file of the Assessing Officer for fresh consideration.
Addition u/s 14A - Held that:- We make it clear that if the assessee has already disallowed more than 5% of the exempted income, the same has to be sustained. Ordered accordingly. This ground of appeal is partly allowed.
Eligibility for deduction u/s 35D in respect of total expenditure incurred towards share issue - Held that:- Extension of the industrial undertaking cannot be considered as complete in the relevant previous year. Ld. CIT(Appeals) was justified in denying assessee claim under Section 35D of the Act for the impugned assessment year.
Disallowance u/s 40(a)(ia) on payment of catering charges to catering contractor - Held that:- This issue is squarely covered in favour of the assessee by the decision of Special Bench in the case of Merilyn Shipping and Transports vs Addl. CIT [2012 (4) TMI 290 - ITAT VISAKHAPATNAM] wherein it was held that only the amount outstanding at the close of the financial year has to be disallowed u/s 40(a)(ia) of the Act. Being so, in our opinion, the Assessing Officer has to see whether any amount is outstanding at the close of the financial year and that portion is to be disallowed. Accordingly, this issue is remitted back to the file of the Assessing Officer with the above direction.
Disallowance u/s 40(a)(i) - payments made to non-residents in respect of which tax deduction has been made at lower rates without obtaining a certificate u/s 195(2)- Held that:- Assessee was right in effecting deduction of tax at source considering se 44BB of the Act. The disallowance was rightly deleted by the ld. CIT (Appeals)
Disallowance u/s 40(a)(i) in respect of dry-docking charges paid to Fair Mount Marine BV Netherlands - Held that:- The assessee took the plea for the first time that the said service was covered under Article 8A of DTAA before the CIT(A) and there was no such claim made before the Assessing Officer. In our opinion, the Assessing Officer has to examine the issue whether Article 8A of India-Netherlands DTAA is applicable to the assessee's case or not. Accordingly, this issue is remitted back to the file of the Assessing Officer for fresh consideration.
Demand - whether the appellant was engaged in the manufacture of canopies has to be addressed by the nature of process undertaken by the appellant - Held that: - The documentary evidences in respect of all the canopies procured by the appellant either from job worker or by purchase indicated that the impugned goods were obtained by the appellants from these sources - In the absence of any supporting evidence adduced by the Revenue to establish any manufacture of impugned goods by the appellant at their Delhi unit prior to July, 2000 and taking into consideration the evidences submitted by the appellants regarding purchase of capital machinery and electricity consumption during the year 2000 - Decided in favor of the assessee.
The Supreme Court dismissed the civil appeal after condoning the delay. The judgment was delivered by Mr. Dipak Misra and Mr. Prafulla C. Pant, JJ. The citation is 2015 (12) TMI 1584 - SC Order.
Denial of CENVAT credit on cement - cement used for stabilization of hazardous waste namely jerositewaste product emerged during the course of manufacture of non-ferrous metal - Held that: - the issue has already been settled by the appellant's own case M/s Hindustan Zinc Ltd Versus Commissioner of Central Excise And Service Tax, Jaipur [2015 (10) TMI 1558 - CESTAT NEW DELHI] relied upon where it was held that appellant has used cement for stabilization of hazardous waste 'jarosite' as toxic effluent at secured land fill which is part and parcel of their manufacturing activity. In these terms, we hold that appellant has correctly taken cenvat credit.
Denial of CENVAT credit not justified - appeal allowed - decided in favor of appellant.
SSI exemption - benefit of N/N. 9/2003-C.E., dated 1-3-2003 - use of brand name of others - ‘Paras’ - ‘Wonder 555' - whether brand name belonged to others or it did not belong to anyone, thus, making it eligible for use by anyone, and avail SSI exemption? - Held that: - N/N. 9/2003-C.E., dated 1-3-2003, inter alia, states that “exemption contained in the notification shall not apply to the specified goods bearing the brand name or trade name, whether registered or not of another person. ……” It is thus evident that to deny the benefit of the said exemption to the impugned goods, it has to be established that the brand names ‘Paras’ and ‘Wonder 555’ belonged to some other person(s). We are not in agreement with the contention of the ld. DR that if the brand names did not belong to the appellant, they necessarily belonged to others, as we find this contention fallacious because a brand name or trade name need not necessarily belong to someone in which case everybody would be entitled to use it. We find that in the primary adjudication order as well as the impugned order it is nowhere claimed, leave alone shown, that these brand names belonged to some other person(s) and consequently the very basis for denial of benefit under N/N. 9/2003-C.E. collapses.
Benefit of notification available - appeal allowed - decided in favor of assessee.
Discrepancy in respect of the quantities found in the containers, vis-a-vis those declared - discrepancies in quantity, admittedly, relate to an excess DEPB - decision in the case of COMMISSIONER OF CUSTOMS, MUMBAI Versus RK. TOMAR [2007 (11) TMI 262 - CESTAT, MUMBAI] referred - appellant is granted four weeks’ time for doing the needful as per office report dated 1-12-2015, failing which the civil appeal shall stand dismissed without further reference to the Court - appeal disposed off.
Interpretation of the notification dated 1-6-2007 - tribunal [2016 (7) TMI 89 - CESTAT NEW DELHI] has held that, construction of hospitals for charitable organization (e.g. B.L. Kapoor Hospital) is covered within the scope of the scope of commercial construction and hence liable to S.T. under C.I.C.S.. - HC dismissed the revenue appeal.
Confiscation of vessel – Classified as ‘Happy Success’ under CTH 8904 or as Supply Vessel under CTH 8901 – N/N. 21/2002-Cus – Held that: - various statutory authorities have categorically certified the description of subject vessel as ‘Supply Vessel’. In the certificates shown at Sl. No. (i),(ii) and (iv), the survey of the vessel was also conducted and thereafter the classification of subject vessel was made as ‘Supply Vessel’. On going through the judgments on the identical issues, it is found that in the case of Hull Offshore Ltd. v. Commissioner of Customs (Import), Mumbai [2013 (10) TMI 409 - CESTAT MUMBAI], the classification of the vessel was decided on the basis of various certificates of different statutory authorities similarly. In the present case also the same authorities classified the subject vessel as ‘Supply Vessel’. Hence the certification of the various above authorities that the subject vessel is a Supply Vessel is absolutely in the line of the above judgment.
Discrepancy in the Memorandum of Agreement is due to inadvertence – at some page it was mentioned as “Ocean Going Utility-cum-Offshore Supply Vessel” while in other it was described as “Steel Tug MV NAVIS SUCCESS”. In the same agreement “Supply Vessel” was mentioned and the same gets confirmed on the basis of other various certificates, which establish that the Steel Tug was mentioned due to inadvertence. Therefore when statutory bodies classified the vessel as ‘Supply Vessel’, no weightage can be given to an inadvertent mistake appearing in MOA.
Printout of various website - vessel categorized as Offshore Tug/Supply Vessel. Held that: - the website is neither of the supplier nor of the appellants, it is maintained by some third party. Moreover when there are many statutory authorities certified the subject vessel as Supply Vessel, only unauthenticated website data can not be given credential.
Chartered Engineer’s report - from any material it could not be proved that the vessel has ever used as Tug. On the contrary, ample of evidences prove that the vessel is ‘Supply Vessel’ and used as ‘Supply Vessel’. As regard Winch on the vessel, this alone is not sufficient to conclude the classification of the vessel as Tug. Even though the vessel has winch, this will not suffice to hold the classification of vessel as Tug.
As regard non-filing of Bill of Entry - once goods is exempted by customs exemption notification, non-filing of Bill of Entry at the time of import is merely a procedural lapse as there is no mala fide intention of the appellant as no benefit accrues to the appellant by non-filing of Bill of Entry.
Vessel correctly classified as supply vessel – confiscation of vessel lapses – decided in favor of appellant.
SEZ unit - Release of confiscated 12 kgs of gold bars - confiscation of gold bars - imposition of penalties - SEZ - mandatory intimation under the Trade Facilitation Notice No.02/07 dated 3.3.2007 to be sent to the Department - Whether the failure on the part of the passenger to adhere to the rules provided in Rule 29(5) of the SEZ Rules, 2006 and in the absence of valid permit or authorization, the detention of gold bars justified? - opportunity of being heard - applicability of section 51 - Held that: - the implication of section 51 of the SEZ Act is that anything inconsistent to the provisions of the SEZ Act will not be considered. As stated above, there is also a discrepancy relating to issuance of detention receipt. Since there was no case made out for confiscation of the goods as per Rule 29(5) of the SEZ Rules, earlier show cause notice was dropped. If at all any proceedings to be initiated, that can be initiated only under the provisions of the SEZ Act and Rules. Also, the unit is a SEZ unit, section 51 applicable.
Non consideration of CCTV footage by the Appellate Authority - Held that: - the CCTV footage was concealed by the Appellate Authority for the reasons best known to them. Though the burden lies upon the passenger to establish his defence, the Appellate Authority ought to have considered the said electronic evidence also, before penalising the Petitioner. Production of scientific and electronic evidence in court as contemplated under Section 65B of the Evidence Act is of great help to the adjudicating authority.
The charges levelled against were dropped, after considering the implication of Section 51 of the SEZ Act and also the electronic evidence of CCTV footage. Further, there is also a statutory compliance provided under Section 128A(3) of the Customs Act, which the Appellate Authority failed to comply with. Hence, the matter deserves reconsideration and re adjudication, as long as the SEZ Act and the Rules and the Acts relied on by the Respondents are inconsistent with each other.
Petition disposed off - matter remanded - opportunity of being heard to be provided to the petitioner.
Refund claim - payment by cash before sanction of refund under Rule 5 of the Cenvat Credit Rules, 2004 - no minimum balance of AED - BED eligible for payment of AED - whether refund claim justified on the ground that BED was eligible for payment of AED? - Held that: - there is no provision of law to entertain such claim for refund. The appellant paid amount due to the Government by cash instead of using credit, as claimed by them. There is no wrong payment. No amount has been paid in excess to the Government as there is no ground for any return of money by way of refund to the appellant - refund not justified - appeal dismissed - decided against appellant.
Demand of interest - appellant utilized accumulated Cenvat credit while discharging Service Tax liability from Cenvat credit on GTA Services under reverse charge mechanism - whether interest is required to be paid by the appellant for wrongly availing and utilizing Cenvat credit - Held that:- demand of Service Tax for the period 1-1-2015 to 31-3-2007 was paid in cash on 13-9-2007 & 27-9-2007 belatedly. Therefore, interest liability for wrongly utilization of Cenvat credit and late payment of duty in cash is attracted and has been correctly upheld by the first appellate authority. - Decided against the appellant
Entitlement for exemption in terms of Section 80P(2)(a)(i) - whether assessee are not a Co-operative Banks but a Co-operative Societies? - Held that:- Taking note of the observations in the judgment in the case of M/s. The Quepem Urban Co-operative Credit Society Ltd., (2015 (6) TMI 573 - BOMBAY HIGH COURT ) to the effect that merely giving credit facilities to the members would not be a Co-operative Bank but continued to be a Co-operative Society and as there is no material on record that the respondents were giving any such credit facilities to the non members, we find that the observations in the said judgment in the case of M/s. The Quepem Urban Co-operative Credit Society Ltd., ( supra ) would be squarely applicable to the facts of the present case. As such, as no other contentions have been raised by the learned counsel appearing for the appellant, we find that the proposed substantial questions of law to that effect would not survive and does not require any further consideration
Cenvat demand - input services used in the manufacture of rectified spirit - 2% of total production of rectified alcohol is not used in the manufacture of denatured alcohol - original authority indicated that approximately 98% of is used for de-natured alcohol cleared on payment of duty - Held that:- there is no assertion with evidence by the Revenue regarding actual clearance of exempted rectified spirit by the respondent to the extent of 2% of total production. An inference made is the reason for this appeal. However, even, if it is considered that such 2% of rectified spirit has been cleared by the respondent, the plea made by the respondent as recorded by the original authority regarding applicability of Rule 6(5) of Cenvat Credit Rules, 2004, has to be considered the services or of such nature, which do not attract the provision of sub-rules (1), (2) and (3) of Rule 6. - Decided against the Revenue
Refund claim - Circular No. 108/02/2009, dated 29-1-2009 - non-leviability of service tax for the transactions made with the buyers of the flats - service tax paid by mistake of law and appellant had not collected the same from the customer/buyers - Held that:- this special kind of agreement, where the builder has not sold the flat directly but made the buyers as owners of the land and those owners in turn entered into an agreement with the said builder for construction of flats for their own personal use, the provisions of Section 65(91a) of the Finance Act, 1994 are clear that said residences (flats) would not be covered under the definition of residential complex. Consequently these activities or the transactions in question would not attract liability of payment of service tax under the service of construction of complex service as per the provisions of Section 65(105)(zzzh) which defines the taxable service of construction of complex.
The service in question is not liable for payment of service tax and the appellant’s claim for refund would deserve examination and consideration as per the provisions of law as applicable during the relevant period. It is made clear that service is definitely under the exclusion category and not liabile for payment of service tax. This appeal is allowed by way of remand to the original adjudicating authority for examination and consideration of refund claim under the provisions of refund claims wherein the adjudicating authority will also examine the claim under both the criteria i.e. time bar as well as ‘unjust enrichment’.the service in question is not liable for payment of service tax and the appellant’s claim for refund would deserve examination and consideration as per the provisions of law as applicable during the relevant period. It is made clear that service is definitely under the exclusion category and not liabile for payment of service tax. This appeal is allowed by way of remand to the original adjudicating authority for examination and consideration of refund claim under the provisions of refund claims wherein the adjudicating authority will also examine the claim under both the criteria i.e. time bar as well as ‘unjust enrichment’.the service in question is not liable for payment of service tax and the appellant’s claim for refund would deserve examination and consideration as per the provisions of law as applicable during the relevant period. It is made clear that service is definitely under the exclusion category and not liabile for payment of service tax. This appeal is allowed by way of remand to the original adjudicating authority for examination and consideration of refund claim under the provisions of refund claims wherein the adjudicating authority will also examine the claim under both the criteria i.e. time bar as well as ‘unjust enrichment’. - Appeal allowed by way of remand
Demand of interest and imposition pf penalties - for the period post 18.04.2006 - raised an amount as External Commercial Borrowing (ECB) in the form of Convertible Bond - to raise ECB, appellant had paid amounts to various entities situated abroad as an amount towards the service rendered - appellant discharged service tax liability and has also availed the CENVAT credit of such service tax liability on the amount paid as tax under reverse charge mechanism.
Held that:- appellant's challenge to demand of interest is basically on the ground that the said demand of tax was not sustainable on the ground that the show-cause notice is issued for the demand of tax on 11.03.2008 while the fees were paid to various entities during the period October 2004 to September 2006 and the demand of tax was paid on 28.05.2007. We find strong force in the contentions raised by the appellant in as much if the appellant would have taken the plea of limitation, he may have succeeded and no demand of tax would be sustainable on him by applying the judgement of Tribunal in the case of Jain Irrigation Systems Ltd [2015 (9) TMI 160 - CESTAT MUMBAI]. Therefore, we set aside the demand of the interest and the penalties imposed on the appellant by the impugned order which is challenged before us. - Appeal disposed of
Seeking setting aside the penalties imposed - non-discharge of service tax liability in time due to financial crises and ill health of the husband of the Proprietor - discharged the entire service tax liability and interest thereof before the issuance of show cause notice - Held that:- it is found that the appellant has not discharged the entire interest liability which is fastened on them due to non discharge of service tax liability. There is no dispute that the appellant is liable to discharge the service tax liability under the category of Manpower Recruitment or Supply Agency Services. We also find that the appellant had charged and collected the service tax from their clients but did not deposit the same into the Government treasury. Also there is no evidence submitted regarding many clients of the assessee did not pay them the amount as billed. Therefore, we have to hold that the appellant having charged and collected the service tax liability and not deposited in the Government treasury and having also not to discharge the interest liability, the impugned order is correct and appellant is not eligible for the relief under Section 80 of the Finance Act, 1994. - Decided against the assessee
Rejection of refund claim - grounds of limitation - Held that: - The transaction on which duty was paid was a domestic clearance. The appellants have not exported the goods themselves but have supplied against the CT-1 to a domestic buyers who may have in turn exported the goods. Commissioner (Appeals) has made an error in considering it as export and relying on clause (a) to the Explanation (B) of Section 11B for calculating the period of limitation. He should have relied on clause (f) to Explanation (B) of Section 11B, which clarifies the date of payment of duty shall be the relevant date. Since the appellant had paid duty in the month of May, 09 and filed a refund claim in April, 2010, the claim is not barred by limitation.
Grounds of unjust enrichment - Held that: - the appellants have not been given opportunity to defend their case. They could not produce certificate of Chartered Accountant or any other documents before the lower authorities as they were never asked to establish their case against unjust enrichment - Matter remanded to the Commissioner (Appeals) to examine the issue of unjust enrichment after considering the documents produced by the appellant.
Jurisdiction of Tribunal to hear the appeal - Held that: - The appellants had paid duty on the domestic transaction - refund sought cannot be equated with the rebate - Tribunal has the jurisdiction to hear this appeal.
Appeal disposed off - matter remanded to decided the issue of unjust enrichment.
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