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Showing 321 to 340 of 1574 Records
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2024 (12) TMI 1254
Works contract service - transmission of electricity irrespective of classification - services rendered by the appellant for construction of various structures, superstructures etc. of hydro power projects for generation of electricity for TNEB - N/N. 11/2010-ST and 45/2010-ST - it was held by CESTAT that the demands no not sustain.
HELD THAT:- There are no reason to interfere with the impugned order dated 26.04.2018 passed by The Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Chennai - appeal dismissed.
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2024 (12) TMI 1253
Violation of principles of natural justice - non-consideration of submissions - Classification of imported goods - import of natural Rutile Ore/ Leucoxene Sand of different grades - whether the imported goods are ‘ore’ or concentrate and whether eligible for availing exemption under N/N. 4/2006 – CE dt. 01.03.2006 as superseded by N/N. 12/2012 – CE dt. 17.03.2012 - time limitation.
Classification of imported goods - import of natural Rutile Ore/ Leucoxene Sand of different grades - HELD THAT:- Reliance placed upon a decision of this Court in the case of M/S. STAR INDUSTRIES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) , RAIGAD [2015 (10) TMI 1288 - SUPREME COURT] where it was held that ' once we arrive at the conclusion that process of roasting of Ore amounts to manufacture and it creates a different product known as concentrate, for the purpose of exemption notification, which exempts only 'ores' it is not possible to hold that concentrate will still be covered by the exemption notification. Therefore, harmonious construction of Note 2 and Note 4 would lead us to hold that in those cases when Note 4 applies and Ores becomes a different product, it ceases to be ores.'
Non-consideration of submission - principles of natural justice - HELD THAT:- It is found from the judgment of the Tribunal that without even considering what is laid down in paragraphs 29 and 31 of STAR INDUSTRIES, the Tribunal has brushed aside the binding decision. Therefore, the case will require re-consideration at the hands of the Tribunal.
Time Limitation - HELD THAT:- Even as regards the finding on limitation, the Tribunal has overlooked the fact that the show cause notice was based on IIT, Powai’s test report dated 03rd May, 2013. The finding of fact of the Tribunal on delay is without considering the factual aspects on record.
Conclusion - Due to failure to consider properly the submissions, the impugned judgment is set aside and appeal restored to the file of The Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai for fresh consideration.
Appeal allowed in part by way of remand.
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2024 (12) TMI 1252
Condonation of a gross delay of 326, 326, 330, 330 and 333 days respectively in filing the Civil Appeals which has not been satisfactorily explained - Under-valuation of imported goods - Demand of differential customs duty - demand based on load port documents - it was held by CESTAT that 'the impugned order in so far as the same is concerned with imports through said 365 Bills of Entry in respect of enhancement of value, confirmation of differential Customs duty, order to pay interest, confiscation of said goods and penalties imposed including personal penalties is set aside.'
HELD THAT:- There are no good reason to interfere with the impugned orders passed by the Customs, Excise and Service Tax Appellate Tribunal - Civil Appeals are, accordingly, dismissed on the ground of delay as well as on merits.
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2024 (12) TMI 1251
Violation of principles of natural justice - SCN not recived by the petitioner - Seeking quashing the impugned Order - in respect of certain exports the actual realization of the amount in foreign exchange was belated and duty drawbacks could not have been availed by the Petitioner - HELD THAT:- A perusal of Section 153 of the Customs Act would show that one of the modes for service under Section 153 (b) of The Customs Act is through registered post, speed post or courier, however, it can also be sent through email in terms of Section 153(c) of The Customs Act. In addition, from 2021 onwards, notices and hearing notices can also be made available on the common portal as well.
In the present case, the notice appears to have been sent under Section 153 (b) of The Customs Act and on the display board of the Customs Department. Section 153 (b) only records notice by post or courier and not via email - In the opinion of this Court, the provision itself makes it clear that notices can be sent by email. Moreover, it is also unclear as to why all the notices which were sent have been returned as the Petitioner has categorically stated that there was no change of address.
In the overall scheme of things and the facts which have emerged, this Court is of the opinion that owing to the fact that as per the Petitioner the entire amount of the shipping bills and foreign exchange have been realized, the Petitioner ought to be given an opportunity to reply to the Show Cause Notice and a hearing may be afforded to the Petitioner - The impugned order dated 10th November, 2022 is set aside. Let a fresh show cause notice be served upon the Petitioner on the email address. In addition the said show cause notice shall be served upon the ld. Counsel appearing for the Petitioner within one week.
Petition disposed off.
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2024 (12) TMI 1250
Application under Section 311 of Code of Criminal Procedure - delay in prosecution and filing of the complaint - prosecuting agency DRI seeks to bring on record several bill of entries under the heading index - Import duty evasion - HELD THAT:- The Court takes into consideration that this is the second application under section 311 of Cr.P.C, however same is also being read with Section 244 of Cr.P.C. and while such occasion was not availed of earlier on behalf of the DRI is still speculative. The arguments of the Ld. Senior Counsel that the data uploaded over computer are confidential and cannot be procured or accessed without the permission of the Court does not seems to inspire confidence, as these are already seized by the DRI as per their own version. There is no reason why such opportunity was not grabbed at the very first instance when the complaint case was filed by DRI after 17 years of the alleged occurrence - the arguments of the Ld. Counsel for the accused that there is inordinate delay in filing the present case is not sustainable in view that there is no limitation qua taking cognizance qua economic offence.
This Court is of the opinion that the application is allowed subject to the cost of Rs. 50,000/- to be paid in DLSA by the DRI. It is clarified herein, that the department has to deduct the amount from the responsible officer for such lapse as since the cost is being imposed upon the State/ Department of State, it cannot be the case that the same be burden upon Exchequer. It is also not appreciated that though Sr. Counsel had submitted that physical copies is already seized by the Department and department could not lay his hand over such documents, and therefore Computer Copies from the database is required.
Application stands allowed as the document is relevant for the adjudication the case and in particular, regarding the input qua thickness of item (i.e. 0.6 mm), subject to payment of cost within one month.
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2024 (12) TMI 1249
Dismissal of company petition filed by the appellant on grounds of maintainability and delay - maintainability of petition filed by the appellant as per Section 244(b) of the Companies Act, 2013 - HELD THAT:- The appellant has not filed any record of the company wherein he was shown to be a member of the Respondent No.1 between 2012-2013 till the date he had filed Company Petition in the year 2023. Rather if one peruses the additional affidavit filed by the Respondent herein before the Ld. NCLT one would find at the time of the filing of the Company Petition there were 97 members of the Company, the list of which stood uploaded on the website of the ROC and appears to be the correct list. Thus considering this number of members on the date of filing the petition, the Ld. NCLT held the appellant did not meet the threshold for filing the Company Petition.
Considering the fact the appellant was removed in the year 2012 from the list of members in EOGM dated 01.02.2012; such removal having been published in the newspaper; the appellant never took steps to challenge the decision of the EOGM dated 1.2.2012; he never filed any record wherein he could show he was a live member after 2012-13 till 2023, there are no infirmity in the impugned order. There are no force in the arguments of the learned counsel for the appellant that during these years he always believed he was still a member of the Club. Such an argument cannot be believed by any stretch of imagination.
The appeal is thus devoid of merit and is accordingly dismissed.
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2024 (12) TMI 1248
Exercise of inherent powers of this Court under Section 482 of the CrPC (now Section 528 of the BNSS) - Immunity from prosecution under Section 32A of the Insolvency and Bankruptcy Code (IBC) - Lack of territorial jurisdiction - disclosure of offences in the FIR.
Exercise of inherent powers of this Court under Section 482 of the CrPC (now Section 528 of the BNSS) - HELD THAT:- The Hon’ble Supreme Court, in Neeharika Infrastructure [2021 (4) TMI 1244 - SUPREME COURT], reiterated the principles to be followed while quashing an FIR and held 'When a prayer for quashing the FIR is made by the alleged accused, the Court when it exercises the power under Section 482CrPC, only has to consider whether or not the allegations in the FIR disclose the commission of a cognizable offence and is not required to consider on merits whether the allegations make out a cognizable offence or not and the court has to permit the investigating agency/police to investigate the allegations in the FIR.'
The Hon’ble Supreme Court has time and again reiterated that the power of quashing should be exercised sparingly with circumspection, in the “rarest of rare cases”. Additionally, while examining an FIR/complaint, quashing of which is sought, the Court cannot embark upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR/complaint - Thus, ordinarily, the Courts are barred from usurping the jurisdiction of the police, since the two organs of the State operate in two specific spheres of activities, however, the inherent power of the Court is to secure the ends of justice or prevent the abuse of the process of law.
As per the law, to invoke its inherent jurisdiction under Section 482 of the CrPC, the High Court has to be fully satisfied that the material produced by the accused is such that would lead to the conclusion that the defence is based on sound, reasonable and indubitable facts, and that the material so produced is such as would clearly defeat or negate the allegations contained in the FIR without conducting trial - Further, as per Rajiv Thapar v. Madan Lal Kapoor [2013 (1) TMI 932 - SUPREME COURT], the material placed on record has to be of such impeccable quality that would persuade a reasonable person to dismiss and condemn the accusations as false. Therefore, in order to meet the ends of justice, the High Court may be persuaded by its judicial conscience to prevent the abuse of the process of law.
Immunity from prosecution under Section 32A of the Insolvency and Bankruptcy Code (IBC) - It is the case of the petitioner that the impugned FIR is liable to be quashed on merits as the same cannot exist qua the petitioner in view of Section 32A of the IBC - HELD THAT:- In Ebix Singapore Pvt. Ltd. [2021 (9) TMI 672 - SUPREME COURT] submitted a resolution plan for Educomp Solutions Ltd., a CD undergoing the CIRP under the IBC. While dealing with various legal issues, the Hon’ble Supreme Court observed that Section 32A of the IBC was introduced to provide immunity to the CD and its assets from liabilities arising out of past offenses once the resolution plan is approved. It was also observed that the said provision ensures the clean slate principle, shielding the CD and its assets from past liabilities once a resolution plan is implemented. It was further clarified that this immunity is crucial for the successful implementation of resolution plans and encourages resolution applicants to participate in the CIRP.
Further, in Ajay Kumar Radheyshyam Goenka [2023 (3) TMI 686 - SUPREME COURT], the Hon’ble Supreme Court while upholding the settled position of law observed that Section 32A of the IBC ensures that the corporate debtor is freed from the past liabilities under the approved resolution plan in the event the new control is with the person/management which is not related to the person/management related to the commission of such offence. However, while stating the effect of Section 32A of the IBC on the directors of the company, it was made clear by the Hon’ble Court that the criminal liability of directors and officers of the concerned corporate debtor is not absolved and the IBC does not shield individuals from personal criminal liabilities under the Negotiable Instruments Act, 1881.
Therefore, it is settled that once a company, against whom an FIR is registered, undergoes CIRP and a resolution plan gets duly approved by the NCLT, whereby, the control of the affairs of the concerned CD is taken over by a new management which is not related to the CD’s erstwhile directors/promoters who are related to the allegations of commission of such offence, the said company’s liability for an offence committed prior to the commencement of CIRP ceases and the concerned CD shall not be prosecuted for such an offence from the date the resolution plan has been approved - In the instant case, it is an admitted position of fact that the impugned FIR pertains to the allegations of commission of fraud and diversion of funds by the petitioner and its erstwhile directors/promoters during the period 2008 to 2017 which is apparent from the bare reading of the complaint and FIR.
Keeping in mind the settled position of law, the admitted position of facts that the offences alleged in the complaint and the FIR pertain to the period 2008-2017, i.e., before the commencement of the CIRP; resolution plan has been approved by the learned NCLT and there has been no objection/appeal against the same; the respondent CBI has not objected or brought on record any contention to submit to the effect that the resolution applicant is related to the persons accused of commission of offences, this Court is of the view that there are cogent grounds to invoke Section 32A of the IBC - It has been ascertained that Section 32A of the IBC protects a CD and leads to extinguishment of any criminal liability of the CD if the control of the said CD goes in the hands of the new management which is different from the original/old management.
This Court also deems it apposite to state that the present petition has been adjudicated only with respect to the contention of immunity from the prosecution of the CD/petitioner under Section 32A of the IBC and has neither dealt with the issues on merits of the allegations levelled in the impugned FIR nor with the issue of territorial jurisdiction.
Conclusion - In view of the undisputed fact that the CIRP in regard to the petitioner company commenced on 10th October, 2019 whereas the FIR was registered on 7th February, 2023 in regard to the alleged offences committed between the year 2008 to 2017, and that the resolution plan of the CD has been approved on 17th February, 2023 by virtue of which a new management has taken over the control of the petitioner/CD; any liability for such offences shall cease against the petitioner/CD and the petitioner cannot be prosecuted for the said offences as the same were committed prior to the approval of the resolution plan. Therefore, the impugned FIR is liable to be quashed qua the petitioner.
Petition allowed.
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2024 (12) TMI 1247
Seeking withdrawal of the Insolvency Petition u/s 12A of the IBC r/w Regulation 30A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - submission pressed by the Appellant is that the Resolution Professional has no jurisdiction to pray for withdrawal of the application.
Whether the Resolution Professional had any jurisdiction or authority to file a purshish for withdrawal of the application? - HELD THAT:- It was the Resolution Professional who has filed the application seeking withdrawal of the CIRP. The Hon’ble Supreme Court had occasion to consider the entire statutory scheme for withdrawal of CIRP in recent judgment of GLAS Trust Company LLC [2024 (10) TMI 1185 - SUPREME COURT (LB)]. The Hon’ble Supreme Court has laid down that after admission of CIRP, the CIRP process becomes in rem proceeding and it is the Resolution Professional who has to thereafter conduct the proceeding and after proceedings having become in rem, they are no longer the preserve of only the applicant creditor and the corporate debtor and even creditors who were not the original applicants, become necessary stakeholders - The Hon’ble Supreme Court after noticing the entire statutory scheme in the IBC for withdrawal of the application held that the application for withdrawal has to be filed through the Resolution Professional.
Thus, it is the IRP/RP who is the person in control of the insolvency proceedings including the proceedings initiated by Resolution Professional for withdrawal under Section 12A - there are no lack of jurisdiction in the Resolution Professional filing purshish for withdrawal of Section 12A application.
In the present case, the MHIL has filed its claim in Form C on 11.06.2024, as submitted by Counsel appearing for MHIL which claim was kept on verification by the Resolution Professional for long period and could be admitted only on 16.09.2024 and prior to that date, MHIL has to file an application seeking intervention as well as seeking a direction to accept the claim of MHIL - The withdrawal of the application under Section 12A is on account of subsequent event which has taken after 16.08.2024 i.e. admission of the claim of MHIL on 16.09.2024 i.e. much before the application filed under Section 12A could be heard or allowed. The Resolution Professional has rightly brought into the notice of the Adjudicating Authority on 17.09.2024 when application came for hearing that claim has been admitted and CoC has to be re- constituted. It is thus satisfied that the Resolution Professional had every jurisdiction to file purshish to withdraw of the application. In the facts of the present case, Adjudicating Authority has permitted withdrawal of Section 12A application in accordance with law by order dated 12.11.2024.
There are no error in the order dated 12.11.2024 passed by the Adjudicating Authority. The Appeal filed against the earlier order dated 15.10.2024 has become infructuous in view of the subsequent order dated 12.11.2024 - appeal dismissed.
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2024 (12) TMI 1246
Determination of the date of default for the purpose of invocation of the proceeding under Section 7 of I & B Code - Appellant had preferred Writ Petition before the High Court of Telangana and the same is still pending consideration - what would be the criteria to determine, as to what would be the date of default has to be, either 01.10.2012 or 03.01.2020, where the OTS/Compromise was in favour of the Financial Creditors was ultimately withdrawn in the meeting of the members of consortium on 04.02.2019?
HELD THAT:- The Ld. Adjudicating Authority while scrutinizing the propriety of the judgment referred to, as rendered in the matters of Bijnor Urban Co-Operative Bank Limited Vs. Meenal Agarwal & Others [2021 (12) TMI 669 - SUPREME COURT], which was relied by the Appellant, has answered the same by observing thereof, that there cannot be any contrary view, with regards to the guidelines issued for the grant of benefit of the OTS scheme, which though cannot be claimed as a matter of right, because it is an arrangement, made under the guidelines issued by the Reserve Bank of India in order to carve out a middle, way for shortening the settlement of the dispute, but it is not as a matter of right. The Ld. Adjudicating Authority has observed that, the aforesaid authority in the matters of Bijnor Urban Co-Operative Bank Limited [2021 (12) TMI 669 - SUPREME COURT], which deals with regards to the modalities to be adopted for sanctioning of the OTS, for settlement of a dispute is not an arrangement, which is available to a dishonest borrower. The defaulter, Corporate Debtor has not remitted the amount.
It was contended that the date of declaration of the account has to be Non-Performing Asset (NPA) on 01.10.2012, would not be the actual date of determination of the limitation, because the same according to the Appellant was to be considered, from the date when the Corporate Debtor has acknowledged the dues - The Ld. Adjudicating Authority, observed that the application under Section 7 of the I & B Code, has been filed on 19.07.2020, and that is being argued to be well within the limitation, determining the same to be with effect from the compromise decree of 03.01.2020. The Ld. Adjudicating Authority considered the aforesaid aspect and ultimately observed, that default in the case of the proceeding has to be reckoned from the date when the financial creditor had actually got the knowledge of the default having been committed, which in the instant case will be falling to be 01.10.2012 when the notices under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act was issued.
Commission of a default consciously means, that it is an expression of default when it is realized and accepted by the Financial Creditor and accepted by the Corporate Debtor when the notices under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act was issued and accepted by the Corporate Debtor. The aspect of default as defined under Section 13 (2) of the SARFAESI Act was to be reckoned from the date notice is issued. It does not mean a debt when held or any part or instalment of the amount becomes due to be payable, but not paid. It would be actually be the default which has occurred when the notices were issued on 01.10.2012, for drawing the proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, reckoning of the period of limitation prescribed under Article 137 the Limitation Act, since has been given a retrospective effect for the purposes of the proceeding under Section 7 or 9 of the I & B Code. The drawing of the proceedings by issuing a notice or demand on 29.08.2018, after the reckoning of the default committed on 01.10.2012, the procedure under Section 7 rendered to be initiated and barred by limitation.
As the entire proceeding under Section 7 of I & B Code, was barred by limitation, the same does not hold merit and would accordingly stand ‘dismissed’.
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2024 (12) TMI 1245
Validity of delayed judgment and order made by the Special Director (Enforcement) - Inordinate and unexplained delay between the conclusion of the arguments and the pronouncement of the impugned order - HELD THAT:- As in the peculiar facts of the present case and upon considering the delay between the conclusion of arguments and pronouncement of impugned orders and further, also upon considering the explanation offered, we are satisfied that such an explanation hardly constitutes exceptional or extraordinary circumstances, and therefore that the impugned order dated 9 March 2009 warrants interference.
We note that the appeal instituted by the South Indian Bank Limited against the same impugned order dated 9 March 2006 was allowed by the appellate tribunal on the grounds of delay between the conclusion of the hearing and pronouncement of the said judgment and order. Considering that the tribunal, on that occasion, spoke through its single member, was not quite relevant. It was not the case of the respondent that the single member, i.e. the Chairperson was not competent to dispose of the appeal. Nothing on record states that the respondents had challenged the tribunal order dated 25 January 2021 in the appeal instituted by South Indian Bank Limited, nor was the same brought to our notice. Therefore, the appellate tribunal was not justified in taking a different view on identical facts.
Thus, we set aside the impugned order dated 9 March 2009 and remand the matter to the Special Director (Enforcement) or the Competent Authority by whatever name called to dispose of the show cause notices issued against the appellants herein as expeditiously as possible. Needless to add, the appellants must be given a hearing, and the competent authority must pass reasoned orders within a reasonable period from the conclusion of the hearing.
In terms of Ramdular Singh vs. State of UP [2024 (12) TMI 1127 - SC ORDER] matters must be disposed of within a maximum of three months from the date of all parties' hearings. Though these observations have been made in the context of Courts, there is no reason why a different timeline should apply to the facts and circumstances of the present case. In any event, this timeline could always be taken as a guideline for determining a reasonable period.
These appeals are allowed in the above terms. The appellants or their duly authorized representatives must appear before the Special Director on 2 January 2025 at 11.00 am so that a schedule can be set out by the competent authority for hearing in the show cause notices.
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2024 (12) TMI 1244
Legality of amount collected by the appellant from the sub-agents/customers, representing as Service Tax - liability to deposit it to the credit of the Central Government under the provisions of Section 73A(2) of the Finance Act 1994 - Procedural variations - Invocation of the provisions of Section 73A.
Legality of mount collected by the appellant from the sub-agents/customers, representing as Service Tax - liability to deposit it to the credit of the Central Government under the provisions of Section 73A(2) of the Finance Act 1994 - HELD THAT:- It is found that in the entire transaction there is nothing to indicate that an amount representing as service tax that is collected and retained by the appellants. It is found that due to an understanding between the appellant and the sub-agent, the liability of the the subagentto pay this Service Tax to the exchequer, is shifted to the Appellant and an accounting entry is made as the liability stands discharged at the hands of the Appellant. Effectively, the service tax on the portion of the amount of commission paid to the sub-agent is discharged first by the appellant and thereafter recovered. His portion of the commission (net of service tax) is already withheld by the sub-agent. Therefore, it cannot be said that the appellants have recovered service Tax from their agents and have not paid it.
The only plausible conclusion is that what was recovered was the service Tax already paid by the appellants on the commission actually retained by the sub-agent; no service tax is actually collected by the Appellant which is payable or recoverable under Section 73A.
It is found that the SCN alleges that the appellants also illegally collected an amount as representing Service Tax from the sub-agents by wrongly impressing upon them that they (M/s TSIYPL) were providing services to the sub-agents and therefore, they (M/s TSIYPL) were entitled to collect Service Tax from them; M/s TSIYPL did not deposit the amount collected by them as representing Service Tax, with the Government exchequer. During investigations, M/s TSIYPL failed to provide any legal justifications/statutory authority under which Service Tax was collected by them from their sub-agents/customers of the airlines. There are no evidence in the Notice to allege that the appellants impressed upon their sub-agents that they were providing certain services and therefore, are eligible to collect some service tax from them.
Procedural variations - HELD THAT:- It has to be construed that appellants and their subagents are rendering the ‗Air Travel Agent service. As a natural corollary, they share the commission and so, the tax burden. While alleging that the appellants have collected an amount representing service Tax form their sub-agents, Revenue has conveniently ignored the fact that the commission was also shared. It is not the case of the Revenue that tax burden cannot be shared more so, when remuneration is shared. There is no law forbidding such sharing of the tax burden when Revenue is shared - Revenue cannot enrich itself on the strength of procedural variations and accounting practices of the appellant.
Invocation of the provisions of Section 73A - HELD THAT:- Revenue conveniently ignored the fact of sharing of remuneration, given by the Airlines, by the appellant and their sub-agents. Therefore, it was wrong to seek tax again on the sharing of Tax burden. Tax on the total remuneration was discharged. Demanding service tax again on the portion of sub-agent‘s commission would amount to double taxation - Revenue cannot enrich itself on the strength of procedural variations and accounting practices of the appellant. The amount shown as service tax in the invoice issued by the appellants is to account for the sub-agent‘s share of service tax. No case is made by revenue for invocation of the provisions of Section 73A.
The impugned order is set aside - appeal allowed.
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2024 (12) TMI 1243
Eligibility for exemption under S.No.12(d) of Notification 25/2012 for services provided by the sub-contractor - Entitlement to exemption when services are not provided directly to the Government but through a contractor - contractor had been awarded the work of constructing part of dam from M/s Transstroy – JSC EC UES JV (hereinafter referred to as the Principal Contractor), who, in turn, was awarded the work by the Government of Andhra Pradesh for construction of dam - Extended period of limitation.
Whether in the facts of the case, the services provided by the sub- contractor are in the nature of services eligible for exemption under S.No.12(d) of Notification 25/2012? - HELD THAT:- When the expression used in the notification is “by way of construction”, whether it should mean actual construction of dam or it should mean any activity, howsoever remote it may be that ultimately lead into emergence of dam/ construction of dam. Another aspect, which is also crucial to understand is that similar activities of site formation, excavation, etc., were otherwise specifically covered under the specific classification of service prior to introduction of negative list based Service Tax in 2012. There was also an exemption available to such site formation services (vide Notification 17/2005-ST dt.07.06.2005) when provided in relation to, inter alia, construction of dam. However, after the introduction of Negative List, no such exemption is available for any site formation activities or services provided, which may be in relation to construction of dam. Therefore, going by the strict interpretation of notification, the activities of site formation, excavation, removal of soil boulders, etc., for dam spillway intake structure, etc., would not strictly be covered within the ambit of the expression “by way of construction” of dam. It is also a settled legal position in view of the judgment of Hon’ble Supreme Court in the case of CC (Import), Mumbai Vs Dilip Kumar and Co & Ors [2018 (7) TMI 1826 - SUPREME COURT] that an exemption notification claimed must be strictly interpreted by way of plain reading of the expression and only when there is any ambiguity or possibility of two different interpretations, the benefit should go to the Revenue.
In this case, in view of the fact that the site formation services were separately classifiable service prior to 2012 and were also otherwise exempted in relation to dam, etc., but no such exemption, per se, is available post 2012 and therefore, even by the plain reading it would be obvious that it is the construction of dam, as such, which is exempted and the activity of site formation cannot be brought in within the expression to consider this for exemption under S.No.12(d) of Notification 25/2012. Thus, even if there is some ambiguity the benefit will go to Revenue. Their reliance on the case of Prasad Babu Kalyanam Vs CCT, Visakhapatnam-GST [2024 (2) TMI 1308 - CESTAT HYDERABAD] is also misplaced in the sense that there the issue of service was not involved. It was only relating to providing the service to the Government or Governmental Authority or otherwise when there was a sub- contractor and contractor relation and it was held that when the service is provided even indirectly, through the contractor, to the Governmental Authority, they will be eligible for exemption. Whereas, in the present case, when the activity itself is not covered within the ambit of the notification itself, they cannot, by virtue of their ultimate assertion that the Principal Contractor being eligible for exemption will also make them exempted, is not tenable. Therefore, on this count, the appellants are not eligible to claim exemption under S.No.12(d) of Notification 25/2012.
If yes, then whether they are entitled for exemption under said notification when the same are not being provided to the Government directly but to the contractor, who, in turn, is providing the services to the principal contractor? - HELD THAT:-As the activities undertaken by the appellant are not covered within the expression in Notification 25/2012 then whether they have been provided directly or indirectly would not have any significance. Secondly, when the Government intended to provide exemption to site formation and clearance, excavation, earth moving and demolition, which exactly are the kind of activities assigned to the appellant, when provided to any person by any other person in the course of construction of roads, dams, etc., there was a specific exemption available for the activities. Therefore, in the absence of any specific exemption available for the activities being performed by the appellant in the post Negative List regime, their activities cannot be considered for coverage under S.No.12(d) of Exemption Notification 25/2012.
As far as the issue of contractor and sub-contractor is concerned, this Bench, in the case of Akash Engineering Services Vs CCT, Visakhapatnam-I [2023 (12) TMI 1305 - CESTAT HYDERABAD] has dealt with the liability to pay Service Tax even when the main contractor has discharged the entire Service Tax on the project value and held, inter alia, that even sub-contractor is required to discharge the Service Tax irrespective of whether the main contractor has discharged the entire Service Tax or otherwise in respect of entire activities being provided by them and if the service provided by the sub-contractor otherwise amounts to provision of service.
Whether the activities undertaken by the sub-contractor can be considered as works contract within the definition of WCS under Finance Act, 1994, in view of the factual matrix and material on record? - If the services are considered as WCS, then whether they will be entitled for exemption under S.No.29(h) of the said notification? - HELD THAT:- Holistically evaluating the terms and conditions and the scope of work awarded to the appellant by the Contractor, the same would not be covered within the expression “by way of construction” of dam in the given factual matrix. It is also obvious that despite pleading that they have discharged VAT there is no evidence on record to suggest except for certain deductions made by the Contractor from their bill on account of VAT, to prove that there was transfer of property while executing the site formation activities. Apparently, it appears that they were getting certain reimbursements on account of VAT paid on lubricants, spares, explosives, etc., from the Contractor. However, even if the appellants are claiming that VAT has been paid on lubricants, spares, etc., the definition of WCS would entail that they were otherwise required to transfer the property in goods to the Contractor or recipient for it to be covered within the definition of WCS. Under the VAT laws, when there is a deemed sale, the VAT is leviable unless otherwise exempted. In this case, there is no evidence adduced by the appellant that they had discharged any VAT on the services/activities performed by them to their Contractor or it was otherwise exempted - The activities are more in the nature of service of site formation, etc., as held by the department. Therefore, on this count also, they would not be eligible for exemption under S.No.29(h) of the Notification 25/2012.
Extended period of limitation - HELD THAT:- In this case, there is no ground adduced by the Appellant that they had bonafide belief of their being not liable to Service Tax during the material time nor they have produced any evidence to suggest that they had sought any clarification from the department regarding leviability of Service Tax, etc., in respect of the activities being carried out by them. In fact, even at a subsequent stage, they have been taking multiple grounds to substantiate their claim that Service Tax is not leviable on these grounds. Therefore, the appellants were not sincere about finding out their tax liability and especially when they are engaged in work at such a large scale. Therefore, in the facts of the case, there are no reason to interfere with the observations of the Adjudicating Authority justifying the invocation of the extended period.
There are no infirmity in the Order passed by the Adjudicating Authority and the same is sustained - appeal dismissed.
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2024 (12) TMI 1242
Violation of principles of natural justice - Submissions made in the miscellaneous application were not raised before the authorities below - requirement to consider the additional grounds raised now - Liability of corporate body to discharge the service tax liability on legal services availed by engaging advocates and paid legal fees for the period from 1.7.2012 - Reverse Charge Mechanism - Submissions made in the miscellaneous application were not raised before the authorities below.
HELD THAT:- From the order of the Adjudicating Authority, it is found that the appellant was represented by Shri P. Kulasekaran, Ld. Advocate who attended the personal hearing on 13.01.2022 and he reiterated that the decision be taken based on the decision of the Delhi High Court judgement in the case of DELHI TAX BAR ASSOCIATION AND ANOTHER VERSUS UNION OF INDIA [2013 (4) TMI 77 - DELHI HIGH COURT]. No other submission was made by the Ld. Counsel for the appellant and accordingly, the order confirming the demand was passed. The appellant challenged the said order and filed the appeal on 01.4.2022, however, when the appeal was listed for hearing none appeared on behalf of the appellant instead a letter was submitted whereby they agreed to discharge the service tax liability and also deposited the aggregate amount towards the confirmed demand and penalties. In view of the stand taken by the appellant before the Adjudicating Authority as well as before the Commissioner (Appeals), it is evident that they had virtually accepted the service tax liability.
All the referred submissions which are now being sought to be made in the miscellaneous application were not raised before the authorities below and hence there is no finding on them. The appellant accepts that they are certainly in the nature of new grounds, however since they are purely questions of law, there is no bar in considering the same. However, it is opined that though the issue now being raised are purely on legal grounds yet the department should get enough opportunity to place on record the submissions in support thereof and contest the same. As noticed earlier, the matter before the authorities below has proceeded at the behest of the appellant on the footing that the matter was covered by the decision of the Delhi High Court in DELHI TAX BAR ASSOCIATION AND ANOTHER VERSUS UNION OF INDIA [2013 (4) TMI 77 - DELHI HIGH COURT] and accordingly, the appellant has accepted its liability towards service tax in writing and thereafter discharged the said liability by depositing the amount towards the confirmed demand.
Conclusion - Keeping in view the principles of natural justice which equally applies in favour of the department, in the interest of justice it would be fair to remand the matter to the Adjudicating Authority to consider the additional grounds which the appellant has raised now and record the findings thereof - the matter is remanded to the Adjudicating Authority to consider afresh on merits - appeal allowed by way of remand.
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2024 (12) TMI 1241
Non-payment of service tax - income from renting out immovable properties - whether the demand of service tax under the category of Renting of Immovable Property service on the appellant is sustainable or not? - HELD THAT:- It is found that in a similar case this Bench in the case of M/S. THE COMMISSIONER VERSUS COMMISSIONER OF GST AND CENTRAL EXCISE, CHENNAI III AND M/S. PALANI MUNICIPALITY VERSUS COMMISSIONER OF GST AND CENTRAL EXCISE, MADURAI [2024 (6) TMI 767 - CESTAT CHENNAI] has considered the decisions of jurisdictional High Court in the case of CUDDALORE MUNICIPALITY VERSUS THE JOINT COMMISSIONER OF GST & CENTRAL EXCISE, THE ASSISTANT COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX AND VIRUDHACHALAM MUNICIPALITY VERSUS THE ASSISTANT COMMISSIONER, OFFICE OF THE ASSISTANT COMMISSIONER OF GST AND CENTRAL EXCISE, CUDDALORE [2021 (4) TMI 500 - MADRAS HIGH COURT], GV. MATHESWARAN VERSUS THE UNION OF INDIA AND OTHERS [2015 (3) TMI 391 - MADRAS HIGH COURT] and the subsequent decision in the case of ST. THOMAS MOUNT CUM PALLAVARAM CANTONMENT BOARD VERSUS ADDITIONAL COMMISSIONER, COMMISSIONER OF GST AND CENTRAL EXCISE, CHENNAI [2023 (4) TMI 1024 - MADRAS HIGH COURT] and the remanded the case to the file of AA. The Hon’ble Court in the case of St. Thomas Mount Cum Pallavaram Cantonment Board after referring to the above conflicting decisions, held it proper to remand the matter back to the file of original authority.
It is deemed proper to set aside the impugned order and remand the matter back to the file of original authority who shall adhere to the directions given by the Hon’ble High Court in the case of St. Thomas Mount Cum Pallavaram Cantonment Board and then pass a de novo order in accordance with law.
Appeal disposed off by way of remand.
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2024 (12) TMI 1240
Exemption from service tax on services provided by the appellant for government and its agencies as per N/N. 25/2012 dated 28.06.2012 - work of fixing and laying of the pipelines for water supply and drainage to Surat Municipal Corporation and Ors.
HELD THAT:- From the facts of the matter, it can be seen that the appellant has been provided services of lying down the water supply pipelines and sewerage discharged pipeline etc. for Surat Municipal Corporation which is a statutory body and not a profit making organization, the services provided by SMC are of non commercial nature and the water pipeline which have been laid by the respondent assessee for the Surat Municipal Corporation are for non commercial purpose. The provisions of the N/N. 25/2012-ST dated 20.06.2012 under serial no. 12E and Serial No. 25A are fully applicable applicable towards activity undertaken by the respondent assessee and therefore fall under the category of the exempted services.
In view of the above decision of the Gujarat High Court in BMS Projects Pvt Ltd vs Commissioner of Central Excise-Surat [2017 (9) TMI 1386 - GUJARAT HIGH COURT] and as well as by perusal of the mega N/N. 25/2012 dated 20.06.2012. There are no doubt that the activity undertaken by the respondent assessee falls under the category of exempted services.
Since the facts in the present appeal are similar to the one which have been decided in the above cited decision of the Hon'ble Gujarat High Court. The appeal filed by the revenue does not have any merit, therefore the same is set aside.
Appeal dismissed.
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2024 (12) TMI 1239
Recovery of the excess availed credit along with interest and for imposing penalty - breach of Rules 4 and 9 of the Cenvat Credit Rules 2004 (CCR 2004) - suppression of facts or not - extended period of limitation - HELD THAT:- This is a case where the appellant had irregularly availed CENVAT credit by taking double credit on the same invoice and also by taking credit over and above what is specified in the invoice input. They had thus breached Rules 4 and 9 of the Cenvat Credit Rules 2004 (CCR 2004) and had committed a blame worthy act. The excess credit was recoverable under Rule 14 of CCR 2004.
Interest and penalty - HELD THAT:- The appellant has reversed the credit even before issue of SCN and had sufficient credit balance and had not utilised such credit for payment of duty as verified and stated by the Ld. Adjudicating Authority in the OIO. In such circumstances no interest was payable by them as per the ratio of the Hon’ble Karnataka High Court judgment in the case of COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX LARGE TAXPAYER UNIT, BANGALORE VERSUS M/S BILL FORGE PVT LTD, BANGALORE [2011 (4) TMI 969 - KARNATAKA HIGH COURT] - Considering that the unit is a public sector unit and that the excess credit was not availed a lenient view is called for. In the facts and circumstances of the case, the interest demanded and the fine imposed is set aside.
Extended period of limitation - HELD THAT:- It is settled law that to invoke willful suppression, fraud etc, there must be some positive act which betrays a negative intention of willful default from the side of the assessee to establish a charge of suppression, fraud etc. and not merely an error made. No such act has been shown in the impugned order.
The impugned order is modified on the above terms and the interest and penalty set aside - Appeal allowed.
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2024 (12) TMI 1238
Denial of CENVAT Credit - duty paying documents - case of Revenue is that appellant has availed input service tax credit on the basis of invoices which are not the prescribed documents as per Rule 4(7) and Rule 9 of Cenvat Credit Rules, 2004 (CCR) as well as Rule 4(a) of Service Tax Rules, 1994 - denial of credit also on the ground that challans deposited against C&AG report based whereupon the said Cenvat credit has been availed, are not the prescribed documents as per Rule 9(1)(bb) of CCR, 2004 - Extended period of limitation.
The denial of Cenvat credit of Rs. 16,12,208/- on the ground that the invoices issued by the input service providers are not the valid documents - HELD THAT:- Cenvat credit cannot be denied merely on the ground that the documents does not contain all the particulars required to be contained in the invoice when there is no dispute regarding receipt of service - Reference made to decision in the case of Kemwell Biopharma Pvt. Ltd. Versus Commr. of C.Ex. & ST, LTU, Bangalore [2016 (6) TMI 229 - CESTAT BANGALORE]. In this case, the Tribunal hold that mere non-mentioning of registration number of service provider on invoices is only a procedural lapse with regard to duty paying documents. In absence of any evidence of services not having been received or utilized, substantive benefit of credit, not deniable for such procedural lapse.
In the present case also there is no dispute regarding receipt of input services as well as tax paid on such services. The only allegation is that the address is wrongly mentioned on the invoices. Admittedly, the appellant is Input Service Distributor. Resultantly, the substantive benefit of credit provided in Rule 3 of CCR cannot be denied by resorting to procedural requirements under Rule 4(7) and Rule 9(2) of CCR Rules. It is also an apparent fact on record that those suppliers had mentioned the incorrect address but once the said discrepancy was noticed the service providers rectified the mistake and issued the supplementary invoices by mentioning the correct address of the appellant. The supplementary invoices are also on record. It is held that Cenvat credit availed on such invoices has rightly been availed - the order directing reversal of Cenvat credit is therefore, held liable to be set aside.
The denial of Cenvat credit of an amount of Rs. 32,95,447/- alleging that the challans deposited against C&AG report based whereupon the said Cenvat credit has been availed, are not the prescribed documents as per Rule 9(1)(bb) of CCR, 2004 - HELD THAT:- Apparently the entire liability of service tax was paid by the appellant under Reverse Charge Mechanism vide the said challans pursuant to C&AG audit report. The said challans evidencing the payment of service tax are enclosed on record. Once the payment of tax is made under RCM, it is Rule 9(1)(e) as shall be relevant.
Rule 9(1)(bb) of CCR which provides that Cenvat shall be taken by manufacturer/service provider/input service distributor on the basis of supplementary invoices/bill or challan issued by the provider of output service, except where the additional amount of tax be recovered from the provider of service on account of non-levy or non-payment or short levy or short payment by reason or fraud or collusion or suppression of facts with intent to evade the payment of service tax. On the other hand, Rule 9(1) (e) CCR provides that Cenvat credit shall be taken by the manufacturer or the provider of output service or input service distributor, inter alia, on the basis of challan evidencing payment of service tax, by the service recipient as the person liable to pay service tax. Perusal of both these provisions when read in light of the fact that the impugned amount of service tax was paid by the appellant under Reverse Charge Mechanism it becomes clear that Rule 9(1)(bb) shall not be applicable - it is held that department has wrongly invoked Rule 9(1)(bb) while denying the Cenvat credit of Rs. 32,95,447/- confirmation of said demand is, therefore, liable to be set aside.
Extended period of limitation - HELD THAT:- Admittedly the appellant has been regularly filing his returns mentioning the amount of Cenvat credit availed. There can be no possibility of any suppression as is alleged by the department. It is also an admitted fact that the service tax was duly been paid under forward or as well as under Reverse Charge Mechanism vis-à-vis issue No. (1) and issue No. (2) respectively. The question of any evasion of tax is, therefore, absolutely redundant - no evidence is produced by the department for proving any positive act of the appellant which may amount to suppression - there was no occasion to invoke the extended period of limitation.
The impugned order is hereby set aside. Consequent thereto, the appeal is hereby allowed.
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2024 (12) TMI 1237
Levy of penalty u/r 209A can be imposed on partnership firm - HELD THAT:- Reliance placed in the case of Commissioner v Woodmen Industries [2004 (7) TMI 637 - SC ORDER] where it was held that 'The Tribunal further relying on an earlier order in the case of Aditya Steel Industries [1996 (2) TMI 232 - CEGAT, MADRAS] held that penalty under Rule 26 of Central Excise Rules, 2002 was imposable only on a person and not on a firm.'
Thus, penalty under 209A which is pari materia of Rule 26, penalty cannot be imposed on partnership firm.
As regard the penalty on the partner, it is found that it is settled by the Hon’ble Gujarat High Court in the case of Jay Prakash Motwani [2009 (1) TMI 501 - GUJARAT HIGH COURT] that in case of partnership firm penalty on the partner cannot be imposed. Accordingly, penalties on both the appellants are not sustainable only on the above finding.
The penalties are set aside - appeal allowed.
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2024 (12) TMI 1236
Benefit of exemption from excise duty on RMC manufactured at site under Sr. No. 144 of Notification No. 12/2012-CE dated 17.03.2012, for the period prior to amendment dated 01.03.2016 - Invocation of extended period of limitation.
Whether benefit of exemption from excise duty is available on RMC manufactured at site under Sr. No. 144 of N/N. 12/2012-CE dated 17.03.2012, for the period prior to amendment dated 01.03.2016. i.e. when the exemption was granted to "Concrete Mix manufactured at the site of construction"? - HELD THAT:- This issue was carried in litigation in various judgments and there were conflicting issues on this issue. Later on the Hon’ble Apex Court in the case of L&T Limited [2015 (10) TMI 612 - SUPREME COURT] finally decided the matter that the exemption is available to only ready mix concrete and not the concrete mix. It is also observed that subsequently the Government has brought the exemption also for concrete mix, vide Notification No. 12/2012-CE dated 17.03.2012 under Serial No. 144. This shows that there was an ambiguity about the exemption on concrete mix vis a vis ready mix concrete. Considering all these fact and applying the judgments, learned Commissioner (Appeals) has held the demand being time barred. Therefore, there are no infirmity in setting aside the demand on the ground of time bar by Commissioner (Appeals) in the impugned order.
Extended period of limitation - HELD THAT:- On the identical issue Tribunal in the case of Reliance Industries Limited [2022 (3) TMI 400 - CESTAT AHMEDABAD] also held the demand as time bar.
Thus, the ratio of the above judgment is directly applicable on the issue of demand being time bar. Accordingly, the learned Commissioner (Appeals) has rightly set aside the demand of extended period. Accordingly the impugned order to the extent it set aside the demand for the extended period is upheld.
Revenue’s appeal is dismissed.
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2024 (12) TMI 1235
Reversal of CENVAT Credit - liability to pay an amount equal to 6% of the value of exempted goods (electricity) under Rule 6(3)(i) of the CENVAT Credit Rules, 2004 - common inputs used for generation of electricity and supply of the same to their sister concerns - electricity falls under the category of exempted goods or not - extended period of limitation.
HELD THAT:- Hon’ble Karnataka High Court in case of Commissioner Central Excise and Service Tax, Banglore Vs. Bill Force Pvt Ltd [2011 (4) TMI 969 - KARNATAKA HIGH COURT] has held that the once the CENVAT Credit has been reversed by the assesse, it amounts to not taking of the CENVAT Credit on inputs.
The learned Adjudicating Authority has not quantified the amount of the duty which is to be recovered from the appellant and therefore, same is not sustainable on the merit
The appellant was entitled for CENVAT Credit of common inputs used for generation of electricity and supply of the same to their sister concerns.
The impugned Order-In-Original is not sustainable on the merits on this issue and therefore the same is set aside - appeal allowed.
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