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Showing 341 to 360 of 1526 Records
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2023 (10) TMI 1186
Taxability of income in India - income earned from ILP[Industrial Liaison Program], Sponsorship assignments and consortium membership fees to tax as FIS u/A 12(4) of US-India DTAA - HELD THAT:- Receipts from Industrial Liaison Program - As for attracting liability to pay tax under the head “FIS” in terms of Indo-US DTAA, the services should not only be of technical nature, but it should also make available the technical knowledge, experience, skill, know how, etc., to the recipient of such technical services.
In the case of ILP program, the assessee is merely introducing the corporates to its faculty, showcasing the research projects undertaken by them which will enable the corporates to see if any of this research could be leveraged by them in their own strategic plan.
Assessee is neither rendering any technical services to the Corporates nor making available any technical knowledge or experience or skill. What is being transferred to the Corporates is purely the factual information with respect to the various research projects. Assessee is not making available the underlying know-how with respect to the said research projects as enumerated under the DTAA and MOU.
From the above facts, we are of the opinion that the receipts under the head ILP cannot be reckoned as FIS in nature within the meaning of Article 12 of the India-US DTAA. Accordingly, we set aside the finding of the DRP and direct the AO to delete the addition made in relation to this ground. Hence the ground of appeal of the assessee is allowed.
Sponsorship receipts - Assessee undertakes specific research for the corporate and the technology and knowledge from the research is provided to the corporate in the form of research report, who will apply the same and derive an enduring benefit. Once, the assessee after the research submissions report not only provides the research report to the Indian corporate who then apply the research work for their own business. Further, in the specific IP clause agreement as incorporated above, there is a clear-cut stipulation and sponsor will get IP and in some cases it was joint IP, which also goes to show that technical knowledge has been made available to the clients.
Thus, in our view it was clearly making available of technical designs and knowhow and accordingly, the ld. AO and ld. DRP had rightly concluded that the receipts under this programme falls within five years clause of India-US DTAA.
Accordingly, we conclude that the receipts earned by the assessee under the sponsorship arrangement qualify as FTS/ FIS within the meaning of the Act and DTAA. In the result, this ground filed by the assessee is dismissed.
Receipts from co-ordination / consortium membership as FIS under the Treaty - In the case of co-ordination agreement, the assessee is merely acting as the host wherein the assessee has the responsibility to help manage the overall direction of the research performed by the consortium members and helps to provide access and dissemination of the Consortium research to its members. Assessee does not undertake any research nor does it describe any method or process involved in carrying out such research. The assessee’s role is to merely act as a co-ordinator between all the consortium members. It is only providing administrative support to the members.
Thus, the assessee is not rendering any technical services to the corporate members. Also, the assessee is not providing any technical plan or design to the corporate members. Assessee cannot be said to be making available any technical know-how, experience, etc., or technical plan / design to the members as enumerated under the DTAA and MOU.
There remains no ambiguity to the fact that the receipts are not FIS in nature within the meaning of Article 12 of the India-US DTAA. Accordingly, we set aside the finding of the DRP and direct the AO to delete the addition made in relation to this ground. Hence the ground of appeal of the assessee is allowed.
Not granting of credit as claimed in the Income-tax Return - AO is directed to verify and grant the credit of TDS in accordance with law. The ground of appeal of the assessee is thus allowed for statistical purposes.
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2023 (10) TMI 1185
Withholding tax - Intimation u/s 201 - Effect of protocol signed at the time of conclusion of the principal tax treaty - Relevant notification yet to be issued by the Government - rate of tax to be deducted at source on the payment of fees for technical services by the assessee to TDK Electronics Components SA - rate of withholding tax as per the provisions of Income-tax Act, 1961 OR rate specified in the relevant 'tax treaty' entered into between India and Spain read with the protocol entered into with the members of the OECD - As per assessee in view of the provisions of Article 13 read with Protocol appended below the Indo-Spain tax treaty which forms an integral part of tax treaty from Assessment Year 2018-19 and onwards and as the treaty rate is more favourable to the assessee, the assessee was required to deduct tax at source under the head FTS @ 10%
HELD THAT:- As in view of the decision of this tribunal in the case of ITC Ltd [2001 (12) TMI 196 - ITAT CALCUTTA-A] Tribunal has held that the protocol to the DTAA is an integral and indispensable part of the tax treaty and furthermore, the benefit of lower rate as prescribed in the protocol for fees for technical services under the relevant tax Treaty is not dependent on any further unilateral action or issuance of notification by the respective Governments.
As also held by this Tribunal that no separate notification is required to be issued by the Government of India in order to make a protocol applicable. We find merit in the contention of assessee that as per the DTAA entered into between India and Spain read with the protocol entered into with the members of the OECD, tax rate of 10% was applicable on the payment for fees for technical services. To this extent, relevant grounds raised by the assessee are allowed.
As 10% tax rate as per the DTAA includes surcharge and education cess and no separate surcharge of education cess needs to be added - We find that it has been well settled that in case the rate of tax are adopted as per the DTAA, then no surcharge and education cess is to be applied over and above the tax rate since the tax rate as per the DTAA is held to be all-inclusive of such surcharge and education cess.
Since the rate of tax applicable in the case of the assessee is 10% and not 10.608% and since the assessee has rightly deducted the tax at source @ 10%, it cannot be treated as an assessee in default and accordingly the excess amount of tax demanded by the revenue authorities is deleted. Further as tax demand has been deleted, the interest levied also stands deleted being consequential in nature. Accordingly, all the effective grounds raised by the assessee in the instant bunch of appeal stands allowed.
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2023 (10) TMI 1184
TP Adjustment - Disallowing economic adjustments for difference in working capital employed by assessee and its comparables - Comparability analysis - HELD THAT:- For negative working capital of the comparables, this issue has been settled in the case of Software AG (India) Pvt. Ltd [2015 (11) TMI 1895 - ITAT PUNE] and for this, even the OECD guidelines also confirmed the position.
In the present case and noted that the Atmel India CDS segment operates with relatively favourable working capital position than that of comparable companies and as a result of this Atmel India working capital percentage on operating cost turns out to be negative i.e. -9.71%. We noted that this fact does not hamper from claiming of working capital adjustment as the Tribunal is consistently allowing this claim as held in the case of Software AG (India) Pvt. Ltd., supra. Hence, we direct the TPO to allow the claim of assessee accordingly. This issue of assessee’s appeal is allowed.
TPO rejecting Akshay Software Technologies Limited - As before us, argued that Akshay Software Technologies Ltd., is involved in procurement, installation, implementation, support and maintenance of ERP products & services. It was also argued that Akshay Software Technologies Ltd., is financially comparable as it is engaged in providing computer software & services with the assessee company. Actually this fact needs to be verified whether the Akshay Software Technologies Ltd., is comparable with the functions of the assessee or not. Hence, this issue needs to be referred back to the file of the TPO who will find out whether Akshay Software Technologies Ltd., is comparable to the assessee or not.
R Systems International Ltd. rejected as adopted statutory year ending on 31st December, 2012 as financial year as against the financial year ending for tax 31st March, 2013 in the present year - We noted that this does not make any difference whether a company is maintaining its books of accounts for the December ending or March ending. Only a suitable adjustment has to be made in view of different fiscals. Hene, we direct the TPO to take this company as comparable after making suitable adjustments. We direct the TPO / AO accordingly.
Appeal filed by the assessee is partly-allowed for statistical purposes.
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2023 (10) TMI 1183
Addition u/s 68 - unexplained nature and source of the share premium and non discharge the onus of proving the genuineness of the transactions and identity and creditworthiness of the share applicants - assessee argued AO was satisfied with the share capital received from the alleged four share applicants and only added the share premium even though total amount of share capital and share premium were received from same share subscribers and same banking channel - HELD THAT:- Where the share applicants have duly responded to the notices u/s 133(6) of the Act and all documentary evidences have been filed by the assessee to discharge its primary onus explaining the nature and source of the alleged share premium and the ld. AO having failed to find any discrepancy in these details, the decisions of this Tribunal in the case of M/s. Mahalakshmi Vinimay (P) Ltd. [2023 (5) TMI 1264 - ITAT KOLKATA] holding in favour of the assessee observing that AO could have taken an adverse inference, only if, he would have pointed out the discrepancies or insufficiency in the evidences and details received in his office and pointed out as to on what account further investigation was needed by way of recording of statement of the directors of the subscriber companies.
Even if the directors of the subscriber companies have not come personally in response to the summons issued by the AO, in our view, adverse inference cannot be taken against the assessee solely on this ground as it is not under control of the assessee to compel the personal presence of the directors of the shareholders before the AO.
Once the assessee has produced documentary evidence to establish the existence of the subscriber companies, the burden would shift on the revenue to establish their case.
Thus we delete the addition made u/s 68 of the Act and allow all the effective grounds raised by the assessee.
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2023 (10) TMI 1182
Exemption u/s. 54EA - surplus arising on transfer of 10,00,000 shares as the business receipt arising from transfer of shares held as stock-in-trade - whether the gain arising on transfer of shares of DSPML Sec should be assessed to tax under the head capital gains or as business income and, consequently, whether the assessee would be entitled to exemption in respect of the same u/s 54EA? - HELD THAT:- Equity shares of DSPML Sec is an unlisted shares and therefore, the principle laid down in the said Circular will apply to its case. The exceptions referred to paragraph of the said Circular will not apply as there is no doubt about the genuineness of the transfer, nor does the issue pertain to lifting of corporate veil.
The third exception being transfer of shares along with the control and management of the underlying business is also not applicable to its case because, the AO has himself noted that Myrill Lynch had 4 members on the Board of Directors of DSPML when they held only 8.33% equity stake and there was no change in this position even after they acquired 40% stake.
Even the ld. AO in the assessment report dated 01/01/2015 has accepted this position, accordingly, in view of the CBDT Circular itself, we hold that transfer of unlisted shares of DSPML is to be taxed under the head “capital gains” irrespective treating it as business income is set aside and the transfer of shares is treated as capital gains. Once, the gains arising of transfer of shares of DSPML is capital gains, then, the assessee is entitled for exemption u/s. 54EA - claim of deduction / exemption u/s. 54EA is allowed.
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2023 (10) TMI 1181
Income taxable in India - Taxability of Management Service Fees (MSF) - services provided by the assessee in terms of service agreement - Royalty - whether any imparting of any kind of knowledge, skill or experience? - HELD THAT:- With regard to various streams of services like providing of information technology, operational support marketing, quality, health, safety and environment, estimating and engineering and personal and organization, administration and legal services, it has been held that there is no imparting of any kind of knowledge, skill or experience by way of information concerning industrial, commercial or scientific which is made available to VOIPL.
For instance, assessee has stated that, information technology services are provided for use of group companies computer system where IT teams provide manual general information without providing any information or method to design or create a computer system. IT is mainly kind of help desk and trouble- shooting services which are required on a regular basis. For operational support system also, it mainly provides for check- list for project plans, safety work and inspection plans etc. Similarly, for marketing, the assessee provides for e- marketing through its website and maintaining it, printing and publishing brochures which can be distributed to its potential clients. It also helps VOIPL to obtain certificate of approval from concerned organizations and obtained the contracts on the regular basis. Regarding quality health and safety environment services, the assessee merely conducts internal audits at regular intervals so that proper adherence to such quality standards and procedures are valid/ should remain valid. Similarly, in the estimating and engineering services and other services also, the assessee is mainly providing tender process, helping and preparing (estimates) and bids and plan consisting in local performance and other guarantees to the client of VOIPL etc.
For rendering of these services, there is no element of imparting any "know how or there is transfer of any knowledge, skill or experience. Thus, we hold that none of the services provided by the assessee in the term of "service agreement" falls within the scope and ambit of "royalty" as defined in Article 12(4) of the DTAA.
Here again, Management services fees charged is an allocation of cost which is without markup, hence it has been stated that the same being in nature of reimbursements do not constitute Royalty as per India-Netherlands Double taxation avoidance agreement (DTAA'). We find that the aforementioned decision of the ITAT in assessee’s own case for AY 2009-10 [2016 (11) TMI 1249 - ITAT MUMBAI] has also held that the payments received by the assessee are in nature of reimbursement without any markup and thereby, such reimbursements cannot be held to be royalty.
None of the services provided by the assessee in terms of service agreement falls within the scope of Royalty as defined in Article 12(4) of the India Netherlands DTAA and also that the payments received by the assessee are in the nature of reimbursement without any mark-up and therefore, the same cannot be held to be ‘Royalty’ and not taxable in India. Further, Management Services if represents the allocation of the actual cost incurred which has been certified by the auditors and the Tribunal has held that Management Services Fee are not taxed in India. Accordingly, this issue is decided in favour of the assessee.
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2023 (10) TMI 1180
TP Adjustment - ALP for corporate guarantee - HELD THAT:- Respectfully following the said decisions of the coordinate benches of the Tribunal in the case of the Appellant for the Assessment Years 2011-12 [2021 (10) TMI 822 - ITAT MUMBAI], 2012-13 [2021 (4) TMI 254 - ITAT MUMBAI], 2013-14 [2021 (10) TMI 453 - ITAT MUMBAI] and 2014-15 [2021 (4) TMI 254 - ITAT MUMBAI], we hold that corporate guarantee commission determined by the Appellant at the rate of 0.35% per cent per annum is at arm’s length not requiring any transfer pricing adjustment.
Disallowance u/s 14A r.w. Rule 8D - assessee has suo moto disallowed expenses - Mandation of recording satisfaction - HELD THAT:- As decided in M/S GREATSHIP (INDIA) LTD. CASE [2022 (12) TMI 1464 - ITAT MUMBAI] the dissatisfaction has been recorded, however, the same is not in accordance with mandate of Section 14A(2) of the Act as the Assessing Officer has acted in a mechanical manner based upon conjecture/surmise and has recorded dissatisfaction without having regard to the accounts of the Appellant and/or the computation of suo moto disallowance made by the Appellant under Section 14A of the Act. The general hypothesis made by the Assessing Officer fails to meet the mandate of Section 14A(2) of the Act in view of the methodical computation of disallowance furnished by the Appellant taking into the account the actual expenditure incurred by the Appellant. Accordingly, we delete the addition.
Computation of book profit making adjustment on account of addition made in respect of guarantee commission and disallowance made u/s 14A r.w Rule 8D by the assessing officer - HELD THAT:- We find that AO has neither made any discussion nor proposed any addition in the draft assessment order pertaining to making adjustment in the book profit u/s 115JB of the Act and also made no discussion or addition in the final assessment order.
Therefore, following the decision of Sanmina SCI India (P) Ltd. (2017 (8) TMI 663 - MADRAS HIGH COURT) and decision of Woco Motherson Advances Rubber Technologies Ltd. [2017 (4) TMI 660 - GUJARAT HIGH COURT]. We have already deleted the aforesaid further addition made u/s 14A of the Act on the basis adjustment made by the assessing officer in the computation of book profit u/s 115JB of the Act. In view of the above facts and judicial findings, the appeal of these grounds of appeal of the assessee are allowed.
Short credit of TDS - HELD THAT:- As ITAT in the case of the assessee itself for assessment year 2018-19 [2022 (10) TMI 1209 - ITAT MUMBAI] in appeal against intimation u/s 143(1) has allowed the appeal in favour of the assessee. Therefore, we direct the AO to allow the claim of TDS credit as directed by the ITAT in the case of the assessee as referred above, therefore, this ground of appeal of the assessee is allowed for statistical purpose.
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2023 (10) TMI 1179
Payment of penalty as a condition to re-export can be imposed or not - Seeking permission to re-export the goods - Mis-declaration of quantity of goods - import of Shikakai and Areca nut - 9845 kgs of Areca nuts were in excess and 9920 Kgs of Shikakai were in short supply in terms of quantity declared in the bill of entry - HELD THAT:- Penalty imposed by the respondent authorities is for violation of the provisions of the Act, 1962 which has nothing to do with the redemption of the goods which are permitted to be re-exported on payment of fine though the same is also subject matter of the appeal. In such circumstances, the respondent authorities ought to have permitted the petitioner to re-export the goods without insisting upon the payment of penalty imposed by the said order as the same is subject matter of appeal before the Appellate Authority.
The paragraph No. 17.4 with regard to making it mandatory for the petitioner to pay the penalty as a condition precedent for re-export the goods is without any basis and the same is required to be modified. Therefore, the paragraph No. 17.4 of the impugned order would now read as that “the petitioner is permitted to re-export the goods on payment of redemption fine only.”
The respondent authorities are directed to permit the petitioner to re-export the goods without insisting upon the payment of penalty imposed by the respondent authority in the order permitting re-export of goods on payment of redemption fine of Rs. 5,00,000/- only - Petition allowed in part.
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2023 (10) TMI 1178
Levy of penalty u/s 112 & 114 of the Customs Act, 1962 - abating the importer to import goods illegally by resorting to undervaluation - Proxy importer or not - HELD THAT:- The investigation was conducted alleging illegality by way of undervaluation of the goods. During investigation statements were recorded and during the pendency of the investigation, the importer approached the Hon’ble High Court of Kerala and as directed by the Hon’ble High Court, goods were released to importer. The Adjudication Authority has concluded the findings against the appellant on the ground that documents pertaining to the import was handed over to clearing agent by the appellant. However, there is no admissible evidence forthcoming in the impugned order that appellants had resorted to undervaluation of goods. Moreover as per the order issued by Adjudicating Authority, goods were released to the Proprietor of the importer M/s Pushpa Telecom. Once the importer itself appears before the Hon’ble High Court by filing an affidavit and when the Hon’ble High Court find the proprietor of the firm M/s Pushpa Telecom Shri R. Mohandas Rangasamy as bona fide importer to order release of goods, there is no reason to consider him as proxy importer as held by the adjudication authority.
In present import, there is no evidence to allege that appellants were actively involved in illegal import of goods by communicating with overseas agencies or by transferring any amount though illegal channel. Merely if the documents pertaining to the import is handed over through the appellants to clearing agent, no conclusion can be drawn that appellants are involved in illegal import.
Appeal allowed.
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2023 (10) TMI 1177
Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - Failure to bring the rejection report of FSSAI to the knowledge of Customs authorities - non conduct of due diligence and advise the importer properly - Withholding of information or not - delay or inefficiency or non-cooperation to join the investigation by the appellants or not - contravention of Regulations 10(d), (e), (f), (m) and (q) of the CBLR, 2018 - HELD THAT:- There is definitely delay in adjudication and that for the import transaction in September 2019, the order of revocation of appellant’s customs broker license has been passed on 04.05.2023. Revenue is unable to explain why there was such a long delay in taking action against appellants, when the information about confirmation of penalties for improper import through SIIB investigation was received vide Order dated 31.03.2022. There is no mention of when the offence report was received from Kolkata Customs though it is shown that based on adjudication order of SIIB investigation, prohibition order of Commissioner of Customs, Kolkata, the Mumbai Customs authorities have initiated action under CBLR, 2018. There are no reasons recorded in detail justifying the delay in passing the impugned order by the learned Principal Commissioner.
It appears that the reasons having been not quoted and if such reasons exist, the same being not specified and not explained for undue delay cannot be accepted as reasonable grounds.
On the basis of various decisions taken by the coordinate benches of the Tribunal and higher judicial forums on the adherence to time limits prescribed under CBLR, 2018, and for the opportunity to be given for cross examination of witness whose statements were relied upon for action to be taken under CBLR, it is found that there is no basis for sustaining the impugned order of the learned Principal Commissioner.
Failure to bring the rejection report of FSSAI to the knowledge of Customs authorities - non conduct of due diligence and advise the importer properly - violation of Regulation 10(d) and 10(e) of the Rules - HELD THAT:- The records of the case indicate that the Non-compliance certificate/rejection report which was supposed to have generated on 17.03.2020, was communicated to the importer and the appellants by FSSAI vide their letter dated 14.01.2021 only on 14.01.2021 as attachment to the mail. The two e-mail dated 01.01.2021 and 14.01.2021 originating from Deputy Director (Eastern Region) of the FSSAI addressed to appellants and importer have been issued beyond the date of clearance of imported goods by Customs on 20.03.2020, and thus the appellants could not have either advised the importer or brought this to the knowledge of Customs - Further, when the CBEC circular and FSSAI guidelines specifically provide that the Customs authorities should check on the issue of NOC before clearance of imported goods, the responsibility for exercise of due diligence or bringing this to the knowledge of Customs does not lie on the part of the appellants and for the same, responsibility cannot be fastened on the appellants - there is no evidence to indicate any violation of Regulations 10(d) or 10(e) ibid, by the appellants.
Withholding of information or not - delay or inefficiency or non-cooperation to join the investigation by the appellants or not - violation of Regulation 10(f), 10(m) and 10(q) ibid - HELD THAT:- There is no factual evidence to show that the appellants had withheld any information, or was there any delay or inefficiency or non-cooperation to join the investigation by the appellants. The factual records indicate that the appellants were not aware of the non-conformity certificate issued to the importer and they were informed by the importer about the NOC having been issued based on the follow-up visit of the importer to the office of FSSAI. There is no evidence to show any inefficiency or undue delay on the part of appellants in clearance of the imported goods. In fact, the B/E was filed on 25.09.2019 and it is due to inaction on the part of the Customs, the entire clearance of goods was delayed - the show cause proceedings have not duly observed the principles of natural justice in giving reasonable opportunity to the appellants to properly place their case before the appropriate authorities. Thus, there is no evidence to indicate any violation of Regulations 10(f), 10(m) or 10(q) ibid, by the appellants.
It is factually incorrect to state that the appellants had colluded with the importer in clearance of imported goods contrary to the FSSAI rejection certificate. Thus, it is found that the conclusions arrived at by the Principal Commissioner in the impugned order is contrary to the factual position and thus it is not legally sustainable.
There are no merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in revoking the license of the appellants, as well as in imposition of penalty against them and for forfeiture of security deposit - appeal allowed.
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2023 (10) TMI 1176
Refund claim - fulfilment of the condition of filing Appeals against the self-assessed Bills of Entry as a pre-requisite to entertain the refund claim or not - classification of goods Pisum Sativum [Peas] - to be classified under Sl No.20 or under Sl No.20A during the period under dispute? - interpretation of Notification No.50/2017 Cus dated30.6.2017, as amended by Notification Nos.84/2017 Cus dated 8.11.2017, 93/2017 Cus dated 21.12.2017 and 29/2018 Cus dated1.3.2018.
Whether the present case calls for fulfilment of the condition of filing Appeals against the self-assessed Bills of Entry as a pre-requisite to entertain the refund claim as per the judgement in the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV [2019 (9) TMI 802 - SUPREME COURT] by the Hon’ble Supreme Court being relied on heavily by the Revenue? - HELD THAT:- The AMAN MEDICAL PRODUCTS LTD. VERSUS COMMISSIONER OF CUSTOMS, DELHI [2009 (9) TMI 41 - DELHI HIGH COURT] decision pertains to pre-amendment provisions and has been held as not correct by the Apex Court in the ITC case. The Micromax decisions of 2016 and 2019 MICROMAX INFORMATICS LIMITED VERSUS UNION OF INDIA & OTHERS [2016 (3) TMI 431 - DELHI HIGH COURT] and MICROMAX INFORMATICS LIMITED VERSUS THE UNION OF INDIA AND ORS. [2018 (12) TMI 802 - BOMBAY HIGH COURT] respectively considered the amended provisions of Section 27 to arrive at the decisions. During the period under dispute the importers were without doubt covered by these decisions since the ITC judgement was rendered by the Supreme Court subsequently.
In these decisions, it was held in respect of self-assessed Bills of Entry, the importers were not even required to file any application for re-assessment as was being directed vide the Board Circular 24/2004 Cus dated 18.3.2004. These decisions had effectively overruled the Board Circulars - In the present case, by documentary evidence the importers have proved that they have made the efforts to get the self-assessed Bills of Entry re-assessed as per the factual matrix.
Whether the re-assessment request under Section 149 would meet the requirement of filing of Appeal, because the Hon’ble Supreme Court in the ITC case has held that before the refund claim is entertained, Appeal has to be filed against the self-assessed Bills of Entry? - HELD THAT:- From a careful analysis of section 149, it is found that under the said provision a discretion is vested on the proper officer to authorise amendment of any document after being presented in the customs house. However, as per the proviso, no such amendment shall be authorised after the imported goods have been cleared for home consumption or warehoused, etc. except on the basis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported, etc. Thus, amendment of the Bill of Entry is clearly permissible even in a situation where the goods are cleared for home consumption - In the instant case, petitioner has not sought for any refund on the basis of the self-assessment. It has sought re-assessment upon amendment of the Bills of Entry by correcting the customs tariff head of the goods which would then facilitate the petitioner to seek a claim for refund.
Madras High Court in M/S. HEWLETT PACKARD ENTERPRISE INDIA PRIVATE LIMITED VERSUS JOINT COMMISSIONER OF CUSTOMS, DEPUTY COMMISSIONER OF CUSTOMS, THE PRINCIPAL COMMISSIONER OF CUSTOMS, UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE [2020 (10) TMI 970 - MADRAS HIGH COURT] correctly held that in a case of correction of inadvertent error, the appropriate remedy would be seeking an amendment to the Bills of Entry and not fling of appeal because there is no legal flaw in the order of self-assessment amenable to appeal but only a factual mistake which can be rectified by way of amendment or correction. Such correction or amendment has been sought for by the petitioner on the basis of documents which were already in existence at the time of release of the goods for home consumption.
This judgement after considering the Supreme Court’s decision of ITC with detailed analysis, clearly holds that the self-assessed Bills of Entry can be entertained for re-assessment under Section 149. It holds that there is no specific requirement for an Appeal under Section 128 and relies on the decision of ITC. Against this decision of Bombay High Court, the Revenue filed SLP, which has been dismissed by the Supreme Court as reported in COMMISSIONER VERSUS DIMENSION DATA INDIA PRIVATE LTD. [2022 (2) TMI 750 - SC ORDER].
Whether during the period under review the goods in question, Pisum Sativum [Peas] falling under Customs Tariff Heading 0713 10 00, are required to be assessed @ NIL rate of BCD in terms of Sl No.20 as claimed by the importers [two appellants and five respondents] or the goods are required to be assessed @50% rate of BCD in terms of Sl No.20A, as claimed by the Revenue? - HELD THAT:- During the period under dispute, in view of the amendment carried out under Notification No.29/2018 dated 1.3.2018, it is amply clear that the product under dispute fell both under for Sl No.20 and Sl No.20A during the period under question. If it were not to be so, there are no reason for the Revenue to bring in the amendment by way of this Notification No.29/2018 Cus dated 1.3.2018 at all.
This is rather a case of ambiguity in the Taxation liability and not a case of ambiguity on account of exemption granted. The Revenue cannot deny that during this period, any importer could have insisted on getting the NIL rate of BCD benefit by citing the co-existence of Sl No.20 and Sl No.20A for the brief period. The very fact that the Sl No.20 was further modified on 1.3.2018 to include Pisum Sativum in the exclusion list, it would clarify that this product was very much part of both Sl No.20 and Sl No.20A.
If there is a scope to hold that the product may fall both under Sl No.20 as well as under Sl No.20A during the period under dispute. If so, as to whether the beneficial rate of BCD can be claimed by the importers or the same is not to be extended to them in terms of the Hon’ble Supreme Court’s judgement in the case of COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY & ORS. [2018 (7) TMI 1826 - SUPREME COURT] as is being canvassed by the Revenue? - HELD THAT:- During the period in question the Notification itself specifies two Effective Rates of 50% and NIL rate. This has resulted in ambiguity about as to whether the Taxing provision in this case is NIL or 50% BCD. As a matter of fact,the importers are not availing any exemption, but taking recourse to lesser Tax liability as per the Effective Rates specified in the Notification, which is beneficial to them, for which they are eligible to do so. The case law of Dilip Kumar, in fact helps the importer rather than the Revenue.
The arguments of the Revenue cannot be agreed upon that the case law of Dilip Kumar would be of any help to them so as to overcome the dual rates of BCD specified during the period in question. The Notification No.50/2017 Cus dated 30.6.2017, being an Effective Rates Notification in respect of the goods in question, Pisum Sativum, rather helps the importer’s case.
Appeals of Revenue dismissed.
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2023 (10) TMI 1175
Refund of service tax paid - Clearing & Forwarding Agent Service - Banking & Other Financial Service - Courier Service - Customs House Agent Service - refund claim was rejected by the Original Authority by observing that port of export was the place of removal and Clearing & Forwarding Agent Service, Courier service and Customs House Agent Service, were not used beyond the port of export i.e. place of removal - HELD THAT:- From the N/N. 41/2012 itself it is evident that the notification has been issued to grant the rebate/ refund of service tax paid in respect of export of goods. Such a beneficial notification which provide for refund/ rebate of taxes to the exporters are in line with the most talked philosophy in this regards “that export the goods and not the taxes”. If the taxes paid on the goods either at the stage of input of finished product as exported, are exported than that will render the exports of the country un-competitive with the goods being exported from elsewhere. Hence all such notifications which provide for disburdening the exports from the domestic taxes need to be interpreted with the above objective in mind.
There are no merits in the impugned order by holding that this calculation has to be done shipping bill wise and rebate claim rejected where the difference arrived at in respect of those shipping bills where the papers arrived at is less than twenty percent when such a condition is not prescribed by the notification.
The grounds for denial had been stated in the show cause notice but the same were never taken up by the original authority for denying/ modifying the rebate/ refund claim made by the appellant. The grounds on which the rebate/ refund claim made by the appellant was rejected by the original authority has not been agreed to by the Commissioner (Appeals). He has to that extent of merits of the order set aside the order of original authority but goes on to uphold the denial of the refund claims made in respect of the shipping bills mentioned in para 2 & 3 of the Show Cause Notice. Such an approach were by Commissioner (Appeal) decides the appeal beyond the scope of impugned order cannot be appreciated, because it is also settled principle in law that no person can be made worse off in his own appeal.
The impugned order is set aside and appeal is allowed.
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2023 (10) TMI 1174
Rectification of mistake - Error apparent on the face of record - appeal is dismissed under litigation policy - HELD THAT:- It is found that the appeal filed by the appellant before this tribunal in case of seizure/confiscation of gold biscuits to be maintainable before this Tribunal. Accordingly the same is dismissed as non maintainable.
Same should have been the fate of the appeal filed by the Revenue which has been against the same order of Commissioner (Appeals). The appeal of the revenue was also filed before the wrong forum and could have been dismissed as not maintainable. However the bench dismissed the appeal on the ground that the amount involved in appeal is less than the threshold limit provided for by the litigation policy circular issued by the revenue. Against the order dismissing the appeal filed by revenue for the reason of amount involved, revenue has filed the application for rectification.
When Revenue itself has stated in appeal as above they cannot claim any error apparent on record taken for which their appeal was dismissed. The grounds stated in the application for rectification of mistake are not the part of records before the tribunal for consideration. The new facts and grounds taken in the rectification application, which were never the part of the appeal considered cannot justify the rectification application. Accordingly, this rectification of mistake application can be dismissed on this ground itself.
Rectification of Mistake application filed by the Revenue is dismissed.
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2023 (10) TMI 1173
Writ petitions by minority shareholders of Bharat Nidhi Ltd. (‘BNL’) - Request to place on record a compilation of documents - complains to the SEBI of violation by BNL of various provisions of the Securities laws - allegation of violations pertaining to the minimum public sharing norms (“MPS”) as also violations in respect of the promoters disclosure in shareholding in BNL - as contented that BNL was earlier listed on the Delhi Stock Exchange and after the same ceased to be functional, BNL had sought listing of its share at the Calcutta Stock Exchange, which is also not functional. BNL is now stated to be on the Dissemination Board of the National Stock Exchange.
HELD THAT:- The contents of Regulation 29 to the effect “may not be released to the public” is with a further rider that “only if the same prejudices the Board and/or the applicant”. These contents are quite, significant, by virtue of which Regulation 29 cannot be read as a blanket or a mandatory bar on non supply of documents and information.
By no stretch of imagination, can it be said that the petitioners in the present case, who are minority shareholders and in such capacity, being part owners of the company to the extent of their shareholding, are persons who are alien/outsiders to the company (BNL), moreover they are integral to the company, having an inextricable concern and interest in the functioning and management of the company.
Thus the word ‘public’ as used in Regulation 29 can in no manner be made attributable to shareholders of BNL like the petitioners. This apart, if such contention as urged on behalf of the respondents that the petitioners are ‘public’ and therefore, they are not entitled to receive information by the applicability of Regulation 29, if accepted, the same yardstick and parameters become applicable to respondent Nos. 3 to 9, who are also shareholders of BNL, who are hence not a different class, than that of the petitioners. The petitioners as also respondent Nos. 3 to 9 belong to the same species as shareholders
As it cannot be countenanced that some shareholders can take shelter under Regulation 29 to plead confidentiality of settlement information, against a group of other shareholders, so as to bring about an effect that information in relation to settlement be not supplied to such persons of their own class who are similarly situated. No shareholder can take a position that he cannot disclose any information on the affairs of the company to other shareholders. This would bring about a situation of disharmony, distrust causing damage to the management and functioning of the company.
None of the contentions as urged on behalf of respondent Nos. 2 to 9 in opposing the prayer of the petitioners to furnish documents would persuade us to hold that there was any embargo legal and/or factual for such documents not to be furnished/supplied to the petitioners.
The objection of such respondents that the petitioner ought not to have raised such plea on the documents at the midst of the final hearing, as this itself would show that no prejudice was caused to the petitioners, in our opinion, is certainly not a tenable contention, for more than one reason.
Moreover, as observed above, the case of the petitioners is that the very basis of the SEBI undertaking investigation on the complaints as made by the petitioners of BNL violating the rules, regulations and norms as prescribed by SEBI, being violated by BNL and the same forming subject matter of investigation by SEBI and the resultant show cause notice were foundational facts, hence, in such context, it was the petitioners’ entitlement to receive all the documents in that regard. Such documents therefore have all relevancy as law would contemplates in the present lis between the parties. Thus, the impression of respondent Nos. 2 to 9 that the petitioners should not be provided with such documents, is not acceptable.
Once it is the entitlement of the petitioners in law to receive such documents, they need to be furnished such documents, unless furnishing of these documents would stand prohibited in law, which is certainly not a situation in the present facts.
Regulations are framed under the SEBI Act, 1992. The avowed object and intention of the Act is to protect the interests of investors in securities and to promote the development of, to regulate the securities market. Thus, all actions which are taken by the SEBI and through the various bodies as constituted under the Act and the regulations are required to act considering the paramount interest of the investors. For such reasons as well, we do not find as to why the petitioners ought not to be entitled to the documents. We do not find that there is any impediment whatsoever in law or otherwise for the documents, as demanded, to be supplied to the petitioners.
We are inclined to grant to the petitioners interim relief in terms of prayer clause (g).
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2023 (10) TMI 1172
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial creditors - existence of debt and dispute or not - It was held by NCLAT that The amount advance of Rs.1.2 Crore cannot be held to be financial debt and no error has been committed by the Adjudicating Authority in rejecting the Section 7 Application - HELD THAT:- There are no reason to interfere with the impugned order - appeal dismissed.
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2023 (10) TMI 1171
Maintainability of section 9 application - initiation of CIRP - Application dismissed on the ground that it is barred by limitation - arbitration clause present in the agreement - eligibility for benefit of Section 14 of the Limitation Act.
It is submitted that there is arbitration clause in the agreement and the suit could not have been decided on merits, hence, the benefit of Section 14 needs to be extended to the Appellant.
Time Limitation - HELD THAT:- Benefit of Section 14 of the Limitation Act was sought by the Appellant on the basis of filing of suit and pendency of the suit during the period 03.10.2017 till 18.07.2022. The suit was withdrawn without any liberty from the Court to institute a fresh proceeding and termination of suit cannot be held on ground of defect of jurisdiction on cause of like nature. Thus, an essential condition for extending the benefit of Section 14 is absent. Thus, the delay in filing Section 9 application with delay cannot be said to be a sufficient cause within the meaning of Section 5.
The benefit for exclusion of the time during which proceedings under SARFAESI Act was pending was based on the observation that the said proceedings are without jurisdiction, on which prima facie finding High Court has granted stay. Hon’ble Supreme Court in Sesh Nath Singh [2021 (3) TMI 1183 - SUPREME COURT] also observed that Section 5 of the Limitation Act is also applicable in proceedings under Section 9 and on sufficient cause, the said delay can be condoned - The Judgment of “Sesh Nath Singh” was in facts and grounds as noted above and does not help the Appellant in the present case.
It is further observed that that the proceedings under IBC are not proceedings for recovery of contractual dues, as is apparent from the facts of the present case the Operational Creditor has initiated proceeding for recovery of its contractual dues arising out of contract between the parties. Suit for recovery of dues was already filed by the Appellant which was withdrawn by the Appellant. It is, however, relevant to notice that withdrawal of the suit was not on the ground contended by the Appellant nor any liberty was granted by the Civil Court to institute a fresh suit nor Appellant at any point of time resorted to the proceeding of arbitration which according to the Appellant was reason for withdrawal of suit.
The present was a case filed by the Operational Creditor only for recovery of its contractual dues with regard to default committed as per the case of the Appellant on 30.04.2015 for stage 1 and 23.10.2018 for stage 2. The Adjudicating Authority did not commit any error in rejecting Section 9 application as barred by time - there are no merit in this Appeal - appeal dismissed.
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2023 (10) TMI 1170
Money Laundering - proceeds of crime - Changing hands of settlement money - requirement of impleadment of petitioner - HELD THAT:- It is noticed that Soshit Karamchari case [1980 (11) TMI 160 - SUPREME COURT], Fertilizer Corporation case [1980 (11) TMI 158 - SUPREME COURT] as well as R.Rathinam case [2000 (2) TMI 881 - SUPREME COURT] were rendered prior to 31.12.2009 before the aforementioned amendments kicked in qua Cr.PC. In this view of the matter also, they do not come to the aid of the petitioner. However, as regards Jagjeet Singh case [2022 (4) TMI 1519 - SUPREME COURT], it is post amendment i.e., rendered in 2022 and what Jagjeet Singh case deals with is, right of a victim. This has been elucidatively articulated by Hon'ble Supreme Court in paragraph Nos.14 and 15 of Jagjeet Singh case, holding that Until recently, criminal law had been viewed on a dimensional plane wherein the Courts were required to adjudicate between the accused and the State. The 'victim' - the de facto sufferer of a crime had no participation in the adjudicatory process and was made to sit outside the Court as a mute spectator. However, with the recognition that the ethos of criminal justice dispensation to prevent and punish 'crime' had surreptitiously turned its back on the 'victim', the jurisprudence with respect to the rights of victims to be heard and to participate in criminal proceedings began to positively evolve.'
This Court has no hesitation in saying that victimology has no application to implead petitioner.
Whether the settlement money has not changed hands? - HELD THAT:- This is a case where there is nothing to demonstrate that there is 'proceeds of crime'. This is a private transaction between private individuals / entities and the two individuals /entities have chosen to resort to ADR [Alternative Disputes Resolution] i.e., arbitration by SIAC [Singapore International Arbitration Centre]. In the course of arbitration by SIAC, the private entities / individuals have chosen to give a closure to the dispute by entering into a Memorandum of Understanding / Settlement. This Court is also acutely conscious of the position that an Arbitration Tribunal (SIAC) is a Private Tribunal and as far as this Court is concerned, the paramount consideration is, this is not a matter where it is anybody's case, much less the case of prosecution that public money is involved.
Paragraph No.467 of Vijay Madanlal [2022 (7) TMI 1316 - SUPREME COURT] case is the ratio. It is instructive and we respectfully follow paragraph No.467 of Vijay Madanlal case. In the case on hand, to state with specificity, what is applicable is paragraph No.467(v)(d) of Vijay Madanlal case. This is a case where there is a closure of the predicate offence and therefore, we say that paragraph No.467(v)(d) of Vijay Madanlal case is applicable in all force to the case on hand. In any event, this paragraph No.467(v)(d) of Vijay Madanlal case is now subject to the caveat in Emta Coal case [2023 (7) TMI 885 - SC ORDER], i.e., caveat that if predicate offence is resuscitated or opened, the entire matter will get revived. The rights are preserved as done in Emta Coal case by Hon'ble Supreme Court. Therefore, we make it clear that we respectfully follow the ratio in Vijay Madanlal case {paragraph No.467(v)(d)} and Emta coal case {paragraph No.16} which we have followed in Anil Jain case [2023 (9) TMI 1379 - MADRAS HIGH COURT].
Law is well settled that in a Section 482 of Cr.PC quash legal drill, what the Section 482 Court would look into is, uncontraverted averments in the complaint without adding or subtracting to the same. In the case on hand, this legal drill becomes extremely simple as quash prayer turns on the legal point that on closure of predicate offence, ECIR cannot proceed. In this view of the matter, there are no hesitation in saying that the inevitable conclusion is that prayers need to be answered in the affirmative i.e., acceded to.
Applications disposed off.
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2023 (10) TMI 1169
Condonation of delay of one year and eight days in filing appeal - petitioner neither filed an appeal within the period of limitation under Section 85(3) of Finance Act, 1994 nor within the condonable period of limitation - providing services to various “educational institutions - applicability of Mega Exemption Notification No.25 of 2012-ST- dated 20.06.2012 - HELD THAT:- In this case, the Court concerned with Mega exemption Notification No.25/2012-S.T. dated 20.06.2012 issued under Sub -Section (1) to Section 93 of the Finance Act, 1994 as amended from time to time and Section 66D(l) of the Finance Act, 1994 until its deletion in 2016.
In the case of Manonmaniam Sundaranar University vs. The Joint Director (GST Intelligence), Coimbatore [2021 (4) TMI 819 - MADRAS HIGH COURT], a learned Single Judge of this Court accepted the claim of the petitioner therein in so far as exemption for payment of service tax on amounts collected towards affiliation. However, learned Single Judge did not accept the contention of the said University in so far as collection of rent from service providers like Bank, Post Office, Canteens, etc.
In UNION OF INDIA VERSUS WOOD PAPERS LTD. [1990 (4) TMI 55 - SUPREME COURT], the Hon’ble Supreme Court held that at the stage of applicability, the Notification has to be construed strictly and the ambit should not be widened or extended. It further held that once only when the first stage is crossed, the notification should be construed liberally that is other technicalities and procedural compliances should not come in the way of extending the benefit. There was no scope for expanding the scope of negative list in Section 66D(l) of the Finance Act, 1994 as the petitioner has not crossed the threshold.
The Hon’ble Supreme Court has repeatedly held that the operation of the notification has to be judged not by the object which the rule making authority had in mind but the words it has employed effectuate the legislative intend. Therefore, there is no scope for extending the benefit of Section 66 D(l)(ii) of the Finance Act, 1994 to the petitioner.
With effect from 01.07.2012, under Section 66B of the Finance Act, 1994, service tax was to be levied at the rate specified therein on the value of “services” other than the services specified in the “negative list” provided or agreed to be provided in the taxable territory by one person to another and concluded in as much as the manner as may be prescribed - to begin with the services provided by the petitioner did not fall within the purview of “negative list” as defined in Section 65B(34) read with Section 66D(l)(ii) of the Finance Act, 1994 and/or as amended by Notification No.9 of 2016-S.T dated 01.03.2016. Therefore, the contention of the petitioner that the petitioner was outside the purview of Service Tax levy under Section 66B of the Finance Act, 1994 is liable to be rejected.
The petitioner being a University recognized under the provisions of the UGC Act, 1956, has to be construed as an “educational institution”. As an “educational institution”, the petitioner would have been exempted from payment of service tax for renting out its “immovable property” for a brief period, till 1.4.2013 - The exemption for renting of immovable property was short lived. This exemption stood withdrawn in view of amendment to Entry 9 to Mega Exemption No.25/2012-S.T dated 20.06.2012 vide Notification No. 3/2013-S.T, dated 1-3-2013.
This writ petition has to fail, on all counts except, for “renting of immovable property” for a brief period between 01.07.2012 and 31.03.2013. The said exemption is not available with effect from 01.04.2013 in view of amendment to vide Notification No.3/2013–ST dated 01.03.2013 amending Mega Exemption Notification No.25/2012 – ST dated 20/06/2012 - After 1.4.2013, only if the petitioner had rented out its immovable property by to an “ Educational Institution”. After amended to Mega Exemption Notification No.25/2012 – ST dated 20/06/2012, vide Notification No.6/2014-S.T dated 11.07.2014, there was no exemption for renting of “immovable property”.
Petition dismissed.
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2023 (10) TMI 1168
CENVAT Credit - Service or Repair of Motor Vehicles carried out by Authorized Service Station (ASS) of motor vehicle manufacturers - service provided by the Salvager under Port services for refloating a grounded dredger - denial of credit on the ground that the invoices are raised where the name of the owner of the vehicle is mentioned and not that of the assessee.
HELD THAT:- The very same issue was considered by the Tribunal in the assessee’s own case M/S. UNITED INDIA INSURANCE CO. LTD. VERSUS CCE & ST, LTU, CHENNAI [2018 (6) TMI 200 - CESTAT CHENNAI] where the Tribunal held that not having the invoice in favour of the appellant should be considered only as a procedural infraction and should not be used to deny the credit which otherwise they are eligible.
After appreciating the facts and noting that the Commissioner (Appeals) has allowed the credit after which the refund has been sanctioned to the appellant, it is opined that the denial of credit is without any legal or factual basis.
The impugned order set aside - The appeal filed by the assessee is allowed.
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2023 (10) TMI 1167
Valuation - inclusion of passenger service fee and airport taxes collected from passengers in the assessable value for computation of service tax - HELD THAT:- The appellant has complied with the condition of Rule 6 of Service Tax (Determination of Value) Rules, 2006 and the same are not includible in the assessable value of service provided by the appellant, as the impugned period is, post 27-2-2010 and the said issue has been examined by this Tribunal in the appellant’s own case in [2017 (9) TMI 715 - CESTAT CHANDIGARH] wherein this Tribunal has made it clear that these charges are not to be included in the assessable value of the services provided by the appellant relying on the decision in the case of Continental Airlines v. CST, New Delhi [2015 (7) TMI 1079 - CESTAT NEW DELHI]. Moreover, as per the exemption Notification No. 12/2010, dated 12-2-2010, statutory taxes charged by any Government on Air passengers would be excluded from the taxable value for the purpose of levy of tax and therefore, the service tax is not payable by the appellant.
Thus, Passenger Service Fee (PFS) and Airport Tax are not includible in the assessable value of the services provided by them. Therefore, the impugned order deserves no merit, accordingly, the same is set aside - appeal allowed.
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