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Showing 341 to 360 of 1644 Records
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2025 (4) TMI 1304
Taxability of income in India or not - Royalty receipts taxable in India u/s 9(1)(vi) and Article 12 of the DTAA - Infrastructure Data Centre (IDC) Services & Consumer CRM Development Charges - HELD THAT:- As relying in assessee's own case for AY 2019-20 [2022 (12) TMI 1563 - ITAT MUMBAI] IDC and CRM Development Charges are not taxable in India and accordingly direct the AO to delete the addition made in this regard. Grounds 2 & 3 raised by the assessee are allowed.
Other Services Charges taxed as Royalty - We notice that the impugned issue is recurring in nature and that the Co-ordinate Bench while considering the same for AY 2019-20 [2022 (12) TMI 1563 - ITAT MUMBAI] as held this issue is recurring in nature and has been decided in favour of the assessee by the decision of the coordinate bench of the Tribunal for the preceding assessment years. The learned DR could not show us any reason to deviate from the aforesaid decision and no change in facts and law was alleged in the relevant assessment year. Thus, respectfully following the order passed by the coordinate bench of the Tribunal in assessee’s own case cited we uphold the plea of the assessee and direct the AO to delete the addition on account of other service charges (referral fees).
Management Service Fee taxed as Royalty - We notice that an identical has been considered by the Co-ordinate Bench in assessee's own case for AY 2010-11 to AY 2013-14 has considered similar issue and held the same in favour of the assessee. For the year under consideration the revenue did not bring any new material on record and therefore direct the AO to delete the addition made in this regard.
Member Login Fees - An identical issue has been considered by the Co-ordinate Bench in assessee's own case for AY 2019-20 [2022 (12) TMI 1563 - ITAT MUMBAI] uphold the plea of the assessee and direct the AO to delete the addition on account of member login fees.
Assessee appeal allowed.
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2025 (4) TMI 1303
Non-compliance of the statutory requirement of pre-deposit - authority to waive or reduce the pre-deposit requirement after the 2014 amendment to section 129E of the Customs Act, 1962 - HELD THAT:- It would be seen from a bare perusal of section 129E of the Customs Act that after 6.8.2014 neither the Tribunal nor the Commissioner (Appeals) have the power to waive the requirement of pre-deposit, unlike the situation which existed prior to the amendment made in section 129E on 06.08.2014 when the Tribunal, if it was of the opinion that the deposit of duty and interest demanded or penalty levied would cause undue hardship, could dispense the said deposit on such conditions as it deemed fit to impose so as to safeguard the interest of the Revenue.
The Supreme Court in Narayan Chandra Ghosh vs. UCO Bank and Others [2011 (3) TMI 1478 - SUPREME COURT], examined the provisions contained in section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 relating to pre deposit in order to avail the remedy of appeal. The provisions are similar to the provisions of section 129E of the Customs Act. The Supreme Court emphasised that when a Statue confers a right to appeal, conditions can be imposed for exercising of such a right and unless the condition precedent for filing appeal is fulfilled, the appeal cannot be entertained. The Supreme Court, therefore, held that deposit under the second proviso to section 18(1) of the Act, being a condition precedent for preferring an appeal, the Appellate Tribunal erred in law in entertaining the appeal. The Supreme Court also held that the Appellate Tribunal could not have granted waiver of pre-deposit beyond the provisions of the Act.
It will also be appropriate to refer to a decision of the Delhi High Court in Dish TV India Limited vs. Union of India & Ors. [2020 (8) TMI 183 - DELHI HIGH COURT], wherein the requirement of pre-deposit under section 129E of the Customs Act, came up for consideration. The High Court held that when the Statue itself provided wavier of pre-deposit to the extent of 90% or 92.5% of the duty amount and made it mandatory to deposit 7.5% or 10% of duty amount, the Courts cannot waive this requirement of deposit.
The Madhya Pradesh High Court in Ankit Mehta v/s Commissioner, CGST Indore [2019 (3) TMI 1342 - MADHYA PRADESH HIGH COURT] also dismissed the Writ Petition that had been filed against the order of the Tribunal dismissing the appeal for the reason that the required pre-deposit was not made. The contention that was advanced before the Tribunal and before the Madhya Pradesh High Court was that the appellant was not in a position to make the pre-deposit due to financial constraints. After examining the provisions of section 129E of the Customs Act, the Madhya Pradesh High Court observed 'section 129E does not empower the Tribunal or the Commissioner (Appeals) to waive the pre-deposit or to reduce the pre-deposit, this Court is also not inclined, keeping in view the aforesaid statutory provisions of law to waive or reduce the pre-deposit and, therefore, no case for interference is made out in the matter.'
Conclusion - The appellant has not made the pre-deposit. In view of the aforesaid decisions of the Supreme Court, the Delhi High Court and the Madhya Pradesh High Court, it is not possible to permit the appellant to maintain the appeal without making the required pre-deposit.
As the mandatory statutory requirement of pre-deposit has not been satisfied by the appellant, the appeal stands dismissed.
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2025 (4) TMI 1302
Reopening of assessment u/s 147 - case re-opened after a period of four years - reasons to believe - HELD THAT:- On a perusal of the reasons recorded which are reproduced above, there is no allegation of any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. Even on a perusal of the reasons recorded, the said pre-condition cannot be discerned with even in the absence of such allegation.
Reasons are based on verification of the profit and loss account and the other relevant records. If that be so, we fail to understand how the pre-condition specified in first proviso to Section 147 is satisfied. Therefore, on this short ground itself, the re-opening notice u/s 148 is required to be quashed and set aside.
Eligibility of interest u/s 80P was a subject matter of investigation in the course of the regular assessment proceedings and same is evident of the original assessment order, wherein the issue of deduction u/s 80P is discussed.
Disallowance u/s 40(a)(ia) a query was raised by the Respondents in the course of the assessment proceedings vide notice dated 18.07.2016 and same was replied by the assessee vide letter dated 09.11.2016, wherein all the details with respect to the TDS were furnished. The details are also filed along with this Petition from page 125 to 135. Therefore, on both these grounds i. e. deduction under Section 80P and disallowance for non-deduction of TDS, the issue was examined during the course of the assessment proceedings and therefore, any attempt to re-open the case would amount to re-opening on the basis of change of opinion and review of the earlier order passed u/s 143 (3) of the Act. This is not permissible under the Act which confers the power to re-open the case under Section 147 of the Act. Decided in favour of assessee.
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2025 (4) TMI 1301
Assessment order passed in violation of the principles of natural justice - not granting the Petitioner an opportunity of personal hearing - Violation of the provisions of Section 143 (3) r/w. 144B - HELD THAT:- As this was indeed a clear case of violation of principles of natural justice, we set aside the impugned assessment Order and remand the matter to the assessing officer with a direction to carry out the assessment afresh after giving an opportunity of hearing to the Petitioner and also providing a draft assessment Order. This exercise must be completed within three months from the date of uploading of this order.
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2025 (4) TMI 1300
Validity of re-assessment Order - Petitioner submits that this is a case of gross and apparent violation of principles of natural justice - HELD THAT:- We are satisfied that this Petition can be entertained despite the Petitioner having invoked the alternate statutory remedy of Appeal. This is because the undisputed facts indicate a clear violation of the principles of natural justice and fair play.
Petitioner was issued a Show Cause Notice and granted time to file a response by 23.59 hours of 30.03.2022. Such response was filed by the Petitioner at 17.59 hours on 30.03.2022. Even before the time limit indicated in the Show Cause Notice would expire, the second Respondent made the impugned re-assessment Order dated 30.03.2022 at 17.22 hours. Thus, the Petitioner’s response filed within the time line indicated was not even considered. Such non-consideration vitiates the impugned Order and constitutes violation of the principles of natural justice.
We set aside the impugned re-assessment Order and remit the matter back to the assessing officer for considering the Petitioner’s response for granting the Petitioner a personal hearing and making a fresh re-assessment Order on its own merits and in accordance with law. This entire exercise must be completed within three months of the uploading of this order.
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2025 (4) TMI 1299
Reopening of assessment - Bogus long term capital gains - information received from the Insight Portal regarding price manipulation in scrip of Tilak Venture Ltd. to provide accommodation entry of bogus long-term capital gains to its beneficiaries, proceedings u/s 147 of the Act were initiated in the case of the assessee - HELD THAT:- As in the present case, the proceedings u/s 147 of the Act were initiated based on the information received from the Insight Portal. Since the impugned additions were made pursuant to proceedings initiated u/s 147 of the Act, therefore, they can be either based on the information received by the AO or the information as obtained by the AO pursuant to an independent enquiry.
Once the AO has failed to prove in the present case that the assessee was involved in the alleged bogus transaction of accommodation entry on the basis of either of the aforesaid information, nor is there any vague reference against the assessee, the Revenue cannot now plead that the CIT(A) while adjudicating the assessee’s appeal failed to conduct the inquiry. Further, apart from raising the aforesaid plea, the Revenue has not specifically pointed out which inquiry the CIT(A) failed to conduct. Therefore, we do not find any merits in the aforesaid submissions of the learned DR.
Thus, no infirmity in the impugned order passed by the CIT(A). Accordingly, the deletion of the additions made u/s 68 and section 69C of the Act is upheld, and the grounds raised by the Revenue are dismissed.
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2025 (4) TMI 1298
Denial of the deduction claimed u/s 54B - assessee has failed to substantiate its claim that the land sold was agricultural land - HELD THAT:- What is relevant for claiming deduction u/s 54B is a transfer of a capital asset being a land which was used for agricultural purposes and not transfer of an agricultural land as there may be a case where the land may be used for the agricultural purpose, however, the same being covered under one of the clauses of section 2(14)(iii) of the Act be considered as a capital asset.
Therefore, from the careful perusal of the provisions of section 54B we do not find any merits in the findings of the lower authorities that since the land sold by the assessee was a capital asset and not an agricultural land, therefore, the deduction u/s 54B of the Act is not available to the assessee.
We find that the lower authorities have not examined the 7/12 extract as relied upon by the learned AR before us to substantiate the claim that the land sold was used for agricultural purposes. Find from the orders passed by the lower authorities that there is no such reference by the assessee to these documents.
Since the necessary documentary evidence for complete adjudication of this issue was not examined by the lower authorities even in the second round of proceedings, we have no option but to again restore this issue to the file of the Jurisdictional AO for de novo adjudication with a direction to the assessee to furnish documents to substantiate the fulfilment of the conditions for claim of deduction u/s 54B of the Act. Appeal by the assessee is allowed for statistical purposes.
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2025 (4) TMI 1297
Addition u/s. 68 - unexplained credit in the books of accounts - assessee had submitted details of stock and contended that it has already offered such amount as sales and regularly complied with requirement of laws like Gujarat VAT Act - AO had not accepted the explanation of assessee and relied upon investigation report wherein it was found that cash were collected from various persons by Shri Sanjay Soni and others and were deposited in various dummy accounts with Axis Bank and part of such amount was ultimately transferred to assessee - HELD THAT:- CIT(A) held that the assessee was a trader of bullion and in the year under consideration, he had made sales to Green Traders, Shri Jitendra Patel and DPS Commodities against which amount was received through banking channel.
CIT(A) held that the though the assessee had submitted copy of relevant bills issued to SVP Corporation, stock register and VAT report no contrary evidence was brought by the AO. CIT(A) held that the assessee had sufficient stock before making any sales.
CIT(A) in unequivocal terms held that when assessee was a trader in bullion, having sufficient stock before making any sale, the AO not doubting any purchases made by assessee including its quantitative records, there was no reason for treating entire cheque amount received from above concerns as unexplained credit u/s 68 of the Act. Decided against revenue.
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2025 (4) TMI 1296
Disallowing the claim of accumulation u/s. 11(2) - there is no specific reason mentioned in Form 10 how the amount accumulated going to be spent for - HELD THAT:- AO does not have case that accumulation u/s. 11(2) of the Act is for purpose outside the objects of the assessee trust. The only reason stated by the AO in denying the claim of accumulation of income u/s. 11(2) of the Act is that the amount set aside for accumulation has not been specifically mentioned or categorised. We find from Form 10 that the assessee had enumerated the reasons for accumulation of income which is well within the objects of the assessee trust.
As decided MAMTA HEALTH INSTITUTE FOR MOTHER AND CHILDREN [2007 (5) TMI 88 - HIGH COURT, DELHI] in annual report as well as the overview of these projects clearly shows that the projects were in consonance with the objectives sought to be achieved by the assessee, which were for the benefit of women and adolescent girls particularly in the slums or in a community which was not particularly well off. On-going through the objects of the society, it is clear that the assessee sought to accumulate funds for a charitable purpose. Appeal filed by Revenue is dismissed.
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2025 (4) TMI 1295
Classification of imported goods - Toshiba Air conditioner Outdoor unit - Toshiba Air Conditioner Indoor units - to be classified under CTH 8515 9000, thereby availing the benefit of Customs Notification No.46/2011 Sl. No. 1103(1) or under CTH 8415 8110? - HELD THAT:- After going through the orders, that the Tribunal has considered the contentions of the Revenue for denying the benefit of notification and ordering re-classification per OIO for the reasons given thereunder and it has been clearly laid down that the goods in question would fall under CTH 84159000 as ‘parts’. In view of the above and following the judicial discipline, there are no merit in the impugned order, which calls for setting aside the same.
Conclusion - Indoor and outdoor units of multi-split air conditioners operating on Variable Refrigerant Flow technology, imported together as a combination, are classifiable as parts under CTH 8415 9000.
Appeal allowed.
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2025 (4) TMI 1294
Rectification of the mistake - typographical errors - errors occurred due to incorporation of the facts of another appeal on the similar controversy about manufacture of lithium ion battery or Power Bank and the exemption available under Notification No. 50/2017 dated 30.06.2017 Entry No. 512 - HELD THAT:- It is observed to to be an acknowledgement that the facts in the present final order are similar to the facts of some other appeal which probably would have been decided at the similar point of time. Hence the record of the orders pronounced and that of hearing got checked.
It came to notice that another appeal titled as XOR Technologies LLP Vs. Principal Commissioner of Customs (Preventive), New Delhi [2024 (10) TMI 297 - CESTAT NEW DELHI]. It involved the same issue of benefit of Notification No. 50/2017 dated 30.06.2017 and whether the product manufactured by the appellant is Lithium Ion Battery Pack or Power Bank. Except that in present case, it is Lithium Ion Battery instead of Lithium Ion Battery Pack.
The present appeal was heard on 25.06.2024 and the impugned final order is dated 18.10.2024. The perusal of final order dated 30.09.2024 in said the appeal shows that the appellant therein were also availing the benefit of Notification No. 50/2017 dated 30th June 2017 entry at Sr. No. 512 being importing raw material for manufacture of Lithium-ion battery Packs - keeping in view that the defects pointed out are nothing but the typographical errors which have occurred due to overlapping of facts of two appeals heard simultaneously with respect to the same subject matter.
Conclusion - The identified errors are typographical and their rectification ordered as per the appellant's submissions and the factual matrix.
With incorporations of such typographical correction in respective paragraphs of the final order, as mentioned the application seeking rectification of typographical errors in the said final order stands allowed.
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2025 (4) TMI 1293
Rejection of the plaint filed by the appellant - decree of permanent injunction from transferring any tenancy right in favour of any new tenant in respect of the property described in Schedule- “A” of the plaint - Company and its Directors have been mismanaging the assets of the Company - locus standi and a cause of action to seek a declaration of shareholding and related rights without having the transfer of shares recorded under Section 56 of the Companies Act, 2013 - misjoinder of causes of action - HELD THAT:- As rightly enumerated in the impugned judgment and deemed decree, the plaintiff does not disclose clearly in the plaint as to how he became such partial owner of the property - Thus, there is a palpable non-disclosure of the right of the plaintiff to the suit property, which forms an essential component of the bundle of facts which comprise of the cause of action for the suit.
For a plaintiff to claim a remedy in a suit, the plaintiff has to essentially disclose a legal right to the subject property as well as an infringement of such right, both of which ingredients are absent from the plaint inasmuch as the immovable property is concerned, which is the only subject-matter of the suit as mentioned in the plaint schedule - the learned trial Judge also proceeded on the premise that if the plaintiff has an axe to grind regarding the alleged mismanagement of the affairs of the Company by inducting third party-tenants, the appropriate remedy would be under Section 241 of the 2013 Act.
The reliance of the plaintiff/appellant on the Division Bench judgment of this Court in the matter of Eastern Indian Motion Picture Association [2024 (2) TMI 775 - CALCUTTA HIGH COURT] by the appellant is also misplaced, since in paragraph no.21 thereof, the coordinate Bench categorically observed that it did not find it necessary to go into the issue whether the dispute therein was covered by Section 241 of the 2013 Act. Thus, the said judgment cannot be said to be a binding precedent on the applicability of Section 241 in the facts of the present case - That apart, the said judgment was rendered in the particular factual matrix of the said case, which are not applicable to the present case.
There are no reason to interfere with the impugned judgment and deemed decree, both on the basis of the observations arrived at by the learned trial Judge and the additional reasons supplied - it is not inclined to interfere in the present appeal.
Conclusion - The suit is not maintainable due to lack of cause of action, misjoinder of causes of action, and bar under the Companies Act and procedural law.
Appeal dismissed.
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2025 (4) TMI 1292
Challenge to order admitting Section 95 application filed by the State Bank of India against the Personal Guarantor - Submission is that since the Resolution Plan has changed the quantum of debt, the proceedings under Section 95 ought not to have proceeded with - HELD THAT:- There can be no dispute that Resolution Plan is binding on all including the Financial Creditor. Clause 1.8 F as has been relied by the Counsel for the Appellant only provide that the financial creditors shall have the right to recover any unrecovered financial debt owed by the company to them by recourse to the personal guarantees. Thus, in event under the Resolution Plan any amount is recovered by the financial creditor allowance of the said amount has to be given while preparing a repayment plan with regard to personal guarantors’ insolvency.
Conclusion - There is no error in the initiation of the CIRP against the personal guarantor i.e. Appellant herein and the submission which has been raised by the Appellant regarding the recovery of certain amount by the financial creditor under the Resolution Plan is a question that need to be addressed by the Resolution Plan at the time of finalizing the repayment plan against the personal guarantor.
Appeal dismissed.
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2025 (4) TMI 1291
Classification of services - works contract services or erection, commissioning and installation services? - exemption from payment of service tax for the services rendered to Government authorities such as CPWD - principles of natural justice was not followed either by the adjudicating authority or the appellate authority - HELD THAT:- It is seen that the appellant has not submitted any documents/ records to substantiate their claims before the original adjudicating authority or the Commissioner (Appeals).
In fact, one of the grounds of appeal is that the principles of natural justice was not followed either by the adjudicating authority or the appellate authority. Further, the appellant has disputed the computation of service tax liability for the Financial Years 2009-10, 2010-11, 2011-12 and 2013-14. Copies of the Balance Sheets, Challans evidencing payment of service tax etc., has been submitted with the present appeal. The adjudicating authority or the Commissioner (Appeals) were not given the opportunity to examine the said documents and appreciate the submissions of the appellant.
Conclusion - The matter requires to be remanded to the original authority for adjudication. The appellant will be given the opportunity to submit all relevant records and documents to substantiate his claims. The adjudicating authority may finalise the case expeditiously.
The appeal is allowed by way of remand.
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2025 (4) TMI 1290
Denial of the appellant’s claim for interest on delayed refund - Section 11BB of the Central Excise Act, 1944 - HELD THAT:- An assessee is entitled to litigate for securing its legitimate interests and the fact that the assessee has so litigated cannot per se be held against the assessee, or be a ground, to deny it’s just dues. As per Section 11BB of the Central Excise Act, 1944, the relevant date for payment of interest hinges only on the date of receipt of the application and if the duty is not refunded within a period of three months from the date of receipt of the application, then the applicant shall be paid interest at the specified rates fixed by the Central Government, on expiry of a period of three months from the date of receipt of the application.
The issue is no more res-integra and it is worthwhile to reproduce what the Honourable Supreme Court has held on this aspect in its Judgement dated 21-10-2011, more than a decade ago, in Ranbaxy Laboratories Ltd v. Union of India, [2011 (10) TMI 16 - SUPREME COURT]. The Honourable Apex Court, after referring to the relevant provisions of Section 11B of the Act dealing with claims for refund of duty as well as Section 11BB pertaining to interest on delayed refunds, went on to hold that 'the only interpretation of Section 11BB that can be arrived at is that interest under the said Section becomes payable on the expiry of a period of three months from the date of receipt of the application under sub-section (1) of Section 11B of the Act and that the said Explanation does not have any bearing or connection with the date from which interest under Section 11BB of the Act becomes payable.'
The finding in the impugned OIA by the appellate authority that the appellant’s claim for payment if interest is not justified, is decidedly untenable and is liable to be set aside
Conclusion - The appellant is entitled to interest on delayed refund under Section 11BB of the Central Excise Act, 1944, from the expiry of three months from the date of receipt of the refund claim.
Appeal allowed.
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2025 (4) TMI 1289
Short payment of service tax - liability of a cable operator for service tax under the Finance Act, 1994 - invocation of extended period of limitation - recovery of service tax with interest and penalty - HELD THAT:- The Chandigarh Bench has in the order relied upon in the case of Alpha Cable Network held that extended period could not have been invoked. As facts of the present case are exactly identical to the case of Alpha Cable Network or that decided by the Chandigarh Bench, there are no merits in the impugned order to the effect it upheld the demand for extended period of limitation. The demand should be restricted to normal period of limitation. Thus the matter needs to be remanded to the Original Authority for determination of the quantum of taxes for normal period.
There are no merit in the submissions to the effect that Cenvat credit in respect of these documents should be allowed for computation of the demand. However in the remand proceedings while working out the demand for normal period Adjudicating Authority should take into consideration if any document against which the credit has been claimed was within the period as prescribed by proviso to Rule 4(7) of the Cenvat Credit Rules, 2004 as amended from time to time.
Conclusion - The local cable operators are independently liable for service tax, cannot avoid liability by pointing to MSO's tax payment, are entitled to threshold exemption if conditions are met, must comply with registration and return filing requirements to claim CENVAT credit, and that limitation periods and penalties must be applied consistent with statutory provisions and judicial precedents.
Matter remanded to the Original Authority for computation of the demand for the normal period of limitation - appeal allowed in part by way of remand.
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2025 (4) TMI 1288
Inadmissible CENVAT Credit - short payment of service tax on the commission received in advance - taxability - debit card income - Banking and financial services rendered in Jammu and Kashmir - renting of immovable property.
HELD THAT:- It appears that the Tribunal looked into the issue as regards the CENVAT credit in detail - there is no discussion as regards the other four issues which were raised by the Revenue. All that has been stated as regards those four issues is that they are covered by case laws. To a certain extent, the learned counsel appearing for the Revenue is right that although there is a finding recorded with regard to the CENVAT credit, yet there is no discussion at the end of the Tribunal with regard to the four issues.
It is submitted that let this order be set aside and the matter be remanded to the Tribunal for fresh consideration so far as the untouched four issues are concerned - thus, instead of remanding the matter, liberty should be granted to the Revenue to prefer an appropriate application before the Tribunal saying that these four issues have not been discussed in the impugned order and some finding needs to be given, one way or the other.
Appeal disposed off.
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2025 (4) TMI 1287
Rejection of refund claim filed under transitory provision contained in Section 142(3) of the CGST Act, 2017 - rejection on the ground that refund application was barred by limitation since not filed within one year from the relevant date as per provision contained in Section 11B(1) of the Central Excise Act and refund was not allowed on cesses under the said provision of Central Excise Act - HELD THAT:- When the notification that excludes cesses from the expression “eligible duties and taxes” from the definition has not been notified to make it enforceable and Section 140 of the CGST Act providing transitional arrangement for input tax credit namely CENVAT Credit to be carried-forward to Electronic Credit Ledger for its utilisation opting to pay tax can get the same back in cash if it failed to utilise the same, refund of the said CENVAT Credit that includes education cess and secondary & higher education cesses is permissible under Section 142(3) of the CGST Act, which this Tribunal is competent to enforce in view of the decision of the Larger Bench passed in the case of Bosch Electrical Drive India Pvt. Ltd. [2023 (12) TMI 1145 - CESTAT CHENNAI-LB].
Conclusion - Refund of accumulated credit on education cess and secondary & higher education cess is permissible under Section 142(3) of the CGST Act since Explanation 3 to Section 140, which excludes such cesses, has not been notified and is therefore not enforceable.
The order passed by the Commissioner of Central Tax (Appeals-I), Pune refusing cash refund on education cess and secondary & higher education cesses is hereby set aside - Appeal allowed.
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2025 (4) TMI 1286
Entitlement for refund claim - amount inadvertently paid towards National Calamity Contingent Duty (NCCD) by utilisation of CENVAT credit of basic excise duty, the utilisation of which stood expressly prohibited by virtue of amendment Notification 13/2016 – CE/NT dated 01.03.2016 - bar of time limitation u/s 11B of the Central Excise Act, 1944 - principles of unjust enrichment.
Time limitation - HELD THAT:- The period of dispute is March 2016 to June 2017. The Show cause notice proposing to recover the NCCD is issued on 04.04.2018, in response to which the appellant remitted the payments on 13.06.2018 and 14.06.2018. Vide the letter dated 10.07.2018, the appellant filed Form-R seeking refund of the debit made erroneously towards NCCD, for the period March 2016 to June 2017. From the above, it is clear that the said application for refund is made after the expiry of one year from the relevant date and therefore going by the land mark judgement of the Constitution Bench of Hon’ble Apex Court in the case of Mafatlal Industries Ltd. Vs Union of India [1996 (12) TMI 50 - SUPREME COURT], any application for refund which could only be under Section 11B, has to be filed within the timeframe provided under the said section, which is not the case here and hence, the rejection of refund as barred by limitation, cannot be found fault with.
Principles of unjust enrichment - HELD THAT:- The Original Authority has tabulated the sample invoices which reflects the passing on of the duty (NCCD) on their customers, which only reflects that the appellant had, in fact, collected the same from their customers in cash. This fact is based on the analysis of invoices issued and the appellant has not disputed these facts - The appellant's claim that passing on the duty burden was irrelevant is rejected.
Conclusion - i) The refund claim is barred by limitation under Section 11B as it was filed beyond the prescribed one-year period. ii) The appellant is not entitled to refund as it had passed on the burden of NCCD to its customers, resulting in unjust enrichment if refund was allowed.
Appeal dismissed.
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2025 (4) TMI 1285
Availment of input service credit on outward freight from factory to sales outlets - Input Credit availed by the Appellant on sales commission paid to the franchisee for marketing and selling the products manufactured by the appellants is allowable or not - eligibility to avail input service credit on service tax on rent paid for the Retail outlets.
Whether the assessee is eligible to avail input service credit on outward freight from factory to sales outlets? - HELD THAT:- The rent for the franchisee showroom is borne by the Appellant and sales tax in respect of the goods stock transferred to the outlet is suffered by the Appellant as per Clause 7 of the Franchisee agreement. Further we find that as per clause 9 of the said agreement, the appellant bears the cost of transportation of stock transferred to the franchisee outlet and for the unsold stock transferred back to the Appellant by the Franchisee. Besides, as per Clause 10 of the agreement, the insurance coverage for showroom stock is taken by the Appellant. It is also found that the definition of ‘place of removal’ contained in Section 4(3)(c) of Central Excise Act, 1944 includes the premises of a consignment agent or any other place from where the excisable goods are sold. Under the above circumstances, the Franchisee showroom is the place of removal and therefore the credit availed on outward GTA services for movement of goods from the appellant’s unit to Franchisee premises on stock transfer basis is eligible as it is for transportation of goods up to the place of removal.
Reference made to the decision of the CESTAT New Delhi in the case of Cantabil Retail India Ltd, Rajesh Rohilla, Ani Bansal, Director Vs. Commissioner of Central Excise, Delhi-I [2017 (9) TMI 205 - CESTAT NEW DELHI] wherein it was held 'The Revenue presumed that the services should be in or in relation to manufacture of ready-made garments, whereas Rule 2(l) clearly talks about services used by manufacturers, whether directly or indirectly in or in relation to the manufacture of final products and clearance of final products up to the place of removal. A plain reading of the said statutory provision will indicate that the presumption of the Revenue is not sustainable.'
The Appellant is entitled to avail the Cenvat credit of transportation paid on goods stock transferred to the franchisee outlets.
Whether the input credit availed on sales commission paid to franchisees for marketing and selling the appellant's products is allowable? - HELD THAT:- The inclusive part of the provisions of Rule 2(l) of Cenvat Credit Rules, 2004 provides for availment of Cenvat credit on sales commission paid to franchisees. The appellant had incurred expenses/paid commission to the franchisees for display of the products and effecting the sale of goods which was attributable to the promotion of sales of the said goods. The CBEC Circular No. 943/04/2011 clarified that the credit would be admissible on the services of sale of dutiable goods on commission basis. The Ld. Counsel placed reliance on the decision of the Tribunal in the case of M/s. Ultratech Cement Ltd. Versus CCE, Jodhpur [2017 (12) TMI 882 - CESTAT NEW DELHI] wherein the Tribunal relying on the above said circular had held that there was no bar on availment of Cenvat credit on sales promotion service by way of sale of dutiable goods on commission basis - the Appellant is eligible for Input Credit availed on sales commission paid to the franchisees.
Whether the Appellant is eligible to avail input service credit on service tax on rent paid for the Retail outlets? - HELD THAT:- It is not disputed that the goods manufactured were transferred from the factory premises to the franchisee showroom, from where the goods were sold to eventual customers. The issue is no more res integra as there is a catena of judgements delivered by various forums which is applicable to the present appeal. The Tribunal in the case of Commissioner of C.EX., Delhi-III Vs. Mark Exhaust Systems Ltd. [2015 (9) TMI 1472 - CESTAT NEW DELHI], on a similar issue held 'Since the duty paid vehicles were removed to the depot, from where the same were sold to the customers, such activity squarely falls under the definition of “input service” under the category of “storage up to the place of removal”, itemised therein. In the above referred cases, the Tribunal has allowed the services availed for the Go-down/Depot by holding that the services have nexus with the ultimate manufacturer of final product”' - Thus, the Cenvat Credit on rent paid on immovable property in respect of retail outlets is eligible for Cenvat Credit.
Conclusion - i) Cenvat Credit on outward transportation upto the place of removal is allowed and the place of removal is determined to be the sales outlets (franchisees stores). ii) Cenvat Credit on Sales commission paid to the franchisees is allowed. iii) Cenvat credit availed on commercial rent paid for retail outlets/ show rooms is allowed.
Appeal allowed.
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