|
Advanced Search Options
Case Laws
Showing 341 to 360 of 1466 Records
-
2024 (6) TMI 1126
Revision u/s 263 - allowability of deduction of interest claimed u/s 57 - submission made by the Ld. A.R. is this that the PCIT is not justified in invoking jurisdiction u/s 263 of the Act by directing the fresh assessment when the earlier assessment as assessed u/s 143(3) of the Act has been covered under “limited scrutiny” category and AO has passed the order in conformity with the CBDT instructions applicable for limited scrutiny considering all the relevant facts available on the matter
HELD THAT:- We find that the assessment was finalised u/s 143(3) by AO under limited scrutiny scheme wherein the assessment was related to allowability of deduction of interest, claimed u/s 57 and the AO while conducting limited scrutiny in accordance with the above mentioned CBDT circular as argued by the AR and relied upon, considered all facts and only thereafter disallowed the deduction u/s 57 as claimed by the assessee.
In that view of the matter, the order passed by the AO cannot be said to be erroneous so as to prejudicial to the interest of Revenue. We note that when the Ld. AO has exercised its jurisdiction within the boundary of the CBDT circular, verified the issues raised in a limited scrutiny and only upon due application of mind finalised the issue upon making disallowance u/s 57, PCIT cannot exercise the revisional jurisdiction conferred upon him u/s 263 of the Act beyond the issues which were raised and finalised under such limited scrutiny. On this aspect we have considered the judgement passed by different coordinate benches and the higher forums as relied upon by the Ld. A.R.
It is a settled principle of law the PCIT cannot exercise the power of revision to look into any other issue which the assessing officer himself could not look into under the limited scrutiny proceeding. In other words the powers of the PCIT for revision u/s 263 of the Act would be limited to the issues which has been considered in the limited scrutiny assessment; the revisionary powers u/s 263 cannot frame beyond the issues considered in the limited scrutiny. In that view of the matter as observed by the PCIT that since the agricultural receipts and the issue of adequacy of agricultural expenditure were not verified by the assessing officer, the order passed u/s 143(3) of the Act is erroneous insofar as prejudicial to the interest of Revenue is palpably bad, not sustainable in the eye of law and therefore quashed. Appeal of the assessee is allowed.
-
2024 (6) TMI 1125
Violation of principles of natural justice by the CIT(Exemption) - not allowing the assessee an opportunity to be heard - Notices not issued on the registered e-mail id of the assessee - HELD THAT:- We noted that the assessee was issued notices on 27.05.2023 and 06.06.2023 but there is no evidence that these were issued on the registered e-mail id of the assessee.
In our view, the assessee was not allowed reasonable opportunity of being heard and hence, we set aside the order of CIT(Exemption) dated 15.06.2023 and remand the matter back to his file for fresh adjudication. Needless to say that the CIT(E) will issue notices to the registered e-mail id of the assessee and assessee is also directed to give one dedicated e-mail id to CIT(Exemption), so that he can serve the notices there. In term of the above, order of CIT(Exemption) is set aside and matter remanded back to his file for fresh adjudication. Appeal filed by the assessee is allowed for statistical purposes.
-
2024 (6) TMI 1124
Unexplained cash deposits u/s 69A - cash deposits during the demonetization period - CIT(A)-NFAC dismissed the appeal of the assessee by holding that the availability of so called cash balance in the books of account is only evidence on paper and the said amount must have been utilized for some other purposes which are not brought on record
HELD THAT:- As an undisputed facts that the assessee has disclosed the investment in his books of account and also shown the same in the computation of income which was offered for taxation. Therefore, the Ld. AR’s contention that the provisions of section 69A are not applicable in the present case of the assessee as the cash deposits during the demonetization period are duly recorded in the assessee’s books of accounts holds good.
Also decided in the case of Sri Tatiparti Satyanarayana [2022 (3) TMI 896 - ITAT VISAKHAPATNAM] wherein the Tribunal held that the provisions of section 69 cannot be invoked when the assessee has disclosed investment in the books of account and in the computation of income which was offered for taxation.
Thus we direct the Ld. AO to delete the addition made on account of unexplained money since the provisions of section 69A are not applicable in the case of the assessee. Assessee appeal allowed.
-
2024 (6) TMI 1123
Unexplained cash deposited in bank u/s 69 - During the demonetization period all cash In hand in denomination of Rs. 500 and Rs. 100 deposited in bank - as per DR assessee has not given the details as to fees received/elective income/loan as well as the buildthon fund and study tour fund including the cash book from the bank from 01-04-2016 to 08-11-2016 and the date of cash deposits in bank from 01-04-2016 to 08- 11-2016 - HELD THAT: - It is pertinent to note that the books of accounts of the assessee trust were never rejected at any point of time by the Assessing Officer. Besides this, the evidences produced by the assessee before the Assessing Officer as well as before the CIT(A) clearly shows that the assessee has received fees from students related to the event as well as study tour including the buildthon event fund. The assessee has given the cash bills from bank from 01-04-2016 to 08-11-2016. Hence, the assessee has given the expenses for the said period. Thus, the assessee has given all the details as to how the assessee has that much cash in hand during the demonetization period.
This was never doubted by the Revenue. In fact, the bank statements clearly show including the details given of the students from which the fees and the money has been received. The bank slip cannot be crucial evidence to reject the other direct evidence produced by the assessee before the AO. AO as well as the CIT(A) was not right in making the addition of cash deposits in bank account during the demonetization period by invoking section 69A as the assessee has fully explained the cash deposits and thus the same cannot be treated as unexplained money. Thus, the appeal of the assessee is allowed.
-
2024 (6) TMI 1122
Disallowance u/s 40(a)(ia) for year end provision made - assessee explained that assessee company’s account were finalized in 2nd week of April every year. In order to reflect its expenses in the books of account as per the applicable accounting standard and accounting policy, the company was required who merely provide for the expenses because the bills from the vendors were not received and these provisions were made on reasonable estimate basis and were debited to expense account and credited the provision account - HELD THAT:- As decided in own case for assessment year 2013-14 [2022 (4) TMI 1558 - ITAT MUMBAI] AO has not examined the issue about year-end payments. There is a difference between the payments that are made during the year and the payments made at the fag-end of the year. In our humble opinion in 2nd category of payments tax has been detected in the subsequent year when Bills are booked. In this regard we have also considered the amendment made to Sec.40(a)(ia) by the finance act, 2008, with retrospective effect from 1.4.2005. We have also perused the case laws relied upon by the AR GE India Technology Centre Private Ltd.(2010 (9) TMI 7 - SUPREME COURT) and Industrial Development Bank of India [2006 (7) TMI 248 - ITAT BOMBAY-H]. Principles discussed in the said judgement is also support our view that provisions of tax deducted at source were not applicable in case consideration Ground number is decided in favour of the assessee.
Claim of deduction u/s 10AA in respect of interest income - HELD THAT:- As decided the case of the assessee for assessment year 2014-15 [2023 (9) TMI 1114 - ITAT MUMBAI] wherein as held a similar view is expressed in the case of Symantee Software India P Ltd [2015 (1) TMI 110 - BOMBAY HIGH COURT] while considering the deduction under section 10A of the Act. It is relevant to mention here that the manner of computing deduction under section 10A as per the provisions of subsection (4) of the said section is similar to subsection (7) of section 10AA and therefore the ratio of the above decisions rendered in the context of deduction under section 10A would equally be applicable to deduction claimed under section 10AA. Accordingly we hold that interest income is also to be considered for the purpose of arriving at the profits eligible for deduction under section 10AA. The Assessing Officer is directed to re-compute the deduction under section 10AA accordingly. Decided in favour of the assessee.
TDS u/s 195 - Disallowance of expenses incurred on payment of subscription fees u/s 40(a)(i) - assessee has made payment towards subscription services to various non-resident without deducting withholding taxes - HELD THAT:- We have perused the decision of Dun & Bradstreet Information Services India Pvt. Ltd [2011 (7) TMI 957 - BOMBAY HIGH COURT] wherein held that payment to non-resident for import of business information reports from an American company were not liable to deduction of tax at source u/s 195 of the Act.
Also perused the decision of American Chemical Society [2024 (3) TMI 1258 - ITAT MUMBAI] wherein held that subscription fees received by assessee, a corporation based in USA from providing access to its online chemistry database and online authorise the independent customers would not qualify as royalty in terms of Sec. 9(1)(vi) and Article 12(3) of India USA DTAA. We have also considered the submission of the assessee that subscription was paid for the services pertaining to publication and same were not an information or advice given individually. The subscription services were not of the nature of transfer of right in the copyright in the article etc - AO has not contrary disproved the material fact that subscription was made for use of a copyrighted article and not for transfer of right in the copyright in the article and assessee had not received any licence for commercial exploitation of the copyright - CIT(A) is not justified in sustaining such disallowance - Decided in favour of the assessee.
Disallowance of foreign tax credit in respect of income pertaining to Sec. 10A/10AA eligible units in India - HELD THAT:- As perused the decision of ITAT for the assessment year 2009-10 [2019 (11) TMI 408 - ITAT MUMBAI] wherein as held where the respective tax treaty provides for benefit for foreign tax paid even in respect of income on which the assessee has not paid tax in India, still, it would be eligible for tax credit under section 90 of the Act. Like Article 25 of the Indo–USA treaty, treaties with various other countries such as Indo–Denmark, Indo–Hungary, Indo–Norway, Indo–Oman, Indo–US, Indo–Saudi Arabia, Indo–Taiwan also have similar provision providing for benefit of foreign tax credit even in respect of income not subjected to tax in India. However, Indo–Canada and Indo–Finland treaties do not provide for such benefit unless the income is subjected to tax in both the countries. Therefore, the foreign tax credit would be available to the assessee in all cases except the foreign tax paid in Finland and Canada. The Assessing Officer is directed to grant credit accordingly. Thus we direct the assessing officer to allow foreign tax credit subject to the terms and conditions as directed in the above referred order of the ITAT therefore, this ground of appeal of the assessee is allowed for statistical purposes.
MAT computation on Addition of “Provision for Diminution in value of Investment” - Counsel contended that diminution in the value of investment charged to profit and loss account was in the nature of write off loss due to diminution in the value of investment and not the amount retained/provision set aside for diminution in value of investment - HELD THAT:- We have perused the decision of ITAT Mumbai in the case of ACIT Vs. Reliance Welfare Association [2018 (1) TMI 855 - ITAT MUMBAI] wherein held a debit appearing in Profit & Loss Account is not a provisions set aside for diminution in value of investment but a actual charge to the Profit & Loss account which has been written off against the value of the current asset. Therefore, we are of the considered view that debit appearing in Profit & Loss Account is not a provision of set aside for diminution in value of investment but the actual charged for the loss in the diminution in value of investment. Therefore, we are of the view that for the book profit purpose of section 115JB is not required to be increased as the same is not in the nature of provision. Decided in favour of assessee.
Deduction u/s 10AA on commercial profits instead of income from business and profession - HELD THAT:- As in the case of assessee for assessment year 2014-15 [2023 (9) TMI 1114 - ITAT MUMBAI] held that the expression “profits and gains” derived was subject matter of adjudication by the Hon’ble Supreme Court in the case of Vijay Industries Ltd. [2019 (3) TMI 171 - SUPREME COURT] wherein the Hon’ble Apex Court observed that the profits and gains referred to commercial profits without deducting depreciation and investment allowance as per the Act. Since this aspect was not raised by the assessee before the lower authorities, accordingly, the lower authorities did not have an occasion to give their finding on the same. Hence, in the interest of justice and fair play, we deem it fit and appropriate to remand this issue raised in the additional ground to the file of the ld. AO for denovo adjudication - This ground is allowed for statistical purpose.
Disallowance of taxes paid in overseas countries - assessee has paid the state taxes in the USA on its USA sourced income - same was claimed as a deductible expenses in the return of income - AO held that such claim was not allowable as deduction either u/s 37(1) or Sec. 40(a)(ii) - HELD THAT:- As for assessment year 2009-10 [2019 (11) TMI 408 - ITAT MUMBAI] the tax which has been paid abroad would not be covered within the meaning of section 40(a)(ii) of the Act, since, the meaning of the word “tax” as defined under section 2(43) of the Act would mean only the tax chargeable under the Act. Thus, as per the aforesaid decision of the Hon'ble Jurisdictional High Court, taxes levied overseas which are not eligible for relief either under section 90 or 91 of the Act, would not come within the purview of section 40(a)(ii) of the Act. It is the specific plea of the assessee that the State tax is not covered either under Indo–US or Indo–Canada tax treaty, hence, not eligible for any relief under section 90 of the Act. Pertinently, unlike section 91 read with Explanation–(iv), section 90 does not provide for inclusion of tax levied by any State/ local authority of that country within the expression ‘income tax’. In view of the aforesaid, we direct the Assessing Officer to verify whether the State taxes paid by the assessee overseas are eligible for any relief under section 90 of the Act and if it is not found to be so, assessee’s claim of deduction should be allowed. In view of our decision above, no separate adjudication of grounds no.1.2 is required.
TDS u/s 195 - Disallowance of expenditure on imported software on account of non-deduction of TDS - HELD THAT:- We have perused the decision of ITAT for assessment year 2012-13 [2022 (4) TMI 1558 - ITAT MUMBAI] ground of appeal of the revenue stand dismissed.
Disallowance u/s 14A r.w.Rule 8D(ii) - mandation of recording of objective satisfaction with cogent reasons - HELD THAT:- As decided in own case assessment year 2014-15, [2023 (9) TMI 1114 - ITAT MUMBAI] it is the settled position that the Assessing Officer cannot invoke the provisions of disallowance under section 14A read with rule 8D without recording any cogent reasons as to why he is not satisfied with the correctness of the claim of the assessee. Mere recording that the amounts being meager compared to the exempt income earned, cannot be construed as recording of satisfaction. Therefore, we hold that the CIT(A) has correctly deleted the addition made by the Assessing Officer for want of recording of objective satisfaction with cogent reasons.
Nature of expenses - disallowance of advertisement expenses (Brand building expenses) - HELD THAT:- As it is evident from the details of expenditure mentioned in the aforesaid paragraphs, the expenditures were incurred by the assessee for the purpose of advertisement in newspaper, magazine, events, seminar, conferences, exhibition, advertisement at Airport, etc. We find that on identical issue, the Co–ordinate Bench of the Tribunal [2019 (11) TMI 408 - ITAT MUMBAI], passed in assessee’s own case in Tata Consultancy Services Ltd. v/s ACIT, for the assessment year 2009–10 held that AO has brought no material on record to establish that the expenditure is for brand building. As observed earlier, the expenditure relates to advertisement in newspaper, magazine, events, seminars, conferences, exhibitions, etc. Thus, the nature of expenditure incurred by the assessee clearly indicates that it was for promoting its own business. Further, considering the turnover of the assessee, the expenditure incurred on advertisement does not appear to be unusually high. That being the case, the expenditure incurred on advertisement cannot be treated to be in the nature of capital expenditure and amortized over a period of five years.
Disallowance of payment towards Tata Brand Equity subscription - HELD THAT:- We have perused the decision of ITAT for AY. 2011-12 [2022 (4) TMI 544 - ITAT MUMBAI] following the judicial precedence in case of sister concerns, we direct the Assessing Officer to delete the disallowance on account of subscription fees paid by the assessee to Tata Sons Limited.
Disallowance of expenditure of commission to non-resident is allowable as deduction (disallowance u/s 40(a)(i) on account of non-deduction of TDS - HELD THAT:- We have perused the decision of ITAT for assessment year 2009-10 in the case of the assessee [2019 (11) TMI 408 - ITAT MUMBAI] facts on record clearly reveal that commission has been paid to non–resident agents located in their respective countries towards services rendered by them in those countries in relation to obtaining export contracts for the assessee. No material has been brought on record by the Assessing Officer to demonstrate that the non–resident agents either have any business connection in India or have PE in India so as to bring the commission payment within the tax net. The factual finding recorded by learned Commissioner (Appeals) that the non–resident agents have rendered the services in their respective countries and do not have either any business connection in India or any PE in India has not been controverted by the Revenue. Further, the nature of payment viz. commission has also not been disputed by the Revenue. That being the case, since the commission paid to the non–resident agents is not chargeable to tax in India at their hands, there is no necessity for the assessee to withhold tax under section 195(1) of the Act on such payment. - Decided in favour of assessee.
-
2024 (6) TMI 1121
Seeking provisional release of the seized goods, pending adjudication under Section 110A of the Customs Act, 1962 - Circular No. 35/2017-CUS dated 16.08.2017 - HELD THAT:- In terms of Clause 2.1 of the circular, the provisional release can be resorted to upon the request of the owner of the seized goods, subject to executing a Bond for the full value / estimated value of the seized goods. The other condition imposed at Clause 2.2 includes furnishing of Bank Guarantee or security deposit to cover the entire amount of duty / differential duty leviable on the seized goods being provisionally released - the conditions imposed as per Annexure-D are at variance with the circular and guidelines of the Board itself.
The provisional release order imposing conditions contrary to the Circular requires to be modified - Petitioner to execute a Bond for the value / estimated value of the seized goods - Petitioner to furnish Bank Guarantee or Security Deposit for the differential duty which admittedly is Rs. 5,55,060/-.
In terms of the conditions for release stipulated above, which would substitute the conditions of provisional release at Annexure-D, the writ petition is disposed off - If the petitioner complies with the requirements of the modified conditions referred to above, the respondents to take note of it and take immediate steps for provisional release of the goods.
-
2024 (6) TMI 1120
Levy of penalty on the appellant in terms of regulation 18 of Customs Brokers Licensing Regulation 2013 - aiding and abetting on the part of the appellant in mis-classification of the goods rendering the same liable for confiscation under section 111 (m) of the Customs Act, 1962 - HELD THAT:- It is noted that no case of imposition of penalty subsists in the matter as there is nothing to impute any misdemeanour, commission, or omission of an act clearly attributable on part of the appellant attributable to them as their role and responsibilities of a customs broker. It is duly recorded by the Commissioner that the customs broker had requested for second appraisement of the subject bills of entry by way of examination of the goods. While the department choose to enhance the value of the imported goods, no change to the classification of the goods under import was carried out. Under the circumstances, it is most improper to allude any misdemeanor on the part of the customs, broker or to hold them responsible for any misdeclaration, when they have themselves solicited first check examination of import cargo.
The order records that the custom broker had also called for the previous Bills of Entry of subject imports from the importer in order to substantiate their case for filing of the classification of the imported goods described as “Spruce Rough Sawn”. The Commissioner has also noted that the importer had diligently carried out his responsibilities and also undertaken address and IEC verification of the importer. In fact, it is noted in the order that the Customs Broker had sent his employee to the office of the importer for purpose of verification.
It is found most improper and unwarranted on the part of the department to impose a penalty of Rs.50,000/- on the appellant - there is no case for invocation and imposing of penalty on the appellant in the present case - the Order-in-Original passed by the adjudicating authority is set aside - appeal allowed.
-
2024 (6) TMI 1119
Seeking grant of bail - Money Laundering - proceeds of crime - irregularities in framing and implementation of Excise Policy of GNCTD for the year 2021-22 - proper consideration of submissions not done by Vacation Judge - it is argued that the Impugned Order is perverse as the Vacation Judge has not given an opportunity of being heard to ED to oppose the bail application filed by the respondent as per mandate of section 45 (1) (i) of PMLA - violation of principles of natural justice - HELD THAT:- The Vacation Judge while passing the Impugned Order did not appropriately appreciate the material/documents submitted on record and pleas taken by ED and the averments/grounds as raised in the petition under section 439 (2) of the Code require serious consideration while dealing with said petition.
Accordingly, the present application is allowed and the operation of the Impugned Order is stayed.
-
2024 (6) TMI 1118
Seeking grant of bail - Money Laundering - bribery - proceeds of crime acquired in the form of commission/bribe in lieu of allotment of tenders by the accused Veerendra Kumar Ram, a public servant - fulfilment of parameter fixed u/s45 (ii) of the PMLA - HELD THAT:- It prima-facie appears that the petitioner knowingly assisted to her husband who is co-accused to purchase immovable properties at New Delhi in her name and the purchase consideration was paid from the proceeds of crime generated by her husband Veerendra Kumar Ram. The petitioner knowingly tried to directly conceal the proceeds of crime acquired by her husband and claimed it to be untainted in the guise of taking entries in her bank accounts from the companies providing entries by charging commission. The materials on record reflects that bank account statements of the petitioner, there are huge credits from M/s RP Investment and Consultancy, Manoj Kumar Singh and M/s RK Investment & Consultancy - There are materials against the present petitioner regarding her specific role in the offence of the prosecution complaint that she committed the offence of money laundering with respect to the proceeds of crime.
It appears that the petitioner knowingly assisted his son who is co-accused to purchase immovable properties at New Delhi in his own name to the tune of Rs 22.5 Crore from the commission/bribe amount, which was acquired by his son Veerendra Kumar Ram. Further, the bank account statements of the petitioner reflect huge credits to the tune of Rs 4.525 crores. There are materials against the petitioner regarding his specific role in the offence which is mentioned in Para-11.4 of the prosecution complaint that he committed the offence of money laundering with respect to the proceeds of crime.
It has been settled by Hon’ble Apex Court time and again in its various pronouncements that the powers under Section 438 Cr.P.C., is of extra-ordinary character and must be exercised sparingly in exceptional cases only and therefore, the anticipatory bail can be granted only in exceptional circumstances where the court is prima facie of the view that the applicant has falsely been implicated in the crime, as grant of anticipatory bail to some extent, is interference in the sphere of investigation of an offence and hence, the court must be cautious while exercising such powers - It is also settled connotation of law that the grant or refusal of the application should necessarily depend on the facts and circumstance of each case and there is no hard and fast rule and no inflexible principles governing such exercise by the Court.
In SUSHILA AGGARWAL AND OTHERS VERSUS STATE (NCT OF DELHI) AND ANOTHER [2020 (1) TMI 1193 - SUPREME COURT] the Constitution Bench of the Hon’ble Apex Court has reiterated that while deciding applications for anticipatory bail, Courts should be guided by factors like the nature and gravity of the offences and the role attributed to the applicant and the facts of the case - The Hon’ble Supreme Court, in catena of decisions, has categorically held that the judicial discretion of the Court while considering the anticipatory bail shall be guided by various relevant factors and largely it will depend upon the facts and circumstances of each case.
Further, it is evident by taking into consideration the provision of Section 19 (1), 45 (1), 45 (2), the conditions which is required to be considered while granting the benefit of bail in exercise of power conferred under Section 438 or 439 of Cr.P.C., apart from the twin conditions which has been provided under Section 45 (1) of the Act, 2002, the conditions or the requirement which has been followed while granting the bail under Section 439 or 438, as the case may be, is required to be considered.
Now coming to the facts of instant case, this Court, based upon the imputations as referred in preceding paragraphs which has been discovered in course of investigation, is of prima-facie view that what has been argued on behalf of the learned counsel for the petitioner that proceeds cannot be said to be proceeds of crime but as would appear from the imputations , money which has been obtained by the accused person Veerendra Kumar Ram has been obtained in the form of the commission and same was utilized and concealed by the petitioners despite knowing that it is the proceeds of crime.
In the instant case, there is sufficient evidence collected by the respondent Enforcement Directorate to prima facie come to the conclusion that the petitioners were actively involved in the offence of Money Laundering as defined in Section 3 of the PMLA. As against that there is nothing on record to satisfy the conscience of the Court that the petitioners are not guilty of the said offence and the special benefit as contemplated in the proviso to Section 45 should be granted to the petitioners who are the lady and sick person respectively - on the basis of aforesaid discussion the Court does not find any substance in the submission of the learned counsel for the petitioners.
This Court, in view of the aforesaid material available against the petitioners, is of the view that in such a grave nature of offence, which is available on the face of the material, applying the principle of grant of anticipatory bail wherein the principle of having prima facie case is to be followed, this Court is of the view that the nature of allegation since is grave and as such, it is not a fit case of grant of anticipatory bail.
This Court is of the view that the instant applications are fit to be dismissed and as such, stand dismissed.
-
2024 (6) TMI 1117
Condonation of delay in filing of Appeal - Time limitation - Writ Petition has been filed long after the order was passed was communicated to the petitioner - HELD THAT:- The petitioner failed to file statutory appeal in time before the first respondent and thus, the first respondent has dismissed the Appeal on the ground of limitation in view of the decision of Hon’ble Supreme Court in SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [2007 (12) TMI 11 - SUPREME COURT].
The decision of the Appellate Commissioner cannot be found faulted as the Appellate Commissioner is bound by the limitation prescribed under Section 85 of the Finance Act, 1994. At the same time, it is noticed that the petitioner may have a case on merits. It is noticed that the petitioner has deposited 7.5% of the disputed tax at the time of filing of Appeal in No.40/2023-ST (Madurai) before the first respondent.
The petitioner is directed to deposit another 17.5% (Rs. 1,22,317.50/-) of the disputed tax, within a period of 30 days from the date of receipt of a copy of this order, as a condition, for the first respondent to entertain the Appeal and dispose of the same on merits without reference to the limitation - Petition disposed off.
-
2024 (6) TMI 1116
Levy of penalty - Respondent had discharged the Service Tax Liability and even paid the interest thereon before issuance of SCN - HELD THAT:- It is well settled principle that an Appellate Court ought not to interfere with exercise of discretion except where such exercise has been shown to be arbitrary, capricious or perverse. Further, the Appellate Court ought not to reassess the material and seek to reach a different conclusion from the one reached by the Tribunal if one reached by the Tribunal was reasonably possible on the material - If the discretion exercised by the Tribunal is reasonable and in a judicial manner, the fact that the Appellate Court would have taken a different view may not justify interference with the Tribunal's exercise of discretion.
Once it is a discretion to be exercised there can be no substantial questions of law arising thereof. Tribunal has given reasons in the impugned order why imposition of penalty is not merited.
There are no perversity in the exercise of discretion - there are no substantial questions of law arising - appeal dismissed.
-
2024 (6) TMI 1115
CENVAT Credit - linking of services provided by M/s Tata Sons Limited to the separate registered units of Tata Steel Division with the production and business activities of M/s TSL, Jamshedpur as per the condition laid down in Rule 2(1) of Cenvat Credit Rules, 2004 - can Companies Act, 1956 may supersede the provisions of Central Excise Act, 1944/Finance Act, 1994 and the rules made there under in respect of laws and procedure of taxation?
HELD THAT:- The law mandates that the manufacturer who wants to avail benefit of this service tax, if he has more than one unit, should also get registered itself as a service provider, whereupon it would be able to collect the input service tax paid in all the units and accumulate them at its Head Office and thereafter distribute the said credit to its various units in the manner specified in Rule 7 of the CENVAT Credit Rules, which provide for only two limitations, viz., firstly it cannot exceed the amount of service tax paid and secondly the credit of service tax attributable to services used shall not be distributed in a unit exclusively engaged in the manufacture of exempted goods or providing of exempted service.
No provision of the CENVAT Credit Rules, including Rule 7, prohibits input service tax paid at a particular unit being sought to be availed in another unit. Once the manufacturer is registered as an input service distributor in terms of Rule 7, it is entitled to distribute the credit of duty paid on such inputs in the manner prescribed to any of its unit keeping into account the limitations imposed by Rule 7. The extraneous reasonings of the adjudicating authority contained in the said order are irrelevant and have no substance or merit whatsoever, particularly in view of the settled proposition of law in this respect.
In the instant case, the company Tata Steel Limited, which is duly incorporated and registered under the Companies Act, 1956 as a public limited company has various divisions/units situated in various parts of the country. The registered and Head Office of the company, including of the said divisions/units, is at Mumbai, the ISD in the instant case. It is settled proposition of law that divisions and units of a company are not separate legal entities/persons.
It is also well settled, that once the decision of Tribunal has been accepted by the department in any other case; it cannot reagitate the same issue in another case.
Neither Section 11A(1) of the Central Excise Act nor Section 73(1) of the Finance Act, 1994, as amended, provided, during the material period, for issuance of a show cause notice in respect of duty of excise or service tax, credit whereof had been availed wrongly but which was reversed or paid back prior to issuance of the show cause notice.
The instant appeal is decided against the Revenue - Appeal of Revenue dismissed.
-
2024 (6) TMI 1114
Invocation of extended period of limitation - non-payment of service tax in respect of the services rendered in the premises of TSL’s Steelworks - recovery of service tax with interest and penalties - HELD THAT:- The finding of the learned Tribunal that no documentary evidence was submitted to indicate that the service rendered by TGS to TSL was service to self is patently erroneous and perverse - There is no provision in law under which service tax is levied providing that two units of a public limited company, registered under the Companies Act, because of being separately registered, as required, under the Service Tax Rules, 1994, can and are to be treated as two distinct persons and services provided by one unit to another shall be deemed to be taxable supply. In the absence of such specific provision, transaction between two units of the same company cannot be held as ‘service’ rendered by one unit to the other within the meaning of the Act.
Two separate service tax registration of the two units is wholly irrelevant in this regard. It is settled law that one unit of the company does not and cannot render service to another unit of the same company, as this would amount to service rendered to self, which is not a taxable service under the Act.
It is a principle, settled by the Hon’ble Apex Court in CCE, Navi Mumbai Vs Amar Bitumen & Allied Products Pvt. Ltd. [2006 (8) TMI 187 - SUPREME COURT], that it is necessary that judicial precedent is followed and in the event a Bench of the same strength of the Tribunal seeking to differ with the decision of another Bench, the matter has to be referred to the President of the Tribunal for reference to a larger bench for deciding the matter. Without assigning any reason or basis, this judicial principle laid down by the Hon’ble Apex Court, has also been violated by the Tribunal in passing the impugned order.
The law is no more res integra that a company incorporated under the Companies Act, 1956 is a single person/entity in the eye of law and cannot reconstitute itself to several legal entities. Divisions/branches thereof cannot have identity different and distinct from the company. Reference in this regard may be made to Section 3(42) of the General Clauses Act, 1897 - thus, separate registration of each factory/premises of manufacturer/service provider does not and cannot render each one of such factory/premises of the manufacturer/service provider a separate legal entity. In fact, there is no such provision in either the Central Excise Act or the Act or in any other law of the land.
It is well settled that credit of input service is to be utilized for payment of service tax towards, inter alia, output service. There is, or can be no dispute with this legal position and this is what the representatives of TGS and TSL “agreed” with, during the course of personal hearing - TGS had rightly availed the subject CENVAT credits of service tax paid, without there being any concomitant obligation to make payment of service tax on the services rendered to another unit of TSL. Contrary finding of the Tribunal is also erroneous and untenable.
The Department’s appeal is unsustainable and is rejected. The impugned order of the CESTAT being contrary to law and unsustainable in its entirety; the issue of whether the normal period or the extended period of limitation is sustainable in the instant case, is irrelevant.
Appeal of Revenue dismissed.
-
2024 (6) TMI 1113
Levy of service tax - Manpower Recruitment and Supply Agency Services - secondment of employees by the Appellant to its associated/related Company at United Kingdom on reverse charge mechanism - extended period of limitation - HELD THAT:- Argument is led by both sides with reference to provision of law and judicial decisions on the point but ultimately the consensus that emerged is that in view of Hon'ble Supreme Court judgment on the issue, as passed in the case of C.C.,C.E. & S.T. – BANGALORE (ADJUDICATION) ETC. VERSUS M/S NORTHERN OPERATING SYSTEMS PVT LTD. [2022 (5) TMI 967 - SUPREME COURT], secondment of employees by overseas entity for the purpose of completion of Assessee’s job amounts to manpower supply and Assessee was service recipient for the same and, therefore, demand was sustainable but invocation of extended period was impermissible as Assessee had bonafide believe that it was not liable to pay any Service Tax, apparently for the reason that judicial decision on the similar line till pronouncement of Northern Operating Systems Pvt. Ltd. judgement by the Hon'ble Supreme Court was holding the field.
But in the present case it could be noticed that show-cause notice was issued on 14.10.2014 up to the end of financial year 2011-12 and in view of clear provision contained in Section 73(1) read with 73(6), the normal period for making demand through show-cause notice was 18 months from the relevant date unless any fraud, collusion, wilful misstatement, suppression of facts, contravention of any of the provisions of this Chapter or the Rules made thereunder with intent to evade payment of Service Tax is noticed, Central Excise Officer can serve notice for demand that could be extended up to 5 years.
This being the statutory provision, the notice of demand being signed on 14.10.2014 and dispatched thereafter cannot be considered to have been sent within 18 months of the end of financial years up to which demand is made i.e. up to 31st March 2012, against which Service Tax Return was filed on 24.04.2012 - the show-cause notice is not issued in conformity to the law and, therefore, it was required to be quashed before initiation of adjudication proceeding.
The demand, apart from being barred by the period of limitation, is also unsustainable for the extended period and since no demand is due for the normal period - the order passed by the Commissioner of Service Tax Commissionerate, Pune is hereby set aside - Appeal allowed.
-
2024 (6) TMI 1112
Denial of CENVAT Credit - input service or not - duty paid on re-insuring motor vehicle while providing General Insurance Service - HELD THAT:- From the bare reading of Sub-Clause (BA) of Rule 2(l) of the CENVAT Credit Rules, 2004, it can be said that Sub-Clause (BA) would apply to the Appellant’s case and presence of two negatives namely ‘but excludes’ in Clause 1 and ‘except when used by’ in Sub-Clause (BA) would bring a positive meaning to the fact that the said input service is available to the provider of output service who are specified in Sub-Clause (D) of Clause 105 of Section 65 of the Finance Act, 1994 who is by definition the insurer carrying on general insurance business in relation to General Insurance and providing service to a policy holder or to any other person. It has to be interpreted and understood in the manner two negatively worded statutes are to be understood.
By definition itself General Insurance Company has been exclusively granted the right to use CENVAT Credit in relation to motor vehicles insured by them or reinsured by them but the learned Commissioner had committed a blunder in reproducing the section wrongly in his order and replacing “provider of output service” with “provider of input service” to reach at his findings that credit are not admissible. Therefore, by definition available in the CENVAT Credit Rules, 2004 under Rule 2(l) and to meet the statutory requirement in making itself eligible to provide insurance service as General Insurance Company, Appellant is entitled to avail CENVAT Credit on re-insurance of motor vehicles and the credit availed by it during the relevant period from April, 2011 to March, 2012 on this score were all admissible credit.
The order passed by the Commissioner of Service Tax-V, Mumbai is hereby set aside - Appeal allowed.
-
2024 (6) TMI 1111
Refund of service tax paid under reverse charge mechanism, under the erstwhile law - Applicability of Section 11B of the Central Excise Act, 1944 and Section 142(3) of the CGST Act, 2017 - HELD THAT:- Section 142(3) of CGST Act, 2017 provides that claim for refund under the erstwhile CENVAT Credit Rules or Central Excise Act, 1944 etc. must be disposed in accordance with the existing law and the amount has to be paid in cash. Section 2(48) of CGST Act, 2017 states that the existing law means any law, notification, order, rule or regulation etc. which is made or passed before the commencement of CGST Act, 2017 - Further Section 174(2)(c) of CGST Act, 2017, talks about rights and liabilities which have accrued or have been incurred under the erstwhile legislations. Thus, when this section provides for the department to issue Show Cause Notice for any violations of the erstwhile law, reciprocally the assessee can file refund claims for the rights accrued under the erstwhile legislations under the provision of section 142(3) of CGST Act, 2017.
In the case of ADFERT TECHNOLOGIES PVT. LTD. VERSUS UNION OF INDIA AND ORS. [2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT], it is held that transitional credit being vested right cannot be taken away on procedural or technical ground.
The appellant has paid the tax under the erstwhile law. In the present case, the claim is only for refund and not proceedings for assessment or adjudication. In such a scenario, sub-section (3) of section 142 gets attracted. Rejection of the refund claim is not legally valid and merits to be set aside.
The impugned order is et aside - appeal allowed.
-
2024 (6) TMI 1110
Non-payment of service tax - Classification of service - Works Contract Service or not - services to educational institutions during the period from March 2008 to March 2011 - building’s constructed for the said educational institutions can be regarded as ‘intended for commerce or industry’ or not - demand alongwith interest and penalties - extended period of limitation.
Classification of service - HELD THAT:- Classification of services is a matter relating to chargeability and the burden of proof is squarely upon the Revenue. If the Department intends to classify a service under a particular category, the Department must adduce proper evidence and discharge the burden of proof.
The judgments of the Hon’ble Supreme Court in UNION OF INDIA VERSUS GARWARE NYLONS LTD. [1996 (9) TMI 123 - SUPREME COURT], HPL CHEMICALS LTD. VERSUS CCE, CHANDIGARH [2006 (4) TMI 1 - SUPREME COURT], PUMA AYURVEDIC HERBAL (P) LTD. VERSUS COMMISSIONER OF C. EX., NAGPUR [2006 (3) TMI 141 - SUPREME COURT], although rendered in the case of classification under the Central Excise Act is also relevant for classification of a service under the FA 1994.
Interpretation of phrase ‘primarily for the purposes of commerce or industry’ - HELD THAT:- The statutory definition of a service given for a particular activity (commercial training or coaching) cannot be taken to understand the term ‘commerce or industry’ used for another service (WCS) when no ambiguity is involved. As a general principle of interpretation, where the words of a statutory provision are plain, and unambiguous, the intention of the Legislature is to be gathered from the language of the provision itself. The term ‘commerce or industry’ are commonly understood terms and do not require the aid of another definition from the statute to gather its intention. Commercial activities, relate to activities having profit as the primary aim - The department has not discharged the initial burden in establishing chargeability of the service falling under WCS. Merely because the institutions are collecting a fee will not make the institution primarily for the purposes of commerce or industry. The demand must hence fail.
Extended period of limitation - HELD THAT:- It is settled law that mere failure to register and pay duty does not amount to willful suppression. The Act contemplates a positive action which betrays a negative intention of willful default. There must be some positive act from the side of the assessee to bring a charge of fraud, willful suppression etc with intention to evade payment of duty. No such allegation is found either in the SCN or in the findings of the Original Authority - Normal audit objection based on legal reasoning does not lead to a charge of suppression. Something more is required. In any case the demand having failed on merits the issue of any demand, interest and penalty does not arise.
The impugned order is set aside - appeal allowed.
-
2024 (6) TMI 1109
Input service or not - Rent-a-Cab services - Outdoor Catering services - Club or Association services - CENVAT Credit on Service tax paid (though on its own volition without providing any output service and without any authority of law).
Whether in the facts and circumstances of the case, the respondent assessee is entitled to avail credit on services i.e. Rent-a-Cab services, Outdoor Catering services and Club or Association services which have been specifically excluded from the definition of “input services” as defined under Rule 2 (l) of Cenvat Credit Rules, 2004, w.e.f. 01.07.2012? - HELD THAT:- Admittedly there is no material on record to show that these services were utilised for personal consumption to deny credit. Respondent/Assessee is a company and therefore issue of personal consumption does not arise. These expenses are admittedly incurred for its employees who are working for the respondent/assessee in the course of its business to render output services - Whether any service is used for personal consumption or not is certainly question of fact. Furthermore, on other services, the appellant / revenue has not disputed this position. In view thereof, this being question of fact, no substantial question of law arises from the impugned order of the Tribunal.
Whether in the facts and circumstances of the case, the CESTAT was right in holding that because the respondent assessee has paid the Service tax (though on its own volition without providing any output service and without any authority of law), such a payment of service tax will entitle them to take cenvat credit of the service paid on input service? - HELD THAT:- Respondent / Assessee discharges service tax liability on various amount collected from sale of time slot, subscription charges etc. before remitting the money to Singapore. Respondent / Assessee takes input tax credit on the aforesaid service tax paid and same has been accepted and admitted by appellant / revenue. Appellant / Revenue has also admitted that respondent/assessee is entitled to input tax credit of the said service tax liability paid - The Tribunal has given a finding that appellant / revenue has not disputed that the provider of ‘broadcasting service’ is entitled to CENVAT credit of the service tax paid on specified services - the contention of appellant / revenue that respondent / assessee does not have the physical establishment for rendering the Broadcasting service is misconceived since the retrospective amendment itself deems that respondent / assessee has having rendered broadcasting services.
Even if the contention as raised by appellant / revenue is to be accepted then they would be required to refund the CENVAT credit which they propose to disallow since there is no dispute that the said CENVAT credit is taken on input services and the services on which the service tax has been discharged were exported. Therefore the effect of denial of credit would be that the appellant / revenue will have to refund the said credit amount resulting into whole exercise being tax neutral.
Thus, no substantial question of law arises in as much as on account of retrospective amendment, respondent/assessee is deemed to have rendered the broadcasting services and in the alternative based on the admission of appellant /revenue, the amount of input tax credit of which is taken has been collected without any authority of law and therefore would be required to be refunded.
Since no substantial question of law arises from the impugned order, the present appeal is dismissed.
-
2024 (6) TMI 1108
CENVAT Credit - duty paid on input materials and input services are used both in or in relation to the manufacture of dutiable and exempted goods respectively - correctness of switching the options from Rule 6(3)(i) to 6(3)(ii) of the Cenvat Credit Rules, 2004 in the same financial year 2008-2009 despite Explanation-I to the Rule 6(3) of Cenvat Credit Rules, 2004 which prohibits the switching of option in the same financial year - error in not considering the exercise of option under Rule 6(3)(i) of Cenvat Credit Rules, 2004 by M/s Tata Steel Limited as they have self-assessed their tax liability in statutory Returns ER-1.
HELD THAT:- The restriction provided under “Explanation-I” of not being able to withdraw the option during the remaining part of the financial year can arise only when a manufacturer has exercised such option with due intimation to the jurisdictional Central Excise authority. This is evident from Rule 6(3A)(a) of the CENVAT Credit Rules itself, inasmuch as, this provision specifically requires that while exercising the option to pay in terms of Rule 6(3)(ii) of the CENVAT Credit Rules a manufacturer has to provide/intimate in writing to the Range Superintendent the particulars as detailed in the said sub-clause (a) of Rule 6(3A). The particulars detailed in the said sub-clause (a) of Rule 6(3A) of the CENVAT Credit Rules includes intimation of the date from which the option is being exercised or is proposed to be exercised.
As a matter of fact, the requirement under Rule 6(3A)(a)(ii) of the CENVAT Credit Rules in clear terms indicate that a manufacturer can opt for the option under Rule 6(3)(ii) of the CENVAT Credit Rules at any point of time during a financial year, upon intimation to the Range Superintendent. Once such option is exercised by a manufacturer, the restriction as provided in "Explanation-I” of Rule 6(3) would become applicable and the manufacturer cannot withdraw from such option “during the remaining part of the financial year” - The correspondence on record of the Assessee with Range Superintendent exchanged during the period May 2008 to June 2008, clearly establishes that the Assessee had never exercised at any point of time during the period 2008-09 the option in terms of Rule 6(3)(i) of the CENVAT Credit Rules prior to May 2008.
There are no hesitation in holding that the Commissioner has erred in holding that it is on record that the Assessee had exercised the option under Rule 6(3)(i) of the CENVAT Credit Rules in the instant case. There is no document disclosed either in the show cause notice or in the OIO which evidences exercising of such option by the Assessee - Further, exercising an option is a positive act and cannot be inferred as has been sought to be done by the Commissioner.
The learned Tribunal has not committed any error and had rightly allowed the appeal of the Assessee and quashed the Order-in-Original - Appeal dismissed.
-
2024 (6) TMI 1107
Refund of the Cenvat duty on education cess and secondary & higher education cess paid through Cenvat Credit account of BED in terms of the provisions of Notification No. 56/2002-CE dated 14.11.2002 as amended - part rejection of refund on account of education cess and secondary & higher education cess paid through Cenvat Credit account of BED - appropriation of amount from sanctioned refund.
Rejection of refund on account of education cess and S&H education cess - HELD THAT:- The appellant is registered in the state of Jammu & Kashmir and were availing benefit of area based exemption under N/N. 56/2002-CE dated 14.11.2002. The said notification provides mechanism to give effect to aforesaid exemption by way of refund of duty paid through PLA. As per the procedure, the manufacturer avails Cenvat Credit of duty/cess paid by them on inputs and utilizes whole of the CENVAT credit available with them on last day of the month for payment of Central Excise duty and Cess. The balance amount of duty is paid in cash and on application of refund, the refund is granted for payment of Central Excise made in cash only.
The above said issue is no more res-integra and stands finally decided by the decision of the Hon'ble Supreme Court in the case of M/S. UNICORN INDUSTRIES VERSUS UNION OF INDIA & OTHERS [2019 (12) TMI 286 - SUPREME COURT], wherein the Hon'ble Apex Court, after considering the provisions of Notification No. 71/2003-CE dated 09.09.2003 has held that a notification has to be issued for providing exemption under the said source of power and that in the absence of notification containing an exemption to such additional duties in the nature of education cess and secondary & higher education cess, they cannot be said to have been exempted.
Appropriation of an amount of Rs.4,61,315/- - HELD THAT:- The impugned order is not sustainable because appropriation cannot be done without issuing any show cause notice and without granting personal hearing to the appellant. This issue was considered by the various benches of this Tribunal in M/S DEPOSIT INSURANCE AND CREDIT GUARANTEE CORPORATION VERSUS COMMISSIONER, CENTRAL EXCISE & SERVICE TAX (LTU) , MUMBAI (VICE-VERSA) [2023 (5) TMI 339 - CESTAT MUMBAI] - The Tribunal has held that the refund cannot be appropriated when there is no confirmed demand at the time of adjudication and recovery provisions of Central Excise Act are not applicable to service tax.
The rejection of refund of Rs.62,842/- on account of education cess and S&H education cess is upheld - Appropriation of an amount of Rs.4,61,315/- from the sanctioned refund amount is set aside - appeal allowed in part.
............
|
9911796707
