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Showing 361 to 380 of 1564 Records
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2022 (12) TMI 1204
TP Adjustment - determination of the arm’s length price of ‘deemed international transactions’ of television content production fees received from the broadcasters - HELD THAT:- For determination of arm’s length price of the deemed international transactions, it is important to go through the agreement entered between the AE and domestic third-party. The said agreement and confirmation have been filed for first time before us, which being crucial and important for adjudicating the issue dispute, same are admitted as additional evidence in terms of Rule 29 of ITAT Rules, 1963 and issue-in-dispute involved in relation to adjustment to the deemed international transactions is restored back to the file of the Ld. AO/TPO for deciding afresh after providing adequate opportunity of being heard to the assessee. The ground of the appeal of the assessee accordingly allowed for statistical purposes.
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2022 (12) TMI 1203
TP adjustment made in respect of interest on delayed receivables - As submitted that the assessee has received advances from the AE in some cases, which should have been netted off - HELD THAT:- We are of the view that there is merit in his contentions. As rightly submitted by Ld A.R, the Arm’s Length Price of transactions have to be determined by following any one of the methods prescribed under the Income tax Rules. Admittedly, the TPO/DRP, in the instant case, has not followed the same. Accordingly, we deem it proper to restore this issue to the file of AO/TPO for determining the ALP, i.e., interest on delayed receivables by following the rules. The assessee is free to raise all the contentions before the AO/TPO. Appeal filed by the assessee is treated as allowed for statistical purposes.
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2022 (12) TMI 1202
Grant of ad interim order restraining the respondent company who is in liquidation from taking possession or control of the pledge shares or to interfere with the possession of the physical share certificates of the petitioner - HELD THAT:- NCLT and NCLAT are constituted under Section 408 and 410 of the Companies Act, 2013 but without specifically defining the power and functions of NCLT. Section 408 of the Companies Act states that the Central Government shall constitute a National Company Law Tribunal to exercise and discharge such powers and functions as are or may be conferred on it by or under the Companies Act or any other law for the time being in force. The matters fall within the jurisdiction of the NCLT, under the Companies Act, 2013 lie scattered all over the Companies Act, therefore, Section 420 and 424 of the Companies Act, 2013 indicates in brought terms, merely the procedure to be followed by the NCLT before passing any order. There is no separate provision in the Companies Act exclusively dealing with the jurisdiction and powers of NCLT.
In Sub-Sections (4) and (5) of Section 60 of the IBC, 2016 give an indication respectively about the powers and jurisdiction of the NCLT. Sub- Section 4 of Section 60 of IBC, 2016 states that the NCLT will have the powers of DRT as contemplated under part III of the Code for the purpose of sub Section (2). Sub Section (2) deals with situation where the Insolvency Resolution or Liquidation of Bankruptcy of the corporate guarantor or personal guarantor of a Corporate Debtor is already pending before the NCLT - In the present case, the petitioner though had filed the civil suit praying for decree as well as the declaration with respect of the equity shares of the respondent and subsequently the petitioner has invoked the provisions of Section 7 of IBC which was duly admitted by the NCLT and the petitioner has filed the similar claim before the Liquidator.
As per Section 238 of the IBC, 2016 is having override effect in any other law for the time being in force. In view of my prima facie findings that this Court cannot pass any interim order at this stage. This Court is of the view that the matter in issue in the suit can be more appropriately and effectively decided and adjudicated by the NCLT. In the present case, Section 430 of the Companies Act, 2013 itself provides an additional bar by stating that no injunction shall be granted by any civil court in respect of any action taken or to be taken in pursuance of any power conferred on the NCLT by the Companies Act, 2013.
This Court finds that the petitioner is not entitled to get an ad interim order - Application disposed off.
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2022 (12) TMI 1201
Permission to Liquidator of the respondent Company to withdraw a sum of Rs.15,55,290.10 which is lying to the credit of Application No.3703 of 2019 - whether the proceedings initiated under Insolvency and Bankruptcy Code, 2016 can replace the execution of the arbitral awards? - HELD THAT:- Admittedly, the appellant finance company herein is an unsecured creditor. As per Section 53(1) of Insolvency and Bankruptcy Code, 2016, the priority to distribute the proceeds from the sale of the liquidation assets to the unsecured creditors shall be after distributing of workmen dues, wages and unpaid dues to employees.
The Hon'ble Apex Court in the judgment in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [2019 (1) TMI 1508 - SUPREME COURT] had upheld the validity of Section 53(1) of Insolvency Code, which prescribes priority of distribution of assets in liquidation.
In the present case, the respondent has submitted its proof of claim in the capacity as the Liquidator of the respondent Company claiming (i) principal amount of Rs.1,27,77,777.05 in terms of the Trip Loan agreement dated 17.4.2018; (ii) Legal charges of Rs.24,135/-; and (iii) Additional Financial charges of Rs.77,56,165/- in respect of the very same claim. Therefore, the Liquidator of the respondent Company seeks to recover its dues qua the applicant/respondent Company in accordance with the procedure envisaged under Insolvency and Bankruptcy Code, 2016 - a recovery certificate issued in respect of the same claim, which is essentially a crystallization of the claim through the process of adjudication, had also be classified as a “financial debt” under Insolvency and Bankruptcy Code, 2016. Consequently, the nature of the underlying claim of the creditor, would determine the categorisation of the amount payable under the final decree passed adjudication of the same claim. The liability arising out of an arbitral award or a court decree would be categorised as either financial or operational debt depending on the nature of the underlying claim which stands crystallised through the arbitral or court proceedings.
The appellant, as per Section 9 of Insolvency and Bankruptcy Code, 2016, is a Non Banking Finance Company and admittedly an unsecured financial creditor. As per the decisions laid down by the Hon'ble Supreme Court cited supra and Section 53 of Insolvency and Bankruptcy Code, 2016, the financial debts owed to unsecured creditors have to be distributed by the liquidator as per the preference set out under Section 53(1) of Insolvency and Bankruptcy Code, 2016 i.e after distributing the workmen dues, wages and unpaid dues to the employees - there are no reason to interfere with the decision of the learned Single Judge, hence, the instant appeal challenging the said order of the learned Single Judge is liable to be dismissed.
Appeal dismissed.
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2022 (12) TMI 1200
Scope of the IBC - CIRP - Effect of moratorium - proceedings where both the parties may gain out of the agreement/contract. - Dishonor of cheque - Time-lines for completion of the insolvency resolution process by the Adjudicatory Authority - delay in completion of the proceedings otherwise - Prayer to consider the issue in the public interest so that the object and purpose of the Code of 2016 is served and at the same time Sections 12 and 14 of the Code of 2016 are given effect to for the purpose sought to be achieved therein - HELD THAT:- The issue therein was in reference to the proceedings under Section 138 of the Negotiable Instruments Act, 1881, which was alleged to be outside the scope of Section 14 of the Code of 2016. The argument was not accepted by the Apex Court despite the proceeding not being exactly of civil nature, but having impact on the corporate debtor for a monetary obligation and it was held that such proceedings would come under the prohibition of Section 14 of the Code of 2016 - The primary focus of the legislation is to ensure revival and continuation of the corporate debtor by protecting it from its own management and from a corporate death by liquidation. The time-lines given therein have also been referred by the Apex Court as a measure to protect all its creditors and workers by seeing that the resolution process goes through as fast as possible. The reference of Section 85 of the Code of 2016 in Chapter II in Part III of the Code of 2016, has also been given to show the effect of admission of application, i.e., on the date of admission of the application, the moratorium period shall commence in respect of all the debts. The provision aforesaid does not refer to any other proceeding than in reference to the debts.
Section 14 of the Code of 2016 is meant to refer those proceedings where even the corporate debtor would be a gainer, apart from third party, because third party would not fall under the definition of “creditor”. The bankruptcy proceedings remains generally to secure the institution by applying the measures given under the Code of 2016 and it is mainly in reference to the debt liability of the company and not to apply during the period of moratorium. It does not exclude application of other provisions to be given effect to and as the petitioner illustrated, in regard to the exclusion of the decree for specific performance where even a corporate debtor would be receiving the monies.
The issue that now remains is about the maintainability of the public interest litigation. The writ petition has been filed showing it to be in public interest, but other than to refer to the work of research by the petitioner, who is pursuing her studies in Post Graduation, no other reason has been given to indicate the public interest. The purpose of public interest litigation is quite different than as construed by the petitioner - We, therefore, do not find the writ petition to be maintainable as a public interest litigation, but appreciating the work undertaken by the petitioner to seek interpretation of the provisions, this court has summarized the issue and made clarification of the issue by giving interpretation of the provisions therein.
The writ petition is disposed of.
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2022 (12) TMI 1199
This Court jurisdiction to entertain the execution petition of a foreign decree - Summary judgement - execution proceeding emanates from the letter which respondent/DH demanded repayment from the appellant/JD the amount paid to the lender – bank as Guarantor of the loan obtained by the appellant/JD; which was refuted by the appellant/JD - HELD THAT:- Upon going through decision in Renusagar Power Co. Ltd. Vs. General Electric Co [1993 (10) TMI 232 - SUPREME COURT] and applying it to the facts of the present case, we find that no doubt in view of said decision ex post facto permission can be obtained from the RBI to remit the funds, however, when the decree itself is found to be vitiated, being against the prescribed procedure of law recognized in India, the occasion for obtaining ex post facto permission from RBI by the decree holder in respect of awarded amount, does not arise at all. We have already observed that the decree passed by the Court in UK is without any merit and abrogative. Also, in the present case the respondent/DH was the Guarantor to the lender located in a foreign country. We also find that once a conditional permission has been granted by the RBI, any claim beyond the said conditions is contrary to law.
A careful evaluation of afore-noted statements made on behalf of appellant/JD’s witness as well observations of the UK court shows that the pleas raised by both the sides are on triable issues. However, without granting an opportunity to leave to defend to appellant/JD, the UK court has passed the Summary Judgment, enforcement of which is sought in India.
It is an admitted position that on one hand appellant/JD filed its leave to defend and on the other, respondent /DH sought passing of Summary Judgment by the Court. It is also not disputed that at the time of passing of the impugned judgment and decree, leave to defend filed by the appellant/JD was not granted and it is on the basis of documents placed on record the Summary Judgment was passed.
In BL Kashyap v. JMS Steels and Power Corporation [2022 (1) TMI 1311 - SUPREME COURT] it has been held that while dealing with the application seeking leave to defend, the Court has not to proceed as if denying the leave is the rule and it is only to be granted in meritorious cases, rather the Court has to ensure that where triable issues are raised, leave to defend be granted and even the Court can grant conditional leave to defend.
This Court had specifically put a query to appellant/ JD, why it did not file an appeal before the UK Court? - The learned senior counsel appearing on behalf of appellant replied that when the respondent/DH sought a Summary Judgment from the Court at UK to get the decree enforced in India, that too without affording an opportunity to leave to defend to the appellant/JD, which is against the procedure followed under Indian Law, there was no ground to file an appeal against the said judgment in UK or in India. We find that since the foreign decree was not executable in India, in such circumstances there was no occasion for appellant/JD to file an appeal against that and it is only when its executions is sought in India, the appellant/JD has filed its objections.
The present case has not been filed under Order und 14 RSC and after passing of Default Judgment, respondent/DH sought Summary Judgment under Rule 24.2 of the UK Civil Procedure Rule, 1998, which is completely different than the other provisions of law and so, the decision in Navin Khilani [2007 (5) TMI 686 - DELHI HIGH COURT] is not applicable to the facts of the present case.
We find that the setting aside of default judgment and passing of summary judgment by the same court at UK, is not recognized under the prescribed procedure of law in this country. Moreover, the disputes between the parties are triable issues and denial of leave to defend to the appellant/JD is against the interest of justice.
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2022 (12) TMI 1198
Money laundering - loans were fraudulently obtained by KSBL from banks/Financial Institutions by declaring clients’ shares as its own shares - Direction to grant extension of time to the petitioners to prepare a reply to the show cause notice, for a further period of two months and consequently exclude two month period from the computation of 180 days under Section 5(3) of the Prevention of Money Laundering Act, 2002 - HELD THAT:- No doubt that the adjudicating process as envisaged under Section 8 of the Act is time-bound process. Timelines are mentioned therein. Therefore, in view of the said discussion, according to this Court, the petitioners are entitled to grant of extension of some reasonable time to submit reply to the show cause notice, dated 19.09.2022. According to this Court, two months time from today is reasonable.
According to Sri Avinash Desai, learned counsel for the petitioners, the petitioners have to get information and submit explanation effectively. Unless and until the said defendants submit explanation, 1st respondent/ Adjudicating Authority will not be in a position to pass an order in terms of Section 8(3) of the Act. Therefore, no prejudice would be caused to 2nd respondent. For the purpose of computing the time period of 180 days, the period during which the proceedings were extended shall be excluded in terms of proviso 3 to Section 5 of the Act - It is relevant to note that this Court vide Common order dated 10.08.2022 in W.P.No.30753 of 2022 granted two months time to submit explanation to the show cause notice dated 22.04.2022 issued in respect of PAO therein. There is no challenge the said order and it attained finality. There is no allegation that petitioners did not comply with the said order.
This court is also inclined to extend time to the petitioners - this Writ Petition is disposed of granting two months time from today to the petitioners to submit their explanation/reply to the show cause notice dated 19.09.2022.
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2022 (12) TMI 1197
Seeking grant of anticipatory bail - money laundering - scheduled offences - ponzi companies - petitioner is alleged to be instrumental in facilitating co-accused Pranjil Batra for purchasing/acquiring 10 dummy/paper/fictitious companies in cash consideration to the tune of Rs.42 crores through 'accommodation' entries - HELD THAT:- The role of the petitioner when examined make it clearly apparent that he has indulged into money laundering by way of facilitating co-accused in execution of the fraud through dubious modus-operandi.
Money laundering criminals use shell companies because shell companies are commercial companies that appear legitimate but are actually controlled by criminals. These shell companies mix illegal funds with legitimate funds to hide unfair income. Front companies are not only aiming to make a profit but also to protect illegal funds. By using shell companies and other investments in legitimate companies, money laundering proceeds are used to control industry or other sectors leading to monetary instability due to improper distortions in asset prices. It also provides a way to avoid taxation and, thus, deprive the country of income - the PMLA was promulgated to check money laundering and stringent provisions have been incorporated therein as money laundering cripples the economy of a nation. Section 24 of the PMLA provides that when a person is accused of having committed the offence under Section 3, the burden of proving that 'proceeds of crime' is untainted property shall be on the accused. Section 44 of the PMLA is another section in the string of strict provisions which provides for continuity of commission of offence as long as all the 'proceeds of crime' are not recovered and empowers the investigating agency to file supplementary complaints upon surfacing of any fresh evidence and such complaint is to be tried along with the initial complaint.
The fetter imposed by Section 45 of the PMLA in the matter of grant of bail, having been restored, as is evident from the judgments referred to above and also that the said fetters are equally applicable while considering grant of anticipatory bail, it goes without saying that the twin conditions as regards the Courts satisfaction that there are reasonable grounds for believing that the accused is not guilty and also that the accused, if granted bail is not likely to commit similar offence again is sine-qua-non in the matter of grant of bail.
At this stage, there is nothing to show that the petitioner is innocent or that in case granted bail, he will not flee from justice or that he will not commit similar offences again. As such, having regard to the facts and circumstances of the case, as discussed in earlier portion of this order, particularly the enormity of the scam wherein a substantial part of proceeds of crime is yet to be located and recovered, the custodial interrogation of the petitioner would be indispensable. Thus, no special case for grant of anticipatory bail to petitioner is made out.
Petition dismissed.
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2022 (12) TMI 1196
Seeking return of amount given to plaintiff - Defendant contested the plaintiff's claim by filing his written statement submitting inter alia that he was never in need of money and has never taken any amount from plaintiff and had not executed any promissory note in his favour - claim barred by virtue of Section 269SS of the Income Tax Act and is also barred by the provisions of the Money Lending Act or not - HELD THAT:- It is a solitary instance of advancement of loan by plaintiff to the defendant for which no license under the Money Lending Act was required by plaintiff. There is no evidence adduced by defendant to show that plaintiff is in the business of money lending and had advanced similar loans to different persons hence his contention that plaintiff was required to be registered under the Money Lending Act is without any merit. Likewise it was not mandatory for plaintiff to have advanced the sum to the defendant by way of cheque alone and it cannot be said that he could not have done the same by way of cash. The provisions of Section 269SS of the Income Tax Act are not applicable to the present facts. In any case, the defendant upon receiving loan amount from plaintiff cannot take shelter of such a hyper technicality.
A perusal of proceedings of the trial Court shows that the defendant ever since the very inception had been totally negligent in prosecution of his case and had been taking repeated adjournments firstly for filing of the written statement and thereafter for cross-examining plaintiff's witnesses. His right to cross-examine plaintiff's witnesses was eventually closed by the trial Court on 21.06.2018 observing that last opportunity on imposition of costs had already been granted to him earlier hence no further opportunity can be granted to him. It cannot be said that the trial Court has committed any illegality in closing the right of defendant to cross-examine plaintiff's witnesses.
There are no illegality committed by the Courts below in decreeing the claim of plaintiff. The findings arrived at by them are based upon due appreciation of the oral as well as the documentary evidence available on record and no error or perversity in the same is found. The findings being findings of facts are not liable to be interfered with at the second appellate stage - appeal dismissed.
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2022 (12) TMI 1195
Voluntary payment pursuant to declaration in SVLDRS-1 in 12 equal monthly installments - Circular 1071/4/2019 dated 27.08.2019 - contravention of Section 73 of the Finance Act - HELD THAT:- The notice issued by the respondent No.2 under Section 87, according to the petitioner, is in contravention of Section 73 of the Finance Act since there is a mandate to adjudicate and the amount declared as voluntary disclosure of the petitioner cannot be taken as a final amount without any adjudicatory process.
Mr.Hemani assisted by the learned advocate, Ms.Vaibhai Parikh, who has drawn our attention to the Circular 1071/4/2019 dated 27.08.2019 to say that in case of the voluntary disclosure of duty not paid, the full amount of disclosed duty would have to be paid. However, there is nothing to say that the interest and penalty would be automatic and any recovery can be made without adjudication.
Issue Notice and Notice as to interim relief as well, returnable on 22.12.2022.
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2022 (12) TMI 1194
Maintainability of appeal - appropriate forum - classification of services - Business Auxiliary services or not - HELD THAT:- The issue, therefore, that arises for consideration is essentially within the realm of valuation of services rendered by the respondent in booking Cargo on a commission basis under the head ‘Business Auxiliary Services”. The issue is thus of valuation and the remedy in terms of Section 83 of the Finance Act, 1944 read with Section 35 (G)(1) and Section 35 (L)(1)(b) of the Act, would not lie before this Court, but would be by way of an appeal before the Hon’ble Supreme court.
We are fortified, in taking this view by a judgment of this Court rendered in THE COMMISSIONER OF SERVICE TAX, MUMBAI VII, MUMBAI VERSUS M/S. GREENWICH MERIDIAN LOGISTICS (I) PVT. LTD. [2018 (9) TMI 1893 - BOMBAY HIGH COURT] which holds that the remedy in a matter concerning the issue of valuation is by way of filing an appeal in terms of the above provisions of law before the Hon’ble Supreme Court. The appeal before us is therefore not maintainable.
The appeal is dismissed for want of maintainability.
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2022 (12) TMI 1193
Refund claim - rejection on the ground that the input services are not approved as per the approval list by the approval committee of SEZ - N/N. 15/2009- ST dated 20.05.2009 - HELD THAT:- As per the facts of the present case the refund claim is pertaining to the period March to May, 2009 and the appellant had applied and the approval was given by the Approval Committee in September, 2009. Even though belatedly the facts remains that the input services were approved by the Approval committee. Without prejudice, it is found that this issue is no longer res- integra as in various judgments this Tribunal has expressed clear view that the approval of input services by the approval committee is only a procedural requirement and due to this procedural lapse refund cannot be rejected.
The issue is no longer res-integra in as much as it was held that due to non approval of input services refund cannot be rejected under Notification No. 15/2009 –ST dated 20.05.2009. Accordingly, the refund is not liable to be rejected on this ground. As per the learned AR Commissioner (Appeals) has not given finding on the time bar therefore for this purpose the matter is remanded to the Commissioner (Appeals) to give finding on the issue of time bar.
The appeals are allowed by way of remand to the Commissioner (Appeals).
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2022 (12) TMI 1192
Refund claim - rejection of claim on the ground of nondisclosure of availment of Cenvat Credit in ST-3 Returns - Rule(5) of Cenvat Credit Rule, 2004 read with Notification No. 27/2012 – CE(NT) dated 18/06/2012 - HELD THAT:- Time and again in series of decisions this Tribunal has repeatedly held that non-mentioning of the credit availed in ST-3 return is only a procedural lapse for which the substantial relief cannot be denied to the assessee but despite that the lower authorities seem to be adamant in not taking cognizance of the views of the Tribunal. In the instant matter, when the appellant realized their mistake they immediately, vide letter dated 16/06/2017, intimated the said mistake / discrepancy to the authority before whom the refund claim was filed by them and requested the said authority to accept the duly corrected/ rectified ST-3 returns manually for the period April, 2016 to September, 2016 but the said authority vide letter dated 16/06/2017 turned down the said request and rejected the refund claim merely on the basis of non-disclosing the availment of credit in ST-3 returns. Learned Commissioner also followed the same without applying his independent mind to the issue and without looking into the settled legal position as laid down by this Tribunal in number of decisions.
In the instant matter, the mistake committed by the appellant is merely a procedural lapse which they tried to rectify immediately thereafter but were not permitted and substantial relief was denied to them, which is not permissible in law. Admittedly the ST-3 Returns manually filed by the Appellants were not verified as the same were not accepted by the authority below - the justice demands that the impugned order be set aside and the matter be remanded to the Original Authority for deciding the issued afresh after verification of ST-3 returns filed by the appellant manually.
The matter is remanded to the Original Authority in order to decide the issue afresh - Appeal allowed by way of remand.
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2022 (12) TMI 1191
Levy of penalty - discharge of entire service tax liability prior to the issuance of any show cause notice and the appellant - reverse charge basis in respect of business auxiliary services received from abroad - HELD THAT:- If Commissioner (Appeals) is correct in his observation “As mentioned in the Show Cause Notice. was only after verification of the details submitted by the Appellants, the short payment of Service Tax liability was detected, which otherwise would have gone undetected which takes the colour of malafide intent and not a voluntary payment”, then penalty should have been imposed under Section 78 of the Finance Act, 1994. Hon’ble Supreme Court has in the case of UNION OF INDIA VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS AND COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE VERSUS M/S. LANCO INDUSTRIES LTD. [2009 (5) TMI 15 - SUPREME COURT] specifically held that if the ingredients for invocation of extended period are present, then mandatory penalty as provided under Section 11AC of the Central Excise Act, 1944 (corresponding to Section 78 of the Finance Act, 1994) should have been imposed. Section 78 also provides that if the penalty under Section 78 is imposed, no other penalty under Section 76 could have been imposed on the appellant.
Accordingly the contention raised by the learned AR that there was malafide intention to evade payment of duty cannot be upheld. Secondly, Section 73(3) clearly provides that payment of tax could have been on own violation or on being pointed out by the department. Then also no notice could have been issued.
Appeal allowed.
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2022 (12) TMI 1190
Maintainability of appeal - appropriate forum - classification of services - rate of tax - appellable before this court or under section 35L of the Excise Act which appeal would need to be filed before the Apex Court - HELD THAT:- The Apex Court in the case of NAVIN CHEMICALS MFG. & TRADING CO. LTD. VERSUS COLLECTOR OF CUSTOMS [1993 (9) TMI 107 - SUPREME COURT] has decided that classification issue is an issue of rate of duty and /or value of goods for the purposes of assessment.
The Hon’ble Supreme Court having decided that classification issue in Navin Chemicals Manufacturing and Trading Company Limited Vs. Collector of Customs in an issue of rate of duty and for value of goods for the purposes of assessment, the same is binding on us. Therefore, in view of section 35G(1), which specifically prohibits an appeal being entertained by this Court, if it is an order of the Tribunal relating amongst other things to the determination of any question having arisen on account of “rate of duty” or the “value of goods” for the purposes of assessment, this Court would not have jurisdiction.
This appeal is not maintainable before this court and the course of action available to the appellant is to file an appeal before the Supreme Court under section 35L(1)(b) of the Excise Act - Appeal disposed off.
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2022 (12) TMI 1189
Refund claim of the amount of pre- deposit under section 11 B read with section 35 F of the Central Excise Act 1944, instead of availing credit suomoto under Cenvat Credit Rules, 2004 - HELD THAT:- The appellant have suo-moto re-credited an amount of Rs 3,75,000/- for which the appellant had given the bank guarantee at the time of provisional release of the seized goods. This amount was subsequently appropriated against confiscation of the seized goods ordered by the Assistant Commissioner vide OIO dated 30.09.2005 therefore, the amount of bank guarantee has been converted to redemption fine against the confiscation of the goods. On succeeding in the appeal before the Tribunal the appellant was supposed to file a refund claim for refund of the amount of redemption fine. Whereas the appellant have taken the suo-moto re-credit as cenvat credit. As per the cenvat credit rules, an assessee can take the cenvat credit of any duty paid on the inputs used in the manufacture of final product cleared on payment of duty - In the present case the amount of redemption fine is not eligible as cenvat credit as the same is not a duty which was paid on any input received by the appellant. The right course of action about refund of the amount of bank guarantee adjusted against the redemption fine is to file a formal refund claim.
The appellant is otherwise eligible to claim the refund of Rs 3,75,000/- from the department in terms of section 11 B of the Central Excise Act,1944. Since the appellant have followed the wrong procedure by re-crediting the amount of cenvat credit but otherwise the appellant is prima facie eligible for refund, The period involved in the present proceeding right from taking re-credit till the filing of refund claim is reduced for the purpose of limitation as prescribed under section11 B. The appellant has liberty to file a formal refund claim under section 11 B within three months from the date of this order.
Appeal disposed off.
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2022 (12) TMI 1188
Utilization of CENVAT Credit - basic excise duty for payment of education cess and secondary and higher education cess - HELD THAT:- The issue is no longer res-integra in the light of the various judgments cited by the learned counsel for the appellant. Particularly in view of the judgment of Jurisdictional High Court of Gujarat in the case of COMMISSIONER, CENTRAL EXCISE, CUSTOMS & SERVICE TAX, VAPI VERSUS M/S MADURA INDUSTRIES TEXTILES [2013 (1) TMI 352 - GUJARAT HIGH COURT] wherin it was held that the benefit of utilization of credit of basic excise duty for payment of education cess is to be allowed.
The utilization of cenvat credit of basic excise duty for payment of education cess and secondary and higher education cess is correct and legal.
Appeal allowed.
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2022 (12) TMI 1187
Wrongful availment and utilization of CENVAT Credit - recovery alongwith interest and penalty - process amounting to manufacture or not - HELD THAT:- As no manufacturing activity was undertaken by them, their premises was simply a godown used for dispatch of the finished goods. The only activity that was being undertaken in the said godown is repacking and relabeling of excisable goods and dispatch thereof. These activities undertaken in respect of the goods of Chapter 39 & 40 did not amount to manufacture. Accordingly the appellant was neither required to pay any central excise duty nor entitled to any Cenvat credit in respect of these goods.
The contention as raised by the Revenue that the activities undertaken by the appellant do not amount to manufacture, but still undisputedly the appellant has paid the duty in respect of the finished goods. Having accepted the payment of duty, Revenue could not have denied the Cenvat credit availed by the appellant.
Appeal allowed.
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2022 (12) TMI 1186
Rejection of refund claim - time bar under the provisions of Section 11 (B) of the Central Excise Act - HELD THAT:- The appellant has attempted to increase their refund claim pursuant to remand in the first round by the Commissioner (Appeals) in February, 2019. It is held that the claim had become time barred for the period 1.7.2012 to 30.06.2013, as has been held by the Commissioner (Appeals).
Thus, there being no merits in this appeal, the same is dismissed.
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2022 (12) TMI 1185
Validity of a circular dated 29th March, 2016 issued by the Transport Commissioner-cum- Chairman, State Transport Authority (STA) - direction to collect tax from the dealers/manufacturers of motor vehicles on the basis of total number of vehicles possessed and registered during the entire year by the dealer - Section 2 (8) of the Motor Vehicles Act, 1988 - HELD THAT:- There is merit also in the contention of the dealers that if the interpretation placed by the Transport Commissioner on Section 5 of the OMVT Act, as accepted by the learned Single Judge, were to be affirmed, then the requirement under Rule 7 of the OMVT Rules, 1976 of the dealers having to give a declaration regarding the number of vehicles possessed under the TC would become entirely redundant. Likewise, the declaration in Form-XIV of the OMV Rules 1993 which also contains a similar declaration would become redundant. The learned Single Judge does not appear to have, while upholding the circular dated 29th March, 2016, discussed either Rule 7 of the OMVT Rules 1976 or Form-XIV of the OMV Rules, 1993.
The concept of a TC is that it can be used on several vehicles of the same make and model which are possessed by the dealer under the TC limited to the purposes specified in Rule 41 of the MV Rules. Since the purposes for which the vehicles are used is clearly specified in Rule 41 of the MV Rules, there can be no apprehension of misuse by the dealer of such vehicles for purposes other than Rule 41 of the MV Rules. It will have to be found as a fact that there has been such misuse for which there would have to be an enquiry of some sort preceded by a notice to the concerned dealer.
This Court is unable to subscribe to the view of the learned Single Judge that the interpretation placed on Section 5 of the OMVT Act through the impugned instruction is correct and in consonance with the legislative intent behind Section 5 of the OMVT Act and the scope and ambit of that provision. In other words, this Court is of the considered view that the instruction dated 29th March, 2016 is ultra vires Section 5 of the OMVT Act and therefore cannot be sustained in law. Accordingly, this Court quashes the impugned instruction dated 29th March, 2016.
Validity of the demand notices issued by STA to each of the Appellants on the basis of the impugned instructions dated 29th March, 2016 - HELD THAT:- The TC fees can be collected strictly only in terms of Rule 81 of the MV Rules and only in respect of the vehicles which the dealer has in his possession under the TC. Accordingly, all the impugned demand notices issued to the respective Appellants both for TC tax and TC fees in respect of vehicles ‘possessed and registered’ in excess of the vehicles covered by the TC issued, are hereby quashed.
Refund of the excess TC tax and TC fees collected by the STA on the strength of the interim order passed by this Court - HELD THAT:- The question of refund of this excess amount to the dealer would arise only where that burden has not been passed on by the dealer to the customer. It is for this reason, this Court had in its order dated 18th October, 2022, called for an affidavit from the dealers. The affidavit filed by the dealers is not categorical in this regard. It merely states that “some dealers may have passed on the additional incidence to the customers whereas the others have paid it from their own resources” - it is not possible for this Court to direct refund of excess TC tax and TC fees collected by virtue of the impugned instruction issued by the STA to the RTOs. However, what is clear is that the collection hereafter of TC tax and TC fees on the basis of the impugned instructions dated 29th March, 2016 will have to cease forthwith.
Section 5 is both the charging Section as well as the ‘machinery provision’. It indicates that TC tax will become payable in respect of the vehicles possessed by the dealer under the TC certificate and also specifies what is the tax payable if the number of vehicles found in possession under the TC certificate exceeds that number. It also clearly specifies that the tax is to be collected at an annual rate and in advance - Appeal allowed.
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