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Showing 361 to 380 of 2057 Records
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2019 (7) TMI 1698
Expenditure claimed u/s.36(1)(iii) - difference between interest received and interest paid - HELD THAT:- Assessee has been considered as an investment company and making investments was part of its business.
In the case of CIT vs. Shriram Investments (Firm) [2013 (11) TMI 1656 - ITAT CHENNAI] held that deduction u/s.36(1) (iii) of the Act had to be allowed in respect of interest paid, if capital was borrowed for the purpose of business or profession.
As already mentioned there is no finding by any of the lower authorities that disparity between interest receipts and payments arose on account of charging of lower rate of interest on loans advanced when compared to interest paid on loans received. AO was not justified in making a disallowance for the difference between interest received and interest paid by the assessee. Disallowance stands deleted.- Decided in favour of assessee.
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2019 (7) TMI 1697
CENVAT Credit availed by agents - Service Tax deducted by the IATA agent by giving them a commission in respect of sales - HELD THAT:- The credit has been taken by the appellant on certain invoice raised by the IATA agent.
Ld. Counsel argued that they were providing services to IATA agent and receiving commission on which the IATA agent had paid Service Tax. They had taken credit on the said Service Tax - there is no merit in the said argument for the reason that if the appellant was providing service to IATA then it was responsibility of the appellant to pay Service Tax and not by IATA agents. Moreover if the appellant were providing services on the basis of commission to IATA agents, then IATA agents could have availed the credit in these circumstances.
Appeal dismissed.
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2019 (7) TMI 1696
CENVAT Credit - SAD - whether the Cenvat credit taken by the appellant with respect to SAD on 20-1-2015, by virtue of Bill of Entry dated 22-5-2014, whether the same is not permissible under proviso to Rule 4(1) of Cenvat Credit Rules, which have been introduced vide Notification No. 21/2014-C.E. (N.T.), dated 11-7-2014 w.e.f. 1-9-2014? - HELD THAT:- The said proviso have been introduced w.e.f. 1-9-2014 and there is no stipulation in the amending notification that the same shall apply retrospectively. Rules of interpretation provide that whenever any statute is newly added the same has got only prospective effect unless it is specifically provided in the amending statute or the amendment is by way of substitution of an existing provision mainly by way of clarification or removal of defects. Accordingly, the said proviso in Rule 4(1) of Cenvat Credit Rules has got only prospective effect.
Thus, the appellant has taken credit rightly on 20-1-2015 on the basis of Bill of Entry dated 22-5-2014 - appeal allowed - decided in favor of appellant.
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2019 (7) TMI 1695
CENVAT Credit - input/input services - credit availed by them was being utilised for payment of duty of excise as also for payment of Service Tax on the output services - period April, 2011 to March, 2015 - HELD THAT:- The appellant was acting in dual capacity of manufacturer as also output service provider. The input credit availed on various inputs and input services, which are relatable to the manufacturing activities only, can be utilised only for payment of duty in respect of the manufactured goods. The same cannot be utilised for payment of Service Tax.
In terms of the provisions of Rule 3 of Cenvat Credit Rules, 2004, the manufacturer or producer of final product or provider of output services is entitled to take the credit of duty paid on various inputs as also input services. Further in terms of sub-rule (4) of Rule 3 manner of utilization of Cenvat credit is prescribed. In terms of sub-rule (4), the credit availed by an assessee can be utilised for payment of duty of excise on any final product or payment of Service Tax on any output service. There is no distinction in the said sub-rule that the credit relatable to the input service used for manufacture shall be used only for payment of duty on the manufactured goods and the credit availed in respect of input services used for providing output services would be used only for payment of Service Tax. In the absence of any such distinction made in the Cenvat Credit Rules, 2004, the reasoning of the authorities below cannot be upheld.
Extended period of limitation - HELD THAT:- Admittedly the appellant was filing all the requisite returns with the Revenue indicating the credit earned by them and so utilised. The Revenue has not referred to any evidence on record to show that there was any mala fide on the part of the assessee, except the fact that such availment and utilization was to be reflected in ER-1 return and the same should have been reflected separately in ST-3 returns - Otherwise there is no dispute about the fact of availment of credit and its utilization having been reflected in the returns. In such a scenario, there are no reasons to invoke the extended period of limitation.
The appeal is allowed on merits as also on limitation.
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2019 (7) TMI 1694
Validity of reopening of assessment - Reopening based on some information collected by way of survey under section 133A - learned single judge observed that, it was a matter which could be effectively challenged by approaching the statutory authority - HELD THAT:- Matter involves some fact finding exercise and the same can be effectively prosecuted before the competent authority under the statute, which cannot be a matter for discussion and finalization invoking the discretionary jurisdiction of this court under article 226 of the Constitution of India.
No irregularity, much less any illegality, with regard to the course ordered to be pursued by the learned single judge. The appeal fails and it is dismissed accordingly. We have not expressed anything with regard to the merit of the case. It is always open for the appellant to establish the merit of the case before the statutory authority, based on the facts and the relevant provisions of law.
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2019 (7) TMI 1693
Disallowance u/s 14A r/w rule 8D - AO noticed that during the year the assessee has earned exempt income by way of dividend on mutual fund and shares - HELD THAT:- Disallowance made by the Assessing Officer is far in excess of the total expenditure claimed by the assessee. Therefore, under no circumstances, the disallowance made by the AO could have been sustained. Therefore, following the decisions of the Tribunal and the Hon'ble Jurisdictional High Court[2014 (1) TMI 1183 - ITAT MUMBAI] in the preceding assessment years we hold that the disallowance under section 14A r/w rule 8D, should be restricted to the amount already disallowed by the assessee under section 14A. - Decided in favour of assessee.
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2019 (7) TMI 1692
Levy of Central Excise Duty - Process amounting to manufacture - raw pine resin - forest department of the State of Uttarakhand collects such resin from pine trees growing spontaneously in the forest - scope of "Tapping" or "rill method".
Are the respondent-writ petitioners entitled to question of levy of Excise Duty on Oleo-Pine Resin? - HELD THAT:- While it may have been open to the Forest department to question the levy of excise duty on them, on the ground that such a levy violates Article 265 of the Constitution of India, the Forest department has, in its counter-affidavit, stated that the appellants were justified in levying excise duty. In any event, it is not the Forest department which has questioned the levy or collection of excise duty by the appellants. The appellants have neither levied nor collected excise duty from the respondents-writ petitioners. The mere fact that excise duty was included in the sale price, which the respondents-writ petitioners were required to pay in order to purchase oleo-pine resin from the Forest department, would not make the sale price a levy of excise duty on them. Permitting such challenges may well result in a third party questioning the assessment order, passed against another, in writ proceedings. Such a course of action, in our opinion, is impermissible.
While we have strong reservations regarding the maintainability of the Writ Petition, at the instance of a third party questioning the levy and collection of excise duty from another, we cannot also ignore the fact that the learned Single Judge has examined, on merits, the power of the appellants to levy excise duty on oleo-pine resin. We shall not, therefore, non-suit the respondent-writ petitioners on the ground of lack of standing, and shall instead examine the question whether or not extraction of oleo-pine resin, from pine trees by the Forest department, would amount to "production" of goods on which excise duty can be levied under Section 3(1)(a) of the Excise Act.
Scope of the words 'manufacture' and 'production' used in Entry 84 of List I of the Seventh Schedule to the Constitution and in section 3(1)(a) of the Central Excise Act.
(a) Meaning of Excise Duty - HELD THAT:- A duty of excise is an indirect duty which the manufacturer or producer passes on to the ultimate consumer, i.e. its ultimate incidence is always on the consumer. The said tax can be levied at a convenient stage so long as the character of the impost is not lost - The taxable event, in the case of duties of excise, is not directly on the goods, but on the activity i.e. the manufacture or production thereof. Though both excise duty and sales-tax are levied with reference to the goods, the two are very different imposts; in one case the imposition is on the act of manufacture or production, while in the other it is on the act of sale. In neither case, can it be said that the excise duty or sales tax is a tax directly on the goods for, in that event, they will really become the same tax - To be justified as such, the tax should be closely related to production or manufacture of goods.
(b) Words used in the entries in the Lists of the VII schedule should be given the widest possible meaning? - HELD THAT:- As long as the amplitude of Entry 84 in List I is not so extended as to trench upon the Entries in List-II which are reserved for law making to the State Legislatures, the widest possible meaning should be given thereto. In the absence of any limitation placed on the word "produce" in Entry 84, and as the widest meaning should be given to the Entries in the Lists in the VII Schedule, there is no justification in restricting its scope, and in not extending it to all kinds of "production" - it is very difficult to accept that the words "manufacture"/ "production" used in Entry 84 of List I, on being given a liberal construction and the widest amplitude, would nonetheless require us to hold that both these words mean the same. If that be so Parliament, in exercising its constituent power, must be held to have, unnecessarily and without any reason, used both the words "production" and "manufacture" when use of either one of the two words would have sufficed.
(c) Use of the word 'or' between the words 'manufacture' and 'production' in several provisions of the Excise Act and its effect - HELD THAT:- The word 'or', as used in Section 3 of the Excise Act, can only mean that the Central Government has the power to levy duty either on "manufacture" or on "production" or on both. The language of Section 3 is clear, and the Excise Act does not require us to substitute 'or', or read this word interchangeably, for achieving its object. On the contrary, the object of the Excise Act is to subject both "manufacture" and "production" to levy of excise duty. Use of the word "or" between them would require the words "manufacture" / "production" to be read disjunctively. Consequently, even if the subject goods are not manufactured articles, but are only those which are produced, they can still be subjected to excise duty under Section 3 of the Act - The word "produced" is used, besides the word "manufactured", not in one particular Section, but in several provisions of the Excise Act. Similarly, the word "producer" is also used, besides the word "manufacturer", in several Sections of the said Act. If, as is contended before us, the word "produced" were to mean the same as "manufactured", would Parliament, having used the word "produced" besides the word "manufactured", in several Sections of the Excise Act, not be held to have indulged in a redundant exercise of using two words with the same meaning, over and over again, when use of either one of them would have sufficed? As Parliament has used the two words "produced or manufactured", and "producer or manufacturer", in several Sections of the Excise Act, and each word in a Statute must be given its natural meaning, it is difficult for us to hold that the word "production" means "manufacture", and vice versa.
What do words 'Manufacture' and 'Production' mean? - HELD THAT:- The word "production" has a wider connotation than the word "manufacture". While every manufacture can be characterised as production, every production need not amount to manufacture - The word 'produced' includes an activity of manufacturing the materials by applying human endeavour on some existing raw material, but the word 'produce' may include securing certain produce from natural elements, for example, by growing plants on soil, or by operating mines and the like or, for example, by milking the cow the milkman produces milk though he has not applied any process on any raw material for the purpose of bringing into existence the thing known as milk.
(e) Does extraction of Oloe-Resin from pine trees amount to 'production'? - HELD THAT:- The mode of resin collection, and central groove cleaning, involves removal of the resin pots from the tree, and thereafter removal of resin from the pot with the help of a scraper and collected in the collection cans or tins. The central groove is also cleaned, after each collection, with a groove cleaner to facilitate smooth running of fresh resin in the resin pot. During the period April to July, when the resin yield is the maximum, the resin should be collected as early as possible to avoid overflow from the resin pot, but the freshening should be one only, at weekly intervals and not before. The manual also details the manner in which the tapping should be closed, and for crop setting for subsequent years. Since Oleo Pine Resin is extracted from Pine trees by human endeavor following an elaborate and well laid down procedure, we are satisfied that such activity would amount to "production" under Section 3(1)(a) of the Excise Act.
(f) Does Oleo-Resin sold by the forest department satisfy the test of marketability - HELD THAT:- For articles to be goods, they must not only be "moveable" but also be known in the market as such, and they must be capable of being sold in the market as goods. Actual sale in the market is not necessary, user in captive consumption is not determinative, but the articles must be capable of being sold in the market or known in the market as goods - In the present case, the oleo resin extracted from Pine trees are "moveable goods" which are put to auction by the Forest Department; and the respondent-writ petitioners have, in fact, purchased oleo resin from the Forest Department. Since Oleo Pine Resin has been bought by the respondent-writ petitioners, and has been sold to them by the Forest Department, it satisfies the test of "marketability"; and, since it is referred under Tariff Entry No. 13019049, it constitutes excisable goods on which excise duty can be levied under Section 3(1)(a) of the Excise Act.
Inclusion of a particular 'good' in a tariff entry does not automatically render it exigible to Excise Duty - HELD THAT:- Unlike oleoresins from seeds, fruits, leaves, spices, flowers or roots, which are specifically enumerated under Chapter 13, the subject goods are oleoresins extracted from the bark of oleo pine trees and, therefore, fall under "other" oleoresins under chapter heading 1301 90 49. Just as human effort is required for extraction of oleoresin from seeds, fruits, leaves, spices, flowers or roots, extraction of oleoresin from the bark of pine trees, as detailed hereinabove, also requires human effort and a prescribed procedure being followed. If as is contended, on behalf of the respondent-writ petitioners, oleo-resin extracted from seeds, flowers, leaves, roots etc. is a new commodity which emerges on the seeds, flowers, leaves, roots etc. being crushed, oleo resin extracted from the bark of a Pine tree is also a new commodity derived on its extraction from the stem or bark of a Pine tree. Suffice it to state that the oleo-resin extracted from all the aforesaid categories of plant-produce is a natural product which involves human effort involving employment of a scientific procedure of its extraction -
The subject goods are also plant-produce extracted from the stem or the bark of a pine tree, and stand on a similar footing as oleo-resins from the aforesaid categories.
Can natural products be subjected to duty under Excise Act? - HELD THAT:- "Agriculture production" is a common and widely recognized phrase. Illustrations of Agriculture production are many. For instance horticulture production where systematic activity is carried on to produce fruits for commercial purposes, such as apple orchards. Another instance is of rubber plantations. Even in meat processing industries, production of meat is from live animals, and no new substance comes into existence - If Entries, in the three Lists of the Seventh Schedule to the Constitution of India, are to be given the widest possible meaning, there is no justification in reading the words "production" in a restricted sense and thereby exclude "natural produce" from its ambit. Reading the word "produced" in Entry 84 of List I in a wide manner to include "natural produce" would not result in its trenching upon any Entry in List II of the Seventh Schedule. We see no reason, therefore, to hold that "natural produce" would not amount to "production of goods". This contention, urged on behalf of the respondent-writ petitioners, also necessitates rejection.
Would application of ejusdem Generis rule require exclusion of oleo- Resin extracted from the pine trees from the ambit of Chapter-13 of the Tariff Act - HELD THAT:- For the ejusdem generis principle to apply there must be sufficient indication of a category that can properly be described as a class or genus, even though not specified as such in the enactment - To invoke the application of the ejusdem generis rule, there must be a distinct genus or category running through the bodies already named. The specific words must apply not to different objects of a widely differing character but to something which can be called a class or kind of objects - The general words "other oleo resins" are broad enough to bring within its ambit all kinds of oleo resins, other than oleo resins from seeds, fruits, roots, flowers etc, and may not call for the application of the Ejusdem Generis test. Even if the ejusdem generis rule were to be applied, it would only require the general words "other oleo-resins" in Tariff Item No. 1301 9049 to take their colour from the earlier special words and, since the earlier special words are "oleo-resin extracted from different parts of a plant", the general words "other oleo-resins" must, at best, be confined to plants alone. Consequently, applying the ejusdem generis rule, the words "other oleo-resins" in Item No. 1301 9049 would bring within its ambit oleo-resin extracted from the stem or the bark of trees (in the present case pine trees).
Should a new article emerge in the case of production of goods also? - HELD THAT:- While holding that the intention of the legislature, in employing the word "production", was to introduce an element of volition and effort involving employment of some process of bringing into existence goods, the Supreme Court held that the assessee had not done anything towards production of the trees, and even the cutting had been done by the contractor. In the case on hand, an elaborate and well laid down process of extraction of Oleo Resin from pine trees is followed by the Forest Department. As volition and effort, involving employment of a scientific process to remove Oleo Resin from Pine trees, is involved, the Forest department must be held to have produced oleo-resin; and such production may be subjected to the levy of excise duty under Section 3(1)(a) of the Excise Act.
It is declared that extraction of Oleo Resin from Pine trees, by the Forest Department of the Government of Uttarakhand, involves human endeavor and an elaborate and well laid down procedure being followed. Such extraction would amount to "production" of goods on which Central Excise duty, under Section 3(1)(a) of the Excise Act, can be levied - appeal allowed.
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2019 (7) TMI 1691
CENVAT Credit - Job-worker - certain inputs used in the manufacture of job work goods when the job work is carried out under N/N. 214/86-CE - only reason for denial of the credit is that the appellant is using inputs in the job work goods which is exempted under notification 214/86-CE - HELD THAT:- There is specific provision under Rule 3 of Cenvat Credit Rules, 2004 wherein the input used for manufacture of goods under exemption notification 214/86-CE credit is allowed - even though the job work goods are exempted under notification 214/86-CE, the credit is allowed.
Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 1690
Tax liability alleged to have arisen from erroneous valuation adopted by the assessee - it was contended by the noticee that ₹ 28,89,312 were on account of administrative expenses that were reimbursed and that ₹ 10,86,097 was an erroneous credit in the ledger - HELD THAT:- For want of consideration of the eligibility for this benefit in the orders impugned, the matters is to be remanded back to the original authority.
Matter remanded back to the original authority for a fresh adjudication after submitting claim of coverage under the said notification to proper consideration.
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2019 (7) TMI 1689
Reopening of assessment u/s 147 - non supply of reasons and not qua the change of opinion - HELD THAT:- In this case the assessee has not filed any return of income despite the issue of notice under section 148 due to the fact that all the records of the assessee were seized by the various government agencies and assessee was not having any access to such records at the relevant point of time. This fact was brought to the notice of the AO.
Assessee requested by various letters during course of the assessment proceedings to supply the reasons but AO did not supply any reasons recorded for re-opening. Even after completion of the assessment, the assessee again requested vide letter dated 30.05.2018 and 01.05.2019 to supply copy of reasons but some were not supplied to the assessee. Once it has established that assessee has not been supplied copy of reasons recorded, then the reassessment proceedings as well as the assessment framed as a result thereof are invalid.
The case of the assessee is squarely covered by the decision of the Hon’ble Bombay High Court in the case of CIT vs. IDBI Ltd [2016 (7) TMI 1587 - ITAT BANGALORE]wherein it has been held that where the reasons recorded are not supplied to the assessee, the order of reassessment would be without jurisdiction. - Decided in favour of assessee.
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2019 (7) TMI 1688
Application for change of status of applicant, New Okhla Industrial Development Authority - HELD THAT:- Learned Senior Counsel appearing on behalf of the Appellant submitted that the “New Okhla Industrial Development Authority” (NOIDA) has already been considered as a ‘Financial Creditor’ and the ‘Resolution Professional’ has already submitted the report. Now it is not open to any of the Authority to change the status of NOIDA from the ‘Financial Creditor’ to any other type of ‘Creditors’.
However, the ‘Interim Resolution Professional’ is already directed to examine the claim of the NOIDA, who is the Applicant before the Adjudicating Authority and no final decision has been taken and the Adjudicating Authority has made it clear that the claim of the NOIDA cannot be rejected on the ground that it is time barred or the claim is by an entity other than the ‘financial Creditor’.
No opinion expressed - appeal disposed off.
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2019 (7) TMI 1687
CENVAT Credit - input services - place of removal - warehousing service and inspection service - HELD THAT:- There is no dispute to the fact that warehousing service and inspection service were received by the appellant and payment of the same was also borne by the appellant. These charges were not collected by the appellant from the customers. Since the warehousing facility availed by the appellant for storing the goods and from there the goods were sold to the customer, it cannot be said that the goods were sold from the factory gate. As regards the inspection charges, as per the agreement with the customers, the appellant are under obligation to carryout inspection at the customer’s end in respect of the goods manufactured and supplied by them. The charges of the inspection is also borne by the appellant. In such case, the sale is clearly on FOR basis i.e. customer’s place. Moreover, the inspection charge is not a service which is used for removal of the goods - The expenses towards both the services stand included in the assessable value. Therefore, both the services were clearly used in or in relation to the manufacture and sale of the goods.
In given facts of the present case, the appellant are entitled for the Cenvat credit in respect of warehousing and in inspection services - Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 1686
Principles of natural justice - Disqualification of Directors - Section 164(2) of the Companies Act - direction to 2nd respondent to activate DINs of the petitioners, to enable them to function other than in strike off companies - petitioner contend that before passing the impugned order, notices have not been issued, giving them opportunity, and this amounts to violation of principles of natural justice, and on this ground alone, the impugned orders are liable to be set aside - HELD THAT:- The 2nd respondent has disqualified the petitioners under Section 164(2)(a) of the Act 18 of 2013, for not filing financial statements or annual returns, for period prior to 01.04.2014. The action of the 2nd respondent runs contrary to the circular issued by the Ministry of the Corporate Affairs, and he has given the provisions of Act 18 of 2013, retrospective effect, which is impermissible - as the impugned orders in present writ petitions disqualifying the petitioners as directors under Section 164(2)(a) of the Act, have been passed considering the period prior to 01.04.2014, the same cannot be sustained, and are liable to be set aside to that extent.
Issuance of prior notice before disqualifying the petitioners as directors - HELD THAT:- Section 164(2)(a) makes it clear that it provides disqualification on happening of an event i.e., if a person who is or has been a director of a company has not filed financial statements or annual returns for any continuous period of three financial years, shall be ineligible to be re-appointed as a director of that company or appointed in any other company for a period of five years from the date on which the said company fails to do so. The provision does not provide for issuance of any prior notice or hearing.
Thus, it is clear that Section 164(2)(a) of the Act is a deeming provision and the disqualification envisaged under the said provision comes into force automatically by operation of law on default and Legislature did not provide for issuance of any prior notice, but the respondents notified disqualification even before it incurred, and deactivated DINs, which is illegal arbitrary and against provisions contained in Section 164(2)(a) of the Act.
Deactivation of DINs - contention of the learned counsel for the petitioners is that except for the grounds mentioned under Rule 11 (a) to (f) of the Rules, the DINs cannot be cancelled or deactivated, and the violation mentioned under Section 164(2)(a) of the Act, is not one of the grounds mentioned under clauses (a) to (f) of Rule 11, and hence for the alleged violation under Section 164(2)(a) of the Act, DIN cannot be cancelled - HELD THAT:- Clauses (a) to (f) of Rule 11, provides for the circumstances under which the DIN can be cancelled or deactivated. The said grounds, are different from the ground envisaged under Section 164(2)(a) of the Act. Therefore, for the alleged violation under Section 164 of the Act, DINs cannot be cancelled or deactivated, except in accordance with Rule 11 of the Rules - the deactivation of the DINs of the petitioners for alleged violations under Section 164 of the Act, cannot be sustained.
The impugned orders in the writ petitions to the extent of disqualifying the petitioners under Section 164(2)(a) of the Act and deactivation of their DINs, are set aside, and the 2nd respondent is directed to activate the DINs of the petitioners, enabling them to function as Directors other than in strike off companies - Petition disposed off.
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2019 (7) TMI 1685
Condonation of delay of 1390 days in filing this appeal - no sufficient cause shown for delay - HELD THAT:- The appellant has miserably failed to explain why there was an inordinate delay of 3 years and 10 months in filing the appeal. It is not in dispute that the appellant had received the order dated 15 December, 2014 on 22 December, 2014. As to who has to take a decision for filing the appeal is an internal matter of the appellant and any alleged failure on the part of the Branch Accountant in informing the Branch Manager about the order cannot be made a ground for condoning this inordinate delay of 3 years and 10 months in filing the appeal. This apart, when the new incumbent joined in March, 2015, it was his duty to have brought the order to the notice of the competent person required to take a decision for filing an appeal.
The impugned order dated 15 December, 2014 was received by te appellant on 22 December, 2014 but the appeal was filed with inordinate delay of 3 years and 10 months. The reasons stated in the application and which have also been reiterated by learned Counsel of the appellant do not make out a sufficient cause for condoning the delay in filing the appeal - COD application dismissed.
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2019 (7) TMI 1684
Recovery of Sales tax and VAT dues - validity of action of the State's Revenue Machinery (the Revenue), in taking possession of and attempting to sell certain properties for alleged arrears of Sales Tax and Value Added Tax from its respective owners, which are claimed by them to be their secured assets - HELD THAT:- Even though the KGST Act/KVAT Act creates a 'First Charge' in favour of the Revenue to recover the arrears of tax, the afore provisions of the SARFAESI Act and RDB Act make the secured dues entitled to be paid in priority over such taxes and in fact, elevates the rights of the secured creditor, to recover such dues, also to a position of priority - the cumulative effect is that whoever sells the property or in whatever manner it is sold, the secured debts will require to be paid off first and all others will have to wait for their turn. Viewed in this purlieu, the predication of the learned Additional Advocate General that the 'First Charge' of the Revenue over the properties will be extinguished only if they sell the property first, pails into insignificance because the statutory right of the Revenue is, at the best, to bring the property to sale and nothing more.
Irrefragibly, when the secured creditors have a right in priority to have their debts extinguished, obviously, their right to proceed against the property would also rank high than that is claimed by the Revenue. The assertion of the Revenue that their 'Charge' will continue over the property until it is sold by them, hence, is rendered without forensic support to stand on.
Whether Section 26E of the SARFAESI Act and Section 31B of the RDB Act create an overriding and first right in favour of the Banks/Financial Institutions to recover their dues, over and above the rights of the Revenue created through the KGST Act/KVAT Act? - HELD THAT:- This enquiry has been rendered relatively easy for this Court because, in CENTRAL BANK OF INDIA VERSUS STATE OF KERALA AND OTHERS [2009 (2) TMI 451 - SUPREME COURT], the Hon'ble Supreme Court considered the right of the Banks/Financial Institutions as regards recovery of their dues prior to the afore two provisions being introduced in the SARFAESI Act and in the RDB Act. The conclusions of the Hon'ble Supreme Court are unequivocally worded that, in the absence of these provisions in the respective Statutes, the Banks/Financial Institutions cannot claim any priority over the Revenue's First Charge on the properties concerned for recovery of dues of Sales Tax/Value Added Tax.
The provisions of Section 11(2) of the EPF Act are only bolstered and supported by the provisions of Sections 529 and 529A of the Companies Act. This view certainly does not support the submissions of the learned Additional Advocate General, since arrears of tax revenue have not been, in any manner, protected either by the SARFAESI Act or by the RDB Act.
Petition allowed.
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2019 (7) TMI 1683
Smuggling - Gold - it appears that the contention of the seventh accused that the 3rd accused was arrested only for the purpose of compelling the seventh accused to surrender before the Investigating Officer, as the 3rd accused is the wife of the seventh accused, cannot be viewed lightly. It appears that no gold was seized from the seventh accused - HELD THAT:- It appears that the third accused, who was not involved in the above crime, was arrested and detained in custody without any justification. No crime was also registered against the third accused, in connection with the alleged prior incidents. The seventh accused is the husband of the third accused. No gold was seized from him. This being the situation, there are no justification for the prosecution to oppose the application filed by the seventh accused, when the prosecution has no objection in granting bail to the first accused, who was caught red-handed with 25 kg of gold. Considering the facts and circumstances of the case, including the stage of investigation, the further detention of the petitioners is not necessary for the progress of investigation of the case.
These applications stand allowed and the petitioners shall be released on bail on condition of each of the petitioners executing a bond for ₹ 35,000/- each, with two solvent sureties each, each for the like sum to the satisfaction of the Jurisdictional Magistrate.
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2019 (7) TMI 1682
Levy of penalty u/s 271(1)(c) - addition made during the course of assessment, which were confirmed by the appellate authority - non specification of charge - assessment was framed u/s 153A r.w.s. 143(3) of the Act wherein addition was made on account of undisclosed income as well as low household withdrawals - HELD THAT:- It is only when the authority invested with the requisite power is satisfied that either of the two events existed in a particular case that proceedings u/s. 271(1)(c) are initiated. This pre-requisite should invariably be evident from the notice issued u/s. 274 r.w.s. 271 which is the jurisdictional notice, for visiting an assessee with the penal provision.
The intent and purpose of this notice is to inform the assessee as to the specific charge for which he has been show caused so that he could furnish his reply without any confusion and to the point.
In the present case, neither the assessee nor anyone else could make out asto whether the notice u/s. 274 r.w.s. 271 (1)(c) of the Act was issued for concealing the particulars of income or for furnishing inaccurate particulars of such income disabling it to meet with the case of the Assessing Officer. There are a catena of judgments highlighting the necessity for identifying the charge for which the assessee is being visited and in all those decisions, Hon'ble Courts have repeatedly held that where the jurisdictional notice is vague, similar to the one in the present case, the consequent levy cannot be sustained.
No merit for the penalty so imposed, accordingly, AO is directed to delete the penalty so imposed u/s. 271(1)(c) of Act. - Decided in favour of assessee.
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2019 (7) TMI 1681
Contribution to Pension Fund Trust - HELD THAT:- As decided in own case [2014 (8) TMI 1199 - ITAT CHENNAI] bare reading of section 36(1)(iv) makes is amply clear that the sum should be contributed by the employer towards a recognized provident fund or approved superannuation funds subject to such limits as may be prescribed for recognizing provident fund or approving the superannuation fund. The section does not lay down any specific condition that the fund should be approved by the jurisdictional Commissioner or Chief Commissioner only.
In the present case, the assessee is contributing in the Pension Fund Scheme jointly floated by twelve State Transport Corporations operating in different districts of the state of Tamil Nadu. All the State Transport Corporations are signatories to the Trust Deed for setting up of joint State Transport Employees Pension Fund Scheme. It is not in dispute that the said fund has been recognized by the CIT-VII, Chennai. Once the assessee is contributing towards recognized fund, the assessee is entitled to get the benefit for the contributions made to the said fund.
Allowing the damages for remittance to Pension Fund Trust - HELD THAT:- As decided in own case [2018 (11) TMI 1798 - ITAT CHENNAI]issue is decided in favour of the assessee and against the Revenue.
Disallowance of Chairman’s Office Expenses - HELD THAT:- As submitted by ld. D.R that during the course of Appellate proceedings, the assessee has submitted their evidences before the ld.CIT(A) and the ld.CIT(A) has decided the matter without calling for the remand Report from the ld.Assessing Officer. The ld.AR has not denied the said factual position. We accordingly set aside the matter to the file of ld.CIT(A) to seek the Remand Report from the ld.Assessing Officer and decide the matter afresh as per law. This Ground relating to the expenses incurred for Chairman’s Office Expenses is allowed for statistical purposes.
Disallowance u/s.14A read with Rule 8D - HELD THAT:- By no stretch of imagination can Section 14A or Rule 8D be interpreted so as to mean that the entire tax exempt income is to be disallowed. The window for disallowance is indicated in Section 14A, and is only to the extent of disallowing expenditure “incurred by the assessee in relation to the tax exempt income”. This proportion or portion of the tax exempt income surely cannot swallow the entire amount as has happened in this case. See JOINT INVESTMENTS PVT LTD VERSUS COMMISSIONER OF INCOME TAX [2015 (3) TMI 155 - DELHI HIGH COURT].
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2019 (7) TMI 1680
Valuation - inclusion of VAT subsidy in the assessable value - short/non payment of Excise Duty - contravention of Section 4(3)(d) of the Central Excise Act, 1944 - period January 2016 to December, 2016 - denial of abatement of Notification No. 26/2012-ST, dated 26.2.2012.
Inclusion of VAT subsidy in the assessable value - HELD THAT:- The demand is not sustainable - This Tribunal has also occasioned to examine the issue afresh in case of M/s H-One India Private Limited Vs. CCE, Rajasthan [2019 (5) TMI 1226 - CESTAT NEW DELHI] wherein after considering the various decisions of this Tribunal, it has been held that the VAT subsidy obtained in form 37B under RISP scheme is not includible in the computation of transaction value under Section 4D of the Act.
Abatement claimed scheme by the appellant under the Notification No. 26/2012 - denial on the ground that the appellant failed to adduce any documentary evidence as mandated by the Central Board of Excise and Customs 37B order dated 12.3.2007 - HELD THAT:- This issue is also decided in favour of appellant in case of M/s Benara Bearings & Pistons Ltd. Vs. CCE, Kanpur [2013 (4) TMI 672 - CESTAT NEW DELHI] where it was held that the procedural requirements of filing certificates or declarations on each and every GR amounts to legislation and cannot be upheld in as much as there is no such requirement of filing the affidavits/certificates in the notification itself. The notification only requires non-availment of credit by the transport agencies. It is not the Revenues case that the transport agencies, who were not even registered with the service tax department, has availed any credit.
Admittedly, the appellant is not output service provider and only recipient of services and, therefore, is not laible to pay the tax under reverse charge mechanism and is excluded from the purview of Cenvat Credit Scheme. The amended notification as has been extracted above also strengthened the contention of appellant that as a service recipient is not bound to follow the requirement of endorsement of non-availment of Cenvat credit under 37B order by the CBIC.
Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 1679
CENVAT Credit - demand of service tax alongwith interest and penalty - restaurant services - short term accommodation services - contravention of Section 68 of Finance Act read with Rule 6 of Service Tax Rules 1994 read with Notification No. 1/2006-ST dated 1.3.2006 as amended by Notification No. 34/2011-ST dated 24.4.2011.
Abatement as per Notification No. 1/2006-ST - proportionate credit - Rule 6(3D) of the Cenvat Credit Rules - HELD THAT:- The issue decided in their own case M/S THE OBEROI RAJVILAS, M/S TRIDENT, M/S OBEROI VANYAVILAS VERSUS CCE, JAIPUR [2018 (5) TMI 1715 - CESTAT NEW DELHI] where it was held that the procedure prescribed in Rule 6(3A) of the Credit Rules is only to make the provisions of Rule 3 workable. By means of proportionate reversal the requirement of Rule 6(3) has been substantially satisfied. This is also provided in Rule 6(3D) of the Cenvat Credit Rules which was introduced at a later date - benefit of abatement cannot be denied - demand do not sustain.
Demand of service tax under restaurant service for mini bar - HELD THAT:- The activity per se is not a service as the customers provides services to themselves after paying the applicable VAT. Therefore the demand on this score is not sustainable.
Payment of service tax in respect of health club and finance service dry cleaning etc. - demand has been raised merely on the basis of value as reflected in the balance sheet as compared with the ST returns - HELD THAT:- The appellant has extended various count of discount to their customers which would definitely not with value of such services placing reliance on the decision of Bhayana Builders (P) Ltd [2018 (2) TMI 1325 - SUPREME COURT]. The discount has been clearly and correctly reflected in their ledger account for the impugned period however same has not been taken into account while issuing the show cause notice or confirmation the demand - We are in agreement with the submission of learned Advocate that the discount is clearly mentioned in the ledger account as at page 20-58 of appeal paper book. Also, the appellant is entitled for the exemption as contained in Notification No. 14/2008 for providing the exemption paying to the foreign based service provider and travel agent - there is no justification of levying service tax on this service and the same accordingly, not sustainable.
Demand on tour operator service - HELD THAT:- The activities being undertaken by the appellant is not falling within the ambit of tour operator service which has two parts. First part covers person who is engaged in the business of planning, scheduling, organising or arranging tours and the second part covers any person operating tour in tourist vehicle having permit granted under Motor Vehicle Act/Rule. The appellant has only provided pick up and drop facility for elephant ride up to Kanota dam. This, therefore, cannot be treated as tour operator service as per the definition of service under the Act. The appellant is not engaged in business of operating tour and is recognised as luxury hotel and has not tour operator, therefore, demand is not sustainable.
Extended period of Limitation - HELD THAT:- The same is merely on the basis of non production of document by the appellant before the adjudicating authority and the appellate authority. It has been brought to our notice that these documents were in fact produced by the appellant before the lower authorities. However, the same has not been considered by them - demand pertaining to the Cenvat credit is also not sustainable and liable to be set aside.
Appeal allowed - decided in favor of appellant.
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