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2022 (6) TMI 1149
Delayed payment of employees’ contribution to ESI & PF account within the due date provided under the PF & ESI Act - HELD THAT:- We note that the issue is no longer res integra. The decisions of Hon’ble High Court Calcutta namely in the case of (i) CIT –vs.- Vijayshree Ltd [2011 (9) TMI 30 - CALCUTTA HIGH COURT], PHILLIPS CARBON BLACK LIMITED [2014 (10) TMI 916 - CALCUTTA HIGH COURT], M/S COAL INDIA LIMITED. [2015 (8) TMI 1451 - CALCUTTA HIGH COURT] and M/S. AKZO NOBEL INDIA LTD. VERSUS COMMISSIONER OF INCOME TAX KOL. -IV [2016 (6) TMI 1128 - CALCUTTA HIGH COURT] - This aspect has been considered by the Coordinate Bench of ITAT Kolkata in the case of Lumino Industries Ltd.[2021 (11) TMI 926 - ITAT KOLKATA] to allow the claim of deduction in respect of employees contribution shares towards ESI, PF, by the assessee before the due date of filing of return u/s 139(1) of the Act. Therefore the appeal of assessee succeeds and so, it is allowed in favour of assessee.
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2022 (6) TMI 1148
Disallowance u/s 14A r.w.r. 8D - Disallowance under Rule 8D(2)(ii) i.e. with respect to the interest disallowance which has been worked out on the basis of gross interest expenses - HELD THAT:- We find that Hon'ble Gujarat High Court in the case of Nirma Credit and Capital Pvt. Ltd. (2017 (9) TMI 485 - GUJARAT HIGH COURT) has held that for the purpose of working out disallowance under Rule 8D(2)(ii) of the Act, the expenditure by way of interest paid by assessee would be after reducing the taxable income earned during the financial year. Before us, Revenue has not placed any contrary binding decision in this case. We therefore in view of the aforesaid decision of Hon'ble Gujarat High Court direct the AO to working out the disallowance under Section 14A r.w. Rule 8D of the Income Tax Rules on the basis of the net interest under Rule 8D(2)(ii) of the Act. We thus direct accordingly. Thus the ground of assessee is partly allowed.
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2022 (6) TMI 1147
Addition u/s 68 - unsecured loan - main thrust of the assessee to explain the cash credit in the shape of unsecured loan is that its account are audited under section 44AB of the Act and Audit Report was filed alongwith the return of income - assessee further explained that the loan from Kumar Nagendra is explained by the assessee by filing a copy of account and bank statement of the party but the same was ignored by the authorities - HELD THAT:- The assessee has failed to discharge its onus as required under section 68 of the Act to prove the identity of the loan creditor, creditworthiness of the loan creditor and the genuineness of the transaction. Accordingly, the Assessing Officer made this addition.
As assessee explained the loan from Kumar Nagendra is explained by the assessee by filing a copy of account and bank statement of the party but the same was ignored by the authorities. Except this explanation the assessee has not brought anything on record to prove the identity of the loan creditors, creditworthiness of the loan creditor and genuineness of the transaction
Since the assessee has not produced any documentary evidence in respect of the unsecured loan from Munna Kumar, we find that the assessee failed to discharge its primary onus to prove the identity and creditworthiness of the loan creditor as well as genuineness of the transaction. As regards the unsecured loan of Rs. 40 Lac from Kumar Nagendra is concerned, the Assessing Officer as well as the CIT(A) has recorded this fact from the bank statement that a cash was deposited immediately prior to issuing of D.D. in favour of the assessee.
Merely filing the bank statement by the assessee would not discharge the onus cast upon it to prove the creditworthiness of the loan creditor and genuineness of transaction particularly when the cash was deposited in tranches within a short spam of about ten days before issuing a D.D. in favour of the assessee. In the absence of any material brought on record before us to counter the finding of the Assessing Officer as well as the CIT(A), we do not find any reason to interfere with the impugned order of the CIT(A) qua this issue. Accordingly, the impugned order of the CIT(A) is upheld. - Decided against assessee.
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2022 (6) TMI 1146
Allowable business expenditure u/s 37 - deductibility of freebies etc to medical practitioners - referral commission paid to doctors is in violation of the professional conduct under the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations 2002 - Whether authorities below erred in holding that referral commission paid to doctors is in violation of the professional conduct under the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations 2002, and, as such, inadmissible as a tax deduction under section 37? - HELD THAT:- The expression ‘allied healthcare industry’ is required to be interpreted in the context in which appears in the code of conduct for the medical practitioners, and not on the basis of how this expression has been defined in some other context in a journal or on website guidelines. We are unable to see any justification for excluding a medical service provider, like the assessee before us, from the segment of the ‘pharmaceutical and allied healthcare industry’ in the present context.
When an unsuspecting client walks into the consulting chamber of a dentist who advises him to go for stem banking from his dental plump, one cannot be sure whether it is the doctor’s genuine advice on its merits of what the doctor actually believes to be beneficial to the client or it is a piece of advice influenced by the financial inducement by way of ‘referral fee’ that the doctor will get for his client being referred to the service provider in question. Such a situation de facto amounts to receipt of cash or monetary grant by the medical professional from the allied healthcare industry, on the pretext of referral fees- in clear violation of rule 6.8.1(d) of the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002. The true consideration for this referral fee is the advice given to the doctor’s patient, and a potential customer of the service provider, in favour of stem cell banking.
The fiduciary relationship between the doctor and patient is, or has the potential of being, compromised as such by the extraneous considerations. That is clearly contrary to the letter, as also the spirit, of the code of conduct for the medical practitioners. The acceptance of such a referral fee by a medical practitioner is thus forbidden by the legally enforceable code of conduct, which renders it an expense for a purpose that is ‘prohibited by law’ depriving the assessee company to claim a tax deduction in respect of the said expenditure. We, therefore, approve the conclusions arrived at by the learned Commissioner (Appeals) on this issue, and decline to interfere in the matter. Ground dismissed.
Additional receipts having been brought to tax in the hands of the assessee - HELD THAT:- Assessee has now got some material to demonstrate that this receipt was already accounted for, but he fairly admits that this material was not available earlier, and, as such, authorities below had no occasion to deal with the same. Learned Departmental Representative also fairly accepts that this issue can be remitted to the file of the Assessing Officer for fresh examination, and taking an appropriate call in the light of such fresh examination. With the consent of the parties, therefore, the matter stands restored to the file of the Assessing Officer. Ground no. 3 is thus allowed for statistical purposes in the terms indicated above.
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2022 (6) TMI 1145
Validity of Reopening of assessment u/s 147 - requirement of recording of “reasons to believe” - validity of jurisdiction assumed by the AO for reopening the case of the assessee - disallowing claim of deduction u/s.54F - HELD THAT:- Assessing Officer had issued Notice u/s. 148 without recording the “reasons to believe” on the basis of which the case of the assessee was reopened by him. In our considered view, the failure on the part of the Assessing Officer to record “reasons to believe” prior to issuance of notice u/s.148, ould go to the very root of the validity of jurisdiction assumed by him u/s. 147 of the Act.
Our aforesaid view, i.e., the absence of recording of “reasons to believe” by the Assessing Officer prior to issuance of Notice u/s. 148 would render the jurisdiction assumed by him for reopening the case of the assessee u/s.147 of the Act and resultantly the consequential assessment so framed as invalid as relying on cases Abdul Majid [2005 (5) TMI 24 - ALLAHABAD HIGH COURT], Baldwin Boys High School [2015 (2) TMI 806 - KARNATAKA HIGH COURT], Shiv Ratan Soni and Baldev Singh Giani [2000 (9) TMI 42 - PUNJAB AND HARYANA HIGH COURT]
Requirement of recording of “reasons to believe” enshrined u/s. 148(1) of the Income Tax Act, 1961 was mandatory on the part of the Assessing Officer. Observing, that the assessment record did not contain reasons recorded by the Assessing Officer, thus the notice of reassessment proceedings had to be treated as nullity.
Thus we are of the considered view, that as the Assessing Officer prior to issuance of Notice u/s.148 had failed to record “reasons to believe”, therefore, he had wrongly assumed jurisdiction and framed the impugned assessment u/s.148/143(3) - Decided in favour of assessee.
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2022 (6) TMI 1144
Assessment u/s 153C - Denial of natural justice - no copy of satisfaction note was provided by the Assessing Officer in the course of assessment proceedings - HELD THAT:- It is fact on record that apart from the statements recorded u/s 131 from the assessee and from Shri Navin Nishar, Shri N K Sodhani and Shri Jayesh Zanani and relied upon by the Assessing Officer, there was no incriminating material found in support of the addition towards receipt of the purported alleged commission receipt. We also notice that though the Ld. CIT(A) has also relied on the statements of Shri Navin Nishar, Shri N K Sodhani and Shri Jayesh Zanani, the assessee was never provided with an opportunity to cross examine Shri Jayesh Zanani. It is also a fact that the statements of these parties were later retracted. We also notice that no new material was ever brought on record by the Assessing Officer to corroborate the allegation of commission receipt even despite the fact that the statements u/s 131 of the Acts relied upon by the Assessing Officer stood retracted. From perusal of the records and order of the lower authorities it is abundantly clear that there is no corroborative evidence or incriminating material to support the allegation on the assessee having received commission income.
We have observed that the assessee was not provided an opportunity of cross examination of Shri Jayesh Zanani, whose statements were relied upon by the AO for passing the order. Without prejudice, there is no mention in the statement of Shri Jayesh Zanani that the assessee has been paid commission at the rate of 0.15 percent by the companies stated to be entry providers. When no opportunity for cross examination is given, it is not proper to rely on such statements and fatal to the order passed.
There has been gross violation of the principles of natural justice and bearing in mind the above judicial precedents, we have no hesitation in holding that there was gross violation of principles of natural justice and fair play as the additions has been made without providing an opportunity to the assessee to cross examine those persons whose statements has been relied upon by the AO. And as regards merits of the case, we find that the issue is covered in favour of the assessee by the decision of the Coordinate bench in assessee’s group case of M/s Hemadri Machine Tools Private Limited wherein the alleged bogus donation on which the commission is alleged to have been earned was deleted.
Thus in view of above findings and also considering the merits of the case in that there is no incriminating material/corroborative evidence to affirm the receipt of commission income, all the grounds stand allowed. The addition made by AO accordingly stands deleted.
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2022 (6) TMI 1143
Income from house property - AO observed that in view of the provisions of section 23 deemed rental income of the property at Delhi, which remained vacant during the year was required to be taxed under the head Income from House Property’ - assessee as confronted that house was very old and partly damaged and was not in a livable condition - AO got field verification done and rejected the explanation and estimated the ALV of the property at Rs. 12,00,000/- for the AY 2008-09 and added an annual enhancement of 10% on the same for the subsequent years - AO held that since the property was not let out at any time during the period, the vacancy allowance was not available to the appellant - HELD THAT:- AO has not based the estimate on any reasonable working in determining the annual letting value. No description of the property as to the area and the market rates prevalent for rentals has been brought on record. Since, the annual value determined is devoid of any rational endorsement, we hereby delete the addition made by the revenue authorities. Appeal of assessee allowed.
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2022 (6) TMI 1142
Time limitation of one year to claim refund of Special Additional Duty - N/N. 93/2008-Customs dated 01.08.2008 - Whether N/N. 102/2007-Customs dated 14.09.2007 and the amending Notification No.93/2008-Customs dated -01.08.2008 issued under sub-section (1) of Section 25 of the Customs Act, 1962, have the standing and statutory backing to prescribe limitation for claiming refund? - HELD THAT:- This Court has taken a view in THE COMMISSIONER OF CUSTOMS, BANGALORE VERSUS M/S. MOLEX INDIA PVT. LTD., [2021 (10) TMI 342 - KARNATAKA HIGH COURT] agreeing with the view taken by the Delhi High Court in SONY INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS [2014 (4) TMI 870 - DELHI HIGH COURT], where it was held that Indisputably, in N/N.102/2007-Cus dated 14.9.2007, no time period was mentioned for claiming the refund under the said notification. By virtue of the amendment notifications and Circular Nos.6/2008, 10/2012 and 18/2013 issued by Central Board of Excise and Customs, additional restrictions were imposed for availing the exemption.
The substantial questions raised are answered against the Revenue and the appeal is dismissed.
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2022 (6) TMI 1141
Detention of goods - goods proposed to be exported under duty draw back scheme - levy of penalty - HELD THAT:- There are no merits in the present writ petition as far as the challenge to the impugned order is concerned as the petitioner has an alternate remedy. Therefore, the writ petition is liable to be dismissed. However, liberty given to file a statutory appeal before CESTAT, chennai within a period of sixty days from the date of receipt of copy of this order to the petitioner.
The writ petition stands disposed off.
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2022 (6) TMI 1140
Mis-declaration of imported goods - Scania 310 Chassis - one complete amphibian bus body mounted on chassis - whether the said mis-classification was with some malafide intention or not? - Confiscation of imported goods - redemption fine - penalty - HELD THAT:- The appellant herein imported one amphibious bus body manufactured and supplied by M/s. Advanced Amphibious Design Inc. Honolulu mounted on Scania 310 chassis supplied by M/s. Scania CV AB Sweden claiming classification of goods under CTH 8901. The appellant had claimed the CTH 89019000 which pertains as per chapter Heading reads as “Ships, boats and floating structures” and further the explanatory notes to the said chapter heading clearly excludes Amphibious motor vehicles designed to travel over both land and certain tracks of water (swapms etc.) are classifiable as motor vehicles in Chapter 87. There is no dispute that mis-classification was there as the appellant have not challenged the re-classification by the revenue rather they have paid the differential duty alongwith interest before the issuance of the show cause notice and the only issue raised by the appellant is about redemption fine and penalty.
The imported goods herein is Amphibious bus which is also a specialized motor vehicle which runs on road as well as on water. Thus, being a specialized transport vehicle, it is appropriately classifiable under CTH 87 Section XVII of Custom Tariff Act, which covers vehicles, aircraft, vessels and associated transport equipment. As per para 4(b) of Section XVII, amphibious motor vehicles are classified under the appropriate heading of Chapter 8703. However in bill of entry they claimed the classification of the goods under CTH 8901. As per the appellant, they merely goes by the advice of their consultant chartered accountant who vide his opinion dated 13.1.2017 advised them that amphibious bus shall be covered either under CTH 89019000 or 89069000.
The law laid down by the Hon’ble Supreme Court in the matter of NORTHERN PLASTIC LTD. VERSUS COLLECTOR OF CUSTOMS & CENTRAL EXCISE [1998 (7) TMI 91 - SUPREME COURT] which has been relied upon by learned Counsel, will not be of any help for the appellant as the said judgment was passed since there was bonafide belief as therein the appellant’s earlier consignment bearing the same description, same classification, identical claim for exemption was cleared by the Delhi Customs House for the previous year, whereas in the instant appeal looking at their earlier import which was under adjudication at the time of the instant import, if the appellant had any doubt regarding classification then instead of taking shield of opinion from their chartered account they could have requested for first check examination and could have taken advice from the customs about the correct classification of the imported goods.
The discussion made herein leads to an inevitable conclusion that the appellant had mis-classified the goods with an intention to evade payment of appropriate Custom duty. The appellant resorted to mis-classification / mis-declaration of description of goods showing number of packages as two instead of manifested number of packages as one and since the goods have been deliberately misdeclared/ mis-classified in the Bill of Entry they are liable for confiscation under Section 111(m) of the Customs Act, 1962 and appellants are therefore rightly held liable for penalty under Section 112(a) ibid.
Appeal dismissed - decided against appellant.
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2022 (6) TMI 1139
Refund claim of Special Additional Duty (SAD) - rejection on the ground of time limitation - refund claim has been rejected without issuing a Show Cause Notice or without granting an opportunity of personal hearing - HELD THAT:- It is clear from the findings recorded by the Adjudicating Authority that the appellant has filed the refund claim within the prescribed time limit of one year from the date of payment of duty, however, before a wrong forum. It is the settled position of law that when a refund claim is filed before a wrong forum, within the statutory time-limit, the date on which the claim was originally filed has to be taken as the date of filing of the refund claim.
In the case of SUN PHARMACEUTICAL INDUSTRIES LTD. VERSUS UNION OF INDIA [2016 (8) TMI 1515 - DELHI HIGH COURT] a similar issue was considered. It was held that when a refund application is made within the prescribed time-limit before a wrong forum and subsequently filed before the correct authority/forum, the original date of filing of the claim has to be taken for computing the time-limit of one year.
The rejection of refund on the ground of time-bar cannot be justified. The impugned order rejecting the refund claim is set aside. However, the matter requires to be remanded to the Original Authority who shall process the refund claim on merits - Appeal allowed by way of remand.
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2022 (6) TMI 1138
Import of kid bikes - allegation that the goods do not conform to the BIS requirements - Confiscation of the entire goods with an option to redeem the goods for the purpose of re-export only - levy of penalty - HELD THAT:- From the narration of facts stated, it can be seen that out of 183 kids bikes, the department does not deny the identity of 157 kids bikes. So also, there is no dispute as to the brand of these 157 bikes. The dispute is with regard to the 26 nos. of kids bikes only. However, the authorities below have ordered for confiscation and directed to re-export the entire goods or for destruction of the same at the cost of the importer (appellant).
The order for confiscation and re-export made in regard to 26 nos. of kids bikes does not require interference. From the records, it is seen that the goods were subjected to quality assurance test by National Accreditation Board for Testing & Calibration Laboratory (NABL). This report is dated 30.05.2018. It can be presumed that before the original export to USA, the goods were subjected to test for quality and standards. It is affirmed by the department that the reimported 157 bikes belong to the lot that was originally exported. Therefore, it has to be construed that the appellant has complied with requirement of BIS standard (brand name) as well as identity of 157 nos. of bikes. The order of confiscation and re-export in respect of 157 bikes requires to be set aside - the impugned order is set aside and modified to the effect that the 157 nos. of kids bikes have to be released to the appellants for home consumption. Confiscation and order to re-export or for destruction of remaining 26 nos. of kids bikes is upheld.The redemption fine of Rs.1,00,000/- is imposed for the entire goods.
It is directed that 157 nos. of kids bike has to be released on payment of redemption fine Rs.5,000/-. The requirement to pay redemption fine for 26 nos. of bikes for re-export is set aside. The penalty of Rs.50,000/- imposed under Section 112 (a) of the Customs Act, 1962 is reduced to Rs.1,000/-.
Appeal allowed in part.
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2022 (6) TMI 1137
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - Time Limitation - HELD THAT:- The Corporate Debtor contended that the Financial Creditor is guilty of forum shopping and has filed proceedings before DRT for the same cause. However, it is to be noted that the purpose of proceedings under Recovery of Debts Due to Banks and Financial Institutions (RDDBFI Act), 1993 is debt recovery and an action under the Insolvency and Bankruptcy Code aims at resolution of the insolvency of the Corporate Debtor. As such, taking action under one legislation cannot curtail the Financial Creditor’s right under the Insolvency and Bankruptcy Code 2016.
Time Limitation - HELD THAT:- It can be seen that the date of default is mentioned to be 30.09.2012 i.e the date on which the account became NPA. Accordingly, the limitation period for filing the application would ordinarily end on 30.09.2015. However, balance sheets of the Corporate Debtor from the year 2012 to 2019 have been placed on record by the Financial Creditor in the supplementary affidavit dated 6.02.2020. In these Balance sheets, multiple acknowledgments of debt to the Financial Creditor have been made by the Corporate Debtor, specifically, the Corporate Debtor has acknowledged the debt in the balance sheets of Financial Years 2012-13, 2014-15, 2015-16, 2016-17, 2017-18 and 2018-19 - due to the specific admissions of debt by the Corporate Debtor, section 18 of the Limitation Act, 1963 will come into effect and result in computation of fresh limitation period of three years from the date of acknowledgment in each balance sheet. Since the last of such acknowledgments was made on 31st March 2019, the limitation period would last up till 31st March 2022. As such, the present petition is well within limitation.
Whether admissions are not valid as the debt so acknowledged by the Corporate Debtor in the said balance sheets? - HELD THAT:- This Adjudicating Authority is satisfied that the debt albeit disputed was due from the Corporate Debtor to the Financial Creditor and the Corporate Debtor has made a default in the payment of the same and has also acknowledged the said fact and therefore the plea of Corporate Debtor is untenable and needs to be rejected.
Application admitted - moratorium declared.
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2022 (6) TMI 1136
Seeking initiation of Liquidation Process of the Corporate Debtor - seeking appointment of Resolution Professional as the Liquidator of the Corporate Debtor - Section 33(1)(a) of the I&B Code, 2016 - HELD THAT:- On 18.05.2022, when the matter came up for orders, the learned Resolution Professional submitted that the CoC held on 13.05.2022 noted the failure of the applicants in submitting a joint resolution plan. In the said meeting, the Resolution Applicants appeared and sought time till 16.05.2022 for submitting their joint Resolution Plan as committed before this Tribunal. Considering their request, the 25th meeting of CoC directed them to submit their Plan latest by 16.05.2022 and decided to adjourn the meeting further to 16.05.2022 for considering the progress of submission of Resolution Plan. On 16.05.2022, both the applicants intimated their inability to submit a joint Resolution Plan by email and confirmed this matter by appearing before the adjourned CoC held on 16. 05.2022.
It is clear that the only option left with this Tribunal to order the liquidation of the Corporate Debtor. Hence, this Tribunal proceeded to order the liquidation of the Corporate Debtor.
M/s. Trivandrum International Health Services Limited is hereby put under liquidation with immediate effect under Section 33 (1) of I&B Code, 2016 - Application allowed.
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2022 (6) TMI 1135
Money Laundering - scheduled offences - proceeds of crime - tainted money - requirement of sanction for criminal prosecution in money-laundering cases - Section 50 of PMLA - HELD THAT:- Money-laundering poses a serious threat not only to financial systems of countries but also to their integrity and sovereignty. To obviate such threats international community has taken some initiatives. The Prevention of Money-Laundering Bill having been passed by both the Houses of Parliament received the assent of the President on 17th January, 2003. It came on the Statute Book as THE PREVENTION OF MONEY-LAUNDERING ACT, 2002 (15 of 2003) (Came into force on 1-7-2005). The PMLA seeks to combat money laundering in India and has three main objectives: (I) to prevent and control money laundering, (ii) to confiscate and seize the property obtained from the laundered money; and (iii) to deal with any other issue connected with money laundering in India.
It is not in dispute that the tainted money was not obtained by the applicants in discharge of any official duty, the said money has no nexus with the official duty of the applicants and therefore, as per Section 197 of CrPC, there was no requirement for obtaining sanction for criminal prosecution of the applicants. There is no provision under the PMLA Act requiring sanction for criminal prosecution.
In this case, in the complaint filed by the ED all the facts as available in case registered by the ACB are mentioned and evidence has also been recorded under Section 50 of PMLA of the applicants by the competent authority. The defence taken by the applicants that they are innocent, under the pressure of Alok Kumar Agrawal they took the money which was seized from them, is a matter of evidence and also depends upon the defence to be taken by Alok Kumar Agrawal during the course of trial. Therefore, the defence taken by the applicants cannot be considered at this stage and it can be considered after recording entire evidence in the case - In the present case, in view of Section 94 of IPC, the defence of the applicants that they kept the tainted money of Alok Kumar Agrawal under threat or compulsion, whether there was any threat of instant death, is to be considered only after taking evidence of the parties during trial.
This Court is of the opinion that the tainted money seized from the applicants has no nexus with their official duties and as such, there is requirement of obtaining sanction for criminal prosecution in the money-laundering case and further, no such provision is there in the PMLA. The evidence of the applicants has been recorded in the case registered by the EoW and thereafter, their statements under Section 50 of PMLA was recorded wherein it was found that the tainted money was received by the applicants. Therefore, if the applicants are made accused in the money-laundering case, there is no illegality and also there is no any bar under any law for their impleadment in money-laundering case - this Court finds no illegality or perversity in the impugned orders of the trial Court taking cognizance of the offence against the applicants.
Revision petition dismissed.
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2022 (6) TMI 1134
Refund of the service tax - no services were provided by the German company and that the amount having been refunded to them, they are not liable to pay service tax under reverse charge mechanism - section 142(3) of CGST Act, 2017 - HELD THAT:- It is seen that there is no dispute that the appellant has not paid the service tax on the amount paid by them to the German company. So also there is no dispute that the contract was cancelled and the advance paid by them was returned by the foreign company to the appellant.
Section 142(5) of CGST Act, 2017 provides that the refund claim of service tax paid under the existing law in respect of services not provided shall be disposed of under the existing law and has to be paid in cash. It states that such refund is subject to provisions of sub-section (2) of section 11B of Central Excise Act, 1944 only - In the present case, refund has been rejected on the ground of being filed beyond the period of one year as stipulated in sub-section (1) of section 11B. The contract having been annulled on 9.8.2018, it cannot be expected of the appellant to file the refund claim within a period of one year from the date (6.6.2017) of payment of service tax. Further, section 142(5) expressly states that the limitation provided in sub-section (1) of section 11B is not applicable.
The Tribunal in the case of PUNJAB NATIONAL BANK VERSUS COMMISSIONER OF CENTRAL TAX, BANGALORE NORTH [2021 (7) TMI 326 - CESTAT BANGALORE] had occasion to consider a similar issue as to whether limitation would apply to the refund filed after the introduction of GST, where it was held that appellant is entitled for cash refund in view of Section 142(9)(b) of the CGST Act but for the purpose of verification of original invoices/documents, I remand the case back to the original authority for the limited purpose of verification of the invoices/ documents. The original authority will grant the refund after verification of the document and after following the principles of natural justice.
In the case of M/S. PKF SRIDHAR & SANTHANAM LLP VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI [2021 (10) TMI 1230 - CESTAT CHENNAI], it was held that the department cannot retain any amount which is not collected under the authority of law. When there is no liability to pay the service tax, the amount paid by the appellant cannot be retained by the department.
On perusal of section 142(5), it is stated that any amount accruing to the assessee has to be paid in cash notwithstanding anything contrary contained other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944. The restriction with regard to limitation is contained in section 11B(1) of the Central Excise Act, 1944. This being the case, the rejection of refund on the ground that it is time-barred cannot be justified - appeal allowed - decided in favor of appellant.
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2022 (6) TMI 1133
Recovery of dues - priority over of the dues - Whether in the absence of any provisions providing for First Charge in relation to Central Excise dues in the Central Excise Act, 1944, the dues of the Excise department would have priority over the dues of the Secured Creditors or not? - HELD THAT:- The petitioner-Bank is having first charge over the property belongs to the respondent No.3 and prays for deciding the matter in the light of the law laid down by Hon'ble Apex Court in the case of PUNJAB NATIONAL BANK VERSUS UNION OF INDIA & ORS. [2022 (2) TMI 1171 - SUPREME COURT], where it was held that the provisions contained in the SARFAESI Act, 2002, even after insertion of Section 11E in the Central Excise Act, 1944 w.e.f. 08.04.2011, will have an overriding effect on the provisions of the Act of 1944.
In view of the aforesaid judgment of Hon'ble Apex Court, nothing remains to be decided by this Court and by following the principle laid down by Hon'ble Apex Court the letter/ communication dated 01.03.2013 (Ann.P.18) appears to be illegal and without jurisdiction and is hereby quashed holding thereby that the petitioner-Canara Bank is having first charge over the property belongs to the respondent No.3. It is further directed that respondent No.1 and 2 shall not create any hurdle in auction and sale of the property in question.
Petition allowed.
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2022 (6) TMI 1132
Levy of penalty u/r 8 (3A) of Central Excise Rules, 2002 - Freezing of Bank accounts of petitioner - non paid duty - HELD THAT:- Though the rule clearly prescribes the penalty however, the Revenue has not followed the principle of natural justice in as much as they have not issued any SCN and no opportunity was given to the appellant to defend or explain their case. It is a settled law that even though there is no explicit provision for issuance of SCN, as per the Principle of natural justice an assessee should be given sufficient opportunity to explain their case particularly for invocation of penal provision. In the present case admittedly neither SCN was issued to the appellant nor was any opportunity given.
The penalty is liable to be set aside only on the ground of principle of natural justice - Penalty set aside - appeal allowed - decided in favor of appellant.
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2022 (6) TMI 1131
Dishonor of Cheque - Insufficiency of fund - Legally enforceable debt or not - acquittal of the accused - preponderance of probablities - failure to discharge the fundamental burden of proving his capacity to advance loan - Section 397 and 401 of Cr.P.C. - HELD THAT:- The consistent defence of the petitioner eversince he received the statutory notice from the complainant/respondent is that there was no privity of contract and the cheque was not given to the complainant to discharge any legally enforceable debt and further, the complainant has no source of income to advance Rs.9 lakhs. When a specific defence raised by the accused person at the inception itself even before filing the complaint, the complainant is bound to explain in his complaint regarding the source of income. Failure to explain his source of income is fatal to the complaint. The person capacity to advance loan of Rs.9 lakhs is a very fundamental fact when the capacity is questioned. To add, the complainant admits that he did not receive any other document for advancing loan of Rs.9 lakhs, except the postdated cheque given to him.
In any transaction, when cheque is issued, it is presumed to be issued to discharge the existing debt. Offence under Section 138 of Negotiable Instruments Act will get attracted, if the said debt happens to be legally enforceable. Therefore, the existing debt pre-suppose a presumption. If the accused able to prove by preponderance of probabilities that there was no existing debt on the date on which the cheque bears, then the complainant under Section 138 of the Negotiable Instruments Act cannot have the advantage of the statutory presumption under Section 139 of the Negotiable Instruments Act.
Hon'ble Supreme Court in BASALINGAPPA VERSUS MUDIBASAPPA [2019 (4) TMI 660 - SUPREME COURT], when the capacity to advance loan or transaction for which the alleged cheque given is denied, the complainant cannot take advantage of Section 139 of the Negotiable Instruments Act without discharging his burden of proving the fundamental fact regarding transaction, which has created an existing debt (or) his capacity to advance loan atleast equivalent to the amount found in the cheque. In this case, for the cheque amount is Rs.9 lakhs, no other previous existing debt (or) transaction claimed in the complaint. No evidence was produced by the complainant to prove his financial capacity to advance a huge sum of Rs.9 lakhs.
Taking into consideration his background admittedly a small time farmer holding 6 acres of land and not even a bank savings account claiming he advanced loan of Rs.9 lakhs as against the postdated cheque and no other document obtained for the money transaction, is obviously bound to be suspected - this Court holds that the appellate Court erred in reversing the trial Court judgment.
This Criminal Revision Case is allowed.
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2022 (6) TMI 1130
Dishonor of Cheque - signing of cheque jointly - vicarious liability u/s 141 of NI Act - insufficiency of funds - acquittal of the accused - existence of legally enforceable debt or not - HELD THAT:- This court finds force in the submission of learned counsel for the petitioners that, at no point of time, allegation, if any, with regard to advancement of loan to the petitioners ever came to be leveled rather, the complainant specifically stated in the complaint that in March, 2016, he on the request of accused Rishi Rana advanced him loan to the tune of Rs. 5.00 Lakh for his domestic use. There is not even a whisper in the complaint that the loan to the tune of Rs. 5.00 Lakh was advanced to some firm or other partners of accused Rishi Rana. It is only after conclusion of evidence, that the complainant filed an application under S. 319 CrPC praying therein to array the petitioners as an accused on the ground that they have also signed cheque alongwith accused Rishi Rana. It has been further averred in the reply that inadvertently before instituting complaint under S.138, no notice could be issued to the petitioners.
Once there is no allegation in the complaint that Rs. 5.00 Lakh was advanced to the firm or to other partners of the accused Rishi Rana, complaint against the petitioners is otherwise not maintainable. Mere fact that they have also signed the cheque in question, is not sufficient to conclude complicity of the petitioners in the case, especially when there is no allegation in the complaint that the complainant had advanced loan to the tune of Rs. 5.00 Lakh to the firm or the persons sought to be arrayed as accused - True it is that in the case at hand, cheque in question has been signed by petitioners alongwith respondent/accused Rishi Rana, but once there is no liability if any of these persons towards complainant, they otherwise cannot be held liable for issuance of cheque, which ultimately came to be dishonoured on account of insufficient funds.
Interestingly in the case at hand, there is no allegation worth the name in the complaint against the petitioners, that they had taken loan from complainant and they with a view to discharge their liability issued cheque which subsequently came to be dishonoured on account of insufficient funds - Otherwise also it is well settled by now that only the person who was at the helm of affairs of the Company and in charge of and responsible for the conduct of the business at the time of commission of an offence will be liable for criminal action.
No doubt under S.319 CrPC, court enjoys vast power to order impleadment of those persons as accused against whom, some evidence appears during trial or enquiry that he has also committed offence alongwith other accused but in the case at hand, there is /was no material available before court below to arrive at a conclusion that persons sought to be arrayed as accused i.e. petitioners herein had committed offence punishable under S.138 of the Act.
Petition disposed off.
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