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Showing 441 to 460 of 1551 Records
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2024 (2) TMI 1111
Penalty u/sec. 271(1)(c) - income disclosed in search action - only contention that has been submitted by the assessee in his defence on merits is that he has declared the suppressed receipts amount in his return of income filed u/sec. 153A - HELD THAT:- In the case of CIT v. Prasanna Duga [2015 (5) TMI 317 - CALCUTTA HIGH COURT] has held that even subsequent to search, if the assessee voluntarily discloses a sum and offers the same to tax, since the said amount was not disclosed in original return, penalty levied u/sec. 271(1)(c) was justified.
SLP against the same decision was dismissed in Prasanna Dugar [2015 (8) TMI 477 - SC ORDER] holding that even if assessee voluntarily disclosed a sum subsequent to search and offered said sum to tax, penalty levied under sec. 271(1)(c) r.w. Explanation 5A was justified.
Reverting to the present fact situation, it is evident that due to search action, it was disclosed that there had been suppression of receipts by the assessee. This suppression of receipts was also later on admitted by the assessee vide his statement u/sec.132(4). The suppress receipts were even disclosed as additional income in the return filed u/sec. 153A of the Act by the assessee.
But the fact remains that if search had not taken place, then these suppressed receipts would not have been discovered and would have escaped being taxed. This is a definite case of concealment of income. Thus even on merits also, we do not find any infirmity in the findings of the ld. CIT(A) in upholding the levy of penalty u/sec. 271(1)(c) of the Act. All the grounds, in both the appeals, raised by the assessee stands dismissed.
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2024 (2) TMI 1110
Unexplained money - proof of source cash deposited in bank account - proof of cash on hand - HELD THAT:- From CIT(A)'s order it is clear that the assessee’s claim regarding cash in hand was rejected but without giving any reason for the same. If the assessee’s contention is that it had turnover exceeding the limit u/s 44AD, the learned CIT(A) ought to have taken action in accordance with law.
However, he merely sustained the addition made by the AO. Therefore, the claim of the assessee regarding business transaction in cash is not adverted by the lower authorities by giving a clear finding. Therefore assessee having cash in hand cannot be rejected. The impugned addition is hereby deleted. Grounds raised by the assessee are allowed.
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2024 (2) TMI 1109
Addition of agricultural income - Admission of additional evidence to substantiate agriculture activities of assessee - HELD THAT:- During the hearing, AR placed on record the surveyors’ report, wherein the land used for agriculture activities, types of trees, and other activities are mentioned. Accordingly, the learned AR submitted that the land measuring 66.8135 Hector was used for the plantation of mango, cashew, coconut, pineapple, banana, jackfruit, chikoo, jamun, bamboo, and animal feeding plantation. Thus, it is the claim of the assessee that apart from the 7/12 extract the aforesaid surveyors’ report also justifies the claim of the assessee that an amount of Rs. 22.70 lakh is the agriculture income of the assessee.
Since the aforesaid document, now placed as additional evidence, was not considered by any of the lower authorities, therefore, in the interest of justice, we deem it appropriate to restore this issue to the file of the jurisdictional AO for de novo adjudication after consideration of the additional document furnished by the assessee - We also direct the AO to conduct thorough verification/examination of all the aspects pertaining to the claim of income as agricultural income - As a result, ground no. 1 raised in assessee’s appeal is allowed for statistical purposes.
LTCG - Exemption u/s 54F - claim denied as vacant and peaceful possession of the residential house is not handed over to the assessee as full and final consideration is not paid - During the hearing, in support of the claim that the assessee is the lawful owner of the flat and the share certificate by the Co-operative Housing Society has also been transferred in its name, reference was made to the copy of share certificate issued by Housing Society - HELD THAT:- It is evident from the record that the aforesaid documents have not been considered by the lower authorities and the claim of the assessee was rejected u/s 54F on the basis that the assessee is not the owner of the flat. Therefore, in the interest of justice, we deem it appropriate to restore this issue to the file of the jurisdictional AO for de novo adjudication after consideration of all the material as furnished by the assessee.
Appeal by the assessee allowed for statistical purposes.
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2024 (2) TMI 1108
Deduction u/s 80IA - copy of Form 10CCB was not e-filed separately within due date - mandatory v/s directory obligation - Against the same, the assessee filed revised return of income and on the same day, the assessee filed copy of Form 10CCB electronically, still, the claim was denied by CPC - HELD THAT:- We find that this issue is squarely covered in assessee’s favor by the decision of G.M. Knitting Industries P. Ltd [2015 (11) TMI 397 - SC ORDER] as affirming the decision of AKS Alloys P. Ltd [2011 (12) TMI 39 - MADRAS HIGH COURT] wherein it was held that when a relief is sought for under Section 80IB of the Act, there is no obligation on the part of the assessee to file return accompanied by the audit report, thereby, holding that the same is not mandatory. Therefore, it is clear that before the assessment is completed if such report is filed, no fault could be found against the assessee.
Filing of audit report along with the return was not mandatory but directory and that if the audit report was filed at any time before the framing of the assessment, the requirement of the provisions of the Act should be held to have been met. See A.N. Arunachalam [1994 (1) TMI 65 - MADRAS HIGH COURT] and in CIT v. Jayant Patel [1998 (9) TMI 6 - MADRAS HIGH COURT] - Thus we direct Ld. AO to allow the impugned deduction u/s 80IA.
Disallowance u/s 36(i)(va) for late payment of PF dues - HELD THAT:- This seem to be double disallowance since this disallowance has already been offered by the assessee suo-moto in the computation of income. The AO is directed to verify the same and delete this disallowance, if the submissions of Ld. AR are found to be correct. This ground stand allowed for statistical purpose.
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2024 (2) TMI 1107
Assessment u/s 153C - Penalty u/s 271D / 271E - violation of provisions of Sec.269SS and 269T - basis of presumption u/s 132(4A) - Period of limitation - assessee is a third party - assessee reiterated that it had no connection with the cash payments and receipts as mentioned in the seized material of M/s Vels group and these entries were merely one-sided entries only - HELD THAT:- In the seized material which is found from third party premises, it was alleged that the assessee received cash loan in violation of provisions of Sec.269SS - This allegation was on the basis of presumption u/s 132(4A) which provide that where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person and the contents of such books of account and other documents are true.This presumption is rebuttable one and operates only against the person in whose possession the books of account, other documents, money, bullion, jewellery or other valuable article or thing is found. The assessee is a third party and therefore, this presumption could not be raised against the assessee.
Connection with the cash payments and receipts - So far as the assessee is concerned, he has denied having received any such loan. To support the same, the assessee also filed confirmatory letter from the other party that no such cash transactions have taken place between the assessee and the other group. No further enquiry has been made by Ld. AO to corroborate the receipt of loan by the assessee. The allegation is merely on the basis of one-sided entries found in the premises of a third party. Therefore, the impugned penalty could not be sustained considering this point.
As undisputed AO has moved a proposal to appropriate authority for initiation for proceedings u/s 271D on 26.05.2022 whereas the assessment order was passed on 28.09.2021. The proposal has been moved nearly 8 months after completion of assessment proceedings. The same is in violation of CBDT Circular no. 09/DV/2016 dated 26.04.2016 advising Assessing Officer to make a reference to the Range Head regarding violation of provisions of Sec.269SS and 269T during the course of assessment proceedings itself. Thus, the action of Ld. AO was in gross violation of departmental circular. Therefore, we confirm the findings of Ld. CIT(A) in that regard.
Mandation of recording the satisfaction - Case of the assessee is covered by the decision of Jai Laxmi Rice Mills (2015 (11) TMI 1453 - SUPREME COURT] which specifically provide that no penalty could be levied u/s 271E without recording the satisfaction.
recoding of satisfaction in the assessment order regarding the violation of provisions of Sec.269SS was a mandatory requirement for valid initiation of penalty proceedings u/s 271D of the Act. No such penalty could be levied if AO failed to record such satisfaction in the assessment order. Therefore, in our considered opinion, Ld. CIT(A) has passed a well reasoned order deleting the impugned penalty. Decided in favour of assessee.
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2024 (2) TMI 1106
Territorial jurisdiction of AO - Validity of notice issued u/s 143(2) and assessment completed by ACIT, Circle-3, Deoghar - Whether curable defect u/s 292BB? - as argued assessment was completed by ACIT, Circle-3, Deoghar, Jharkhand whereas the assessee’s residential place is in Gomti Nagar, Uttar Pradesh which is covered in database of Income tax - grievance of the assessee is that the assessee has no territorial jurisdiction or any other jurisdiction u/s 127 before the Ld. AO, Deoghar, Jharkhand.
HELD THAT:- Here the assessee’s jurisdiction is duly covered in assessment order and in appeal order clearly mentioned in the state of UP. There is no such any territorial jurisdiction of Ld. AO in Deoghar, Jharkhand on the jurisdiction of state of UP. So entirely the Ld. AO connected for violation of the jurisdiction. We fully rely on the order of Coordinate Bench in case of Rungta irrigation Ltd. (2019 (10) TMI 344 - ITAT KOLKATA] and M/s K.A. wires Ltd. (2020 (3) TMI 418 - ITAT KOLKATA] - AO had acted beyond the jurisdiction.
We also relied the order of M/s Rupasi Bangla Agro Industries Pvt ltd [2023 (12) TMI 930 - ITAT KOLKATA]The notice which was issued U/s 143(2) by the ld. AO is beyond jurisdiction. The said notice is not curable U/s 292BB of the Act.The ld. DR was unable to show any different facts. The ld. AO has framed the assessment beyond the jurisdiction. Decided in favour of assessee.
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2024 (2) TMI 1105
Disallowance of interest expenditure u/s 40A(2)(b) - interest paid to related parties - Addition on the ground that the appellant had the enough funds to pay the debts and the borrowings from the related parties were not necessary - HELD THAT:- In the present case, it is pertinent to note that it is not anybody’s case that the interest has been paid by the assessee to its partners and rather fact of the case is that the assessee has availed unsecured loans from its related persons at the interest rate of 18% per annum. Thus, we find no merits in the reliance placed by the learned CIT(A) on the aforesaid provision for justifying the rate of interest at 12%.
Since, in the present case, the relevant material for determining the fair market value of the interest rate for availing unsecured loans has not been examined, we deem it appropriate to restore this issue to the file of the AO for de novo adjudication.
In the interest of justice, one more opportunity is granted to the assessee to furnish the relevant material/documents to justify its claim that payment of interest @18% is at fair market value. With the above directions, the impugned order on this issue is set aside and ground no. 1 raised in assessee’s appeal is allowed for statistical purposes.
Addition on account of notional interest on the amount lying idle in assessee’s bank account - HELD THAT:- From the perusal of the summary, duly supported by the statements of the bank accounts of the assessee maintained with the Bank of Bahrain and Kuwait as well as HDFC Bank, we find that prior to the payment to various airlines such as Jet Airways, Global Aviation, Cathay Pacific, Air France, etc. assessee’s bank accounts are maintaining huge balance, however after the payment to the aforesaid airlines the balance in assessee’s accounts even goes down to negative balance. Thus, we agree with the submissions of the assessee that it needs funds for its working capital to run the business. Therefore, we find no merits in the findings of the AO on this issue.
Thus as huge funds in assessee’s bank account were required for the purpose of working capital and were paid to various airlines during the course of its business as a freight agent - aforesaid addition has been made by the AO without invoking any provision of the Act, and therefore in our considered view, also lacks the authority of law. The impugned addition is set aside. As a result, ground no. 2 raised in assessee’s appeal is allowed.
Disallowance of transportation charges - Appellant has not deducted TDS thereon as applicable - HELD THAT:- During the hearing, the learned AR by referring to the provisions of section 194C(6) of the Act submitted that TDS under this provision is not required to be deducted while crediting or paying a sum to the transporter upon the furnishing of PAN of the transporter to the person paying or crediting such sum. AR submitted that the assessee must have provided the PAN to the AO during the assessment proceedings, however, there is no documentary evidence, at present, regarding the same.
In the interest of justice, we grant one more opportunity to the assessee to provide the PAN of the transporter to AO in order to prove the compliance of provisions of section 194C(6) of the Act. Accordingly, this issue is restored to the file of the AO for de novo adjudication.
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2024 (2) TMI 1104
Fringe Benefit Tax (“FBT”) - business promotion expenses treated as fringe benefit accorded by the assessee to its employees - As per the assessee, the expenses debited under the head “Advertisement and Business Promotion” and considered by the AO to be covered u/s 115WB(2)(d) and section 115WB(2)(o) are not incurred on its employees and rather the same has been incurred on the Doctors.
HELD THAT:- We find that the assessee filed the details of expenses, vouchers, etc. to substantiate its claim that the Advertisement and Business Promotion expenses are recurring expenditures incurred during the normal course of the business exclusively for the purpose of business. AO after examination and verification of these details on a text check basis stated that the expenses are incurred by field staff for giving various gifts, travel facilities, etc. to the Doctors for promoting the products of the assessee. Therefore, from the aforesaid remand report, it is sufficiently evident that the Revenue has accepted that the expenses under the head CRM/KAM are incurred for the benefit of the Doctors.
We find that in Pr.CIT v/s Aristo Pharmaceuticals (P) Ltd., [2020 (1) TMI 1155 - BOMBAY HIGH COURT] after analysing the provisions of section 115WA of the Act held that for levy of FBT, the relationship of employer and employees is the sine qua non and the fringe benefits have to be provided by the employer to the employees in the course of such relationship. Accordingly, the Hon’ble High Court held that since there was no employer-employee relationship between the taxpayer and the Doctors, the expenditure incurred for distributing free samples to the Doctors could not be construed as fringe benefits to be brought within the additional tax net by levy of FBT.
Since, in the present case, no material has been brought on record by the Revenue to show that the Doctors were employees of the assessee, therefore, addition made by the AO u/s 115WB(2)(d) and section 115WB(2)(o) of the Act is deleted. Grounds raised by the assessee are allowed.
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2024 (2) TMI 1103
Deduction u/s 80IC - disallowance of deduction as products manufactured by assessee falling under the negative list - CIT (A) decided the issue in favour of the assessee - HELD THAT:- Since ld. CIT (A) has followed earlier order of CIT (A) which has been upheld by the ITAT, we uphold the order of the ld. CIT (A) on this issue as held products manufactured by the appellant viz., "Pillar Filler" and "OGX" do not fall under the negative list contained in the Thirteenth Schedule, and therefore, the appellant is entitled to deduction under section 80IC of the Act. Therefore, maintaining judicial discipline and respectfully following the decision of ld. CIT (A), the appeal on this ground is allowed. Decided in favour of assessee.
Nature of expenses - disallowance of royalty expenditure holding the same to be capital in nature as covered within the meaning of intangible asset u/s 32(1)(ii) of the Act, after allowing depreciation @ 25% thereon - CIT (A) deleted the disallowance following the orders passed by the Tribunal in assessee’s own case in earlier years - HELD THAT:- As this issue is squarely covered by the following decisions of M/s. Henkel Teroson India Ltd [2012 (3) TMI 723 - ITAT DELHI],M/s. Henkel Teroson India Ltd [2016 (7) TMI 1694 - ITAT DELHI] and M/s. Henkel Teroson India Ltd [2018 (4) TMI 1971 - ITAT DLEHI] - Respectfully following the precedent as above, we do not find any infirmity in the order of the ld. CIT (A). Accordingly, we uphold the same on this issue.
Restriction of tax paid u/s 115-O @ 10% in terms of Article 10 of the DTAA between India and Germany - HELD THAT:- On this issue, we note that this issue has been raised for the first time before the ITAT by way of cross objections. Assessee, at the outset, admitted that this issue has been decided in the case of DCIT vs. Total Oil India Pvt. Ltd. [2023 (4) TMI 988 - ITAT MUMBAI (SB)] wherein it has been held that the beneficial rate for taxation of dividend under application DTAAs is not applicable on the DDT paid on dividends inasmuch as DDT is an additional income tax in the hands of the company and not the shareholder i.e. DDT is a tax liability of the company on the profits it seeks to distribute as dividend and not income in the hands of the shareholder with incidence of payment of tax on the company. Accordingly, following the precedent, we reject this objection raised by the assessee.
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2024 (2) TMI 1102
Prayer for a direction extending the validity period of Duty Credit Certificate by a period of 15 years - permit use of the Duty Credit Certificate to defray I.G.S.T and G.S.T Compensation Cess - utilise the benefit under the Target Plus Scheme ('TPS') - Option of set off in duty and additional duty payable on its imports - Entry 56 of notification No.26/2017-Cus. - violative of Articles 14 and 19(1)(g) of the Constitution of India - retrospective amendment of EXIM policy affecting the rights under the TPS - prescribes 24 months time limit for utilisation of the certificate under the TPS - Director General of Foreign Trade ('D.G.F.T') to be ultra-vires the Section 5 of the Foreign Trade (Development and Regulation) Act, 1972 ('the Act') read with Foreign Trade Policy (2004-2009) -
(i) Whether the period of validity for availing the Duty Credit Benefits under the TPS as 24 months from the date of issue of scrips is without jurisdiction and illegal ? - HELD THAT:- Section 5 of the Act empowers the Central Government to announce the export and import policy and also to amend the policy from time to time. Section 6 of the Act empowers the Central Government to appoint any person as D.G.F.T to advice the Government in formulation of the policy to carry out the policy and to exercise such powers as is conferred upon him by the Central Government in implementing the EXIM policy. Section 6(3) of the Act provides power to amend that policy cannot be delegated to D.G.F.T and it would be prerogative to the Central Government.
It is in this background, the Central Government has chosen to designate the D.G.F.T as the Ex Officio Additional Secretary to the Government of India. Because the substantial part of the scheme is contained in the FTP and the procedural part of it has to be laid down in the Handbook of Procedures, it is expressly authorised under the FTP, the Handbook of Procedures is also notified by the Ministry of Commerce and Industry, Government of India and the public notice is signed by the person in the capacity both as the D.G.F.T and Ex Officio Additional Secretary to the Government of India. Thus, the ruling of the Hon'ble Supreme Court of India in Agricas LLP's case [2020 (8) TMI 705 - SUPREME COURT] would be squarely applicable to the facts of the case and the very same authority being both the D.G.F.T and the Additional Secretary to the Government of India and the notification being issued by the Ministry of Commerce and Industry, Government of India, it cannot be said that period of 24 months has been prescribed by the delegatee.
Secondly, a reading of Clauses 2.4 and 2.8 of the FTP it can be seen that not only the laying down the procedure is ordered to be made in the Handbook of Procedures, it is also stated that the Certificates are valid only for the period mentioned therein. Therefore, it cannot be said that there is no express delegation of power to prescribe the validity period of 24 months.
Thirdly, the 24 months period of validity was prescribed by the notification mentioned above on 07.04.2006. As a matter of fact, when in the earlier round of litigation, the retrospective amendment of EXIM policy affecting the rights under the TPS was challenged before the Hon'ble Supreme Court of India in Kanak Exports' case[2015 (11) TMI 80 - SUPREME COURT], none of the petitioners thereunder including the present petitioner complained about the prescription of 24 months period of validity of the Duty Certificate. Suffice it to say that when the TPS was introduced in the FTP, simultaneously, the Handbook of Procedures in Volume - I also prescribed the said validity period of 24 months. Having availed the benefit with the said period prescribed and just because now in the year 2021, due to its business reasons, wherein, the petitioner is unable to exhaust the entire duty credit it cannot now belatedly challenge the prescription of 24 months and therefore, we hold that there is no infirmity or illegality in Clause 3.2.5(VII) of the Handbook of Procedures. Accordingly, we answer this question.
(ii) Whether the Entry 56 made vide notification, dated 01.07.2017 is illegal and amounts to taking away the vested rights of the petitioner ? - HELD THAT:- According to the Central Government, these additional duties which are brought in by the amendment need not be given exemption by adjustment of duty credit under the TPS. Accordingly, the impugned notification, was issued, whereunder by Entry 56, it was made clear limiting the exemption on imports availed under Duty Credit Certificates to the levy of additional duties under Sections 3(1), 3(3) and 3(5). Thereby, it was ensured that there was no change in the scope of exemption that has been originally granted by the notification, dated 10.07.2006. Thus, it cannot be said that the Entry 56 takes away any vested right.
A reading of Sections 3(7) and 3(9) would show that the legislature consciously did not employ the term as ‘additional duty’. It is only the trade notice which mentions the manner of collection as if they would be collected as additional duty. Thus, mentioning as such in the trade notice will not make the I.G.S.T or G.S.T Compensation Cess as additional duty. Accordingly, we answer this question that the impugned Entry 56 merely clarifies and makes the existing position abundantly clear and does not in any manner take away any vested right and as such, is not illegal or ultravires.
(iii) Whether the petitioner is entitled for extension of time to avail the Duty Credit in view of the delay on the part of the respondents in issuing the Duty Credit Scrips ? - HELD THAT:- It is true that pursuant to the various amendments which were the subject matter of the earlier round, even though the TPS was introduced in the FTP of 2004-2009, ultimately, the retrospective amendments were held to be invalid and the Central Government and the D.G.F.T were directed to confer the benefits on the Star Trading Agencies as per the scheme by the judgment dated 27.10.2015. Even thereafter, no due certificates from the departments were insisted upon and only after the order of the Hon'ble Supreme Court of India in the Contempt Petition, dated 26.11.2019, ultimately, the Target Plus Scrips were issued on 19/04/2021. However, that by itself does not cause prejudice to the petitioner because the 24 months period starts running from the date of issue of the scrips and therefore, no vested right of the petitioner is defeated.
Thus, the Court cannot come to the aid of the petitioner by granting the relief of extending time by 15 years as the same is not based on any concomitant right. However, during the course of the arguments, it was brought to the notice of this Court that by citing the time lag and the varied circumstances, the petitioner has moved the Policy Relaxation Committee under Clause 2.5 of the Policy and pending the hearing, by an order, dated 12.01.2024, we held that pendency of the Writ Petitions would not be an impediment for the Committee to take a decision on its own merits dehors the pendency of the Writ Petitions.
We once again reiterate that the consideration of the Policy Relaxation Committee can be on its own merits dehors the dismissal of the Writ Petitions.
In the result - (i) The Writ Petitions in W.P.Nos.3335 and 3337 of 2022 shall stand dismissed;
(ii) W.P.No.3339 of 2022 is disposed of rejecting the prayer of the petitioner to extend the validity period of Duty Credit Certificate by a period of 15 years and to use the Duty Credit Certificate to defray I.G.S.T and G.S.T Compensation Cess, however with the observations that it would be open for the respondents or the Policy Relaxation Committee under Clause 2.5 of the Policy to consider extension of time etc., on the petitioner's request on its own merits as per the law and policy.
(iii) There shall be no order as to costs. Consequently, W.M.P.No.3458 of 2022 is closed.
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2024 (2) TMI 1101
Whether guilty of fraud - Illegal export of red sanders by misdeclaring it as gypsum boards - red sanders are prohibited goods - Penalty imposed for abettment - statement given to the Customs Officer recorded u/s 108 - Whether the confessional statement of the appellant given to the Customs officers u/s 108 of the Customs Act, 1962 though retracted at a later stage, is admissible in evidence and could form basis for conviction? - HELD THAT:- It is well settled principle of law that the statement recorded u/s 108 of the Customs Act is a substantive piece of evidence not only against the maker of the statement, but also against the co-accused. No corroboration to the statement is required. The appellant was given adequate opportunity to provide rebuttal evidence, but nothing produced by him to prove his innocence.
It is to be noted, the records relied by the Department indicates, Alexander was summoned under Section 108 of the Customs Act for the second time and his statement was recorded on 19.06.2006 before the Jailer, Central Prison, Madurai. The appellant, vide summon dated 15.06.2006, was asked to appear before Senior Intelligence Officer, D.R.I., Chennai, on 19.06.2006 at 12.00 noon, to give evidence and produce documents in connection with the seizure of red sanders from M/s.Freedom Impex. The appellant had appeared before the Senior Intelligence Officer, D.R.I. at Chennai on 19.06.2006 in response to the summon. The statement recorded remain inconclusive with the noting that the appellant refused to reply to the question when confronted with the statement of John Alexander dated 19.06.2006, which was supposed to be recorded on the same day at Madurai Central Prison. In the impugned order, the conduct of the appellant his refusal to sign the statement been considered as an attended circumstances to infer his guilty.
Whereas, the time and sequence apparently indicates that by all probability, the statement of John Alexander purported to have recorded in Madurai Central Prison on 19.06.2006 could not have reached Chennai and shown to the appellant on the same day at 12.00 noon, when he appeared before the Senior Intelligence Officer, D.R.I. Further, by recording that the appellant had refused to sign the statement, the Department has made it as a reason to arrest him and produce before the Magistrate on the same day at about 09.00 p.m.
The facts, such as the alleged payment of Rs. 60,000/- through ICICI Bank as remuneration for the illegal export and the alleged transit of Cargo from Chennai to Tirunelveli by the appellant, were never verified, though they are verifiable. The admission that the appellant is a licensed dealer in red sander and he know the exporter John Alexander as Alex of Tutucorin is neither a fact to corroborate the incriminating statement of co-noticee, indicting the appellant. The principle of preponderance of probability been wrongly invoked by CESTAT without any fact either circumstantial or by way of corroboration relate the appellant to the Cargo seized by D.R.I. Not even a remote material available to believe the statement of a tainted person.
The decisions of the Hon'ble Supreme Court in K.I.Pavunny's case [1997 (2) TMI 97 - SUPREME COURT] or in Naresh J.Sukhawani's case [1995 (11) TMI 106 - SUPREME COURT] and Imtiaz Ahmed's case [2022 (12) TMI 1341 - KARNATAKA HIGH COURT] does not vouchsafe the impugned order holding the appellant guilty based on the confession of the co-accused without semblance of corroboration or circumstances. If statement of an accomplice accepted without material corroboration, it will be travesty of justice.
Therefore this Court holds that the order of the CESTAT impugned in this appeal is liable to be set aside, being perverse and contrary to law.
In the result, this Civil Miscellaneous Appeal is allowed. There shall be no order as to costs. Consequently, connected Miscellaneous Petition is closed.
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2024 (2) TMI 1100
Request for provisional release of the goods subject to furnishing a bond - Export business of spices - Bill of Entry - Coarse Ground Chilli re-imported - exemption under Notification No. 52/2003-Customs - HELD THAT:- During the pendency of this writ petition, the assessment order (original) has been passed, wherein it has been held that Coarse Ground Chili re-imported vide the Bill of Entry 8862322 is not eligible for exemption under Notification No. 52/2003-Customs. Once the petitioner request for exemption from payment of duty has been declined in the order (original), the petitioner has the remedy of filing the appeal.
Thus, We do not find that this writ petition is to be entertained when the final order has been passed against which the remedy of appeal is provided under the Customs Act, 1962.
There is no question of granting any interim relief as prayed by the petitioner. However, it would be expedient in the interest of justice to direct the Appellate Authority to decide the Interim Application of the petitioner within a period of two weeks from the date of its filing along with the appeal.
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2024 (2) TMI 1099
Mis-declaration - Imported goods declared as Indonesia Robusta Coffee - 100% EOU - Goods imported was Coffee husk and not Coffee beans - confiscated goods under Sections 111(f), (l), (m) & (o) of the Customs Act, 1962 - CESTAT has allowed the appeal that the importer can approach the concerned authority and submit a fresh application under Rule 5(1)(a) of Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017- HELD THAT:- Shri. Javali is right in his submission that confiscation could not be ordered unless goods were seized. Further, since the respondent Unit is 100% EOU, even if there were to be a mistake in declaration, unless it is proved by the Customs Authority that the goods are not re-exported or sold in the domestic market, the entire issue remains revenue neutral in nature. In any event, the CESTAT has reserved liberty to the importer to submit a fresh application under Rule 5(1)(a) of the Rules. Thus, Revenue cannot have any grievance. Resultantly, this appeal must fail.
Hence - The substantial questions of law raised in the appeal memorandum are answered in favour of the assessee and against the Revenue.
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2024 (2) TMI 1098
Conversion of Shipping bill under Drawback scheme to Advance Authorisation scheme - Condition provided in Board's Circular No. 36/2010 - Payment of customs duties on goods exported - documents of export are produced - time limit in the Circular No.36/2010 - HELD THAT:- No allegation that on the basis of Shipping Bill/export documents, the exporter has not fulfilled any of the conditions of the export promotion scheme to which he is seeking conversion. Further there is no allegation that the examination report and other endorsements made on the shipping bill/export documents is not sufficient prove the fact of export and the export product is clearly covered under relevant drawback Schedule. Further there is no allegation of fraud/ misdeclaration/manipulation against the appellant.
Adjudicating authority concluded that the Appellant was not diligent in maintaining the records and on that ground, the request for amendment is denied. However as per the finding in the order, when certain omissions were brought to the notice of the Appellant, they have verified the records and rectified the same and therefore it cannot be concluded as they are not diligent in maintaining the records.
Thus, the impugned order rejecting the request for conversion of the shipping bill based on the Circular No.36/2010 is set aside. The issue is remanded for De-novo adjudication and adjudicating authority is directed to consider the documents produced by the appellant and to decide whether the appellant is entitled to the benefit of Scheme to which they want to convert their claim. Needless to say before, considering the issue, reasonable opportunity should be extended to the appellant for personal hearing.
Appeal is allowed by way of remand.
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2024 (2) TMI 1097
100% EOU - Classification of goods - Bill of Entry describes the goods as ‘Indonesia robusta coffee beans’ - On examination found to be Coffee husk/bits - Denial from benefit of Notification No.52/2003-Customs - confiscation u/s 111(f)(l)(m) and (o) - Penalty - 100% EOU - whether the Coffee husk/bits with infected coffee beans is also a raw material for manufacture of coffee - HELD THAT:- The tariff headings under Chapter 0901 reads as “coffee, whether or not roasted or decaffeinated, coffee husks and skins; coffee substitutes containing coffee in any proportion”. The Chapter Heading 0901 11 is for coffee and Chapter Heading 0901 9010 is for coffee husks and skins; thus, clearly distinguishing coffee from coffee husk. Therefore, the Commissioner was correct in classifying coffee husk under Chapter Heading 0901 9010 as against Indonesia Robusta coffee beans being classified by the appellant under Chapter Heading 0901 1145.
The appellant had produced a procurement certificate from Export Promotion Cell which allows them to import Indonesia Robusta coffee beans thus implying that the benefit of the Notification No.52/2003 will be allowed only if the imported goods are found to be Indonesia Robusta coffee beans and this is a raw material for the manufacture of instant coffee which is to be exported by the appellant. Therefore, the question of allowing coffee husk/bits under the guise of coffee beans is ruled out since the coffee husk in no terms can be a raw material for the manufacture of instant coffee rather it is used only as a waste either as animal feed or as agricultural manure. Hence, the benefit of the Notification cannot be extended to the appellant since it is not a raw material for the items to be exported.
This Tribunal in a similar set of facts has held that it is for the concerned authority under Special Economic Zone to consider the request of the EOU to import raw materials suitable for manufacture of export products and to ensure fulfilment of export obligations as per the norms issued from time to time and accordingly, remanded the matter to allow the appellant to produce amended procurement certificate from the concerned authorities under Rule 5(1)(a) of the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017.
Since this Tribunal has already remanded the matter for further examination and verification with regard to the procurement certificate, we also remand the case with the following observations: (i) To examine whether the amended letter of the Development Commissioner allows coffee husk/bits as the raw material for the manufacture of instant coffee. (ii) To obtain a letter from the Coffee Board whether Coffee Husk can be used as a raw material for the manufacture of instant coffee that the appellant intends to export.
Thus, we set aside the impugned order and the appeals are is remanded to the Commissioner for de novo adjudication subject to above observations.
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2024 (2) TMI 1096
Valuation of imported goods under Rule 9 and 10(1)(c) - addition of payment made towards royalty -100% subsidy of foreign supplier - Related party - Import of raw material for manufacture of finished goods - HELD THAT:- Appellant has produced enormous documents to show that the pricing has been uniform worldwide in respect of transaction between affiliates. As seen from Rule 3, the 2% variation in the prices demonstrated by the appellant in the tables given below do not reflect as abnormal discounts to reject the transaction value. The Department has also not produced any evidence to show any financial flow back on account of the relationship. Thus, there is no reason to reject the transaction value in the present case.
On Persual of Rule 12, it is clear that Cogent reasons with evidence needs to be produced to prove that the declared value is not acceptable and in the present case revenue has failed to prove. As seen from the Rules the Original Authority has after rejected all other methods has arrived at the loaded value as per Rule 9 which is last in the sequence. The Commissioner having rejected this method of enhancement of value cannot remand the case for redetermination under any other method as it has already attained finality and there is no appeal on that method of valuation. Hence the remand to redetermine is not sustainable and hence set aside.
Addition of payment made towards royalty under Rule 10(1)(c) of the Customs Valuation Rules, 2007, law is well settled that addition of payment made towards royalty can be made only in cases where the goods have been manufactured from the raw material imported by using the trade secret license under License agreement. The Royalty is not payable in instances of trading of imported finished goods and on goods repacked in India and it is only for use of technology to produce the products in India.
Admittedly the royalty has been paid for use of technology to produce the products and it is payable on the net value of the goods manufactured in India and therefore, royalty cannot be added to the finished goods imported by the appellant for trading purpose.
Thus, in view of the settled principles of Valuation, we find the impugned order devoid of merits. Accordingly, the appeal is allowed with consequential relief if any, in accordance with law.
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2024 (2) TMI 1095
Prayer for being excused of any criminal liability and relieved of the alleged defaults complained of by the respondent in the notice dated 6.10.2020 - prayer for an injunction restraining the respondent / Registrar of Companies (ROC), West Bengal from initiating criminal proceedings in respect of any of the matters referred to in the notice dated 6.10.2020 - section 463(2) of the Companies Act, 2013 - HELD THAT:- In the present case, the respondent did not pass any reasoned order pursuant to the reply given by the Company on 17.11.2020. This letter was a detailed reply to the impugned Notice dated 6.10.2020. Criminal proceedings were instituted in June, 2023 after almost 3 years from the date of issuance of the preliminary findings letter. In the present case, the respondent issued the Notice dated 9.11.2023 which is a supplementary Inspection Notice from the Office of the Regional Director after filing of the present writ petition. Thus, the petitioner’s apprehension was correct and ultimately came true by issuance of the Notice dated 9.11.2023.
The Departmental Circular dated 20th June, 2016 relied on by the respondent is an internal document. The contents of the circular are mostly illegible. In any event, the consent/sanction referred to in section 470(3) of The Code of Criminal Procedure would only be applicable where the prosecution has exceeded the limitation period due to the requirement for sanction from the concerned authority.
The reasons persuade the Court to allow the prayers in the writ petition and excuse the petitioners and each one of them of any criminal liability in respect of the alleged defaults complained of by the respondent in the impugned notice dated 6th October, 2020. The respondent is accordingly restrained from instituting or proceeding with any criminal proceedings in respect of the matter referred to in the notice dated 6th October, 2020 or take any further steps in respect thereto.
Petition allowed.
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2024 (2) TMI 1094
Corporate insolvency proceedings - infirmity in the scheme - it was held by NCLAT that In absence of any provision to get the Schemes in question executed through any court of Competent jurisdiction, the relevant provision(s) having been repealed, the appellant(s) may raise the question, if the respondent(s) move before any court of Law for implementation of the Schemes - HELD THAT:- It is not required to interfere with the impugned order of the National Company Law Appellate Tribunal, New Delhi - appeal dismissed.
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2024 (2) TMI 1093
CIRP - Validity of extension of 90 days was calculated Retrospectively from 10.05.2023 rendering the very extension practically an infructuous one - It is the stand of the Appellant that the Resolution Professional had no actual or constructive knowledge of the ‘Retrospective Calculation’, on 27.07.2023, until the order was uploaded on 11.08.2023 - HELD THAT:- This Tribunal points out that the Petitioner/Appellant had mentioned that he is approaching the Adjudicating Authority/Tribunal praying for an extension of 90 days to complete the CIRP of the Corporate Debtor.
As per Section 12(3) of the I&B Code, 2016, on receipt of an application u/s 12(2) of the Code, if the Insolvency Resolution Process remained pending on the date of the commencement of the I&B Code(Amendment) Act, 2019, such Resolution Process must be completed within a period of 90 days from the date of commencement.
This Tribunal taking note of the fact that the sole COC Member has passed a Resolution to extend further period of 90 days from the last date of CIRP dated 10.05.2023, in view of the categorical and candid averment that for a ‘better negotiation’, ‘evaluation’ and ‘discussion’ on the Resolution Plan received from the Resolution Applicant and submission of the same to the Adjudicating Authority/Tribunal the Interim Resolution Professional has proposed to extend the CIRP period for a further period of 90 days from the date of approval of the instant IA, and considering the totality of the entire conspectus of the facts and circumstances surrounding the instant case, this Tribunal comes to an ‘inevitable’ and ‘irresistible’ conclusion that the Adjudicating Authority/Tribunal had committed an error in not granting the exclusion for the period from 09.05.2023 to 27.07.2023 viz. the period spent in pursuing the IA (IB)1235/CHE/2023, the exclusion period would have enabled the Petitioner/Appellant to pursue the Expression of Interest received and made efforts to revive the Corporate Debtor through a Resolution Plan and in furtherance of ‘substantial cause of justice’ and to prevent an aberration of justice, the observation made by the Adjudicating Authority/Tribunal in the impugned order dated 27.07.2023 in IA that the ‘CIRP’ is extended for a further period of 90 days with effect from 10.05.2023 is set aside because of the fact that the period of pendency of proceeding before the Adjudicating Authority/Tribunal shall be excluded when calculating the CIRP period. Likewise, the period of pendency of instant Comp App is ordered to be excluded and the extension of CIRP period of 90 days is granted by this Tribunal from the date of the disposal of the instant Appeal, as per Section 12(2) of the I&B Code, 2016.
Consequently, the instant Appeal succeeds.
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2024 (2) TMI 1092
Challenge to direction that entire cost be paid by the Applicant/Appellant - Admission of CIRP set aside - Corporate Debtor was NBFC - HELD THAT:- In a situation where CIRP has been admitted and there is interim order passed by the Appellate Authority to the effect that in the CIRP no final decision shall be taken with regard to resolution plan since the order was challenged on the ground that CIRP cannot proceed against a NBFC, the CoC and the Resolution professional should have been more cautious in proceeding and incurring costs in the CIRP of the Corporate Debtor.
The ends of justice be served in giving liberty to the Resolution Professional to file an application before the Adjudicating Authority to take a decision on payment of balance cost, as to whether entire balance cost is fully payable and as to whether entire cost be borne by the Appellant or shared by all the members of CoC and/or Resolution Professional. Taking into consideration the sequence of events and facts which have taken place in the CIRP proceedings of the Corporate Debtor, the Adjudicating Authority shall pass orders in the application.
Appeal disposed off.
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