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Showing 461 to 480 of 1482 Records
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2023 (6) TMI 1022
Unaccounted sale of Gajjak, Makhane and Namkeen - rejection of books of accounts - Whether there is any single evidence on record to prove that the assessee has made any sale out of books? - HELD THAT:- AO basis the yield working of raw material and other input cost has determined the expected level of production of finished goods and comparing the said figure and figures of sales shown by the assessee has held that the differential is nothing but sales which has been effected by the assessee outside the books of accounts.
Shortage has been equated with undisclosed sales basely solely on yield ratio. In our view, no doubt yield ratio is one of the guiding factors which needs to be considered for determining appropriate level of production but at the same time, to equate production with sales, there has to be something more in terms of positive evidence in form of unrecorded sales realization which has not been entered in the regular books of accounts which is apparently absent and not available on record.
Alternatively, the explanation of the assessee that being food items, it is inherent that there would be pilferage, wastages and more importantly, there is a expiry date of three months under FSSAI Act beyond which these foods items are not worthy of human consumption and have to be taken off the shelves needs to be rebutted which has again not happened in the instant case. There is no justifiable basis for making the addition and the same is hereby directed to be deleted.
Addition on account of excess consumption of Diesel - HELD THAT:- As assessee started production of Gajjak during the year and for the purposes, has used diesel bhatties and therefore, comparison of diesel consumption via-a-vis last year is not correct in absence of suitable adjustments which has not happened in the instant case.
Assessee has produced the invoices for diesel purchase in respect of which the payments have been made through the banking channel. There is thus complete documentation in support of diesel consumption which is placed on record and no defect has been pointed out by the AO. In any case, where the overall books of accounts have been rejected, there is no basis for making the individual addition relying on the same books of accounts and all the AO is required to do is estimate appropriate level of profit based on some rational basis and which has not happened in the instant case. Addition is hereby directed to be deleted.
Assessee appeal allowed.
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2023 (6) TMI 1021
Credit for TDS denied - transfer of business - TDS credit has been claimed by the assessee in its original as well as revised return of income - claim denied as TDS credit did not appear in Form 26AS of the assessee - Appellant transferred business of generation, transmission and distribution of electricity to another company Adani Electricity Mumbai Ltd. (AEML) vide share purchase agreement. Maharashtra Electricity Regulatory Commission (MERC) transferred the distribution license from the Appellant to AEML - substitution of name of Rinfra in place of AEML who received the amount as trustee on behalf of Rinfra.
HELD THAT:- As deductor, i.e., Tata Power Company has refused to issue a certificate in favour of the assessee or comply with the Rules u/s.37BA due to whatever perceptions and apprehensions they had. There is no provision or mechanism also to enforce such certificate from Tata Power Company.
Here is the case the deductor, i.e., Tata Power Company have refused to issue certificate or rectify the form and when assessee had made specific request, then instead they stated that they are not in a position to issue TDS certificates in favour of the assessee based on AAR order which is applicable to AEML and RInfra who are party to it. Instead Tata Power Company have requested AEML to get directions from the Income Tax department asking TPC to issue TDS certificate in favour of RInfra. When the same was done, then again officials from Tata Power Company stated that they have already made the payment to AEML, deducted and deposited the tax thereon and filed the TDS return accordingly and if a revised TDS return is filed and a revised TDS certificate in favour of Rinfra would be issued, they would receive queries from the Income tax department resulting in unnecessary litigation.
They suggested alternatives to the assessee in their email, that AEML may declare in their return of income that TDS pertains to Rinfra and Rinfra may claim TDS in their assessment following the provisions of section 199.Rinfra/ AEML may approach the AO/CIT(TDS) for Issue of direction to TPC for issue of revised TDS certificate in the name of Rinfra. But Rinfra Official suggested that alternatives were not viable and the only legal and proper course of action was that TPC should revise the TDS return and substitute the name of Rinfra in place of AEML who received the amount as trustee on behalf of Rinfra
A Form or a Rule is an aid to implement the provisions of the main enactment, i.e., Income Tax Act and the procedure prescribed under the Rule is to facilitate and implement tax. Rules and Form cannot be interpreted so as to make the main provisions of the Act subservient to such Rules or forms prescribed therein to make the procedure cumbersome and lead to grueling situation to comply like here in this case or lead to denial of credit which assessee is otherwise eligible under the provisions of the Act.
There is no prescribed form available, at least nothing has been brought to our knowledge either under the Rules or provided by the CBDT. To make such rectification, if deductor fails to issue certificate or comply with the provisions of the Rules, other than deductor revising its Form 26AS online which due to many circumstances and apprehensions deductor may not do it. In such genuine cases, at least Assessing Officer should be authorised or empowered to examine the matter and give the credit of TDS to which assessee is eligible for it.
Herein in this case, it is not even disputed by the department that assessee is entitled for credit for TDS. Either some mechanism should be devised by the department to address such grievances in such circumstances or authorised the Assessing Officer to examine it and allow; or the strict conditions provided in Rule 37BA should be read in the provisions of Section 199(1) to make it workable in genuine cases where department is sure no double credit is allowed or claimed.
We direct the AO of the assessee to ensure that credit of the TDS amount is given to the assessee. Accordingly, the order of the ld. CIT (A) is confirmed and the appeal filed by the Revenue is dismissed.
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2023 (6) TMI 1020
Unexplained investment u/s 69 - Agreement to sell which is on a plain paper has been questioned by the AO as well as the ld CIT(A) - HELD THAT:- We are intrigued by the fact that the agreement to sell relates to transfer of an immoveable property wherein 90% of the agreed consideration has already exchanged hands at the time of entering into such agreement and at the same time, the handing over the possession has been deferred to the time of registration and which has eventually not happened in the instant case and thus, prima facie reflects a situation which is apparently one-sided at the cost of another party.
Having said that, it is relevant to determine the enforceability of such agreement to sell against the assessee in terms of the Indian Contract Act as well as the applicability of the provisions of Transfer of Property Act, Indian Registration Act and Indian Stamp Act.
The explanation of the assessee explaining the source of cash payment have to be tested on the touchstone of enforceability of such agreement to sell as per relevant statue and only where it is determined that such an agreement to sell is enforceable in hands of both the parties and/or the parties have actually taken certain steps to enforce their respective rights emanating from such agreement to sell, the same can act as a relevant and credible evidence in support of the explanation of the assessee.
As no explanation of the assessee in this regard is given it would be appropriate that the matter is set-aside to the file of the AO to examine the same after providing reasonable opportunity to the assessee - Ground of assessee allowed for statistical purposes.
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2023 (6) TMI 1019
Validity of proceedings initiated u/s 153C - HELD THAT:- There is no tax effect involved in the years under consideration since the assessment u/s 153C r/w section 143(3) has been concluded at the returned income. However, as per the assessee, adjudication on the validity of initiation of proceedings u/s 153C is relevant for the subsequent assessment year(s), which are currently pending before the learned CIT(A).
We find that adjudication on the validity of initiation of proceedings u/s 153C in favour of either party, in the present appeals, will have no impact on the total assessed income, as the AO has accepted the total income as declared by the assessee in his return of income without making any addition. Thus we are of the considered opinion that the various grounds raised by the assessee challenging the initiation of proceedings under section 153C of the Act, in the present appeals, are rendered academic and therefore, are kept open.
The findings of CIT(A) upholding the initiation of proceedings u/s 153C do not impact the computation of the total income of the assessee. Such being the circumstances, we are of the view that the entire exercise by the learned CIT(A) in adjudicating the various grounds raised by the assessee on the validity of initiation of proceedings under section 153C of the Act is merely academic, with no other relevance for the assessment years under consideration.
We direct that the findings of the learned CIT(A), in the impugned orders, on the validity of initiation of proceedings u/s 153C of the Act shall not have any precedential value while deciding appeal(s), which are currently pending before the learned CIT(A). Decided against assessee.
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2023 (6) TMI 1018
Addition of “Sundry Creditors” u/s 41(1) - AO estimated adhoc addition of 10% of the amounts shown under the head - HELD THAT:- Nowhere the AO, or Ld. CIT (A) have discussed as to what was the details filed by the assessee before the AO & CIT (A). Merely because there are Sundry Creditors appearing in the balance sheet, then it does not entail invoking of provision of section 41(1) automatically.
There has to be something on record that there is a cessation of liability and the entire conditions precedent for invoking section 41(1) has to be fulfilled. There is no scope of any kind of adhoc or estimated addition u/s. 41(1). No infirmity in the order of the Ld. CIT (A) in deleting the said addition. Appeal of the Revenue is dismissed.
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2023 (6) TMI 1017
Payment of on-money in cash - not extending an opportunity to the appellant to cros xamine witnesses relied upon - AO on the basis of information received from the Directorate of Investigation that the assessee has been identified as one of the persons who had paid on-money in cash to M/s Runwal Homes Private Limited for the purchase of property, initiated proceedings u/s 147 - HELD THAT:- As evident from the record, when summons were issued by the AO to the assessee as well as the builder, Mr. Subodh Runwal, calling for the details and explanation in support of the on-money paid/received, none of them replied to the summons and therefore, the assessment was completed on the basis of material available on record.
Thus, when the person, whose statement was relied upon to make the addition in the hands of the assessee, does not appear in response to the summons, the submission of the Revenue that the assessee chose not to avail the opportunity to cross-examine the builder provided by the AO appears to be a mere empty formality.
As difference in the price of the property, which was considered as on-money paid in cash is based on sale value as per the email, however, there is no evidence available on record as to between whom this email correspondence took place.
Merely providing the evidence relied upon by the AO cannot substitute the fundamental requirement of providing the opportunity for cross-examination.
Hon’ble Supreme Court in I.C.D.S. Ltd. [2020 (2) TMI 1424 - SUPREME COURT] held that where the issue involved was about not extending an opportunity to the appellant to cross-examine witnesses relied upon by AO, the entire matter would be considered by First Appellate Authority afresh by giving fair opportunity to both sides to espouse their claim.
We set aside the impugned order and restore the matter to the file of AO for de novo adjudication after providing the assessee with all the documents, which were relied upon in support of the impugned addition. Further, the AO is directed to grant the opportunity to cross-examine the party on whose statement reliance was placed. Grounds raised by the assessee are allowed for statistical purposes.
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2023 (6) TMI 1016
Revocation of CHA license - forfeiture of security deposit - penalty - Availment of ineligible duty drawback without realization of any export proceeds - misuse of Import Export Code (IEC) of various exporters for fraudulent exports of low quality shoe uppers, etc. - HELD THAT:- Admittedly, there are two inquiry / investigation reports on record - one as early as in 2010 by the DRI authorities, based on which the licence of the appellant was kept under suspension. If this is considered as the inquiry report, then, the order of revocation vide impugned Order-in-Original which was passed in 2013 is clearly beyond the time-limit prescribed under the statute - If the second / other inquiry report by the Assistant Commissioner is considered, which is in November 2012, then, again, the revocation order vide impugned Order-in-Original in March 2013 is also beyond the prescribed ninety-day time limit, which is against the principles underlying the statute.
The sole basis for the revocation is stemming out of the second inquiry report wherein, apparently, only statements are relied upon, which are no doubt uncorroborated. No other incriminating documentary evidence is made available on record nor has the outcome of investigation been placed on record by the Revenue to implicate or even suggest the active role of the appellant. Further, the Assistant Commissioner-Inquiry Officer has applied the Regulations and alleged violation of the same based on the statements per se - thus, the impugned order has been passed beyond the time period allowed under the Regulations and therefore, the order as well as the consequential revocation is held to be not in accordance with law, for which reason the impugned order insofar as it relates to the revocation stands set aside.
The forfeiture of entire security deposit is disproportionate, also since there is no specific allegation as to the involvement of the appellant; rather, the culprits have clearly been identified as Mr. M. Vijay Anand and Mr. B. Mohan, who, admittedly, having misused the fake IECs, it is they who are actually liable for any penalty - It is deemed fit that a nominal amount of Rs.10,000/- could be forfeited out of the security deposit, but not the entire amount of Rs.75,000/- - appeal is allowed insofar as the revocation of CHA licence is concerned - appeal partly allowed insofar as forfeiture of security deposit is concerned.
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2023 (6) TMI 1015
Confiscation of imported goods - rough diamonds - composition of lots/parcels and the reasoning for recourse to the ‘residual method’ of valuation after rejecting the declared value under rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - HELD THAT:- The intention of circular no. 53/2003- Cus dated 23rd June 2003 of Central Board of Excise and Customs (CBEC) in aligning customs procedure to conform to the global crusade against ‘conflict diamonds’ but such a peremptory direction which deprives an adjudicating authority of inherent latitude in exercising powers conferred statutorily is certainly poor, even if wellintentioned, execution of such intent. After all, statutory exercise of power, in adjudication process, is also an acknowledged check on policy formulation that transcends legislative intent which should have been reasonably overcome, in overriding circumstances for conformity with the comity of nations, only by amendments in statute - A circular of an attached office of the Central Government to its subordinate formations is not to be presumed as articulation even of policy intent let alone legislative intent when it circumscribes statutory conferment. In the light of failure to contest the easing of restrictions on re-export, the argument of Learned Authorized Representative for absolute confiscation is unacceptable.
It is quite possible that purposeful misdeclaration of value by importers of articles, such as ‘rough diamonds’, may warrant recourse to rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 but the peculiarities of a trade upon which customs officials may be entirely dependent for expertise and whose activities may, even validly, be veiled under layers of secrecy may not be found by assessing officers to be of concern but the law cannot be ignored. That supervisory level of customs officialdom may have found it necessary to bypass impediments to proper resort to rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 does not make up for that want of credibility - Absent that, substituted value will fail the test of law, as it does in the present dispute, and will have to be held as untenable even at the cost of declaring such instructions, if any, as not implementable.
It is not the case of the lower authorities that any prohibition, ‘under Customs Act, 1962 or any other law for the time being in force’, stood in the way of clearance for home consumption upon assessment of bill of entry; a subsequent proceeding under Customs Act, 1962 cannot rest upon a prohibition that, at the time of clearance, was not in existence for resort to section 124 of Customs Act, 1962 proposing confiscation of goods under section 111 of Customs Act, 1962 - To postulate that empowerment to confiscate, under section 111(m) of Customs Act, 1962, on the ground that misdeclaration of value empowers resort to valuation provisions of the statute, intended for specific purpose, is to put the cart before the horse and effect before cause.
The orders of the lower authorities leave no room for doubt that there is no difference in rate of ‘nil’ duty, corresponding to either of the tariff items – declared or substituted, in dispute, with the implication that the Customs Tariff Act, 1975 is not germane to the impugned goods - It is also not the case of the lower authorities that any other law, requiring declaration of ‘value’ in bill of entry for any purpose other than assessment to duty, has been breached insofar as the present dispute in concerned. In such circumstances, section 14 of Customs Act, 1962, or any Rules framed thereunder, is not of relevance to the impugned goods. Consequently, the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 cannot be brought to bear on the impugned goods.
The importer may, if it chooses to, exercise right to re-export without any restraint on the goods subject to compliance with section 50 of Customs Act, 1962. Upon seeking of re-export, the goods shall be released to them within a period of one month. The appeal of Revenue, devoid of merit and substance, is dismissed.
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2023 (6) TMI 1014
Classification of imported goods - Low Aromatic White Spirit - to be classified under the CTH 2710 1990 or under the CTH 27101239 as Solvent 145/205 as per IS 1745:2018.
HELD THAT:- As per the Test Report details furnished, the IBP of the impugned goods is 162 degree Celsius and FBP is 194 degree Celsius, whereas as per the IS standard 1745 the minimum IFB should be 145 degree Celsius (IBP) and maximum FBP should be 205 degree Celsius respectively. The Appellant stated that the IFB 162 of the impugned goods is much higher than the minimum IFB requirement of 145 as per the IS 1745 standard.
The Appellant stated that when the Test Reports differs from the standards prescribed, the goods cannot be held to satisfy the requirements under IS 1745 standards meant for CTH 2710. Hence the impugned goods cannot be categorized as ‘Light Oils and Preparations’ as per the CRCL Test report - there are merit in the argument of the Appellant. None of the above said parameters are matching with the minimum or maximum standards fixed as per IS 1745 standards. There is a vast difference between the minimum IFB and maximum FBP fixed as per IS standard 1745 and the result received for the impugned goods. Hence, the impugned goods cannot be classified under CTH 27101239 as per the comparison between the Test reports received from CRCL and its comparison with the IS Standard 1745 parameters required.
The condition as prescribed in the Note 4 has not been verified in the CRCL report. It is the primary condition required to be tested for classifying any goods under CTH 2712. From the said Note, it is evident that for purpose of sub heading 2710.12, the “light oils and preparations” are those of which 90% or more by volume (including losses) distil at 210 degree Celsius, but the test report is silent about it. AS per the Test Report, the FBP is 194, which means 100% of the goods evaporate at 194 degree Celsius itself whereas for classification of the goods as ‘solvent 145/205’ under CTH 27101239, the requirement as per Note 4 is that only a maximum of 90% should evaporate at 205 degree celsius. Since the entire 100% of the goods evaporate at 194 degree celsius itself, the goods are not meeting the requirements as specified under Chapter Note 4 of Chapter 27, accordingly we hold that the impugned goods cannot be classified under CTH 27101239 as claimed by the Revenue.
When the goods do not satisfy the criteria fixed under Note 4 of Chapter 27, the goods cannot be classified under CTH 27101239. The remaining option available in the Tariff is to classify the same under CTH 27101990 which is the only residuary entry available for classification - the Test Reports of CRCL Kolkata does not provide any material evidence for classification of the said goods under CTH 27101239. Since the said goods are rightly classifiable under the CTH 27101990, the classification adopted by the Appellant is in order and hence the goods are not liable for confiscation.
Appeal allowed.
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2023 (6) TMI 1013
Refund of SAD - time bar - delay of one and two days in filing the two bills of entry - whether the refund claims filed by the appellant are barred by limitation of one year from date of payment? - HELD THAT:- In terms of Section 9, the date of deposit of duty (SAD) being 26.08.2011 and 25.08.2011. The period of one year shall commence on 27.08.2011 and 26.08.2011 respectively. Accordingly, the one year shall be completed on 27.08.2012 and 26.08.2012. In this fact, the first refund claim since filed on 27.08.2012 is well within 1 year and in respect of second refund claim though the one year is completed on 26.08.2012 but being Sunday the filing of refund on Monday I.e. 27.08.2012 is well within the time limit prescribed in terms of Section 10 of General Clauses Act, 1897. As regard the computation of 1 year that from the date of commencement of the year shall complete on the same date in the next year, this has been held by Hon'ble High Court of Bombay in the case of Skoda Auto Volkswagen India Pvt. Ltd [2021 (3) TMI 542 - BOMBAY HIGH COURT].
In view of undisputed settled legal position in terms of General Clauses Act, 1897 read with decision of Hon'ble Bombay High Court, the appellant's both refund claims were filed within the stipulated time period of one year hence the same are not time barred.
Appeal is allowed.
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2023 (6) TMI 1012
Valuation of imported goods - imported goods were sold to unrelated buyers in India at a higher price - whether the value arrived by using the new process is acceptable as Customs Value on which Customs Duty is required to be paid in terms of Section 14 of the Customs Act, 1962 read with the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.
HELD THAT:- The CBIC has issued a Circular no. 5/2016 dated 9.02.2016 on the issue of "Procedure for investigation of related party import cases and other cases by the Special Valuation Branches". On examination of the contents of the application as well as arguments put forth during the course of hearing I find that the CBIC Circular No. 5/2016-Customs dated 9th February, 2016 is relevant for all related party transactions Moreover, CBIC circular 5/2016 dated 09.02.2016, as stated in para 2 therein, has taken cognisance of WCO's Guide to Customs Valuation and Transfer Pricing (June 2015) which recognises TPuS method, however there is no separate dispensation provided in the CBIC circular to this method in related party transaction cases. This CBIC circular remains applicable on equal footing to the importer following TPus method as per WCO guide as well as to any other related party importer.
It is observed that the Rule 10 of CVR, 2007 stipulates addition of price elements on account of certain goods and/or services to the transaction value ill the correct transaction value. CBIC Circular provides that the transactions where any payments are sought to be made which are in the nature of instances given at (a) (Rule 10(1) (c)), (b) (Rule 10(1)(d)) and (c) (Rule 10 (1)(e)) above, shall be examined with respect to the need for S VB investigations. The applicant has stated that they are not making any such payments (in the form of royalty, license fee etc.) which are required to be added in order to arrive at the transaction value - the application of Rule 10 is not warranted due to absence of financial flows on account of any such cost elements. TPuS method clearly shows that the proposed transaction value is sum total of manufacturing cost (direct cost & indirect cost) and administrative expenses, other expenses and profit represented by CAR indicating absence of any financial flows which can fall under the scope of Rule 10(1)(c), Rule 10(1)(d) and Rule 10 (1)(e).
The applicant's proposed valuation method, Transfer Pricing System and Steering Concept (TPuS) method also known as Resale Price method/Resale Minus method, for determination of transaction value under Section 14 of the Customs Act 1962 for goods proposed to be imported from the related party suppliers, after compliance with the procedure prescribed in the CBEC (now CBIC) Circular No. 5/2016 Customs from F. No. 465/12/2010-Cus V dated 09/02/2016 on the issue of "Procedure for investigation of related party import cases and other cases by the Special Valuation Branch", is consistent with Rule 3 as well as Rule 7 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - This ruling will apply prospectively only to the TPuS method proposed to be adopted by the applicant for transaction value determination w.e.f. 1st May 2023.
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2023 (6) TMI 1011
Classification of goods proposed to be imported - Processed API Betel-nut product known as Supari - Processed Betel-nuts unflavoured chemically processed Supari in small cut-pieces (not split) - classifiable under Chapter heading 0802 80 or 2106 90 30? - HELD THAT:- In this chapter, the entry 0802.80 refers to areca nuts, used chiefly as a masticatory. Thus the Explanatory Notes to Chapter-I indicate that chapter I covers nuts intended for human consumption (whether as presented or after processing); whether they are fresh, frozen (whether or not previously cooked by steaming or boiling in water) or dried (including dehydrated, evaporated or freeze-dried) and whether the nuts could also be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled. The processes to which the subject goods would be subjected to, as described in their submission, appear more of a process for additional preservation or stabilization and/or to improve or maintain their appearance only and they retain their original character.
In this context the decision of the Hon'ble Calcutta High Court in the case of Killing Valley Tea Co. v/s Secretary to State [1920 (5) TMI 1 - CALCUTTA HIGH COURT] is worth mentioning, wherein it was held that a tea leaf remains the same even after being subjected to mechanical processes like withering, crushing, roasting, fermenting etc. is a definite pointer to the principle that needs to be applied for classification in such matters.
he observations of the Hon'ble Supreme Court in the case of M/S. Crane Betelnut Powder Works [2007 (3) TMI 6 - SUPREME COURT], that the process of cutting betel nuts into small pieces and addition of essential/non-essential oils, menthol, sweetening agent etc. did not result in a new and distinct product having a different character and use also an extension of the same line of reasoning. However, after amendment by insertion of a note in chapter 21 of Central Excise Tariff these decisions are of no relevance at present in deciding classification matters under the Customs law.
The claim of applicant that these processes are very crucial for changing the essential characteristics of raw tendered betel nuts with the resultant betel nut product which, as argued by the applicant, is chemically processed and is most appropriately classifiable under CTH 2106 90 30 falls flat solely due to the fact that these are carried out to preserve or to stabilize and/or to improve or maintain their appearance, and in fact they aid to retain the character of betel nut. In my opinion the applicant has failed to substantiate their claim that the subject goods are chemically processed. Notwithstanding the claim of the applicant to any chemical process discussed above it is observed that the resultant product remains the same — betel nut may be with variation in arecoline and tannin contents. Due to this no preparation of betel nut has come in to existence requiring classification under chapter 21. Hence it is not found that the applicant's recourse to and reliance placed on the research paper as legally acceptable for deciding the classification of subject goods.
HSN Explanatory Note under heading "General" to chapter 8 provides that fruit and nuts of this Chapter may be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled. Further, it is also provided that the addition of small quantities of sugar does not affect the classification of fruit in this Chapter.' Thus, the HSN explanatory notes to Section I indicate that chapter 8 covers nuts intended for human consumption (whether as presented or after processing); whether they are fresh, frozen (whether or not previously cooked by steaming or boiling in water) or dried (including dehydrated, evaporated or freeze-dried) and whether the nuts could also be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled - it is thus concluded that the processes described by the applicant do not necessitate the subject goods to be moved from the purview of chapter 8 to bring under the ambit of chapter 21 for the purpose of classification.
Thus, the subject goods placed before me for consideration, i.e., 1) Processed API Betel-nut product known as Supari and 2) Processed Betel-nuts unflavoured chemically processed Supari in small cut- pieces (not split) merit classification under chapter 8 of the Customs Tariff, and more appropriately, under the heading 0802, as under:
Processed API Betel-nut product known as SUPARI (Not Prepared): 0802 80 10.
Processed Betel-nuts unflavoured chemically processed SUPARI in small cut pieces (Not split): 0802 80 90.
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2023 (6) TMI 1010
Application for recalling of Ruling - Classification of goods - Vitamin Premixes - classifiable under Heading 23.09 or under Heading 29.36 - rectification of mistake - Section 28I (2) of the Customs Act, 1962 - HELD THAT:- The interesting fact is the applicant has approached the Authority only in respect of the current application and has sought to recall, modify, rectify or make the ruling void ab-initio. They claimed the applicability of the case laws in respect of other cases also and the same case laws were relied in most of them. However, they have not sought to make the rulings in those cases void ab-initio as most of them are favorable to them. This clearly reveals that the applicant has not approached this forum with clean hands and have tried to twist facts and laws to circumvent the ruling.
There are no merit in this application made by the applicant for modification of the Ruling under Regulation 21 of the CAAR, 2021 vide letter dated 06.09.2022 and the same is rejected.
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2023 (6) TMI 1009
CIRP - assignment of trademark in favor of petitioner - Infringement of seven trademarks, having proprietary rights acquired through a deed of assignment - Refusal of grant an order of injunction restraining Duckbill from using the marks - serious allegation of fraud, misrepresentation and suppression of facts and cheating - HELD THAT:- There is every reason to believe that as a statutory functionary the liquidator acted regularly in the usual course of his duties and found fourteen registered trademarks in the name of the company. He found nothing in the records to suggest that out of those trademarks, seven had been transferred in 2017 - What is most significant is that these marks were assigned by the father-inlaw on behalf of the company to her daughter-in-law for only Rs. 7,000/- whereas about rupees 5 crores have been paid by Duckbill to purchase these marks.
The purported deed of assignment dated 3rd April, 2017 was sought to be lodged with the Registrar on 18th January, 2022 for registering the assignment. This application to record this assignment was made by filling up a form RM-P issued by the Trademark registry. This form provides for an application for post registration changes in a trademark. In the garb of making this application Poulami Mukherjee tried to record with the registry that Duckbill had assigned the seven trademarks to her (see page 168 of the application CAN 2 of 2023) and managed to get the assignment registered on 14th June, 2022.
Under Chapter V of the Trade Marks Act, 1999 the right of assignment and transmission is vested in the registered proprietor. In case of these seven marks, the registered proprietor was Duckbill, the custodian of whose assets was the liquidator. So the real proprietor was the liquidator - a deliberate attempt was made by Poulami and her father-in-law to divest Duckbill of its principal assets that is the trademarks and misappropriating them, by backdating a deed of assignment to 2017 and then filing it with the trademark registry five years later.
This appeal is dismissed by vacating our interim order dated 24th January, 2023. The impugned judgment and order is affirmed by substituting therein the reasons in this judgment and order.
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2023 (6) TMI 1008
Condonation of delay of 14 days in filing appeal - Period of Limitation specified under Section 61 (2) of the I & B Code, 2016 - HELD THAT:- In the present case, from the date of Certified Copy, being made ready Viz. 02.02.2023 and the date of filing of the instant Appeal, on 19.03.2023, the instant Appeal, came to be filed on 45th Day.
The contention of the Respondent is that, the impugned order, came to be passed on 31.01.2023, by the Adjudicating Authority / Tribunal, and the time starts from 01.02.2023 and when the instant Appeal, came to be filed on 19.03.2023, the 46 Days, had elapsed, which is impermissible, because of the fact that an Appeal, is to be filed, within 45 days (30 + 15 = 45 days), being the Outer Limit, and further that, there is no provision in the I & B Code, 2016, to Condone the Delay, beyond the period of 15 days, ofcourse, after the expiry of 30 days, mentioned in Section 61 (2) of the I & B Code, 2016.
As a matter of fact, the word requisite, means properly required, and it is for the Appellant, to show the necessity that no part of delay, beyond the prescribed period, is due to his Default.
Taking note of the primordial fact that the Certified True Copy of the Impugned Order, was made ready by the Office of the Registry of the Adjudicating Authority, on 02.02.2023 (Impugned Order, came to be passed on 31.01.2023), and the instant Appeal, came to be filed on 19.03.2023, before the Office of the Registry, this Tribunal, comes to an inevitable, inescapable and irresistible conclusion, by excluding the time taken by the Adjudicating Authority / Tribunal, to prepare an Order, that the instant Appeal, came to be filed on 45th day (30 + 15 = 45 Days), within the Permissible Time Period, and viewed in that perspective, Condones the Delay of 15 Days (after the expiry of 30 days, vide Section 61 (2) of the Code), that has occurred, in preferring the instant Appeal, before this Tribunal, by accepting the explanation offered, on the side of the Petitioner / Appellant.
Petition allowed.
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2023 (6) TMI 1007
Rejection of Resolution Plan - Section 31(1) of the ‘Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Having observed that the Resolution Plan preferred by one of the Resolution Applicants, required prior approval of RBI, the Adjudicating Authority, while rejecting the Resolution Plan passed an order for Liquidation. The Appellant herein is the Interim Resolution Professional (IRP) whose main grievance is that while ordering Liquidation of the Corporate Debtor, the Adjudicating Authority had appointed the 2nd Respondent herein as the Liquidator contrary to the Statutory Provisions, by disqualifying the Appellant under Section 34 (4)(a) of the Code.
In Company Appeal (AT) (CH) (Ins) No. 181 of 2022 [2023 (6) TMI 505 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI] has set aside the rejection of the Resolution Plan by the Adjudicating Authority holding that this ‘Tribunal’ is of the considered view that the Adjudicating Authority ought not to have rejected the Resolution Plan, more so, when the principal objective of the Code is that ‘revival of the Corporate Debtor and Resolution’. Liquidation ought to be the last resort, keeping in view the scope and spirit of the Code.
As Liquidation itself is set aside, this Company Appeal is rendered infructuous and for all the aforementioned reasons, the present Company Appeal is dismissed as an infructuous one - apepal dismissed.
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2023 (6) TMI 1006
Maintainability of Application for CIRP filed under Section 9 of I&B Code - Sub-contractor of the main contractor - Contractual Relationship between the Appellant and the Respondent or not - privity of contact - whether proceedings under IBC can be sustained on the basis of a promissory estoppel? - HELD THAT:- IEDCL had sub-Contracted the work to the ‘Appellant’/’Operational Creditor’ herein. IEDCL is one of the subsidiaries of IL&FS Solar Power Limited (ISPL)/ the main Contractor which had entered into a contract with ‘Embassy Energy Private Limited’/the ‘Respondent’ herein for operation of the Solar Power Project. It can be seen from the ‘Agreement for Civil Works and Construction’ entered into between Embassy Energy Private Limited/’Respondent’, the owner and ISPL that except for Clause 6.1.1 which deals with the name of the sub-Contractor, any ‘Contractual Obligation’ with the ‘Appellant’ herein is not established by way of any Written Agreement.
From the agreement it is clear that a sub-Contractor shall not have any Contractual Relationship with the owner and shall not be entitled to prefer any Claims against the owner. The material on record establishes that there is no Operational Relationship between the Appellant and the Respondent herein and it is pertinent to mention that the Respondent is not even a party to the Agreements entered into between ISPL and IEDCL and ISPL and the Appellant/Operational Creditor.
It is clear from the record that there are no goods and services supplied directly by the Operational Creditor to the Respondent herein and therefore it cannot be said that there is any Operational Debt between the Operational Creditor and the Respondent herein. Merely because the owner had given a bona fide assurance that if IEDCL fails to pay the amount they would pay the same on their behalf, the amount will not fall within the definition of Operational Debt as defined under Section 5(21) of the Code.
The Hon’ble Supreme Court in the matter of Essar Oil Limited Vs. Hindustan Shipyard Ltd. & Ors. [2015 (7) TMI 373 - SUPREME COURT], has held that when a principal employer grants a contract to a Construction Company the sub-Contractors cannot sue the principal employer for any issues, if payable, as there is no privity of contract between the sub-Contractors and the principal employer.
This Tribunal is of the considered view that any promise made in the letter dated 17.10.2018, specifically having regard to Clause 6.1.4 of the Agreement for Civil Works and Construction entered into between Embassy Energy Private Limited and ISPL, whereby and whereunder, it was clearly specified that the sub-Contractor, would not have any contractual relationship with the owner and would not be entitled to prefer any Claims against the owner, these amounts claimed cannot fall within the definition of acknowledgement of debt in the absence of any contractual relationship between the Operational Creditor and the Respondent herein.
The Respondent is a commercially solvent Company and the scope and objective of the Code is not to send a commercially Solvent Company to Insolvency specifically having regard to the facts of the attendant case on hand - Appeal dismissed.
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2023 (6) TMI 1005
Money Laundering - alleged collection of huge amount of money from the public by M/s. Fine Indisales Private Limited and of misappropriation thereof - HELD THAT:- The Court below could have issued a bailable warrant at that stage if it was not inclined to grant time or had any reason to believe that the Petitioners were avoiding appearance, but directing issuance of N.B.Ws. straight away cannot at all be held to be justified in the facts and circumstances of the case. It is stated that the Petitioners were engaged in marketing jobs at different places of Raipur and Mumbai and therefore, could not personally appear.
This is a reasonable explanation for non-appearance, which ought to have been considered by the Court below. Even the fact that the Petitioners were never arrested during investigation and prosecution does not allege that they had not cooperated with the investigating agency, does not seem to have been considered by the Court at all. Therefore, there seems to be no justified reason to take coercive steps against the Petitioners for their appearance.
This Court is strongly persuaded to hold that the impugned order in so far as it relates to the direction for issuance of N.B.W. cannot be sustained in the eye or law - Petition allowed.
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2023 (6) TMI 1004
Seeking enlargement on Bail - Money Laundering - Scheduled offences - swindling of money invested by the Government in a dubious manner - discrepancies including diversion of APSSDC funds through various shell companies - diversion of Government funds - Section 45 of the PMLA - HELD THAT:- It has been revealed about diversion of major funds to suspicious entities done by SEPL under the pretext of supply of software/ hardware/materials/services. It is alleged that in reality, the supply of such goods and services was not done. On examination of data and analysis of bank account statements shows that about Rs. 56.00 crores, out of the funds received from APSSDC, was transferred by SEPL to the entity ACI, and the said amount was diverted through a web of shell entities by way of layered transactions.
The petitioner had knowledge that no goods or services were being provided by the shell companies to DTSPL. An amount of Rs. 241.00 crores was received by SEPL from DTSPL and a significant part of the said government funds were diverted through SEPL and complex web of shell companies under the guise of supply of software/ hardeware/materials/services - government funds were diverted by DTSPL, belonging to Vikas Khanvelkar, through SEPL and a web of shell companies, and in lieu of transfer of funds, cash was provided by entry operators who were managing the shell companies, and the said cash was moved from entry operators to Suresh Goyal. In the said diversion of government funds, the petitioner, Suman Bose and Vikas Khanvelkar played pivotal roles. Hence, the petitioner committed the offence of money laundering under Section 3 of the PMLA punishable under Section 4 of the PMLA.
In the aforesaid identical case in SANJAY RAGHUNATH AGARWAL VERSUS THE DIRECTORATE OF ENFORCEMENT [2023 (4) TMI 874 - SUPREME COURT], lodging of the prosecution complaint is sequel to the registration of the FIR in the predicate offence way back in the year 2021. In the present case on hand also, no charge sheet has been filed in the predicate offence for the last more than 15 months. The petitioner herein has been in jail from 04.03.2023. It is the first offence insofar as the petitioner is concerned. There are no other complaints registered as against him. The said argument gives room to say that second condition in clause (2) of sub-section (1) of Section 45 of the PMLA would be satisfied. In the aforesaid circumstances, continued incarceration of the petitioner is not justified.
In respect of a query raised by the investigating agency, the petitioner herein gave response to each and every question that has been asked for. Prosecution complaint was also filed on 01.05.2023. The petitioner was arrested on 04.03.2023 and since then he is in judicial custody. When time and again, petitioner is continuously attending before the investigating agency and co-operating with the investigation, this Court is of the opinion that it is not necessary to detain the petitioner in jail further. In view of the aforesaid facts and circumstances, this Court feels that request of the petitioner for grant of bail can be considered, however, on certain conditions.
The petitioner shall be enlarged on bail on his executing a personal bond for a sum of Rs. 50,000/- with two sureties each for the like sum to the satisfaction of the Additional Sessions Judge-cum- Metropolitan Sessions Judge, Visakhapatnam - the Criminal Petition is allowed.
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2023 (6) TMI 1003
Levy of Service Tax - Business Auxiliary Service - commission / remuneration received by the Respondent Assessee from its parent Company - Online Information and Database Access or Retrieval Services - payment of Annual License fee to its parent Company - period prior to 2008.
Business Auxiliary Service - commission / remuneration received by the Respondent Assessee from its parent Company - HELD THAT:- Both the parties agree that the issue is covered by the decision of this Court in the case of Respondent Assessee itself by the judgment in THE COMMISSIONER SERVICE TAX-VII VERSUS M/S. WARTSILA INDIA LTD. [2018 (9) TMI 1521 - BOMBAY HIGH COURT] wherein this Court has held that services of procuring orders and passing it to its overseas principal and receiving payments for the same in foreign exchange is an activity of export of services covered by the Export of Services Rules, 2005 - the Appellant Revenue has not brought to attention that the decision of this Court, referred to hereinabove, is stayed - the issue raised is covered by the decision of this Court, no substantial question of law arises for consideration.
Classification of services - whether annual license fee charged by Wartsila Corporation, England, for certain software licenses is covered by the entry Information Technology Software Services, which was taxable from 16th of May 2008 or whether same falls within the entry Online Information and Database Access or Retrieval Services as contended by the Revenue? - HELD THAT:- The Appellant Revenue has accepted the classification of the said service under the head “Information Technology Software Service” post 2008. In our view, if the Appellant Revenue has accepted the classification of entry under the head “Information Technology Software Service” for the period post 2008, then it cannot be contended by the Appellant Revenue that pre 2008 that very service falls under the entry “Online Information and Database Access or Retrieval Services”. The Tribunal in its order has given a finding of fact that the reasoning of the original authority is bereft of any examination of the taxable entry connected with the definition and bereft of even alluding to the activities of the overseas entity for ascertainment of delivery of service to the Assessee.
It is settled position, by the ratio of decisions of the Apex Court in the case of Balaji Enterprises vs. CCE, [1997 (5) TMI 108 - SUPREME COURT] and decision of this Court in the case of Indian National Shipowners Association [2009 (3) TMI 29 - BOMBAY HIGH COURT], that an introduction of a fresh entry from a particular date pre-supposes that the said services were not covered by the earlier entries. It is not the contention of the Appellant Revenue that the 2008 insertion of entry “Information Technology Software Services” is retrospective - thus, no substantial question of law arises with respect to this question.
Appeal of Revenue dismissed.
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