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Showing 501 to 520 of 1445 Records
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2024 (3) TMI 945
Revision u/s 263 - PCIT order of revision based on the audit objection - borrowed information or independent application of mind by CIT - HELD THAT:- The bench noted the ld. PCIT has raised four issues, on four issue the ld. AO has raised the issue, the assessee submitted the reply and the ld. AO has taken a plausible view on the matter.
AO taken a view based on the submission made by the assessee which the ld. PCIT merely based on the audit objection and PCIT’s observation that the view taken by the ld. AO on which the ld. PCIT is not in agreement cannot hold the order liable to be sustained
PCIT based on the borrowed information and has not established as to how the view taken by the ld. AO is not correct when the issue raised has already been form part of the proceeding before the ld. AO. Based on the discussion so recorded we are of the considered view that the proceeding initiated u/s. 263 is merely based on the audit objection, PCIT is not agreement with the ld. AO and the observation on the stock, in the audit report already filed by the assessee. Thus, there is clear absence of his satisfaction and there is no independent view of the ld. PCIT even on merits thus, the assessee which has been completed there cannot be the second inning to the revenue without justifying the twin condition to the order passed by the ld. AO.
We note that on all the four issue the AO has called for the details, examined the issue and the plausible view on the matter is taken. Merely there is an audit objection, adverse remark of the auditor and the ld. PCIT is not in agreement with the view of the AO the order cannot be sustained as liable to quash as the twin condition provided u/s. 263 that the order should be erroneous and prejudicial to the interest of the revenue fails and therefore, we do not agree with the finding of the ld. PCIT wherein he could not point out any mistake / error in order which is prejudicial to the interest of the revenue.
The AO while framing the assessment had taken a possible view, and revenue did not demonstrate the error remain on the part of the ld. AO. In fact, when the ld. AO has conducted the required enquiry and not violated any of the conditions mentioned for revision of order as required by Explanation 2 of Section 263 of the Act, the order passed by the Assessing Officer could not be deemed to be erroneous so as to be prejudicial to the interests of the revenue - See MANNA TRUST, [2022 (1) TMI 693 - RAJASTHAN HIGH COURT] wherein as held Jurisdiction of the Commissioner under Section 263 of the Act is restricted and cannot be equated with the appellate jurisdiction. The Commissioner does not sit in appeal.
As proceeding initiated u/s. 263 is merely based on the audit objection, PCIT is not agreement with the ld. AO and the observation on the stock, in the audit report already filed by the assessee. Thus, there is clear absence of his satisfaction and there is no independent view of the ld. PCIT even on merits - Decided in favour of assessee.
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2024 (3) TMI 944
Exemption u/s 11 - Charitable activity u/s 2(15) - AO has rejected the exemption on the ground that the activity of the assessee for advancing the object of general public utility cannot be accepted as the society is advancing the object of general public utility and gross receipt of assessee from such activity was more than Rs. 10 lakhs, in the previous year and therefore the activities of the assessee were held to be not for charitable purpose - assessee submitted that the assessee is registered u/s 12A - HELD THAT:- We find that the assessee is registered u/s 12A and has derived income by way of contributions from the head office, membership fee, income from publication of Indian Foundry journal , other grants and donations etc. besides receiving interest on fixed deposits . We find that undoubtedly the assessee’s main object is general public utility which is clearly covered u/s 2(15) of the Act however the receipts from the said activity is more than 10 lakh and now the issue before us where surplus generated from the said activity is meager so that it does not fall within the ambit of proviso to Section 2(15) of the Act. We note that profit on the receipts is very meager and therefore the decision of Co-ordinate Bench in the case of Indian Chamber of Commerce (2014 (12) TMI 256 - ITAT KOLKATA) is clearly applicable
We are inclined set aside the order of ld. CIT(A) and further uphold that the assessee is entitled to exempt u/s 11 of the Act during the year on the ground that the profit derived from the services rendered as public utility service is very meager. The AO is directed to allow the exemption u/s 11 of the Act. Appeal of the assessee is allowed.
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2024 (3) TMI 943
TP Adjustment - assessee has issued the corporate guarantee on behalf of AE’s - TPO has applied the interest saved approach i.e. interest saved by the AE’s on account of corporate guarantee given by the assessee and based on this approach the TPO has computed the guarantee fees in the hands of the assessee @ 75% of interest saved - HELD THAT:- After giving a thoughtful consideration to the orders of the coordinate Bench for earlier AYs we are of the considered view that the basis of interest split benefit between guarantor and borrower is 50:50 basis, therefore, we direct the AO to restrict the addition by splitting the interest benefit for the year under consideration on 50:50 basis. In our considered view whatever mistake which has happened inadvertently in earlier years cannot be allowed to perpetuate indefinitely. Considering the fact that the coordinate Bench has principally decided the split on 50:50 basis. Ground 1-5 allowed.
TP adjustment on account of royalty - TPO/ CIT(A) held charge of brand royalty of 0.75% in the case of Dabur International Limited and 2% composite royalty in case of Asian Consumer Care Ltd. - HELD THAT:- Following the aforesaid decision of the ITAT in assessee's own case 2022 (10) TMI 219 - ITAT DELHI] A.Y. 2010-11 we direct that in case of Dabur Nepal (P) Ltd., royalty is quantified at nil, the case of Dabur International UAE, royalty is quantified at 0.75% of FOB sales.
Disallowance on account of delay in deposit of ESI / EPF - HELD THAT:- This issue is now squarely covered in favour of the revenue and against the assessee by the decision of Check Mate Services Private Limited [2022 (10) TMI 617 - SUPREME COURT]
Addition u/s. 43B based on audit report - HELD THAT:- As seen from the chart the liability as on the first day of the previous year was Rs. 227754220/- out of which Rs. 160073926/- were paid during the year and Rs. 67156645/- was not paid during the year which means that this amount was never charged to the P & L account, therefore, there is no question of any disallowance. We have verified from the computation of income and we are of the considered view that there is no need of addition which we direct the AO to delete.
Addition for change of accounting policy - HELD THAT:- In the computation of income the assessee has made addition on account of instrumeny hedging adverse currency fluctuation against of balance sheet exposer in FG Rs. 52,93,552/- which means the assessee has already added the loss and that there was no need of any further addition by the AO. We accordingly direct the AO to delete the addition.
Deduction as capital subsidy on statutory exemption from payment of excise duty - HELD THAT:- Respectfully following the decision of the Coordinate Bench in [2021 (2) TMI 1250 - ITAT DELHI] for A.Y. 2008- 09 we hold accordingly and direct the AO to decide the issue fresh after affording a reasonable and adequate opportunity of being heard to the assessee.
Notional interest imputed on trade receivables - assessee interalia raised invoices on account of sales made to its associates enterprises - TPO recharacterized the delay in receipt of receivables as deemed unsecured loans advanced to the AE and sought to impute notional interest on the delay in receipt of receivables @ 12.65% and made addition - CIT(A) accepted it to be an international transaction but since no interest was charged on receivables due from unrelated parties, the CIT(A) deleted the addition - HELD THAT:- We find that an identical quarrel was considered by this Tribunal in assessee’s own case [2022 (10) TMI 219 - ITAT DELHI] in A.Y. 2010-11 and 2011-12 wherein held as not in agreement with the submission of Ld. DR. It is no doubt that after the amendment, receivables are an international transaction which needs to be benchmarked separately but as rightly pointed out by the ld. CIT(A) above that margin of the assessee both in FMCG and non-FMCG segment is much higher than the comparables. Hence, since benchmarking under both the segments has been accepted in the transfer pricing, we do not find any infirmity in the order of ld. CIT(A) that there is no reason to separately benchmark receivables.
Direction to re-compute the deduction 80IB and 80IC of the Act without further allocation of the head office expenses - HELD THAT:- CIT(A) following the principal of consistency followed the order of his predecessor for the assessment year 2007-08 & 2008-09 [2021 (2) TMI 1250 - ITAT DELHI] 2009-10 [2017 (12) TMI 934 - DELHI HIGH COURT].wherein as find no infirmity in the order of the CIT(A) reversing the action of the AO in allocating the head office expenses and depreciation to various eligible units for the purpose of recomputing the deducting u/s 80IB/80IC. The factual finding of the ld.CIT(A) that the assessee has added back the depreciation as per Companies Act, 1956 and claimed depreciation as per the Income-tax and, therefore, the AO was wrong in allocating the difference of depreciation available under the Companies Act and the Income-tax Act to the eligible units could not be controverted by the ld. DR. Similarly, the ld. DR also could not controverted the factual finding given by the CIT(A) that expenses aggregating to Rs. 1,563.02 lakhs being head office expenses were suo motu disallowed by the assessee and added back in the computation of income and once these expenses were claimed by the assessee the same cannot be allocated to the eligible units for computation of deduction u/s 80IB/80IC and, therefore, cannot be allocated to the eligible units.
Addition made u/s. 14A r.w.r. 8D - Exempt income earned or not? - HELD THAT:- The facts on record show that the assessee has not earned any exempt income during the year under consideration, therefore, the ratio laid-down by the Hon’ble High Court of Delhi in the case of Cheminvest [2015 (9) TMI 238 - DELHI HIGH COURT] and Cortech Energy Limited.[2014 (3) TMI 856 - GUJARAT HIGH COURT] squarely apply and respectfully following the same no interference is called for ground No.7 is also dismissed.
TDS u/s 194H - Addition u/s. 40(a)(ia) - assessee has incurred an expenditure on account of bank guarantee commission/ fee for alleged failuer to deduct tax at source - HELD THAT:- We find that the issue is squarely covered by the decision of Hon’ble Jurisdictional High Court of Delhi in the case of JDS Apparels [2014 (11) TMI 732 - DELHI HIGH COURT] wherein the Hon’ble Court has held that amount charged by bank as a fee for rendering banking services to its client could not be treated as commission or brokerage u/s. 194H of the Act.
Deduction u/s. 80G - assessee has claimed deduction being 50% paid as donation to various trust/ organizations - AO denied the claim of exemption holding that the organizations did not have valid 80G certificates - When the certificates were produced before the CIT(A) he refused to admit the same as they were not produced before the AO - HELD THAT:- We are of the considered view that the CIT(A) ought to have admitted the evidences. In the interest of justice and fair play we restore this issue to the files of the AO. The assessee is directed to furnish the certificates of eligibility and the AO is directed to consider the same and decide the issue as per the provisions of the law.
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2024 (3) TMI 942
TP Adjustment - bilateral Advance Pricing Agreement (APA) between India and the USA - international transaction pertaining to receipt of information technology enabled services and payment towards K-Net charges - whether international transactions between the Applicant and its AEs as Covered Transactions? - HELD THAT:- As the year under consideration is covered under the APA [bilateral Advance Pricing Agreement [APA] between India and USA, the assessee filed its modified return of income which we have been told has been processed. Since the modified return of income is now available with the AO, we deem it fit to restore the impugned quarrel to the file of the Assessing Officer. The Assessing Officer is directed to consider the modified return of income in light of APA and decide the issue afresh after affording reasonable and adequate opportunity of being heard to the assessee. Accordingly, Ground No. 1 with all its sub-grounds is allowed for statistical purposes.
Foreign Tax Credit - HELD THAT:- HCL Comnet Systems And Services Ltd [2023 (11) TMI 1238 - DELHI HIGH COURT] has decided the issue in favour of the assessee as relying on Wipro Ltd. case [2015 (10) TMI 826 - KARNATAKA HIGH COURT]
Short credit of TDS - HELD THAT:- We are of the considered view that this issue needs verification and we direct the Assessing Officer to verify the details of TDS and allow credit as per provisions of law. Ground No. 5 is allowed for statistical purposes.
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2024 (3) TMI 941
Application for final approval u/s 80G(5)(iii) - time limit prescribed for making an application for final approval u/s 80G - as per revenue assessee had already commenced its activities since long even prior to grant of provisional registration, and since the time period for making application mentioned in Clause (iii) to First Proviso to section 80G(5) of the Act had already expired, therefore, the assessee could not be granted final registration u/s 80G(5) - HELD THAT:- CBDT has extended the date upto 30.09.2023 for making application under Clause (i) to First Proviso to section 80G(5) of the Act, which means that the institutions, which were already registered prior to the amendment brought to section 80G(5) by Amendment Act of 2020 w.e.f. 01.04.2021, if an institution for some reasons could not make an application for renewal/continuance of registration under Clause (i) to First Proviso to section 80G(5) of the Act within the stipulated period of three months, it could still apply under Clause (i) upto 30.09.2023.
Once an institution has applied under Clause (i) to First Proviso to section 80G(5) of the Act on or before 30.09.2023, it will be further governed by the statutory provisions of Clause (iii) of First proviso to section 80G(5) of the Act and not by the CBDT Circular for the purpose of limitation. CBDT Circular is for extension of date to help the institutions which could not apply under Clause (i) within stipulated period of three months, and not for curtailing limitation or barring institutions for final registration under Clause (iii) to First Proviso to section 80G(5) of the Act.
For making application for final registration under Clause (iii) to First Proviso to section 80G(5) of the Act, the institution must have been provisionally registered either under Clause (i) or Clause (iv) to First Proviso to section 80G(5) of the Act.
If the view of the ld. CIT(Exemption) is accepted to be correct, then no institution which has already been into charitable activities before seeking provisional approval under Clause (iv) to First Proviso to section 80G(5) of the Act would ever be entitled to grant of final registration under Clause (iii) to First Proviso to section 80G(5) of the Act even after grant of provisional approval, which would make the relevant provisions of section 80G(5) otiose and defeat the object and purpose of these statutory provisions.
As held that after grant of provisional approval, the application cannot be rejected on the ground that the institution had already commenced its activities even prior to grant of provisional registration. Thus the date of commencement of activity will be counted when an activity is undertaken after the grant of provisional registration either under Clause (i) or Clause (iv) to First Proviso to section 80G(5) of the Act.
In the case in hand, the assessee admittedly has applied for final registration after grant of provisional registration under Clause (iv) to First Proviso to section 80G(5) of the Act and therefore, the application filed by the assessee is within limitation period.
The issue is otherwise squarely covered by the decision of Vivekananda Mission Asram [2023 (12) TMI 1298 - ITAT KOLKATA] and in the case of “West Bengal Welfare Society [2023 (9) TMI 1422 - ITAT KOLKATA] and Sri Aurobindo Bhawan Trust, Krishnagar vs. CIT(Exemption)” [2024 (3) TMI 839 - ITAT KOLKATA] - Therefore, the impugned order of the CIT(Exemption) is set aside and the ld. CIT(Exemption) is directed to grant provisional approval to the assessee under Clause (iii) to First Proviso to section 80G(5) of the Act, if the assessee is otherwise found eligible. The ld. CIT(A) will decide the application for final registration within three months of the receipt of copy of this order. Appeal of the assessee is treated as allowed for statistical purposes.
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2024 (3) TMI 940
Penalty u/s. 271B - penalty u/s. 271A has been levied as assessee has not audited his book of accounts as per the provisions of section 44AB - HELD THAT:- It is a settled proposition of law that once the penalty has been levied u/s. 271A of the Act for non maintenance of books of accounts, then penalty u/s. 271B of the Act cannot be levied. See Varadagovind Parthasarthy Iyer [2023 (8) TMI 1444 - ITAT MUMBAI].
Once the penalty u/s. 271A has been levied for non maintenance of books of accounts, no penalty u/s. 271B of the Act can be levied. This view has been supported by the decisions of various high courts. It is observed that in the present case in hand the ld. A.O. had levied a penalty u/s. 271A of the Act which according to the ld. AR has been accepted and paid by the assessee. As per the decisions cited herein above, we deem it fit to hold that penalty u/s. 271B of the Act cannot be levied in the present facts of the case for non auditing of the books of accounts where the assessee has failed to maintain the same. We hereby direct the ld. A.O. to delete the impugned penalty. Ground no. 1 raised by the assessee is hereby allowed.
Penalty u/s. 271(1)(c) - Assessee has concealed the particulars of income during the year under consideration - CIT(A) upheld the penalty vide an ex parte order holding that the assessee has failed to substantiate his claim neither by documentary evidence nor by the submission of the assessee - assessee contended that there has been no variation in the returned and assessed income - HELD THAT:- It is observed that the assessee had filed his return of income in response to notice u/s. 148 of the Act, declaring total income which amounts to business income on the total turnover and commission income which aggregates to Rs. 6,57,615/- out of which the assessee had claimed deduction of Rs. 15,970/- under Chapter VIA of the Act. A.O. in the assessment proceeding had accepted the return of income filed by the assessee and determined the total income without any variation between the returned and the assessed income
From the above observation, we deem it fit to hold that as there has been no variation in returned and the assessed income, there could not be any possibilities of the assessee concealing the particulars of income which could attract the provision of section 271(1)(c) of the Act. We hereby deem it fit to direct the ld. A.O. to delete the impugned penalty levied u/s. 271(1)(c) of the Act. Hence, the grounds raised by the assessee are hereby allowed.
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2024 (3) TMI 939
Deduction u/s 80IC - Claim denied on the ground that the audit report in Form No.10CCB was not filed within the due date - assessee pleaded that there are case laws for the proposition that if Form 10CCB is filed during the course of assessment before the final order the deduction is to be allowed - HELD THAT:- The due date of filing of return in this case was 07.11.2017. The return was filed on 29.08.2017 and the Tax audit report was also filed on 28.10.2017 and Form 10CCB on 28.05.2018. The return was processed under section 143(1) of the Act on 08.02.2019
We find that in this case, Form 10CCB was filed before the intimation u/s 143(1) dated 08.02.2019. In these circumstances, the case laws point out that deduction is to be allowed. See G.M. KNITTING INDUSTRIES (P.) LTD. & AKS ALLOYS (P.) LTD. [2015 (11) TMI 397 - SC ORDER] wherein held that even if form 3AA was not filed along with return of income but the same was filed during the assessment proceedings and before the final order of the assessment was made that would amount to sufficient compliance. Also see GREEN DOT HEALTH FOODS PVT. LTD. [2023 (2) TMI 516 - ITAT DELHI] - Appeal of the assessee stands allowed.
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2024 (3) TMI 938
Seeking rectification of an alleged mistake - error apparent on the face of record or not - submission in the applications is that this Tribunal committed an error because this Tribunal was competent to decide but had not decided the question of jurisdiction - HELD THAT:- These applications seeking rectification of mistake are misconceived. The appellants were represented by a learned counsel who made submissions on their behalf. Needless to say, that when a learned counsel makes submissions, the court has to presume those to be on the instructions of the appellants. After arguing the appeal on merits and partly succeeding and partly failing in the appeal, the appellant then decided to hire a new counsel to find fault with the submissions made by the previous counsel and further alleging that this Tribunal committed a mistake in proceeding on the basis of the submissions made by the previous counsel.
It is also incorrect to say that this Tribunal did not follow the directions of the High Court and had not applied its mind on the question of jurisdiction. It had not only applied its mind but also recorded in paragraphs 1 and 2 of the Final Order the question of jurisdiction not only with respect to the judgment in M/S MANGALI IMPEX LTD., M/S PACE INTERNATIONAL AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2016 (5) TMI 225 - DELHI HIGH COURT], the review petition filed by the Revenue and the further retrospective amendments made by Finance Act, 2022.
Considering the judgments and the subsequent amendments, if it has to be decided if the officer issuing the SCN had jurisdiction or not in this case, it can only be done on the basis of the submissions made by both sides. Both sides did not want to press the question of jurisdiction and therefore the matter was decided on merits and it was decided so.
The Tribunal can rectify if there is a mistake apparent on record. In this case, there are no mistake at all in Final Order, let alone, an error apparent on record. Therefore, the applications deserve to be dismissed and are dismissed.
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2024 (3) TMI 937
Recovery of duty foregone - non-installation of the capital goods and consequent non-fulfilment of post-importation condition - It is the contention that the ‘capital goods’ had not been installed within the prescribed time period and that the export obligation could not, therefore, have been fulfilled - HELD THAT:- It is on record that the ‘capital goods’ were found to have been installed at premises other than that indicated in the licensing documents. It was held in the impugned order that, though the rent agreement for the said premises had been produced, documents evidencing shift of the ‘capital goods’ was neither available nor furnished by the appellant. The imports had been permitted, and duty had been foregone, subject to condition that ‘export obligation’ would be completed within six years. It is also on record that the licensing authority had extended the time-period for effecting the installation which, in effect, re-scheduled the date by which the export obligation would have to be fulfilled.
There is nothing available on record to indicate that, after such installation, as claimed by the appellant in application for relaxation of time for fulfillment had been preferred, exports had been undertaken. It would also appear to us that the deferment of time for installation does not, of itself, re-schedule the deadline for completion of export obligation. The imports had been effected in October 2012 and December 2012 with post-import fulfilment of the export obligation by 2018.
In the facts and circumstances of fulfilment of export obligation not having been evinced and the stipulated deadline prescribed in the authorisations not adhered to, the confirmation of duty liability, equal to the duty foregone, would appear to be reasonable. However, there is no finding on the entitlement for depreciation in proportion to the export performance established from the records. This would have a bearing on the other consequences under Customs Act, 1962. The rectification of that want requires that the impugned order be set aside and matter remanded back to the original authority for fresh decision after consideration of the facts and circumstances including evidence of exports undertaken by deployment of the said capital goods that may be furnished by the appellant herein.
The appeal is disposed off by way of remand.
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2024 (3) TMI 936
Classification of goods - Nutrition/Dietary Supplements classified under Tariff item 21069099 attracts IGST at the rate of 18 % under serial No. 453 and/or 23 of Schedule III of Notification No. 1/2017- Integrated Tax (Rate) dated 28-06-2017 as claimed by the appellant or the said goods is covered under serial No. 9 of Schedule IV of the said notification which provided for IGST at the rate of 28% as claimed by the Revenue? - HELD THAT:- The case of the department is that since goods are covered under Serial No. 9 the same will not fall under either Serial No. 453 or 23 of Schedule III, which is absolutely incorrect. Other than the specified goods covered under Serial No. 9 all other goods fall under Serial No. 453 and/or 23 of any chapter falls under the discerption given therein. We find that the Adjudicating Authority has not given any heed to a vital fact that discerption mentioned in serial No. 9 is only for some specific items which does not cover the goods of the present case. Therefore, the appellant’s goods does not fall under Serial No. 9. Accordingly, the Serial No. 453 and/or 23 of Schedule III is the correct entry where the appellant’s goods fall. Hence, the correct rate of IGST applied by the appellant i.e. 18% is correct and legal.
The identical issue has been considered by this Tribunal in the case of NEUVERA WELLNESS VENTURES P. LTD. VERSUS C.C. MUNDRA [2023 (10) TMI 964 - CESTAT AHMEDABAD] wherein it was held that From tariff entry of 2106, it can be seen that the entry covers various food preparation not elsewhere specified or included. However, out of the many items provided under tariff item 2106, the serial No. 9 described only some of those goods. This also establish that Serial No. 9 is not a general entry which covers entire entry of 2106 but only some of the goods which are specified in the description of goods are provided under serial no. 9 of Schedule IV,. This fact also strengthens the claim of the appellant that their goods are not covered under serial no. 9 of the schedule IV of Notification 1/2017-IGST-Rate and correctly falls under Serial No. 453 according to which the rate of IGST is 18%.
The appellants have correctly declared their goods under Serial No. 453 and/or 23 of Schedule III of Notification No. 1/2017- Integrated Tax (Rate) which attracts 18% of IGST. Therefore, the impugned order is not sustainable.
The impugned order is set aside. Appeal is allowed.
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2024 (3) TMI 935
Classification of imported goods - defatted coconut - to be classified under CTH 08011990 or under CTH 23065020? - Benefit of Notification No.50/2017- Customs dated 30.06.2017 Sl. No. 114 - HELD THAT:- As per the first test report dated 11.11.2020, oil content is 46.8% and it confirm to the FSSAI (Food Products Standards and Food Additives) standard of defatted coconut. There is no reason given in the impugned order-in-original to discard the said finding. Thereafter another set of sample were drawn and sent to Coconut Development Board. Vide report dated 08.12.2020, they have also classified that sample submitted is defatted coconut and oil content was 45.51%. Alleging that the said report was not clear about the parameter for identifying the defatted and desiccated coconut, on further query was made and they have confirmed that as per Codex committee there is no difference between defatted and desiccated coconut.
The adjudicating authority proceed with technical standards for desiccated coconut as per CODEX standard (CODEX STAN 177-1991) and concluded that goods which was defatted coconut is low fat desiccated coconut classifiable as under CTH 08011110. Such presumption is drawn on conclusion that to bring the goods under CTH 2306, oil should have removed from them and in the nature of residues material suitable for any subsequent use after there primary use in food industry. Such finding is arrived without considering the standard prescribed by the FSSAI and only based on the standard of Codex. Such method adopted by the adjudicating authority for classification of food articles is prima facie unsustainable. Moreover, Revenue is not disputing the fact that similar goods are being imported through Chennai port.
There is no infirmity in the order issued by the Commissioner (Appeal) - Revenue is directed to classify the goods as per the declaration made by the respondent by extending the benefit of notification as applicable - Appeal dismissed.
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2024 (3) TMI 934
Valuation of imported goods - Cement Carrier ship - rejection of transaction value - redetermination of value - inclusion of handling charges, transportation, cost of insurance and landing charges in assessable value - failure to declare the value of Bunkers on board at the time of delivery at Colombo.
Mis-declaring the value of ship by not adding value of transportation, cost of insurance and lending charges - failure to declare the value of Bunkers on board at the time of delivery at Colombo - HELD THAT:- In the present case, though the invoice value of Rs. 26,91,00,000/- was declared at the time of import, as per the prevailing practice, at the request of appellant, it was subject to valuation by Chartered Engineer and as per the valuation report, chartered engineer assessed the value of ship as Rs. 27,00,00,000/- and based on the above said value, it was allowed to clear on payment of proper Custom duty. Now in addition to that, adjudicating authority is adding 20% as cost of transportation, handling charges of 1.125% and 1% of assessable value for confirming demand of Rs. 30,31,174/- - The inclusion of ‘freight’ and ‘insurance’ in the assessable value in commercial parlance, is designated as ‘CIF’ in transactions. The vessel, ever coursing the seas and oceans, does not take on additional insurance merely for the purposes of movement to a destination for registration and the cost of self-propulsion does not add to the value of the vessel. Moreover as per the estimated voyage cost produced by the appellant, they have added cost of Rs. 1,70,595/- towards cost of voyage and other expenses for the fuel from Colombo to Mangalore Port and paid customs duty. Consequently, the enhancement of ‘assessable value’ beyond the value assessed by Chartered Engineer fails on every count.
Adding the cost of Bunkers, based on the balance quantity of Bunkers at Mangalore port - HELD THAT:- The issue is squarely covered by the judgment of the Hon’ble Supreme court in the matter Mangalore Refinery & Petrochemicals Ltd. Vs. CC, Mangalore, [2015 (9) TMI 245 - SUPREME COURT] where it is held that the quantity actually received into the shore tank in port in India should be the basis for payment of Customs duty, being the goods imported into India. Considering the law laid down by the apex court, demand of duty for the balance quantity of Bunkers available in Colombo at the time of delivery of the ship cannot be added towards the cost of Bunkers.
Regarding value, as per the request of the appellant, Chartered Engineer carried out survey and as per the report No. AR/016/2011-12 dated 09.05.2011, value assessed the as Rs 27 Crores. Hence this appeal is allowed by accepting the assessable value of the goods as Rs. 27 Crores and additional demand of customs duty against cost of transportation, insurance and handling charges as demanded in the impugned order is set aside - Since there is no suppression of fact, confiscation of the ship and fine and penalty imposed by the adjudicating authority is set aside. The impugned order modified to the extent of confirming assessable value as Rs. 27 Crores.
Appeal allowed in part.
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2024 (3) TMI 933
Valuation of imported goods - Unwrought / Unrefined Zinc - enhancement of value - rejection of transaction value - demand of additional duty on the basis of NIDB data for primary Zinc ingots - contemporaneous imports or not - HELD THAT:- The Department has rejected the transaction value and redetermined the same on the basis of LME price considering the percentage of Zinc content in the consignments in terms of the Test Report of CRCL, Kolkata. As per the Test Report, the Zinc content in Bill-of-Entry No. 4533688 dated 10.03.2016 was 87.80% and the Zinc content in Bill-of-Entry No. 8650713 dated 19.03.2015 was 92.50%. The Ld. Authorized Representative appearing for the Revenue was asked to furnish a copy of both the Test Reports. However, the Ld. Authorized Representative could not submit a copy of the Test Report for the Bill-of-Entry No. 8650713 dated 19.03.2015. It is observed that the percentage of Zinc should be above 92% in “‘Zinc dross”. Only in the Bill-of-Entry No. 8650713 dated 19.03.2015, the Zinc percentage was found to be more than 92%. However, no such report has been produced by the Department to substantiate this claim. In the absence of a Test Report, it cannot be considered that the percentage of Zinc content in the goods imported by the respondent was above 92%.
In respect of the other Bill-of-Entry No. 4533688 dated 10.03.2016, the percentage of Zinc content was found to be only 87.80%, which is less than 92%. Accordingly, these goods cannot be considered as “Zinc dross” which are restricted as per the Foreign Trade Policy.
The Department has not brought any evidence on record to substantiate their claim that the percentage of Zinc content in both the Bills-of-Entry was more than 92% so as to classify the same as “Zinc dross”. Accordingly, there is no infirmity in the impugned order passed by the Ld. Commissioner (Appeals) and therefore, the impugned order passed by the Ld. Commissioner (Appeals) is upheld.
The appeal filed by the Department is rejected.
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2024 (3) TMI 932
Smuggling - Betel Nuts - foreign origin goods - town seizure - notified item or not - onus to prove - HELD THAT:- It is a case of town seizure of betel nuts which is not a notified item under Section 123 of the Customs Act, 1962. Therefore, the onus to prove that the betel nuts are a smuggled one is on the Revenue. At the time of interception, the appellant has produced documents pertaining to procurement of the said betel nuts through proper channel. In that circumstances, we hold that the Revenue has failed to discharge their onus to prove that the goods impugned are a smuggled one or of foreign origin.
As Revenue has failed to discharge their onus that the goods in question are a smuggled one, in these circumstances, the confiscation of the impugned goods is not sustainable in the eyes of law and therefore, confiscation of the impugned goods is set aside. As the goods are not liable for confiscation, consequently no penalty is imposable on the appellants.
The impugned order set aside - appeal allowed.
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2024 (3) TMI 931
Validity of declaring of the respondent as a Secured Creditor - retention of shares held as security - primary grievance of the petitioner is that the NCLT ought to have decided the Liquidator’s application under Section 25 of the Insolvency and Bankruptcy Code (IBC), 2016 prior to deciding the application under Regulation 21-A of the IBBI (Liquidation Process) Regulations, 2016 - direction to hand over the share certificates - HELD THAT:- The provisions of Regulation 21-A of the 2016 Regulations are to be examined. Clause (1) of the same provides that a Secured Creditor shall inform the Liquidator of its decision to relinquish its security interest to the liquidation estate or realize its security interest as the case may be. Alliance has filed a Form-D application expressing its interest to realize its security interest. The Liquidator, upon expiry of 30 days from the liquidation commencement, Alliance having not intimated its decision, filed the application under Regulation 21-A for presuming the assets covered under the security interest to be part of the liquidation estate - irrespective of the claim of Alliance to the pledged shares being sub judice in a separate suit, the fact remains that the effect of the order under Regulation 21-A is that the assets covered under the security interest that is the said shares, are presumed to be part of the liquidation estate.
By virtue of the order passed under Regulation 21-A treating the assets covered under the alleged security interest of Alliance (the shares-in-question) to be part of the liquidation estate, the interest of the secured creditors, be it the petitioner or others, cannot be adversely affected in any manner; rather, such order can only enure to the benefit of the secured creditors. The effect of the order is that, despite the claim of security interest of Alliance in the said shares, those are made a part of the liquidation assets, thereby subjecting the sale proceeds obtained after sale of such shares to the rigours of Section 53 of the IBC - Section 53 provides the order of priority for distribution of the proceeds from the sale of the liquidation assets. If the shares are treated to be liquidation assets and are sold as such, the proceeds from the said sale will be a part of the hotchpot of the liquidation assets and will be distributed in terms of Section 53 where the secured creditors will get their dues in accordance with the order of priority stipulated therein. The petitioner claims to be a secured creditor and, hence, could only be benefited, and not suffered, from the order under Regulation 21-A.
There are no irregularity in the order impugned herein. Since the Liquidator’s repeated efforts directing Alliance to hand over its shares failed, Section 25 of the IBC has been rendered academic. Section 25, it is to be noted, does not envisage any adjudication of the rights of a secured creditor to any of the assets. Only if a secured creditor in the liquidation proceedings realizes its security interest in the manner specified in section 52 of the IBC, under sub-section (1)(b) of the said Section, he shall inform the Liquidator of such security interest and identify the assets subject to such security interest to be realized, as per the provisions of sub-section (2) of Section 52 - the scope of an adjudication of the security interest during a liquidation process is provided only in Section 52(3). If Alliance had succeeded in having its way under Section 52(1)(a), it would not be the bounden duty of the Liquidator to adjudicate on the said rights under sub-section (3) of Section 52. However, since such bid of Alliance has failed by way of the impugned order under Regulation 21-A, presuming the shares-in-question to be a part of the liquidation asset and directing sale thereof, there cannot arise any question of such adjudication, since, in any event, the shares become a part of the liquidation estate, sufficiently subserving the interest of all secured creditors, including the petitioner (who claims to be a secured creditor), who would be getting their dues in order of priority under Section 53 of the IBC.
The petitioner cannot claim to have been aggrieved in any manner, as the order passed under Regulation 21-A did not adjudicate on the rights of Alliance in respect of security interest to the disputed shares. Rather, the Liquidator has rightly submitted that the said shares would be shown in the auction sale to be subject to the pending suit.
The argument of the petitioner that the order is devoid of reasons is entirely misplaced. In the absence of any adjudication on the issue of Alliance’s rights to the pledged shares, there arises no question of any reason being provided for such non-existent adjudication - there is no scope of interference in the present writ petition.
Petition dismissed.
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2024 (3) TMI 930
Rejection of transfer application - proceedings were initiated by the Financial Creditor under Section 7 which proceedings were initially admitted and the application to recall the said order was rejected - HELD THAT:- The facts indicate that the order of admission of the CIRP and the order rejecting the application of the Corporate Debtor for recall of the order was set aside by this Tribunal on 26.09.2023 and thereafter Section 7 proceedings revived before the Adjudicating Authority to be proceeded and decided in accordance with law.
There can be no dispute to the preposition of law that mere apprehension of bias is sufficient for transfer of a proceeding. The question is as to whether the facts and sequence of the events in the present case reflect any apprehension of bias. Having adverted to the submission and facts and sequence are fully satisfied that neither there is bias reflected nor any apprehension of bias which can be imputed the Bench hearing the matter. In the impugned order, Hon’ble President has looked into the submission and has rejected the application for transfer in which there are no error.
Appeal dismissed.
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2024 (3) TMI 929
Liability to contribute towards Liquidation Process Costs - scope of Financial Institution - Appellant points out that neither the Appellant nor the Debenture Holders, it acts on behalf of the fall within the definition of Non-banking Institution, under Section 45-I(e) of the RBI Act and hence, not liable to contribute towards Liquidation Costs - HELD THAT:- As a matter of fact, in view of the rejection of the Resolution Plan, by the Members of the Committee of Creditors, and in view of the CIRP Period, expiring on 17.02.2020, the Resolution Professional, preferred an Application, as per Section 33(1) of the Code, seeking Liquidation of the Corporate Debtor. The Adjudicating Authority / Tribunal, by an Order dated 13.03.2020, passed an Order of Liquidation, for the Corporate Debtor. Also that, the Adjudicating Authority, had appointed the 1st Respondent / Liquidator as Liquidator, through an Order dated 13.03.2020.
The 1st Respondent / Petitioner / Liquidator, had informed the 3rd Respondent / Phoenix ARC Private Limited, through letter dated 26.08.2020, their respective Share of Liquidation Costs of Rs.36,74,771/-, (which includes, the approved Liquidation Costs and Liquidator Fee) and requested to remit their respective Share as a whole or at least 30% within 5 days, from the issuance of the Letter. In fact, the 1st Respondent / Petitioner / Liquidator, had provided the Liquidator’s Fee Estimate, as per Letter dated 26.08.2020, as per Regulation 4(2)(b) of the Liquidation Process Regulations, 2016 - It is represented on behalf of the 1st Respondent / Petitioner / Liquidator that any delay, in depositing the Liquidation Costs by the Respondents, is delaying the Liquidation Process and the Liquidator, is unable to perform his duties, as mandated under the I & B Code, 2016.
Petition is filed in a Bona fide manner, and in the interest of Justice, the said Application, may be allowed by issuing necessary directions to the Respondents, to forthwith defray the portion of Liquidation Process costs, as per Regulation 2A of the IBBI (Liquidation Process) Regulations.
The filing of a Certified Copy (Paid Cost Copy), is not an empty ritualistic formality, in the considered opinion of this Tribunal. It cannot be gainsaid that only when the Petitioner / Appellant / Aggrieved Party, applies within the prescribed period of Limitation, as envisaged, under Section 61 (2) of the Code, the time taken to secure the Certified Copy, will be excluded from the Computation of Period of Limitation - In terms of Rule 22(2) of the NCLAT Rules, 2016, a Certified Copy of the Impugned Order, shall accompany every Appeal to be filed, before the Office of the Registry. Only in a Paid Certified Copy, by an Aggrieved Party, the details Viz. when the Application for Certified Copy of the Impugned Order was made by the Applicant, when it was made ready, when it was handed over / taken delivery, etc., will find a place, ofcourse, duly signed by the Deputy / Asst. Registrar of the Adjudicating Authority / Tribunal.
Considering the entire conspectus of the attendant facts and circumstances of the instant case, in an encircling manner, comes to an irresistible conclusion that the Impugned Order, dated 25.05.2023 in IA No. 399 / BB / 2020 in CP (IB) No. 189 / BB / 2018, passed by the Adjudicating Authority / NCLT, Bengaluru Bench, in directing the Appellants, 1st Respondent and two other Respondents, to Defray their portion of Liquidation Process Costs, is free from any legal infirmities.
Appeal dismissed.
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2024 (3) TMI 928
Admission of section 7 application - financial debt owed by the Corporate Debtor or not - default was committed by the Corporate Debtor in not carrying out the construction due to interim order or not.
Whether Grandstar Reality Pvt. Ltd., auction purchaser under SARFAESI Act, 2002, on 17.06.2016/ 19.07.2016 can be held to be Financial Creditor of the Respondent allottees, who were issued allotment letters/ Builder Buyers Agreement by Akme Projects Ltd. (the predecessor of the Corporate Debtor)? - HELD THAT:- The definition of Financial Creditor means that any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to. The crucial word in the definition is “any person to whom a financial debt is owed” becomes a Financial Creditor. Further, the expression “includes a person to whom such debt is legally assigned or transferred to” is only incidence of further elaboration of person to whom the financial debt is owed. In the facts of the present case, there can be no denying that financial debt, which was owed by Akme to the allottees is now the debt owed by Grandstar Reality Pvt. Ltd. The Grandstar Reality Pvt. Ltd. is fully covered by the definition of Section 5, sub-section (7), who owed the debt towards the allottees.
The financial debt can be owed in more than one manner. Assignment or transfers are two modes, which has been expressly included in the definition. In cases of amalgamation and demerger under the Companies Act, 2013 of a Corporate Debtor with another entity is obviously considered as Corporate Debtor on account of transfer/ vesting of assets and liabilities to the amalgamated/ transferee Company. Transferee Company cannot be permitted to escape the rigours of the Code by claiming that disbursement was not done to it directly. In the present case, where Grandstar Reality Pvt. Ltd. has taken over the Project under the SARFAESI Act, cannot escape the rigours of the Code and defeat the rights of the homebuyers under the Code - there is a financial debt and the filing of the Application by the allottees under Section 7 cannot be faulted on this ground.
Whether no default was committed by the Corporate Debtor in not carrying out the construction due to interim order passed by the Hon’ble Supreme Court in Rameshwar and Ors. vs. State of Haryana and Ors. [2018 (3) TMI 1964 - SUPREME COURT], M/s Akme Projects Ltd. vs. YES Bank & Anr.Whether no default was committed by the Corporate Debtor in not carrying out the construction due to interim order passed by the Hon’ble Supreme Court in Rameshwar and Ors. vs. State of Haryana and Ors.; in M/S. AKME PROJECTS LTD. VERSUS YES BANK LTD. & ANR. [2016 (10) TMI 1397 - DELHI HIGH COURT]? - HELD THAT:- The learned Counsel for the Respondent is right in her submission that even in additional affidavit filed on 19.01.2024 by the Appellant, no such facts have been stated, which may indicate that Grandstar Reality Pvt. Ltd. has been taking steps for completion of the Project. In the additional affidavit, the Appellant has placed reliance on letter dated 09.05.2023 issued by Tehsildar in terms of the order No.17/LAC dated 12.04.2023 passed by District Revenue Officer cum Land Acquisition Collector Gurugram. On looking into the said letters/ orders, it is clear that said orders were issued on a request made by one Om Prakash Yadav in the Rameshwar’s case. Hence, order of the District Revenue Officer dated 12.04.2023 and letter dated 09.05.2023 by Tehsildar are not relevant for the present case - in the facts of the present case default was clearly proved on the part of the Grandstar Reality Pvt. Ltd. and the findings recorded by the Adjudicating Authority that Section 7 Application is complete and deserved to be admitted, does not warrant any interference.
There are substance in the submission of learned Counsel for the Respondent that since the Project has been taken over by the Grandstar Reality Pvt. Ltd. in 2016 and it is now the obligation of Grandstar Reality Pvt. Ltd. to continue the Project, the filing of the claim by the allottees against the CIRP of Akme Project, cannot preclude the allottees from agitating their claim by filing Application under Section 7 against the Grandstar Reality Pvt. Ltd., who has taken over the Project.
There is no error in the order of the Adjudicating Authority admitting Section 7 Application. The Appeal is dismissed.
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2024 (3) TMI 927
Seeking impleadment of Successful Auction Purchaser/Appellant as one of the Respondents - HELD THAT:- This ‘Tribunal’, makes a pertinent mention that all pleadings exchanged prior to and non-impleadment, to overcome direction issued by the ‘Adjudicating Authority/Tribunal’, in regard to impleadment shall not be anyway to be construed that the concerned party had an effective and adequate opportunity to putforth its views/grievances, in terms of the ‘principles of natural justice’.
This ‘Tribunal’, is of the considered view that even though the ‘Adjudicating Authority/Tribunal’ had observed among other things “Liquidator is permitted to start e-auction process afresh allowing the ‘Applicant/Successful Bidder’ and other persons to participate in the process. It was also submitted that the mistake was bona fide and he is willing to allow the ‘Successful Bidder’, to participate with the amount already ‘furnished/deposited’ and ultimately, proceeded to pass an order, that there will be a ‘fresh auction’ and the ‘Applicant, Successful Bidder’ and other persons would be permitted to participate in the ‘fresh e-auction’ is liable to be set aside, to secure the ‘ends of justice’ because of the latent and patent fact that the ‘Appellant/Proposed Impleading Party, who was directed earlier by the ‘Adjudicating Authority/Tribunal’ through its order dated 30.01.2024 to be impleaded as the ‘Appellant/Successful Bidder’, as one of the ‘Respondents’, was not added as a party as one of the Respondents, this ‘Tribunal’ is of the considered view that the said omission is a vital one and goes to the root of the matter and affects the impugned order on the file of the ‘Adjudicating Authority/National Company Law Tribunal, Division Bench Court-I, Chennai.
Appeal allowed.
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2024 (3) TMI 926
Money Laundering - scheduled offences - cognizance of offence - issuance of summons without conducting an enquiry as prescribed under Section 202 of Cr.PC - petitioner not charged with the predicate offence, still be prosecuted for the offence under the PMLA Act or not - sufficient evidence to establish that the petitioner - accused No. 7.
Is it permissible to take cognizance and issue summons without conducting an enquiry as prescribed under Section 202 of Cr.PC? - HELD THAT:- Upon examination of Clause (b) to Sub-Section 1 of Section 44, it is evident that the Special Court, irrespective of the provisions in the Code of Criminal Procedure, possesses the authority to take cognizance of an offence under Section 3 without being committed to trial. In the present case, the complaint was lodged by the respondent, an authorized Officer, and the Special Court can take cognizance without resorting Section 202 of Cr.PC, thus, the argument presented by the learned Senior Counsel for the petitioner, asserting that the issuance of summons violated Section 202 of Cr.PC is untenable.
Can the petitioner, who is not charged with the predicate offence, still be prosecuted for the offence under the PMLA Act? - HELD THAT:- In the present case, the scheduled offences are under investigation by the jurisdictional police. Therefore, the petitioner can be subjected to prosecution under the PMLA, if it can be established that the petitioner has prima facie committed an offence under Section 3 of the PMLA.
Does the investigation under the PMLA Act provide sufficient evidence to establish that the petitioner - accused No. 7 has prima facie committed the offence alleged? - HELD THAT:- There is no evidence to suggest that the petitioner, who is a payment gateway, had knowledge that the funds transferred to the merchant IDs of accused No. 5 were derived from criminal activity related to a scheduled offence, nor did they knowingly assist accused No. 5 in concealing or transferring illicit proceeds as clean money. Even if we accept the statements from the Director of accused No. 5 and the employee of accused No. 7, at most, it indicates that accused No. 7 was negligent in setting up the merchant IDs in the name of accused No. 5. Intent is essential to constitute an offense under Section 3 of the PMLA. Therefore, the commission amount earned by accused No. 7 cannot be deemed a result of facilitating the illegal money-lending business of accused No. 5, as there is no evidence to establish that accused No. 7 had the intention to commit the crime under Section 3 of the PMLA - When there is no prima facie material to substantiate that the Accused No. 7 knowingly facilitated the transfer of proceeds of the crime, no presumption can be drawn that the Petitioner was involved in money laundering as stated under Section 24, and the burden is on Petitioner to prove otherwise.
The complaint averments does not apparently satisfy the essential elements to constitute the offences alleged against the Petitioner, and, therefore the continuation of the criminal proceedings will be an abuse of the process of the law - Petition allowed.
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