TMI Tax Updates - e-Newsletter
January 12, 2022

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Central Excise Indian Laws

Articles

1. Non-submission of receipt of electricity bill is not a ground of rejection of application for GST registration

   By: Bimal jain

2. VAULT MANAGERS – PART II

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. CBDT extends due dates for filing of Income Tax Returns and various reports of audit for the Assessment Year 2021-22 under the Income-tax Act, 1961

2. Centre secures approval for export of Indian mangoes to USA this season

3. India and Korea to have Trade talks tomorrow

4. Auction for Sale (Issue/Re-issue) of (i) New GS 2032’, (ii) ‘GoI Floating Rate Bond 2034’, and (iii) ‘6.95%GS 2061’

Notifications

GST - States

1. FD 02 CSL 2021 - dated 6-1-2022 - Karnataka SGST

CORRIGENDUM - Notification (4-H/2021) No. FD 02 CSL 2021, dated: 7th December 2021

2. G.O. Ms. No. 42 - dated 31-12-2021 - Puducherry SGST

Seeks to bring in force provisions of sections 2, 3, 7 to 12 and 14 to 16 of the Puducherry Goods and Services Tax (Amendment) Act, 2021

3. G.O. Ms. No. 41 - dated 31-12-2021 - Puducherry SGST

Seeks to bring in force sub-rule (2), sub-rule (3), clause (i) of sub-rule (6) and sub-rule (7) of rule 2 of Puducherry Goods and Services Tax (Eighth Amendment) Rules, 2021

4. G.O. Ms. No. 20/2021-Puducherry GST (Rate) - dated 31-12-2021 - Puducherry SGST

Amendment in Notification G.O. Ms. No. 21/2018-Puducherry GST (Rate), dated the 27th July, 2018

Circulars / Instructions / Orders

Income Tax

1. 01/2022 - dated 11-1-2022

Extension of timelines for filing of Income-tax returns and various reports of audit for the Assessment Year 2021-22

Highlights / Catch Notes

GST

• Route Change in Transport Doesn't Imply Tax Evasion Without Evidence, No Justification for Confiscation or Detention.

  Case-Laws - HC : Validity of confiscation and detention of goods - Change of route / wrong route for transport of goods - mere change of route without anything more would not necessarily be sufficient to draw an inference that the intention was to evade tax. Sometime, change of route may assume importance provided there is cogent material with the department to indicate that an attempt was sought to be made to dispose of the goods indirectly at a particular place. If such is the case, then probably, the authority may be justified in initiating appropriate proceedings, but mere change of route of the vehicle by itself is not sufficient. - HC
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• High Court Quashes Confiscation of Goods Sold Below MRP; Undervaluation Not Grounds for Seizure.

  Case-Laws - HC : Validity of confiscation and detention of goods - detention on the ground that manufacturer sells his products to its customer or dealer at a price lower than the MRP - intent to evade tax or not - it is a settled legal position that undervaluation cannot be a ground for seizure of goods in transit by the inspecting authority. - The confiscation proceedings initiated by the respondents are hereby quashed and set aside - HC
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• Basic Excise Duty and NCCD Remain Valid Post-101st Amendment Despite GST Introduction; Surcharge under Article 271 Still Applies.

  Case-Laws - HC : Constitutional validity of levy of basic excise duty and NCCD, after coming into force of the Constitution (101st Amendment) Act, with effect from 01.07.2017 - permissibility of simultaneous levy of GST under Article 246A of the Constitution of India - As levy under Article 246 is permissible even after introduction of Article 246A, the levy of surcharge tracing power under Article 271 would still subsist even if the goods are subjected to levy of goods and services tax under Article 246A. - the levy of tax is a product of legislative choice and on policy decisions which are the prerogative of the Executive - HC
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Income Tax

• Court Rules on Reopening Assessment: No "Reasons to Believe" u/s 147; Favors Assessee in Section 14A Case.

  Case-Laws - HC : Validity of Reopening of assessment u/s 147 - eligibility of reasons to believe - change of opinion - Disallowance u/s 14A r.w.r. 8D - As in this case, it is not even prima facie the case of the Assessing Officer that there was failure on part of petitioner to fully and truly disclose all material facts, this Court has to interfere by exercising its jurisdiction under Article 226 of the Constitution of India. - Decided in favour of assessee. - HC
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• Court Clarifies Scope of Assessee's Disclosure Obligations u/s 147 of Income Tax Act; Inferences Are Tax Officer's Duty.

  Case-Laws - HC : Validity of reopening of assessment u/s 147 - the Explanation to the sub-section has nothing to do with “inferences” and deals only with the question whether primary material facts not disclosed could still be said to be constructively disclosed on the ground that with due diligence the Income-tax Officer could have discovered them from the facts actually disclosed. The Explanation has not the effect of enlarging the section, by casting a duty on the assessee to disclose “inferences” to draw the proper inferences being the duty imposed on the Income Tax Officer. Therefore, it can be concluded that while the duty of the assessee is to disclose fully and truly all primary relevant facts, it does not extend beyond this. - HC
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• High Court Rules Reopening of Assessment Invalid u/s 147 Due to Change of Opinion, No Undisclosed Facts Found.

  Case-Laws - HC : Validity of Reopening of assessment u/s 147 - change of opinion - Onus to prove - Not only material facts were disclosed by petitioner truly and fully but they were carefully scrutinized and figures of income as well as deduction were reworked carefully by the AO - In the reasons for reopening, there is not even a whisper as to what was not disclosed. In our view, this is not a case where the assessment is sought to be reopened - HC
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• High Court Rules Change of Opinion Insufficient for Reassessment u/s 147 of Income Tax Act.

  Case-Laws - HC : Reopening of assessment u/s 147 - change of opinion to commence proceedings for reassessment - An Assessing Officer is not permitted to make a roving inquiry. We are, therefore, not satisfied that the reasons given by the Assessing Officer make out any case of failure on the part of petitioner to fully and truly disclosed material facts. - HC
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• Court Questions Validity of Reopened Assessment u/s 147 Due to Assessing Officer's Lack of Due Diligence.

  Case-Laws - HC : Reopening of assessment u/s 147 - bogus accommodation entries receipts - What perplexes us as much as the assessee was perplexed is how can a company provide bogus entry to itself. - The facts clearly shows total non application of mind by the Assessing Officer Mr. Suryavanshi. His statement in the reasons “ and after careful application of mind ” is risible. There is total non application of mind. - HC
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• Assessee Fails to Prove Source of Bank Credits; CIT(A) Rejects Explanations on Taxable Income from ICICI Account.

  Case-Laws - AT : Taxability of the credits appearing in the bank account of the assessee with ICICI Bank - before the ld. CIT(A) no confirmations from the parties from whom advance was received was filed and similarly the proof as to the existence of opening cash balance as well as cash withdrawn from bank was not filed - CIT(A) was justified in rejecting the explanation offered in support of the credits appearing in the bank account of the assessee - AT
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Customs

• Court Decision Overturned for Violating Natural Justice: Appeal Rejected Without Appellant's Knowledge or Counsel Present.

  Case-Laws - HC : Principles of natural justice - condonation of delay of 75 days in filing appeal - appeal decided in absence of counsel for the appellant - Such order rejecting the application on merit behind the back of the appellant could not have been passed by the learned Member. At the most the matter could have been posted for dismissal in default. It appears that the learned Member has not followed the basic principles of natural justice in passing the impugned order. - HC
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• Court Allows Partial Amendment of EDI Shipping Bill After 9-Month Delay; Discretion u/s 149 Reviewed.

  Case-Laws - AT : Request for amendment of EDI shipping bill - delay of 9 to 12 months from date of filing of shipping bills - The exporter or importer has, as a corollary, the right to seek an amendment under section 149 but nothing in the section suggests that the importer or exporter has a right to an amendment. Otherwise, the words ‘the officer may, in his discretion’ in Section 149 will be otiose. Needless to say that once an officer makes a decision, such a decision will be subject to judicial review. - The appeal is partly allowed by only directing the Respondents to permit amendment of the shipping bills either in the Customs EDI system or manually, as may be feasible - AT
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• Court Remands Case on 10.5% Loading in Goods Valuation Due to Unverified Related Supplier Data.

  Case-Laws - AT : Valuation of imported goods - loading of 10.5% to the assessable value - they had furnished the value of goods imported from the related supplier as also the value of those from unrelated suppliers and, for each year between 2012-13 and 2015-16, ranged from 44.42% to 45.07% despite which the first appellate authority has, by referring to ₹ 9.80 crores of import from related suppliers, held those to be 87.5% of the procurement. - The decision of the first appellate authority has been based on foundations which remain unverifiable and is of indeterminate origin. - Matter restored back. - AT
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Central Excise

• Industrial Oxygen, Liquid Nitrogen, and Nitrogen Gas qualify for area-based exemption under Notification No. 49/2003-CE, S.No. 16.

  Case-Laws - AT : Benefit of area based exemption - Industrial Oxygen, Liquid Nitrogen and Nitrogen Gas are ‘Industrial Gases’ based on atmospheric fraction - the industrial gases are covered at S.No. 16 of the schedule of the said notification, which is a specific entry, therefore, the appellant is entitled for exemption under Notification No. 49/2003-CE dt. 10.06.2003 at S.No. 16 of the schedule. In these circumstances, it is held that the goods of the appellant i.e. industrial gases are not covered under Annexure to the notification at S.No. 4 of negative list - AT
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• Goods Sold in Kilolitres Classified Under Tariff Act Chapter 310510099 per Legal Metrology Rules, 2011.

  Case-Laws - AT : Classification of goods - Biozyme - If the commodity is sold, semi-sold, viscous or a mixture of sold and liquid and volume means, if the commodity is liquid or is sold by cubic measure. Admittedly, in this case, the goods have been sold by the appellant in kilo litre. Therefore, as per Legal Metrology (Packaged Commodities) Rules, 2011, the goods are appropriately classifiable under chapter 310510099 of the Tariff Act. - AT
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• CENVAT Credit Approved for Factory Renovation: Water Tank and Pump Room Construction Included Under Input Service Definition.

  Case-Laws - AT : Reversal of CENVAT Credit - input service - Modernization, Renovation and repair of the factory or not - construction of water tank and pump room - Since nature of construction done in the factory is of Renovation and Modernization of the existing factory which is clearly covered under inclusion clause of the definition of input service, therefore, the appellant was entitled for the Cenvat Credit of such input service. - AT
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Case Laws:

• GST

• 2022 (1) TMI 381
  Validity of confiscation and detention of goods - Undervaluation of goods - Change of route / wrong route for transport of goods - detention on the ground that manufacturer sells his products to its customer or dealer at a price lower than the MRP - intent to evade tax or not - HELD THAT:- Merely the direction preferred by the petitioners for delivery of consignment to the place destined for, an inference cannot be drawn with regard to the intention of the petitioners to evade tax. - mere change of route without anything more would not necessarily be sufficient to draw an inference that the intention was to evade tax. Sometime, change of route may assume importance provided there is cogent material with the department to indicate that an attempt was sought to be made to dispose of the goods indirectly at a particular place. If such is the case, then probably, the authority may be justified in initiating appropriate proceedings, but mere change of route of the vehicle by itself is not sufficient. Goods being transported is undervalued - HELD THAT:- No material has been placed on record. Even otherwise, as held by this Court as well as other High Courts, it is a settled legal position that undervaluation cannot be a ground for seizure of goods in transit by the inspecting authority. In the instant case, there is no such indication. The confiscation proceedings initiated by the respondents are hereby quashed and set aside. The vehicle as well as the goods shall be released at the earliest and handed over to the writ applicants - Application allowed.

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• 2022 (1) TMI 380
  Constitutional validity of levy of basic excise duty and NCCD, after coming into force of the Constitution (101st Amendment) Act, with effect from 01.07.2017 - permissibility of simultaneous levy of GST under Article 246A of the Constitution of India and levy of basic Excise duty and NCCD under Article 246 qua tobacco and tobacco products - simultaneous levies would be consistent with purposive and harmonious construction of the Constitution or not? Power under Article 246 read with entry 84 List I post the GST regime and introduction of Article 246A of the Constitution of India - HELD THAT:- The effect of introduction of Article 246A is conferment of the power of simultaneous levy on goods and services in the nature of Goods and Services Tax and the use of the word notwithstanding which is a non-obstante clause does not have the effect of abrogation of power available under Article 246. The words notwithstanding anything contained in Article 246 ought to be construed as having the effect of merely clarifying that inspite of the power under Article 246, power under Article 246A could be exercised and that Article 246 would not be an impediment to the operation of 246A - irrespective of the restructuring of Entry 84 of List I the power under Article 246 remains unaltered. The intention of preserving such power under Article 246 is further reflected in the repealing and saving provision of Section 174 of the Central Goods and Services Tax Act, 2017 which saves provisions of the Central Excise Act, 1974 in respect of goods included in Entry 84 of the Union List of the Seventh Schedule to the Constitution. Taxing on taxable event, Aspect Theory and Subsumation of manufacture in Supply - Subsumation of manufacture in the Concept of Supply - HELD THAT:- The legal argument based on intendment of avoiding of cascading taxes will not have the effect of prohibiting levy of tax which otherwise is permissible as the power under Article 246 remains protected and preserved - It must also be noted that the Legislature enjoys a wide latitude to decide on the methodology of revenue generation and the courts should not rush and must tread carefully while dealing with legislation based on Fiscal Policy. In the process of achieving ultimate goal as envisaged while introducing the GST the continuance of levies under the previous legislations unless barred ought to be permitted as being competent vis -vis available source of power which cannot be defeated by resort to argument based on objects of GST as contained in the Objects Clause. Taxing on taxable event, Aspect Theory and Subsumation of manufacture in Supply - Taxing of Taxable event - HELD THAT:- Even though the petitioner would contend that what is being taxed is the aspect of manufacture under the Central Excise Act and the same taxable event of manufacture as subsumed in GST, even if such contention were to be accepted it would amount to taxing of the taxable event of manufacture on two occasions and unless there is any prohibition in law such a levy would still be permissible - It must be noted that taxing statutes are revenue generation statutes and in that context, levy even if on the same taxable event which may also amount to double taxation is per se not prohibited unless prohibition can be read into on the basis of any other constitutionally available principle. The aspect as to whether the levy of excise duty when considered along with other existing duties including NCCD has the effect of falling foul of constitutional guarantee may be a different ground of attack. Taxing on taxable event, Aspect Theory and Subsumation of manufacture in Supply - Aspect Theory - HELD THAT:- In the case of Federation of Hotel and Restaurant v. Union of India [ 1989 (5) TMI 50 - SUPREME COURT ] the question that was considered was whether expenditure tax was in pith and substance actually a tax on luxuries which was squarely covered by Entry 62 List II or it could be construed as a tax on consideration paid on purchase of goods which would fall under Entry 54 of List II and accordingly, the question of legislative competence of the Parliament was in question. The then Attorney General Parasaran had invoked the Aspect Theory by contending that there could be different aspects of the same matter constituting distinct fields of legislation. In effect it was submitted that Hotels may be taxed in their expenditure aspect by the Union and in their luxury aspect by the States. The Apex Court was essentially considering legislative competence of the Union Parliament and it is in that context that the principle of the Aspect Doctrine appears to have been considered and eventually held that the question as to whether power under Article 246A which is tax on goods and services if levied on a product could also be a subject of levy of an indirect tax on the same product in exercise of power under Article 246. While the power under Article 246A provides for a simultaneous levy by the Parliament and subject to 246A (2) the legislature of every State; on the other hand, power under Article 246 is with the Union. The question of legislative competence under 246A vis- -vis Article 246 would not strictly fall within the ambit of applicability of the Aspects Theory. Legality of levy of NCCD as per Section 136 of the Finance Act, 2001 - HELD THAT:- As per Section 136 of the Finance Act, a surcharge by way of duty of excise at the rates specified in the schedule is levied - it becomes clear that surcharge is a methodology for raising additional revenue and has nothing to do with the leviability of the tax or the assesses liability to pay the tax. NCCD as a surcharge and Article 271 - HELD THAT:- The levy of the surcharge i.e., NCCD by way of provision of the Finance Act, though is described as a duty of excise, is legally speaking a self-contained levy which stands independent of the duty - the interpretation of the petitioners that surcharge cannot be levied under Article 271 as regards those goods and services which are included under Article 246A is liable to be rejected as no such restriction could be placed on a plain reading of Article 271 which provides that surcharge could be levied at any time to increase duties or taxes. In fact, surcharge being imposed by way of the Finance Act has nothing to do with surcharge on GST that may still be levied. As levy under Article 246 is permissible even after introduction of Article 246A, the levy of surcharge tracing power under Article 271 would still subsist even if the goods are subjected to levy of goods and services tax under Article 246A. Levy of NCCD during the period of Exemption of Excise Duty - HELD THAT:- Though the Notification No.2/2019 dated 06.07.2019 reintroduced a nominal basic Excise Duty, the levy during the period of 30.06.2017 and 06.07.2019, is not disturbed and accordingly the relief sought for in by the petitioners for refund of NCCD during such period is liable to be rejected. It must further be noted that even though NCCD is in the nature of duty of Excise and may be construed to be an additional duty, yet it is an independent levy and exemption granted on Excise Duty cannot prohibit imposition of other additional duties or levy and accordingly there is no bar for operation of NCCD. Levy of basic excise duty and NCCD is violative of Article 14 of the Constitution of India - HELD THAT:- It is a settled principle that the Legislature has a larger discretion in the matter of classification for the purpose of tax. The requirement however is that there is a classification and a rational nexus between such classification and the object sought to be achieved - No case is made out for interference on the ground of the levy being hit by the law contained in Article 14. Petition dismissed.

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• Income Tax

• 2022 (1) TMI 379
  Reopening of assessment u/s 147 - Eligibility of reasons to believe - issuing the notice under section 148 after expiry of 4 years - HELD THAT:- AO who passed the original Assessment Order had all material facts before him when he made the original assessment. When the primary facts necessary for assessment are truly and fully disclosed, the Assessing Officer is not entitled on change of opinion to commence proceedings for reassessment. This Court in Ananta Landmark Pvt. Ltd. v/s. Deputy Commissioner of Income Tax [ 2021 (10) TMI 71 - BOMBAY HIGH COURT] has held that Where on consideration of material on record, one view is conclusively taken by the Assessing Officer, it would not be open to reopen the assessment based on the very same material with a view to take another view. Thus the notice issued for re-opening the assessment has been issued without jurisdiction.- Decided in favour of assessee.

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• 2022 (1) TMI 378
  Validity of Reopening of assessment u/s 147 - eligibility of reasons to believe - change of opinion - Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Re-opening of assessment is based on the very same material which has been considered before the original Assessing Order was passed, with a view to take another view - petitioner by its letter dated 05/01/2015, had informed the Assessing Officer that the average value of equity investment was Rs. 239.29 crores against the average net worth of the Company of Rs. 795 crores. AO who passed the original Assessment Order, had all primary facts necessary for assessment and he is supposed to have considered all these points when he passed the Assessment Order. Also on change of opinion, assessment cannot be re-opened and in any event, even if we, for a moment, agree with the contents of the reason that the average value of investment was adopted at Rs. 21.79 crores as against Rs. 239.29 crores, still there is a bar under section 147 of the Act as then prevailing to re-open assessment after a period of 4 years where the assessment order has been passed under sub-section 3 of section 143 unless any income chargeable to tax, has escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment. As in this case, it is not even prima facie the case of the Assessing Officer that there was failure on part of petitioner to fully and truly disclose all material facts, this Court has to interfere by exercising its jurisdiction under Article 226 of the Constitution of India. - Decided in favour of assessee.

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• 2022 (1) TMI 377
  Reopening of assessment u/s 147 - assessment as proposed after expiry of period of 4 years - eligibility of reasons to believe - power of AO to review an assessment which has been concluded - Change of opinion - assessment of firm u/s 184 - HELD THAT:- As in the reasons to believe in the present case, we do not find even a single ground which can be considered to be tangible basis for re-opening the assessment or conclude that there has been failure to disclose any material fact. AO states that from the partnership deed, audited accounts and Form No.3CD report, it is seen that that the Assessee has 15 partners, one of whom is Dhansukh Nanda HUF. According to the AO, an HUF cannot become a partner of a firm or enter into a contract with other person and hence the Assessee has not complied with the provisions of Section 184 of the Act and the amount and remuneration paid to partners, aggregating cannot be considered for deduction. This is a clear case of change of opinion because petitioner had, before the original assessment order was passed, filed Form No.3CD in which Dhansukh Nanda HUF is shown as a partner with 10% profit sharing ratio. Form No.3CD also indicates that a sum of Rs. 1,94,826/- has been paid as interest to Dhansukh Nanda (HUF). These materials were on the face of a document available before the Assessing Officer who passed the original Assessing Order dated 27/01/2015. Mr. Walve states that in the original Assessment Order, there is no mention about Dhansukh Nanda HUF and therefore it is likely that the original Assessing Officer has failed to note that one of the partners in petitioner firm was an HUF. We do not agree with Mr. Walve because if Assessment Order does not speak about this, we would consider it as having been accepted by the Assessing Officer who passed the original Assessment Order that it was perfectly okay for an HUF to be a partner in petitioner firm. We would hasten to add that we are not for a moment opining whether an HUF can be a partner in a firm under the provisions of Indian Parnership Act, 1932. This is a clear case of change of opinion. There is also nothing to indicate any failure on the part of petitioner to disclose any material fact. Hence, we do not propose to go into the issue as to whether the stand of respondent that petitioner has not complied with provisions of Section 184 of the Act is correct. - Decided in favour of assessee.

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• 2022 (1) TMI 376
  Validity of reopening of assessment u/s 147 - Scope of Explanation- 1 to section 147 of the Act - eligible reasons to believe - Income assesseble under the head business income or other sources and as such Petitioner was not entitled to the deduction under section 24 - As per JAO because the properties which were demerged from BCCL and vested in the Petitioner Company, have not been mutated to the ownership of Petitioner, the transactions cannot be regarded as demerger but transfer of various assets and liabilities undertaken, which attract capital gain - HELD THAT:- AO had these details before him and also has accepted that there was a scheme of arrangement between BCCL and Petitioner and the Real Estate Division of the BCCL was demerged and vested with Petitioner with effect from 1st April, 2011. Therefore, Petitioner had explained all the details and after considering all that, the assessment order dated 12th March, 2015 was passed, accepting the return of income filed by Petitioner with same set of reason. AO had in his possession all the primary facts and it was for him to make necessary enquiries and draw proper inference as to whether the amount was to be allowed as deduction under section 24. AO had all material facts before him when he made original assessment. When the primary facts necessary for assessment are fully and truly disclosed, the Assessing Officer is not entitled on change of opinion to commence proceedings for re-assessment. Even if the Assessing Officer, who passed the assessment order, may have raised too many legal inferences from the facts disclosed, on that count the Assessing Officer, who has decided to reopen the assessment, is not competent to reopen assessment proceedings. Where on consideration of the material on record, one view is conclusively taken by the Assessing Officer, it would not be open to re-open the assessment based on the very same material with a view to take another view. As pointed out that the Explanation to the sub-section has nothing to do with inferences and deals only with the question whether primary material facts not disclosed could still be said to be constructively disclosed on the ground that with due diligence the Income-tax Officer could have discovered them from the facts actually disclosed. The Explanation has not the effect of enlarging the section, by casting a duty on the assessee to disclose inferences to draw the proper inferences being the duty imposed on the Income Tax Officer. Therefore, it can be concluded that while the duty of the assessee is to disclose fully and truly all primary relevant facts, it does not extend beyond this. Using the words failure to disclose fully and truly all material facts , is clearly made only as an attempt to take the case out of the restrictions imposed by the proviso (1) to section 147 of the Act. - Decided in favour of assessee.

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• 2022 (1) TMI 375
  Validity of Reopening of assessment u/s 147 - Eligibility of reasons to believe - change of opinion - Onus to prove - failure on the part of petitioner to fully and truly disclose all material facts required for assessment - whether primary material facts not disclosed ? - HELD THAT:- The assessee had made submissions on these items earlier but still states that income chargeable to tax has escaped because in his opinion certain amounts are required to be added back in profit and loss account and certain amounts should not have been disallowed. Where on consideration of material on record, one view is conclusively taken by the Assessing Officer, it would not be open to reopen the assessment based on the very same material with a view to take another view. We are satisfied that petitioner had truly and fully disclosed all material facts necessary for the purpose of assessment. Not only material facts were disclosed by petitioner truly and fully but they were carefully scrutinized and figures of income as well as deduction were reworked carefully by the AO - In the reasons for reopening, there is not even a whisper as to what was not disclosed. In our view, this is not a case where the assessment is sought to be reopened on the reasonable belief that income had escaped assessment on account of failure of the assessee to disclose truly and fully all material facts that were necessary for computation of income but this is a case wherein the assessment is sought to be reopened on account of change of opinion of the Assessing Officer- See 3I INFOTECH LTD. VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX [ 2010 (6) TMI 372 - BOMBAY HIGH COURT] - Decided in favour of assessee.

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• 2022 (1) TMI 374
  Reopening of assessment u/s 147 - Eligibility of reasons to believe - undisclosed short term capital gains - petitioner had not offered to tax the short term capital gains on scrip named Vikas Wsp Ltd. Admittedly, it was offered only after petitioner received the notice under Section 148HELD THAT:- Even if, we hold that the reasons are not very happily worded, still the fact that petitioner after almost 6 years and after receiving the notice under Section 148 filed return showing upward revision, itself would mean that the Assessing Officer would be entitled to reopen the assessment. Though, we would agree with Mr. Jain that reopening of the assessment is not permitted for fishing or roving inquiry or for verification purpose, still the fact that petitioner has filed returns in response to the notice under Section 148 of the Act and disclosing therein that short term capital gains earned in F. Y.- 2011-2012 was not offered to tax, would itself entitle the Assessing Officer to issue notice under Section 142(1) of the Act calling for further details. If we interfere, the Revenue may suffer. In the circumstances, we do not wish to exercise our jurisdiction under Article 226 of the Constitution of India. Petitioner may adopt the alternate remedy that is available under the provisions of the Act.

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• 2022 (1) TMI 373
  Reopening of assessment u/s 147 - change of opinion to commence proceedings for reassessment - Roving enquiry - HELD THAT:- AO had all materials facts before him when he made the original assessment. When the primary facts necessary for assessment are fully and truly disclosed, the AO is not entitled on change of opinion to commence proceedings for reassessment. Even if the AO, who passed the assessment order, may have raised too many legal inferences from the facts disclosed, on that account the AO who has decided to reopen assessment, is not competent to reopen assessment proceedings. Where on consideration of material on record, one view is conclusively taken by the AO it would not be open to reopen the assessment based on the very same material with a view to take another view. But from the reasons, it appears that the Assessing Officer is proceeding purely on the basis of suspicion because he is unable to comprehend how a person, whose income has been assessed at Rs. 5,22,05,840/-, would have invested Rs. 95.33 Crores. An Assessing Officer is not permitted to make a roving inquiry. We are, therefore, not satisfied that the reasons given by the Assessing Officer make out any case of failure on the part of petitioner to fully and truly disclosed material facts. Once all the material were placed before the Assessing Officer and he chose not to mention about all the investments in the assessment order, it could not be contended that the Assessing Officer has not applied his mind while passing the assessment order. - notice u/s 148 quashed - Decided in favour of assessee.

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• 2022 (1) TMI 372
  Reopening of assessment u/s 147 - bogus accommodation entries receipts - allegation of non application of mind - no recommended grant of approval u/s 151 - HELD THAT:- Reasons indicate total non application of mind in as much as in the tabular form, it is stated that Sharvah Multitrade Company Private Limited for F.Y. 2014-15 had been a beneficiary through fund trail - Then again, it is mentioned that the above mentioned bogus entities managed, controlled and operated by M/s. Sharvah Multitrade Company Private Limited for providing bogus accommodation entries, hence, all the transactions entered into between the above mentioned entities and the assessee/beneficiary are bogus accommodation entries in nature. What perplexes us as much as the assessee was perplexed is how can a company provide bogus entry to itself. Sharvah Multitrade Company Private Limited is alleged to be a beneficiary identified through fund trail and its PAN number is shown to be AAQCS2595H. Petitioner, who is the assessee, is also Sharvah Multitrade Company Private Limited and its PAN number is AAQCS2595H. Therefore, this clearly shows total non application of mind by the Assessing Officer Mr. Suryavanshi. His statement in the reasons and after careful application of mind is risible. There is total non application of mind. In the affidavit in reply, the same Mr. Suryavanshi states as Annexure 2 is the copy of the approval u/s 151 of the Act . There is no annexure 1 mentioned anywhere. Moreover, in the affidavit filed in the Court, even this annexure is missing. This further displays total non application of mind by this officer. The said Mr. Suryavanshi while rejecting the objections, by an order dated 23rd July 2021, first of all makes a false statement that the assessee s above submissions and objections have been carefully considered and the same are dealt with as under but he does not deal with the objection of the assessee of lack of application of mind. Mr. Suryavanshi is totally silent about the objections raised on non application of mind. In the affidavit in reply, at paragraph 9 he says it was a typographical error and inadvertent mistake because in the case information received in insight portal on 27th March 2021, only first page was displayed. Even if we accept what he says for a moment, still anyone reading the reason would realise that it defies sensibility that how the company will provide bogus entry to itself. Even otherwise this Mr. Suryavanshi had an opportunity to correct the error when he passed the order on objections but he chose to skirt the issue and he went on to say in his affidavit in reply that the objection was duly dealt with by issuing a letter dated 23rd July 2021. In our view, it has not been duly dealt with because this Mr. Suryavanshi had an obligation to deal with the objections raised by petitioner in their objections to reopening Declare that the Impugned Notice u/s 148 are wholly without jurisdiction, illegal, arbitrary, and liable to be quashed. - Decided in favour of assessee.

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• 2022 (1) TMI 371
  Taxability of the credits appearing in the bank account of the assessee with ICICI Bank - addition made as no explanation to source of cash deposits given - HELD THAT:- As before the AO no details were filed as to the source of deposits of the said sums. However, before the ld. CIT(A), the assessee had attempted to explain the source of deposits as advance received towards sale of land from Mr. Dharumbre and M/s. Prayas Buildwell Pvt. Ltd. and the cash deposits are stated to be made out of opening balance and withdrawal of the cash from the bank - before the ld. CIT(A) no confirmations from the parties from whom advance was received was filed and similarly the proof as to the existence of opening cash balance as well as cash withdrawn from bank was not filed - CIT(A) was justified in rejecting the explanation offered in support of the credits appearing in the bank account of the assessee. Accordingly, we uphold the order of the ld. CIT(A). We do not find merit in the appeal filed by the assessee.- Decided against assessee.

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• 2022 (1) TMI 370
  Disallowance being the amortisable portion of lease premium payment - HELD THAT:- Amortisable portion of the lease taken from the Noida Authority is concerned, Ld. AR fairly admitted that this issue is covered against the assessee by the order of the Hon ble Delhi High Court in [ 2012 (7) TMI 526 - DELHI HIGH COURT] pertaining to the assessment year 2004-05, and though the assessee is in appeal before the Hon ble Supreme Court on that issue, as the things stand today the assessee is bound by the order of the Hon ble Delhi High Court. Land at Visakhapatnam into Tuticorin - As observed that the nature of lease, the location of the land, the terms and conditions of lease etc, for example, it is located in the Porto premises, the entry and exit of which is with Port Security, land used only for storage during transit etc., that the assessee has in its long time lease with Visakhapatnam Port trust is different from the terms and conditions of lease from Noida Authority; that the principle on the issue whether the rent in question is to be allowed as Revenue expenditure or not, is laid down by the Hon ble High Court in assessee s own case for earlier assessment years and this depends on the facts of each case; that the issue was to be examined in the interest of Justice; that no prejudice would be caused to the Revenue in examining the matter once again; and therefore, the issue was set aside to the file of the learned Assessing Officer for considering the arguments of the assessee de novo in accordance with law. AR, in all fairness, submits that the same course as adopted for the assessment year 2008-09 may also be followed for this assessment year in restoring the issue to the file of the learned Assessing Officer for considering the facts and circumstances relevant for this particular assessment year and to take a call de novo. Ld. DR reports no objection for sending it back to the learned Assessing Officer. Recording the same, we allow this ground for statistical purpose, by restoring the issue to the file of the learned Assessing Officer to take a view de novo for this particular assessment year after hearing the assessee de novo in accordance with law. Addition u/s 14A r.w.r. 8D - HELD THAT:- AO advocated to the P L Account and the Balance Sheet of the assessee and not being satisfied with the claim of the assessee that no expenditure was incurred for earning the exempt income, he proceeded to determine the proportionate expenses attributable to the earning of the exempt income. We are, therefore, of the considered opinion that it is not a case of where the reasons are not recorded but is only a case where the dissatisfaction of the learned Assessing Officer inevitably follows. Alternative plea of the assessee, insofar as the interest component under rule 8D(2)(ii) - no material is produced before us to establish that the assessee invested out of its own funds comprising of share capital and reserves and no interest-bearing funds were invested during the year, or to show that there is no nexus between the deployment of the interest-bearing loans and investments. It is a verifiable fact. We, therefore, direct the learned Assessing Officer to verify whether the own funds of the assessee exceed the investments during the year, and whether the borrowed funds were utilised for the purpose for which they were borrowed during the year and in either case let there not be any disallowance on account of rule 8D(2)(ii) of the Rules. Insofar as the disallowance under rule 8D(2)(iii) of the Rules is concerned, we do not find any ground to interfere with the same. Credit for deemed tax on the dividend income - Dividend income received by the assessee from OMIFCO Oman and the consequential deemed tax credit relief allowed by the Ld. CIT(A) under the Indo Oman DTAA - HELD THAT:- As relying on own case [ 2017 (4) TMI 1035 - DELHI HIGH COURT] Assessee is entitled to the credit for deemed tax on the dividend income received by them by virtue of the provisions of DTAA read with section 90 of the Act as well as the clarification issued by the Sultanate of Oman and the assessment made under the Oman Law as well as the orders passed in the case of assessee for the earlier assessment years. Findings of the Ld. CIT(A) are, therefore, do not suffer any illegality or irregularity and do not warrant any interference. Consequently, we uphold the same and dismiss these grounds of appeal of the Revenue.

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• 2022 (1) TMI 369
  Rectification of mistake u/s 154 - limitation period - HELD THAT:- No order can be made after the expiry of four years from the end of the Financial Year in which orders sought to be amended was passed. In this case, the Assessing Officer sought to amend the order dated 25/3/2013. Hence, the limitation would start from 1/4/2014 and would expire on 31st March, 2017. However, impugned order is dated 16/3/2016. Therefore, the grounds of the assessee are devoid of any merit. Hence, dismissed. Disallowance of depreciation - setting off of unabsorbed depreciation as claimed denied - HELD THAT:- We find that the Ld. CIT(A) has relied upon the judgment of the Special Bench of this Tribunal in the case of DCIT VS. Times Guaranty Ltd[ 2010 (6) TMI 516 - ITAT, MUMBAI] However, the Hon ble Madras High Court has ruled in favour of the assessee in the case of CIT Vs. Tamil Nadu Small Industries Corporation Ltd. [ 2021 (7) TMI 849 - MADRAS HIGH COURT] Therefore, respectfully, following the judgment of the Hon ble Madras High Court in the case of CIT Vs. Tamil Nadu Small Industries Corporation Ltd. We hereby direct the Assessing Officer to delete the disallowance and allow setting off of unabsorbed depreciation as claimed by the assessee.

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• 2022 (1) TMI 368
  Nature of expense - capitalization of licenses fee which give assessee company long term right to use telecommunication spectrum and the annual extension - revenue or capital expenditures - CIT-A deleted the addition - HELD THAT:- Revenue has not brought to our notice that the decision of the Tribunal pertaining to Assessment Year 2008-09 [ 2021 (9) TMI 763 - ITAT DELHI ] was reversed by the Hon ble High Court of Delhi. The Ld. CIT (A) has given a finding on fact that the Revenue share fee was for the operation and usage of the right given under the license and had not result into creation of capital asset or advantage. This finding on fact is not rebutted by the Revenue. Moreover, the Revenue has not brought to our notice any other binding precedent on this point. Under these facts, we do not see any infirmity into the order of the Ld. CIT(A) The same is hereby affirmed. The Grounds raised by the Revenue is dismissed.

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• 2022 (1) TMI 367
  Disallowance of Employees Provident Fund Employees ESI u/s. 36(1)(va) - Whether the said amount has been deposited before the filing of return u/s. 139(1) - HELD THAT:- As decided in AIMIL Ltd. [ 2009 (12) TMI 38 - DELHI HIGH COURT ] the employees contribution is not deposited by the due date prescribed under the relevant Acts and is deposited late, the employer not only pays interest on delayed payment but can incur penalties also, for which specific provisions are made in the Provident Fund Act as well as the ESI Act. Therefore, the Act permits the employer to make the deposit with some delays, subject to the aforesaid consequences. Insofar as the Income Tax Act is concerned, the assessee can get the benefit if the actual payment is made before the return is filed, as per the principle laid down by the Supreme Court in Vinay Cement [ 2007 (3) TMI 346 - SC ORDER] - also see PRO INTERACTIVE SERVICE (INDIA) PVT. LTD. [ 2018 (9) TMI 2009 - DELHI HIGH COURT] - Decided in favour of assessee.

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• 2022 (1) TMI 366
  Disallowance u/s 14A read with Rule 8D(2) - as pleaded that in proprietary concern, no investments were made by the assessee and that all the investments were made only in the personal activities of the assessee - HELD THAT:- AO did not heed to the contentions of the assessee and directly proceeded to make disallowance by applying computation mechanism provided in 2nd and 3rd limb of Rule 8D(2) of the Rules and arrived at the disallowance and after reducing the voluntary disallowance made by the assessee, the net disallowance was made under section 14A of the Act in the assessment. This action of the AO was upheld by the ld. CIT(A). We find that the law is now very well by the decision of Hon ble Supreme Court in the case of Maxopp Investments [ 2018 (3) TMI 805 - SUPREME COURT] wherein it has been held that disallowance under section 14A of the Act cannot exceed exempt income. There is no dispute that the exempt income derived by the assessee is only Rs. 8,64,141/-. The assessee before us is not seeking any reduction for disallowance of expenses made voluntarily in the sum of Rs, 14,57,932/- which itself is more than the exempt income. Hence, there is no need to make any further disallowance under section 14A of the Act. Accordingly, the grounds raised by the assessee are allowed.

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• Customs

• 2022 (1) TMI 365
  Principles of natural justice - condonation of delay of 75 days in filing appeal - appeal decided in absence of counsel for the appellant - HELD THAT:- A perusal of the impugned order would reflect that in the absence of the appellant or his counsel, the impugned order came to be passed. The reason for the delay as contended by the appellant is that his earlier counsel failed to prefer an appeal within the prescribed period of limitation and therefore the appellant handed over the papers to the second counsel for preferring the appeal. The learned Member of the Tribunal found the reasons for delay to be vague and not sufficiently explained. It is not disputed that the impugned order of rejection of application for condonation of delay came to be passed on merit behind the back of the appellant or his counsel. The impugned order does not mention about any opportunity of hearing was granted to the appellant Such order rejecting the application on merit behind the back of the appellant could not have been passed by the learned Member. At the most the matter could have been posted for dismissal in default. It appears that the learned Member has not followed the basic principles of natural justice in passing the impugned order. One opportunity needs to be given to the appellant to argue his case on merits - the application for condonation of delay is allowed - appeal allowed.

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• 2022 (1) TMI 364
  Request for amendment of EDI shipping bill - delay of 9 to 12 months from date of filing of shipping bills - original authority has declined to amend the shipping bills because the EGM has already been closed and it is not possible to amend the shipping bill thereafter in the EDI system - valid ground to deny amendment under section 149 or not - HELD THAT:- Section 149 states the officer may, in his discretion, permit amendments and it does not say the officer shall permit amendment. If the legislative intent was to make amendment a vested right, then there was no need for permission from anyone. Not only is the word used is May and not Shall , but it is followed by the words in his discretion . The only limitation on the discretion of the officer is the proviso which states that it shall not be permitted except on the basis of the documentary evidence before the export. Subject to this limitation, the officer, indeed, has the discretion which he can exercise and permit or not permit amendments to the shipping bill. The exporter or importer has, as a corollary, the right to seek an amendment under section 149 but nothing in the section suggests that the importer or exporter has a right to an amendment. Otherwise, the words the officer may, in his discretion in Section 149 will be otiose. Needless to say that once an officer makes a decision, such a decision will be subject to judicial review. When discretion is given to an administrative or quasi-judicial authority, can he decide in any manner he pleases or is it subject to any restrictions? - HELD THAT:- The officers exercised discretion to NOT permit amendments for any reason other than the fact that the EGM was closed and therefore, the amendment cannot be done in the Customs EDI system. The other reasons argued by the learned Departmental Representative such as the Shipping Bill was subjected to less rigorous examination because it indicated that no benefits were being claimed in the column and that this amounts to changing the nature of the scheme under which the goods are exported are not mentioned in either the order-in-original or in the impugned order. Hence, these reasons cannot be accepted while deciding this appeal. Whether the reason given for not permitting amendment of the Shipping Bill can be sustained? - HELD THAT:- The appellant has made out a strong case for getting the Shipping Bills amended because its intention to claim the benefit was evident on the face of each Shipping Bill. Only an entry was made NO instead of marking YES and this should not deprive the appellant of its substantive benefit. The reason for not allowing the amendment is that the EGM was closed which may be valid reason for not being able to make the amendment in the EDI system, but is not a valid reason for not allowing amendment under Section 149. Whether Customs officers should be directed to transmit the Shipping Bills to the DGFT? - HELD THAT:- The request before the original authority and the appeal before the Commissioner (Appeals) were only with respect to permitting amendments in the Shipping Bills. This issue has also not been urged at the time of hearing of this appeal and is, therefore, not being decided. The appeal is partly allowed by only directing the Respondents to permit amendment of the shipping bills either in the Customs EDI system or manually, as may be feasible - appeal allowed in part.

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• 2022 (1) TMI 363
  Valuation of imported goods - loading of 10.5% to the assessable value under rule 10 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - interpolation of extraneous and unverifiable facts - HELD THAT:- The issue in dispute pertains to the three agreements against which payments were to be made to the overseas entity in terms of net sales of the final product. According to Learned Counsel, none of the agreements had incorporated condition which would validate the invoking of rule 10 of the said Rules. It was also pointed that they had furnished the value of goods imported from the related supplier as also the value of those from unrelated suppliers and, for each year between 2012-13 and 2015-16, ranged from 44.42% to 45.07% despite which the first appellate authority has, by referring to Rs. 9.80 crores of import from related suppliers, held those to be 87.5% of the procurement. The decision of the first appellate authority has been based on foundations which remain unverifiable and is of indeterminate origin. In these circumstances, it would be appropriate for the matter to be heard afresh by the first appellate authority for decision after consideration of all the submissions by the appellant - Appeal allowed by way of remand.

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• Corporate Laws

• 2022 (1) TMI 362
  Reduction of Share Capital of Company - Section 66 of Companies Act - HELD THAT:- The present position of law, while dealing with the provisions of Section 66 is that if none of the shareholders are objecting for the proposed reduction, then after considering the merits of the case as also connected facts and circumstances such petition normally deserves to be admitted. In the case of Elpro International Limited [ 2007 (6) TMI 292 - HIGH COURT OF BOMBAY ], Hon ble Bombay High Court has expressed that the question of reduction of share capital is the matter of domestic concern of the company. Further observed that decision for reduction is based on commercial consideration undertaken by the businessmen who are in the best position to know of the necessities and interests of the company concerned, in the absence of serious allegations as regards the bona fides of the proposed Scheme, the Courts are of the view that no interference in such decisions are acquired. It is ordered to confirm the reduction of share capital of Petitioner Company by approving the minutes of the EOGM commenced on 23rd January 2021 and concluded on 21st February 2021, wherein the members of the Petitioner Company resolved for the reduction of share capital of the Company, as prescribed U/s. 66 of the Companies Act, 2013 - the necessary alteration shall be made in the Memorandum of Association by the Petitioner Company for reduction of the amount of its share capital and of its shares, the copy of the altered Memorandum of Association and the minutes approved along with the order shall be delivered to the ROC by filing the E form INC, within 30 days of the receipt of copy of the Order.

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• 2022 (1) TMI 361
  Sanction of scheme of Amalgamation - section 230(1) read with section 232(1) of the Companies Act, 2013 - HELD THAT:- Various direction with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed.

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• Insolvency & Bankruptcy

• 2022 (1) TMI 360
  Voluntary liquidation of Corporate Person through its liquidator(Insolvency Professional) - Section 59 of the Insolvency and Bankruptcy Code, 2016 (Code) read with Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 - HELD THAT:- In the present case, it may be seen from the records the main intention for the company to wind up its services is that company decided to close down its business operations in India and doesn t intend to carry on its business operations and pursue objects for which it was incorporated. Further, the applicant has informed the concerned authorities i.e. IBBI, RoC and Income Tax Department and has also made paper publication in Form-A in two newspapers. The Liquidator has completed the final distribution of assets and has also closed the bank account. The Liquidator has also prepared and submitted the final report to the IBBI and RoC. The Application is duly supported by the affidavit of the Liquidator. Income Tax Department has issued No Objection Certificate on 15.06.2020 and no litigation is pending against the corporate person as on signing of the final report. That, all the assets have been realized and liabilities have been paid off and remaining balance had been repatriated to the shareholders of the company and the bank balance is nil. Also the Board has stated that only requirement as per Section 59(4) is to notify the Board about the resolution passed by the company within seven days of such resolution. The Board has no other role in the liquidation proceedings before the Adjudicating Authority. The concerned RoC has also submitted in its report that as per data available and maintained, no inquiry/inspection/complaint/legal action has been proceeded/pending against the subject company. The applicant Company is hereby dissolved in terms of Section 59(8) of the Insolvency Bankruptcy Code, 2016 with effect from the date of the present order - Application allowed.

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• Central Excise

• 2022 (1) TMI 359
  Benefit of area based exemption - Industrial Oxygen, Liquid Nitrogen and Nitrogen Gas are Industrial Gases based on atmospheric fraction - benefit of exemption under N/N. 49-50/2003-CE dt. 10.06.2003 denied on account of the fact that gases manufactured by the appellants are Inorganic Chemicals falling under Chapter 28 and are covered under the entry at S.No. 4 of the Annexure to the Notification No. 49/2003-CE dt. 10.06.2003 in negative list. For unit no. I - HELD THAT:- To find that the product which is manufactured by the appellant is industrial gas, manufactured by way of atmospheric fraction, which specifically covers at S.No. 16 of the schedule, therefore, it is to be seen that whether the appellant is entitled for benefit under notification or not that product qualifies at S.No. 16 of the schedule of notification or S.No. 4 of the Annexure. S.No. 4 of the Annexure covers inorganic chemicals, although industrial gases are inorganic chemicals, but there is a specific entry at S.No. 16 of the schedule which is the appropriate classification of the said goods and the Hon ble Apex Court in the case of SPEEDWAY RUBBER CO. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH [ 2002 (5) TMI 51 - SUPREME COURT] has observed that as per Rule 3(a) of Interpretation Rules of Central Excise Tariff Act, 1985, the heading which provides most specific description shall be preferred to the heading providing a more general description. In the case of MANGALAM ALLOYS LTD. VERSUS COMMISSIONER OF CUS., AHMEDABAD [ 2010 (4) TMI 493 - CESTAT, AHMEDABAD] , this Tribunal has further observed that if the goods falls in two entries of the notification, the assessee is entitled to choose the entry which is more beneficially to the assessee. As per the stated facts herein above that the industrial gases are covered at S.No. 16 of the schedule of the said notification, which is a specific entry, therefore, the appellant is entitled for exemption under Notification No. 49/2003-CE dt. 10.06.2003 at S.No. 16 of the schedule. In these circumstances, it is held that the goods of the appellant i.e. industrial gases are not covered under Annexure to the notification at S.No. 4 of negative list - the appellant is rightly claim the benefit of exemption at S.No. 16 of the schedule of Notification No. 49/2003-CE dt. 10.06.2003 for unit no.I. With regard to Unit No. II - HELD THAT:- The item manufactured by the appellant does not covered at S.No. 5 of the Annexure-1 (negative list) appended to Notification No. 50/2003-CE dt. 10.06.2003. Therefore, the appellant is entitled for benefit of exemption Notification No. 50/2003-CE dt. 10.06.2003 - the demand is sustainable against the appellant. Territorial Jurisdiction - HELD THAT:- In the show cause notice, the issue of Territorial Jurisdiction is not a subject matter. Therefore, argument advanced by the ld. A.R. is beyond the scope of show cause notice. Therefore, the said argument is of no value. The appellant for unit no.I is entitled for benefit of exemption Notification No. 49/2003-CE dt. 10.06.2003 at S.No. 16 and for unit no.II, the appellant is entitled benefit of exemption Notification No. 50/2003-CE dt. 10.06.2003 as same does not fall under S.No. 5 of the Annexure-1 (negative list) of the said notification - Appeal allowed - decided in favor of appellant.

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• 2022 (1) TMI 358
  Classification of goods - Biozyme - classifiable under tariff entry 31051000 or under tariff entry 31010099 - suppression of facts - intent to evade duty or not - penalty - extended period of limitation - HELD THAT:- The fact remains that the appellant is clearing Biozyme in the packages of less than 10 litres or more than 10 litre cleared under chapter heading 31051000 was accepted by the department. With regard to the goods which are less than 10 litres, the Revenue wants to classify under chapter 31051000 of chapter heading of the tariff which described he goods should be in tablet form or similar form or packages or packages goods weight not exceeding 10 kgs. Therefore, intent of the said entry is clear that the goods should be in solid form i.e. in the form of tablet or powder and not in weight. Admittedly, kilogram and kilo litre have defined in kilo it should be sold in the form of kilo it should be in liquid form under chapter 3101000 of the tariff talks about the tablet or similar form of packages less than 10 kgs - the classification of the product under chaper 31051000 of the Act is not applicable and the product is correctly classifiable under chapter 310510099 of the tariff. If the commodity is sold, semi-sold, viscous or a mixture of sold and liquid and volume means, if the commodity is liquid or is sold by cubic measure. Admittedly, in this case, the goods have been sold by the appellant in kilo litre. Therefore, as per Legal Metrology (Packaged Commodities) Rules, 2011, the goods are appropriately classifiable under chapter 310510099 of the Tariff Act. Appeal allowed - decided in favor of appellant.

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• 2022 (1) TMI 357
  Reversal of CENVAT Credit - input service - Modernization, Renovation and repair of the factory or not - construction of water tank and pump room - HELD THAT:- Interest and penalty will arise only when there is a short payment and non payment of duty or wrong availment of Cenvat Credit. In the present case the appellant had availed the Cenvat Credit in respect of construction of water tank and pump room. Since this construction was done in the existing factory to expand the facility of the existing factory therefore, it will clearly fall under the Modernization and Renovation of the factory. This is not a case where a new factory was set up which excluded from the definition of input service. Since nature of construction done in the factory is of Renovation and Modernization of the existing factory which is clearly covered under inclusion clause of the definition of input service, therefore, the appellant was entitled for the Cenvat Credit of such input service. Since the Cenvat credit itself is admissible the same is not recoverable, consequently, neither any interest can be demanded nor any penalty can be imposed, therefore, the demand of interest and penalties clearly illegal and incorrect. Appeal allowed - decided in favor of appellant.

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• Indian Laws

• 2022 (1) TMI 356
  Dishonor of Cheque - time limitation - applicant has advanced argument that opposite party no.2 filed the case beyond reasonable limitation - no reasonable cause for delay was provided - Sections 138 and 142 of the N.I. Act - HELD THAT:- The cause of action arose on 28.11.2005, therefore, the opposite party no.2 had sent legal notice on 13.12.2005 to the applicant. The time of one month notice expired on 11.01.2006 as per Sections 142 (1) (b) of the N.I. Act. If fifteen days further added, the same will expire on 26.01.2006. The opposite party no.2 filed the case under the N.I. Act on 21.03.2006, which is much beyond the time schedule prescribed under Sections 138 (c) and 142 (1) (b) of the N.I. Act. Reliance placed in the case of Sil Import, USA Vs. Exim Aides Silk Exporters, Bangalore [ 1999 (5) TMI 580 - SUPREME COURT ] is also important to mention. The Court has pronounced the judgment, wherein, it is provided that after legal notice of one month, fifteen days period for committing the offence will start and thereafter after expiry of fifteen days, the offence is completed and within one month, if, no complaint is filed the Magistrate is barred to take cognizance of the complaint, which is filed beyond limitation period. The entire complaint filed by opposite party no.2 does not indicate any reason as to why delay took place in filing the complaint. The averment regarding the delay and time-barred complaint is made in para 11 and 12 of the instant application and the opposite party no.2 has not denied the contents of para 11 and 12 while giving reply in para 10 of the counter affidavit the opposite party no.2 has said that case is argumentative and suitable reply will be given at the time of argument. The opposite party no.2 has rather admitted the contents of para 11 and 12 because vague reply has been given. Application allowed.

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