TMI Tax Updates - e-Newsletter
April 19, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
Indian Laws
Highlights / Catch Notes
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GST:
Disparity between the petitioner's GSTR 1 and GSTR 3B returns - error occurred on account of reflecting an amount wrongly towards CGST and SGST instead of IGST - Despite the petitioner's explanation, the tax demand was confirmed. The High court found that the disparity arose from incorrectly specifying higher amounts under output CGST and SGST in the returns. However, it noted the petitioner's delay in approaching the court. Ultimately, the court quashed the impugned order subject to the condition that the petitioner remit 10% of the disputed tax demand. The respondent was directed to provide the petitioner with a reasonable opportunity for a personal hearing and issue a fresh order within two months.
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GST:
Jurisdiction to issue show cause notice and initiate proceedings under GST - Director General of GST (Intelligence) - proper Officer - The High Court acknowledges the inspection conducted at the petitioner's premises, where it was found that taxable goods were supplied without appropriate GST payment or fulfillment of conditions for exemption. The Court rules that the impugned proceedings were issued by the competent authority, as per Circular dated 09.02.2018, which designates officers of the Director General of GST (Intelligence) to issue show cause notices. - Regarding the petitioner's argument on the applicability of Circular No.23/2021, the Court clarifies that it pertains to state GST officers and does not bind central tax officers. Therefore, the impugned proceedings are valid.
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Income Tax:
Validity of Faceless Assessment - demand notice was issued without furnishing a draft order to the Petitioners, violating Section 144C(1) of the IT Act. - After considering submissions from both parties, the High court found merit in the petitioner's argument regarding non-compliance with statutory procedures. Consequently, the court quashed the impugned assessment order and notice. However, contrary to the petitioner's plea to conclude the matter there, the court opted to follow the approach established by the Supreme Court. The court ruled that while the assessment order was set aside, the department should be given an opportunity to rectify the procedural error and pass a fresh order in compliance with the law.
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Income Tax:
Rectification of mistake - period of limitation - To give appeal effect of orders passed by the ITAT and issue a refund. - The High Court referred to the interpretation of the term "received" and its implications, emphasizing that the limitation period should commence when the Department becomes aware of the order, not necessarily when the certified copy is physically received. - In light of the principles established in previous cases, including CIT v. Odeon Builders P. Ltd. and Lakhpatrai Agarwal v. CIT, the Court held that the Department's failure to comply with the ITAT's order within the stipulated time was unjustified.
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Income Tax:
Prosecution Proceedings - Offence u/s 276B and 278B - not depositing the TDS amount - The court acknowledged that the petitioners provided reasonable explanations for the delay in depositing the TDS amount, considering factors like insolvency proceedings and the impact of the COVID-19 pandemic. - The court found merit in the petitioners' reliance on Circular No. F No 285/90/2008-IT(Inv-I)/05 dated 24.04.2008, as it outlines conditions for prosecution under the Act. Additionally, the court cited precedents from both the Jharkhand High Court and its own jurisdiction, emphasizing that once the TDS amount with interest has been deposited, criminal proceedings should not continue.
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Income Tax:
Income tax proceedings against company dissolved / insolvent - Jurisdiction or authority to reopen or assess income for any period prior to the approval of the Resolution Plan - The High Court affirmed that once a Resolution Plan is approved under the IBC, it becomes binding on all stakeholders, including creditors and guarantors, extinguishing liabilities prior to its approval. Relying on Supreme Court judgments, the Court reiterated that the legislative intent behind Section 31 of the IBC is to provide a fresh start to the successful resolution applicant, safeguarding against surprise claims. The Court dismissed attempts to distinguish between voluntary and involuntary insolvency, emphasizing that the protection afforded under Section 31 applies uniformly.
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Income Tax:
Validity of Reopening of assessment - “tangible material” as may ever give rise to a “reason to believe" - Reliance on the Report of the Justice M.B. Shah Commission - The High Codurt observed that the assessing authority primarily based its action on the report, which did not provide a definitive finding but only a possibility of under-invoicing. The court held that this did not constitute "tangible material" required to form a "reason to believe". Consequently, the reassessment notice was deemed invalid as it was founded on speculative assumptions rather than hard evidence.
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Income Tax:
Deduction u/s 80P(2)(a)(i) - The Tribunal rejected the Revenue's argument regarding the timing of the return filing, emphasizing that the amended provision did not apply retrospectively to the assessment year in question. Regarding the alleged failure to claim deduction in the belated return, the Tribunal found that the claim was indeed made, thus dismissing the Revenue's contention.
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Income Tax:
Levy of late fee u/s 234E for the delay in filing E-TDS return - the Appellate Tribunal referred to a judgment of the jurisdictional High Court which held that the levy of late fee for the belated filing of the E-TDS return for the assessment year prior to 01.06.2015 is not warranted. Therefore, the Tribunal allowed the appeal of the assessee, deleting the late fee levied under section 234E of the Act.
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Income Tax:
Delay in filling appeal before the Tribunal - appeal is time-barred by 24 days - The assessee failed to respond to notices issued u/s 143(2)/142(1) for scrutiny assessment, leading to the ld. Assessing Officer passing the assessment order ex-parte u/s 144(1) based on best judgment - Despite being provided with multiple opportunities to respond to notices and present its case, the assessee failed to do so at various stages of the proceedings. The Tribunal noted the lack of submission on merit by the assessee, which significantly weakened its position. Moreover, the explanation provided for the delay in filing the appeal was deemed insufficient. Consequently, the Tribunal dismissed the appeal as time-barred.
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Income Tax:
Levy of penalty u/s 270A - Excess exemption claimed on Gratuity u/s 10(10)(i) and Leave Encashment receipts u/s 10(10AA)(ii) - The Appellate Tribunal recognized the transition of the appellant's employer from a government entity to a PSU. It noted that while the appellant began his service with a government entity, his retirement benefits were received from a PSU. Considering this transition, the Tribunal acknowledged the appellant's bona fide belief in claiming full exemption. It accepted that part of the appellant's service tenure was rendered as a government employee, justifying his claim for full exemption. - Considering the above, the Tribunal set aside the penalty imposed by the AO, stating that while doubt regarding taxation may favor the state, in penalty matters, the principle leans towards the assessee. Therefore, it quashed the penalty order.
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Customs:
Territorial jurisdiction of Court - Confiscation of gold - levy of penalty on the petitioner - The High Court assessed the jurisdictional aspect raised by the petitioner and concluded that the case did not fall within its jurisdiction for effective adjudication. It emphasized that no fraction of the cause of action arose in the State of Rajasthan, thereby dismissing the petitioner's arguments based on jurisdiction. Only on count of the fact that the residence of the petitioner is situated in the State of Rajasthan, the territorial jurisdiction does not lie with this Court.
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Customs:
Summons issued to attend the office of the DRI - seeking permission for presence of their advocate and videography of the Petitioner’s interrogation - The High court allowed the petitioner's advocate to be present during interrogation, maintaining a visible but not audible distance. Additionally, the court permitted videography of the interrogation, with costs to be borne by the petitioner. However, the court emphasized that the absence of the advocate or videographer would not excuse the petitioner from attending the interrogation.
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Customs:
Absolute Confiscation of gold recovered during the course of search - imposition of penalties - The tribunal concluded that the customs authorities failed to establish a reasonable belief that the gold was smuggled, as required by law. It determined that the initial seizure and the punitive measures were not supported by the necessary legal standards or evidence. Therefore, the tribunal set aside the order for confiscation and penalties, allowing the appeals and granting relief to the appellants.
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Customs:
Town Seizure - Absolute confiscation of gold - imposition of penalties on the firm as well as on the appellants - The Tribunal found that the Revenue failed to provide sufficient evidence to establish that the gold in question was of foreign origin or smuggled. Moreover, the appellants demonstrated compliance with procurement laws by presenting documentary evidence of lawful procurement and refining processes. As a result, the Tribunal set aside the impugned order, ruling in favor of the appellants and allowing the appeals with consequential relief.
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Customs:
Classification of imported goods - amino acid powder - whey protein powder - The Tribunal supported the customs authority's classification of the goods under CTI 21069099. It noted that the goods, being dietary supplements and not solely amino acids or chemically defined compounds, did not fit under CTI 29379090. The imported goods are not protein concentrates (such as whey protein) but are mixtures of amino acids, vitamins, etc. for use by dissolving in water. In our considered view, Chapter Note 5(b) squarely puts the imported goods under heading 2106 and since they do not exactly fall under any of the other Customs Tariff Items, CTI 2106 90 99 is the correct classification.
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Customs:
Multiple assessments in the same Bills of Entry - Finalization of provisional assessment - The Tribunal clarified that the Customs Act allows for reassessment before goods are cleared for home consumption under Section 47. Thus, multiple assessments can be made as necessary until final clearance, supporting the customs authority's actions. - Further, the Tribunal found no requirement under the Customs Act for an SCN to be issued in the context of finalizing assessments after provisional assessments are made. It was determined that the written submissions by the importer were adequately considered, hence there was no violation of natural justice.
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Customs:
Valuation of imported goods - Ethylene Vinyl Acetate [EVA] - The appellant declared it as 18%, but testing by CIPET revealed a higher content of 22.4%. Despite the submission of multiple test reports, the tribunal upheld CIPET's report, considering it reliable and accurate. The appellant's challenge against CIPET's testing method and the validity of other test reports were dismissed. The tribunal affirmed the rejection of the declared value and the determination of the assessable value based on contemporaneous imports, concluding that the Customs officer's actions were justified.
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Customs:
Revocation of Customs Broker License - The Tribunal examined each charge individually and found that the appellants were not directly involved in the mis-declaration by the importer. Lack of evidence linking the appellants to deliberate misrepresentation led to the dismissal of these charges. The Tribunal acknowledged the importance of due diligence by Customs Brokers but emphasized that they cannot be expected to verify every detail independently. They concluded that the appellants fulfilled their obligations diligently, especially considering they acted based on information provided by the importer.
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Customs:
Valuation of imported goods - addition of franchise fee and international marketing charges incurred and of services obtained, in transaction value - The tribunal’s insistence on strict compliance with procedural fairness and the need for clear factual and legal grounds to support customs authority actions reflect a judicial approach that balances enforcement with fairness to the trading community. The judgment also highlights the evolving nature of international trade and the challenges customs authorities face in keeping pace with complex commercial arrangements. - The matters were remanded to the original authority for a fresh examination of the justification for invoking the extended period and the accurate quantification of the demand.
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Indian Laws:
Dishonour of Cheque - Plea to expedite the trial of a complaint - Case of applicant is that though this complaint under the Act, 1881 was filed in the year 2022, but the trial could not be concluded - The High Court, after considering the submissions and examining relevant legal provisions, as well as referring to Supreme Court directives emphasizing expeditious disposal of cases under Section 138, made a decision. It directed the Chief Judicial Magistrate to conclude the trial expeditiously, preferably within six months from the receipt of the order, in line with statutory provisions and judicial precedents.
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Indian Laws:
Dishonour of Cheque - Grant of Bail - Mandate to deposit of a minimum of twenty percent of the fine or compensation awarded by the trial court - While acknowledging the discretionary language of "may" in Section 148, the High Court interpreted it as a rule rather than an exception, aligning with the legislative intent to expedite legal proceedings. The High Court referenced previous Supreme Court judgments to support its interpretation of Section 148, emphasizing the necessity of complying with the legislative intent to prevent delays in cheque dishonor cases. - Consequently, the High Court modified the appellate court's order, directing the petitioner to deposit twenty percent of the fine imposed by the trial court within sixty days.
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PMLA:
Money Laundering - Compliance of summons issued by the petitioner, ED u/s 50 - District Collectors to appear before the ED - The Supreme Court expressed disapproval of the District Collectors' failure to comply with its earlier order to appear before the ED. It emphasized the importance of respecting court orders and the rule of law. Despite acknowledging the reasons provided by the respondents for their non-appearance, including election duties, the Court deemed it necessary to ensure compliance with the summons issued under the PMLA.
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PMLA:
Seeking grant of anticipatory bail - Money Laundering - twin conditions of Section 45 of the PMLA Act satisfied or not - main accused was exonerated on identical allegations by the Adjudicating Authority - The court allowed the anticipatory bail application, stipulating conditions to ensure the applicant's appearance in court and non-interference with the trial process. The decision was influenced by previous Supreme Court rulings granting bail under similar circumstances and the fact that the applicant, being a woman, fulfilled certain leniency provisions under the PMLA.
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PMLA:
Money Laundering - Proceeds of crime - attachment of moveable property of the appellant - The tribunal analyzed PMLA Section 5(1), determining that attachment requires proceeds of crime and a likelihood of concealment or transfer. It interpreted 'proceeds of crime' based on a Supreme Court case, concluding that the disputed amount frozen by the police qualified as such. Since there was no risk of transfer or concealment due to the frozen status, the tribunal deemed the attachment unjustified under PMLA. It interfered with the attachment order, directing that it remains invalid as long as the disputed amount is frozen by the police, with automatic reinstatement if released.
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PMLA:
Money Laundering - provisional attachment order - Despite claiming innocence and presenting evidence of legitimate business transactions, the appellant's receipt of payments through non-existing companies raised suspicions. The Appellate Tribunal, while acknowledging the appellant's denial of involvement in criminal activities, upheld the attachment order due to insufficient evidence supporting innocence. The appellant was advised to pursue legal remedies against the alleged fraudulent party. Overall, the Tribunal found no grounds to intervene in the attachment order.
Articles
Notifications
Circulars / Instructions / Orders
Case Laws:
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GST
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2024 (4) TMI 717
Disparity between the petitioner's GSTR 1 and GSTR 3B returns - error occurred on account of reflecting an amount of Rs. 59,430.68/- each wrongly towards CGST and SGST instead of IGST - HELD THAT:- On examining the petitioner's reply dated 17.03.2023, it appears prima facie that the disparity was on account of wrongly specifying higher amounts in the GSTR 3B returns as regards output CGST and output SGST. This aspect was not duly taken note of while issuing the impugned order. At the same time, it should be noticed that the impugned order was issued in June 2023 and the petitioner has approached this Court belatedly. On instructions, learned counsel for the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.
The impugned order calls for interference albeit by putting the petitioner on terms. Therefore, the impugned order dated 09.06.2023 is quashed subject to the condition that the petitioner remits 10% of the disputed tax demand within fifteen days from the date of receipt of a copy of this order. Upon being satisfied that the above mentioned amount was received, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within two months from the date of receipt of a copy of this order.
The petition is disposed off.
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2024 (4) TMI 716
Jurisdiction to issue show cause notice and initiate proceedings under GST - Director General of GST (Intelligence) - proper Officer and adjudicating authority as contemplated under Sections 73 and 74 of the CGST Act or not - HELD THAT:- The respondents have conducted an inspection on the petitioner's premises. During the inspection, they found that during the period from 22.09.2017 to 20.08.2019, the petitioner company has effected outward supply of taxable goods viz., certain grocery items, under the unregistered brand name, but, they have not paid the appropriate GST and not fulfilled either one of the conditions prescribed in the Notification No.27/2017-Central Tax (Rate) dated 22.09.2017 to avail exemption. Therefore, the impugned proceedings has been issued.
As per the Circular dated 09.02.2018 issued by the Central Board of Indirect Taxes and Customs, Central Government of India, the officers of Director General of G.S.T. (Intelligence) shall exercise the power to issue show cause notice. Therefore, this Court is not inclined to accept the submission of the petitioner that the impugned proceedings has been issued by the incompetent authority - Moreover, the impugned proceedings is only a pre-show cause notice.
The writ petition is dismissed.
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Income Tax
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2024 (4) TMI 715
Validity of Faceless Assessment - demand notice was issued without furnishing a draft order to the Petitioners - violation of principles of natural justice in not furnishing a draft order to the assessee and affording the assessee an opportunity to file its objection to the same - HELD THAT:- An opportunity must be given to the Department to follow the correct procedure and proceed with the matter in accordance with the law. In short, the error on the part of the Department was corrected, but the Department was allowed to proceed after such correction, thereby affording the assessee sufficient opportunity consistent with the principles of natural justice and fair play.
Secondly, M/S CWT India Pvt. Ltd. (2023 (9) TMI 438 - BOMBAY HIGH COURT), though rendered after the decision of the Hon'ble Supreme Court in Mantra Industries Ltd. [2023 (5) TMI 498 - SC ORDER], does not appear to have taken cognisance of the decision (supra). Perhaps this decision may not have even been cited before the Bench.
Instead, the reference can usefully be made to the decision in Faqir Chand [2021 (8) TMI 488 - DELHI HIGH COURT], Kottex Industries Pvt. Ltd. (2022 (10) TMI 1134 - GUJARAT HIGH COURT], Piramal Enterprises Ltd. (2021 (8) TMI 48 - BOMBAY HIGH COURT] where the impugned assessment orders were quashed but liberty was granted to the Department to proceed further in accordance with law and after complying with principles of natural justice and fair play.
Thus, for all the above reasons, we quash and set aside the impugned assessment order and notice and remand the matter to the Assessing Officer/ Department to take corrective measures and pass a fresh order.
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2024 (4) TMI 714
Rectification of mistake - period of limitation - To give appeal effect of orders passed by the ITAT and issue a refund. - whether the limitation period for the remand by the ITAT would have to be strictly construed to begin from the date when the order of the ITAT is “received” by the concerned authority through an appropriate mechanism, particularly in light of the provisions of Section 254 r.w.s.153(3) of the Act and the judgment rendered by this Court in Odeon Buildwell [2017 (3) TMI 1266 - DELHI HIGH COURT]?
HELD THAT:- The legal landscape in the present lis relates to sub-Section 3 to Section 153 of the Act which stipulates that an order for fresh assessment pursuant to an order u/s 254 or Section 263 or Section 264 of the Act may be made at any time before the expiry of a period of nine months. The said provision further encapsulates that the aforesaid period has to be calculated from the end of the financial year in which the order u/s 254 is received by the authorities mentioned in the said Section.
Evidently, from the extract of the relevant portion of the judgment in Odeon Buildwell (supra) in the preceding paragraph, it is seen that the contextual interpretation of the phrase “received” postulates the time when are the parties notified about the pronouncement and are represented at that instant in the open court. As held that the solitary reason of non-receiving of the order by the concerned authority cannot consequently make the period of limitation cease to run.
Court further noted that once a responsible authority including the Department’s Representative is aware of the order, the communication of the order is purely an administrative arrangement which has to be carried out internally within the Department.
Recently, in the case of Lakhpatrai Agarwal [2023 (2) TMI 533 - BOMBAY HIGH COURT] has held that the legislative intent behind the enactment of Section 254(3) of the Act does not prescribe shifting of the onus of proving the receipt of the order under the said provision on the assessee.
As safely concluded that the expression “received” employed in Section 153(3) of the Act would not strictly mean that a certified copy of the order of the ITAT, in the given facts and circumstances, ought to have been necessarily supplied to the concerned authority through an appropriate mechanism devised by the respondents.
Further, sub-Section 3 to Section 254 of the Act casts a duty upon the ITAT to send the copy of the orders passed under Section 254 of the Act to the assessee as well as to the Principal Commissioner or Commissioner. A conspectus of Section 254 read with Section 153(3) of the Act would reveal that the said provisions cannot be made applicable to the detriment of the petitioner in the case at hand.
There is no force in the argument put forth by the respondents that the order was not received by the concerned authority through appropriate channel. In any case, as decided in Odeon Buildwell (supra), the ground raised by the respondents is only an internal arrangement of the Department and the same cannot be stretched to mean that it is a valid ground for the extension of the limitation period. The underlying rationale of the Legislature behind the enactment of Section 153(3) and setting the limitation therein, cannot be envisaged to expand the time limit for passing of a fresh assessment. Rather, the said provision entails a strict adherence to the time period within which the remand order in the present case should have been complied with by the respondents.
Taking into consideration the ITAT’s response that the concerned order was sent on 24 October, 2018, the Department ought to have passed the order to give the appeal effect within twelve months from then. However, the same has not been done by the Department till date.
Since the respondents have failed to comply with the order of the ITAT in passing a fresh assessment order within the stipulated time, the instant writ petition is allowed.
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2024 (4) TMI 710
Disallowance of ESIC contribution - delayed remittance - HELD THAT:- It an admitted fact that due ESIC contribution is remitted beyond the due date prescribed under the relevant law. As rightly submitted by the Ld. AR that, this issue of disallowance has been settled by the Hon’ble Apex Court in ‘Checkmate Services’ [2022 (10) TMI 617 - SUPREME COURT] wherein their Hon’ble Lordship have held that the due date for depositing/remittance of PF/ESIC contribution etc., shall be governed by the respective PF/ESIC Act and assessee shall not be eligible for deduction if such contribution to respective fund is remitted beyond the due date prescribed therein.
Consequently such delayed remittance shall not be eligible to shelter under the extended period as prescribed by section 43B of the Act. In view thereof, the disallowance towards delayed remittance of ESIC made in the assessment and confirmed in appellate proceedings stands errorless. The ground raised challenging the disallowance thus stands meritless, hence dismissed.
Ad-hoc disallowances - ingenuine sale incentive/expenditure - HELD THAT:- On careful consideration of records it transpired that, neither of the lower tax authorities had pin-pointed any voucher where genuineness of sale incentive/expenditure claimed to have been incurred by the assessee wholly and exclusively for the purpose of its business did not inspire any confidence, nor it was the case of the revenue that any part of the expenditure in question was either found bogus or fictitious, nor was found to have not been incurred by the appellant wholly and exclusively for the purpose of its business. Indeed, it showcased an exercise of running around the circle. Further we neither could come across any provision in Income Tax Statute nor it has been brought to our notice by either parties any provision which subscribes vis-à-vis empower the tax authorities to arrive at this logic of subscribing ad-hoc disallowances.
Evidently, there have been no clear findings as to number of vouchers requiring denial of allowances with the amount of expenditure and nature of defects therein or therewith. If the Ld. AO had any doubt with regard to the genuinity of any one of the vouchers produced he could have drawn sample vouchers and called upon the assessee to establish its genuineness. Moreover department could not bring out any deprecative material on record to substantiate its conclusion as logical.
We couldn’t even remotely see there is any mention of rationale in arriving at the percentile of disallowance in the present case. For the reasons we find force in the claim of the assessee that, devoid of any specific infirmity in the claim for deduction for sales incentives debited to profit & loss account, the ad-hoc disallowance is arbitrary and could by no means be held to be justified in given situation where books of accounts are subjected to audits.
Hon'ble High Court of Madras in ‘V.C. Arunai Vadivelan [2021 (2) TMI 501 - MADRAS HIGH COURT] wherein if the AO had any doubt with regard to the genuinity of any one of the vouchers produced he could have drawn sample vouchers and called upon the assessee to establish its genuineness. Without doing so, making an adhoc disallowance by not specifically assigning any reason to a voucher or bunch of vouchers is not legally tenable.’
Thus in the absence of clear finding about non-genuineness or fictitiousness of portion of expenditure disallowed, we find no favour with the arbitrary view of the tax authorities below. For the reason we vacate the ad-hoc disallowance in its entirety and thereby allow this ground.
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2024 (4) TMI 709
Deduction u/s 80P(2)(a)(i) - denial of deduction as no return had been filed within the time stipulated by the Assessing Officer in furtherance to his sec. 142(1) notice - HELD THAT:- As the amended provision herein i.e., sec. 80AC of the Act imposing such a stipulation of filing of sec. 139(1) return within the “due” date, has been substituted by the Finance Act, 2018 w.e.f. 01.04.2018 whereas the impugned assessment year herein is 2017-2018 only. There is no indication in the statute that this substituted sec. 80AC carries any retrospective effect. Thus find no merit in Revenue’s instant preliminary argument going by stricter interpretation as per Commissioner of Customs (Imports), Mumbai vs. M/s. Dilip Kumar And Co. & Ors. [2018 (7) TMI 1826 - SUPREME COURT]
As per sec. 80A(5) of the Act that the assessee had not made the impugned claim even in it’s alleged belated return - DR failed to rebut the clinching fact emerging from the assessee’s pleadings in Form-35 that the assessee had indeed raised the impugned claim in it’s return filed on 11.12.2019. It is reiterated that sec. 80AC of the Act has already been held as not applicable in light of the detailed discussion in preceding paragraph(s). Faced with this situation,we reject the Revenue’s instant second substantive argument while placing reliance on sec. 80A(5) of the Act.
Assessee has derived it’s impugned interest income from both nominal as well as regular members - This last issue is found to be no more res integra once hon’ble apex court’s recent landmark decision in Mavilayi Service Co-operative Bank Ltd., [2021 (1) TMI 488 - SUPREME COURT] has rejected the Revenue’s very stand. Faced with this situation, thus accept the assessee’s impugned sec. 80P(2)(a)(i) deduction claim in very terms. Necessary computation shall follow as per law. Ordered accordingly.
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2024 (4) TMI 708
Levy of penalty - Penal proceedings for misreporting of income u/s 270A - Excess exemption claimed on Gratuity u/s 10(10)(i) and Leave Encashment receipts u/s 10(10AA)(ii) - HELD THAT:- Levy of penalty in this case in our considered view was not warranted for the reasons that; (i) admittedly for part of the service the appellant was State Government employee whose employment by enforcement of electricity Act, 2003 and MSEGCL employee Service Regulation 2005 was converted into non-governmental service/employment. Therefore, the belief under which full/extended exemption of retirement benefit claimed in the ITR filed was in first not incorrect in its entirety and certainly it was bonafied and not synthetic one (ii) secondly, the explanation offered by the appellant in support of his mistaken but bonafied belief and disclosed all material facts of his service & the circumstance which swayed to claim full exemption in his ITR in our considered view squarely falls within clause (a) of s/s (6) of section 270A, therefore pardonable (iii) and finally, the imposition of penalty is at the discretion of Ld. AO, since s/s (1) of section 270A of the Act, refers to the word 'may' and not as ‘shall’.
The tax authorities below in our considered view were failed to appreciate the facts and circumstance of the present case holistically and further in right spirit of law, but dealt therewith without application of mind and perfunctory imposed / confirmed the penalty @ accelerated rate of 200% u/s 270A of the Act in unwarranted case like this.
In respect of penalty in fiscal laws the principle followed is more like the principle in criminal cases. That is to say the benefit of doubt is more easily given to the assessee, and this finds expounded in VV. IYER VERSUS COLLECTOR OF CUSTOMS [1972 (9) TMI 52 - SUPREME COURT].
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2024 (4) TMI 707
Fees levied u/s 234E - delay in filing TDS statement for various quarters - HELD THAT:- Following the judicial precedents laid in ‘Fatheraj Singhvi Vs UOI’ [2016 (9) TMI 964 - KARNATAKA HIGH COURT] NFAC has rightly allowed the appeal of the assessee and deleted the fees levied by the respondent u/s 234E of the Act wherein as held when the amendment made under Section 200A of the Act which has come into effect on 1.6.2015 is held to be having prospective effect, no computation of fee for the demand or the intimation for the fee under Section 234E could be made for the TDS deducted for the respective assessment year prior to 1.6.2015.
In the event, the present appeal filed against the impugned order seeking reversal in our considered view calls for no adjudication, hence deserves to be dismissed as infructuous. Thus, ordered accordingly.
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2024 (4) TMI 706
Levy of late fee u/s 234E for the delay in filing E-TDS return - contention of the assessee before the CIT (A) was that no late fee could be levied on the belated filing of the E-TDS return for the period prior to 01.06.2015, since the amendment to section 200A of the Act was made w.e.f. 01.06.2015 - HELD THAT:- With due respect to the judgement of Conceria International Ltd. Cited [2023 (12) TMI 281 - MADRAS HIGH COURT] the issue has been considered by the jurisdictional High Court in the judgement reported in Fatehraj Singhvi Vs. UOI [2016 (9) TMI 964 - KARNATAKA HIGH COURT], which was followed in the judgement reported [2022 (3) TMI 303 - KARNATAKA HIGH COURT], wherein the jurisdictional High Court has held that the levy of late fee for the belated filing of the e-TDS return for the assessment year prior to 01.06.2015 is not warranted.
When there is a judgement of the jurisdictional High Court, we have to follow the same and therefore, we hold that the levy of late fee could not be imposed for the disputed assessment year 2013-14 as held by the Hon’ble Karnataka High Court in the case of Fatehraj Singhvi Vs. UOI cited (supra). Accordingly, we delete the late fee levied under section 234E of the Act and allow the appeal of the assessee.
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2024 (4) TMI 713
Prosecution Proceedings - Offence u/s 276B and 278B - not depositing the TDS amount for the Financial Year 2019-20 within the statutory period prescribed under law and delay caused by them remained unexplained - petitioners have delayed in depositing the amount collected on behalf of the govt. ranging from 15 days to 394 days - HELD THAT:- The maximum delay of 394 days for depositing the TDS amount to the revenue account have been well explained by the petitioners, therefore, the authorities ought to have been taken into consideration same, particularly for the reasons that the petitioners-company has suffered the I.B. proceeding and the restriction imposed during the COVID-19 pandemic, the petitioners case is directly covered by the judgments cited in the case of Dev Multicom Pvt. Ltd. [2022 (3) TMI 1038 - JHARKHAND HIGH COURT] and M/s. D.N. Homes Pvt. Ltd. Khurda & another [2023 (11) TMI 447 - ORISSA HIGH COURT] because the prosecution indeed has been initiated by the opposite parties against the petitioners after having received the TDs amount along with the interest. Therefore, the entire proceeding arising qua the petitioners stands quashed.
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2024 (4) TMI 712
Income tax proceedings against company dissolved / insolvent - Jurisdiction or authority to reopen or assess income for any period prior to the approval of the Resolution Plan - Distinction between voluntary and involuntary corporate insolvency - respondents chose to commence proceedings referable to Section 144B
HELD THAT:- Resolution Plan once approved would bring the curtains down on any claims pertaining to a period prior to the approval of the RP is no longer res integra.
We note that while dealing with an identical issue, we had in Ireo Fiverriver Pvt. Ltd [2024 (4) TMI 665 - DELHI HIGH COURT] as held successful resolution applicant cannot be foisted with any liabilities other than those which are specified and factored in the Resolution Plan and which may pertain to a period prior to the resolution plan itself having been approved.
Section 144B power entails proceedings for assessment, reassessment or re-computation being initiated in terms of the faceless procedure of assessment as prescribed therein. Any effort to assess, reassess or re-compute could tend to lean towards a re-computation of liabilities which otherwise stands freezed by virtue of the Resolution Plan having been approved.
Such an action or recourse would clearly be barred by Section 31 of the IBC which binds all creditors of the corporate debtor, including the Central and State Governments or any other local authority to whom a debt is owed. A Section 144B action is what the Supreme Court frowned upon and chose to describe as the “hydra head” and thus being contrary to the clean slate principle which the IBC advocates. We, consequently, find ourselves unable to sustain the impugned action.
We find ourselves unable to sustain that line of reasoning bearing in mind the undisputable legal position which obtains in light of the scheme of the IBC and which fails to incorporate any distinction between voluntary and involuntary corporate insolvency. As we read the provisions of the Act, the IBC does not erect different levels of protection or insulation dependent upon whether corporate insolvency had been initiated voluntarily or on the basis of a petition referable to Section 7 of the IBC.
In our considered opinion, the purport of Section 31 of the IBC stands conclusively settled by the Supreme Court in terms of the judgments rendered in Essar Steel India Ltd. Committee of Creditors v. Satish Kumar Gupta and Ghanashyam Mishra [2019 (11) TMI 731 - SUPREME COURT].
We also bear in mind that upon commencement of CIRP, the petition is duly advertised in terms of the provisions made in Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and which would thus constitute due public announcement. The respondents, therefore, cannot sustain the invocation of Section 144B based on their own failure to lodge a claim within the time stipulated.
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2024 (4) TMI 711
Validity of Reopening of assessment - “tangible material” as may ever give rise to a “reason to believe" - Justice M.B. Shah Commission submitted its Report and only suggested possibility of under invoicing of Iron Ore extracted from mines and exported from the State of Goa - HELD THAT:- Undisputed between the parties that the present re-assessment proceeding has arisen under the unamended law i.e. the law that was in force upto 31.03.2021. Under the law as it then existed, no re-assessment proceedings could ever be initiated except against a valid “reason to believe” recorded by the assessing authority.
Second, even in a no assessment case, re-assessment could rise only after such “reason to believe” had been recorded in writing before issuance of notice u/s 148. Thus, recording of “reasons to believe” in writing was a sine qua non for valid assumption of jurisdiction to re-assess an assesse.
As to what amounts to a “reason to believe,” the law has remained settled over long decades. In S Ganga Saran and Sons (P) Ltd. [1981 (4) TMI 5 - SUPREME COURT] in the context of the then existing Section 147(a) of the Act, yet, in the context of initiation of reassessment proceedings upon recording of “reasons to believe”, it was established in law that those words were stronger than “is satisfied”; the “belief” must be based on “reasons” that are “relevant and material”.
For initiation of reassessment proceedings, there must exist “tangible material” indicating some income had arisen either on accrual or actual/ cash basis and that it has escaped assessment. Merely because the invoices issued by the petitioner were below the international price, it could never be alleged that there was any income on accrual basis as the petitioner earned no legal right to receive any higher amount. Therefore, we have to examine if there exists any material indicating receipt of any income on actual/ cash basis, over and above the invoice price.
The entire opinion of the Commission and the recital made in the “reasons to believe” recorded by the petitioner as also reasons recorded by that authority while rejecting the objections raised by the petitioner are directed and confined solely to the observations made by the Commission. The Report is not before us in entirety. To the extent it has been relied by the assessing authority, it only admits of a possibility of higher realizations having been made. Even that possibility exists not on the strength of any material discovered by the commission of higher realizations made by exporters (including the petitioner) but on a presumptuous basis solely by comparing the invoice price with the prevailing international price. Hence, that presumption/ opinion howsoever considered is not based on any hard evidence (either oral or documentary) of any higher price realized. Rather, it is conjectural and in any case on suspicion. Report remains a pure subjective opinion and nothing more.
The vital fact of value/ price realized by the petitioner against the invoice issued, was neither gone into nor any definite opinion was expressed thereto. In any case, no material was discovered by the Commission, as may support that “belief”.
Thus we find reassessment proceedings initiated against the petitioner for the AY 2011-12 were wholly without jurisdiction. It also being beyond the pale of doubt- unless jurisdiction is first clearly established, the reassessment- proceedings may not survive and an assessee may not be forced to participate in the same. Decided in favour of assessee.
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2024 (4) TMI 705
Delay in filling appeal before the Tribunal - appeal is time-barred by 24 days - The assessee failed to respond to notices issued u/s 143(2)/142(1) for scrutiny assessment, leading to the ld. Assessing Officer passing the assessment order ex-parte u/s 144(1) based on best judgment - HELD THAT:- Punishment in the shape of taxes and penalty could be disproportionate to the negligence of assessee for not appearing before the AO or before the ld. 1st and 2nd Appellate Authority, but failure of the assessee to plead its case on merit do exhibit that it is a Company which is on papers only. The shadow prosecutor of the proceeding do ensure procedural compliance of filing appeals before the Appellate Authority in time.
Our experience of more than twenty years in adjudicating such type of litigation do suggest that this type of stand is being taken intentionally so that the time limit to take action in the case of those share applicants could be expired and a plea be raised before the Higher Appellate Forum that matter be remitted back for deciding afresh on merit. After expiry of six years earlier prior to 2021 and now ten years, action in the case of share applicant would not be taken up by the Income Tax Authorities. When we examine these facts and try to strike a balance between the adjudicatory process, then sometime it gives us pain and disappointment. But nevertheless, we have to resolve this dispute according to the material available on record.
A perusal of the application filed for condonation of delay, we are of the view that neither an affidavit of the Director is being filed nor exact details are submitted as to how this delay has happened. The assessee has not filed any confirmation from Ms. Devuani Dutta showing that appeal papers were submitted to her within time and she was busy in other tax matters and, therefore, could not file the appeal. Appeal of the assessee is dismissed.
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2024 (4) TMI 666
Levy of penalty - Penal proceedings for misreporting of income u/s 270A - Excess exemption claimed on Gratuity u/s 10(10)(i) and Leave Encashment receipts u/s 10(10AA)(ii) - HELD THAT:- Levy of penalty in this case in our considered view was not warranted for the reasons that; (i) admittedly for part of the service the appellant was State Government employee whose employment by enforcement of electricity Act, 2003 and MSEDCL employee Service Regulation 2005 was converted into nongovernmental service/employment. Therefore, the belief under which full exemption of retirement benefit claimed in the ITR filed was in first not incorrect in its entirety and certainly it was bonafied and not synthetic one (ii) secondly, the explanation offered by the appellant in support of his mistaken but bonafied belief and disclosed all material facts of his service & the circumstance which swayed to claim full exemption in his ITR in our considered view squarely falls within clause (a) of s/s (6) of section 270A of the Act, therefore pardonable (iii) and finally, the imposition of penalty is at the discretion of Ld. AO, since s/s (1) of section 270A of the Act, refers to the word 'may' and not as ‘shall’.
However, the tax authorities below in our considered view were failed to appreciate the facts and circumstance of the present case holistically and further in right spirit of law, but dealt therewith without application of mind and perfunctory imposed / confirmed the penalty @ accelerated rate of 200% u/s 270A of the Act in unwarranted case like this.
As in respect of penalty in fiscal laws the principle followed is more like the principle in criminal cases. That is to say the benefit of doubt is more easily given to the assessee, and this finds expounded in VV. IYER VERSUS COLLECTOR OF CUSTOMS [1972 (9) TMI 52 - SUPREME COURT]. In view of this, we set-aside the impugned order of Ld. NFAC and quashed the order of penalty. Appeal of assessee allowed.
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Customs
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2024 (4) TMI 701
Seeking to change the classification of the product imported by the appellant - WAXSOL-911(A) grade - to be classified under the heading 2710 or under 3405? - HELD THAT:- The dispute involved in the instant case is identical to the dispute involved in the case decided in PANOLI INTERMEDIATES INDIA PVT LTD AND OTHERS VERSUS C.C. -KANDLA [2023 (6) TMI 317 - CESTAT AHMEDABAD]. In the said decision after examining the dispute the tribunal observed A detailed examination about the nature of product, its usage and its proper classification based upon exclusion clauses of HSN explanatory note is warranted including of consideration of chapter 2712. In view of claim of product being in the nature of Slag wax, same needs elaborate discussion and findings from the authority below.
It is seen that the matter was remanded to the original adjudicating authority for fresh adjudication on the ground that the adjudicating authority needs to give his own finding on the issue of classification and also various other issues mentioned - it is felt that this matter should also be remanded back to the original adjudicating authority or identical terms as in order above, to be decided a fresh.
Appeal allowed by way of remand.
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2024 (4) TMI 700
Absolute Confiscation - Imposition of penalty under Section 112 of the Customs Act, 1962 - Smuggling of Gold - foreign origin Gold - non-recording of statements to corroborate the allegation of smuggling of gold - HELD THAT:- It is observed that nowhere appellants, namely, Shri Rupam Ghosh and Shri Vijay Bhagat, during the course of interrogation or thereafter, have denied their implication in the case. Only at the time of appellate stage, they are claiming that they have been falsely implicated in the case - As gold has been recovered from the possession of Shri Vijay Bhagat and Shri Rupam Ghosh, therefore, they cannot claim that they have been falsely implicated in this case and recovery of the gold was made on the basis of foreign marking, having a reasonable belief that gold is of foreign origin.
The gold in question has been rightly confiscated absolutely by the ld. adjudicating authority. As recovery of gold has been made from Shri Vijay Bhagat and Shri Rupam Ghosh, therefore, they cannot be exonerated. Accordingly, the penalty imposed on them of Rs.3,00,000/- each is confirmed.
Although the name of Shri Suresh Patil has been given by Shri Rupam Ghosh and Shri Vijay Bhagat during the course of investigation, but no corroborative evidence has been produced by the Revenue apart from the statement of the co-accused to allege that Shri Suresh Patil or Shri Balaji Abaso Patil (appellants herein) were involved in the activity of smuggling of the gold in question - As no evidence has been produced by the Revenue against Shri Suresh Patil and Shri Balaji Abaso Patil, therefore, no penalty can be imposed on the said two appellants.
Appeal disposed off.
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2024 (4) TMI 699
Seizure of Gold - Extension of time u/s 110 (2) of the Customs Act for issuance of SCN - Absolute Confiscation of gold recovered during the course of search - imposition of penalties - failure to submit the documents of procurement of gold bars of foreign origin at the time of seizure in terms of Section 123 of the Customs Act, 1962 - Admissibility of statements.
Extension of time under Section 110 (2) of the Customs Act - HELD THAT:- It is found that during the course of investigation, Panchanama was drawn and in Panchanama while seizing the gold, some papers were also recovered from the possession of the Appellant No. (2), but the details of those papers were neither supplied or mentioned in the Panchanama nor recorded in the relied upon documents - further the fact noted is that as per the examination report of CRCL, the purity of gold was found 99.5%. Although the gold is having a foreign markings that does not establish that the gold is foreign gold as the foreign marking gold contains purity of 99.9%. In that circumstances, the Revenue has failed to make the reason to believe that the gold in question is smuggled in nature.
Applicability of provisions of Section 123 of the Customs Act, 1962 - HELD THAT:- As the purity of gold was 99.5%, although there is an inscription of gold being of foreign origin, which does not establish that the gold in question is of smuggled in nature. Moreover, one of the gold bar is having marked as “MMTC PAMP” that the gold bar cannot be of foreign origin and smuggled one, which itself breaks the case of the Revenue. The Revenue is also relying the marking of “MMTC PAMP” Indian marks, therefore, how can it be alleged that the gold in question is of foreign origin and smuggled one, therefore, the Revenue has failed to make out a case of reasonable belief that the gold in question is smuggled one. Consequently, the provisions of Section 123 of the Customs Act, 1962 are applicable to the facts of the case.
Admissibility of statements - HELD THAT:- The case of the Revenue is based only on the basis of statement of the Appellant No.(2) during the course of interrogation on 19.06.2016, no further corroborative evidence has been produced by the Revenue in support of their allegation that the gold in question is of foreign origin and smuggled one. Without corroborative evidence, the statement of the Appellant No.(2) dated 19.06.2016 is inadmissible.
Thus, the gold in question cannot be held liable to be confiscated. Consequently, the order for confiscation of gold in question is set aside. As the gold in question is not liable for confiscation, therefore, no penalties can be imposed on the appellants.
The impugned order is set aside - appeal allowed.
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2024 (4) TMI 698
Town Seizure - Absolute confiscation of gold - imposition of penalties on the firm as well as on the appellants - onus to prove u/s 123 of CA - HELD THAT:- It is found that it is a case of town-seizure. Moreover, the gold bars recovered were having no markings and having purity of 99.96%. In that circumstances, the Revenue has failed to discharge their onus how they form an opinion that they have a reasonable belief that the gold is of foreign origin and smuggled one. Moreover, the appellants have been able to prove by producing various documentary evidences, like, their Books of Accounts and certification from M/s G.N.H. & R [P] Ltd., Kolkata and the appellants have also produced certain “Hall Marking” issued by them from time to time. In that circumstances, the appellants were able to discharge their onus of procurement of gold through licit means in terms of Section 123 of the Customs Act, 1962.
The gold in question cannot be held liable to be confiscated. Consequently, the order for confiscation of gold in question is set aside and as the gold in question is not liable for confiscation, therefore, no penalties can be imposed on the appellants.
The impugned order set aside - appeal allowed.
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2024 (4) TMI 697
Classification of imported goods - amino acid powder - whey protein powder - to be classified them under the Customs Tariff Item (CTI) 29379090 or under CTI 21069099? - multiple assessments in the same Bills of Entry - Finalization of provisional assessment - violation of principles of natural justice - Jurisdiction - Assistant Commissioner of Customs, proper officer or not - enhancement of value of Insane Lab Psychotic (Amino Acid Powder).
Were there multiple assessments in the same Bills of Entry in these cases contrary to the provisions of section 17 as alleged by the appellant? - HELD THAT:- Assessment has to be done by the importer himself and the proper officer can (a) verify the entries made, i.e., the details provided in the Bill of Entry with regard to the nature of goods, specifications, value, etc; and (b) verify the self-assessment of the goods; and then re-assess the duty. Both the self-assessment and the re-assessment are assessments as per section 2(2). But there could be occasions when the assessment cannot be done at that stage because of some details or test report, etc. are required. In such cases, the goods are provisionally assessed to duty and the goods are cleared for home consumption and thereafter, the provisional assessment is finalized. In such a case, although the goods cease to be imported goods once they are cleared for home consumption, the assessment which was only provisional before such clearance has to be finalized. This finalization is not a new assessment but a completion of the assessment which was left incomplete before the goods were cleared.
Once an order under section 47 is issued, the goods cease to be ‘imported goods’ as per section 2(25) and therefore, no assessment of duty is possible. Thus, it puts an end to the process of assessment under section 17. Thereafter, the assessment already made can be modified either on appeal to the Commissioner (Appeals) by either side or an appeal by higher appellate authorities or it can be reopened and revised by the department by issuing an SCN under section 28 - until the order clearing the goods for home consumption under section 47 is issued, the goods continue to be imported goods and assessment and re-assessment is permissible more than once. It is this flexibility within the system which greatly facilitates trade and expedites clearances while providing an opportunity to the assessing officer to make changes in the assessment if necessitated before clearing the goods for home consumption.
Finalization of provisional assessment - Was there any violation of principles of natural justice in these cases? - HELD THAT:- As per the Customs Act, SCN has to be issued under section 28 (if a demand is being raised) or under section 124 (if the goods are to be confiscated or penalty is to be imposed). Regular assessment under section 17 or its finalization under section 18 have no provision for issue of SCN. However, if the duty is re-assessed under section 17(2) by the proper officer, unless the importer accepts such re- assessment in writing, he has to issue a speaking order within 15 days. Similarly, nothing in section 18 which deals with provisional assessment or its finalization provides for issue of an SCN. In these cases, initially, the Bills of Entry were provisionally assessed awaiting the test reports of CRCL on receiving which the assessments were finalized. The appellant was provided copies of the test reports and the appellant made written submissions which were considered - thus, no violation of either any provision of the Act or the principles of natural justice in not issuing an SCN to the appellant before finalizing the assessment.
Was the Assistant Commissioner of Customs who passed the OIO the proper officer to do so? - HELD THAT:- The provisional assessment order was issued by Assistant Commissioner, ICD, Piyala and it was finalized by the Deputy Commissioner, ICD, Piyala. A successor in office naturally completes the action by the predecessor. There are no infirmity in the order of finalization of assessment being done by the successor officer.
Were the imported goods classifiable under CTI 29379090 as claimed by the appellant or CTI 21069099 as classified in the impugned orders? - HELD THAT:- It is evident both from the test reports of CRCL as well as copies of the labels of the imported goods enclosed with the appeal that they are mixtures of amino acids and also contain vitamins and caffeine or tea extract and other similar substances. They are meant to be consumed as such or after mixing in water. They are not meant to be consumed in unlimited quantities and the recommended consumption is also indicated - Nothing in the test reports or in the labels indicates that they are either hormones or hormone-stimulating factors as is claimed by the learned counsel.
The imported goods are not protein concentrates (such as whey protein) but are mixtures of amino acids, vitamins, etc. for use by dissolving in water. In our considered view, Chapter Note 5(b) squarely puts the imported goods under heading 2106 and since they do not exactly fall under any of the other Customs Tariff Items, CTI 2106 90 99 is the correct classification.
Can the enhancement of value of Insane Lab Psychotic (Amino Acid Powder) 35 SU/220 grams be sustained? - HELD THAT:- The assistant Commissioner, finding the value of US$ 10.25 per piece much lower, rejected it under rule 12 of the Customs Valuation Rules and enhanced it to US$ 12.50 per piece based on a previous import by the appellant itself, under Rule 4 of the Customs Valuation Rules. The Commissioner (Appeals), observing that the contemporaneous value adopted was for the same product imported by the same importer, upheld the re-determination of value. We find that the appellant’s submission that the previous import by the invoice dated 22.10.2018 was for only 1176 pieces while this import by Invoice dated 24.09.2018 was for 15,624/- pieces deserves to be accepted. When 14 times as many goods are imported, a reduction in pieces per piece from US$ 12.50 to US $ 10.25 is explicable in the normal course of business. The enhancement of value cannot, therefore, be sustained.
Appeal allowed in part.
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2024 (4) TMI 696
Valuation of imported goods - Ethylene Vinyl Acetate [EVA] - rejection of declared value - redetermination of value based on the contemporaneous imports - reliability on the test report of CIPET - correctness of method of re-determination of value - HELD THAT:- The test report clearly states that the sample which was tested was from the Bill of Entry in dispute. It also specifies which standard methodology was adopted for testing each of the parameters. CIPET is the premier plastics research and training institute of the country and when it has adopted specific testing methods, there are no reason to doubt them. The appellant provided no reasons whatsoever to support its assertion that the method adopted by CIPET was incorrect. The method adopted by CIPET was ASTM E 1131 (TGA method). The appellant says ASTM D 5594-98 was the correct method and it will give the result according to its declaration. ASTM stands for American Society for Testing and Materials which lays down standards for materials as well as testing protocols which are followed world over - there are no reason to believe that the ASTM standard followed by the CIPET is incorrect.
Insofar as the other test reports submitted by the appellant are concerned, any test report is as good as the sample. For instance, if we say, blood sugar content is very high, we should specify whose blood was drawn and tested and if it was drawn fasting or post prandial. Otherwise, the blood sugar levels in the test report mean nothing. Neither of the test reports relied upon by the appellant indicates that the samples which were tested were from the goods imported against the Bill of Entry - Further, even if there is one report from the Government laboratory and another from a private party, the law laid down by the Supreme Court in Reliance Cellulose is that the test report of the government laboratory cannot be discarded in favour of some private test report - it is held in favour of Revenue and against the appellant insofar as the test report is concerned.
Valuation of imported goods - imported EVA was declared to have 18% vinyl acetate but on testing by CIPET was found to contain 22.4% vinyl acetate - HELD THAT:- If the assessing officer rejects the transaction value under Rule 12, then the value has to be re-determined under Valuation Rules 4 to 9 - The assessing officer determined the value under Rule 9 observing that the other Rules from 4 to 8 do not apply and, therefore, determined the assessee value as per the contemporaneous values as per Independent Commodity Intelligence Service (ICIS) data. Learned counsel submits that if contemporaneous values must be considered they must originate from the same area. While its imports were from Saudi Arabia, the contemporaneous values adopted were based on the values of imports from other regions - the officer had no choice but to look at the values of EVA with 22% vinyl acetate imported from other countries. After considering all such values, he adopted the lowest of such values - there are no infirmity in the determination of the assessable value in this case.
The impugned order is upheld - the appeal is dismissed.
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2024 (4) TMI 695
Revocation of Customs Broker License - forfeiture of security deposit - imposition of penalty - fulfilment of obligations as required under CHALR, 2004/CBLR, 2018 or not - undervalued goods or not - mis-declaration in import of goods in order to evade payment of customs duty - contravention of Regulations 13(d), 13(e) and 13(n) of CHALR, 2004 corresponding to 10(d), 10(e) and 10(m) of CBLR, 2018.
Violation of Regulation 10(d) - HELD THAT:- The appellants have duly filed the bills of entry as per the documents given by the importers and they were not aware of the purported mis-declaration of the imported goods. In the instant case, the violations were found by the department only on the basis of specific information received by NSPU and further investigations carried out thereafter. Hence the appellants CB cannot be found fault for the reason that they did not advise their client importer to comply with the provisions of the Act. Further, as the purported mis-declaration of imported goods was not known to the appellants, the non-compliance by the importer in respect of imported goods could not have been brought to the notice of the Deputy Commissioner of Customs (DC) or Assistant Commissioner of Customs (AC) by the appellants CB - the violation of Regulation 10(d) ibid, as concluded in the impugned order is not sustainable.
Violation of Regulation 10(e) - HELD THAT:- The documents submitted by the importer to the appellants CB included invoice, packing list, Bill of lading and country of origin certificate. The copy of these documents were perused and we find that the Commercial invoice and Bill of lading No. SHASEA03943 specifically mentions the name and address of the supplier/consignor as Hangzhou Westlake Automotive Spare Parts Group, INC., Hangzhou, China. Besides the country of origin certificate issued by China Trade Council specify that imported goods are of HS code 8708.93 of Harmonized System of international classification and that the goods are of origin of the People’s Republic of China. However, while declaring the imported goods in the B/E, the tariff classification mentioned in these documents were not cross verified by the appellants CB - the conclusion arrived at by the Commissioner of Customs (General) has merits and his findings on the violation of said Regulation 10(e) ibid is sustainable on basis of above documents.
Violation of Regulation 10(m) - HELD THAT:- Before the imported goods were taken up for investigation, the customs duty on declared value was duly paid on 13.07.2009 i.e., the same day of filing B/E. Even during investigation proceedings, right from detailed examination of the goods under panchnama proceedings, the appellants CB's representative was present and cooperated with investigation authorities. Further, voluntary statements were also given during the investigation by the partner Shri Lalit Agarwal, of appellants CB and S/Shri Sampat Phatangare, Arjun Nishit, employees of the appellants CB. The details of Retail Sale Price (RSP) in respect of all the 89 items of imported goods had been declared in the B/E. Further, there is no case of importer or any other person having complained about the inefficiency or delay in clearance of the imported goods by the appellants CB. Therefore, the conclusion arrived at by the learned Commissioner of Customs that the appellants have failed to discharge their obligations cast on him under Regulation 10(m) ibid is factually non supported by any evidence and thus it is not legally sustainable.
The appellants could have been proactive in fulfilling their obligation as Customs Broker for exercising due diligence, particularly when the import documents indicated the correct tariff classification. Thus, to this extent the appellants CB are found to have not complied with the requirement of Regulation 10(e) ibid and thus partial forfeiture of security deposit for an amount of Rs.5000/- for not being proactive for fulfilling of obligation under Regulation 10(e) ibid alone, is appropriate and justifiable.
There are no merits in the impugned order passed by the learned Commissioner of Customs (General), Mumbai in forfeiture of security deposit of Rs.15,000/- for violations under Regulations 13(d), 13(e) and 13(n) of CHALR, 2004 corresponding to 10(d), 10(e) and 10(m) of CBLR, 2018 - in view of the failure of the part of appellants in not having acted in a proactive manner in fulfillment of the obligation under Regulation 10(e) ibid, corresponding to 13(e) of CHALR, 2004 particularly when they had received the documents indicating the correct HS code for the imported goods, it is found that it is justifiable to partially forfeit the security deposit to the extent of Rs.5,000/-, which would be reasonable, commensurate with the violation and would be in line with the judgement of the Hon’ble Supreme Court in the case of COMMISSIONER OF CUSTOMS VERSUS M/S K.M. GANATRA & CO. [2016 (2) TMI 478 - SUPREME COURT], in bringing out the importance of crucial role played by a Customs Broker.
Appeal allowed in favour of appellant.
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2024 (4) TMI 694
Recovery of SAD refund sanctioned erroneously - benefit of N/N. 102/2007-Cus dated 14.09.2007 denied - mis-match between the imported goods and sale of imported goods - purchase of wooden logs but sale after processing i.e. in sawn sized - As per the department since the imported goods were not sold as such the refund is not admissible - Extended period of Limitation -HELD THAT:- Obviously when the form of the wooden timber is changed the description and quantity will be different in the sale invoice as compared to the bill of entry. However, there is no allegation of the department that the goods sold by the appellant is not imported goods but some different goods. Therefore, so long the same imported goods have been sold due to minor difference in the details will not jeopardise the substantial benefit of the refund to the appellant.
The main condition for granting the refund is that the importer should pay the VAT/sales tax which is not under dispute. Therefore, the SAD paid in lieu of sales tax has to be refunded. The main reason for difference of description is that the timber logs imported have undergone the process of sawing and sawn timber was sold. This issue has been raised against various importers of timber logs and in some of the cases the Tribunal has held that merely because the timber log is converted into sawn timber and the same has been sold, the benefit of the N/N. 102/2007-Cus cannot be denied.
As regard other discrepancies raised by the department, the difference in description and certain other details does not prove that the goods sold by the appellant on which Notification No. 102/2007 was availed is not for the imported goods but for some other goods. Therefore, due to minor difference of details between the invoice and bills of entry is at the most merely a procedure lapse which does affect the vital facts that the SAD was paid by the importer and against sale of the said goods the appellant has discharged the VAT/sales tax, therefore, there is no concrete reason for denial of the refund.
Extended period of Limitation - HELD THAT:- Admittedly the show cause notice has been issued after one year from the date of sanction of refund. The refund was sanctioned by the sanctioning authority after due verification of all the documents and if there is any difference of description, it was found that the same is not a forgery with intention to defraud the government. Therefore, it cannot be said that the appellant have suppressed the facts or mis-represent with intention to evade payment of duty. In this fact, the judgments cited by the appellant in the case of Tamil Nadu Housing Board [1994 (9) TMI 69 - SUPREME COURT] directly supports their case on limitation. Accordingly, the demand is not sustainable on limitation also.
The demand for recovery of refund already sanctioned is not sustainable. Hence, the impugned order is set aside - Appeal allowed.
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2024 (4) TMI 693
Valuation of goods - addition of franchise fee and international marketing charges incurred and of services obtained, in transaction value under the authority of rule 10 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - Penalty under section 114AA of Customs Act, 1962 - extended period of limitation - HELD THAT:- In the extant version of section 14 of Customs Act, 1962, between ‘transaction value’ and the proviso therein, as set out in section 14, is the mandate for inclusions in the price, agreed upon for the particular shipment and which is not in doubt, to render the ‘transaction value’ compatible with ‘value’ intended for assessment in section 14 of Customs Act, 1962. It also empowers framing of rules to that end besides resort to rules for attending upon circumstances in which ‘transaction value’ is not available. The valuation provision itself thus distinguishes ‘transaction value’ and ‘transaction value not being determined’ which calls for recourse to the Rules framed under that empowerment. The Rules provide for substitution when ‘transaction value’ of imported goods are not available, for inclusion in ‘transaction value’ for adjustment to conform to ‘value’ and for empowering the deeming of ‘transaction value’ as not being available. Merely owing to the remedies for these contingencies being collated in one statutory instrument, every recourse is not to be attended by taint on ‘transaction value’ meriting rejection.
The ‘franchise fee’ and ‘international marketing charges’ are to be included in the ‘transaction value’ for conformity with section 14 of Customs Act, 1962. To that extent, and in the context of not being pressed on behalf of the appellants, the includibility attains finality. On the issue of inclusion of third element in order of Commissioner of Customs, Air Cargo Complex (ACC), it has been submitted that the dispute for subsequent period has been remanded to the original authority. It is, however noted, that dropping of that element in the adjudication orders has not been appealed against by Revenue. It must be presumed to have attained finality in favour of appellant herein.
Penalty under section 114AA of Customs Act, 1962 - HELD THAT:- The decision in SHRI. T.R. VENKATADARI, SHRI. SANJAY AGGARWAL, SHRI. A. RAGHUNATHAN, SHRI. VIJAY MALLYA VERSUS COMMISSIONER OF SERVICE TAX-I, MUMBAI [2017 (10) TMI 455 - CESTAT MUMBAI], combined with the lack of any evidence of roles played by any individual, suffices to set aside that detriment. The imposition of penalty under section 114A of Customs Act, 1962 in one of the orders of Commissioner of Customs, Nhava Sheva is contrary to law and must be set aside.
Confiscation - penalty u/s 112 of Customs Act, 1962 - HELD THAT:- The confiscation ordered in all three orders and penalty ordered under section 112 of Customs Act, 1962 in two of the orders are without sufficient examination of law and fact. Likewise, the invoking of extended period in all the orders has been undertaken without proper examination of factual circumstances that enable such demand. These require re-ascertainment in accordance with our observations supra including quantification of demand legally recoverable.
All the orders are set aside and restored to the original authority for fresh proceedings that shall be limited to justification, if any, for invoking extended period and consequent quantification of tenable demand and to evaluate the grounds on which liability to confiscation are supported by law and facts with penalty under section 112 to follow only in the event of validation of confiscation.
Appeal disposed off.
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2024 (4) TMI 704
Territorial jurisdiction of Court - Confiscation of gold - levy of penalty on the petitioner - burden lies on the respondents to establish that the seized gold was smuggled in nature and there was violation of the Customs Act, 1962 by the petitioner or not - seeking release of seized gold - HELD THAT:- This Court observes that the preliminary objection of the respondent regarding the territorial jurisdiction of this Court deserves acceptance and the same is hereby accepted, because after a perusal of the record as a whole, it is clear that the entire proceedings, including confiscation, recording of the statements, hearing of the case etc. were conducted at Shillong (Meghalaya), and that, the gold biscuits i.e. the articles in question, never reached the territory of the State of Rajasthan.
Therefore, only on count of the fact that the residence of the petitioner is situated in the State of Rajasthan, the territorial jurisdiction does not lie with this Court. While making such observations, this Court is conscious of the fact that the present matter is quite old, but the same also cannot persuade this Court to hear and decide the case on its own merits, for lack of jurisdiction, and that, in reiteration, not even a fraction of the cause of action arose in the State of Rajasthan, so as to persuade this Court to make the effective adjudication of the case. Moreover, no interim order is operating in the present case.
This Court does not find it a fit case so as to grant any relief to the petitioner in the present petition - petition disposed off.
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2024 (4) TMI 703
Jurisdiction - DRI - proper officer to issue SCN - power of assessment under Section 17 - When Section 28(11) of Customs Act, 1962, envisages that all persons appointed as officers of Customs under sub-Section (1) of Section 4 before the 6th day of July 2011, shall be deemed to have and always had the power of assessment under Section 17 and shall be deemed to have been and always had been the proper officers for the purpose of this Section, whether CESTAT is correct in disputing/questioning the jurisdiction of the DRI to issue show-cause notice?
HELD THAT:- The issue raised in this appeal had already been dealt with by this Court in THE COMMISSIONER OF CUSTOMS VERSUS SHRI SANKET PRAFUL TOLIA [2021 (6) TMI 432 - MADRAS HIGH COURT] where the same substantial question of law has been raised, and it was held that The appeals are restored to the file of the Tribunal with a direction to keep the appeals pending and await the decision of the Honourable Supreme Court.
The impugned order is set aside - appeal allowed.
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2024 (4) TMI 702
Summons issued to attend the office of the DRI - seeking permission for presence of their advocate and videography of the Petitioner’s interrogation - HELD THAT:- We have perused the Judgment of this Court passed in Ronak Kumar, Jasraj Jain and Chetan Kumar [2022 (2) TMI 470 - BOMBAY HIGH COURT] as well as the Judgment passed by this Court in Gagan Jot Singh [2024 (3) TMI 747 - BOMBAY HIGH COURT] Considering the prayers made in the Petition, we do not find any impediment in permitting the Petitioner’s advocate to remain present when the Petitioner is summoned for interrogation by the Respondent No. 2. The Petitioner’s advocate to remain present at a visible but not audible distance. We also permit videography of the said interrogation, however, at the cost of the Petitioner.
We make it clear that if the Petitioner’s advocate is unable to remain present or if the person video graphing is not present, that will not be a ground for the Petitioner, not to remain present, before the Respondent No. 2–DRI, when summoned.
Writ Petition is accordingly allowed and is accordingly disposed of.
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Insolvency & Bankruptcy
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2024 (4) TMI 692
Dismissal of application seeking direction to release payment as an Operational Creditor, for the services rendered during the CIRP period - it was held by NCLAT that In view of the aforesaid discussion and the fact that Resolution plan was approved way back on 28.02.2020 by the Hon’ble Supreme Court and has been implemented, we do not find any merit in the present appeal and the same is hereby dismissed.
HELD THAT:- There are no reason to interfere with the impugned order - appeal dismissed.
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2024 (4) TMI 691
Prayer for condonation of delay - it was held by NCLAT that Our jurisdiction to condone the delay being limited to 15 days and we having held that benefit of Section 14 of the Limitation Act cannot be extended to exclude period during which I.A. No. 2337 of 2023 and I.A. No. 3270 of 2023 remained pending before the Adjudicating Authority, the Delay Condonation Applications which prays condonation of 74 days delay deserves to be dismissed.
HELD THAT:- There are no reason to interfere with the order of the National Company Law Appellate Tribunal since no substantial question of law is involved in the appeal - appeal dismissed.
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2024 (4) TMI 690
CIRP - Preferential Transaction - transactions infringing section 43 of the IBC - it was held by NCLAT that In the background of the report of ‘Forensic Audit’ of the ‘Corporate Debtor’, it is quite clear that the said transactions amounting to Rs.7,81,352 are ‘preferential transactions’, as defined under section 43 of the IBC - HELD THAT:- There are no good ground and reason to interfere with the impugned judgment and hence, the present appeal is dismissed.
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PMLA
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2024 (4) TMI 688
Seeking grant of anticipatory bail - Money Laundering - twin conditions of Section 45 of the PMLA Act satisfied or not - main accused was exonerated on identical allegations by the Adjudicating Authority - HELD THAT:- It is not in dispute that the FIR was registered on 19.02.2010 whereas the respondent filed a complaint arraying the applicant as accused in ECIR on 04.01.2021 i.e. after 10 years. From the summons issued to the applicant, it is quite vivid that she was permitted to appear through an authorized person and it cannot be said that she did not cooperate in the investigation. According to the proviso appended to Section 45 of the PMLA Act, a woman may be granted anticipatory bail.
The judgment passed by the Hon’ble Supreme Court in the matter of Satender Kumar Antil [2022 (8) TMI 152 - SUPREME COURT] cannot be lost sight of as the applicant is a lady and she cooperated in the investigation of the matter and other co-accused persons against whom similar allegations were made, have already been granted anticipatory bail by the Hon’ble Supreme Court and by this Court, therefore, in the considered opinion of this Court, the present is a fit case to extend the benefit under Section 438 of Cr. P.C. to the applicant.
The anticipatory bail application is allowed and it is directed that in the event of arrest of the applicant in connection with the aforesaid offence, she shall be released on anticipatory bail on her furnishing a personal bond for a sum of Rs. 50,000/- with one surety in the like sum to the satisfaction of the arresting officer on the fulfilment of conditions imposed - bail application allowed.
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2024 (4) TMI 689
Money Laundering - summons issued by the petitioner, ED under Section 50 of the Prevention of Money Laundering Act, 2002 (PMLA) - HELD THAT:- From the documents produced on record today, it appears that the said respondents – Collectors instead of respecting this Court’s order, did not appear in person and filed their replies to the summons dated 01.03.2024 issued by the ED, stating inter alia that the information and data sought for is maintained by the other executive wings and would be required to be collected from different departments and offices located at various places and the process will require some time.
When the Court had passed the order directing them to appear in response to the summons issued by the ED, they were expected to obey the said order and remain present before the ED. By not following the order, they have created an impression that they do not have respect either for the Court, or for the law, much less for the Constitution of India. Such an approach is strongly deprecated.
It is directed that the respondents – District Collectors shall remain personally present and appear before the ED on 25.04.2024 and respond to the summons issued under Section 50 of the PMLA in respect of the information /data sought therein, failing which, strict view shall be taken in the matter.
List on 06.05.2024 for reporting the compliance.
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2024 (4) TMI 687
Money Laundering - Proceeds of crime - attachment of moveable property of the appellant - HELD THAT:- The perusal of the provision of Section 5 of PMLA reveal that the attachment of the property is warranted when it is involved in money laundering and the person is in possession of the proceeds of crime and such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation. The attachment of the property thus pre-supposes not only it to be proceeds of crime but apprehension of its concealment or transfer, etc.
In the instant case, it is not in dispute that Bund Garden Police Station has frozen the bank account No.920020062949058 of TIET on 29.08.2021. It is for the amount of proceeds of crime to the tune of Rs.7.96 crores and additional amount is of Rs.1.5 crores for which a property of the appellant in the connected appeal has been attached. Till the order of Competent Authority of police remains in force, there cannot be any likelihood of transfer or alienation of the said amount by the appellant. In view of the above, there was no reason for the respondent to attach the TIET Bank account and accordingly we find that attachment was caused by the respondent without there being an element of any apprehension or alienation or to deal with the property in a manner to frustrate the confiscation.
The proceeds of crime involved in this case is for a sum of Rs.8,67,98,250/- and the amount available in the TIET account is of Rs.7.96 crore, however attachment was to bemade to the extent of Rs.8,67,98,250/-and accordingly a property worth of Rs.1.50 crores of the appellant in the connected appeal was attached. The attachment of the amount in this case is of Rs.7,17,98,250/- - Since we have caused interference in the order of attachment and its confirmation in reference to Section 5(1) of the Act of 2002 as a greater amount than attached has been frozen by the Bund Garden Police Station, Pune, our order in favour of the appellant would operate till amount of Rs.7.96 crores remains frozen with the Bund Garden Police Station and is not interfered or withdrawn.
Appeal disposed off.
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2024 (4) TMI 686
Money Laundering - provisional attachment order - Without there being any evidence to prove a case of money laundering by the appellant, the order of attachment has been confirmed by the Adjudicating Authority - violation of principles of natural justice - HELD THAT:- As per the accounting system, payment towards the supply of material has to be made by the firm to whom supplies have been made. It cannot by a stranger firm unless proper arrangements in writing are made. The facts of this case are quite alarming. The transaction to deposit the amount in the bank account of the appellant was not under normal circumstances but was at the time of demonetization of money by the Govt. of India. Although the appellant is not an accused but the proceeds of crime has been channelized to him, thus attachment cannot be held to be illegal.
The detailed charge sheet has not been quoted which otherwise refers further facts as to how demonetized money was channelized in the bank accounts of the companies and ultimately it came in the account of appellant.
The appellant no doubt submitted the invoices to show supply of cloths to Ajay Kumar Jain but he has not produced any material to show arrangement for payment towards the supply to Ajay Kumar Jain through the bank account of three non-existing companies. The appellant has shown his innocence for receipt of the money towards its supply to Ajay Kumar Jain but it cannot be accepted. The appellant was knowing receipt of money through the firms to whom he never supplied any material.
There are no illegality in the impugned order - appeal dismissed.
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2024 (4) TMI 718
Seeking grant of pre-arrest bail - Money Laundering - predicate offence - proceeds of crime - illegal gratification - section 45 of PMLA - HELD THAT:- In the case of ROHIT TANDON VERSUS THE ENFORCEMENT DIRECTORATE [2017 (11) TMI 779 - SUPREME COURT], three-judge bench of the Hon'ble Apex Court has held that such statements are admissible in nature and can make out a formidable case about involvement of accused in the offence of money laundering.
Furthermore, the challenge to Section 50 of PMLA was rejected by the Hon'ble Apex Court in case of Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT], wherein it was held that the statements recorded under Section 50 of PMLA cannot be compared to statements under Section 67 of NDPS Act, and that such statements were not in violation of Article 20(3) of the Constitution of India - thus, at the stage of adjudicating an anticipatory bail application, the statements recorded under Section 50 of PMLA, will be relevant to be considered and appreciated, alongwith other evidence collected by the investigating agency, for the purpose of ascertaining whether the offence of money-laundering is prima facie made out against an accused or not.
There is no doubt that a person is entitled to all remedies, reliefs and fundamental rights available to him under the Constitution and law, such as to seek anticipatory bail, when apprehending arrest by the investigating agency or to file a petition challenging validity of summons issued to him. However, to hold that filing of a petition or an application, which is not diligently pursued, would amount to a justification for not joining investigation despite repeated summons and notices being received from the law enforcement agency, will be a dangerous proposition.
The Courts of law cannot allow a legal strategy, commonly used by a person, to obstruct investigation or join investigation as that would amount to stripping the investigating agency of their valuable right to summon a person under the law, to give information about a suspected crime especially under the law, which has been upheld by the Hon'ble Apex Court as constitutional and not illegal.
The investigating agencies are involved in investigating offences, as per law, and rather it is the boundened duty of every citizen to join investigation when called for. Needless to say, this Court should not be laying down that a citizen will not have a right to seek anticipatory bail, however, to make that a ground for not appearing before the investigating agency cannot be permitted by Courts.
Whether non-co-operation with the investigation agency will come in way of grant or refusal of anticipatory bail? - HELD THAT:- The State has a right to summon a person, through the investigating agencies, to ensure rule of law and bring those who are in conflict with law and in violation of law, within the confines of law. The power of Directorate of Enforcement to summon a person is circumscribed under Section 50 of PMLA and as held by Hon'ble Apex Court in case of Vijay Madanlal Choudhary and Directorate of Enforcement v. State of Tamil Nadu [2024 (4) TMI 667 - SC ORDER], a person so summoned under Section 50 is bound to respect the same - Not responding to or attending to the notices or summons of an investigating agency would amount to non-cooperation with investigation.
As a public servant i.e. a person who is in service of public, especially the one who professes that his whole life is for public service, he should have cooperated with the investigation. Moreso, since the allegations are also of misuse of public funds to his own use by purchasing properties through his associates as well as other irregularities committed by him as Chairman of the Delhi Waqf Board, it becomes crucial that he joins and cooperates with investigation.
When this Court analyzes the material available on record and the investigation conducted so far, it appears that the basic purpose for calling or summoning the applicant herein in the present ECIR is that the evidence collected so far, be it the diaries seized during investigation or the statements recorded under Section 50 of PMLA, have revealed that the properties in questions were purchased from money, including cash amount of about Rs. 27 crores, which is the proceeds of crime generated by the applicant - Non-joining of investigation on this ground therefore, cannot be held in the favour of the applicant/accused since the assessment of evidence gathered by the investigating agency will ultimately be put before the Court of law.
Balancing the right of accused and right of investigating agency - HELD THAT:- Right to life, liberty and security of a person is paramount under the Constitution of India and in the criminal law in India. However, at the same time, the powers of the investigating agency to investigate an offence wherein the joining and providing information by a person is required, sending of summons cannot amount to infringing one's right to freedom and personal liberty on the pretext that the person concerned has apprehension of being arrested. For that, he has a separate remedy to take recourse too, in the form of anticipatory bail as well as regular bail before the Court of law or quashing of summons on whatever ground he deems appropriate - Thus, a person in India has a fundamental right to liberty and life, and the shield of law remains available even to an accused against whom an offence is alleged and his liberty can be curtailed only, as per law. His right against arbitrary detention or arrest to be informed of specific offence, he is accused of, at appropriate stage of investigation, protection against self incrimination, presumption of innocence till held guilty, bail not jail being a rule etc. remain available to an individual who is suspected accused.
Undoubtedly, every such person as any other citizen of India is entitled to the protection of law, however, the law will also equally apply to him, subject to any privilege if at all, in a case applicable to him. Needless to say, the protection as per law which is available to all citizens is also available to such members and public figures. Their standing in lives or being an elected representative of the people does not create a class or elite class entitling them to different treatment being extended under the same law - an MLA or a public figure is not above the law of the land.
In the realm of governance and public service, the role of an elected official carries significant weight and responsibility. As an MLA, the applicant stands as a figure of authority and influence, entrusted with representing the interests and aspirations of their constituents. It is crucial to acknowledge that the actions of such public figures are observed closely by those they serve, often looking up to them for guidance and leadership. Thus, the applicant's failure to cooperate with the investigating agency sets a perilous precedent.
The seizure of diary by the investigating agency which reveals that the properties in question were purchased for about Rs. 36 crore out of which Rs. 27 crores were paid in cash, and out of the total amount of Rs. 36 crores, an amount of Rs. 8.33 crores was paid by the present applicant - Recovery of one Sale Agreement which shows the sale consideration as Rs. 36 crore, as against one alleged false and fabricated agreement which shows the sale consideration as Rs. 13.40 crore which has been allegedly prepared at the behest of present applicant to conceal the proceeds of crime and misguide the investigating agency.
The material evidences so gathered during the course of investigation under PMLA revealed that the applicant Amanatullah Khan has acquired huge cash amounts, being the proceeds of crime out of criminal activities relating to his corrupt and illegal activities relating to illegal recruitment of the persons in Delhi Waqf Board, leasing out the properties of Delhi Waqf Board in unfair & illegal manner, misappropriation of Delhi Waqf Board funds including others while being the public servant i.e. Chairman of Delhi Waqf Board and MLA from Okhla Legislative Assembly of Delhi during the period from 2015 onwards. In order to launder the same, he had hatched a criminal conspiracy along with his close associates and others and in pursuant thereupon, he had invested his ill-gotten money i.e. proceeds of crime, in the immovable properties through his associates namely Zeeshan Haider, Daud Nasir and others.
The material brought before this Court at this stage is sufficient to attract bar under Section 45 of PMLA, and it prima facie shows the offence of money laundering being committed by the present accused/applicant - this Court does not find it a fit case for grant of pre-arrest bail to the present applicant Amanatullah Khan.
The present bail application stands dismissed.
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2024 (4) TMI 667
Money Laundering - grant of interim stay of the operation of the impugned summons issued by the petitioner – ED - Section 50 of PMLA - HELD THAT:- From the section it clearly transpires that the concerned officers as mentioned therein, have the power to summon any person whose attendance he considers necessary, either to give evidence or produce any record during the course of investigation or proceeding under the PMLA. Since, the petitioner – ED is conducting the inquiry / investigation under the PMLA, in connection with the four FIRs, and since some of the offences of the said FIRs are scheduled offences under PMLA, the same would be the investigation/proceeding under the PMLA, and the District Collectors or the persons to whom the summons are issued under Section 50(2) of the Act are obliged to respect and respond to the said summons.
The operation and execution of the impugned order is stayed, pending the present SLPs. The District Collectors shall appear and respond to the summons in question issued by the petitioner – ED on the next date, that may be indicated by the ED.
List after four weeks.
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Service Tax
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2024 (4) TMI 683
Scope of SCN - Classification of service - Club or Association services or not - services of licencing the copyrights in musical works to its members who had only paid subscription fee of meager amount and licensing of copyright in musical work - HELD THAT:- The Show-cause cum demand notice lacks clarity about the recipient of the service and the nature of services provided to it allegedly by the appellant.
The nature of service provided by the appellant was stated to be administration of copyrights owned by its members and it is in the nature of facilities or advantages extended to its members. However, going by the factual background, it is noticed that appellant is a company and not a Society registered under Society Registration Act but it collects monthly subscription fee from its members. Apart from this amount no other consideration flows from the members/ copyright owners to the appellant and there is no denial of the fact that entire collection from the membership had never exceeded the threshold prescribed for registration of a Company under Service Tax.
Clause 29A of Article 366 of Constitution of India defines all services associated with sale of goods or lease of the kind as deemed sale and as because Intellectual Property, which in the present case is copyright and other related rights in the nature of performance, play etc. that is not in tangible form, the same may not be included under the definition of services under Section 65B (44 read with Section 66E) but the very fact that Section 65 (55b) that defines “Intellectual Property Services” expressly excludes copyright from the category of Intellectual Property services and there is also no demand against such licence fee/ royalty collected by the appellant from the customers/ users, the order of the Commissioner is unsustainable in both law and facts. Further demand being confirmed against administrative expenditure that was deducted from the membership fee and royalty/ licence fee by a non-profit organization namely assesse, consideration should also be treated as ‘Nil’ for the purpose of taxation.
The order passed by the Commissioner of Service Tax-VI, Mumbai is hereby set aside - Appeal allowed.
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2024 (4) TMI 682
Time limitation - Levy of service tax - Manpower Supply Service - secondment of employees by the Appellant to its associated Foreign Counterpart at Germany on reverse charge mechanism - suppression of facts or not - HELD THAT:- In the present case it could be noticed that show-cause notice was issued on 16.10.2015 up to the end of financial year 2013-2014 during the relevant period and in view of clear provision contained in Section 73(1) read with 73(6), the normal period for making demand through show-cause notice was 18 months from the relevant date and if any fraud, collusion, wilful misstatement, suppression of facts, contravention of any of the provisions of this Chapter or the Rules made thereunder with intent to evade payment of Service Tax is noticed in view of proviso to Section 73(1), Central Excise Officer can served notice for demand that could be extended up to 5 years. This being the statutory provision, the notice of demand being signed on 16.10.2015 and dispatched thereafter cannot be considered to have been sent within 18 months of the end of financial years, up to which demand is made i.e. up to 31st March 2014 - the show-cause notice is not issued in conformity to the law and, therefore, it was required to be quashed before initiation of adjudication proceeding.
Appellant having filed its return for the said period on 25.10.2013, in view of clear provision contained in Section 73(6)(i)(a) wherein it has been mentioned that for the purpose of determination of “relevant date”, periodical return filed on the date showing particulars of Service Tax paid during the period to which return relates would be taken for the purpose of calculation of period of limitation of 18 months, which would end on 25.01.2015 the entire demand is barred by limitation.
The contention made by the Appellant that this appeal is hopelessly barred by the period of limitation, agreed upon, as the entire proceeding is carried out in gross violation of the position of law and deviation in any form from the statutory provision is impermissible.
The order passed by the Principal Commissioner of Central Excise & Service Tax, Pune-I is hereby set aside - Appeal allowed.
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2024 (4) TMI 681
Non-payment of service tax - commercial and industrial construction service - rendering of service even before registering with the department on 11.6.2007, but it had not paid any service tax on such services - non-payment of service tax on some projects/contracts on the ground that they were charitable/educational hospitals or projects - non-payment of service tax on certain residential construction on the ground that they were residential units - collection of some amounts as ‘service tax’ in some of the running bills on these projects, but did not deposit these amounts in the exchequer - non-inclusion of value of materials supplied free of cost by its clients in the value of taxable services - non-payment of service tax at all in respect of the services rendered by it from April 2009 to June 2010.
Demand for the services provided prior to 1.6.2007 are concerned, the demand is under the head ‘commercial and industrial construction service’ - HELD THAT:- During this period, the appellant was not registered with the service tax. From 1.6.2007, the appellant is registered under the head ‘Works Contract Service’ and paid service tax on the service. There is no dispute that the nature of the service was the same both before and after 01.06.2007 - ‘Works Contract Service’ is a contract which involves rendering of service along with transfer or deemed transfer of property in goods. For instance, if a builder constructs a building under a contract including the cost of materials, not only does he render the service but he also transfers the property in the material used such as bricks, steel, cement, etc. while rendering the service. Such services are distinct from contracts for sale of goods or contracts for rendering services and are known to commerce as a separate species of contracts. Such contracts became chargeable to service tax as ‘works contracts service’ w.e.f 1.6.2007 and there was no charge of service tax on such services prior to 01.06.2007 as held by the Supreme Court in COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] - the demand of service tax on works contracts executed prior to 1.6.2007 under the head ‘commercial or industrial construction service’ cannot be sustained.
Demand for the period after 1.6.2007 - suppression of facts or not - time limitation - HELD THAT:- The appellant cannot claim exemption from service tax on the ground that its client was exempted under some provision of income tax. If it wants to claim exemption from service tax, it is its responsibility to show how it was covered by an exemption notification or exemption clause under the provisions of the service tax. Similarly, if it wants to claim exemption from income tax, it has to show how it is exempted under the laws of income tax. However, it is found from Annexure B(1) of the SCN that the amounts which it had received from these three organisations were received clearly beyond the normal period of limitation and hence any demand on this count is hit by limitation.
Construction of residential complexes - HELD THAT:- It is found that the demand for the normal period of limitation was not under “construction of residential complexes” but only under the head of ‘Works Contract Service’ and hence this submission is also irrelevant.
Composition scheme - demand raised on the gross amounts received without any abatement towards the value of the goods - HELD THAT:- The reason for not allowing abatement as recorded in paragraphs 44 and 45 of the impugned order is that the appellant had not opted for payment of service tax under Works Contract Composition scheme. In this factual matrix, when it is undisputed that goods were used in execution of the contracts and the value of the goods is not available, it will not be open to the department to charge service tax on the entire gross amounts received including the value of the good transferred. Service tax cannot be charged on the value of the goods sold or otherwise transferred as a part of the contract. It is found that even if the appellant had not opted for the composition scheme by submitting a letter in writing as required during the relevant period, if it is otherwise eligible for the benefit of the composition, it cannot be denied for the technical fault of not submitting a letter within time. Accordingly, the demand for the normal period of limitation under this head is confirmed allowing abatement under the Composition scheme.
The last submission on merits of the case is that the impugned order confirmed demands on the value of the free materials supplied by the clients of the appellant - HELD THAT:- It is found from the SCN that demands have been made on this account. It has been decided by the larger bench of this Tribunal in M/S BHAYANA BUILDERS (P) LTD. & OTHERS VERSUS CST, DELHI & OTHERS [2013 (9) TMI 294 - CESTAT NEW DELHI-LB] that the value of supplies made free of cost by the service recipient cannot be included in the taxable value for calculating service tax. This decision was upheld by the Supreme Court in COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT]. Therefore, the demand on this account needs to be set aside.
Appeal allowed in part.
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2024 (4) TMI 680
Levy of service tax - works contract service - construction of a new building or a civil structure or a part thereof or a pipeline primarily for the purpose of commerce and industry - Boundary wall is a part of the building or is it a civil structure or a part of the building or civil structure? - Extended period of limitation - penalties - HELD THAT:- Admittedly, service tax was payable on the construction of a new building or a civil structure or a part thereof. The appellant’s contention is that boundary wall is not a part of the building nor is it a civil structure. This submission cannot be accepted. A boundary wall is invariably a part of the building or a civil structure. It needs to be noted that service tax was payable not only when the entire building or a civil structure is built but it was also payable when a part of it is built - the submission of the appellant that the boundary wall is not a part of the building and is also not a civil structure, cannot be agreed upon. Therefore, regarding the demand on merits, the issue is decided against appellant.
Extended period of Limitation - Suppression of facts or not - HELD THAT:- During investigation itself, the appellant agreed and paid the service tax. Had the appellant been discharging its obligations and filing ST 3 returns, it would have been the responsibility of the department to scrutinise them with the records and raise a demand. The appellant in this case neither disclosed the rendering of this service nor paid service tax on it nor filed the returns. This qualifies as suppression of facts with intent to evade payment. Therefore, the extended period of limitation was correctly invoked in this case.
Imposition of penalties under section 77 and 78 of the Finance Act - HELD THAT:- Whenever any service tax is not paid by reason of fraud or collusion or wilful misstatement or suppression of facts or violation of the provisions of the Act or Rules with an intent to evade payment of service tax, penalty under section 78 can be imposed. In other words, the same elements which make the extended period of limitation invokable also make the assessee liable to penalty under section 78 - Since it is already held against the appellant on the question of extended period of limitation, there are no reason to take a different view with respect to penalty under section 78. Section 77 is a general penalty for offences. Since the appellant had failed to pay self assess service tax correctly and pay it and file returns, we find the penalty of Rs. 10,000 on the appellant under section 77 is also just and fair.
The impugned order is upheld - Appeal dismissed.
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2024 (4) TMI 679
Classification of service - Business Support Service or Renting of immovable property - appellant is an operator of individual or multiple cinemas screen at multiple complexes as owner/lessee having ownership/lease hold rights - HELD THAT:- There is no service as such which has been provided by the appellant to the distributors. The appellant has agreed for exhibiting the distributor’s film without any interference of the said distributors. The distributors had actually granted licence to exhibit the theatrical exihibition rights of the film in the lincesed theatre.
As far as the time and number of shows are concerned, the distributor has agreed for getting share in the Revenue collected from the sale of the tickets that to within 10 days of completion of every week to which it pertains. The agreement clarifies that it is the transfer of copyright by the distributor in favour of the appellant to the exclusion of all including the owner of the said copyright.
The issue is otherwise no more res-integra. Various decisions have clarified that Revenue sharing arrangement in itself does not necessarily imply provision of service, unless service provider and service recipient relationship is established - reliance can be placed in DELHI INTERNATIONAL AIRPORT P. LTD. & MUMBAI INTERNATIONAL AIRPORT P. LTD. VERSUS UNION OF INDIA & ORS. [2017 (2) TMI 775 - DELHI HIGH COURT] - there is otherwise nothing on record to establish the said relationship.
There are no reason to differ with the findings arrived at in the Order-in-Appeal, the same is accordingly upheld - appeal of Revenue dismissed.
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2024 (4) TMI 678
Classification of service - Business Auxiliary Services or not - process of washing of coal - period 16.06.2005 to 31.03.2007 - HELD THAT:- The decision of the Tribunal in ARYAN ENERGY (P) LTD. VERSUS COMMR. OF CUS. & C. EX., HYDERABAD-I [2008 (5) TMI 248 - CESTAT BANGALORE], M/S SPECTRUM COAL AND POWER LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIPUR [2012 (9) TMI 24 - CESTAT, NEW DELHI] and M/S. ARYAN COAL BENEFICATIONS PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX NEW DELHI [2012 (9) TMI 205 - CESTAT, NEW DELHI] have consistently held that the activity of beneficiation of coal by the assessee is part of mining activity and, therefore, would be liable to service tax only w.e.f. 1.6.2007 and once it is established that the activity is mining, it cannot be taxed under the “Business Auxiliary Service” for the period prior to 1.6.2007.
It is found that it is settled by the judicial pronouncements that the activity of beneficiation/washing of coal is a taxable service in relation to mining of minerals only w.e.f. 1.6.2007 and, therefore, the Commissioner rightly decided that no demand can be made by the Department for the period prior to 01.06.2007 under the category of “Business Auxiliary Service”.
There are no reasons to differ from the settled law and which is squarely applicable in the facts of the present case - The impugned order is accordingly affirmed - appeal filed by the Revenue stands dismissed.
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2024 (4) TMI 677
Classification of services - mining services or not - hiring pay loader and tipper/dumper for loading - HELD THAT:- The findings of Bombay High Court in the case of INDIAN NATIONAL SHIPOWNERS' ASSOCIATION VERSUS UNION OF INDIA [2009 (3) TMI 29 - BOMBAY HIGH COURT] have been quoted by the Adjudicating Authority and it has been held that the transportation of coal as performed by the Assessee herein on tippers/trucks upto siding has no direct/indirect nor any proximate relation with the mining of coal (mining activity).
The issue is no more res-integra, the authorities have rightly followed the judicial discipline while applying the ratio of the Hon’ble Supreme Court’s decision in COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR VERSUS SINGH TRANSPORTERS [2017 (7) TMI 494 - SUPREME COURT]. Hence, there are no infirmity in the order under challenge.
The order under challenge is hereby upheld - the appeal filed by the department is dismissed.
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2024 (4) TMI 676
Recovery of service tax alongwith interest and penalty - Business Auxiliary Service - the facts and the law and binding judicial precedents on the identical issue not properly appreciated - violation of principles of natural justice - Extended period of limitation - HELD THAT:- The identical issue has been considered by the Tribunal in the case of M/S S.R. MEDICAL AGENCIES VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-II [2023 (8) TMI 1150 - CESTAT CHANDIGARH] and this Tribunal after considering all the submissions of both the parties has held This issue has been considered by various benches of the Tribunal and has consistently been held that the assessee is not liable to pay service tax under the category of ‘Business Auxiliary Service’.
The impugned order is not sustainable in law and therefore, the same is set aside - appeal allowed.
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2024 (4) TMI 684
Maintainability of petition - availability of alternate remedy before the appellate Commissioner under Section 85 of the Finance Act, 1994 - marginal delay in filing the present Writ Petition - HELD THAT:- Since the petitioner has an alternate remedy before the appellate Commissioner under Section 85 of the Finance Act, 1994, I am inclined to dispose of this Writ Petition by giving liberty to the petitioner to file statutory appeal before the appellate Commissioner within a period of 30 days from the date of receipt of a copy of this order subject to the petitioner depositing 20% of the disputed tax considering the delay involved. If such an appeal is filed by the petitioner within 30 days from the date of receipt of a copy of this order together with pre-deposit of 20% i.e., 10% over and above what is contemplated under Section 35-F of the Central Excise Act, 1944, the appeal shall be entertained and disposed by the Commissioner on merits and in accordance with law.
Since the Deputy Commissioner of GST & Central Excise, Madurai I Division, has been arrayed as the sole respondent in this Writ Petition, the Commissioner of CGST & Central Excise, Madurai – I Division, No.5, V.P. Rathinasamy Nadar Road, Bibikulam, Madurai – 625 002, is suo motu impleaded as second respondent in the Writ Petition.
Petition disposed off.
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2024 (4) TMI 675
Levy of penalty upon both the appellants, being the Director/ Authorized Signatory in terms of Section 78A of Finance Act, 1994 - benefit of Section 124 (1) (b) of SVLDRS - HELD THAT:- Apparently and admittedly, it was the main co-noticee i.e Wisdom Guards Pvt. Ltd. who has been issued the discharge certificate (SVLDRS Form No. IV) under the SVLDRS, Scheme, 2019. There are no such provision in the scheme which may extend immunity to the other co-noticees because of the discharge certificate in favour of the one of the co-noticee. Hence, the said contentions of the appellant not agreed upon.
Coming to the another aspect of Section 78A of Finance Act to have been introduced only w.e.f. 10.05.2013, we hold, based upon the settled position of law, that all provisions of statute have to be given prospective effect unless and until, they are expressly made to apply retrospectively. Section 78A of the Act is perused. There is nothing in the Section to reflect that the section has to be applied retrospectively - the section can be invoked w.e.f. 10.05.2013. The period involved in the present appeal is 2011-2012 to 2013-2014. Hence, it is clear that the periods is pre as well as post the insertion of Section 78A in the impugned Act - there are no reason to extend any benefit of said provisions to the appellant.
Appeal allowed in part.
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2024 (4) TMI 674
CENVAT Credit - non-payment of amount equivalent to 6% on the value of exempted services as required under Rule 6 (3) (i) of Cenvat Credit Rules, 2004 - HELD THAT:- In the present case, it is observed that, undisputedly entire Cenvat credit taken/availed by the appellant during the period under dispute, whether in respect of taxable service or exempted service, have been deposited along with interest well before the issuance of the show cause notices and got appropriated by the adjudicating authorities vide the impugned order. The law in this respect is settled that if credit originally availed is reversed subsequently it would amount to as if not credit has been awaited.
Support drawn from the decision of Hon’ble Supreme Court in the case of CHANDRAPUR MAGNET WIRES (P) LTD. VERSUS COLLECTOR OF C. EXCISE, NAGPUR [1995 (12) TMI 72 - SUPREME COURT]. It is observed that the Commissioner (Appeals) has considered the decision of this Tribunal as well as of Hon’ble Madras High Court which are based on the aforesaid decision of Hon’ble Supreme Court.
There is no infirmity in the order under challenge, the same is accordingly upheld - Appeal of Revenue is dismissed.
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2024 (4) TMI 673
Recovery of short paid service tax alongwith interest and penalty - Valuation of Security Agency Service - inclusion of various charges like, accommodation, vehicle running and maintenance, Telephone, Stationary and other expenses, in the gross value for calculation of service tax liability - HELD THAT:- The principal Bench of the Tribunal recently in the case of SR. COMMANDANT CENTRAL INDUSTRIAL SECURITY FORCE (BHEL UNIT) BHARAT HEAVY ELECTRICALS LTD. VERSUS COMMISSIONER OF CUSTOMS, & CENTRAL EXCISE [2023 (4) TMI 608 - CESTAT NEW DELHI] while relying upon the another decision of the Tribunal in the case of M/S BHARAT COKING COAL LTD. VERSUS COMMR. OF CENTRAL EXCISE & S. TAX, DHANBAD [2021 (9) TMI 23 - CESTAT KOLKATA] held that Allahabad Bench of the Tribunal in the case of CENTRAL INDUSTRIAL SECURITY FORCE VERSUS COMMISSIONER OF CUSTOMS, C.E. & S.T., ALLAHABAD [2019 (1) TMI 1661 - CESTAT ALLAHABAD], has already settled the issue in favour of the appellant to hold that expenses incurred towards medical Services, vehicles, expenditure on Dog Squad, stationery expenses, telephone charges, expenditure incurred by the service recipient for accommodation provided to CISF etc are not includible.
There are no reason to differ from those findings. Findings otherwise stands acknowledged by the Department itself. Resultantly, the order under challenge has been wrongly confirmed the impugned demand in total ignorance of the above said decisions - the impugned order set aside - appeal allowed.
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2024 (4) TMI 685
Condonation of delay of 1776 days in filing the Civil Appeal - Rectification of mistake - mistake apparent of the face of record or not - Refund claim - export of services or not - it was held by High Court that The Tribunal’s order rejecting application of the petitioner to rectify mistake apparent from record in its order cannot be faulted - HELD THAT:- Issue notice on the application for condonation of delay as well as on the Special Leave Petition and the Civil Appeal.
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Central Excise
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2024 (4) TMI 671
Recovery of CENVAT Credit alongwith interest and penalty - input - goods used in the fabrication of various machineries, support structures, platforms for machineries and equipments etc. used in the factory - HELD THAT:- Undisputedly, the appellants during the relevant period used the aforesaid inputs in their factory in the fabrication / manufacture of various equipments, machineries, plants etc. and support structures holding the capital goods. The learned Commissioner in the impugned order following the judgment of the Larger Bench of this Tribunal in VANDANA GLOBAL LTD. VERSUS CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] decided the issue against the appellants holding that credit is not admissible on the aforesaid inputs used in the fabrication of various capital items.
The impugned orders are devoid of merit and accordingly the same are set aside - Appeal allowed.
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2024 (4) TMI 670
CENVAT Credit - input service - hiring of aircraft - services were used for furtherance of cost of the business of manufacture of the goods or not - HELD THAT:- The definition of the input service is wide enough to cover all the services received by the appellant as input services without being directly used in the process of manufacture. If it is establish that the services were used by the manufacturer for the production of the finished goods which is one of the criteria to credit could not have been denied. In the present case, Commissioner (Appeals) have concluded that charter services were raised for transportation of the senior executive officials of the company for attending the business meeting in relation of the manufacture and sale of finished goods.
In case of MANGALORE REFINERY AND PETROCHEMICALS LTD VERSUS COMMISSIONER OF CENTRAL EXCISE & CENTRAL TAX, MANGALORE COMMISSIONERATE [2021 (6) TMI 715 - CESTAT BANGALORE], the Bangalore bench has held as far as air travel charges are concerned, the same has been used for the purpose of business trips undertaken by the company officials/guests for business related purposes and the same has been held to be input service.
There are no reason to differ with the findings recorded in the impugned order by Appellate Authority and the same is upheld - appeal dismissed.
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2024 (4) TMI 672
Appropriate forum - Maintainability of appeal u/s 35(H) of the Central Excise Act, 1944 - determination of question relating to rate of duty or excise or to the value of goods for the purpose of assessment - HELD THAT:- The appeal would not be maintainable before this Court. However, the appellant would be at liberty to assail the order by filing an appeal u/s 35(L) of the Act of 1944 before the Apex Court. However, on filing of the photocopy of the original documents, the certified copy of the original documents, if any, be returned to the learned counsel for the appellant.
Appeal disposed off.
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Indian Laws
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2024 (4) TMI 669
Dishonour of Cheque - Plea to expedite the trial of a complaint - Case of applicant is that though this complaint under the Act, 1881 was filed in the year 2022, but the trial could not be concluded - Section 143(2) of NI Act, 1881 - HELD THAT:- The Apex Court in the case of INDIAN BANK ASSOCIATION AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2014 (5) TMI 750 - SUPREME COURT], has issued direction for expeditious disposal of the cases under the Act, 1881 where it was held that We, therefore, direct all the criminal courts in the country dealing with Section 138 cases to follow the above-mentioned procedures for speedy and expeditious disposal of cases falling under Section 138 of the Negotiable Instruments Act.
From the above mentioned judgements of Hon'ble Apex Court, it is clear that the Apex Court for expeditious disposal of cases under the Act, 1881 has issued several directions which the concerned court/Magistrate has to follow while deciding the cases under the Act, 1881. From the observations of the Apex Court as well as analysis of Sections 138 & 143 of the Act, 1881, it is expedient that all the proceedings under the Act, 1881 should be concluded expeditiously without going into unnecessary technicality.
This Court directs the Chief Judicial Magistrate, Sant Kabir Nagar to conclude the trial of Complaint Case No. 10260 of 2022 (Shyam Ji Vs. Bhagwandas Chaudhary) u/s 138 Negotiable Instrument Act, P.S. Bakhira, District Sant Kabir Nagar, keeping in mind the direction of the Apex Court, expeditiously preferably within a period of six months from the date of receipt of certified copy of this order, strictly in accordance with statutory provision of Sections 143(2) and 143(3) of the Act, 1881, if there is no legal impediment.
Application disposed off.
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2024 (4) TMI 668
Dishonour of Cheque - Grant of Bail - Mandate to deposit of a minimum of twenty percent of the fine or compensation awarded by the trial court - failure to consider the Statutory Provisions as enshrined U/S 148(1) & 148 (2) of NI Act 1881 - HELD THAT:- In the instant case, the Appellate court although vide order dated 29.02.2024 had admitted the appeal and also allowed the Bail Application moved by the appellant/petitioner but by the same order despite admitting the appeal preferred by the appellant/petitioner had erroneously rejected the stay and operation of the impugned order dated 16.02.2024 passed by the trial court and thereby, rejected the stay application (Paper No.5B) and further directed him to deposit amount of fine imposed by the trial court within a period of ten days' from the date of the order and also provided that in case of non-deposition of fine by the appellant/petitioner, the order of granting bail to the appellant/petitioner shall stand automatically cancelled, thus, the appellate court while passing the impugned order dated 29.02.2024 by which it has rejected to stay the operation of the order dated 16.02.2024 passed by the trial court has failed to consider the Statutory Provisions as enshrined under Section 148(1) and 148(2) of the Negotiable Instrument Act, 1881, which resulted in miscarriage of justice.
This Court finds that the Appellate Court has erred in law while rejecting the stay application of the appellant/petitioner, by which it was prayed by the appellant/petitioner to stay the fine of Rs.4,00,000/- imposed by the trial court while convicting him under Section 138 of the Negotiable Instruments Act, 1881 till the disposal of the appeal preferred by the appellant/petitioner before the Appellate Court.
Petition disposed off.
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