TMI Tax Updates - e-Newsletter
January 16, 2018
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
-
Income Tax:
Reopening of assessment - condition precedent necessary under Section 151(1) not complied - recording of satisfaction - issue of notice after 4 years - the impugned notice under Section 148 stands setaside /quashed - HC
-
Income Tax:
Where assessee is non-resident company, entire tax to be deducted at source at payments made by the payers to it and there was no question nof payment of advance tax by the assessee, therefore, revenue could not charge any interest u/s 234B. - AT
-
Income Tax:
Charging interest u/s. 234B(3) / (4) - The section 234B(4) states that if there is any increase or decrease in the income, correspondingly interest shall be increased or reduced accordingly. In the instant case, since reassessment u/s 147 of the Act was completed and in the reassessment the assessed income being higher, the interest is to be calculated as per section 234B(3) of the Income-tax Act, instead of section 234B(4) of the Income-tax Act. - AT
-
Income Tax:
Disallowance of the claim of agricultural income - nature of the agricultural activities carried on by the assessee - The case of the Revenue is that the assessee, though has levelled the land by use of tractors, has not done any further agricultural activity of sowing the seeds etc. - AO directed to re-verify the facts and evidences - AT
-
Income Tax:
Deemed speculation loss - Arbitrage /Jobbing as a composite activity is covered under section 43(5)(c) of the Act. Hence, explanation to section 73 of the Act is not applicable as the Assessee is not carrying on the business of purchase and sale of share but business of arbitrage. - AT
-
Income Tax:
Deemed dividend u/s. 2(22)(e) - the loan given by the company only in the immediate preceding year, i.e., assessment year 2007-08, should be assessed as deemed dividend in accordance with the provisions of sec. 2(22)(e) in that year. The deemed dividend so assessable in that earlier assessment year is liable to be deducted from the amount of “accumulated profits” for the purpose of computing the deemed dividend during the year under consideration - AT
-
Customs:
The Antenna used at Base Transceiver Station/NodeB/eNodeB in a wireless telecommunication network, merits classification under CTH 8517 62 90.
-
Customs:
Know Your Customer (KYC) norms - in ease of import or export through courier by an individual, either Aadhaar card or Passport or PAN card or Voter-ID card shall suffice for KYC verification however recording of address of place of delivery, as mentioned above, would continue.
-
Customs:
Interest on delayed payment of duty - the petitioner's imports were in February 1994, much prior to the insertion of Section 28AB of the Act - interest payable under the bond is not an interest payable under the Act - demand of interest sustained - HC
-
Service Tax:
Refund claim - invoice without signature - services provided to SEZ unit - There is no dispute as to the fact that the service provider M/s. Standard Chartered Bank has paid the service tax and the appellant has also discharged the same to the service provider - claim of refund cannot be denied - AT
-
Service Tax:
Claim of small service provider exemption - Notification no. 6/2005-ST - the provider of taxable service has the option not to avail the exemption and pay service tax on the taxable services provided by him and such option, once exercised in a financial year, shall not be withdrawn during the remaining part of such financial year - AT
-
Central Excise:
Classification of goods - Natural Micronised Progesterone - Merely by adding the excipient, the medicine which has character of basic drug does not get altered - Benefit of exemption allowed - AT
-
Central Excise:
Use if brand nanme on Gold jewellery - distinction between brand name and house mark - In the case the medallions of gold/silver only the house mark “MMTC Logo” is applied on the articles. The brand name “Sanchi” is not appearing either on the articles or packing - no excise duty @1% - AT
-
VAT:
Levy of service tax or VAT - workover service contracts - The contract between the petitioners and the ONGC does not involve any transfer of the right to use goods and resultantly there is no deemed sale attracting the levy of value added tax on such transaction. - HC
-
VAT:
Penalty - issuance of sale invoice instead of tax invoice by seller - assessee was required to disclose the Tin Number and other details to the selling dealer and to purchase such materials only by way of tax invoice - no undue benefit gained by the assessee - no penalty - HC
-
VAT:
Input Tax Credit - capital goods - M. S. Sheets utilized for construction of silo - UP VAT - the distinction of movable or immovable nature of goods is not contained in the Act, and is otherwise not a relevant consideration - HC
Articles
Notifications
GST - States-
128/ST-2 - dated
22-11-2017
-
Haryana SGST
The Haryana Goods and Services Tax (Twelfth Amendment) Rules, 2017.
-
119/ST-2 - dated
31-10-2017
-
Haryana SGST
The Haryana Goods and Services Tax (Eleventh Amendment) Rules, 2017.
-
43/2017-State Tax (Rate) - dated
15-11-2017
-
Himachal Pradesh SGST
Amendments Notification No.4/2017- State Tax (Rate), dated the 30th June, 2017.
-
43/2017-State Tax - dated
15-11-2017
-
Himachal Pradesh SGST
Extends the time limit for furnishing the return by an Input Service Distributor in FORM GSTR-6.
-
42/2017-State Tax (Rate) - dated
15-11-2017
-
Himachal Pradesh SGST
Amendments in the Notification No.2/2017- State Tax (Rate), dated the 30th June, 2017.
-
42/2017-State Tax - dated
15-11-2017
-
Himachal Pradesh SGST
Extends the time limit for furnishing the return in FORM GSTR-5A supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient.
-
41/2017-State Tax (Rate) - dated
15-11-2017
-
Himachal Pradesh SGST
Amendments in the Notification No. 1/2017- State Tax (Rate), dated the 30th June, 2017.
-
40/2017-State Tax - dated
15-11-2017
-
Himachal Pradesh SGST
Recommendations of the Council, hereby notifies the registered persons whose aggregate turnover in the preceding financial year did not exceed one crore and fifty lakh rupees.
-
39/2017-State Tax - dated
15-11-2017
-
Himachal Pradesh SGST
Appointed the Proper Officers.
-
38/2017-State Tax - dated
15-11-2017
-
Himachal Pradesh SGST
Amendments in the Notification, No.34/2017- State Tax, dated 9th Oct., 2017.
-
37/2017-State Tax (Rate) - dated
15-11-2017
-
Himachal Pradesh SGST
Notify the state tax on intra-State supplies of goods Motor Vehicles 65% of state tax applicable otherwise on such goods.
-
36/2017-State Tax (Rate) - dated
15-11-2017
-
Himachal Pradesh SGST
Amendments in the Notification No.4/2017- State Tax (Rate), dated the 30th June, 2017.
-
35/2017-State Tax (Rate) - dated
15-11-2017
-
Himachal Pradesh SGST
Amendments in the Notification No.2/2017-State Tax (Rate), dated the 30th June, 2017.
-
34/2017-State Tax (Rate) - dated
15-11-2017
-
Himachal Pradesh SGST
Amendments in the Notification No. 1/2017-State Tax (Rate), dated the 30th June, 2017.
-
33/2017-State Tax (Rate) - dated
15-11-2017
-
Himachal Pradesh SGST
Amendments in the Notification No.13/2017- State Tax (Rate), dated the 30th June, 2017,
-
32/2017-State Tax (Rate) - dated
15-11-2017
-
Himachal Pradesh SGST
Amendments in the Notification No.12/2017- State Tax (Rate), dated the 30th June, 2017.
-
31/2017-State Tax (Rate) - dated
15-11-2017
-
Himachal Pradesh SGST
Amendments in the Notification No.11/2017- State Tax (Rate), dated the 30th June, 2017.
-
KA. NI-2-1712/XI-9(42)/17 - dated
17-11-2017
-
Uttar Pradesh SGST
Uttar Pradesh Goods and Services Tax (Ninth Amendment) Rules, 2017
-
KA. NI-2-1697/XI-9(42)/17 - dated
16-11-2017
-
Uttar Pradesh SGST
Notification regarding evidences required to be produced by the supplier of deemed export supplies for claiming refund
-
KA. NI-2-1696/XI-9(42)/17 - dated
16-11-2017
-
Uttar Pradesh SGST
Supply of goods by a registered person against Advance Authorisation
-
KA. NI-2-1679/XI-9(42)/17 - dated
16-11-2017
-
Uttar Pradesh SGST
To Waive Late Fee of GSTR-3B for Month August & Sept-2017
-
KA. NI-2-1668/XI-9(47)/17 - dated
16-11-2017
-
Uttar Pradesh SGST
Notifies the State tax on intra-State supplies of goods. Regarding Motor Vehicles
-
KA. NI-2-1667/XI-9(47)/17 - dated
16-11-2017
-
Uttar Pradesh SGST
Amendment in Notification No. KA.NI.-2-837/XI-9(47)/17 dated 30 June 2017Amendment in Notification No. KA.NI.-2-837/XI-9(47)/17 dated 30 June 2017
-
KA. NI-2-1666/XI-9(47)/17 - dated
16-11-2017
-
Uttar Pradesh SGST
Amendment in Notification No. KA.NI.-2-836/XI-9(47)/ 17 dated 30 June 2017
-
KA. NI-2-1663/XI-9(15)/17 - dated
16-11-2017
-
Uttar Pradesh SGST
Specifying tax rate at 0.05% on supply to registered recipient for export
-
KA. NI-2-1659/XI-9(42)/17 - dated
7-11-2017
-
Uttar Pradesh SGST
UTTAR PRADESH GOODS AND SERVICES TAX (EIGHTH AMENDMENT) RULES, 2017
-
NI.-2-1635/XI-9(47)/17 - dated
2-11-2017
-
Uttar Pradesh SGST
Regarding notifying certain goods at the tax rate 2.5 percent under UP-GST Act w.e.f. 18 Oct 2017
-
NI.-2-1634/XI-9(47)/17 - dated
2-11-2017
-
Uttar Pradesh SGST
Amendment in Notification No. KA.NI.-2-854/XI-9(47)/17 dated 30 June 2017
-
NI.-2-1553/XI-9(47)/17 - dated
24-10-2017
-
Uttar Pradesh SGST
Amendment in Notification No. KA .NI-2-854/XI-9(47)/17 dated 30 June 2017
Circulars / Instructions / Orders
News
Case Laws:
-
Income Tax
-
2018 (1) TMI 675
Reopening of assessment - condition precedent necessary under Section 151(1) not complied - recording of satisfaction - issue of notice after 4 years - Held that:- Since from the facts, it is evidently clear that the condition precedent necessary under Section 151(1) for issuance of a notice under Section 148 is not available or is reflected that from the proceedings, it is then that the principles laid down by the Constitutional Bench of Hon’ble Supreme Court in the case of “Calcutta Discount Company Ltd. vs. Income Tax Officer” [1960 (11) TMI 8 - SUPREME Court] other similar judgments come into play envisaging the writ Courts having the power to exercise the power of issuance of writ, prohibiting the Income Tax officer from the proceedings with reassessment when patently it appears that the proceedings are in contravention to the provisions of the Income Tax Act. Since this Court finds that issuance of notice under Section 148 at the first instance itself was without a proper sanction as is required under the proviso to Section 151(1) of the Income Tax Act. We need not go into the veracity and merits of the case any further at this stage. - Decided in favour of assessee
-
2018 (1) TMI 674
Order by appropriate authority for purchase by Central Government of immovable property - abrogation of the order under sub-section (1) of Section 269UD - Held that:- Firstly, the petitioner had no title in respect of the property as he is claiming on the basis of an agreement for development executed by the original owners Shri Suhas Deshpande and Others. Whatever title or right he had, is completely lost in the light of execution of the registered conveyance dated 12th December, 2008. The petitioner has no locus to call upon this Court to exercise writ jurisdiction under Article 226 of the Constitution of India. Apart from this fact, we find that there is no abrogation of the order under sub-section (1) of Section 269UD. The prayers made in this petition cannot be entertained at the instance of the petitioner not only on the ground that he has no right, title or interest in respect of the said property, but he has indulged in suppression of facts. Moreover, after termination of the agreement dated 14th December, 1990 the petitioner has never sought enforcement of the said agreement by filing a civil suit. As noted earlier, one of the original owners by notice dated 12th January, 1992 has purported to terminate the agreement dated 14th December, 1990. Hence no case is made out for interference under the writ jurisdiction of this Court. The petition is dismissed.
-
2018 (1) TMI 673
Penalty u/s 271 (1)(c) - defective show cause notice - Held that:- The show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. In these circumstances, we are of the view that imposition of penalty cannot be sustained. The plea of the assessee for cancelling imposition of penalty which is based on the decisions referred to in the earlier part of this order has to be accepted. We therefore hold that imposition of penalty in the present case cannot be sustained and the same is directed to be cancelled. - Decided in favour of assessee.
-
2018 (1) TMI 672
Penalty proceedings u/s.271(1)(c) - without striking off one of the limbs and without specifying the specific charge in the notice initiating penalty proceedings for inaccurate particulars of income - Held that:- The notice issued by the Assessing Officer u/s. 274 r.w.s. 271(1)(c) of the Act is on account of non-application of mind and therefore on this account itself the penalty imposed u/s.271(1)(c) is liable to be deleted. Thus, we direct the Assessing Officer to delete the penalty levied u/s.271(1)(c) of the Act. See CIT v. Samson Perinchery [2017 (1) TMI 1292 - BOMBAY HIGH COURT] - Decided in favour of assessee
-
2018 (1) TMI 671
TPA - comparable selection criteria - Held that:- All the five comparables- i.e. AL, CLL, GITL, Rites and WL, selected by the TPO for benchmarking the IT's of the assessee are not providing MSS, that there functionally dissimilar, that they have to be excluded from the final list of the valid comparables .There is nothing on record to prove that support services provided by the above five comparables were also associated with marketing function. There is no doubt that the support services provided by the assessee were directly associated with marketing. We find that if these five comparables are excluded from the list the valid comparables, the assessee will be in the safe zone of +/- 5% -the OP to OC of the assessee is 5.18% whereas OP to OC of the remaining comparables is 3.01%. In the circumstances, we hold that the IT's entered into by the assessee with its AE was at arm’s length Foreign exchange loss disallowed - Held that:- As decided in assessee's own case we find that the AO on one hand would tax gain on FE earnings but would not allow loss arising on FE loss. In our opinion, the stand taken by the AO is not justified in any manner .If the gains of FE fluctuation had to be taxed then the loss arising out of such fluctuation has to be allowed .We find that the honorable Supreme Court, in the case of Oil and Natural Gas Corporation (supra)has held that the loss claimed by the appellant on account of fluctuation in the rate of FE as on the date of the balance-sheet was allowable as expenditure under section 37(1) of the Act . Income from the AE on account of incentive - Held that:- As decided in assessee'e own case incentive scheme was introduced by the assesee and the AE makes part payment for the expenditure incurred by the assessee for the scheme. Advertisement expenditure cannot be compared with introduction of an incentive schemes that would increase the revenue of the AE. Here it is not a case of incidental benefit to AE-it is a case of major benefit to the AE and fringe benefit to the assessee. TP provisions were introduced to take care of such eventualities i.e. determine the market value of transactions had they been entered in by two independent entities. Therefore, in our opinion, the order of the DRP does not require any interference from our side. Main argument of the assessee stands dismissed. As far as disallowing the expenditure of ₹ 2 crores, while computing the taxable income of the assessee, is concerned, we would like to hold that the DRP was not justified in disallowing the same. There is no doubt about incurring of expenditure by the assessee, as stated earlier .The assessee had introduced an incentive scheme and had incurred the expenses of ₹ 34 .61 crores . Whether the money received from AE was at arm’s length or not is a separate issue. But, incurring of expenditure was never in doubt. So, in our opinion, the alternate argument raised by the assessee has to allowed
-
2018 (1) TMI 670
Consideration for administrative support functions received by appellant - whether services involved in the agreement satisfy the "make Available" criteria or not? - Held that:- In the present case, the assessee has not provided adequate details before the Assessing Officer as well as before the ld DRP. Before us, also, no evidences were laid but assessee attempted to press upon only the legal arguments. Before laying down the facts of a case reliance on judicial precedents becomes an exercise in futile. Therefore, as assessee has not provided the complete details, in the interest of justice, we set aside the whole issue back to the file of ld Assessing Officer for deciding whether the services involved in the agreement satisfy the "make Available" criteria or not. We also direct assessee to provide complete details about the services showing their nature, manner of rendering and demonstrate before the AO that the services are of such a nature that recipient would not be able to perform them on its own. Needless to say, that proper opportunity of adducing information as well as the hearing shall be granted to assessee before deciding the issue. In the result ground, No. 1 of the appeal of the assessee is allowed with above direction. Grossing up the above services by the amount of tax deduction at source - Held that:- As we have already set aside the whole issue of determination of fees for technical services back to the file of the ld Assessing Officer the issue of grossing up of those services is related to that issue only, in the interest of justice, we also set aside ground No. 2 of the appeal of the assessee to the file of Assessing Officer. Charging of interest u/s 234B - Held that:- The issue is squarely covered in favour of the assessee by the decision of the Hon'ble Delhi High Court in case of DIT (International Taxation) Vs. GE Packaged Power Inc. (2015 (1) TMI 1168 - DELHI HIGH COURT), wherein, it has been held that where assessee is non-resident company, entire tax to be deducted at source at payments made by the payers to it and there was no question nof payment of advance tax by the assessee, therefore, revenue could not charge any interest u/s 234B.
-
2018 (1) TMI 669
Charging interest u/s. 234B(3)/(4) - AO had levied interest u/s 234B from 1st April 1993 upto the date of reassessment u/s 147 which according to AR is patently wrong, because section 234B(3) states about levy of interest from the date of determination of total income u/s 143(1) of the Act up to the date of reassessment or recomputation u/s 147 - Held that:- The section 234B(4) states that if there is any increase or decrease in the income, correspondingly interest shall be increased or reduced accordingly. In the instant case, since reassessment u/s 147 of the Act was completed and in the reassessment the assessed income being higher, the interest is to be calculated as per section 234B(3) of the Income-tax Act, instead of section 234B(4) of the Income-tax Act. The A.O., how he had computed interest u/s 234B of the Act is not very discernable and the period for which the same has been levied is also not mentioned in the order dated 12.10.2010. We are of the view, in the interest of justice and equity, the interest u/s 234B needs to be recalculated afresh. Therefore, we restore this appeal to the files of the A.O. to recalculate interest. The A.O. shall afford a reasonable opportunity of hearing to the assessee. The Assessing Officer shall also take note of the dictum laid down by the order of the Tribunal in the case of MBG Commodities (P.) Ltd. v. DCIT [2016 (8) TMI 82 - ITAT HYDERABAD] while calculating the interest u/s 234B of the Act, afresh. It is ordered accordingly. Appeal filed by the Revenue is allowed for statistical purposes
-
2018 (1) TMI 668
Assessment of income of the assessee - Principal-Agent- Relationship exists between the assessee and the government of Maharashtra - the assessee is an agent of the State Government of Maharashtra - whether the income generated and earned by the principle i.e. the State Government of Maharashtra is liable to be taxed in the hands of the CIDCO as its business income? - Held that:- As decided in assessee's own case [2012 (9) TMI 331 - ITAT MUMBAI] the assessee to be the “agent” of the State Government of Maharashtra, read with the entire overwhelming documents, suggesting that there is no income to the assessee as such, and whatever is, generated, it gets deposited in the Consolidated Fund of the State. We also cannot ignore the fact that the department has been assessing the assessee as a State Government undertaking for the last three years, therefore, even this cannot be called as an afterthought and applying the ‘rule of consistency’, we hold that the department cannot be allowed to take a distinctive approach in the current year The revenue authorities were thus, clearly in error, in assessing the business income in the hands of the assessee at ₹ 63,786.58 lacs. We delete this income, as not belonging to the assessee - Decided in favour of assessee.
-
2018 (1) TMI 667
Nature of income - busniss income or income from other sources - Held that:- It is not denied by the learned DR, even though he has vehemently relied on the order of the authorities below that main business of the assessee is shipping business and the assessee has also taken loan from SCICI Ltd. for the purchase of ship and charting in vessels. The assessee since could not immediately acquire the ship, has advanced the money from its own sources as well as from the money borrowed to its subsidiary company, which were also engaged in the similar business. Since these companies to whom the assessee has given temporary loan for acquiring ship is also the subsidiary company of the assessee therefore even on the basis of commercial expediency, the assessee is bound to assist those companies. We, therefore, set aside the order of the CIT(A) on this issue and direct the AO to treat the sum of ₹ 3,41,10,001/- out of the sum of ₹ 3,64,92,593/- as income from business. The rest of the income i.e. interest on staff loan, interest on securities, miscellaneous earning, rent received as well as income tax refund to the extent sustained by us, cannot be regarded as income from business. We, therefore, do not find any illegality or infirmity in the order of the CIT(A) to the extent that these income as assessed under the head “Income from other sources.” Addition respect of interest and other expenses attributable to the tax free income - Held that:- It is not a case where the AO has applied the provisions of section 14A but just allocated the various expenses between the exempt income as well as taxable income. It is not denied that the assessee is having own funds to the extent of ₹ 39,74,69,549/- while investment on tax free securities was to the extent of ₹ 16,01,31,377/- as is apparent from page 87 of the paperbook (balance sheet). We noted that the disallowance has simply being made by the AO on estimate basis. In view of the decision of Hon’ble Jurisdictional High Court in the case of HDFC Bank Ltd.[2014 (8) TMI 119 - BOMBAY HIGH COURT] we are of the view that no such disallowance can be made as the natural inference will be that the assessee made investment in tax free securities out of its own funds. We, therefore, delete the said disallowance. Thus, additional ground stands allowed. Claim of deduction towards the expenses as well as treating the interest received from subsidiary company and inter corporate loans, bill discounting to be part of profit of shipping business - Held that:- Since while disposing of additional ground no.1, we have directed the AO to treat the interest received from subsidiary as well as interest and discounting charges on trade bills as “Income from business” of the assessee as part of shipping business, the natural inference will be that the interest paid as well as other expenses which has been disallowed to the extent of ₹ 2,23,17,217/- will automatically be allowed as deduction out of the income computed from business. Thus, to that extent ground 1 and 2 are allowed. Loans of barge division - Held that:- AR was fair enough to concede that this issue is duly covered against the assessee by the decision of this Tribunal in the case of DCIT vs. Orion Agencies Ltd. [2009 (6) TMI 680 - ITAT MUMBAI]. We accordingly, dismiss this ground.
-
2018 (1) TMI 666
Disallowance under section 40(a)(i) - assessee as the firm of chartered accountants and has paid sums to various entities on account of professional fee - asseessee firm explained that the payment was made to various nonresidents and it is not in the nature of income chargeable to tax in India and, thus, tax was not required to be deducted in terms of section 195 - Held that:- We find that the ITAT in its earlier orders has dealt with DTAA with recipients in all countries except Australia and Philippines. As regards DTAA with Philippines is concerned, the ld. Commissioner of Income Tax (Appeals) has given finding that the same is similar to DTAA with Mauritius. The DTAA with Mauritius has already been dealt with by the ITAT in its orders as above. Hence, we consider this issue also of payment recipients in Philippines covered in favour of the assessee. However, as regards the payment to KPMG Australia is concerned, the concerned DTAA has not been commented upon by the ld. Commissioner of Income Tax (Appeals). He has followed earlier year order in which there is no reference to DTAA to Australia. Hence, we remit this issue to the file of the ld. Commissioner of Income Tax (Appeals) to examine the issue of payment made to KPMG Australia with reference to the concerned DTAA . Disallowance u/s. 40(a)(i) - Held that:- As decided in assessee's own case the case of the assessee falls within the four corner of the ambit of the 'Principle of Mutuality'. Thus, we do not find any reason or ground to interfere in the order passed by learned Commissioner (Appeals) hence the appeal filed by the revenue is dismissed.
-
2018 (1) TMI 665
Addition u/s 68 - bogus accommodation entries - Xeroxed copies of documents submitted by the assessee - Held that:- The assessee in its response has only mentioned that the assessee has given the name and address and PAN numbers of the investing companies and, hence, it has discharged the onus. In none of the responses, the assessee submitted that these companies are actually in existence at the addresses mentioned. That these companies should be issued summons. That assessee is prepared to bring the directors or the principal officers for confirmation. In fact, the assessing officer has noted that assessee has failed to submit the ledger copies of these concerns duly signed by the principal officers. That the documents submitted are only xeroxed copies. This clearly bolsters the Revenue's case that these are non-existent companies and are operating only on paper to provide accommodation entry being run by Shri Praveen Kumar Jain and his group concerns. The transaction through banking channel does not absolve the assessee from the finding that these are dubious entities by way of which the assessee’s undisclosed income has been channeled back as share application money. Thus assessee has obtained bogus accommodation entries from entities operated by Shri Praveen Kumar Jain and his group, the mere production of Xeroxed copies of documents cannot support the case of the assessee - Decided against assessee
-
2018 (1) TMI 663
Exemption u/s. 11 and 12 eligibility - Held that:- We find that a number of opportunities were given to the assessee to explain and furnish necessary information for completing the assessment, but the assessee continued to take adjournments and also on certain occasions avoided to attend the proceedings. The order passed by the Assessing Officer narrates various instances on which the assessee was required to attend the proceedings, but he did not attend the same. AO had specifically asked for furnishing all information regarding particulars or nature of services provided and professional receipts shown at ₹ 96,00,000/- but the assessee did not file the same. The ld. CIT(A), relying on certain case laws and without commenting upon the observations of the Assessing Officer, has allowed relief to the assessee. Therefore, we deem it proper to remit the issue back to the file of ld. CIT(A) with the direction to pass a speaking and reasoned order after meeting out the observations made by the Assessing Officer. - Decided in favour of revenue for statistical purposes.
-
2018 (1) TMI 662
TPA - determination of the % of the CG fee - Held that:- Considering the judgments of Bombay High Court in the cases of Everest Kanto and Glen Pharmaceutical (2015 (5) TMI 395 - BOMBAY HIGH COURT), we hold that CG Fee should be restricted to 0. 50% on CG given by the assessee. First ground of appeal is decided in favour of the assessee, in part. Disallowance of interest u/s. 36(1)(iii) - Held that:- What is to be seen is business purpose and what the sister concern did with the money. The expression ‘commercial expediency’ is an expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The expenditure may not have been incurred under any legal obligation, but yet it is allowable as a business expenditure if it was incurred on grounds of commercial expediency. Further, the expression ‘for the purpose of business’ is wider in scope than the expression ‘for the purpose of earning profits’. Once it is established that there was nexus between the expenditure and the purpose of the business which need not necessarily be the business of the assessee itself, the revenue cannot justifiably claim to put itself in the armchair of the businessman or in the position of the Board of Directors and assume the role to decide how much s reasonable expenditure having regard to the circumstances of the case. No businessman can be compelled to maximize his profits. The IT authorities must put themselves in the shoes of the assessee and see how a prudent businessman would act. The authorities must not look the matter from their own viewpoint but that of a prudent businessman. Thus as relying on the assessee's own case we are inclined to delete impugned additions - Decided in favour of assessee. No granting TDS credit - Held that:- As per the assessee, the AO had granted credit of ₹ 1. 94 crores only. We direct the AO to make verification about the claim made by the assessee and give credit accordingly. Ground no. 4 is also restored back to the file of the AO for fresh adjudication.
-
2018 (1) TMI 661
Reopening of assessment - reason to believe - receipt of accommodation entries - Held that:- In this case cogent and credible information was received that the assessee has obtained accommodation entries from entities managed by Shri Mukesh Choksi and Associates. Shri Mukesh Choksi has admitted that the group was engaged in fraudulent billing activities and giving accommodation entries in order to enable the clients to declare speculation profit/loss, short term capital gain/long term capital gain, profit/loss on account of accommodated trading, introduction of share application money, or introduction of money in the form of gifts, etc. Information was received that the assessee had obtained accommodation entries and claimed the same as long term capital gain as exempt. In this scenario, the assessment was reopened. It is the settled law that at the time of reopening there should be reasonable cause and the escapement of income need to be proved to hilt at the time of reopening. This proposition is duly supported in the case of CIT vs. Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA] . The overwhelming evidence are available with the revenue that the share transactions reflected by the assessee were bogus transaction routed through bogus entities managed by Shri Mukesh Choksi and Associates. The assessee has given no cogent reason to counter the aforesaid findings. The Assessing Officer has clearly mentioned in the show cause that after examining the transactions and after thorough verification of details submitted by the assessee, he was not convinced. In these circumstances, in my considered opinion, it is clear from the factual date noted hereinabove that the assessee has entered into dubious transaction meant to reflect its undisclosed income in the garb of long term capital gain. - Decided against assessee
-
2018 (1) TMI 660
Revision u/s 263 - foreign commission expenses debited in the Profit and loss account were not related to the business activity of the assessee and also as the assessee had failed to deduct tax at source under Sec. 195 on the aforesaid commission, therefore, the same even otherwise was liable to be disallowed for the said reason - Held that:- Now when the assessee had in the course of proceedings before the A.O proved that the foreign commission was paid to the foreign commission agents for services rendered abroad, which thus did not cast any obligation on the assessee to withhold tax while making such payment, therefore, the observation of the Principal CIT that the assessee had neither submitted an order under Sec. 195 of the Act, nor the prescribed certificate in Form No. 15CA of the Chartered Accountant, specifying that the deduction at source on such commission paid was not required to be made, in itself is rendered as redundant. Thus, in the absence of any statutory obligation on the assessee for withholding tax on the aforesaid payment, neither of the aforesaid verifications as were sought by the Principal CIT did survive any more. We are of the considered view that the Principal CIT in the backdrop of the aforesaid facts as emerges from the record, and was also pleaded by the assessee before him, had however not shown as to how the view taken by the A.O was found to be erroneous Now when the A.O after making necessary inquiries and verifications which should have been made by him in the course of the assessment proceedings and the queries raised vide notice under Sec. 133(6), had arrived at a plausible view, which we are afraid the Principal CIT had not been able to show as to how the same was erroneous, nor as to what all inquiries and verification leading to a contrary view should have been made by him, therefore, are unable to persuade ourselves to be in agreement with the Principal CIT that the order passed by the A.O under Sec. 143(3) was erroneous in so far it was prejudicial to the interest of the revenue, therein rendering it liable to be revised under Sec. 263 of the Act. We may further observe that we are in agreement with the contention of the ld. A.R that merely because the A.O had not referred about the inquiries and verifications carried out by him in respect of the issue under consideration in the body of assessment order, the same would not vest jurisdiction with the CIT to revise the order, as long as such exercise so carried out by the A.O can be gathered from the record. - Decided in favour of assessee
-
2018 (1) TMI 659
Disallowance of the power and fuel expenses - Held that:- Despite there being Sales Tax Number available in the bills supplied by the parties to the assessee the Ld. assessing officer should have referred if he has any doubt to the sales tax authorities about the veracity of the purchases made by the assessee. The assessing officer has not done so. The assessing officer has also not passed the information to the assessing officer of those parties to verify the purchases. In view of this facts merely on the basis of conjectures and surmises the Ld. assessing officer has made a disallowance of power and fuel expenses. Even otherwise if the Ld. assessing officer is of the opinion that the purchases are bogus, he should have disallowed the amount of purchases of that particular party and not an ad hoc disallowance should have been made. CIT (A) has confirmed the disallowance only for the reason that assessee has not produced further details but he has not given any reason or any clue about what further details assessee should have furnished before the assessing officer. In the result we do not find any reason to confirm the orders of the lower authorities. Therefore we reverse the finding of the lower authorities and the direct the Ld. assessing officer to delete the disallowance of ₹ 25 Lacs out of the power and fuel expenditure. In the result ground No. 1 of the appeal of the assessee is allowed. Addition on account of meeting and conference expenses - Held that:- The assessee has incurred these expenditure for the purpose of business of the assessee and also given a detailed reason thereof. Furthermore, the assessee has submitted the requisite detail before the AO. The AO has not stated that what details have not been submitted and if the details have not been submitted by the assessee then expenditure should have been disallowed to that extent. The Ld. assessing officer has made the ad hoc disallowance, without pointing out any instances of the expenditure for which the information is not made available by the assessee. Therefore the disallowance made by the Ld. assessing officer and confirmed by the Ld. CIT (A) cannot be sustained. In the result ground No. 2 of the appeal of the assessee is allowed. Disallowance u/s 40 A(3) - Held that:- In the present case the assessee has made the payment in excess of the amount specified and could not also justify the claim of the assessee that such payment falls under the exception covered under rule DD of the Income Tax Rules, 1962. In view of this, we do not find any infirmity in the order of the Ld. assessing officer in making the above disallowance of ₹ 48650/–. In the result ground No. 3 of the appeal of the assessee is dismissed. Penalty u/s 271(1)(c) - Held that:- In the assessment order the ld Assessing Officer vide recording the satisfaction has stated that assessee has concealed or furnished inaccurate particulars of its income. In the penalty order in para No. 5 the ld Assessing Officer has noted that assessee has furnished inaccurate particulars resulting in concealment of income. The ld CIT(A) has deleted the penalty following the decision of the Hon'ble Supreme Court in case of CIT Vs. Reliance Petro Products Pvt. Ltd [2010 (3) TMI 80 - SUPREME COURT ] - Decided in favour of assessee.
-
2018 (1) TMI 658
Disallowance of the claim of agricultural income - nature of the agricultural activities carried on by the assessee - The case of the Revenue is that the assessee, though has levelled the land by use of tractors, has not done any further agricultural activity of sowing the seeds etc. - Held that:- In the case of K.Lakshmanan & Co. vs. CIT (1998 (2) TMI 10 - SUPREME Court), the Hon'ble Supreme Court was dealing with a case of an assessee which was growing mulberry leaves and rearing silkworms and the assessee has grown the mulberry tree and plucked the leaves from the trees which were cut and fed to the silkworms and the silk cocoons were sold in the market by the assessee. The assessee claimed that the entire income derived from growing of mulberry leaves and sale of cocoons was exempt from levy of income-tax as it was ‘agricultural income’. The Hon'ble Supreme Court held that the agricultural produce of the cultivator will be mulberry leaves and by no stretch of imagination can the silkworms and certainly not the silk cocoons be regarded as the agricultural produce of the cultivator. We find support from this judgment also in favour of our findings. The assessee has filed the copies of the invoices and bills and agricultural activities as additional evidence before us and we have considered the same for giving relief to the assessee. However, since this additional evidence was not filed before the authorities below, we deem it fit and proper to admit the same and remand the same to the file of the AO for verification of the authenticity of the said documents and for computation of agricultural income. If it is found that these documents are genuine, then our findings stands. If it is otherwise, the AO is free to take a decision on the basis of only such documents which are found to be genuine. The assessee is directed to furnish the bifurcation of its income from CWG towards agricultural activity and non-agricultural activity before the AO on the basis of our finding that activity up to harvesting is agricultural activity. - Decided partly in favour of assessee
-
2018 (1) TMI 657
Disallowance made on account of mark to market loss on future contracts - deemed speculation loss - Held that:- Set-off of speculation loss against business income was declined by the AO on the plea that Explanation to Section 73 is applicable. The CIT(A) has dealt with the issue threadbare and reached to the conclusion that Explanation to Section 73 is not applicable to the facts and circumstances of the present case in so far as in the present case the assessee comes within the exclusion provided in the said Explanation, the income of the assessee under the head 'income from capital gains' and 'income from other sources' is more than income under the head 'income from business and profession' and, therefore, the Explanation to section 73 is not applicable. The business carried on by the assessee is jobbing/arbitrage. Jobbing/arbitrage is a composite activity of buying in one segment (cash) and selling in another segment (F&O) and assessee will earn income in once segment and incur loss in another segment, such that the income would always be more than the loss. Therefore, the business is itself arbitrage and the same cannot be treated as two separate business of trading in shares and dealing in F&O. Arbitrage /Jobbing as a composite activity is covered under section 43(5)(c) of the Act. Hence, explanation to section 73 of the Act is not applicable as the Assessee is not carrying on the business of purchase and sale of share but business of arbitrage. Disallowance u/s.14A - Held that:- As found from record that most of the shares held by assessee were stock in trade. In view of the settled judicial pronouncements, we direct the AO to exclude investment in shares held as stock in trade out of average investment while computing disallowance under Rule 8D(2)(iii) of the IT Act. We direct accordingly.
-
2018 (1) TMI 656
Receipt of ‘on money’ for sale of flats - sworn statement of the assessee u/s 132(4) - Held that:- Claim of the assessee was not accepted by the assessing officer in view of clear evidences found during the course of search operation which were duly signed by the parties concerned in the presence of witnesses and the fact that the noting in the seized documents pertained to both – accounted and unaccounted receipts. The sworn statement of the assessee has neither been retracted nor contradicted either during the course of assessment proceedings or before the first appellate authority. The assessee had explicitly conceded and confessed in the sworn statement(supra) that those receipts in cash have not been recorded in the books of account or accounted for, Such being the case, the Assessing Officer and CIT(A) is justified in treating the same as ‘on money’ for sale of flats. The learned AR has also contended that the only net profit element in undisclosed sale is to be taxed. This contention of the learned Counsel is devoid of any merit since the assessee is unable to prove any expenditure is incurred for the receipt of on money for the sale of the flats. Therefore, this ground raised by the assessee is rejected. - Decided against assessee.
-
2018 (1) TMI 655
Condonation of delay in late filing appeal before CIT(A) - Validity of reopening of assessment - assessee's claim that these orders were not received by them - Held that:- It is noted that the AO had passed the separate assessment order on 21-01-2014 which were dispatched on 28-01-2014. However, these assessee's claimed that these orders were not received by them. Thus the orders were made and dispatched in time but these assessee's claim that these orders were not received by them. Subsequently, the respective assessee’s applied for certified copies of the assessment order. It is further noted that the respective assessee's filed the appeal before the ld. CIT(A) who summarily rejected the appeal of the respective assessee's vide her separate order dated 09-08-2016 being time barred and not allowing the condonation of delay. In view of the facts, circumstances of the case and arguments of the ld.AR of the assessee, it will be in interest of equity and justice to condone the delay in filing the appeal by the respective assessee's. It is also pertinent to mention that the efforts should be made to adjudicate upon the case of the assessee on merits instead of dismissing the same on technical reasons. Appeals of the assessee's are allowed for statistical purposes.
-
2018 (1) TMI 654
Deemed dividend u/s. 2(22)(e) - relevant assessment year - whether loans given by M/s. Classic Linens International Pvt Ltd is on account of commercial expediency - Held that:- the loan given by the company only in the immediate preceding year, i.e., assessment year 2007-08, should be assessed as deemed dividend in accordance with the provisions of sec. 2(22)(e) in that year. The deemed dividend so assessable in that earlier assessment year is liable to be deducted from the amount of “accumulated profits” for the purpose of computing the deemed dividend during the year under consideration Deemed dividend does not include any dividend paid by the company in the assessment year under consideration and it is to be set off against the amount of deemed dividend. Hence, the factual aspect on this matter requires verification from the end of the ld. Assessing Officer. Accordingly on the matter of accumulated profits and deemed dividend computed by the lower authorities, which are not in accordance with the provisions of Sec. 2(22) (e) of the Act. The issue is remanded to the file of the ld. Assessing Officer with the direction to carry out necessary verification with regard to the computation of accumulated profits and thereafter determine the quantum of deemed dividend as discussed above specifically with reference to Sec. 2(22)(e)(iii) of the Act and to consider the accumulated profit which do not include current year’s business profit which accrues only at the end of the years. It is needless to say that an opportunity of hearing is to be given to the assessee by the Assessing Officer. - Decided partly in favour of assessee for statistical purposes.
-
Customs
-
2018 (1) TMI 653
Smuggling - Heroin - Section 50 of the NDPS Act - Baggage rules - Since the Respondents were feeling uneasy and had also refused to take any hot/cold drinks being offered to them, their body search was conducted and it was noticed that their bellies were unusually stiff - Respondents Juarah and M. Walai remained admitted in Safdarjang Hospital from 02.04.2010 to 09.04.2010 and during the said period, they had ejected a total number of 55 capsules weighing 382. 58 gm and 58 capsules weighing 586.67 gms respectively from their rectum. This recovery was made in the presence of doctors on duty, interpreter and two punch witnesses. The capsules recovered were sealed and deposited with the SDO (Arrival) of IGI Airport, New Delhi. whether the alleged recovery of the narcotic drug from the Respondents was in compliance of the provisions of Section 50 of NDPS Act? - whether the alleged recovery of the narcotic drug from the Respondents was in compliance of the provisions of Section 103 of the Customs Act? - Whether the statement of the Respondents under Section 67 of NDPS Act was as per the legal requirement or not? Held that: - The notices served upon the Respondents were not in conformity with the provisions of Section 50 of the NDPS Act and were merely an enquiry by the empowered officer to the Respondents. By these notices the respondents were not informed of their legal rights to be searched before the Magistrate or Gazetted officer. Further it is note worthy that PW13 Sh. Khalid A. Noori in his cross examination admitted that he did not know the meaning of words “Gazetted officer” and “Magistrate” in Persian. Since both the respondents were not conversant with English, the meaning of these two words was not conveyed to them in vernacular language by PW13. Looked from any angle the very purpose of notice under section 50 was defeated what to speak of compliance. Section 103 of the Customs Act provides for the power to screen through x-ray, bodies of suspected persons for detecting hidden goods. Section 103 of the Customs Act will apply when the body of the suspected person is required to be x-rayed. In the present case, the customs officers have opted to go for x-ray examination of the body of the Respondents, and, therefore, they had to follow the procedure laid down in Section 103 of the said Act. It is evident from the record that the alleged recovery of narcotic drug from the respondents was in violation of the safeguards provided in Section 50 of the NDPS Act as well as Section 103 of the Customs Act and thus, the same cannot be used as evidence of proof of unlawful possession of the contraband against the respondents. It is a settled law that while weighing the evidentiary value of a statement under Section 67 of the NDPS Act, the Court should not lose sight of the ground realities and should take into consideration whether the confession was made under duress or was voluntary in nature - the respondents were apprehended on 01.04.2010 and their alleged statements under Section 67 of the NDPS Act were recorded on 09.04.2010 while they were in custody of the Customs officers. In his cross-examination PW1 Sh. Prashant Prakhar admitted that he had interrogated the respondents through the interpreter and the answers given by them were recorded in the form of their statements under Section 67 of the NDPS Act. PW1 Sh. Prashant Prakhar also admitted that he had told the respondents that they were required to tender their statements under Section 67 of the NDPS Act and did not inform them about their right to remain silent. Considering the same, the statements of the respondents under Section 67 of the NDPS Act cannot be said to be voluntary and no reliance can be placed on them. Petition dismissed.
-
2018 (1) TMI 644
Interest on delayed payment of duty - the petitioner s imports were in February 1994, much prior to the insertion of Section 28AB of the Act - order of the Settlement Commission - Held that: - In the case of Commissioner of Customs (Port) v. Settlement Commission, Cus. & C. Ex. [2004 (8) TMI 116 - HIGH COURT AT CALCUTTA], the Court considered somewhat a similar issue and held that as per Section 127H of the Act, the power of the Settlement Commission is relatable to waiver either partial or full amount of interest under the Act only. Further, it was held that the rate of interest of 24% was not the interest chargeable under the Act, but under the bond, which is contractual document in nature and this contractual question has not been examined by the Commission - the Hon’ble Supreme Court in the case of Rexnord Electronics and Controls Ltd., v. Union of India [2008 (3) TMI 8 - SUPREME COURT] held that the interest payable under the bond is not an interest payable under the Act. There is no error in the order passed by the Settlement Commission - appeal dismissed.
-
Corporate Laws
-
2018 (1) TMI 652
Sale of the assets and properties of the company in liquidation - Held that:- As considered the contents of the present report with the copy of the supplementary valuation report dated 14.09.2017, as also the minutes of the meeting of the sale committee at Annexure – F, finds that the prayers made in the present report could be granted. Accordingly, it is directed that for sale of the assets and properties of the company in liquidation, the upset price and EMD shall as recommended by the sale committee. The schedule programme for sale of the assets and properties of the company in liquidation shall be as stated above in para-4. The Official Liquidator shall issue advertisement in daily newspapers “Gujarat Samachar” in all editions of the State of Gujarat in Gujarati script and in “Times of India” in English script in Ahmedabad edition for inviting offers for sale of land of the company in liquidation. The Official Liquidator is also permitted to make payment to the concerned Advertising Agency on receipt of the bill from such agency towards advertising expenses. The action taken by the Official Liquidator for deploying 06 (six) security guards of M/s.Shubham Protection Force as per the decision taken by the members of the sale committee held on 25.05.2017 and 14.09.2017 is ratified and the Official Liquidator is permitted to make monthly payment of ₹ 70,200/- inclusive of all taxes to the said security agency for providing security guards to safeguard the assets and properties of the company in liquidation from the funds available with the Official Liquidator in the company’s account.
-
Service Tax
-
2018 (1) TMI 650
Business Auxiliary Services - Support Services for business or commerce - scope of SCN - Held that: - the Commissioner (Appeals) has gone beyond the scope of the show cause and in the appellant’s own case Doon’s Caterers Versus Commissioner of Service Tax, Delhi [2015 (9) TMI 1470 - CESTAT NEW DELHI], on identical set of facts, where it was held that The principle is well settled that a classification of taxable service which is not alleged in the show cause notice cannot be concluded to support levy of tax. The ld. Commissioner (Appeals) has gone beyond the scope of SCN - appeal allowed.
-
2018 (1) TMI 649
Benefit of N/N. 14/2004 dated 10.09.2004 - whether the education service is exempted from the BAS? - Held that: - it appears that N/N. 14/2004 dated 10.09.2004 provides the exemption for the activities in relation to agriculture, printing and textile processing or education - From the agreement between the Education Board Chhattisgarh Madhyamik Shiksha Mandal and the appellant, it appears that the service is rendered by the appellant are “in relation to” education which is exempted from the service tax as per the N/N. 14/2004 dated 10.09.2004 - appeal allowed - decided in favor of appellant.
-
2018 (1) TMI 648
Business Auxiliary Service - whether the amounts received by the appellant as consideration for hiring out the buses to APSRTC during the period 2005-06, 2006-07 (prior to 01.06.2007) would amount to taxable services under business auxiliary services or otherwise? - Held that: - Board vide circular No 137/155/2007 CX.4 dated 02.08.2007 has categorically clarified that mere renting of buses prior to 1.6.2007 will not be taxable under business auxiliary services or any other services. If this is the clarification given by the Board, both the lower authorities have erred in holding that amounts received by the appellants are taxable under business auxiliary services - appeal allowed.
-
2018 (1) TMI 647
Maintainability of appeal - rejection of VCES declaration - Held that: - there is no appellate remedy provided therein as enacted by the Finance Act, 2013. In absence of such remedial provision, the appeal is not maintainable in Tribunal for which, that is dismissed. Chief Commissioner is requested to examine the cases of false declarations under Section 111 of the VCES, 2013 for appropriate action at his end - appeal dismissed.
-
2018 (1) TMI 646
Refund claim - invoice without signature - services provided to SEZ unit - no proper documents is required to indicate that the tax liability has been discharged by the respondent who is registered in the Cochin Special Economic Zone - Held that: - It is a common knowledge that any such computer generated invoice by the banks does not require signature as the said invoice mentions specifically that “this being a computer generated invoice, no signature is required”. There is no dispute as to the fact that the service provider M/s. Standard Chartered Bank has paid the service tax and the appellant has also discharged the same to the service provider - appeal dismissed - decided against Revenue.
-
2018 (1) TMI 645
Claim of small service provider exemption - Notification no. 6/2005-ST dated 01.03.2005 as amended by Notification no. 4/2007-ST dated 01.02.2007 - denial on the ground that the option to avail the exemption cannot be exercised in the middle of the Financial year, where the appellant had already opted for payment of service tax from beginning of the Financial year - Held that: - The notification dated 01.02.2007 in clear and unambiguous terms provides that the provider of taxable service has the option not to avail the exemption and pay service tax on the taxable services provided by him and such option, once exercised in a financial year, shall not be withdrawn during the remaining part of such financial year - In this case, since the appellant had opted for payment of service tax at the beginning of the Financial year, as per the mandates of the said notification, it cannot change the option during the middle of the financial year, opting for the benefit provided under the said notification - appeal dismissed - decided against appellant.
-
Central Excise
-
2018 (1) TMI 676
CENVAT credit - outward transportation of goods on Freight on Road (FOR) basis from factory gate/depot to customers’ premises - Held that: - an identical issue has come up before the Tribunal in the assessee-Appellants’ own case M/s Ultra Tech Cement Ltd. Versus CCE & ST, Rohtak [2014 (10) TMI 679 - CESTAT NEW DELHI], where it was held that sales by the assessee were on FOR basis and therefore the assessee had legitimately availed Cenvat credit on the service tax paid on the freight charges borne for its FOR sales - appeal allowed.
-
2018 (1) TMI 643
SSI Exemption - threshold limit for exemption - Whether denial of benefit of SSI Exemption N/N. 9/2003 was just, legal and proper when admittedly the turnover for FY 2003-04 was less then ₹ 3 crores that is the prescribed time? - Held that: - the appellant could not appear before the Tribunal and on facts, the appellant has a chance to distinguish the judgment which sought to be relied upon by the Tribunal - No facts or reasoning has been given by the Tribunal except relying on the judgment of Supreme Court in the case of CCE, Pune Vs. SKF India Ltd. [2009 (7) TMI 6 - SUPREME COURT] - without entering into merits of the case only on the ground that the appellant was not served on the new address, the matter is required to be remitted back to the Tribunal on the second issue.
-
2018 (1) TMI 642
Demand of interest u/r 96ZO(3) of the CER, 1944 - quantification of interest - Held that: - a stand has been taken that several notices were issued to the petitioner for payment of interest, but they have not complied with the said demand. Since the Court was not satisfied with the contentions raised by the petitioner, it directed the respondent to produce the original files by order dated 31. 07. 2017. However, files are not forthcoming from the Department and the Department has not given any instruction to the learned Senior Panel Counsel in this regard. There will be a direction to the first respondent to issue a fresh demand giving breakup details as to how the interest had been computed and thereafter, proceed to recover the interest in accordance with law - petition disposed off.
-
2018 (1) TMI 641
CENVAT/MODVAT credit - penalty - Held that: - the order directing levy of penalty of ₹ 35,000/- under Rule 571(4) of the Central Excise Rules, is set aside and the matter is remanded to the third respondent for arriving at a correct value, as it is contended that cum-duty price ought to have been taken into consideration - appeal allowed by way of remand.
-
2018 (1) TMI 640
Demand of interest on duty payable on transit/storage loss - time limitation - Held that: - the demand pertains to a period which is more than the normal period of limitation for raising the demand under Section 11A of the Act. It is apparent that the limitation prescribed u/s 11A of the Act would be applicable to the demand of interest made under Central Excise Rules, 2002 - In the instant case the demand has been raised for the period April 2001 to December 2007. On 21.6.2007 thus, the same cannot be sustained as it is beyond the normal period of limitation prescribed under Section 11A of the Act. No element necessary for invoking extended period of limitation has been invoked in the said notice thus the notice is clearly barred by limitation. Appeal allowed.
-
2018 (1) TMI 639
Valuation - job-work - includibility - expenses incurred on Inward transport charges, Insurance charges, Overheads etc. incurred by the supplier - Held that: - what needs to be included in the assessable value for the purpose of job work is the value at the hands of the job worker and that what obviously include the expenses incurred for bringing the goods to the job worker - identical issue decided in the case of NELLAI CONCRETE PRODUCTS & CO. P. LTD. Versus COMMR. OF C. EX., TIRUNELVELI [2011 (10) TMI 531 - CESTAT CHENNAI], where it was held that the freight incurred for transporting the raw materials to the premises of the appellant stands correctly included for determining the duty amount. Time limitation - Held that: - the claim of bona fide belief cannot be sustained - extended period rightly invoked. Appeal dismissed - decided against appellant.
-
2018 (1) TMI 638
Refund of interest - Rule 7(4) of the Central Excise Rules, 2002 read with Section 11AB of the Central excise Act, 1944 - Held that: - appellants have paid interest in respect of duty paid before the finalization of the assessment. In case duty paid before the finalisation of the assessment, interest is not chargeable - the amount of interest paid by the appellant is refundable to them. Time limitation - Held that: - the refund has arisen only after finalization of assessment and before finalization of the assessment there was no ground for the Appellant to file refund as the same would have been held premature. The provisional assessment was finalized on 28.12.2006 and the instant claim was filed on 20.04.2007 which is well within the six months of the finalisation of the assessment, hence the claim cannot be considered to be time barred. Unjust enrichment - Held that: - the interest was paid by the appellant on their own and the same not being the part of the price of the goods, question of passing of incidence of the same does not arise - refund not hit by unjust enrichment. Appeal allowed.
-
2018 (1) TMI 637
Valuation - includibility - whether value of certain parts and accessories cleared alongwith machinery is to be added to assessable value or not? - Held that: - the appellants are including the value of the bought out parts and accessories when cleared along with the main machine in the assessable value. The appellants are however not paying duty when such parts and accessories are cleared independently as replacement. The impugned order does not deal with this issue. It is not in dispute that the parts and accessories are bought out items and if the same are supplied as such no duty liability would arise as there is no manufacturing activity - demand set aside. Demand - amount of sales tax collected but not paid to the government - Held that: - the deduction of sales tax is available only on actual basis and thus any amount collected in excess of the actual would form part of the assessable value - demand upheld. Time limitation - Held that: - from the invoices it cannot be made out if the amount collected by them is actually paid to the government exchequer. There is no such declaration in the RT-12 return as well in these circumstances invocation of extended period is justified and penalty under Rule 173Q can be imposed - quantum of penalty reduced. Appeal allowed in part.
-
2018 (1) TMI 636
Classification of goods - Natural Micronised Progesterone - exemption under N/N. 4/2006 dated 01.03.2006 - The department's case is that as per Sr. No. 47 of 4/2006 and list 3 of Sr. No. 58 the product covered under exemption is Natural Micronised Progesterone tablet whereas the appellants product consist of various ingredients, and is not alone Natural Micronised Progesterone, accordingly, exemption is not available - Held that: - as per the exemption entry the drug and medicine both are exempted. Drug contains only one ingredient i.e. basic drug whereas any medicine which is manufactured out of a drug is invariably consist of other ingredients which is normally form of excipient - Merely by adding the excipient, the medicine which has character of basic drug does not get altered. Therefore, only by adding excipient the exemption cannot be denied, in the facts of the present case - appeal dismissed - decided against Revenue.
-
2018 (1) TMI 635
CENVAT credit - fake invoices - availing cenvat credit without receipt of inputs and raising the credit based on only two documents - penalties - time limitation - Held that: - SCN dated 31.03.2005 was issued for confiscation of the finished goods and raw materials which were found in excess. The preamble of the SCN specifically records that on the basis of intelligence collected, the factory premises of the main appellant was visited. The current SCN in the appeal in hand is also stating the very same preamble and demands the duty from the appellant for availing cenvat credit without receipt of the materials. The SCN earlier issued was decided by the Tribunal in favour of the appellant herein by setting aside the confiscation, in my view, the SCN in this appeal which has been issued on 31.08.2009 seems to be patently hit by limitation. The impugned is unsustainable on limitation and is liable to be set aside - appeal allowed.
-
2018 (1) TMI 634
Clandestine removal - shortage of Calcium Carbonate which is an input - difference between daily production register (profit register) and daily stock register (RG-1 statutory register) - demand on the basis of consignment notice - penalty - redemption fine - Held that: - issue as regards the demand of the duty of inputs and finished goods allegedly manufactured and cleared clandestinely during excess August & September seems to be incorrect - In the absences of any evidence to indicate that the Calcium Carbonate is an input was manufactured by the appellant, the demand of excise duty is not sustainable. As regards the demand of excise duty of the goods allegedly clandestinely manufactured cleared during the period August and September 2009 I find that this allegation is based only on the mismatch of the production figures indicated in the profit register as against RG-1 register - the Revenue has not been able to conclusively prove that there was clandestine manufacture and clearances of the goods from the factory of the appellants - demand set aside. As regards, the evidences relied upon by the Ld. DR more specifically the statements of the Directors which is reproduced in the Show Cause Notice, I find that except for the statement of the Director which indicated that the goods were cleared clandestinely and cash basis further investigation had not taken place and there is no evidence on records to show that the cash was received from whom and where it was utilized - demand set aside. As regards the demand of ₹ 1,67,117/- on the goods allegedly removed clandestinely on the basis of two consignment notes, I find that the Revenue has been able to establish this demand - demand upheld. Confiscation - redemption fine - Held that: - I do not find that the said confiscation need not be upheld as there is nothing on records to indicate that the appellant had intention to remove the said goods clandestinely. In the absence of any such evidence, in my view, the confiscation of the goods needs to be set aside and I do so. Penalty - Held that: - the penalties imposed on the main appellant, the penalty of ₹ 1,67,117/- under Section 11AC needs to be upheld on the findings as recorded herein above while other penalties have to be set aside and I do so - as regards, the penalty imposed on Sh. K. D. Agarwal, the other appellant, there is nothing on records to show that he needs to penalized under Rule 26 of the Central Excise Rule 2002. Accordingly, the penalty imposed on Sh. Agarwal is set aside. Appeal allowed in part.
-
2018 (1) TMI 633
CENVAT credit - MS Angles, Channels etc. - The department was of the view that the appellants are not eligible for credit taken on cement and steel as they do not fall under the definition of inputs or capital goods - Held that: - The decision in the case of Rajasthan Spinning and weaving mills [2010 (7) TMI 12 - SUPREME COURT OF INDIA], had held that the credit is eligible - the imposition of penalty is unwarranted and unjustified and is set aside. Appeals for remanded reconsideration by following various case laws on the said issue whether credit is admissible on cement and steel used for construction of building/foundation/shed etc. - appeal allowed in part and part matter on remand.
-
2018 (1) TMI 632
Opportunity to cross-examine - Appellant had sought cross-examination of the panch witnesses in order to bring on record that there was some commission and omission while recording of stock found physically in the premises - principles of natural justice - Held that: - In the absence of cross-examination of the panch witnesses, the adjudicating authority may not be able to rely upon the Panchnama which is drawn at the factory premises - the adjudicating authority should be given an opportunity to make available the panch witnesses for cross-examination and after doing so should pass an order after following principle of natural justice- appeal allowed by way of remand.
-
2018 (1) TMI 631
SSI exemption - use of brand name of others - It appeared to revenue that the SSI exemption is not available to the appellant as they have manufactured table diaries for LIC with the logo of LIC - Held that: - it is admitted fact that the diaries manufactured by the appellant for LIC have not been traded by LIC - the appellant is entitled to exemption under Notification No. 8/2003 CE read with Circular No. 71/71/94 CX dated 27/10/1994 - appeal allowed.
-
2018 (1) TMI 630
Demand in respect of trading activity - It is the submission that demand on the trading activity as dropped by the First Appellate Authority is based on the certificate issued by the Chartered Accountant who had reconciled the entire detail - Held that: - It can be seen from the impugned order that the First Appellate Authority in Paragraph 11.2 to 11.7 has categorically recorded the findings in detail after considering the Chartered Accountant Certificate, statements of the various persons recorded, the ledger accounts as produced by the assessee. It is also seen from the said records that Chartered Accountant who had certified that their trading activity is statutory auditor - the First Appellate Authority was correct in dropping the demands of the duty of ₹ 32,76,128/- on a sound reasoning - the appeal filed by the Revenue is devoid of merits and is rejected. SSI exemption - threshold limit - Held that: - the demand of the duty liability on the appellant needs to be tested with the plea of the appellant s counsel that they are eligible for SSI Exemption during the relevant period. In order to do so, it is imperative that the adjudicating authority be given an opportunity to decide the matter after considering the submissions of the appellant assessee herein - matter on remand. Appeal allowed in part nad part matter on remand.
-
2018 (1) TMI 629
Deemed credit - N/N. 29/96 CE (NT) dt. 03.09.1996 - deemed credit disallowed on the ground that the value of raw material was suppressed which resulted into short levy and hence due to such incorrect declaration, the deemed credit is not available to the Appellant - Held that: - the price declarations based upon the cost sheet data furnished by the merchant/ trader M/s Jaitex was filed by Appellants. The same is apparent from the statement of Shri Mehra, Proprietor of the Unit and Shri R. Prasad, Authorised signatory. There is no evidence that the Appellant has suppressed or misdeclared the prices. For the incorrect value furnished by the supplier the Appellant cannot be find faulted with. The Revenue has not been able to bring on record any evidence as to collusion of Appellant with M/s Jaitex - in such view of facts the Appellant cannot be held responsible for the alleged offences. Extended period of limitation - Held that: - In view of the facts which clearly does not show any act on the part of the Appellant to evade duty payment we hold that the demands raised by invoking extending period of limitation is not sustainable against the Appellant - penalty also set aside - demand only for normal period upheld. Appeal allowed in part.
-
2018 (1) TMI 628
Clandestine removal - shortage of stock - case of appellant is that difference in stock is only due to accounting system - extended period of limitation - whether the difference in stock of finished goods between theoretical accounting in the books of account and actual accounting based on actual weighment in the Central Excise records at the time of clearance can be considered as shortage of goods clandestinely removed and whether the extended period is invocable, in a case where all the facts were disclosed in the audited financial statements which is a public document and in a case where earlier show-cause notice was dropped involving the same facts? Held that: - the appellant have maintained a stand that the books of account is on the basis of theoretical calculation of production, whereas the quantity of clearance is taken on the basis of actual weighment. This method of accounting in books of account vis-a-vis on actual weighment basis is the reason for difference in the stock shown between both of the records. It is also considered that there is no iota of evidence that any quantity of alleged shortage or even small part of it clandestinely removed by the appellant - the discussion in the finding is based on his personal assumption and presumption without any rebuttal to the findings given by the adjudication order. It is also observed that the total difference is only to the tune of 0.24% as compare to the total production. This also goes on to show that such a meagre difference is obvious when accounting of production is made on theoretical basis and clearance of goods are made on actual weighment basis. Time limitation - Held that: - the appellant have been declaring adjustment of finished stock i.e. written of quantity in their books of account which was audited. Moreover, the similar practice was earlier noticed by the Department and show-cause notice was dropped by the Commissioner and the order of the Commissioner was accepted by the Revenue. In this scenario, it cannot be said the appellant have malafidely suppressed the fact, therefore the demand is clearly hit by limitation also. Appeal allowed - decided in favor of appellant.
-
2018 (1) TMI 627
Whether the interest liability and penal provisions are attracted in respect of reversal of Cenvat credit availed in excess? - CENVAT credit on capital goods taken at 100% and is reversed on being pointed out - Held that: - Apex Court in the case of Ind-Swift Laboratories Ltd. [2011 (2) TMI 6 - Supreme Court] case has held that interest is leviable if the Cenvat credit has been wrongly taken but not utilised - the Adjudicating Authority has rightly upheld the levy of interest. Penalty - Held that: - the Central Excise duty was imposed on coal for the first time in the year 2011. The dispute of wrong availment of Cenvat Credit on capital goods is for the period immediately after introduction of such Excise Duty - the mistake was inadvertent and unintentional - penalty set aside. Appeal allowed in part.
-
2018 (1) TMI 626
Clandestine removal - evidences - Held that: - Department has not brought on any incrementing records/evidence to prove clandestine manufacture and removal of goods. Further, the Department has not investigated the matter with the buyer, to ascertain whether the alleged goods were received by them. Thus, in absence of proper substantiation of the fact regarding clandestine removal of goods, the charges cannot be framed merely based on the rough pad and irregular maintenance of the RG-1 records - appeal allowed.
-
2018 (1) TMI 625
CENVAT credit of CVD paid on capital goods - case of Revenue is that as per Rule 4 (2) (a) and (b) the assessee can avail only 50% of duty paid on capital goods as credit in any financial year - Held that: - due to certain administrative reasons and non-receipt of original documents, the appellant could not avail the credit of 50% in the same financial year when the capital goods were received by them. Accordingly, they availed the credit to the full extent in the next financial year 2012-2013 - The appellants are apparently eligible for 50% credit in 2011-2012 itself, as they had capital goods and did pay duty on such capital goods - appeal allowed - decided in favor of appellant.
-
2018 (1) TMI 624
Demand of Duty @ 1% on gold and silver jewellery - use of brand name - distinction between brand name and house mark - case in dispute is that medallion of gold / silver and other articles of silver have been cleared bearing only the house mark. The brand name ‘Sanchi’ belonged to MMTC has not been embossed on any of these items and this fact is not in dispute - Held that: - In the CBEC circular No. B-1/3/2011 TRU dated 25.3.2011, issued at the time of introduction of 1% duty, it has been clarified that, “only such jewellery or other articles of precious metals which either bear or are marketed and sold under a brand name attract this levy. Whether a particular name or mark or symbol etc. is a brand name or not is a matter of fact, and can be ascertained from the manner in which it is understood in commercial or trade parlance. The test of goods being branded would be if the buyer seeks to buy the goods because they bear or are sold under a particular brand. As such, a mere mark of identity put by a jeweller or the job worker, commonly known as a ‘house mark’ shall not be considered a brand name.” In the case the medallions of gold/silver only the house mark “MMTC Logo” is applied on the articles. The brand name “Sanchi” is not appearing either on the articles or packing. Hence, Central Excise duty of 1% will be not payable on each goods - In the case of silver articles, it is on record that such articles bear the house mark but are sold with the brand name which appears in the packing material. Consequently, such articles are to be considered as sold with the brand name and hence will attract the levy of 1% in terms of notification. The appellant has stated, that the department has taken wrong sales figures. He has submitted the CA certificate supporting the correct sale figure as per records - the matter needs to be remanded to the adjudicating authority for requantification of the demand taking into account the correct turnover. Appeal allowed by way of remand.
-
2018 (1) TMI 623
CENVAT credit - inputs - repair and maintenance of old Transformers - Held that: - Inasmuch as the appellants were manufacturing transformers and were availing Cenvat credit of duty paid on inputs, there could be a bonafide belief on their part that such credit is available on their activities. In the absence of any evidence to show that such availment was being carried out by the appellant with a malafide intention, penal provisions should not be invoked. Extended period of limitation - Held that: - the notice issued after limitation from the date of the audit, had to be held as barred by limitation, inasmuch as the suppression, if any came to be notice of the Revenue, when the audit were conducted - penalty also set aside. Appeal allowed in part.
-
2018 (1) TMI 622
Demand of duty - bottom ash/ flying ash - Held that: - the Coal was used only for generating the heat, and is not related to manufacturing activity - demand set aside - appeal allowed.
-
2018 (1) TMI 621
Valuation - includibility - whether freight, insurance and inspection charges will form part of the assessable value? - Held that: - it is an admitted fact that freight and inspection charges have been separately charged in the invoice - the Assistant commissioner was correct in holding that the freight and inspection charges are not includible in the assessable value - appeal allowed.
-
2018 (1) TMI 620
CENVAT credit - various iron & Steel items namely M. S. Channel, M. S. Angle, H.R. Plates etc - Held that: - The Tribunal allowed the credit on the said items in the cases Commissioner of Central Excise, Raipur Versus M/s Jindal Steels And Power Ltd. [2016 (1) TMI 59 - CESTAT NEW DELHI] and M/s. Singhal Enterprises Private Limited Versus The Commissioner Customs & Central Excise, Raipur [2016 (9) TMI 682 - CESTAT NEW DELHI] - appeal dismissed - decided against Revenue.
-
2018 (1) TMI 619
SSI Exemption - N/N. 1/93 dated 25/02/1993 - N/N. 74/93-CE - Scope of notifications - Held that: - I did not find N/N. 74/93-CE being subject matter of the present appeal - Explanation (E) of Notification No.8/2002-CE and Explanation (E) of Notification No.8/2003-CE are para-materia same - appeal dismissed - decided against Revenue.
-
2018 (1) TMI 618
SSI Exemption - use of Brand name - It appeared to Revenue that the appellants are using the brand name of Radisson below the words chocolate box on the packing material - extended period of limitation - Held that: - extended period of limitation is not invocable in the facts and circumstances, as admittedly the appellants were all along registered with the Central Excise Department/Services Tax Department. They had been filing their service tax returns which have never been found to be untrue and rejected by the Revenue. The earlier show cause notice dated 03/06/2009 was finally settled in their favour and refund allowed in July, 2010. The appellants had suo motu taken registration under Central Excise, in March, 2014 for manufacture and clearance of branded confectionery - there is no case of mis-interpretation, suppression or concealment of facts is made out against the appellants - the extended period of limitation is not invocable. So far the normal period is concerned I find that there is no demand for the normal period as admittedly the appellants have taken registration since April, 2014 and are paying duty in accordance with law as advised - SCN not maintainable - appeal allowed.
-
2018 (1) TMI 617
Jurisdiction - power to remand - as per the department, clause 122 seeks to amend Section 35A of the of the Central Excise Act, 1944, so as to withdraw the power of Commissioner (Appeals) to ‘remand’ the matters back to the Adjudicating Authority for fresh consideration - Held that: - the precedent ruling of this Tribunal in the case of Commissioner of Central Excise Versus Honda Seil Power Products Ltd. [2013 (3) TMI 303 - CESTAT NEW DELHI], squarely coveres the issue in the present case, where it was held that power to remand the matter back in appropriate cases is inbuilt in Section 35A(3) of the Central Excise Act, 1944 and it is apparent that the Commissioner (Appeals) have power to remand the matter back to the original adjudicating authority even after the amendment of Section 35A(3) - appeal dismissed - decided against Revenue.
-
2018 (1) TMI 616
Whether appellant are entitled to claim the benefit of nil rate of duty in respect of paper products classified under Heading 4801.00 of the Schedule to the Central Excise Tariff Act, 1985? - Held that: - the issue is squarely covered by the ruling of this Tribunal - Northern Bench, New Delhi in the case of Nichiketa Papers Ltd. Versus commissioner of Central Excise, Chandigarh-I [2004 (5) TMI 114 - CESTAT, NEW DELHI], where it was held that the appellant should be treated as having been included in the Schedule w.e.f. 23-12-1999 for the purpose of the benefit of Nil rate of duty under the schedule to the Central Excise Tariff Act - appeal allowed - decided in favor of appellant.
-
2018 (1) TMI 615
Eligibility of exemption under N/N. 6/2006-EX dated 01/03/2006 read with N/N. 21/2002-CUS dated 01/03/2002 - flanges - non-production of certificate of DGHS as one of the Contractor/Sub-contractor - Held that: - they supplied these items as per ‘international competitive bidding’ to the Contractor/Sub-contractor executing project as per requirement - further, the condition No.29 referred to in N/N. 21/2002 is to be complied by importers of goods and do not apply to domestic manufacturers. Therefore, when there was no requirement of producing Project Authority Certificate, the reasoning given by the Appellate Authority, is otherwise out of context, is not sustainable - appeal allowed.
-
CST, VAT & Sales Tax
-
2018 (1) TMI 614
Levy of service tax or VAT - workover service contracts entered into by the petitioners with clients - GVAT Act - Article 286 of the Constitution of India read with section 5(2) of the Central Sales Tax Act, 1956 - While the petitioners duly filed returns under the GVAT Act, they did not admit any liability of tax under the GVAT Act since according to the petitioners the contracts do not involve any sale/deemed sale of goods. Whether the contract entered into between the petitioners and the ONGC for workover operations on oil wells of the ONGC is (a) a purely service contract, or (b) a composite contract involving both, an element of service as well as transfer of right to use goods? Held that: - while the overall supervision of the project is carried out by the representative of the ONGC, the actual work is executed by the contractor through his representative and all the contractor’s personnel are under his charge - the court has held that all the sub-clauses of Article 366(29-A) of the Constitution serve to bring transactions where one or more of the essential ingredients of a sale as defined in the State of Goods Act, 1930 are absent, within the ambit of purchase and sales for the purposes of levy of sales tax. The amendment especially allows specific composite contracts viz., works contract [sub-clause (b)]; hire-purchase contracts [subclause (c)], catering contracts [sub-clause (e)] by legal fiction to be divisible contracts where the sale element could be isolated and be subjected to sales tax. The court has observed that of all the different kinds of composite transactions, the drafters of the Forty-sixth Amendment chose three specific situations, a works contract, a hire-purchase contract and a catering contract to bring them within the fiction of a deemed sale. Of these three, the first and third involve a kind of service and sale at the same time. Apart from these two cases where splitting of the service and supply has been constitutionally permitted in sub-clauses (b) and (f) of clause (29-A) of Article 366, there is no other service which has been permitted to be so split. The contract between the petitioners and the ONGC does not involve any transfer of the right to use goods and resultantly there is no deemed sale attracting the levy of value added tax on such transaction. The contention of the petitioner that the transaction is only for providing the service of workover operation and nothing more, therefore, deserves to be accepted. The contract entered into between the petitioner and the ONGC for workover operations of oil wells of ONGC is a pure contract of services to the ONGC. The impugned order passed by the Tribunal which holds that the contract dated 8.7.2008 entered into between the petitioner and the ONGC is a composite contract involving both the element of deemed sale by way of transfer of right to use goods and the element of providing services to the ONGC, being contrary to the intention of the parties as provided in the agreement to contract, cannot be sustained. The Tribunal after holding the contract to be a composite one, involving an element of service as well as an element of transfer of the right to use the goods has remanded the matter to the first appellate authority to recalculate the tax liability with consequential effect on interest and penalty - petition allowed.
-
2018 (1) TMI 613
Review application - Amnesty Scheme - whether, in the present case, there has been any delegation of the said power which is vested in the Commissioner under the aforesaid clause 8? - Held that: - We have perused the Review Petitions as well as the grounds in support thereof. In our opinion, no case for review of order dated 04.10.2017 [2017 (10) TMI 181 - SUPREME COURT OF INDIA] is made out - review petition dismissed.
-
2018 (1) TMI 612
Whether the additional sales tax liability of an Agent, is independent of the liability of its principal? Held that: - the petitioner's principal is situated outside the State of Tamil Nadu viz., in Andhra Pradesh, and they have no branch in the State of Tamil Nadu, and the petitioner is the direct agent of the principal, who is an assessee in Andhra Pradesh, and there is a consensus between the petitioner and the principal at Andhra Pradesh - the decision in the case of Siemens Ltd., [1998 (6) TMI 547 - TAMIL NADU TAXATION SPECIAL TRIBUNAL] would squarely apply to the facts of the present case, where it was held that clause (a) of sub-section (1) of section 2 of the principal Act, namely Act 14 of1970 is ultra vires and should stand deleted. We make it clear that we are striking down only clause (a) of section 2(1). We also make it clear that under section 2 (2) and 2 (3) the intention of the legislature not to pass on the burden of additional sales tax to the consumers and the reference to prosecution, shall stand unaltered. The matter is remanded to the third respondent/Assessing Officer, who shall redo the assessment in accordance with law.
-
2018 (1) TMI 611
Inter-state sales - suppression - exemption - Held that: - Merely because the vehicles had moved from Mannargudi to the Container Corporation of India Ltd., there cannot be any interference that the vendor had effected interstate sales on the above, both the appellate authority and the Tribunal have recorded their concurrent findings that the vendor cannot be found fault with, but the buyer is the real culprit. Under Article 226 of the Constitution of India, Courts should not interfere with the concurrent findings of the fact unless, on conclusion, by material on record, hold that there is perversity. There is no merit in the contention of the writ petitioners nor there is any case to interfere, on the substantial questions of law, raised. Tax Case Revision Petitions are dismissed.
-
2018 (1) TMI 610
Penalty - issuance of sale invoice instead of tax invoice by seller - assessee was required to disclose the Tin Number and other details to the selling dealer and to purchase such materials only by way of tax invoice - case of revisionist is that since no advantage had been taken by it, no deliberate act can be attributed to it, and therefore penalty imposed is bad in law - Held that: - the Tribunal has clearly noticed the fact that there was no undue benefit gained by the assessee on account of issuance of sale invoice instead of tax invoice - In such circumstances, the act of purchasing dealer cannot be construed as a deliberate act so as to bring it within the clutches of section 54(1)(5) - penalty not sustained - revision allowed.
-
Indian Laws
-
2018 (1) TMI 651
Writ of prohibition - discharge of duty by statutory authority - Section 14 of the SARFAESI Act - possession of property - Held that: - There is no quarrel that writ petitioner is entitled to enjoy the subject property and the heir apparent under the Will are the daughter-inlaw and Grandson of K.P.Ramakrishna Pillai viz., Mrs. Punithavathi and Ajith Kumar, respectively. Section 14 of the SARFAESI Act, 2002 mandates that on receipt of an affidavit from the Authorised Officer, the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, shall after satisfying the contents of the affidavit, pass suitable orders for the purpose of taking possession of the secured assets, within a period of 30 days from the date of application. Proviso to the said Section states that if no order is passed by the Chief Metropolitan Magistrate or District Magistrate, within the said period of thirty days, for the reasons beyond his control, he may after recording reasons, in writing, for the same, pass the order within such also period but not exceeding in aggregate 60 days - As per Section 14 of the Act, duty is cast on the Chief Metropolitan Magistrate or the District Magistrate, as the case may be, to assist the secured creditor in taking possession of the secured asset. Under the scheme of Act, District Collector cum District Magistrate or the Chief Metropolitan Magistrate, as the case may be, is empowered to pass orders, after considering the parameters, set out in the said section. Statutory authority cannot be restrained from discharging his duties and functions by issuance of a writ of prohibition. In the case on hand, statute empowers the District Magistrate cum District Collector, to pass orders on the application filed under Section 14 of the SARFAESI Act, 2002. He cannot be said to have acted without jurisdiction. Action of the District Magistrate cum District Collector cannot be said to be in excess of jurisdiction. Adhering to the principles of natural justice, the District Magistrate Cum District Collector, has issued notice to the petitioner and others. There is no violation to fundamental right. Request of the petitioner to issue a writ of Prohibition does not satisfy the parameters - Prayer sought for, in the instant writ petition W.P.No.31563 of 2017 to prohibit a statutory authority from discharging his duties under Section 14 of the SARFAESI Act, cannot be granted. Petition dismissed.
|
