TMI Tax Updates - e-Newsletter
October 12, 2023
Case Laws in this Newsletter:
GST
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Penalty order u/s 129(1) of the UPGST Act - confiscation of goods - It was contended that, the goods, along with documents, were inside the railway station for getting the Railway Receipt as the number of the Railway Receipt is to be mentioned in the e-way bill - Once this fact was brought, from the date of interception till the passing of the impugned order, not a word has been whispered by either of the authorities below that there was any intention of the petitioner to evade payment of tax. - Cost of Rs. 1000 imposed on the Revenue / GST officers - HC
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GST:
Cancellation of GST registration of petitioner - The SCN was incapable of eliciting any meaningful response as it provided no intelligible reasons for proposing cancellation of the petitioner’s GST registration - the petitioner’s GST registration was cancelled on account of a letter received from the Anti-Evasion Branch and for the reasons that No Objection Certificate had not been received from the said Branch. - GST registration directed to be restored - HC
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GST:
Validity of criminal proceedings initiated - Non-payment of GST - non-appearance at any date against four summons issued to the accused - The documents on record clearly suggest that summons have been replied, which was also entertained by the authority by way of granting time. Thus, it cannot be said that this is a case of non-compliance of summon issued by the authority concerned. - Criminal proceedings quashed - HC
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GST:
Cancellation of GST registration of petitioner - allegation of not maintaining the sale register - It is a matter of common knowledge that under the GST Act, A/c book are to be maintained by every person. There is no finding at any stage to show that A/c book were not maintained by the petitioner. In absence of such finding, no violation of section/rule of UPGST Act/UPGST Rule can be made out against the petitioner. - Once, there is no violation of Section 29 read with rule 21, any action taken for cancellation of registration cannot sustain in the eye of law. - HC
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GST:
Apprehension of pre-judging the matter - Validity of preliminary report - the challenge to the preliminary report dated 02.06.2023 has worked itself out inasmuch as subsequently a final report has been drawn on 24.07.2023 and the correctness of the said report also need not be gone into at this juncture since the matter has now travelled to the stage of issuance of the show cause notice dated 23.08.2023. - HC
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GST:
Payment of GST under Reverse Charge Mechanism (RCM) - guarantee/security to the bank provided by the Managing Director by providing the personal properties as security and personal guarantee - The order cannot be said to be in any manner erroneous, arbitrary or bad in law. - HC
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GST:
Non-application of mind by the GST officers - Validity of issue of Show cause notice (SCN) - The Commissioner of State Tax is required to explain as to why such an approach to generate unwarranted litigation, on the part of the Officers ought not to be deprecated and taken to the logical conclusion - HC
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GST:
Validity of order passed u/s 74 - The impugned order contains reasons and has been passed after affording the petitioner an opportunity. All the points of the petitioner have been duly dealt with and considered in the impugned order. There are no other grounds urged warranting any interference with the impugned order. There is no illegality nor perversity nor error of law in the impugned order. - HC
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Income Tax:
CSR expenditure - whether a allowable business expenditure? - explanation to Section 37(1) of the Act would not be applicable as it was with effect from the assessment year 2015-16. - Tribunal was satisfied that the CSR expenditure incurred prior to the assessment year 2015-16 are allowable as business expenditure as the same are wholly and exclusively incurred for the purpose of business. - HC
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Income Tax:
Condonation of delay in filling appeal before High court - Huge delay of 1072 days - 'sufficient cause' of delay or not? - Now, they suddenly woke up from slumber like Rip Wan Winkle and prayed to condone the delay in filing the appeals. Such callous and lackadaisical attitude on the part of the appellant, cannot be countenanced by this court. - Pray denied - HC
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Income Tax:
Reopening of assessment u/s 147 - Scope of new provision section 148A - The explanation tendered for issuance of 148 A (b) notice yet again for the third time is fallacious and unacceptable as the liberty granted under Ashish Agarwal would be available only in those situations where the matters stood at an initial / preliminary stage of re-assessment i.e., at notice stage. In matters where the proceedings have been carried forward to the stage of passing of Section 148A(d) order and issuance of section 148 notice, there is simply no justification in law or in fact, to subject the petitioner to a third round of proceedings. In our view, this is a case, where the liberty granted has not been ‘used’ but ‘abused’ by the Department. - HC
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Income Tax:
Benefit of DTAA against Dividend Distribution Tax (DDT) - whether the benefit of DTAA can be extended to domestic company? - The Protocol with reference to Article 10 as per India Hungary DTAA on taxability of distributed profits cannot be interpreted so as to say that it covers the domestic companies, since there is no specific clause in the Treaty to that effect. Consequently assessee's claim of refund of DDT in respect of shareholders covered under India Netherlands DTAA is rejected. - AT
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Income Tax:
Validity of Reopening of assessment u/s 147 - Failure to record the valid satisfaction - The assessment order passed, as a consequence is, liable to quashed. The contention of the ld. DR that there was a separate reasons recorded by the AO which revealed the source of information or the material with the AO leading to his belief of escapement of income, is of no assistance to the validity of the re-assessment proceedings, since admittedly, this reason was never confronted to the assessee. - AT
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Income Tax:
Revision u/s 263 - Disallowance u/s 14A r.w.r 8D - In case, the ld. 1st Appellate Authority forms an opinion that ld. AO has committed an error by not making complete disallowance on all the limbs of Rule 8D, then, he could have issued a notice for enhancement of income by exercising his appellate power. Therefore, this issue ought to have not been taken up in 263 proceeding. The order of ld. Pr. CIT is not sustainable on the first-fold of reasoning given by him. - AT
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Income Tax:
Higher rate of Depreciation - Prime requirement is that moulds should be owned by the assessee, the same should be part of block assets shown by the assessee and these were put to use for the purpose of business of the assessee and the three requisite conditions have been fulfilled by the assessee in the present case and thus it is entitled to claim depreciation @ 30% - AT
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Income Tax:
Penalty u/s 271(1)(b) - non-compliance of notice u/s 142(1) - The judgment/decision on the strength of which we had expressed deletion of penalty are not applicable, as there is deliberate and willful disobedience by the assessee in filing the response before the Assessing Officer, even after receiving the notice u/s 142(1) - Penalty confirmed - AT
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Income Tax:
Penalty u/s 271(1)(c) - estimation of income - bogus purchases - penalty u/s 271(1)(c) of the Act cannot be levied where the addition is made on estimate basis - AT
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Customs:
Levy of penalty u/s 114AA of the Customs Act, 1962 - Smuggling - Red Sanders - appellant have not made, signed or use any declaration, statement or document pertaining to alleged illegal export when all the activities regarding this export was carried out by the exporter and his Clearing House Agent - None of the substantial questions of law formulated arise in this appeal - Levy of penalty got confirmed - HC
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Customs:
Seeking waiver (exemption) of cost recovery basis - whether the CFS has achieved the bench marking for waiver of cost recovery charges - the sanction of posts of customs officers was with effect from 18.03.2020 - The petitioners are entitled to waiver of cost recovery charges in light of circular dated 12.09.2005 with effect from 01.07.2019. Costs recovered towards posting of custom officials at the petitioners’ CFS post 01.07.2019 be refunded to the petitioners - HC
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Customs:
Conversion of shipping bills - Denial of Export Benefits - Appellant thus having waited for long for cancellation correctly applied for conversion to Customs authorities. However, denial of export benefit despite delay and non response by the DGFT authorities makes the rejection letter of Commissioner improper - the rejection letter quashed aside and lower authorities are directed to convert DFIA Shipping Bills to Drawback Shipping Bills as are involved in the present appeal. - AT
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Customs:
Levy of penalty - the appellant had attempted to import areca nuts in guise of betel nut products by mis-declaring and mis-classifying under Chapter 21 so as to avail the benefit of 100% exemption of BCD and thereby evade payment of legitimate customs duty. - Levy of penalty confirmed - AT
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Indian Laws:
Dishonour of Cheque - existence of a legally enforceable debt - onus to prove - The fundamental error in the approach lies in the fact that the High Court has questioned the want of evidence on part of the complainant in order to support his allegation of having extended loan to the accused, when it ought to have instead concerned itself with the case set up by the accused and whether he had discharged his evidential burden by proving that there existed no debt/liability at the time of issuance of cheque. - SC
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Indian Laws:
Seeking partial setting aside of award - scope of the contract - extra Cost on increased - Extra GST Burden - non-grant of entire additional GST burden - In view of the terms of the contract, AT had rightly relied upon the aforesaid clause which restricted the Contractor from seeking any adjustment in the Contract price either on the increase or decrease in cost as a consequence of change in tax duties/levies - HC
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Service Tax:
Classification of services - works contract services or not - activity of construction of Mega Sports Complex for hosting 34th National Games by Government of Jharkhand - the activity undertaken by the Appellant is 'Works Contract Service' as defined under Clause (b) of Section 65(105)(zzzza) and hence the activities undertaken are not liable to service tax as the mega sports complex is not primarily meant for commercial purposes. - demand set aside - AT
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Central Excise:
Clandestine production and removal - excesses and shortages in stock - The quantum of excess and shortages determined by the exercise of stock taking is negligible in all cases except for the scrap. The stock taking errors and the weighing scale errors etc could have accounted for the shortages and excesses. - Demand made in respect of shortages which are in range from 0.3 kgs to 23.60 kgs cannot be justified, without any evidence of any clandestine clearance or without any investigation also being made in this respect. - AT
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Central Excise:
Wrongful availment of CENVAT credit - Removal of machinery after two days of taking credit - The fact of removal of one Autoconer to Guna plant, which took place within two days of taking credit, was not brought to the notice of the Central Excise Authorities, and it was detected only during the course of audit. As such there is nothing wrong if penalty is levied on the appellant either. - HC
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Central Excise:
Classification of goods - Loader fitted in the tractor supplied by the customer - Adjudicating Authority has considered all the parameters, considered the photographs, physical aspect of the product, use of the product namely tractor to arrive at the conclusion that loader being accessory of the tractor, is correctly classifiable under Chapter heading 8708 - Revenue appeal dismissed - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2023 (10) TMI 416
Penalty order under section 129(1) of the UPGST Act - confiscation of goods - at the time of interception of the goods were inside or outside the railway station? - HELD THAT:- Against the order passed under section 129(3) of the SGST Act, an appeal was preferred before the Additional Commissioner, but by the impugned order, a fact has been noticed at internal page no. 4 that the owner of the goods, along with documents, were inside the railway station for getting the Railway Receipt as the number of the Railway Receipt is to be mentioned in the e-way bill, Part B. Once this fact was brought, from the date of interception till the passing of the impugned order, not a word has been whispered by either of the authorities below that there was any intention of the petitioner to evade payment of tax. It is also not in dispute that the petitioner, after getting the knowledge of the goods being intercepted and confiscated before passing the seizure order, has informed the authorities about the attending circumstances, but without considering the same, the impugned order under section 129(3) of the SGST Act has been passed. This Court in the case of M/S SHYAM SEL AND POWER LIMITED VERSUS STATE OF U.P. AND 2 OTHERS [ 2023 (10) TMI 218 - ALLAHABAD HIGH COURT] has held Upon a purposive reading of the sections 129, 130 and 138, it would suffice to state that the legislation makes intent to evade tax a sine qua non for initiation of the proceedings under sections 129 and 130 of the CGST Act. The Punjab Haryana High Court, in M/S RAGHAV METALS VERSUS STATE OF HARYANA AND OTHERS [ 2022 (3) TMI 682 - PUNJAB HARYANA HIGH COURT] has held Keeping in view these circumstances, it cannot be said that the petitioner had any intent to evade the tax or the mismatch in the quantities is of such nature which shall entail proceedings under Section 129 of the Act. In view of the facts circumstances stated above as well as the law laid down by the Apex Court as well as this Court, the impugned orders cannot be sustained in the eyes of law - impugned order passed by the respondent no. 2 as well as the impugned order passed by the respondent no. 3 are hereby quashed - The writ petition is allowed with a cost of Rs. 1,000/-, which shall be paid to the petitioners by the respondents Authorities within a period of 15 days from today.
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2023 (10) TMI 415
Cancellation of GST registration of petitioner - specific reason for cancellation not provided in the SCN - HELD THAT:- As is apparent, the SCN did not set out any specific reason or allegation on the basis of which the proper officer proposed to cancel the petitioner s registration. Although, it is alleged in the SCN that the registration has been obtained by means of fraud, wilful misstatement or suppression of facts, it does not provide any clue as to the alleged fraud committed by the petitioner; the alleged wilful misstatement made by him; or the material facts allegedly suppressed by him. It is well-settled that a show-cause notice must clearly state the reasons for proposing any adverse action to enable the noticee to respond to the same. The SCN was incapable of eliciting any meaningful response as it provided no intelligible reasons for proposing cancellation of the petitioner s GST registration - the petitioner s GST registration was cancelled on account of a letter received from the Anti-Evasion Branch and for the reasons that No Objection Certificate had not been received from the said Branch. The order dated 15.11.2022 is thus void as having been passed in violation of the principles of natural justice - the SCN is also not sustainable for the reason that it fails to meet the necessary standards required of a show-cause notice. The order cancelling the petitioner s GST registration cannot be sustained. The SCN as well as the order dated 15.11.2022 cancelling the petitioner s GST registration, are set aside - respondent is forthwith directed to restore the petitioner s GST registration - Petition allowed.
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2023 (10) TMI 414
Validity of criminal proceedings initiated - Non-payment of GST from January, 2018 to November, 2018 before initiation of the investigation - Deliberate ignoring the summons issued by the Central Goods and Service Tax Department u/s 70 of the Central Goods and Service Tax Act, 2017 - non-appearance at any date against four summons issued to the accused - violation of provisions of Section 70 of the CGST Act - HELD THAT:- The Court has gone through the materials on the record including the summons, which have been issued to the company and the same are brought on record. The summon contained in Annexure-2, dated 27.12.2018 is addressed to M/s SSK Devcon Private Limited and pursuant to that, the company vide letter dated 29.12.2018 replied the said summon informing the authority concerned that sum of Rs.1,56,20,520/- was deposited on 05.12.2018 and 45 days' further time was requested for depositing further dues. Vide letter dated 14.01.2019 contained in Annexure-4, the authority allowed time and directed to make full payment of GST amount. It is crystal clear that so far as the amount of GST is concerned, that has already been deposited. However in the counter affidavit, it has been stated that sum of Rs.5,21,95,792/- has been received by the authority concerned subject to verification. However, non-filing of any case or initiation of proceeding for any recovery suggest that there is no due against the petitioners. The documents on record clearly suggest that summons have been replied, which was also entertained by the authority by way of granting time. Thus, it cannot be said that this is a case of non-compliance of summon issued by the authority concerned. Considering that the summons were replied, which were entertained by the authority concerned and it cannot be said that the petitioners have not complied with the summons, issued by the authority concerned and further there are procedure prescribed under the CGST Act, 2017 for penalty under Section 125 which restricted to a fine of Rs.25,000/- only and none of the failure prescribed in Section 132 of the said Act is the subject matter of the present cases and further Section 70 of the said Act speaks of procedure to be adopted for summoning, that will in accordance with the Code of Civil Procedure and further considering that the reply to the summons were entertained by the authority concerned, to allow to continue the proceeding under Section 174 of the Indian Penal Code against the petitioners will amount to abuse of process of law. The entire criminal proceedings arising out of Complaint Case including the order taking cognizance dated 19.06.2019, pending in the Court of the learned Judicial Magistrate, 1st Class, Ranchi are quashed - Petition allowed.
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2023 (10) TMI 413
Condonation of delay of 9 months in filing appeal - time limitation - principles of natural justice - HELD THAT:- Considering the facts and circumstances of the case and the specific averments made in the writ petition show bona fide of the petitioner company and in the interest of natural justice and that the impugned adjudication order was passed ex parte and that the delay in filing the appeal was also due to laches and lapse of its tax consultant which is unprofessional conduct of the tax consultant and though the assessee should also been be vigilant and diligent about its legal rights after all it is a company having service of tax professional and experts but still in the interest of justice and in view of the statement made by the petitioner that petitioner is ready and willing to pay a cost of Rs.5 lakhs to the authority concerned for condonation of delay in filing the appeal before the first appellate authority, the impugned orders of the appellate authority dated 20th April, 2023 are set aside. Since the impugned adjudication orders were passed ex partee may be due to lapse or fault on the part of the petitioner s tax consultant, matter should be remanded back to the adjudicating authority concerned, accordingly, the impugned adjudication orders dated 12th March, 2022 are also set aside - Petition disposed off.
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2023 (10) TMI 412
Cancellation of GST registration of petitioner - cancellation on the ground that the petitioner was not maintaining the sale register - HELD THAT:- Admittedly, it is not in dispute that the TTZ authorities have been constituted by Ministry of Environment and Forest, Government of India in exercise of power conferred by sub-clause 1 3 of Section 3 of Environment (Protection) Act, 1986, which is known as the Taj Trapaezium Zone Pollution (Prevention and Control) Authority. In exercise of power under Sections 5 24 of the said Act, the direction can be issued in the interest of protecting the environment - On perusal of Section 5 of Environment (Protection) Act, it is clear that for the protection of environment, a direction can be issued to officer or any authority and they shall be bound by the said direction in respect of industry only. In the case in hand, the petitioner is the coal trader and from his business activities does not emanate any hazardous thing which is bad for the environment. From bare perusal of Section 24 of the Environment (Protection) Act, 1986, it is evidently clear that if an offence is punishable under this act and the offender is also found guilty of said offence, offender shall be liable to punish under other act and not under Environment (Protection), 1986 Act. The Hon'ble Apex Court in the case of Ind-Swift Laboratories Limited [ 2011 (2) TMI 6 - SUPREME COURT] has categorically held that a taxing statute must be interpreted in the light of what is clearly expressed therein meaning thereby when Section 29 read with rule 21 specifically provides a complete mechanism statute under which the registration can be cancelled and no aid can be taken by any other statute - The Division Bench of this Court in the case of Agra Coal Suppliers [ 2011 (5) TMI 1145 - ALLAHABAD HIGH COURT] has held that in the area of TTZ, the registration cannot be cancelled. Admittedly, no order of cancellation was passed on the date fixed for 29.4.2022, but thereafter on 14.10.2022 for which neither any notice nor any communication was made to the petitioner. Further, in the cancellation of registration order, it has wrongly been mentioned that no reply was submitted by the petitioner, but the next mentions the reply date. In view of the law laid down by the Division Bench of this Court passed in Agra Coal Suppliers impugned order cannot sustain - It is a matter of common knowledge that under the GST Act, A/c book are to be maintained by every person. There is no finding at any stage to show that A/c book were not maintained by the petitioner. In absence of such finding, no violation of section/rule of UPGST Act/UPGST Rule can be made out against the petitioner. Once, there is no violation of Section 29 read with rule 21, any action taken for cancellation of registration cannot sustain in the eye of law. Petition allowed.
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2023 (10) TMI 411
Seeking grant of Interim Bail - Input Tax Credit - creation of fake entities to avail Input Tax Credit, without actual supply of goods - HELD THAT:- The order of cancellation of registration was passed on 11 November 2022, to take effect from 26 November 2020. Resultantly, the alleged availment of Input Tax Credit cannot be said to be from the very entity whose registration had already been cancelled. Since the major component of the wrongfully availed Input Tax Credit to the tune of Rs. 7.74 Crores is attributed to M/s. Sunshine Traders, the order of restoration of the registration does bear upon the Respondent s case against the applicants. Secondly, the applicants have appeared before the Investigating Officer, as directed. As many as seven statements of the applicant No. 1 have been recorded. Relevant documents appear to have been collected. It cannot be, thus, urged that the applicants have not co-operated with the investigation. As the applicants have been protected since December 2022 and the sustainability of allegation of wrongful availment of Input Tax credit in respect of a major component (Rs. 7.74 Crores) become debatable, at this length of time, no custodial interrogation of the applicants is warranted for further investigation. The applicants also appears to have roots in society. The possibility of fleeing away from justice appears to be remote - the order of interim bail made absolute - application disposed off.
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2023 (10) TMI 410
Apprehension of pre-judging the matter - Validity of preliminary report which was drawn by the authorities concerned - appellants/ assessees did not file their rebuttal to the preliminary report as there was an application pending before the Special Commissioner - HELD THAT:- The challenge to the preliminary report dated 02.06.2023 has worked itself out inasmuch as subsequently a final report has been drawn on 24.07.2023 and the correctness of the said report also need not be gone into at this juncture since the matter has now travelled to the stage of issuance of the show cause notice dated 23.08.2023. The appellants should participate in the adjudicating proceedings by filing an appropriate reply to the show cause notice dated 23.08.2023. In reply to the show cause notice, the appellants are entitled to raise all factual and legal issues including the issue that the Bureau of Investigation cannot act or function as an adjudicating authority to adjudicate the show cause notice. If such a plea is raised, the said authority who had issued the show cause notice shall decide the said contention as first amongst the several contentions that may be raised by the appellants in reply to the show cause notice. Since the time limit prescribed for submitting the explanation to the show cause notice has already expired, the time is extended and the appellants shall submit their reply to the show cause notice not later than 16th October, 2023. Appeal dismissed.
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2023 (10) TMI 409
Payment of GST under Reverse Charge Mechanism (RCM) - guarantee/security to the bank provided by the Managing Director by providing the personal properties as security and personal guarantee - N/N. 13/2017- Central Tax (Rate) dated 28.06.2017 - HELD THAT:- A plain reading of the notification referred to in the preceding paragraphs would clearly give an indication that the Central Government vide the said notification had specifically notified that the services provided by the Director of a company or a body corporate to the said company or said body corporate be leviable of tax on reverse charge basis and in the said event, the company would become liable to pay the tax for the said services. The said notification is also not under challenge and the same still holds good. In the teeth of the said notification, the finding arrived at by the respondent No. 1 at the first instance dated 18.11.2021 and the order in original dated 31.03.2023 passed by the respondent No. 3 also cannot be said to be in any manner erroneous, arbitrary or bad in law - No strong case made out by the petitioner calling for interference with the said impugned order. Petition dismissed.
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2023 (10) TMI 408
Validity of SCN issued alleging non filing of returns - Petitioner had informed the concerned officers that the returns were already filed - issue on the operation of the electronic portal - HELD THAT:- There are inaction on the part of the State officers to whom several representations were addressed, who have not even bothered to respond to such repeated representations. Eventually, the Petitioner was also required to approach the Hon ble Cabinet Ministers of the Central Government, namely the Finance Minister and the Minister for Micro, Small and Medium Enterprises - Certainly, such an approach on the part of the State Officers, who are supposed to be dealing with the assessees is not expected and when it is informed to us that the policy of the Government is of an ease of during business. If this be so, the basic requirement in regard to the grievances being made by the assessees through their representations need to be addressed with utmost urgency and more particularly in a case as the present, wherein, more than 20 representations being made by the Petitioner were not addressed. This itself is quite alarming. The Commissioner of State Tax is required to explain as to why such an approach to generate unwarranted litigation, on the part of the Officers ought not to be deprecated and taken to the logical conclusion. Let the affidavit also address on the merits of the Petitioner s contention on the return having been filed, as also on the Petitioner s contention of there being no justification in issuing the show cause notice. Such reply affidavit be placed on record within a period of 2 weeks from today. Copy of the same be served to the Petitioner well in advance. Stand over to 10th October 2023, High on Board.
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2023 (10) TMI 407
Validity of order passed u/s 74 - Violation of principles of natural justice - opportunity hearing not provided to petitioner - payments made in the post GST regime in respect of contracts or outgoing projects where estimates had been approved before 1st July, 2017 - Notification dated 16th August, 2017 - HELD THAT:- The impugned order is well reasoned and categorically records that the petitioner has received the entire payment against execution of work contracts in the post GST regime. Hence, the petitioner was obliged to pay GST on such payment and the same ought to have been made after filing the proper form. The plea of the appellant that the tax has not been paid by the Department, is also not tenable in law and non-payment of GST by the petitioner is in contravention of the provision of the Act. In any event, all these aspects have been considered in the impugned order. The impugned order contains reasons and has been passed after affording the petitioner an opportunity. All the points of the petitioner have been duly dealt with and considered in the impugned order. There are no other grounds urged warranting any interference with the impugned order. There is no illegality nor perversity nor error of law in the impugned order. Petition dismissed.
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Income Tax
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2023 (10) TMI 448
Block assessment u/s 158BC - third round of appeal - assessee made disclosure of approx. Rs. 77.69 Lacs and agreed to file the necessary return of income. However, in response to notice u/s 158BC, he filed Nil return of income - Tribunal, vide order after considering assessee s submissions as well as additional evidences filed by the assessee, reduced the taxable income - The impugned assessment order is not sustainable in law as the same is not in consonance with the specific directions of the Hon'ble Tribunal while remitting the matter to the assessing authority - whether AO failed to note that the assessee had filed evidences of the state revenue authorities before this Hon'ble Tribunal to show and prove his agriculture income and also the source of investments of other persons whose income and investments were sought to be included as that of the assessee, based on which this Hon'ble Tribunal deleted those additions? - argument that the additions made by AO without reference to search material should not be included in his income for the block period HELD THAT:- Upon perusal of order of Tribunal in first round, it could thus be seen that detailed factual findings have been rendered by Tribunal on each of the issue after appreciating the assessee s submissions as well as evidences filed by the assessee before the bench. The same documents were placed by the assessee before Ld. AO in the present proceedings. However, Ld. AO rejected the same and chose to take the same stand as taken in original assessment order. Aggrieved, the assessee is before us with similar arguments and evidences. Under these circumstances, the bench concurs with the findings of Tribunal in first round and considers it fit to adopt the same adjudication in the present proceedings. In other words, the income of the assessee stand reduced as adjudicated by Tribunal in the first round. All the grounds of appeal stand disposed-off accordingly. Our aforesaid adjudication is duly supported by the order of Hon ble Special Court acquitting the assessee and all the other accused persons. The observations of Hon ble Supreme Court in DCIT vs. Jayachandran Others [ 2018 (4) TMI 1473 - SUPREME COURT] duly support the argument of Ld. AR that the findings arrived at by the criminal court could be taken into consideration while deciding the question as to the relationship between the parties to the case. When the findings are arrived by a criminal court on the evidence and the material placed on record then in absence of anything shown to the contrary, there seems to be no reason as to why these duly proved evidence should not be relied upon by the Court. Additionally, it would also be pertinent to note that, in the first round, the additional evidences were not furnished by the assessee with respect to all the impugned issues but the same were confined to only few of the issues only as tabulated by Ld. AR Additional evidences ought to have been confronted to the AO who would be in a better position to appreciate / verify the same. This fact also strongly supports adoption of first round adjudication of the Tribunal by us. Therefore, we direct Ld. AO to determine the total income of the assessee at Rs. 64,98,721/- as per the first round of decision by Tribunal.
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2023 (10) TMI 446
Higher rate of depreciation on moulds - moulds used by the vendors and not by the assessee directly - manufacturing of rubber and plastic goods done by the vendors - Revenue s contention was that since the assessee is a two-wheeler manufacturer, the depreciation @ 30% is not available to the assessee as the assessee is not a rubber/plastic manufacturer - HELD THAT:- As decided in Honda Motorcycle Scooter India (P.) Ltd. [ 2016 (10) TMI 634 - ITAT DELHI] it is immaterial whether the plastic /rubber moulds were used in the factory premises of the assessee or vendors. Prime requirement is that moulds should be owned by the assessee, the same should be part of block assets shown by the assessee and these were put to use for the purpose of business of the assessee and the three requisite conditions have been fulfilled by the assessee in the present case and thus it is entitled to claim depreciation @ 30% which was rightly allowed by the ld. CIT(A). Decided in favour of assessee. Addition of excise duty not recovered from sales - According to Ld. AO the assessee has got benefit of CENVAT on one hand and has shown reduced income by excluding excise duty not recovered from sales, therefore, expenses claimed in the profit and loss account on account of excise duty not recovered from the sales is not allowable - HELD THAT:- We note that Ld. AO got confused between the two items; CENVAT/MODVAT and excise duty which are two different items and cannot be co-related. We are fully concurred with the finding of Ld. CIT(A) that one is expense while the other is a credit or prepaid tax which can be adjusted by offsetting the same with the excise duty payable and Ld. AO has failed to notice the difference between the two. Accordingly, we uphold the order of Ld. CIT(A) by holding that excise duty not recovered from sales as debited to the profit and loss account is a deductible item u/s 37 of the Act. Accordingly, the appeal of the Revenue is dismissed by upholding the order of Ld. CIT(A).
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2023 (10) TMI 445
Unverifiable purchases - AO, on perusal of the books of account of the assessee and on the basis of information received from the ld. Commissioner of Income-tax, Central Circle-4, Surat, observed that the assessee firm had obtained accommodation entry in the form of bogus purchases - HELD THAT:- When all these facts are staring on us, there is absolutely no scope of disbelieving the purchases made by the assessee from the five suppliers merely based on search statements recorded from certain third parties at Surat during the course of search conducted in AY 2008-09 which are absolutely not relevant for framing the assessment in the AY 2013-14 in the hands of the assessee. Hence, we hold that the ld. CIT(A) erred in bringing to tax the profit element of 19.84% on the value of disputed purchases. No addition could be made in these peculiar facts and circumstances of the case in view of the fact that the purchases made by the assessee together with the corresponding sales thereon and the profits derived thereon (which includes profit on disputed purchase and undisputed purchase) have already been disclosed by the assessee in the returns of income. Hence, we hold that the purchases made from five suppliers should be held as genuine. Purchase made from Anshika Jewellers - No adverse inferences were drawn on the aforesaid documentary evidence by the Revenue. When all these facts are staring on us, merely because the concerned supplier had not responded to the notice issued u/s 133(6) of the Act by the AO, the ld. AO was not justified in disbelieving the purchases made by the assessee. The assessee cannot be made responsible for producing the supplier in later years when transactions with the concerned supplier had been carried out in earlier years. In any case, non-production of a concerned supplier for examination by the assessee would not make the transaction ingenuine. Reliance in this regard is placed on the decision of Orissa Corporation Ltd., [ 1986 (3) TMI 3 - SUPREME COURT] There are other means to verify the existence of the said supplier by the Revenue in the manner known to law. The assessee had duly discharged its primary onus to prove the veracity of the purchases. The corresponding sales is also duly disclosed by the assessee. Hence, there is absolutely no justification for making any addition by disbelieving the purchase made from Anshika Jewellers. Assessee appeal allowed.
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2023 (10) TMI 444
Addition of demonetized cash deposit - assessee is a non-resident and filed his return of income - assessee s case was selected for scrutiny assessment for verification of cash deposit made by him i.e., demonetization cash in the savings bank account maintained with ICICI Bank, R.A - CIT(A) considered the explanation of the assessee and availability of funds, restricted the addition of unexplained demonetized cash deposit as compared to addition made by AO - HELD THAT:- Taking into consideration the entire withdrawal of the family and also giving weightage to family expenses, demonetized cash deposit of Rs. 15 lakhs is explained in the absence of any proof that the assessee has spent the entire available funds of Rs. 42,38,100/- for personal needs. CIT(A) has already accepted 50% of cash deposit and balance was treated as unexplained but there is no reason given that how the assessee has spent the above amount of family withdrawals. Even otherwise that the assessee has withdrawn this amount of Rs. 15 lakhs in March, 2015 and credence should be given to the same. We accept the cash deposit of Rs. 15 lakhs as explained and delete the balance addition confirmed by the CIT(A) and allow the appeal of assessee.
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2023 (10) TMI 443
Disallowance of reimbursement of expenses to agent - CIT(A) deleted addition - HELD THAT:- As observed that in the assessment order passed in case of the Agent, viz., Sahara India firm, the payment has been accepted without any adverse finding. It is further observed, in the impugned assessment year, the reimbursement of expenses to the agent works out to 11.81% of the total deposits mobilized during the year. Whereas, in assessee s own case in assessment year 1994-95 [ 2007 (10) TMI 636 - ITAT, DELHI ] Tribunal has accepted the expenditure at the rate of 10.3% of the deposits mobilized to be reasonable expenditure. In the assessment year 1995-96 [ 2013 (10) TMI 697 - ITAT DELHI ] the Tribunal has allowed reimbursement expenses, which worked out to 13.06% of the deposits mobilized during the year. Thus, in view of the aforesaid factual position, we hold that learned Commissioner (Appeals) was justified in deleting the disallowance. This ground is dismissed. Disallowance of write back of provision of dividend income - HELD THAT:- We find, though, the assessee created the provision for dividend in assessment year 1995-96 and offered it as income, however, actually it did not receive any dividend. Therefore, the provision was reversed in assessment year 1996-97 and assessee claimed the deduction of the amount already offered to tax in the immediately preceding assessment year. The aforesaid factual position remains uncontroverted. Thus, it is apparent, AO without properly examining the fact in accordance with the direction of the Tribunal, has repeated the disallowance. That being the case, we do not find any infirmity in the decision of learned first appellate authority. Accordingly, we uphold the same by dismissing the ground raised..
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2023 (10) TMI 442
Penalty u/s 271(1)(b) - non-compliance of notice u/s 142(1) - whether there was a compliance by the assessee in response to the notice u/s 142(1) or not? - HELD THAT:- As penalty levied u/s 271(1)(b) of the Act is a technical penalty and normally is required to be levied when there is a willful default on the part of the assessee for noncompliance in filing the document/information in response to the notice of the Assessing Officer. In the present case, the assessee, despite several opportunities, had not filed any reply before the Assessing Officer. Though, subsequently, the assessee has complied with the same. In our view, once there is deliberate or willful default on the part of the assessee then the penalty should be imposed. During the course of argument as submitted before us that the AO had passed the order u/s 143(3) r.w.s. 147 of the Act, when it was so represented before us, we had made it clear that the penalty is required to be deleted, however, on verification, we find that the Assessing Officer had passed the order u/s 144 r.w.s. 147 of the Act and not u/s 143(3) r.w.s 147 - Thus judgment/decision on the strength of which we had expressed deletion of penalty are not applicable, as there is deliberate and willful disobedience by the assessee in filing the response before the Assessing Officer, even after receiving the notice u/s 142(1) - Hence, we uphold the penalty imposed by the AO. Decided against assessee.
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2023 (10) TMI 441
Disallowances of 10% of operating expenses, cost of material consumed and employee benefits and other expenses debited in P L account - CIT(A) deleted the addition - HELD THAT:- AO has considered the total amount as found debited in the profit and loss account while making adhoc disallowance of 10%. AO has completely ignored the fact that the assessee itself has made suo-moto disallowance u/s 40a(ia) of the Act while computing the total income. Therefore, it is manifest from the order of the AO that the adhoc disallowance is made by the AO in a casual manner without considering any material on record and facts. AO has not brought any fact or material before us to controvert the fact recorded by the Ld. CIT(A) while deciding this issue. Decided against revenue. Difference in the liability as on 31.03.2012 and 31.03.2013 - CIT(A) deleted the addition - HELD THAT:- CIT(A) has specifically stated the statutory liability arisen from provisions of TDS, Income Tax, Service Tax, entry tax, professional tax, interest and interest on these taxes for the various years cannot be treated as unexplained liability. It is further recorded that the increase in current and long term liabilities is due to amount received from directors and their relatives and concerns. Assessee filed a copy of confirmation letter from these creditors/lenders giving the details of name, Pan, Address and date of transactions. CIT(A) has also recorded the fact that no fresh long term borrowing has been taken by the assessee. Rather the assessee has paid of Rs. 75,48,418/- on outstanding loan of Rs. 3.90 crore as on 31.03.2012 the payment of interest was subjected to TDS. AO has not controverted these facts records and considered by the Ld. CIT(A) while deleting addition even the AO was given an opportunity of verification and examination of additional evidence but the same was not availed by the AO. Hence we do not find any error or illegality in the impugned order of the Ld. CIT(A) same is upheld. Disallowance u/s 14A r.w. Rule 8D - CIT(A) deleted the addition - HELD THAT:- We note that there is no exempt income earned by the assessee during the year under consideration whereas the AO has made disallowance u/s 14A@ 0.5% of the average value of investment. Ld. CIT(A) has deleted this addition by considering the fact that there is no exempt income earned by the assessee and by following the decision of Cheminvest Limited [ 2015 (9) TMI 238 - DELHI HIGH COURT] as well as decision of Keti KJ Construction Limited [ 2023 (1) TMI 1285 - ITAT INDORE] - Thus as there is no exempt income in the year under consideration no error or illegality in the impugned order of the Ld. CIT(A) for this issue. Appeal of revenue dismissed.
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2023 (10) TMI 440
Penalty u/s 271(1)(c) - estimation of income - bogus purchases - addition is made in assessee s case as a percentage of bogus purchases i.e. by applying 12.50% towards gross profit on the bogus purchases - main contention of the ld AR is that when profit is arrived at on an estimate basis there cannot be any levy of penalty for concealment of income - HELD THAT:- We notice that the coordinate bench in the case of ACIT vs. M/s. Fancy Diamonds India Pvt. Ltd. [ 2022 (6) TMI 1359 - ITAT MUMBAI ] which has held that in case where the addition is made on estimated basis, the penalty u/s. 271(1)(c) of the Act is not leviable. Tribunal has relied on the decision of Krishi Tyre Retreading and Rubber Industries [ 2014 (2) TMI 21 - RAJASTHAN HIGH COURT ] the decision of the Hon ble Punjab Haryana High Court in the case of CIT vs. Sangrur Vanaspati Mills Ltd. [ 2008 (2) TMI 285 - PUNJAB AND HARYANA HIGH COURT ] and Subhash Trading Co. Ltd. [ 1995 (11) TMI 37 - GUJARAT HIGH COURT ] on estimated basis, there cannot be any penalty levied. In assessee s case the AO has made the addition by estimating the profit @ 12.50% on alleged bogus purchases for the reason that the assessee has spiked the purchase price in order reduce the profits and the said purchases made by the assessee from hawala parties. The penalty u/s. 271(1)(c) is levied by applying the minimum tax rate on the said estimated profits and therefore the ratio of the above decisions is clearly applicable in assessee s case. We hold that penalty u/s 271(1)(c) of the Act cannot be levied where the addition is made on estimate basis and accordingly the penalty levied is hereby deleted. Appeal of assessee allowed.
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2023 (10) TMI 439
Reopening of assessment u/s 147 against dead assessee - legal representative of the deceased assessee preferred appeal before ld. CIT (A) which was dismissed - HELD THAT:- It is an admitted fact that during the assessment proceedings notice was issued by the AO which was received back unserved with the postal remarks that the said assessee, the recipient of the said notice has already died. Therefore, in our view, when once the AO had come to know about the death of appellant during the proceedings, therefore, AO was under obligation to verify or to investigate about the legal heirs of the said deceased. We are conscious of the fact that it is a settled law that no order of assessment can be passed against the deceased. Since as per the facts of the present case, amended Form 36 has been filed by the legal heirs of the deceased before us and are contesting the appeal and have already been taken on record. Thus in the fitness of circumstances, since the AO has passed assessment order against a dead person without specifying names of legal heirs, which is not legally sustainable, thus we have no other option except to quash the impugned order. However, taking into consideration the peculiar facts and since provisions of section 159 of the Act has not been complied with by the AO and also the assessment order has been passed ex parte under section 144/147 of the Act, therefore, considering the interest of justice, equity and fair play, we restore the matter back to the file of the AO to initiate proceeding against the legal representatives already taken on record before us, in accordance with the provisions of section 159 of the Act from the stage it has come to the knowledge of the AO regarding the death of the deceased. Appeal of the assessee is allowed for statistical purposes.
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2023 (10) TMI 406
Reopening of assessment u/s 147 - Deemed dividend u/s 2(22)(e) - HELD THAT:- The notice of reasons to believe itself reveals information and material which was available with the AO. Despite relevant information being available with the AO, if the AO chooses not to deal with the same, it cannot be presumed that it is Petitioner, who has not made a complete and full disclosure. As perused in detail the letter dated 7th April 2008 of the Chartered Accountants of the Petitioner providing exhaustive details accompanied by all relevant documents to the AO. It is clear from all the documents on record including the notice recording reasons for reopening of assessment itself that there is no failure to disclose on the part of Petitioner. It is evident that the original assessment order was passed based on all the necessary information already available at the time of original assessment. The order rejecting the objections of Petitioner in fact supports the contention of Petitioner in respect of him furnishing all documents and relevant information, but simply discards the same by stating that even if there is no fresh material, but the information placed on record is such that it is difficult to be detected. The rejection order further cites a number of precedents of various Courts which are wholly inapplicable to the facts of the present case, being on a justification as to how the facts in the present case do not suggest a change of opinion The reasons for rejection of the objections raised by petitioner are without any substance and hence untenable. We are firmly of the view that there is no failure on the part of Petitioner in making full and true disclosure to the AO during the original assessment leading to a possibility of application of the provisions of Section 2(22)(e) of the Act resulting in a substantial tax effect. Decided in favour of assessee.
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2023 (10) TMI 405
CSR expenditure - whether a allowable business expenditure? - Tribunal concluded that CSR expenditure incurred prior to the assessment year 2015-16 are allowable as business expenditure - HELD THAT:- CIT(A) after considering the facts held that the activity done by the assessee is undoubtedly a CSR activity and their business expenditure and observed that the expenditure is also part of ledger account of the assessee and the expenditure is incurred in consultation with the State Government Authorities. CIT(A) noted that the Assessing Officer has not doubted any of the vouchers and memos which were submitted by the assessee to substantiate the nature of expenses incurred by them. After taking note of the decision of the Hon ble Supreme Court in Thakur Prasad Sao Vs. Member, Board of Revenue [ 1975 (12) TMI 160 - SUPREME COURT ] the appeal filed by the assessee was allowed. The revenue carried the matter on appeal before the Learned Tribunal. The Learned Tribunal after reconsidering and reappreciating the facts of the case also noted that it is mandatory for the assessee, which is a mining industry, to look after the development of the area in which the mines were operating to create employment opportunities, provide educational facility to children etc. Thus expenses incurred for the welfare schemes were also taken into consideration and found to be justified. The Learned Tribunal also noted that the expenditure having been claimed by the assessee as of deduction for the assessment year 2014-15 and the mining which was made by adding explanation to Section 37(1) of the Act would not be applicable as it was with effect from the assessment year 2015-16. Thus, Tribunal was satisfied that the CSR expenditure incurred prior to the assessment year 2015-16 are allowable as business expenditure as the same are wholly and exclusively incurred for the purpose of business. Thus, on being satisfied with the factual matrix the Learned Tribunal dismissed the appeal filed by the revenue. No substantial question of law.
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2023 (10) TMI 404
Income taxable in India - income from the Offshore supply - assessee is a South Korean company engaged in the business of manufacturing and installation of electric cables set up project offices in India for installation of electric cables in India in connection with the Indian projects that were awarded to it - ITAT has come to a factual finding that though assessee had entered into a contract with MRVC for supply of equipments and services, Off-shore as well as On-shore, the terms of the contract distinctly set out the quantum of Offshore supplies to be made by assessee to MRVC and also the quantum of payment to be received by assessee from MRVC outside - HELD THAT:- ITAT after considering the contract between assessee and MRVC, came to the conclusion that the composite contract specifically records the quantum of goods to be supplied outside India, the property in the plant and machinery got transferred to MRVC once they were loaded on the mode of transport from the country of origin to India and even the payment is made outside India. We cannot find fault with these factual findings and the decision of ITAT in holding that the income arising from Off-shore supplies are not taxable in India. Therefore, question A and B raised by the Revenue cannot be entertained. As there is no liability to pay tax, the question of demanding 10% on presumptive basis will not arise. Question D is accordingly rejected. We find support for this view of ours in Xelo Pty. Ltd. [ 2011 (11) TMI 439 - BOMBAY HIGH COURT] Interest u/s 234B is not leviable following the decision of DIT(IT) vs. NGC Network Asia LLC [ 2009 (1) TMI 174 - BOMBAY HIGH COURT]
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2023 (10) TMI 403
Reopening of assessment against company already struck off - HELD THAT:- Section 176 of the Income Tax Act states that if any company discontinued from business and had not carried on any other business, the re-assessment order can be passed against the Principal Officer of the Company. However, the assessment order cannot be passed once the company is struck off, since the same will be construed as passing of order against a dead person. Therefore, this Court is of the view that the right course available for the respondent/Department is only to approach the NCLT in terms of provisions of Section 252 of the Companies Act read with Rules 11 and 87 of the NCLT Rules for the revival of the Company. After revival of the Company, it is open for the respondent/Department to initiate proceedings u/s 147 of the Income Tax Act. Hence, the impugned order is liable to be quashed.
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2023 (10) TMI 402
Condonation of delay in filling appeal before High court - Huge delay of 1072 days - ' sufficient cause' of delay or not? - HELD THAT:- As discretion to condone the delay has to be exercised judiciously based on facts and circumstances of each case and that, the expression 'sufficient cause' cannot be liberally interpreted, if negligence, inaction or lack of bona fides is attributed to the party. In the present case, the petitioner/appellant has not given 'sufficient cause' for condoning the huge delay of 1072 days in filing the appeals. It is also to be pointed out that the appeals were filed along with condone delay petitions in the year 2012 itself. By order dated 14.09.2012, notice was ordered to the respondent in the condone delay petitions. Subsequently, on two occasions, in March, 2015, the matter stood adjourned for filing counter by the respondent. Thereafter, nothing moved and the appellant has not taken any step to follow up the same, till June 2023. Now, they suddenly woke up from slumber like Rip Wan Winkle and prayed to condone the delay in filing the appeals. Such callous and lackadaisical attitude on the part of the appellant, cannot be countenanced by this court. The Supreme Court in Pundlik Jalam Patil v. Executive Engineer, Jalgaon Medium Project [ 2008 (11) TMI 611 - SUPREME COURT ] observed that the courts help those, who are vigilant and do not slumber over their rights . Therefore, we are not inclined to condone the delay of 1072 days in filing the appeals.
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2023 (10) TMI 401
Reopening of assessment u/s 147 - reassessment under the new regime - Scope of new provision section 148A - order rejecting the objections of the petitioner has been passed u/s 148A(d) accompanied by a notice issued u/s 148 - whether at all the liberty granted under the judgment in Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT] would be available / applicable in this case, as, even prior to delivery of that judgment on 04.05.2022, the respondent had issued a notice u/s 148A(b) of the Act followed by an order u/s 148A (d) of the Act accompanied by Section 148 notice dated 18.04.2022? - third round of proceedings for re-assessment - HELD THAT:- The first round ended with success for the petitioner with the allowing of [ 2022 (2) TMI 923 - MADRAS HIGH COURT] granting liberty to the Department to initiate proceedings if limitation so permitted. Department issued a second notice in April, 2021 and proceedings have been taken forward till the passing of order under Section 148 A(d) and notice u/s 148 dated 04.05.2022. Those proceeding, the Department concedes at para 7 of counter dated 17.10.2022, have been dropped, There is absolutely no justification for the Department to re-visit the proceedings simply invoking the liberty granted in Ashish Agarwal. Having chosen to drop the second round of proceedings, the Department is bound by that decision in full. The explanation tendered for issuance of 148 A (b) notice yet again for the third time on 02.06.2022 is fallacious and unacceptable as the liberty granted under Ashish Agarwal would be available only in those situations where the matters stood at an initial / preliminary stage of re-assessment i.e., at notice stage. In matters where the proceedings have been carried forward to the stage of passing of Section 148A(d) order and issuance of section 148 notice, there is simply no justification in law or in fact, to subject the petitioner to a third round of proceedings. In our view, this is a case, where the liberty granted has not been used but abused by the Department. Submission of the Revenue that the proceedings initiated on 01.04.2021 stood revived is also founded to be factually incorrect as there are material differences between the reasons dated 25.06.2021 and those u/s 148A(b) notice dated 04.05.2022. If, as the Department states, the third round is only a revival of the earlier proceedings, then the reasons ought to have been identical, which is not the case. Thus, the justification for the impugned proceedings is found vitiated on this aspect as well. A reading of the judgment in Ashish Agarwal specifically the directions extracted make it clear that the liberty related relates to Section 148 notices alone as paragraph 26(1) categorically states that the impugned Section 148 notices issued to the respective assessees under unamended Section 148 of the IT Act and which were the subject-matter of writ petitions before various respective High Courts shall be deemed to have been issued under Section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show cause notices in terms of Section 148A (b) . Such liberty is unavailable to the respondent in this case since the respondent has, suo motu, and even prior to the judgment in Ashish Agarwal acted on the liberty granted by the Madras High Court and issued notice under Section 148A (b) in April, 2021. Having so availed the same, and thereafter allowing the proceedings to lapse, there is no question of initiating proceedings once again, which, in my considered view, is nothing but sheer harassment to an assessee.
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2023 (10) TMI 400
Bogus sale purchase transactions - Addition u/s 40A(3) - AO rejecting the book results and thereby enhancing the turnover and adopting the GP rate @ 15% - Learned counsel submitted that not only sec. 40A(3) disallowances herein does deserves to be deleted but also these twin assessee s are entitled for reduction in G.P. which has been assessed at a very exorbitant rate of 2% in the CIT(A)'s respective orders under challenge - HELD THAT:- As lower authorities had found these twin assessee s as well as various other entities to have sourced their purchases from, and to, as the case may be, M/s. Blue Bird India Ltd., which in turn, was found to be engaged in providing accommodation entries. We further wish to reiterate that this so-called accommodation entry provider entity s book results as well as turnover have been found to be genuine in this tribunal s learned coordinate bench s order. The necessary corollary that flows therefrom is that once M/s. Blue Bird India Ltd., has been held to be a genuine entity which was seriously doubted so as to give rise to all these sec. 148/147 proceedings, we must necessarily hold that all the corresponding sale/purchase book results of these assessees must also deserve to be accepted in toto since not based on any other independent finding. That being the case, we must also hold that the learned lower authorities action, more particularly, that of the AO rejecting books as well as disallowing sec. 40A(3) cash purchases deserve to be upheld qua the latter issue only as these twin assessee s had themselves recorded the same in their returns submitted but also there is no justification of their part in justifying the respective cash purchases as per Rule 6DD. The very factual position continues before us as well as these twin assessee s identical endeavor is only to reduce the gross profit estimation than explaining the mitigating circumstances/business exigencies in making cash purchases. Faced with the situation, we conclude that these twin assessee s respective book results ought to be treated as genuine, which inturn, forms sufficient material for us to revive the Ld. Assessing Officer(s) identical action to the extent he had made sec. 40A(3) disallowance, involving varying sums, in all these cases. The Revenue s stand is partly accepted to this limited extent in all of it s instant three appeals
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2023 (10) TMI 399
Denial of the credit of Foreign Tax Credit for the delay in filing of Form 67 - taxes paid in USA - HELD THAT:- As decided in BHASKAR DUTTA VERSUS DCIT, INT. TAX-1 (2) (2) , NEW DELHI. [ 2023 (1) TMI 534 - ITAT DELHI] held that Rule 128 (9) does not say that if prescribed form would not be filed on or before the due date of filing of the return no such credit would be allowed. Further by the amendment to the rule with effect from 1 April 2022, the assessee can file such form number 67 on or before the end of the assessment year. Therefore, legislature in its own wisdom has extended such date which is beyond the due date of filing of the return of income. Here it is not the case of violation of any of the provisions of the act but of the rule, which does not provide for any consequence, if not complied with. Therefore we hold the assessee is eligible for foreign tax credit, as she has filed form number 67 before completion of the assessment, though not in accordance with rule 128 (9) of The Income-tax Rules, which provided that such form shall be filed on or before the due date of filing of the return of income. Assessee appeal allowed.
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2023 (10) TMI 398
Addition u/s 56(2)(viib) - AO rejected the valuation made by the valuer under DCF method and valued the share at Rs. 196 per share being book value of shares and thus made the addition of differential amount - CIT(A) limiting the investment to only the investment which yield dividend income AND allowing the interest expenses by observing that the assessee has its own fund HELD THAT:- We note that in this case, ld. CIT (A) has given a finding that actual performance of the assessee is even better than the forecast. Hence, any adverse inference on account of forecast is not appropriate and sustainable. Further, we note that ld. CIT (A) has passed a very reasonable and elaborate order. As decided in M/S. KILITCH HEALTHCARE INDIA LTD. AND (VICE-VERSA) [ 2022 (4) TMI 323 - ITAT MUMBAI] Rule 11UA(1)(C)(c) which is the relevant here, provides that the fair market value of unquoted shares and securities other than equity shares in a company which are not listed in any recognized stock exchange shall be estimated to be price it would fetch if sold in the open market on the valuation date and the assessee may obtain a report from a merchant banker or an accountant in respect of which such valuation. Admittedly, this rule is applicable in the present case and as provided in the said rule the assessee had option to obtain fair market value on the basis of valuation done by the accountant. Now the assessee has obtained valuation of accountant. Section 56(2)(vii)(b) provides fair market value of shares to be the one as may be determined in accordance with the method as may be prescribed or as may be substantiated to the satisfaction of Assessing Officer. Hence, if the method adopted by the assessee is not in accordance with the Rules contained in Explanation (a)(i) to section 56(2)(vii)(b), above any other method to the satisfaction of the AO can be adopted. The obvious corollary is that if the method adopted by the assessee is in accordance with the method contained in the Act read with Rules, the AO cannot disregard the same without cogent reasoning. Admittedly in this case the assessee has adopted a method which is in accordance with that prescribed in the Act read with the Rules. Prescribed method for unquoted shares is not any specific method but it provides that assessee may obtain valuation report from merchant banker or accountant. In this case the assessee has obtained valuation report of the accountant. To this extent, valuation adopted by the assessee cannot be said to be not in accordance with law - Decided against revenue.
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2023 (10) TMI 397
Determination of status of assessee - AO was of the view that assessee is not a local authority for the purpose of Section 10(20) - AO being dissatisfied about the status of the assessee as registered u/s 12AA thereafter being dissatisfied considered the status of assessee as of juridical person - All receipts, for purposes of developmental work were considered as income u/s 2(24) of the Act. Therefore, in the absence of evidence, the expenses claimed were disallowed - HELD THAT:- The bench is of considered view that the conclusion of ld. AO was erroneous as with regard to the nature of receipts. The same were commissions received from various sugar mills in the hands of assessee for specific purpose of being used in the developmental activity so Ld CIT(A) has rightly held them to be not falling in the category of income for purpose of Section 2(24) of the Act and that being the case the status of assessee being local authority or otherwise was not of consequence. The grounds raised by the Revenue have no substance and the appeal of the Revenue is dismissed.
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2023 (10) TMI 396
Excess cash found as a result of survey - assessee has surrendered said excess cash and offered the same for taxation in the statements recorded during the course of survey - HELD THAT:- From the basis taken by the Assessing Officer for making addition and conclusion drawn by the ld. CIT(A), first of all, we note that the assessee before the authorities below consistently submitting that the sales in post survey period has been increased by the amount of excess cash found which was a result of cash sales not recorded in the cash book and thus the same has been declared by way of inclusion in the post survey sales. Also we clearly note that the assessee has shown the excess cash amount as sales on the date of survey i.e. 19.02.2014 which reveals the fact of inclusion of impugned amount in the sales shown by the assessee at the end of financial period and thus said amount, included as sales in the books on the date of survey, clearly show that the same was part of sales declared by the assessee for the relevant period. In view of above, no further addition is required to be made and any further amend will result into double taxation. Accordingly, ground no. 3 of assessee is allowed. Addition on account of excess stock found during the survey and surrendered as income under the head Undisclosed Income - As argued same being declared as income by way of profit/part of taxable income, there is no case of any further addition - HELD THAT:- We are in agreement with the contention of ld. AR that in absence of stock register it cannot be presumed that entire stock inventorised by the survey team was unaccounted stock and there must be some accounted stock also on the date of survey which was included by the survey team in the inventory prepared on the date of survey. Consequently, we are inclined to hold that even the GP rate declared by the assessee and accepted by the Department i.e. 3.45% turnover is an appropriate and undisputed bench mark for making reverse calculation to ascertain closing stock on the date of survey as on 19.02.2014 or on the date of end of financial period i.e. 31.03.2014. As per trading account discernable from the audited balance sheet of assessee which has not been disputed by the ld. Senior DR the closing stock comes to Rs. 26,90,788/- by taking gross profit rate @3.45%. As considering the undisputed fact that the survey team has taken entire inventory of stock as undisclosed stock without providing credit of any accounted stock which is not acceptable even for a person ordinary prudent that the person undertaking purchases of Rs. 57.32 crore and making sales of Rs. 61.95 crore would not have any disclosed or unaccounted/excess closing stock on the date of survey. It is also relevant and pertinent to mention that the survey team has added and considered all stock on the date of survey as unaccounted/excess stock of assessee placed in two places of Azadpur Mandi and two cold storages which is not justified and correct approach. Therefore in our considered opinion that assessee eligible for credit of Rs. 26,90,788/- as closing stock out of alleged uncounted stock of Rs. 72,23,450/-. Accordingly, ground no. 4 is partly allowed.
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2023 (10) TMI 395
Applicability of transfer pricing provisions to companies covered under the Tonnage Tax Scheme - assessee is a company incorporated wholly owned subsidiary of Van Oord Dredging and Marine Contractors BV, a company registered in Netherlands which over the years has become a main contractor directly entering into contracts with Government and port authorities in India - HELD THAT:- As decided in own case [ 2019 (6) TMI 1238 - ITAT MUMBAI] we hold that the transfer pricing provisions are not applicable to the assessee to the extent of operations carried out through operating qualifying ships where the income is taxed under TTS. Addition on account of allocation of head office expenses - TPO, for the purpose of making the transfer pricing adjustment, has added a sum being 50% of the expenses allocated to the assessee for the cost incurred centrally at head office towards rendering various services - TPO made the adjustment for the reason that the assessee failed to provide details services rendered, breakup of cost allocated etc., and therefore made the adhoc addition - DRP confirmed the disallowance made by the TPO - HELD THAT:- As in assessee s own case for A.Y. 2008-09 we direct the assessing officer / TPO to delete the adjustment made towards the qualifying activities under TTS only. Benefit of DTAA against Dividend Distribution Tax (DDT) - AR as a counter argument submitted that DDT is a tax on the income of the assessee and is a tax paid in addition to the regular income tax - whether the benefit of DTAA can be extended to domestic company? - HELD THAT:- If we look at the wordings in the India Hungary DTAA, what it provides is that the tax on the profits distributed by an Indian company is taxable at the rate of 10% in the hands of the shareholders. The treaty does not contain anything whereby the domestic company is protected by the DTAA and that the rate mentioned therein shall be considered by domestic company distributing the profit for the purpose of DDT. The clause only specifies that the distributed profits will be taxable in the hands of the shareholders who are residents of Hungary/Netherlands at the rate of 10% which otherwise be subject to tax in accordance with Article 10 of the Treaty. If the tax laws of recipient shareholder country so provides, they can take the benefit of tax credit. DTAAs referred to by the ld AR nowhere suggests that domestic companies are allowed to enter the arena of DTAA. Therefore, in our considered view, the Protocol with reference to Article 10 as per India Hungary DTAA on taxability of distributed profits cannot be interpreted so as to say that it covers the domestic companies, since there is no specific clause in the Treaty to that effect. Consequently assessee's claim of refund of DDT in respect of shareholders covered under India Netherlands DTAA is rejected.
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2023 (10) TMI 394
Addition of rent receipt - properties sub-letted to sister concerns - Fair rental value u/s 23(1)(a) - assessee has received rent from unrelated entity at a higher rate vis- -vis rent received from its related sister concern lesser than the rent collected from unrelated parities - as per AO assessee has given 23 flats to its sister concerns which is nothing but a colorable devise and shifted its additional rental income to its sister concern - HELD THAT:- We observe from the record that assessee has not submitted any information regarding the cost involved in furnishing of above flats to the tax authorities. We also observe that during the hearing bench has asked the assessee to submit the balance sheet of assessee company as well as sister concern but no such information was submitted subsequently and till date. Since assessee has not submitted any information related to furnishing of flats which was leased out to unrelated parties and assessee has leased out majority of the flats i.e., 23 flats to its sister concern at ₹.25,000/- per month. In absence of any information we are not able to determine the expenditure of furnishing made by the assessee in furnishing of flats leased out to M/s.Hover India Automotive and M/s.Anmol rice Mills Pvt. Ltd., and we also observe that the carpet area of all the flats are more or less similar and from the record we observe that Assessing Officer has made an addition per month for each flat. We observe that assessee has leased out ₹.1,50,000/- and ₹.60,000/- respectively to the unrelated parties the average comes to ₹.1,05,000/-. Since Assessing Officer has determined the monthly rent of ₹.69,790/- which is less than ₹.1,05,000/-, in our considered view which seems to be proper in absence of any information of furnishing of flats. The case of relative on which Ld. AR relied heavily are distinguishable as it is relating to individual and held only few flats. Whereas in this case, the assessee itself a company and the business carried on by the LLP can also be carried on by the assessee itself. Therefore, we are inclined to sustain the additions made by the Assessing Officer and accordingly, Ground No.1 raised by the assessee is dismissed. Municipal tax receipts - CIT(A) / AO denied the deduction due to the fact that the name of the assessee is not mentioned in the tax receipt - HELD THAT:- We observe from the record that the municipal tax receipts are issued in the name of the land lord and the ownership of the flats are with Society. The taxes are borne by the society and collects the proportionate taxes from the flat owners. Accordingly, the assessee has paid the proportionate tax to the society. This system of collection of municipal taxes are common in the housing societies where the ownership of the building is with the society and the land belongs to 3rd parties as land owners. What is relevant is, whether the assessee has owned up the relevant taxes and remitted the same; in this case, the assessee has borned and paid the same through banking channels to the society. Therefore, the municipality register or receipt will not have the name of the flat owners, but the name of the land owners. Accordingly claim of the assessee is proper in this case and we direct the AO to allow the claim after verification. Accordingly, ground raised by the assessee is allowed.
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2023 (10) TMI 393
Reopening of assessment u/s 147 - communication received from ACIT, Corp. Cir 3(1) to reopen the case of the present assessee to tax short term capital gains - notice issued on old address of assessee - HELD THAT:- In the proposal seeking approval of reopening, it was mentioned that the assessee did not file the return of income and it did not have any PAN. However, the original scrutiny assessment u/s 143(3) was already carried out in the case of the assessee on 27-03-2014 and in that order, the sole issue was the jurisdiction of the assessee. In that order, a categorical finding has been rendered that the jurisdictional AO of the assessee would be ITO, Business Ward XV(4), Chennai. The address of the assessee was also mentioned as Alwarpet, Chennai. Despite that, present AO recorded contrary finding that there was no PAN and no return of income was filed by the assessee and the address of the assessee was mentioned as Porur address, which was no longer the address of the assessee. Consequent to the Cadre Restructuring of the Department w.e.f. 15-11-2014, the jurisdiction of the appellant for Alwarpet, Chennai 600018 address lie with Non-Corporate Range 3 whereas notice has been issued by present AO i.e., DCIT, NCC 8(1) at Porur address. It could also be seen that AO has wrongly invoked the provision of clause (a) of Explanation 2 of Section 147, which applies only where no return of income has been furnished by the assessee. In the case of the assessee, the return of income was filed and the scrutiny assessment u/s 143(3) was completed by the jurisdictional AO accepting the returned Income of the assessee. Therefore, present AO has wrongly invoked the provisions of Clause (a) of Explanation 2 of Section 147, which applies only where no return of income has been furnished by the assessee. The AO has not perused the original assessment records and had proceeded to issue the notice u/s 148 without verification of the documents on record. Accordingly, the conclusion that notice u/s 148 was issued mechanically without due application of find could not be faulted with. As in the present case, the reassessment notice has been issued at old address and the assessment order is an ex-parte order. The assessee has challenged the jurisdiction of Ld. AO at the first instance before first appellate authority. Decided against revenue.
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2023 (10) TMI 392
Assessment u/s 153A - unabated / completed assessment - Date of completion of original assessment or where no assessment was made, before search proceedings - Issue of no notice u/s 143(2) - whether additions made in these two years are based on any incriminating material found during the course of search? - HELD THAT:- We noticed earlier that the search operations were conducted in the hands of the assessee on 13-06- 2014. We notice that the original assessment was completed for AY 2010-11 u/s 143(3) of the Act on 19-03-2013, i.e., prior to the date of search. Hence this year would fall under the category of unabated/completed assessment year. For AY 2012-13, the assessee had filed return of income on 29.11.2012. No assessment u/s 143(3) has been passed, but the time limit for issuing notice u/s 143(2) has expired prior to the date of search. The Hon ble Delhi High Court has held in the case of Chintels India Ltd [ 2017 (7) TMI 746 - DELHI HIGH COURT] has held that the return filed would become final if no notice u/s 143(2) of the Act was issued within the limitation period prescribed for issuing the same. Accordingly, the AY 2012- 13 would also fall under the category of unabated/completed assessment . The additions made by the Assessing Officer in both the years under consideration are not based upon any incriminating material found during the course of search operations. Since both the years under consideration fall under the category of unabated assessment years , the Assessing Officer could not have made addition in both years in the absence of any incriminating material relating to the same. The above said decision of ours is based upon the decision rendered in the case of Abhishir Buildwell P Ltd [ 2023 (5) TMI 587 - SUPREME COURT] as held no addition can be made in respect of completed assessments in absence of any incriminating material. Accordingly, the AO could not have made the impugned additions in the assessment completed u/s 153A of the Act, since no incriminating material relating to both the years under consideration was found during the course of search. Thus we are of the view that the additions made by the Assessing Officer in both the years under consideration are liable to the deleted. Decided in favour of assessee.
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2023 (10) TMI 391
Intimation passed u/s 143(1) - income from the scrips granted under MEIS of the Foreign Trade Policy 2015-20 - To be treated as capital receipts not chargeable to tax or revenue receipt - said receipt of MEIS licences was also sought to be excluded from the book profits computed u/s 115JB of the Act on the plea that it is capital receipt right from inception and hence cannot find its place in the profit and loss account - HELD THAT:- CIT(A) in his order simply observed that the ld. CPC Benguluru in the intimation u/s 143(1) of the Act had not made any adjustment under any head of income regarding the aforesaid issue and neither refund is reduced nor any demand is created. CIT(A) further observed that once an amount is offered in the return of income by an assessee, the same cannot be sought to be reduced in the appellate proceedings. We are unable to comprehend ourselves to accept to this proposition of the ld. CIT(A). The assessee is always at liberty to plead that a particular receipt has been erroneously offered to tax in the return. It is trite law that there is no estoppel against the statute. Since no factual finding has been given by the ld. CIT(A) on the detailed concerns raised by the assessee , we deem it fit and appropriate, in the interest of justice and fairplay, to restore this appeal to the file of ld. CIT(A) for denovo adjudication in accordance with law. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.
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2023 (10) TMI 390
Validity of Reopening of assessment u/s 147 - Assessee argued that reasons recorded did not reveal any material or information in the possession of the AO on the basis of which he formed belief of escapement of income and non-application of mind by the AO while recording satisfaction for escapement of income - HELD THAT:- It is an admitted fact that the reasons supplied to the assessee did not disclose either material or information in the possession of the AO, which revealed to him that the assessee had resorted to CCM to shift profits/loss in trading of shares so as to evade payment of tax. Also, the reasons as noted by me, show no application of mind by the AO, relying merely on the information available with him. This information, as noted, neither reveals the material nor the source from where it came, nor it specifies scrip on which CCM was resorted to by the assessee to earn loss. In the absence of the specific information available with the AO, there was no scope for the AO to apply his mind on it independently, and check the information available with him so as to arrive at his own satisfaction of the income of the assessee being escaped the assessment. Therefore we are in complete agreement with the ld. counsel for the assessee that the jurisdiction assumed by the AO to reopen the case of the assessee is de hors the satisfaction of the AO of any income of the assessee having escaped the assessment and was clearly in violation of the condition prescribed under section 147 of the Act for assuming valid jurisdiction to frame assessment. The assessment order passed, as a consequence is, liable to quashed. The contention of the ld. DR that there was a separate reasons recorded by the AO which revealed the source of information or the material with the AO leading to his belief of escapement of income, is of no assistance to the validity of the re-assessment proceedings, since admittedly, this reason was never confronted to the assessee. The Hon ble Supreme Court in the case of GKN Driveshafts (India) Ltd . [ 2002 (11) TMI 7 - SUPREME COURT] has categorically laid down the procedure to be adopted during reassessment proceedings, taking note of the principle of natural justice embedded in any proceedings, that the AO is required to supply copy of the reasons to the assessee, entertain his objection on the same, deal with the objections, and thereafter proceed with the reassessment proceedings - Therefore, the requirement of the assessee for being supplied with copy of the reasons before proceeding to frame assessment is a mandatory requirement and a brief or cryptic reason supplied to the assessee, with the original being held back by the AO, will not suffice to fulfill this mandatory requirement of law. For this reason, reject the arguments of the ld. DR. Throughout the re-assessment proceedings, and even in the appellate proceedings, the assessee was never confronted with the information with the AO regarding CCM indulged in by the assessee nor the details of the specific scrip in which the assessee had purportedly done CCM. There is no reference anywhere in the order both of the AO and the CIT(A) of the specific scrip in which the CCM was resorted to. In the absence of the assessee being confronted with the specific details of the adverse information in the possession of the Revenue department, on the basis of which the addition was made to his income, there is no case at all for upholding the order of the ld. CIT(A). Assessee appeal allowed.
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2023 (10) TMI 389
Revision u/s 263 - Disallowance u/s 14A r.w.r 8D - as per CIT AO has made disallowance u/s 14A r.w.r. 8D only on one of the limbs provided in Rule 8D and failed to explore the other conditions enumerated in this Rule - HELD THAT:- A perusal of the financial statement would indicate that the assessee was having more interest-free funds than the investment. The interest-free funds are to the tune of Rs. 381 crores, whereas the investment which yielded tax-free income in the shape of dividend is only Rs. 133 crores. Therefore, there is no error in the order of the ld. Assessing Officer by not making any disallowance under Rule 8D(i). Also we are of the view that as per clause (c) of Section 263, if an item is under dispute before the ld. 1st Appellate Authority, then, proceeding under section 263 will not be taken up on that item. In the present case, AO has made the disallowance u/s 14A r.w.r. 8D that disallowance is subject matter of appeal before the ld. 1st Appellate Authority at the instance of assessee. In case, the ld. 1st Appellate Authority forms an opinion that ld. AO has committed an error by not making complete disallowance on all the limbs of Rule 8D, then, he could have issued a notice for enhancement of income by exercising his appellate power. Therefore, this issue ought to have not been taken up in 263 proceeding. The order of ld. Pr. CIT is not sustainable on the first-fold of reasoning given by him. As there is a domestic transaction between inter-related parties AO was required to make a reference to the ld. TPO mandatorily which he failed - We are of the view that Coordinate Benches have taken a view that since clause (i) of section 92BA stands omitted from the provision and omission of such is to be construed as if it never existed in the Statute Book and if it never existed in the Statute Book, then, no Arm s Length Price is required to be determined for a transaction with specified persons in section 40A(2)(b) of a domestic transaction. If no Arm s Length Price is required to be determined, then, no reference was required to be made. Therefore, on this fold of contention also, the order of the ld. Pr. Commissioner is not sustainable. Considering the above facts and circumstances in their setting as a whole, we allow this appeal and quash the order of ld. Pr. Commissioner passed Assessee appeal allowed.
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2023 (10) TMI 388
Addition u/s 68 - unexplained cash credit - onus to prove - HELD THAT:- The assessee has not submitted any evidences/explanation to discharge its onus u/s 68 even before us. The assessee chose not to appear before us when this appeal was fixed for hearing nor adjournment application was filed. The assessee has not submitted any explanation/evidences to satisfy the mandate of Section 68. Thus, we adverse view is to be taken as despite several stages of litigation, and despite being given adequate and sufficient opportunities by us, the assessee failed to satisfy the mandate of Section 68 with respect to loan raised by assessee during the year under consideration from M/S Newwave commercial Pvt. Ltd.. The onus u/s 68 was on the assessee as the said sum stood credited in its books of accounts, which the assessee failed to discharge the identity, creditworthiness of the creditor and genuineness of the transaction - we hold that the order passed by the ld. CIT(A) did not properly dealt with the issues involved in the appeal and accordingly, we set aside the order passed by the ld. CIT(A) and sustain the order passed by the AO. In terms of the above, we allow the appeal filed by the revenue.
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Customs
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2023 (10) TMI 447
Seeking waiver (exemption) of cost recovery basis - whether the CFS has achieved the bench marking for waiver of cost recovery charges - CFS has operated for two consecutive years from the date of sanction order for creation of posts - conditions as mentioned in instructions issued by GOI on 12.09.2005, fulfilled or not. Case of appellant is that waiver of recovery of charges could not be restricted on the ground that the proposal for exemption from payment of cost can be considered after the CFS has operated for two consecutive years from the date of sanction order for creation of posts which sanction order was dated 18.03.2020. HELD THAT:- The petitioners on 12.05.2008 made an application for establishment of a service unit at Mundra. By a notification dated 19.08.2011, in exercise of powers under Rule 11(11) of the Rules, the entire area of the CFS of the petitioner company was designated as Landing Place for unloading of imported cargo and loading of export goods meant for both SEZ and DTA. By a notification no. 2/2016-17, the office of the Principal Commissioner of Customs appointed the petitioner company as a Custodian of such cargo in accordance with the notification dated 19.08.2011 on certain conditions. Reading the aforesaid condition would indicate that the posting of custom officials at the CFS of the petitioner company, the petitioners had to bear costs of the custom officials posted at the station of the petitioners. This was on a cost recovery basis and the payments were at such rates and the manners specified by the Government of India. Reading of the notification dated 12.09.2005 would indicate that it deals with waiver of payment of cost recovery charges in respect of CFS. Reading the communication would indicate that the authorities considered regularization of those cost recovery posts at ICDs/CFS which have been in operation for two consecutive years with following performance benchmarks for the past two years. In case of the petitioners , admittedly, for the two yeas i.e. 2017-18 2018-19 the benchmark beyond 1200 for handling containers and as far as the number of bills of entry and shipping bills has been complied with. In the impugned communication, it is the case of the respondents that since the sanction of such posts was with effect from 18.03.2020 the waiver can be considered only after two years from such date and on fulfilling the additional conditions as per the circular dated 12.09.2005. Perusal of the records in the petition would indicate that when the sanction was accorded to the petitioner company for operating as a Designated Landing Site in accordance with the notification dated 19.08.2011 on 11.05.2016, on 17.07.2014 the office of the Commissioner of Customs, Kandla on the subject of creation of posts on cost recovery basis had observed that the office was in the process of granting approval as custodian to the petitioner company under Section 45 of the Act. As per para 2(b) of Circular No. 34/2003 dated 24.04.2003, it was mandatory to take prior approval for posting of officers and staff on cost recovery basis in the ICD/CFS. The creation of the requisite number of posts should precede the notification and therefore an approval was sought for. It is undisputed that the petitioners have qualified for waiver of cost recovery charges on completion of two years when in the years 2017-18 and 2018-19 they have achieved the benchmark as stipulated in the circular of 12.09.2005 and therefore the sanction of a post was a matter of internal arrangements between the departments which had no bearing on the cost recovery and/or waiver of such charges. The denial of waiver on the ground that such costs cannot be waived as the posts had not been sanctioned at the relevant point of time certainly is arbitrary and therefore cannot be sustained. The petitioners are entitled to waiver of cost recovery charges in light of circular dated 12.09.2005 with effect from 01.07.2019. Costs recovered towards posting of custom officials at the petitioners CFS post 01.07.2019 be refunded to the petitioners - Petition allowed.
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2023 (10) TMI 438
Quantum of penalties levied under Section 112 as well as Section 114AA of Customs Act - levy of personal penalty imposed on the second appellant Mr. K. Naser - whether the penalties are unjust and disproportionate to the quantum of offence? - Smuggling - gold concealed inside the pressure washer pumps, absolutely confiscated. HELD THAT:- Considering the overall facts and circumstances including the fact that imported goods and the gold suffered absolute confiscation, it is opined that the imposition of penalty under Section 114AA if reduced from Rs.10,00,000/- to Rs.5,00,000/- it would meet ends of justice in the case of appellant-company. There are no justifiable reason to interfere with the personal penalty imposed on the second appellant Mr. K. Naser. Appeal disposed off.
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2023 (10) TMI 437
Denial of Export Benefits - Disallowance of request for conversion of shipping bills from Duty Free Import Authorisation scheme (DFIA) to Drawback Scheme - denial without any reasoned order through the impugned order - violation of principles of natural justice - HELD THAT:- It is stated position that despite vigorous follow up with the office of Joint DGFT, Rajkot for cancellation, the same has not met with any response and is pending till date. Therefore, being in denial of any of the benefit, the appellants approached for amendment of Shipping Bills to claim draw back benefit which has been denied to them without affording any opportunity or reasons for denial of the claim even by the Customs. The appellants, therefore, have made various detailed submissions including on the validity of CBEC No. 36/2010-Cus. dated 23.09.2010 for indicating that the 3 months period prescribed in the same has been struck down by the Hon ble Gujarat High Court in the matter of THE PRINCIPAL COMMISSIONER OF CUSTOMS, MUNDRA VERSUS M/S LYKIS LIMITED [ 2021 (2) TMI 261 - GUJARAT HIGH COURT] which has been reiterated by the Hon ble Bombay High Court in COLOSSUSTEX PRIVATE LIMITED AND TODI RAYONS PRIVATE LIMITED VERSUS UNION OF INDIA, THE CENTRAL BOARD OF EXCISE AND CUSTOM, THE DEPUTY COMMISSIONER OF CUSTOM, MAHARASHTRA, THE COMMISSIONER OF CUSTOM NS-II, THE ASSISTANT COMMISSIONER OF CUSTOMS NS-II, RAIGAD, [ 2023 (9) TMI 313 - BOMBAY HIGH COURT] . In which Hon ble High Court of Bombay has also struck down the limitation of 3 months from the let export order in aforementioned circular. With the point of emphasis of the appellants being that the amendment should have been allowed in the shipping bill to them from DFIA Scheme to Drawback as claimed by them and the denial of the same through amendment or otherwise as export benefit was totally unfair and not maintainable. It is grievance of the the appellants that Commissioner not having given any detailed rejection order, they are probing in dark for reasons as could have prevailed with the department in denying them the export benefit - It is found that since, October, 2015 despite doing exports in the year 2013-2014 and having applied for cancellation of DFIA. They have been in denial of the benefit both by the joint DGFT authority as well as Customs authorities due to lack of response or lack of proper response. Left in a limbo, appellant have filed present appeal against letter of rejection considering the same as appealable as they are aggrieved by the same - such denial of export benefit even when export has taken place is not worthy of approval. Appellant thus having waited for long for cancellation correctly applied for conversion to Customs authorities. However, denial of export benefit despite delay and non response by the DGFT authorities makes the rejection letter of Commissioner improper - the rejection letter quashed aside and lower authorities are directed to convert DFIA Shipping Bills to Drawback Shipping Bills as are involved in the present appeal. The amendment of impugned Shipping Bills by the Commissioner allowed, while doing so and in the absence of any cancellation being on record which was indicated in VRA Cotton Mills Pvt. Ltd. Case, the Commissioner are directed to follow Course indicated in para-5 of Board s Circular No. 36/2010-Cust dated 23.09.2010 and ensure that exporter does not take benefit of both schemes and also inform the DGFT authorities that in view of non-response to the cancellation request, same is deemed to have been granted. Appeal is therefore, allowed directing Customs authorities to allow conversion and consider Drawback claim in above terms.
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2023 (10) TMI 436
Levy of penalty - Classification of imported goods - import of areca nuts in guise of betel nut - Goods declared as scented sweet supari-Betel Nut - to be classified under CTH 08028090 or under 21069030? Whether the goods Scented Sweet Supari is classifiable under CTH 2106 9030 as claimed by the importer or under CTH 08028090, as per the Department and, therefore, would be entitle to the exemption of 100% BCD by virtue of the Notification No. 96 of 2008 or is entitle to exemption to only 60% BCD by virtue of the classification by the Revenue? HELD THAT:- The Alert Circular No. 4 of 2022 dated 25.08.2022 issued by DRI, has been issued to overcome mis-declaration and mis-classification of areca nuts, which were being imported through several ports under Chapter 21 so as to pay customs duty at lesser rates and to avoid floor price restrictions imposed by DGFT vide notification No. 20/ 2015-2020 dated 25.07.2018 and in that backdrop, the field department was sensitized and asked to exercise due diligence while clearing the import of areca nuts. Referring to the decision of the Supreme Court in M/S AYUSH BUSINESS OVERSEAS ETC. VERSUS COMMISSIONER OF CUSTOMS (CHENNAI VII) [ 2021 (3) TMI 1285 - SC ORDER] , it was stated that only the preparations of betel nuts would fall under Chapter 21 and the goods imported as boiled areca nut would merit classification under Chapter 8 of the Customs Tariff. It is not found that the said Circular, in any manner, supports the importer and, therefore, on that basis, no reliance can be placed in favour of the appellant. On examining the Advance Ruling relied upon by the Revenue in respect of the same product, i. e., Flavoured Supari classified under CTH 0802, it not only relates to identical goods and though it is in respect of a different company, M/s. Globe Impex being a proprietorship company owned by Shri Gagan Uppal and now it is a partnership company i.e., M/s. Globe Impex, however, the fact is that both the companies not only have the same 'name', M/s Globe Impex, where Shri Gagan Uppal is one of the partners and is responsible for the day-to-day working of the company and is, therefore, fully aware of the classification of the goods in terms of the Advance Ruling sought by him as the Proprietor of the company. The goods imported by the appellant are neither product of betel nut nor preparation containing betel nut but are only betel nuts in cut pieces and are excluded from Chapter Heading 2106 and the same are classifiable under chapter Heading 0802. Consequently, the benefit of Notification No 96/2008 dated 13.8.2008 of 100% exemption from BCD is not available to the appellant. Similarly, in terms of Notification No.20/2015-2020 dated 25.07.2018, the import of areca nuts at less than the minimum price of Rs.251/- per kg. are prohibited goods - the appellant had attempted to import areca nuts in guise of betel nut products by mis-declaring and mis-classifying under Chapter 21 so as to avail the benefit of 100% exemption of BCD and thereby evade payment of legitimate customs duty. In view thereof, M/s. Globe Impex and also Shri Gagan Uppal are liable to penalty under Section 112(a)(i) of the Act. Appeal dismissed.
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2023 (10) TMI 387
Levy of penalty u/s 114AA of the Customs Act, 1962 - Smuggling - Red Sanders - appellant have not made, signed or use any declaration, statement or document pertaining to alleged illegal export when all the activities regarding this export was carried out by the exporter and his Clearing House Agent - opportunity for cross-examination provided or not - violation of principles of natural justice - Jurisdiction of High Court. HELD THAT:- Retraction does not always dilute, reduce or wipe out the evidentiary value of a confession statement. In each case, the court will have to examine whether the confession was voluntary and true and whether the retraction was an afterthought. In Smt.Kalawati and Another v. State of H.P. [ 1953 (1) TMI 31 - SUPREME COURT] , the Apex Court held that the amount of credibility to be attached to a retracted confession would depend upon the facts and circumstances of each case. In Shankaria v. State of Rajasthan [ 1978 (4) TMI 234 - SUPREME COURT] , it was held that where the confession was not retracted at the earliest opportunity but after the lapse of several months, the circumstance reinforces the conclusion that the confession was voluntary. The appellant's confession statements under Section 108 were recorded on 18/3/2015 and 19/3/2015, whereas the alleged retraction was made on 26/5/2015. There is no explanation for the delay. Coming to the facts of the case, except the bare allegations, there was no material on record to indicate that the customs officials had pressurised or forced the appellant to confess. On the other hand, the records show that the officer who recorded the statements of the appellant explained to him that he was under no obligation to answer any question and warned him that anything he said might be used against him in any court of law/proceedings - The sequence of events as described, statements of the co-accused, recovery of smuggled goods and incriminating documents coupled with circumstantial evidence of the case provide corroboration to the confession statement of the appellant. The evidence on record establishes that the smuggling syndicate coordinated by the appellant misused the IEC of the exporter, M/s. Liberty Marketing to smuggle out Red Sanders, an item prohibited for export - the ingredients of Sections 144 and 144AA of the Customs Act are squarely attracted. The High Court s jurisdiction under Section 130 of the Customs Act is limited. It is not within the domain of the High Court in an appeal under Section 130 of the Customs Act to reappreciate the fact on which the findings were arrived at by the Tribunal, the final fact-finding authority. True, a finding of fact may give rise to a substantial question of law, inter alia, in the event the findings are based on no evidence or while arriving at the said finding, relevant admissible evidence has not been taken into consideration, or inadmissible evidence has been taken into consideration, or legal principles have not been applied in appreciating the evidence or when the evidence has been misread - the adjudicating authority, the appellate authority, and the Tribunal appreciated the facts and evidence on record in the correct legal perspective and rightly found that the appellant was liable to penalty under Sections 144 and 144AA of the Customs Act The quantum of penalty imposed also appears to be reasonable - Appeal dismissed.
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Service Tax
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2023 (10) TMI 435
Applicability of Reverse charge mechanism - liability petitioner to pay service tax - petitioner was providing services of goods transport agency - N/N. 30/2012-Service Tax (S.T.) dated 20.06.2012 with effect from 01.07.2012 read with Rule 2(1)(d)(5) of the Service Tax Rules, 1994 - HELD THAT:- The petitioner may have a case to establish before the respondent that the petitioner was not liable to pay tax, and that, the recipient of service alone was liable to pay tax on reverse charge basis as is specified in Notification No.30/2012-Service Tax (S.T.) dated 20.06.2012 - The petitioner has not received any of the notices, which preceded the impugned order and thus, the petitioner had failed to participate in the proceedings. Although the respondent cannot be faulted, the fact remains that the petitioner did not get an adequate opportunity to participate in the show cause proceedings. The impugned order is set aside and the case is remitted back to the respondent to pass a fresh order on merits and in accordance with law within a period of six months from the date of receipt of a copy of this order - Petition disposed off.
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2023 (10) TMI 434
Rejection in cash of unutilized cenvat credit - requirement to reconsider the formula for prorating the cenvat credit pertaining to domestic turnover - rejection of credit taken on input services availed in the unregistered premises - input services - clearing and forwarding services - event management service - gardening services - tour operator services - packaging services - reversal of cenvat credit in respect of the refund rejected is beyond the jurisdiction - time limitation. HELD THAT:- The original authority has directed the respondent to debit / reverse the cenvat account to the tune of which has not been sanctioned. The respondent has already debited the amount in their cenvat account before filing the refund claim. The original authority ought not to have directed the respondent to reverse the credit again for the mere reason that the refund has not been sanctioned in cash. The Commissioner (Appeals) has correctly understood the matter - it can be seen that by the impugned order, the Commissioner (Appeals) has not sanctioned any amount as refund in cash. The respondent has been allowed to take recredit of the amount which has not been sanctioned to them as cash. This being so, the appeal filed by department alleging that credit availed by the respondent is ineligible for the reason that the premises is not registered and that the input services have no nexus with the output services is without any substance. The Hon ble High Court in the case of COMMISSIONER OF SERVICE TAX-III, CHENNAI VERSUS CUSTOMS, EXCISE SERVICE TAX APPELLATE TRIBUNAL, CHENNAI M/S. SCIOINSPIRE CONSULTING SERVICES (INDIA) PVT LTD, CHENNAI [ 2017 (4) TMI 943 - MADRAS HIGH COURT] had held that cenvat credit cannot be denied on the ground that premises is not registered. In the case of K LINE SHIP MANAGEMENT (INDIA) PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI [ 2017 (7) TMI 412 - CESTAT MUMBAI] it was held that eligibility of cenvat credit cannot be questioned or determined at the time of granting refund of cenvat credit. Since the order passed by the Commissioner (Appeals) is only to avail recredit the contention of the Revenue with regard to limitation is also of no consequence. There are no merits in the appeals filed by the department. The appeals are dismissed.
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2023 (10) TMI 433
Extended period of limitation - business auxiliary service - commission paid to overseas agents under reverse charge mechanism as per Section 66A of the Finance Act, 1994 invoking the proviso to Section 73(1) of the Finance Act, 1994 - HELD THAT:- This Bench in the case of M/s. Texyard International [ 2015 (8) TMI 794 - CESTAT CHENNAI ] had occasion to analyse an identical issue wherein, after considering the submissions of both sides, the Bench had observed that The exemption of service tax under BAS was allowed in relation to four industries namely agriculture, printing, textile processing and education. Therefore, the appellant being textile industry, it is covered under the category textile processing in the notification. The ratio laid down in the above case has been followed by this Bench in the case of M/s. Madras Security Printers Pvt. Ltd. v. Commissioner of Service Tax, Chennai [ 2023 (4) TMI 1195 - CESTAT CHENNAI ]. The impugned order set aside - appeal allowed.
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2023 (10) TMI 432
Levy of Service Tax - Business Auxiliary Services - intermediary services - recipient of service provided by a FTO to a cellular / mobile subscriber of an HNO, during international roaming - activity of providing cellular / mobile services to a subscriber during international outbound roaming - HELD THAT:- The issue of the service provider and the service recipient, has been examined by a Coordinate Bench of this Tribunal in M/s Vodafone Idea Limited [ 2023 (9) TMI 68 - CESTAT CHENNAI] . It is found that though the issue in the said order pertained to inbound roaming services and the technical issues involved are similar - the majority order makes it clear that in the case of international inbound roaming the FTO is the person who is legally entitled to receive the service of the HNO as per the agreement, even though the beneficiary is the customer/ subscriber of FTO in the taxable territory. The order hence rejects the concept that during international roaming the subscriber of the home telecom operator is the service receiver. During international outbound roaming outside the taxable territory the HNO is the service recipient of the services provided by the FTO and not the HNO s subscribers/ customers. The averment of the appellant in this regard hence succeeds. The reliance placed by Revenue on the minority order and Board s Education Guide has been examined by the majority decision in the same judgment and has not found favour for reasons stated therein. Whether the activity undertaken / provided by the FTO to the HNO is exigible under RCM? - HELD THAT:- The issue as to whether the appellant is liable to pay service tax under RCM on outbound roaming services received from the foreign telecom service provider under the category of telecommunication services was examined by a coordinate Bench of this Tribunal in Vodafone Essar Digilink [ 2017 (5) TMI 882 - CESTAT NEW DELHI] - the Division Bench concluded that services provided by any person who is not a telegraph authority is not liable to discharge service tax either under section 66 or under section 66A of the Finance act 1994. Although the activity of providing cellular / mobile services to a subscriber during international outbound roaming relates to telecommunication service, however the said services provided by any person who is not a telegraph authority , as in the present case, the activity would not be a taxable service as defined by section 65(109a) and is hence not exigible to service tax at the hands of the appellant under RCM. Appeal allowed.
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2023 (10) TMI 431
Classification of services - works contract services or not - activity of construction of Mega Sports Complex for hosting 34th National Games by Government of Jharkhand - period June 2007 to May 2008 - HELD THAT:- The adjudicating authority has held that the activity undertaken by the Appellant are covered under Clause (e) mentioned above as EPC project, whereas the Appellant claimed that their activity would fall under Clause(b) mentioned above as it is construction of a civil structure not primarily meant for commerce or industry. A perusal of the activity undertaken by the Appellant indicate that the sports complex is a civil structure, primarily meant for conducting sports activities and not meant for commercial purposes - the contention of the Appellant agreed with that the facilities like Restaurants, VIP Guest house, Hotel facility etc. is only for the purpose of making the sports complex habitable and functional and in accordance with international standards. The same in no way make the Sports complex is meant for commercial purposes - thus, the activity of the Appellant are covered under Clause (b) of the definition of 'Works Contract Service'. The same view has been held by the Principal Bench of CESTAT, New Delhi, in the case of Jatan Construction Pvt Ltd vs. CCE, Jaipur [ 2018 (1) TMI 374 - CESTAT NEW DELHI] , wherein identical case has been decided in favour of the assessee by relying on the Larger Bench decision in M/S. LANCO INFRATECH LTD. AND OTHERS VERSUS VERSUS CC, CE ST, HYDERABAD [ 2015 (5) TMI 37 - CESTAT BANGALORE (LB) ]. Thus, the activity undertaken by the Appellant is 'Works Contract Service' as defined under Clause (b) of Section 65(105)(zzzza) and hence the activities undertaken are not liable to service tax as the mega sports complex is not primarily meant for commercial purposes. In view of the above, the demands confirmed in the impugned order are set aside. As the demand itself is not sustainable, the question of charging interest and imposing penalty does not arise. The impugned order set aside - appeal allowed.
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2023 (10) TMI 430
Levy of Service Tax - Manpower Supply Services - appellant are a Society registered under Andhra Pradesh Co-operatives Societies Act 1964 - HELD THAT:- There is no exclusion or exemption granted to societies who has to avoid payment of service tax. On going through the Order-in-Original, it is observed that the appellant has taken the same pleading before the Adjudicating Authority. The Adjudicating Authority has given a very detailed findings and has held that the appellants arguments cannot be legally sustained. There are no reason to interfere with the detailed and considered decision given by the Adjudicating Authority - appeal dismissed.
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2023 (10) TMI 429
Levy of Service Tax alongwith interest and penalty - Construction of Residential Complex service - tax on the value of undivided share by the land owners - invocation of extended period of limitation. The total land used for the development is taken into consideration and the Department has calculated land owner share, applying the percentage of constructed area in terms of the Agreement. HELD THAT:- The issue is no longer res integra as clarified by the Board Circular No. 108/2009, read with Circular No. 151/2012, wherein, in view of the amendment brought in the definition of Construction of Residential Complex service , whereby explanation was inserted w.e.f. 01.07.2010, and builders were first time brought into the ambit of service tax. Further, it was clarified by the aforementioned Circulars, in view of the Finance Act, 2010 that builder/ developer of residential complex, is not liable to pay service tax for the period prior to 01.07.2010. The impugned order set aside - appeal allowed - decided in favour of appellant.
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2023 (10) TMI 386
Levy of penalty - Issuance of SCN - Service tax along with interest paid before issuance of SCN - delay in payment occurred only on the understanding and accounting with regard to the new amendment which was brought forth with effect from 10.05.2008 - HELD THAT:- The appellant has paid up the service tax along with interest much before issuance of show cause notice. There was also an issue of irregularly availed cenvat credit. The appellant has paid up this amount also along with interest. The show cause notice itself shows that the amount paid up by the appellant is to be appropriated. In such circumstances, as per sub- section (3) of Section 73 of the Finance Act, 1994, the department ought not to have issued any show cause notice. Further, it can also be seen that the delay in payment of service tax was due to transition / amendment that was brought forth w.e.f. 10.05.2008 with regard to the liability to pay service tax on book adjustment by Associated Enterprises. As the appellant has paid up the entire amount of service tax / wrongly availed cenvat credit along with interest much before issuance of show cause notice, it is opined that as per sub-section (3) of Section 73 of the Finance Act, 1994, no show cause notice ought to have been issued to the appellant. The penalty imposed on the appellant under Section 77, 78 of the Finance Act, 1944 and under Rule 15 of CCR 2004 therefore requires to be set aside. The impugned order is modified to the extent of setting the penalties imposed without disturbing the confirmation of service tax, interest and the appropriation thereof - appeal disposed off.
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Central Excise
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2023 (10) TMI 428
Wrongful availment of CENVAT credit - Removal of machinery after two days of taking credit - Failure to correctly interpret and apply the provisions of Rule 4, Rule 11A, 11AB and 11AC of the Cenvat Credit rules, 2002 - suppression/mis-statement of facts - extended period of limitation - HELD THAT:- The Appellate Tribunal, after considering the contentions of the parties held that the appellant had availed 50% of the credit on both the Autoconers at their Baddi plant on 29.01.2002; after availing credit on both the machines if there was transfer of one of the two Autoconers to Guna plant during 2001-2002, the right course would have been to debit the full credit of Rs. 5,62.949/- pertaining to the transfer of Autoconer and to take its full credit at the Guna plant - The Tribunal held that the fact of removal of one Autoconer to Guna Plant, which took place within two days of taking credit, was not brought to the notice of Central Excise Authorities, and it was detected only during the course of audit, and so the levy of penalty by the Commissioner of Appeals was sustainable. Thus, the question of Tribunal incorrectly interpreting and applying provisions of Rule 4 of the Cenvat Credit Rules 2002, Section 11A, 12 AB and 11AC of the Act does not arise. In the instant case, the appellant does not deny the transfer of one Autoconer from the Baddi Plant to the Guna Plant in the State of Himachal Pradesh on 31.01.2002, having availed 50% of the credit duty paid on both the Autoconers at Baddi on 29.01.2002. The finding of the Tribunal that this was detected by the audit and only then the explanation was offered by the appellant is not disputed by the appellant - the Tribunal did not err in holding that after availing credit on both the machines, if there was transfer of one of the two Autoconers to Guna plant during 2001-2002, the right course would have been to debit the full credit of Rs. 5,62,949/- pertaining to the transfer of Autoconer, and to take its full credit at the Guna Plant, and this view is consistent with Rule 4 (2) (a) of the Cenvat Credit Rules, 2002 - The fact of removal of one Autoconer to Guna plant, which took place within two days of taking credit, was not brought to the notice of the Central Excise Authorities, and it was detected only during the course of audit. As such there is nothing wrong if penalty is levied on the appellant either. Appeal dismissed.
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2023 (10) TMI 427
Classification of goods - SSI exemption - Loader fitted in the tractor supplied by the customer - classifiable as a whole under Chapter heading 8705 or any other Chapter heading? The assessee s claim is that the product manufactured by them is Loader which is accessory of the tractor and is classifiable under Chapter heading 8708 and eligible for SSI exemption under Notification No. 8/2003-CE dated 01.03.2003. HELD THAT:- From various photographs it can be seen that no activity is carried out on the tractor which is already manufactured by the Tractor Manufacturing Company. The tractor is supplied by the customer and on the readily manufactured tractor the loader is fitted and such loader is manufactured independently by the assessee. In this entire process and the nature of the tractor which is received on which loader is fitted, the conclusion is drawn that the appellant s activity of manufacturing loader independently occurs by taking various alteration and since it is to be fitted in the tractor therefore, the assessee s activity is under manufacture of the whole vehicle but limited to manufacture of loader. Merely by fitting such loader which is manufactured and mounted on the tractor, cannot be said to be amounting to manufacture of special purpose motor vehicle classifiable under heading 8705. In case of manufacture of special purpose motor vehicle, the fabrication and mounting of special purpose body of motor vehicle is fabricated and mounted on the chassis. In the present case, tractor is already manufactured and in majority of cases the clients use his tractor for some time and thereafter it is given to the assessee only for fitting loader in the fully manufactured tractor. The Adjudicating Authority after analyzing relevant Chapter notes of the tariff as well as Chapter note of HSN has rightly interpreted that the tractor alone is of no use and it is used as a power machine for the purpose of use of tractor and different equipment is fitted in the tractor. Therefore, the equipment such as loader in the present case is part of tractor which is much different from the vehicles classifiable as a special purpose motor vehicle under Chapter heading 8705. The Adjudicating Authority has considered all the parameters, considered the photographs, physical aspect of the product, use of the product namely tractor to arrive at the conclusion that loader being accessory of the tractor, is correctly classifiable under Chapter heading 8708 - there are no infirmity in the impugned order - appeal of Revenue dismissed.
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2023 (10) TMI 426
Exemption of duty on the clinker, used captively in the production of cement vide N/N. 67/1995-CE dated 16.03.1995 as amended - Denial on the ground that the final product viz., Cement cleared to the SEZ unit is an exempted product - final product cleared to Special Economic Zone (SEZ) without payment of duty - HELD THAT:- The said issue was considered by the Tribunal in a batch of cases including the case of the appellant in M/S ULTRATECH CEMENTS LTD AND OTHERS VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, TIRUCHIRAPALLI AND OTHERS [ 2015 (10) TMI 1058 - CESTAT CHENNAI ] where it was held that appellants are eligible for exemption under Notification 67/95-CE on clinker captively consumed for manufacture of cement cleared to SEZ units/developers without payment of duty for both the periods prior to and after the amendment of SEZ Act. In the case of COMMISSIONER OF CENTRAL EXCISE, TIRUCHIRAPALLI VERSUS MADRAS CEMENTS LTD. [ 2017 (12) TMI 1664 - CESTAT CHENNAI ], the Tribunal has applied the said decision to set aside the demand. The demand cannot sustain. The impugned order is set aside - appeal allowed.
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2023 (10) TMI 425
Reversal of CENVAT Credit - exempt turnover - requirement of reversal under clause (i) or (ii) of sub- Rule (3) of Rule 6 of CCR? - wrong maintenance of records - Clearance of both taxable and exempted finished goods - ratios of inputs were skewed - Suppression of facts - extended period of limitation - HELD THAT:- Rule 6(3) categorically starts with the words Notwithstanding anything contained in sub-rule (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow any one of the following options, which, inter alia, include option to pay an amount equal to the specified percentage of value of exempted goods or exempted services, along with other option of reversing the proportionate amount under sub-rule (2) or maintain separate accounts for the receipt consumption in the inventory of inputs, as provided in clause (a) of subrule (2) and take credit only on inputs under sub-clause (ii) and (iv) of the said clause (a), and pay an amount as determined under sub-rule (3A) in respect of the input services. Once it is the case that proper records have not been maintained with regard to receipt of inputs and its utilization, sub-rule (3) gives option to the Assessee, and thus, Revenue cannot enforce any of the option(s) under sub-rule (3). Thus, Appellant is entitled to reverse the amount of credit as per option in clause (i) of sub-rule (3) of Rule 6 i.e., pay an amount equal to the specified percentage (5% or 6%) of the value of exempted goods, in the facts of the present case. Appellant shall be entitled to consequential benefits, in accordance with law. As the Appellants have admittedly paid the amount of Rs.1,28,95,173/- during audit/ investigation under protest, they shall be entitled to refund of the same with interest as per Rules - Appeal allowed.
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2023 (10) TMI 424
Denial of CENVAT Credit - procurement/import of capital goods between 2005-06 and 2007-08 - denial on the ground of lack of evidence of having been received at the designated factory of the appellant - HELD THAT:- The physical verification of imported machinery was undertaken after closure of the factory. There is no reference in the orders of the lower authorities to audit having included physical verification of these; in any case, their existence at the sister units could well have been ascertained and failure to do so is dereliction on the part of the adjudicating authority as central excise authority having jurisdiction over the factory of the appellant. Choosing to style alleged non-intimation of transfer as sufficing to deny credit also demonstrates failure to cite the authority under which the appellant was required to intimate such transfer. Under the scheme of CENVAT Credit Rules, 2004, taking of credit is permitted on receipt of goods in factory, subject to such variations as permitted therein, and not to be denied if availed against proper documentations. Any allegation of non-receipt of such capital goods at factory, in contradistinction with non-availability that may be justified with explanations subject to ascertainment, would, therefore, have to be based on, and also sustained on, clear evidence of diversion. There are no compelling motive for diversion of imported and locally procured goods save that two establishments set to take credit one on document and the other on availability of capital goods which, in the absence of supporting evidences, defies logic as having occured. It would appear that the entire exercise was half-hearted and relying entirely on presumptions which is a characteristic that is anathema to adjudicatory proceedings. The impugned order is set aside - Appeal allowed.
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2023 (10) TMI 423
100% EOU - Valuation - terry towels / terry fabrics of cotton falling under chapter 63 of the Central Excise Tariff Act 1985 - failure to adopt 8% ad valorem as per the Central Excise Tariff Act, 1985 while calculating the CVD in respect of clearances effected to DTA as provided in N/N. 23/2003 CE dated 31/3/2003 read with section 3 of Central Excise Act 1944 - HELD THAT:- The issue stands squarely covered by the decision of the Tribunal in the appellant s own case in COMMISSIONER OF CENTRAL EXCISE, SALEM VERSUS SRI GUGAN MILLS AND SARADHA TERRY TOWELS LTD. [ 2018 (6) TMI 908 - CESTAT CHENNAI] where it was held that In UOI vs Plastic Processors [2005 (4) TMI 581 - SUPREME COURT], the hon ble Apex Court has held that CVD was payable at effective rates and not at tariff rates on clearances made by 100% EOU into DTA. The demand cannot be sustained. The impugned order is set aside - Appeal allowed.
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2023 (10) TMI 422
Reversal of CENVAT Credit - exempted goods are cleared or exported to EOU or to SEZ - seeking reversal alongwith interest - Clearances of exempted goods in DTA, paying 10% amount - penalties In respect of Rs.15,59,640/- - HELD THAT:- The Revenue is admitting that the amount has already been paid but insisting that the interest is required to be paid on this amount. In respect of Rs.29,61,191/- already reversed by the Appellant, Revenue admits that interest of Rs.1,47,209/- has already been paid. The interest amount paid is not being disputed on account of any quantification. In respect of Rs.74,64,464/- - HELD THAT:- The AR s Office has queried the details from the Jurisdictional Commissioner to get it verified as to whether 10% of the value of the clearance of the exempted goods was being paid by the Appellant, as claimed by them. They have received letter dated 21.06.2013 from the Office of the Commissioner, Visakhapatnam, stating that the Assessee has reversed 10% of the value of clearances. This letter has been annexed with the synopsis submitted by the Revenue. Interest amount - HELD THAT:- In respect of the interest of Rs.29,61,191/-, the same stands paid by the Appellant. Since the Appellant has not brought in any evidence to the effect that they were carrying sufficient balance, we reject their submission that interest is not required to be paid. The interest of Rs.1,47,209/- paid by them meets the requirement of interest as demanded in the OIO - Similarly, in respect of Rs.15,59,640/-, since the AR s Office has received confirmation about payment of the same and the Appellant is not contesting the same, no Appeal lies from the Appellant s side on this count. However, they are required to pay the interest on this amount. Clearances of exempted goods in DTA, they have paid 10% amount - HELD THAT:- This fact has been verified by the Revenue and the Jurisdictional Authorities have confirmed that this is correct. Therefore, once the Appellant pays the 10% amount on the clearance of exempted goods, the demand of Rs.74,64,464/- would amount to once again demanding reversal of the Cenvat credit which is legally not permissible. Therefore, Appeal allowed to the extent that the confirmed demand of Rs.74,64,464/- is set aside. Penalties - HELD THAT:- Since the issues involved are that of interpretation and almost the entire duty demands have been dropped at the first stage itself and even the balance confirmed demand is being set aside now, the penalties are set aside. Appeal disposed off.
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2023 (10) TMI 421
Valuation - adoption of independent third party factory gate price for making the payment of Excise Duty when the goods are cleared to their depots - HELD THAT:- The identical issue was before this Tribunal in respect of the same Appellant, wherein the demand was issued for the period April 1991 to September 1995. There is nothing to suggest that the practice adopted by them during April 1991 to September 1995 was different from the practice adopted by them during the present period of dispute i.e., April 1994 to September 1996. Even the Revenue has not come out with any counter argument on this count. The procedure adopted by the Appellant right through April 1991 to September 1996 remained the same for the value adopted by them for clearances to their depots which is based on the factory gate sales done by them for which they have produced the documentary evidence before the Lower Authorities. The procedure for the discounts being given at depots remained same as per the earlier period. The earlier Final Order of this Bench dated 09.05.2022 [ 2022 (5) TMI 1244 - CESTAT HYDERABAD ] has already gone into considerable depth and has allowed the Appeal filed by the present Appellant and dismissed the Appeal filed by the Revenue. There is nothing on record to show that this Final Order of this Bench was taken up further by the Revenue before the Hon ble Supreme Court nor is there anything to suggest that this Order has been stayed by the Apex Court - thus, conclusion arrived at by this Bench vide Final Order dated 09.05.2022 is squarely applicable. Appeal allowed.
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2023 (10) TMI 385
Reversal of CENVAT Credit - inputs used in the manufacture/body building of vehicles on duty paid chassis supplied by NEKRTC, BMTC - benefit of Notification No. 6/2006- CE dated 01/03/2006 Sl. No. 139(i). HELD THAT:- From the records, it is found that even though these documents have been submitted before the authorities below, however, no cognizance has been taken nor any finding on the same recorded to ascertain the claim of the appellant on facts as to whether separate accounts were maintained in availing credit on inputs used by the appellant in fabrication of vehicles cleared to M/s. Ashok Leyland and NEKRTC relating to 55 vehicles. Therefore, it remained to be examined whether in fact the appellants have availed cenvat credit on inputs used in or in relation to the manufacture of 55 vehicles as alleged in the notice or their claim of non-availment is correct. There are force in the contention of the learned Advocate for the appellant that even though the audit team has recorded an observation that the appellant had availed cenvat credit on inputs used in the manufacture of 55 vehicles cleared to NEKRTC and others but details have not been furnished to the appellant substantiating the said objection. It is prudent to remand the matter to the adjudicating authority to ascertain the fact in the light of the Annexure H I submitted by the appellant in support of their claim that separate accounts were maintained for the inputs used in connection with bodybuilding activity carried out for M/s. Ashok Leyland and inputs used in the manufacture of 55 vehicles in question, where no cenvat credit availed - Appeal allowed by way of remand.
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2023 (10) TMI 384
Clandestine production and removal - excesses and shortages in stock - entire case is based on the records maintained by the appellant - invocation of principle of administrative inconvenience - HELD THAT:- The observations made in the impugned order to effect that the appellants were not maintaining the record is contrary as the entire case of the department is based on the Book Balance in the book of accounts and physical stock found at the time of visit. Further department itself has resumed these documents as seen by the Annexure attached - Thus the decisions relied upon by the Commissioner (Appeal) in ISATYABRAT SWAIN, M/S. SURYA POLYPACK PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE MEERUT I [ 2014 (10) TMI 559 - CESTAT NEW DELHI (LB)] for invoking the concept of administrative inconvenience etc., would not apply to the present case, where it was held that Similarly, in the case of INDIAN ALUMINIUM COMPANY LTD. VERSUS THANE MUNICIPAL CORPORATION [ 1991 (9) TMI 162 - SUPREME COURT] it was observed that non-observance o f even a procedural condition not to be condoned if likely to facilitate commission of fraud and introduce administrative inconveniences. Admittedly, if the condition is so important that non-observance of the same may result in fraudulent activity, such condition cannot held to be an empty formality. In any case when the entire case is based on the records maintained by the appellant, there are no justification in such observations which have been reproduced by the Commissioner (Appeal) in routine and stereotype manner without even examining even the panchnama. The quantum of excess and shortages determined by the exercise of stock taking is negligible in all cases except for the scrap. The stock taking errors and the weighing scale errors etc could have accounted for the shortages and excesses. The decision relied upon in the impugned order, the will not support the case of department without any explicit and conclusive evidence in respect of the clandestine clearance being alleged. Further the goods which were still in the factory premises of the appellant have not been cleared. Hence there cannot be any charge of clandestine clearance made against the appellant in respect of these goods. Officers could have asked the appellants to rectify their book balance and got them tallied with the physical stock determined by them. Similar view has been expressed in case of KOCH RAJES CD. INDUSTRIES PVT. LTD. VERSUS COMMISSIONER OF C. EX., MUMBAI-IV [ 2005 (7) TMI 248 - CESTAT, MUMBAI ]. Demand made in respect of shortages which are in range from 0.3 kgs to 23.60 kgs cannot be justified, without any evidence of any clandestine clearance or without any investigation also being made in this respect. There are no merits in the impugned order, which in any case is completely vague as having failed to consider any of the issues that are involved in the matter and has gone on only to invoke the principle of administrative inconvenience , without even establishing the relevance of the same. Appeal allowed.
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CST, VAT & Sales Tax
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2023 (10) TMI 420
Levy of penalty on revisionist - no intent to evade the payment of tax - HELD THAT:- Admittedly, the goods were intercepted during transportation from State of Telangana to Ghaziabad, U.P. and at the time of interception the goods were accompanying with all required documents along with form 38. The purpose of form 38 is that the department should know that the goods are being imported from one State to another State. Some defects were pointed out by the department i.e. the name of the goods was not properly mentioned in form 38 and the allegation was made that the form was filled with magical ink which will be evaporated on high temperature and therefore the presumption has been drawn that the form can be re-used. On the said observation, the goods were seized and penalty was imposed. This Court in Sale / Trade Tax Revision No. 5 of 2020 (Commissioner, Commercial Tax, U.p. Vs. S/S Atul Trading Company [ 2020 (3) TMI 820 - ALLAHABAD HIGH COURT] held that Even Form 38 was found to be duly filled up evidencing the transaction under which the goods were being imported. The assessee had duly produced his books of accounts in which the transaction in question is duly accounted for. In such circumstances, merely on assumption that Form 38 could be re-used, the Assessing Officer was not justified in imposing penalty. In view of aforesaid identical case, the allegation that form which was filled with magical ink can be re-used, cannot be accepted by this Court - revision allowed.
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2023 (10) TMI 419
Maintainability of Revision petition - creation of additional demand - sale or works contract - Section 46(3) before the H.P. VAT Appellate Tribunal - HELD THAT:- The Tribunal that by filing the appeal, the petitioner was actually seeking reconsideration of the order dt. 29.08.2013, is patently erroneous in law. The view of the Tribunal that the petitioner is trying to reagitate the same issues which stood decided by the Tribunal in its order dt. 29.08.2013, cannot be agreed and, therefore, the appeal is not maintainable and cannot be entertained. The order dt. 29.08.2013 passed by the Tribunal, decided only certain broad principles and did not give any findings on the actual facts and had remitted the matter back to the 2nd respondent by directing a Committee of two or three Members of TRU and Assessing Authority to be constituted to examine the case. There is no question of the appellant seeking review and reconsideration of the order dt. 29.08.2013 by filing the appeal before the Appellate Authority challenging the order dt. 26.10.2020 passed by the 2nd respondent, as has been wrongly held by the Tribunal - the Civil Revision Petition is allowed.
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Indian Laws
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2023 (10) TMI 418
Dishonour of Cheque - existence of a legally enforceable debt - discharge of initial onus of proving the essential facts underlying the offence under Section 138 of the NI Act - signature on the cheque was admitted by the accused - rebuttal of statutory presumption under Section 139 NI Act - Whether the accused can be said to have discharged his 'evidential burden', for the courts below to have concluded that the presumption of law supplied by Section 139 had been rebutted? HELD THAT:- The presumption under Section 139 was rebutted by putting questions to the appellant in his cross examination and explaining the incriminating circumstances found in the statement recorded under Section 313 of Cr.P.C. Section 139 of the NI Act, which takes the form of a shall presume clause is illustrative of a presumption of law. Because Section 139 requires that the Court shall presume the fact stated therein, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. But this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary as is clear from the use of the phrase unless the contrary is proved - As soon as the complainant discharges the burden to prove that the instrument, say a cheque, was issued by the accused for discharge of debt, the presumptive device under Section 139 of the Act helps shifting the burden on the accused. The effect of the presumption, in that sense, is to transfer the evidential burden on the accused of proving that the cheque was not received by the Bank towards the discharge of any liability. Until this evidential burden is discharged by the accused, the presumed fact will have to be taken to be true, without expecting the complainant to do anything further. In order to rebut the presumption and prove to the contrary, it is open to the accused to raise a probable defence wherein the existence of a legally enforceable debt or liability can be contested. The words until the contrary is proved occurring in Section 139 do not mean that accused must necessarily prove the negative that the instrument is not issued in discharge of any debt/liability but the accused has the option to ask the Court to consider the non-existence of debt/liability so probable that a prudent man ought, under the circumstances of the case, to act upon the supposition that debt/liability did not exist - The nature of evidence required to shift the evidential burden need not necessarily be direct evidence i.e., oral or documentary evidence or admissions made by the opposite party; it may comprise circumstantial evidence or presumption of law or fact. There is a fundamental flaw in the way both the Courts below have proceeded to appreciate the evidence on record. Once the presumption under Section 139 was given effect to, the Courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability. The entire focus would then necessarily have to shift on the case set up by the accused, since the activation of the presumption has the effect of shifting the evidential burden on the accused. The nature of inquiry would then be to see whether the accused has discharged his onus of rebutting the presumption. If he fails to do so, the Court can straightaway proceed to convict him, subject to satisfaction of the other ingredients of Section 138. If the Court finds that the evidential burden placed on the accused has been discharged, the complainant would be expected to prove the said fact independently, without taking aid of the presumption. The Court would then take an overall view based on the evidence on record and decide accordingly. The fundamental error in the approach lies in the fact that the High Court has questioned the want of evidence on part of the complainant in order to support his allegation of having extended loan to the accused, when it ought to have instead concerned itself with the case set up by the accused and whether he had discharged his evidential burden by proving that there existed no debt/liability at the time of issuance of cheque. There are no slightest of hesitation in concluding that this case calls for interference, notwithstanding that both the courts below have concurrently held in favour of the accused - the judgment of the High Court of Punjab and Haryana at Chandigarh set aside - appeal allowed.
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2023 (10) TMI 417
Seeking partial setting aside of award - patent illegality - extra Cost on increased Establishment Cost including Overheads, Salary of Regular and Contractual Staff, Inspection Vehicle hire Charges, etc. due to prolongation of contract - extra cost due to extension of CAR and WC Insurance Policy - Loss of Profit because of prolongation of contract - Extra cost due to depreciation due to prolongation of contract period - additional cost due to use of 04 bolt fastening system for radius beyond 700 mt - abnormal increase in quantity of track fastenings - Additional GST burden - HELD THAT:- AT rejected the claims by observing that the BOQ specified in the Contract was not based on number of bolts to be used but on the radius of the curve. AT also observed that the Contractor was unable to convince that the increase in number of bolts was due to the new design that the DMRC required the Contractor to follow. According to the AT, the DMRC s insistence on following ETAG001 (European Guideline) was never objected to by the Contractor at the time of design change suggested by the DMRC or that the same was not required. AT has further observed that even before the AT, the Contractor was unable to link the design change to the requirement of conformity with the European standard and the increase in the number of bolts. Even otherwise, it is seen that in terms of Clause 5.1 of the Contract, the Contractor was responsible for submitting the design in accordance with Clause 6.3.2 of the Contract, which was subject to DMRC s approval. Design was submitted by the Contractor on 03.06.2015 and the same was found to be deficient by DMRC which was conveyed to the Contractor vide its letter dated 08.06.2015. It is observed by AT in the award that the Contractor did not challenge DMRC s comments on the design submitted by it and on its own re-submitted a new bolt calculation on 19.09.2015 - the rates quoted in Item 8 of the BOQ are for quantities that are measured in metre length of the track of various radii. The quantities of individual items of the track fitting system was neither sought for by DMRC in the BOQ nor quoted by the Contractor when they submitted their rates. It would not have been possible for the AT to order variation in quantities on account of increase in the number of bolts installed, due to the design change, as was claimed by the Contractor, since, the same may have been contrary to the BOQ. In any case, the AT has dealt with the claim in a judicial manner, referring to the contract provisions and the evidence produced by the parties. Reimbursement of increased GST - HELD THAT:- AT allowed claim to the extent of 1.40% on account of the concession initially agreed to by DMRC. In the considered opinion of this Court, the AT had rightly relied upon the aforesaid clause which restricted the Contractor from seeking any adjustment in the Contract price either on the increase or decrease in cost as a consequence of change in tax duties/levies. In this regard, it is pertinent to note that AT also noted that the Contractor failed to provide any substantiation on the amount of input credit availed by it. This contention is rejected accordingly. Petition dismissed.
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2023 (10) TMI 383
Dishonour of Cheque - application preferred by the respondent / complainant under Section 311 for re-examination of the complainant has been allowed - validity of new documents filed for examination - HELD THAT:- From perusal of the impugned order passed by the trial Court, it appears that after completion of the trial, the respondent / complainant has obtained certain new documents, which relates to the Proprietorship of the petitioner / accused Firm. It is also alleged that letter of authority has also been issued in favour of the petitioner / accused. Therefore, in view of the new documents filed by the respondent re-examination of the petitioner / accused is just and proper. The scope and object of Section 311 of Cr.P.C. is to enable the Court to determine the truth and to render a just decision after discovering all relevant facts and obtaining proper proof of such facts, to arrive at a just decision of the case. It is also notable that such power must be exercised judiciously and not capriciously or arbitrarily, therefore, it is not a case of lacuna. Hon'ble the apex Court in the case of RAJENDRA PRASAD VERSUS THE NARCOTIC CELL THROUGH ITS OFFICER IN CHARGE, DELHI [ 1999 (7) TMI 707 - SUPREME COURT] where it was held that We cannot therefore accept the contention of the appellant as a legal proposition that the Court cannot exercise power of re-summoning any witness if once that power was exercised, nor can the power be whittled down merely on the ground that prosecution discovered latches only when the defence highlighted them during final arguments. The power of the court is plenary to summon or even recall any witness at any stage of the case if the court considers it necessary for a just decision. On cumulative consideration of the facts of the present case, this Court is of the view that the impugned order of the trial Court does not suffer from any legal infirmity, which may be called for any interference, therefore, present petition filed under Section 482 of Cr.P.C. is hereby dismissed. Petition dismissed.
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2023 (10) TMI 382
Dishonour of Cheque - funds insufficient - compounding of offence - compromise of matter reached at - HELD THAT:- Having taken note of the fact that during the pendency of the instant petition the complainant-Bank and the petitioner-accused have compromised the matter and now the complainant-Bank does not intend to pursue the complaint under Section 138 of the NI Act and the complainant-Bank has no objection in compounding the offence, therefore, this Court sees no impediment in accepting the prayer made on behalf of the accused-petitioner for compounding of offence while exercising power under Section 147 of the Act as well as in terms of guidelines issued by the Hon'ble Apex Court in DAMODAR S. PRABHU VERSUS SAYED BABALAL H. [ 2010 (5) TMI 380 - SUPREME COURT ], wherein the Hon'ble Apex Court has held since Section 147 was inserted by way of an amendment to a special law, the same will override the effect of Section 320(9) of the CrPC, especially keeping in mind that Section 147 carries a non obstante clause. In K. SUBRAMANIAN VERSUS R. RAJATHI REP. BY P.O.A.P. KALIAPPAN [ 2009 (11) TMI 1013 - SUPREME COURT ], it has been held by the Hon'ble Apex Court that in view of the provisions contained in Section 147 of the Act read with Section 320 of Cr.P.C., compromise arrived at can be accepted even after recording of the judgment of conviction. Since, in the instant case, the petitioner-accused after being convicted under Section 138 of the Act, has compromised the matter with the complainant-Bank and the complainant-Bank has no objection in case the judgment of conviction, dated 23.02.2022, and order of sentence, dated 25.02.2022, passed by the learned Chief Judicial Magistrate Mandi, District Mandi, H.P., and affirmed by the learned Sessions Judge, Mandi, District Mandi, H.P., are quashed and set-aside, prayer for compounding the offence can be accepted in terms of the aforesaid judgments passed by the Hon'ble Apex Court. The present matter is ordered to be compounded and the impugned judgment of conviction, judgment of conviction, and order of sentence passed by the learned Chief Judicial Magistrate Mandi, District Mandi, H.P. and affirmed by the learned Sessions Judge, Mandi, District Mandi, H.P. is quashed and set-aside - Petition disposed off.
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