TMI Tax Updates - e-Newsletter
November 2, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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GST:
GST Revenue collections for the month of October 2018 crosses Rupees One Lac Crore
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GST:
Rate of GST - works contract service of construction of 599 residential quarters allotted to the applicant by MPPGCL - The impugned activity of the applicant would attract GST @18%
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GST:
Levy of GST - Work contract services received from vendors for supply and erection work under various projects - Government Entity - The Applicant is not entitled for the benefit of concessional rate of GST @12%
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GST:
E-way bill - in case of minor discrepancies in the details mentioned in the E-way bill, specially errors of one or two digits/character of the vehicle number would not be sufficient for initiation of any proceedings under the Act.
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Income Tax:
Prohibition of Benami Property Transactions (Removal of Difficulties) Second Order, 2018
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Income Tax:
Rate of tax - The claim of the assessee that it should not be taxed at maximum marginal rate is not tenable as the PAN of the assessee suggests that the assessee is a Body of Individuals and not 'Trust' as the fifth character of PAN is 'B' and not 'T' which should be the case of Trust.
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Income Tax:
TDS u/s 194C on by products - consideration in kind - milled / shelled paddy as retained by the millers and the same has a marketable value - the property in the by-product was not passed on by the assessee / Procurement Agencies as milling charges - No TDS liability
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Income Tax:
Claim of depreciation while claiming exemption u/s 11 - the income of the trust is required to be computed under section 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from the gross income of the trust.
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Income Tax:
TPA - selection of MAM for determining ALP of transaction - APM v/s RPM - Ld.AO/TPO erred in not conducting fresh search of comparables which would have strict functional similarity while using RPM as MAM.
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Income Tax:
Time limit of completing the proceedings - non deduction of TDS u/s 194C - the proviso to section 201(3) which was made to extend the time limit of completing the proceedings cannot be applied to already time barred cases.
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DGFT:
Implementation of the Track and Trace system for export of Pharmaceuticals and drug consignments alongwith maintaining the Parent-Child relationship in the levels of packaging and their movement in supply chain - Extended till 1.7.2019
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Indian Laws:
Exchange Rate of Foreign Currency Relating to Imported and Export Goods Notified
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PMLA:
Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2018 - Client Due Diligence - filing of the electronic copy of the client's KYC records with the Central KYC Records Registry
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Service Tax:
Export of service or not - the services rendered in the form of auditing and accounting of various entities situated in India - assessee forwarded the certificate to the foreign entities - the activity would definitely qualify for as export of services and no service tax liability arise
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Service Tax:
Classification of services - composite mining contract - Vivisecting the composite contract and charging service tax on different components of the contract individually under different services is not justified
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Service Tax:
Area based jurisdiction for grant of Refund - If the Revenue was of the view that the refund claims should have been filed with the jurisdictional officer of the Head Office, they were within their rights to transfer the same to the officer having the proper jurisdiction
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Service Tax:
Classification of services - providing services to ICICI Bank - the contract entered into by the appellant in the year 2009 was not a contract for supplying the manpower services but was a contract for promotion of the services provided to the service recipient
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Service Tax:
Interest on delayed claim - The period of three months as mentioned in Section 11BB is to reckon from the date of application as was filed u/s 11(1) and not from the application as was filed after the order of refund
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Central Excise:
Rebate of Excise Duty and sugar cess paid - When the export is not disputed by the revenue, the rebate claim cannot be rejected on the ground of procedural infractions - rebate allowed.
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Central Excise:
Excisability/marketibility - match splints - The argument by the petitioners that the item covered under Chapter Heading 3605 0010 or 3605 0090 as 'matches' is 'chemically dipped splints' and not 'fully finished match bundles' is without basis.
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Central Excise:
Validity of Show Cause notice - Demand of Excise duty in excess of ₹ 50 lakhs - there must be pre show-cause notice consultation with the assessee by the adjudicating authority - in the absence of pre SCN consultation, notice quashed.
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VAT:
Attachment of property of the legal heirs of the deceased Directors of the Company - recovery of tax arrears of the company - A person, who is not connected with a Company, should not be driven, just because he is a heir of the Company's Directors
Notifications
Customs-
77/2018 - dated
1-11-2018
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Cus
Seeks to further postpone the implementation of increased customs duty on specified imports originating in USA from 2nd November, 2018 to 17th December, 2018
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90/2018 - dated
1-11-2018
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Cus (NT)
Exchange Rates Notification No.90/2018-Custom(NT) dated 1.11.2018
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89/2018 - dated
31-10-2018
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Cus (NT)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Sliver- Reg.
GST - States-
32/2018 - State Tax - dated
10-9-2018
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Arunachal Pradesh SGST
Seeks to extend the due date for filing of FORM GSTR - 1 for taxpayers having aggregate turnover up to ₹ 1.5 crores
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22/2018-STATE TAX (RATE) - dated
6-8-2018
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Manipur SGST
Amendment in Notification No. 8/2017 -State Tax (Rate), dated the 28th June, 2017
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54/2018 – State Tax - dated
16-10-2018
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Mizoram SGST
Mizoram Goods and Services Tax (Twelfth Amendment) Rules, 2018
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53/2018 – State Tax - dated
16-10-2018
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Mizoram SGST
Mizoram Goods and Services Tax (Eleventh Amendment) Rules, 2018
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52/2018 – State Tax - dated
4-10-2018
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Mizoram SGST
Seeks to notify the rate of tax collection at source (TCS) to be collected by every electronic commerce operator for intra-State taxable supplies
Income Tax-
F. No. 370149/194/2017-TPL - S.O. 5602(E) - dated
31-10-2018
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IT
Prohibition of Benami Property Transactions (Removal of Difficulties) Second Order, 2018
Money Laundering-
F.No.P.12011/5/2011-SO(ES Cell)-Part 3 - G.S.R. 1078 (E) - dated
31-10-2018
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PMLA
Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2018
SEZ-
S.O. 5482 (E) - dated
23-10-2018
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SEZ
De-notification of entire area of 10.218 Hectares of the Special Economic Zone - for IT/ITES sector at Serilingampally Village, Serilingampally Mandal, Ranga Reddy District, Telangana
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2018 (11) TMI 56
Detention of goods with vehicle - detention on the ground that the vehicle number do not tally with the vehicle number mentioned on the E-way bill - Held that:- The circular of the Government of India, Ministry of Finance, Department of Revenue Central Board of Direct Taxes and Custom GST Policies Wing dated 14.09.2018, which modifies the earlier circular dated 13.04.2018 clearly stipulates that in case of minor discrepancies in the details mentioned in the E-way bill, specially errors of one or two digits/character of the vehicle number would not be sufficient for initiation of any proceedings under the Act.
Goods with vehicle is directed to be released - petition disposed off.
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2018 (11) TMI 55
Prayer for withdrawal of petition - Held that:- The Goods and Services Tax Council has directed the petitioners to make its grievance to the Nodal Officer, having jurisdiction over the petitioners for consideration of its grievance with regard to TRANS-1, which has already been filed.
Petition is dismissed as withdrawn.
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2018 (11) TMI 59
Scope of Job-Work - supply of services - BPCL would commence movement of inputs to applicants plant through pipeline as a principal supplier on free of cost and the applicant acting as job worker would converting the inputs to industrial gases and same would be sent back to BPCL through pipelines - tax rate for supply of job work services - Valuation for GST.
Activity amounting to Job-work or not? - Held that:- The applicant being a job worker satisfy the necessary ingredients to carry out job work activity. The treatment or process undertaken by the applicant on the goods belong to the principal ie, BPCL. The goods on which treatment or process apply are the inputs of the principal. The principal transfer the inputs meant for job work on free of cost under intimation to the ‘job worker’. The term ‘process’ is wide enough to include any activity of conversion, manufacture, development or preparation of goods. Therefore the activity of conversion of natural gas and other inputs to industrial gas qualify as ‘treatment or process’ of inputs. Hence the activity squarely fall under the scope of ‘job work’.
Valuation - Held that:- Any activity whether amounting to manufacture or not, could qualify as job work activity, subject to the condition that the inputs owned by the principal and the job worker carried treatment or process on the inputs/goods. The value on which GST would be payable by the applicant for rendering of job work services shall be the transaction value ie, price actually paid or payable as per the commercial arrangement between the applicant and principal. No other cost shall be required to be considered for the valuation of the job work activity unless the same is specifically included in the job work charges as agreed between the parties.
Rate of GST - Held that:- The services included under the Heading 9988 are manufacturing services performed on physical inputs owned by others. The activity of the applicant is job work as the output is not owned by the applicant providing this service. Hence the activity falls under serial No.(ii) of the HSN 9988 taxable @18% GST.
Ruling:- The activity undertaken by the applicant of processing natural gas and other inputs received from BPCL free of cost basis and manufacturing industrial gases from them shall fall under the scope of ‘job work’ under GST.
The activity of the applicant being job work; is a provision of service, as the input as well as output is owned by the principal and not owned by the applicant and falls under serial No.(ii) of the 9988 taxable GST.
GST is payable on the transaction value for which job work service is rendered.
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2018 (11) TMI 58
Rate of GST - Construction services - works contract in relation to construction of road, bridges, buildings, civil structures of government, semi-government and private undertakings, secured through tenders in the case of government undertakings, and through personal negotiations in case of private undertakings - Scope of 'Government Entity' - N/N. 11/2017Central Tax (rate) dated 28.06.2017 - Concessional rate of GST @12% applicable or tax rate applicable at 18%? - Sr. No.3(vi)(c) of Notification no.11/2017-CT (Rate) dtd.28.06.2017.
Whether MPPGCL, a Government Entity or not? - Held that:- In the Application itself that MPPGCL has been established by the Government of Madhya Pradesh and the Government of Madhya Pradesh has a 100% shareholding in the company. The State Government is also exercising full control over the activities of the said company. Needless to say that in the given circumstances M/s MPPGCL qualifies to be called and termed as a 'Government Entity' for the purpose of GST law, as it fulfils the necessary and sufficient conditions laid down under notification.
Applicable Rate of GST - benefit of concessional rate of GST - Held that:- The civil construction of residential quarters is neither the primary work entrusted to MPPGCL nor it has any bearing on the work i.e. power generation by any means. Accordingly, we fail to understand as to why the benefit of concessional rate @12% GST should be available to this particular works contract awarded to the Applicant? The intention of the legislature has been to concessional rate to such work which has been entrusted to a government entity for public interest in general. Any work having direct involvement in the entrusted work i.e. power generation would merit exemption envisaged under Sr.No.3(vi)(c) of the Notification No.11/2017-CT(Rate) under CGST Act and corresponding notification under MPGST Act 2017, but extrapolating and extending this concessional rate to any or all activities of MPPGCL will not only be unwarranted but also defeat the very purpose of concessional rate.
The impugned activity of the applicant would attract GST @18% (9% CGST + 9% SGST) classifiable under SAC 9954 read with Notification No.11/2017-Central Tax (Rate) and corresponding notification under MPGST Act 2017.
Ruling:- M/s. Madhya Pradesh Power Generation Company Limited is a Government Entity as defined under Notification No.31/2017-Central tax (Rate) for the purpose of GST law.
The works contract service of construction of 599 residential quarters allotted to the applicant by MPPGCL will merit classification under SAC 9954 and would attract GST @ 18% (9% CGST + 9% SGST).
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2018 (11) TMI 57
Levy of GST - Work contract services received from vendors for supply and erection work under various projects - whether clause(vi)(a) of Sr. No. 3 of table of Notification No. 11/2017-Central Tax(Rate) dated the 28th June, 2017 is applicable on the works contract services received by it?
Held that:- The Government of Madhya Pradesh is having full control over the applicant M/s. M.P. Poorv Kshetra Vidyut Vitran Co. Ltd. and the applicant is covered under the definition of Government Entity - The projects are undertaken for construction of electricity distribution lines, sub-stations and other infrastructure which are meant predominately for sell of electricity in urban and/or rural area.
The projects under DDUGY, IPDS, ADB, SSTD, Saubhagya Yojna, FSP and all other schemes of governments are carried out for business purpose and the benefit of Concessional Rate of 12% (6% under Central tax and 6% State tax) as per notification under is not available to the applicant on works pertaining to construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration, which are carried out in respect of projects under DDUGY, IPDS, ADB, SSTD, Saubhagya Yojna, FSP and all other schemes of governments as the same is undertaken for the business purpose.
The composite supply of works contract as defined at Section 2 of CGST Act ‘2017 and MPGST Act, 2017 is treated as supply of service in terms of serial no.6, Schedule II of CGST Act '2017 and MPGST Act, 2017 - In the instant case, the applicant had awarded work to the successful bidder for Supply of Materials and Erection respectively. Therefore, the contract entered by the applicant is squarely falls under the works contract and falls under entry no. (ii) of S. No. 3 of the table of notification no. 11/2017 - Central Tax (Rate), Dated - 28th June 2017 as amended from time to time and corresponding notifications under and MPGST Act, 2017, the applicable rate of tax is 18% (9% under Central tax and 9% State tax).
Ruling:- The Applicant is not entitled for the benefit of concessional rate of GST @12% (6% under Central tax and 6% State tax) for the said projects in terms of Notification No.24/2017-Central Tax (Rate) dated 21.09.2017 read with Notification No.31/2017-Central Tax (Rate) dated 13.10.2017.
The applicable rate of tax is 18% (9% under Central tax and 9% State tax).
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Income Tax
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2018 (11) TMI 50
Denying exemption u/s 11 - Disallowance of rent - Held that:- A perusal of the impugned orders shows that all the documents relevant to the issue of rent were not before the AO and even the CIT (A), has dismissed the appeals without actually considering the detailed submissions made by the assessee in this regard and which are part of the record. As both the parties before us have agreed, we deem it fit to restore the issue to the file of the AO for all the three years in appeal before us to be determined afresh after giving the assessee due opportunity to present its case. We also direct the assessee to furnish all the documentary evidences and explanations on which it seeks to place reliance whenever it is called upon by AO to do so failing with the AO shall be at liberty to proceed as per law.
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2018 (11) TMI 49
TDS u/s 194H - discount allowed to the prepaid card distributors in respect of supply of SIM card/Recharge vouchers (SIM/RV) - treatment of the assessee as assessee in default - Held that:- In assessee’s own case having considered the contentions on either side and the orders of the learned AO, first and second appellate authorities, the Hon’ble jurisdictional High Court reached a conclusion that to the transaction between the assessee and the distributors in respect of sale of the SIM/RV cards, provisions of Section 194H are applicable. The authorities below rightly concluded that the provisions of Section 194H are applicable to the facts of the case and there should have been tax deducted at source in respect of the said transaction.
The assessee said that the assessee cannot be branded as the assessee in default u/s 201(1) read with Section 194H in the absence of any evidence that the prepaid distributors have not offered for tax the discount availed by them from the appellant, we are of the considered opinion that it is a verifiable fact and learned AO has to verify whether the prepaid distributors have offered or not for tax the discount availed by them from the assessee. AO for verification of the fact whether or not the prepaid distributors offered for tax the discount availed by them from the assessee.
Non deduction of the TDS u/s 194J on the payments of roaming charges - Held that:- The payments in question shall not be recorded as payment towards fee for technical services and only such payments as are for services which are specialized, exclusive and utmost to users/consumers qualified as fee for technical services in terms of Explanation 2 to Section 9(1)(vii) so as to attract TDS u/s 194J. On this premise, in assessee’s own case, a coordinate bench of this Tribunal held that in the absence of any human intervention during the actual roaming process, payment would not be fee for technical services and cannot be regarded as payments to Section 194J are applicable.
While respectfully following assessee’s own case for the immediately preceding year, we are of the considered opinion that this demand cannot be sustained and has to be deleted.
Interest levied u/s 201(1A) to the tune it is needless to say that interest is consequential in nature and on the amount to be found chargeable on the verification of the fact as directed in the preceding paragraphs.
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2018 (11) TMI 48
Denial of exemption u/s 11 - application of maximum marginal rate - deemed registration u/s 12A - Held that:- The provisions at section 12A(2) will apply from the assessment year immediately following the financial year in which such application is made. In this case, the application of registration is made on 27.11.2015, hence the exemption under section 11 & 12 will be applicable not before A.Y. 2016-17. Further, the proviso section 12 A(2) will also not apply in the case of the assessee as the assessee has not shown any income derived from the property under trust. Beside this, the registration granted by CIT does not grant exemption u/s 11,12 &13 automatic and it is conditional after the Assessing Officer satisfies himself about the genuineness of the activities claimed.
The claim of the assessee that it should not be taxed at maximum marginal rate is also not tenable as the PAN of the assessee suggests that the assessee is a Body of Individuals and not 'Trust' as the fifth character of PAN is 'B' and not 'T' which should be the case of Trust. As the Return of Income was filed by the assessee in capacity of Body of Individuals and automatically the provisions of section 11, 12 &13 will not apply in the case of the appellant unless the registration is granted by CIT which was granted later. Hence, the provisions of section 167B (1) of the Act clearly suggests that under this situation the appellant has to be taxed at maximum marginal rates.
No infirmity in the order of CIT(A) in upholding the action of the CPC Bangalore in taxing the assessee at maximum marginal rate.
Capital receipt - Held that:- CIT(A) has relied upon the order dated 16.5.2017 of ITAT, Delhi Bench in the case of Divine Educational Institute & Social Development Society vs. ITO [2017 (5) TMI 966 - ITAT DELHI] wherein, it has been held that corpus fund which is meant for specific purpose to meet out capital expenditure could not be part of annual receipts, even if the trust is not registered under section 12AA of the Income Tax Act. However, in the present case the assessee has shown the receipt towards corpus fund of building account which is a capital receipt which has been invested in FDR. Therefore, Ld. CIT(A) correctly followed the aforesaid decision of ITAT and held that this receipt and treated as capital receipt to meet the capital expenditure and not chargeable to tax.
No relief can be given on account of interest on FDR of Building Fund also which is a revenue receipt and income during the year. Further, other deductions claimed by the assessee were not allowed u/s 11 & 12 of the Act and there is no infirmity in the intimation u/s 143(1) of CPC Bangalore. CIT(A) has passed well reasoned order which does not need any interference, on my part, therefore, uphold the same and reject the grounds raised by the Assessee.
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2018 (11) TMI 47
TDS u/s 194C on by products - consideration in kind - milled / shelled paddy as retained by the millers and the same has a marketable value which, in fact, constitute as a part of the consideration paid by the assessee to the millers, whereon the assessee failed to deduct any TDS.Held that:- In the case in hand, the neither the Procurement agency becomes the owner of the by product nor there is any ascertainable value of the by-product. Even, the Procurement Agencies have neither any inclination to know the price of the by-product nor they have right to claim any amount out of the value of the by-product on the ground that its sale value has exceeded the milling charges.
In this case the assessee's were not the owners of the by-products. Another factor for consideration is that the property passed ‘in kind’ should have some ascertainable and determinable value, which can be taken as part of the consideration paid for the work done. Further, it is the nature of the contract, term of the agreement, the intention of the parties and overall facts and circumstances of the case which are required to be analyzed and considered for determining whether the provisions of section 194C of the Act or other similar provisions of the Chapter would be attracted or not in a particular case. As discussed above in detail, since we have held that the property in the by-product was not passed on by the assessee / Procurement Agencies as milling charges, hence, it is held that TDS provisions of section 194C are not attracted in this case. - Decided in favour of assessee.
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2018 (11) TMI 54
Deduction u/s 80IB - addition made on account of upward adjustment u/s. 92CA(3) of the Act on account of guarantee fee on loans availed by AEs of Assessee against guarantee of Assessee - Held that:- Learned counsel appearing on behalf of the CIT-A has referred to an order dated 11th July, 2018, in which the Bench thought it fit to issue notice on the point involved. However, we have been informed that on 4th September, 2018, the matter has been dismissed on the ground of ‘low tax effect’.
Place this matter before a Bench presided over by Justice A.K. Sikri.
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2018 (11) TMI 46
Levy of late filing fees u/s 234E while issuing intimation u/s 200A - scope of amendment to section 200A - Held that:- In the present case, the undisputed facts are that the assessee filed its TDS return (Form 26Q) for the fourth quarter of financial year 2012-13 on 1.10.2013 and the same was processed and intimation under section 200A was issued vide order dated 25.12.2013 much prior to the amendment to section 200A w.e.f. 1.6.2015 empowering the AO levying the fees under section 234E of the Act. It is therefore not a case of continuing default where the assessee has defaulted in furnishing the TDS statement even after 1.6.2015 and thereafter, the demand for payment of fees under section 234E has been raised by the Assessing officer.
In case of Fatheraj Singhvi [2016 (9) TMI 964 - KARNATAKA HIGH COURT] has held that the provisions of amended section 200A are prospective in nature.
Further, the decision in case of M/s. Dundlod Shikshan Sansthan and Others [2015 (9) TMI 807 - RAJASTHAN HIGH COURT] as relied by CIT (A) is in the context of validity of section 234E, but not in the context of power of AO for levy of fee under section 234E prior to 1.6.2015. In view of the above, AO while processing the TDS statements for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted.
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2018 (11) TMI 45
Claim of depreciation while claiming exemption u/s 11 - Held that:- Normal depreciation can be considered as a legitimate deduction in computing the real income of the assessee on general priciples or under section 11(1) (a) of the Income-tax Act, 1961. Income of a charitable trust derived from building, plant and machinery and furniture is liable to be computed in a normal commercial manner although the trust may not be carrying on any business and the assets in respect where of depreciation is claimed may not be business assets. In all such cases, section 32 of the Act providing for depreciation, for computation of income derived from business or profession is not applicable. However, the income of the trust is required to be computed under section 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from the gross income of the trust. - See COMMISSIONER OF INCOME-TAX VERSUS INSTITUTE OF BANKING PERSONNEL SELECTION [2003 (7) TMI 52 - BOMBAY HIGH COURT] - decided against revenue
Carry forward of deficit and allowing set off against the income of subsequent years - Held that:- Income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied then adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years against the income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year in which adjustment had been made having regard to the benevolent provisions contained in section 11 of the Act and such adjustment will have to be excluded from the income of the trust under section 11(1)(a). - Decided against revenue
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2018 (11) TMI 44
Addition u/s 69C - Addition under the head cash payments made to the tenants - expenditure remains unexplained and being unaccounted - CIT-A restricted part addition - addition made on the basis of certain payments appearing on the back side of page No.102 of Annexure A-I seized during the course of search - Held that:- We find from records of the case that the facts are clear that these payments, if at all, have been made or are received by Grishma Constructions & Trading Pvt. Ltd and not by the assessee, as the front side of the same page has got details relating to the project being undertaken by Grishma Constructions on the land owned by Ram Panchayat Trust. We have noted that the CIT(A) has observed this fact but noted that Grishma Constructions also not owned up these transactions and these transactions have not been considered in its hands during the assessment made in its case. He further noted that the additions made by the AO, as of now, unless and until the assessee group owns up such transactions elsewhere is to be added here.
As for as payment to Shri Desai is concerned, the CIT(A) partly rejected this page by observing that sufficient evidence has been made available by the assessee, as this payment has been made through cheque and an agreement in this regard has been entered into between Shri Desai and Grishma Constructions & Trading Pvt. Ltd.
As regards payment to other parties the facts of the case are that these payments pertains to Grishma Constructions or are received by Grishma Construction. Hence, we are of the view that this paper belongs to Grishma Constructions & Trading Pvt. Ltd and not the assessee even though they are closely related parties. We find that these payments had been made to the tenants of Ram Panchayat Temple Trust, apparently, for vacation of property of Grishma Constructions & Trading Pvt. Ltd whose project was going to start. Further it is also a fact that the Pluto Project was undertaken by Grishma Construction & Trading Pvt. Ltd. by entering into MoU for development of property of Ram Panchayat Temple Trust, Borivali Mumbai dated 02.07.2004. These facts also confirm that only interested party for vacation of property from tenants was Grishma Construction & Trading Pvt. Ltd and not the assessee. Hence, we delete the addition - Decided in favour of assessee.
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2018 (11) TMI 43
TPA - selection of MAM for determining ALP of transaction - APM v/s RPM - comparable selection - functinal dissimilarity - Held that:- We advert to functions performed by assessee. It is admitted fact that assessee simply purchase products from its AE's and is resold without any further value addition. Assessee has cataragorised itself to be low risk bearing entity.
There is no dispute regarding very minimal risk/no risk withstood by assessee on the basis of low intensity function performed by it. The product imported from AEs representing international transaction, is neither processed further, nor used as raw material for manufacturing any other product. Thus on the basis of legal position enumerated hereinabove, in our considered opinion RPM has to be the most appropriate method to determine ALP of transaction having regard to the arrangement between assessee and the AE of simple purchase and sale of product without having any value addition by assessee.
Thus, we are inclined to uphold APM to be the MAM for determining ALP of transaction. Once it is held, RPM to be the most appropriate method, comes the turn of AO/TPO/DRP to satisfy himself that not only correct method has been applied by assessee but also that proper data for determination of a repeat under such method has been made available. Admittedly, comparables proposed by assessee and used by Ld.TPO/AO/DRP for purposes of analysis, do have significant intensity functions, as compared to that of assessee. AO/TPO/DRP overlooked these huge differences between low risk function performed by assessee vis-a-vis high intensity functions performed by comparables which is not acceptable when RPM is used as MAM.
We are thus of opinion that Ld.AO/TPO erred in not conducting fresh search of comparables which would have strict functional similarity while using RPM as MAM.
TPO erred in not conducting fresh search of comparables for purposes of determining the comparability of the arm’s length price by using RPM as MAM. Further before DRP even after assessee having submitted additional evidence in relation to fresh comparables for determining ALP by using RPM as most appropriate method was rejected.
Adjustment on account of difference in the ALP of the international transaction of receipt of localisation support - Held that:- We reject the benefit test applied Ld. TPO.
On careful perusal of the agreement it is observed that supply of know-how and training by AE is to the suppliers and not to assessee. In our considered opinion, it cannot be said that such expenditure is subsumed with royalty agreement. Ld.TPO was required to simply determine ALP of transaction, unconnected with the fact, of any benefit that is accrued to assessee. Ld.AO/TPO/DRP has acted contrary to ratio laid down by Hon’ble High Court in case of Cushman & Wakefield India (Pvt.)(Ltd.) [2014 (5) TMI 897 - DELHI HIGH COURT]. We accordingly set aside the issue to Ld.AO/TPO for deciding this issue within broader parameters
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2018 (11) TMI 53
Computation of deduction u/s 80HHC - Exchange fluctuation, provision written back, should be treated as income derived out of business for computation - Tribunal holding not 90% of Exchange Fluctuation, provision written back, should not be deducted from the business profits under explanation (baa) - Held that:- The assessee had explained to the AO that the difference in value was due to exchange fluctuation, which has been accounted separately in profit & loss account and the value adopted by it is based on actual realisation of foreign exchange.
With regard to sale of scrap, the assessee contended that the scrap, which was sold forms an integral part of the revenue generated from the industrial undertaking, since the same is derived from operational activity of the undertaking. After examining the factual position, the CIT(A) accepted the case of the assessee and duly supported its finding by referring to the decisions on the point. Thus, in the facts and circumstances of the case, we are of the considered view that no substantial question of law arises for consideration in these appeals and the decision in the case of Alfa Laval India Ltd. [2003 (9) TMI 43 - BOMBAY HIGH COURT] would squarely apply to the facts and circumstances of this case.
As relevant to take note of the decision of the High Court of Himachala Pradesh in Purewal & Associate Ltd., [2016 (1) TMI 809 - HIMACHAL PRADESH HIGH COURT] wherein the Court considered the object of Section 80HHC which was to grant an incentive to earners of foreign exchange and therefore, held that it has to be essentially considered with reference to that object. In paragraph 22 of the judgment, the Court noticed Section 41(1) and pointed out that it creates a legal fiction and can be extended for the purpose allowing from profits of business as referred to in Section 80HHC of the Act.
We hold that there is no substantial questions of law arising for consideration in these appeals and the decision purely revolves around the factual matrix and it is not a case of decision on mixed questions of fact and law. Thus, we are not inclined to interfere with the order passed by the Tribunal confirming the order passed by the CIT(A). - Decided against revenue.
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2018 (11) TMI 52
Reopening of assessment - enormous donations received by the assessee - escapement of income from tax - Held that:- Issue which is falling for consideration and determination in these proceedings is identical to that arising out of the challenge to the order dated 31st December, 2017, passed by the Assessing Officer for the Assessment Year 2015-16. That order is challenged in an appeal before the Commissioner of Income Tax (Appeals) by this very petitioner and the appeal is pending. The stand of the petitioner is common.
We are of the firm opinion that in the event we express any views and either way on the contentions raised by Mr. Ganesh, they may prejudice the case of the petitioner in the pending appeal. Depending upon the view expressed by us, the petitioner would also not be in a position to then assail the notice impugned in this writ petition.
In the light of these plural remedies and given the nature of the mixed issues involved, we are of the opinion that this writ petition need not be entertained. Any expression of opinion on disputed factual matters would prejudice the case of either side. The issues are not purely legal, but are mixed, namely, of fact and law. Whether the ingredients of section 115BBC(2) are fulfilled or satisfied will have to be considered in the backdrop of the factual assertions of the petitioner. Similarly, the language of section 80G (5) and section 11 has any bearing on the case will have to be decided in the backdrop of the petitioner's activities. The petitioner itself is asserting that its activities are mixed. It is a mixed purpose Trust.
The writ petition is, therefore, disposed of by clarifying that this Court has kept open the challenge to be raised in appropriate legal proceedings. The writ petition stands disposed of accordingly.
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2018 (11) TMI 51
The appeal is admitted on the following substantial questions of law:-
“(i) Whether under the facts and the circumstances of the case and in law the learned ITAT has not erred in reversing the decision of the learned CIT (A) and holding the amount remitted by the appellant to be in the nature of “royalty” as per provision of Section 9(1)(vi) of the Income Tax Act, 1961 as well as Article 12 of the India-Isreal Double Tax Avoidance Agreement and there by holding the Appellant as “Assessee in default” for not deducting TDS under Section 195 of the Act?”
Issue notice to the respondent. Rule is made returnable by eight weeks.
No ground for grant of anyinterim order. The stay application is accordingly dismissed.
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2018 (11) TMI 42
Disallowance of claim of deduction u/s 80IC - assessee is engaged in hotel business - as during the assessment proceedings, the assessee withdrew the claim of deduction - Held that:- It is true that during the assessment proceedings, the assessee withdrew the claim of deduction u/s 80IC of the Act. It is equally true that subsequently, by the judgment of Aanchal Hotels Pvt. Ltd [2016 (6) TMI 1033 - UTTARAKHAND HIGH COURT] as held a hotel set up in the State of Himachal Pradesh or the State of Uttaranchal and having a valid NOC from the Pollution Control could be said to be eligible for deduction u/s 80IC of the Act.
When this claim was made before the CIT(A), CIT(A) did make some enquiry behind the back of the assessee and decided the issue against the assessee.
CIT(A) ought to have confronted the result of the enquiries made by him and should have given reasonable opportunity to the assessee to explain his case. The matter deserves to be set aside to the file of the CIT(A) to decide the issue afresh - decided in favour of assessee for statistical purposes
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2018 (11) TMI 41
Addition on account of wages payment - allowable busniss deduction u/s 37 - Held that:- Through the entire material available on record and we find no justification to sustain the impugned order. It is pertinent to note that the ld. Authorities below while disallowing the impugned wages payments have nowhere observed that any of the wages expenses claimed was not incurred wholly and exclusively for the purpose of business, particularly when the said expenditure were incurred by the assessee, debited in the books of account and supported by bills and vouchers.
AO has stressed on wages expenditure, which could be payable by the assessee as per his own hypothetical calculations without pointing out that any such payment on wages or any such voucher/bill was disallowable in particular or was not laid wholly or exclusively for the purpose of business, being the true intent of section 37(1). For this view, we stand fortified by catena of decision of Hon’ble Apex Court in Sasson J. David & Co. (P) Ltd. vs. CIT [1979 (5) TMI 3 - SUPREME COURT] relied by the assessee and various other decisions.
As examined the trading, profit & loss account in the light of explanation given by assessee before the ld. Authorities below and we find considerable substance in the contention of the assessee that owing to constant labour supply through contractors, the contractual labour payment was increased from ₹ 16,75,000/- in A.Y. 2010-11 to ₹ 71,80,000/- in A.Y. 2011-12, i.e., the year under consideration. Since this payment of ₹ 71,80,000/- was made through banking channel, the ld. Authorities below themselves have not doubted this payment anymore nor did they drew any adverse inference on the basis of this contractual labour payment.
AO has also not made any addition on this score. Therefore, in our opinion, once the main hike was in contractual labour payment and this payment was accepted by the ld. Authorities below as genuine, the working of the authorities below cannot be sustained for disallowance of wages expenses. Moreover, the ld. Authorities below appear to have not considered the explanation of the assessee in right perspective that the assessee has paid substantial amounts of ESI/PF on all the wages payments, which resulted into substantial increase in the amount spent on ESIC/PF from ₹ 25.38 lacs in preceding year to ₹ 31.33 lacs in the year under consideration.
If the contractual labour payments, on genuineness of which there is no dispute, are set apart, the increase in other labour payments is of only ₹ 34,54,759/- i.e., from ₹ 1,01,59,706/- to ₹ 1,36,14,465/-, which in view of increase in production and other factors relevant to such increase as explained by the assessee, cannot be said to be unreasonable. CIT(A) appears to have sustained the action of the AO on the premise that different individuals were employed every month, which goes to belie the explanation of the assessee that trained labour is needed for the manufacture of product.
The monthly change of individuals, would not suggest that the changed labour was not trained one and such extraneous facts would not be suffice to disallow the wages payments claimed by the assessee. If the ld. CIT(A) had any doubt on the genuineness of labour payments made by assessee, he could call for examination of the payees exercising his powers vested u/s. 250(4) of the IT Act, which is lacking in the instant case.
Therefore, mere on suspicion and fake presumption, no disallowance can be made, as held in plenty of decisions of various higher courts. The assessee has submitted a comparative chart before us giving various factors responsible for increase in labour payments, which stands uncontroverted on behalf of the Revenue. If the factors responsible for increase in wages payments as explained by the assessee are considered in right perspective, the wages payments claimed by the assessee cannot be said to be unreasonable. In the totality of facts and circumstances and in view of our above discussion, we, find the appeal of the assessee full of merits which deserves to be allowed. - Decided in favour of assessee.
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2018 (11) TMI 40
Time limit of completing the proceedings - non deduction of TDS u/s 194C - Assessee in default u/s 201(1) - Period of limitation - Held that:- Such an amendment brought by the Finance (No.2) Bill 2009 was clarified by CBDT vide Circular No. 5 of 2011 explaining the said amendment which came into effect w.e.f 1st April, 2010. The amendment as well as the said CBDT circular had come up for consideration of Vodafone Essar Mobile Services vs. Union of India (2016 (8) TMI 509 - DELHI HIGH COURT) wherein after detailed discussion referring to the catena of judgments held that CBDT Circular No. 5 of 2011, clarifying that the proviso to section 201(3) which was made to extend the time limit of completing the proceedings and passing orders in relation to the pending cases cannot be interpreted so as to enable the department to initiate proceedings for declaring assessee to be ‘assessee in default’ u/s 201 of the Act for a period earlier than four years prior to 31st March, 2011. Accordingly, their lordship held that the barred limit of four years which was earlier held by the Courts to be applicable in such cases cannot be extended by said amendment. Thus, respectfully following the ratio laid down Hon’ble High Court, we hold that the initiation of proceedings u/s 201(1) - Decided in favour of assessee.
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Customs
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2018 (11) TMI 39
Suspension of CHA License - Regulation 19 (2) of CBLR 2013 - suspension on the ground that the containers contained undeclared goods - the licence of the customs broker / appellant has been suspended indefinitely - Held that:- The finding in the impugned order is that the appellant did not directly collect the authorization letter and KYC norms from the importer but got the same through Mr. Jayakumar of Easwar Logistics which is clear violation of obligation under Regulation 11 (a) and (m) of CBLR 2013. The Regulation does not specifically mention that customs broker has to obtain KYC norms from the importer directly. It only states that appellant has to comply with obtaining the KYC documents - It is also not the case of the department that the appellant has played any active role in the importation of misdeclared consignment.
Further even after 9 months of issuing the SCN, so far there has been no proceedings for revocation of the licence - Department cannot issue orders of suspension indefinitely in the guise of revocation of licence so as to obstruct the customs broker from engaging in his activities of livelihood indefinitely.
The impugned order for continuation of suspension of customs broker licence is unjustified - appeal allowed - decided in favor of appellant.
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2018 (11) TMI 38
Principles of natural justice - Prohibition on CHA from working in certain area - Mumbai Customs zones I, II & III - it is the case of appellant that no opportunity was accorded to them to explain their position - Held that:- Observing principles of natural justice is the rule, and dispensing it, is the exception to the said rule. Needless to mention the exception could be resorted to only in extraordinary circumstances - the situation is such that the personal hearing if allowed would defeat the very of purpose of directing prohibition, then it should be resorted to.
Also, there is no evidence or observation by the learned Commissioner justifying direction of prohibition dispensing with the personal hearing to the appellant.
The matter remanded to the adjudicating authority to decide the issues afresh after affording a reasonable opportunity of hearing to the appellant - appeal allowed by way of remand.
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Service Tax
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2018 (11) TMI 35
Constructions of Residential Complex Service - Composite service involving sale of goods alongwith providing of services - Works Contract Service or not? - Held that:- The preliminary issue of service being provided under „Work Contract Service‟ is required to be adjudicated in the light of law laid down by the Hon‟ble Supreme Court in the case of Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT] - the matter should be remanded to Commissioner for fresh decision - Appeal allowed by way of remand.
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2018 (11) TMI 34
Classification of services - whether the services of packing, palletisation, storage, transportation, handling of import and export cargo etc. undertaken by the appellant are classifiable as ‘cargo handling services’ / ‘Port Services’ (from 01.07.2003) or as a part of Custom Handling Agency services being rendered by the appellant?
If these are considered as part of Custom House Agency services, whether the amounts which they have collected on account of the aforesaid services should be treated as reimbursable expenses and hence not included in the assessable value?
Held that:- It is true that the services which they rendered with respect to handling of cargo and processing etc. are classifiable as cargo handling services if they had rendered them in isolation. However, Custom House Agent himself also renders these services in addition to the services under CHA Regulations 1984. It has been recognised by the CBEC that all these activities are part of the CHA activities. If these activities are considered as part of CHA services, then the amount charged by them should form part of the assessable value for the CHA services.
The services rendered by the appellant during the course of Custom House Agency services in the form of handling of cargo etc. do not form a separate taxable service falling under Custom House Agency services or Port Services. It is a composite service rendered by the Custom House Agent. The amounts charged by them from their clients do not get included in the value of taxable services rendered to the extent that they are reimbursable expenses. This is a fact to be verified from the invoices and accounts.
Appeal allowed by way of remand.
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2018 (11) TMI 33
Classification of services - loading, transport and unloading of coal from mining - whether classified under Goods Transport Agency Services or under the head Cargo Handling Services? - reverse charge mechanism - Held that:- In terms of 65A (2)(b), that the classification in the case of combined service is to be decided by analyzing the fact as to which service gives essential character to the service being performed - As can be seen from the contract that the essential character of the service for which contract has been entered by the service provider is that the service received are for transportation of coal for mining area to the railway siding and the activity of loading/ unloading mechanically or otherwise is only incidental to the activity of transportation of the cargo in these cases - the service provided by the appellants have rightly been classified in the Goods Transportation Agency service.
Tis issue has already been examined by the Hon’ble Supreme Court in their decision in the case of CCE & ST Raipur Vs Singh Transporters [2017 (7) TMI 494 - SUPREME COURT] wherein the Hon’ble Supreme Court has held that activity undertaken by the assessee of transporting of coal from the pithead of the mines to railway siding is more appropriately classifiable under service head of Transport of Goods by road services.
Appeal allowed - decided in favor of appellant.
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2018 (11) TMI 32
CENVAT Credit - Rule 6(3)(c) of CENVAT Credit Rules, 2004 - invocation of extended period of limitation - export of services or not - Services provided by the appellant to the foreign network firms and other foreign companies and the consideration for such services collected in convertible foreign currency - Form F-3 - Services procured from foreign Chartered Accountants Firm - reverse charge mechanism - exempt service provided or not?
Services provided by the appellant to the foreign network firms and other foreign companies and the consideration for such services collected in convertible foreign currency - Export of Services under the Export of Services Rules, 2005 - period involved was April 2005 to September 2008 - Whether the services provided by the appellant to foreign network firms and other foreign companies for a consideration collected in convertible foreign exchange would be qualified for export services under export of services rules 2005 or otherwise? - Held that:- It is undisputed that the appellant herein rendered services to their overseas network entities as well as to their clients located outside India and the consideration for such services was collected in convertible foreign currency. The findings of the adjudicating authority is that the services rendered by the appellant are in the form of auditing and accounting of various entities situated in India but had only forwarded the certificate to the foreign entities which is not service rendered outside India; it is also finding that the services are rendered to foreign clients, but performed wholly within India - the activity undertaken by the appellant herein in this appeal would definitely qualify for as export of services and no service tax liability arise - demand set aside.
Services provided to Satyam Computer Services Ltd. in respect of certification of Form F-3 which is required tobe filed before the US Securities and Exchange Commission (SEC) - exemption under N/N. 58/89-ST, dated 16.10.1998 - Held that:- The certification service by a Chartered Accountant was not included in the 11 services enlisted in Notification No. 59/98 (supra) which were taxable. And hence, the certification service being not included in the 11 services so mentioned was clearly exempt in terms of the said notification till 28.02.2006 - demand not sustainable.
Chartered Accountants’ Service - reverse charge mechanism - Held that:- The definition is an inclusive one and a very wide inasmuch as it includes any concern rendering services in the field of chartered accountancy. In the case in hand, it is undisputed that appellant herein had availed the services rendered by PricewaterhouseCoopers USA and U.K, in the areas of accounting and auditing and various other functions related to chartered accountant services. In our view, the definition of practicing chartered accountant, the emphasis is on the membership of Institute of Chartered Accountants of India and certificate of practice granted under the provisions of Chartered Accountants Act, 1949 (38 of 1949) may not apply to the appellant as the second part i.e. inclusive part is emphasizing on independent concern engaged in rendering chartered accountancy services. It can be noted that the second part of the definition does not talk about requirement of the concern being Indian or otherwise. So, in our view, it applies to all concerns whether it is in India or abroad - if the associated concern is situated abroad and engaged in rendering services in the field of chartered accountancy, will get covered under the definition of ‘practicing of chartered accountants’ and in our view the demand confirmed by the authorities is sustainable and accordingly appeal to this extent is rejected.
Applicability of mischief of Rule 6(3) of the CENVAT credit rules 2004 - appellant claims that they have not provided any exempted services during the relevant period - Held that:- The taxable services related to accounting and auditing are not exempted and the claim of the assessee has been that they have never sought exemption from the services under the said notification No. 59/1998. The provisions of notification No. 25/2006-ST, dt. 30.07.2006 is for seeking exemption for the amount received as consideration for appearances before the statutory authorities in the course of proceedings initiated under any law for the time being in force by way of issue of notice. It is the submission that this benefit of notification No. 25/2006 was also not claimed by the appellant during the relevant period in question. Nothing adverse is recorded in the adjudication order on this claim made by the appellant - demand not sustainable.
Time limitation - Held that:- As regards the question of limitation, we hold against the appellant at point no. 3(c), we find that appellant being practitioner in Service Tax, should have discharged the service tax liability on their own and can not take the shelter under the bonafide belief for claiming relief under limitation.
Appeal allowed in part.
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2018 (11) TMI 31
Classification of services - composite mining contract - contract with M/s. TISCO was also for consolidated mining activities - whether classified as mining services or as Cargo Handling services? - adjudicating authority has picked up two of the activities for charging service tax under the categories of “Business Auxiliary Service” for crushing of ore lumps as well as “Cargo Handling Service” for transportation of stock.
Held that:- It is to be noted that the contract is not a service contract simplicitor either for crushing or for transportation of material. It is a composite contract encompassing all the activities listed therein. When the entire scope of the contract is considered, it is evident that this will be covered only within the category of mining which has been included as a separate service w.e.f. 01.06.2007.
The Tribunal in the case of Hazaribagh Mining & Engineering P. Ltd. vs. C.C.E., C. & ST, BBSR-I [2016 (12) TMI 1131 - CESTAT, KOLKATA] have considered a similar composite mining contract which was made chargeable to service tax under different categories. The Tribunal held that once the contract is a composite contract for the entire activities from site formation to segregation of ores then the same has to be charged as a separate service (Mining Services), which was made chargeable to service tax w.e.f 01.06.2007 only.
Vivisecting the composite contract and charging service tax on different components of the contract individually under different services is not justified - demand set aside.
Contract with M/s. B.K.Coalfields - Site formation services or not? - Held that:- After perusal of all documents, he has concluded that the activities are nothing but mining services which are chargeable to service tax only w.e.f. 01.06.2007 - there is no infirmity in the view taken by the adjudicating authority that the activities carried out under M/s. B.K. Coalfields Ltd contract also will not be liable to vivisected and charged to service tax under individual categories.
Appeal dismissed - decided against Revenue.
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2018 (11) TMI 30
Area based jurisdiction for grant of Refund - rejection of refund despite lack of jurisdiction - Works Contract service - services provided to the Government, a local authority or a governmental authority - exemption was restored by inserting entry 12A in the Mega Exemption.
Held that:- The question of jurisdiction raised by the Revenue is not about the basic jurisdiction of the Assistant/Deputy Commissioner to deal with the refund claims. The objection is on area based jurisdiction. If the Revenue was of the view that the refund claims should have been filed with the jurisdictional officer of the Head Office, they were within their rights to transfer the same to the officer having the proper jurisdiction. Adopting an analogy that if an appeal against the orders of the Lower Authorities is to be filed before Delhi Benches of the Tribunal and same stands filed before the Allahabad Benches, the normal and accepted course of action would be to transfer the appeal to Delhi in spite of rejecting the same on the point of jurisdiction.
Matter remanded to the Original Adjudication Authority - petition allowed by way of remand.
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2018 (11) TMI 29
Levy of service tax - Works contract service - whether the appellant is liable to tax prior to 1st June 2007 under the category ECIS? - demand for period from 1.6.2007 - scope of SCN.
Held that:- The correct and specific classification of subject services during the period from 1st June 2007 onwards is under works contract service - Admittedly, the work done prior to 1st June 2007 being similar, we hold the classification adopted by the adjudicating authority under ‘Erection, commissioning and installation service (ECIS)’ is erroneous, and in conflict of the ruling of the Hon’ble Supreme Court in the case of CCE Vs. Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT].
Demand after 1st June 2007 - scope of SCN - Held that:- Admittedly, there is no such proposal in the show cause notice to tax the same under ‘works contract service’. Whereas adjudicating authority have classified the services post 1st June 2007 under works contract service and have levied the tax - in absence of proposal in the show cause notice, the demand confirmed under the category WCS is erroneous and the same is beyond the scope of the show cause notice - demand set aside.
Appeal allowed - decided in favor of appellant.
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2018 (11) TMI 28
Valuation - inclusion of subvention charges in assessable value - Business Auxiliary Services - direct selling agent services provided by appellant to ICICI Bank - It has been argued that the service tax should be denied only on the amount received by them net of subvention - Held that:- The issue is decided in the case of COMMISSIONER OF SERVICE TAX, MUMBAI VERSUS M/S. JAYBHARAT AUTOMOBILES LTD. AND VICE-VERSA [2015 (8) TMI 503 - CESTAT MUMBAI], where it was held that the amount of commission paid by the bank for promotion of their financial products by the appellant to customers is subject to payment of Service Tax - thus, as far as the valuation of services is converned the rejection of subvention cannot be permitted in light of above decision.
Extended period of limitation - Held that:- There is no scope for interpretation or doubt in this regard and thus there cannot be any bonafide doubt regarding taxability of the service provided by the appellant - there is no merit in the argument on limitation canvassed by the Ld. Counsel.
Appeal dismissed - decided against appellant.
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2018 (11) TMI 27
Classification of services - providing services to ICICI Bank - Whether classified as Business Auxiliary Service or under the head Manpower services? - Held that:- The contract entered with the appellant by ICICI Bank was for identifying eligible consumers for the retail products of ICICI including credit gross commercial/ product gross/ emergence and other retail finance products. The appellant was also required to provide certain services related to issuance of credit across as described in the said contract - It is apparent that the contract entered into by the appellant in the year 2009 was not a contract for supplying the manpower services but was a contract for promotion of the services provided to the service recipient - The argument of the appellant that no conclusion regarding nature of services provided can be reached on the basis of scope of the agreement of 2009 is misplaced. A perusal of the agreement of 2009, clearly indicates that it is a continuation of earlier arrangement.
Valuation - includibility - rent - cost of manpower - whether reimbursable expenses or cost of service? - Held that:- A free supply changes the nature of contract. For example a contract for ‘painting of building’ would became ‘a labour contract’ if paint and painting equipment is supplied free. However, a painting contract will remain a painting contract even if the agreement has clause where actual cost of paint and equipment is reimbursed - the appellants are not entitled to exclude the rent and salaries from the assessable value. The demand on this count in respect of services provided to ICICI is upheld on merit.
Contract entered into by the appellant with Tata Teleservices Ltd. - Held that:- The service provided is in the nature of supply of manpower. In these circumstances the demand of service tax under the head of BAS cannot survive.
Time Limitation - Held that:- The service provided is in the nature of supply of manpower. In these circumstances the demand of service tax under the head of BAS cannot survive - The ST-3 form prescribes disclosure of all amounts received in respect of service even if not part of Assessable value. Failure to disclose the same amounts to misdeclaration. Thus, the appellant’s argument on limitation is dismissed.
Simultaneous penalty under section 76 & 78 - Held that:- The penalty under section 76 is set aside. Penalty under section 78 is revised to the amount of revised demand of duty.
Appeal allowed in part.
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2018 (11) TMI 26
Penalty u/s 77 and 78 of FA - Liability of service tax - Manpower Supply Agency Service - reverse charge mechanism - Held that:- The manpower supply service is covered under the definition of input service and the input credit is available to the appellant and thereby making the whole transaction as revenue neutral - no malafide intention can be inferred if the transaction is revenue neutral and extended period can also not be invoked.
Further, the impugned period of dispute is from July 2012 to September 2013 whereas the SCN was issued on 08.12.2016 which is beyond the normal period of one year. Further, the only ground on which the Commissioner (A) has invoked the extended period is that the appellants have not disclosed the said fact in their return and thereby suppress the material facts.
The penalty is not sustainable - appeal allowed - decided in favor of appellant.
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2018 (11) TMI 25
100% EOU - Refund of accumulated CENVAT Credit - denial on the ground that GTA service on account of nexus - denial also on the ground that credit was availed after 5 years, which is not proper - Held that:- In view of the Board Circular dated 28.2.2015 and in view of the decision of the Tribunal in the case of Kennametal India Ltd. [2016 (8) TMI 1031 - CESTAT BANGALORE], it is a settled issue that in the case of export, port is the place of removal and credit up to the port of export is an input credit, which the appellant is entitled to.
Further, there is no time limit prescribed under CENVAT credit scheme for availing the CENVAT credit and it has been so held in the case of Coromandel Fertilizers Ltd. [2008 (8) TMI 333 - CESTAT, BANGALORE].
Appeal allowed - decided in favor of appellant.
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2018 (11) TMI 24
Extended period of limitation - Section 73 (1) of Central Excise Act - banking and other financial services - suppression of facts - reverse charge mechanism - Held that:- From the available records that the appellant had disclosed the fact of obtaining ECB loan in foreign currency in the Balance Sheet prepared during the disputed period.
It cannot be said that non-payment of service tax by the appellant, was owing to the reason of fraud, collusion, willful mis-statement, etc., with intent to defraud the Government Revenue. In this case, since the period of dispute is from April 2011 to March 2012 and the show-cause notice was issued on 07.01.2016, the extended period of limitation cannot be invoked for confirmation of the adjudged demand and the same should only be confined to the normal period.
The impugned order cannot be sustained on the ground of limitation - Appeal allowed - decided in favor of appellant.
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2018 (11) TMI 23
Condonation of delay in filing appeal - appeal was filed before him after 826 days from the date of receipt of the adjudication order - Section 85 of the Finance Act, 1994 - Held that:- It is evident that the appeal was preferred before the office of the Commissioner (Appeals) after more than 800 days from the date of receipt of the adjudication order. With regard to filing of appeal before the Commissioner (Appeals), Section 85 of the Finance Act, 1994 mandates that the same should be presented within three months from the date of receipt of the decision or order by the adjudicating authority. The proviso clause appended to Section 85 of the Act, provides discretion to the Commissioner (Appeals) for condoning the delay up to a further period of three months, if the appeal is not filed within the stipulated period.
On perusal of Section 85 of the Act, it reveals that the Commissioner (Appeals) can only entertain the appeal (with condonation of delay application) up to a period of six months from the date of receipt of the adjudication order by the assessee-appellant - In this case, since the appeal was preferred by the appellant after 826 days from the date of the order, the same is not maintainable for consideration by the Commissioner (Appeals).
The appeal filed by appellant is dismissed.
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2018 (11) TMI 22
Condonation of delay in filing appeal - delay in filing of an appeal before commissioner (appeal) - proof of deliver of an order in original - Held that:- Sub-clause (a) thereof makes it clear that the service of the order by the registered post with acknowledgement due to the person for whom it is intended or his authorised agent is the sufficient service. From the order under challenge, it is apparent that there is a document of dispatch of the order i.e. vide dispatch No.2200 dated 3rd March, 2010 - the compliance of Rule (a) Section 37 C of CEA stands fulfilled. There was no need to the Department to adopt any other mode as prescribed under various other Sections.
Condonation of delay in filing appeal - Section 85 sub-clause (3) of the Finance Act - Held that:- As per Section 85 sub-clause (3) of the Finance Act, the appeal before Commissioner (Appeals) could have been filed within 60 days of such receipt of the order under challenge. The proviso to said Section empowers the Commissioner to condone the delay of subsequent 30 days. The Section makes it clear that the legislature has fixed a statutory limit for the purpose of any appeal to be filed before Commissioner (Appeals) - Commissioner (Appeals) has no discretion to condone the delay beyond 60 + 30 i.e. 90 days of the service of the order under challenge - delay cannot be condoned.
There are no reasonable cause in the contention of the appellant - Moreover the Commissioner had no power to condone the delay of more than 3 years - appeal dismissed.
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2018 (11) TMI 21
Liability of Service tax - services of goods transport operators (GTO) - freight charges to the transporters - case of appellant is that the SCN were bad in law being vague as no service tax amount proposed to be recovered was not mentioned - Held that:- Similar issue has been considered by this Tribunal in the case of Pandurang SSK Ltd. [2011 (2) TMI 671 - CESTAT, MUMBAI]. In the said case also, the demand related to the period 16.11.1997 to 1.6.1998 for availing of services of goods transport operator (GTO). The service tax since not paid on the freight charges, initially a show cause notice was issued in December 2001; later, a revised show cause notice was issued in February 2004 post amendment and insertion of Section 71 and Rule 7A in the Finance Act, 1994 and Service Tax Rules, 1994 - it was held by the Tribunal that It is settled law that nothing can be added to a statute, nor can anything be deleted therefrom, by a court, whose function it is to interpret the expressions as they exist in the statute.
Appeal allowed - decided in favor of appellant.
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2018 (11) TMI 20
Interest on delayed claim - time limitation - Section 11 B of Central Excise Act - whether the Revenue is liable to pay interest under Section 11 BB of the Act of which commences from the date of expiry of three months from the date of receipt of application for refund or on expiry of the said three months period from the date on which the order of refund is made?
Held that:- The bare perusal of these provisions makes it clear that the appellant has to file the application praying for refund of any duty of excise and interest within one year from the relevant date i.e. within 1 year from the date of assessee became entitled for that refund. Once such application is made as per Sub-Section 2 of 11B of the Act Assistant Commissioner has to pass an appropriate order and if the refund as claimed is allowed it has to be made within three months of the application as was made by the asseessee under said Section 11 B.
The Explanation to Section 11 BB further clarifies the controversy which says that where any order of refund is made by Commissioner (Appeals) Appellate Tribunal, National Tax Tribunal or any Court against the an order of Assistance Commissioner of Central Excise under sub-Section 2 of Section 11 B, the order passed by the Commissioner(Appeals), Appellate Tribunal or as the case may be shall be deemed to be an order passed under the sub-section 2 of the sub-Section B for the purposes of this Section.
The period of three months as mentioned in Section 11 BB of the Act is to reckon from the date of application as was filed under Section 11(1) of the Act and not from the application as was filed after the order of refund - the Department without any specific directions was liable to pay the interest.
Appeal allowed - decided in favor of appellant.
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Central Excise
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2018 (11) TMI 14
Liability of successor - Attachment of plant, machinery and the finished goods - recovery under Section 11 of Central Excise Act, 1944 - Central Excise duty not paid - Applicability of Section 11 and Rule 230(2) of Central Excise Rules 1944 - whether in case where the assets of a company have been taken over by State Finance Corporation and then sold to another company, the liabilities of the central excise dues of the previous company will pass on to the bidder who takes over the assets?
Held that:- Section 11 of Central Excise Act deals with the recovery of sums due to the government - The proviso thereof provides that a duty or any other sums of any kind is recoverable or due, transfers or otherwise disposes of his business or trade in whole or in part or effects any change in the ownership thereof, in consequence of which he is succeeded in such business or trade by any other person, all excisable goods, materials, preparations, plants, machineries, vessels, utensils, implements and articles in the custody or possession of the person so succeeding may also be attached for the purpose of recovering such duty or other sums.
Whether such liability continues where the assets are attached by State Finance Corporation and then sold to another company? - Held that:- Hon’ble Supreme Court has held so in the case of Macson Marbles Pvt. Ltd. [2003 (11) TMI 71 - SUPREME COURT OF INDIA]. It is true that in the case of Macson Marbles Pvt. Ltd., Rule 230(20 of Central Excise Rules 1944 were referred to. However, Section 11 of Central Excise Act and its proviso are similarly worded and we find no reason to distinguish these provisions from the erstwhile Rule 230 of Central Excise Rules 1944.
Appeal allowed - decided in favor of appellant.
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2018 (11) TMI 19
Validity of Show Cause notice - Demand of Excise duty in excess of ₹ 50 lakhs - Section 11A of the Central Excise Act, 1944 - SCN was not preceded by pre show cause notice consultative procedure as directed by the Central Board of Excise and Customs.
Held that:- Our attention is invited to Instructions dated 8th July, 2016, 13th July, 2016 and Master Circular dated 10th March, 2017 issued by the Central Board of Excise and Customs. In the aforesaid circulars, the Chief Commissioners / Commissioners have been advised that before issuing a show-cause notices raising a demand in excess of ₹ 50 lakhs, there must be pre show-cause notice consultation with the assessee by the adjudicating authority. This as the instruction notes is with a view to promote voluntary compliance and also reduce necessity of issuance of show-causes notices.
In this case, admittedly, both the notices are in excess of ₹ 50 lakhs and the averment of the petitioner that there was no pre show-notice consultation in terms of the circular has not been disputed by the Revenue till date - prima facie the impugned notices appear to be without jurisdiction, warranting our interference.
At the request of the Revenue petition is adjourned to 29th November, 2018.
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2018 (11) TMI 13
SSI Exemption - use of brand name of others - N/N. 8/2003-CE dated 1.3.2003 - Held that:- The issued involved is no more res integra as the same as already been laid to rest by the Order of this Bench of the CESTAT in the appellant’s own case M/S. APPU HOTELS LTD. SHRI A. SENNIMALAI VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI – I [2018 (7) TMI 241 - CESTAT CHENNAI] wherein this Bench has ruled in favour of the assessee.
The Department has neither been able to distinguish the Order of this Bench in the appellant’s own case nor could it furnish any contrary orders/judgements of higher fora; and hence the issue being identical, the above ratio is required to be followed for which reason the impugned Order is set aside - appeal allowed - decided in favor of appellant.
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2018 (11) TMI 12
CENVAT Credit - waste arising in the course of manufacture of dutiable goods - slag - Rule 6 of CENVAT Credit Rules.
Whether slag generated as waste product in the course of manufacture of alloy and non-alloy steel as dutiable final product attracts the provisions of Rule 6 of CCR 2004 requiring payment of an amount equal to 6% of the value of the said waste product?
Held that:- The EOF slag is a waste product which arises in the course of manufacture of dutiable final products - Rule 6 will not apply in the case where the exempted by- product or waste emerges in the course of manufacture of dutiable products.
It is well settled that slag arising in the course of manufacture of iron and steel is a waste and that the provisions of Rule 6 of CCR, 2004 are not attracted.
Appeal allowed - decided in favor of appellant.
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2018 (11) TMI 11
CENVAT Credit - inputs - fake invoices - entire case is on the basis of alleged confessional statement of Amit Gupta dated 06.12.2012 and Sanjeev Maggu of Leo Transport dated 06.09.2013 - Held that:- The issue herein is squarely covered by the precedent order of this Tribunal, in the case of Multimetals Ltd. & others vs. CCE & ST Udaipur [2018 (5) TMI 818 - CESTAT NEW DELHI], where it was held that Shri Amit Gupta has not been made party in the proceeding. Liability of ₹ 50,000/- under Rule 26(2) of the Central Excise Rules, 2002 has been imposed upon him being the kingpin of the case.
The appellants have discharged its onus as required under Rule 9(1) & (5) of CCR, 2004 - Credit cannot be denied - appeal allowed - decided in favor of appellant.
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2018 (11) TMI 10
Penalty - CENVAT Credit on input services - irregular availment - benefit of Section 11A(2) of the Act for non issuance of show cause notice, only for imposition of penalty - Whether under the circumstances of the case, the provisions of the sub-rule (2) of Rule 15 of the CENVAT Credit Rules, 2004 read with Section 11AC of the Act can be invoked, justifying imposition of penalty on the appellant?
Held that:- Sub-rule (2) of Rule 15 of the Rules mandates that in case of wrong availment or utilisation of CENVAT credit, attributable to the reason of fraud, collusion or willful misstatement or suppression of facts, or contravention of any of the provisions of the Excise Act, or of the rules made thereunder, with intent to evade payment of duty, then the manufacturer shall also be liable to pay penalty in terms of the provisions of Section 11AC of the Act.
The undisputed facts are that the availment of irregular CENVAT credit was disclosed by the appellant in the monthly ER-1 returns filed before the department and the credit so availed was not utilized for payment of Central Excise duty on removal of the final products. This fact is evident from the records of the appellant that it had huge balance of CENVAT credit at the time between taking of such irregular credit and subsequent reversal thereof. Thus, under the circumstances of the case, it cannot be said that taking of irregular CENVAT credit was due to fraudulent intent on the part of the appellant to defraud the Government revenue.
Penalty do not sustain - appeal allowed - decided in favor of appellant.
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2018 (11) TMI 9
Penalty u/s 11AC - short levy or non-levy of paper cess or education cess - N/N. 4/2006-CE dated 01.03.2006 - final product is exempted from payment of basic duty of excise - Held that:- Since the appellant's final product was fully exempt from payment of duty, they could have entertained a bonafide belief that the same does not attract any duty also on account of cess or education cess. In the absence of any evidence to the contrary, no malafide can be attributed to them so as to impose any penalty.
Suppression of facts or not? - Held that:- Admittedly, the appellant was enjoying the exemption for the first clearance upto 3500 MT and this fact was in the knowledge of the revenue as also being reflected in the returns. Mere non mention of the Notification number would not make the assessee guilty of any suppression or misstatement with the malafide intention to evade taxes - it cannot be said that the said availment of credit was with any malafide intention.
Part of the demand is within the limitation period, which is upheld alongwith interest - penalty set aside - appeal allowed in part.
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2018 (11) TMI 8
Captive consumption - part of the sulphuric acid manufactured by them is being used in demineralisation of water, which is being used by them captively for further manufacture of their final product - N/N. 67/95-CE dated 16.3.1995 - denial of benefit on the ground that DM water is the appellant’s final product and is exempted from payment of duty.
Held that:- The Hon’ble Supreme Court in the case of CCE, New Delhi vs. Hindustan Sanitaryware & Industries [2002 (9) TMI 103 - SUPREME COURT OF INDIA], has dealt with an identical issue. It stands held by the Hon’ble Supreme Court that exemption to captive consumption of modvatable inputs is available even if intermediate product is exempt from duty, but final output is dutiable. As such it was held that plaster of paris used in making of moulds which in turn are used as inputs in relation to the manufacture of sanitaryware, would be eligible to exemption under Notification No.217/87-CE, which was an exemption on account of captive consumption.
Inasmuch as, admittedly, the DM water comes into existence during the course of manufacture of the final product and is used captively, the same has to be held as an intermediate product and not a final product. In such a scenario, the same would earn exemption of captive consumption Notification No.67/95-CE dated 16.3.1995.
Appeal allowed - decided in favor of appellant.
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2018 (11) TMI 7
SSI exemption - clubbing of clearances - both the units were proprietary concern of Smt. Vidya D. Agrawal - N/N. 214/86 - Time limitation - Held that:- Admittedly, the show cause notice stands issued for the period beyond the normal period of limitation. Further, the appellant was following the procedure of Notification No.214/86 and was admittedly doing the job work for the principal manufacturer. Non-filing of declaration by the principal manufacturer cannot be held to be a suppression or misstatement on the part of the job worker so as to justifiably invoke the longer period of limitation.
The demand having been raised beyond the period of limitation is totally time barred and is required to be set aside - appeal allowed - decided in favor of appellant.
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2018 (11) TMI 6
Process amounting to manufacture - various activities like drilling, cutting, bending, welding etc. - demand of Excise duty with Interest and penalty - invocation of extended period of limitation - Held that:- There is no doubt about the fact that the matter was not free from doubt and inasmuch as the earlier decisions were in favour of the assessee, the matter was referred to Larger Bench - Hon’ble Supreme Court in the case of Kiran Ispat Udyog [2015 (8) TMI 998 - SUPREME COURT] wherein it was held that inasmuch as the issue was entangled in judicial battle and hazy picture was clarified only subsequently, the extended period cannot be held to be invocable.
Inasmuch as in the present case admittedly, the extended period stands invoked by the revenue and admittedly, the issue was not free from doubt having been referred to the Larger Bench, the demand barred by limitation - appeal allowed - decided in favor of appellant.
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2018 (11) TMI 18
Benefit of N/N. 36/2001 dated 26.06.2001 - appellant being the principal - Excisability/marketibility - match splints - Held that:- It is admitted by the petitioners that they purchase duty paid machine made match splints, undertake the other jobs through third party job workers and then sell it to their customers. Accordingly, the petitioners always hold principal interest on the goods bought and processed and sold by them. Therefore, it follows that the match splints purchased by them being duty paid and machine made, the finished match bundles manufactured by the petitioners are liable to levy of central excise duty in terms of Sl.No.142 of Notification No. 12/2012 dated 13.03.2012 - The petitioners being principals and not job workers, the benefit of exemption contained in Notification No. 36/2001 dated 26.06.2001 is not applicable to them.
Excisability/marketibility - match splints - Held that:- The argument by the petitioners that the item covered under Chapter Heading 3605 0010 or 3605 0090 as 'matches' is 'chemically dipped splints' and not 'fully finished match bundles' is without basis. Matches are marketed and ultimately consumed in boxes/bundles. The argument that since match splints are marketable and therefore held to be dutiable under Chapter 36 and therefore matches in bundles are not classifiable under chapter 36, is not tenable.
Petition dismissed.
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2018 (11) TMI 17
Rebate of Excise Duty and sugar cess paid - white sugar - Rule 18 of the Central Excise Rules, 2018 - N/N. 19 /04 CE (NT) dated 06.09.2004 - correlation of the duty paid goods with the export goods - discrepancies in the documents over the correlation of the duty paid goods to the ones exported by the canalizing agent - Held that:- Revenue had not disputed the fact of availability of proof of shipment of the subject quantity of white sugar to Bangladesh by the petitioners through the Canalizing Agent and the ARE1 is endorsed by the proper officer of customs to that effect. When the export is not disputed by the revenue, the rebate claim cannot be rejected on the ground of procedural infractions - rebate allowed.
Eligibility of sugar cess as rebate - Held that:- The petitioners have filed an array of transactional documents to co-relate the export endorsed in the ARE1 by the proper officer of customs with the duty paid invoices issued at the factory during June 2006. The department also have the means to collect the trail of goods cleared from the factory to the Chennai Port Trust Warehouse and sale to M.s MMTC Ltd and thereafter to the Port for shipment and movement onboard vessel - matter remitted back to the original authority for fresh consideration in the light of the observations made in this order after giving opportunity of hearing to the petitioners and to file documents to establish their claims.
Petition allowed in part and part matter on remand.
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2018 (11) TMI 16
Monetary amount involved in the appeal - Circular/ Instructions dated 11th July, 2018 - Held that:- As per the Circular, Revenue not to file appeals to the High Court where the tax effect does not exceed ₹ 50 lakhs. It also directs its Officers to withdraw the pending appeals where the tax effect is less than ₹ 50 lakhs.
In view of the Circular/ Instructions dated 11th July, 2018 issued by the Central Board for Indirect Taxes and Customs, Mr. Walve, the learned Counsel appearing for the Revenue, on instructions of Mr. Milind Gawai, Commissioner, Central Tax Pune-1 seeks to withdraw this Appeal.
Appeal dismissed as withdrawn.
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2018 (11) TMI 15
Refund claim - duty paid on Scented Supari pending adjudication - Section 5-B of the Central Excise Act, 1944 - reversal of MODVAT Credit - Section 5-B of the Central Excise Act, 1944 - time limitation - Held that:- There is no dispute that a refund claim accrues on the petitioner as a result of the Order dated 27.04.2010 in Writ Appeal No. 1271 of 2000 going in favour of them against the department. And there is also no dispute that the modvat credit taken and utilized for the payment of duty on the final products shall not be allowed as refund - And a proceeding is pending on the file of the respondents, one on the refund claim and another regarding the ineligibility of modvat credit.
Whether the impugned Show Cause Notice No 34/2010 dated 11.10.2010 is sustainable? - Held that:- Admittedly there was a dispute going on at the material time. The duty was paid by the petitioner under protest - In the peculiar circumstances of the case, the question of demanding modvat credit availed is not tenable. It is arbitrary exercise of power. It is not correct to argue that the dispute got settled in favour of the petitioner by virtue of an order of this Court and as a consequence a demand notice gets slapped on them. Such a preposition borders on absurdity. The recourse to Section 5-B of the Central Excise Act, 1944 by the respondents is not correct.
At the material time, while the petitioner had contested the assessment by registering protest, the respondents endorsed the assessment that included the availment of modvat credit. Also the dispute in the pending court cases pertained to the dutiability of the final products and the availing of modvat credit was never in dispute during the pendencies. Therefore the plea on the principle of equity made by the respondents on the bar of limitation is misplaced. The modvat credit was availed during the period May, 1994 to March, 1995 - Even the Writ Petition was decided against the Department on 12.04.1999. The Show Cause Notice was issued on 11.10.2010. Therefore, the Show Cause Notice is hit by limitation also.
The issue of Show Cause Notice No 34/2010 dated 11.10.2010 is arbitrary exercise of authority and hit by the bar of limitation. Therefore the statutory remedy is not efficacious making it a fit case warranting Writ interference under Article 226 - Petition allowed.
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CST, VAT & Sales Tax
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2018 (11) TMI 5
Attachment of property of the legal heirs of the deceased Directors of the Company - recovery of tax arrears of the company - Held that:- It is not the case of the respondents that the petitioner is one of the Directors or Share Holders or Board Members of the Company or after the demise of (late) L.Narayanan Chettiar and (late) Saraswathi Narayanan, the petitioner is taking care of the Company. It is not their case that the partition deed was made ready, once after the demand was raised, so as to escape from the clutches of law, ie., in order to avoid from payment of tax. Moreover, they have not stated anywhere that the Company has been dissolved.
It is a statute that affairs of a Company has to be dealt within the chain of power of the Company. A person, who is not connected with a Company, should not be driven, just because he is a heir of the Company's Directors, unless otherwise there is a solid proof that he is also involved in the affairs of the Company, in any manner. But, that is not the case of the respondents herein.
Impugned proceedings quashed - petition allowed - decided in favor of petitioner.
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2018 (11) TMI 4
Penal interest for the belated payment of arrears - Eligibility for the settlement under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2008 - Samadhan Scheme - Second proviso to Section 24(3) of the Tamil Nadu General Sales Tax Act.
Held that:- As per the Second proviso to Section 24(3) of the Tamil Nadu General Sales Tax Act, if an appeal/revision is preferred, then the interest payable is postponed till disposal of appeal/revision and after such disposal, it shall be calculated on the amount that becomes due - if a person wants to enroll himself/herself under Samadhan Scheme, then no appeal or revision should be pending. Therefore, the petitioner has moved the Tribunal to withdraw their appeals and after withdrawing the same, the petitioner has approached the first respondent for Samadhan Scheme. However, their plea was negatived, stating that no demand of penal interest is pending against the petitioner in view of the order passed in the revision petition, which, in the opinion of this Court, is not correct.
In the case on hand, admittedly, original assessment was made much prior to the cut off date, ie., 01.04.2002, which is not disputed. Therefore, the arrears of tax, penalty or interest in respect of which the petitioner wanted to file an application, related to the assessment made much prior to 01.04.2002 - Therefore, in the opinion of this Court, the subsequent developments cannot deprive the petitioner, the benefits under the Samadhan Scheme.
The first respondent is directed to receive the applications of the petitioner for Samadhan Scheme and examine the same, on its own merits and pass appropriate orders, within a period of six weeks from the date of receipt of a copy of this order - Petition allowed.
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2018 (11) TMI 3
Cancellation of the registration certificate granted to the petitioner - MVAT Act - Held that:- The supporting documents namely the reasons for the cancellation and/or whether the same was preceded by a notice and/or a hearing are not available on record today - for the time being the registration is restored.
However for the cancellation of the registration the respondents will issue a show cause notice to the petitioner setting out the reasons why they proposes to cancel the registration of the petitioner.
Removal of the petitioner's name from the list of Non Genuine dealers - Held that:- It is agreed between Counsel on instructions that the petitioner will file representation to Mr. R. M. Kapse, State Tax Officer, C-107, Nodal-12, Mazgaon, Mumbai – 400010 regarding deletion of its name from the list.
Petition disposed off.
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2018 (11) TMI 2
Validity of Assessment Order - TNVAT Act - petitioner has sought for an opportunity of being heard to explain the real facts, which was not provided - Principles of Natural Justice - Held that:- Even though the petitioner has given elaborate submissions and objections, the impugned order does not appear to have dealt with the objections elaborately. In many of the proposals, the objections were rejected on the ground that the required materials were not available with the authority. The case laws submitted by the petitioner were also not considered while taking a decision - Moreover, there is nothing on record to show that the materials, on the basis of which the respondent proposed to re-assess, were supplied to the petitioner and he was sought to explain the same. On the other hand, the dealer himself made a request to summon the sellers for the purpose of cross-examining them to elucidate the fact.
The matter is remanded back to the respondent for fresh consideration - petition allowed by way of remand.
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2018 (11) TMI 1
Validity of revised assessment order - assessment year 2011-12 - TNVAT Act - Principles of Natural Justice - Held that:- In this case, admittedly, the petitioner has not submitted his objections. Even then, the respondent ought to have independently considered the proposals and justified the same. But, the respondent has passed the impugned order. Therefore, on this ground, the impugned order is liable to be set aside.
The matter is remanded back to the file of the respondent - petition allowed by way of remand.
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Indian Laws
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2018 (11) TMI 37
Whether the Division Bench was justified in allowing the respondent's appeal and was, therefore, justified in restoring the award of the Labour Court?
Held that:- In a case of this nature, and having regard to the fact that many decades had passed in between with no evidence adduced by the respondent that whether he was gainfully employed from 1977 onwards or not, the Labour Court should have awarded lump sum money compensation to the respondent in lieu of the relief of reinstatement along with payment of back wages and continuity of service by taking recourse to the powers under Section 11A of the Act, rather than to direct his reinstatement with all consequential benefits.
Having regard to the peculiar nature of the respondent's appointment and rendering of services by him for a very short duration (just 240 days only) and with no evidence as to whether he worked for gains or not after his services came to an end in 1977, this was a fit case where the Labour Court should have awarded lump sum compensation to the respondent instead of directing his reinstatement in service with consequential benefits. The Labour Court was empowered to pass such order by taking recourse to the powers under Section 11A of the Act. This has also been the view of this Court in such type of cases.
While modifying the impugned order and the award of the Labour Court, we direct the appellant to pay a sum of ₹ 50,000/in lump sum to the respondent (employee) by way of compensation in lieu of respondent’s right to claim reinstatement in service - appeal allowed in part.
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2018 (11) TMI 36
Dishonor of Cheque - Section 138 of NI Act - whether the learned Magistrate can dismiss the complaint by invoking the proviso to Section 203 of Cr.P.C. at the initial stage before issuing the process? - Held that:- In the present case, on perusal of the complaint, all the three documents are annexed along with the complaint and the list of witness are also annexed including the Manager of the Central Bank and it is relevant to mention Section 142 of the Act deals with cognizance of offence.
As per Section 142 of the Negotiable Instruments Act, notwithstanding anything contained in Cr.P.C., no Court shall take cognizance of any offence punishable under Section 138 except upon complaint in writing made by the payee or as the case may be, the holder in due course of the cheque; such complaint is made within one month of the date on which the cause of action arises and the offence under Section 138 shall be inquired into and tried only by a Court within whose local jurisdiction the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course as the case may be, maintains the account is situated or if the instrument is presented for payment by the payee or holder indue course, otherwise through an account, the branch of the drawee bank where the drawer maintains the account is situated.
Further, the involvement of the accused in the offence andother factual issues are trialable issue.
However, this order will not stand on the way of the respondents to defend their case at the time of trial. It is for the petitioner to establish the day to day affairs of the firm and other legal ingredients for implicating the accused in the above said offence at the time of trial - revision allowed.
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