TMI Tax Updates - e-Newsletter
February 12, 2018

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws FEMA PMLA Service Tax Central Excise CST, VAT & Sales Tax

TMI SMS

• SEBI - synchronization in trading - impugned transactions are manipulative/deceptive device to create a desired loss and/or profit - SC

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Highlights / Catch Notes

• GST:

  Seizure order - Section 129(1) of the Uttar Pradesh Goods and Services Tax Act, 2017 - in the matter of seizure under the provisions of IGST Act the provisions of Central G.S.T. Act such as Section 129 would apply mutatis mutandis - the impugned order is to be treated to have been passed under IGST Act read with Section 129 of the Central G.S.T. Act rather than the one passed under U.P.G.S.T. Act. - HC
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• Income Tax:

  Where the constituent participants make a JV to secure a contract, which is merely a pass through entity with minimal expenses, no tax liability cab be attributed by holding the subject entity JV as AOP. No net profit on % bases can be taxed as has been done in this case - AT
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• Income Tax:

  Claim of Depreciation on the Film Projector - to be depreciated @ 15% instead of 60% - Though some elements of computer function are necessarily involved, the film projector in this case cannot be said to be computer entitled for higher rate of depreciation of 60% applicable for computation. - AT
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• Customs:

  Jurisdiction - power of DRI to issue directions - suspicion of illegal import - The power is available only to any “police officer” - Freezing a bank account is not the same as seizing an asset; it interdicts operation of a bank account and it deprives the account holder of banking facilities. Indisputably, there is no sanction in the Customs Act for such action - HC
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• Customs:

  Classification of goods - imported sulphonated fish oil - as per the re-test the goods are free from mineral oils thus taking them out of the ambit of Chapter heading 3403 - AT
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• Corporate Law:

  SEBI - Buying and selling securities in the derivatives segment - manipulation and synchronization in trading of shares - The impugned transactions are manipulative/deceptive device to create a desired loss and/or profit. - SC
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• Service Tax:

  Validity of Show cause notice raising demand from January 2013 - Assessee had opted for Voluntary Compliance Entitlement Scheme (VCES) - The said Scheme availed by the petitioner having no effect in the impugned assessment proceedings for the subsequent period commencing from January 2013. - HC
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• Service Tax:

  Small Scale exemption utpo ₹ 10 lakhs - for the purpose of calculation of aggregate value as per said explanation “B” 60% of the consideration received by the appellant for which exemption was admissible does not need to be taken into consideration. - AT
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• Service Tax:

  Penalty u/s 77(2) of the FA 1994 - delay in filing the service tax return - penalty of ₹ 20,000/- for each return - When the penalty has been imposed under Section 77(2) of the Finance Act, 1994, in that circumstance penalty under Section 70 cannot be imposed on the assessee. - AT
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• Central Excise:

  CENVAT credit - input services - service utilized in relation to modernization, renovation and repair of the factory - credit allowed - AT
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• Central Excise:

  Cenvat credit - input services - appellant has not incorporated the premises in the registration certificate - premises was used for undertaking job work activity of the Appellant - credit allowed - AT
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• Central Excise:

  Eligibility of re-credit - rejection of refund claim - Once the refund has been rejected the Appellant become eligible for the recredit of such amount - The reversal of Cenvat credit is not payment of duty and therefore, provisions of Section 11B of the Central Excise Act, 1944 are not applicable - AT
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• Central Excise:

  Demand of interest on differential duty - finalization of provisional assessment - rule 7(4) of Central Excise Rules, 2002 read with section 11AA of Central Excise Act, 1944 - price variation clause - demand set aside - AT
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• Central Excise:

  CENVAT credit of additional duties of customs - denial on the ground that the appellant is not the importer of the goods - The appellant is a loan-licensee of the importer and manufactures goods for, and on behalf of, the importer - credit allowed - AT
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• Central Excise:

  100% EOU - the appellant had failed to include the said item in the list of goods permitted to be manufactured and exported - The duty liability on such units arises from section 3A of Central Excise Act, 1944 which has an entirely different basis for assessment unlike other manufacturing units. - AT
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• Central Excise:

  Manufacture - intermediate goods - sugar syrup coming into existence during the manufacture of biscuits and captively consumed does not attract Central Excise duty for the reason that there is no evidence that the same is marketable. - AT
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• VAT:

  ITC - When the Assessing Authority could pass the impugned re-assessment order for the whole year in one go, disallowing the ITC claim illegally by restricting it on the basis of monthly Tax Periods, what can be the justification for disallowing the same, without it being found to be an unverified claim, not supported by valid Sales Invoices ? None - is the simple answer ! - HC
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Articles

• THE WEST BENGAL AUTHORITY FOR ADVANCE RULING REGULATIONS, 2018
• Applicability of IGST on Sale of Warehoused Goods

Notifications

• GST - States

• J.21011/1/2017-TAX/Vol-III - dated 8-1-2018 - Mizoram SGST
  The Mizoram Goods and Services Tax (Thirteenth Amendment) Rules, 2017.

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• J.21011/1/2017-TAX/Vol-III/Part - dated 15-12-2017 - Mizoram SGST
  Seeks to exempt all taxpayers from payment of tax on advances received in case of supply of goods

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• J.21011/1/2017-TAX/Vol-III - dated 15-12-2017 - Mizoram SGST
  Corrigendum on Tenth Amendment to the MGST rules, 2017.

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• J.21011/1/2017-TAX/Vol-III/Pt(vii) - dated 24-11-2017 - Mizoram SGST
  The Mizoram Goods and Services Tax (Eleventh Amendment) Rules, 2017.

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• J.21011/1/2017-TAX/Vol-III/Pt(v) - dated 24-11-2017 - Mizoram SGST
  Seeks to exempt suppliers of services through an e-commerce platform liable to collect tax at source under section 52 of the MGST Act from obtaining compulsory registration under section 24(ix) of the Act provided their aggregate all India turnover does not exceed 20 lakh rupees.

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• J.21011/1/2017-TAX/Vol-III/Pt(iv) - dated 24-11-2017 - Mizoram SGST
  Seeks to limit the maximum late fee payable for delayed filing of return in FORM GSTR-3B from October, 2017 onwards to 25 rupees per day. (In case of nil return filers, late fee is to be 10 rupees per day.)

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• J.21011/1/2017-TAX/Vol-III/Pt(iii) - dated 24-11-2017 - Mizoram SGST
  Seeks to extend the due dates for the furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover of more than ₹ 1.5 crores.

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• J.21011/1/2017-TAX/Vol-III/Pt(ii) - dated 24-11-2017 - Mizoram SGST
  Seeks to prescribe quarterly furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover of less than ₹ 1.5 crore.

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• J.21011/1/2017-TAX/Vol-III/Pt(i) - dated 24-11-2017 - Mizoram SGST
  Seeks to mandate the furnishing of return in FORM GSTR-3B till March, 2018 by the 20th of the succeeding month.

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• J.21011/1/2017-TAX/Vol-III/Pt - dated 24-11-2017 - Mizoram SGST
  The Mizoram Goods and Services Tax (Twelfth Amendment) Rules, 2017.

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• J.21011/1/2017-TAX/Vol-III(xx) - dated 17-11-2017 - Mizoram SGST
  The Mizoram Goods and Services Tax (Ninth Amendment) Rules, 2017.

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• J.21011/1/2017-TAX/Vol-III(xvii) - dated 17-11-2017 - Mizoram SGST
  Seeks to extend the time limit for filing of FORM GSTR-4.

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• J.21011/1/2017-TAX/Vol-III(xvi) - dated 17-11-2017 - Mizoram SGST
  Seeks to extend the time limit for submission of FORM GST ITC-01.

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• J.21011/1/2017-TAX/Vol-III(xv) - dated 17-11-2017 - Mizoram SGST
  Seeks to make payment of tax on issuance of invoice by registered persons having aggregate turnover less than ₹ 1.5 crores.

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• J.21011/1/2017-TAX/Vol-III(xiv) - dated 17-11-2017 - Mizoram SGST
  Amendments in the Notification of the Government of Mizoram, Taxation Department, No.J.21011/1/2017-TAX/Vol-I/Pt (i) dated 3/10/2017.

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• J.21011/1/2017-TAX/VOL-III(xiii) - dated 17-11-2017 - Mizoram SGST
  Seeks to waive late fee payable for delayed filing of FORM GSTR-3B for Aug & Sep, 2017.

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• J.21011/1/2017-TAX/Vol-III(xi) - dated 17-11-2017 - Mizoram SGST
  The Mizoram Goods and Services Tax (Tenth Amendment) Rules, 2017.

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• J.21011/1/2017-TAX/Vol-III(v) - dated 17-11-2017 - Mizoram SGST
  Amendments in the Notification of the Government of Mizoram, Taxation Department, Notification No. J.21011/1/2017-TAX/Part-III, the 10th July, 2017.

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• J.21011/1/2017-TAX/Vol III(x) - dated 17-11-2017 - Mizoram SGST
  Seeks to notify certain supplies as deemed exports under section 147 of the MGST Act, 2017.

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• J.21011/1/2017-TAX/Vol 111(xviii) - dated 17-11-2017 - Mizoram SGST
  Seeks to cross-empower State Tax officers for processing and grant of refund.

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• FIN/REV-3/GST/1/08 (Pt-1)/015 - dated 29-12-2017 - Nagaland SGST
  The Nagaland Goods and Services Tax (Fourteenth Amendment) Rules, 2017.

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• FIN/REV-3/GST/1/08 (Pt-1)/016 - dated 21-12-2017 - Nagaland SGST
  The Nagaland Goods and Services Tax (Thirteenth Amendment) Rules, 2017.

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• FIN/REV-3/GST/1/08 (Pt-1)/103 - dated 28-11-2017 - Nagaland SGST
  The Nagaland Goods and Services Tax (Twelfth Amendment) Rules, 2017.

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• FIN/REV-3/GST/1/08 (Pt-1)/101 - dated 28-11-2017 - Nagaland SGST
  Amend NT No. 11-2017 CT(R) specify rate (Amendment in F.NO.FIN/REV3/GST/1/(Pt-1) “N”,30th June,2017)

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• FIN/REV-3/GST/1/08 (Pt-1)/100 - dated 28-11-2017 - Nagaland SGST
  Seeks to provide concessional GST Rate of 2.5% on Scientific equipments.

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• FIN/REV-3/GST/1/08 (Pt-1)/097 - dated 28-11-2017 - Nagaland SGST
  Amend NT No. 2-2017 CT(R) GST Exemption(Amendment in F.NO.FIN/REV3/GST(Pt-1) “E”, 30th June,2017)

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• FIN/REV-3/GST/1/08 (Pt-1)/096 - dated 28-11-2017 - Nagaland SGST
  Amend NT No.1-2017 CT(R) GST Tax Rate (Amendment in F.NO.FIN/REV3/GST(Pt-1) “D”, 30th June,2017)

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• FIN/REV-3/GST/1/08 (Pt-1)/095 - dated 28-11-2017 - Nagaland SGST
  The Nagaland Goods and Services Tax (Eleventh Amendment) Rules, 2017.

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Circulars / Instructions / Orders

• GST - 31/05/2018 - dated 9-2-2018
  Proper officer under sections 73 and 74 of the Central Goods and Services Tax Act, 2017 and under the Integrated Goods and Services Tax Act, 2017–reg.

News

• Shri Subhash Chandra Garg,Secretary,DEA: The Government welcomes the MPC’s assessment and notes its decision to maintain the Policy Rate

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Case Laws:

• GST

• 2018 (2) TMI 608
  Seizure order - Section 129(1) of the Uttar Pradesh Goods and Services Tax Act, 2017 - inter-state transaction - Held that: - The U.P.G.S.T. Act makes provision for levy and collection of tax on intrastate supply of goods or services or both i.e. relating to transactions within the State, whereas IGST Act covers interstate transactions. In this view of the matter, the transaction in question is treated to be covered by the IGST Act and the provisions of U.P. G.S.T. Act would not apply - in the matter of seizure under the provisions of IGST Act the provisions of Central G.S.T. Act such as Section 129 would apply mutatis mutandis - the impugned order is to be treated to have been passed under IGST Act read with Section 129 of the Central G.S.T. Act rather than the one passed under U.P.G.S.T. Act. The goods and the vehicle seized are directed to be released on furnishing indemnity bond as well as security other than cash and bank guarantee of the taxable amount of the seized goods.

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• Income Tax

• 2018 (2) TMI 607
  Validity of reopening - Validity of notice u/s 148 when scrutiny assessment was made but same was annulled - doctrine of merger - Held that:- SLP dismissed. HC order confirmed [2017 (8) TMI 241 - GUJARAT HIGH COURT] HC has held that the reopening is based on the belief of the Assessing Officer that the sale proceeds should be taxed as the business income and not as capital gain. This subject matter was not a part of the order of the Commissioner (Appeals). The Commissioner (Appeals) having entertained only part of the assessee's appeal, the principle of merger as flowing from the proviso to section 147 of the Act would not apply. Assessing Officer proceeded to pass the order of assessment discarding the assessee's objection of non service of notice and in which he held that income generated from the sale of land was a business income. When such order was set aside on the ground of invalidity, having been passed without service of notice, the order does not survive in eye of law. There is thus no original assessment. There is no opinion of the Assessing Officer on record. There is no question of the assessee's return having been scrutinised. There is therefore, no change of opinion.- Decided against assessee.

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• 2018 (2) TMI 606
  Addition u/s 68 - Held that:- SLP dismissed. The findings of fact recorded therein were correctly held by the impugned judgment not to raise any substantial question of law. HC order confirmed [2014 (4) TMI 485 - BOMBAY HIGH COURT]. HC has held that Entries on the basis of cash books were written and maintained systematically - they were in the books of accounts of the assessee in respect of his unaccounted business - it cannot be said that the books indicated any amount in the nature of cash credit in the hands of the assessee as defined by Section 68. Tribunal rightly came to the conclusion that the provision of Section 68 could not have been invoked - Decided against Revenue.

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• 2018 (2) TMI 605
  Interest chargeable u/s 7C in a case where the shortfall in the payment of advance surtax has arisen only on account of unanticipated additions/ disallowance in the income tax assessment - Held that:- Till date the Tribunal has not filed the Supplemental Statement of Case as directed in the order passed by this Court dated 24 February 2017. The Tribunal is directed to file the Supplemental Statement of Case as directed by the order dated 24 February 2017 on or before 20 February 2018. This Reference to be on board “For Directions” on 21 February 2018 at 3.00 p.m. It is made clear that in case, the Tribunal fails to file the Supplemental Statement of Case on or before 20 February 2018, the Registrar of the Income Tax Appellate Tribunal shall remain present in Court at 3.00 p.m. on 21 February 2018.

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• 2018 (2) TMI 604
  Penalty u/s 271(1)(c) - undisclosed income - two partners had admitted such undisclosed income by filing revised computation of their income, declaring therein their share of the aforesaid amount as their undisclosed income? Held that:- It cannot be a universal rule that once an appeal from the order of the Tribunal has been admitted in the quantum proceedings, then, ipso facto the issue is a debatable issue warranting deletion of penalty by the Tribunal. There could be cases where the finding of the Tribunal in quantum proceedings deleting addition could be perverse, then, in such cases, the admission of appeal in quantum proceedings would indicate that an appeal against deletion of penalty on the above account will also warrant admission. In the penalty appeal, it would not be appropriate to widen the scope of controversy in the quantum appeal which after hearing the parties had not admitted it on this question as it was not insisted upon at the hearing of the appeal in the quantum proceedings. This appears to be so, as otherwise, we would have dealt with this question at that time as we are now dealing with it, as the Revenue insists on this question. Considerations for imposition of penalty are undoubtedly different from considerations which would come into play while deciding the appeal in quantum proceedings. In case, if the respondent assessee succeeds in the quantum proceedings, no occasion to impose penalty upon the assessee can arise. However, in case the Revenue succeeds in the quantum proceedings, then that by itself will not necessarily invite penalty. It would still be open to the respondent assessee to urge that in the facts and circumstances of the case, no penalty is imposable.

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• 2018 (2) TMI 603
  Penalty u/s 271D - failure to comply with Section 269SS - reasonable cause u/s 273B for entering into such transactions through journal entries - Tribunal holds that the failure to comply with Section 269SS was on account of reasonable cause on the part of the respondents - Held that:- In the present facts, the period during which the journal entries were made by the respondents was in the previous year relevant to the Assessment Year 200910 i.e. Financial Year 200809. At that time, the decisions of the Tribunal in the cases of Triumph International (2012 (6) TMI 358 - BOMBAY HIGH COURT). wherein held that deposits / loans received through journal entries do not fall with the mischief of Section 269SS, were holding the field. Thus, not in breach of Section 269SS of the Act While agreeing with the submission of Mr. Mohanty, learned Counsel for the appellant that the decision of this Court in Triumph International Finance (supra) has only clarified / stated the position as always existing in law, the receiving of deposits / loans through journal entries would certainly be hit by Section 269SS of the Act. - Decided in favour of assessee

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• 2018 (2) TMI 602
  Exemption under Section 10(23-C)(vi) denial - non charitable activities - withdrawal of approval - Held that:- There was ample material on record to establish that the petitioner Trust had indulged in illegal activities and could not be said to be existing purely for Educational purposes, and rather various other business activities of the said family of Trustees and their money was passing through the cover and shields of the Books of Accounts of the petitioner - Trust rendering it as merely a skeleton for the purpose of exemption to Educational Trust and rather than a real Educational Trust, solely existing for the purpose of Education. Such sham or bogus Trusts cannot be held to be entitled to exemption under the provisions of Section 10(23-C) and therefore the Respondent Authority has rightly withdrawn the approval of the petitioner - Trust under the said provision. As far as the withdrawal of the approval with effect from 01/04/2009 is concerned, even that cannot be assailed, because the evidence and material discussed in detail in the impugned order reflect such entries in the Books of Accounts which reflect illegality having existing on record right from the Financial Year 2010-11 onwards and therefore the illegalities and transactions offending the said provisions cannot be split or bifurcated for the period in question only after the search and seizure operations were carried out on 16/12/2015 and the illegality cannot be allowed to be perpetuated for the preceding periods for which such evidence pointing out the illegalities exist on record. - Decided against assessee.

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• 2018 (2) TMI 601
  Addition on account of subsidy payable by the Govt. - system of accounting - Held that:- It is seen that as in the earlier years the AO in the year under consideration also questioned the Accounting System followed by the assessee and held it to be a hybrid system and thus contrary to the statutory mandate. The assessee's claim that it was following the mercantile system of accounting was not accepted. The CIT(A) relying on the past precedent available in the decision cited, and considering the facts in the year under consideration which were identical rejected the addition made by the AO by way of a disallowance.

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• 2018 (2) TMI 600
  Registration u/s 12AA denial - assessee authority is not an institution working for charitable purpose, since it was carrying on activities of commercial nature with the motive to make profit - Held that:- The activities of the authority were carried out with profit motive but not with the pre-dominant object of welfare of the people at large within the meaning of newly introduced proviso to section 2(15) hence not applicable to the present case i.e. the assessee authority. We hold that the assessee authority has been created with the object of general public utility which is a charitable object within the meaning of Section 2(15) and the proviso to Section 2(15) is not applicable because assessee authority is not carrying out activities with any profit motive but the pre-dominant object is welfare of the people at large. Therefore, the CIT is directed to grant registration u/s 12AA of the Act to the assessee authority. - Decided in favour of assessee

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• 2018 (2) TMI 599
  Penalty u/s. 271(1)(c) - defective notice - non mentioning of charge - Held that:- We find that the notice dt. 07-03-2013 issued u/s. 274 r.w.s 271 of the Act does not specify the charge of offence committed by the assessee viz whether had concealed the particulars of income or had furnished inaccurate particulars of income. Hence the said notice is to be held as defective. Thus penalty to be canceled - Decided in favour of assessee.

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• 2018 (2) TMI 598
  Capital gains taxabilty on sale of land - FMV determination - land was awarded free of cost by the Government - AO has also taken the cost of acquisition at nil - Held that:- Land in question does not fall in the category for which the cost of acquisition cannot be ascertained. Therefore, cost of acquisition of land in question would be fair market value as on 01.04.1981. Since, the AO has taken the cost of acquisition at nil. Therefore, we direct the AO to recomputed the capital gain by taking the cost of acquisition of the land as fair market value as on 01.04.1981.

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• 2018 (2) TMI 597
  Reopening of assessment - failure by the AO to issue a notice to the Assessee under Section 143(2) - Held that:- The issue of notice U/s 143(2) in reassessment proceedings, prior to finalizing re-assessment order, cannot be condoned by referring to Section 292BB and is fatal to the order of re-assessment. See Pr.CIT Vs Jai Shiv Shankar Traders Pvt. Ltd. [2015 (10) TMI 1765 - DELHI HIGH COURT] - Decided in favour of assessee.

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• 2018 (2) TMI 596
  Addition on account of cash deposited in bank account - Held that:- AO has not brought on record that the cash in hand available with the assessee was not utilized for depositing in the various bank account. Particularly when, the AO himself accepted the deposits of ₹ 15,20,900/- in various bank accounts out of the said cash in hand available with the assessee, so there was no occasion to doubt the deposits of ₹ 26,55,000/- out of the cash in hand amounting to ₹ 49,30,572/- available with the assessee as on 01.04.2010. Therefore, considering the totality of the facts, delete the addition made by the AO and sustained by the CIT(A). - Decided in favour of assessee.

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• 2018 (2) TMI 595
  Revision u/s 263 - additional depreciation on windmill allowability - Held that:- this issue is covered in favour of the assessee, by Tribunal’s decision in the case of ACIT vs. Power Build Ltd and vice versa (2012 (8) TMI 1122 - ITAT AHMEDABAD). We are of the considered view that the course adopted by the Assessing Officer, which is unambiguously supported by a binding judicial precedent, cannot be said to be erroneous and prejudicial to the interest of the revenue. As noted in the case of CIT vs. Malabar Industrial Co Ltd [2000 (2) TMI 10 - SUPREME Court] where two views are possible and the ITO has taken one view with which CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the ITO is not sustainable in law”. A view taken in consonance with the Tribunal decision cannot be said to unsustainable in law. Clearly, therefore, the learned Commissioner was in error in invoking his revision powers under section 263 in respect of additional depreciation on windmill. As regards the Commissioner’s invoking the revision powers under section 263 in respect of, what is termed as by the CIT, “excess claim of ₹ 68,02,000”, we have noted that the stand of the assessee is that these expenses are duly deductable under section 37(1), that the assessee had furnished complete information, as requisitioned by the Assessing Officer, at the assessment stage – copies of which are placed at pages 44 to 59 of the paper-book filed before us, and yet the Commissioner has remitted the matter to the file of the Assessing Officer for necessary verification. As a matter of fact, the learned CIT has justified the action on the ground that “since the order is being set aside on other issues, this issue is also set aside and the Assessing Officer is directed to examine the nature of these payments as per law”. As the things stand now, however, the order under section 263 on the other issue (i.e. additional depreciation) stands vacated. In any case, it is not even the case of the CIT that there is any error in the claim or this aspect of the matter was not examined in the original proceedings. Action of the CIT in invoking powers under section 263 cannot be justified - Decided in favour of assessee

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• 2018 (2) TMI 594
  Disallowance u/s 40(a)(ia) - additions due to TDS default - Held that:- We hold that the second proviso to section 40(a)(ia) is applicable with retrospective effect. Consequently if recipient of the amount has considered the same for computation its income offered to tax then no disallowance is called for u/s 40(a)(ia) of the Act. See CIT vs. Ansal Landmark Township Pvt. Ltd. (2015 (9) TMI 79 - DELHI HIGH COURT) The assessee filed the additional evidence in support of its claim that the recipient have included this amount in the income offered to tax however, the CIT(A) declined to admit the additional evidence. We find that the additional evidence filed by the assessee can be verified by the AO from the record of the Department or otherwise. We admit the additional evidence and direct the AO to verify the additional evidence filed by the assessee and in case the AO is satisfied with the evidence filed by the assessee that the recipient of the amounts have considered the same while computing their income offered to tax then, in view of the second proviso to section 40(a)(ia) of the Act no disallowance can be made u/s 40(a)(ia). Appeal of the assessee is allowed for statistical purpose.

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• 2018 (2) TMI 593
  Estimation of income of JV - Addition u/s. 40A(2)(b) - addition by computing the profit of the joint venture @4% of the gross receipts as the assessee - Held that:- In CIT vs. Oriental Structure Engineers Pvt. Ltd. [2015 (3) TMI 102 - DELHI HIGH COURT] has observed that in the case of JV of such kind Section 40A(2) is not applicable. There are other judicial findings in this regard arriving at the same conclusion which are reported as CIT vs. SMSL UANRCL (JV) [2015 (3) TMI 279 - BOMBAY HIGH COURT]. In all the above cases, it has been held that where the constituent participants make a JV to secure a contract, which is merely a pass through entity with minimal expenses, no tax liability cab be attributed by holding the subject entity JV as AOP. No net profit on % bases can be taxed as has been done in this case. Note that AR of the assessee in this case relied upon the order of the CIT(A) and DR relied upon the order of the AO. But the DR could not controvert the finding of the CIT(A) wherein he has followed the precedents of the Hon’ble High Court and Tribunal and Ld. DR also could not place any contrary decision before us. - Decided against revenue.

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• 2018 (2) TMI 592
  Claim of Depreciation on the Film Projector - to be depreciated @ 15% instead of 60% - Held that:- Section 32 of the Act which granted depreciation allowance does not define the word ‘computer’. However, the ITAT Special Bench in the case of Datacraft India Ltd. (2010 (7) TMI 642 - ITAT, MUMBAI) had the occasion to consider the meaning of word ‘computer’. In the present case, the concerned machine is a film projector. This is an optical instrument for projecting an image upon a surface. It is a device that projects a beam of light on to a screen for viewing a picture already programmed, fed and input. Though some elements of computer function are necessarily involved, the projector cannot be said to be a machine whose principal output/object/function is achieved only through computer function. Hence, that the film projector in this case cannot be said to be computer entitled for higher rate of depreciation of 60% applicable for computation. The decisions referred by the assessee were with respect to printer, scanner and router which are altogether different items. In fact, the exposition from Special bench, Mumbai decision in the case of Datacraft India Ltd. (supra) had defined the term ‘computer’ which has clinched the issue in favour of the Revenue. Accordingly, I do not find any infirmity in the order of the authorities below. Hence, I affirm the same. - Decided against assessee.

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• 2018 (2) TMI 591
  Levying Income Tax @ 30% on Short Term Capital Gains on sale of shares as against 10% u/s. 111A of the Act as claimed by the Appellant - additional evidence acceptance - Held that:- Assessee has actually paid the STT and the sale transaction took place after 1st October, 2004. However, the learned CIT-A has not at all considered this submission and has held that assessee has not filed any additional evidence. What sort of additional evidence learned CIT-A had in mind has not been spelt out. Assessee has made factual submission and these could have been verified from the assessment records. Hence the non-consideration of asseessee’s submission and laconic dismissal of the plea by the learned CIT-A is not sustainable. Accordingly, remit the issue the file of learned CIT-A. Learned CIT-A is directed to consider the issue afresh keeping into account our observations as above and after giving the assessee proper opportunity of being heard. - Appeal by the assessee stands allowed for statistical purposes.

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• 2018 (2) TMI 590
  Denying the benefit of deduction u/s. 80P(2) - whether the assessee was a 'Primary Agricultural Credit Society' or a 'Co-operative bank'? - Held that:- CIT(A) is justified in directing the Assessing Officer to grant deduction u/s. 80P(2) as primary agricultural credit society registered under the Kerala Co-operative Societies Act, 1969 is entitled to deduction u/s. 80P(2). See Edanad-Kannur Service Co-operative Bank Ltd. and others [2018 (1) TMI 848 - ITAT COCHIN]. - Decided in favour of assessee.

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• 2018 (2) TMI 589
  Maintainability of miscellaneous petition u/s 254 - limitation period provided for rectification of the mistake - Held that:- By Virtue the amendment in the provisions of Section 254(2) of the Act w.e.f. 01.06.2016 the time period within which the mistake apparent from record can be rectified has been reduced from 4 years to 6 months. There is no quarrel on the point that this amendment in Section 254(2) cannot be given effect retrospectively so as to take way of right of the parties to file the application of rectification. The miscellaneous petition filed by the Revenue on 22.05.2017 is beyond the period of limitation expired on 30.11.2016 and according the same is not maintainable.

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• Customs

• 2018 (2) TMI 588
  Jurisdiction - power of DRI to issue directions - Freezing of petitioner's Current account - it is suspected that the petitioner is connected/involved in illegal import of tyres - whether the DRI has the jurisdiction to issue such directions without passing any orders under the provisions of the Customs Act? Held that: - Chapter XIII of the Customs Act contains provisions regarding search, seizure and arrest. In terms of Section 105(1) of the Customs Act, if the specified officer has reason to believe that any goods are liable to confiscation or any documents or things, which in his opinion will be useful for or relevant to the proceedings under the Act, are secreted in any place, he may authorize any officer of Customs to search or may himself search for such goods, documents or things - It is clear from a plain reading of Section 105(1) of the Customs Act that the specified officers must have “reason to believe” that any goods are liable to confiscation or any documents or things, which are useful or relevant to the proceedings have been secreted. A mere reason to suspect would not be sufficient for authorizing search of any premises. Section 102(1) of CrPC permits any police officer to “seize any property which may be alleged or suspected to have been stolen, or which may be found under circumstances which create suspicion of the commission of any offence”. Apart from the reason that the investigations are being conducted under the Customs Act and the provisions of Section 102 of CrPC are not available; the impugned communication is also not sustainable under the provisions of Section 102 of CrPC for several reasons. The power is available only to any “police officer” and as held by the Supreme Court in Surjeet Singh Chhabra v Union of India & Ors [1996 (10) TMI 106 - SUPREME COURT OF INDIA] - the DRI officials are not police officers. Also, in terms of Section 102(3) of CrPC, it is necessary for the police officers to report seizure to a Magistrate. Plainly, no such procedure was followed. Whether the operations on bank accounts could be interdicted? - Held that: - There is no provision under the Customs Act which permits the proper officer to direct freezing of bank accounts. Section 110(1) of the Customs Act provides for seizure of goods - the amount in a bank account which represents the sale proceeds of smuggled goods can be confiscated in terms of Section 121 of the Customs Act and can also be seized under section 110 of the Customs Act. But, there is no provision which permits freezing of bank accounts. Even if the credit balance of a bank account is considered as goods which can be seized, there is no authority in law to suspend operations in a bank account. Freezing a bank account is not the same as seizing an asset; it interdicts operation of a bank account and it deprives the account holder of banking facilities. Indisputably, there is no sanction in the Customs Act for such action - the impugned communication directing freezing of accounts of the petitioner is unsustainable Petition allowed.

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• 2018 (2) TMI 587
  Benefit of N/N. 106/95-Cus - fabrics - imports with a condition of re-export of the final product - Held that: - it appears that the test results cannot be validated by subsequent retest on resubmission of the samples. It is evident that the original testing was made on estimation. No case has been made by the department and no corroborative evidence has been placed before us - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 586
  Classification of goods - imported sulphonated fish oil - perusal of retest report - Held that: - It was not within the jurisdiction of Commissioner (Appeals) to rely upon the first test report, which was taken note of in the first order of Commissioner (Appeals) and was set aside. Further as per the re-test the goods are free from mineral oils thus taking them out of the ambit of Chapter heading 3403 - the order passed by the Original Adjudicating Authority is proper - appeal allowed by restoring the Order-in-Original.

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• 2018 (2) TMI 585
  Condonation of delay of 3136 days in filing the appeal - delay on the ground of non-service of notice - Held that: - it is for the department to establish that the order has been served upon the appellants. Though the dispatch document is showing the dispatch of the Order-in-Original, as furnished by both sides, we do not find any evidence establishing that the copy of the order has been served upon the appellants - delay cannot be condoned - COD dismissed.

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• 2018 (2) TMI 584
  Import of restricted item - old/used digital multifunctional Print and Copying Machines - Department took the view that the impugned goods are restricted for import and required valid license for import, which was not produced by the importer - Held that: - the imported goods in question are not restricted item - the imposition of redemption fine and penalty are unsustainable and are required to be set aside. The impugned order is modified by setting aside, the redemption fine and penalty imposed without disturbing the enhancement of value - appeal allowed in part.

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• 2018 (2) TMI 583
  Refund of SAD - rejection on the ground that the sale invoice does not contain 'no credit of additional duty of customs levied under sub-section (5) of Section 3 shall be admissible against this invoice' - Held that: - the matter is no longer res integra vide the Tribunal's decision in the case of Chowgule & Company Pvt. Ltd Vs. CCE [2014 (8) TMI 214 - CESTAT MUMBAI (LB)], wherein the Larger Bench has held that the endorsement is merely procedural one and the purpose and object of the endorsement could be achieved when the duty element is not specified in the invoice - refund allowed - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 582
  Application to recall the final order - service of notice - Held that: - There is no grievance on the part of the ld. Counsel that the earlier intimations for adjourning the matters were not received by them. The present notice adjourning the case has also been sent to the very same address. Therefore, the appellant cannot contend that the notice was not received by them. There is no affidavit filed that they have not received notice. It is only a verified petition - In the absence of affidavit the contention that they have not received the notice is not acceptable. Application dismissed.

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• 2018 (2) TMI 581
  Restoration of appeal - provisional release of goods - Held that: - the relief sought by the applicant in the initial appeal filed by the applicant against the order of provisional release is required to be revived otherwise the applicant shall remain remedy less. As there is change in the circumstance, therefore, the application for restoration of the appeal is required to be examined. Admittedly in this case, initially the applicant has withdrew their appeal on the ground that the relief sought in the appeal has become infructuous due to the reason that final adjudication order passed by the adjudicating authority but the said final order has been set aside by this Tribunal. Therefore, the relief sought in the initial appeal filed by the appellant survives. The appeal is restored to its original number by allowing the application for restoration of appeal.

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• Corporate Laws

• 2018 (2) TMI 580
  Buying and selling securities in the derivatives segment - manipulation and synchronization in trading of shares - violation of transparent norms of trading in securities - Held that:- I fail to understand as to why Kasam Holding has made the transactions repeatedly by incurring losses. It seems improbable that Kasam Holding which was facing loss in each transaction by trading with the respondent, was still eager to trade with the same repeatedly for about four days which is not in consonance with the market trend and human conduct; more so, when there has not been any major difference in the underlying price. It is thus difficult to accept that several such sell and buy orders between the respondent and Kasam Holding being within a gap of 1 , 2 or 3 or few seconds were by mere coincidence. As contended by the appellant-SEBI, it was too much of coincidence that there were number of transactions of 'buy and sell orders' between the same parties with same quantity of stock with significant variation in price. Considering the reversal transactions, quantity, price and time and sale, parties being persistent in number of such trade transactions with huge price variations, it will be too na ve to hold that the transactions are through screen-based trading and hence anonymous. Such conclusion would be over-looking the prior meeting of minds involving synchronization of buy and sell order and not negotiated deals as per the board's circular. The impugned transactions are manipulative/deceptive device to create a desired loss and/or profit. Such synchronized trading is violative of transparent norms of trading in securities. If the findings of SAT are to be sustained, it would have serious repercussions undermining the integrity of the market and the impugned order of SAT is liable to be set aside. On the above additional reasonings also, agree with the conclusion allowing the appeal preferred by SEBI against the traders. Also agree with the conclusion dismissing the appeal preferred by the SEBI against the brokers.

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• FEMA

• 2018 (2) TMI 579
  Abetting one Sh. P.G. Rawal in transferring foreign exchange in contravention of Section 8(3) read with 8(4) and Section 48 read with Section 64(2) - Held that:- While the order in original has passed a very detailed order, however the adjudicating authority has not given any evidence or facts to state as to how the appellant has abetted with Sh. P.G. Rawal, in the said contravention. It appears that he has based his judgment on an inference from the conduct of the appellant since in spite of ample opportunities given to him, the appellant has failed to file a reply or appear for the personal hearing. With regard to the contention that the appellant was the proprietor of two firms, i.e. M/s Vikram Sales Corporation and M/s Valifan Sales Agency, the adjudicating authority mentions at para 25 (vii) that the appellant in his statement, stated that both these firms belonged to Sh. Nitin Shah but the latter "appointed" him as the proprietor of the above two firms. It is not clear as to how a proprietor can be appointed. This fact has not been gone into by the original authority at all and no investigation has been conducted to establish the link between the appellant and the firms. Most importantly , no basis has been given by the adjudicating authority as to how he was involved in the entire case of fraudulently transfer of foreign exchange. This is a case where remittances were sent abroad by way of bogus imports. In order to penalize someone for contravention of various provisions of law, clear cut evidences have to be there with regard to his/their involvement. The adjudicating authority has made no efforts to provide the same. Instead, he has gone ahead and levied penalty of ₹ 7,50,000/- on the basis of mere inferences as recorded by him.

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• PMLA

• 2018 (2) TMI 578
  Offence under PMLA - valuables in the Lockers involved in money laundering - criminal act of money laundering to sabotage the demonetization policy announced by Govt. of India - period more than 180 days is already elapsed and the Enforcement Directorate has not passed any orders under section 5(1) of PMLA - Held that:- In the present case there are no allegation against her involving in the schedule offence or under the PML Act, 2002. More than 180 days period already expired. No proceedings are initiated against the appellant. Only on the basis of apprehension jewellery ornaments are attached. No document and currency was recovered in the locker when it was search. The involvement of her brother cannot be attributed to her as nothing indiscriminating material was either recovered from her and from the locker. Both sisters are married sister. Thus, it is apparent that there are no “reason to believe” that the valuables in the Lockers are involved her in money laundering. Section 20(1) of PMLA absolutely bars and prohibits retention of the seized property beyond 180 days from the day on which such property was seized.It is apparent that the statutory requirement as to entertainment of reasonable belief in relation to section 17 of PMLA does not exist in the present case. Thus orders passed agaisnt assessee set aside and the lockers of the appellant is de-freezed accordingly by allowing the appeal.

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• Service Tax

• 2018 (2) TMI 577
  Validity of Show cause notice raising demand from January 2013 - Assessee had opted for Voluntary Compliance Entitlement Scheme (VCES) - filing of declaration and payment of dues - Held that: - The due Service Tax liability for the period upto December 2012, for which the petitioner had filed the Declaration in VCES-1 Form vide Annexure ‘C1’ cannot have any relation with the subsequent period commencing from January 2013. The liability of Service Tax depends upon the taxable event, which is the event or action of rendering of the services. There is no dispute before this Court about the admitted tax liability for Service Tax of the petitioner and the Voluntary Scheme availed by the petitioner was only to square up his admitted Service Tax liability for the past period from 01.10.2007 to 31.12.2012, which payment was allowed to be made in instalments in a staggered manner before December 2013 and June 2014, as per the provisions of the said Scheme. That Declaration and Scheme itself can of course, have no effect on the subsequent period commencing from January 2013. The said Scheme availed by the petitioner having no effect in the impugned assessment proceedings for the subsequent period commencing from January 2013. Petition dismissed.

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• 2018 (2) TMI 576
  Business Auxiliary Services - activities provided by the appellant for sale of SIM card and electronic rechargeable coupon to the customers - Held that: - similar issue decided in the case of Chotey Lal Radhey Shyam Versus Commissioner of Central Excise And Service Tax, Lucknow [2015 (11) TMI 979 - CESTAT ALLAHABAD], where it was held that the appellant is only engaged in trading activity and does not render any taxable service in the category of 'business auxiliary service' - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 575
  Refund claim - denial on the ground that the invoices etc. do not bear the clear description of the service and the credit has been availed by the assesee before making payment of the invoices and the house keeping of cafeteria service has no nexus with output service etc. - Held that: - the Commissioner (Appeals) has dealt with in detailed with each and every of the objection of the Revenue and held in favor of assessee - Revenue in their memo of appeal has not raised any ground worth rebutting the above finding of Commissioner (Appeals) - appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 574
  Valuation - whether the commission from insurance companies and from financial institutions would form part of the assessable of the service being provided by them or not? - Held that: - the issue stands decided against them by various decisions of the Tribunal and as such they are not contesting the same. Whether the discounts extended by the manufacturing companies would be liable to service tax by including same in the value of the services? - Held that: - the appellant have not contested the demands on the ground of commissions received from insurance companies and financial institutions. As such the quantification of their liability to pay service tax is required to be done by the Original Adjudicating Authority. Penalty - Held that: - the said issue was the subject matter of various litigations before various forums and as such was not free from doubt, thus not justifying imposition of any penalty upon the appellant. Appeal allowed by way of remand.

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• 2018 (2) TMI 573
  Small Scale exemption utpo ₹ 10 lakhs - Rent-a-cab Operator Service - benefit of N/N.6/2005-ST dated 01.03.2005 - Held that: - On perusal of the said N/N. 9/2004 and No.1/2006-ST, we find that 60% of the consideration received is exempted from the whole of the service tax leviable thereon. Therefore, we find that for the purpose of calculation of aggregate value as per said explanation “B” 60% of the consideration received by the appellant for which exemption was admissible does not need to be taken into consideration. After excluding 60% consideration the aggregate value of clearance for the years 2007-08, 2008-09 and 2009-10 in the present case is within the permissible limit for the exemption under the said Notification No.6/2005-ST dated 01.03.2005 which exempts taxable service from whole of service tax leviable under Section 66 of the FA 1994 - benefit allowed - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 572
  Penalty u/s 77(2) of the FA 1994 - delay in filing the service tax return - penalty of ₹ 20,000/- for each return - Held that: - the adjudicating authority has imposed penalty under Section 77(2) for contravention of the provisions under section 70 of the Finance Act, 1994 read with Rule 7 of the Service Tax Rules, 1994, up to ₹ 1,000/-. When the penalty has been imposed under Section 77(2) of the Finance Act, 1994, in that circumstance penalty under Section 70 cannot be imposed on the assessee. penalty of ₹ 40,000/- imposed on the appellant is set-aside and penalty of ₹ 1,000/- imposed on the appellant under Section 77 of the Finance Act, 1994 for contravention of provisions of Section 70 of the Finance Act, 1994 read with Rule 7 of Service Tax Rules, 1994, is confirmed. When penalty under Rule 7 has been imposed on the appellant, no late fees can be imposed. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 571
  CENVAT credit - sales commission - Held that: - In similar circumstances, a Division Bench of this Tribunal in the case of Ashapura Volclay Ltd and others Vs. C.C., Jamnagar [2017 (6) TMI 659 - CESTAT - Ahmedabad] following the principle laid down by the Larger Bench, disposed of the matter, with the liberty to approach the Tribunal after disposal of the cases pending before the higher forum. The present appeals are also disposed of with the liberty to both sides to approach the Tribunal - appeal disposed off.

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• 2018 (2) TMI 570
  Liability of service tax - commission received - M/s. Herbalife distributes / sells their nutritional food products and cosmetics through a network of independent distributors across India - The department was of the view that the appellant has not discharged the liability of service tax for the commission received - Held that: - There is no material to establish that the appellant has suppressed facts and in fact during the relevant time the issue whether an independent distributor engaged in multilevel marketing is subject to levy of service tax was under much dispute - the demand for the extended period of limitation is unjustified and requires to be set aside - the matter is remanded to the adjudicating authority for the limited purpose of quantification of the service tax for the normal period - appeal allowed by way of remand.

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• 2018 (2) TMI 569
  Liability of service tax - various charges viz., NSE/BSE transaction charges, SEBI turnover fees, Stamp duty, Depository/Demat charges and Security Transaction charges, shown separately in the respective invoices - whether the appellants-stock brokers are required to include NSE/BSE transaction charges, SEBI turnover fees, Stamp duty, Depository/Demat charges and Security Transaction charges in the value of “brokerage and commission charges” recovered from their customers/clients? Held that: - similar issue decided in the case of LSE Securities Ltd. Versus CCE [2012 (6) TMI 364 - CESTAT, New Delhi], where it was held that the charges realized by appellants were not being of commission or brokerage are not taxable and shall not form part of gross value of taxable service. The allegation of the department that the demat charges collected by the brokers are banking and financial service, hence taxable, also devoid of merit in as much such charges are collected by the Appellant and paid to the depository participants viz. CDSL/NSDL who are authorised to levy such charges under the Depositories Act, 1996. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 563
  CENVAT credit - input services - repair and maintenance of ADMs under Annual Maintenance Contract - Held that: - the repair and maintenance service received by the appellant for repair of the ADMs which has been leased out to the dealers/distributors, an input service i.e. repair and maintenance is carried out during the leasing of the machine - the leasing of the machine is output service on which Service Tax has been discharged. During the leasing period, the repair and maintenance service was provided on the leased machine. Therefore, repair and maintenance service become input service for providing output service i.e. leasing of machine - credit allowed - appeal allowed - decided in favor of appellant.

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• Central Excise

• 2018 (2) TMI 568
  CENVAT credit - inputs - Angles, Channels and Joists - Revenue in the Grounds of Appeal stated that the assesse has claimed the manufacture of different Capital Goods in their factory. However, they did not produce the copy of Work Order or Agreement with any Engineering firm for the manufacturing of their so called Capital goods - Held that: - the Chartered Engineer has categorically mentioned the quantity of Angles, Channels and Joists used in the manufacture of the said capital goods in detail. Therefore, the contention of the Revenue that the appellant had not given any details of the consumption of the said materials cannot be accepted. Tribunal in the identical situation in the case of Commissioner of Central Excise & Customs Vs. M/s. SPS Steel & Power Limited [2017 (7) TMI 844 - CESTAT KOLKATA] dismissed the appeal filed by the Revenue. Appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 567
  CENVAT credit - fake invoices - non-receipt of the goods, by the said manufactures, but availing of credit on invoices only - Held that: - There is no evidence on record that manufacturer recipients, other than M/s. Apex Alloys Steel Pvt. Ltd., were aware of the fact that inputs received by them are not the same for which only cenvatable documents were received by the second stage dealer - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 566
  Refund/Abatement claim - non-production of chewing tobacco - Rule 10 of Chewing Tobacco and Un-manufactured Tobacco, Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 under N/N. 11/2010-CE (NT) dated 27.02.2010 as amended - Held that: - the assessee submitted calculation of abatement of duty for which the machine was in sealed condition during the relevant months. It is seen from the Adjudication Order that the production was running from 01.08.2014 to 08.08.2014 (8 days) and no other production was made on and from 09.08.2014 to 31.08.2014 i.e. for 23 days for which the abatement was claimed - abatement to be extended - appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 565
  Demand of interest - rule 7(4) of Central Excise Rules, 2002 read with section 11AA of Central Excise Act, 1944 - price variation clause - finalization of provisional assessment - whether interest is leviable/payable under Rule 7(4) of Central Excise Rules, 2002 immediately from next month to the provisional assessment directed by the department or after finalization of the provisional assessment on determination of the duty? - Held that: - Under rule 7(4) of CER 2002 (as it existed before 1st March 2016), the finalization of provisional assessment yielding differential duty would obligate the assessee to pay interest between the date of such determination and the date of payment. A plain reading of this provision does not confer jurisdiction to demand interest from the date of invoice - The appellant has discharged the liability to differential duty liability by raising supplementing voices and the finalization of provisional assessment was merely a confirmation of the differential duty leviable. Reliance placed in the case of CEAT Limited v, Commissioner of Central Excise & Customs, Nashik [2015 (2) TMI 794 - BOMBAY HIGH COURT], where it was held that The liability to pay interest arises on any amount payable to Central Government and consequent to order for final assessment under Rule 7 subrule (3). Demand set aside - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 564
  CENVAT credit - Naphtha which is used in their factory for generation of electricity and a part of such electricity so generated had been wheeled out to their sister unit - denial of proportionate credit of Naptha amounting ₹ 1,04,371/- used in the generation of electricity wheeled outside the factory - Held that: - the Appellants are not eligible to the credit on Naphtha used for generation of electricity wheeled outside the factory - reliance placed in the case of M/s. Maruti Suzuki Ltd. Versus Commissioner of Central Excise, Delhi-III [2009 (8) TMI 14 - SUPREME COURT], where it was held that appellant are not entitled to CENVAT credit to the extent of the excess electricity cleared at the contractual rates in favor of joint ventures, vendors etc., which is sold at a price - proportionate credit required to be reversed. Penalty - Held that: - due to conflicting views on the issue, imposition of penalty is uncalled for. Appeal allowed in part.

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• 2018 (2) TMI 562
  Re-credit of duty, reversed earlier - whether the Appellant-Assessee could avail suo motu re-credit of the duty initially paid/reversed in their books of accounts, after a period of time? - Held that: - In similar circumstances, a Division Bench of this Tribunal in the case of Ashapura Volclay Ltd and others Vs. C.C., Jamnagar [2017 (6) TMI 659 - CESTAT - Ahmedabad] following the principle laid down by the Larger Bench, disposed of the matter, with the liberty to approach the Tribunal after disposal of the cases pending before the higher forum - appeal disposed off.

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• 2018 (2) TMI 561
  Benefit of N/N. 03/2004 dated 08.01.2004 - denial on the ground that supply is not for industrial use - Held that: - in the instant case the supply of cranes by the appellant was meant for setting up a water supply facility for thermal power plant and hence covered by the said Notification - benefit allowed - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 560
  Manufacture - carrying out of gas cutting - whether the process amounts to manufacture? - Held that: - In the case of Sanjay Industrial Corpn. [2015 (3) TMI 592 - SUPREME COURT] also on merit it was held that the activity amounts to manufacture - the activity of the appellant, i.e. process of profile cutting from M.S. Plates, attracts excise duty. Penalty - Held that: - penalty appears on higher side - penalty reduced to ₹ 1 lakh. Appeal allowed in part.

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• 2018 (2) TMI 559
  Valuation - includibility - transportation charges - Held that: - it is clear that Rule 5 of Valuation (Determination of Price of Excisable Goods) Rules, 2000 does not envisage the cost of transportation from the place of removal upto the place of delivery be included for determining the value - at the relevant time the cost of transportation which has been charged separately by debit note is not includable for the purpose of central excise duty - reliance placed in the case of CCE v. Accurate Meters Ltd. [2009 (3) TMI 1 - SUPREME COURT] - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 558
  SSI Exemption - clubbing of clearances - Held that: - it appears that M/s. Speed-O-Graph, M/s. Ganesh Engineering and M/s. Trimurthy Enterprises are independent entities and the Proprietors are different, their assessments are different and have permission to run their business at different places. The department has failed to examine the source of raw materials of these Companies. When assessments are different then their turn-over cannot be clubbed with the respondent-assessees - appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 557
  Clandestine removal - re-quantification of demand - Held that: - at the relevant time the appellant was engaged in the manufacture of recorded audio cassettes - As per N/N. 48/1994 dated 01/03/1994 (Sr. No. 4) recorded audio cassettes attracts ‘nil’ rate - Similarly in the N/N. 16/96-CE dated 23/07/1996 (sr. No. 105) recorded audio cassettes attracts nil rate of duty - When it attracts ‘nil’ rate the appellant is entitled to get this benefit - matter remanded to the adjudicating authority once again to give the benefit pertaining to the duty on audio recorded cassettes. Remaining order is hereby sustained, although during the course of arguments the Learned Counsel vehemently argued about trading activities but from the records, it was not proved. The raw materials for which claim was made as a trading item in fact was used by the appellant for captive consumption. Exchange of the bills between two parties has nothing to do with the trading activities. In view of above the remaining portion of the order is hereby sustained. Appeal allowed in part by way of remand.

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• 2018 (2) TMI 556
  CENVAT credit - it was alleged that duty was collected but was never deposited in the exchequer - Held that: - the present case is a part of the fraud where the payment was made through the account payee cheques but duty was never deposited to exchequer but CENVAT credit was claimed on the account which was never deposited in the government exchequer - appeal dismissed - decided against appellant.

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• 2018 (2) TMI 555
  CENVAT credit - Advice Transfer Debits (ATDs) - Held that: - the appellant could not produce the relevant ATDs for certain amount of credit availed and also some ATDs do not bear the requirement as per Rule 4A of STR 1944 - in the interest of justice, one more chance be accorded to the appellant to establish their case before the adjudicating authority - appeal allowed by way of remand.

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• 2018 (2) TMI 554
  Valuation - includibility - notional interest - The department is of the view that the notional interest will have to be added to the assessable value of the goods - Held that: - similar issue decided in the case of COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III Versus ISPL. INDUSTRIES LTD. [2003 (4) TMI 99 - SUPREME COURT OF INDIA], where it was held that if there is no deference in the selling price for both categories of the wholesale buyers and there is also “no proof” that on account of advance deposits taken from some buyers, the price charged from all buyers has been reduced, then element of notional interest on advance deposits, cannot be added - interest to be included in present case. The appeal is not time-barred and extended period is rightly invoked in the appellants’ case. Appeal dismissed - decided against appellant.

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• 2018 (2) TMI 553
  CENVAT credit - job-work - Held that: - the job-worker M/s Navketan Pharma Pvt. Ltd. is the manufacturer who has already paid the excise duty. So, they are entitled to claim CENVAT credit. Reliance placed in the case of Commissioner of Central Excise, Goa Versus M/s. Cosme Farma Laboratories Ltd. [2015 (4) TMI 355 - SUPREME COURT], where it was held that Though the drugs/medicaments might not have been manufactured by the one who is a licensee and the actual manufacturer is guilty of manufacturing substandard drugs, the licensee becomes responsible and liable under the provisions in the said Act. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 552
  SSI exemption - crossing of turnover limit - Held that: - it appears that during the period under consideration the appellant has not crossed the limit of the SSI exemption - issue squarely covered by the decision in the case of Collector of Central Excise v. Universal Electrical Industries [2003 (3) TMI 104 - SUPREME COURT OF INDIA], where it was held that when the value of the finished goods, which are exempted under different notifications, is to be excluded, while arriving at the aggregate value of clearance for the purpose of volume of the benefit of notification No. 175/86, having regard to the wording of Explanation II thereof - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 551
  Penalty levy on the firm as well as on its partner - Held that:- The duty demand along with interest was paid before issuing the show cause notice. When it is so, then penalty is not leviable as per the ratio laid down in the following cases . See Union of India v. Rajasthan Spinning and Weaving Mills [2009 (5) TMI 15 - SUPREME COURT OF INDIA] and Commissioner of Central Excise v. Rashtriya Ispat Nigam Ltd. [2003 (5) TMI 509 - SUPREME COURT]. We set aside the impugned order and cancel the levy of penalty. Accordingly, impugned order is modified to this extent. Remaining order is sustained.

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• 2018 (2) TMI 550
  Refund claim - CENVAT credit wrongly availed - non-production of required documents - Held that: - it appears that the appellant has wrongly claimed refund of the unutilized CENVAT against Rule 5 of the CCR 2004. Appellant has failed to produce the documents on the basis of which credit was wrongly availed. Thus, it appears that the refund claim is not sustainable in law - appeal dismissed - decided against appellant.

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• 2018 (2) TMI 549
  VIAILATIBUS ET NON DORMIENTIBUS JURA SUB VENIUNT - opportunity of being heard - Held that: - Needless to mention that law helps those who are vigilant and not those who sleep over their rights, as per the maxim VIAILATIBUS ET NON DORMIENTIBUS JURA SUB VENIUNT - appeal dismissed.

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• 2018 (2) TMI 548
  CENVAT credit - input services - Outward Transportation - Repair and Maintenance of compressor maintained at daughter station - Held that: - in terms of the decision of the Tribunal in the case of Lafarge India Pvt Ltd [2017 (1) TMI 1069 - CESTAT NEW DELHI] the appellant is entitled to avail the credit on ‘Outward Transportation Service’ upto the daughter station as the place of removal - credit allowed. Repair and Maintenance of compressors at daughter station - Held that: - without maintaining a particular pressure of gas at daughter station, the gas cannot be sold. When the gas cannot be sold, the appellant cannot run their manufacturing activity, therefore, the appellant is entitled to avail Cenvat Credit on ‘Repair and Maintenance Service’ of compressors at daughter station - credit allowed. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 547
  CENVAT credit - duty paying documents - it was alleged that the main appellant is not entitled to avail Cenvat Credit on the basis of the invoices issued by the co-appellant - Held that: - the main appellant has taken Cenvat Credit on the strength of invoice, which is a document a prescribed under Rule 9(2) of Cenvat Credit Rules, 2004 and having full particulars of the suppler of the goods. Therefore, in terms of Rule 3 of Cenvat Credit Rules, 2004, the main appellant is entitled to take Cenvat Credit - the Cenvat Credit cannot be denied to the main appellant - penalty also cannot be imposed. Penalty on co-appellant - Held that: - the co-appellant has misinterpreted himself as the second stage dealer whereas the co-appellant has the third stage dealer but, the payment of duty has not been disputed. Therefore, penalty u/r 26 of the Central Excise Rules is not imposable on the co-appellant as ingredients of the said provisions are missing, but for the breach of misrepresentation has committed by the co-appellant, therefore, penalty u/r 27 of the Central Excise Rules, 2002 is imposable on co-appellant. Appeal allowed in part.

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• 2018 (2) TMI 546
  Clandestine removal - Sulpo Para Ninyl Sulphone (SPVS) - shortage of finished goods - Held that: - there is a shortage of 8,300 Kgs of SPVS of finished goods, but how this calculation of shortage has been arrived at, had not been explained by the Ld. AR to ascertain the quantity - From the show cause notice, he could not ascertain the quantity of shortage alleged in the show cause notice of 8,300 Kgs. Moreover, no investigation was conducted at the end of the receiver of the said alleged clandestine removal of goods - charge of clandestine removal of goods is not sustainable against the appellant. Demand not sustainable - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 545
  CENVAT credit - input services - service utilized in relation to modernization, renovation and repair of the factory - Held that: - service utilized in relation to modernization, renovation and repair of the factory are definitely fall within the meaning of “input service” even though construction of a building or civil structure or part thereof has been placed under exclusion clause of the said definition of “input service” - harmonious reading of the inclusive part of the definition and the exclusion clause mentioned at clause (a) relating to construction service of the definition of “input service”, it is clear that the construction service relating to modernization, renovation and repair of the factory continued to be within the meaning of “input service” and accordingly, the Service Tax paid on such service is eligible to credit. Undisputedly, the appellants carried out modernization, renovation or repair work in their factory premises as is evident from the input service invoices enclosed with the respective appeal paper book; therefore, is eligible to credit. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 544
  100% EOU - refund in cash of unutilized CENVAT credit - Held that: - there is no dispute of the fact that this credit is accumulated in the books of accounts of the appellant on account of export of the goods and they filed refund of cash credit periodically relevant to the particular quarter - theirs is an 100% EOU and the total amount of refund mentioned as ₹ 64,78,444/- which had been claimed on the ground that the said credit could not be utilized for domestic clearances, therefore, restricting the refund to the particular quarter, is unsustainable in law - refund allowed - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 543
  Default in payment of duty - Rule 8(3) and 8(3A of the CER 2002 - Held that: - The Hon’ble High Court of Gujarat in the case of Indsur Global Ltd. Vs. Union of India [2014 (12) TMI 585 - GUJARAT HIGH COURT] had held that the relevant portion of Rule 8(3A) relates to bar of utilization of CENVAT credit by such defaulters to be ultra vires - the appeal is allowed by way of remand to the adjudicating authority for denovo consideration.

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• 2018 (2) TMI 542
  Demand of differential duty - it was alleged that they have cleared parts of different machineries and not the complete machinery hence liable to pay duty @ 15% Adv. as the same is not complete Sugar Mill Machinery - Held that: - in order to settle the controversy the detailed examination of purchase order and the nature of goods has to be made into so as to decide the classification of the goods and the duty applicable thereon - Since the relevant records has to be scrutinized, it is appropriate to remand the case back to the adjudicating authority who shall carry out the detail scrutiny of the relevant records and documents and shall decide the classification of the goods and applicable duty on the goods involved - appeal allowed by way of remand.

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• 2018 (2) TMI 541
  Restoration of appeal - the Commissioner (Appeals) had rejected the appeal on ground of non compliance of stay order of deposit of duty amount as ordered by him - Held that: - the Appellant has now deposited the 25% duty amount as pre-deposit, we hold it to be sufficient for grant of stay and restoration of appeal - the deposit of 25% of the duty amount is sufficient compliance for hearing the appeals on merits and therefore we direct the Commissioner (Appeals) to hear the appeal on merits and pass appropriate order. The matter is remanded back to the learned Commissioner (Appeals) to pass an appropriate order on merits.

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• 2018 (2) TMI 540
  Disallowance of cenvat credit - input services - appellant has not incorporated the premises in the registration certificate - premises was used for undertaking job work activity of the Appellant - Held that:- As per definition of Inputs Service, the services used directly or indirectly in or in relation to manufacture of final products and clearance of final products upto place of removal including other services would fall into the category of Input Service in terms of Rule 2 (l) of Cenvat credit Rules, 2004. Hence there is no reason to disallow the cenvat credit. It has been held in number of judgments that the credit cannot be denied on the ground that the services were availed outside the registered premises. See Ultra Tech Cement Ltd. [2010 (9) TMI 126 - CESTAT, MUMBAI] Appellant are eligible for credit of service tax charged to them on rented premises.

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• 2018 (2) TMI 539
  Eligibility of re-credit - rejection of refund claim - Held that: - Once the refund has been rejected the Appellant become eligible for the recredit of such amount. Since, the disputed Cenvat credit has not been utilized therefore the Appellant has right to re-credit the same. The reversal of Cenvat credit is not payment of duty and therefore, provisions of Section 11B of the Central Excise Act, 1944 are not applicable and as such the credit is permissible to the Appellant. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 538
  Demand of duty and penalty u/s 11AC - Held that:- Adjudicating authority has analyzed the entire allegations made in the SCN in considerable detail. He has taken note of the findings of the results of the cross examination held on 4.2.2009, 19.2.2009 and 26.2.2009. Based on the analysis of same, detailed findings have been arrived in paras 55-67 of the impugned order. Only based on these findings, has the adjudicating authority justified the reduced demand of duty of ₹ 32,17,912/- and imposed penalty of ₹ 32,82,270/- under Section 11AC of the Central Excise Act on the assessee. The penalty of ₹ 1 lakh imposed on the Managing Director of the appellant appears to be commensurate with the reduced demand of duty confirmed by the Commissioner.

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• 2018 (2) TMI 537
  Availment of CENVAT credit of taxes paid on various services between April 2013 and September 2013 - Held that:- The production undertaken by their job-worker requires use of certain capital goods which, similar to that used in their own premises, are supplied on contracts entered into with providers entered by the appellant. Rule 4 of CENVAT Credit Rules, 2004 does not limit the availment to such as are received only at the manufacturer's premises. The denial of CENVAT credit as upheld in the impugned order is without authority of law and is set aside. Appeal is allowed.

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• 2018 (2) TMI 536
  CENVAT credit - credit was alleged to have been wrongly availed against endorsed documents that were not originally issued to the appellant - Held that: - the first appellate authority had failed to consider the extracts of the invoice register and the sample copies of the invoices - It is necessary that the documents furnished by the appellant would need to be examined - appeal allowed by way of remand.

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• 2018 (2) TMI 535
  Demand along with interest thereon and imposing penalty of 25% of the confirmed demand under section 11AC of Central Excise Act, 1944 - Held that:- It would appear that the claims have not been examined in the manner that they should have been. To enable this to be done, the impugned order is set aside and the matter remanded to the original authority who shall decide the matter afresh after taking note of all the submissions made by the appellant.

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• 2018 (2) TMI 534
  Demand of interest on differential duty - finalization of provisional assessment - rule 7(4) of Central Excise Rules, 2002 read with section 11AA of Central Excise Act, 1944 - price variation clause - Held that: - Under rule 7(4) of CER 2002 (as it existed before 1st March 2016), the finalization of provisional assessment yielding differential duty would obligate the assessee to pay interest between the date of such determination and the date of payment. A plain reading of this provision does not confer jurisdiction to demand interest from the date of invoice - The appellant has discharged the liability to differential duty liability by raising supplementing voices and the finalization of provisional assessment was merely a confirmation of the differential duty leviable. Reliance placed in the case of CEAT Limited v, Commissioner of Central Excise & Customs, Nashik [2015 (2) TMI 794 - BOMBAY HIGH COURT], where it was held that The liability to pay interest arises on any amount payable to Central Government and consequent to order for final assessment under Rule 7 subrule (3). Demand set aside - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 533
  Proof of supply of goods to SEZ - Held that: - in accordance with the procedure in the special economic zone, the authorized officer had apparently dispatched the duly discharged ARE-1s to the jurisdictional range officer of the appellant. Accordingly, the proper course of action for the lower authorities should have been to ascertain the correct position from the range officer - matter restored to the original authority for proper ascertainment - appeal allowed by way of remand.

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• 2018 (2) TMI 532
  CENVAT credit - inputs used in the construction of residential colony adjacent to their factory in a remote location - time limitation - Held that: - the demand pertaining to March 2009 was sought to be recovered by show cause notice dated 1st April 2014 and that demands for various periods, both prior and subsequent, had been issued to them between 2006 and 2011. The impugned show cause notice was issued well beyond the period of one year prescribed in section 11A of CEA 2004. The demand beyond the normal period of limitation, which the notice cannot claim to cover at all, is not recoverable - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 531
  CENVAT credit of additional duties of customs - denial on the ground that the appellant is not the importer of the goods - Held that: - On a perusal of the delivery note, it is seen that the goods manufactured by the appellant are bought by the importer on record. The daily stock account contains the details of such receipts and disposals - The appellant is a loan-licensee of the importer and manufactures goods for, and on behalf of, the importer. Rule 3 of CENVAT Credit Rules, 2004 permit availment of CENVAT credit on goods that are utilized in manufacture of dutiable goods. Credit allowed - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 530
  Refund of unutilized CENVAT credit - denial on the ground of limitation - Held that: - It is now well-settled that, the claim for each quarter being restricted to one, the relevant date should be taken to be the last date of the quarter during which the exports have taken place. It is, therefore, apparent that the lower authorities have adopted an incorrect “relevant date” to the detriment of the appellant. The refund application restored to the original authority for deciding afresh on the eligibility to refund - appeal allowed by way of remand.

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• 2018 (2) TMI 529
  CENVAT credit - input service - courier service - repair and maintenance of garden service - Held that: - the definition of 'input service' does not exclude courier and, to the extent that, the cost of such service is included in the assessable value of goods, that are dutiable, credit of tax paid on such input service cannot be denied. Compliance with environmental laws would bring the input service within the ambit of production activity - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 528
  100% EOU - ready-made garments cleared by M/s Abhishek Corporation Ltd, for manufacture of “cotton yarn knitted fabric and yarn dyed fabrics, from their premises without approval for manufacture of “garments” and without permission for “domestic tariff area” clearance - Held that: - the appellant had failed to include the said item in the list of goods permitted to be manufactured and exported. There is no denial that the premises from which the “ready-made garments” had been cleared was bonded as a 100% export-oriented unit - The duty liability on such units arises from section 3A of Central Excise Act, 1944 which has an entirely different basis for assessment unlike other manufacturing units. - appeal dismissed - decided against appellant.

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• 2018 (2) TMI 527
  CENVAT credit - duty paid on inputs that were exclusively used for manufacture of exempted products - Held that: - the inputs were such as could have been used for both dutiable and exempt goods. That the appellant had been discharging its obligation to pay an amount equal to 6% of the value of exempted goods under rule 6(3)(i) of CENVAT Credit Rules, 2004 fortifies this claim of the appellant - credit not required to be reversed - appeal allowed.

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• 2018 (2) TMI 526
  CENVAT credit on cess - Held that: - Law does not require the cess to be a charge on the profits of the appellant. It is also strange that this transaction has been described as passing on of cess and, compounding of such misdescription with penal consequences, is not contemplated in law - Inclusion of the cess in the consideration for sale price of imported goods is commercially sound and it is not the place of the tax authorities to intervene in determining the composition of such consideration - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 525
  CENVAT credit - Rule 16 of CER 2002 - Since, the duty paid products brought back by the appellants were time expired products in terms of Pesticides Rule, 1971 and cannot be put to reprocessing, the credit availed is denied - Held that: - Admittedly, the appellants cannot reprocess the returned goods due to statutory regulations governing pesticides - there can be no allegation of suppression or fraud in availing the credit, on their own returned goods on which they have discharged originally the Central Excise duty. Considering that the full reversal of ineligible credit along with interest has been made by the appellant well before the issue of notice, the case could have been closed without issue of notice. The period of availment of irregular credit being longer than one year by itself will not bar the closure of the proceedings. While upholding the reversal of credit with interest, no further proceedings are required - the penalty imposed on the appellant are set aside - appeal allowed in part.

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• 2018 (2) TMI 522
  Classification of goods - Sugar syrup - intermediate goods - It appeared to Revenue that sugar syrup was classifiable under Tariff Item No. 17029090 - N/N. 67/1995-CE dated 16.03.1995 - Held that: - this Tribunal in the case of Rishi Bakers Pvt. Ltd., Kanpur [2015 (4) TMI 893 - CESTAT NEW DELHI] held that there was no evidence to prove that sugar syrup captively consumed is classifiable under Tariff Item No. 17029090 nor there is any evidence to prove that the goods in question in the form in which they come into existence in the appellants factory are marketable - Sugar syrup coming into existence during the manufacture of biscuits was not attracting Central Excise duty. In the present case we hold that sugar syrup coming into existence during the manufacture of biscuits and captively consumed does not attract Central Excise duty for the reason that there is no evidence that the same is marketable. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2018 (2) TMI 524
  Input Tax Credit (ITC) - Section 10(3) of the KVAT Act, 2003 - denial on the ground that the claim of Input Tax Credit against the Output Tax Liability of the assessees did not pertain to the same ‘Tax period’ for which Output Tax Liability and Net Tax Liability was to be determined in accordance with Section 10(3) of the Act - interpretation of statute. Whether the claim of deduction or set off of Input Tax Credit against Output Tax Liability of the dealer can be restricted or denied on the ground of any time frame within which such Sales Invoices on the basis of which ITC is claimed should pertain or information or record of such ITC Invoices should be informed in the Returns to be filed, particularly if such time frame is restricted to the period of ‘Tax Period’ which can be as short as a month or a quarter, or the period of filing of Returns being 20 days from the end of month concerned or maximum six months from the end of ‘Tax period’ even for filing of Revised Returns disclosing errors and omissions? What is the true meaning and purport of Section 10(3) of the KVAT Act, 2003 vis-à-vis Section 35 of the same Act, 2003? Held that: - The substantive provision of Section 10(3) of the KVAT Act, 2003, did not lay down any such restrictive time frame for allowing the deduction of ITC against the OPT in a particular tax period to determine the net tax payable for that tax period and therefore there is no justification whatsoever to accept such an interpretation put forth by the learned counsels for the Respondent State. Such contentions had not only been negatived and with great respects - this Court can safely conclude that the machinery provisions cannot be allowed to override and defeat the substantive claim of the Input Tax Credits under Section 10(3) of the KVAT Act, 2003, which without any restriction of the time frame, allowed such deduction or credit of the ITC against the OPT liability of the Dealer in question. When the Assessing Authority could pass the impugned re-assessment order, Annexure C dated 29/04/2016 for the whole year in one go, disallowing the ITC claim illegally by restricting it on the basis of monthly Tax Periods, what can be the justification for disallowing the same, without it being found to be an unverified claim, not supported by valid Sales Invoices ? None - is the simple answer ! The claim of credit of input tax is indefeasible as was the case of CENVAT under Excise law and such credit of ITC under VAT law which is equivalent to tax paid in the chain of sales of the same goods, cannot be denied on the anvil of machinery provisions or even provisions relating to time frame which is law of limitation only bars the remedy rather than negativing the substantive claims under the taxing statutes. The impugned assessment orders/re- assessment orders passed by the Respondent - Assessing Authorities to this extent of denying the claim of ITC to the petitioners assessees are illegal and unsustainable and deserve to be quashed and set aside by this Court. The matters would stand restored to the file of the Respondent Assessing Authorities to pass fresh orders in accordance with law - petition allowed.

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• 2018 (2) TMI 523
  Jurisdiction - power to revise the order of appellate authority - Whether the Additional Commissioner of Commercial Taxes was justified in invoking the powers under Section 64 (1) of the KVAT Act to revise the order of the Appellate Authority passed under Section 62 of the Act? - Held that: - the Addl. Commissioner is empowered to call for and to examine the record of any order passed or proceeding recorded under this Act and on such examination if it is found that any order passed by any Officer who is not above the rank of a Joint Commissioner, revision powers can be exercised provided such order is erroneous in so far as it is prejudicial to the interest of the Revenue. Time limitation - Whether the re-assessment proceedings initiated by the prescribed authority under the Act are barred by limitation as provided under Section 40 of the Act? - Held that: - it can be held that amendment to Section 40 has retrospective effect with effect from 01.04.2005 enhancing the period of limitation provided under Section 40 of the Act - the proviso to Section 40 have been amended with effect from 01.04.2012 by Act No.17/2012 and subsequently by Act No.54/2013 retrospective effect was given with effect from 01.04.2005 and the constitutional validity of the same having been upheld, the arguments of the learned counsel that the reassessment proceedings are barred by limitation is wholly untenable. Whether the reassessment proceedings initiated by the prescribed authority are barred by Section 32 of the Act? - Held that: - it is not only until the expiration of 5 years the books of accounts are required to be kept and maintained but also for such other period as may be prescribed or until the assessment reaches finality whichever is later. The phrase “until the assessment reaches finality” has to be read in conjunction with Sections 39 and 40 of the Act - it is clear that assessment also includes reassessment. The prescribed limitation for assessment/reassessment is in terms of Section 40. The limitation period being enlarged by the amendment carried out under Section 40 of the Act, the same shall have a bearing on Section 32. In the present case, the period of limitation as per the Amendment Act No.54/2013 is eight years with effect from 01.04.2005 i.e., 30.04.2013, the date of finality of the assessment, which would be the date of expiry of limitation to reassess the deemed assessments made under Section 38 of the Act for the assessment year 2005-2006. Reassessment proceedings were initiated by issuing notice dated 16.02.2013 and the reassessment order was passed on 22.04.2013 well within the period of limitation even as per Section 32 of the Act. The revisional order passed by the Addl. Commissioner of Commercial Taxes is justifiable - appeal dismissed.

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