TMI Tax Updates - e-Newsletter
February 13, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Service Tax
Central Excise
Indian Laws
Highlights / Catch Notes
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Income Tax:
Disallowance of brokerage charges - despite, the assessee giving up the entire claim of brokerage charges, the Tribunal has granted limited relief to the extent evidence on record favoured the assessee's claim of such payment. No question of law arises
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Income Tax:
Deduction u/s 80IC - proof of manufacturing activity - the end project is result of manufacturing activity which amounts change in the original articles - it cannot be treated as mere assembling of wooden planks
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Income Tax:
Penalty u/s. 271(1)(c) - depreciation at higher rates on valuation of the office flats - the assessee has come out with bonafide explanation and under these circumstances no penalty is exigible
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Income Tax:
Unexplained cash credit addition u/s 68 - share application money - the assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants, thereafter the onus shifted to AO to disprove the documents furnished by assessee cannot be brushed aside by the AO to draw adverse view cannot be countenanced.
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Income Tax:
Deduction of remuneration paid to the partners u/s 40(b) - The interest income cannot be notionally be excluded for the purpose of determining the allowable of deduction of remuneration paid to the partners u/s 40(b).
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Income Tax:
Claim of gifts received - additions u/s 68 - the issue of gifts given in the earlier year cannot be examined for the year under consideration as it was part of the cash introduced by the assessee in the earlier year.
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Customs:
Valuation of imported goods - enhancement of value - the price list of any product cannot be taken as the basis for determining the transaction value - Provisional release of the goods allowed.
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Customs:
The vital rights that of cross examination and three personal hearing through single letter is not legal. The proceeding is thus vitiated, which out to have been considered by the Ld. Commissioner, while passing the impugned order.
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Customs:
Confirmation of cost recovery charge - the appellant is duly entitled for the benefit of cost recovery charge for the subsequent years in terms of the new regulation also under provisions of the HCCAR, 2009
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Customs:
Imposition of Anti-dumping duty - Amidst the confusion that is manifest in the show cause notice, and the impugned order, the non-applicability of the classification claimed in the bills of entry cannot be held to be deliberate - Demand set aside - confiscation and penalties set aside.
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Customs:
Classification of imported goods - Video Conferencing System - The equipments under import are used for reception, conversion and transmission or regeneration of voice and video (images) and hence get classified under double dash heading 851762, and at triple dash under heading 85176290
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Customs:
Concessional rate of duty - import of hospital equipment - There is nothing in this notification which requires the accessories or spare parts to be imported along with the main equipment only to claim the benefit of this notification.
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DGFT:
Uploading of Adjudication & Appellate Orders on the DGFT website
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Service Tax:
Rebate clam - Export of BAS or not - So far as the clause “used outside India” is concerned, the said clause is deleted with effect from 27.2.2018 - the appellant is entitled to rebate as claimed by them and the same shall be allowed subject to arithmetical correction if any
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Service Tax:
SSI Exemption - appellant’s taxability on the services rendered as a sub-contractor is not in dispute but the liability has been discharged by the main contractor - the amount is liable to be included in the gross turnover.
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Service Tax:
Demand of Interest without issuing SCN - amount of CENVAT credit taken and reversed - the lower authorities have totally erred in entertaining such a view while demanding interest without issuance of show cause notice (SCN).
Articles
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2019 (2) TMI 542
CENVAT Credit - credit of eligible duties in respect of inputs held in stock on the appointed day - Held that;- No documents have been prescribed under the Central Goods and Services Tax Rules; under the circumstances, when the petitioner has produced documents evidencing payment of duty, he is entitled to the credit in respect thereof - Issue Notice returnable on 27th February, 2019.
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2019 (2) TMI 541
Search or seizure - seizure of goods, documents or books or things - subsection (2) of section 67 of the Central Goods and Services Tax Act, 2017 - Held that:- The basic requirement is that the goods, documents, books or things should have been secreted in any place. It was submitted that in the facts of the present case, the goods in respect of which the impugned order of prohibition under rule 139(4) of the rules has been issued, are the goods which are accounted for in the books of account and are not secreted anywhere, and hence, the order of prohibition is contrary to the provisions of sub-section (2) of section 67 of the Act - Issue Notice returnable on 21st February, 2019.
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2019 (2) TMI 540
Validity of search proceedings - power of proper officer to carry on search proceedings - Held that:- It appears that the proper officer could not have any reason to believe as contemplated under sub-section (2) of section 67 of the Act, and hence, the entire search proceedings are without authority of law - Issue Notice returnable on 21st February, 2019.
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Income Tax
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2019 (2) TMI 539
Reopening of assessment - notice beyond the period of four years from the end of relevant assessment year - assessee's claim of custom duty paid on imports of SCADA - Held that:- The entire issue of the assessee's claim of custom duty paid on imports of SCADA was examined by the Assessing Officer in the original assessment proceedings. Despite this, if the AO was in possession of information then not available to him, sufficient to enable him to form a belief that income chargeable to tax had escaped assessment, reopening of assessment that too beyond the period of four years could still be resorted to. In the present case the entire information or material which the Assessing Officer now seeks to place reliance upon, was before him during the original assessment. This fact was brought to his notice in a detail reply filed by the assessee to the queries raised by the Assessing Officer in which assessee referred the entire investigation of the Custom Department leading to the filing of declaration under KVSS. The Assessing Officer, therefore, did not have any new or additional material on which the impugned notice was based. - Revenue appeal dismissed.
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2019 (2) TMI 538
Disallowance of brokerage charges - Held that:- For multiple reasons, this appeal cannot be entertained. Firstly, as noted, during the remand proceedings, the assessee was confronted with material suggesting that the brokerage payments were not genuine. The assessee gave a statement conceding to the same and later on before the CIT(A) withdrew the entire claim. Once having withdrawn the claim from the appellate authority, it was not open for her to challenge the order based on said concession, before the Tribunal. In the appeal memo also, no grounds are made out suggesting any mistake of law on facts which led the assessee to give such concession. When the assessee by withdrawing the claim did not invite any decision from CIT(A), we wonder under what circumstances, she could have filed appeal against the order of the CIT(A) recording that such ground is not required to be examined on merits. Even independently, the Tribunal has examined the material on record leading to the concession given by the assessee and granted limited relief to the extent on the basis of remand report, it was found that the prescribed claim was not bogus. Thus, despite, the assessee giving up the entire claim of brokerage charges, the Tribunal has granted limited relief to the extent evidence on record favoured the assessee's claim of such payment. No question of law arises
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2019 (2) TMI 537
Unexplained expenditure by invoking Section 69C - Held that:- The entire issue is based on appreciation of facts on record. The Tribunal has assessed the evidence to come to the conclusion that, there was no evidence in possession of the Assessing Officer to make additions. Significantly, the Tribunal noticed several inconsistencies in the contents of the email and found that the loose documents/papers were not found from the possession of the assessee, nor they were signed by the assessee and finally the purchaser of the land, was not examined by the Assessing Officer. We do not find any question of law arising. Income from house property - rateable value of the properties as determined by the Municipal Authorities - Additions made by reversing the rateable value of the property owned by the assessee which was vacant - Held that:- In case of Smt. Smitaben N. Ambani v/s. Commissioner of Wealth Tax [2009 (1) TMI 430 - BOMBAY HIGH COURT] this Court was considering a similar question in context of valuing the self occupied property, for the purpose of wealth tax of the assessee. The provisions for assessing the value of the property were similar to those applicable in case of assessee's annual rateable value in terms of Section 23 of the Act. This question is, therefore, not entertained.
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2019 (2) TMI 536
TDS u/s 194J or 194H - payment made to a holding company of the assessee - sub-brokerage payments - Held that:- Any person responsible for paying to a resident any income by way of commission or brokerage would at the time of crediting of such income to the account of the payee or at the time of payment of such income whichever is earlier, deducted income tax at the rate of 5%. This specific provision requiring deduction of tax at source in relation to payment of commission of brokerage cannot be ignored while examining the payment of brokerage in the present case so as to take the case within the ambit of Section 194J of the Act as was admitted by the Assessing Officer, CIT (Appeals) and the Tribunal correctly assessing the statutory position and deleted the disallowance. No question of law arises.
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2019 (2) TMI 535
Claim of deduction u/s 35(2AB) - as evident from the approval letters that the approval for the R&D activities were given in the subsequent Assessment Years and not for the assessment year under consideration - Held that:- We notice that several High Courts have held that such research and development activity once approved by the competent authority, the approval would relate back to the date of application. See COMMISSIONER OF INCOME-TAX VERSUS. CLARIS LIFESCIENCES LTD. [2008 (8) TMI 579 - GUJARAT HIGH COURT] Disallowance u/s 14A - Held that:- Perusal of the impugned judgment of the Tribunal would show that in addition to relying on the conclusion in case of this very assessee in earlier assessment year, the Tribunal further noted that during the year under consideration, no fresh investments were made by the assessee except for a small investment of ₹ 2.52 lakhs. Such being the fact, we do not see any error in the view of the Tribunal. This question is therefore not entertained. Deduction disallowance u/s 36(1)(iii) - whether should be allowed u/s 57(iii) of the I.T. Act when the primary motive of the assessee company is not earning income from other source? - Held that:- As he assessee had objected to the Revenue's proposal for disallowance of expenditure on the ground that there were sufficient interest free funds available with the assessee from which the investment was made. The assessee had raised an alternative contention that in any case the dividend to be received from such investment, was taxable and, therefore, the expenditure under Section 57(iii) of the Act should be granted. It is this alternative contention which the CIT(A) and the Tribunal finally accepted. The undisputed fact is that the dividend income at the hands of the assessee would be taxed. We, therefore, do not find any error in the view of the Tribunal except assessee's contention. This question is therefore not entertained.
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2019 (2) TMI 534
Reopening of assessment - Bogus purchases and accommodation entries - Held that:- Through the reasons, now he wishes to add the entire amount holding a belief that such sum represents the petitioner's undisclosed income. We are not called upon to decide whether the AO's first approach of taxing only the profit element embedded in bogus purchases was correct or that his later approach of taxing the entire bogus purchases is correct. What we are however called upon to judge is whether in facts of the present case, he can change his basis of assessing the income. In clear terms, once AO noticed the factum of bogus purchases and accommodation entries and in scrutiny assessment, taxed the same in the manner he thought was appropriate, he cannot be allowed to shift the stand by issuing notice of reopening of assessment. This would be based on mere change of opinion. We may stress on the point that after the assessment was completed, there was no further material available with the Assessing Officer which would enable him to form a belief that the income chargeable to tax had escaped assessment. - Decided in favour of assessee.
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2019 (2) TMI 533
Disallowance of Writing of the bad debts - Held that:- Tribunal in the impugned judgment noticed that the assessee had business relations with M/s. Kiraj Consultants Pvt Ltd who was sub-broker of the assessee. In the course of such business transactions, the assessee transferred an amount of ₹ 2.61 crores to bad debts account. AO also verified that the amount was in fact written of despite which did not grant the assessee's claim. The Tribunal in the impugned judgment referred to and relied upon a decision in the case of TRF Ltd Vs. CIT [2010 (2) TMI 211 - SUPREME COURT]. The Tribunal was of the opinion that the AO could not have questioned the decision of the assessee to write of the debt as bad debt. We are broadly in agreement with the view of the Tribunal. The assessee found that the debts of M/s. Kiraj Consultants Pvt Ltd were irrecoverable and therefore, wrote of the same as bad debts. The Assessing Officer could not have disallowed the same merely on the ground of doubting with the assessee's wisdom to do so. - Decided against revenue.
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2019 (2) TMI 532
Application for registration u/s 12AA rejected - object of the Trust and genuineness of its activities - Held that:- Identical issue had arisen before this Court in CIT [Exemptions]) Vs. Tara Educational & Charitable Trust. [2017 (8) TMI 377 - BOMBAY HIGH COURT] The said appeal was dismissed as not giving rise to any substantial question of law.
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2019 (2) TMI 531
Disallowance of Project Development Expenses - AO considering it as Capital Expenditure against the Assessee's claim to be considered it as Revenue Expenditure u/s 37(1) - Held that:- AO deleting a sum of ₹ 39.79 lacs being part of the project development expenses, considering as a capital expenditure against the assessee's claim of the expenditure being revenue in nature. We notice that identical question had come up for consideration before the Tribunal in case of this very assessee for earlier assessment year 2008-09. Tribunal had held the issue in favour of the assessee. In the present impugned judgment also, the Tribunal has relied on the same order. In CIT-4 Vs. M/s. Reliance Supply Chain Solutions Ltd [2017 (7) TMI 611 - BOMBAY HIGH COURT] which was dismissed on 5.7.2017. No question of law, therefore, arises. Disallowance towards the assessee's expenditure for gratuity and leave encasement - Held that:- Expenditure was actually incurred and that there was no question of disallowance in terms of Section 43B of the Act.
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2019 (2) TMI 530
Reopening of assessment - proof of fresh material or evidence brought on record - assessee did not disclose the details with regard to the reinsurance ceded to Indian Reinsurance Companies and Foreign Reinsurance Companies - Held that:- The information regarding reinsurance which was ceded by the assessee to both Indian and Foreign Reinsurance Companies were disclosed explicitly in Schedule 1A, 1B and 1C to the profit and loss account and information on foreign currency outgo during the respective years was disclosed in the director's report forming part of the financial statements which were filed along with return of income of respective years. The tax audit reports for the respective years also contained verification statement of auditor certifying the compliance by the assessee with TDS provisions. Thus, when the scrutiny assessment was completed by the AO u/s 143(3) of the Act, the information provided by the assessee in the aforementioned schedule to the profit and loss account was perused, the legal position was noted and the assessment was completed and therefore, in our considered view the Tribunal rightly set aside the reopening of the assessment on the ground that there was no fresh material or evidence brought on record and what was done was solely based on change of opinion. - Decided against revenue.
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2019 (2) TMI 529
Reopening of assessment - Failure of the Assessee to disclose fully and truly all material facts - Held that:- The requirement flowing from the first proviso to Section 147 of the Act, that income chargeable to tax has escaped Assessment due to failure of the Assessee to disclose fully and truly all material facts, therefore, would have to be satisfied. In the present case, the reasons recorded by AO would clearly establish that, these requirement is not satisfied. In the reasons itself, AO has referred to perusal of the case recorded for the Assessment Year in question from which, he could see that certain error in the assessment has crept in. He refers to the similar additions made in the assessment for the Assessment Year 2012-13 which were confirmed by the CIT (Appeals). In the absence of the failure of the Assessee to disclose fully and truly all material facts, the impugned notice issued beyond a period of four years of the relevant Assessment Year, cannot be sustained. AO has not referred to any material outside of the Assessment records to form the belief that, income chargeable to tax has escaped assessment. In fact, he proceeds essentially on the basis of the case records. Under the circumstances, impugned notice is set aside.
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2019 (2) TMI 528
Assessment of trust - Eligibility for carry forward of deficit of the assessee to the subsequent years when the income of a charitable or religious trust / institution is required to be computed by applying general commercial principles - Held that:- Substantial questions of law covered by the judgment of COMMISSIONER OF INCOME TAX VS. RAJASTHAN AND GUJARATI CHARITABLE FOUNDATION POONA [2017 (12) TMI 1067 - SUPREME COURT]. - Decided in favour of the Assessee. Entitlement to carry forward of deficit to assessee trust - Held that:- Substantial questions of law covered by the judgment of COMMISSIONER OF INCOME-TAX (EXEMPTIONS) AND ANOTHER VERSUS OHIO UNIVERSITY CHRIST COLLEGE [2018 (11) TMI 1055 - KARNATAKA HIGH COURT] - Decided in favour of the Assessee.
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2019 (2) TMI 527
Disallowing the entire business expenses being Bank charges, Depreciation, Interest on vehicle, Electricity Charges and Telephone charges - Held that:- We are of the view that the AO has misconstrued the income. So far facts are concerned, the expenses claimed by the assessee are towards the heads stated hereinabove and are not relatable to the subleasing of the property as contended by the AO. Therefore, we are of the view, whether the expenses are relatable purely to the business of subleasing the property, or expenses incurred in the regular course of business, is a matter of fact, which is to be considered by the AO. We are of the view that the matter requires to be remanded to the AO for considering the material available with him and thereafter, come to a conclusion whether expenses are required to be allowed or not. Appeal is disposed off. The matter is remanded to the Assessing Officer for a fresh consideration. All contentions are kept open.
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2019 (2) TMI 526
Exemption u/s 11 - AO has denied the said carry forward of the excess of expenditure of income - Held that:- The assessee is a Charitable Trust which is registered with the Director of Income Tax (Exemption), Mumbai u/s. 12A and u/s. 80G of the Act. The assessee had claimed an amount of ₹ 2,33,03,449/- as excess expenditure over income being deficit to be carried forward for setting it off in subsequent years. The AO has denied the said carry forward of the excess of expenditure of income which has been later allowed by the CIT(A) based upon the decision of Hon’ble Bombay High Court in the case of CIT v. Institute of Banking Personnel Selection(IBPS)[2003 (7) TMI 52 - BOMBAY HIGH COURT]. We have observed that the Hon’ble Courts/Tribunal had taken consistent stand that in case of Charitable Trust excess expenditure over income is to be allowed to be carried forward for setting off against income of subsequent years . We do not find any reason to deviate from the consistent stand taken by the Hon’ble Courts/ Tribunal and Respectfully following aforesaid decision(s) as enumerated in preceding para’s of this order, we allow the carry forward of excess expenditure over income of ₹ 2,33,03,449/- to be carried forward to subsequent years . Thus, we confirm/affirm decision of learned CIT(A) and dismiss the appeal of the Revenue. We order accordingly.
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2019 (2) TMI 525
Levy of penalty u/s 271(1)(c) - disallowance of traveling expenses - Held that:- Assessee cannot be penalized for making a claim of expenditure, which is not acceptable to Ld. AO. In fact it is found that Ld.A.O. disallowed expenditure on ad hoc basis. This itself shows that there is no dispute regarding all particulars being filed by assessee which is disallowed in part by Ld. AO on premise that it has not been incurred exclusively and wholly for purpose of business of assessee. AO has not brought on record anything contrary to establish that claim of assessee do not pertain to travelling expenses. From paper book filed before us it is observed that assessee has placed vouchers and invoices raised by airlines in respect of payments made for travel by its officials. Further Assessing Officer has not found fault with explanation offered by assessee in response to notice u/s 274 of the Act. Merely because disallowance has been made which has been confirmed by Ld.CIT(A), he proceeded to levy penalty on ad hoc disallowance - Decided in favour of assessee.
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2019 (2) TMI 524
TDS 195 - Disallowance u/s 40(a)(ia) - tds liability in respect of activities abroad - non-deduction of TDS on payments made to foreign agents - Held that:- Issue raised by revenue in its appeal stands squarely covered by decision of this Tribunal in assessee’s own case for assessment year 2010-11 This Court in CIT vs. Eon Technology (P) Ltd.[2011 (11) TMI 20 - DELHI HIGH COURT] where the Court in similar circumstances held that providing such services, in respect of activities abroad, do not constitute fee for technical services and therefore, disallowable u/s 40(a). No substantial question of law arises.
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2019 (2) TMI 523
Penalty u/s 271D - assessee taken loan in cash exceeding permissible limits - Held that:- Penalty has been imposed for violation of provisions of section 269SS of the Act, which ex facie, appears to be correct. In the absence of any explanation forthcoming from the side of the assessee, we are convinced that the authorities below have taken a reasonable view in the given facts in imposing and confirming the penalty u/s.271D of the Act. We, therefore, uphold the same. - Decided against assessee.
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2019 (2) TMI 522
Exemption u/s. 54EC - investments made in REC Bonds within the specified mandatory time period - Held that:- In view of undisputed facts and the decision of Coordinate Bench in assessee’s own case [2017 (12) TMI 1327 - ITAT PUNE] we hold that the assessee is eligible for claiming exemption u/s. 54EC on the entire amount of investments made in REC Bonds within the specified mandatory time period.
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2019 (2) TMI 521
Penalty u/s. 271(1)(c) - proof of concealment or furnishing of inaccurate particulars of income - Held that:- All the particulars of assessee’s claim were duly available before the A.O. There is no case of concealment or furnishing of inaccurate particulars of income. Just because the A.O. was not in agreement with the claim of the assessee, which cannot be said to be ex-facie bogus, penalty u/s. 271(1)(c) is not leviable. This proposition is duly supported by the Hon'ble Apex Court decision in the case of Reliance Petroproducts Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT]. Accordingly, we set aside the orders of the authorities below and decide the issue in favour of the assessee.
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2019 (2) TMI 520
Disallowance of exemption claimed u/s 54F - CIT(A) has adopted the market value as per the DVO's report - Held that:- CIT(A) has adopted the market value as per the DVO's report. The revenue has not brought any other material except the valuation made by the stamp valuation authority. It is also not stated as to how the DVO's report is not correct. No infirmity in the order of the Ld. CIT(A) to adopt the market value as per the DVO's report. Further, Ld. CIT(A) has allowed deduction u/s 54F of the Act. As the assessee in accordance with the provisions of section 54F of the Act amount was deposited in the capital gain account and so utilized there from within the time frame as prescribed under the law, the grounds raised by the revenue are devoid of merit. Hence, we reject the same. - Decided against revenue
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2019 (2) TMI 519
Disallowance of deduction u/s 80IC - proof of manufacturing activity - spot enquiry revealed that no manufacturing activities were seen at the premises of the company - CIT-A allowed the claim - Held that:- The original products used by the assessee are wooden planks, evafoam, thermocol, adhesive tape/ pheumatic, stapler pins, and nails. The final product obtained in the process by the assessee is wooden crates which are a distinct and separate article different from all the products that go into it manufacture and recognized as a distinct product by Central Excise and VAT classification which has assigned the product a specific HS Code and serial no. respectively in the Central Excise and VAT Schedules. As per Uttrakhand VAT Act, 2005, wooden crates were recognized as a distinct product and item. Similarly the assessee has been registered as manufacture with District Industries Centre and registered as a factory under the Factories Act. Further the assessee has been granted exemption from Excise Duty and has availed exemption from duty which is only granted to manufacturing units. Thus as per the term defined by Section 2 (29BA) of the Act would be any activity that results in the creation of an article for object that is new and distinct from the raw material that go into its manufacture and having a different name, character , use and / or integral structure. It cannot be denied that the wooden crates are completely distinct from the planks, nails, fevicol foam etc. that are used to make them and have a use of their own. The change brought in wooden planks by hand by the labours using small cutters would amount as manufacture a product, which is obtained as wooden crates by the assessee. We find that the original commodity used by the assessee as raw material are a wooden sleepers / planks which are go into sizes to according to the orders placed with the assessee then the cut two sizes wooden planks are subject to smoothening use of planting machine then the planks are treated to fix the evafoam and thermocol to make the material carried in the crates jerk resistant then the planks are stapler and nail are used industrial nails and staplers, therefore, the result of the process is wooden crates which is distinct from the wooden slippers planks being original commodity. Therefore, the end project is result of manufacturing activity which amounts change in the original articles. Hence, it cannot be treated as mere assembling of wooden planks even the Hon’ble Supreme Court in the case of Oracle Software India Ltd. [2010 (1) TMI 9 - SUPREME COURT OF INDIA] held that if an operation / process renders a commodity or article fit for use for which it is otherwise not fit, operation / process falls within the meaning of word manufacture. - Decided against revenue
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2019 (2) TMI 518
Deduction u/s 80P - Held that:- Hon ble High Court of Kerala has categorically held in assessee s own case for the assessment year 2007-08 [2011 (2) TMI 1422 - ITAT COCHIN] that the assessee is not a primary agricultural credit society and it is a co-operative bank. The Hon ble High Court further held that the assessee is not entitled to deduction u/s 80P(2) of the Act, in view of introduction of section 80P(4) with effect from 01.04.2007. Staff Retirement Benefit Fund - as submitted that when the employees withdraw the amount from such fund, to the extent of withdrawals, it should be allowed as deduction u/s. 37(1) - Held that:- We notice that for the assessment year 2009-10 the assessee has accepted the CIT(A) s order and no further appeal was preferred to the Tribunal. The assessee s contention that to the extent of withdrawals made by the employees from unrecognized provident fund should be allowed as deduction u/s. 37 was never raised before any of the authorities below nor the assessee was able to prove fresh facts are not required to be examined. Hence, this plea of the assessee is rejected. Therefore, the order of the CIT(A) on this issue is confirmed. TDS u/s 195 - Disallowance of expenditure for non-deduction of TDS of commission to PCARDB - Held that:- The assessee having failed to deduct tax at source, the commission payment was rightly disallowed as per the provisions of section 40(a)(ia). In the interest of justice and equity, we are of the view that the assessee should be given an opportunity to prove that the deductees / payees have duly paid the tax on receipt of commission. The matter is restored to the AO. The assessee shall produce such proof as mandated by second proviso to section 40(a)(ia) read with 1st proviso to section 201 to prove that payees have duly paid taxes on the commission received by it from assessee. If the assessee is able to prove that the deductees / payees paid the tax on the commission that it had received from the assessee, such commission expenses shall not be disallowed.
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2019 (2) TMI 517
Penalty u/s. 271(1)(c) - depreciation at higher rates on valuation of the office flats - assessee on realising its mistake has suo motto revised aforesaid depreciation during assessment proceedings and claimed depreciation on lower value on which the asset was transferred subsequently on 05.08.2006 - Held that:- The assessee had justifiable cause for claiming higher depreciation in the return of income filed with Revenue for impugned assessment year AY 2006-07 as the said office premises was transferred in the books of account of the assessee for value recorded at ₹ 167.58 lakhs during impugned assessment which was based on valuation certificate and it could not be said that the said valuation is without any cause or justification, thus it led the assessee to claim higher depreciation but however for whatever reasons the said assets was transferred vide registered agreement entered into on 05.08.2006 at lower value of ₹ 92.29 lacs which led the assessee to revise its claim of depreciation downward for impugned assessment year by withdrawing claim of depreciation to the tune of ₹ 3,63,548/-. Thus under these circumstances in our considered view , the assessee has come out with bonafide explanation and under these circumstances no penalty is exigible on the assessee u/s 271(1)(c) of the 1961 Act as the assessee case is covered by Explanation 1 to Section 271(1)(c) of the 1961 Act. Depreciation on assets purchased in the name of M/s S.D. Construction proprietary concern of Shri. Shekhar Dadarkar who is partner in the assessee firm - Held that:- The vendors had inadvertently made invoices in the name of this concern as it is well known concern in market. It is submitted that the assessee accounted for these purchases in its books of accounts and these assets were transferred to the assessee books of accounts through journal entries. It is also being averred that no depreciation was claimed by S.D. Construction on these assets. Claim of the assessee for depreciation on these assets did not found favour by the all the authorities concurrently while adjudicating quantum additions till the stage of tribunal and the appeal of the assessee was dismissed by tribunal on this ground for AY 2006-07 [2012 (8) TMI 1149 - ITAT MUMBAI]. So far as leviability of penalty u/s 271(1)(c) is concerned, we are of considered view that the assessee has indeed brought this asset in its books of accounts by transferring these assets to its books of accounts through journal entries. It is also claimed that the asset was used for business purposes. It could not be refuted by learned DR that the said assets were not used for business purposes of the assessee. The invoices were only drawn by vendor in the name of other concern M/s S.D.Construction and the said concern did not avail depreciation on these assets as is claimed by the assessee. Under these circumstances, we are of the considered view that no penalty u/s 271(1)(c) is exigible on the assessee - Decided in favour of assessee
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2019 (2) TMI 516
Penalty levied u/s 271(1)(c) on transfer pricing adjustment - Held that:- In quantum proceedings for both years under consideration, this Tribunal set aside addition made on account of transfer pricing adjustment back to Ld.TPO for readjudication, in light of submissions/details filed by assessee.We are therefore inclined to set aside penalty proceedings back to Ld.AO by keeping all contentions open for assessee. The Ld.CIT DR do not object penalty proceedings being set aside back to Ld. AO for reconsideration.
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2019 (2) TMI 515
Exemption u/s 54 denied - assessee has purchased and sold three flats by three separate agreements for flat No.701, 702 & 703 at Glen Eagle and thereafter converted them into one - Held that:- CIT(A) has given a detailed finding and passed a very reasoned order after following the Hon’ble Bombay High Court on this issue. No reason to deviate from the conclusion drawn by CIT(A) and accordingly the order of Ld. CIT(A) is upheld as assessee was using all three flats as a compact unit and has only one electricity bill for all three flats. The issue is covered by the decision of the Hon’ble Bombay High Court in the case of CIT vs. DevdasNaik [2014 (7) TMI 173 - BOMBAY HIGH COURT] as relied by the Ld. CIT(A). We, therefore, uphold the order of CIT(A) by dismissing the appeal of the Revenue.
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2019 (2) TMI 514
Deduction u/s 54F denied - capital gain treated as STCG - assessee had sold flat during impugned AY which was held for a prescribed period of less than 3 years and therefore, the resultant gains were STCG in nature - Held that:- Upon due consideration, we find that this is undisputed fact that the assessee acquired the right in specific Flat No. 702, 7th Floor, Aerial View CHS Ltd. by way of allotment letter dated 22/10/2008, as placed on record. The sale consideration was fixed at ₹ 3.40 Crores which was already paid by the assessee on 29/09/2008 i.e. much before issuance of allotment letter. The agreement for allocation of flat was executed vide agreement dated 15/12/2011 which was registered on 13/04/2012. This agreement is in respect of the same flat which was allotted to the assessee vide allotment letter dated 22/10/2008 and the agreement also contains reference of the allotment letter. The perusal of these facts reveal that the property proposed to be acquired by the assessee was specific & a unique property which was clearly identified in the allotment letter dated 22/10/2008 for which the agreement was executed on 15/12/2011 which was in furtherance of the stated allotment only. AO, in our opinion, got misled by the fact that right in the flat got vested in the assessee upon allotment and the same got exchanged with actual flat upon execution of the agreement and therefore, the holding period should have been counted from the date of the agreement. Allotment as well as execution of the agreement did not vest two different capital assets in the hands of the assessee which got exchanged with each other upon execution of the agreement rather the event of allotment as well as execution of agreement was part & parcel of the same transaction and only an improvement in ownership rights held by the assessee in the flat. This being the case, no infirmity could be found in the impugned order and therefore, this ground stands dismissed. Having said so, the resultant gains earned by the assessee would be LTCG only and therefore, we proceed to delve into the issue of assessee’s eligibility to claim deduction u/s 54F. As further fortified by the observation of first appellate authority that amendment to Section 54F was applicable only with effect from 01/04/2015 wherein the word "a" was substituted with the word "one" which shows that prior to the amendment, the exemption was not restricted to investment made in one residential house. Lastly, the aforesaid deduction, merely on the basis of stated certificate of BMC, in our opinion, could not be denied to the assessee particularly when the corroborative evidences stood in assessee’s favor. Resultantly, the overall factual matrix leads us to concur with the stand of first appellate authority - Decided in favour of assessee.
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2019 (2) TMI 513
Unexplained cash credit addition u/s 68 - share application money - explanation to nature and source of credit found in assessee's books - Held that:- In this case on hand, the assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants, thereafter the onus shifted to AO to disprove the documents furnished by assessee cannot be brushed aside by the AO to draw adverse view cannot be countenanced. In the absence of any investigation, much less gathering of evidence by the Assessing Officer, we hold that an addition cannot be sustained merely based on inferences drawn by circumstance. Applying the propositions laid down in these case laws to the facts of this case, we are inclined to uphold the order of the Ld. Commissioner of Income Tax (Appeals) Section 68 of the Act provides that if any sum found credited in the year in respect of which the assessee fails to explain the nature and source shall be assessed as its undisclosed income. In the facts of the present case, both the nature & source of the share application received was fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. The PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed on AO's record. Accordingly all the three conditions as required u/s. 68 of the Act i.e. the identity, creditworthiness and genuineness of the transaction was placed before the AO and the onus shifted to AO to disprove the materials placed before him. Without doing so, the addition made by the AO is based on conjectures and surmises cannot be justified. No addition was warranted under Section 68 - Decided in favour of assessee
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2019 (2) TMI 512
Deduction of remuneration paid to the partners u/s 40(b) - Disallowance of remuneration to partners after recomputing book profit on the basis of adjusted net profit and loss representing profit and gains of business/profession - Held that:- This is a settled principle of law that the interest income for the purpose of ascertaining ceiling on the basis of book profit, the profit shall be in the profit and loss account. The interest income, thus, cannot be notionally be excluded for the purpose of determining the allowable of deduction of remuneration paid to the partners u/s 40(b) of the Act. In the case in hand both the shed rent and the interest income assessed as business income for the purpose of computing admissible deduction u/s 40(b). The Learned AO took a different view by not allowing the said deduction. However, in a similar set of facts, the Co-ordinate Bench for A.Y. 2008-09, decided the matter in favour of the assessee
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2019 (2) TMI 511
Addition on account of cash deposited in bank - Held that:- AO instead of taking up the assessment of the preceding year has made the addition of the said amount by rejecting the source of the amount as shown as opening cash balance. Further, the AO has not rejected the books of accounts of the assessee and, therefore, once the assessee has established the availability of the cash in the books of account, then the proper course of action for rejecting the said claim and making the addition is to reopen the assessment of the earlier year. Hence, to the extent of availability of cash of ₹ 11,32,626/- being opening cash balance which was duly reflected in the books of account of the assessee for the year under consideration as well as in the earlier year, the same cannot be rejected and the consequential addition is not sustainable. Claim of gifts received from the mother and father both the donors are assessed to tax and filing their returns of income, then the assessee has discharged her onus of proving the identity, creditworthiness and genuineness of the transaction. In case the AO was not satisfied with the evidence produced by the assessee, the AO was very well empowered to summon the donors for their examination. Though there may be an issue of creditworthiness of the donors for giving the gifts for the earlier year as well as for the year under consideration, however, the issue of gifts given in the earlier year cannot be examined for the year under consideration as it was part of the cash introduced by the assessee in the earlier year. Further, there is no dispute that the reason and occasion of the deposit made in the bank account is to purchase a house which was purchased by the assessee. Therefore, in the facts and circumstances of the case, the addition made by the AO is deleted. - Decided in favour of assessee. Unexplained expenditure for registration of plot of land - Held that:- This issue is consequential as the assessee has explained the source of this expenditure by opening cash balance as well as the gift of ₹ 2,50,000/-. Since we have decided the issue of availability of opening cash balance as well as genuineness of the gift in favour of the assessee, the said addition made by the AO is liable to be deleted. - Decided in favour of assessee.
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Customs
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2019 (2) TMI 510
Extended period of limitation - suppression of facts - invocation of section 28(2) proviso of the Customs Act, 1962 - import of saffron - Held that:- Although the Tribunal should have, in the impugned order, adverted to the allegations in the show cause notice listing out the suppression of facts / fraud as also the conclusion in the Commissioner’s order that the Revenue could have invoked the extended period of limitation, still, the omission on the part of the Tribunal to deal with this aspect is not fatal to the case of the assessee - The Tribunal may have agreed with the Commissioner had it referred to all these materials, but today this is a matter of pure conjecture and surmises. We do not wish to indulge into any guesswork for the substantive conclusion of the Tribunal in the impugned order is non-appealable. Once the Revenue was unable to substantiate its pleas and arguments before this Court on merits, then, the Tribunal was not required to render any finding on the point of limitation strictly. Appeal dismissed - decided against Revenue.
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2019 (2) TMI 509
Valuation of imported goods - enhancement of value - Detention of goods on the ground that the appellant have not been able to produce the import documents or purchase documents of the imported auto parts which were detained from the domestic market area - Provisional release of the seized goods - Section 110A of the Customs Act, 1962 - Held that:- Since the declared value of the import consignment has already been enhanced by the Department and as it is a settled legal principle that once enhanced, the same value cannot be re-visited again without any concrete evidences. As alleged in the show cause notice dated 01/03/2018 that price list mention the higher prices than declared by the importer we will like to mention that the price list of any product cannot be taken as the basis for determining the transaction value as has already been held by Hon’ble Supreme Court in the case of Eicher Tractors Ltd. vs. CC, Mumbai [2000 (11) TMI 139 - SUPREME COURT OF INDIA]. Provisional release of the goods should be allowed to the appellant on submission of a bond for an amount of ₹ 92,90,825/- backed by bank guarantee of ₹ 2 lakhs as per provisions of Section 110 (2) of Customs Act, 1962 - appeal allowed.
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2019 (2) TMI 508
Revocation of CHA License - forfeiture of security deposit - compliance of Regulation 11(d) and 11(e) of CBLR, 2013 - mis-match between the business place of transferors and account used for the transfer of money - Held that:- It is evident from the records of the case that the appellants have obtained the duty free licence from M/s Him Logistics Pvt. Ltd. or through a broker Mr. Lalit Jain and utilised the same towards the payment of Customs duty for the consignment imported by their client. It was held in the inquiry report the appellant was responsible for utilisation of forged duty scrips for the payment of customs duty, and therefore, not observed due diligence in conducting their business as per the provisions of CBLR. In this regard, we find that free duty licences/ duty credit scrips have been registered at the various customs port other than ICD and available on EDI system. As per the procedure prescribed under EDI system, it is not possible for the appellant to temper with the data/ information contained in the EDI system which is fool proof and secured system is prescribed not by one or two but by five officers of the customs including the Joint and Additional Commissioner. The appellant as CHA is only required to verify the KYC norms as per the documents made available to him. And there is no requirement of physically verifying business or residential premises of the importers which also included the fraudulent obtaining of Licence/ duty credit scrips. Right of cross-examination - principles of natural justice - Held that:- The inquiry officer has denied the right to cross examination to the appellant which is not negotiable under the Regulation and also various decisions of the higher judicial fora including the Supreme Court, the High Courts and the Tribunals. Similarly, giving three personal hearing vide the same letter while adjudicating the dispute is wrong and against the principle of natural justice. The vital rights that of cross examination and three personal hearing through single letter is not legal. The proceeding is thus vitiated, which out to have been considered by the Ld. Commissioner, while passing the impugned order. The impugned order suffers inherent legal infirmities and liable to be set aside - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 507
Confirmation of cost recovery charge - legal provisions not clearly invoked - Invocation of provisions of Regulation 5(2) and 6(1)(o) of HCCAR - Held that:- The ld. Adjudicating authority has confirmed the demand under the provision raised by the show cause notice dated 29.3.2016. The show cause notice at para 16(ii) has invoked the provisions of Regulation 5(2) and 6(1)(o) of HCCAR. However, the Commissioner has confirmed the demand without invoking any of those regulation. A perusal of the regulation reveals that the same is intended for levying of cost recovery charge and payment thereof. Similarly, the condition at 5(2) only states that custodian or CCSP will have to undertake to bear expenses of the custom officers posted in the custom area on cost recovery charge basis as per the manner prescribed unless and until the same is exempted by the Ministry of Finance. Therefore, Regulation 6(1)(o) of the Regulation (6) is not meant for recovery of default payment but only it says that the CCSP will have to bear the cost of officer deployed at their premises. Similarly, Regulation (12) of the CCAR does not prescribe for the recovery of defaulted cost recovery charge. But only states that the same is procedure for suspension or revocation of approval and imposition of penalty. The ld. Adjudicating authority has not appreciated the legal provision as contained in HCR, which do not indicate the machinery for realisation of cost recovery charge on account of being defaulted. In fact, the show cause notice has invoked the provisions of Regulation 12 of HCCAR which does not provide for the realisation of the cost recovery charge but only revocation of the licence granted to CCSP on account of various breaches as contained therein. This regulation has no provisions for recovery of unpaid cost recovery charge on account of non-fulfilment of criteria as laid down in the CBEC circular - the order passed by the ld. Adjudicating authority is beyond the scope of the provisions of HCCAR, 2009. The provisions of Regulation 5(2) of HCCAR is clear and unambiguous that the cost recovery charge is not required to be paid when the same is specifically exempted by the order of Government of India and Ministry of Finance. It is on record that in the case of appellant Ministry has exempted cost recovery charge vide letter dated 23.5.2006 and 18.2.2009. We thus hold that the appellant is duly entitled for the benefit of cost recovery charge for the subsequent years in terms of the new regulation also under provisions of the HCCAR, 2009 - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 506
Imposition of Anti-dumping duty - enhancement of assessable value - change in classification of imported goods - trapezoidal roof profiles - primary claim on behalf of the appellants is that the imported goods are not flat rolled products of iron or steel as the leeway of corrugation , afforded by note 1(k) in chapter 72 of First Schedule to Customs Tariff Act, 1975, cannot be said to include trapezoidal profile - differential rate of duty - applicability of N/N. 2/2017-Cus (ADD) dated 11th January 2017. Held that:- Undoubtedly, of the two headings, the one in the impugned order is more specific. A priori, that description would not stretch beyond fitment to sheets of uniform flatness; however, the chapter note does allow corrugated sheets to be considered as flat rolled probably because of the similarity of process of conversion. The literature adduced by Learned Counsel does draw a distinction between corrugated and trapezoidal with functional dissimilarities in evidence. They are, therefore, not amenable to interchangeable denomination in common parlance. The deliberate inclusion of corrugated in flat rolled could well have encompassed the distinct and separate trapezoidal had legislative intent determined so as both were in use by the trade when the tariff was enacted. There is no evidence to support the claim that the goods are utilized exclusively in erection of structures; that may well be true but absence of material to conclude so mandates the ascertainment of fitment within the alternative classification that is sought. The goods do conform to that description and, consistent with the Explanatory Notes referred supra, we concur with that alternative classification. Amidst the confusion that is manifest in the show cause notice, and the impugned order, the non-applicability of the classification claimed in the bills of entry cannot be held to be deliberate - there is no justification for confiscation and the imposition of the penalties proposed in the show cause notice. Demand set aside - confiscation and penalties set aside - the classification of the goods confirmed under heading no. 7216 9100 of First Schedule to Customs Tariff Act, 1975 - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 505
Classification of imported goods - Video Conferencing System - classified under CTH 85176990 or under CTH 85176290 - whether the benefit of exemption under Notification No 24/2005-Cus (Sl No 13) admissible in respect of the goods imported by the appellant describing them as “Video Conferencing system”? Held that:- Codec, which is nothing but a coder/ decoder, is part of every system transmitting audio or video messages over a digital media and internet protocol. Codec cannot be distinguishing feature for the goods under import from the VOIP Equipments - there is no hesitation in holding that the goods imported are nothing but “VOIP Equipment”. Exemption Notification No 25/2004-Cus at Sl No 13 - benefit of exemption has been denied by the authorities below in respect of the goods sought to be cleared against specific bill of entry - Held that:- The authorities below have rightly denied the benefit of exemption. We are not bound by the orders/ view taken by the authorities below in respect of the subsequent Bill of entries. It is for the revenue authorities to investigate that when Commissioner (Appeal) had disallowed the benefit of this exemption, and matter was sub-judice before us, why the assessing authorities have allowed the benefit of the exemption in case similarly placed imported goods. Chief Commissioner of the concerned ports should cause an investigation in the matter if they deem fit. However the incorrect/ erroneous order of an authority cannot be binding precedent and reason for allowing the benefit to the appellant. Heading 851762 & 851769 are double dashed heading. The heading 851762, covers specific category of equipments and devices which is for reception, conversion and transmission or regeneration of voice, images or other data. The equipments under import are used for reception, conversion and transmission or regeneration of voice and video (images) and hence get classified under double dash heading 851762, and at triple dash under heading 85176290 - the classification as made by the department is justifiable. Appeal dismissed - decided against appellant.
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2019 (2) TMI 504
Valuation of imported goods - Polyester Chips Semi Dull Raw White A Grade - rejection of declared value - contemporaneous unit price of polyester chips was higher than declared unit price - Difference of opinion. Held that:- As there is difference of opinion, the matter is referred to Hon ble President, to refer the matter to Third Member to determine; Whether the appeal should be dismissed as held by Member (Judicial) or it should be allowed as held by Member (Technical).
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2019 (2) TMI 503
Quantum of penalty imposed u/s 114A of the Customs Act, 1962 - Revenue submitted that only the duty involved was taken into account, but not considered the amount of interest liable to be paid on the said duty - Held that:- The question of law whether component of interest be considered while arriving at the quantum of penalty prescribed under Section 114A of the Customs Act, 1962 has been considered by the Tribunal in Bharti Airtel Ltd.'s case [2012 (7) TMI 233 - CESTAT, BANGALORE], where it was held that Commissioner was not in a position to determine the interest amount at the time of passing the impugned order. Therefore, his imposing penalties equal to the duty determined is in order. Appeal dismissed - decided against Revenue.
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2019 (2) TMI 502
Concessional rate of duty - import of hospital equipment Gas Manifold System - benefit of N/N/. 21/2002-CUS dated 01.03.2002 - It is his submission that the accessories of this system which they have imported through air cargo complex, Hyderabad also fall under the same category and are eligible for exemption notification - Held that:- A plain reading of the exemption notification does not require the chapter heading of the accessories to be the same as that of main equipment or even the accessories to fall under Chapter 90. They could fall under any chapter of the Customs Tariff and still be eligible for exemption under the notification. Coming to the second contention that the accessories were imported separately and not with the main equipment, this is a factual position and is not in dispute. There is nothing in this notification which requires the accessories or spare parts to be imported along with the main equipment only to claim the benefit of this notification. Such an interpretation of the first appellate authority is not supported by the wording of the exemption notification. Since, these two are the only points of dispute, it can be held that the assessee is eligible for exemption notification in respect of the accessories imported by them. Appeal allowed - decided in favor of appellant.
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2019 (2) TMI 501
Mis-declaration of imported goods - Bubble Air Mattress - benefit of N/N. 21/2002-Cus dated 01.03.2002 Sr. No. 370 - Held that:- The Hon'ble Supreme Court recently in the case of Dilip Kumar Co. [2018 (7) TMI 1826 - SUPREME COURT OF INDIA] has reiterated the principles in observing that in claiming the benefit of exemption notification, the claimant should establish that their case falls within four corners of the exemption notification - In the present case, the appellant has failed to prove their case that the imported goods fall under the description of goods mentioned in the said notification. The benefit of exemption N/N. 21/2002-Cus dated 1.3.2002 to Bubble Air Mattress, which was wrongly declared as Bubble Air Mattress for special jelly cushion to prevent bed sores . Since the appellant has mis-declared the product in the Bill of Entry therefore, confiscation and imposition of penalty by the lower authorities are justified. Appeal dismissed - decided against appellant.
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2019 (2) TMI 500
Classification of imported goods - Coking Coal or not - benefit of N/N. 21/2002-CUS dated 01.03.2002 as amended Sl.No.68 - Held that:- An identical issue in respect of various bills of entry were disposed of by this Bench in JSW STEEL LTD VERSUS CC, VIJAYAWADA [2017 (11) TMI 1584 - CESTAT HYDERABAD] wherein it is held that coal imported by appellants under 19 Bills of Entry is eligible for the benefit of exemption notification under 21/2002-Cus - there is no reason to deviate from such a view already taken by the Bench. It is nobody s case that coal imported by appellant is not non-coking coal as during the period in question, the parameters for ascertaining what is coking coal were insufficient and the coal which is imported in this appeal was answering to the specification as indicated at N/N. 21/2002-CUS. Appeal allowed - decided in favor of appellant.
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2019 (2) TMI 499
Interest on delayed refund - relevant time for calculation of interest - Refund of excess duty paid under protest - rejection of refund was on the ground of time limitation - Section 11BB of Central Excise Act, 1944 - Held that:- The appellant had filed refund claim on 06.07.1989 and reminder on 06.04.1994 - Appellant are eligible to interest on expiry of three months from the date when the Finance Bill, 1994 received the assent of the President of India i.e. on 26.05.1995. Consequently, interest is available to the appellant from 27.08.1995 till the date, the amount was paid to them - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 498
Rejection of refund claims - filing of bills of entry which are self assessed - Held that:- The 1st Appellate Authority has directed the adjudicating authority to reassess the goods which in my view is a correct appreciation of the facts and law, in the case in hand - there is no reason to interfere in such a well reasoned order passed by the 1st appellate authority - appeal dismissed - decided against Revenue.
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2019 (2) TMI 497
Refund of SAD - N/N. 102/2007-Cus dated 14.09.2007 - applicable rate of VAT is Nil - sale of imported goods on payment of nil rate of VAT - Held that:- On identical issue the principal Bench of Tribunal in the case of Gazal Overseas [2015 (12) TMI 427 - CESTAT NEW DELHI] relying on the CBEC circular No. 06/2008 dated 28.04.2008 (which binding on the Departmental officers) held that the SAD refund is available even when the appropriate rate of VAT payable is nil - refund allowed - appeal dismissed - decided against Revenue.
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2019 (2) TMI 496
Maintainability of appeal - Jurisdiction - Payment of Drawback - Classification of export goods - Section 129A in the Customs Act, 1962 - Held that:- Section contemplates that any order relates to payment of drawback is provided in Chapter X and Rules made therein, the Tribunal has no jurisdiction to decide the appeals. In the present case, there is no dispute that though the issue is of classification but it has consequential effect of payment of drawback. Therefore, the issues relates to drawback, would not have the jurisdiction of this Tribunal. The issues relates to drawback, would not have the jurisdiction of this Tribunal. The appellants have to file revision application before the proper authority under Section 129DD of the Customs Act, 1962 - the appeals are not maintainable and the same are dismissed.
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Service Tax
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2019 (2) TMI 495
Demand of service tax from the erstwhile partner of the firm - allegation that appellants/partner have collected amount from a purchaser of the flat - allegation is that the firm received ₹ 1.50 lakhs as service tax on 25.7.2011 in regard to the amount of ₹ 6.60 lakhs which was the balance to be paid by Shri Gangadharan who purchased the flat - Held that:- Merely because the appellant D. Prabhu had written a letter dated 13.7.2010 requesting the purchase to pay up the balance amount, the demand has been raised against the appellants herein - there is no logic of the department to issue such a notice against the appellants herein merely basing upon the letter written by the appellant when they were partners of the firm. The records show that the balance amount was paid by the purchaser of the flat by way of demand draft in favour of Shri Thiyagarajan, who continued to be the partner of the firm. The same evidences the payment made by the purchaser to the firm / Thiyagarajan. The demand of service tax made against the appellant is without any factual or legal basis - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 494
Valuation - includibility of certain amount claimed to be reimbursable expenses - non-discharge of service tax under GTA Service - Held that:- The issue regarding taxability of reimbursed expenditure has been set at rest by the Hon’ble Supreme Court, in the case of Union of India Vs. Intercontinental Consultants and Technocrafts Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT OF INDIA], where it was held that only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax - demand set aside. GTA Services - Held that:- We are unable to perceive any discussion on the contentions of the assessee as to providing service to SEZ or that appellant did or did not furnish any documents; nor that the appellant’s contentions are correct or incorrect, we are therefore constrained to remand this issue back to the file of the adjudicating authority to pass a denovo adjudication order, after offering reasonable opportunity to the appellants and after considering all such supporting documents placed/to be placed by the assessee - matter on remand. Appeal allowed in part and part matter on remand.
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2019 (2) TMI 493
Manpower supply services - deduction of cost incurred towards labour charges payable - Held that:- The factory supplied man power to the farmers based on their request. So also, in para-11 of the notice, it is mentioned that supply of Cane Harvest labourers by the factory is done only in cases where the farmers make a specific request for the same - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 492
Rebate clam - Business Auxiliary service - export of the service to the parent company at Singapore or not - Held that:- As per the requirement of Export of Service Rules, 2005 read with the explanatory Circular No. 111/05/2004 ST, as the services provided by the appellant are in the nature of Business Auxiliary Service, the export of services is complete as the principal is located outside India with whom there is contract of service and such principal have paid for such services to the appellant in convertible foreign exchange, which is not disputed. So far as the clause used outside India is concerned, the said clause is deleted with effect from 27.2.2018 - the appellant is entitled to rebate as claimed by them and the same shall be allowed subject to arithmetical correction if any Appeal allowed - decided in favor of appellant.
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2019 (2) TMI 491
Liability of service tax - supply of tangible goods service - activity of leasing of machinery - Held that:- The appellant has delivered the effective possession and control of the machinery on the said machinery, which have been delivered to the lessee and admittedly, the said machinery was installed in the promises of the lessee at Sonepat, Haryana. The workers of lessee are entitled to operate such machinery and the lessee is required to take care of the said machinery. Further, pursuant to circular from the CBSE, wherein clearly explaining the scope of the service, it was clarified that transactions, where the supply of tangible goods for use and leviable to VAT/sales tax is a deemed sales of goods and not covered under the scope of the proposed service. The appellant have failed to lead evidence as regards payment of VAT on the said transaction, the said finding is vague as the invoice itself shows charging of VAT and appellant had contended in the very 1st reply to the show cause that they have paid VAT - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 490
Liability of service tax - activities of providing table space or services to financial companies /bank/institutions so as to facilitate loans to the prospective buyers of cars as the appellant is a dealer/retailer of cars and other automobiles - Held that:- The issue herein was finally settled by the Larger Bench of this Tribunal in the case of Pagariya Auto Centre Vs. CCE, Aurangabad [2014 (2) TMI 98 - CESTAT NEW DELHI (LB)], wherein it has been held that no uniform principle emerges as would guide determination of whether a particular transaction involving an interface between an automobile dealer and bank or financial institution would per se amount to BAS. The identification of the transaction and its appropriate classification as the taxable BAS or otherwise must clearly depend upon a careful analysis of the relevant transactional documents. Only such scrutiny and analysis would ensure rational classification of the transaction. Extended period of limitation - Held that:- The definition of “BAS” was substituted by Finance Act, 2004 w.e.f. 10.09.2004. The appellant has admittedly paid the service tax on the concerned activities w.e.f. 10.09.2004. Thus, there is no deliberate default on the part of the appellant and in this view of the matter, the extended period of limitation is not applicable. Appeal allowed - decided in favor of appellant.
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2019 (2) TMI 489
Classification of services - clearing and forwarding agent service or not? - validity of SCN - Held that:- On going through the impugned order, it is found that the same is cryptic and devoid of reasons inasmuch as the issue raised before the learned Commissioner (Appeals) had not at all been considered while passing the order - matter remanded to the learned Commissioner (Appeals) to consider all aspects of the case - appeal allowed by way of remand.
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2019 (2) TMI 488
Business Auxiliary Service - Reverse charge mechanism - commissions paid to the foreign agent, Service Tax liability - failure to discharge service tax - Held that:- Tribunal applying the principles of law laid down in Indian National Ship Owners Association's case [2009 (12) TMI 850 - SUPREME COURT OF INDIA] dropped the demand for the earlier period and confirmed for the period 18.4.2006 to 31.3.2007. Incidentally the respondent was not available during the course of hearing before this Tribunal - Since the issue of limitation has not been discussed by the adjudicating Commissioner, even though claimed to have been raised by the respondent before him. Since the issue of limitation has not been discussed by the adjudicating Commissioner, even though claimed to have been raised by the respondent before him - Appeal is allowed by way of remand.
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2019 (2) TMI 487
Valuation - Includibility - amount collected by the appellant towards the cost of text books and study materials or otherwise - Held that:- The appellant is conducting the service of “Commercial Training and Coaching” centre and the separate invoices are prepared for the services rendered for coaching and separate bill is prepared for the EAMCET textbooks. This issue is not disputed by the Revenue. On identical issue, the Bench of Tribunal in the case of Chate Coaching Classes Pvt. Ltd., [2012 (6) TMI 721 - CESTAT, MUMBAI] Pinnacle Vs. CCE [2011 (8) TMI 570 - CESTAT, NEW DELHI] and Cerebral Learning Solutions Pvt. Ltd., [2013 (4) TMI 527 - CESTAT NEW DELHI] has held that the cost of study materials and textbooks cannot be included in the value of the services rendered for commercial coaching and training centre. Appeal dismissed - decided against Revenue.
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2019 (2) TMI 486
CENVAT Credit - service rendered but service tax not paid - contravention of Rule 4(7) of the CENVAT Credit Rules, 2004 - Held that:- Undisputedly, the appellant had received services from M/s DBC Port Logistics Ltd. during the relevant period 2014-15. Admittedly against the total amount raised in the invoices for providing input services to the appellant, there was short payment of ₹ 1,23,08,514/- till 31.3.2015. Also it is accepted by the appellant that even though the amount was not paid by the appellant for more than 90 days, but they availed CENVAT Credit of ₹ 15,21,332/- attributable to the unpaid amount. Appeal allowed - decided in favor of appellant.
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2019 (2) TMI 485
Construction of complex (residential) service - the appellant had constructed 39 flats to service recipients and had received an amount of ₹ 1,55,60,500/- from them and had not discharged the service tax liability on such receipts - CBEC Circular No. 108/2/2009-ST, dt. 29.01.2009 - Held that:- Service Tax is leviable only when the service is rendered by one person to another for a consideration. If the appellant had, in fact, constructed all the flats with their own money and thereafter sold these flats to their customers, then evidently no service has been rendered and no service tax is payable - These facts will be evident only in the records of the original adjudicating authority who investigated the case. It is a fit case to be remanded back to the original adjudicating authority to consider the submission of the appellant in their appeal before this Tribunal that they had constructed the flats with their own money and only thereafter sold them to their customers and therefore were exempted from payment of service tax in terms of CBEC circular dated 29.01.2009. The matter back to the original authority to consider this claim of the appellant and after following principles of natural justice - Appeal allowed by way of remand.
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2019 (2) TMI 484
Refund of service tax - refund rejected on the ground that refund claim was preferred beyond the period as provided under Section 11B of Central Excise Act, 1944 - principles of natural justice - Held that:- The issue involved in this case is regarding refund of the amount which has been claimed by the appellant before the lower authorities - Both the lower authorities have not considered the various case laws as mentioned by the appellants before the Tribunal and also the decision of the Apex Court in the case of Larsen & Tourbo Limited. [2015 (8) TMI 749 - SUPREME COURT]. The entire issue needs reconsideration by the Adjudicating Authority - appeal allowed by way of remand.
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2019 (2) TMI 483
Liability of service tax - sub-contract - erection, commissioning or installation service - appellant claims that the principal has already paid the said amount, and no further liability remains on his part - time limitation - Held that:- The demand raised on the appellant under this category of being taxable as a sub-contractor for the period April 2004 to September 2007 seems to be incorrect as identical issue cropped up before this Bench in the case of Power Mech Projects Ltd [2016 (9) TMI 844 - CESTAT HYDERABAD], where it was held that the demand of service tax for ECIS services is not sustainable as the main contractor has discharged the service tax liability - demand set aside. Manpower recruitment or supply agency service - SSI Exemption - Held that:- This demand is sustainable on the appellant. It is undisputed that appellant had during the period in question had supplied temporary manpower to B&R for executing various works on M/s B&R. This would fall under the category of manpower recruitment or supply agency services - The point which has been urged by the learned counsel that appellant would be eligible for small scale service providers exemption will not carry their case any further as in order to claim exemption, appellant’s turn over has to be within a specified limit as per the Notification. In the case in hand we find that appellant’s taxability on the services rendered as a sub-contractor is not in dispute but the liability has been discharged by the main contractor - the amount is liable to be included in the gross turnover - demand with interest upheld - penalty set aside. Appeal allowed in part.
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2019 (2) TMI 482
Business Auxiliary services - N/N. 25/2004-ST dated 10.09.2004 - Held that:- The appellant herein has rendered service of documentation and other related work to promote the services rendered by their client namely M/s GE Countrywide which would fall under the definition of Business Auxiliary services under Section 65(19) of the Finance Act, 1994. The services rendered by them fall under the head of Business Auxiliary services during the relevant period and were liable to be service tax. There is nothing in the Notification No. 25/2004-ST dated 10.09.2004 to show that this was to have retrospective effect. It is a well settled principle of law that in statute every provision should be taken to have only perspective effect unless there is a specific indication or otherwise - the appellant is clearly liable to service tax under the head of Business Auxiliary Service for the services rendered by them during the relevant period. Penalty - Held that:- The appellant could have held a bonafide belief though wrongly that they were not covered under the service tax and hence in exercise of the demand confirmed under the Section 80 the penalty is set aside. The appeal is disposed of by upholding the tax with interest and setting aside the penalties - appeal dismissed - decided against appellant.
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2019 (2) TMI 481
Classification of services - amount received as consideration - site formation and clearance, excavation and earth moving and demolition services or not - N/N. 17/2005-ST dated 07.06.2005 - Held that:- The said contract is for supply and installation of reinforced cement concrete and various other embankment work which includes supply of material. It is seen from agreement that Respondent has agreed to supply materials like pipes, concreting items like cement, coarse aggregates, fine aggregates, etc. The respondent/assessee and M/s RIL has considered this as a works contract and RIL has deducted an amount as TDS towards VAT on composition scheme as required under APVAT Act, 2005. Since the contract entered by the respondent with RIL indicates it as works contract, the question of charging service tax on the amount received as and fall under site formation services would not arise - appeal dismissed - decided against Revenue.
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2019 (2) TMI 480
GTA Service - freight charges - charges paid for each consignment less than threshold limit - failure to discharge service tax - Held that:- his Tribunal in the appellant's own case for the earlier period BHIMA SAHAKARI KARKHANA LTD VERSUS CCE, PUNE-III [2015 (10) TMI 627 - CESTAT MUMBAI] considered the issue of taxability of the inward freight charges paid when the amount paid for transportation in each consignment was less than ₹ 750/- and for a single carriage is less than ₹ 750/- - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 479
SEZ unit - Refund of service tax - N/N. 12/2013-ST - rejection on the ground that the claim was filed beyond the period of one year stipulated in the notification - Held that:- The bulk of the demand pertains to rejection of invoices meant for waste disposal services availed by the appellant on the ground that these were not approved by the Development Commissioner. No show cause notice was issued to the appellant on this ground. The show cause notice which was issued was only covering another part of the refund claim - the principles of natural justice have been violated and therefore the matter needs to be remitted to the original authority with direction to issue a show cause notice - appeal allowed by way of remand.
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2019 (2) TMI 478
Nature of activity - manufacture or service - re-treading of worn out tyres for various clients - extended period of limitation - Held that:- Hon’ble Apex Court’s decision in the case of Safety Retreading Co. (P) Ltd. (supra) has impliedly decided the issue, wherein, their Lordships have specifically held that the value to be considered in retreading of tyres does not include the value of the material, extended the benefit of notification No. 12/2003-ST, dt. 20.06.2003, if the assessee is able to evidence the material issuage - thus, the respondent is eligible for the benefit of notification No. 12/2003-ST and service tax needs to be collected only on the value of services rendered which can be arrived at by considering the Chartered Accountant’s certificate produced. Time Limitation - Held that:- There is no suppression or misstatement of facts with intent to evade payment of service tax by the appellants. Hence the demand made in show cause notice and confirmed in the order impugned is hit by time bar and is to be restricted to one year (from the date of service on the appellant’s back to one year) that is to be paid with interest. Appeal allowed in part.
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2019 (2) TMI 477
Classification of services - Site Formation and Clearance Services or mining services? - period July 2005 to March 2007 - Held that:- Similar issue came up before the Tribunal in the case of Ganta Ramanaiah Naidu vs. CCE Guntur (wherein one of us Shri M.V. Ravindran was a Member) [2010 (8) TMI 474 - CESTAT, BANGALORE] an identical issue was argued and after reproducing various correspondence entered into with Coalfields by the appellant therein, the Bench held that the classification of services even if resolved at this juncture would be of a academic nature and did not record any findings; holding that having discharged the liability and the interest thereof, penalty is not to be imposed - the entire tax liability with interest has already been discharged. Penalty u/s 76, 77 and 78 - Held that:- During the period in question, appellant herein may have entertained a bonafide that tax is not payable as per the correspondence with M/s Western Coalfields Limited, has made out the case for invoking section 80 of Finance Act, 1994 - penalties imposed under sections 76, 77 & 78 are set aside. Appeal disposed off.
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2019 (2) TMI 476
Taxability - Construction of Complex Services - period April, 2006 to December, 2010 - Held that:- On an identical issue, in the case of Kolla Developers & Builders [2018 (11) TMI 164 - CESTAT HYDERABAD] this Bench has held that construction of residential complex by the builders prior to 01.07.2010 is not taxable in terms of CBEC Circular No. 108/2/2009-ST dated 29.01.2009 and No. 151/2/2012-ST dated 10.02.2012 - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 475
Commercial or Industrial Construction services - period September, 2004 to December, 2005 - Held that:- There being no dispute as to the fact that all the contracts were composite contracts for supply of materials and services, we hold that law laid down by the Apex Court in the case of Larsen & Toubro Ltd [2015 (8) TMI 749 - SUPREME COURT] would apply directly in the case in hand and accordingly, the demands confirmed under CICS are liable to be set aside - demand set aside. Erection, Commissioning and Installation services - demands have been raised on the ground that appellant herein has entered into contracts for erection of towers - Held that:- Similar issue came up before the Bench in the case of Neo Structo Construction Ltd [2010 (3) TMI 252 - CESTAT, AHMEDABAD] - After analysing the definition of Erection, Commissioning and Installation services, pre and post 01.05.2006, and also considering the Board’s Circular No. 334/4/2006-TRU dated 28.02.2006, the Bench held that erection of fabricated and prefabricated structure will be covered under the heading of ECIS only after 01.05.2006. The said ratio is directly applicable in the case in hand as the period involved in this case is prior to 01.05.2006. Accordingly, there cannot be any demand on the appellant under ECIS. The demands confirmed by the impugned order set aside - appeal allowed.
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2019 (2) TMI 474
Liability of Interest - amount of CENVAT credit taken and reversed - SCN not issued demanding interest - whether appellant is required to be issued a show cause notice for the demand of interest or otherwise? - Held that:- There is no dispute as to the fact that appellant was not issued a show cause notice. The Dy. Commissioner of Customs, Central Excise & Service Tax, Warangal Division, by letter dated 12.10.2010 has demanded interest on the amounts reversed by the appellant and also specifically states that as per Rule 14 of CENVAT Credit Rules, there is no requirement for issuance of show cause notice - the lower authorities have totally erred in entertaining such a view while demanding interest without issuance of show cause notice. In the absence of any show cause notice for the recovery of interest the entire demand for interest is unsustainable - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 473
Classification of services - Erection Commissioning and Installation Services or Works contract service? - contract for supply of labour and material along with installation of fire fighting system - period 07.05.2007 to 16.07.2007 - Held that:- The appellant had herein entered into contract for supply of material fire fighting system and installation thereof, which included Erection Commissioning and Installation of services - The law is settled by the Hon’ble Apex Court in the case of Larsen & Tourbo Ltd., [2015 (8) TMI 749 - SUPREME COURT] - demand set aside - appeal allowed - decided in favor of appellant.
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Central Excise
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2019 (2) TMI 472
Maintainability of appeal - non-deposit of 7.5% of duty and penalty - Held that:- In the main appeal, the Commissioner (A) has not given any finding on the merit and has rejected the appeal of the appellant only on non-depositing 7.5% of the duty and penalty - It is found that the appellant have deposited 10% of the duty before this Tribunal and thereby complied with the requirement of Section 35F. The impugned order is not sustainable and the same is set aside by remanding all the cases to the Commissioner (A) with a direction to decide the same on merits by following the principles of natural justice - appeal allowed by way of remand.
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2019 (2) TMI 471
Valuation - includibility of VAT in assessable value - Revenue was of the view that the VAT liability discharged by utilizing the investment subsidy granted in form 37B cannot be considered as VAT actually paid, for the purpose of Section 4 of the Central Excise Act, 1944 - Held that:- This matter is no longer res-integra as this Tribunal in several cases on similar facts decided the matters holding that the amount of the subsidy in the form of retention of VAT/sales tax under Rajasthan Investment Promotion Scheme is not includable in the assessable value for payment of central excise duty on the manufactured goods - reliance placed in the case of SHREE CEMENT LTD. SHREE JAIPUR CEMENT LTD. VERSUS CCE, ALWAR [2018 (1) TMI 915 - CESTAT NEW DELHI], where it was held that There is no justification for inclusion in the assessable value, the VAT amounts paid by the assessee using VAT 37B Challans - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 470
CENVAT Credit - inputs/capital goods - MS plates, angles, coils and other products - whether the articles as that of angles, channels, HR plates, MS rounds, joist, sections, wire rope, wire mesh, etc. are the inputs/capital goods enabling the assesse/ appellant to avail the cenvat credit? - Held that:- The Hon’ble Supreme Court has earlier dealt with the issue in the case C.C.E., Jaipur Vs. Rajasthan Spinning and Weaving Mills Ltd. [2010 (7) TMI 12 - SUPREME COURT OF INDIA] wherein the Hon’ble Apex Court has considered an identical issue of steel plates and MS channels used in the fabrication of chimney for diesel generating set. This principle of “User Test Principle” as classified by the Hon’ble Apex Court has subsequently been used in several decisions, i.e. C.C.E. Vs. India Cements Ltd. [2014 (7) TMI 881 - MADRAS HIGH COURT] - Even in the case of Vandana Global’s own case as the Commissioner (Appeals) has relied upon the above said decision while rejecting the appellant’s case. High Court of Madras in the case C.C.E. Vs. India Cements [2011 (8) TMI 399 - MADRAS HIGH COURT] has also reiterated the principle of “User Test Principle” as detailed by Hon’ble Apex Court. Seeing from these decisions it stands clear that the articles on which the appellant herein has availed the cenvat credit clearly falls within the definition of capital goods as defined under Rule 2(k) of the Cenvat Credit Rules 2004. Appeal allowed - decided in favor of appellant.
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2019 (2) TMI 469
CENVAT credit - appellant had not availed cenvat credit in accordance of Rule 4(1) of CCR 2004 i.e. immediately or within a reasonable period in respect of explosives used in the mines - Rule 4(1) of CCR 2004 - Held that:- In view of law settled by Supreme Court in VIKRAM CEMENT VERSUS COMMISSIONER OF CENTRAL EXCISE, INDORE [2006 (1) TMI 130 - SUPREME COURT OF INDIA] with respect to availing credits on the explosives used in the mines, the appellant herein is absolutely entitled for the same. The findings of the Commissioner Appeals that the appellant was not the party as such the decision are absolutely wrong in view of Article 141 of the Constitution of India which lays down that any law declared by Supreme Court shall be binding on all courts within the territory of India i.e. the decision becomes the law of the land. While ignoring the decision of Supreme Court which covers squarely the present case that too merely on the ground that appellant was not the party to the petition before Supreme Court is therefore opined to be an act of high judicial indiscipline on the part of the Commissioner(Appeals). Appeal allowed - decided in favor of appellant.
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2019 (2) TMI 468
Clandestine manufacture and removal - MS Ingots - name of the appellant Noticee No.1 of impugned SCN was found mentioned in the incriminating records of M/s. Monu Steels, the another manufacturer of ingots - demand on the basis of excess electricity consumption - Held that:- The law i.e. as to whether the third party records can be adopted as an evidence for arriving at the findings of clandestine removal, in the absence of any corroborative evidence, is well established - the findings of clandestine removal cannot be upheld based upon the third party documents, unless there is clinching evidence of clandestine manufacture and removal of the goods - demand set aside - appeal allowed - decided in favor of appellant.
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Indian Laws
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2019 (2) TMI 467
Requirement of pre-deposit of half of the amount for maintainability of appeal - Section 13(2) of the SARFAESI Act - Interpretation of statute - whether respondent Nos. 1 to 5, who were neither the borrowers nor the guarantors are liable to make pre-deposit of half of the amount of the debt, which has been claimed by the petitioner herein under Section 13(2) of the SARFAESI Act? Held that:- The provision of pre-deposit has been prescribed in second proviso to Section 18(1) of the SARFAESI Act. The said proviso clearly states that “no appeal shall be entertained unless the borrower has deposited with the Arbitral Tribunal 50% of the amount of debt”. It must be noted that even though the appeal under Section 18(1) can be filed by “any person” aggrieved, as it starts with those words, but when it comes to pre-deposit with the Arbitral Tribunal for entertaining the appeal, reference is made to “borrower” - On a reading of the definition of “borrower”, the same would include a guarantor as well but not a person other than borrower / guarantor. The only interpretation given to second proviso to Section 18(1) shall be that if a person other than borrower / guarantor files an appeal before the Arbitral Tribunal then the stipulation of the pre-deposit of 50% (or 25%) of the amount of debt due from him as claimed by the secured creditors or determined by the DRT shall not be insisted upon. This is the only interpretation, which can be given to second proviso to Section 18(1) read with Section 2(f) of the SARFAESI Act. It is a well settled law of interpretation that “when the words of the statute are clear, plain or unambiguous, ie., they are reasonably susceptible to only one meaning, the Courts are bound to give effect to that meaning irrespective of consequences - there is no ambiguity in the provisions of Section 18 of the SARFAESI Act. The provisions of Section 18 of the SARFAESI Act, are determinative of the fact that the legislature intended that it is only the borrower and the guarantor, who should be under obligation to make the pre-deposit. The same is clear on a literal and grammatical meaning of the words “borrower” and “any person aggrieved” as found mentioned in Section 18 and 2 (f) of the Act. There is no inconsistency within the provision of Section 18(1) of the Act. The only way, second proviso to Section 18(1) can be interpreted is that it is either the borrower or the guarantor, who is liable to make pre-deposit on an appeal filed by him / her against the order of the DRT. The DRAT has rightly rejected the contention made on behalf of the petitioner for the pre-deposit to be made by the respondent. Petition dismissed - decided against petitioner.
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