TMI Tax Updates - e-Newsletter
February 20, 2018
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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Income Tax:
Cancellation of Registration certificate u/s 12A - CIT had no jurisdiction to cancel the registration certificate once granted by him under Section 12A till the power was expressly conferred on the CIT by Section 12AA(3) of the Act w.e.f. 01.10.2004 - SC
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Income Tax:
Reopening of assessment - validity of reasons to believe - on the application of method of valuation as mandated by the Explanation to Section 56(2)(vii) of the Act, prima facie, the Assessing Officer could not have had reason to believe that income chargeable to tax has escaped assessment. - HC
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Income Tax:
Penalty u/s 271(1)(c) - Even if it is presumed that assessee was not eligible for allowance of depreciation even then the penalty u/s 271(1)(c) cannot be imposed - AT
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Corporate Law:
Winding up petition - Just because the name of the company is struck off the register under Section 248 of the Companies Act, 2013, that will not come in the way of the Court to pass an order winding up of company. - HC
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Service Tax:
Refund of unutilized CENVAT credit - Export proceeds / money was routed by the Foreign Service receiver through M/s. Wells Forgo NA, USA through HSBC Bank. Ultimately the amount was received by the appellant in rupees - Refund allowed. - AT
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Service Tax:
When the appellant has earned a substantial consideration by dumping debries through trippers and trucks i.e own transportation, then the tax is leviable, may be as unregistered dealer - liability of service tax sustained - AT
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VAT:
Input tax credit - denial on the ground that the said input tax related to purchases effected from seven dealers, whose returns were not traceable - no input tax credit can be disallowed on the premise that the selling dealer is de-registered subsequent to the relevant tax periods. - HC
Articles
Circulars / Instructions / Orders
Case Laws:
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Income Tax
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2018 (2) TMI 1220
Cancellation of Registration certificate u/s 12A - CIT's express power to cancel/withdraw/recall the registration certificate once granted by him under Section 12A - Held that:- CIT had no express power of cancellation of the registration certificate once granted by him to the assessee under Section 12A till 01.10.2004. It is for the reasons that, first, there was no express provision in the Act vesting the CIT with the power to cancel the registration certificate granted under Section 12A of the Act. Second, the order passed under Section 12A by the CIT is a quasi judicial order and being quasi judicial in nature, it could be withdrawn/recalled by the CIT only when there was express power vested in him under the Act to do so.In this case there was no such express power.
In the light of the object of Section 12A of the Act and Section 21 of the General Clauses Act held that the order of the CIT passed under Section 12A is quasi judicial in nature. Second, there was no express provision in the Act vesting the CIT with power of cancellation of registration till 01.10.2004; and lastly, Section 21of the General Clauses Act has no application to the order passed by the CIT under Section 12A because the order is quasi judicial in nature and it is for all these reasons the CIT had no jurisdiction to cancel the registration certificate once granted by him under Section 12A till the power was expressly conferred on the CIT by Section 12AA(3) of the Act w.e.f. 01.10.2004. - Decided n favour of assessee
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2018 (2) TMI 1212
Rejection of books of accounts - profit estimation - Held that:- Income has to be computed in accordance with the method of accountancy followed by an Assessee i.e. cash or mercantile, such method has to be followed keeping in view the Accounting Standard notified by the Central Government from time to time. Sub clause 3 provides a situation, that is, if the Assessing Officer is unable to deduce the true income. On the basis of method of accountancy followed by an Assessee than he can reject the book result and the assessee’s income according to his estimation or according to his best judgment. AO in that case is required to point out the defects in the accounts of Assessee and required to seek explanation of the Assessee qua those defects. If the assessee failed to explain the defects than on the basis of the book result, income cannot be determined and Assessing Officer would compute the income according to his estimation keeping in view the guiding factor for estimating such income.
Additional Rent paid by cheque for using the godown - the assessee failed to show any justification for payment of additional rent because there was no agreement between the assessee and landlord for payment of additional rent. The assessee could obtain a confirmation exhibiting additional space required as well as additional rent paid. But no such steps were taken.
Similarly, the assessee failed to demonstrate as to what services have been rendered by her husband or the daughter to whom salaries have been paid. Therefore, the salary claimed by the assessee towards husband and daughter deserves to be disallowed. Out of total addition confirmed by the ld.CIT(A) hereby confirm addition of ₹ 66,000/-, ₹ 4,12,584 and ₹ 2,16,000/-.
As far as addition with respect to purchase made from Vinod M. Chaudhar are concerned, the turnover of assessee is of ₹ 19.55 crores. Her sales have been accepted. Therefore, a small amount of purchases could not be doubted merely on the ground that farmer was not produced before the ld.AO. It is quite difficult for an assessee to locate each and every small supplier. Therefore, delete this addition. - Decided partly in favour of assessee.
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2018 (2) TMI 1211
Disallowance of commission expenses - Held that:- A customer intending to purchase a vehicle would visit an auto dealer directly, and on the basis of discussions, including demonstration, as well as other relevant factors, viz. past experience, reputation of the manufacturer, etc., take a decision, also co-opting the information gathered from other such dealers of the same or different manufacturers, i.e., as per his needs and budget. Why, then, would a person contact another, as Mohini Sharma, or others (to whom commission has been paid), who would in turn only refer him an auto dealer. No personalized; rather, cognizable service is involved, for a customer to approach a third person for a reference. There is no value addition for the customer and, in fact, even from the standpoint of the dealer so as to incur any cost for the same. In fact, the market being fiercely competitive, as admitted by the assessee itself in the context of another issue, it is incomprehensible that commission is paid merely for reference, i.e., even if did not result in any sale. The assessee’s claim is completely unsubstantiated and unproved. The disallowance is accordingly confirmed. - Decided against assessee
Estimation of the assessee’s income from its two workshops - addition to its’ dealership (trading) business in respect of which the assessee is not maintaining any separate books of account - Held that:- We are, on balance, satisfied with the explanations (including the corroborative material) furnished by the assessee (through the ld. AR) in respect of the queries raised qua the accounting of the job work segment of the assessee’s business. We are, however, unable to appreciate as to how the sale of used oil is, as claimed, credited to the sale of spare parts inasmuch as there is no purchase thereof (used oil). However, where credited to a sale account, the same, irrespective of the account head, gets credited to the profit & loss account, so that the same is in order. The total sale for the relevant year, as appears from the sale bills enclosed in the paper-book (PB pgs. 69-72), is for ₹ 28,444/-. Revenue has not doubted the sale volume thereof, making an informed estimate of the sale that ought to have materialized. Under the circumstances, therefore, subject to the said amount being credited to the profit and loss account for the year, no interference with the profit (of the workshop business) as disclosed per the assessee’s accounts is called for - Decided in favour of assessee
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2018 (2) TMI 1210
Transfer pricing adjustment - assessee’s payment of royalty to its AE - MAM selection - ALP determination - Held that:- The assessee’s payment of royalty to its AE was justified by using the external CUP, that is, by placing catena of comparable uncontrolled transaction of the third parties. TPO without actually carrying out any analysis of the comparables during the remand proceedings or assigning any basis had simply held that royalty should be taken at Nil, because assessee has incurred loss at entity level and that is why the technical knowledge or knowhow from AE has not provided any economic benefit to the assessee.
Such an observation or reasoning cannot be upheld at all, because once there is a valid agreement for transfer of non-exclusive right for use of license to use technology including knowhow of AE for the purpose of carrying out manufacturing of automotive parts from which assessee has earned substantial revenue receipts, then such a use of technology and knowhow is directly linked with manufacturing and resultantly sales.
Incurring of loss cannot be the parameter to hold that the technological knowhow or license was of no benefit hence there was no requirement to pay the royalty. Loss cannot be co- related with the economic benefit of use of technology or knowhow because profit and loss are market driven and host of other economic factors. TPO was only required to see, whether the payment of royalty meets the arm’s length requirement of ALP or not. When the chance was given to the TPO in the remand proceedings by the CIT(A) he has failed to examine the external CUP. CIT (A) has analyzed all the factors and various comparable uncontrolled transactions to reach to a conclusion that royalty payment @ 3.15% is at ALP, and accordingly, we do not find any reason to deviate from such a finding and the same is upheld. - Decided against revenue.
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2018 (2) TMI 1209
Deduction u/s 54F - new residential flat is situated outside India and hence deduction u/s 54F is not available - Held that:- There is an amendment by Finance Act 2014 in Section 54F, with effect from 01.04.2015 wherein the benefit of deduction u/s 54F will be allowed only when reinvestment in residential house property is made within India. Prior to the aforesaid amendment , there was no bar for the taxpayer making investments outside India in residential house property to get the benefit of deduction u/s. 54F provided other conditions are fulfilled.
We are presently concerned with appeal for AY 2011-12 which is prior to amendment of Section 54F by Finance Act, 2014 w.e.f. 01-04-2015. There is no dispute between rival parties so far as compliance of the other conditions by the assessee as stipulated u/s 54F of the 1961 Act to get the benefit of deduction u/s 54F are concerned . The Hon’ble Gujarat High Court in the case of Leena Jugalkishore Shah (2016 (12) TMI 351 - GUJARAT HIGH COURT) has allowed the deduction u/s. 54F to the taxpayer making investments outside India in residential house properties .
Claim of being charged to tax as long term capital gain on sale of shares of private limited company instead of it being short term capital gain as claimed in the return of income filed by the assessee with Revenue - Held that:- Since the assessee filed the claim before the AO as well before learned CIT(A) to bring to tax capital gains as long term capital gain on sale of shares of Private Limited Company instead of short term capital gain as declared in the return of income we admit the said claim filed by the assessee , however , we are remitting the matter back to the file of the A.O for considering the aforesaid additional claim raised by the assessee on merits after hearing the contention of the assessee and evaluating evidences filed/to be filed by the assessee on merits in accordance with law. A.O will consider the claim of the assessee on merits in accordance with law. The assessee is directed to appear before the A.O. and file necessary contentions, explanation and evidences before the A.O. w.r.t. aforesaid additional claim which shall be evaluated by the AO on merits in accordance with law. The AO shall provide proper and reasonable opportunity of being heard to the assessee in accordance with principles of natural justice in accordance with law on merits.
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2018 (2) TMI 1219
Reopening of assessment - validity of notice - Held that:- We are conscious that the return of the assessee was originally accepted without scrutiny and that therefore the Assessing Officer had much greater latitude in reopening such assessment. Nevertheless, even in such cases, reopening of the assessment is not permissible in law unless the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment. In this context, the question of validity of the reason demonstrating formation of belief by the Assessing Officer becomes relevant.
As relying on case of one M/s.Prakriya Pharmachem thru Its current partner & others v. ITO [2016 (1) TMI 946 - GUJARAT HIGH COURT] reasons recorded by the Assessing Officer to form belief that the income chargeable to tax had escaped assessment lack validity. - Decided in favour of assessee
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2018 (2) TMI 1218
Reopening of assessment - validity of notice - Held that:- We are conscious that the return of the assessee was originally accepted without scrutiny and that therefore the Assessing Officer had much greater latitude in reopening such assessment. Nevertheless, even in such cases, reopening of the assessment is not permissible in law unless the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment. In this context, the question of validity of the reason demonstrating formation of belief by the Assessing Officer becomes relevant.
As relying on case of one M/s.Prakriya Pharmachem thru Its current partner & others v. ITO [2016 (1) TMI 946 - GUJARAT HIGH COURT] reasons recorded by the Assessing Officer to form belief that the income chargeable to tax had escaped assessment lack validity. - Decided in favour of assessee
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2018 (2) TMI 1208
Validity of return - it was submitted by the assessee that the original return on 29.09.2010 in physical form was filed by him and since the subsequent return in electronic form on 26.05.2011 was not filed by him, the same should be ignored. It was also submitted by the assessee that the said return was filed by somebody else with ill intention giving higher figures of sale, purchase and other expenses.
Held that:- We find merit in this contention of the learned counsel for the assessee and since the learned DR has also not raised any objection in this regard, we set aside the impugned order passed by the Ld. CIT(A) and restore the case to the file of the A.O. for making the assessment afresh in pursuance of the return of income originally filed by the assessee on 29.09.2010 as the same is the only return validly filed by the assessee for the year under consideration. A.O. shall consider the entire material available on record before completing the assessment afresh and afford proper and sufficient opportunity of being heard to the assessee.
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2018 (2) TMI 1217
Addition of excise duty - valuation of closing stock made u/s 145A - special audit scope - As decided by HC [2017 (8) TMI 188 - BOMBAY HIGH COURT] tax audit report of the statutory auditor and the audit report of the Comptroller & Auditor General of India shows that the impact of inclusion of excise duty in the value of closing stock stands nil, hence no additions - Held that:- Application for exemption from filing certified copy of the impugned order is allowed. Issue notice.
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2018 (2) TMI 1207
Unexplained cash credit u/s.68 - proof of the claim of the share application money received - Held that:- Perusal of the bank accounts shows that in all the cases, transactions are with identical companies, from where, the money is coming and it is received either on the same day or immediately previous day to the date of transfer of the funds through RTGS. Admittedly, these evidences need to be examined in detail. This being so, the issues in this appeal are restored to the file of the AO for readjudication. The facts in the present case showed that certain evidences had been produced before the AO. The AO had sent these details to Kolkata for examination as the share applicants are based in Kolkata. Now, examining such persons in Kolkata at the back of the assessee would be a clear violation of the principles of the natural justice. In these circumstances, keeping in mind the principles of natural justice, the issues in this appeal are restored to the file of the AO for re-adjudication. - Appeal filed by the assessee is partly allowed for statistical purposes.
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2018 (2) TMI 1216
Reopening of assessment - validity of reasons to believe - valuation of shares - income has escaped assessment on application of Section 56(2)(vii) - Held that:- 6 Prima facie, the order disposing of the objections, while dealing with the objection of no reason to believe that income has escaped assessment on application of Section 56(2)(vii) of the Act, has completely ignored the Explanation thereto. The Explanation to Section 56(2) (vii) of the Act states that the fair market value is to be determined in accordance with the Income Tax Rules. The office note annexed to the Assessment Order dated 28th February, 2013 passed under Section 143(3) of the Act holds that on application of Rule 11 UA of the Income Tax Rules, the value per share came to less than ₹ 5/per share.
The impugned notice indicates a change of opinion, as this very issue namely – valuation of share was a subject matter of consideration during the regular assessment proceedings. Besides, on the application of method of valuation as mandated by the Explanation to Section 56(2)(vii) of the Act, prima facie, the Assessing Officer could not have had reason to believe that income chargeable to tax has escaped assessment. Thus the impugned notice is without jurisdiction. - Decided in favour of assessee
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2018 (2) TMI 1215
Addition u/s 14A - Tribunal found that the assessee had surplus tax free funds thus there was no question of disallowance of any interest income and even after completing the format, the disallowance cannot exceed the total administrative expenditure incurred by the assessee - Held that:- We are fully in agreement with the view of the Tribunal. Under no circumstances, can the Assessing Officer attribute administrative expenses for earning tax free income in excess of the total administrative expenditure incurred by the assessee. If it is a case where Assessing Officer disputes, question and disallow the very declaration of the assessee regarding total administrative expenditure, the issue can be somewhat different. Nevertheless, when the Assessing Officer has in the present case did not disturb the assessee's declaration that total administrative expenses incurred by the assessee for all its activities was ₹ 30 lakhs, there was no question of disallowing administrative expenses to the tune of ₹ 60 lakhs under Section 14A of the Act with the aid of Rule 8D of the Rules. Tax Appeal is, therefore, dismissed. - Decided against revenue
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2018 (2) TMI 1206
Assessment u/s 153A - disallowance u/s. 40A(3) - Held that:- Since assessee has not claimed any expenditure, therefore, no disallowance can be made during the year under consideration. See M/s Galaxy Dwellers (P) Ltd. vs. DCIT [2017 (11) TMI 112 - ITAT DELHI].
Hon’ble Punjab & Haryana High Court in the case of Gurdas Garg vs. CIT (2015 (8) TMI 569 - PUNJAB & HARYANA HIGH COURT) has held that where genuineness of transactions made in cash in excess of ₹ 20,000 was not disbelieved by authorities, same cannot be disallowed under Section 40A(3). - Decided in favour of assessee.
Disallowance being finance charges on loan taken from parent company - Held that:- This addition is not tenable because in this case no incriminating material was found during the course of search, hence, this ground is also allowed in favour of the assessee and against the Revenue.
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2018 (2) TMI 1205
Penalty u/s 271(1)(c) - depreciation claim - Held that:- Assessee had filed complete particulars with respect to assets on which depreciation was claimed. The assessee has also filed chart of fixed assets placed at page No. 3 of the paper book showing claim of the said depreciation. From the above documents itself, the Assessing Officer has observed that the assessee has claimed depreciation to the extent of ₹ 2,57,677/- and therefore, it cannot be said that the assessee had concealed income or had furnished wrong particulars of income.
Even if it is presumed that assessee was not eligible for allowance of depreciation even then the penalty u/s 271(1)(c) cannot be imposed as held by Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts (P.) Ltd. (2010 (3) TMI 80 - SUPREME COURT) wherein held that every wrong claim made by the assessee cannot tantamount to furnishing of wrong particulars of income or concealment of income - Decided in favour of assessee.
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2018 (2) TMI 1204
Revision u/s 263 - addition towards share capital and share premium u/s 68 - Held that:- Admittedly, the assessee had not appeared before the Ld. CIT despite repeated opportunities. From the Affidavit filed by the Ld. AR before us, we find that the assessee had been dependent on one Chartered Accountant who has been given the brief to handle the income tax affairs before the Ld. CIT and who in turn had not represented the assessee before the CIT and that the assessee was totally in dark with regard to subject mentioned proceedings and it came to the knowledge of the assessee only on receipt of the order of the Ld. CIT u/s 263. We find the reasoning given in the Affidavit is understandable and deserved to be appreciated and hence we deem it fit and appropriate in these facts and circumstances, in the interest of justice and fair play, to remand the order of Ld. CIT to the file of the Ld. CIT for de novo adjudication - Decided in favour of assessee for statistical purposes.
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2018 (2) TMI 1214
Reopening of assessment - claim of deduction u/s 10B - Held that:- The claim was u/s 10B and as per clause (3) of the provision, deduction claimed had to be of amounts which is brought into the Country, within six months from the close of the previous year. The previous year ended on 31-03-2005 and the assessee ought to have brought in the amounts prior to 30-09-2005, unless extended by the Reserve Bank of India as provided under Explanation to sub-section (3). If such extension has not been granted, definitely, there is a suppression in so far as the assessee having filed return, presumably, only after closure of the previous year, which is long after the date prescribed in sub-section (3) for bringing the amounts into the Country.
Re-assessment proposed, within the six year period is perfectly in order, if the said amounts have not already been disallowed in the original assessment order itself. We hence direct that in the re-assessment proceedings, the specific contention raised by the assessee as to the deduction to the extent of US$ 1,23,691/- having already been carried out in the original assessment order is to be verified. The re-assessment having been initiated on the specific ground, it should be confined to that ground alone. The assessee shall be afforded an opportunity of hearing and the exercise shall be completed within a period of three months from the date of receipt of certified copy of the judgment. With the above observations and modifying the judgment of the learned Single Judge, to the limited extent of the directions herein above, we dispose of the Writ Appeal.
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2018 (2) TMI 1203
Penalty u/s 271(1)(c) - undisclosed investment - return of income furnished after the date of search - Held that:- The undisclosed income was detected/discovered in the form of investment in he property and therefore the assessee was found to be owner of assets value of which was not disclosed and consequently it falls in clause (i) to explanation 5A to section 271 (1)(c).
There is no dispute that assessee admitted the acquisition of property by utilizing his income from the previous year ended before the date of search and accordingly the assessee surrendered the said amount for the assessment year under consideration. Since assessee did not file return of income before the date of search notwithstanding the said income declared in the return of income furnished after the date of search, for purpose of levy penalty u/s 271(1)(c) the assessee shall be deemed to have concealed the particulars of income to the extent of such amount which was surrendered and offered to tax in the return of income filed post search.
Therefore when all the conditions as stipulated under explanation 5A are fulfilled in the case of the assessee then the penalty levied u/s 271(1)(c) was proper and sustainable. - Decided against assessee.
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2018 (2) TMI 1202
Validity of proceedings invoked u/s 153C - no satisfaction note was recorded - notice without sanction of law - Held that:- AO of searched person, as a jurisdictional requirement, must record his satisfaction that incriminating material found as a result of search belongs to assessee herein. In this regard, we take note of the plea of the assessee that no satisfaction note has been found recorded by the AO of the searched person to show that any money, bullion, jewelery or other valuablearticles or things or books of accounts or documents seized etc. belongs to the assessee-company which has any bearing on the determination of total income of assessee herein. It goes without saying that substantive action under s.153C is not permissible for an empty cause without corroboration of incriminating material.
Thus, it is obvious that Revenue has grossly failed to substantiate legal foundation of action undertaken by invoking s.153C and further failed to controvert any of the aforesaid formidable pleas raised on behalf of the assessee in support of its cross-objection - Decided in favour of assessee.
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2018 (2) TMI 1213
Treating entire share capital of the assessee/appellant as its income - unaccounted income - Held that:- In the light of the provisions of Section 68 of the Act and the legal position referred to above, we are of the opinion that the assessee has failed to discharge its initial burden to prove that the money of ₹ 48,58,000/- was collected through share capital. Therefore, the A.O. is wholly justified in rejecting the stand of the assessee and treating the sum of ₹ 48,58,000/- as the income from undisclosed sources and accordingly charging the same to tax. Both the lower appellate fora and in our view rightly confirmed the order of the A.O. - Decided against assessee
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2018 (2) TMI 1201
Bogus purchases - profit estimation - Held that:- The assessee has failed to discharge the primary onus of proving the purchases as it could not produce sufficient evidences to show actual delivery of material and also could not produce confirmatory letters from the alleged bogus suppliers and thus failed to substantiate the purchases. The assessee is a trader and there could be no sales without purchases.
Addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize profit earned by assessee against purchase of material in the grey market and undue benefit of VAT against bogus purchases, which Ld. CIT(A) has rightly done. Therefore, addition of 12.5% of bogus purchases to be reasonable one and see no reason to interfere with the conclusion of the Ld. CIT(A). - Decided against revenue
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Customs
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2018 (2) TMI 1200
Cancellation of redemption certificates - imposition of fiscal penalty - Held that: - from a perusal of the affidavit in support and the annexures thereto it is found that none of the factual developments post institution of the writ petition have been denied or controverted by the Revenue - Once identically situate, parties have obtained the relief and in terms of the order of the CESTAT, as confirmed by the Hon'ble Supreme Court and these certificates or letters of redemption, then, we do not think that anything would survive for adjudication. The Revenue has acted in terms of the orders and which bind it. We, therefore, do not think that the Director General of Foreign Trade can withhold the request which is made by the petitioner all the more when the orders passed and impugned in the petition, would not survive the scrutiny of law - petition allowed - decided in favor of petitioner.
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2018 (2) TMI 1199
Issuance of guidelines for Registration of Sale Contracts for Import of Poppy Seeds from China - Public Notice No.PS-11/2016 (Annexure- W) - Amendment in the condition No.3(c) of the import policy, imposing quantitative restriction - issuance of guidelines for registration of sale contracts for import of poppy seeds from Turkey and China Governments - selection of applicants through ‘draw of lots’ - validity of public notices dated 4.11.2016 and 5.12.2016 issued by the Narcotics Commissioner, Government of India, Ministry of Finance, Central Bureau of Narcotics in compliance of the guidelines issued by the Government of India, Ministry of Finance, fixing the final country cap for import of poppy seeds from Turkey and China Governments? - condition No.3(c) of the amended import policy issued by the Central Government, exercising powers under Articles 226 and 227 of the Constitution of India?
Held that: - The import of poppy seeds, is governed by EXIM (Imports and Exports) Policy. Chapter 12 of Import Policy heading 1207 applies, among other things, to poppy seeds. The poppy seeds is governed by Exim Code heading 1207 91 00. The policy contemplates import of poppy seeds subject to certain conditions which have been specified - condition No.3 contained three stipulations, by amended notification, condition Nos.(a) and (b) are not altered. Condition No.3(c) as amended, in addition to existing one is, “All import contracts for this item shall compulsorily be registered with the Narcotic Commissioner, Gwalior, prior to import in accordance with the guidelines issued by the Department of Revenue, which may, inter-alia, include fixing of country caps, imposing quantitative restrictions, if any, per importer, or any other relevant provisions as deemed necessary for implementation of National Policy on Narcotic Drugs and Psychotropic Substances”.
On careful perusal of the provisions of Section 3 of the Foreign Trade Act, it makes it clear that the power conferred under Section 3(1) of the Act is not restricted merely to prohibiting or restricting imports at the point of entry but extends also to controlling the subsequent disposal of the goods imported. It is for the appropriate authority to consider the policy, which must depend on diverse considerations, to be adopted in regard to the control of import of goods. The import of goods can be controlled in several ways. If it is desired that goods of a particular kind should not enter the country at all, the import of those goods can be totally prohibited. In case total prohibition is not desired, the goods could be allowed to come into the country in limited quantities.
It is not in dispute that in view of the notification dated 29.7.2016 made in No.17/2015-20, the Central Government has permitted to import poppy seeds from the countries as mentioned in condition No.3(a) of the notification i.e., from Australia, Austria, France, China, Hungary, the Netherlands, Poland, Slovakia, Spain, Turkey and Czech Republic, United Kingdom, Democratic People’s Republic of Korea, Macedonia, Germany and Ukraine. If the competent authority fixes the country cap to import poppy seeds from the exporting countries mentioned supra, every importer/applicant like the petitioners would get 90 metric tons on the basis of the priority list in accordance with the draw of lots and there would not be any discrimination among the applicants/traders and it is the policy of the Central Government and the same is in accordance with law - the Central Government is justified in amending condition No.3(c) of the import policy imposing quantitative restrictions, if any per importer under the provisions of Section 3 of the Foreign Trade Act.
The respondent – Central Government has taken all precautions to distribute poppy seeds among the traders restricting 90 metric tons per importer and drawing of lots as stated supra is only at the interest of public/consumers at large. Therefore there is no violation of fundamental rights of the petitioner guaranteed under Article 19(1)(g) of the Constitution of India. The restriction made by the Central Government is reasonable restriction imposed by the Central Government as a policy decision and same is in accordance with the provisions of Article 19(6) of the Constitution of India.
The import policy amending condition No.3(c) came to be issued exercising the powers under the provisions of Section 3 of the Foreign Trade Act in order to facilitate all the applicants/traders in the field of poppy seeds business and to control the monopoly of poppy seeds business to a particular importer, in the interest of the general public in India at large. Therefore the interest of the country prevails at large, but not individual. On that ground also, the writ petitions are liable to be dismissed.
The Central Government taking into consideration all the surrounding circumstances and the fact that poppy seeds is a special produce, amended condition No.3(c) of the import policy as a policy decision exercising its legislative domain in order to distribute poppy seeds to all the applicants who aspire for import of poppy seeds and in order to avoid monopoly by any one of the applicants. The petitioners have not pointed out any malafide on the part of the Central Government while amending the condition No.3 of the import policy. Further, there is no violation of fundamental rights of the petitioners guaranteed under Article 19(1)(g) of the Constitution of India. Therefore the reasonable restriction imposed by the Central Government is within the parameters of Article 19(6) of the Constitution of India and in the interest of consumers at large - the petitioners have not made out any case to interfere with condition No.3(c) of the amended import policy issued by the Central Government exercising the powers under Article 226 and 227 of the Constitution of India.
The impugned notification, guidelines and public notices issued by Respondent Nos.1 to 4 are in accordance with law. The petitioners have not made out any ground to interfere with the same exercising the powers under Articles 226 and 227 of the Constitution of India - petition dismissed.
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2018 (2) TMI 1198
Condonation of delay - Whether the CESTAT was right in passing the order dated 2nd February, 2017 and dismissing the application for rectification on the ground that the Tribunal does not have any power of review and hear the appeal on merits notwithstanding the fact that the appellant had filed an application that there was error apparent on the face of the order dated 20th October, 2014?
Held that: - there was an error apparent in the order dated 20th October, 2014, for the issue was whether the appeal was preferred within limitation period, and not whether delay in filing of the appeal should be condoned. The appellant had clearly contended that there was no issue or question of condonation of delay, as the starting point of limitation would be the date of communication of the order to the appellant and not the date on which the order under challenge was passed - The primary aspect, which has to be examined and answered, is the date on which the order-in-original dated 20th March, 2007 was communicated and served on the appellant and whether the stand of the appellant that this order was communicated and served for the first time on 25th February, 2013 was correct. It is case of the appellant that the appeal was not time barred.
In view of the stand of the assessee, the Tribunal would have to decide whether or not the appeal preferred by the appellant was within limitation. Issue would also arise whether limitation period would commence or taken from the date of the impugned order, date on which the order was issued or sent by post or the date on which the order was served. The second aspect/issue is a question of law. Factual and legal aspects are interconnected. In case the Tribunal comes to the conclusion that the date of the order or the date of issue would be the starting point of limitation, then the Tribunal would have to examine and decide the question of condonation of delay.
Partly decided in favor of assessee and part matter on remand.
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2018 (2) TMI 1197
Confiscation of seized Betel Nuts - smuggling - Held that: - the appellant had not refuted the allegations against them except that the goods are non-notified items - the quantum of redemption fine and penalty are excessive - the fine and penalties imposed on the appellants are reduced to 50% of the amount as ordered - appeal allowed in part.
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2018 (2) TMI 1196
Classification of imported goods - Palm Stearin - Adjudicating authority vide speaking order classified the goods imported under chapter 38.23 as against the claim of the Respondent before him being covered under chapter 15.11 - Held that: - the issue is now covered by the decision of Hon’ble Apex Court in the case of Commissioner of Central Excise, Customs & Service Tax Visakhapatnam vs. Jocil Ltd [2010 (12) TMI 24 - Supreme Court of India], where it was held that their Lordships has held as under and settled the law that the classification of Palm Stearin Oil will be under chapter 38.22 - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1195
Scope of SCN - classification of imported goods - Held that: - In the SCN the revenue sought classification under CTH 44219019 whereas in the appeal the revenue now want to change the classification to CTH 44219090 which is beyond the scope of the SCN - appeal not maintainable as beyond the scope of SCN - Appeal dismissed.
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2018 (2) TMI 1194
Benefit of N/N. 21/2002-Cus dated 01.03.2002 - inport of D.C. Defibrillators for Internal use & Pacemakers - Revenue says that internal use means the Defibrillator is required to be used internally - Appellant explains that the equipment cannot be used in the body of a patient.
Held that: - Revenue has no evidence to show that D.C. Defibrillators is required to be used in the heart but not in the Operation Theatre. When Revenue fails to lead any evidence to establish that such equipment can be used at any place other than operation theatre, to be called as meant for internal use, the term of “internal use” cannot be interpreted as suggested by Revenue - appeal allowed - decided in favor of appellant.
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Corporate Laws
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2018 (2) TMI 1193
Dissolution of company - Held that:- As stated in the present report, there are no assets and properties of the company nor any fund is available in the account of the company and, therefore, that the Registrar of the Companies as well as other Government Departments have no objection if the company is allowed to be dissolved.
Court having heard learned advocate for the Official Liquidator and having considered the contents of the present report with the documents annexed with the report and also having considered that there appears to be proper compliance of the provisions of Section 497 of the Act, finds that the prayers sought for in the present report could be granted.
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2018 (2) TMI 1192
Dissolution of company in voluntary winding up seeked - Held that:- As there are no assets and properties nor any fund is available in the account of the company and that the Registrar of the Companies as well as other Government Departments have no objection if the company is allowed to be dissolved.
The Court, having heard learned advocate for the Official Liquidator and having considered the contents of the present report with the documents annexed with the report and also having considered that there appears to be proper compliance of the provisions of Section 497 of the Act, finds that the prayers sought for in the present report could be granted.
Company is ordered to be dissolved in terms of Section 497 of the Act. The Ex-directors of the company are directed to pay ₹ 10,000/- being expenses relating to filing of the present report to the office of the Official Liquidator within a period of three weeks from the date of receipt of intimation from the Official Liquidator for payment of such amount to the office of the Official Liquidator
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2018 (2) TMI 1191
Decree against the Defendants to jointly and severally pay to the Plaintiffs the outstanding principal amount along with interest accrued thereon - whether the present suit filed on 27th October, 2015 is barred by the Law of Limiation? - Held that:- Mentioned paragraph in the e-mail dated 12th April, 2013 (Exhibit-BB-8 at page 374 of the Plaint) constitutes an acknowledgment on the part of Om Sai Motors that they are liable to pay ₹ 5 Crores to Tata Motors/TML. Om Sai Motors, therefore, cannot be now heard to say that the paragraph from the email dated 12th April, 2013 cannot be treated as an acknowledgement by Om Sai Motors and that the suit is barred by the law of limitation.
Charges towards taxes and duties would also include charges towards Form-C under the provisions of the Sales Tax laws. It also cannot be accepted that the Summary Suit is not maintainable because Tata Motors/TML have relied upon a ledger account maintained by Tata Motors/TML. The claims of Tata Motors/TML is based on the invoices raised against Om Sai Motors for vehicles supplied by Tata Motors to Om Sai Motors and for Logistic support provided by TML to Om Sai Motors. The claim, as submitted by Tata Motors/TML is based on a written contract and, therefore, the Summary Suit is maintainable. After accepting all the vehicles from Tata Motors/TML and acknowledging the same on the invoices submitted to them by Tata Motors/TML and also acknowledging their liability to pay the balance dues of ₹ 5 crores, Om Sai Motors have thereafter for the first time by its e-mail dated 13th June, 2013 tried to raise the defence that Tata Motors/TML had handed over the vehicles to Om Sai Motors despite Om Sai Motors not having ordered for the same only because the same were lying in their yard. The defence on the face of it appears to be false and is not bonafide and has no merit.
The present case is covered under clauses (e) and (f) of para 18 of the decision in IDBI Trusteeship Services Ltd. (2016 (11) TMI 1529 - SUPREME COURT) and Tata Motors/TML are entitled to a judgment forthwith. Even otherwise, the learned Advocate appearing for the Defendants has informed the Court that the Defendants are not in a position to even deposit in Court any amount whatsoever.
The above Summons for Judgment is therefore allowed in terms of prayer clause (a) with a modification to the extent that the Plaintiffs shall be entitled to interest on unpaid invoices only from the date of filing of the Suit
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2018 (2) TMI 1190
Winding up petition - Power of Registrar to strike defunct company off register - Held that:- Just because the name of the company is struck off the register under Section 248 of the Companies Act, 2013, that will not come in the way of the Court to pass an order winding up of company.
Therefore, even under the Companies Act, 1956, if the Registrar of Companies was to strike off the name of the company from the register, that would not affect the power of the Court to wind up the company the name of which has been struck off the register.
In the circumstances, there is no bar in winding up the company. It should be noted that the company has not filed any affidavit in reply opposing the petition. Therefore, the averments in the petition are not controverted. Even to the statutory notice, no reply has been filed. It is settled law that where no response to a statutory notice has been made, the court may pass a winding up order on the basis that amount claimed has not been denied by the company and there is a presumption of inability to pay by the company. Where no response has been made to the statutory notice, the respondentcompany runs a risk of winding up petition being allowed. By virtue of Section 434 of the Companies Act 1956 a presumption of the indebtedness can be legitimately drawn by the court where no reply to the statutory notice is forthcoming.
Thus having heard petitioner and having considered the petition alongwith the documents annexed to the petition, it is satisfied that the company is indebted to petitioner, is unable to discharge its debts, is commercially insolvent and requires to be wound up.
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Insolvency & Bankruptcy
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2018 (2) TMI 1222
Corporate Insolvency Resolution Process - Duties of resolution professional - non-compliance of the requirements of the Code - Held that:- Non-issuance of the notice of the Meeting of the COC held on 4.1.2018 to the Resolution Applicant in this case is not fatal which requires interference of this Adjudicating Authority with the decision of the COC.
Here, the COC rejected the Resolution Plan not on the ground that it is not a viable Resolution Plan, but on the ground that it is not in conformity with the requirements of the Code. On the ground that the Resolution Plan is not rejected by the Resolution Professional on the basis that it does not confirm to the requirements of the Code and Regulations, it cannot be concluded that the Resolution Plan is in accordance with the requirements.
When the information is there before the COC regarding the non-compliance of the requirements of the Code and Regulations, Committee of Creditors is perfectly justified in rejecting the Resolution Plan. Therefore, there are no facts and circumstances that warrant interference by this Adjudicating Authority in the rejection of the Resolution Plan dated 3.1.2018 submitted by the Resolution Applicant, even assuming that this Adjudicating Authority has got jurisdiction to decide the validity or otherwise of the rejection of the Resolution Plan submitted by the Resolution Applicant. Application dismissed.
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2018 (2) TMI 1221
Corporate insolvency process - satisfaction of default - Held that:- The case is remitted back to the Adjudicating Authority (National Company Law Tribunal), New Delhi to admit the application under Section 10 after notice to the parties if there is no defect. In case of any defect, appellant be allowed time to remove the defects. The appeal is allowed with the aforesaid observations. See “M/s. Unigreen Global Private Limited vs. Punjab National Bank and others” – Company Appeal (AT) (Insolvency) [2018 (1) TMI 505 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI]
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Service Tax
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2018 (2) TMI 1187
CENVAT credit - denial on the ground that they have not filed proper ST-3 return for the relevant period - Held that: - Admittedly the impugned order proceeded in a summary manner to deny the credit by simply recording that the services are not covered under the definition of input services and, hence, they are allowed for credit. Even, a plain perusal of the various input services like security services, electrical works, repair and maintenance, mobile charges, advertisement charges, auditor charges etc. will show that these are with reference to business of the appellant and provision of taxable output service which in the present case is telecommunication service - the appellant availed credit based on large number of duty paid documents. They did submit details in a consolidated summary. It is open to the Jurisdictional Authorities to verify each one of the document.
No useful purpose will be served by remanding the matter again as the dispute relates to period which is 14 years before - appeal allowed by way of remand.
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2018 (2) TMI 1186
Club or association service - the affiliation fee and the membership fee received from district level academy members of the assessee/appellant - Held that: - There can be no service and tax liability in such arrangement of members availing certain facilities provided by association of such members forming into a club - the demand of service tax under club or association service and also penalties relatable to such tax liability.
Irrespective of the status of BCCI as a charitable organization or otherwise, BCCI is sole organization incharge of game of cricket officially, in India. Managing, controlling and organizing the game of cricket, its development and other allied activities cannot be considered as business or commerce for service tax purpose. Such activities are with reference to managing a recognized sports. BCCI being the sole authority to manage the sport of cricket in India cannot be considered as involved in business or commerce with reference to activity of developing infrastructure for such sport.
Appeal dismissed - decided against Revenue.
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2018 (2) TMI 1185
Refund of unutilized CENVAT credit - N/N. 5/2006-CE (NT) dated 14.3.2006 - denial on the ground that the condition that the payment for export service is to be received by the service provider in convertible foreign exchange was not satisfied - Held that: - one of the conditions for allowing refund is that the proceeds for export of service should have been received in convertible foreign currency - In respect of the present refund claims, the proceeds for export of service were not received directly in foreign exchange but the same was routed by the Foreign Service receiver through M/s. Wells Forgo NA, USA through HSBC Bank. Ultimately the amount was received by the appellant in rupees.
The issue has been decided in favour of the appellant by this Tribunal in the case of BBC World Services India Pvt. Ltd. vs. Commissioner of Service Tax, Delhi [2018 (2) TMI 369 - CESTAT NEW DELHI], where it was held that It is manifestly clear that the amount credited to the account of the appellant in India is in consequence of a debit of pound sterling account maintained by participated bank in nostro mechanism in UK. The said debit of foreign exchange by the UK bank and consequent credit in Indian rupee in Indian bank as part of nostro transaction is reported to RBI and necessarily forms part of foreign exchange earning in India.
Refund allowed - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1184
Valuation - includibility - transaction charges - Stock Broking Service - Held that: - It cannot be nobodys case that the transaction charges are charged by the appellants on the clients. It is evident that these charges are required to be paid by the clients only to the stock exchange for the transactions in shares or stocks that they may have entered into on their own or through the stock brokers like the appellant herein. Merely because the appellants are collecting the said charges from their clients and remitting the same to the concerned stock exchange cannot be a reason for considering such amounts as received by them for services rendered by them.
In the case of First Securities Pvt. Ltd. [2007 (6) TMI 33 - CESTAT, BANGALORE] the Tribunal has held that handling charges collected from investors and the amounts collected towards transaction charges cannot be equated to brokerage or commission for purchase of securities.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1183
CENVAT credit - extended period of limitation - Held that: - the appellant availed the credit on the basis of the documents prepared in ERP System. Apparently there is a doubt on availment of the credit on trading goods. In any event, there is no material available on record of suppression of facts with intent to evade payment of tax.
The Tribunal in the case of Rajasthan Renewable Energy Corporation Limited Vs. Commissioner of Central Excise, Jaipur [2016 (12) TMI 342 - CESTAT NEW DELHI] allowed the appeal of the assessee on the ground that the assessee being a State Government Enterprise, the allegation of lawful mis-statement, suppression of facts with intent to evade payment of duty cannot be made.
The demand of CENVAT Credit for the extended period of limitation cannot be sustained and the penalty is also liable to be set aside - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1188
Levy of service tax - activity done by the petitioner namely erection, maintenance and repairs of street lights for the use of Municipal Corporation - Held that: - The inability to pay the mandatory pre-deposit cannot be a ground to entertain a writ petition - Petition not maintainable - petition dismissed.
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2018 (2) TMI 1182
Refund claim - N/N. 27/2012-CE (NT) - denial on the premise that services for which they have availed Cenvat credit are not input services and appellant has filed 3 times revised returns showing different figures - Held that: - The fact of revised return is on record. Nowhere in the Finance Act, 1994 it is stated that return is to be revised once, twice or thrice. If there is mistake, it is right of the appellant to revise the return and there is no such bar on the appellant to revise the return and appellant can revise the returns several times.
The appellant has provided certificates issued by bank co-relating the exports made by the appellant and payments realised thereof. The adjudicating authority shall examine the certificates to verify that against the exports of goods the appellant has received the payment through the banking channels or not.
The matter is remanded back to the adjudicating authority only for verification of the bank certificates produced by appellant - Appeal allowed by way of remand.
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2018 (2) TMI 1181
Refund claim - rejection on the ground of time limitation - Held that: - if an assessee paid the duty/service tax by mistake or in good faith or pressure from the Dept. the said amount shall go to deposit towards Service Tax or duty - Admittedly, in this case, the appellant has paid Service Tax being recipient by mistake therefore, the said amount shall be deposit as Service Tax and the provisions of Sec 11B of the Act is not applicable - refund allowed - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1180
Refund claim - time limitation - whether the time limit prescribed u/s 11B of the CEA 1944 in respect of filing of refund claims whether has to be considered from the end of the quarter as prescribed u/r 5 of CCR 2004 read with N/N. 5/2006, dated 14-3-2006 as amended by N/N. 27/2012 or should be applied from the date of receipt of payment for export of services?
Held that: - As numerous appeals are pending in this Bench on this point of computation of time limit whether should be from the date of FIRC only or from the end of quarter of export of services and there being divergence of views of Tribunal, I deem it fit to direct the Registry to place this issue before the Hon'ble President and seek his advice for placing all these matters before Larger Bench to settle the question of law.
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2018 (2) TMI 1179
Levy of service tax - manpower supply service - Held that: - Wherever manpower of appellant was used as per the terms agreed by agreement dated 27-09-2009, there cannot be levy of service tax in disguise holding manpower supply service was provided. The Agreement when read together with the material fact as above, that does not call for levy of service tax on the appellant in respect of alleged manpower supply service - appeal allowed.
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2018 (2) TMI 1178
GTA Service - the appellant had transported “Debris” by deploying their own “trippers and trucks” where “Debries” were loaded - main contention of the appellant is that “debries” is not a goods and it has no value, so liability of tax does not arise - Held that: - it appears that “debries” is not value less item as appellant has got substantial amount by dumping the debries. Had there not been any debries, there was no question of transportation - It is evident that when the appellant has earned a substantial consideration by dumping debries through trippers and trucks i.e own transportation, then the tax is leviable, may be as unregistered dealer - liability of service tax sustained.
Penalty - Held that: - the appellant was under bonafide belief that Service Tax is not leviable - also interpretation of issue involved - penalty not warranted.
Appeal allowed in part.
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2018 (2) TMI 1177
Penalty - Valuation - CHA Services, for service tax purpose - quantification of lump sum amount - Held that: - As the amounts were to be reconciled in the accounts and the non-payment in time is attributable to reconciliation of receipt, we find that it is a fit case for invoking Section 80 for waiver of penalty imposed on this tax liability - penalty set aside - appeal allowed.
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2018 (2) TMI 1176
Jurisdiction - Refund of of accumulated Cenvat credit - case of Revenue is that Commissionerate-I was not having any jurisdiction over the assessee’s factory and the refund claim should have been filed with Commissionerate-III, who had the proper jurisdiction - Held that: - In the absence of any dispute about legality of the refund claim or about appellant’s entitlement to the same, the setting aside the order by the Commissioner (Appeals) is not justified - In case, the officer who sanctioned the refund claim was not having jurisdiction over the appellant, it was for him to return the papers back to the assessee for proper filing or to transfer the same to the correct Commissionerate. In any case, the appellate authority set aside the order instead of remanding the matter to be re-adjudicated by the proper officer.
It is not fit to remand the matter to the proper Commissionerate/Officer as the refund has already been sanctioned and there is no dispute about merits of the refund - impugned order set aside and matter restored the order of the original adjudicating authority with consequential relief to the appellant, if any, as per law - appeal allowed.
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Central Excise
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2018 (2) TMI 1175
CENVAT credit - input services - Service Tax paid on the consulting engineering services received by the appellant in relation to structural design and drawing of cellar foundation of 6 HI Mill Project - Held that: - Admittedly the consulting engineer services stand used by the appellant for the purpose of execution of the construction of structural design and drawing of cellar foundation of 6 HI Mill Project. As the exclusion is not only in respect of the actual services mentioned in the exclusion clause, but also refers to the services used for execution of such construction, I am of the view that the lower authorities have rightly denied the credit of the Service Tax paid on the consulting engineer services.
Penalty - Held that: - inasmuch as the issue is a bona fide dispute of legal interpretation of the newly introduced provisions, and inasmuch as the credit was availed by reflecting the same in the Cenvat accounts, no mala fide can be attributed to the assessee so as to call for imposition of any penalty - penalty set aside.
Appeal allowed in part.
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2018 (2) TMI 1174
Interest on delayed payment of duty - whether the appellant is liable for payment of interest on delayed payment of nine days from 06.09.2013 to 14.09.2013 on ₹ 5,02,36,000/-? - Held that: - issue is no more res-integra in view of the decision of the Tribunal in the case of Trimurti Fragrances Pvt. Ltd. Vs. Commissioner of Central Excise, Delhi [2016 (2) TMI 718 - CESTAT NEW DELHI], where it was held that the third proviso to Rule 9, the duty was payable by the 5th of August, 2013. Duty was in fact paid on 27th July, 2013. There is therefore no delayed payment of duty warranting levy of interest under Section 11AA of the Act.
The appellant failed to pay the duty on the due date i.e. 05.09.2013 and paid a part of the duty only on proportionate basis for running of the machine for the remaining days w.e.f. 16.09.2013 on 14.09.2013 - the Tribunal observed that failure to pay monthly duty by 5th day of the same month under Rule 9 of the Rules would not invite liability of interest as in the case of claim of abatement as the duty was paid in the same month.
The demand of interest is set aside - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1173
CENVAT credit - outdoor canteen service - bus and car hire service - garden service - period involved is December 2010 to August 2011, March 2013 to September 2014 - Held that: - the issue is covered squarely in favor of the appellant herein as followed by the Tribunal in the case of Hindustan Coca Cola Beverages Ltd. [2016 (8) TMI 35 - CESTAT HYDERABAD] - CENVAT credit availed on canteen services, bus and car hire services for the period in question in all these appeals seems to be correct.
Garden maintenance service - Held that: - issue is now settled by the Hon’ble Karnataka High Court in the case of Millipore India Pvt. Ltd. [2011 (4) TMI 1122 - KARNATAKA HIGH COURT] - credit allowed.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1172
CENVAT credit - duty paying documents - Rule 9 of the CCR 2004 - denial on the ground that photocopy of the courier bill of entry is not a proper document in terms of Rule 9 of CCR - Held that: - the photocopy of courier bill of entry issued by the courier agency has been duly notarized and attested as true copies by the courier agency in favour of the appellant who has taken the cenvat credit on the basis of those consolidated courier bill of entry - it is not in dispute that the goods were imported through courier agency. Since the courier bill of entry has been issued by the courier agency in favour of various parties/consignees, there was no scope for issuing the original invoices in favour of each and every party - credit allowed - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1171
CENVAT credit - input services of Commercial and Industrial Construction Service - whether the services in relation to setting up of marketing office of the appellant-factory received prior to 1.4.2011 but the credit distributed and availed on the basis of Input Service Distributor (ISD) invoice during November 2011 is entitled for CENVAT Credit as an input service under Rule 2(1) of CCR?
Held that: - the documents produced by the appellant on record clearly establishes that the construction service was obtained prior to 1.4.2011 and it is only distributed by the ISD in November 2011 - credit cannot be denied - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1170
Refund claim - denial on the ground that the shipping bills and the Bill of lading are not in the name of the respondent - Held that: - the name of M/s. Liberty Marine Syndicate Pvt. Ltd. and M/s. Resource International Pvt. Ltd. were mentioned in the shipping bills at the time when the goods were exported. Therefore, they are the exporter under the Customs Act - appeal allowed - decided in favor of Revenue.
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CST, VAT & Sales Tax
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2018 (2) TMI 1169
Jurisdiction - whether the Joint Commissioner is empowered to issue such an authorisation in terms of Section 64 (4) of the Act in terms of the statutory provisions, audit can be ordered only by the Commissioner? - Held that: - the audit has been authorised by the Joint Commissioner, who has no jurisdiction to do so - identical issue decided in the case of M/s. Jeevan Buy N. Save Versus The Joint Commissioner (CT), The Commercial Tax Officer, The Assistant Commissioner (CT) [2017 (2) TMI 180 - MADRAS HIGH COURT], where it was held that The jurisdiction to conduct VAT audit, which was authorised by the Joint Commissioner was not accepted by the petitioner and therefore, the assessment orders passed were also without jurisdiction.
The impugned assessment order and the Value Added Tax audit report are set aside - petition allowed.
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2018 (2) TMI 1168
Input tax credit - denial on the ground that the said input tax related to purchases effected from seven dealers, whose returns were not traceable - It was the grievance of the petitioner that even before filing the objections to the said notice, the Assessing Officer proceeded to pass a reassessment order confirming its proposal to disallow the input tax credit claimed by the petitioner.
Held that: - it is categorically admitted that in respect of selling dealer Nos.1 to 3, assessee is entitled to the input tax credit; as regards the selling dealer No.7 is concerned, now the assessee has filed the income tax returns filed by the said dealer along with bank statements, which prima facie shows that the selling dealer has remitted the collected tax from the assessee. The assessee has utilized the goods purchased from the selling dealers for the manufacture of goods and effected local and interstate sales.
It is trite that the revenue can be at a loss in allowing the input tax credit to a dealer, who deals with a bogus transaction, for example, a selling dealer who is not in existence or a deregistered dealer, in such circumstances, it is not in doubt that unless the purchasing dealer establishes the genuineness of the invoices issued by the selling dealer, no input tax credit can be allowed but that is not the case in the present set of facts. The Assessing Officer while passing reassessment order has categorically observed that the invoices are genuine and in view of the material placed before this Court with respect to the selling dealer No.7, the matter requires reconsideration by the Assessing Officer - Even as regards the selling dealer Nos.4 to 6, no reasons are assigned by the respondent for denying the input tax credit. It is also trite that no input tax credit can be disallowed on the premise that the selling dealer is de-registered subsequent to the relevant tax periods.
The factual aspects requires reconsideration - petition allowed by way of remand.
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2018 (2) TMI 1167
Cancellation of registration - TNVAT Act - non-existent dealer - Held that: - the cancellation of the registration appears to be solely based upon report of the Deputy Commercial Tax Officer, which in fact is a report submitted by another officer of the Department. In any event, before cancellation of the registration, procedure required to be complied with under sub-sections (14) and (15) of Section 39 of the Act has to be mandatorily complied with. This having not been done, cancellation of the petitioner's Registration is held to be not sustainable in law - the respondent is directed to restore the petitioner's registration under the provisions of the TNVAT Act - petition disposed off.
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2018 (2) TMI 1166
Principles of Natural Justice - revision of assessment under Section 22(4) of the Act - Held that: - considering the conduct of the petitioner in dragging the matter without offering proper explanation, it is held that the instant case is not a case where there is violation of principles of natural justice or violation of provisions under Section 22(4) of the Act, but it is the case where the petitioner filed to avail the opportunity granted to them - the petitioner should submit a proper reply duly supported by records. However, only one opportunity will be given to the petitioner, failing which, the respondent can proceed to recover the tax as quantified in the impugned order - petition disposed off.
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2018 (2) TMI 1165
Reversal of input tax credit - TNVAT Act - CST Act - petitioner's case is that without even issuing show cause notice where a proposal has been made to reverse the input tax credit availed apart from demanding 50% penalty - Held that: - The petitioner was given 15 days time to produce those records. This notice dated 13.09.2013 was issued after the writ petition was filed and an order of stay was granted on 16.08.2013. Therefore, the petitioner appears to have not acted in furtherance to the amended notice dated 13.09.2013. Since the respondent has himself realized the mistake and issued a modified notice, the impugned notices cannot be enforced - petition allowed.
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Indian Laws
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2018 (2) TMI 1189
Rejection of revision application - rejection on the ground that the said application has been filed belatedly after 9 months from the date when the case was fixed for defence evidence - Held that: - The documents which are sought to be summoned from the complainant cannot be said to be necessary for the disposal of the case. The burden is on the applicant to rebut the presumption as provided under Section 139 of Negotiable Instruments Act.
The complainant has closed his evidence and case was fixed for recording of defence evidence about 9 months back. No explanation has been given by the complainant for not filing the application immediately after the case was fixed for his defence evidence.
The document sought by the applicant are not necessary and the application under Section 91 Cr.P.C has been filed to delay the proceedings - application dismissed.
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