TMI Tax Updates - e-Newsletter
April 2, 2024

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

TMI Short Notes

1. Maximizing Value in Insolvency: NCLAT Upholds CoC's Right to Negotiate Post-Challenge Mechanism

  IBC:

2. Supreme Court Clarifies Limitation Period for Appeals before NCLAT under IBC in the Digital Age: E-filing and Limitation Periods

  IBC:

Articles

1. No penalty shall be imposed in cases where Part B of the E-way bill remains unfiled due to technical difficulties

   By: Bimal jain

2. Priority/out of turn disposal of appeals by CIT(A) Assessment Units and Additional Joint CIT(Appeals)

   By: Vivek Jalan

3. ITC is permissible when the consideration is settled via Book Adjustment

   By: Bimal jain

News

1. Second highest monthly Gross GST Revenue collection in March at ₹1.78 lakh crore; Records 11.5% y-o-y growth (18.4% on net basis)

2. Welcome Address by Shri Shaktikanta Das, Governor, RBI at the RBI@90 commemoration function on April 1, 2024, Mumbai

3. ITR form A.Y. 2024-25 Utilities Available in offline or Online mode

4. Clarification regarding applicability of new tax regime and old tax regime

Notifications

GST - States

1. 13/2023 – State Tax (Rate) - dated 5-3-2024 - Jharkhand SGST

Amendment in Notification No. 12/2017-State Tax (Rate), dated the 29th June, 2017

2. S. R. O. No. 355/2024 - dated 30-3-2024 - Kerala SGST

Amendment in Notification G.O. (P) No.62/2017/TAXES dated 30th June, 2017

3. S. R. O. No. 354/2024 - dated 30-3-2024 - Kerala SGST

Seeks to extend dates of specified compliances in exercise of powers under section 168A of Kerala State Goods and Services Tax Act, 2017

4. S. R. O. No. 353/2024 - dated 30-3-2024 - Kerala SGST

Amendment in Notification G.O. (P) No.62/2017/TAXES dated 30th June, 2017

5. S. R. O. No. 352/2024 - dated 30-3-2024 - Kerala SGST

Amendment in Notification G.O. (P) No.181/2017/TAXES. dated 6th December, 2017

6. S. R. O. No. 351/2024 - dated 30-3-2024 - Kerala SGST

Notify supply of online money gaming, supply of online gaming other than online money gaming and supply of actionable claims in casinos under section 15(5) of Kerala State Goods and Services Tax Act, 2017

Circulars / Instructions / Orders

GST

1. Instruction No. 01/2023-24-GST (Inv.) - dated 30-3-2024

Guidelines for CGST field formations in maintaining ease of doing business while engaging in investigation with regular taxpayers

Highlights / Catch Notes

GST

• Court Rules Timber Trader's Tech Limitations Denied Fair Hearing; Online Notices Insufficient for Justice.

  Case-Laws - HC : Violation of principles of natural justice - The court observes that the petitioner, a timber trader, lacks familiarity with advanced technology and online portals. It notes that notices were indeed uploaded only through the portal, which created difficulty for the petitioner to access them. The court, therefore, accepts the petitioner's contention that he was not afforded a fair opportunity of hearing. - While acknowledging that Section 169(d) allows for notice issuance through online portals, the court emphasizes that other modes of communication are also available under Section 169 of the TNGST Act 2017. It points out that the petitioner's lack of technological proficiency warrants consideration of alternative communication methods.
  Visit to Get Source

  ---

• Refund of Pre-Deposit with Interest Entitled Post-Resolution Plan Approval in Insolvency Proceedings.

  Case-Laws - HC : Refund of pre-deposit alongwith interest - CIRP - Approval of Resolution Plan under IBC - Analyzing the insolvency proceedings and the subsequent approval of the resolution plan, the court concluded that the tax liability against the petitioner had been extinguished. Therefore, the rejection of the refund application by the revenue authority was deemed misconstrued and misdirected. The court emphasized the entitlement of the petitioner to the refund, considering the legal precedent established by the Supreme Court regarding resolution plans.
  Visit to Get Source

  ---

• Treated Industrial Water Exempt from GST, Not Classified as Purified or Demineralized Under Customs Tariff Act Regulations.

  Case-Laws - AAR : Classification of treated water - end-use - The AAR meticulously analyzed the Applicant's activities, the treatment process, and the nature of the treated water. It distinguished between different categories of water mentioned in the GST notifications and concluded that the treated water does not fit into categories that are taxed under GST, such as 'purified' or 'demineralized' water, given its intended use for industrial purposes and not for human consumption. - The treated water supplied by the Applicant is correctly classifiable under Heading 2201 of the Customs Tariff Act, as amended by Notification No. 2/2017-Central Tax (Rate), and falls under the category of water other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container, which is exempt from GST.
  Visit to Get Source

  ---

Income Tax

• Court Rules Photocopy Insufficient for Income Additions Without Original or Supporting Evidence.

  Case-Laws - HC : Determination of sale consideration - reliance on photocopy of the alleged agreement to sell - The High Court scrutinized the circumstances surrounding the photocopy of the agreement to sell. It noted that the original document was not produced, and there was no other evidence to corroborate the details mentioned in the photocopy. Therefore, the court concluded that the photocopy alone could not serve as a valid basis for making additions to the assessee's income. - The court emphasized that the burden of proving the authenticity of the photocopy rested with the Revenue, especially since the entire case relied solely on it.
  Visit to Get Source

  ---

• Court Rules Invalid Tax Notices Against Non-Existent Firm; Criticizes Officer for Lack of Due Consideration.

  Case-Laws - HC : Reopening proceedings against non-existent entity/ partnership firm -The case revolves around the jurisdictional issue arising from actions taken by the assessing officer against a dissolved partnership firm. Despite the firm's amalgamation with a private limited company, the assessing officer proceeded with notices alleging non-filing of income tax returns. The petitioner challenged these actions, arguing that they were without jurisdiction since the partnership firm no longer existed. The High Court agreed with the petitioner, emphasizing that once an entity ceases to exist, no further actions can be initiated against it. It criticized the assessing officer for passing orders without proper consideration and quashed the notices issued against the petitioner.
  Visit to Get Source

  ---

• Tribunal Questions 13% Markup on Reimbursement Expenses; Seeks Clarity on Assessee's Role in Transactions.

  Case-Laws - AT : Accrual of income - Reimbursement of expenses treated as income of the Assessee - Application of Markup on Reimbursement Expenses: The contentious issue was whether the Assessee should apply a markup on these reimbursement expenses. The Commissioner had directed a 13% markup, a decision that was challenged. The Tribunal remanded this issue back to the Commissioner for a detailed examination of whether the Assessee's role was merely as a conduit or if it played a significant role that could justify the markup.
  Visit to Get Source

  ---

• Tribunal Confirms PCIT's Rejection of CCD Valuation Method, Supports Income Addition Under IT Act Section 56(2)(viib.

  Case-Laws - AT : Revision u/s 263 - issue of shares at premium - The Tribunal affirmed the PCIT's findings regarding the inadequacy of the AO's examination of the valuation of CCDs. It concluded that there was no error in discrediting the valuation method adopted by the appellant. - Despite the appellant's contentions regarding jurisdictional matters, the Tribunal upheld the validity of the orders passed by the PCIT and AO. - The Tribunal agreed with the AO's application of section 56(2)(viib) and the rejection of the DCF method, thereby affirming the addition made to the appellant's income.
  Visit to Get Source

  ---

• Tribunal Confirms Indian Taxation on US Income, Stresses Global Income Declaration and Treaty Relief Evaluation.

  Case-Laws - AT : Rectification u/s 154 - taxation of salary income earned in USA - The appeal before the Appellate Tribunal involved various issues related to the taxation of income earned by the appellant for the assessment year 2014-15. The Tribunal upheld the validity of the order issued under Section 154, rectifying factual mistakes in the assessment order. It affirmed the appellant's tax residency status as being in India, thereby subjecting the income earned in the USA to taxation in India. The Tribunal emphasized the need for offering global income for taxation and directed the Assessing Officer to consider the appellant's eligibility for relief under the India-USA treaty provisions.
  Visit to Get Source

  ---

• Tribunal Upholds ITAT Decision Allowing Bad Debt Claims in Chit Funds, Emphasizes Non-Conventional Debtor-Creditor Status.

  Case-Laws - AT : Disallowance of bad debts written off - bad debts in respect of subscriptions defaulted by the prized subscribers - The Tribunal found the CIT(A)'s decision well-founded, particularly in light of the specific judicial pronouncements and the ITAT Hyderabad's stance, which had, in principle, allowed the claim of bad debts related to chit funds while remanding the matter for factual verification. Moreover, the Tribunal noted that the relationship between chit fund transactions did not characterize a typical debtor-creditor scenario, aligning with the principles laid out in significant judgments.
  Visit to Get Source

  ---

Customs

• Tribunal Overturns Refund Rejection for Discrepancies in Invoice and Entry Dates Under Customs Notification 102/2007-Cus.

  Case-Laws - AT : Refund of SAD - The case involved refund claims filed by the appellant under Customs Notification No.102/2007-Cus. for Special Additional Duty of Customs paid during the import of goods. While a part of the refund claim was sanctioned, the original authority rejected the claim for two Bills of Entry, citing discrepancies between invoice dates and dates of Bill of Entry. The appellant contended that the rejection was based on unfounded assumptions by the department, clarifying that goods were intended for delivery at Sivakasi and were transported directly from Chennai to Sivakasi. The Tribunal found the rejection erroneous, emphasizing that an importer can arrange for direct delivery to the customer from the port.
  Visit to Get Source

  ---

• Tribunal Grants Exemption for Imported Porcelain Panels, Classifies Them as Ceramic Tiles Under Chapter 6907.

  Case-Laws - AT : The case involved the classification of imported goods, specifically 'Porcelain Panels,' for which the appellant claimed exemption under Notification No.72/2005-Cus. The original authority and Commissioner (Appeals) denied the exemption, but the appellant argued for classification under Chapter 6907 as ceramic tiles. The Tribunal examined the evidence, including catalogues and examination results, and concluded that the goods were rightly classified as ceramic tiles under Chapter Heading 6907. Consequently, the appellant was deemed eligible for the exemption provided under the notification. All appeals were allowed based on these findings.
  Visit to Get Source

  ---

Indian Laws

• Arbitration and Cheque Dishonor: Court Upholds Separate Causes of Action, Allows Simultaneous Civil and Criminal Proceedings.

  Case-Laws - HC : Dishonour of Cheque - Effect of arbitration proceedings - The High Court referred to a Supreme Court judgment which clarified that arbitration proceedings and proceedings under Section 138 NI Act arise from separate causes of action. As per the Supreme Court precedent, the pendency of arbitration proceedings would not affect the proceedings under Section 138 NI Act. - The Court emphasized that there was no bar to the simultaneous continuance of criminal and civil proceedings if they arose from separate causes of action. Therefore, the contention of the petitioners that the complaint under Section 138 NI Act was not maintainable due to ongoing arbitration proceedings was dismissed.
  Visit to Get Source

  ---

PMLA

• High Court Affirms PMLA Case Independence; Criticizes Assumptions Linking Scheduled Offenses to Proceeds of Crime.

  Case-Laws - HC : The High Court affirmed the independence of proceedings under the PMLA, clarifying that while the outcome of the scheduled offense may have some bearing on the PMLA case, the prosecution must independently prove the allegations under the PMLA. - The Court criticized the complainant for presuming that the scheduled offense automatically generated proceeds of crime, emphasizing the need for independent proof. It noted deficiencies in the evidence presented by the prosecution, particularly regarding the source of the alleged proceeds of crime. - Ultimately, the High Court concluded that the appeal lacked merit and upheld the trial court's decision to dismiss the complaint. It emphasized that an acquittal should not be disturbed unless there are serious legal infirmities or factual errors, which were not present in this case.
  Visit to Get Source

  ---

• Court Upholds Money Laundering Complaint; Affirms PMLA's Constitutionality Despite Pending Predicate Offense.

  Case-Laws - HC : The High Court dismissed the petitions seeking to quash the criminal complaint under the Prevention of Money-Laundering Act, 2002 (PMLA). The petitioners argued that the complaint lacked sufficient grounds, as the predicate offense initiated by the CBI was pending, and there was no evidence linking the funds used for property purchase to proceeds of crime. However, the court upheld the constitutionality and interpretation of the PMLA as clarified by the Supreme Court in Vijay Madanlal Choudhary case. It emphasized that money laundering is a continuous process, and prosecution under the PMLA can be initiated independently of the status of the scheduled offense.
  Visit to Get Source

  ---

Service Tax

• Dispute Over Service Tax on Penalty Fees in Contracts Remanded for Further Consideration After New Guidelines.

  Case-Laws - HC : Demand of service tax on amounts collected as penalties under various contracts - The petitioner argued that these amounts did not involve any value addition or service element, thus not attracting service tax liability. - The petitioner relied on a circular dated 3.8.2022 and a judgment of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which influenced the decision not to challenge the orders. The court needed to consider the implications of these subsequent events on the original show cause notice. - Matter restored back.
  Visit to Get Source

  ---

• Services Classified as "Mining of Mineral, Oil or Gas" Under Raising Agreement, Not as Business Auxiliary Services.

  Case-Laws - AT : Classification of service - The CESTAT concluded that, the activities under the Raising Agreement were comprehensive, extending beyond mere production or processing of goods. They were integral to mining operations, encompassing exploration, development, excavation, extraction, and ancillary services necessary for mining. Hence, they were distinct from the services envisaged under BAS. - The tribunal favored a specific over a general classification, aligning with principles outlined in Section 65A of the Finance Act, 1994. It found that the services rendered by the appellant were more aptly classified under "Mining of Mineral, Oil or Gas" services, a category specifically introduced into the Finance Act in 2007.
  Visit to Get Source

  ---

• Demand for Interest Denied Due to Late Issuance; No Suppression or Malafide Intent Found in State Government Undertaking.

  Case-Laws - AT : Extended period of limitation - PSU - The Tribunal noted that the demand for interest was raised beyond the statutory limitation period. It was emphasized that since the appellant was a State Government Undertaking, the element of suppression of facts and malafide intention did not apply.
  Visit to Get Source

  ---

Central Excise

• Tribunal Rules Initial Duty Assessment Stands Despite Later Price Negotiations on Goods Cleared to Depots.

  Case-Laws - AT : Refund of the excess duty paid - whether subsequent negotiation of the prices can be the basis for reopening the assessment? - The Tribunal observed that the appellant cleared goods on stock transfer basis to their depots, adopting the price prevailing at or nearest to the time of sale from the depots. This was done in accordance with Rule 7 of the Central Excise Valuation Rules. Subsequent negotiation of prices did not affect the assessable value already determined and on which duty liability was discharged. The Tribunal cited precedent to support this conclusion.
  Visit to Get Source

  ---

Case Laws:

• GST

• 2024 (4) TMI 25
  Validity of Demand of GST - No personal hearing as required under Section 75(5) - Bank account has been frozen - discrepancies between GSTR-3B and GSTR-7 and mismatch between GSTR-3B and GSTR-7 - ASMT-10 order passed - intimation issued u/s 73 - HELD THAT:- Opportunity of hearing is a basic requirement before passing any adverse order. In the present case, admittedly, the petitioner has not availed that opportunity of personal hearing provided through portal. Since the petitioner has made out a prima facie case, this Court is inclined to entertain this Writ Petition and grant an order of interim stay. The learned Additional Government Pleader submits that instead of granting an interim order, the petitioner can be provided one more opportunity and the date can be fixed by this Court. For the sole purpose to provide an opportunity of personal hearing to the petitioner, this Court is inclined to set aside the impugned order. Accordingly, the same is set aside. The petitioner, without expecting any further notice from the 1st respondent, shall appear before the 1st respondent on 27.03.2024 and shall provide his explanation, if any. The 1st respondent shall consider the same and pass a fresh order. In fine, this Writ Petition is allowed.

  ---

• 2024 (4) TMI 24
  Violation of principles of natural justice - show cause notice issued through online portal - Petitioner not acquainted with the advance technology of following the notices - on-line portal and uploading the notices through on-line portal - No opportunity of hearing - HELD THAT:- The impugned order has been passed after issuing notice in Form ASMT-10 dated 13.05.2022 and notice in Form DRC 01A dated 05.11.2022 and notice in Form DRC 01 dated 03.12.2022. Admittedly, all these notices were uploaded only through the portal. Though Section 169(d) of TNGST Act 2017, enables the respondent to issue notice through the common portal, other modes are also made available to the respondent under Section 169 of the TNGST Act 2017. In this case, the petitioner is a Timber Trader. He is not an educated person and he is not acquainted in following the notices uploaded through the common portal. Thus, this writ petition is allowed by setting aside the impugned order passed by the respondent dated 23.02.2023 and the matter is remitted back to the respondent for fresh consideration. The respondent shall proceed with the assessment and pass orders afresh, after providing an opportunity of hearing to the petitioner. The petitioner shall appear before the respondent on 04.03.2024 (Monday) along with the required documents. In order to avoid such a situation, the respondent shall also find out the possibility of issuing the notices through other modes, which are also made available u/s 169 of the TNGST Act 2017. Consequently, connected miscellaneous petition is closed.

  ---

• 2024 (4) TMI 23
  Refund of pre-deposit alongwith interest - CIRP - Approval of Resolution Plan under IBC - wrongful availment of CENVAT credit - HELD THAT:- There are no hesitation in holding that the Revenue in the impugned order has completely misdirected itself in law and has completely misconstrued the orders passed by the Ld. NCLT. The purport of the order dated 22.04.2022 passed by the Ld. NCLT which has been relied by the Revenue to reject the claim of the Petitioner that no persons will claim any dues including the statutory dues owed to Central, State Government or any local authority is rather applicable qua the claims of the Revenue against the Petitioner, and does not in any manner imply that the pre-deposit made by the Petitioner is not to be refunded; more so, when the very tax liability has stood extinguished. Further, if at all the Revenue retains the pre-deposits made by the Petitioner; the same would amount to unjust enrichment since the very tax liability which was subject matter of appeals, stood extinguished. So far as stand of the Revenue that Refund application of Petitioner was examined as per Circular No. 984/08/2014-CX dated 16.09.2014; in this regard, it is observed that the said circular is inapplicable to the facts of the instant case and it is of a period prior to the enactment of the Insolvency Bankruptcy Code, 2016. Moreover, there is no reference to the said circular in the impugned order. In the case of Rainbow Papers [ 2022 (9) TMI 317 - SUPREME COURT] , the Revenue not only filed its claims before the resolution professional and also had challenged the resolution plan before the NCLT. However, in the instant case, there was neither any claim filed by the Revenue before the resolution professional nor there was any challenge by the Revenue to the resolution plan or any other orders passed by the NCLT. In the case of Sanjay Kumar Agarwal [ 2023 (11) TMI 54 - SUPREME COURT] , a review was filed against the judgment in Rainbow Papers and the same was dismissed. The order is hereby, quashed and set aside. The Respondent-Revenue is directed to refund the aforesaid pre-deposit amount of Rs. 2,06,31,698/- to the Petitioner along with applicable statutory interest - the instant writ application is allowed.

  ---

• 2024 (4) TMI 22
  Classification of treated water - what is the appropriate classification of the treated water that would be sold by the Applicant, after carrying out various treatment process on the effluent water purchased by them - rate of GST applicable on the said treated water - HELD THAT:- Upon going through the processes effected by the Applicant, the effluent water is subjected to micro-filtration and sand filtration process to remove suspended impurities. They have then used a series of RO units for removing minerals. In spite of the RO treatment, the TDS of the treated water is higher, which can be seen from the test report. As per the report furnished by the South India Textile Research Association (SITRA) Textile Testing and Service Centre, test report No. V2300304, dated 9-8-2023 of Sample given for testing, in the case of the Applicant, it is seen that the recovered water contains chlorides, sulphates, Bicarbonates, etc. The TDS levels of the treated water as per the test report is 272 mg/1, which clearly shows the treated water is not demineralized as per the standard norms. From the above, it is clear that treated water cannot be construed as de-mineralized water. As discussed, treated water will not fit into Sl. No. 24 of Notification No. 1/2017-C.T. (Rate), dated 28-6-2017. Also treated water is not demineralized water as claimed by them but water, without any special characters as indicated in the tariff entries. Therefore, it is amply clear that, water recovered out of the effluent treatment process nothing but an ordinary water which is suitable for reuse by the dyeing and bleaching units as a solvent and as a washing, rinsing medium. Thus, it aptly fits into Sl. No. 99 of Notification No. 2/2017-C.T. (Rate), dated 28-6-2017 under the Heading 2201 rather than Sl. No. 24 of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017 under the same Heading 2201. It is observed that the process carried out by the Applicant involves conversion of effluent water into treated water to make it suitable for reuse by the member units. At the same time, the treated water cannot be put into any other usage, as the same is not completely free of impurities, bacteria and other harmful micro-organisms and chemicals. The above facts reiterate that the ultimate intention behind the effluent treatment process is to treat the effluent water discharged by textile units to recover water, salt and other chemicals consumed during the course of dyeing and bleaching to the maximum extent possible so as to reuse the same without getting it discharged to pollute water bodies. Moreover, ZLD has been mandated by the TNPCB for all the highly polluting industries including Textile Dyeing and Bleaching industries in order to prevent pollution of River water and ground water. Therefore, it is evident that the common effluent treatment plant has been set up in order to comply with the legislative and environment regulations thereby conserving water through recovery and reuse and not to manufacture water or chemicals. Therefore, we find that effluent treated water is eligible for exemption as per Notification No. 2/2017-Central Tax (Rate) as amended vide Notification No. 7/2022-Central Tax (Rate), dated the 13th July, 2022 Therefore, The classification of treated water to be sold by the applicant is correctly classifiable as per Notification No. 2/2017-Central Tax (Rate). The said treated water is eligible for exemption as per the notification.

  ---

• Income Tax

• 2024 (4) TMI 21
  Determination of sale consideration - reliance on photocopy of the alleged agreement to sell which contains, inter alia the signatures of the assessee as a purchaser of the property - ITAT deleted addition - Whether the photocopy of a document, some part of information/facts recorded on it found to be correct in verification, could be treated as a valid document or not in the absence of the original? - HELD THAT:- Hon ble Supreme Court in the case of S. Ganga Saran Sons (P) Ltd. [ 1981 (4) TMI 5 - SUPREME COURT] has held that the Income Tax Officer must rely upon relevant material to form a reason to believe escapement of income and such belief should not be arbitrary or irrational. Hon ble Supreme Court in the case of Moosa S. Madha Azam S. Madha [ 1973 (2) TMI 5 - SUPREME COURT] was of the opinion that photostat copies have very little evidentiary value. Admittedly, the entire foundation is laid on the basis of the photocopy of the alleged agreement to sell dated 5 March 2010. The original copy of the said document has not seen the light of the day. Further, there is no other evidence to support the veracity of the recitals made in the aforesaid alleged agreement. Therefore, under the facts of the present case, the same cannot be construed to be a sustainable ground for making addition to the income of the assessee. Decided in favour of assessee.

  ---

• 2024 (4) TMI 20
  Reopening proceedings against non-existent entity/partnership firm - HELD THAT:- Since the partnership firm-M/s Parikh Sales has merged with the petitioner-M/s Parikh Marketing Pvt. Ltd. with it s all assets and liabilities which were also taken over by the company and therefore, M/s Parikh sales became a non-existent partnership firm.The Petitioner had also informed to the Department on 20.04.2009 about this conversion and changing in constitution. In pursuance to Show Cause Notice u/s 148A(b) in the name of partnership firm, a detailed joint show cause reply was also filed on behalf of the partnership firms and the petitioner stating all the past facts with evidences that it has been acquired by the company and stated that the amount deposited in Axis Bank was duly considered in the return of the company and there was no escapement and as such the case should not be reopened u/s 147 of the Act and the entire proceedings be dropped. It transpires that the respondent No. 2, without making any further clarification or without giving any opportunity of personal hearing, passed final Order u/s 148A(d), giving only one line finding on merits that the case was examined and found that transaction in the above bank account of M/s Parikh Sales has been made and no ITR has been filed for the above AY and concluded that it is fit case for issuance of notice u/s 148 of the Act, for the Assessment Year 2019-20 in the case of M/s Parikh Sales. Thus, no hesitation in holding that the impugned order passed u/s 148A(d) is without application of mind, passed in a casual stereotype manner and is a non-speaking order. It further transpires from record that when the petitioner logged on at the IT Portal under the PAN of the erstwhile dissolved partnership firm M/s Parikh Sales being PAN ID AACFM7615D; an error message was reflected that PAN does not exist . Now it is settled legal proposition that no valid notice can be issued against a dead person [Refer Durlabhbhai Kanubhai Rajpara [ 2019 (4) TMI 784 - GUJARAT HIGH COURT ] Thus impugned notices could not have been served upon Assessee, and same deserves to be quashed. Decided in favour of assessee.

  ---

• 2024 (4) TMI 19
  Bogus LTCG - Exemption u/s 10(38) denied - addition of presumptive commission @ 3% to the entry operator for providing long term capital gain, treating it as unexplained expenditure - HELD THAT:- We draw our force from the decision of Arun Kumar Agarwal (HUF) [ 2012 (8) TMI 398 - JHARKHAND HIGH COURT ] wherein it has been held that the long term capital gain realized on sale of penny stocks has to be treated as genuine as the assessee has furnished all the evidences in support of her claim. In the present case, the purchase of shares has not been disputed or doubted. However, the sale has been disputed in the current year to be bogus and in the nature of accommodation entries. Thus we set aside the orders of the authorities below and delete the addition made towards Long Term Capital Gain on sale of shares of CCL. Accordingly, grounds taken by the assessee in this respect are allowed.

  ---

• 2024 (4) TMI 18
  Accrual of income - Reimbursement of expenses treated as income of the Assessee - HELD THAT:- We observe that the AO in the assessment order by specifically mentioning that the Assessee failed to provide party wise details of clinical research and development expenses and support service charges, work orders for major parties, copies of debit note/invoice/vouchers for support service charges, clinical research and development expenses and actual rendering of such income and expenditure and reimbursement details of expenses and evidence in order to show that the expenses have actually been incurred by the Assessee and therefore, the same were reimbursed, treated the said amount allegedly claimed as reimbursement of expenses, as income of the Assessee. Commissioner though approved the action of the Assessee in treating the expenses incurred which have been reimbursed from Wyeth and its affiliates for clinical trials and not routing the same as pass through cost incidental or ancillary to the primary business activities of the service provider and non- deduction of tax at source, however as it appear from impugned order, it is a fact which though refuted specifically by the AR that Ld. Commissioner failed to examine the party wise details of clinical research and development expenses and support service charges, work orders for major parties, copies of debit note/ invoice/vouchers for support service charges, clinical research and development expenses and actual rendering of such expenditure and any other documentary evidence such as bank details etc. qua reimbursement of expenses that such amount represents reimbursement of cost and does not have any profit element, hence, for the limited purpose for examination of such parameters as noted above, we are inclined to remand the instant issue to the file of the Ld. Commissioner with a direction to verify the aforesaid details/documents as noted above and/or any other corroborative material which the Assessee intends to rely in order to substantiate its claim and recompute the claim of reimbursement accordingly. Resultantly, the Appeal filed by the Revenue department is partly allowed for statistical purposes. Direction given by the Commissioner to the AO to charge a markup of 13% on the said amount on account of payment received from the said entities - HELD THAT:- We observe that though the Assessee on the one side, has claimed that Assessee s duty is to approach and identify the third party investors who would be willing to perform clinical trial activities and thereafter the Wyeth group is entitled to decide qua the appointment of investors and once such a decision is made and the identified third party investors are assigned the job of performing clinical research, the Assessee shall co-ordinate and supervise the work of such identified third party investors and report the status of work and data collected to the Wyeth group entities. Assessee on the contrary claimed that the Assessee has not performed any value added activities and the role of the Assessee is in the nature of facilitator and/or conduit between the third party Institutions (Investors) and Wyeth group. We also observe that the OECD has also laid down certain guidelines qua mark-up on the cost of the services as reproduced and considered by the Hon ble Co-ordinate Bench of the Tribunal in the case of Vedanta Limited Vs. ACIT [ 2020 (9) TMI 1010 - ITAT DELHI ] We are in agreement with the Assessee that if no services have been provided, except playing the role of conduit only, then no mark up would be applicable, however where the Assessee has played an active/main role in identifying and selecting the third parties, making the arrangements, controlling and supervising their work and reporting their working to the principal and charged for such services from the alleged reimbursement/external costs, then in our considered opinion mark-up would be necessitated, hence, for the just decision of the case and for substantial justice, we deem it appropriate to remand this issue to the file of Ld. Commissioner for decision afresh.

  ---

• 2024 (4) TMI 17
  Revision u/s 263 - issue of shares at premium - AO was directed to frame the assessment order afresh w.r.t. the applicability of section 56(viib)/68 of the Act after affording the assessee an opportunity of being heard - as per CIT AO has not verified justification of share premium with regard to the FMV and creditworthiness of the subscriber to whom the said shares/CCDs have been allotted at premium - HELD THAT:- The assessment order u/s 143(3) does not have a word with regard to what was the nature of scrutiny assessment, what query, if any, were raised and based upon what material the returned income was accepted. PCIT has thoroughly examined the transaction of issuance of the shares/convertible debentures and found that the AO has not examined any aspect of the genuineness of this investment in the assessee company. In fact, in proceedings u/s 263 also none appeared for the assessee company. The record shows that in proceedings u/s 263/143(3) the AO had issued a notice on 31.03.2019 upon which the assessee company had furnished replies on e-filing portal and considering the same the assessment order u/s 143(3)/263 has been passed making the addition. There is no material before us to draw a conclusion that the valuation taken by the assessee company was correct and there is no error in discrediting the DCF method adopted by the assessee company. Thus there is no error in invoking the provisions of section 56(2)(viib) of the Act r.w.r. 11UA(1)(c)(b) of the IT Rules by the AO. The ground raised in the appeal have no substance. Assessee appeal is dismissed.

  ---

• 2024 (4) TMI 16
  Rectification u/s 154 - taxation of salary income earned in USA - global income for tax in India - debatable issue or not? - Scope of beneficial provisions of Article 4(2) of India USA Treaty - income received outside India from J.P. Morgna, USA - assessee submitted that the issue raised by the AO is a debatable issue which cannot be rectified - HELD THAT:- AO has rectified the order passed u/s 143(3) and added salary income received in USA from J.P. Morgan and the assessee has claimed relief in his computation of income. The assessee also claimed foreign tax credit without offering global income. The assessee reiterated the submission made before the lower authorities and he also relied on the various judgments noted supra. We note that the case law relied by the assessee will not support the arguments since here there is factual position that in Indian Income-tax return i.e ITR 2, Schedule FSI, which is placed at page No.15, the assessee has not offered the salary received from JP Morgan, USA and he has offered under the head other sources of income of Rs. 12,64,665/- and has claimed tax paid outside India of Rs. 4,15,267/- and he also accepted that he is a resident/ordinary resident of India as per sec. 5(1)(c) of the Act and he is liable to tax in India on his global income, which was not shown in the Income-tax return filed by the assessee in India, therefore, there is factual mistake done by the assessee himself and, therefore, it is not a debatable issue. Accordingly AO has correctly invoked sec. 154 of the Act and rectified the order passed us/ 143(3) of the Act. Assessee has claimed relief under Article 16 of the Indo- USA DTAA (Treaty) r.w.s 90 of the Act on the salary received and the CIT(A) has accepted the arguments put forth before him and CIT(A) has given direction to the AO noted Supra. We also direct the AO to follow the direction of the CIT(A) and to pass OGE (Order Giving Effect) within 6 months from the receipt of this order considering the eligibility of the assessee as per DTAA provisions. The assessee is directed to file necessary documents for support of his case. Accordingly, this issue is partly allowed for statistical purposes.

  ---

• 2024 (4) TMI 15
  Disallowance of bad debts written off - bad debts in respect of subscriptions defaulted by the prized subscribers - As per DR bad debts in respect of subscriptions defaulted by the prized subscribers can be claimed only to the extent of the funds introduced by the Foreman and that the subscriptions that is becoming bad in future point of time cannot be held to have become bad in the current year and hence bad debts can be allowed only to the extent of the funds put in by the Foreman during the year HELD THAT:- While dismissing the appeals of the Revenue and deciding the issue in favour of the assessee by the Hon ble High Court of Hyderabad, Telangana [ 2023 (6) TMI 1373 - TELANGANA HIGH COURT] we have also perused the decision of the Hyderabad Benches of the Tribunal, wherein, for the assessment years 1998-99 and 1999-2000 Tribunal, in principle, allowed the appeal of the assessee in respect of bad debts claim and remitted the matter back to the file of the Assessing Officer for verification of factual issues of the case. Hon ble Madras High Court in assessee s own case [ 2012 (4) TMI 630 - MADRAS HIGH COURT] relied on by the assessee has dismissed the appeals of the Revenue for the preposition that the unrecovered amount of the subscriber was to be construed as a bad debt and allowable as deduction under section 36 of the Act. So far as the ground raised by the Department is that the Hyderabad Benches of the Tribunal, vide its order in ITA Nos. 471 1049/Hyd/2002 remitted the issue of bad debts to the file of the Assessing Officer is concerned, we find that the ground raised by the Department is not correct for the reason that the Hyderabad Benches of the Tribunal, in principle, allowed the claim of bad debts and only for factual verification, remitted the matter to the AO. Therefore, it cannot be said that the entire issue, on merits, has been remitted back to the file of the AO. Keeping in view of the decision of the Hyderabad Benches of the Tribunal, Hon ble High Court of Hyderabad, Telangana [ 2023 (6) TMI 1373 - TELANGANA HIGH COURT] as well as the judgement of the Hon ble Madras High Court in assessee s own case (supra), the ground raised by the Department is dismissed. Disallowance u/s 14A - contention of the assessee is that for the purpose of calculating the amount of disallowance under provisions of Rule 8D, only those investments that would fetch exempt income should be included - HELD THAT:- The above contention of the assessee is acceptable in view of the decision of the Coordinate Benches of the Tribunal in the case of Parry Agro Industries Ltd. [ 2018 (3) TMI 2031 - ITAT CHENNAI] - Just because, the Department has not accepted the decision of the Tribunal, we cannot take any different view in the absence of any higher Courts decision having modified and reversed the findings of the Tribunal. CIT(A) has rightly directed the AO to rework the computation of disallowance u/s 14A r.w. Rule 8D to restrict the same to the extent of dividend income earned by the assessee by following the above decision of Parry Agro Industries Ltd.(supra). Where there is no exempt income earned in relevant assessment year, section 14A cannot be invoked in view of the decision in the case of CIT v. Chettinad Logistics (P) Ltd. [ 2017 (4) TMI 298 - MADRAS HIGH COURT] as rightly followed by the ld. CIT(A). Thus, we find no infirmity in the order passed by the ld. CIT(A) with regard to the application of section 14A r.w. Rule 8D. Decided against revenue.

  ---

• Customs

• 2024 (4) TMI 28
  Refund of Special Additional Duty of Customs paid - denial of refund on the ground that goods described in the Bills of Entry are not the goods which have been sold as per invoices produced by the appellant - HELD THAT:- The original authority has misconceived that since the goods have been imported by appellant s Branch at Hyderabad, the goods have to travel upto Hyderabad and then be delivered to the customer at Sivakasi. A person who is in Mumbai, Hyderabad or any other place in India can import goods at Chennai port. It is not necessary that the goods have to come back to the said customer at Mumbai or Hyderabad and then be delivered to the customer to whom the goods are to be sold. The importer can make arrangements to deliver the goods to the customer from the port itself. This being so, the assumption made by the original authority that it is impossible for the goods to travel upto Hyderabad and then be delivered to the buyer at Sivakasi, is highly erroneous. The invoices are raised by the importer appellant which is the Hyderabad Branch. The rejection of refund claims is without any factual basis. The impugned order to the extent of rejecting the refund claims in respect of two Bills of Entry and the invoice Nos.157 158/2013 requires to be set aside - Appeal allowed.

  ---

• 2024 (4) TMI 14
  Benefit of exemption under Sl.No.A204 of the N/N. 72/2005-Cus. dated 22.07.2005 - import of Porcelain Panels, size 900mm X 1800mm X 5.5mm - classifiable under Chapter Heading 6907 or not - HELD THAT:- As seen from the catalogue and the literature placed by the appellant before the authorities concerned, the item porcelain panel is nothing but ceramic tile and therefore, from the Chapter Headings, it is very clear that the goods are rightly classified under Chapter Heading 6907. The Explanatory Notes for Chapter Heading 6907 states This heading covers ceramic flags and tiles including quarry tiles, commonly used for paving or facing wall, hearths etc. The invoice No.EXP1599-3 dated 29.08.2012 clearly mentions the items as ceramic tiles filed along with one of the Bill of Entry. The goods are ceramic tiles as per the invoices and catalogues filed by the appellant; therefore, the benefit of the exemption Notification for ceramic tiles on the ground that they are slabs/panels cannot be accepted. Accordingly, the good are classifiable under Chapter Heading 6907 and are eligible for the benefit of Notification No. 72/2005 dated 22.07.2005. All the appeals are allowed.

  ---

• Insolvency & Bankruptcy

• 2024 (4) TMI 13
  Condonation of delay in filing appeal - it was held by NCLAT that Auction having already completed on 04.04.2022, there was no occasion to stay the auction. Further process of Sale was to be undertaken as per the Liquidation Regulations - HELD THAT:- Admittedly, the delay in filing the appeal is beyond the maximum period which can be condoned under Section 62 of the Insolvency and Bankruptcy Code 2016. The appeal is hence dismissed on the ground of limitation.

  ---

• PMLA

• 2024 (4) TMI 27
  Money Laundering - Validity of acquittal of accused - Dismissal of the Complaint - falsification of accounts, forgery and cheating - misusing the password and manipulating the data - HELD THAT:- This Court is conscious of the fact that an appeal against acquittal cannot be interfered unless and until the reasoning given by the trial Court suffers serious legal infirmity or factual error. If the views expressed are reasonably possible, even if another view is possible, the appellate Court need not interfere. It is well settled principle of law that an order of acquittal should not be disturbed, unless it is perverse or bereft of reasoning or contrary to the evidence on record. Even, if an alternate view is probable/possible, the view of the trial Court, which has acquitted, cannot be substituted by this Court with the alternate possible view to reverse the order of acquittal. In this case, unfortunately, the complainant had proceeded on a presumption that the crime investigated by CBI had generated proceeds of crime and further leading to acquisition of property. Without placing material evidence, either about the crime or about the proceeds from that crime, the complainant cannot succeed. That is the reason why, the trial Court has specifically pointed out that without proving the fundamental fact, which is necessary to invoke the provisions of the PMLA, the complainant cannot succeed. This Court totally agrees with this view. It is also found that the appellant / complainant had not made any attempt to invoke Section 44(1) of the PMLA as explained under the Statute. Since the predicate offence has also been pending in the same Court, the appellant / complainant ought to have asked for simultaneous trial in both the cases to avoid conflicting verdict and to avoid omission in marshalling evidence. For the reasons best known, they had allowed the PMLA case to proceed first and while doing so, also failed to place all the material documents though available to substantiate the fundamental requirement to proceed under the PMLA. This Court is of the view that the criminal appeal is liable to be dismissed without any interference of the finding of the trial Court - Appeal dismissed.

  ---

• 2024 (4) TMI 26
  Money Laundering - proceeds of crime - Predicate/scheduled offence - offences punishable under Sections 3, 4 and 8 (5) of PMLA - HELD THAT:- It is an admitted fact that the trial in the predicate offence (scheduled offence) had concluded. The trial Court has convicting three of the accused in this case. Their appeal is pending. The Hon ble Supreme Court has held that the accused in the PMLA case need not necessarily be an accused in the schedule offence case. It is the proceeds of crime, which must be common to both cases and not the offenders. The predicate offence might have committed prior to the PMLA Act came into force or after the act introduced. Since money laundering is a process involving many stages like:- (a) Placement (which is to move the funds from direct association of the crime); (b) Layering (which is disguising the trail to foil pursuit); and (c) Integration (which is making the money available to the criminal from what seem to be legitimate sources), the prosecution under PMLA can be initiated at any time. Section 3 and the Explanation (ii) to Section 3 of the PMLA is interpreted by the Hon ble Supreme Court as, money laundering as defined under Section 3 has a wider reach and captures every process and activity, direct or indirect, in dealing with the proceeds of crime and is not limited to the happening of the final act of integration or tainted property in the formal economy. The Explanation inserted to Section 3 by way of amendment of 2019 does not expand the purport of Section 3, but is only clarificatory in nature. So it include every process or activity indulged into by anyone. This Court is of the view that the petitions to quash does not carry any merit to sustain - these Criminal Original Petitions are dismissed.

  ---

• Service Tax

• 2024 (4) TMI 12
  Demand of service tax on amounts collected as penalties under various contracts - Constitutional Validity of Section 66E(e) of the Finance Act, 1994 - violative of Articles 246 and 265 as well as Articles 14 and 19(1)(g) of the Constitution of India or not - HELD THAT:- It is clear and forthcoming that the contentions sought to be put forth by the petitioner have been interpreted and construed by the respondents by the circular dated 3.8.2022 which is subsequent to the show cause notice dated 20.6.2016. It is also relevant to note that prior to the issuance of the said circular dated 3.8.2022, the CESTAT has rendered its judgment in the case of South Eastern Coalfields Ltd. [ 2020 (12) TMI 912 - CESTAT NEW DELHI] - The respondents have subsequently issued a circular dated 28.2.2023, where under it has decided not to challenge the judgment rendered in the case of South Eastern Coalfields Ltd. Hence, the reliance placed by the petitioner on the said aspects requires consideration since the same goes to the foundational basis on which the show cause dated 20.6.2016 has been issued. It is further relevant to note that vide the said show cause notice dated 20.6.2016, the petitioner has been notified that it is liable to pay service tax. Further, it has been called upon to file its reply and place evidence in support of its defence. The petitioner was also required to indicate as to whether they wish to be heard in person before the case is adjudicated. The petitioner shall appear before the second respondent on 30.4.2024, on which date it shall place on record its defence along with all material it chooses to rely upon - Consequent to the appearance of the petitioner, the second respondent after affording an opportunity to the petitioner to put forth its defence shall consider the same in the light of the circulars dated 3.8.2022 and 28.2.2023 and after conducting further proceedings pass appropriate orders in accordance with law - Appeal disposed off.

  ---

• 2024 (4) TMI 11
  Classification of service - Business Auxiliary Services or Mining of Minerals, Oil or Gas? - activity/service rendered by the appellant in raising iron ore to the Appellant under agreement dated 03.05.2003 - imposition of penalty - HELD THAT:- It is clear that the agreement entered into by the appellant comprises host of activities/services referred to and necessary and incidental to mining operations within the mining area mentioned in the said Agreement. Broadly, the activity comprises of exploration, development, excavation, extraction, grading, screening, sizing, sorting and stacking, etc. Also, the Appellant is required to built and maintain necessary infrastructure by way of building internal roads, office premises etc. within the mining area in carrying out the mining activities. For undertaking all the activities, the appellant received consideration of Rs.188/- per metric tonne of calibrated iron ore and Rs.25/- per metric tonne of iron ore fines raised and generated, thus, the activities undoubtedly indicate that the appellant has provided services which are akin to the category of mining of minerals service inserted in the Finance Act,1994 with effect from 1.6.2007. The activities undertaken by the appellant are composite in nature and involves not merely production of minerals but services before production and after production of the said minerals including building and maintenance of necessary infrastructure; hence, rightly covered under the scope of mining operations and not under Business Auxiliary service . The Tribunal following the circulars and the judgments rendered earlier in the case of M/s. G. S. Atwal Co. Engineers Pvt. Ltd. vs. CST, Kolkata [ 2023 (6) TMI 310 - CESTAT KOLKATA ] considering and comparing the three competing services viz. Cargo Handling service, Business Auxiliary Service and Site Formation and clearance, excavation and demolition services with that of mining services held that the activities carried out by the appellants, which are akin to the services rendered by the Appellant in the present case, fall under the scope of mining operations, hence, leviable to tax w.e.f. From 01.06.2007. The issue involved in the present case is, whether the host of activities/service carried out by the appellant under the Raising agreement, result in the nature of service mentioned under clause(v) of Business Auxiliary Service or Mining of Mineral, Oil or Gas services. Also, the Ld. A.R for the Revenue made an attempt to distinguish the case laws referred by the appellant submitting that the nature of competing service involved in these cases is different i.e., Site formation service, cargo Handling Service etc. hence not applicable to the present case. The said argument is devoid of merit. Reading the circulars and relevant entries, it is clear that the services provided by the appellant squarely fall under the category of mining services and in all these cases it has been consistently held that Mining service involves a host of activities and rendered under a composite contract which cannot be divided into individual components/service for levy of service tax on each service separately; and observed all these activities combined are rightly classifiable under Mining of Mineral, Oil or Gas service leviable to service tax w.e.f 01.6.2007. The impugned Order is devoid of merit and accordingly set aside - Appeal allowed.

  ---

• 2024 (4) TMI 10
  Extended period of limitation - PSU - CENVAT Credit - input services - credit denied holding that the cenvat credit was taken before making the payment of the same - Rule 4(7) of the Cenvat Credit Rules, 2004 - HELD THAT:- There is no restriction for availment of cenvat credit. In that circumstances, the appellant is entitled to take the cenvat credit as held by this Tribunal in the case of M/S MUNJAL SHOWA LTD. VERSUS C.C.E., DELHI-III, GURGAON [ 2018 (12) TMI 84 - CESTAT CHANDIGARH] . It is found that at the most the appellant is liable to pay interest in the intervening period, but whole of the demand has been raised by invoking extended period of limitation as the appellant being a Public Sector Undertaking owned by the State Government, the element of suppression of facts and malafide intention for extending period of limitation is not invokable. Further the demand of interest has been raised by invoking extending period of limitation is also not invokable as held by this Tribunal in the case of M/s Munjal Showa Limited. The impugned order is set aside and the appeal is allowed

  ---

• 2024 (4) TMI 9
  Liability of service tax - directors remuneration - Reverse Charge Mechanism falling under Sl.No.5A of the Notification No. 30/2012-ST dt.20.06.2012 - HELD THAT:- The issue is no longer res integra and the same has been decided against the Revenue and in favour of the Assessee in M/S ALLIED BLENDERS AND DISTILLERS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, AURANGABAD [ 2019 (1) TMI 433 - CESTAT MUMBAI] and M/S. MAITHAN ALLOYS LTD. VERSUS CCE ST, BOLPUR [ 2019 (4) TMI 1595 - CESTAT KOLKATA] where it was held that Demand of service tax on remuneration paid to whole time directors cannot be sustained. This Appeal filed by the Revenue is dismissed being without merits.

  ---

• 2024 (4) TMI 8
  Classification of services - transportation services - Declared service or not - benefit of entry of Section 66D (p)(i)(A) of the Finance Act, 1994 denied - it was held by CESTAT that The case of the appellant is on much better footing on the admitted fact that the appellant s client FCPL is in fact the GTA who issued Consignment Note in respect of the Transportation Service provided to M/s Reliance Industries Ltd. Therefore, appellant is not liable to pay Service Tax - HELD THAT:- There are no reason to interfere with the impugned judgment passed by the Custom Excise and Service Tax Appellate Tribunal, West Zonal Bench at Ahmedabad. The Civil Appeal is dismissed.

  ---

• 2024 (4) TMI 5
  Levy of service tax - Business Support Services - sale of merchandise - payments made to foreign players and staff - receipts from BCCI merchandise sale and import of service - reversal of CENVAT Credit - consideration paid to players could be considered as payment towards brand promotion services - HELD THAT:- Reliance placed in the case of M/S. INDIA CEMENTS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNNAI [ 2023 (8) TMI 1395 - CESTAT CHENNAI ] of this very Bench in the appellant s own case for different periods wherein the coordinate Bench has granted relief to the appellant by following the orders of other coordinate Benches and held that The very same issue was considered by the Tribunal in the case of KPH Dream Cricket Pvt. Ltd. [ 2019 (5) TMI 1171 - CESTAT CHANDIGARH ] where it was held that on player s fee, no service tax is payable. Sale of merchandise - it is the case of the appellant that there was no service but only sale, which is not amenable to service tax - HELD THAT:- It is found from the impugned order that there is no dispute that the demand pertains to the sale of merchandise and hence, the same can never be held to be service by any stretch of imagination. Hence, the demand as far as this issue is concerned is set aside and the appeal is allowed to this extent. The impugned orders are set aside and the appeals allowed

  ---

• Central Excise

• 2024 (4) TMI 7
  Default of monthly payment of duty - consequent denial of utilization of Cenvat credit under Rule 8(3A) of the Central Excise Rules, 2002 during the period September, 2009 to August, 2010 - HELD THAT:- In view of the fact that four of the High Courts have already declared the provisions of Rule 8(3A) of the Central Excise Rules, 2002 as ultra vires the Constitution and have also set-aside the order of the Commissioner, in the given factual backdrop of the case, the decision rendered by the Tribunal cannot be said to be in any manner arbitrary, illegal or contrary to law. Once the provision of law itself has been struck down not one but by four High Courts, it would had been difficult of the Tribunal to have sustained the order of the Commissioner. There are no substantial question of law made out calling for an interference with the impugned order - The appeal thus fails and is accordingly rejected.

  ---

• 2024 (4) TMI 6
  Refund of amount paid as pre-deposit - time limitation - rejection of refund on the ground that as per Section 11B(5))ec) of Central Excise Act, 1944, appellant is legally obliged to submit a refund application within 1 year from the relevant date - HELD THAT:- In the matter of AJNI INTERIORS VERSUS UNION OF INDIA AND 1 OTHER (S) [ 2019 (9) TMI 529 - GUJARAT HIGH COURT ], there is no such order issued by Tribunal considering the amount deposited by the appellant as pre-deposit as held by this Tribunal while considering the stay petition submitted by the appellant. Further submitted that the judgment of the Hon ble High Court in the matter of M/s Ajni Enterprises was distinguished by Hon ble High Court of Madras in the case of M/s Daily Tamthi [ 2021 (2) TMI 94 - MADRAS HIGH COURT ] wherein it has been clearly held that the decision of the Gujrat High court is contradictory to the law laid down in UOI Vs Suvidha [ 1996 (8) TMI 521 - SC ORDER ]. Similarly, Tribunal in the matter of M/s Industrial Equipment Co Ltd [ 2021 (9) TMI 493 - CESTAT CHANDIGARH ] also considered the issue and following the following view taken by Hon ble High court of Karnataka in the matter of KVR Construction [ 2012 (7) TMI 22 - KARNATAKA HIGH COURT ], distinguished the judgement of Ajni interiors held that refund claim is not barred by limitation. The provisions of Section 11B(5) (ec) of Central Excise Act, 1944 will apply only in respect of excise duty paid by the appellant and not applicable for refund of Rs. 26,38,300/- including Rs.24,27,751/- being credit and interest of Rs. 2,10,549/- deposited by appellant during investigation to cover the alleged wrong claim of CENVAT Credit which was held unsustainable by this Tribunal in appeal. Appeal allowed.

  ---

• 2024 (4) TMI 4
  Levy of Excise Duty - marketability of the sugar syrup - captive consumption - sugar syrup emerged as an intermediate product consumed captively in the manufacture of exempted final product viz. biscuits - period from May 2007 to April 2013 - SCN dated 26.05.2012 issued for the period May 2007 to September 2011 - Extended period of limitation - HELD THAT:- Before fastening the duty liability on the sugar syrup manufactured by the appellant, it is relevant to establish the marketability as held by the Tribunal in M/S AMBAJI FOODS (INDIA) PVT LTD VERSUS CCE, KANPUR [ 2010 (8) TMI 714 - CESTAT, NEW DELHI] . From the records, we find that the adjudicating authority has not analysed the aspect of marketability of the product analysing the shelf life of the product and other factors as clarified in Board s Circular No.226/60/96-CX dated 03.07.1996 referred by the appellant. The appellant through their miscellaneous applications sought to add grounds about the liability for the period after 12/09/2011 submitting that the amending Notification No.39/2011-CE dated 12.09.2011 allowed exemption to sugar syrup consumed captively in the manufacture of biscuits in the factory. Admittedly, this plea was not taken before the authorities below. However, since it would go to affect the liability for the period after 12.09.2011, following the principles of law settled by the Hon ble Supreme Court in the cases of JUTE CORPORATION OF INDIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND ANOTHER [ 1990 (9) TMI 6 - SUPREME COURT] and DEVANGERE COTTON MILLS LTD. VERSUS COMMISSIONER OF C. EX., BELGAUM [ 2006 (4) TMI 134 - SUPREME COURT] , the said grounds are allowed to be taken. Matter remanded to the adjudicating authority to examine the issue of marketability of the sugar syrup in the light of the Board s Circular No.226/60/96-CX dated 03.07.1996 and also the applicability of amending Notification No.39/2011-CE dt. 12.09.2011 - all the appeals are allowed by of remand to the adjudicating authority.

  ---

• 2024 (4) TMI 3
  Refund of the excess duty paid - whether subsequent negotiation of the prices can be the basis for reopening the assessment? - HELD THAT:- The appellant has adopted a selling price to the stock transferred goods on the basis of the sale from depots at or to the nearest time of its removable from the factory. The learned Commissioner (Appeals) while setting aside the order of the adjudicating authority allowing refund claims of the excess duty paid on account of subsequent negotiation of the sale price from depots, observed Allowing refund in these cases amounts to reassessment of goods, which were already assessed finally by the respondent at the time of clearance of goods from factory. The refund amount is determined and sanctioned without any authority of law. The observation of the learned Commissioner (Appeals) is in line with the opinion expressed by this Tribunal in the case of Finolex Cables Ltd. [ 2011 (3) TMI 414 - CESTAT, MUMBAI] wherein it is held that In the instant case, the appellant-assessee has discharged duty liability accordingly. Subsequent change in prices effected by the appellant at the depot does not affect the assessable value already determined and on which duty liability has been discharged. If that is allowed, the very object and purpose of Rule 7 of the Central Excise Valuation Rules will be totally defeated. There are no reason to interfere with the order of the learned Commissioner (Appeals) - the impugned order is upheld - appeals filed by the appellant are dismissed.

  ---

• CST, VAT & Sales Tax

• 2024 (4) TMI 2
  Recovery of dues - priority of charges - whether appellant State/Excise Department will be having first charge upon the property of M/s Gilvert ISPAT Pvt. Ltd., in terms of provisions of Section 26 of the H.P. VAT Act, 2005 or secured creditor Punjab National Bank shall have priority to recover over any other charge, including charge in favour of State, in terms of provisions of Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) as amended from time to time? HELD THAT:- In Central Bank of India s case [ 2009 (2) TMI 451 - SUPREME COURT] , it was held by the Supreme Court that charge created in favour of State under the provisions of General Sales Tax Act in respect of sales tax dues prevailed over the charge created in favour of the Bank in respect of loan taken by a person/Firm/Company and the amendment made in the State operated in respect of charge that were in force on the date of introduction of Section 33-C of Madhya Pradesh General Sales Tax Act, creating first charge in favour of the State. After incorporation of Section 31-B in RDB Act, High Court of Kerala has decided similar issue in a petition State Bank of India vs. State of Kerala and others, WP (C) No. 28316 of 2016 and other connected matters, vide judgment dated 30.07.2019 [ 2019 (7) TMI 1684 - KERALA HIGH COURT] holding that secured creditor under Section 26E of the SARFAESI Act and Section 31B of the RDB Act, obtains priority over the right claimed by the Revenue both in proceeding against the properties in question or in recovering the secured debt. It is apt to record that in Section 38 of Kerala Value Added Tax, 2003, there was provision that notwithstanding anything to the contrary contained in any other law for the time being in force for recovery of any amount of tax, penalty, interest and any other amount, if any, payable by a dealer or any other person under this Act, there shall be the first charge in favour of State on the property of the dealer, or such person - It is apt to record that SARFAESI Act and RDB Act are Special Central Acts, whereras H.P. VAT Act is a State Act. In view of provisions of Articles 246, 251 and 254 of Constitution of India, law made by the Parliament i.e. Central Act, RDB Act and SARFAESI Act, shall prevail upon law made by the legislature of the State, i.e. H.P. VAT Act and being special enactment shall also have precedence over any general Central Act. Thus, learned Single Judge has not committed any mistake, irregularity, illegality or perversity in allowing petition2 preferred by respondent No. 1- petitioner Himanshu Prashar - appeal dismissed.

  ---

• Indian Laws

• 2024 (4) TMI 1
  Dishonour of Cheque - MoU between the parties contained an arbitration clause, pursuant to which arbitration proceedings have been initiated - maintainability of complaint under Section 138 NI Act - HELD THAT:- The arbitration proceedings as well as the proceedings under Section 138 of the NI Act arise from separate causes of action and the pendency of the arbitration proceedings would not affect the proceedings under Section 138 of the NI Act. There is no merit in the contention of the petitioners that the complaint under Section 138 of the NI Act is not maintainable in view of the ongoing arbitration proceedings between the parties. Additionally, whether the aforesaid cheque was given as a security or not is something which can only be proved as a matter of defence during trial. There is no merit in the present petition - the present petition is dismissed.

  ---