TMI Tax Updates - e-Newsletter
April 27, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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GST:
Profiteering - Reduction on rate of tax post GST - whether the rate of tax on the car had been reduced post-GST - Authority found that, the benefit of reduction in the tax rate was passed on to the applicant by way of reduction in the price of the car of base colour.
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Income Tax:
Initiation of the re-assessment proceedings u/s 147 by issuing a notice u/s 148 merely because of the fact that now the AO is of the view that the deduction under Section 10A was allowed in excess, was based on nothing but a change of opinion on the same facts and circumstances - SC
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Income Tax:
Validity of Second (Fresh) Notice u/s 158BD - search proceedings - First notice u/s 158BC was issued to the firm - Assessing Officer, who is assessing the Firm as well as the Appellant, is the same person - - SC uphold the validity of the notice.
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Income Tax:
Setoff of public issue expenses with Interest accrued - Respondent was statutorily required to keep the share application money in the bank till the allotment of shares was complete - the interest accrued to such deposit of money in the bank is liable to be setoff against the public issue expenses - SC
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Income Tax:
Deduction u/s 80-O - Royalty - proof of rendering technical services - Appellant was a managing agent - the principal agent relationship between the parties established - there is no basis for grant of deduction to the Appellant under Section 80-O of the IT Act - SC
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Income Tax:
Exemption u/s 10B - mere location of the ‘SESA Plant’ outside the EOU and customs bonded area is not a disqualification to claim deduction u/s 10B - HC
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Income Tax:
Personal expenses - whether can be taxed in the hands of assessee u/s 2(24)(iv) as the amount was routed through the franchisee, which was the HUF of the assessee? - Held No - HC
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Income Tax:
Capital gain - LTCG - investment in the new residential house - the assessee has claimed deduction u/s 54 and not under section 54F of the Act. Thus, the conditions and restrictions imposed u/s 54F of the Act are not applicable to the assessee. - AT
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Income Tax:
Expenses towards Keyman Insurance Premium - rule of consistency - Keyman Insurance policies were taken in the name of directors in pursuance to resolution of the Board - claim of the assessee allowed. - AT
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Income Tax:
Income form house property - can assessed income be lower than returned income - AO is bound to compute the tax payable by the assessee on the income computed by him even if it is at a lesser figure than the income returned by the assessee - AT
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Customs:
Valuation - import of digital device (media) with contents - the value of the goods must include a value for the contents. - AT
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Customs:
Classification of calcium nitrate - mono potassium phosphate - The claim of Revenue for classification under chapter 28 fails to sustain - AT
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Customs:
Classification of HP Photo Center Microlab Printer - the Revenue appeal of classification under Chapter 9010 cannot be upheld - AT
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Customs:
Classification of ‘billiards cloth’ - The samples are established to be composed of fabric or fabric mixtures and no different from imports of textile fabric for other uses - no reason to discard the re-classification of the goods under chapter 51 - AT
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IBC:
Such the Company is not able to repay its debts then its management cannot be expected to have a divine right to keep continue with the managing the affair of the company - petition under the I & B Code is acceptable.- Tri
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Service Tax:
Maintenance charges collected from the flat owner under the statutory obligation as will not be chargeable to service tax in the hands of the builder - AT
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Service Tax:
Sharing of revenue - Business support services - The amount thus shared in between the Appellant and M/s RMIL cannot be taxed as it has already suffered taxes at the time of receipt by M/s RMIL - no service tax demand can be made against Appellant. - AT
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Service Tax:
Default in payment of service tax - Benefit of reduced penalty u/s 78 - the major demand amount already stands paid by them - the Appellant is entitled to pay reduced penalty of 25% imposed upon them u/s 78- AT
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Service Tax:
Refund of service tax paid under reverse charge mechanism - time limitation - refund claim has to be filed within one year from the relevant date - AT
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Service Tax:
Woks contract service - benefit of composition scheme - The failure to intimate exercise of the option, in the face of eligibility should not saddle the appellant with the additional burden of duty - the disallowance of the benefit of composition is not correct - AT
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Central Excise:
Recovery of the Central Excise dues - First charge on the property - the stage for enforcement of the charge would come only when the property is sold for recovery of the Central Excise dues - SC
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Central Excise:
Extended period of limitation - suppression of facts - Where facts are known to both the parties omission by one to do what he might have done and not that he must have done, does not render it suppression. - HC
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Central Excise:
Classification of Mahindra Bolero Camper - passenger vehicle or goods vehicle - even by applying the conditionalties attendant to HSN notes in Heading 8703, the impugned vehicle will not merit classification under 8703. - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2018 (4) TMI 1378
Input tax credit - FORM GST TRAN-1 - migration to GST - petitioner though attempted to upload FORM GST TRAN-1 within the time limit stipulated, they could not complete the process of uploading the form due to IT related glitches - Held that: - circular No.39/13/2018-GST dated 03.04.2018, as per which the GST Network was directed to identify the taxpayers who could not complete filing of FORM GST TRAN-1 on the basis electronic audit trail and to provide them facility to complete the filing of FORM GST TRAN-1 - the writ petitions are disposed of directing the GST Network to make appropriate facilities/provisions to enable the petitioners to complete the filing of FORM GST TRAN-1 as directed in circular No.39/13/2018- GST dated 03.04.2018 - petition disposed off.
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2018 (4) TMI 1377
Profiteering - Reduction on rate of tax post GST - Honda Car having Model No. WR-V 1.2 VX MT (i-VTEC) - whether the rate of tax on the car had been reduced post-GST and if so, whether there was substantial reduction in the rate of tax as had been contended by the applicant and whether the benefit of reduction in rate of tax had been passed on to the applicant? - Held that: - Section 171(1) of the Central Goods and Service Tax, 2017 requiring that "any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on the recipient by way of commensurate reduction in prices" has not been contravened in the present case.
The rate of tax both during pre-GST era as well as the post GST era was a matter of fact which has been clearly delineated in detail by the DGSG in his report dated 23.02 2018. It has also been found that the applicant's contention that the pre-GST rate of tax which was 51% was reduced to 29% in post GST era, was factually incorrect as the pre-GST rate of tax, on the car contracted to be purchased by the applicant, was leviable at 31.254% which was rationalized to 29% (CGST-14%+SGST-14%+Cess-1%)thus there was a reduction of only about 2% - the benefit of reduction in the tax rate was passed on to the applicant by way of reduction in the price of the car of base colour by an amount of ₹ 10,550/-.
Whether any input tax credit benefit was to be passed on to the applicant by the respondent? - Held that: - the respondent has given details of all the basic components of the price of the car purchased by the applicant as has been mentioned in Table 'B' above and benefit of ₹ 10,550/- on account of reduction of tax by about 2% viz. from 31.254% (pre GST) to 29% (post GST), as discussed above, has already been passed on to the applicant and the amount of ₹ 10,550/- is inclusive of the ITC as has been calculated in Table 'B' - no additional benefit on account of ITC is required to be paid by the respondent.
The respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 - application dismissed.
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Income Tax
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2018 (4) TMI 1365
Capital gain computation - cost of acquisition of the house property sold by the assessee - single or joint ownership - Held that:- The claim of the assessee that she along with her husband had purchased the property from three co–owners for total sale consideration of ₹ 1,10,00,001, prima–facie, appears to be correct.
The documentary evidences as submitted before both the Assessing Officer and the learned Commissioner (Appeals), unfortunately, without properly looking into them they have considered the sale consideration mentioned in respect of a single co–owner in one agreement at ₹ 36,36,000 for the purpose of indexation benefit. The aforesaid approach of the Departmental Authorities is completely untenable and unfair. When the assessee through proper documentary evidence is making a claim, the Departmental Authorities are duty bound to examine the correctness of assessee’s claim. Departmental Authorities have completely ignored / overlooked documentary evidences brought on record while making the addition on account of long term capital gain.
Eligibility to claim deduction 54F - assessee has not invested the capital gain in new residential house within the prescribed time limit - Held that:- Commissioner (Appeals) completely misconceived the facts and misapplied the provisions of law while coming to the conclusion that the assessee being the owner of more than one residential house apart from the new residential house is not eligible to claim deduction 54F of the Act. In the process, the learned Commissioner (Appeals) has completely over looked the fact that the assessee has claimed deduction under section 54 of the Act and not under section 54F of the Act. Thus, the conditions and restrictions imposed under section 54F of the Act are not applicable to the assessee.
We are inclined to set aside the impugned order of the learned Commissioner (Appeals) and restore all the issues arising in the present appeal relating to computation of long term capital gain and deduction claimed under section 54 of the Act to the file of the Assessing Officer for de novo adjudication - Decided in favour of assessee for statistical purposes.
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2018 (4) TMI 1356
Reopening of assessment - addition u/s 69B - Held that:- Commissioner (Appeals) correctly concluded that in the absence of any evidence brought on record to prove the payment of on–money by the assessee the addition made under section 69B of the Act cannot be sustained. See ITO v/s M/s. Saturn Advisory Services Pvt. Ltd [2017 (11) TMI 1054 - ITAT MUMBAI] - Decided in favour of assessee.
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2018 (4) TMI 1355
Addition u/s 68 - unexplained share premium received - admission of additional evidence - Held that:- As could be seen from the facts on record, there appears to be a valid reason for inability of the assessee in producing supporting documentary evidences to prove the genuineness of the share premium which the assessee has now sought to produce before us by way of additional evidences under rule 29 of the Rule, 1963.
We are inclined to admit the additional evidences produced by the assessee, since, in our view such evidences may have a crucial bearing for deciding the issue in dispute. However, considering the fact that these additional evidences were not filed either before the Assessing Officer or before the Commissioner (Appeals), the Department must also be given a fair chance to examine and verify the authenticity of the additional evidences furnished by the assessee for deciding the genuineness of the share premium received. - Decided in favour of assessee for statistical purposes
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2018 (4) TMI 1354
Disallowance of Keyman Insurance Premium paid - rule of consistency - Held that:- When it is a fact on record that the Insurance policies are continuing from the year 2004 and in the preceding assessment years assessee’s claim of deduction in respect of premium paid have been allowed by the Assessing Officer in scrutiny assessments, in the absence of any material change in facts the deduction claimed in respect of premium paid cannot be disallowed in the impugned assessment year, as the rule of consistency must be applied.
Keyman Insurance policies were taken in the name of directors in pursuance to resolution dated 24th February 2004 of board of directors and it has also been submitted before us by the learned Counsel for the assessee that the sum assured under the insurance policy as per the terms and conditions will come back to the assessee on the death of policy holders. We allow assessee’s claim of deduction of premium paid in both the assessment years. - Decided in favour of assessee
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2018 (4) TMI 1376
Reopening of assessment - deduction u/s 10A has been allowed in excess - change of opinion - Held that:- The very basis of issuing the show cause notice dated 09.03.2004 was that the assessee was not maintaining any separate books of account for the said two categories and the details filed do not reveal proportional allocation of common expenses be made to these categories. Even the said show cause notice suggested how proportional allocation should be done.
All these things leads to an unavoidable conclusion that the question as to how and to what extent deduction should be allowed under Section 10A of the IT Act was well considered in the original assessment proceedings itself. Hence, initiation of the re-assessment proceedings under Section 147 by issuing a notice under Section 148 merely because of the fact that now the Assessing Officer is of the view that the deduction under Section 10A was allowed in excess, was based on nothing but a change of opinion on the same facts and circumstances which were already in his knowledge even during the original assessment proceedings. - Decided in favour of assessee
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2018 (4) TMI 1375
Validity of Second (Fresh) Notice u/s 158BD - search proceedings - First notice u/s 158BC was issued to the firm - Assessing Officer, who is assessing the Firm as well as the Appellant, is the same person - Held that:- Section 158BD makes it clear that the AO needs to satisfy himself that the undisclosed income belongs to any person other than the person with respect to whom the search was made under Section 132 or whose books of accounts or other documents or assets were requisitioned under Section 132A.
Mere disclosure made by the present assessee before the authority cannot be the basis for reaching a satisfaction that any undisclosed income belongs to him unless the seized books of accounts or other documents or assets are perused, examined or verified by the concerned Assessing Officer.
The very object of the Section 158BD is to give jurisdiction to the AO to proceed against any person other than the person against whom a search warrant is issued. Although Section 158BD does not speak of ‘recording of reasons’ as postulated in Section 148, but since proceedings under Section 158BD may have monetary implications, such satisfaction must reveal mental and dispassionate thought process of the Assessing Officer in arriving at a conclusion and must contain reasons which should be the basis of initiating the proceedings under Section 158BD.
The order dated 14.08.2000, passed by the Additional Commissioner of Income Tax (Appeals), under Section 144A whereby he, inter-alia, directed the Assessing Officer to take the undisclosed income of the Appellant including from the benami business in the name of two other persons at an aggregate sum of ₹ 17 lakhs as against ₹ 14 lakhs declared by the Appellant in his block return was passed in contravention of law and is not sustainable in the eyes of law.
Appeal dismissed - Decided against the assessee.
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2018 (4) TMI 1374
Setoff of public issue expenses with Interest accrued - taxability of interest accrued on account of deposit of share application money - Held that:- If the share application money that is received is deposited in the bank in light of the statutory mandatory requirement then the accrued interest is not liable to be taxed and is eligible for deduction against the public issue expenses.
The issue of share relates to capital structure of the company and hence expenses incurred in connection with the issue of shares are to be capitalized because the purpose of such deposit is not to make some additional income but to comply with the statutory requirement, and interest accrued on such deposit is merely incidental.
In the present case, the Respondent was statutorily required to keep the share application money in the bank till the allotment of shares was complete. In that sense, we are of the view that the High Court was right in holding that the interest accrued to such deposit of money in the bank is liable to be setoff against the public issue expenses that the company has incurred as the interest earned was inextricably linked with requirement of the company to raise share capital and was thus adjustable towards the expenditure involved for the share issue. - Decided against revenue
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2018 (4) TMI 1373
Entitled to deduction u/s 80-O - proof of rendering technical services - principal agent relationship - eligibility criteria - Held that:- The services of managing agent, i.e., the Appellant, rendered to a foreign company, are not technical services within the meaning of Section 80-O of the IT Act. The Appellant failed to prove that he rendered technical services to the Sumitomo Corporation and also the relevant documents to prove the basis for alleged payment by the Corporation to him. The letters exchanged between the parties cannot be claimed for getting deduction under Section 80-O of the IT Act.
The Appellant was a managing agent and the High Court was right in holding the principal agent relationship between the parties and there is no basis for grant of deduction to the Appellant under Section 80-O of the IT Act. - Decided against assessee.
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2018 (4) TMI 1353
Reopening of assessment - no notice u/s 143(2) have been served upon the assessee - Held that:- The reply received by assessee under RTI Act reveal that no notice have been served upon the assessee under section 143(2). The Director of the Assessee-Company has specifically pleaded before us that returns are filed in response to notice issued under section 148. Therefore, the matter requires factual verification from the record because such fact was not brought on record before the authorities below and the A.O. mentioned in the assessment orders that no return u/s 148 have been filed by the assessee.
The assessee also pleaded that the objections filed in response to initiation of proceeding under section 148 have not been disposed of by the A.O. This was also not decided by the authorities below. Therefore, it requires factual verification because it would also have significant impact of passing of the assessment orders by the A.O.
As assessee pleaded that no amounts in question have been received by assessee-company in its bank account requires reconsideration of the above issues at the level of the A.O. In view of the above discussion, we set aside the orders of the authorities below and restore both the assessments to the file of A.O. with a direction to redecide all the above grounds of the assessee - Decided in favour of assessee for statistical purposes.
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2018 (4) TMI 1352
Denying the exemption u/s 10B - return of income not filed on or before the due date specified under section 139(1) - Held that:- We are of the view that authorities below correctly denied the exemption under section 10B to the assessee because original return under section 139(1) was not filed within the period prescribed under section 139(1). Therefore, provisions of Section 10B(1) Proviso (3) will apply against the assessee. On this ground itself assessee would not be entitled for deduction.
Disallowance u/s 14A - Held that:- The assessee has own sufficient funds which are more than the investment made by the assessee. Therefore, no interest is to be disallowed. Further, A.O. has not made out a case if any borrowed funds have been used for the purpose of making investment to earn exempted income. In the absence of any nexus between the borrowed funds and the funds invested to earn exempt income, the disallowance of interest is not permissible. Set aside the orders of the authorities below and delete the addition of ₹ 2,19,610/-. As regards the balance amount of ₹ 47,053/-, Learned Counsel for the Assessee did not make further submissions considering it to be a small amount. This part of ground is accordingly dismissed.
Levy of penalty u/s 271(1)(c) - Held that:- In the penalty order the A.O. did not specify which limb of Section 271(1)(c) penalty have been levied i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. It is well settled that penalty is not automatic and need not be imposed in each and every case. The facts and circumstances shall have to be considered. Considering all it is not a fit case of levy of penalty. - Decided in favour of assessee.
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2018 (4) TMI 1372
Addition u/s 68 on account of unsecured loans - Held that:- The matter pertains to some six years back and it has been explained by the Assessee that the loan in question is outstanding due to the financial crunch being faced by the appellant firm. We find substance in the contentions of the learned counsel for the Assessee/appellant before us as the material/ reply placed by the Assessee before the Assessing Officer has not been considered and no opportunity has been given to him to explain his position, therefore, the view taken by the Tribunal is perverse, accordingly, this question is answered in favour of the Assessee/ appellant before us.
Addition of unexplained expenditure - Held that:- Such addition was already made in the assessment year 2006-07 and not the year in question. Simply by saying that this was a bogus liability for assessment year 2006-07 which is cleared in assessment year 2007-08, it must be repaid out of unrecorded sources is only a presumption without any evidence brought on record to that effect. In the upshot, this addition made by the Assessing Officer is held to be bad and needs to be deleted as, in terms of well settled law, the same amount cannot be taxed for two separate years. - Decided in favour of assessee.
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2018 (4) TMI 1351
Validity of initiation of proceedings u/s 271(1)(c) - non specification of charge - Held that:- When the AO has not specifically indicated the grounds for initiation of proceedings for levy of penalty whether it is for concealment of particulars of income or for furnishing inaccurate particulars of income, then the said show cause notice suffers from illegality and consequential order passed by the AO u/s 271(1)(c) is not sustainable and liable to be quashed. Accordingly, we set aside the impugned order passed u/s 271(1)(c) and delete the penalty of levied by the AO u/s 271(1)(c) of the Act. - Decided in favour of assessee.
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2018 (4) TMI 1350
Addition u/s 68 - unexplained share application received - Held that:- The ratio laid down by the Hon’ble Apex Court in the case of Lovely Export [2006 (11) TMI 121 - DELHI HIGH COURT ] is applicable in the present case as in this case only when the opportunity is given to the assessee in respect of proving the identity, genuineness and creditworthiness of the share applicant.
CIT(A) has not taken cognizance of these three components while dismissing the appeal of the assessee. Therefore, it will be appropriate to remand back this issue to the file of the Assessing Officer. We further direct the assessee to produce these parties before the Assessing Officer along with the relevant details for verification and thereafter if no party was found the Assessing Officer with proper reasons make addition on this issue.
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2018 (4) TMI 1349
Taxation income from letting of flats - income from business income or income from house property - assessee agreed to be assessed under the head "Income of house property" with respect to the letting of the flats instead of its earlier claim as filed in return of income to have earned income from business - AO did not gave full effect to the assessee on having himself assessed such income under the head "Income from house property" from letting out of flats because the income came down below the returned income due to statutory deduction allowable to the assessee u/s. 24(a) - Held that:- Assessee in the assessee's own case for 2010-11 and 2011-12 allowing the full effect to the decision of the AO to assess the said income from letting of the flats under the head "Income from House Property‟.
Assessing Officer is bound to compute the tax payable by the assessee on the income computed by him even if it is at a lesser figure than the income returned by the assessee. This ground is allowed.
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2018 (4) TMI 1364
Cash deposits from undisclosed source - proof of withdrawal of cash - Held that:- By filing the bank statement, the contention of the assessee is that it has withdrawn cash of ₹ 14,43,149/- in the financial year 2012-13 and has made cash deposit of ₹ 5,00,000/- during the said year and hence, it had cash balance of ₹ 9,43,149/- at his disposal as at the beginning of the financial year 2013-14, which was utilised for deposit of cash in this year in the bank. We find that this contention of the assessee needs to be verified by the Assessing Officer before adjudicating the issue. We restore back the issue of deposit of ₹ 9,00,000/- out of opening cash balance of the assessee to the file of the Assessing Officer for adjudication afresh.
As regards deposit of ₹ 1,70,000/- claimed to be out withdrawals of ₹ 2,87,360/- made during the year, it is observed that the said withdrawals are prior to the deposit of ₹ 1,70,000/- made by the assessee in the bank on 9.5.2013. The revenue could not bring any material on record to show that the assessee could not have utilised these withdrawals made at the earlier point of time that the deposit made in the bank account of ₹ 1,70,000/- on 9.5.2013. Hence, we set aside the orders of the lower authorities on this issue and vacate the disallowance of ₹ 1,70,000/- made by the Assessing Officer - Decided partly in favour of assessee for statistical purposes.
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2018 (4) TMI 1363
Receipt from non-PSC partners - nature of Fee for Technical Services and royalty - AO taxed the same @25% as were effectively engaged with the PE - scope of section 44BB in view of the proviso in section 44BB/44DA/115A declined - extraction or production of mineral oil - as per revenue VAT and Service Tax reimbursements necessarily form part of the gross receipts and the same should be taxed - Held that:- Case of the assessee is also supported by the judgment in the case of SBS Marine Ltd. vs. ADIT [2015 (8) TMI 1253 - UTTARAKHAND HIGH COURT] and ONGC vs. CIT (2015 (7) TMI 91 - SUPREME COURT).
As held where the pith and substance of each of the contracts/agreements is inextricably connected with prospecting, extraction or production of mineral oil and where the dominant purpose of each of such agreement is for prospecting, extraction or production of mineral oils, though there may be certain ancillary works contemplated there under, the payments received under the said contracts would be more appropriately assessable under the provisions of section 44BB and not Section 44D of the Act.
For includibility of Service Tax/VAT reimbursement in the gross receipts is concerned, it is seen that the issue is squarely covered by the judgment of the Hon'ble Delhi High Court in the case of Mitchell Drilling International Pty. Limited (2015 (10) TMI 259 - DELHI HIGH COURT) wherein held that service tax being statutory levy should not form part of gross receipts as per provisions of section 44BB of the Act - Decided against revenue
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2018 (4) TMI 1362
Income based on the nature of services rendered by assessee - article 12 of Indo USA DTAA - whether section 9(1)(v)(c) are not in the nature of royalties/fees for included services? - income incurred in India - Held that:- The decision of the coordinate bench in assessee‘s own case for AY 2000-01 to 2004-05, that royalty income of the appellant earned from OEMs situated outside India for the patents licensed to OEMS for manufacture of CDMA Network outside India we hold that same is not chargeable to tax u/s 9 (1) (vi)(c) of the ACT. As the revenue is not chargeable to tax in India as per Income tax Act 1961 requirement of looking at the provision of article 12 (7) of Indo USA DTAA is futile. Ground No 1 and 2 of the appeal of the assessee.
Royalty from BREW operator agreement of ₹ 67848685/- and 15% thereof amounting to ₹ 10177303/- is not chargeable to tax in the hands of the assessee u/s 9(1)(vi) as well as Article 12 of the Indo-USA Tax Treaty. Ground No. 3 of the appeal of the assessee is allowed.
The taxation of royalty in respect of the CDMA handsets and equipment and the addition in respect of invoicing the revenues under the BREW agreement thus stand deleted.
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2018 (4) TMI 1361
Disallowance of claim on account of derivative transactions - bogus loss - Held that:- The assessee has provided documentary evidence by way of contract notes, bank statements evidencing cheque payments for all these transactions, payment of security transactions tax before the Assessing Officer. The National Stock Exchange has confirmed that these transactions have taken place in the exchange and in the name of the assessee.
The impugned transactions were carried out through banking channel and all the supporting evidence such as contract note, payment of STT were filed at the time of assessment proceedings. The impugned loss claimed by assessee is genuine loss in the above facts and circumstances of the case and therefore eligible for deduction. See M/s. Ratnabali Commodities vs ITO [2018 (4) TMI 1295 - ITAT KOLKATA] - Decided in favour of assessee
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2018 (4) TMI 1371
Validity of notice u/s 10(1) - Prosecution proceedings under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 - information regarding certain investments in acquiring assets abroad - Held that:- Time given for completion of assessment and reassessment is only in terms of Section 11 of the Act. Section 11 1) of the Act states that, no order of assessment or reassessment shall be made under Section 10, after the expiry of two years from the end of the financial year, in which, the notice under sub-section (1) of Section 10 was issued by the Assessing Officer. Sub-section (2) commences with a non obstante clause, stating that, notwithstanding anything contained in Section (1) of the Act, an order of fresh assessment in pursuance of an order passed under Section 18 setting aside or cancelling an assessment, may be made at any time before the expiry of the period of two years from the end of the financial year, in which, the order under Section 18 is received by the Principal Commissioner or the Commissioner.
Thus, the prayer sought for by the petitioners in the second category of Writ Petitions, i.e. to direct the third respondent to forthwith pass orders under Section 10 (3) of the Act, if acceded to, it would be contrary to the statutory provisions under Section 11 (1) of the Act. Therefore, such a positive direction cannot be issued.
Seeking direction upon the third respondent, Deputy Director of Income Tax (Investigation) Unit - 3 (3) to forthwith pass orders under Section 10 (3) of the Act is rejected, as the Writ Petitions are disposed of, directing both the Deputy Director of Income Tax (Investigation) Unit - 3 (3) and Deputy Director of Income Tax (Investigation) Unit - 3 (2) to pass orders in accordance with the provisions.
Writ petition dismissed.
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2018 (4) TMI 1360
Addition on account of interest on nonperforming assets u/s. 43D - Held that:- This issue is now squarely covered in favour of the assessee and against the revenue by the decision in the case of Shri Mahila Sewa Sahakari Mandli Ltd. [2016 (8) TMI 377 - GUJARAT HIGH COURT] notwithstanding the provisions of section 43D of the Act, since the provisions of section 45Q of the RBI Act have an overriding effect vis-a-vis income recognition principles in the Companies Act, the Assessing Officer is bound to follow the RBI Directions so far as income recognition is concerned. The contention that the assessee cannot indirectly claim the benefit which would amount to a benefit similar to that under section 43D of the Act, therefore, does not merit acceptance.
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2018 (4) TMI 1359
Denying grant of registration u/s 12AA - denial of claim of exemption in earlier year u/s 10(23C)(iiiab) - absence of dissolution clause - seeking registration after a lapse of 39 years - altruistic intent - Held that:- The fact that the activities carried out by the applicant /assessee are charitable in nature been confirmed by us in the earlier part of the order. Merely because the functioning of the applicant/assessee is guided by the directions given by the Government of Punjab, does not take away the charitable character of the objects of the assessee, nor do they effect the genuineness of the activities carried out by the applicant/assessee.
Even if the applicant/assessee is working under the directions of the Government as long as the activities carried out by it are in sync with its stated objects, which have been held to be charitable by us in the earlier part of our order and as long as there is no other finding vis-ŕ-vis the genuineness of the activities carried by the assessee, the independence of the assessee in decision making cannot in any way effect the genuineness of the activities carried out by the applicant/assessee. The aforesaid contention of the Ld.CIT(E) is, therefore, dismissed by us.
No merit in the contention of the Ld.CIT(E) that in the absence of dissolution clause in the Memorandum of Association of the assessee, the provisions of section 13(1)(c) of the Act were attracted since the said dissolution clause had been amended way back in 2008 itself providing for the transfer of the assets and funds of the society to another society with similar aims and objects in the event of the dissolution of the applicant assessee. - Decided in favour of assessee.
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2018 (4) TMI 1370
Claim of deduction u/s 10B - whether mere processing of the iron ore in a plant and machinery located outside the bonded area will not disentitle the assessee from deduction where the iron ore was excavated from the mining area belonging to an export oriented unit - location of the ‘SESA Plant’ outside the EOU and customs bonded area - Held that:- The judgment in the case of Commissioner of Income Tax Vs. Caritor (India) Pvt. Ltd. (2015 (2) TMI 670 - KARNATAKA HIGH COURT) though arises in the context of deduction under Section 10A of the Act which is different from deduction under Section 10B in so far as Section 10A provides for the location of the unit in the ‘Special Economic Zone’ [see 10A 2(c)] such locational restriction is absent in case of Section 10B, however the principle that benefit of customs and excise duty is independent of the entitlement of deduction under the Income Tax Act is applicable in the present case also.
Hence, in our view, mere location of the ‘SESA Plant’ outside the EOU and customs bonded area is not a disqualification to claim deduction under Section 10B of the Act. - Decided against revenue
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2018 (4) TMI 1358
Penalty u/s 271(1)(c) - assessee surrendered the amount before the settlement commission u/s 245D - Held that:- In the case in hand all the facts were already on record of assessment proceedings however, the same were not available before us particularly the statement recorded u/s 132(4), the seized material as well as alleged surrendered made by the assessee before the settlement commission and consequent surrender in the assessment proceedings.
Since, these facts are relevant for deciding the issue whether the penalty has been levied by the AO on the sum which was surrendered by the assessee or against the addition made by the AO. The assessee has raised this issue first time before this Tribunal and in the absence of the said issue raised before the authorities below the relevant facts though available on the assessment record were not referred in the impugned orders by the authorities below. Thus we set aside these appeals to the record of the ld. CIT(A) for considering the additional ground raised by the assessee which has been admitted by us for adjudication on merits - Decided in favour of assessee for statistical purposes.
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2018 (4) TMI 1357
Disallowance of 50% depreciation on assets in respect of Unit-II - CIT found that unit-II comments in operations since 20/04/2009 and deleted the disallowance of 50% of depreciation - revenue contending that the CIT(A) committed an error in accepting additional evidence without giving opportunity to the Assessing Officer in violation of Rule 46A - Held that:- No doubt CIT(A) stated in his order that on a careful consideration of the evidence furnished before him in the shape of copies of the sales invoices for the period between 20/04/2009 2 30/09/2009 along with the copies of the transporter’s receipts, nevertheless it is further observed by him that all these documents were available with the AO also.
By no stretch of imagination it could be said that the CIT(A) while allowing the additional evidence, made a wrong statement that all these documents were available with the AO also. Nowhere in the order it is stated that the assessee came forward with any additional evidence at the appellate stage. Assessee simply produced the copies of the documents which are already available with the AO, on considering which, while observing that basing on these documents which were available with the AO, CIT(A) reached their conclusion that Unit-II commenced its operations since 24/08/2009. - Decided against revenue
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2018 (4) TMI 1369
Personal expenses - whether can be taxed in the hands of assessee u/s 2(24)(iv) as the amount was routed through the franchisee, which was the HUF of the assessee? - Held that:- See case of Commissioner of Income-Tax, Chennai Vs.C.S.Srivatsan [2013 (3) TMI 248 - MADRAS HIGH COURT] as held the assessees have various avathars in various establishments - each of the unit has different composition. Each unit has varied number of members. Under such circumstances, the acceptability of the finding given by the Income Tax Appellate Tribunal has to be considered that the amounts paid by the company towards personal expenses of the assessee cannot be taxed in its hands under Section 2(24)(iv). - Decided in favour of assessee.
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2018 (4) TMI 1368
Crane hire charges treated as turnover of the appellant - alternate plea for permission to set off the crane hire charges paid against the crane hire charges received - Held that:- This particular crane higher charges received by the assessee was a part of the regular operation of the business and it was never the case of the assessee that it forms part of the total turnover.
As relying on case of Commissioner of Income Tax Vs.K.Ravindranathan Nair [2007 (11) TMI 10 - Supreme Court of India] we find that the Tribunal was fully justified in permitting the alternate plea of set off to be raised and there is no error in the order passed by the Tribunal.
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2018 (4) TMI 1367
Eligibility for deduction u/s.10A - excluding the value of telecommunication expenses and traveling expenses in foreign currency both from the export turnover and total turnover - Held that:- Taking into consideration the decision rendered in the case of CIT v. Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT] we are of the view that the order directing to exclude communication charges and travelling and conveyance expenses both from export turnover and total turnover, is just and proper and calls for no interference.
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2018 (4) TMI 1366
Benefit claimed by the assessee u/s 10B - Held that:- In view of the omission of sub-Section (9) in Section 10B with effect from 01. 04.2004 should it be understood that the said section never existed in the statute book and therefore, the benefit claimed by the assessee under Section 10B should be allowed. See CIT-A vs. M/S. GE THERMOMETRICS INDIA (P) LIMITED [2015 (1) TMI 10 - KARNATAKA HIGH COURT] - Decided in favour of assessee.
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Customs
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2018 (4) TMI 1348
Smuggling of televisions of sizes 32” and above - illegal import of Vitamin ‘C’ - illegal attempt to export contrabaned in the form of Red Sanders Wood - penalties - Held that: - the allegations made against the appellants are not borne by the evidence on record. Since appellant’s name does not figure in any of the fraudulent imports identified by DRI, we find no justification for the penalties imposed on the above four persons - penalties set aside.
Penalty u/s 112/114AA on CHA - it was alleged that they facilitated custom clearance of imports made by Shri BK Goyal in the name of different importers - Held that: - the allegation is not specific to any Bill of Entry identified against the appellant. In the absence of specific allegation, the charge of facilitation of illegal import cannot be sustained against the appellants - penalties set aside.
Penalties on M/s Shriniwasa Roadways P Ltd, Sh Nagendra Mishra, Shri Shriniwas Bansal - Smuggling - illegal import - Held that: - the appellants have admitted to the transportation of 43 containers from Calcutta to Delhi through CONCOR. It further stands admitted that they have booked the consignments showing their name as consignor on behalf of fictitious firms - the appellants have to be held responsible for facilitating the illegal import carried-out by Shri BK Goyal and Shri Rahul Goyal - penalties upheld.
Penalty on Shri PK Ralli - Held that: - the active role played by Shri PK Ralli in the scheme of illegal import under the direction and scheme of master-minded Shri BK Gpyal stands established - penalty upheld.
Appeal allowed in part.
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2018 (4) TMI 1347
Valuation - import of digital device (media) with contents - inclusion of royalty fee in the assessable value of goods imported - rule 10 of Customs Valuation (Determination of Value of Imported Goods) Rules 2007 - whether the assessable value, as enhanced by the original authority and upheld by the first appellate authority, is in consonance with Customs Valuation (Determination of Value of Imported Goods) Rules, 2007?
Held that: - From the facts on record, it would appear that the import is not only of the media but also of the contents therein. For ease of conveyance, the contents are supplied in ‘digital beta tapes’ and the replication thereof merely enables distribution. The contention of the appellant that the assessable value should be restricted only to the media as declared by them, on their own computation, is not tenable. It, therefore, necessarily follows that the value of the goods must include a value for the contents.
The royalties are related to the number of episodes. There is also no justification to conclude that the said royalty/licence fee may include consideration for reproduction or distribution rights.
Extended period of limitation - suppression of facts - Held that: - reliance placed in the case of M/s Continental Foundation Joint Venture Sholding, Nathpa HP Versus Commissioner of Central Excise, Chandigarh-I [2007 (8) TMI 11 - SUPREME COURT OF INDIA], Where it was held that when the Revenue invokes the extended period of limitation under Section 11A the burden is cast upon it to prove suppression of fact - extended period not invocable.
Confiscation - redemption fine - Held that: - The goods having been cleared in the normal course, the proceedings for recovery and confiscation were initiated much later. The imports were effected without any bond that could cover recovery of fine - redemption fine set aside - confiscation also set aside.
Appeal allowed in part.
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2018 (4) TMI 1346
Classification of imported goods - calcium nitrate - mono potassium phosphate - whether classifiable under heading 3105 or under heading 2834/2835 of the First Schedule to the Customs Tariff Act, 1975? - Held that: - when the grouping of products and their description very obviously connotes end-use such disassociation cannot be said to be intended - Chapter 31 of the First Schedule to the Customs Tariff Act, 1975 deals entirely with fertilisers. Fertilisers, by its very nomenclature, indicates nothing but their usage; these are intended for use in agriculture for ensuring better yield of crop.
The explanatory notes to the Harmonized System of Nomenclature for chapter 31 excludes ‘separate chemically defined compound’ but does not exclude those answering to descriptions in note 2A, 3A, 4A or 5. A common feature of these negative exclusions is that they should not be put up in forms and packages described in heading 3105.
The exclusion for separately defined chemical compound from chapter 31 is but natural as fertilisers are also indisputably inorganically chemicals or inorganic compounds. Hence such separate chemically defined compound that are not intended for use as fertilizer would, by default, be classifiable within the appropriate entry in Chapter 28 of the first schedule to the Customs Tariff Act, 1975.
The claim of Revenue for classification under chapter 28 fails to sustain - appeal dismissed - decided against Revenue.
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2018 (4) TMI 1345
Classification of imported goods - HP Photo Center Microlab Printer - whether classified under 9010 5000 of the First Schedule to the Customs Tariff Act or under 8443 3250 of CTA? - Held that: - reliance placed in Collector of Customs v. Business Forms Limited [2002 (1) TMI 68 - SUPREME COURT OF INDIA], where it was held that the HSN Explanatory Notes are entitled to far greater consideration than the Tribunal has given there - the Revenue appeal of classification under Chapter 9010 cannot be upheld - appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1344
Classification of ‘billiards cloth’ - whether classified under heading number 5112 1930 and 5112 3030 or under heading number 9504 9090 of the First Schedule to the Customs Tariff Act, 1975? - Held that: - We have no reason to misdoubt the claim of the appellant that cloth for use on billiard tables may be of the same material but, in the absence of presentation in ‘made to measure’ form or for direct use on billiard tables, find ourselves unable to accept the proposition that intended use should be inferred from the declaration. The samples are established to be composed of fabric or fabric mixtures and no different from imports of textile fabric for other uses. - no reason to discard the re-classification of the goods under chapter 51
Extended period of limitation - Held that: - The earlier bills of entry had been filed on 10th February 2006, 4th July 2006 and 10th May 2007 whereas the show cause notice was issued on 8th November 2007 which is clearly beyond the normal period of limitation.
Penalty - confiscation - Held that: - without the taint of misdeclaration on the part of the importer, the goods are not liable for confiscation, under section 111 of Central Excise Act, 1962, and, therefore, penalty under section 112 of the Customs Act, 1962 does not also lie.
Appeal allowed in part.
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2018 (4) TMI 1343
Penalty u/s 114AA of CA - penalty was not imposed by the adjudicating authority on the ground that Section 114AA was inserted in the Customs Act, 1962 as per Taxation Amendment Laws, 2006 that came into force only on 13.7.2006 - Held that: - as per the annexure to the show cause notice in the list of shipping bills, it is observed that some of the shipping bills pertain to the period prior to 13.7.2006 and some of them were issued after 13.7.2006 - in all those cases where the shipping bills were issued prior to 13.7.2006, no penalty can be imposed on the respondents under Section 114AA as the provision of this section was not existing prior to 13.7.2006.
The learned Commissioner should decide on the basis of role and of fence, if any, committed on the part of the respondents to decide imposition of penalty - appeal allowed by way of remand.
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Insolvency & Bankruptcy
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2018 (4) TMI 1379
Corporate insolvency process - jurisdiction of this court - Held that:- Objections raised by the Corporate Debtor Companies carry no force that the Applicant Bank cannot move an application under the I & B Code before this Court, while the JLF is considering or has seized of the issue of resolution plan for the Corporate Debtor or the Applicant Bank filed the present petition contrary to the guidelines issued by the RBI.
Because in our humble opinion such objection/contention may sound high but remedy lie elsewhere not necessarily before this Court under the I & B Code. The company could take up such issue with the RBI but such action does not necessarily debar the Applicant Bank for filing present application under the I & B Code before this Court nor jurisdiction of this Courts is expressly barred, if such RBI Circular/Guidelines are ignored or violated by the Applicant Bank. Moreover, M/s. Rotomac Global Pvt. Ltd. earlier itself, in its letter dated March 14th, 2016 No. RGPL/2015-16 addressed to AGM, Bank of India, Kanpur earlier has proposed for reassessment of its non-fund based limits from ₹ 2,250/- Crores to ₹ 4,220/- Crores out of which a debt of ₹ 3,100/- Cores as a non-fund based loan has been duly admitted. Since, such being position that the Corporate Debtor Companies are not able to repay its debts then, its Board of Director cannot be expected to remain in and to keep continue with the affair of managing the company.
Thus as a matter of record that the Corporate Debtor Companies M/s. Rotomac Global Private Limited itself through its letter dated 14.03.2016 has admitted its loan liability to the extent of ₹ 3,100 Crores. Such being the factual position the Company is not able to repay its debts then its management cannot be expected to have a divine right to keep continue with the managing the affair of the company - petition under the I & B Code is acceptable.
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FEMA
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2018 (4) TMI 1342
Seizure of bank account due of the suspicion that foreign exchange was suspected to be held outside India in contravention of Section 4 of the FEMA, 1999 - Liberalise Remittance Scheme (LRS Scheme) - Exercise of powers conferred upon him in terms of the provisions of Section 37A(1) of FEMA, 1999 - Held that:- The main error in the impugned order is that RBI scheme has not been discussed at all. The impugned order is totally silent about the scheme. The relevant circulars of RBI 2004 to 2007 have not been considered. When, it was pointed to Mr. Rana, he says that these are not applicable. The said arguments of Mr. Rana is without any force as the circulars speak for themselves and those are applicable.
It is also a matter of surprise that the hearing were conducted by the Ld. Competent Authority in disjoint manner, separately for appellant and separately for complainant. The said practice is not a healthy practice in our system. It is apparent that the Competent Authority did not want to hear the matter in the presence of both parties.
The Competent Authority has violated the principles of natural justice by not affording cross-examination of respondent authority while passing the order by which the Appellant would have been able to establish the fallacy of allegations and also the fallacy of patent illegality of the order apart from exhibiting that there was no material nor the reason to believe as envisaged under Section 37-A(1) of FEMA, 99.
In the nature of the seriousness of present case, the right to cross- examination would have been given in view of gravity of the matter. Had the said right been granted, there might have been different result. Rather in the present case, the adjudicating authority has issued the notice after the expiry of five months knowingly well that the proceedings were to be completed within the period of 180 days. Even no time left for the purpose of cross-examination of relevant witnesses.
In the interest of justice equity and fairplay we allow the respondent to again verify the position as to whether the appellants have brought the entire amount of remittance within four weeks, from the date of the order after verification the amounts seized be released in the accounts of Appellants with YES Bank, Chhattarpur Branch, New Delhi within one week thereafter. The liberty is also granted to the respondent to move application for clarification if any pertaining to deposit of amount in question.
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Service Tax
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2018 (4) TMI 1318
Rectification of order - works contract - Whether the order dated 12.08.2015 passed by the CESTAT deserved to be set aside since its finding that service tax is liable on works contract service prior to 01.06.2007 is vitiated? - Held that: - there is a provision of Section 35EQ of the Central Excise Act,1944 for rectification of order and therefore, that the nomenclature of the application and order make no difference and prays that the aforesaid objection be ignored and matter be decided on merits.
Works' contract cannot be vivisected into various components. It cannot be taxed under different Acts - The work contract service involved in the present case, the erection, commission and installation would not be leviable to service tax as demand was made prior to 01.06.2007.
Matter remitted back to the Customs, Excise and Service Tax, Appellate Tribunal, Principal Bench, West Block No.2, New Delhi to decide it refresh - appeal allowed by way of remand.
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2018 (4) TMI 1339
Demand of service tax - Maintenance and Repair Service - Circular No.B1/6/2005-TRU dated 27.6.2005 - Held that: - the respondent is collecting repair and maintenance charges under the statutory obligation provided in Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963. The respondent is under the obligation of the said Act, collecting the maintenance charges from the dwelling unit owner and transferring it to the actual service provider.
The issue has been considered by this Tribunal in various judgments particularly in the case of Kumar Beheray Rathi vs. CCE, Pune-III [2013 (12) TMI 269 - CESTAT MUMBAI], where it was held that the maintenance charges collected from the flat owner under the obligation as per the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, the same will not be chargeable to tax in the hands of the builder.
Appeal dismissed - decided against Revenue.
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2018 (4) TMI 1338
Whether the commercial training or coaching centre provides training and coaching of foreign languages such as French, German, Japanese, Spanish etc. falls under ‘vocational training’ and consequently exempted under N/N. 9/2003-ST dated 20.6.2003?
Held that: - very identical issue in respect of training and coaching in English language has been decided in the case of Anurag Soni [2017 (2) TMI 1220 - CESTAT, NEW DELHI], where it was held that the said training is covered under vocational training.
The training in the present case imparting the foreign languages is at par with the training in English language - the judgement squarely applies to the present case - demand do not sustain - appeal dismissed - decided against Revenue.
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2018 (4) TMI 1337
CENVAT credit - various input services - denial on account of nexus - Held that: - all the services used by the appellant are used in or in relation to providing the output service i.e. broadcasting and business auxiliary services - It is also observed that all these services have been held as input services in various judgments as cited by the appellant.
As regards the charge that the registration number was wrongly mentioned in the input service invoices, we are of the view that merely for this error, substantial benefit of cenvat credit cannot be denied unless until it is proved that the services covered under the said discrepant invoices were not received by the appellant and not used for providing the output service which is not the case here.
Appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1336
Penalty - payment of service tax and interest on being pointed out - construction of residential complex - Held that: - appellant alongwith various other appellants were litigating the matter before Hon’ble High Court against levy of service on the construction of residential complex. Subsequently the appellant have paid substantial amount of service tax - penalty set aside by invoking section 80 - appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1335
Sharing of revenue - Business support services - Appellant have entered into agreement with M/s RMIL outlining the role of each of them in providing consolidate service to the investor. By virtue of agreement M/s RMIL was entrusted with the sole responsibility of collection of card fee including service tax for such consolidated service to the customer - SCN issued on the ground that Appellant is engaged in providing infrastructure services, namely its internet based trading platform to the clients of M/s RMIL and such service are classifiable under taxable service category of “Business Support Service”.
Held that: - The discharge of service tax liability has been made by M/s RMIL as it has collected fee as agent of the Appellant and paid applicable service tax before remitting the 95% amount to the Appellant. The amount thus shared in between the Appellant and M/s RMIL cannot be taxed as it has already suffered taxes at the time of receipt by M/s RMIL - no service tax demand can be made against Appellant.
Scope of SCN - Held that: - on the one hand the show cause notice has demanded tax under the category of “Business Support Service” on the ground that the Appellant made available its infrastructure namely its internet based trading platform to clients of M/s RMIL and on the other hand the impugned order confirmed the demand on the ground that Appellant is providing stock broking service to investor. This amounts to confirmation of demand beyond the scope of show cause notice which is not permissible under law.
Extended period of limitation - penalty - Held that: - the demand pertains to the period 2008 – 09 to 2009 – 10 is hit by limitation of time - The discharge of service tax on entire card fee by M/s RMIL clearly shows that the Appellant had bonafide belief that M/s RMIL is only liable to tax - extended period and penalty set aside.
Appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1334
Management, Maintenance and Repair Service - non-payment of service tax - benefit of reduced penalty - Held that: - though the Appellant have been disputing the computation of service tax but no evidence was produced by them before the said authority to show any anomaly in demand - the demand has been correctly made from them. Therefore we uphold the service tax demand.
However, the major demand amount already stands paid by them - the Appellant is entitled to pay reduced penalty of 25% imposed upon them under section 78 - if the remaining service tax demand and 25% penalty is paid by them within 30 days of the receipt of this order, they shall be liable only for 25% penalty imposed upon them u/s 78 and the remaining amount of penalties shall stand waived.
Appeal allowed in part.
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2018 (4) TMI 1333
Valuation - inclusion of reimbursement of amount received from service recipient - crew accommodation, hotel expenses, local travel by crew, handling cost etc. - Held that: - reliance placed in the case of INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. Versus UOI. & ANR. [2012 (12) TMI 150 - DELHI HIGH COURT], where it was held that Rule 5 (1) which provides for inclusion of the expenditure or costs incurred by the service provider in the course of providing the taxable service in the value for the purpose of charging service tax is ultra vires Section 66 and 67 - such amount need not be included in assessable value - appeal dismissed - decided against Revenue.
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2018 (4) TMI 1332
Refund claim - Service Tax paid on the services used for export - N/N. 17/2009-ST dated 07.07.2009 - Held that: - an identical issue in the assessee - Appellants’ own case, M/s. Bhansali International Versus C.C.E. Jaipur-II [2017 (7) TMI 1109 - CESTAT NEW DELHI], for the earlier period, has come up for consideration before the Tribunal, where the refund was allowed - refund allowed - appeal allowed - decided in favor of appellant-assessee.
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2018 (4) TMI 1331
Refund claim - N/N. 17/2009 - ST dated 07.07.2009 - Port Services - CHA Services - Sterlizing of Export Goods - denial of port services and CHA services on the ground that necessary documents not produced - Held that: - in respect of port services and CHA Services, the denial of refund claim in the absence of necessary documents not tenable - refund allowed.
Fumigation/Seterlization Charges - rejected on the ground that service provider has provided the service for sterilization of exported goods, but not provided fumigation of the export containers - Held that: - the Service Tax paid on Fumigation/Sterlization charges is not allowable for the reason that the same charges are allowed only for containers and not on the goods to be exported - the assessee - Appellants have claimed the Fumigation/Sterlization charges on the goods which is not permissible as per N/N. 17/2009 - ST dated 07.07.2009 - refund rightly rejected.
Appeal allowed in part.
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2018 (4) TMI 1330
CENVAT credit - recovery of an amount of 8% of the value of exempted/ non-taxable services - appellant provided taxable as well as exempt services - non-maintenance of separate records - Rule 6 of the CCR 2004 - Held that: - the appellant had already reversed the CENVAT credit and also paid interest on such reversal - Since on the date of passing of the impugned orders, there were no outstanding liability recoverable from the appellants, the demand of amount in terms of Rule 6(3) of the rules cannot be sustained.
Taking of irregular CENVAT credit and subsequent reversal thereof, has not been specifically mentioned either by the appellants in the periodic returns or discussed by the authorities below in the show cause notice /impugned order - for ascertaining the reversal of credit as asserted by the appellants, the matter should go back to the original authority.
Appeal allowed by way of remand.
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2018 (4) TMI 1329
Classification of services - respondent is engaged in providing services in connection with the movement of coal for various companies as per the terms of agreement entered into between them - whether the services classifiable under clearing and forwarding agents service or not? - extended period of limitation - penalty - Held that: - On a plain reading of the scope of work described in the agreement, it transpires that the respondent is not engaged in providing either of the service mentioned in the definition clause:- clearing or forwarding - the services provided by the respondent should not be classified under “clearing and forwarding agents service”, for the purpose of levy of service tax.
Since there is no demand, extended period and penalty cannot sustain.
Appeal dismissed - decided against Revenue.
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2018 (4) TMI 1328
Refund of service tax paid under reverse charge mechanism - time limitation u/s 11B of the CEA 1944 - case of assessee-appellant is that it was under no statutory obligation to pay service tax on the ‘manpower recruitment and supply agency service’ and that since the said amount was deposited inadvertently, the same should be refunded by the department, without insisting for the time-limit - Held that: - It is an admitted fact on record that the said refund application was filed by the assessee-appellant and entertained by the department under Section 11B and Central Excise Act, 1944, made applicable to Section 83 of the Finance Act, 1994. Since the said statutory provision mandates that refund claim has to be filed within one year from the relevant date (i.e. from the date of payment of service tax amount), the statutory authorities cannot interpret the language of the statute otherwise, in order to decide the issue differently.
It is evident from the terms and conditions provided in the work order that the contractor was not providing any ‘manpower recruitment and supply agency service’. Therefore, the assessee-appellant, in the capacity of recipient of services, will not be liable to pay service taxon reverse charge mechanism on such category of service provided by the contractor.
Appeal dismissed - decided against appellant.
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2018 (4) TMI 1327
Penalties - service tax demand along with interest was also paid by the appellant before adjudication of the matter - wrong advice of tax consultant - malafide intent - Business Auxiliary Services - Held that: - Held that: - due to wrong advice of the Excise Consultant, the appellant though had reflected its liability in the E R1 returns, but did not pay the service tax within the stipulated time frame - based on the records maintained by the appellant, the department has proceeded for recovery of the adjudged dues. Therefore, mala fides cannot be attributed for imposition of penalty on the appellant - penalty set aside by invoking section 80 - appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1326
Works contract service - abatement - Held that: - the appellant-assessee is provider of ‘works contract service’ but, during the relevant period, had been discharging the tax liability on the service component of ‘commercial and industrial construction service’ - The issue of composite contracts has since been settled by the Hon’ble Supreme Court in Commissioner of Central Excise, Kerala V. Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT].
The appellant is also entitled to the benefit of the Works Contract Service (Composite Scheme for Payment of Service Tax Rules), 2007.
Liability of appellant needs to be ascertained - appeal allowed by way of remand.
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2018 (4) TMI 1325
Penalty - GTA Service - appellant had not discharged the service tax under GTA service on the freight paid exceeding ₹ 750/- and not exceeding to ₹ 1500/- and had not disclosed the same in their ST-3 returns - suppression of taxable value - Held that: - The said N/N. 34/2004 dated 03.12.2004 was indeed subject matter of litigation. The Notification exempted the taxable service provided by a goods transport agency to a customer, in relation to transport of goods by road in a goods carriage from the whole of service tax leviable under Section 66 of the Act - appellant were under a bonafide belief that an individual consignment was basis of the liability. In spite of instruction of the department, they were contesting the matter.
No contumacious conduct with an intention to evade payment of duty has been established, the appellants were bonafidely litigating the issue - penalty is unwarranted.
Demand of service tax with interest upheld - penalty set aside - appeal allowed in part.
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2018 (4) TMI 1324
Penalty - activity rendered by the appellant is of purchasing of prepaid sim cards from M/s. TPCL and selling them to the ultimate customer - tax with interest discharged before issuance of SCN - Held that: - the issue rendered in this case pertains to service tax liability on the commission received, which has been a recurring dispute before the Tribunal in various matters - the appellant could have extended the bonafide belief that there is no liability for services rendered during the relevant period - penalty set aside by invoking section 80 - appeal allowed in part.
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2018 (4) TMI 1323
Works Contract - appellant has constructed City Centre in Tripura - Department has demanded service tax under the category of “Commercial or Industrial Construction Services” - Held that: - the Hon’ble Supreme Court in the case of Commr. of Central Excise & Customs, Kerala Vs. Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT], has observed that prior to 2007, the service tax on works contract is not leviable. After that, the service tax is leviable.
Matter remanded to the adjudicating authority to decide the issue afresh - appeal allowed by way of remand.
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2018 (4) TMI 1322
Woks contract service - Construction services - composite contract - abatement - composition scheme - Held that: - the dispute for the period after 1st June 2007 arises merely from technical lacuna. The appellant, as provider of ‘works contract service’, is entitled to the composition scheme which has been designed to limit the tax to the service component of composite contract. The failure to intimate exercise of the option, in the face of eligibility should not saddle the appellant with the additional burden of duty - the disallowance of the benefit of composition is not correct - appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1321
Commercial or industrial construction services - Repair of roads - Held that: - management and maintenance and repair services has been defined in Clause (64) of Section 65 of the Finance Act, 1994. In the said definition, maintenance or management of immovable property including roads and toll plaza had also been included - there was no question of payment of service tax in respect of management, maintenance or repair of roads as per Section 97 of the Finance Act, 1994 - appeal dismissed - decided against Revenue.
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2018 (4) TMI 1320
Levy of tax on State Police - Security services - Held that: - an identical issue has come - up for consideration before this Tribunal in the case of Superindent of Police Vs Commissioner of Central Excise and Service Tax, Jaipur - I [2016 (12) TMI 289 - CESTAT NEW DELHI], where it was held that police department, which is an agency of the State Govt., cannot be considered to be a person engaged in the business of running security services. Consequently, the activity undertaken by the police is not covered by the definition of Security Agency under Section 64(94) of the Act - demand set aside - appeal allowed - decided in favor of appellant.
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Central Excise
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2018 (4) TMI 1316
Rebate claim - DEPB scheme - false documents and Bills of Entry - principles of natural justice - Held that: - the impugned orders were passed ex-parte and without having cognizance to the reply submitted by the appellant - During the course of arguments, learned Counsel submitted that first time evidence can also be produced before the Tribunal.
Matter remanded to the original authority to decide the issues denovo on merit but by providing reasonable opportunity to the appellant, with liberty to file fresh evidence.
Appeal allowed by way of remand.
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2018 (4) TMI 1317
Validity of SCN - time limitation - suppression of facts - Whether a demand cum SCN can not be issued within a period of five years from the relevant date as per the provisions contained under the proviso to section 11A(1) of the erstwhile Central Excise Act, 1944, when the party has suppressed the material fact of production and clearance of excisable goods from the department with an intent to evade payment of Central Excise duty? - Held that: - the revenue has not taken action against the assessee within the period of one year from the relevant date. What is that relevant date in the given facts and circumstances, is not in dispute, for it is the date on which the goods were cleared, i.e. date of clearance of goods/filing of monthly returns. Both events incidentally fall within the same month, which in the instant case, was February, 2008.
It is also a matter of record that in July, 2009 itself, the assessee had apprised the department of revenue, by way of a declaration, as envisaged under the Act/Rules/ Regulations, indicating its intent of taking benefit of Notification dated 10.06.2003 - assessee had made evident its intent of availing the benefits under the Act, in accordance with law.
Under identical circumstances, the Apex Court in case titled as Pushpam Pharmaceuticals Company Versus Collector of Central Excise, Bombay, [1995 (3) TMI 100 - SUPREME COURT OF INDIA] has explained that in normal understanding, contravention of any of the provisions of the Act cannot be read separately, in isolation or differently, that of the accompanying words, such as fraud, collusion or willful default - Where facts are known to both the parties omission by one to do what he might have done and not that he must have done, does not render it suppression.
Appeal disposed off.
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2018 (4) TMI 1315
Classification of goods - Mahindra Bolero Camper and its variants - appellants informed the jurisdictional Central Excise authorities that they intend to classify the said “Bolero Camper” as motor vehicle for transportation of goods under CETH classification 8704.21.90, w.e.f. 01.07.2008 - Department took the view that the impugned motor vehicle is not primarily meant for carrying loads but for transporting persons and hence would merit classification under CETH 8703 only - whether the goods classifiable under CETH 8704 or under CETH 8703?
Held that: - the test laid down in the earlier Tribunal decision in their own case in CCE, Pune-I Vs. Telco Ltd. [2002 (2) TMI 717 - CEGAT, MUMBAI], that a motor vehicle would be classifiable under 8703 or 8704, depending on how the gross vehicle weight in design of the vehicle was distributed and whether the major portion of it was used for transportation of passengers or for transportation of goods, is still the settled yardstick to be applied in such a controversy - On the basis of the details submitted by appellants, the above test when applied to various variants of the impugned vehicle clearly indicate that in these vehicles of the appellant the load carrying capacity is more than passenger capacity.
Evidently, these vehicles then cannot be alleged to be vehicles “principally designed for the transport of persons” which is a sine qua non for meriting classification under Tariff heading 87.03.
For a motor vehicle to find a fit in Heading 8703, will necessarily have only a single enclosed interior space, have rear windows along two side panels, have sliding, swing out or lift up doors, with windows, on the side panels or in the rear and more importantly, will not have any permanent panel or barrier between the area for the driver and front passengers and the rear area to enable it being used for transport of both persons and goods. Moreover, as per HSN, to find place in 8703, there should be presence of comfort features and interior finish throughout the vehicle interior - the impugned vehicle namely “Mahindra Camper” and its variants by no such imagination can be said to be satisfying these requirements. Hence, even by applying the conditionalties attendant to HSN notes in Heading 8703, we find that the impugned vehicle will not merit classification under 8703.
Revenue have made another contention that by common parlance, the vehicle is only known as a “passenger vehicle”. But, other than making such an assertion, no evidence has been brought forth to prove that the impugned vehicle is used predominantly for transport of passengers and not of goods.
Appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1314
SSI Exemption - dummy units - mutuality of interest between Fizikem and its distributor - value of clearances in the related preceding financial years had exceeded the SSI limit - Held that: - The investigation has not thrown up irrefutable evidence to establish that there is “mutuality of interest”, flow back of funds or even tangled web of financial arrangements between the respondents - lower appellate authority is correct in concluding that there is no corroborative evidence to substantiate the allegation that advertising charges are borne by respondents 3 & 4 on behalf of Fizikem.
Appeal dismissed - decided against Revenue.
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2018 (4) TMI 1313
CENVAT credit - welding electrodes - Held that: - Since there is no dispute as to the fact that the welding electrodes were received and used in the factory premise during the relevant period in question for maintenance and the issue having been settled by the Apex court in the case of Ramala Sahkari Chini Mills Ltd [2016 (2) TMI 902 - SUPREME COURT], where it was held that for the proposition that the definition of input during the relevant period has been interpreted to state word "include" is generally used to enlarge the definition, credit is allowed - appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1312
Export of goods to Falta Special Economic Zone (SEZ) without furnishing a General Bond or Letter of Undertaking to the jurisdictional Assistant Commissioner of Central Excise - contravention of provisions of Rule 19 of the Central Excise Rules, 2002 read with N/N. 42/2001-CE(NT) dated 26.06.2001 as amended - Held that: - Hon’ble Supreme Court in the case of Mangalore Chemicals & Fertilizers Ltd. vs. Deputy Commissioner [1991 (8) TMI 83 - SUPREME COURT OF INDIA] has held that Appellant did not have prior permission because it was withheld by the Revenue without any justification. The High Court took the view that after the period to which the adjustment related had expired no permission could at all be granted. A permission of this nature was a technical requirement and could be issued making it operative from the time it was applied for - appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1311
Interest on late reversal of CENVAT credit - sale of readymade garments in respect of their own manufactured goods as well as trading goods - Rule 6(3A)(e) of Cenvat Credit Rules, 2004 - Held that: - The provision u/r 6(3A)(e) of CCR for interest is in respect of amount payable under the provision of Rule 6(3A), aforesaid provision is explicit, therefore in terms of Rule 6(3A) (e) of Cenvat Credit Rules, 2004 interest is legally chargeable - in terms of Rule 6(3A) (e) of CCR 2004, appellant is liable to pay interest on the amount of ₹ 81,75,709/-.
Extended period of limitation - Held that: - Once the amount admittedly reversed, interest shall be chargeable as piggy back of the principal amount, therefore appellant cannot get relief on limitation.
Appeal dismissed - decided against appellant.
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2018 (4) TMI 1310
Manufacture - demand was confirmed invoking Rule 6(3)(i) Cenvat Credit Rules,2004 on the ground that appellant’s activity of repacking and re-labeling does not amount to manufacture therefore activity amount to trading only - Rule 6(3) (i) of CCR - Held that: - it is undisputed fact that appellant even though the activity does not amount to manufacture but cleared re-packed goods on payment of duty, which is more than the amount payable under Rule 6(3)(i), once the goods have been cleared on payment of duty, Rule 6(3)(i) cannot be applied - demand under Rule 6(3)(i) is not sustainable.
Refund claim - case of appellant is that once it was held by the Revenue that activity of repacking and re-labelling does not amount to manufacture, all the duty paid on such repacked goods become refundable - Rule 16 of Central Excise Rules, 2002 - Held that: - Additional Commissioner while disposing of SCN proposing denial of Cenvat credit clearly held that demand is not sustainable on the ground that appellant have cleared the repacked goods on payment of duty - when the appellant have availed the Cenvat credit and paid excise duty even though the activity does not amount to manufacture, amount of excise duty paid by them cannot be refundable.
The appellant’s activity of taking Cenvat credit on the duty paid goods received in the factory and re-issue of the said goods after re-packing and re-labelling on payment of duty is squarely covered under the provision of Rule 16 of CER 2002. Therefore there is no question of any refund of any amount paid while clearing re-packed goods.
Appeal allowed in part.
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2018 (4) TMI 1309
Refund claim - time limitation - Rule 5 of Cenvat Credit Rules - Whether refund claim made u/r 5 and notification issued thereunder, limitation of one year as per Section 11B shall apply or otherwise? - Held that: - larger bench of this Tribunal in the case of Commissioner of Central Excise, And Service Tax, Bengaluru Service Tax-I Vs. M/s. Span Infotech India Pvt. Ltd. [2018 (2) TMI 946 - CESTAT BANGALORE] held that in case of refund under Rule 5 one year period should be reckoned from the end of the quarter during which exports take place - Appeals are disposed of by way of remand to the Commissioner (Appeals) for deciding the matter a fresh.
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2018 (4) TMI 1308
Valuation - non-inclusion of certain amounts recovered by the appellant - whether the value of software supplied separately at the option of buyer is includible in the assessable value of goods? - extended period of limitation - Held that: - it is apparent that the matter is not free from doubt and one could hold a bona fide view that the said value of optional software is not includible - In the instant case extended period of limitation has been invoked. It is apparent from the history of this issue that the extended period cannot be invoked, in view of doubt persisting - appeal allowed on the ground of limitation.
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2018 (4) TMI 1307
Clandestine manufacture and removal - footwears - the goods were shown to have been manufactured by societies which as per the department were bogus - Revenue is against the findings that the goods were manufactured by the individual cobblers/ karigars and cleared through societies and that there is no evidence to show that the Respondents manufactured the goods themselves or got the same manufactured on their behalf - corroborative evidences.
Held that: - when the revenue has failed to show any involvement of Respondents in manufacture of footwear, in that case there is no reason to raise demand against the Respondents. Further the sales tax, income tax assessments clearly shows that the Respondent did not undertake any manufacturing activity. Even the police enquiry conducted shows that the societies were genuine and had some genuine members. In the whole investigation it is nowhere appearing that the Respondents purchased any raw material or leather for getting the footwear manufactured. Even none of the individual or entity has named Respondent as the person who got the goods manufactured on his behalf - The onus of proving that the Respondent is the manufacturer of the goods has nowhere been discharged the revenue. The show cause does not even show as to where the goods were manufactured and in which premises the actual physical activity of manufacture took place. There is no inculpatory statement of any person of the Respondent company that they themselves were manufacturing the goods in question.
In order to show that there has been production of goods the evidences in the form of use of raw material, labour, machine etc has to be shown whereas in the present appeals none of such elements are present. Hence it cannot be said that the Respondents has produced the goods.
The Respondents cannot be held liable for duty as no evidence of manufacture of footwear by them or on their behalf has been brought to the record - appeal dismissed - decided against Revenue.
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2018 (4) TMI 1306
CENVAT credit - input service - insurance services - Rule 2(l) of CCR 2004 - Held that: - prior to the amendment in the definition of input service w.e.f 1.4.2011, the scope of input service was very wide and it includes all the services which fall in or in relation to the manufacture of final product - the appellants are entitled to CENVAT credit of service tax paid on insurance premium in respect of dependent/family members of the employees.
Tribunal in the case of Ramboll Imisoft Pvt. Ltd. [2016 (6) TMI 1071 - CESTAT HYDERABAD] has allowed the service tax paid on insurance premium in respect of the dependents/family members holding that it is an input service.
Appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1305
CENVAT credit - input services - insurance used in respect of family members of their employees - Held that: - there is no merit in the appeal in respect of the credit availed in respect of family members and the same is denied.
Penalty - Held that: - there can be a bonafide doubt in the mind of the appellant as it can be an issue of interpretation - penalty set aside.
Appeal allowed in part.
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2018 (4) TMI 1304
Clandestine removal - Sponge Iron - shortage of finished goods - demands based on documents recovered from Shri Ambika Ispat and the statements of various persons - time limitation u/s 11A (1) of the Act - Held that: - The demand is wholly presumptive, based on suspicions and /or investigation conducted at the end of the so-called supplier Shri Ambika Ispat - The revenue have not found any irregularity in the affairs of these appellants, who are all registered manufacturers with the Department and have maintained regular books of accounts and filed regular returns which have been duly accepted by the Department.
Suspicion howsoever strong cannot take the place of evidence for visiting the assessee with duty liability for alleged clandestine removal.
The demands are presumptive and not sustainable - appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1303
CENVAT credit - structural items such as Angle, Channel, Plate etc. - principles of natural justice - Held that: - the Adjudicating authority passed an ex parte Order without verification of the use of the items - It is well settled by the various judicial authorities that the Cenvat Credit would be allowed after examination of the use of the items in question as the lower authorities had not examined the use of the items - the matter is remanded to the Adjudicating authority to decide afresh - appeal allowed by way of remand.
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2018 (4) TMI 1302
Valuation - job-work - inclusion of reimbursement expenses - Freight - place of removal - testing charges - Held that: - the place of removal and the conversion charges were fixed on ex factory basis. Therefore, freight or profits earned in transportation cannot be part of the assessable value of the goods in terms of Rule 5 of the Central Excise Valuation (Determination in Price of Excisable Goods) Rules, 2000 read with Section 4 (3) (d) i.e. definition of ‘transaction value’.
The testing is mandatory and without testing the goods cannot be cleared from the factory. The amount received by the respondent towards compensation for the charges is not includible in the ‘transaction value’
Appeal dismissed - decided against Revenue.
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2018 (4) TMI 1301
Valuation - inclusion of VAT - whether the VAT which has been collected and retained by the appellants to the extent of 99% (as 1% deposited with the State Exchequer) is to be added to the assessable value for determining the Central Excise duty payable? - Held that: - an identical issue has come up before the Tribunal in the cases of M/s Bhagwat Sai Metal Alloys & Others Vs. Commr. of Central Excise, Guwahati [2018 (4) TMI 1294 - CESTAT KOLKATA], where the matters were remanded to the adjudicating authority to decide the issue denovo - matters remanded to the adjudicating authority to decide the issues denovo but by providing the reasonable opportunity to the assessees - appeal allowed by way of remand
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2018 (4) TMI 1300
Rebate claim - merchant supplier - appellant herein had procured/purchased the batteries on which Central Excise duty has been discharged - applicability of Section 11 of the Central Excise Act, 1944 - Held that: - It can be seen from Section 11 of the CEA 1944, the same contemplates about recovery/ adjustment/appropriation of the amounts which are due to the Government from the person against whom duty liability is confirmed and due to government - In the case in hand it is undisputed that the appellant herein is a merchant exporter and purchased batteries from M/s Union Batteries Pvt Ltd and claimed rebate of the Central Excise duty paid by Union Batteries Pvt Ltd; that there are no dues to government from the appellant herein.
The amount of rebate which is sanctioned to appellant cannot be appropriated by the authorities by invoking the provisions of Section 11, more specifically when the dues are from totally a different entity M/s Union Batteries Pvt Ltd.
Amount to be refunded in cash - appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1319
First charge on the (hypothecated) property in auction - recovery of the Central Excise dues - Held that: - The claim of the Corporation with regard the first charge on the property was answered by the High Court by holding that the stage for enforcement of the charge would come only when the property is sold for recovery of the Central Excise dues and therefore, the issue raised with regard to the first charge on the property is pre-mature.
The High Court was perfectly justified in coming to the impugned conclusion - The stage at which the remedy of the Financial Corporation may be invoked, as pointed out by the High Court, adequately takes care of the grievance of the appellant.
Appeal dismissed.
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CST, VAT & Sales Tax
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2018 (4) TMI 1299
Revision of assessment - penalty for the wrong availment of ITC - Section 12(3)(b) of the TNGST Act, 1959 - Held that: - In Appollo Saline Pharmaceuticals (P) Ltd., Vs. Commercial Tax Officer (FAC) and Others, [2001 (10) TMI 1100 - MADRAS HIGH COURT] held that The legislative intention therefore, except during the period December 3, 1979 to May 27, 1993 and on and after April 1, 1996 must be taken to be to, permit the levy of penalty only in case where the assessment is a best judgment assessment made on an estimate and not by relying solely on the accounts furnished by the assessee in the prescribed return. On and after April 1, 1996 an explanation has been added below Section 12 (3) which requires the turnover relating to the tax assessed on the basis of the accounts of the assessee, to be disregarded, while determining the turnover on which the penalty is to be levied under Section 12 (3).
Penalty set aside - Tax Case Revision Petition is dismissed.
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2018 (4) TMI 1298
Revision of assessment - penalty for the wrong availment of ITC - Section 12(3)(b) of the TNGST Act - Held that: - In Appollo Saline Pharmaceuticals (P) Ltd., Vs. Commercial Tax Officer (FAC) and Others, [2001 (10) TMI 1100 - MADRAS HIGH COURT] held that The legislative intention therefore, except during the period December 3, 1979 to May 27, 1993 and on and after April 1, 1996 must be taken to be to, permit the levy of penalty only in case where the assessment is a best judgment assessment made on an estimate and not by relying solely on the accounts furnished by the assessee in the prescribed return. On and after April 1, 1996 an explanation has been added below Section 12 (3) which requires the turnover relating to the tax assessed on the basis of the accounts of the assessee, to be disregarded, while determining the turnover on which the penalty is to be levied under Section 12 (3).
Penalty set aside - Tax Case Revision Petition is dismissed.
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2018 (4) TMI 1297
Revision of assessment - penalty for the wrong availment of ITC - Section 12(3)(b) of the TNGST Act, 1959 - Held that: - In Appollo Saline Pharmaceuticals (P) Ltd., Vs. Commercial Tax Officer (FAC) and Others, [2001 (10) TMI 1100 - MADRAS HIGH COURT] held that The legislative intention therefore, except during the period December 3, 1979 to May 27, 1993 and on and after April 1, 1996 must be taken to be to, permit the levy of penalty only in case where the assessment is a best judgment assessment made on an estimate and not by relying solely on the accounts furnished by the assessee in the prescribed return. On and after April 1, 1996 an explanation has been added below Section 12 (3) which requires the turnover relating to the tax assessed on the basis of the accounts of the assessee, to be disregarded, while determining the turnover on which the penalty is to be levied under Section 12 (3).
Penalty set aside - Tax Case Revision Petition is dismissed.
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2018 (4) TMI 1296
Validity of assessment order - petitioner's request for furnishing the copies of the seized records, namely, D7 records has been rejected by the Assessing Officer - principles of Natural Justice - Held that: - the question of manipulation will not arise if the original records are retained by the second respondent and photocopies are produced to the petitioner. If this procedure had been adopted by the second respondent, this very litigation itself could have been avoided and the correct rate of tax could have been recovered from the petitioner and the matter would not be languishing in the Court for the past ten years.
To enable the petitioner to contest the matter on merits, no prejudice would be caused to the revenue if the copies of D7 records recovered from the petitioner's business premises are furnished at the cost of the petitioner.
The respondent is directed to furnish the copies of D7 records which were recovered from the petitioner by the enforcement after the petitioner remits the requisite costs for the same - Petition allowed -
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Indian Laws
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2018 (4) TMI 1341
Deposit of earnest money - relevant time - auction - from which date the period of fifteen days would start for making the deposit of remaining 75 percent; from the date of communication of confirmation of sale or from the date of the auction? - Held that: - Rule 9(2) makes it clear that after confirmation by the secured creditor the amount has to be deposited. Rule 9(3) also makes it clear that period of fifteen days has to be computed from the date of confirmation. In this case, confirmation has been made and communicated on 27th February 2013 and within fifteen days thereof i.e. on 13th March 2018, the amount of twenty-five percent had been deposited. Thereafter, sale certificate has been issued under Rule 9(6).
Even before the confirmation of sale within fifteen days, the amount would be forfeited by the authorised officer who may decide not to confirm the sale that would be a result not contemplated in Rule 9(2), 9(4) and 9(5) which fortify our conclusion that it is only after the confirmation is made under Rule 9(4) that amount has to be deposited and on failure to deposit the amount, twenty-five percent amount has to be forfeited and property has to be resold. - various provisions of Rule 9 makes it clear that interpretation made by Debts Recovery Tribunal and Debts Recovery Appellate Tribunal and as affirmed by the High Court cannot be said to be correct.
The provisions had been fully complied with by the auction purchaser as he has complied with the provisions of Rule 9 by making a deposit of 75 percent of the amount from the rate of confirmation of sale - auction is held to be valid - appeal allowed.
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2018 (4) TMI 1340
Smuggling - Heroin - Baggage Rules - appellant denied the charges and opted for trial, appellant was put to trial - offence under Sections 8(c) r/w 21(c) of the Narcotic Drugs and Psychotropic Substances Act, 1985 - validity of conviction and sentences imposed on accused - Held that: - Section 54 of the NDPS Act creates a presumption that the Accused is guilty of an offence, if she fails to satisfactorily account for possession of contraband. Section 35 states that in a prosecution under NDPS Act, it would be pre sumed that the Accused has the culpable mental state necessary for the offence - In the instant case, the prosecution has discharged its initial burden. Whereas the appellant in this case has not rebutted the statutory presumption. Therefore, the submission of the appellant that the appellant was not in conscious possession of the same is liable to be rejected.
The Apex Court has time and again held that once a physical possession of the contraband by the accused has been established, the onus is upon the accused to prove that it was not a conscious possession - The appellant has failed to discharge her burden in the manner known to law - In her statement submitted during the proceeding under Section 313 of Cr.P.C. also no plea has been taken that she was not in conscious possession of the contraband. It is to be noted that huge quantity of heroin was recovered from the possession of the appellant at the airport while she was about the board a flight bound for Malaysia. This court does not find any justification in the contention of the appellant that non examination of the person who was allegedly asked to bring M.O.4 suitcase for re-check would cause prejudice to the appellant.
This court is of the considered view that the prosecution has proved its case beyond all reasonable doubts and that the learned trial judge was right in holding that the appellant was guilty of charges and that this court does not find any illegally or irregularity in the judgment of conviction and sentence rendered by the trial court.
Quantum of sentence - Held that: - considering both the mitigating and aggravating circumstances of the case, this court is of the view that the quantum of both physical and monetary sentence imposed on the appellant by the learned trial judge appear to be appropriate and thus, the same also do not require any interference at the hands of this court.
Appeal dismissed - decided against appellant.
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