TMI Tax Updates - e-Newsletter
May 30, 2023

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise

Articles

1. Schedule III of CGST Act- related to legal services and court/tribunal services

   By: GEETANJALI PANDEY

2. What is Forward Charge Mechanism under GST?

   By: Ishita Ramani

3. No relief granted against Attachment Order by High Court on ground of alternate appellate remedy available

   By: Bimal jain

4. PAYMENT OF TAX UNDER GST LAWS

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Advisory on due date extension of GST Returns for the state of Manipur

2. ‘Governance in Banks: Driving Sustainable Growth and Stability’ (Inaugural Address by Shri Shaktikanta Das, Governor at the Conference of Directors of Banks organised by the Reserve Bank of India for Public Sector Banks on May 22, 2023 in New Delhi and Private Sector Banks on May 29, 2023 in Mumbai)

Notifications

Customs

1. 38/2023 - dated 23-5-2023 - Cus (NT)

Inland Container Depots for loading and unloading of goods - entries for Village Dahej, Taluka Vagra, Distt, Bharuch notified - Seeks to amend Notification No. 12/97-Customs (N.T.) dated the 2nd April, 1997

DGFT

2. 09/2023 - dated 29-5-2023 - FTP

Export of Rice (Basmati and Non-Basmati) - Requirement of Certificate of Inspection - Amendment in Policy condition of Sl.No. 55 & 57, Chapter 10 Schedule-2, ITC(HS) Export Policy, 2018

3. 08/2023 - dated 29-5-2023 - FTP

Syncing of ITC (HS), 2022- Schedule-1 (Import Policy) with Finance Act 2023 (No.8 of 2023) dated 31.03.2023 and Foreign Trade Policy, 2023

Highlights / Catch Notes

GST

• Forum Explores GST Late Fees Issue Between Registration Cancellation and Revocation; Open for Tax Law Enthusiasts.

  Discussion-Forum : Discussion on: GST - Late fee for the period from date of cancelation of registration to the date of its revocation - this query has been raised by an expert for brainstorming purpose - though there are good discussions to the query, the experts are invited to deliberate more and make posts to this query. - Note: the discussion forum is free - anyone can put the query relating to Tax and corporate laws - An expert may reply - Mere login is required.
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• Experts Debate GST on Factory Shed Sale: Outright Sale or Lease? Payment Advised Under Protest Amid Litigation.

  Discussion-Forum : Discussion on: GST APPLICABLE ON SALES OF FACTORY SHED - the experts have deliberated upon that issue to understand weather the transaction is outright sale or in the nature of lease of the property - the experts have suggested that querist about the rate of GST, payment of duty / GST may be made under protest since the latter is under litigation.
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• High Court Grants Interim Relief in GST Case; Goods Seized Over Alleged Fictitious Transactions Pending Section 130 Proceedings.

  Case-Laws - HC : Release of goods and conveyance - the GST department has seized the goods on the ground that the transactions are fictitious and supplier is not existing the petitioner contended that proceeding u/s 130 cannot be continued unless the goods are released u/s 129 - HC has granted interim relief to the petitioner subject to deposit of penalty, redemption fine and Bank Guarantee for 80% of total amount.
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Income Tax

• High Court Nullifies Reopening Notice u/ss 148 & 148A(d); Directs AO to Provide Supporting Documents in 2 Weeks.

  Case-Laws - SC : Reopening notice u/s 148A(b) - validity of order passed u/s 148A(d) and u/s 148 - HC set aside the notice u/s 148 and order u/s 148(b) and directed AO to furnish the documents/material to the petitioner in support of the notice issued u/s 148A(b) within two weeks to enable the petition to file the reply accordingly - the apex court has dismiss the SLP of the petitioner assessee as withdrawn - SC
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• Supreme Court upholds High Court decision to quash reopening u/s 147 due to change of opinion, not new evidence.

  Case-Laws - SC : Reopening of the assessment U/S 147 - the High Court has quashed the show cause notice on the ground that the AO has accepted the claim of expenditures during scrutiny assessment u/s 143(3) - therefore the income escaping proceeding has been initiated marely on the basis of change of opinion and cannot sustain - the apex court refused to interfere in the decision of at HC - SC
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• Supreme Court Upholds Dismissal: Ignorance of Tax Filing Deadlines Not a Valid Excuse for Delay in India.

  Case-Laws - SC : Condonation of delay in filing of return of income (ITR) - petitioner claimed that he is a foreign citizen having ASCII status and he cannot be reasonably expected to keep himself aware and updated about the due date of filing of written in India - the honorable High Court has dismissed the appeal of the assessment on the ground that ignorance of law is not an excuse and there was no Hardship and genuine region Causing the delay Of filing of ITR - the apex court has maintained the decision of the High Court - SC
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• Assessee denied deduction under Income Tax Act Section 80IB due to late submission of audit report Form 10CCB.

  Case-Laws - AT : Deduction u/s 80IB - delayed filing of audit report in the prescribed Form 10CCB - As the assessee had failed to comply with the statutory conditions which rendered her eligible for claiming deduction u/s.80IB of the Act, therefore the benefit of deduction rightly denied - AT
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• Assessee Entitled to TDS Credit Despite AO's Section 154 Order and CIT(A)'s Erroneous Decision Upholding Denial.

  Case-Laws - AT : Credit of TDS denied - amount is reflecting in 26AS - AO without considering it passed order u/s 154 and not given credit of TDS as claimed though the said amount is reflecting in 26AS Report, which was further confirmed by the CIT(A) wrongly. Assessee is entitled to credit of TDS as claimed. - AT
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• Tax Addition u/s 40(a)(ia) Deleted for Non-Deduction on Site Rent in DTC Advertising Contract.

  Case-Laws - AT : Addition u/s 40(a)(ia) - failure to deduct tax on site rent in respect of contract with DTC for display of advertisement on DTC Bus Queue Shelters and Times Keeper Booths - order of CIT(A) deleting the additions confirmed - AT
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Customs

• Revenue's Fraud Allegations on Duty Drawback Benefits Lack Evidence; Goods Exported Directly from India to Russia.

  Case-Laws - AT : Fraudulent availment of benefit of Duty Drawback - diversion of goods (exported) to third country or not - Revenue have not brought on record any evidence of diversion of goods to any third country - Admittedly, the goods have been exported by air from India to Russia and thus, chances to diversion to third country is highly impossible, without the goods first reaching Russia. - AT
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• Redemption Fine Reduced: Rs. 20 Lakhs Slashed to Rs. 50,000 for Undervaluation of Imported Goods Worth Rs. 86,541.

  Case-Laws - AT : Imposition of Redemption Fine and Penalty disproportionately - Valuation of imported goods - Taking note of the fact that as per the impugned order itself if it is a case of undervaluation, undervaluation is only of Rs. 86,541/-. Redemption filed of Rs. 20 Lakhs needs to be reduced consequently - the same is reduced to Rs. 50,000/-. - AT
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• Court Rules Exemption from Countervailing Duty on Platinum Sponge Imports Valid, Aligns with Board's Circular on Precious Metals.

  Case-Laws - AT : Exemption from payment of CVD - import of goods declared as Platinum Sponge - articles made from recycling of precious metals or during refining process - From perusal of the entry, it is evident that exemption has been granted to all the forms which arise subsequent to the emergence of the form in which these goods are imported. In view of the above circular, the contentions raised by the Revenue which go contrary to the circular issued by the Board cannot be justified. - AT
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IBC

• NCLT Dismisses CIRP Application Due to Genuine Disputes; Credible Defense by Corporate Debtor Under IBC.

  Case-Laws - AT : Initiation of CIRP - Existence of dispute - NCLT dismissed the application - Operational Creditors - There was sufficient foundation of genuine disputes between the two parties and the same is amply supported by material on the record. It is not the remit of IBC to investigate all related contractual disputes and look into their merits as long as it suffices that a plausible defence has been raised as has been done in the present case. In the present factual matrix, the defence raised by the Corporate Debtor cannot be held to be moonshine, spurious, hypothetical or illusory - AT
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Service Tax

• Service Tax Reverse Charge Demands Require Detailed Transaction and Invoice Calculations; Vague Notices Deemed Misconceived.

  Case-Laws - AT : Reverse Charge Mechanism - the demand under service tax on reverse charge mechanism, has to be worked out and calculated transaction wise-wise and invoice-wise. In absence of such exercise, it is found that the show cause notices is vague and fit to be held misconceived and mis-directed. - AT
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Central Excise

• Refund Claim for Excise Duty on Taxis Must Be Filed Within Six Months per Notification No. 12/2012, Sl. No. 273.

  Case-Laws - AT : Refund claim - time limitation - duty of excise paid on motor vehicle registered as Taxi - the limitation for refund for a manufacturer under Notification No.12/2012 under Sl.No.273, is six months from the date of registration of the vehicle as an ambulance or taxi. It is further found that the appellant - assessee have claimed the refund within a period of six months of the vehicles getting registered as taxi or ambulance. - AT
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Case Laws:

• GST

• 2023 (5) TMI 1145
  Maintainability of appeal - appeal not admitted, as appellate tribunal has not yet been constituted - contravention to sub-sections (1) (4) of Section 107 of the GST Act - demand of tax alongwith penalty - It is contended that the petitioner has already deposited 10% of the demanded tax amount before the first appellate authority and as there is no second appellate forum, this Court should entertain this writ petition - HELD THAT:- Since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate tribunal, which has not yet been constituted, the amount of penalty and interest demanded by authority shall remain stayed during pendency of the writ petition subject to the Petitioner depositing the entire amount of tax demanded within a period of fifteen days from today. Application disposed off.

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• 2023 (5) TMI 1144
  Release of goods and conveyance - fictitious transactions - supplier not found to be in existence - HELD THAT:- In the facts and circumstances of the case, by way of interim relief, it is directed that the goods of the petitioner as well as vehicle truck bearing registration MH-11-CH-7275, shall be released provided the petitioner complies with the conditions imposed - petitioner shall deposit with the competent authority of the respondents, total amount of penalty of Rs.1,17,500/-, the tax is not assessed by the authorities - towards fine in lieu of confiscation of goods, which is Rs. 23,50,000/-, the petitioner shall furnish Bank Guarantee for 80% of the total amount. Bond shall be given for remaining 20% of the amount. Petition disposed off.

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• Income Tax

• 2023 (5) TMI 1143
  Reopening notice u/s 148A(b) - validity of order passed u/s 148A(d) and u/s 148 - HC set aside the notice u/s 148 and order u/s 148(b) and directed AO to furnish the documents/material to the petitioner in support of the notice issued u/s 148A(b) within two weeks to enable the petition to file the reply accordingly - HELD THAT:- Special leave petition is dismissed as withdrawn. The pending applications, if any, are disposed of.

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• 2023 (5) TMI 1142
  Reopening of assessment u/s 147 - Reason to believe - genuineness of claim of assessee company about compensation payable - As per HC it is a clear case of change of opinion, Change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment as in survey operation u/s 133-A and in the survey report it was specifically commented to examine in detail genuineness of claim of assessee company about compensation payable - HELD THAT:- We are not inclined to interfere with the impugned judgment and order of the High Court. The special leave petition is dismissed on the ground of delay.

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• 2023 (5) TMI 1141
  Delay in filing return of income - Petitioner is admittedly a foreign citizen having OCI status since 2009 and he cannot be reasonably expected to keep himself aware and updated about the due date for filing return in India especially when he did not have any income taxable in India since the financial year 2010-11 - As per HC ignorance of law is not an excuse - Also Assessee had filed his ITR for the assessment year 2011-12 within the time limit proves that the Assessee was aware of the process of filing the ITR and no genuine hardship or reasonable cause for late filing of the return - HELD THAT:- No good ground and reason to interfere with the impugned judgment and hence, the special leave petition is dismissed.

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• 2023 (5) TMI 1140
  Deduction u/s 80IB - audit report in the prescribed Form 10CCB was filed beyond the stipulated time period - delay occurred due to technical glitches during critical phase of pandemic COVID-19 - HELD THAT:- It settled position of law as laid down in the case of Dilip Kumar and Company ( 2018 (7) TMI 1826 - SUPREME COURT] that the assessee in the present case had failed to strictly comply with the innate statutory requirements contemplated in section 80IB (11A) r.w. 80IB(13) r.w.80IA(7) of the Act, which in clear and unequivocal terms disentitles an assessee from claiming deduction u/s 80IB of the Act, if it had, inter alia, failed to furnish the audit report in Form 10CCB r.w. 18 BBB before the specified date referred to Section 44AB of the Act, therefore, the lower authorities have rightly declined her claim for deduction u/s.80IB of the Act. As the assessee had failed to comply with the statutory conditions which rendered her eligible for claiming deduction u/s.80IB of the Act, therefore, finding no infirmity in the view taken by the lower authorities who had rightly declined her claim for deduction. Decided against assessee.

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• 2023 (5) TMI 1139
  Rectification u/s 154 - Debatable issue - disallowance of deduction of employee share based payment reserve by treating it as contingent liability - whether the AO could disallow deduction of employee share based payment in proceedings u/s 154? - CIT(A) held that since the issue is debatable, therefore, could not have been disallowed in proceedings u/s 154 - As per the contention of the assessee, the cost accrued over the period of rendition of services by the employee was deductible in the year of its accrual that is over the vesting period - HELD THAT:- CIT(A) after considering submissions of the assessee placed reliance on the decisions of Biocon Limited [ 2013 (8) TMI 629 - ITAT BANGALORE] , PVP Ventures Limited [ 2012 (7) TMI 696 - MADRAS HIGH COURT] and the decision of NDTV [ 2017 (2) TMI 1399 - DELHI HIGH COURT] before the CIT(A) and held that such cost cannot be considered as contingent in nature Assessee before the CIT(A) brought on record that for AY 2011-12, the AO has allowed the claim of such expenses. The CIT(A) in these facts held that disallowance of employee share based payment was not permissible u/s 154 of the Act and deleted the addition. We find no infirmity in the impugned order, hence, the same is upheld and appeal of the Revenue is dismissed being devoid of any merit. Appeal of revenue dismissed.

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• 2023 (5) TMI 1138
  Rectification of mistake u/s 154 - Credit of TDS denied - HELD THAT:- Assessee has paid total taxes and credit claimed which is also reflected in the 26AS Report which is further tallying with the Income Tax return for the year under consideration filed by the assessee - The break up whereof has already been discussed by us as above. AO without considering it passed order u/s 154 and not given credit of TDS as claimed though the said amount is reflecting in 26AS Report, which was further confirmed by the CIT(A) wrongly. Assessee is entitled to credit of TDS as claimed. The demand of Rs.10,38,820/- is hereby deleted. AO is further directed to give relief to the assessee in terms of the observation made hereinabove. Assessee s appeal is allowed.

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• 2023 (5) TMI 1137
  Revision u/s 263 - Deduction u/s 80P - interest income derived from deposits made in cooperative societies - HELD THAT:- CIT-DR could not dispute that in latest decision Postal Employees Co. Op Credit Society Ltd.[ 2023 (2) TMI 813 - BOMBAY HIGH COURT] has already rejected the Revenue s identical stand in initiating sec.148 proceedings for the purpose of assessing similar interest income derived from co-operative banks and other institutions. We adopt the foregoing detailed discussion mutatis mutandis to accept the assessee s arguments. Learned PCIT s revision directions in issue stand reversed. The Assessing Officer s corresponding regular assessment is restored as the necessary corollary - Assessee appeal allowed.

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• 2023 (5) TMI 1136
  Addition u/s 40(a)(ia) - failure to deduct tax on site rent in respect of contract with DTC for display of advertisement on DTC Bus Queue Shelters and Times Keeper Booths - effect of second proviso to section 40(a)(ia) as amended - HELD THAT:- It is admitted fact that Ld. CIT(A) has merely followed the judgment in favour of the assessee in his own case [ 2018 (5) TMI 2145 - DELHI HIGH COURT] Hon ble Delhi High Court by order dismissed the the appeal of revenue with following findings that this issue is covered by a judgment of this Court in Commissioner of Income Tax vs. Rajinder Kumar [ 2013 (7) TMI 454 - DELHI HIGH COURT] and also the Commissioner of Income Tax vs. Ansal Land Mark Township Pvt. Ltd. [ 2015 (9) TMI 79 - DELHI HIGH COURT] Consequently finding no error in the conclusion of Ld. CIT(A) the ground raised have no substance and the appeal of Revenue is dismissed.

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• Customs

• 2023 (5) TMI 1135
  Fraudulent availment of benefit of Duty Drawback - wilful misstatement of the particulars declared in the shipping bills - order for confiscation of the goods already exported under draw back u/s 113 (i) of the Customs Act - diversion of goods (exported) to third country or not - levy of penalty u/s 114 (iii) of the Act - Extended period of limitation - HELD THAT:- The show cause notice has been issued after more than 13 years from 27.04.2003, when the Customs has closed the matter by writing to Punjab National Bank, to defreeze the bank account of the appellant. Thus, the extended period is not available to Revenue, and this ground is decided in favour of the appellant and against the Revenue. The show cause notice is based on un-substantiated and vague facts, which have no legs to stand. Admittedly, the appellant have received the payment for the goods exported, which is duly supported by the BRCs issued and re-certified after verification by the Punjab National Bank. Further, there is no evidence brought on record by the Revenue that the appellant have returned any remittance received on account of exports to the buyer located in the foreign country. Further, Revenue have not brought on record any evidence of diversion of goods to any third country - Admittedly, the goods have been exported by air from India to Russia and thus, chances to diversion to third country is highly impossible, without the goods first reaching Russia. The impugned order is set aside - appeal allowed.

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• 2023 (5) TMI 1134
  Imposition of Redemption Fine and Penalty disproportionately - Valuation of imported goods - gold dore bars - rejection of transaction value - re-determination of value - benefit of concessional rate of CVD @ 8% ad-valorem claimed under Sr. No. 318 of Notification 12/2012-Cus dated 17.03.2012 against DGFT License - whether in the facts of the commissioner the case there is a contentious conduct of the appellant on imposing fines and penalties as per the impugned order? HELD THAT:- The Bar no. 1 has been permitted for re-export even the value that has been determined is less than 1 Lakh above the value declared. The redemption filed imposed of Rs. 20 Lakhs on such differential value cannot be justified and needs to be commensurate with the differential value which is only Rs. 86,541/- in case of bar 1. Taking note of the fact that as per the impugned order itself if it is a case of undervaluation, undervaluation is only of Rs. 86,541/-. Redemption filed of Rs. 20 Lakhs needs to be reduced consequently - the same is reduced to Rs. 50,000/-. In respect of bar 2, there is no contravention vis-a-vis claiming the benefit of exemption notification. None of the test reports have shown a purity level of more than 95% there can be a case for undervaluation on which total undervaluation can be Rs. 3,12,735/- by the adjudicating authority involving total duty of Rs. 25000/-. Redemption filed imposed in terms of Section 118 cannot be justified in the present case. In case of bar 2 the same is set aside. For undervaluation of the Gold Bar 2, a penalty of Rs.10 Lakh cannot be justified and is reduced to 10,000/- under Section 112 A of the Customs act. Appeal allowed in part.

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• 2023 (5) TMI 1133
  Exemption from payment of CVD - import of goods declared as Platinum Sponge - articles made from recycling of precious metals or during refining process - N/N. 05/2006 -Central Excise dated 01.03.2006 (Sr. No. 25) and N/N. 12/2012 -Central Excise dated 17.03.2012 (Sr. No. 193) - HELD THAT:- Vide Notification No. 228/88-CE dated 06.07.1988, exemption from Central Excise Duty was granted to articles made from recycling of precious metals, from so much of the duty of excise leviable thereon as is in excess of the value of precious metal added and the amount charged for reconditioning/re-processing etc. - Simultaneously, vide Notification No. 230/88-CE also dated 6.7.1988 (i.e. issued on the same day as Notification No. 228/88-CE,) the Central Government exempted Catalyst, Powder, Sponge, Ingots of precious metals from Central Excise Duty from so much of the duty of excise leviable thereon as is in excess of the value of precious metal added and the amount charged for reconditioning/re-processing etc. - Subsequently, in the Budget proposals for 1994-95, Notification No. 228/88 was rescinded. Also, vide Notification No. 39/1994-CE dated 01.03.1994, unconditional and complete exemption was granted to article of precious metals irrespective of their form. However, Notification 230/1988 continued to be in force. In the budget 1995-96 Notification No. 54/95-CE dated 16.3.1995, effectively continued Notification No.30/94 dated 1.3.1994, Explanation (iv) was however added to the existing notification, clarifying the meaning of articles in relation to precious metals - Notification No.54/95-C.E dated 16.3.1995 and Notification No.230/88-CE dated 6.7.1988 continued in the subsequent years also albeit with new numbers. Sl.No.72.2 of Notification 8/96 inter alia exempted articles of platinum. Sl.No.71.3 of Notification, inter alia, exempted platinum in their primary of forms that is to say to any unfinished or semi-finished including ingots etc. Sl.No.28.14 of notification granted partial exemption, inter alia to catalysts, ingot, powder and sponge inter alia, of platinum. From 1994 onwards the notification has been issued exempting the impugned goods and the wording used in the notification then till the notification under consideration remains the same. The Ministry itself was always of the view that exemption needs to be granted to the metal in the form it emerges during a refining process, whether from ore concentrate or recycled material, the same could not have been denied. From perusal of the entry, it is evident that exemption has been granted to all the forms which arise subsequent to the emergence of the form in which these goods are imported. In view of the above circular, the contentions raised by the Revenue which go contrary to the circular issued by the Board cannot be justified. In case of Ratan Wire and Melting [ 2005 (2) TMI 138 - SUPREME COURT] , a five judges bench of Hon ble Supreme Court has stated the law in respect of the clarifications and circulars issued by the Board stating So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. They are not binding upon the court. It is for the Court to declare what the particular provision of statute says and it is not for the Executive. Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law. Nothing has been brought forth in the appeal or during the arguments to show that there was any subsequent change in the wording of the Notification, or a pronouncement of Hon ble Supreme Court or a Hon ble High Court has come which goes contrary to the above clarification. There are no merits in the appeal - appeal filed by Revenue dismissed.

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• Insolvency & Bankruptcy

• 2023 (5) TMI 1132
  Initiation of CIRP - Existence of dispute - NCLT dismissed the application - Operational Creditors - whether in the facts of the present case, a genuine and real pre-existing dispute can be said to be in existence between the two parties? - HELD THAT:- There are no material on record by way of reply to the Corporate Debtor by the Operational Creditor which substantiates their having controverted the email dated 15.10.2014. The Adjudicating Authority, has, therefore not committed any mistake in holding that the said email clearly reflected that there was a specific dispute about the poor quality of goods supplied by the Operational Creditor. It is also noticed that the quality test analysis report of Coal dated 29.09.2014 was conducted by the testing agency on the instructions of the Operational Creditor as placed at Annexure-H in the reply affidavit. This lends credulity to the contention of the Learned Counsel for the Respondent that when the test was conducted by an agency on behalf of the Appellant themselves and refund was also allowed, the poor quality of coal stood admitted by the Appellant. There was sufficient foundation of genuine disputes between the two parties and the same is amply supported by material on the record. It is not the remit of IBC to investigate all related contractual disputes and look into their merits as long as it suffices that a plausible defence has been raised as has been done in the present case. In the present factual matrix, the defence raised by the Corporate Debtor cannot be held to be moonshine, spurious, hypothetical or illusory - the Adjudicating Authority did not commit any error in rejecting the Section 9 Application filed by the Appellant on the ground of pre-existing dispute. There is no merit in the Appeal - Appeal is dismissed.

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• Service Tax

• 2023 (5) TMI 1131
  Refund claim - rejection on account of certain invoices not being submitted within the limitation period of one year in terms of Section 11B of the Central Excise Act, 1944 - rejection also on the ground of availment of CENVAT Credit on account of non-registration of premises as well as availing CENVAT Credit on certain invoices even before payment of Service Tax. Non-registration of premises - Whether the respondent herein is eligible to avail the CENVAT Credit on inputs / input services without registration of its premises? - HELD THAT:- The Hon ble Madras High Court in the case of COMMISSIONER OF SERVICE TAX-III, C has held that in the absence of any statutory provision prescribing registration of premises as mandatory for availing input service tax credit, the assessee could not be denied refund of unutilized CENVAT Credit on input services. The Hon ble Karnataka High Court in the case of MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX [ 2011 (9) TMI 450 - KARNATAKA HIGH COURT] has held that Registration not compulsory for refund. The denial of CENVAT Credit for non-registration of premises is not justified in the facts of these appeals. Availment of credit which is not due during the quarter - Whether the respondent-assessee can avail CENVAT Credit on inputs or input services before payment of tax thereon and also before the date of invoice? - HELD THAT:- The respondent had availed CENVAT Credit to the tune of Rs.18,169/- prior to the date of payment of tax, i.e., the CENVAT Credit was availed for the refund claimed from April 2013 to June 2013 when the Service Tax was paid on 04.07.2013. The respondent has admitted that it is a procedural lapse, but their substantive right cannot be taken away when there is no dispute as to the eligibility of CENVAT Credit of Service Tax paid and when conditions like payment of tax and receipt of service have been found to be satisfied. Reliance is placed by the Learned Advocate for the respondent on the decision rendered in the case of COMMISSIONER OF CENTRAL EXCISE, SURAT-II VERSUS WHITE EN-ALL PVT. LTD. [ 2003 (10) TMI 533 - CESTAT, MUMBAI] wherein it was held that It is not in dispute that, the goods are duty paid, they have used in the manufacture of finished goods, and the only lapse on the part of the respondents is that instead of taking credit on 8-4-1994 the credit was taken on 6-4-1994. It is nobody s case that, had the credit been taken on 8-4-1994, the same could be held as inadmissible. It is also not brought on record that this credit was utilised before 8-4-1994. Therefore on considering the facts and circumstances of this case, I hold that the credit could not be denied and for this lapse there is no case for imposing penalty. Reliance placed in the case of M/S INDIA CEMENT LTD., VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, TIRUPATI [ 2018 (5) TMI 603 - CESTAT HYDERABAD] where CENVAT Credit was denied on the ground that the appellant therein had availed the credit before the payment of Service Tax and it was held that in the absence of any dispute that the appellant has discharged the tax liability as per the provisions of the Service Tax Rules and there being no dispute as to the eligibility to avail CENVAT Credit, availing CENVAT Credit before few days in advance is only a procedural lapse; credit cannot be denied on this basis. The order passed by the Commissioner (Appeals) does not call for any interference - Appeal filed by the Department are dismissed as not maintainable.

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• 2023 (5) TMI 1130
  Reverse Charge Mechanism - levy of service tax - suppression of value - legal, professional and consultancy expenses - security expenses - manpower and security service - invocation of extended period of limitation - HELD THAT:- The show cause notice does not contain the gist of allegations for raising the demand on RCM basis. The provisions of service tax read with the rules thereunder do not provide for raising of demand on the basis of apparent difference in the figure of expenses in the balance sheet and the amount offered for service tax in the ST-3 Returns. This court takes judicial notice that the demand under service tax on reverse charge mechanism, has to be worked out and calculated transaction wise-wise and invoice-wise. In absence of such exercise, it is found that the show cause notices is vague and fit to be held misconceived and mis-directed. The impugned order set aside - appeal allowed.

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• Central Excise

• 2023 (5) TMI 1129
  Distribution of CENVAT Credit - input services attributable to the final product on a pro-rata basis proportionate to the turnover of each unit between the manufacturing plants of Parle Biscuits and its contract manufacturing units - rule 7(d) of the CENVAT Rules - HELD THAT:- A Division Bench of the Tribunal in M/S. KRISHNA FOOD PRODUCTS, M/S. MARIAMMA R. IYER, M/S. PARLE BISCUITS PVT LTD. VERSUS THE ADDITIONAL COMMISSIONER OF CGST C. EX [ 2021 (5) TMI 906 - CESTAT NEW DELHI] expressed reservations about the proposition of law laid down by the Division Bench in SUNBELL ALLOYS CO OF INDIA LTD MACHSONS PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE CUSTOMS [ 2014 (2) TMI 297 - CESTAT MUMBAI] and also noticed that a Division Bench of the Tribunal in COLGATE PALMOLIVE (INDIA) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2011 (2) TMI 57 - CESTAT MUMBAI] had taken a contrary view. The Division Bench, therefore, referred the questions for consideration by a Larger Bench of the Tribunal. The Larger Bench of the Tribunal in M/S. KRISHNA FOOD PRODUCTS held that Parle was justified in distributing credits on input services attributable to the final product on a pro-rata basis proportionate to the turnover of each unit between the manufacturing plants of Parle and its contract manufacturing units, including the appellant (Krishna Food), under rule 7(d) of the CENVAT Rules. In view of the answer given by the Larger Bench of the Tribunal, the order dated 05.07.2018 passed by the Commissioner (Appeals) cannot be sustained and is set aside - appeal allowed.

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• 2023 (5) TMI 1128
  Refund claim - time limitation - rejection on the ground that the claim for refund of duty paid on vehicle registered as Taxi, was filed after expiry of 6 months from the date of payment of duty, in terms of condition no. 26 (b) of Notification No. 12/2012 - HELD THAT:- The right to claim refund by the manufacturer of the motor vehicle (appellant) under Notification No.12/2012, arises on the material point or event, when the vehicle sold is registered with the Motor Vehicle Department (State Government) as an ambulance or taxi, and the manufacturer receives such information from the buyer of the vehicle along with proof. Thus, in the facts and circumstances, the limitation for refund for a manufacturer under Notification No.12/2012 under Sl.No.273, is six months from the date of registration of the vehicle as an ambulance or taxi. It is further found that the appellant - assessee have claimed the refund within a period of six months of the vehicles getting registered as taxi or ambulance. The impugned order to the extent, it has reduced refund for the amount of Rs.1,10,281/- set aside - The Adjudicating Authority is further directed to disburse the refund amount within a period 45 days from the date of receipt of this order along with interest as per rules - appeal allowed.

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• 2023 (5) TMI 1127
  Levy of penalty u/r 26(2)(ii) of Central Excise Rules, 2002 - vague SCN - It is alleged that goods delivered to the person other than the assessee has been admitted by the transporters in their respective statement - HELD THAT:- The impugned orders do not assign any specific act of contravention of the Central Excise Rules to the appellant. Commissioner has recorded that the appellant has submitted before him that they were no way concerned about the invoices or the material. Nothing has been said in the orders whereby it can be said that the appellant was acting beyond the normal business acts in transportation of the goods. There are no merits in imposition of penalties on the appellant. The same are set aside - Appeals are allowed in respect of transporter appellant.

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• 2023 (5) TMI 1126
  Clandestine Removal - clearance of finished goods without proper accounting in order to evade Central Excise Duty as the stock, as mentioned in the RG-1 register was not tallying with the physical stock - shortages determined by eye estimation - HELD THAT:- This question has been answered in negative by the tribunal in number of case. Decision in the case of DHEBAR STEEL RE-ROLLERS VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIPUR [ 2002 (2) TMI 189 - CEGAT, NEW DELHI ] referred, where it was held Revenue had not produced any evidence to show that the shortages and excesses were based on actual weighment of the inputs and final products. Therefore, the order of confiscation in respect of the goods found excess in the factory and demand of duty in respect of the goods found short is not sustainable. There are no merits in the impugned order - appeal allowed.

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