TMI Tax Updates - e-Newsletter
May 17, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Securities / SEBI
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Detention of goods - absence of valid E-way bills - procedural irregularity or minor errors - Goods to be released after furnishing of Bank Guarantee(s) equal to 100% of tax.
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GST:
Input Tax Credit - lease rent during pre-operative period for the leasehold land - appellant is constructing the Eco Resort on his own account in course of furtherance of its business of providing hospitality service - hence Section 17(5)(d) restricts the Appellant availing input tax credit on lease rental paid
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GST:
Validity of SCN - Detention of goods with vehicle - liability to pay tax, penalty and other charges - Writ against SCN - It is only if it is exfacie evident, from a bare reading of the SCN, that it suffers from inherent lack of jurisdiction, would this Court be justified, in exercising jurisdiction under Article 226 of the Constitution of India to interfere.
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GST:
Rate of GST - Centage charges/Consultancy charges - Construction Agency/Project Management Consultant - pure services provided to the State Government by way of activity in relation to function entrusted to a Panchayat/Municipality under 243G /243W of the Constitution is exempted from goods and services tax
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GST:
Classification of supply - The provision of services of supply of medicines, consumables, surgical items, items such as needles, reagents etc used in laboratory, room rent to in-patients and patients admitted for a day procedure such as IVF for diagnosis or treatments is a composite supply and can be considered as services ancillary to the provision of health care services will be eligible for exemption
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Income Tax:
Revision u/s 263 by Pr. CIT - claim of deduction u/s 10A(lA) - It remains an undisputed fact that the AO had made adequate enquires for adopting one of permissible view for allowing the assessee’s claim for exemption u/s 10A - assessment order cannot be treated as erroneous and prejudicial to the interest of the revenue unless the view taken by the AO is not unacceptable in law
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Income Tax:
Addition of unexplained share application money u/s 68 - Apart from furnishing the financial statement, bank statements and ITRs assessee could not produce any of the Principal Officer of the investor company - Genuineness of the transactions and also the creditworthiness of both the share applicants has not proved as they have no regular means to invest - addition justified
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Income Tax:
Levy of penalty u/s 271B - no initiation of penalty u/s 271B despite higher gross receipt was available to the AO while passing the original assessment order - penalty proceedings initiated in order passed in remanded matter by Tribunal after a long gap of more than 4 ½ years from the date of original assessment is barred by limitation
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Income Tax:
TP Adjustment - writ against DRP order - admission of additional documents and seek a remand report from the AO can only mean that the panel was of the view that further examination of the issue by the Department was called for - if not satisfied with remand report of TPO, Panel could well have sought a clarification, or directed the officer to carry out further verification - remanded for de novo decision of DRP
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Income Tax:
Rectification of mistake u/s 254 - ex-parte order on merit - assessee produced certain records after ex-parte order - factual aspect whether the assessee has received any income from hire charges is very crucial for deciding the issue of claim of higher depreciation on these machinery and vehicle - Tribunal is recalled its order with cost of ₹ 5000/-
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Income Tax:
Taxability of shares premium u/s 56(2)(viib) - AO was required to undertake the exercise of fact finding by determining the FMV of the Shares in question as per Explanation to Section 56(2)(viib) - remanded back to AO because such exercise not having been done - the Assessee will be free to raise all factual and legal contentions including treating said amount as 'gift' from mother to daughter.
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Customs:
Smuggling of Cigarettes - whether CHA is liable for penalty u/s 112(a) - When there is no evidence to establish that the appellant had prior knowledge of the illegal import of cigarettes and also when there is no evidence to establish any wrongful intent on the part of the appellant then there is no justification to impose penalty.
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Customs:
Exemption from SAD - Import of Microprocessors - if the goods are meant for retail sale then obliviously they cannot be meant for fitment within the CPU Housing/ laptop Body - Once the importer claims complete exemption from payment of CVD in terms of the Central Excise Notification referred above he is excluded from claiming exemption from payment of Special Additional Duty of Customs under Notification No 29/2010-Cus.
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Customs:
Valuation of duty free imports - Advance License - In absence of any correction/ amendments in the license, the value of imported goods sought to be exempted by the said license cannot be suo motto altered by the Custom Authorities.
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Customs:
Classification of imported goods - Creative Toys Modelling Clay - Heading 34070010 is more specific for modeling pastes which in our view will include the clays which are used for making models for amusement of children.
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Corporate Law:
Winding up of the Company - Non payment of dues - One thing strikes out immediately. If the goods supplied by the petitioner remained defective, the respondent ought to have returned the goods back to the petitioner. It cannot continue to retain the goods without making the full the payment thereof.
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Indian Laws:
Transfer of property / assets - with the merger of property also vested with the petitioner along with other assets of Sharpedge. This clearly amounted to transfer of the subject property - But in case of transfer of shares / dilution of the share capital by the shareholders cannot be held as transfer of assets of company to another.
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SEBI:
Violation of the Takeover Regulation - holding increased from 24.74% to 25.04% - violation of the Takeover Regulation is only to the extent of 0.04% and that too due to transfer of shares between the promoters via open market - direction of the WTM to make public announcement to acquire shares would be disproportionate - directed to transfer 0.04 % shares through open market
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Service Tax:
Refund of accumulated CENVAT credit - export of service - travel benefits to extend to employees on vacation such as leave or home travel concession are only excluded from the purview of availment of CENVAT credit and services which are used primarily for personal use or consumption of any employee is also excluded. - In other words, services which are related to the out put services are not excluded by this definition. - Refund allowed.
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Service Tax:
Scope of SCN - Management, Maintenance and Repair Services - the appeal filed by revenue refers to 94 contracts that were subject matter of show cause notice, whereas we found that only 12 were referred to in show cause notice - Revenue failed to produce the basis on which order has been passed - Demand set aside.
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Service Tax:
CENVAT Credit - merely because the Mumbai office has not obtained centralized registration under the Relevant Rules, CENVAT credit availed on the service tax paid on input services which are undisputedly utilized by the appellant in providing the taxable output services cannot be disallowed - credit allowed.
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Central Excise:
CENVAT Credit - Just because the Thermal Power Plant has been set up on the plot leased out by the Appellant, it would not entitle them to the CENVAT Credit in respect of the inputs and capital goods procured by the lessor.
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Central Excise:
Supply of goods against international competitive bidding (ICB) - seamless pipes - benefit of N/N. 6/2006-C.E. - goods were not supplied directly to the contractor - the supply of the goods to the project in the present circumstances cannot disentitle them from the benefit of notification.
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Central Excise:
Extended period of limitation - Since the said demand was confirmed solely based on the audit objection and no supporting evidences were produced by the department, alleging undervaluation of the cloth, the extended period of limitation cannot be sustained for confirmation of the adjudged demand
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Central Excise:
Valuation - PVC pipes - determination of correct transaction value as per Section 4(1)(a) of the Central Excise Act, 1944 - price at which the goods were agreed to be supplied by the respondent to MID, Jharkhand State Govt. be the correct transaction value and duty is required to be paid on same - transaction between the respondent and the dealers cannot be considered as true transaction value
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Central Excise:
Process amounting to manufacture or not - diluting of raw material namely, “STYROFAN D 623” and “APCOTEX TSN 100” with water - characteristics, chemical composition, use etc. continued to remain same even after addition of water though there could be some change in the quality and the efficiency in use of the product but that cannot be the sole criteria for considering dilution as a process of ‘manufacture’.
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Central Excise:
Duty & Penalty for clandestine manufacture and removal of goods - it is well settled legal position that the allegation of manufacture and clandestine removal of goods without payment of duty being a serious charge, the burden of proof is on the Revenue - no sufficient cause has been made out by the Revenue so as to necessitate the interference of this bench in the impugned order
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VAT:
Revision of assessment order - inter-state sales - it is no doubt true that the burden is on the petitioner, u/s 16 of the A.P. VAT Act, to show that the turnover, disclosed in the SCN, includes inter-State sales, exempt sales etc., on which VAT cannot be levied - but demand can-not imposed by authority without calling upon the petitioner to furnish the books of accounts, sales invoices etc - remanded for reconsideration
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VAT:
Input Tax Credit - Transitional Relief (TGST) was disallowed as ITC was not carried forward in the return filed in June, 2017 by dealer - later, the dealer filed TRAN-1 claiming the amount - AO shall first scrutinize the revised return and ascertain whether the Form-501 TDS certificates are genuine and If they are genuine, the petitioner is entitled to ITC
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VAT:
Denial of Input Tax Credit (ITC) - Section 11(7A) of the GVAT Act envisages disallowance of tax credit in excess of the amount of tax paid in respect of the same goods - to disallow tax credit on any purchase, it has to be established that the tax has not been paid by the vendor - remanded to hear appeal without pre-deposit
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2019 (5) TMI 963
Permission for withdrawal of Advance Ruling Application - supply or not - activity of construction of complex or building intended for sale to a buyer wholely or partly, where the entire consideration has been received / receivable after completion of construction - HELD THAT:- The application filed by the Applicant for advance ruling is disposed off as withdrawn.
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2019 (5) TMI 962
Permission for withdrawal of Advance Ruling Application - Classification of supply - supply of goods or supply of services - Sale of Karnataka Hotel as going concern on slump sale basis - “Supply” in terms of Section 7(1) of the CGST Act 2017 - HELD THAT:- The application filed by the Applicant for advance ruling is disposed off as withdrawn.
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2019 (5) TMI 964
Input Tax Credit - lease rent during pre-operative period for the leasehold land on which the resort is being constructed to be used for furtherance of business - the said rent is capitalized and treated as capital expenditure - Challenge to AAR decision.
HELD THAT:- WBHIDCL holds the ownership title of the land only and holding no proprietary interest in the immovable property constructed or being constructed on it. The Appellant is not providing any construction service to the WBHIDCL and also will not be operating the hotel on behalf of the latter. Further the Eco Resort comes not only with hotel building but also with swimming pool, cafeteria, outdoor barbeque, landscape gardens. The construction of Resort is not limited to the hotel building only as a significant amount of construction is involved for creating swimming pools and landscaping.
Every registered person is entitled to take credit on any supply of goods or services or both which are used or intended to be used in the course of furtherance of business in terms of sub-section (1) of section 16 of the GST Act, subject to the restrictions stipulated in Section 17 of the GST Act. The WBAAR never held lease rental to be capital good so discussion on sub-section (3) of section 16 of the GST Act is irrelevant.
The Appellant's argument on the absence of any nexus, direct or indirect between lease rental and construction of the Project is incorrect. The Lease Rent paid during pre-operative period for the lease hold land, on which the construction activity had been taken for furtherance of business, has direct nexus between the Lease Rent and construction of resort. Had the appellant not paid the Lease Rent during pre-operative period they would not be able to take any construction activity thereon. Further, the asset will be capitalized in the books of accounts of the Appellant. So it is clear that the Appellant is building the Eco Resort on its own account for furtherance of business, and credit of Tax paid on input goods/service is debarred in terms of Section 17(5) (d) of GST Act.
So the moot question is whether input tax credit on lease rental paid is available in the pre-operative period. It transpires from the above discussion that the Appellant is constructing the Eco Resort on his own account in course of furtherance of its business of providing hospitality service, for which one of the input service availed is lease rental service. The ambit of the blocked credit as per clause (d) of sub-section (5) of section 17 is broad as it includes such goods or services or both when used in the course of furtherance of business. So clause (d) of sub-section (5) of section 17 restricts the Appellant availing input tax credit on lease rental paid.
The AAR decision upheld - appeal dismissed.
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2019 (5) TMI 961
Rate of GST - Centage charges / Consultancy charges - Construction Agency / Project Management Consultant / Special Purpose vehicle for preparation of DPR, tendering of work, executing agreement with contractor, supervision of construction, recording measurements in M-Book, preparation of bill etc. - HELD THAT:- The applicant being a corporation established by the State Government and incorporated under the Companies Act, 1956 with full control of the State Government to carry out functions entrusted by the State Government satisfies the definition of “Government Entity” and accordingly, the out sourced services of soil investigation and structural design works for DPR preparation received by the applicant in respect of the projects listed Sl.No. 1 to 4 will be covered by the exemption under Sl.No. 3 of the above notification.
The Centage Charges / Consultancy Charges received by the applicant in respect of the works at SI Nos. (1) to (4) above being in relation to pure services provided to the State Government by way of activity in relation to function entrusted to a Panchayat / Municipality under 243G / 243W of the Constitution is exempted from goods and services tax as per Sl. No. 3 .of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 - The out sourced services of soil investigation and structural design works for DPR preparation received by the applicant in respect of the projects listed at Sl. No. 1 to 4 will be covered by the exemption under Sl. No. 3 of the above notification as pure services provided to a Government Entity by way of any activity in relation to a function entrusted to a Panchayat / Municipality under 243G / 243W of the Constitution. The services supplied / received by the applicant are taxable at the rate of 18%.
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2019 (5) TMI 960
Classification of supply - healthcare services - composite supply or not - supply of medicines, consumables, surgical items, items such as needles, reagents etc used in laboratory, room rent used in the course of providing health care services to in-patients for diagnosis or treatments which are naturally bundled and are provided in conjunction with each other - Sl.No. 74 of Notification No.12/2017-CT(R) dated 28th June, 2017 - HELD THAT:- “Composite supply” means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. As per Section 2(90) of the CGST Act, 2017, “principal supply” means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary.
The provision of services of supply of medicines, consumables, surgical items, items such as needles, reagents etc used in laboratory, room rent used in the course of providing health care services to in-patients and patients admitted for a day procedure such as IVF for diagnosis or treatments is a composite supply as defined in Section 2 (30) of the CGST Act, 2017 and accordingly tax liability has to be determined in accordance with Section 8 of the CGST Act, 2017.
In this case the provision of health care services being the principal supply and the other supplies being dependent on the provision of health care services can only be considered as services ancillary to the provision of health care services.
In case of an inpatient, the hospital provides a bundle of supplies which is classifiable under health care services eligible for exemption under Sl.No.74 of Notification No.12/2017-CT(R) dated 28th June. 2017.
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2019 (5) TMI 959
Imposition of penalty simultaneously under Sections 129(1)(a) and 129(1)(b) of the Central Goods and Services Tax Act, 2017 - release of detained goods - HELD THAT:- The goods detained shall be released to the petitioner on furnishing bank guarantee in terms of the order passed under Section 129(1)(a) of the CGST Act, 2017. The petitioner shall file an appeal within a period of one month. The appeal shall be disposed of within a further period of three months - Petition disposed off.
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2019 (5) TMI 932
Detention of consignments with vehicle - transport of consignments of ‘Off Highway trucks’ that are zero rated in terms of Section 18 of the IGST - goods unaccompanied by valid E-way bills - Section 129 (1) of the Central Goods and Services Tax Act, 2017 - imposition of penalty.
HELD THAT:- It is the Assessing Officer / State Tax Officer who is the competent and proper person for such determination/quantification. However, a holistic reading of the statutory provisions, indicates that the Department does not paint all violations/transgressions with the same brush and makes a distinction between serious and substantive violations and those that are minor/procedural in nature. Though the petitioners have been issued notices in terms of Section 129 (4) of the Act calling upon them to appear for adjudication, they have not responded to the same. The petitioners are thus directed to appear before the first respondent on 06.03.2019 at the first instance, for commencement of proceedings for adjudication.
The question of whether the movement of the consignments sans valid E-way bills constitutes a substantive error or a mere technical breach shall be considered by the Assessing Officer, having regard to the provisions of Sections 122, 125 and 126 of the Act as well all relevant Instructions and Circulars issued by the Board. Let the officer also bear in mind that E-way bills, though stale, had, in fact, accompanied the consignments. The assessees/petitioners have offered explanations in regard to the circumstances that caused the documents to expire and such explanations will be taken into consideration by the officer in determining the quantum of penalty to be levied.
Consignments in the case of Caterpillar - HELD THAT:- Their immediate release is ordered, the interests of the Department must remain protected. The penalty is quantified, for the moment, and solely for the purposes of this order, 100% of the tax. The goods shall be released forthwith, upon condition that Caterpillar furnish a Bank Guarantee(s) for a sum of ₹ 3,84,30,193/- in favour of the detaining Authority prior to such release. Proceedings for adjudication shall be completed within a period of six weeks from the date of initial hearing, being 06.03.2019.
It is agreed by the Transporter as well as the Revenue that, as far as the Transporter is concerned, a sum of ₹ 7,16,168/- has been remitted covering the tax as well as penalty and the goods have already been released - as far as the case of Transporter is concerned, proceedings for adjudication shall go on and shall be completed within a period of four weeks from the date of initial hearing, being 06.03.2019 - Upon conclusion thereof, the amount paid by the petitioner shall be adjusted against the demand of tax and penalty determined in assessment.
Petition disposed off.
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2019 (5) TMI 958
Input Tax Credit - Transitional Relief (TGST) - filing of TRAN-1 - inclusion of TDS - HELD THAT:- Now a revised return has been filed. Since the revised return has been filed in October, 2017 itself, the problem of the petitioner could have been redressed, if the assessment had been completed or at least if the matter has been looked into. Since that has not been done, we dispose of the writ petition with the following directions:
1) The Assessing Officer shall first scrutinize the revised return and ascertain whether the Form-501 TDS certificates are genuine. If they are genuine, the petitioner is entitled to ITC and the same could be released. The Assessing Officer shall complete the exercise within a period of two weeks;
2) The Assessing Officer shall also complete the assessment, after following due process of law within a month, since the matter is already one year old.
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2019 (5) TMI 957
Validity of SCN - Detention of goods with vehicle - carrying “fresh tamarind” from the petitioner to its purchasing dealer in Tamil Nadu - the description of the goods mentioned in the invoice, did not tally with the goods under transport - Circular dated 12.07.2018 - HELD THAT:- The proceeding, under challenge in this Writ Petition, is merely a show cause notice. It is only if it is exfacie evident, from a bare reading of the show cause notice, that it suffers from inherent lack of jurisdiction, would this Court be justified, in exercising jurisdiction under Article 226 of the Constitution of India to interfere. We are unable to hold that the contents of the show-cause notice, if accepted as true, ex facie reflect inherent lack of jurisdiction for the 1st respondent to issue the said notice.
Questions as to whether the matter falls within the ambit of Section 129(1) or Section 130(1) of the CGST Act, whether or not the Circular issued by the Board on 13.04.2018 is applicable, whether tax and penalty can be levied besides confiscation of the goods and the vehicle etc should be examined, in the first instance, by the first respondent on the petitioner submitting his reply to the confiscation show-cause notice, and the order passed by the first respondent can, thereafter, be subjected to challenge in appropriate legal proceedings.
The petitioner is permitted to submit their reply to the show cause notice within one week from today; and to direct the first respondent to pass orders thereupon at the earliest and, in any event, not later than one week from the date of receipt of the petitioner’s reply to the show cause notice - petition disposed off.
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Income Tax
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2019 (5) TMI 948
Disallowance u/s.14A - whether exempt dividend income from mutual funds and shares was received during the year - disallowance under Rule 8D(2)(ii) towards interest paid - HELD THAT:- This issue is no more res integra in view of the recent judgment delivered in Godrej & Boyce Manufacturing Company Ltd. vs. DCIT [2017 (5) TMI 403 - SUPREME COURT] in which it has been held that when interest free funds in the form of share capital and reserves are more than investment, then no disallowance of interest can be made u/s 14A. Disallowance made by the AO has been wrongly sustained in the first appeal, therefore, order to delete the same.
Disallowance u/s.14A read with Rule 8D(2)(iii) is 0.5% of the average value of the investments - AO computed 0.5% of the average value of investments and made disallowance for the same which came to be affirmed in the first appeal - AR submitted that the disallowance made in this regard is excessive and submitted that the disallowance may be made on the reasonable basis, may be, at ₹ 1,000/- per entry - HELD THAT:- This type of ad hocism is impermissible in view of the clear mandate of Rule 8D(2)(iii).
As the assessment year under consideration is a period after the insertion of Rule 8D, I hold that the disallowance at 0.5%, being the prescription of the rule, as made and sustained in the first appeal is in order. To sum up, disallowance u/s.14A of the Act is sustained at ₹ 4,88,721/- and the assessee gets relief of ₹ 2,73,505/-.
Disallowance of foreign tour expenses - allowable business expenses - AO made addition on the ground that the assessee failed to produce any submission on the performance of foreign tour and how it was related to business - HELD THAT:- A copy of the assessee’s Profit and loss account has been placed and it is seen that the assessee made export sales of ₹ 2.81 crore as against domestic sales amounting to ₹ 40.55 lakh. CIT(A) has recorded the assessee’s submission made before him on page 16 of the impugned order, vide which it was stated that foreign tour was undertaken to USA where the assessee has got its customers. Not only that, the assessee also filed copies of bills and vouchers before the AO during the course of assessment proceedings. This shows that the assessee genuinely undertook foreign visit to USA. Since his major sales are to foreign countries including USA, there can be no reason to disallow the foreign travel expenses incurred in this regard - order to delete the addition. - Decided in favour of assessee.
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2019 (5) TMI 947
Revision u/s 263 - claim of deduction under section 10A(lA) - as per Pr. CIT the benefit of Section 10A/10B should be allowed after setting off losses as per the provisions of Section 71 & 72 from eligible units run by the tax payer - assessee relying on Circular No.1/2013 dated 17.1.2013 - HELD THAT:- We observe that during the course of proceedings u/s 143(3) of the Act specific query was raised by A.O by way of questionnaire dated 9.2.2015 regarding the justification of deduction/ exemption claimed u/s 10A.
From perusal of the extract of the questionnaire issued by Ld. A.O dated 9.2.2015 and specific reply dated 3.3.2015 clearly shows that this is not the case of ‘NO ENQUIRY’ rather the Ld. A.O has made a “PROPER AND DETAILED ENQUIRY” and accepted the claim of the assessee by interpreting the provisions of law, judicial pronouncements as well as the Circular issued by Central Board of Direct Taxes.
From perusal of the judgments in CIT & ANR V/s M/s. Yokogawa India Ltd [2016 (12) TMI 881 - SUPREME COURT] & Decision Craft Analytics Ltd V/s DCIT [2019 (4) TMI 191 - ITAT AHMEDABAD] it is well established that in the instant case the assessee made correct claim by firstly taking the benefit of Section 10A for the profits earned from SEZ units and remaining profits of other units including SEZ unit were utilised for setoff of current and brought forward losses. It remains an undisputed fact that the Assessing Officer had made adequate enquires as noted herein above adopting one of permissible view for allowing the assessee’s claim for exemption u/s 10A before the claim of set off of brought forward and current year loss. Pr. CIT took a different view of the matter. However that would not be sufficient to permit Ld. Pr. CIT to exercise the power u/s 263 of the Act because when two views are possible and Ld. Pr.CIT does not agree with the view taken by the Assessing Officer, assessment order cannot be treated as erroneous and prejudicial to the interest of the revenue unless the view taken by the Assessing Officer not unacceptable in law.
We therefore set aside the finding of Pr. CIT on this issue as it was a mere change of opinion which would not enable Ld. Pr. CIT to exercise jurisdiction u/s 263 as the A.O had considered the details and the explanation offered by the assessee before accepting the claim. - Decided in favour of assessee.
Revision u/s 263 - computing the book profit u/s 115JB - non inclusion the disallowance of interest paid to Income Tax and also directing the Ld. A.O for verifying the claim of additional depreciation on the alleged purchase of old and used plant and machinery - HELD THAT:- Ld. Counsel for the assessee fairly accepted that this finding of Pr. CIT is correct and the directions given to the Ld. A.O to examine these issues two afresh is valid.
We therefore uphold the order of Pr. CIT assuming jurisdiction u/s 263 only to the extent of direction given for computation of book profit u/s 115JB after considering the interest paid on income tax and direction to verify claim of additional depreciation on old and used machineries. - Appeal of the assessee is partly allowed.
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2019 (5) TMI 946
Unexplained share application money - Addition u/s 68 - scrutiny assessment followed by serving of notices u/s 143(2) and 142(1)(ii) - as per CIT-A the share applications were private placement, hence the applicants had full knowledge about the share applicants and was definitely in a position to produce the principle officers of the companies which he failed to do so. By not doing so the applicant failed to discharge its onus u/s 68 - HELD THAT:- In the light of the judgment in the case of Principal Commissioner of Income Tax (Central)-1 V/s NRA Iron & Steel Pvt. Ltd [2019 (3) TMI 323 - SUPREME COURT] we find that the facts are almost similar so much so that the share application was received from two companies based at Indore and Kolkata.
Apart from furnishing the financial statement, bank statements and income tax returns assessee could not produce any of the Principal Officer of the company. Detailed investigation was carried out by Ld. Assessing Officer giving no positive results favouring assessee.
A perusal of the financial statement shows that in the case of BPO Finance & Investments Pvt. Ltd there is no turnover during the year. Petty expenses of ₹ 57,531/- were incurred against NIL revenue and net loss of ₹ 57,531/- was carry forwarded. As against this picture of Profit & Loss Account having NIL turnover and loss of ₹ 57,531/- there stands reserve and surplus of ₹ 125.38 crores on the liability side. Investment in other companies is at ₹ 127.31 crores on the asset side. Bank transactions in BPO Finance & Investment Pvt. Ltd placed at page 10 & 11 shows that huge inflow and outflow of the huge amounts appearing round of the year but having no nexus with the regular business of the company for which it is incorporated.
Genuineness of the transactions of the share application money has not proved and also the creditworthiness of both the share applicants namely Rolled Gold Industries and BPO Finance Investment Pvt. Ltd has not proved as they have no regular means to invest in the share capital of the assessee company. - A.O has justified in invoking the provisions of Section 68 of the Act making the addition for unexplained share application money - Decided against assessee
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2019 (5) TMI 945
Rejection of books of accounts - addition on account of suppression of sale - Under valuation of closing stock - HELD THAT:- No specific instance has been pointed out by the A.O about any transaction which could prove that the assessee had suppressed the sales by way of receiving higher amount for sales but entered the figure on lower price in the books of accounts. The basis taken by the A.O is the MSP and MRP. No weightage has been given by the A.O that the goods are not always sold on MRP due to competition which forces to make sale at lower price. Gross Profit rate remains consistent. Books of accounts have been duly audited. Quantitative details of various qualities of goods have been maintained.
We find that in the similar set of facts in the case of ACIT Vs Avinash Chalana & Co [2013 (5) TMI 985 - ITAT INDORE] after considering the position of strict regulation and condition over the country liquor contractor under the provisions of law and after considering the facts that regular books of accounts were maintained which is duly audited and in view of fact no discrepancy in any manner in the quantitative details maintained was found by the AO has held that there was no justification in rejection of books of accounts and application of provisions of Section 145(3). ITAT also held that estimation of sales at higher figures are not justified and held that Net Profit Rate of 1.77% was reasonable.
We find that similar type of business has been carried out i.e. sale of liquor. Purchases are not doubted at any stage as they are through Excise Department controlled by the Government. Quantitative details have been filed for all the purchases. Books of accounts are duly audited.
Better Net profit rate has been declared i.e. 3.47% as against 3.17% in the immediately preceding financial year. In these given facts and circumstances of the case we find no inconsistency in the well reasoned finding of fact by CIT(A) applying net profit rate of 3.5%. We accordingly confirm the view of Ld. CIT(A) of deleting the addition of suppressed sales and dismiss revenue’s Ground No. 1 & 2.
Addition towards undervaluation of closing stock - HELD THAT:- A.O has merely calculated the stock as per the price value on the Excise records without giving any benefit of damaged as shortages in goods due to handling and transportation. Surprisingly in the Tax Audit Report furnished by the assessee in Annexure-B showing the quantitative details NIL shortage has been shown. Before the lower authorities assessee has claimed about the element of breakage in stock damaged in the process of handling but no such shortage has been entered in the books of accounts nor has been pointed out in the tax audit report which does not support the contention of the assessee as well as finding given by Ld. CIT(A).
Where on one hand no shortage has been reported in the audited financial statements and on the other hand one cannot deny the possibility of breakage and damage in the process of handling goods. In order to be fair to both the parties and meet the ends of justice, we sustain addition of ₹ 2,00,000/- for under valuation of closing stock and allow partly revenue’s Ground No.3.
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2019 (5) TMI 944
Levy of penalty u/s 271B - penalty proceedings initiated after a long gap of more than 4 ½ years from the date of original assessment in order passed in remanded matter by Tribunal - barred by limitation - HELD THAT:- Penalty is not leviable where the penalty proceedings were not initiated long after the completion of the assessment and the assessment order was silent about the levy of penalty u/s 271B.
Since the AO in the instant case has initiated the penalty proceedings after a period of more than 4 ½ years from the date of original assessment order and there was no such mention of the initiation of penalty proceedings u/s 271B and the fact of higher gross receipt was very much available to the Assessing Officer which has been mentioned in the body of the original assessment order, therefore, the penalty proceeding initiated by the AO in our opinion is barred by limitation.
The decision relied on by the DR will not help the Revenue since the same relates to initiation of penalty proceedings u/s 271B in the course of assessment proceedings. The decision does not speak of levy of penalty after inordinate delay. The penalty proceedings initiated after a long gap of more than 4 ½ years from the date of original assessment order is not sustainable in law being barred by limitation. - Decided in favour of assessee.
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2019 (5) TMI 943
Rectification of mistake u/s 254 - ex-parte order on merit - assessment was reopened by the AO to disallow the claim of higher depreciation as the assessee has not shown income from hire charges on dumpers, excavator or JCB - HELD THAT:- Now the assessee has produced certain records to show that the income declared by the assessee includes hire charges in respect of the vehicle dumpers, excavator or JCB etc. Since, this record was not filed before the Tribunal earlier, therefore, the appeal of the assessee was heard and disposed of ex-parte.
We are of the considered opinion that the factual aspect whether the assessee has received any income from hire charges is very crucial for deciding the issue of claim of higher depreciation on these machinery and vehicle. Though the conduct of the assessee after filing the appeal was sincere however, in the facts and circumstances of the case and in the interest of justice we grant one more opportunity to the assessee subject to cost of ₹ 5000/-. Accordingly, the impugned order dated 06.06.2018 of the Tribunal is recalled and the appeal of the assessee is directed to be heard and decided afresh. Miscellaneous application is allowed subject to cost.
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2019 (5) TMI 942
Rectification u/s 254 - revision OR rectification - Penalty u/s 271D imposed on the ground that “a major chunk of the fixed deposits are received in cash, in violation of provisions of Section 269SS” - CIT (A) & ITAT confirmed the levy of penalty - HELD THAT:- The assessee seeks to review the order of the Tribunal for which the Tribunal has no power. On an earlier occasion, the Tribunal while passing the order, had considered the entire facts of the case and decided the issue against the assessee.
AR wants to re-argue the case. In our humble opinion, there is no provision under section 254(2) of the Act so as to allow the assessee to re-argue the case. In our opinion, the decision of the Tribunal has not to be scrutinized sentence by sentence merely to find out whether all facts have been set out in detail by the Tribunal or whether some incidental fact which appears on the record has not been noticed by the Tribunal in its judgment. In our opinion, the Tribunal has considered all the relevant materials and has not taken into account any irrelevant material in basing its conclusion.
It is not necessary for the Tribunal to state in its judgment specifically or in express words that it has taken into account the cumulative effect of the circumstances or has considered the totality of the facts, as if that were a magic formula; if the judgment of the Tribunal shows that it has, infact, done so, there is no reason to interfere with the decision of the Tribunal. Further, in the case of Citizen Co-operative Society Limited vs. Addl. CIT [2010 (2) TMI 708 - ITAT HYDERABAD] it was a Co-operative Bank which received money from the Members/Directors in the course of banking activities which cannot be considered as ‘loan’ or deposits so as to attract the provisions of section 269SS or 269T of the Act. Miscellaneous Petition filed by the assessee is dismissed.
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2019 (5) TMI 941
Deduction u/s 80IC - substantial expansion - initial assessment year - 100% deduction of the profits after substantial expansion undertaken, for eligible business where @100% deduction already taken for first five years - HELD THAT:- As gone through the order of the Hon'ble Apex Court in the case of M/s Aarham Softronics [2019 (2) TMI 1285 - SUPREME COURT] and find that the Hon'ble Apex Court dealt with the entire scheme of the Act relating to the relevant section i.e. section 80IC of the Act, and arrived at the conclusion that the definition of the initial assessment year contained in clause (v) of sub-section(8) of section 80IC of the Act can lead to a situation where there can be more than one initial assessment year within the said period of ten years.
Hon'ble Apex Court thereafter concluded that a newly set up undertaking or enterprise in the State of Himachal Pradesh would be entitled to deduction @ 100% of the Act its profits for the first five years and even thereafter in the case of substantial expansion is carried out by it, then the assessment year relevant to the previous year in which substantial expansion is undertaken becoming the initial assessment year.
That in any case, the period of deduction u/s 80IC of the Act would not exceed 10 years.
It is now settled law that even a new undertaking, which has claimed deduction of its eligible profits @ 100% thereof for the first five years, is entitled to claim deduction @ 100% of its profits thereafter on account of substantial expansion undertaken by it.
Since in the present case the fact that the assessee had undertaken substantial expansion in the impugned year is not disputed, the assessee, we hold, is entitled to claim deduction @ 100% of its eligible profits even if it has already claimed deduction of its profits at the said rate for first five years - Decided in favour of assessee.
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2019 (5) TMI 940
Disallowance of deduction u/s 80IA(4)(iv) - treatment to notionally brought forward business losses and depreciation of earlier years and notionally set off against the income of the windmill - case of the assessee was selected for scrutiny assessment - HELD THAT:- As decided in assessee's own case [2018 (6) TMI 1608 - ITAT AHMEDABAD] depreciation already claimed by the assessee and set off against the regular source of income cannot be notionally brought forward and set off against the income of windmill for the current year after selection of initial year for claiming deduction u/s. 80IA(iv).
The assessee has been given choice of 10 consecutive years out of 15 years for claiming deduction u/s.80IA(iv). Once assessee has selected initial year then unabsorbed depreciation and losses of that year and subsequent years could be carried forward for set off against the income of those years before computing the deduction admissible u/s.80IA(iv). AO has brought forward the depreciation of A.Y. 2007-08, 2008- 09 etc, which has already been set off against the regular income. He brought forward such depreciation on notional basis, which is contrary to the proposition laid down VELAYUDHASWAMY SPINNING MILLS P. LTD. & SUDAN SPINNING MILLS (P.) LTD. & MOHAN BREWERIES AND DISTILLERIES LTD. OTHERS [2010 (3) TMI 860 - MADRAS HIGH COURT]. FAA has rightly appreciated the controversy and rightly granted the deduction to the assessee. No error in the order of the CIT(A) hence, this ground of appeal is rejected in both the years. - Decided against revenue.
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2019 (5) TMI 954
Monetary limit - maintainability of appeal - Exemption u/s 11 - income earned from running of the Kalyana Mandapam - HELD THAT:- When the matter is taken up for admission, the learned Standing Counsel brought to our notice the Circular instruction issued by the Central Board of Direct Taxes vide Circular NO.3/2018 dated 11.7.2018 wherein it is stipulated that appeals shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed ₹ 50 lakhs.
In the instant case, the tax effect is said to be less than the monetary limit imposed and therefore, the appeal filed by the Revenue is dismissed as not pressed, keeping open the substantial question of law for determination in an appropriate case.
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2019 (5) TMI 953
Disallowance u/s 14A r/w Rule 8D - disallowance of expenditure incurred to earn exempted income - HELD THAT:- We are of the opinion that the matter deserves to be remitted back to the Assessing Authority for correct application of Rule 8D and computation of disallowance amount u/s 14A as we are of the clear opinion that the disallowance under Section 14A cannot exceed the exempted income disclosed and assessed by the Assessing Authority. The purpose of Section 14A was very clear that the expenditure incurred to earn exempted income cannot be allowed as a deduction.
Normally, in such cases the Tribunal has adopted the norm of 2% of exempted income as permissible disallowance under Section 14A of the Act.
Therefore, the matter deserves to be examined by the Assessing Authority once again.
This Appeal is disposed of without answering the Substantial Questions of Law raised by the Revenue and the matter is remitted back to the Assessing Authority for determination of disallowance under Section 14A
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2019 (5) TMI 952
Income from other sources u/s 56(2)(viib) - taxability of shares premium - determining the Fair Market Value of the Shares - amount brought into the Assessee Company by the mother for allotment of Equity Shares in her favour with a very high premium - gift - HELD THAT:- Assessing authority was required to undertake the exercise of fact finding by determining the Fair Market Value of the Shares in question as required in the Explanation to Section 56 as quoted above. That exercise not having been done, the matter deserves to be remanded back to the learned Assessing Authority for undertaking the said fact finding exercise. The Assessee will be free to raise all factual and legal contentions including the point about the said amount being treated as 'gift' from mother to daughter.
The Assessee may also seek necessary clarification from the Central Board of Direct Taxes on administrative side.
Therefore, without expressing any opinion on the merits of the case and answering the questions sought to be raised in the present Appeal under Section 260A of the Act, we dispose of the Appeal filed by the Revenue by remitting the matter back to the Assessing Authority.
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2019 (5) TMI 951
TP Adjustment - writ against DRP order - admission of additional documents - constitution & working of DRP - reject the methodology adopted by the petitioner for the reason that the segmental profit and loss had not been disclosed as part of the financial statements and were also not certified by an external Chartered Accountant - rejection claim of assessee for the reason that remand report of the TPO as incomplete - HELD THAT:- The intent and purpose of constituting the DRP, with three high ranking Commissioners that have exclusive jurisdiction for the said purpose, is to provide effective and speedy resolution of transfer pricing disputes. DRP is thus expected to use every measure possible to resolve a dispute before it. DRP, in the present case, rejects the petitioners’ claim solely on the reasoning that the report of the TPO was incomplete.
If at all further information was required, the DRP is expected to have called for the said information to equip itself with the necessary material to come to a reasoned conclusion. Its conclusion will depend upon independent application of mind to all relevant facts and circumstances but such an exercise has to be undertaken in a judicious manner, taking cognizance of all relevant factors.
The fact that the DRP has, in the present case, accepted the request to admit additional documents and seek a remand report from the assessing officer can only mean that the panel was of the view that further examination of the issue by the Department was called for.
Having done this, the purpose is lost if the exercise is not carried through to its logical conclusion. The remand report of the TPO states that the addition was unwarranted on facts but the DRP reasons that the aspect of ‘cost’ being included in the sales was not examined by the officer. Certainly the DRP is not bound to accept the conclusions of the officer in the report, but the Panel could well have sought a clarification, or directed the officer to carry out further verification in this regard.
Set-aside the order of the DRP dated 16.12.2016 and direct rehearing of the matter, in regard to the adjustment relating to ₹ 634,773,087/-. The DRP will decide the issue de novo, calling for such information as it deems necessary either from the Assessing Officer or the petitioner, and after affording an opportunity of personal hearing to the petitioner. Seeing as the matter pertains to Assessment Year 2011-12, the DRP will conclude the hearing within a period of two months from date of receipt of a copy of this order.
The writ petition is allowed in the aforesaid terms.
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2019 (5) TMI 939
Income accrued in India - consideration received by assessee from the payer i.e. Sandvik Asia Pvt. Ltd. amounts to ‘royalty’ or ‘fees for included services’ or ‘fees for technical services under the realm of section 9(1)(vi) - provisions of DTAA between India and Sweden - HELD THAT:- The assessee, non-resident has received consideration against provision of software services from Sandvik Asia Pvt. Ltd. Once the Tribunal has held the same as not royalty either under the Income Tax Act or under DTAA provisions in the hands of payer i.e. Sandvik Asia Pvt. Ltd., consequently the said receipt by the assessee cannot be termed as ‘royalty’ under both the provisions of the Act i.e. section 9(1)(vi) / 9(1)(vii) or under Article 12 of the DTAA between India and Sweden. Accordingly, we hold that consideration received by assessee on providing software services is not taxable in its hands. The grounds of appeal No.2 and 3 raised by assessee on merits are thus, allowed
Levying education cess and levying interest under section 234B are consequential in nature
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2019 (5) TMI 950
Stay petition - stay petition dismissed as the assessee has not paid any amount towards the disputed taxes, in accordance with the guideline issued by the Central Board of Direct Taxes (CBDT) - HELD THAT:- This Court has had occasion to deal with both the Office Memorandum and modification thereto in the case of Mrs.Kannammal V. Income Tax Officer [2019 (3) TMI 1 - MADRAS HIGH COURT] the impugned order is not in accordance with law and does not follow the settled principles to be applied in adjudication of stay application.The same is quashed.The petitioner will appear before the Officer on 03.04.2019 and the Officer shall, after hearing the petitioner and considering all materials placed before him, pass suitable orders in the light of the directions contained in the orders within a period of one(1) week from the date of conclusion of the personal hearing of petition i.e.09.04.2019. Till such time that is till 09.04.2019, stay of recovery shall be maintained. The writ petition is disposed of in the above terms.
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2019 (5) TMI 938
Application for condonation of delay - date of service or order to the appellant - the appeal is lodged within 120 days - thus the appeal cannot be treated as barred by limitation - hence the application for condonation of delay is closed as unnecessary - HELD THAT:- SLP dismissed.
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2019 (5) TMI 949
Long term capital gains Asset - date of acquisition of property for determining the cost of acquisition of the land - asset acquired by the partnership firm by succession from the proprietrix which was allotted to it in 1973 - conversion of the proprietary concern to a partnership firm - whether they became owners of the property by succession? - sale deed specifically stipulates that the property was sold by virtue of the sale deed dated 07.08.1990 to firm - content in sale deed - non furnishing of documents
HELD THAT:- The sole basis, for the appellant’s claim that 01.04.1981 should be taken as the date for determining the cost of acquisition of the land, is that the proprietrix had paid a part of the consideration which was acknowledged in the sale deed, and she was put in possession of the subject land which was delivered to her pursuant thereto. It was incumbent on the assessee to produce a copy of the original allotment letter issued by the APIIC in the year 1973, and the agreement of sale dated 03.07.1990, to establish their claim that the APIIC had not merely allotted the land, but had sold the land to the original proprietrix and had delivered possession to her pursuant to such a sale.
In the absence of either of these documents being produced before the Income-tax authorities concerned, and in as much as the sale deed specifically stipulates that the property was sold by virtue of the sale deed dated 07.08.1990, the Tribunal cannot be said to have erred in affirming the order passed by the CIT (Appeals), fixing the date of acquisition as 07.08.1990 i.e. when the sale deed was executed by the APIIC in favour of the appellant herein. It is only if a substantial question of law arises for consideration, from the order passed by the ITAT, would this Court be justified in exercising its jurisdiction, under Section 260-A, to entertain this appeal. We are satisfied that no such substantial question of law arises for consideration in the present proceedings.
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Customs
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2019 (5) TMI 931
Validity of Detention order - alleged contravention of the provisions of the Customs Act, 1962 - Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 - HELD THAT:- This Court is in agreement with the learned counsel for respondent-Custom that the petitioner was aware of the detention order as he had made a representation to the Hon’ble Lieutenant Governor, Govt. of NCT of Delhi in 2005 - This Court is also in agreement with the contention of learned counsel for respondent-Customs that the detention order could not be executed against the petitioner because he had fled to USA and after coming to India had kept changing his residential addresses in Delhi, Ghaziabad and Dehradun.
However, as the petitioner had allegedly indulged in unlawful activity as far back as July, 2001 and the business of import of mobile phones is no longer lucrative and the petitioner’s passport is lying expired since 2005 as well as the fact that the penalty proceedings had resulted in exoneration of the petitioner, this Court is of the view that continuing the order of detention would be an exercise in futility - In fact, this Court is of the opinion that there is no live-link today between the alleged prejudicial activities and the purpose of detention.
The impugned detention order dated 28th September, 2001 passed by respondent No.2 against the petitioner is set aside - petition allowed - decided in favor of petitioner.
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2019 (5) TMI 929
Refund of SAD - N/N. 102/2007-Cus dt. 14/09/2007 - appellant filed all the requisite documents as required under Notification and also complied with all the conditions of the notification - refund denied for some extraneous reasons which is contrary to the notifications and circulars issued by the Board - HELD THAT:- The appellant have complied with the Notification No.102/2007 and filed the refund claim of 4% additional duty of customs levied under Section 3(5) of the Customs Tariff Act, 1975. Appellant has annexed with the refund claim all the documents which are required as per the notification and circulars issued by the Board from time to time. Further the appellant has also attached a certificate issued by the statutory Chartered Accountant who has certified the payment of VAT by the appellant but the said certificate has also not been believed by both the lower authorities.
All the decisions as relied upon by the appellant cited supra have held that a Chartered Accountant certificate should be accepted to extend the benefit of Notification No.102/2007-Cus. dt. 14/09/2007 - reliance placed in the case of Gujarat Boron Derivatives Pvt. Ltd. [2012 (11) TMI 265 - CESTAT, AHMEDABAD], it has been held by the Tribunal that the circular issued by the Board clearly shows that Chartered Accountant certificate is sufficient if it explains how the burden has not been passed on and the exemption is available if the importer shows that he has paid 4% SAD(CVD) and subsequently the goods have been sold in the domestic market and VAT has been paid. - further, the Board in the Circular No.6/2008-Customs dt. 28/04/2008 has clarified that Chartered Account can also issue certificate certifying that the burden of 4% CVD has not been passed on to fulfil the requirement of unjust enrichment.
It is also a well settled law that no extraneous condition can be introduced into any notification and insistence upon such conditions cannot be made by the Revenue when there is no such condition in the notification.
Refund allowed - appeal allowed - decided in favor of appellant.
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2019 (5) TMI 928
Imposition of penalty u/s 112(a) of the Customs Act, 1962 on CHA - Smuggling of Cigarettes - whether the Appellant, who is a CHA, is liable for penalty under Section 112(a) ibid?
HELD THAT:- This section deals with the cases of confiscatory goods where abetment goes to the root of the matter. It stipulates that a person shall be liable to penalty, who, in relation to any goods does or omits to do any act, which act or omission would render such goods liable to confiscation under section 111 or abets the doing or omission of such an act. The said section provides for imposition of penalty on any person who abets the doing or omission, of any act or omission, which will render the goods liable to confiscation - Cogent, tangible and reliable evidence is required for such penal actions.
There is no evidence to establish that the appellant was aware that the clearance work undertaken by them at the instance of the said Mukhtar Sheikh, was not of a genuine importer. Nor any evidence has been produced to show that the appellant had the knowledge of any fraud or mis-declaration. As per the evidence on record, import of cigarettes under the guise of trolley bags was not within the knowledge of the Appellant and this establishes that the CHA was not aware about the violations beforehand. No evidence has been brought out about the prior knowledge of the appellant regarding violation of the provisions of Customs Act.
As per evidence brought on record, it is not a case that the appellant had wrong intent. It is also not a case that the appellant worked as an accomplice. It is settled principle that lack of due diligence and failure to take more precautions cannot, by itself bring in penal consequences under Section 112(a).
When there is no evidence to establish that the appellant had prior knowledge of the illegal import of cigarettes and also when there is no evidence to establish any wrongful intent on the part of the appellant then there is no justification to impose penalty under section 112(a) ibid - penalty set aside - appeal allowed - decided in favor of appellant-CHA.
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2019 (5) TMI 930
Maintainability of appeal - appropriate forum - Section 130 of the Customs Act, 1962 - Extended period of limitation - short levy under the self assessment scheme - 'accredited client programme' scheme - import of their consignments of motor cars in completely knocked down (CKD) condition - benefit under Sub-Clause (1)(a) to S.No.437 of Notification No.12/2012-Cus dated 17.3.2012 - HELD THAT:- Section 130 of the Act deals with appeals to High Court. In terms of Sub-Section (1) of Section 130 of the Act, an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 01.7.2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment), if the High Court is satisfied that the case involves a substantial question of law.
There are two limbs to Section 130(1) of the Act, the first of which being that it should be an eligible order in the sense that it should not be an order relating to determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment. The second limb is that if the order passed by the Appellate Tribunal is found to be an eligible order i.e. an order, which does not relate to determination as to the rate of duty or value of the goods, then an appeal can be entertained if the High Court is satisfied that the case involves a substantial question of law - Admittedly, the order impugned before us is an order relating to rate of duty of customs and therefore, against the order passed by the Tribunal, an appeal is not maintainable before this Court under Section 130 of the Act.
Section 130E of the Act deals with appeal to Hon'ble Supreme Court. Clause (b) of Section 130E of the Act would be relevant for the purpose of this case and it states that any order passed by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment shall lie to the Hon'ble Supreme Court.
Whether the order passed by the Tribunal can be truncated and decided by two different courts at two different levels? - HELD THAT:- The answer to the said question should be in the negative in the sense that an order passed by the Tribunal cannot be truncated and two courts cannot test the correctness of that order.
Thus it can be concluded that the Revenue, if aggrieved by the order passed by the Tribunal, has to file an appeal before the Hon'ble Supreme Court under Section 130E of the Act and not before this Court, as, already, the order impugned before us is the subject matter of appeal before the Hon'ble Supreme Court at the instance of the respondent herein – assessee.
This appeal is not maintainable reserving liberty to the appellant – Revenue to approach the Hon'ble Supreme Court under Section 130E of the Act.
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2019 (5) TMI 927
Finalization of provisional assessment - value to be adopted for assessment of liquid bulk cargo - HELD THAT:- The bills of entry were finalised by levying duty on the value in the invoice which reflects the quantity loaded at the port of origin. The Hon'ble Supreme Court examined the several provisions in Customs Act, 1962 and, based on the legal position that levy of customs duty is restricted to goods that are brought into India, that the taxable event is the import of goods, that import duty is not leviable on goods that are lost, pilfered or destroyed, and that the measure of value of imported goods cannot be delinked from the contextual of time and place of import, has held that the duty liability is to be ascertained only on the quantity received in the shore tank.
Appeal allowed - decided in favor of appellant.
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2019 (5) TMI 926
Exemption from SAD - Import of Microprocessors - appellants had availed the full exemption from payment of CVD under Notification No 06/2006-CE - denial of benefit under N/N. 029/2010-Cus dated 27.02.2010 on the ground that the goods are meant for fitment within the computer/ laptop and not meant for retail sale - HELD THAT:- It is quite evident that complete exemption from payment of Central Excise duty (CVD) is admissible only in respect of the those microprocessors which are meant for fitment inside CPU Housing/ Laptop Body only. In all other case the Central Excise Duty (CVD) is leviable @ 4%. Admittedly in the present case appellants have claimed complete exemption from payment of Central Excise Duty (CVD) and hence the microprocessor imported by them are meant for fitment inside the CPU Housing/Laptop Body and not for retail sale.
Exemption Notification No 29/2010-Cus dated 27.02.2010 exempts from payment of Special Additional Duty of Customs leviable thereon under sub section (5) of Section 3 of Customs Tariff Act, 1975 - From the wordings of the notification it is quite evident that this exemption is applicable only in respect of the goods which are in pre-packed form and are meant for retail sale. The retail sale price in respect of such goods needs to be declared on the package itself. Thus if the goods are meant for retail sale then obliviously they cannot be meant for fitment within the CPU Housing/ laptop Body.
Wordings of exemptions make them mutually exclusive. The goods mean for retail sale as such cannot be meant for fitment inside the CPU Housing/ Laptop Body. Once the importer claims complete exemption from payment of CVD in terms of the Central Excise Notification referred above he is excluded from claiming exemption from payment of Special Additional Duty of Customs under Notification No 29/2010-Cus.
Appeal dismissed - decided against appellant.
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2019 (5) TMI 925
Confiscation of Vehicle - Penalty u/s 112 (a) of CA - Harely Davidson VRSC CKD - benefit of N/N. 021/2002- Cus Sr No 345 (1) - Revenue was of the view that goods have been misdeclared in terms of description and value and was also imported in contravention of the provisions and restrictions imposed by Policy Circular No 26 date 09.02.2004 in as much as the agency issuing the Certificate of Compliance is not amongst the ones specified.
HELD THAT:- Commissioner (Appeal) has determined the value after discussing the evidences produced before him and has in a reasonable manner arrived at the conclusions drawn by him. Revenue has in their appeal not stated why the conclusions arrived by the Commissioner (Appeal) are incorrect or the why the evidences produced before him and relied upon by him cannot be considered. In absence of any averments in the appeal discarding the evidences relied upon by the Commissioner (Appeal) we do not find any merits in the submissions made by the revenue.
The issue raised in the appeal by the revenue has been raised for first time in appeal without the same being subject matter of adjudication proceedings or in appellate proceedings before the Commissioner (Appeal). In case revenue was aggrieved by adjudicating authority not proposing to add such charge to arrive at the assessable value, the correct course would have been to file appeal or cross objections before the Commissioner (Appeal). Since revenue has proceeded not to file any appeal/ cross objections before the Commissioner (Appeal) they could not have taken this ground for first time while filing the appeal before this tribunal.
Quantum of redemption fine and penalty - HELD THAT:- The proposed enhancement of redemption fine without determining the market value of goods and the duty payable cannot be sustained.
Appeal disposed off.
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2019 (5) TMI 924
Valuation of duty free imports - Advance License - mis-match between the declared unit price of imported goods on Bill of Entry and that computed on the basis of quantity and value mentioned in the license - Interpretation of statute - Circular No 23/96-Cus dated 19.04.1996 - what determines the entitlement to duty free imports under a Value Based Advance License, the value mentioned in license or the quantity mentioned in the license?
HELD THAT:- It was for Custom Authorities after noting the mis-match in the declared unit value on Bill of Entry and that arrived on the basis of quantity and value mentioned in Value Based Advance License to refer the matter to licensing authority and seek corrections. In absence of any correction/ amendments in the license, the value of imported goods sought to be exempted by the said license cannot be suo motto altered by the Custom Authorities.
In the case under consideration the issue is not in respect of license obtained by fraud. The issue is in respect of mis-match between the declared unit price of imported goods on Bill of Entry and that computed on the basis of quantity and value mentioned in the license. The real issue is vis a vis the amendment to the said license to resolve the mismatch.
Appeal allowed - decided in favor of appellant.
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2019 (5) TMI 923
Refund of SAD - N/N. 102/2007-Cus dated 14.09.2007 - rejection on the ground that Para 1 of the Notification is not complied as the goods i.e Barge M V Aquarius was not imported for subsequent sale but was manufacture in Customs Bond by M/s Vijai Marine Services - rejection also on the ground that credit availed - rejection also on the ground that Condition (c) of the Notification is not satisfied as the refund claim has been filed by person other than the importer.
HELD THAT:- Admittedly in the present case, the invoice dated 15.03.2011 issued by the M/s Vijai Marine Services do not carry the endorsement as specified by condition 2(b) of the said Notification. The purpose of such endorsement on the invoice, is only to prevent the buyer of goods from claiming the CENVAT Credit of the Special Additional Duty (SAD) of Customs levied under Section 3(5) of Customs Tariff Act, 1975, for which this refund application has been filed. This requirement becomes more relevant if the person claiming the refund as per this notification is importer and the claimant of the CENVAT Credit is the person to whom the goods have been sold - In present case the buyer of goods himself is claiming the refund of SAD paid by the person ex-bonding the goods on payment of applicable Customs duty.
In his order Commissioner (Appeal) has satisfied himself that no CENVAT Credit has been claimed in respect of the SAD paid - from the order of Commissioner (Appeal) it is evident that he has not absolutely allowed the refund application made but has allowed it subject to the condition of verification of fact of non availment of the CENVAT Credit from the jurisdictional Central Excise Officers. In our view by building this safeguard Commissioner (Appeal) has ensured substantial compliance with the condition specified at 2(b) of the Notification No 102/2007-Cus.
Second objection raised by the revenue in their appeal, is with regards to the respondent filing the refund claim, they being not importer - HELD THAT:- In the present case it is not disputed that the burden of the Custom duties as applicable and paid and that of the sales tax/ VAT as applicable and paid has been borne by the Applicant (Respondents). Since they have borne the burden of both the Customs Duty and Sales Tax/ VAT they have filed this refund claim.
There are no infirmity in the orders of Commissioner (Appeals) - appeal dismissed - decided against Revenue.
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2019 (5) TMI 922
Classification of imported goods - Creative Toys Modelling Clay - whether classified under CTH 34070010 or under CTH 95030090? - Revenue was of the view because of misdeclaration of Classification to avoid CVD, the goods are liable for confiscation under Section 111(m) of the Customs Act, 1962 and appellants were liable to penalty under Section 112(a) of the Customs Act, 1962.
HELD THAT:- Heading 34070010 is more specific for modeling pastes which in our view will include the clays which are used for making models for amusement of children. Since this heading is more specific we are in agreement with the classification as has been held by the Commissioner (Appeal).
Penalty - HELD THAT:- The appellants have in the Bill Of Entry declared the goods by describing them correctly as per the import documents. Revenue has not disputed the description/ declaration in respect of the goods. Only dispute being with reference to classification of the goods. It has been held by various authorities that misclassification cannot be a reason for invoking penal provisions against the importer.
The order of Commissioner (Appeal) classifying the imported goods under heading 34070010 is upheld, but the penalty imposed on the importer under Section 112(a) of the Customs Act, 1962 is set aside.
Appeal allowed in part.
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Corporate Laws
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2019 (5) TMI 921
Winding up of the respondent Company - debt remains due and payable by the respondent and is not paid inspite of issuing notices to respondent - whether the goods supplied by the petitioner remained defective? - HELD THAT:- One thing strikes out immediately. If the goods supplied by the petitioner remained defective, the respondent ought to have returned the goods back to the petitioner. It cannot continue to retain the goods without making the full the payment thereof. In the present case, one cannot help but notice that substantial payments have already been made by the respondent to the petitioner. What is left, is a small amount as compared to the original purchase orders. That apart, the communication dated 11.11.2012 clearly shows that the respondent had accepted its liability to pay to the petitioner - also there was no response to the legal notice dated 26.05.2014 sent by the petitioner.
The defence set up by respondent is not a bonafide defence.
The application is admitted - The Official Liquidator attached to this Court is appointed as the Provisional Liquidator. He is directed to take over all the assets, books of accounts and records of the respondent-company forthwith - Petitioner shall deposit a sum of ₹ 75,000/- towards cost of the publication with the Official Liquidator within 2 weeks, subject to any further amounts that may be called for by the liquidator for this purpose, if required.
List on 05.08.2019.
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Securities / SEBI
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2019 (5) TMI 937
Violation of the Takeover Regulation - inter se transfer between promoters made in the open market - appellant’s holding in the Target Company increased from 24.74 percent to 25.04 percent - shares were purchased for a price exceeding the exempted limit, in view of Regulation 3(1) read with Regulation 3(3) of the Takeover Regulations the acquisition has allegedly triggered an open offer - HELD THAT:- Considering all the aspects of the case that violation of the Takeover Regulation is only to the extent of 0.04 percent and that too due to transfer of shares between the promoters via open market, the direction of the WTM to make public announcement to acquire shares would be disproportionate.
The directions as provided by Rule 32(1)(b) of the Takeover Regulations as cited supra would meet the ends of justice. The appellant can be directed to transfer 0.04 percent shares i.e. 2000 shares through open market and to direct to deposit an amount of ₹ 3,60,300/- (2000 shares x ₹ 180.15 : purchase price) in the Investor Protection and Education Fund would meet the ends of justice.
Order
1. The appeal is hereby partly allowed. The order of the WTM directing the appellant to make public announcement to acquire shares of the target company and to pay interest at the rate of 10 percent as detailed in the order is hereby set aside.
2. Instead it is hereby directed that the appellant shall transfer 2000 shares in open market within a period of 4 weeks and shall deposit an amount of ₹ 3,60,300 in the Investor Protection and Education Fund established by SEBI within a period of six weeks from the date of this order.
3. In default, the amount shall carry interest at the rate of 12 percent p.a. from the date of this order till the date of deposit.
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Insolvency & Bankruptcy
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2019 (5) TMI 920
Recovery proceedings - attachment orders - notices to the petitioner under Section 226(3) - in second writ petition the applicant-petitioner prayed for a mandamus directing the respondent nos.3 and 4 to revive the financial facility provided to the petitioner in terms of a housing loan for purchasing a flat and to withdraw the letter of cancellation of allotment of the said flat. The respondent nos.3 and 4 were officers of Housing Development Financial Corporation Limited (HDFC) - HELD THAT:- Admittedly, the opposite party nos.1, 2, 3, 4 and 5 were not parties in the first writ petition. The second writ petition discloses that HDFC was arrayed as respondent nos.3 and 4 in the second petition. The builder was also arrayed as respondent no.5 in the second writ petition.
The second writ petition was disposed of finally permitting the petitioner to submit a detailed representation before the respondent no.4, who was directed to look into the grievance of the petitioner and take appropriate action in accordance with law.
As pursuant to the order of this Court dated 27 September 2013 passed in this contempt application, the order dated 13 October 2012 was recalled by HDFC and the request of the applicant for instruction to the builder to restore allotment of the flat was considered afresh on the basis of his representation dated 1 October 2013 submitted to HDFC. In the decision, as communicated by letter dated 22 October 2013, HDFC categorically opined not to restore the housing loan facility granted to the applicant and expressed that it is not inclined to request or instruct the builder to restore his flat.
A perusal of the decisions, as communicated by the HDFC pursuant to the representations filed by the applicant in compliance of the order of the writ Court/in this contempt application, reveal that in view of the business decision taken by the HDFC, the request for restoration of the housing loan facility was declined. The direction of the writ Court in the second writ petition has been complied with by HDFC. The disinclination expressed by the HDFC to direct the builder to restore allotment of the flat is apparently based on its business decision. Thus, the decisions of the HDFC, as communicated by its letters dated 13 October 2012 and 22 October 2013, cannot be said to be contumacious.
Reliance placed by the learned counsel for the applicant on the statement of account that has been filed by the HDFC in its affidavit of compliance in an effort to demonstrate that there was no default of the loan account and that, therefore, the decision of the HDFC is mala fide, cannot be a cause for proceeding against the opposite parties for contempt.
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2019 (5) TMI 919
Initiation of corporate insolvency resolution process (CIRP) - Corporate Debtor - section 7 of the Insolvency and Bankruptcy Code, 2016 - whether the financial creditor is to first approach the Adjudicating Authority under Section 8 of PMLA, 2002 for seeking appropriate orders/permission to take any action for resolution of the assets of the corporate debtor attached under provisional attachment order passed by the ED? - whether the proceedings in CP(IB) No. 73/Chd/CHD/2018 be kept in abeyance till the final decision of the Adjudicating Authority under Section 8 of the PMLA Act, 2002?
HELD THAT:- The plea in the instant application is that in view of the provisional attachment order dated 15.03.2017 under Section 5(1) of the PMLA, 2002, the RP will not be able to perform his duties under Section 18(1)(f) of the Code of taking control and custody of any assets over which the corporate debtor has ownership rights. The provisional attachment order directs that the properties provisionally attached under Section 5(1) of PMLA, 2002 shall not be removed, parted with or otherwise dealt with without prior permission of the Deputy Director, ED. Therefore, the ownership rights of the corporate debtor are not affected by the provisional attachment order. The possession also continues to remain with the corporate debtor. It is only the right of removing, parting with or otherwise dealing with the properties has been reduced to the extent that the prior permission of the Deputy Director ED would be required. Therefore, there is no impediment to the initiation of the CIRP consequent to order made by the Adjudicating Authority under the Code.
An order of attachment under PMLA does not ipso facto render illegal a prior charge of encumbrance of a secured creditor and the secured creditor can prove and as and when the secured creditor proves his bonafides and satisfies the other conditions, the property to the extent of such interest of the secured creditor would not be subjected to confiscation.
Thus, the proceedings in CP (IB) No. 73/Chd/CHD/2018 for initiation of CIRP in the case of the corporate debtor be continued and not kept in abeyance and that the financial creditor and/or the Resolution Professional who may be appointed may take necessary action as deemed fit for declaration under the PMLA, 2002 that the property to the extent of the interest of the respective secured creditor is not to be subjected to confiscation.
Application disposed off.
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2019 (5) TMI 918
Initiation of Corporate Insolvency Resolution Process - Corporate Debtor - Corporate Debtor failed to make payment of ₹ 4650.66 lakhs (including interest) - HELD THAT:- The Hon’ble Supreme Court in the matter of Innoventive Industries Limited V. ICICI Bank & Anr.[2017 (9) TMI 58 - SUPREME COURT], has held that the provisions of Section 7 become applicable as soon as a financial debt is established and there is an existence of a default. The Hon’ble court has expressed that the moment the Adjudicating Authority is satisfied that a default in repayment of debt had occurred; the process of insolvency is to be triggered unless the application is incomplete.
The Financial Creditor has stated that as on 31.07.2018, ₹ 4650.66 lakhs (including interest) is due and payable by the Corporate Debtor to the Financial Creditor. The Financial Creditor has stated that the total amount of debt granted, disbursed and restructured from 21.03.12016 and at present aggregate credit limit is of ₹ 2750.00/- lakhs. It is further stated that the account of the Corporate Debtor was declared as Non-Performing Asset w.e.f. 31.03.2016 on account of default in making payment to the Financial Creditor - This Petition reveals that there is a debt as defined in Section 3(11) of IBC; there is a default within the meaning of Section 3(12) of IBC; the application of the Financial Creditor is complete; the amount of more than Rs one lac is a due and no disciplinary proceedings are pending against the proposed resolution professional. Therefore, this petition deserves to be admitted.
Petition admitted.
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Service Tax
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2019 (5) TMI 917
Refund of accumulated CENVAT credit - input services - Air Travel Agent services - export of service - period January to March 2015 - HELD THAT:- On perusal of those documents it apparently clear that the travel agent services were availed by appellant for the purpose of providing and exporting services for which it has registered, besides the fact that it had, with its possession all corresponding documents which could have been produced before the adjudicating authority or the Commissioner (Appeals) had the same being called for.
The observation of Commissioner (Appeals) that the appellant could not produce required documents before the adjudicating authority is un-supported by factual reality. Concerning production of certificate, it is found that appellant had produced the required Chartered accountant’s certificate in compliance to defect memo. Moreover exclusion clause available in 2(l) of CENVAT Credit Rules clearly mentioned that travel benefits to extend to employees on vacation such as leave or home travel concession are only excluded from the purview of availment of CENVAT credit and services which are used primarily for personal use or consumption of any employee is also excluded. In other words, services which are related to the out put services are not excluded by this definition.
Refund allowed - appeal allowed - decided in favor of appellant.
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2019 (5) TMI 916
CENVAT Credit - common input services used for providing taxable and exempted services - Rule 6(3) of CENVAT Credit Rules, 2004 - appellant had not filed any intimation regarding their option to follow the procedure prescribed in Rule 6(3)((ii) read with sub-rule (3A) of Rule 6 of the CENVAT Credit Rules, 2004 - demand of an amount equal to 8% (6% w.e.f 07.07.2009) of the value of exempted services provided by them - HELD THAT:- The issues raised in the present appeal are identical to those decided by CESTAT in case of M/S. HDFC BANK LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, THANE-II [2018 (9) TMI 312 - CESTAT MUMBAI] and M/S. UCO BANK, KOLKATA VERSUS COMMISSIONER OF SERVICE TAX, KOLKATA [2014 (9) TMI 820 - CESTAT KOLKATA].
Since the issue is no longer res-integra and covered by the earlier decisions of tribunal, we respectfully follow the earlier orders, and remand this matter back to the adjudicating authority to reconsider the issue of limitation - In respect of all other issues including interest and penalties we agree with the findings in the impugned order subject to re-quantification of same depending on the findings on the issue of limitation.
Appeal allowed by way of remand.
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2019 (5) TMI 915
Scope of SCN - Management, Maintenance and Repair Services - the appeal filed by revenue refers to 94 contracts that were subject matter of show cause notice, whereas we found that only twelve were referred to in show cause notice - HELD THAT:- Since the appeal filed by revenue refers to 94 contracts that were subject matter of show cause notice, whereas we found that only twelve were referred to in show cause notice, Authorized Representative appearing for revenue was directed by us to produce the complete adjudication file and the review file for examination. However even after adjournment of the matter twice the same could not be produced. Learned Authorized Representative produced a letter dated 12.12.2018 of the Additional Commissioner (Review) CGST Mumbai West stating that the said files cannot be traced - Since the revenue has failed to produce the files which are not traceable, we are not in position to accept the contention of the revenue that there were 94 contracts under consideration in show cause notice. Hence the matter needs to be limited to the contracts referred to in show cause notice.
Respondents had contended before the Commissioner that they had during the period of demand received payments against the services which were provided during period prior to the period of demand. Hence this has formed the basis of the finding for the Commissioner to the effect that the demand has been based on the Balance Sheet figures and not the figures of actual receipts against the taxable services provided during this period.
In the appeal revenue has not disputed the findings rendered by the Commissioner in respect of the twelve contracts referred in the show cause notice, the only reason by which the revenue is aggrieved is that the findings in respect of twelve contracts have been applied to the contracts under consideration and commissioner should have examined all the contracts and rendered the findings individually. We do not know from where revenue authorities got the magical figure of “94 contracts” it is not in the show cause notice or in impugned order. When we tried to decipher the mystery revenue expressed its inability to produce the files of adjudication and review. In absence of any tangible evidence to the effect that there were 94 contracts under consideration while making the demand we reject the said contentions raised by the revenue in their appeal.
Revenue has not challenged the findings recorded by the commissioner on merits but have questioned the manner in which he have gone about dealing with the show cause notice. The major challenge which has been made is with regards to examination of 94 contracts which we are unable to find - thus there are no merit as all the issues raised in the show cause notice have been well considered by the Commissioner in the paras of impugned order referred.
Appeal dismissed - decided against Revenue.
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2019 (5) TMI 914
Non-payment of service tax - Commercial Training or Coaching Service - period from July 2003 to March 2009 - irregular CENVAT Credit availed - training on SAP/ERP module provided to graduates and professionals - exemption under N/N. 9/2003-ST dated 20th June 2003 and Notification No. 01/2004-ST dated 28.2.2004 - ground on which appellant seek exemption is that the software training provided by the appellant is covered under the scope of computer training institute or vocational training institute as the case may be.
Exemption under N/N. 9/2003-ST dated 20th June 2003 and Notification No. 01/2004-ST dated 28.2.2004 - HELD THAT:- The exemption is not available to the appellant since neither the appellant’s institute can be designated as a computer institute rendering services imparting the knowledge in computer nor the courses offered by them are recognized by law prevailing in India. Also they would not qualify for exemption being an establishment authorized to issue a certificate recognized by law - the exemption is not available to the appellant for the period in dispute, that is, from 01/07/2003 to 10/09/2004. The appellant has discharged duty accepting the liability from 10/09/2004 to March 2009 with interest.
Levy of service tax - amount paid for receiving ‘Management Consultancy Service’, and ‘Intellectual Property Rights Services’ from the overseas buyer under reverse charge mechanism - HELD THAT:- Disputing the said demand the appellant has submitted that even though the disputed amount has been reflected in the balance it but since the same were subsequently reversed being not paid hence no service tax liability could be fastened on them. Further, it is their contention that the demand on these services have been confirmed by the learned Commissioner on the basis of a report received from the service tax Commissionerate, however, copy of the same was not passed on them - therefore both the issues requires reconsideration by the Commissioner after passing on copy of the report collected from the service tax Commissionerate to the appellant.
Management, Maintenance or Repair Service relating to software provided to their clients - levy of service tax - HELD THAT:- This aspect has not been examined by the adjudicating authority while confirming the demand on the said service. Therefore, to ascertain the liability post 01st June 2007 the matter is remanded to the adjudicating authority.
CENVAT Credit - denied on the ground that the input service invoices were issued in the addresses of the appellant which was not registered with the department nor the appellant during the relevant period possessed centralized Registration as required under the Relevant Rules - HELD THAT:- Centralized accounting system has been operated from the Head Office at Mumbai where credit has been availed and utilized in discharging service tax liability from the Head Office - merely because the Mumbai office has not obtained centralized registration under the Relevant Rules, CENVAT credit availed on the service tax paid on input services which are undisputedly utilized by the appellant in providing the taxable output services cannot be disallowed - credit allowed.
Penalty - HELD THAT:- Considering that the appellant had paid the entire amount of service tax with interest and does not dispute the liability for the period 10th September 2004 to March 2009, we are of the view that penalty under Section 76 for the said period on the liability relating to ‘Commercial Coaching or Training Service’ is justifiable. But, for the earlier period i.e. 01st July 2003 to 10th September 2004 since the appellant neither intimated the department about the rendering of service and availing exemption involving suppression the fact, accordingly, the demand is sustainable invoking extended period of limitation and penalty is imposable under Section 78 of the Finance Act, 1994.
Appeal allowed in part and part matter on remand.
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Central Excise
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2019 (5) TMI 936
Duty & Penalty for clandestine manufacture and removal of goods - MS scrap and MS Ingots - most of the clearance of MS ingots were effected to M/s. Prince TMT steels Pvt. Ltd., their sister unit and M/s. Beepath Castings Pvt. Ltd. - reliance placed on statements of Shri C.K. Abdurahiman, General Manager and Shri Sibiraj, Chemist of the main respondent - demand also based on documents recovered from the premises of he respondents and investigation conducted - revenue neutrality - Confiscation - penalties.
HELD THAT:- We find that on the basis of the same investigation and the statements of the witnesses and the documents recovered from the premises of the respondents, show-cause notices were also issued to M/s. Prince Rollings (P) Ltd. alleging unaccounted production and clearance. On appeal before the Tribunal, the Tribunal after analyzing the entire evidences on record passed a detailed Final Order in M/S. PRINCE TMT STEELS PVT LTD, M/S. PRINCE ROLLINGS (P) LTD., SRI ANUB SHA, DIRECTOR, SRI. C.K. ABDURAHIMAN, GM, SRI AHMED FAIZAL SHA, DIRECTOR, SRI T.K. ABDUL KARIM, MD VERSUS C.C.,C.E. & S. T- CALICUT [2018 (10) TMI 893 - CESTAT BANGALORE] and set aside the impugned order by allowing the appeals filed by M/s. Prince TMT Steels (P) Ltd., M/s. Prince Rollings (P) Ltd. and other co-noticees on merits. Penalties were dropped -
The present proceedings are also based on the same facts, statements and documents recovered during investigation.
Further, it is well settled legal position that the allegation of manufacture and clandestine removal of goods without payment of duty being a serious charge, the burden of proof is on the Revenue. The charge must be proved by producing cogent / positive material evidence of procuring raw materials, manufacture of goods, removal of goods from the factory, receipt of the goods by the buyer and receipt of consideration etc.
Thus, the Learned Commissioner has given careful consideration to the facts of the case and has given reasoned findings which are similar to the case, based on same set of facts and investigation, decided by this bench. Therefore, no sufficient cause has been made out by the Revenue so as to necessitate the interference of this bench in the impugned order.
Demand set aside - appeal dismissed - decided against Revenue.
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2019 (5) TMI 913
CENVAT Credit - wrongly availed CENVAT Credit - capital goods used for construction of power plant - period from April 2005 to September 2006 - Rule 14 of CENVAT Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944 - Whether the plot of land leased out by the appellant to 2nd party formed the part of factory premises of the Appellant? - Who owns, operates and maintains the Thermal Power Plant erected on that plot of land? - HELD THAT:- It is quite evident that on the said plot marked as A-31 MIDC Industrial Area, Butibori Nagpur, apart from factory of Appellant, quite a good number of other things including the leased out land to 2nd Party, Plot identified as Indo Rama Textiles Ltd., residential complex, temple etc are located. Just because these facilities are located on the same plot they cannot be called the factory premises of the Appellant - since the thermal power plant at material time at least before the merger of 2nd Party with Appellant was under a distinct management and was owned by the distinct company, even if located on the same plot cannot be said to part of the manufacturing operations of Appellant.
Thermal power plant erected at A-31 MIDC Industrial Area, Butibori District Nagpur, has been erected on the plot which do not form the part of factory premises of the Appellant - All the statutory permissions required for setting up and operating the Thermal Power Plant at the aid premises have been obtained by and granted to 2nd Party - 2nd Party has constructed, erected, owns, operates and maintains the thermal power plant strictly in a commercial manner and is free to sell the power generated on acceptable and agreeable commercial terms - Appellant purchase the power generated in the power plant. They have priority in purchase and only after fulfilling their needs can 2nd Party sell the surplus power to third party. The thermal power plant at A-31 MIDC Industrial Area, Butibori District Nagpur is not the captive power plant of the appellant.
Whether the CENVAT Credit in respect of Capital Goods, receive by the 2nd Party on the leased plot and used by them for erection/ installation of thermal power plant will be admissible to appellant for the reason that invoices showed them as consignee? - HELD THAT:- Capital goods in question were being procured by the 2nd Party for use by themselves for erection of the Thermal Power Plant at Butibori. Thus mention of consignee as “M/s Indo Rama Synthetics Limited, A-31 MIDC Industrial Area Butibori Nagpur” on invoices was nothing but an attempt to create entitlement to CENVAT Credit for the Appellant, without passing the actual ownership/ possession or right to use the said goods in their favour.
It is quite evident that 2nd Party was constructing, installing erecting, owning, operating and maintaining the said Thermal Power Plant as its own business asset for generating profits for itself by way of sale of power. Appellant had no role, authority over the 2nd Party or over the Thermal Power Plant. They were purchasing the power generated in the Thermal Power Plant on commercially and mutually agreeable terms and conditions from the 2nd Party. Thus the goods covered by the invoices on which they were shown as consignee were never received by them in their factory premises but were but were received by the 2nd Party on the plot leased out to them by Appellants. 2nd Party has not only received the said goods but have reflected the same in their book of accounts as capital/ fixed assets - Since the goods were never received by the Appellant’s in their premises the and were not installed, operated or used in any process of manufacture of final products, these mention of their name as consignee on the invoices is nothing but to create the instrument/ document for passing on the inadmissible credit to them.
Just because the Thermal Power Plant has been set up on the plot leased out by the Appellant, it would not entitle them to the CENVAT Credit in respect of the inputs and capital goods procured by the lessor.
Whether the CENVAT Credit on Capital Goods is admissible in respect of those Capital Goods which are reflected as Capital Assets in book of accounts of the other legal entity and have been capitalized therein? - HELD THAT:- It is quite evident that CENVAT Credit on the Capital Goods can be availed only if the same are received in the factory of manufacturer of final product and is used the factory of manufacture. In the present case when the goods have not been received by the manufacturer in his factory the credit would not be admissible to him - when the capital goods are capitalized in the account books of 2nd Party, then by adopting this device Appellants could not have claimed the credit in respect of the same goods in view of Rule 4(4) of the CENVAT Credit Rules, 2004.
Further appellants have submitted that credit of ₹ 1,70, 55,003/- has been denied to them in respect of the Capital Goods received in their premises after the merger of Appellants and 2nd Party with effect from 01.02.2007. We find force in the arguments of the appellant that after merger both the entities have become one and the credit cannot be denied on the ground that they were distinct earlier at time of placement of order. After merger the goods received were received by the appellants only in their premises and used by them. Hence we have to set aside the order dated 21.08.208 and remand the matter back to Commissioner for determination of CENVAT Credit to be disallowed after merger of the two entities.
Whether CENVAT Credit in respect of those goods which are not identifiable but classified under Chapter 84 of First Schedule to Central Excise Tariff Act, 1985? - HELD THAT:- Since we are not adjudicating the case in relation to excisablity of the thermal power plant we do not dwell into submissions made by both the sides on this issue and various case laws relied upon by the revenue - However in the remand proceedings in respect of the goods received after the date of effect of merger of two units, Commissioner should consider these issues afresh while considering the case for allowing or disallowing the credit in respect of the goods received after date of merger.
Whether demand is hit by limitation and penalty under Rule 15 of CEVAT Credit Rules, 2004 read Section 11AC justified in the present case on the Appellant? - HELD THAT:- Since both the show cause notices have been issued within normal period of limitation from date of taking the CENVAT Credit sought to be denied we hold that demand is no hit by limitation as provided for by Section 11A(1) of Central Excise Act, 1944 - Also charge of suppression is well established against the appellants.
Since we find that appellants have availed the inadmissible credit by suppressing the relevant and complete information from the department we also uphold the penalties imposed under Rule 15 of CENVAT Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944 - Since the appellants have taken the inadmissible credit the demand for interest too is sustained.
Appeal allowed in part and part matter on remand.
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2019 (5) TMI 956
Demand of Interest and penalty - reversal of irregularly availed CENVAT credit not utilized - time limitation - HELD THAT:- The issue of applicability of interest when credit availed but not utilized for the period prior to amendment of Rule 14 of CENVAT Credit Rules 2004 is no more res integra as held in favour of the Revenue by the jurisdictional Hon'ble Bombay High Court in the case of THE COMMISSIONER OF CENTRAL EXCISE, PUNE-I VERSUS M/S GL & V. INDIA PVT LTD [2015 (5) TMI 375 - BOMBAY HIGH COURT] where it was held that where CENVAT credit has been taken and utilized wrongly, interest should be payable from the date the CENVAT credit has been utilized wrongly for according to the High Court interest cannot be claimed simply for the reason that the CENVAT credit has been wrongly taken as such availment by itself does not create any liability of payment of excise duty.
Time Limitation - HELD THAT:- Interest on the inadmissible credit for the relevant period is payable by the appellant. However, since the interest was demanded for the period from 2006 to 2007 in 2009, and in absence of any suppression of facts, the demand of interest is barred by limitation - Consequently, penalty imposed under Section 11AC of CEA,1944 is also not sustainable.
Appeal allowed - decided in favor of appellant.
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2019 (5) TMI 955
Valuation - PVC pipes - determination of correct transaction value as per Section 4(1)(a) of the Central Excise Act, 1944 - supply under rate contract - mis-declaration of price - whether the price i.e. ₹ 122/- per meter at which the pipes were agreed and supplied to the MID, Jharkhand State govt is the correct transaction value or the price at which initially the pipes were supplied to dealers @ ₹ 52/- per meter, who in turn, subsequently sold the same to MID, Jharkhand State Govt. @ ₹ 122/- per meter, be the basis for computation of duty?
HELD THAT:- There is no dispute of the fact that a tender was floated by the MID, Jharkhand State Govt. for supply of PVC pipes and the respondent was the successful bidder. Many conditions have been prescribed in the tender which includes technical qualification of the bidder, time frame of supply of the pipes including the rate at which the pipes would be supplied. There is also no dispute of the fact that the pipes of requisite specification manufactured by the respondent at their Jalgaon factory and initially cleared to the dealers/distributors, who in turn, supplied it to the MID, Jharkhand State Govt.
This Tribunal has already considered more or less similar facts and circumstances in Bright Drugs Industries Ltd.’s case [2016 (7) TMI 298 - CESTAT NEW DELHI]. In the said case, M/s Bright Drug Industries Ltd. was engaged in the manufacture of pharmaceuticals product and P&P medicaments, entered into rate contract with the Maharashtra Govt. as also with some other govt. agencies for supply of medicaments on an agreed price in response to the tender floated by the said govt. agencies. Medicaments were required to be floated by the appellants.
The transaction between the respondent and the dealers cannot be considered as true transaction value within the meaning and definition of “transaction value” prescribed under Section 4(3)(d) of Central Excise Act, 1944. Consequently, the price at which the goods were agreed to be supplied by the respondent to MID, Jharkhand State Govt. be the correct transaction value and duty is required to be paid on same.
Extended period of Limitation - penalty - HELD THAT:- The respondent had knowledge of the fact that true transaction value of the pipes is ₹ 122/- per meter, the fact which they on oath also disclosed before the Hon'ble Jharkhand High Court, hence, the safe inference that can be drawn that relevant facts though within the knowledge of the respondent but suppressed from the Department relating to the clearances made by the respondent to the MID, Jharkhand State Govt. Hence, extended period of limitation is rightly invoked and also penalty has been correctly imposed by the adjudicating authority.
The order of the adjudicating authority is restored - Appeal dismissed - decided against Revenue.
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2019 (5) TMI 935
Process amounting to manufacture or not - diluting of raw material namely, “STYROFAN D 623” and “APCOTEX TSN 100” with water and then packing the resultant material in different packages - manufacture of ‘Sika Latex’ and ‘Sika Latex Power’ or not - scope of ‘manufacture’ as defined under Section 2(f) of Central Excise Act, 1944 - HELD THAT:- The appellant could able to demonstrate that characteristics and chemical composition of the raw material namely, “STYROFAN D 623 AP” and “APCOTEX TSN 100” continued to remain same even after addition of water to the said raw materials as it has not lost its original character, chemical composition, use etc. after application of the process of dilution with water. Besides, by addition of the water to the said raw materials, there could be some change in the quality and the efficiency in use of the product but that cannot be the sole criteria for considering dilution as a process of ‘manufacture’.
Reliance placed in the case of Servo Med Industries Vs. Commissioner of Central Excise [ 2015 (5) TMI 292 - SUPREME COURT ] where it was held that The syringe and needle retains its essential character as such even after sterilization and no manufacture taking place.
Thus, it can safely be inferred that the process of dilution of the raw materials “STYROFAN D 623 AP” and “APCOTEX TSN 100” cannot be called as a process of manufacture. Consequently, the product Sika Latex and Sika Latex Power also not chargeable to excise duty.
Appeal allowed - decided in favor of appellant.
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2019 (5) TMI 912
Supply of goods against international competitive bidding - seamless pipes - benefit of N/N. 6/2006-C.E., dt.1.3.2006 - denial of benefit on the ground that the goods were not supplied directly to the contractor - HELD THAT:- There is no dispute of the fact that the main contractor M/s HJIPL has supplied the goods against international competitive bidding to M/s Jubilant Oil & Gas Ltd in respect of oil exploration of Cauveri block. The project authority certificate was issued in the name of M/s HJIPL, who in turn, procured the material from the Appellant, on the strength of the said project authority certificate. The quantity and quality of seamless pipes mentioned in the said project authority certificate has been undisputedly supplied by the Appellant to M/s HJIPL.
The sole reason for denying the benefit of said exemption to the Appellant is that the supplies were not made by them directly through international competitive bidding; also they have not satisfied the condition No.19 appended to the said notification - In our view, the supply of the goods to the project in the present circumstances cannot disentitle them from the benefit of notification.
In absence of any contrary evidence to the fact that the pipes in question had not been supplied to the project and used in the project, benefit cannot be denied - appeal allowed - decided in favor of appellant.
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2019 (5) TMI 911
Valuation - inclusIon of wastage/shrinkage - mis-declaration of goods - demand on the ground that it had only taken the value of length of the processed cloth i.e. embroidered cloth of 13.88 metres and did not consider the value of end pieces of cloth (additional 0.62 metres), which was required to hold the fabric in the embroidery machine - conflicting issues - invocation of Extended period of limitation - HELD THAT:- The law is well settled that when there were conflicting views which necessitated reference to Larger Bench, the extended period of limitation cannot be invoked - In the present case, since the adjudged demand confirmed pertains to the period from 01.04.2003 to 07.07.2004 and the show cause notice was issued on 26.03.2008, the said notice, is barred by limitation of time, having been issued beyond the normal period prescribed under Section 11A of the Central Excise Act, 1944.
Demand of duty of ₹ 5,81,187/- on the ground that the appellant had undervalued the cloth in some cases and not taken the value of cloth in some other cases - HELD THAT:- No such bifurcation or evidence had been provided in the show cause notice to substantiate that the value of cloth taken was less than the actual value considered for the purpose of valuation of duty liability. Since the said demand was confirmed solely based on the audit objection and no supporting evidences were produced by the department, alleging undervaluation of the cloth, the extended period of limitation cannot be sustained for confirmation of the adjudged demand.
The appeal filed by the appellant is allowed only on the ground of limitation.
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CST, VAT & Sales Tax
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2019 (5) TMI 934
Compliance with the pre-deposit - Maintainability of appeal - stay on recovery - denial of CENVAT Credit on the basis of alleged negative cross check reports - section 11(7A) of the GVAT Act - HELD THAT:- Having regard to the fact that at the time when the assessment order was made, the petitioners did not have the copies of the assessment orders made in the case of the vendors, the petitioners did not have any opportunity to prove the genuineness of such transactions.
Subsection (7A) of section 11 of the GVAT Act envisages disallowance of tax credit in excess of the amount of tax paid in respect of the same goods. Therefore, to disallow tax credit on any purchase, it has to be established that it is in respect of the very goods purchased by a dealer that the tax has not been paid. Input tax credit cannot be disallowed by working out the percentage of purchases made from a dealer whose registration is cancelled, without first establishing that in respect of the goods purchased by the dealer, the vendor had not paid tax.
The petitioners have made out a strong primafacie case in their favour - Under the circumstances, the Tribunal and the first appellate authority were not justified in directing payment of huge amount of predeposit for the purpose of admitting the appeal and staying recovery - petition allowed.
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2019 (5) TMI 910
Imposition of penalty u/s 15 A(1)(a)of the U.P. Trade Tax Act - absence of reasoning in the impugned order - HELD THAT:- Reason is the very life of law. When the reason of a law once ceases, the law itself generally ceases - Such is the significance of reasoning in any rule of law. Giving reasons furthers the cause of justice as well as avoids uncertainty. As a matter of fact it helps in the observance of law of precedent. Absence of reasons on the contrary essentially introduces an element of uncertainty, dissatisfaction and give entirely different dimensions to the questions of law raised before the higher/appellate courts.
The court should provide its own grounds and reasons for rejecting claim/prayer of a party whether at the very threshold i.e. at admission stage or after regular hearing, howsoever concise they may be.
It is the duty cast upon the Appellate Authority that even if it is in agreement with the view taken by the first Appellate Authority, it should give its own reasons/findings which may indicate that there has been application of mind and also the consideration of grounds raised in the appeal by the revisionist. In absence of reasons it is difficult to come to a conclusion that there has been any application of mind by the Tribunal and such an order in the opinion of the Court cannot be sustained and deserves to the set aside.
Revision allowed.
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2019 (5) TMI 909
Levy of purchase tax - purchases made from unregistered dealers - assessment on the sales suppression - Whether the sales turnover arrived at by the Appellants on the purchases from registered dealers and also from unregistered dealers and tax paid on the sales turnover by arriving at Gross Profit to the purchases. Hence levying tax again on the purchases is correct?
HELD THAT:- It is no doubt true that the petitioner did not appear before the Tribunal. Yet the legal requirement is that the correct turnover has to be taxed and by default, the State cannot be permitted to tax a dealer on the turnover which is not taxable. Therefore, we have to examine as to whether the decision of the Tribunal is justified or not. The Tribunal held that so far as the levy of purchase tax under Section 12 of the TNVAT Act is concerned, the use of the word “otherwise” in Section 12(1)(a) of the TNVAT Act would bring the transaction under the said provision and resultantly, the value of goods purchased from unregistered dealer or from unknown sources would attract tax - However, there is a factual finding recorded by the first appellate authority holding that if purchase tax is demanded from the petitioner, it would amount to double taxation.
When the petitioner responded to the revision notice by their reply dated 02.11.2015, they took a specific stand that the deemed sale value is arrived taking into account the purchases made from registered and unregistered dealers plus gross profit thereon. However, the Assessing Officer did not deal with the said contention presumably because, the petitioner did not cooperate in the revision of assessment proceedings, as the Assessing Officer has recorded that despite an opportunity of personal hearing granted to the petitioner/dealer, he did not avail the same.
The Tribunal in the impugned order has not dealt with this issue, which revolves on the factual aspect - The order of the assessing authority is not clear as to whether the first appellate authority undertook a verification exercise or not whereas, the Assessing Officer revised the assessment pointing out discrepancies in Statement No.12 - thus the records need to be verified before the demand is issued to the petitioner.
The matter is remanded to the Assessing Officer for fresh consideration to direct the petitioner to produce the entire books of accounts and all records based on which Form-WW was filed and after making a thorough scrutiny, redo the assessment in accordance with law - tax case revision allowed by way of remand.
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2019 (5) TMI 908
Revision of assessment - reversal of ITC for purchases made by the petitioner from dealers whose TIN were cancelled - TNVAT Act - It is the case of the petitioner that the first respondent without applying his mind and without giving due consideration to the circular of the Commissioner of Commercial Taxes, VAT cell / 39009 / 2017 (VCC No.1060) dated 29.08.2007 has passed the order - HELD THAT:- Admittedly, there is an appeal remedy available to the petitioner as against the order dated 03.04.2018 passed by the first respondent in A.P.No.44 of 2018. But instead of filing an appeal on the ground that the impugned order insofar as the allowance of the claim of ITC by the petitioner based on purchases from cancelled dealers is passed by the first respondent, with malafide intention and with blatant violations of the principles of natural justice and established position of law.
This Court now needs to examine as to whether the ground raised by the petitioner amounts to violation of the principles of natural justice and whether the first respondent has passed the impugned order mechanically or by total nonapplication of mind.
The first respondent has considered the impugned assessment order and only thereafter has passed the impugned order dated 03.04.2018.
This Court leaves it open for the petitioner to satisfy the requirements of Section 58(1)(b) of the TNVAT Act, 2006 and satisfy the Tamil Nadu Sales Tax Appellate Tribunal, with sufficient cause for not having filed the appeal within the extended period of 60 days. As and when any appeal is filed under Section 58 of the TNVAT Act against the impugned order dated 03.04.2018, the Tamil Nadu Sales Tax Appellate Tribunal shall decide as to whether the appeal has been filed within the maximum period stipulated under the said Section or not.
Petition dismissed.
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2019 (5) TMI 907
Revision of assessment order - change of opinion - deemed assessment - reversal of input tax credit mistakenly claimed twice - suppression of sales or not - HELD THAT:- The assessment pertains to the year 2013-14 whereas after first revision of assessment, which was completed on 31.03.2017, the second respondent has proposed to revise the assessment once again on 11.07.2018, which is concluded by the impugned assessment order dated 21.12.2018 - As rightly pointed out by the learned counsel appearing for the petitioner, mere change of opinion without new or fresh fact de-horse the records, will not entitle the Assessing Officer to revise the assessment order.
Further in the instant case, the second respondent has proposed to revise the assessment for the second time on the same scrutiny of returns filed by the petitioner, which was very much available at the time of the original deemed assessment as well as in the revision of assessment order dated 31.03.2017 and the first revision of assessment order dated 31.03.2017.
There is total non-application of mind by the second respondent before passing the impugned assessment order - the impugned assessment order set aside - petition allowed.
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2019 (5) TMI 933
Revision of assessment order passed by the assessing authority - inter-state sales - Levy of tax under Andhra Pradesh VAT Act - burden to prove the sales effected - no recorded evidence was furnished to support the statement of turnover break-up details - HELD THAT:- While it is no doubt true that the burden is on the petitioner, under Section 16 of the A.P. VAT Act, to show that the turnover, disclosed in the show cause notice, includes inter-State sales, exempt sales etc., on which VAT cannot be levied, the fact remains that, in present case, the revisional authority had, in his endorsement dated 07.02.2018, not even called upon the petitioner to furnish the books of accounts, sales invoices etc.
The impugned order of the revisional authority is set aside - The petitioner shall furnish documentary evidence in support of their plea that inter-State sales of aerated water and fruit drinks have also been included by the revisional authority in the VAT turnover, and VAT at 14.5% was levied on goods liable to VAT at 5%.
Petition allowed by way of remand
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Indian Laws
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2019 (5) TMI 906
Levy of unearned increase in respect of the subject property - Merger of companies - change in the shareholding - DDA claims that the subject property was transferred in the year 2005-06, as there was a material change in the shareholding of the petitioner. According to DDA, the said change in shareholding brought about the change in the effective control in the subject property, which is construed as a transfer, thereby entitling DDA to levy unearned increase.
Whether any unearned increase is payable on account of the merger of Aquarium Acquisition Corp. (AAC) with Gillette Company, USA (TGC) or the transfer of TGCs shareholding in the petitioner to Procter & Gamble, Netherlands?
HELD THAT:- Unearned increase can be demanded only in cases where subject property is sold, transferred, assigned or its possession is parted with by the lessor. In this case, the lease was in favour of Sharpedge, which merged with the petitioner - The question whether the said merger involved transfer of the subject property is no longer res integra. Indisputably, with the merger of Sharpedge with the petitioner (then known as Indian Shaving Products Ltd.) on 23.04.1992, the subject property also vested with the petitioner along with other assets of Sharpedge. This clearly amounted to transfer of the subject property and, therefore, unearned increase was payable on such transfer, which was occasioned in terms of the scheme of amalgamation as approved by BIFR.
The controversy involved in the present petition does not relate to levy of unearned increase on such transfer but on account of dilution of the share capital of TGC by issue of shares to Procter & Gamble, USA and transfer of certain shares held by TGC in the petitioner company to Procter & Gamble, Netherlands.
It is trite law that an incorporated company is an entity separate from its shareholders - It is well settled that shares of a company are a separate asset wholly distinct from the assets held by the company.
In the present case, there was dilution of the share capital of TGC as well as transfer of shares held by the TGC in the petitioner company. The transfer of shares of the petitioner company cannot be construed as transfer of the assets of the petitioner company.
Essentially, DDA seeks to lift the corporate veil of the petitioner in order to establish transfer of assets of the petitioner to the Procter & Gamble Group. Clearly, no grounds for lifting of the corporate veil are established in this case. It is nobody’s case that the transaction relating to dilution of equity of TGC in favour of Procter & Gamble, USA by virtue of the merger of AAC with TGC or the transfer of shares held by TGC in the petitioner company to Procter & Gamble, Netherlands is a subterfuge to transfer the subject property to another entity. The takeover of the Gillette Group by Procter & Gamble, USA was obviously for commercial reasons and the said transaction was not crafted for transferring of the subject property - the fundamental premise that there has been a transfer of the subject property is erroneous and consequently, the demand of unearned increase founded on the same is liable to be set aside.
This Court considers it apposite to direct the concerned Wing of DDA to compute the amount refundable to the petitioner having regard to the decision of the DDA, as recorded in its order dated 26.07.2012, and the observations made hereinabove.
Petition disposed off.
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