TMI Tax Updates - e-Newsletter
May 4, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Input ax credit - ITC will be available for GST paid on purchase of new ready to use furnitures in accordance with Section 16 of CGST/RGST Act, 2017.
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GST:
Input ax credit - GST paid on building materials, such as cement, concrete, bricks, cement or marble or stone slabs or tiles, paint, polish and any other building materials meant for repair of building - GST paid on labour supply for carrying out repair of building - ITC will not be available to the extent of capitalization of supply of goods and services.
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Income Tax:
Revision u/s 263 - Deduction u/s.80-IB(10) to land owners - in response to SCN by CIT assessee placed tribunal decision where deduction u/s.80-IB(10) allowed to land owners - revision as done by the CIT u/s.263 is based exclusively on change of opinion, which is not permissible
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Income Tax:
Eligibility of higher rate depreciation on truck chassis fixed with transit mixture - vehicle used for hire - no evidence that assessee has earned any receipt towards hire of vehicle in the so-called composite contract - no higher depreciation, however transit mixer is eligible for additional depreciation as it is nothing but a plant and machinery used for manufacture/production
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Income Tax:
Maintainability of the appeal - Instruction of CBDT for not filing or withdrawing appeal on low tax effect - Once the Tribunal has pronounced upon the merits of the appeal of the Assessee,this Court cannot set aside the order on ground that appeal before the Tribunal was not maintainable in light of CBDT Instruction - Instruction neither binding on the Court nor the Tribunal
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Income Tax:
Deemed dividend u/s 2(22)(e) - unpaid price of purchase of assets of company - Assessee was having substantial interest as holding more than 10% of the share holding - rightly treated by the Tribunal as an advance to the Director falling within the mischief of Section 2(22)(e)
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Income Tax:
Removal of adverse remarks made against the Officer / counsel of the appellant - court not only give opportunity of explaining or defending the Officer / counsel but also decide that there is evidence on record bearing on that conduct justifying the remarks as well as it is necessary for the decision of the case, as an integral part thereof, to animadvert on that conduct - failing these test no adverse comment desirable
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Income Tax:
Disallowance u/s 40A(3) - purchase of lands - burden of proof lies upon the Assessee to prove before the AO that the cash payments for which deduction is claimed are squarely fall within four corners of the exceptional circumstances enumerated in Section 6DD - not affording an opportunity to the Assessee is miscarriage of justice
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Income Tax:
Non recording of finding of facts - income from sale of shares - What the assessee had to prove before the lower adjudication authorities was that it continued to be an investor in current AY. This finding of fact has not been entered at any stage of the proceedings. - impugned order of the tribunal is erroneous and perverse, give rise a substantial question of law - matter remanded
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Income Tax:
Petition for refund - the computer system cannot override the factual aspects. If the refund is payable, whether the computer systems accepts or not, is of no consequence - Department shall take steps to rectify the error of TDS mismatch in the computer system - the refund shall not be linked with the rectification of the error - directed to grant refund at earliest
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Income Tax:
Hearing of appeal by High Court - appeal heard on merit without framing questions, on the basis of questions of law raised in appeal - The appeals are remanded to the High Court for hearing afresh only after framing appropriate substantial question(s) of law as required u/s 260A( 3)
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Income Tax:
Addition u/s 40A(2) - administrative service expenditure from sister concern as per agreement - instead of different companies incurring such expenditure, the same would be commonly undertaken by one company and different sister concerns would undertake a portion of such expenditure - motivated by business decision, no transfer of profit, tax rate of payee and Assessee was same - no addition
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Income Tax:
Allowability of bad debts - advanced to one Developers for booking commercial space in an upcoming construction project - allowable u/s. 36(1)(vii)OR business loss u/s 37(1) - assessee was engaged in the business of real estate and financing - clearly a business loss
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Income Tax:
TP adjustment - ALP of management service fees at Nil - receipt of service from other group companies not doubted - The authorities below cannot sit in judgment over the decision of assessee in availing the services and there is no question of providing documentation to specify the benefit test - Only thing which needs to be considered is whether the services have been provided - no disallowance
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Customs:
Valuation of imported goods - pearls - rejection of declared value - There are various complaints against the said approved valuer of the goods, therefore, his reports are not acceptable.
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IBC:
Trade union represents its members who are workers, to whom dues may be owed by the employer, which are certainly debts owed for services rendered by each individual workman, who are collectively represented by the trade union. - joint petition could be filed under IBC.
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Service Tax:
Nature of transaction - giving the cylinders on lease - deemed sale or service - supply of tangible goods on lease basis with transfer of right to possession and effective control will go out of ambit of taxable services.
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Central Excise:
CENVAT credit - input services - The security services provided at the residence of the Managing Director fall in the definition of ‘input service’ as it is in relation to manufacturing and therefore, the denial of CENVAT credit is not legally sustainable in law
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Central Excise:
Method of Valuation - Just because the goods have been captively consumed for use within the same factory, it cannot automatically fall within the four walls of Rule 8 ibid. To do so, the excisable goods should be used for “consumption” in the production or manufacture of other articles. - Rule 4 r.w.r 11 to be applied.
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VAT:
Classification of goods - drugs and medicines or not - Himami products - classification of the product under the different statutes cannot be looked into as argued before this Court.
Articles
Notifications
GST - States-
FTX.56/2017/Pt-II/135 - dated
28-2-2019
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Assam SGST
Seeks to make amendments (First Amendment, 2018) to the Assam GST Rules, 2017.
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FTX.56/2017/Pt-I/188 - dated
28-2-2019
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Assam SGST
Seeks to fully waive the amount of late fees leviable on account of delayed furnishing of FORM GSTR-4 for the period July, 2017 to September, 2018.
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FTX.56/2017/Pt-I/187 - dated
28-2-2019
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Assam SGST
Seeks to specify the late fee payable for delayed filing of FORM GSTR-3B and fully waive the amount of late fees leviable on account of delayed furnishing of FORM GSTR-3B for the period July, 2017 to September, 2018 in specified cases.
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FTX.56/2017/Pt-I/186 - dated
28-2-2019
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Assam SGST
Seeks to fully waive the amount of late fees leviable on account of delayed furnishing of FORM GSTR-1 for the period July,2017 to September, 2018 in specified cases.
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FTX.56/2017/Pt-I/184 - dated
28-2-2019
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Assam SGST
Seeks to make Amendments (Fourteenth Amendment, 2018) to the Assam GST Rules, 2017.
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FTX.56/2017/Pt-I/182 - dated
28-2-2019
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Assam SGST
Seeks to exempt supplies made by Government Departments and PSUs to other Government Departments and vice-versa from TDS.
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FTX.56/2017/Pt-I/180 - dated
28-2-2019
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Assam SGST
Seeks to extend the time limit for furnishing the details of outward supplies in FORM GSTR-1 for the newly migrated taxpayers.
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FTX.56/2017/Pt-I/178 - dated
28-2-2019
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Assam SGST
Seeks to extend the time period specified in notification FTX.56/2017/Pt-I/130 dtd. 14/09/2018 for availing the special procedure for completing migration of taxpayers who received provisional IDs but could not complete the migration process.
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F.17 (131)ACCT/GST/2017/4347 - dated
7-3-2019
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Rajasthan SGST
Form GSTR-3B and Payment of taxes for discharge of tax liability
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190 /CSTUK/GST-Vidhi Section/2019-20/CT-19 - dated
23-4-2019
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Uttarakhand SGST
Amendment in Notification No. 3043/CSTUK/GST-Vidhi Section/2018-19 dated the 10th August, 2018
SEZ-
S.O. 1687 (E) - dated
29-4-2019
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SEZ
Central Government rescind Notification No. S.O. 2100(E) dated 5th December, 2007
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2019 (5) TMI 248
Input ax credit - GST paid on building materials, such as cement, concrete, bricks, cement or marble or stone slabs or tiles, paint, polish and any other building materials meant for repair of building - GST paid on labour supply for carrying out repair of building - Works contract or not - HELD THAT:- The input tax credit in general is not available for construction, reconstruction, renovation, addition, alteration or repair of an immovable property even when such goods or services or both are used in course or furtherance of business. However, the limitation in such a scenario is extent of capitalization. The applicant is paying GST on building materials, such as cement, concrete, bricks, cement or marble or stone slabs or tiles, paint, polish etc and on some services such as labour supply. This activity of repair and maintenance which encompasses supply of goods for a construction activity is of immovable nature. The provisions of ITC for the said supply of goods is covered under Section 17(5)(d) read with explanation mentioned therein. Therefore, ITC on GST paid on such goods as mentioned above will not be available to the extent of capitalisation of the said goods as mentioned in Explanation of Section 17(5) of the CGST/RGST Act, 2017. The supply of goods and services supplied for construction work of an immovable nature can be done in composite manner also i.e. works contract. The works contract service for supply of above mentioned goods and service is covered under Section 17(5)(c) read with explanation mentioned therein. Therefore, ITC on GST paid on above said works contract service will not be available to the extent of capitalisation of the said goods as mentioned in Explanation of Section 17(5) of the CGST/RGST Act, 2017. Building Repair Work - GST paid on building materials, such as cement, concrete, bricks, cement or marble or stone slabs or tiles, paint, polish and any other building materials meant for repair of building - HELD THAT:- ITC will not be available to the extent of capitalization of building materials. Building Repair Work - GST paid on labour supply for carrying out repair of building shall be available for ITC, where material and supervision is provided by the applicant - HELD THAT:- ITC will not be available to the extent of capitalization of GST on labour supply. Building Repair Work - Will it make any difference if aforementioned works are carried out in a composite manner as a works contract, where material as well as labour is supplied by a contractor as a composite supply under works contract? - HELD THAT:- ITC will not be available to the extent of capitalization of building materials and service of labour supply. Repair Work relating to Electric Installation / Sanitary Fittings - GST paid on electrical fittings, such as Cables, Switches, NCB, and other electrical consumables meant for repair of existing electrical fittings - HELD THAT:- ITC will not be available to the extent of capitalization of electrical fittings. Repair Work relating to Electric Installation / Sanitary Fittings - sanitary fittings, such as tiles, commode, bath tub, wash basin, PVC pipes and other bath room sanitary fittings and consumables meant for repair of existing sanitary fittings - HELD THAT:- ITC will not be available to the extent of capitalization of sanitary fittings. Repair Work relating to Electric Installation / Sanitary Fittings - labour supply for carrying out repair of electrical installation and/ or sanitary fittings, where material and supervision is provided by the applicant - HELD THAT:- ITC will not be available to the extent of capitalization of service of labour supply. Repair Work relating to Electric Installation / Sanitary Fittings - Will it make any difference if aforementioned works are carried out in a composite manner as a works contract, where material as well as labour is supplied by a contractor as a composite supply under works contract? - HELD THAT:- ITC will not be available for works contract service to the extent of capitalization of supply of goods and services. Furniture Fixture repairing work - wood, board, mica, tapestry, paint, polish and other consumables meant for repair of existing furniture fixtures - HELD THAT:- ITC for GST paid on supply of above mentioned goods will be available in accordance with Section 16 of CGST/RGST Act, 2017. Furniture Fixture repairing work - labour supply for carrying out repair of furniture fixtures shall be available for ITC, where material and supervision is provided by the applicant - HELD THAT:- ITC will be available for service of labour supply in accordance with Section 16 of CGST/RGST Act, 2017. Furniture Fixture repairing work - Will it make any difference if aforementioned works are carried out in a composite manner as a works contract for carrying out repair and maintenance job on movable furniture fixtures such as, Sofa, Table, Chairs, Door, Cabinets, etc. where material as well as labour is supplied by a contractor as a composite supply under works contract - HELD THAT:- ITC will be available for GST paid on composite supply of goods (furniture fixtures) and services (manpower supply) in accordance with Section 16 of CGST/RGST Act, 2017. Furniture Fixture repairing work - whether input tax credit can be availed by the applicant of GST paid on purchase of new ready to use furniture such as chairs, etc, in terms of section 17 of the RGST Act, 2017? - HELD THAT:- ITC will be available for GST paid on purchase of new ready to use furnitures in accordance with Section 16 of CGST/RGST Act, 2017.
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2019 (5) TMI 247
Extension of time period for filing of Form GST Tran-1 - transition to GST Regime - transitional credit - HELD THAT:- The respondents are directed to reopen the portal within two weeks from today. In the event they do not do so, they will entertain the application of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner. List this matter on 01.07.2019.
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2019 (5) TMI 246
Extension of time period for filing of Form GST Tran-1 - Transitional credit - transition to GST regime - HELD THAT:- The respondents are directed to reopen the portal within two weeks from today. In the event they do not do so, they will entertain the application of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner. List this matter on 01.07.2019.
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Income Tax
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2019 (5) TMI 229
TDS u/s 194J - Channel Placement fees - Whether was not in the nature of Royalty as defined u/s.9(1) (vi) and so the tax is not required to be deducted u/s. 194J despite insertion of clarification by virtue of Explanation 6 in Section 9(1)(vi) w.e.f. 01.06.1976? - HELD THAT:- It is an agreed position between the parties that, the issue raised herein stands concluded in favour of the Assessee and against the Revenue by the decision of this Court in the Assessee's own case viz.CIT v/s. M/s. NGC Networks (India) Pvt. Ltd. [ 2016 (1) TMI 1368 - ITAT MUMBAI] . Thus, this question does not give rise to any substantial question of law. Thus, not entertained. Channel Placement fees u/s. 40(a)(ia) - TDS u/s. 194C or 194J - HELD THAT:- The issue raised herein stands concluded against the Revenue and in favour of the Assessee by the decision of this Court in CIT v/s. M/s. UTV Entertainment Television Ltd., [ 2017 (11) TMI 915 - BOMBAY HIGH COURT] rendered on 10/11th October, 2017. Thus, this question does not give rise to any substantial question of law. Thus, not entertained.
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2019 (5) TMI 201
Hearing of appeal by High Court - framing of substantial question(s) of law u/s 260A (3) - appeal heard on merit without framing questions, on the basis of questions of law raised in appeal - interpretation of language of section 40(a)(ia) - TDS u/s 194C - payments made to the harvesters and transporters - HELD THAT:- We find that in Para 4, the High Court observed, Assessee has raised the following questions of law in its appeals and then set out four questions. Likewise, in Para 5, the High Court observed, Revenue has raised the following questions of law in its appeals and then set out three questions. It is not in dispute that the High Court did not frame any question as required u/s 260A (3) As relying on M/s A.A. Estate Pvt. Ltd. . [ 2019 (4) TMI 957 - SUPREME COURT] these appeals have to be allowed and the case needs to be remanded to the High Court for hearing afresh on merits. Appeals allowed. The impugned order is set aside. The appeals are remanded to the High Court for hearing afresh only after framing appropriate substantial question(s) of law as required u/s 260A( 3).
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2019 (5) TMI 200
Addition u/s 40A(2) - administrative service expenditure from sister concern as per agreement - documentary evidences not provided or given for the expenses claimed - AO disallowed the claim on the ground that there was no specific service which could be attributed to the Assessee and also on the ground of excessive payment in terms of Section 40A(2) - Tribunal was of the opinion that the business expediencies for incurring such expenditure cannot be questioned by the Revenue and in relation to Section 40A(2)(b) and there was no material on record to suggest that such expenditure was excessive or unreasonable having regard to the market value of the services for which the payment was made - HELD THAT:- No error in the view of the Tribunal. As pointed out by the learned Counsel for the Assessee, the Assessee and such other sister concerns would proportionately internally allocate administrative expenditure which allocation would be based on scientific distribution. Instead of different companies incurring such expenditure, the same would be commonly undertaken by one company and different sister concerns would undertake a portion of such expenditure. Apart from the expenditure being motivated by business decision, we do not discern any element of transfer of profit, particularly when it is pointed out that the payee had also paid cash at the tax rate as that of the Assessee. - Decided against revenue.
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2019 (5) TMI 199
Allowability of bad debts - advanced to one Developers for booking commercial space in an upcoming construction project - allowable u/s. 36(1) (vii) OR business loss u/s. 37(1) - Tribunal was of the opinion that Assessee in business of real estate, loss was business loss and was allowed u/s 37(1) - HELD THAT:- We do not find any error in the view of the Tribunal. The Assessee was engaged in the business of real estate and financing. The object clause for incorporation of the company widely worded and would cover within its fold range of activities such as erection, construction of buildings and houses as also purchase, sale and dealing in freehold and leasehold land to carry on business as developers of land, buildings, immovable properties. It was in furtherance of such object that the Assessee had entered into a commercial venture by booking commercial space with a developer in the upcoming construction of commercial building, the payment being in the advance booking. The sum was not refunded. This was thus clearly a business loss. We may notice that in the later year when due to continued efforts, the Assessee recovered a part of the said sum, the same was offered as business income. - Decided against revenue.
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2019 (5) TMI 198
Nature of expenditure - VRS expenditure - revenue expenditure or capital expenditure - HELD THAT:- This Court, in the case of Commissioner of Income Tax Vs. Bhor Industries Ltd. . [ 2003 (2) TMI 20 - BOMBAY HIGH COURT] has held that the expense towards voluntary retirement scheme is to save the expenditure and enduring benefits test cannot be applied. It was held that the expenditure must he allowed in the year in which it was incurred. Similarly, in the case of Commissioner of Income Tax Vs. Simpson And Co. Ltd. (No.1) [ 1996 (6) TMI 12 - MADRAS HIGH COURT] held that the amount paid to the employee under voluntary retirement scheme is an allowable deduction since the expenditure was incurred on the ground of commercial expediencies. Eligible profits for the purpose of computing deduction u/s. 80HHC - inclusion of interest income earned from the customers and Hundies, interest of MSEB and MIDC - Revenue contends that by applying explanation (baa), 90% thereof will be deducted from the Assessee s business income -Tribunal held that these receipts had a close nexus to the Assessee s export business and that, therefore, the said explanation would not apply - HELD THAT:- Interest income was from two sources. One was interest on deposits made by the Assessee with the electricity company and with the State Industrial Development Corporation. This was a small portion of the interest income. The amounts being extremely small, we do not entertain this question of the Revenue. The second head of the interest income was interest received from the customers on delayed payments. Correctly therefore, the Tribunal held that such interest was also part of the Assessee s export business. There is a reference to the income from Hundies. However, there is no clarity on this nature of income. The Assessing Officer has not discussed any facts relatable to this source. Only on this ground, this further question which represents the very small portion of the receipt, is not examined. - Decided against revenue.
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2019 (5) TMI 197
Petition for refund - refund is admittedly payable to the Petitioner - demand u/s 201(1) - error of TDS mismatch in the computer system - HELD THAT:- Due to human error, the Petitioner had shown payment to HSBC under old as well as new TAN giving rise to TDS mismatch. AO himself agrees that this is an error and the demand should be deleted from the system. Despite this communication from the AO, the computer system of the department has not taken steps to delete the demand. As a result of which, the Petitioner s sizable tax refund in access of ₹ 21 Crores is held up. Department cannot withhold the refund of the Petitioner. Firstly, the computer system cannot override the factual aspects. If the refund is payable, whether the computer systems accepts or not, is of no consequence. In the present case, according to the department itself, the error had to be rectified. Had this be done timely, there would have been no delay in releasing the Petitioner s refund. Petition is disposed of the Respondent shall release the refund of the Petitioner arising out of the assessment for the assessment years 2007-2008 to 2010-2011 with statutory interest latest by 15/05/2019. Department shall take steps to rectify the error of TDS mismatch in the computer system pertaining to the Petitioner. This may be done as expeditiously as possible. However, the refund of the Petitioner shall not be linked with the rectification of the error.
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2019 (5) TMI 196
Non recording of finding of facts - order is perverse and give rise a substantial question of law - income from sale of shares - assessee is investor in this year also or not - capital gains or business income - HELD THAT:- It is true that in respect of the assessment year 2005-2006, the Division Bench has not interfered with the finding of the tribunal that the assessee was an investor and that the gain made out of shares and transaction was a long-term capital gain. What the assessee had to prove before the lower adjudication authorities was that it continued to be an investor in the subject assessment year 2006- 2007 and continued to make capital gains in the manner it did in the assessment year 2005-2006. This finding of fact has not been entered at any stage of the proceedings. In its absence the impugned order of the tribunal dated 20th January, 2012 is erroneous. There is perversity in the adjudication of the case. A substantial question of law arises. The above fact needs to be determined. The order of the tribunal dated 20th January, 2012 is set aside in respect of this issue. The issue is remanded to the tribunal to make a fresh adjudication with reasons in accordance with law. As this appeal is pending for a long period of time, we are not asking the tribunal to remand the matter back to the lower adjudication authority. The tribunal will determine the question itself and shall pass a reasoned order within six months from the date of communication of this order.
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2019 (5) TMI 195
Disallowance u/s 40A(3) - cash expenditure incurred for purchase of lands - applicability of Section 40A(3) if the lands in question were purchased by him for personal purpose as Capital Assets - no separate deduction in respect of the purchase of two lands in question was claimed in the computation of total income - no enquiry by AO with regard to the applicability of Rule 6DD - HELD THAT:- Merely because the lands in question were purchased as Goods or Stock-in-Trade during the course of business is not sold during the year itself and is included in the closing stock, such contingency does not take it out from the definition of expenditure incurred by the Assessee, as employed u/s 40A(3). Therefore, the said submission raised by the Assessee does not hold any water which is liable to be rejected and the same is accordingly rejected. No discussion by any of the authorities neither the detailed circumstances in which such cash payment was made by the Assessee who wanted to produce the confirmation letters from the dealers of the lands and for the reasons not known to them it was not allowed to do so nor the finding of the Appellate Authority, showing non application of mind to the exceptional circumstances of Rule 6DD and why the same do not apply to the transaction of the purchase of lands in question. Apparently there was no reason for the Assessing Authority for not affording an opportunity to the Assessee to produce not only the confirmation letter from the sellers but also to examine the sellers themselves, by which the Assessee could have established the exemptions of Rule 6DD. Miscarriage of justice might have resulted in cutting short of the assessment procedures by the Assessing Authority. Appellate Authority have just put their imprimatur without discussing any details. Such lack of diligent assessment exercise by the fact finding bodies opens all the doors for the flow of the work in the constitutional Courts, which is not desirable. It is settled legal position that the fact finding arrived at by the final fact finding body is binding on the High Court, while considering the Substantial Questions of Law u/s 260A. Appeal filed by the Assessee is allowed for statistical purposes, without answering the Substantial Questions of Law raised by remanding the case back to the Assessing Authority to examine the issue of applicability of Rule 6DD in the facts and circumstances of the present case.
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2019 (5) TMI 194
Removal of adverse remarks made against the Officer / counsel of the appellant - Ld. single judge made some adverse remark against Officer / counsel of the appellant - whether issuance of notice are required to the respondent herein writ petitioner/assessee? - whether the remarks/observations made in the impugned common order as against the officer of the appellant Department and its Senior Standing Counsel require to be expunged or not ? - HELD THAT:- We hold that the respondent herein writ petitioner/assessee is not concerned about the observations/ adverse remarks made against the officer of the Department and their Senior Standing Counsel and consequently, we hold that no notice is required to be issued to the respondent herein writ petitioner/assessee. The legal principle that can be culled out from the above decisions is that unwarranted comments and remarks were not called for and what was important to bear in mind was as to whether the three cardinal tests laid down by the Hon'ble Supreme Court in the decision in the case of Mohammed Naim [ 1963 (3) TMI 63 - SUPREME COURT] had been complied with. One of those three tests is as to whether the party, whose conduct is in question is before the court or has an opportunity of explaining or defending himself. In the instant case, neither the officer of the Department nor its Senior Standing Counsel had an opportunity of explaining or defending themselves. Therefore, the first test laid down in the decision in the case of Mohammed Naim has not been fulfilled in the instant case. The second test is as to whether there is evidence on record bearing on that conduct justifying the remarks. We have carefully gone through the memo filed by the Department and the observations made by the learned Single Judge. The memo sought for an innocuous prayer to adjourn the matter by 15 days. It referred to engagement of a Special Counsel from New Delhi, who had been nominated pursuant to a request made by the Director General of Income Tax (INV.), Chennai vide letter dated 17.12.2018. Thus, in our considered view, there was nothing to infer that the Senior Standing Counsel for the Department overstepped his brief or for that matter the conduct of the officer warranted certain observations against her. Therefore, we hold that the second test also does not stand fulfilled. The third test is as to whether it is necessary for the decision of the case, as an integral part thereof, to animadvert on that conduct we are of the clear view that the observations made by the learned Single Judge were not necessary for a decision in the case nor it is an integral part thereof. Therefore, we hold that the third test laid down does not stand satisfied. Considering the fact that none of the three tests as laid down by the Hon'ble Supreme Court in the decision in the case of Mohammed Naim has been fulfilled, we are of the clear view that the adverse remarks/ observations made against the officer/officers of the appellant Department or its Senior Standing Counsel are not warranted and accordingly, they need to be expunged. Writ appeals are allowed, the adverse remarks/ observations made against the officer/officers of the appellant Department or its Senior Standing Counsel in the common order dated 31.1.2019 are expunged and consequently, they must be treated as having never existed or being a part of the common order passed by the learned
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2019 (5) TMI 193
Deemed dividend u/s 2(22)(e) - unpaid price of purchase of assets of company - Tribunal, allowing the appeal filed by the Revenue, held that the part of price of the flat sold by the company M/s.Shree Velu Builders (P) Ltd., in which the Assessee was having substantial interest as holding more than 10% of the share holding, be treated as deemed dividend - HELD THAT:- Assessee had substantial interest in the aforesaid closely held company M/s.Shree Velu Builders (P) Ltd. and the company had sold the flat in question to the Assessee himself of which a major portion of price remained unpaid by him at the end of the previous year, which, in our opinion, has been rightly treated by the Tribunal as an advance to the Director falling within the mischief of Section 2(22)(e). The same was therefore, liable to be taxed as deemed dividend in the hands of the Assessee. Therefore, the Appellate Tribunal has not committed any error. We do not find any merit in the appeal filed by the Assessee and thus the questions of law are answered in favour of the Revenue and against the Assessee. Maintainability of the appeal - Instruction of CBDT for not filing or withdrawing appeal on low tax effect - binding on Tribunal or Court - HELD THAT:- The Court or the concerned Tribunal cannot compel the litigant, be it Revenue Department or the Assessee, to withdraw any such appeal from its records. The Court can only grant permission to withdraw at the request of the concerned appellant, unless there is objection raised by the other side and the Court upholds such objection. Such Instructions of CBDT are neither binding on the Court or the Tribunal, nor the Board could direct the concerned Court or Tribunal to compel the litigant to withdraw such appeal. Once the learned Tribunal has pronounced upon the merits of the appeal of the Assessee, the first contention raised by the learned counsel for the Assessee that the appeal before the Tribunal was not maintainable, is infructuous and this Court cannot set aside the order passed by the Income Tax Appellate Tribunal on merits, on account of the aforesaid Instruction No.3 of 2011 dated 09.02.2011, even if it is held to be applicable to this case.
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2019 (5) TMI 192
Waiver of interest imposed u/s 234-A, 234-B and 234-C - Learned Single Judge,had remanded the matter back to the Chief Commissioner of Income Tax, for considering and deciding again the applications of waiver of interest for assessment years 1993 1994 and 1994 1995 respectively. HELD THAT:- Since the matter has been only remanded back to the learned Chief Commissioner of Income Tax for reconsidering the applications for waiver of interest for the assessment years 1993 1994 and 1994 1995, we are not inclined to interfere with the same. Any observation made by the Learned Single Judge, will not influence the reconsideration of these applications for waiver of interest at the hands of the Chief Commissioner of Income Tax, as the same cannot be treated as finding of facts by the learned Single Judge, but it is only the reasons or observations made for remanding back the matter. Therefore, the Chief Commissioner of Income Tax shall decide the applications for waiver of interest afresh in accordance with law uninfluenced by the observations of the Learned Single Judge.
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2019 (5) TMI 191
Disallowance of interest u/s 14A - no tax free income has been earned by the assessee - satisfaction of A.O. regarding correctness of the claim of assessee - HELD THAT:- Matter is covered by the judgment of this Court in PRINCIPAL COMMISSIONER OF INCOME TAX-I, CHANDIGARH VERSUS M/S VARDHMAN CHEMTECH PRIVATE LIMITED, CHANDIGARH [ 2018 (10) TMI 1037 - PUNJAB AND HARYANA HIGH COURT] wherein the appeal filed by the revenue was dismissed.
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2019 (5) TMI 190
Revision u/s 263 - Disallowance u/s 14A - non-consideration of essential points in an assessment order which might come out of non application of mind definetely makes an assessment order erroneous - HELD THAT:- Though the assessee tried to make some submission on the merits of the case like the challenging on the validity of the order passed u/s 263 we are satisfied that the Tribunal has passed the order u/s 263 holding that the order passed by the Assessing Authority exhibits non application of mind and, therefore, this Court being satisfied with the order passed by the Tribunal, at this stage, is not inclined to go into the merits of the contentions raised with regard to the order passed u/s 263. The Assessee would be free to raise contentions on merits for issue u/s 14A in appropriate appellate forum, in accordance with law. Appeal of Assessee has become infructuous, in view of later development and therefore Questions of Law framed are not required to be answered.
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2019 (5) TMI 189
Stay u/s 220 (6) - Stay demand in relation to the appeals pending before the CIT (A) - whether u/s 226 (3) order requiring the Petitioner to pay 10% of the demand as a condition for stay of the total demand during the pendency of the appeals before the CIT (A) apart from the admitted liability for AY 2016-17 can be said to be unjustified? - HELD THAT:- The impugned order requiring the Petitioner to pay 10% of the demand cannot be termed to be unreasonable. Revenue, has shown the Court the copy of a demand dated 17th March 2017 raised by the Additional Commissioner of Income Tax on the Petitioner under Section 221 (1) which is 15% of all the disputed demands which form the subject matter of the appeals pending before the CIT (A). This has in fact been reduced to 10% by the impugned order of Respondent No.2. Petitioner then drew attention of the Court to the notices dated 5th March 2019 issued to the trade debtors of the Petitioner under Section 226 (3) of the Act and prayed that those should be stayed pending the disposal of the appeal before the CIT (A). The above notices issued are consequential upon the impugned order dated 28th February 2019. With the said order not calling for any interference, these notices also do not call for any interference - writ petition is accordingly dismissed and the application is also dismissed.
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2019 (5) TMI 188
Rectification u/s 154 - change in accounting policy - validity of revised return by the assessee - HELD THAT:- Case file suggests that the Assessing Officer had himself accepted assessee s revised return dated 30.09.2011 as per sec. 143(3) order dated 14.12.2011. He had also issued the necessary questionnaire to the assessee to this effect making all the relevant queries on 17.10.2011 u/s 142(1) of the Act. All these crucial facts have gone unrebutted from the Revenue side during the course of hearing. We therefore hold that CIT(A) has rightly held in view of the various judicial precedents that it is not an error apparent on the case of record involved at Assessing Officer s behest. The Revenue fails in its various substantive grounds thereby.
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2019 (5) TMI 187
Addition of loan creditors - proof of documents in respect of names, address and PAN Nos. of the lenders - addition for want of identity of lenders in the form of Adhar Card - HELD THAT:- Assessee has submitted all possible evidences under his hand before the authorities below in the form of names and addresses and PAN of creditors except one person. Further, the Assessing Officer proceeded to make addition without any verification from the respective creditors even on random basis. The CIT(A) also dismissed the appeal of the assessee for want of Adhar Card ignoring the vital evidence submitted by the assessee in the form of names and address, PAN and confirmation of the creditors. The assessee has discharged its onus by providing all relevant details and documents and confirmation from the respective persons. In this situation, I find that the onus cast upon the assessee has been discharged by giving a cogent and reliable details such as names, addresses, PAN nos and confirmation from the creditors. Therefore, if the department did not agree with the explanation, then the onus was on the department to verify the facts. In the instant case, such onus which shifted on the department has not been discharged. I also find that keeping aside all the information and details furnished by the assessee, the Assessing Officer proceeded to make the addition, which was confirmed by the CIT(A) on the sole ground that the assessee has not furnished Adhar Cards of the creditors. - Decided in favour of assessee. Penalty u/s 271(1)(c) - HELD THAT:- Taking support from judicial precedent in the case of K.C. Builders vs. ACIT [ 2004 (1) TMI 7 - SUPREME COURT] wherein held that where the additions made in the Assessment Order, on the basis of which penalty for concealment was levied, are deleted, there remains no basis at all for levying the penalty for concealment, and therefore, in such a case, no such penalty can survive and the same is liable to be cancelled. In view of the foregoing, appeal filed by the assessee is allowed.
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2019 (5) TMI 186
Penalty proceedings u/s 271B - lapse of 23 months and 26 days in passing the assessment order u/s 143(3) r.w.s. 147 - delay of filing of return of income and audit report - assessment not initiated before the completion of the assessment and thus barred by limitation prescribed u/s 275? - HELD THAT:- Due date of filing of the return and audit report u/s 44AB of the I.T.Act was 30.09.2008. Admittedly, in the instant case, the assessee had filed the return of income and the audit report u/s 44AB only on 10.12.2008. The assessment order was completed u/s 143(3) r.w.s. 147 of the I.T.Act vide order dated 21.12.2010. The penalty proceedings were initiated after 23 months and 26 days from the date of assessment order and order u/s 271B was passed on 28.06.2013. There is a delay of filing of return of income and audit report by two months and 11 days. The return of income and audit report u/s 44AB was filed much before the assessment order u/s 143(3) r.w.s. 147 was completed. According to us, the assessee had only committed a technical venial breach, which does not create any loss to the exchequer as the audit report was available to the Assessing Officer well before the completion of the assessment proceedings. On identical facts, the Cochin Bench of the Tribunal in the case of Johns Biwheelers v. ACIT [ 2019 (3) TMI 630 - ITAT COCHIN] had deleted the penalty imposed u/s 271B We delete the penalty u/s 271B - Decided in favour of assessee.
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2019 (5) TMI 185
Rectification u/s 254 - Unexplained investment u/s 69 - payments falling in the financial years prior to the financial year 2004- 05 relevant to assessment year 2005-06 - HELD THAT:- In this case, the transaction entered into viz., agreement of sale of undivided share of land and department store to be constructed with Aadhithiya Constructions is single property spread over to various years is not under dispute. If it is so, when the sources are in question, the said sources are to be seen for the property as a whole and thus, the Tribunal sustained the observations of the ld. CIT(A) and rejected the alternative plea raised by the assessee. Thus, we find no mistake apparent on record and accordingly, the petition filed by the assessee stands dismissed.
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2019 (5) TMI 184
Rectification u/s 254 - Fees paid to ROC - nature of expenditure - revenue or capital expenditure - as per ITAT it is a capital expenditure in nature and hence cannot be allowed as an allowable deduction - as per assessee ROC fees paid for increase in share was disallowed at the time of filing of return of income and hence prayed for suitable rectification - HELD THAT:- Tribunal has observed CIT(A) has rightly held that ROC fees paid for increase in authorized share capital of a company is a capital expenditure in nature and hence cannot be allowed as an allowable deduction. Thus, we find no reason to interfere with the order passed by the ld. CIT(A) on this issue and accordingly, the ground raised by the assessee stands dismissed. The ground raised by the assessee emanates from the appellate order and not in dispute, against which, by following decision in BROOKE BOND INDIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX [ 1997 (2) TMI 11 - SUPREME COURT] the Tribunal sustained the order of the ld. CIT(A). Thus, we find no mistake apparent on record and accordingly, the petition filed by the assessee stands dismissed.
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2019 (5) TMI 183
Penalty passed u/s 271[1][c] - defective notice - penalty proceedings is initiated for furnishing of inaccurate particulars of income or concealment of income - HELD THAT:- Penalty proceedings are attracted only where the assessee has concealed the particulars of income or furnished inaccurate particulars of such income. It is well accepted proposition that the aforesaid two limbs of section 271(1)(c) carry different meaning and the AO should be clear as to the limb under which penalty is being levied. When the AO proposes to invoke the first limb being concealment of income, notice has to be appropriately marked. In the present case, we found that the AO has marked the concealment of particulars of income and furnishing of inaccurate particulars of income. It is imperative and clear that the AO is not sure on which limb the penalty is being levied. Passing of penalty order u/s 271(1)(c), found that there is no application of mind by the AO as he has marked both limbs of notice which is bad in law. We set aside the order of the CIT(A) and cancel the penalty order dated 31/12/2007 and allow the grounds of appeal of the assessee. - Decided in favour of assessee.
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2019 (5) TMI 182
Levy of penalty u/s 271(1)(c) - defective notice - non specification of charge - HELD THAT:- Notice issued by the Assessing Officer under Section 274 read with Section 271(l)(c) to be bad in law as it did not specify which limb of Section 271(l)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013 (7) TMI 620 - KARNATAKA HIGH COURT) and M/S SSA'S EMERALD MEADOWS [ 2016 (8) TMI 1145 - SUPREME COURT] - Decided in favour of assessee.
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2019 (5) TMI 181
Allowability of bad debts written off - offer as income in earlier year - HELD THAT:- We uphold the remittance of the issue of bad debts to the file of the CIT(A). AO shall decide the issue in both angles. He first decide whether sum has suffered tax in earlier years, and can be allowed as bad debts as claimed by the assessee. If not, he shall verify whether it can be allowed as business loss u/s 37. Addition u/s 145A - exclusive method of accounting - calculation of closing stock on account of CENVAT - HELD THAT:- It is not disputed by the Revenue that the assessee has been following consistently the method of valuation of closing stock i.e. exclusive method of accounting for valuation of purchase and sale of goods and inventory. Assessee is maintaining separate books for CENVAT. We find that the position of law on this issue is clear. CENVAT will form part of closing stock only when the same is debited to the profit and loss account i.e. at the time of actual payment. Addition and/or deduction of CENVAT to the value of closing stock has no impact on financial position of the assessee, as the same is revenue neutral. The ld.CIT(A) has accepted the method adopted by the assessee in the light of various judgments. - ground of Revenue is dismissed. Addition on account of interest paid on capital work-in-progress - no interest bearing funds were utilized in connection with the capital WIP - HELD THAT:- We are of the view that the ld.CIT(A) has rightly set aside the issue to the file of the AO for verification of this claim, with direction to allow the same if he finds the same to be correct. This direction of the ld.CIT(A) cannot said to be incorrect or unjust. - ground in both the appeal of the Revenue and the CO of the assessee is rejected. Addition u/s 2(22)(e) - deemed dividend - HELD THAT:- We find that the CIT(A) has recorded a finding that the assessee is not a shareholder of the lender company within the meaning of section 2(22)(e) and therefore, there is no question of treating the loan to be deemed dividend in this case. The CIT(A) has based his finding on the ground that similar addition was deleted in the assessee s own case for the assessment year 2009-10, which was upheld by the Tribunal also [ 2013 (11) TMI 323 - ITAT AHMEDABAD] . Since there is no disparity on facts in the present assessment year also, applicability of section 2(22)(e) does not arise. In the result, appeal of the Revenue is dismissed. Disallowance of late payment of employees contribution to PF - HELD THAT:- This issue is to decided against the assessee in view of Hon ble jurisdictional High Court decision in the case of CIT Vs. Gujarat State Road Transport corporation Ltd. [ 2014 (1) TMI 502 - GUJARAT HIGH COURT] . In view of this submission of the assessee, we reject this ground of CO.
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2019 (5) TMI 180
Reopening of assessment u/s 147 - addition u/s 69 - as alleged agreement to sell found from third party, assessee has given ₹ 1 crore in cash to M/s. Sabh Infrastructure Ltd., on account of purchase of property - HELD THAT:- Copy of the seized agreement to sell which is unsigned by any of the party to the agreement and even there is no witness to the said agreement. It was just a typed copy like photo copy as found during the course of search may be an electronic document found in search. Since it is not signed by the assessee or any other person on behalf of M/s. Sabh Infrastructure Ltd., therefore, it has no evidentiary value and cannot be read in evidence against the assessee. Similarly, the case of M/s. Sabh Infrastructure Ltd., was reopened by the A.O. for assessment year under appeal i.e., 2010-2011, but, no adverse inference has been drawn against the said Company and no addition on account of any amount received from assessee have been made in the case of their assessment u/s 147. There is no other tangible material on record to justify if assessee has paid any cash amount to M/s. Sabh Infrastructure Ltd., on account of purchase of any property. Therefore, in the absence of any tangible material and in the absence of any legally enforceable agreement found during the course of search, it is difficult to believe that assessee has paid any amount in cash to M/s. Sabh Infrastructure Ltd., as is mentioned in the reasons. No reason for the A.O. to record that there is an income escaped assessment on account of the fact mentioned in the agreement to sell. Also See SHRI KRISHAN GOPAL, PROP. M/S. KAY PEE LOCK INDUSTRIES VERSUS ITO WARD-39 (1) NEW DELHI [ 2017 (5) TMI 836 - ITAT DELHI] Considering the totality of the facts and circumstances of the case, we are of the view that there was no justification for the A.O. to record reasons for reopening of the assessment and there was no justification for the A.O. to record his belief that income chargeable to tax has escaped assessment in the matter. In view of the above discussion, we set aside the Orders of the authorities below and quash the reopening of the assessment u/s 147/148. Resultantly, the entire additions shall stand deleted. Appeal of Assessee is allowed.
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2019 (5) TMI 179
Characterization of income - treating the agriculture income as income from other sources - Bills and the vouchers for agriculture produce was available for part income - assessee claimed that it has also earned agriculture income from sale of soyabean, fruits and vegetables for which no mandi receipts is available - AO accepted agriculture income only for which bill was produced - land jointly co-owned - HELD THAT:- Co-ordinate Bench in assessee s own case [ 2016 (10) TMI 1255 - ITAT INDORE] for Assessment Year 2010-11 wherein the issue with regard to sale of agriculture products without bills and vouchers was considered and 30% of such sales was treated as income from other sources As out of the total claim of agriculture income of ₹ 22,78,600/- we allow the claim of agriculture income at ₹ 19,00,204/- and confirm the addition for income of ₹ 3,78,396/- to be treated as income from other sources thereby partly allowing the assessee s appeal As land is jointly owned by three co-owners, we therefore applying our own decision in Para 12 above partly allow the assessee s appeal by restricting the addition for income from other sources at ₹ 3,78,396/- and allow the claim of agriculture income at ₹ 19,00,204/- as against ₹ 22,78,600/- claimed by the assessee.
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2019 (5) TMI 178
Transfer pricing adjustment - treating arm s length value of payment of management service fees at Nil - The TPO was of the view that since no benefit arose to the assessee - import of cutting and drilling tools from its associated enterprise and selling the same in domestic market - whether the payments made to Sandvik AB, the holding company is on account of provision of services by Walter AG, Germany ? - HELD THAT:- The assessee had explained before the TPO that the said service fees consisted of cost pertaining to services within ambit of marketing management, general administration, human resources and information technology. The said interactions were happening on day-to-day basis and documentations were voluminous. Sample copies of documents, e-mails, advise visits reports, etc. were filed before the authorities below. The copies of same are available and the assessee had also filed certificate from the auditor of Sandvik AB under which they have certified the cost allocated by Sandvik AB to the assessee. As already referred to the terms of agreement, wherein Sandvik AB is referred to as Providing Party and the services are to be provided by the providing party, which is defined in clause 1.1 include all or some of Sandvik companies, which provide management services. The concern Walter AG, Germany is part of Sandvik group of companies, which is also not doubted and once the services were provided by Walter AG, Germany, which in turn, as part of Sandvik group of companies, which is headed by Sandvik AB, Germany, then there is no merit in the orders of authorities below in holding that no services have been provided by Sandvik AB to whom the management fees has been paid. Sandvik AB through its group companies was providing similar services to all the group companies and allocation key is adopted for allocating the cost to the individual companies, which is clearly mentioned in the report of auditor. The authorities below cannot sit in judgment over the decision of assessee in availing the services and there is no question of providing documentation to specify the benefit test. Only thing which needs to be considered is whether the services have been provided. However, in the facts of present case, the same is not doubted as the authorities below have time and again referred to the services being provided by Walter AG, Germany, but the adjustment has been made in the hands of assessee on the ground that services are not provided by Sandvik AB with whom the assessee has entered into an agreement. Where the management services have actually been rendered, may be by Sandvik entity i.e. Walter AG, Germany, then arm's length price of such transaction cannot be taken at Nil. However, we find no merit in the orders of authorities below - See SANDVIK ASIA (P.) LTD. VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE- 10, PUNE [ 2017 (6) TMI 1290 - ITAT PUNE] - No merit in the orders of authorities below in adopting the arm's length price of international transactions pertaining to payment of management service fees at Nil. The order of Assessing Officer / DRP in this regard is thus, reversed and the issue raised by assessee is thus, allowed.
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2019 (5) TMI 177
Validity of reopening of assessment u/s 147 - wrong facts in reasons recorded - absence of proper service of notice u/s 148 - Assessment of capital gains in the hands of assessee assuming the land in question as capital asset and deduction u/s. 54F - HELD THAT:- As in the case of one of co-owners of the same land which was sold, namely, Smt. Savita D/o Late Mool Chand reasons and the notice u/s 148 of the Act are ante dated or at the lease that they are not properly recorded. In this set of facts and circumstances, it is difficult to say that there was proper issuance or service of notice u/s 148 and no reliance could be made on the reasons recorded in this matter. We, therefore, hold that there is no proper issuance and service of notice u/s 148 in this matter and consequently, the assessment order is liable to be quashed. Appeal of the assessee is allowed accordingly
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2019 (5) TMI 176
Penalty u/s 271(1)(c) - change of head of income - assessee offered the loss under the head capital gains which, in the opinion of Ld. AO, was assessable under the head business income - HELD THAT:- We find that penalty was levied by Ld. AO for mere change of head of income being no change in overall returned loss and assessed loss. The issue, as rightly noted by Ld. CIT(A) was highly debatable one and subject matter of numerous litigations. The basic condition viz. furnishing of inaccurate particulars / concealment of particulars of income so as to attract the provisions of Section 271(1)(c), in our opinion, have remained unfulfilled in the present case. The same is evident from the fact that penalty proceedings u/s 271(1)(c) for AY 2010-11, on identical facts, was dropped by Ld. AO himself vide order dated 24/05/2013, a copy of which is on record. Therefore, penalty was not justified on this count, as rightly held in the impugned order. Penalty on interest reflected in AIR information but which was not offered to tax - HELD THAT:- The explanation as furnished by the assessee that the same was human error since the interest was never received, was plausible one and the penalty was rightly deleted against the same also. Finding the stand of Ld. CIT(A) in the impugned order to be quite fair logical, we dismiss the appeal. - Decided in favour of assessee.
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2019 (5) TMI 175
Eligibility of higher rate depreciation on truck chassis fixed with transit mixture - vehicle used for hire - additional depreciation on transit mixer which is mounted on the truck chassis - HELD THAT:- Assessee primarily seeks accelerated depreciation on truck/chassis on which mixers is mounted equivalent to what is available to vehicles used for hire. It is the case of the assessee that chassis truck should be treated akin to being used in the business of running it on hire owing to composite nature of contract and consequently higher rate on depreciation at 30% should be allowed to the assessee instead of allowance at 15%. No merit in the aforesaid plea of the assessee on the ground that the assessee could not demonstrate such narrative on facts as to whether the assessee has earned any receipt towards hire of vehicle in the so-called composite contract. No evidence has been produced to justify the presence of element of receipt on account of hire of vehicle. Therefore, the contention of the assessee is abstract and cannot be endorsed. Therefore, we decline to interfere with the action of the AO on this score. Ground No.1 is accordingly dismissed. Additional depreciation on transit mixture u/s 32(1)(iia) - Alternative claim raised by the assessee accepted - The transit mixer is stated to be mounted on the chassis to enable the RMC manufactured/produced at site to be kept in the wet form for its utilization at construction plant. Therefore, transit mixer mounted on the vehicle is nothing but a plant and machinery where ancillary process is done as a continuation of manufacture/production contemplated u/s 32(1)(iia). Therefore, we wholly agree with the alternative contention of the assessee for allowability of additional depreciation on mounted mixer on first principles. However, the cost of purchase of mixer during the year requires factual examination - issue is remitted back to the file of the AO for examining the factual aspect and for determination of additional depreciation on mounted mixer. Ground No.2 is accordingly allowed for statistical purposes. Difference between income reflected in the books of account qua the 26AS - taking note of the discrepancies 26AS stood revised and difference between the books and the tax statement has been scaled down considerably - HELD THAT:- As AR pleaded that the AO should take note of the revised and corrected 26AS statement for determination of the true income of the assessee. The learned DR also fairly agreed on such contention. We find the plea of the assessee to be reasonable and fair. The issue is accordingly set aside and remitted back to the file of the AO for re-determining the income escaped assessment on this score, if any, after taking note of the revised figures embedded in the 26AS statement. The issue is accordingly restored to the file of the AO for its determination in accordance with law. Ground No.3 of the assessee's appeal is allowed for statistical purposes.
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2019 (5) TMI 174
TP Adjustment - MAM selection - benchmarking the sales to AEs. - Internal CUP method OR TNMM - HELD THAT:- Decision on the cross appeal for the assessment year 2007-08 [ 2019 (2) TMI 1613 - ITAT AHMEDABAD] will apply mutatis mutandis on this appeal as well. There are some variations in this year, such as the advance payment in this year is for 13.97 months on an average, as evident from the calculations and such as the fact that there have no sales of certain products to non AEs at all and yet internal CUP mechanism has been adopted. These variations will, however, not have any impact on the conclusions arrived at by us. We, therefore, see no reasons to take any other view of the matter for this assessment year. In any case, that approach is not even disputed by the parties before us. We, therefore, uphold the plea of the assessee and delete the impugned ALP adjustment which was made by adopting Internal CUP method and rejecting the TNMM adopted by the assessee for benchmarking the sales to AEs. Once we hold so, all other issues raised in the appeal are rendered infructuous calling for no adjudication by us.
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Customs
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2019 (5) TMI 245
Release of Consignments - BLACK MAPTE, Beans of the species Vigna mungo (L.) Hepper or Vigna radiata (L.) Wilczek Beans of the species Vigna mungo (L.) Hepper or vigna radiata (L.) Wilczek (Urad Dal / Moong Dal - issuance of Detention Certificate for waiver of Demurrage and Container Detention Charges in terms of Regulation 6(1)(1) of Handling of Cargo in Customs Areas Regulations 2008 - HELD THAT:- The petitioner will remit the entire duty component of the consignments imported by him in case were such duty is leviable as per paragraph 15(iii) above along with a bank guarantee for the 10% of the invoice value. In cases where the duty impact is neutral, the petitioner shall furnish a bank guarantee for the 10% of the invoice value. Upon satisfaction of the aforesaid conditions, the consignment shall be released forthwith. Waiver of Demurrage and Container Detention Charges - Held that:- In the light of Rule 6(l) of the Handling of Cargo in Customs Areas Regulations, 2009, which provides that the Customs Cargo Provider shall not, subject to any other law for the time being in force, charge any rent or demurrage on the goods seized or detained or confiscated by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be, there shall be a waiver of demurrage charges. petition disposed off
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2019 (5) TMI 244
Valuation of imported goods - pearls - rejection of declared value - case of Revenue is that it is a case of mis-declaration of the description of goods, therefore, valuation are required to be assessed by approved valuer of the goods - HELD THAT:- In this case, the appellant have failed to give complete description of the imported goods with regard to size, colour and shine etc. and, therefore, valuation are required to be reassessed as the value declared by the appellant are not acceptable in the absence of description of goods as there is discrepancy in details and prices of imported goods, therefore valuation is required to be done in this case. There are various complaints against Shri Apurva Jagdish Mehta (the approved valuer of the goods), therefore, his reports are not acceptable. As there is no valuation report by approved valuer, therefore, we appoint a panel to value the pearls who shall examine the remnant samples of the goods in question, and thereafter to determine appropriate value of the imported goods and the same shall be the basis of valuation of imported goods. The panel of these three people shall examine the goods and to arrive the correct approximate value of imported goods - Matter on remand.
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2019 (5) TMI 243
Condonation of delay of 250 days in filing appeal - non-compliance with the pre-deposit - HELD THAT:- In the present case though unreasonable delay has accrued in filing the appeals, the same is attributable to the incapacity of the appellant to make payment of pre-deposit. Not condoning the delay would further increase the plight to the appellants as they loss business and market reputation and there could be merit in their appeals that would ensure justice to them. The prejudice to the OP may be to the extent of financial loss which can well be mitigated by way of cost. The delay of 250 days in filing appeal before this Tribunal is condoned subject of payment of cost of ₹ 10,000/- each by each of the appellant - appeal admitted.
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2019 (5) TMI 242
Delay of 37 days in filing the ROM application - Limitation Act - HELD THAT:- Even though, the application for condonation of delay for filing the ROM is dismissed, we will also deal with the alleged error raised in the ROM application. We find that the appellant has furnished necessary documents including the Chartered Accountant's certificate before the Refund Sanctioning Authority. The documents bear the acknowledgement of the department. The alleged error raised in ROM application is factually wrong. The ROA application is dismissed as not maintainable.
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Insolvency & Bankruptcy
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2019 (5) TMI 236
Trade union to be considered as an operational creditor for the purpose of the Insolvency and Bankruptcy Code, 2016 - disputes involving a member or members thereof or for the prosecution of a legal proceeding to which the trade union is a party, and which is undertaken for the purpose of protecting the rights arising out of the relation of its members with their employer, which would include wages and other sums due from the employer to workmen - HELD THAT:- The context, in which the phrase established under a statute occurs, makes it clear that a trade union, like a company, trust, partnership, or limited liability partnership, when registered under the Trade Union Act, would be established under that Act in the sense of being governed by that Act. For this reason, the judgment in Canara Bank [ 2018 (7) TMI 664 - SUPREME COURT OF INDIA] would not apply to Section 3(23) of the Code. Instead of one consolidated petition by a trade union representing a number of workmen, filing individual petitions would be burdensome as each workman would thereafter have to pay insolvency resolution process costs, costs of the interim resolution professional, costs of appointing valuers, etc. under the provisions of the Code read with Regulations 31 and 33 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Looked at from any angle, there is no doubt that a registered trade union which is formed for the purpose of regulating the relations between workmen and their employer can maintain a petition as an operational creditor on behalf of its members Trade union represents its members who are workers, to whom dues may be owed by the employer, which are certainly debts owed for services rendered by each individual workman, who are collectively represented by the trade union. Equally, to state that for each workman there will be a separate cause of action, a separate claim, and a separate date of default would ignore the fact that a joint petition could be filed under Rule 6 read with Form 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, with authority from several workmen to one of them to file such petition on behalf of all. For all these reasons, we allow the appeal and set aside the judgment of the NCLAT. The matter is now remanded to the NCLAT who will decide the appeal on merits expeditiously as this matter has been pending for quite some time.
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Service Tax
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2019 (5) TMI 241
Time limit for filing of Stay application before Commissioner (Appeals) - Whether the Central Excise Act, 1944 or the Finance Act, 1994 prescribes any time limit for filing the Stay application before Commissioner (Appeals)? Whether the Tribunal was justified in dismissing the appeal solely on the ground that there was a delay in filing the stay application before Commissioner (Appeals) even when admittedly the stay application had been filed six months before the date of hearing, and waiver of pre-deposit was specifically pleaded at the time of hearing before Commissioner (Appeals)? HELD THAT:- Whenever the Parliament desired to make a precondition that the amount of duty and/or penalty should be deposited before the Appeal is filed, it is so provided in the legislation. Thus, in terms of Section 35F of the Act, so long as the appeal is not disposed of/ dismissed by the Appellate Authority, it is open to the party to file an application for dispensing with pre-deposit of duty and penalty pending the disposal of the appeal. Once such an application is filed pending the appeal then in terms of the second proviso to Section 35F of the Act, it has to be disposed of by the Appellate Authority whenever possible within 30 days of filing of such an application - There is no period of limitation provided in Section 35F of the Act to file an application for dispensing with pre-deposit of duty and penalty. Therefore, it is not open to read a provision of limitation where it is not found in the section. Undoubtedly, the right of an appeal can be conditional. However, the conditions for the appeal being entertained are to be imposed by legislation and not by executive fiat / action. The order of the Commissioner (Appeals) dated 10th December, 2015 and the impugned order of the Tribunal dismissing the appeal itself on the ground that the stay application has been filed belatedly in a pending appeal, is not sustainable. In the present facts, the application for dispensing with the requirement of pre-deposit under Section 35F of the Act was on record before Commissioner of Central Excise (Appeals) when he passed an order, dismissing the appeal. The issues decided in favour of the Appellant-Assessee and against the Respondent Revenue - matter is remanded to the Commissioner (Appeals) for fresh consideration.
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2019 (5) TMI 240
Nature of transaction - deemed sale or service - appellant has recovered rent charges towards rents of gas cylinders obtained by them from the appellant for the period from 2009-10 to 2012-13 - whether falls under the the Supply of Tangible Goods Service for use without transfer of right of possession/control? - HELD THAT:- For the supply of tangible goods is for use by other person but without transferring right of possession and effective control, then only such supply shall classify under the taxable services of supply of tangible goods\service. After giving the cylinders on lease during the entire period of MOU, the effective right of possession, the effective control is with the lessee and not with the appellant. As per the definition of supply of tangible goods , the supply will fall under the taxable services only when right to possession and effective control is not transferred. Therefore, supply of tangible goods on lease basis with transfer of right to possession and effective control will go out of ambit of taxable services. Moreover this transaction is undisputedly liable to VAT as the appellant are paying the VAT as per the provision of the State Government VAT Act. Thus, the services would not fall under the category of tangible goods for use - appeal allowed - decided in favor of appellant.
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2019 (5) TMI 239
Rectification of Mistake - apparent error on the face of record or not - HELD THAT:- There indeed is an inadvertent apparent error, which is rectified - ROM Application allowed.
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2019 (5) TMI 238
Levy of service tax - testing of LPG cylinders - HELD THAT:- The assessee itself had accepted its activities of providing repair and maintenance of cylinders and we do not see anywhere either in the assessee s reply or elsewhere, as to the appellant claiming to have under taken the above services free of cost - demand upheld. Penalties u/s 76 and 78 of FA - HELD THAT:- Section 76 and 78 are mutually exclusive and hence there cannot be any penalty under both sections - the discretion under Section 80 of the Act could be exercised to set aside the penalties under Section 76 and 78 ibid. But in any case, it is the settled position that penalties under both Sections 76 and 78 are not exigible and therefore, levy of penalty in this case under both Sections 76 78 is clearly without any authority of law. The penalty u/s 77 is upheld. Appeal allowed in part.
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2019 (5) TMI 237
CENVAT Credit - input services - insurance policy called Nagrik Suraksha Policy - period 10/2014 to 03/2016 and 04/2016 to 06/2017 - HELD THAT:- From 1.4.2011, the definition of input service was amended to exclude certain services which also includes life insurance and health insurance services which are used primarily for personal use or consumption of an employee by exclusion Clause (c). The Commissioner (A) has relied upon the decision of the Tribunal in the case of APPLIED MICRO CIRCUITS INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-III [ 2016 (2) TMI 336 - CESTAT MUMBAI] and has held that after amendment of Rule 2(l) and in view of the specific exclusion with respect to life insurance service and outdoor catering, credit is not available. The period involved in the present case pertains to October 2014 to June 2017 when these services were specifically excluded from the definition of input service - credit cannot be allowed - appeal dismissed - decided against appellant.
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2019 (5) TMI 235
Short payment of duty - period from 01.07.2003 to 31.03.2006 - Cargo Handling service or not - HELD THAT:- In the present case, the appellants have provided manual labour for loading of urea and charcoal and thereafter for unloading the collection of loose urea for the internal shifting in the premises of M/s. DCM Shriram Consolidated Ltd. The entire shifting is otherwise done from the conveyer belt of the factory and the goods are actually used for being transported within the factory. It becomes clear that merely a fact of urea being loaded, the entire said activity does not qualify the aforesaid definition. Commercial and Industrial Construction Services - Benefit of N/N. 15/2004 dated 10.09.2004 - inclusion of value of free supply of material by the service recipient - HELD THAT:- There is no error in the order vide which the tax liability for commercial and industrial construction services for ₹ 13,54,295/- has been confirmed. Maintenance and repair services - HELD THAT:- It is an undisputed fact that appellants are discharging their liability qua the services post 16.06.2005. The Adjudicating authority has failed to consider the said aspect. Hence, the confirmation of demand for painting work of ₹ 33,660/- is liable to be set aside - the differential demand in respect of maintenance of railway track is hereby set aside. Canal closure - HELD THAT:- The adjudicating authority has failed to consider that this activity was not for commercial purposes despite acknowledging that the canal site was owned by the Government of Rajasthan. The order confirming the demand of ₹ 34,379/- is, therefore, liable to be set aside. Excavation services - HELD THAT:- The appellants have relied upon the certificate given by Ghiya services, the sister concern of the appellant declaring that they have duly paid service tax on the taxing higher income received from DCM Shriram Consolidated Ltd. to whom the taxis taken on rent from Khandelwal Construction Co. during the year 2004-05 and 2005-06 were supplied also that no service tax credit has been taken by them. The document is very much on record. But the adjudicating authority has failed to consider the same - Once the service tax liability stands already discharged, any confirmation of the demand for the same amount and the same period shall amount to double taxation, which is not permissible under statute - demand set aside. Time Limitation - HELD THAT:- The appellant was under the bonafide belief otherwise also there is no evidence of the Department to prove any positive act on part of the appellant, which may amount to suppression or mis-representation of the facts that too, with an intent to evade payment of tax - the SCN dated 22.10.2008 proposing the demand for the period 01.07.2003 to 31.03.2006 has gone beyond the normal period of one year without the entitlement of the Department to invoke the extended period. Hence, the show cause notice as such, is held to be barred by time. Appeal allowed - decided in favor of appellant.
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2019 (5) TMI 234
Reverse charge mechanism - Management, Maintenance and Repair Services received by the appellant from service providers situated outside India - demand of service tax - HELD THAT:- The definition of Management, Maintenance and Repair Services was amended by adding an Explanation only with effect from 01.06.2007. The Explanation stated that goods includes computer software. The Department has relied upon the Circular dated 07.10.2005 to hold that the maintenance or repair of computer software is leviable to service tax with effect from 09.07.2004 itself. This is because it is argued by them that there was an exemption granted in the case of computer software under Notification No. 20/2003-ST and the said Notification was rescinded with effect from 09.07.2004 - the demand of service tax under Management, Maintenance or Repair Services cannot sustain and requires to be set aside. Classification of services - Business Support Services or telecommunication services - period 2007-09 - HELD THAT:- Telecommunication Services have been brought into the service tax net with effect from 01.06.2007, which includes the activity of international access and use of inbound/outbound roaming facility. When a subscriber of the appellant travels outside India, he will be able to use the mobile network of the Foreign Telecom Operator as per the agreement entered between the appellant and the Foreign Telecom Operator - When the said services fall under the category of Telecommunication Services , the very same activity cannot be subjected to levy of service tax by treating them as Business Support Services . The said service does not in any way fall under the category of Business Support Services, especially when the activity is covered under the definition of Telecommunication Services - Demand set aside. Penalties - service tax with interest paid before issuance of SCN - HELD THAT:- The appellants have paid service tax along with interest much before the issuance of the Show Cause Notice. The Hon ble High Court of Karnataka in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD [ 2011 (9) TMI 114 - KARNATAKA HIGH COURT] has held that when the service tax along with interest is paid before the issuance of Show Cause Notice, the penalties cannot sustain - Penalty do not sustain, while demand of service tax sustain. Appeal allowed in part,
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2019 (5) TMI 233
Quantum of Penalty u/s 78 of FA - failure to discharge service tax properly - whether the Commissioner (Appeals) have rightly refuse to set aside the penalty under Section 78 of the Finance Act, although he has allowed reduction of the penalty amount by 50% in terms of proviso to Section 78? - HELD THAT:- There is admitted failure on the part of the appellant in paying the taxes properly. Further, appellant also failed to pay service tax with interest prior to issue of show cause notice. However, subsequent to passing of the order-in-original on 27.09.2017 appellant have deposited the adjudicated dues by several challans being challan Nos. 01210 to 01217, 01221, 01223, 01295 to 01298, 01290, 01291, 01293, 01280, 01281, 01286, 01323 to 01326 all dated 28.09.2017. The appellant is entitled to benefit of 25% penalty, under the overall facts and circumstances and also the fact that the appellant have admitted tax liability at the time of personal hearing before the adjudicating authority. This appeal is allowed in part and penalty under Section 78 is reduced to 25% of the adjudicated tax dues.
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2019 (5) TMI 232
Business Auxiliary Services - Service tax collected but not paid - Section 73(1) of the Finance Act, 1994 - HELD THAT:- Admission of appellant, in the appeal memo and addendum to it, indicates that appellant had taken Service Tax registration and signed commission documents issued by M/s TTML in which service tax component has been specifically segregated. It further admitted in page 7(2) of the appeal memo that appellant had not respondent to the letters of the respondent and kept mum that resulted in confirmation of the duty demand. In respect of reference to non-existence of Section 73(1A) as referred in the corrigendum notice, it cannot be said that the ingredient of allegations made in the show-cause notice has not made out a case under Section 73(1). It is a settled principle of law that wrong mentioning of appropriate charging sections or provisions will not vitiate the proceedings, if ingredients of the provision is well made out in the charge. However, having record to the fact that Commissioner had not dealt with the penalty aspect as well as extended period, and department has not appealed against it, finding on penalty is not given here, though a clear case of extended period is well made out, in view of the suppression by the appellant in collecting the Service Tax from the service receiver and not crediting the same to the Government treasury. Appellant is liable to pay Service Tax of ₹ 92,118/- collected by it from M/s TTML towards services provided under Business Auxiliary Services along within applicable interest within a period of three months from the date of receipt of this order - appeal dismissed - decided against appellant.
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2019 (5) TMI 231
SSI Exemption - branded service - service of multi level marketing business - Benefit of N/N. 06/2005-ST dated 01/03/2005 - HELD THAT:- The issue at hand is squarely covered by the decision of Charanjeet Singh Khanduja [ 2015 (6) TMI 585 - CESTAT NEW DELHI ] wherein it has been held that the benefit of Notification under 05/2006-ST would be admissible to the distributor engaged in promoting/ marketing of the product of Amway as they are not marketing or promoting any taxable service under a brand name. The appellant is entitled for the benefit of Notification No. 5/2006-ST as the exemption Notification is available to the noticee. The tax dues declared by the appellant under VCES is appropriate - Appeal allowed - decided in favor of appellant.
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2019 (5) TMI 230
Educational institutions or not - Business support services or not - Taxability - services rendered by appellants to the educational trusts - whether the Trusts Sri Chaitanya Education Trust, Nexgen Education Trust and SKCMET are educational institutions or otherwise and whether services rendered to them will be services rendered to educational institution or otherwise? - Difference of opinion. HELD THAT:- There is difference of opinion - Registry is directed to place the file before Hon ble President to refer the matter to a third member to settle the difference of opinion: Whether prior to 01.7.2012 the services rendered by appellants is taxable under Business Support Services as held by Hon ble Member (Technical) or not taxable as held by Hon ble Member (Judicial).
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2019 (5) TMI 228
Validity of SCN - It was alleged that the department did not classify the services provided by the appellant but proceeded to demand service tax on all receipts from NLC without mentioning under which category the service tax is due from the appellant - HELD THAT:- There is no infirmity in that part of the order of the Commissioner (Appeals) holding that the SCN per se is not maintainable. The lower appellate authority has analysed the issue in a proper manner and has arrived at the conclusions - appeal of Revenue dismissed. Validity of cross-objections filed by the respondents - HELD THAT:- When the SCN itself has been held as non-maintainable, there cannot be any justification to uphold part of the demand, only on the ground that it has been paid up by the assessee. Such a decision cannot have any legal sanctity and is not supported by law. This being so, the remnant demand of ₹ 4,29,107/- upheld by the Commissioner (Appeals) will also not sustain and set aside. The cross objection succeeds to that extent. Appeal disposed off.
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2019 (5) TMI 227
Classification of services - works contract service or Construction Services? - Department was of the view that these services would fall under CICS for the period from 16.06.2005 onwards - HELD THAT:- The LAA has found that in some cases both labour and materials have been supplied. However, in some cases, other contract services, for example, those rendered to M/s. Rane Brake Linings Ltd., M/s. Rane (TRW) Steering Systems and M/s. Rane Engine Valve Ltd., the Commissioner (Appeals) has found that the appellants concerned have not supplied sufficient evidence in support of their claim that contracts were in fact composite in nature. At the same time, the learned advocate has drawn our attention to the written submissions made by them before Commissioner (Appeals). She pointed out certain purchase orders in which it is shown that materials were supplied. But authorities below have considered this as service simplicitor. Thus, there is some confusion on facts which could be best resolved by remanding the matter to the adjudicating authority for purpose of ascertaining whether all the contracts involved in the appeal are in fact composite involving both labour and material or otherwise - appeal allowed by way of remand.
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2019 (5) TMI 226
Nature of activity - service or manufacture - Business Auxiliary services - job work activity done by the appellant who returned the goods to the 100% EOU - demand of service tax - HELD THAT:- The issue whether the appellant is liable to pay service tax under the category of BAS for the job work activity done for 100% EOU has been analyzed by the Tribunal in the case of M/S. INTERPLEX ELECTRONICS INDIA PVT. LTD. VERSUS THE COMMISSIONER OF SERVICE TAX, BANGALORE [ 2013 (5) TMI 451 - CESTAT BANGALORE] where it was held that the process undertaken by the appellant amounts to manufacture and therefore they are not liable to pay service tax. Demand cannot sustain - appeal allowed - decided in favor of appellant.
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2019 (5) TMI 225
Erection, commissioning and installation services - Non-payment of service tax - period Oct 2004 to April 2008 and from January 2009 to March 2009 - HELD THAT:- On both the claims relating to services rendered to SEZ as well as claim of abatement, the adjudicating authority has held that no documentary evidence have been produced by the assessee in support of the said contentions. The matter is remanded to the adjudicating authority for the limited purpose of considering these contentions of the appellants and once again determining the net tax liability that would be required to be paid up by the appellant in such de novo proceedings. Time limitation - HELD THAT:- The SCN has been issued on 20.04.2010 quite proximate to the conduct of audit. It is only due to audit, that the apparent non-payment of the disputed tax liability has surfaced - the invocation of extended period for limitation is fully justified in the matter. Penalty - HELD THAT:- It is well settled law that penalty cannot be imposed under both these sections. The penalty under Section 76 ibid is set aside - the penalty under Section 78 ibid will be commensurate with the final tax liability that may be arrived at by the adjudicating authority in the de novo proceedings ordered. However, the benefit of option of paying 25% of the penalty as per the provisions in force at the relevant time should be extended to the appellants. Penalty u/s 77 upheld. Appeal allowed in part and part matter on remand.
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2019 (5) TMI 224
Recovery proceedings against dead person s legal heirs - Section 11 of CEA, 1944 - HELD THAT:- The provisions of Section 11 of Central Excise Act, 1994 and provisions of Section 87 of Finance Act, 1994 are pari meteria - the ruling of Hon ble Supreme Court in the case of Shabina Abraham is squarely applicable in the present case, where it was held that in the absence of machinery provisions for proceeding against dead person s legal heirs, duty and other sums do not become payable to apply recovery provisions under Section 11 of Central Excise Act, 1944. The demand confirmed cannot be recovered from the legal heirs of Shri Kailash Nath Singh - Appeal allowed - decided in favor of appellant.
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Central Excise
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2019 (5) TMI 222
Provisional assessment - Adjustment of excess paid duty with the short paid duty - Rule 8 of Central Excise Rules, 2002 - Rule 7 of Central Excise Rules, 2002 - principle of unjust-enrichment - period in question from 2007-2008 to 2013-2014 - HELD THAT:- The principle of Provisional Assessment as contained in Rule 7 of the Rules 2002 are being ushered in to find fault with the methodology the assessee had adopted for adjustment of excess payment of duty with the duty short paid in some months within same year, which in the present case, will not be attracted because the assessment has been final. The decisions relied by the appellant in MAHINDRA UGINE STEEL CO. LTD., VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE [ 2011 (2) TMI 599 - CESTAT, MUMBAI] are of no assistance, because in these cases there was no evidence on record that the incidence of duty is not passed. In the present case it is an inter unit transfer of SSFA Noodles. Appeal dismissed - decided against appellant.
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2019 (5) TMI 221
Clandestine removal - Sitar and Sikandar Brand gutkha - change in the name of consignors - grounds for challenge taken by the appellants are that there is only a slight change in the name of different consignors mentioned in the LRs brought on record, but their addresses are same, therefore, they are same business entities - HELD THAT:- All the companies mentioned in the recovered Lorry Receipts are different entities, therefore, the respondents cannot be held liable for any Lorry Receipts, which is not related to it - While deciding the dispute between the parties, learned CESTAT has not opined or held that the Lorry Receipts recovered during the search are not admissible, therefore, the argument advanced by the learned counsel for the appellant that the order of learned CESTAT is incorrect or illegal is not tenable. When all the business entities are independent business entities, then there is nothing wrong in holding that a business entity cannot be held responsible for any Lorry Receipts, which is not related to it. The dispute between the parties as well as order of the learned Tribunal is purely based upon appreciation of facts and keeping in view the nature of dispute, no question of law arises. Appeal dismissed - decided against Revenue.
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2019 (5) TMI 220
Clandestine removal - retraction of statements - burden of proof - cross-examination of persons denied - it was also alleged that Tribunal did not consider the movement of the goods, passing of consideration, which are contemporaneous records maintained and filed by the appellant by following mercantile system of accounting - HELD THAT:- It has to be pointed out that the appellant assessee, vide statement dated 14.9.2012, admitted the guilt. In fact, the CENVAT credit, which was availed, was reversed voluntarily. After about three years, the appellant assessee retracted the statement on 19.2.2015. In the interregnum, the appellant assessee did not raise any plea with regard to the allegation of coercion and duress while recording the statement dated 14.9.2012. Therefore, the Adjudicating Authority, the Appellate Authority and the Tribunal were right in rejecting the retracted statement dated 19.2.2015. The Tribunal considered the contentions raised by the appellant assessee and assigned reasons as to why the contentions advanced by the assessee do not merit consideration. Thus, the Tribunal passed a speaking order and by way of this appeal filed by the assessee under Section 35G of the Central Excise Act, 1944, we cannot be called upon to reappreciate the evidence, which was considered and appreciated by the Adjudicating Authority, the First Appellate Authority and the Tribunal. No substantial question of law arises for consideration in this appeal - appeal dismissed.
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2019 (5) TMI 219
Settlement Application - exemption for the Polyvastra for the period from 1996 to 2002 as per the KVIC Certificate issued to M/S.Majestic Dyers and Printers which is the branch of the Petitioner - Notification No.8/96 - HELD THAT:- It is evident that the Petitioner approached the Settlement Commission in respect of the demand made under the four show cause notices referred to supra for an aggregate sum of ₹ 7,00,42,408/-. It is also evident from paragraph 27 of the Impugned Order that the Settlement Commission has fixed the total liability of the applicant/petitioner herein at ₹ 4,64,72,058/- after accepting the contentions of the Petitioner herein with regard to certain heads of demand for excise duty by the Respondents - it is clear that the Petitioner has derived substantial benefit by approaching the Settlement Commission. In the present Writ Petition, the Petitioner seeks to quash the Impugned Order of the Settlement Commission in so far as it denies exemption to the Petitioner from payment of excise duty for processing of Polyvastra for the period extending from the years 1996 to 2002. In effect, the prayer in the Writ Petition is confined to a portion of the order of the Settlement Commission whereby the demand of excise duty in respect of the processing of Polyvastra was held to be valid by the Settlement Commission. The Petitioner cannot be permitted to approbate and reprobate - petition dismissed.
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2019 (5) TMI 218
Clandestine removal - steel ingots - allegations based on statements recorded - corroborative evidences present or not - opportunity to cross-examine the persons whose statements were recorded - HELD THAT:- It is undoubtedly the settled position of law that no uncorroborated statement of a person could be used against any other person and that such other person has every right to cross-examine the person whose statement is being used against him - Here in the case on hand, there is something more than just statements, there are clearly double invoices maintained by the assessee-respondent, carrying the same number but different dates and different values, but accounting only one of the two, which fact was found during the search operation and also resulted in seizure of invoices; that the above discrepancy did result in causing the difference between the physical production quantity vis- -vis the stock register RG-1 which fact also was un-earthed during search and brought on record. Therefore, even if the statement of some of the employees, Managing Director and drivers are to be discarded, still the factual position as to the assessee maintaining duplicate/double invoices of the same number, etc., found and seized, remains un-shaken/unrebutted. The clandestine removal will have to sustain only in respect of duplicate invoices maintained by the assessee and brought on record by the Revenue and the demand, if any, based on the above will have to be re-worked, for which limited reason, the matter is remanded to the file of the adjudicating authority. Appeal allowed in part and part matter on remand.
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2019 (5) TMI 217
Violation of condition of Notification - N/N. 93/2004-Cus dt. 10/09/2004 - it was noticed by the Department that the appellants have cleared the goods for export as per Customs Notification No.93/2004-Cus dt. 10/09/2004 which is issued for exports affected under Advance License under DEEC Scheme - HELD THAT:- The appellant had been issued Advance Authorisation by DGFT for dutyfree import of item viz. Monosodium Glutamate Fine Crystals in terms of Notification No.93/2004-Cus. dt. 10/09/2004. Further the appellant also procured other raw materials from domestic manufacturers without payment of duty as per Notification No.43/2001-CE dt. 26/06/2011 issued under Rule 19(2) of the Central Excise Rules, 2002. Further, there is no dispute that the appellants have manufactured and exported the final product i.e. seasonign powder by using the various raw materials which were imported as well as procured from DTA. Further it is found that there is no violation of the Notification No.43/2001 by the appellant as the appellant has fulfilled all the conditions of the said Notification. In the present cases, the Excise authorities have initiated action for violation of Notification No.43/2001-CE dt. 26/06/2001 which is not sustainable in law. The demand of duty by the Central Excise authorities for violation of Notification No.93/2004 dt. 10/09/2004 is not sustainable in law - appeal allowed - decided in favor of appellant.
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2019 (5) TMI 216
Classification of goods - DSN Capsule - Beneficiale Liquid - whether classified under Chapter 3004 and 2106? - SSI Exemption - clearance of goods from the notified area in the state of Uttarakhand - benefit of N/N. 49/2003-CE dated 10.6.2003 - HELD THAT:- The department has drawn the sample and sent for the test to the CRCL, which is authorised Government body, for test of the product, in question. In this case the appellant have not contested the report by the CRCL. There is a system of retest in the CRCL on being aggrieved by the test report which has not been followed by the appellant. On other hand, the appellant argues that the test report is not conclusive criteria for classification of the goods under the Central Excise Tariff heading. This appears to be not correct proposition. Moreover, the appellant themselves has applied for Drug Licence and which was granted to them on 4.12.2007 to manufacture these products. However, this grant of drug licence is for the subsequent period and hence not having any bearings on the current proceedings. Impugned order upheld - appeal dismissed - decided against appellant.
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2019 (5) TMI 215
CENVAT credit - input services - Security service provided in their Managing Director s residence - HELD THAT:- The stand of the appellant that there is a camp office at the residence of the Managing Director for which security service is provided and it is in relation to the manufacture and the cost of the security service is also included in the CAS-4 for the purpose of payment of excise duty is legally tenable - The findings of the Commissioner (A) that the appellant have not produced any evidence to show that there is a camp office; to counter this ground, the learned counsel for the appellant submitted that it is well known fact that the Managing Directors have camp offices in their residences and there is no need to produce evidence to that effect. The security services provided at the residence of the Managing Director fall in the definition of input service as it is in relation to manufacturing and therefore, the denial of CENVAT credit is not legally sustainable in law - appeal allowed - decided in favor of appellant.
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2019 (5) TMI 214
Manufacturing taking place or not? - appellant was buying Galvanized Iron Strips falling under Chapter No. 7210 49 00 which they were converting through a two stage process into corrugated ducts or hollow pipes classifiable under Chapter heading 7306 - HELD THAT:- Clearly, the inputs were GI Strips while the final products were GI Ducts of non-circular cross section. Thus, they fall under different Tariff headings, the final products being under 7306 69 00. It is also evident that a distinct marketable commodity as known in the market and as is sold in the market under a different name comes into existence. It is immaterial for levy of excise duty that the appellant themselves were not marketing these products. Whether the goods get exempted by virtue of the fact that they were manufacturing these products at site? - HELD THAT:- The SCN was restricted only to the extent where goods were manufactured by them in their factory and transported under the cover of delivery challans. Therefore, the question of any onsite manufacture in the demand raised does not arise. Whether the goods in question need to be welded for them to fall under 7306 69 00? - HELD THAT:- A plain reading of the Tariff heading does not say so. It is true that there are other Tariff headings such as 7306 40 00 and 7306 50 00 which covered only welded products. However, the main four digit heading 7306 includes nonwelded products or open seam products. Therefore, the product in question gets squarely covered by 7306 69 00. Whether this heading existed during the entire period of limitation? - HELD THAT:- During the period 2006-07, Chapter heading 7306 69 00 did not exist at all but it was introduced subsequently. Since the demand is under this heading, the demand to the extent it pertains to prior to 2007-08 has to fail. The amount has to be accordingly re-quantified. Whether the prayer portion of the appeal by the department before the first appellate authority being incomplete adversely affects the demand? - HELD THAT:- although the prayer part of the appeal by the department does not cover the issue of manufacture of excisability, these issues were clearly covered in Para 12 of their appeal before the first appellate authority. Therefore, we find no force in this argument by the appellant. CENVAT Credit - HELD THAT:- It is beyond the scope of show cause notice and if the appellant is entitled to the benefit of Cenvat Credit, they may take so after following due process as applicable during the relevant period. Time Limitation - HELD THAT:- There is nothing on record to show that the appellant had declared their activity before the Central Excise department or taken registration or filed returns or has disclosed their activities in any other manner before the authorities. Therefore, suppression of facts is evident in this case. Sec.11A of the Central Excise Act provides for invocation of extended period where duty has not been paid or has been short paid or has not been levied or short levied by reason of (a) fraud or (b) collusion or (c) any wilful misstatement or (d) suppression or facts or (e) contravention of any provisions of this Act or of the Rules made there under with an intent to evade the payment of duty. The suppression of facts is evident in this case and therefore, extended period of limitation can be invoked. The entire demand needs to be re-quantified since the demand for the period 2006-07 is not sustainable. Therefore, the demand, interest and consequently penalty for the period 2006-07 need to be set aside - Appeal allowed by way of remand.
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2019 (5) TMI 213
CENVAT credit - duty paying documents - credit availed based on invoices raised and issued by second stage dealers - it appeared that appellant had received only non-duty paid M.S. Scrap without any valid cenvat documents for the same from the Central Excise registered dealers and fraudulently taken ineligible Cenvat credit - HELD THAT:- The entire allegations are supported only by the statement of Shri G.Baskaran, Proprietor of Amman Steels. The examination of Shri G. Baskaran was requested for by the appellants vide their letter dt. 05.01.2011. However, from the facts on record (para16) of the OIO dt. 30.03.2011, it emerges that Shri Baskaran vide a letter dt. 16.03.2011 conveyed his disinclination to appear for a cross examination on the grounds that they had already filed their reply to the SCN and that they were also a co-noticee in the SCN. The reply alluded to by Shri Baskaran is the letter dt.16.08.2010, reference to which is found in para-13 of the OIO. In the said reply, the allegations made in the SCN have been denied and it has been contended that the depositions made were not corroborated with any tangible or material evidence; that they received payments from the appellant for the supplies and it could not be alleged that they had issued only their invoices. Even the slender thread of supporting evidence namely the statement of Shri G. Baskaran, Proprietor of Amman Steels, also stands neutralized. This being so, any allegation based on that sole statement will surely lose their bite. When the investigations have found discrepancies in only 10% of the invoices examined for a disputed period of 17 months between June 2005 and November 2006, that too on the basis of a sole statement which also has been subsequently denied by the person concerned, and in the absence of any samples of inputs drawn for corroboration, the allegation that appellants had received only locally procured scrap instead of CR, HR, CR sheets etc. in the input invoice, will not have any legs to stand upon. The allegations made out against the appellants have not been convincingly proved - appeal allowed - decided in favor of appellant.
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2019 (5) TMI 212
Method of Valuation - goods cleared to the sister concerns and also for self-use within the factory of the appellant, which have been utilized in the expansion (civil works) projects - Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000 - HELD THAT:- To fit into the ambit of Rule 8, excisable goods are not sold by the assessee, but are used for consumption by him (viz., captive consumption) or on his behalf in the production or manufacture of other articles. However, what is forthcoming from the facts is that the impugned goods which have been cleared for captive use or stock transferred to other units were not used for consumption by or on behalf of the appellant. The impugned goods were used for construction activities in the expansion projects of the appellant and/or sister units concerned. From the facts on record, it is also evident that the appellants had cleared CTD bars/rods to their group concerns situated at Vijayanagar, Tarapur and Vasind for utilization in various expansion projects of those entities. The appellant cannot come under the fold of self consumption as claimed by the appellants, to justify resorting to valuation at 110% of the cost of production as envisaged under Rule 8 of the Central Excise Valuation Rules, 2000 - There is no doubt that some of the clearances made under the claim of self consumption were also for captive consumption. However, even in these cases, the impugned goods were only used for Expansion (Civil Works) Projects. Just because the goods have been captively consumed for use within the same factory, it cannot automatically fall within the four walls of Rule 8 ibid. To do so, the excisable goods should be used for consumption in the production or manufacture of other articles. The assessable value to be adopted in the case of the impugned goods cleared to sister concerns and also for self-use within the factory, which have only been utilized in expansion projects (civil or construction works), is required to be done as envisaged under Rule 4 of the Central Excise Valuation Rules, 2000 read with Rule 11 ibid. Time Limitation - HELD THAT:- The allegations of suppression, mis-statement, etc., cannot be made on the appellants and in consequence, extended period of limitation cannot be invoked based on such allegations - the SCN dated 19.08.2010 is hit for the most part by limitation and that the demand can only survive for the normal period from the date of issuance of the Show Cause Notice. Penalties - HELD THAT:- As the necessary ingredients for the imposition of penalties are absent and especially since there is absence of suppression, mis-statement, etc., equal penalty imposed under Section 11AC of the Central Excise Act, 1944 as also the penalty imposed under Rule 25 of the Central Excise Rules, 2002, cannot be sustained and will require to be set aside. Appeal allowed in part.
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2019 (5) TMI 211
Refund of accumulated CENVAT credit - time limitation - relevant dates for considering the time limitation - Section 11B of the Central Excise Act - HELD THAT:- This issue is no more res integra and has been settled by various decision of the Tribunal and the High Court that the date of submission of the original claim should be considered for the purpose of reckoning the limitation and not the date of submission of rectified claim. This Tribunal in the case of M/S. KUMARASWAMY MINERAL EXPORTS VERSUS C.C.,C.E. S. T-BELGAUM [ 2019 (2) TMI 1378 - CESTAT BANGALORE] has held that the date of filing the refund claim in case where the original refund claim under Rule 5 filed is returned pointing deficiencies and the refund is refilled will be the date of filing the original claim. Thus, the date of filing the original claim should be considered for the purpose of reckoning the limitation - the refund claim filed by the appellant is within the period of limitation. The appeal is accordingly allowed with consequential relief of interest on delayed refund.
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2019 (5) TMI 210
Valuation - deduction of VAT from transaction value - inclusion of subsidy amount in the assessable value - Section 4(3) (d) of Central Excise Act - HELD THAT:- Identical issue decided in the case of KHANNA POLYWARE (P) LTD. VERSUS CCE, JABALPUR [ 2018 (3) TMI 177 - CESTAT NEW DELHI ], where it was held that There is no justification for inclusion in the assessable value, the VAT amounts paid by the assessee using VAT 37B Challans. Appeal dismissed - decided against Revenue.
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2019 (5) TMI 209
Supply of pipes to various projects processing and supplying water to various bleaching and dyeing units - benefit of N/N. 03/2004-CE, dated 08.01.2004 - Difference in quantities in two sets of certificates - HELD THAT:- There is nothing in the notification which require nexus between the new certificate with the cancelled certificates. We also find that Ld. Counsel for the respondent has explained satisfactorily the reasons for the difference in quantities between the two sets of certificates. After examining the matter and the notification No. 03/2004-CE, dated 08.01.2004, we find that notification exempted pipes needed for delivery of water from its source to the plant and from there to the storage facility. In this case the pipes were being supplied for transporting effluent to treatment plants and treated water from the plant to the industrial units. The Revenue wants to deny exemption to the pipes which were used for transmission of water from the treatment plant to the industrial units. This denial is clearly not covered by the notification which exempts both pipes needed for delivery of water from its source to the plant as well as from there to the storage facility. The Revenue has not made out a case that storage facility is located in the plant only and not in the units which received the water. Adjustment of ₹ 68,72,164/- towards liability of the manufacturer under Rule 6 of CCR 2004 - HELD THAT:- The Assistant Commissioner s attempt to pin the alleged liability of the manufacturer under CCR 2004 on the respondent, who is claiming refund is preposterous. It is not clear under what authority of law he sought to recover the CENVAT credit due from the manufacturer, from the buyer. We also find that this was beyond the scope of the show cause notice and is completely untenable. Appeal dismissed - decided against Revenue.
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2019 (5) TMI 208
Interest on delayed refunds - relevant date for calculation of interest - Section 11BB in the Central Excise Act, 1944 - HELD THAT:- A plain reading of the section shows that date for reckoning the interest is the date of application in case of applications filed post Finance Act, 1995 and three months from the date of presidential assent to this Act for refund applications filed prior to Finance Act, 1995 - In this case, the application was filed in 1992 and therefore with effect from 25.08.1995 interest has to be paid. The appellant shall be paid interest from 25.08.1995 upto the date on which he has been paid the refund - appeal allowed - decided in favor of appellant.
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2019 (5) TMI 207
CENVAT Credit - appellants cleared their finished goods mainly, cement to SEZ developers without payment of excise duty claiming exemption under Notification No.42/2001-CE (NT), dated 26.06.2001 - applicability of Rule 6(6) of Cenvat Credit Rules, 2004 - HELD THAT:- The issue decided in the case of THE COMMISSIONER OF CENTRAL EXCISE CHENNAI II COMMISSIONERATE VERSUS M/S. S.P. FABRICATORS PVT LTD., THE CUSTOMS EXCISE AND SERVICE TAX APPELLATE TRIBUNAL [ 2018 (10) TMI 1474 - MADRAS HIGH COURT] , where it was held that after enactment of Special Economic Zones Act, 2005 w.e.f. 10-2-2006, supplies to SEZ from DTA are treated as export of dutiable goods and entitled to benefits as such including that of exception in Rule 6 (6) of CENVAT Credit Rules, 2004, of not requiring separate accounts of dutiable and non-dutiable inputs/services to be maintained. Appeal dismissed - decided against Revenue.
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2019 (5) TMI 206
Rectification of Mistake - error apparent on the face of record - HELD THAT:- There are any errors apparent on the face of record. The errors which require long drawn process of argument and considerable time to bring out the nature of the error cannot be said to be error apparent on the face of record. In the circumstances, it can be interpreted that the Apex Court has not deviated from its earlier ratio laid down in GENERAL ENGINEERING WORKS VERSUS COMMR. OF C. EX., JAIPUR [ 2005 (3) TMI 16 - SUPREME COURT OF INDIA] since the decision in COMMISSIONER VERSUS MAHENDRA UGINE STEEL CO. LTD. [ 2006 (1) TMI 638 - SUPREME COURT] , the Apex Court has only remanded the matter for reconsideration by the Tribunal. The contention of the appellant that decision in M/s. M/s. Mahendra Ugine Steel Co. Ltd., has to be applied would be redo or review of the order, which the law does not allow. There is no error on the face of record, which requires rectification - ROM application is dismissed.
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2019 (5) TMI 205
Benefit of N/N. 64/1995-CE dt. 16/03/1995 - Supply of goods for use in construction of war ships in Indian Navy - denial of exemption on the ground that they have not supplied the goods to Indian Navy thereby not complied with the provisions of Notification No.64/1995 - HELD THAT:- The said notification was amended vide Notification No.24/2002-CE dt. 11/04/2002 and a new Sl.No.21 was introduced wherein it is clearly mentioned that the exemption is applicable to all goods supplied for use in construction of warships of the Indian Navy. Further the only condition stipulated was that before clearance of the said goods, a certificate from an officer not below the rank of a Rear Admiral of the Indian Navy or of any other officer of the Indian Navy equivalent to the Joint Secretary to the Government of India, to the effect that the said goods are intended for the said use, is produced to the proper officer. This condition has been fulfilled by the assessee by producing the certificate from the competent authority to the Department vide their letter dt. 04/11/2010. Division Bench of this Tribunal in identical facts in the case of GE INDIA INDUSTRIAL LTD. VERSUS COMMR. OF C. EX., CUS. S.T., BANGALORE-I [ 2016 (1) TMI 1138 - CESTAT BANGALORE] has examined whether the assessee is entitled to be benefit of Notification No.64/95-CE or not. The assessee is entitled to the benefit of exemption notification and the Commissioner has rightly given them the benefit of the Notification by dropping the demand - appeal dismissed - decided against Revenue.
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CST, VAT & Sales Tax
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2019 (5) TMI 223
Classification of goods - Warp Knit Fabrics - whether the Warp Knit Fabrics is included under Schedule I, Entry 48 or Schedule II Part 2 Entry 34 of the MP VAT Act, 2002? - HELD THAT:- The Warp Knit Fabrics is falling under Heading 60059000 of the Central Excise Tariff. The said product is listed in the goods of special importance under the Additional Duty of Excise (Goods of Special Importance) Act, 1957. The duty is leviable @ 12%, however, on account of the notification dated 9/7/2004, it is exempted from payment of duty. The Central Excise Service Tax Appellate Tribunal, (CESTAT) West Zonal, while deciding the appeal has classified Warp Knit Fabrics under Heading 60059000, Chapter 60 of the Central Excise Tariff. In the present case, there is no dispute that Schedule I, Entry 48 refers to a classification provided under the I Schedule to the Additional Duties of Excise (Goods of Special Importance Act) 1957 and, therefore, the classification done under the Central Excise Tariff has to be accepted especially when MP VAT Act, 2002 Schedule refers to the Tariff Heading / classification under the Central Excise Act. The findings arrived at by the Assessing Officer in holding that the goods are not included in Entry 48 of Schedule I of the MP VAT Act, 2002 is therefore, bad in law - By no stretch of imagination, the goods can be treated to be included under Entry 34 List 2 of the MP VAT Act, 2002 hence, the question of payment of duty @ 5% does not arise. In the present case, the classification issue has been decided u/S. 70 of the MP VAT Act, 2002 by the Commissioner and appeal to the Addl. Commissioner is certainly going to be an empty formality. This Court is of the considered opinion that the present petitions cannot be thrown out on the ground of availability of alternative remedy before the Asstt. Commissioner as the higher authority ie., the Commissioner has already decided the issue of classification under Section 70 of the MP VAT Act, 2002 on 14/1/2003 - Petition allowed.
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2019 (5) TMI 204
Classification of goods - drugs and medicines or not - Himami Navratna Oil - Himami Boroplus Antiseptic Cream - Himami Boroplus Prickly Heat Powder - Himami Gold Turmeric Cream - Himami Nirog Dant Powder Lal - whether fall in the Entry 4/7 (from 1.1.2000 to 14.03.2000) or Entry 41/49 (15.03.2000 to 31.03.2006) of Part III Schedule II instead of Entry 11 of Part IV Schedule II (where it was previously classified prior to the amendment) from the financial years 1999-2000 to 2005-2006? HELD THAT:- The entries in the present case under the schedule are very specific and this Court does not find any reason to look into the provisions of Central Excise Tariff Act, 1985 for the purpose of classification. For the purpose of payment of excise duty and other taxes, which are under different statutes the classification is provided under the Central Excise Tariff Act, 1985 as well as under other statutes. In the present case, there is no ambiguity in respect of the taxing statute - In similar circumstances, while dealing with certain products manufactured by Vicco, the Division Bench in the case of STATE OF M.P. VERSUS VICCO PRODUCTS (BOMBAY) [ 2017 (5) TMI 376 - MADHYA PRADESH HIGH COURT] ] has held that The classification of a product under a statute cannot be read into another statute. Each statute has to be interpreted on the basis of the provisions contained therein. Therefore, classification of the products in the said judgments dealing with the Central Excise Laws are not relevant for examining the classification of the products under the local Act, which have specifically included face cream under the Entry of Cosmetics and tooth paste and tooth powder under the Entry of Toilet articles. When the entries under the schedule in respect of payment of tax under the Madhya Pradesh Commercial Tax Act, 1994 are very clear, there is no ambiguity, the classification of product under the Madhya Pradesh Commercial Tax Act, 1994 has to be looked into and the classification of the product under the different statutes cannot be looked into as argued before this Court. The Madhya Pradesh Commercial Tax Appellate Board was justified in upholding the classification of the specified goods manufactured by Emami under Entry No.47 from 01/01/2000 to 14/03/2000 / Entry No.41/49 w.e.f. 15/03/2000 to 31/03/2006 of Part-III Schedule-II instead of Entry No.11 of Part-IV of Schedule-II - By no stretch of imagination the products manufactured by Emami Limited can be treated as drugs and medicines. Reference disposed off.
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2019 (5) TMI 203
Principles of natural justice - ex-parte order - HELD THAT:- Admittedly, the Tribunal has not recorded any specific finding with regard to non-appearance of the revisionist and the claim of the revisionist that he was not well on the date fixed. The Tribunal has recorded otherwise a finding that several opportunities were allowed to the revisionist to furnish the explanation but since the revisionist failed to appear before the Tribunal there was no occasion but to conclude the proceeding - The Tribunal has, therefore, rejected the application filed under Section 22 however the tribunal has rectified the mistake which are noticed by treating it that there was mistake. It would be appropriate to remand the matter to the Tribunal to reconsider the claim of the revisionist both on merits as well as nonappearance on the date fixed - revision allowed.
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Indian Laws
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2019 (5) TMI 202
Appointment of one surveyor after another - Compensation for loss suffered on account of damage by fire to the Complainant - whether the Insurance Company has reasons or there were inherent defects in the survey report of Surveyor- M/s Sunil J. Vora Associates or that such report is arbitrary, excessive and exaggerated, before another Surveyor could be appointed? HELD THAT:- The Surveyor- M/s Sunil J. Vora Associates was appointed by Head Office of the Insurance Company. The Head Office of the Insurance Company has communicated to the Regional/ Branch Office as to why another Surveyor has been appointed. In view of said fact, the appointment of another surveyor could not be justified when a conscious decision has been communicated by the Head Office of not approving the appointment of second surveyor. The letter of credit was a valid document which could not be said not to be genuine only on the basis of reason that such letter of credit was not in favour of the Complainant when the order was placed on the Complainant by the above said Singapore based firm - Mr. Ajay Verma is an accused in FIR in which there is no allegation in respect of export by the Complainant. The allegation against Ajay Verma is of duping the exporters whereas, there is no such or similar allegation against the Complainant. The Complainant has also averred that there was endorsement by the Apparel Export Promotion Council, therefore factually such assertion of the Insurance Company is incorrect. There was no valid reason for the Insurance Company not to accept the report of the surveyor- M/s Sunil J. Vora Associates nor there is any proof that such report is arbitrary excessive. There are no cogent reasons to appoint Surveyors time and again till such time one Surveyor gives a report which could satisfy the interest of the Insurance Company. Appeal allowed.
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