TMI Tax Updates - e-Newsletter
June 17, 2023

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws PMLA Service Tax Central Excise CST, VAT & Sales Tax

Articles

1. RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

2. Income already declared under one head cannot be taxed under other head simultaneously

   By: Bimal jain

3. INCOME TAX RETURNS

   By: DR.MARIAPPAN GOVINDARAJAN

4. Oil wells are plant and machinery and eligible for higher depreciation

   By: Bimal jain

News

1. DGGI Gurugram officials bust ITC racket involving 461 shell entities with fraudulently claiming Rs 863 crore, 2 held

2. DRI seizes 1.92 kg of Cocaine worth Rs. 26.5 crore imported by way of concealment inside thermocol balls

3. Some perspectives on Banking Supervision (Opening remarks by Shri M K Jain, Deputy Governor, Reserve Bank of India - June 14, 2023 - at the 25th SEACEN-FSI Conference of the Directors of Supervision of Asia Pacific Economies in Mumbai)

Notifications

Customs

1. 45/2023 - dated 15-6-2023 - Cus (NT)

Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver

2. 44/2023 - dated 15-6-2023 - Cus (NT)

Rate of exchange of one unit of foreign currency equivalent to Indian rupees - Supersession of the Notification No. 39/2023-Customs(N.T.), dated 1st June, 2023

3. 43/2023 - dated 15-6-2023 - Cus (NT)

Courier Imports and Exports (Electronic Declaration and Processing) (Second Amendment) Regulations, 2023 - Export consignment contains jewellery falling under CTH 7117 or CTH 7113 - Form HA modified

Income Tax

4. 42/2023 - dated 15-6-2023 - IT

Special courts u/s 280A of IT Act and section 84 of the Black Money Act - Designates the Courts in the State of Jharkhand accordingly

Indian Laws

5. S.O. 2662 (E) - dated 14-6-2023 - Indian Law

Central Government notifies that the National Bank for Agriculture and Rural Development is allowed to perform Aadhaar authentication on a voluntary basis

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MIRSD/MIRSDSECFATF/P/CIR/2023/091 - dated 16-6-2023

Amendment to Guidelines on Anti-Money Laundering (AML) Standards and Combating the Financing of Terrorism (CFT) /Obligations of Securities Market Intermediaries under the Prevention of Money-laundering Act, 2002 and Rules framed there under

2. SEBI/HO/DDHS/POD1/P/CIR/2023/092 - dated 16-6-2023

Adherence to provisions of regulation 51A of SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 by Online Bond Platform Providers on product offerings on Online Bond Platforms

Customs

3. 17/2023 - dated 15-6-2023

Simplified regulatory framework for e-commerce exports of Jewellery through Courier mode

4. PUBLIC NOTICE No. 07/2023 - dated 27-5-2023

Guidelines for implementation of pilot project relating to import of goods for repair & maintenance and re-export under ERSO Project- Reg.

5. PUBLIC NOTICE NO. 08/2023 - dated 24-5-2023

Regarding assessment of Bill of entry pertaining to Chapter 84.

6. PUBLIC NOTICE No. 09 /2023 - dated 22-5-2023

Change of Custodian - IT system cutover plan during transition on 24th May 2023 – Clearance of Import and Export Cargo during the transition period.

Highlights / Catch Notes

GST

• Court Orders Fresh Adjudication as Tax Refund Rejection Lacked Hearing, Deems Original Order Legally Non-Existent.

  Case-Laws - HC : Refund of ITC on export of goods - Petitioner repeatedly followed-up with the Department - copy of the said refund rejection order is not available in the record of the Department. Admittedly, no opportunity of hearing has been granted to the Petitioner before passing of the purported order of rejection of refund. - Sunch order is non-est in the eye of law being a non-existing order - Matter restored back for fresh adjudication - HC
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• Refund Rejection Overturned: Limitation Period Extended Due to CBIC Notification, Case Sent for Fresh Adjudication.

  Case-Laws - HC : Refund of Input Tax Credit - rejection on the ground of time limitation - In terms of the notification issued by the CBIC, the period commencing from 01.03.2020 to 28.02.2022 is required to be excluded. - The impugned orders are set aside and the petitioner’s application is restored to the Assistant Commissioner for fresh adjudication - HC
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Income Tax

• Virtual Digital Asset Transfers: 30% Tax u/s 115BBH Plus 1% TDS as Per Section 194S.

  Manuals : Taxation of Virtual Digital Assets – As per Section 115BBH @30% is leviable on Income on transfer of ‘Virtual Digital Asset’ - Under section 194S @1% TDS to be deducted of any sum by way of consideration for transfer of a ‘Virtual Digital Asset’.
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• Court Rejects Government's Appeal Due to 1223-Day Delay; No Special Treatment for Largest Litigant Under Limitation Law.

  Case-Laws - HC : Condonation of delay of appeal filed by the revenue - delay of 1223 days - There is no separate law of limitation for the Government nor any latitude can be shown to the Government as the Government is as good as any other litigant and said to be the largest litigant. Revenue could not file appeal only to take the advantage of recent High court decision. - HC
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• Penalty Notice Challenge Only Valid Post-Order, Current Appeal Dismissed as Premature Under Legal Procedure.

  Case-Laws - AT : Validity of notice proposing levy of penalty - mere initiation of penalty proceedings cannot be challenged unless some formal order on the point has been passed in accordance with law. The assessee may challenge the imposition of penalty if so legally advised at appropriate stage. The present appeal is infructuous in effect and substance and thus dismissed in limine. - AT
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• PCIT's revision u/s 263 for cash payments on capital goods reversed; Section 40A(3) disallowance not applicable.

  Case-Laws - AT : Revision u/s 263 - Cash payments towards purchase of capital goods - Violation of the provisions of section 40A(3) - PCIT himself could have examined the impugned transactions and if he had done so, he would have come to know that the payments have been made for purchase of capital goods and disallowance could not have been made u/s 40A(3) of the Act as per the CBDT Circular - Additions deleted - AT
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• Penalty Imposed for Failure to Audit Books u/s 44AB; Plea of Kerala Act Audit Rejected, Penalty Confirmed.

  Case-Laws - AT : Penalty u/s 271B - default u/s. 44AB - failure to get books of accounted audited and furnish the audit report - reasonable cause - Assessee plea that accounts having been audited under the Kerala Act - Levy of penalty confirmed - AT
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Customs

• PET Granules Deemed Eligible for Duty Exemption: Incorrect Denial Overturned, Classified as Consumables Under Customs Regulations.

  Case-Laws - AT : Exemption from duty - Eligibility of ‘polyethylene (PET) granules’ used in testing of ‘moulds’ manufactured - it is nothing but ‘consumables’ which are covered by the omnibus enumeration of eligible requirements other than capital goods, the impugned order has erred in denying the benefit of exemption. - AT
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• Import Proposal for View Boards: Classified as Automatic Data Processing Machines Under Note 6(A) of Chapter 84.

  Case-Laws - AAR : Classification of goods proposed to be imported - Interactive Display System (View Board) - It is found that the subject goods are capable of performing plethora of functions independently on standalone basis and these devices are much more than mere display devices. In fact, display is only one of the features of the goods and cannot be construed to be its only function, much less its principal function. Also, the subject goods satisfy all the conditions laid down under Note 6(A) of Chapter 84, thereby validating the expression “automatic data processing machine”. - AAR
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• LED Socket Assemblies for Fog Lamps Classified Under Heading 8512, Eligible for Exemption Benefits per Serial No. 656.

  Case-Laws - AAR : Classification of goods proposed to be imported - import of LED socket assembly for the manufacture of Front Fog Lamp for automobile applications - Benefit of exemption - The subject goods namely "LED socket assembly" merit classification under Heading 8512 of the Customs Tariff Act, 1975 - the subject goods would be eligible for benefit of serial number 656 of notification No. 69/2011-Cus. - AAR
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• Advance Ruling Application Rejected: Misrepresentation of Address Led to Jurisdictional Denial Under Customs Regulations.

  Case-Laws - AAR : Maintainability of Advance Ruling application - Territorial Jurisdiction - Attempt of the applicant to falsely project their logistics service provider's address as their office address and the same as falling under the jurisdiction of CAAR, Mumbai requires rejection of application on the grounds of jurisdiction alone as per provisions of Regulation 6 of Customs Advance Ruling Regulations, 2021 read with provisions of Section 28 H of the Customs Act, 1962. - AAR
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• Provisionally preserved Areca nuts for import classified under Chapter heading 0812; not fit for immediate consumption.

  Case-Laws - AAR : Classification of goods proposed to be imported - Provisionally preserved Areca nut - The provisionally preserved betel nuts are not fit for immediate human consumption and they are more specifically covered under Chapter heading 0812 due to chapter note 4. - AAR
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• Roasted Betel Nuts Classified Under Tariff Item 2008 19 20 for "Other Roasted Nuts & Seeds" in Customs Tariff Act.

  Case-Laws - AAR : Classification of goods intended to be imported - Roasted Areca Nuts - roasted betel nuts are correctly classifiable under the tariff item 2008 19 20 [Other roasted nuts & seeds] of chapter 20 of the first schedule of the Customs Tariff Act, 1975. - AAR
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• Optoma Creative Touch 3-series IFP Import Classification Decided by AAR Under GRI Rules 1 and 6.

  Case-Laws - AAR : Classification of the proposed items of import - Optoma Creative Touch 3-series Interactive Flat Panel (IFP) - For such an item similar to the subject goods, the issue is to ascertain essential function and terms of the heading read with Section/Chapter Notes for determination of classification of such goods. In light of the foregoing, the issue of classification, in the instant application gets settled in terms of Rule 1 and Rule 6 of General Rules for Interpretation of Import Tariff (GRI) without inviting reference to Rule 3 of GRI. - AAR
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PMLA

• Court Grants Bail in Money Laundering Case, Highlights Flexibility in Statutory Deadlines Without Specified Consequences for Non-Compliance.

  Case-Laws - HC : Grant of bail - Money Laundering - proceeds of crime - predicate offences - it is further settled in law that whenever a statutory provision prescribes a thing to be done within a certain period of time without further stipulating the consequence of failure to do so, then the provision relating to the time period prescribed cannot be treated as mandatory. - the applicant is granted bail - HC
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Service Tax

• Section 128 of Finance Act 2019: Committee Can Correct Errors in Statements Post-30 Days Without Mandatory Time Limits.

  Case-Laws - HC : SVLDRS - Power of Committee u/s 128 of the Finance Act, 2019 to review - Period of limitation - Issuance of statement to modify the same suo moto on discovering arithmetical/clerical mistake after expiry of 30 days. - it is further settled in law that whenever a statutory provision prescribes a thing to be done within a certain period of time without further stipulating the consequence of failure to do so, then the provision relating to the time period prescribed cannot be treated as mandatory. - HC
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• Commissioner (Appeals) Can Remand Service Tax Refund Cases to Adjudicating Authority; Order Upheld as Correct.

  Case-Laws - AT : Jurisdiction - power of Commissioner (Appeals) to remand back the matter - case of Refund of Service Tax - it is settled that the Commissioner (Appeals) has power to remand the matter to Adjudicating Authority. Accordingly, there are no error in the order of the Commissioner (Appeals) therefore the same is upheld - AT
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VAT

• Tribunal Omits Key Questions, Violating Supreme Court's Rationale Requirement for Judicial Orders.

  Case-Laws - HC : Scope of order of the tribunal - The Tribunal has failed to record any reasons with respect to seven out of eight questions raised in the reference applications. It is well settled law laid down by the Hon’ble Supreme Court in various and authoritative pronouncements mentioned supra that reasons must be recorded in a judicial order even when it relates to the non-reference of certain questions raised in the reference applications. The applicants had the right to know that what weighed with the Tribunal in not referring or even discussing the questions raised by the applicants in the applications. - HC
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Case Laws:

• GST

• 2023 (6) TMI 686
  Validity of action of the Respondents in demanding Tax 14 percent on the net invoice price Hyundai Venue 10 Turbo GDI DCT SX Motor Vehicle - seeking refund of Excess tax paid - HELD THAT:- The life tax is to be collected from the vehicle owner upon the sale based on the net invoice price of the vehicle and not upon the ex-showroom price of the vehicle. The life tax can be levied only on the cost of the vehicle under the 6th schedule of the A.P. Motor Vehicles Taxation Act, 1963. It is also clear that the petitioner has purchased the vehicle in the year 2019 and had filed the present writ petition in the same year, which is admittedly within the period of limitation prescribed in the Limitation Act, 1963, viz., three years. This Court feels it appropriate to allow these writ petitions and the respondents are directed to refund a sum of Rs. 52,168/- to the petitioner in W.P. No. 12089 of 2019 and a sum of Rs. 1,16,000/- to the petitioner in W.P.No. 3049 of 2021, which were collected in excess of the life tax payable by both the petitioners under the Sixth Schedule to the Act on the invoice sale price, within a period of four (4) weeks from the date of receipt of a copy of this order. Petition allowed.

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• 2023 (6) TMI 685
  Refund of ITC on export of goods and services without payment of tax - opportunity of hearing not provided before rejection of refund - Section 54(3) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- This Court, after noticing the fact that Petitioner was earlier communicated that its refund has been sanctioned and also the fact that the order rejecting refund of the Petitioner was not available as per official record, formed an opinion that in absence of any order available on record rejecting the claim of refund of the Petitioner, it cannot be said that any decision has been taken towards sanction or rejection of refund application of the Petitioner. It would be evident that Petitioner has filed refund application on 04.03.2019 and vide email dated 22.10.2019 and corresponding communication in GSTN Portal, Petitioner was informed that its refund application has been sanctioned which is awaiting issuance of payment advice under RFD-05 by the jurisdictional officer. Consequent thereto, Petitioner repeatedly followed-up with the Respondent- Department for issuance of payment advice and after a lapse of about 30 months, in the month of April, 2022, Petitioner was communicated for the first time that its refund application has been rejected through RFD 01-B and the refund order is bearing order no. 91 dated 18.10.2019. However, copy of the said refund rejection order is not available in the record of the Department. Admittedly, no opportunity of hearing has been granted to the Petitioner before passing of the purported order of rejection of refund. This Court, vide order dated 30.01.2023, held that in absence of any order either sanctioning or rejecting refund application being available on record, no decision can be said, under law, to be taken on the refund application of the Petitioner. Accordingly, we directed the respondent to take decision on the refund application of the Petitioner. However, despite the order, which has not been challenged by the Respondents, the Respondents have not taken any decision on the refund application of the Petitioner, but instead, filed supplementary counter affidavit again stating, inter alia, that refund application of the petitioner has been rejected vide Order no. 91 dated 18.10.2019 despite the fact that said order is not available in the official record and has contended that petitioner should file refund application afresh. The alleged order bearing Order no. 91 dated 18.10.2019, by which refund application of the Petitioner has been purportedly rejected by the Respondent, is non-est in the eye of law being a non-existing order and the claim of refund of the Petitioner is required to be processed in terms of its original application being Application Reference Number (ARN) AA200318232092U dated 04.03.2019 - application allowed.

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• 2023 (6) TMI 684
  Provisional attachment of property - Input tax credit - it is alleged that the petitioner has not paid/short paid/erroneously refunded input tax credit by perpetrating fraud on the Government, that too by suppression and brazen manipulation - Section 83 of the CGST Act - HELD THAT:- Rule 159(5) of the CGST Rules specifically provides a person whose property has been provisionally attached under Section 83 of the CGST Act, to move the Commissioner for lifting of the attachment - It is without exhausting the above statutory remedy that the petitioner has filed the writ petition invoking the plenary powers of this Court under Article 226 of the Constitution of India. It is well-settled that the writ jurisdiction of this Court is only to be exercised in extra-ordinary circumstances, especially when there is an alternative and efficacious statutory remedy. The principles have been well enunciated by the Hon ble Supreme Court in M/s. Radha Krishan Industries v. State of Himachal Pradesh and others [ 2021 (4) TMI 837 - SUPREME COURT] . The contention that the first respondent is not empowered and competent to pass Ext.P6 orders does not hold good in view of the express delegation of powers by Ext.R1(a) read with Sections 3 and 5 of the CGST Act - Even going by the decision relied on by the learned counsel for the petitioner, it is evident that the Bombay High Court in PRAFUL NANJI SATRA VERSUS STATE OF MAHARASHTRA, COMMISSIONER OF STATE TAX, JOINT COMMISSIONER OF STATE TAX (INVESTIGATION A) [ 2021 (4) TMI 85 - BOMBAY HIGH COURT] has rendered the decision for the reason that there was nothing on record to disclose any authorisation by the Commissioner to the Joint Commissioner to pass the provisional attachment. In the instant case, the matter stands on a different footing because of the investment of power on the first respondent. Thus, there are no doubt that the first respondent is empowered to pass orders in the nature of Ext.P6 under Section 83 of the CGST Act. The writ petition is meritless and is only liable to be dismissed. The writ petition is dismissed.

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• 2023 (6) TMI 683
  Attachment of Bank Accounts of petitioner - Classification of services - rate of GST - whether the skill games which are being facilitated by the petitioner are to be charged as a game of chance at 28% on the entire bet value? - Learned counsel for the petitioner states that on platform fees, they have already paid GST @ 18%. HELD THAT:- Keeping in view the decision in WITZEAL TECHNOLOGIES PRIVATE LTD. VERSUS UNION OF INDIA AND OTHERS [ 2021 (9) TMI 1493 - PUNJAB AND HARYANA HIGH COURT] , where the State counsel has made a statement that they will not initiate any coercive step against the petitioner, in the present case also, no coercive steps will be taken for recovery of the amount demanded as per the show cause notice dated 19.05.2023 (Annexure P-1) and 50% of the attached amount should be defreezed so that the petitioner-company can carry out its day to day working. Adjourned to 17.08.2023.

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• 2023 (6) TMI 682
  Interpretation of statute - Constitutional Validity of Section 16(4) of the CGST Act - appealable order or not - HELD THAT:- This writ petition is being entertained on condition of making payment of 10% of the disputed tax amount of Rs.2,26,74,585/- within two weeks from date. If such payment is made within the time stipulated herein, no coercive action for recovery of the demand arising out of the impugned order in original shall be taken by the respondents. In case of failure to make payment within the time stipulated herein, this interim order will not have any force. It is recorded that though the petitioners have made prayer challenging the Constitutional validity of Section 16(4) of the aforesaid Act and the relevant Rules but have not pressed for the same. List this matter for final hearing in the monthly list of August, 2023.

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• 2023 (6) TMI 681
  Seeking provisional release of detained goods - case of appellant is that the order impugned in the writ petition is a cryptic order and does not contain sufficient reasons warranting detention - HELD THAT:- On examining the order passed by the Writ Court, it is evident that the Writ Court took note of the fact that the order impugned therein is subject to a statutory appeal under Section 107 of the CGST Act and also noticed that Section 129 of the CGST Act enables the appellant to seek provisional release of goods subject to fulfilment of conditions specified therein. The appellant has completely failed to establish that there is any infirmity in the impugned order warranting interference. The Writ Appeal is dismissed by affirming the order passed by the Writ Court. As a corollary, it is open to the appellant to approach the appellate authority under the CGST Act within a period of ten(10) days from the date of receipt of a copy of this order.

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• 2023 (6) TMI 680
  Violation of principles of natural justice - petitioner s request for personal hearing was rejected - HELD THAT:- A plain reading of the order indicates that there is neither any discussion nor any reference to the notice dated 05.11.2020 or the petitioner s reply to the said notice. There are merit in the petitioner s contention that the said order is also vitiated as having been passed without following the principles of natural justice as no opportunity for hearing was afforded to the petitioner. The matter is remanded to the Proper Officer to pass a fresh speaking order after affording the petitioner an opportunity of being heard - petition allowed by way of remand.

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• 2023 (6) TMI 679
  Rejection of claim made by the petitioner before the 2nd respondent liquidator of M/s Albanna Engineering India Pvt Ltd. - rejected on the ground that the same claim was being adjudicated by the Central Authorities under the Central Goods and Services Tax Act - HELD THAT:- The proceedings before the Central Authorities relate to the provisions of the Finance Act, 1994 and for the period up to June 2017, and not to any claim under the GST Laws, this original petition is disposed off permitting the petitioner to file a fresh application before the 2nd respondent along with a copy of the proceedings of the Central Authorities. On receipt of such an application the 2nd respondent shall de novo adjudicate the claim of the petitioner, notwithstanding the fact that the earlier claim of the petitioner was rejected and the said order had been upheld by the National Company Law Tribunal. On a fresh petition being filed by the petitioner, the 2nd respondent shall endeavor to adjudicate the same without any further delay.

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• 2023 (6) TMI 678
  Restriction on refund of IGST paid on export of goods - Procurement of goods under advance authorization / Deemed export - Constitutional Validity of Sub-Rule (10) of Rule 96 of the CGST Rules, 2017 - Seeking direction to respondent No.4 not to adjudicate the show cause notice dated 09.11.2022 pending the Special Civil Application - HELD THAT:- In support of the prayer made in the present Civil Application, it was submitted that this Court has entertained several petitions involving very issue of vires of Rule 96(10) of the CGST Rules, 2017 and has also granted interim protection to the petitioners concerned - One of such order in VISION PRODUCTS PVT. LTD. VERSUS UNION OF INDIA [ 2023 (6) TMI 580 - GUJARAT HIGH COURT] was produced before the Court. When in many cases, interim relief is granted, the petition deserves to be treated at par. Therefore, by way of interim relief, it is directed that the respondent authority shall not make any coercive recovery from the petitioner in respect of the refund of the integrated tax already paid, till further orders - civil application allowed.

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• 2023 (6) TMI 677
  Validity of demands raised by the authority vide Annexure-7 and Annexure-8 - contention of the petitioner is that he has already paid the amount vide Annexure-5 series - HELD THAT:- If the contention of the petitioner, that he has already paid the demands raised by the authority is accepted, then it is the responsibility of the petitioner to apprise the authority concerned indicating that the demands raised are erroneous and, as such, in view of the dues already paid vide Annexure- 5 series, the demand notices be rectified. But instead of doing so, the petitioner waited for three years and, thereafter, approached this Court challenging the assessment orders passed by the authority on 17.03.2020 for 2017-18 and 29.07.2021 for 2018-19. But the assessment order is very clear that the petitioner has been issued with a provisional ID for enrolment on the common portal, but he has failed to enroll on the common portal. Therefore, the provisional certificate of registration was cancelled as per the provision contained in Section 139 (1) of the CGST/OGST Act. The rate of GST for works contract service has been prescribed in Sl.No.3 of the Notification No.11/2017 Central Tax (Rate) dated 28.06.2017 of Ministry of Finance, Govt. of India and Notification bearing S.R.O. No.305/2017 dated 29.06.2017 of Finance Department, Govt. of Odisha, as amended by Notification No.20/2017 Central Tax (Rate) dated 22.08.2017 and Notification No.24/2017 Central Tax (Rate) dated 21.09.2017 at the rate of 12%. Therefore, if the petitioner is aggrieved by such assessment order, he could have preferred appeal within the time specified. Now, at a belated stage, the petitioner could not have approached this Court making request to remand the matter to the Assessing Officer for re-assessment. As such, extra-ordinary jurisdiction of this Court under Article 226 of the Constitution of India cannot be exercised, particularly when an alternative remedy is available. Petition dismissed.

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• 2023 (6) TMI 676
  Maintainability of petition - availability of alternative remedy of appeal - Scope of SCN - copies of objection and written submission filed by the KMC in course of the impugned proceedings not provided - impugned order is appellable order under the statute or not - elaborate speaking order containing the facts and laws raised by both the KMC and the petitioner or not - whether impugned order has been passed by an authority having lack of jurisdiction? - opportunity of personal hearing to the petitioner provided or not - HELD THAT:- The question of violation of principle of natural justice in the case of the petitioners does not arise at all since it is not a case that the issues which have been considered were not indicated in the show-cause notice. Merely by contending that the time of hearing for the KMC and the petitioners were different and that the objection and the written submission filed by the KMC who is also interested party was not furnished to the petitioners is hyper-technical ground and cannot be called a case of violation of principle of natural justice or that there was procedural irregularity in course of the impugned adjudication proceeding. Petitioners should have no grievance, if the KMC who is also an interested has been allotted a different time slot for hearing. Petitioners should have concerned only to the extent as to whether petitioners were issued any show-cause notice or not before passing the impugned adjudication order and whether any opportunity of filing any objection to the show-cause notice was given to them or not or any personal hearing was given or not and that all the contentions raised by them in their objection and written submission has been dealt with in the adjudication order or not and it is found that all these formalities have been observed and there is no violation in these regards by the adjudicating authority and furthermore petitioner could not show that on the issues on merit of the adjudication order, there is any bar on the appellate authority to consider and decide the same. Without going into the merits of the adjudication order, on the ground of availability of alternative remedy by way of statutory appeal these writ petitions are dismissed.

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• 2023 (6) TMI 675
  Refund of Input Tax Credit - rejection on the ground of time limitation - Application filed beyond the period of two years from the relevant date as stipulated under Section 54 of the Central Goods Services Tax, 2017 - HELD THAT:- The respondents has handed over a notification dated 05.07.2021 (Notification No.13/2022 Central Tax) issued by the Central Board of Indirect Taxes and Customs, whereby the period of limitation for filing an application for refund under Sections 54 and 55 of the CGST Act has been relaxed. In terms of the said notification, the period commencing from 01.03.2020 to 28.02.2022 is required to be excluded. The impugned orders are set aside and the petitioner s application is restored to the Assistant Commissioner, CGST, Division Mayur Vihar for deciding the same on merits within a period of six weeks from today - Petition allowed.

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• Income Tax

• 2023 (6) TMI 674
  Validity of reopening of assessment u/s 147 - Change of opinion - issues already raised while completing the assessment - HELD THAT:- Since query had been raised during the assessment proceedings and the assessee had replied to it, as held in Aroni Commercials Ltd. [ 2014 (2) TMI 659 - BOMBAY HIGH COURT] it follows that the query raised was a subject of consideration of the AO while completing the assessment. Infact it was so and the issue of PMS relating to Grasim Industries Ltd. has been raised by the AO during the assessment proceedings, detailed reply has been furnished and has been dealt with in detail in the assessment order. Therefore, this reopening of assessment, in our view, is merely on the basis of change of opinion of the Assessing Officer and that does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment. Also notice of reopening has been issued after the expiry of four years from the end of the relevant assessment year. U/s 148 where the notice has been issued after the expiry of four years from the end of the relevant assessment year, the onus is on the AO to show that income chargeable to tax has escaped assessment by reason of the failure on the part of assessee to disclose fully and truly all material facts necessary for its assessment for that assessment year. There is not even a whisper in the reasons to believe that there was any such failure on the part of petitioner to disclose fully and truly all material facts necessary for its assessment. Decided in favour of assessee.

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• 2023 (6) TMI 673
  Reopening of assessment u/s 147 - procedure prescribed for reassessment - mandatory procedure of disposal of objections by the AO - HELD THAT:- Admittedly, the reasons for reopening having been communicated as per Annexure-F and reply to such reasons having been furnished by the petitioner, the Assessing Officer is bound to dispose off the same by passing a speaking order before proceeding to pass an order under Section 143(3) read with Section 147 - In light of the limitation expiring on 31.12.2018, the practical difficulties of the Assessing Officer could be of no reason to condone the non-adherence to the procedure in GKN Driveshafts [ 2002 (11) TMI 7 - SUPREME COURT] The effect of non-following such procedure has been dealt with by the judgment of the Division Bench of this Court in Deepak Extrusions [ 2017 (3) TMI 1257 - KARNATAKA HIGH COURT] wherein as rightly held that the mandatory procedure of disposal of objections by the Assessing Officer not having been followed, the order of assessment cannot be sustained. The contention of revenue relying on the judgment of Home Finders [ 2018 (5) TMI 260 - MADRAS HIGH COURT] cannot be accepted in light of the declaration in the case of Deepak Extrusions [ 2017 (3) TMI 1257 - KARNATAKA HIGH COURT] stating that the procedure prescribed in GKN Driveshafts (supra) is a mandatory procedure which would vitiate the assessment order - Assessing Officer is bound to dispose off the objections filed by passing a speaking order - Decided in favour of assessee.

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• 2023 (6) TMI 672
  Reopening of assessment u/s 147 - Assessee has taken the stand that he did not enter into any transaction with Dayanand Singh, as alleged and if it is taken out of the equation, the alleged escaped income would be below Rs. 50 lakhs. HELD THAT:- Unfortunately for the petitioner/assessee, this stand was not taken in time. The writ petition is disposed of, with a direction that before the Assessing Officer proceeds to pass an assessment order, he would verify the assertion made by the petitioner/assessee which is recorded in the reply, and in this context, also accord personal hearing to the petitioner/assessee and/or his authorised representative.

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• 2023 (6) TMI 671
  Validity of reopening of assessment u/s 147 - independent application of mind by AO - AO has failed to appreciate the reply submitted by the petitioner, in response to the notice issued u/s 148A(b) - HELD THAT:- What the AO was required to apply his mind was whether the taxable income, if any, earned, had been brought to tax in the hand of one or the other legal entities i.e., the firm or the proprietorship concern; There was enough and more material placed before the AO to Establish this fact. Therefore, in our view, the AO should revisit the issue, and in this regard, also offer a personal hearing to the petitioner and/or his authorised representative. Accordingly, the impugned order passed u/s 148A(d) of the Act is set aside. AO will be at liberty to pass a fresh order albeit, after affording opportunity of hearing to the petitioner and/or his authorised representative, as indicated above.

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• 2023 (6) TMI 670
  Condonation of delay in appeal filed by the revenue - delay of 1223 days - decision to file an appeal was taken by the department much after the decision of this Court in the case of Principal Commissioner of Income Tax-5 v. Swati Bajaj [ 2022 (6) TMI 670 - CALCUTTA HIGH COURT ] - HELD THAT:- The appellant/department having not been diligent cannot now take advantage of the decision of Swati Bajaj and state that the delay of 1223 days has to be condoned. The law of limitation will not assist the person who is not diligent of his right. There is no separate law of limitation for the Government nor any latitude can be shown to the Government as the Government is as good as any other litigant and said to be the largest litigant. Revenue could not file appeal only to take the advantage of recent High court decision. Decided against revenue.

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• 2023 (6) TMI 669
  Addition u/s 14A r.w.s 8D - expenses incurred for earning exempt income - CIT(A) deleted the addition - HELD THAT:- As in the case before us, it was established that no interest bearing funds were used for investment to earn exempted income, no other expenses were incurred to achieve exempted income, the interest paid also has no nexus with the amount of investment in question, however, an exempt income was earned by the assessee in the form of dividend earned from long term investments. Therefore, disallowance u/s 14A r.w.r. 8D was not in accordance with law and therefore, the same is liable to be deleted, however, since, the assessee has gained an exempt income of Rs. 46,500/- during the relevant earlier year which was taken as Rs. 1,94,593/- by the ld. AO, this fact needs verification and thus, we restore the issue to the files of ld. AO, for the limited purpose - Appeal of the revenue is partly allowed for statistical purposes.

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• 2023 (6) TMI 668
  Enhancement order u/s 252(2) of CIT - enhancement to the disallowance carried out by the AO - HELD THAT:- For the enhancement carried out by the CIT(A), we observe that it is incumbent upon the CIT(A) under Section 251(2) to provide reasonable opportunity of showing cause against any proposed enhancement to the Assessee. Thus, the CIT(A) is prevented from making enhancement to the assessed income without opportunity to the assessee. In view of the explicit provision in this regard, it is mandatory requirement of law to necessarily provide opportunity failing which the enhancement carried out is unsustainable in law. On a perusal of the order of the CIT(A), nowhere reference to such show cause or opportunity to assessee for carrying out enhancement is found. Therefore, the enhancement made by the CIT(A) is unsustainable in law. The enhancement so carried out by the CIT(A) thus stand reversed. Action of the lower authorities for making additions on the ground other than recorded reasons - We do not see any merit in such plea. The additions carried out by the Assessing Officer squarely flows from reasons recorded, i.e., large cash deposits in the bank account etc. The additions made comprise of the cash deposits and enhancement of quantum thereof in the appellate proceedings. The objection of the assessee has no substance. Hence, Ground no.2 is dismissed.

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• 2023 (6) TMI 667
  Addition towards Sales Promotion Expenses - purchase of Gold articles - assessee had paid the amount periodically to National India Billion Refinary HCA and Arihant Jewellers and the assessee stated that it purchased Gold articles from the above parties for gifting - HELD THAT:- As no detail of the recipients of such gold items was furnished by the assessee by stating for the sake of confidentiality and oral non-disclosure agreement with the customers, we are unable to provide the details of Name and address of the parties to whom the gifts have been paid/given . The same position prevailed before the ld. CIT(A) as well. Assessee did not furnish even the primary details of the recipients of the gold items and, as such, the commercial expediency remained to be proved. Deduction can be allowed only on showing that the expenditure was incurred for the purpose of business. Assessee has not furnished any detail of recipients. DR is correct in apprehending that such gold items may have been utilised by the Directors for their personal use. In the absence of any detail of the recipients establishing link of the jewellery gifting with the business purpose, the authorities were justified in not granting the deduction. Decided against assessee.

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• 2023 (6) TMI 666
  Validity of notice proposing levy of penalty - Addition of interest received on land compensation from Noida Authority - notice u/s 148 issued to assess the escapement of income on account of interest on land compensation - revised return in response to 148 proceedings included the escaped income in terms of provision of Section 56(2)(vii) r.w. Section 45A of the Act and 50% of the interest received on compensation was offered for tax - AO treated revised return in response to Section 148 is invalid due to error in e-verification and no ITR-V (acknowledgement of ITR) was sent for verification - HELD THAT:- As the present appeal filed by the assessee in quantum proceedings is infructuous as both assessee and the Revenue are ad idem on taxability of the interest on income compensation from NOIDA Development Authority. Hence, mere initiation of penalty proceedings cannot be challenged unless some formal order on the point has been passed in accordance with law. The assessee may challenge the imposition of penalty if so legally advised at appropriate stage. The present appeal is infructuous in effect and substance and thus dismissed in limine.

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• 2023 (6) TMI 665
  Amount paid or written back - Amount already been disallowed in earlier years u/s 43B - HELD THAT:- As in assessee s own case in Grasim Industries Ltd in [ 2022 (2) TMI 376 - ITAT MUMBAI] issue against assessee. Disallowance of club membership fee - HELD THAT:- As decided in assessee own case [ 2022 (2) TMI 376 - ITAT MUMBAI] we find that he aforesaid issue raised in the assessment year is covered in favour of the assessee by the decision of the jurisdictional High Court in Otis Elevator CO. (India) Ltd [ 1991 (4) TMI 53 - BOMBAY HIGH COURT] Respectfully following the same, we dismiss the ground raised by the department. Taxability of the interest received from the Income tax Department - HELD THAT:- We find that the coordinate bench of the Tribunal [ 2022 (2) TMI 376 - ITAT MUMBAI] , passed in assessee s own case for the assessment year 2002 03 held as far as the taxability of interest amount is concerned, granted alongwith interest. However, if in the subsequent year refund of interest is withdrawn, then the same should be reduced from the total income of the assessee. Accordingly, we direct the A.O. to tax interest income in terms of the order of the tribunal for A.Y. 1993-94 as reproduced above, keeping in view our above observation Reduction of interest income while calculating the deduction u/s 80HHC - HELD THAT:- As decided in ACG Associate Capsule Pvt. Ltd. [ 2012 (2) TMI 101 - SUPREME COURT] for computation of profit of business for the purpose of deduction under section 80HHC of the Act, only 90% of net interest or net rental income is to be reduced under clause (1) of Explanation (baa) to section 80HHC of the Act. Reduction of rental income while calculating deduction u/s 80HHC - HELD THAT:- We find that the coordinate bench of the Tribunal [ 2022 (2) TMI 376 - ITAT MUMBAI] , passed in assessee s own case for the assessment year 2002 03 held net rent expenditure and net commission expenditure is required to be reduced from eligible profit rather than the gross rent and gross commission for the computation of deduction u/s 80HHC Deduction u/s 80HHC - Reduction of miscellaneous receipts from the profit of business while calculating the deduction - HELD THAT:- As per ratio laid down by the Hon ble Supreme Court in ACG Associated Capsules Pvt. Ltd [ 2012 (2) TMI 101 - SUPREME COURT] only the net amount can be added. As noted above, under the broad head Miscellaneous Receipt the assessee has received income of varied nature. Therefore, we deem it appropriate to remand this aspect also to the file of the AO for de novo adjudication after necessary examination. If upon examination it is found that the miscellaneous expenses incurred by the assessee are of a similar nature as business income earned, then relief be granted to the assessee in light of the decision in ACG Associated Capsules Pvt. Ltd. (supra). Deduction u/s 80HHC - adjusting loss on the export of trade in goods against profit on export of manufactured goods, while calculating the deduction - HELD THAT:- As in own case in Grasim Industries Ltd. [ 2022 (2) TMI 376 - ITAT MUMBAI] , for the assessment year 2002-03 dismissed similar ground filed by the assessee, inter-alia, in view of the decision of Hon ble Supreme Court in IPCA Laboratories [ 2004 (3) TMI 9 - SUPREME COURT] . Allocation of head office expenditure and reducing the same from deduction u/s 80-O - HELD THAT:- We find that the coordinate bench of the Tribunal in assessee s own case in Grasim Industries Ltd [ 2022 (2) TMI 376 - ITAT MUMBAI] , for the assessment year 2002-03, decided the similar issue in favour of the assessee as held there is no necessity for allocating the head office expenses to the units claiming deduction u/s. 8OHH, 801, 80M and 80-0. The order of the CIT(A) on this issue is accordingly set aside and the grounds raised by the assessee are allowed. LTCL on sale of Equity shares - date of acquisition - HELD THAT:- The date of acquisition of debentures, i.e. 27/06/1997, be considered as the date of acquisition of the equity shares for the computation of long-term capital loss. Additional depreciation claimed by the assessee u/s 32(1)(iia) - Claim denied as plant and machinery should be acquired and put to use in the relevant previous year - HELD THAT:- As relying on Pr. CIT v/s IDMC Ltd [ 2017 (2) TMI 644 - GUJARAT HIGH COURT] issue decided in favour of assessee. Taxability of the dividend received from the Egyptian company - HELD THAT:- As we find no merits in the submissions of the learned DR that this issue be remanded to the AO to examine whether taxes have been paid in Egypt. Since as per the legal position, as it existed prior to the aforesaid amendment, the country of residence is completely precluded from taxing the said income, and therefore, accepting the prayer of the learned DR would result in a complete academic exercise. Thus, respectfully following the legal position as it existed during the year under consideration, which was taken due note by the coordinate bench in the aforesaid decision, we uphold the plea of the assessee that the dividend income received by the assessee from Egypt entity is to be excluded while computing the taxable income of the assessee in India. Accordingly, the additional ground filed by the assessee vide application dated 23/01/2013, is allowed Disallowance on account of rural development expenditure - HELD THAT:- Issue to be decided in favour of assessee as expenditures incurred were for the purpose of business and claimed the same as allowable under section 37(1). Disallowance made on account of exchange rate fluctuation loss - HELD THAT:- Hon ble Supreme Court in the case of Woodward Governor India Pvt. Ltd [ 2009 (4) TMI 4 - SUPREME COURT] has decided this issue in favour of the assessee. Accordingly, we do not find any reason to interfere with the order of the ld. CIT(A) deleting the disallowance made on account of exchange fluctuation loss on conversion of trading assets and liabilities on balance sheet date. Expenditure incurred for making advertisement films to be allowed as revenue expenditure - HELD THAT:- We find that the coordinate bench [ 2022 (2) TMI 376 - ITAT MUMBAI] , passed in assessee s own case for the assessment year 2002 03, while following the decision rendered in the preceding year, decided the similar issue in favour of the assessee. Deduction claimed in respect of payments on account of Provident Fund (P.F) / Employees State Insurance Corporation Scheme (ESIC) made after the due date but within the grace period - HELD THAT:- As the assessee claims that the payment of P.F/ESIC has been made within the grace period and, therefore, is an allowable deduction. In view of the above, we deem it appropriate to restore this issue to the file of the jurisdictional AO to examine the payments of P.F/ESIC made during the period as provided in the relevant statute and to delete the disallowance to that extent Disallowance of professional fees paid in connection with software development and implementation of ERP - HELD THAT:- As assessee s own case for the assessment year 2002 03 [ 2022 (2) TMI 376 - ITAT MUMBAI] software expenditure was allowable as revenue expenditure. Computation of deduction u/s 80HHC - HELD THAT:- This issue is no longer res integra and has been decided in favour of the assessee in CIT v/s Lakshmi Machine Works [ 2007 (4) TMI 202 - SUPREME COURT] wherein held that excise duty and sales tax component cannot form part of the total turnover for computation of deduction under section 80HHC Apportionment of Head Office expenses to the units eligible for deduction under section 80IA - HELD THAT:- We find that the coordinate bench, vide order [ 2022 (2) TMI 376 - ITAT MUMBAI] , passed in assessee s own case for the assessment year 2002 03, decided issue in favour of assessee. Deduction u/s 80IA - profits from the rail system - HELD THAT:- Even though the agreement was entered on 10/04/2000, and the operations commenced in September 1999, it is pertinent to note that the parties to the agreement have honoured the said agreement, and the rights granted therein were not revoked for this reason and the said agreement was still valid in the year under consideration - we find no infirmity in the impugned order allowing deduction u/s 80-IA to the assessee in respect of profits from the rail system. Deduction u/s 80IA in respect of Vikram Unit to be allowed as relying on own case for the assessment year 2002 03 [ 2022 (2) TMI 376 - ITAT MUMBAI] . Deduction u/s 80M - source of investment in shares and securities on which dividend was earned - allocation of any expenditure as expenditure relatable to the dividend income - HELD THAT:- As decided in own case A.Y. 1990 91, 1991 92, 1992 93 borrowed funds were utilized for making investments in securities on which dividend was earned and, therefore, the allocation of part of interest for earning dividend was unjustified. Assessee has filed before us a comparative chart for the source of investment in shares and securities on which dividend was earned The said chart is reproduced herein below. As is evident from the aforementioned chart, the assessee s own funds were much more than the value of investment on which dividend was received in all the three years. It is not disputed that there were no specific borrowings made for making investment in shares and securities - Decided in favour of the assessee.

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• 2023 (6) TMI 664
  Taxability of Inland Haulage Charges - Assessee claimed to be not taxable in India in the light of Article- 9 of India-France DTAA - HELD THAT:- As in assessee s own case in the preceding assessment years 2016-17 [ 2022 (9) TMI 1388 - ITAT MUMBAI] we hold that IHC, since, forms part of income from operation of ships in International Traffic, is covered under Article 9 of the India France Tax Treaty, accordingly, not taxable in India. These grounds are decided allowed. Taxability of Freight Charges for transportation of cargo through Feeder Vessels - assessee invoked treaty provisions and claimed that the said amount is not subject to tax in India - AO held that the said receipts are taxable in India u/s. 44B and made addition of 7.5% of the total receipts - HELD THAT:- We find that the Co-ordinate Bench in [ 2022 (9) TMI 1388 - ITAT MUMBAI] to hold that freight charges received from transportation of cargo through feeder vessels being part of shipping income in International Traffic is covered under Article 9(1) of the India France Tax Treaty, hence, not taxable in India. This issue is also confirmed by HC [ 2012 (8) TMI 1211 - BOMBAY HIGH COURT] . Agency PE - CMA CGA Agencies (India) Pvt. Ltd. Whether Agency Permanent Establishment (PE) of the assessee in India? - HELD THAT:- This issue is recurring and has been repeatedly subject matter of appeal since assessment year 2012-13 [ 2020 (1) TMI 1641 - ITAT PUNE] - The Tribunal has been consistently holding that the assessee has no Agency PE in India. No material has been placed on record by the Revenue to force us to take a different view. Non-taxability of income in the nature of IT support services (FTS) - HELD THAT:- In the instant case, the DRP rejected the claim of assessee merely following its own order in assessment year 2017-18 [ 2022 (11) TMI 379 - ITAT MUMBAI] . Now, that the assessment order for assessment year 2017-18 has been reversed by the Co-ordinate Bench and has restored the issue back to the file of Assessing Officer for adjudication, we deem it appropriate to decide this issue in similar terms as the issue has neither been examined by the Assessing Officer or the DRP. Thus, ground of appeal allowed for statistical purpose.

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• 2023 (6) TMI 663
  Exemption claimed u/s 54F - assessee as co-owner of the other flats as has been alleged by AO - Claim denied as assessee owned interest in more than one residential properties - whether the co-ownership of the assessee in more than one residential properties could make assessee liable for non-eligibility of deduction u/s 54? - HELD THAT:- We find that decision of Dr. P.K. Vasanthi Rangarajan [ 2012 (7) TMI 563 - MADRAS HIGH COURT] is in favour of the assessee and not a single decision of the Jurisdictional High Court , which is adverse to the assessee, has been referred by the Ld. DR and therefore claim of deduction u/s 54F of the Act need to allowed, as there is no material to show that assessee is exclusively owner of the other five residential properties/flats which are occupied by the other family members. The grounds of appeal of the assessee are accordingly allowed.

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• 2023 (6) TMI 662
  Disallowance of depreciation - assets (Vehicles / Car) are purchase in the name of the Directors of the company - HELD THAT:- It is a well settled position that even if the assets are purchase in the name of the Directors of the company and the same are used for the purpose of the business of the assessee company, then the assessee company is eligible to claim depreciation on the same, irrespective of the fact that the assets (vehicles) are not registered in the name of the company. In the case of Bajaj Herbals (P.) Ltd [ 2021 (7) TMI 729 - ITAT AHMEDABAD] held since car was reflected as an asset of company and car loan also appeared as a liability in balance sheet of company and car was used for business of assessee, assessee was to be allowed benefit of depreciation on said car even though it was bought by company in name of its Director. In the instant facts, CIT(Appeals) has made a specific observation that firstly, the assets (vehicles) have not been acquired out of funds of the assessee company, secondly, the assets have been purchased in the names of Shri Bharat Agarwal, Dinesh Chandra Agrawal, however, the assessee has not been able to show the relation of these person with assessee company. We are hereby restoring the file to the Ld. CIT(Appeals) to verify whether the firstly, assets (vehicles) have been acquired out of funds of the assessee company, secondly, whether Shri Bharat Agarwal, Dinesh Chandra Agrawal i.e. person in whose names the vehicles have been registered are the Directors of the assessee company. In case, the assessee is able substantiate the above two aspects, Ld. CIT(Appeals) may allow the appeal of the assessee. Addition u/s 40A(3) - payment by bearer cheque - HELD THAT:- Out of the total payment of Rs. 3.09 crores made to the same party i.e. Shri Dharmendra Rajput, proprietor, Sunrise Construction, a sum of Rs. 6,35,000/- was paid by way of bearer cheque, on account of an inadvertent mistake, wherein account payee cheque was omitted to be mentioned on the face of the cheque. It is not the case of the Department that any cash withdrawal was made in the instant facts. Payee also treated the aforesaid bearer cheque as account payee cheque and deposited the money in the bank along with other account payee cheques. The genuineness and details of the payee/transaction are not also doubted. In the case of Ramaditya Investments [ 2003 (5) TMI 56 - DELHI HIGH COURT] it was held that the provisions of section 40A(3) are not attracted where the parties are identified and there was no material on record to doubt the genuineness of payment. Where a transaction is found to be genuine and the identity of the payee is established, a liberal view on compelling and mitigating circumstances should be taken. This principle was also affirmed in the case of Janam Bhoomi [ 1996 (12) TMI 37 - GAUHATI HIGH COURT] In the present case, the mistake is clearly bona-fide and inadvertent looking into the totality of circumstances. Decided in favour of assessee. Non-deduction of TDS - payments made to transporters - assessee has failed to submit the PAN of recipients and thus there was violation of the provisions of section 194C - HELD THAT:- As per the facts placed before us, admittedly the assessee has not deducted TDS on payments made to some parties and has also not furnished in their PAN numbers. Accordingly, we find no infirmity in the order of CIT(Appeals), who on appreciation of the instant facts, gave partial relief to the assessee.

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• 2023 (6) TMI 661
  Revision u/s 263 - Cash payments towards purchase of capital goods - Violation of the provisions of section 40A(3) - HELD THAT:- The provisions of section 40A(3) of the Act will not apply to repayment of loans or payment towards the purchase price of capital assets such as, plant and machinery not for resale. In light of the Circular No. 34 dated 05.05.1970 issued by the CBDT though the ld. PCIT in his order mentioned that he has perused the record, ledger account filed during the assessment proceedings, but had he appreciated this ledger account in true perspective, he would have come to know that all the payments have been made for purchase of capital assets on which subsequently, depreciation was claimed as is evident from the depreciation chart. PCIT himself could have examined the impugned transactions and if he had done so, he would have come to know that the payments have been made for purchase of capital goods and disallowance could not have been made u/s 40A(3) of the Act as per the CBDT Circular - Thus we set aside the order of the PCIT and restore that of the AO framed u/s 143(3) of the Act. Decided in favour of assessee.

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• 2023 (6) TMI 638
  Penalty u/s 271B - default u/s. 44AB - failure to get books of accounted audited and furnish the audit report - reasonable cause - Assessee plea that accounts having been audited under the Kerala Act - HELD THAT:- The assessee is a business organization, maintaining regular accounts and, as it appears, for several years, which are regularly subject to audit under the Kerala Act and, perhaps, even under the Act. Why, then, one wonders, it, being serviced by professionals, did not get it s accounts for the relevant year audited, obtaining and furnishing the audit report u/s. 44AB of the Act. There is no explanation for the same at any stage. This becomes all the more intriguing as admittedly the accounts stand maintained and, in fact, duly audited, albeit under the governing Act, so that all that was required to be done was to obtain the audit report u/s. 4AB, which seeks factual information on various compliances under the Act, and furnishing it along with the statutory audit report under the Kerala Act. The facts are admitted, and no case for non-levy of penalty has been made out even before us. That apart, this very plea, i.e., of accounts having been audited under the Kerala Act, was found as untenable in law by the Hon ble jurisdictional High Court in Peroorkkada Service Cooperative Bank [ 2020 (1) TMI 624 - KERALA HIGH COURT ], upholding the levy of penalty under like situation. We have, under the circumstances, no hesitation in confirming the penalty. Decided against assessee.

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• Customs

• 2023 (6) TMI 660
  Grant of Bail - overvaluation of goods which were being exported, claiming higher rate of duty drawback and other incentives - correct transaction value in terms of section 14(1) of the Customs Act, 1962 or not - HELD THAT:- There is no material on record to indicate that the Applicants had availed higher rate of duty drawback on the shipping bills. The Applicants have appeared before the Authority and the statement of the Applicants has been recorded on various dates. Considering the nature of accusations this would not be a case for custodial interrogation. The Applications are allowed on the terms and conditions imposed with following:- (a) In the event of arrest of the Applicants - Shri. Nitish Kumar Roy and Shri. Yadavendra Kumar Roy they shall be released on bail on furnishing bail bonds in the sum of Rs. 50,000/- each with one or two sureties in the like amount.

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• 2023 (6) TMI 659
  Maintainability of petition - availability of statutory appellate remedy against the order of confiscation - perishable nature of the commodity that has been confiscated - HELD THAT:- While it is no doubt well settled that the extraordinary jurisdiction of this Court under Article 226 can be exercised in particular cases notwithstanding the existence of an alternate remedy provided under the statute, the conduct of the appellant in the instant case does not warrant the exercise of the extraordinary jurisdiction of this court. We cannot lose sight of the fact that the appellant had earlier approached this Court through a Writ Petition impugning the confiscation order and the said Writ Petition was eventually disposed by relegating the appellant to his alternate remedy of pursuing the appellate remedies under the statute - Having proceeded down that route, the appellant cannot now approach this Court aggrieved by the order of the First Appellate Authority, and prudence would require that this Court refrain from interfering with such appellate orders passed by the authorities in the hierarchy of appeals provided under the statute. It cannot be accepted that the Appellate Tribunal is not an efficacious alternate forum for redressal of his grievances. There are no reason to interfere with the impugned judgment of the learned Single Judge - appeal dismissed.

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• 2023 (6) TMI 658
  Exemption from duty - Eligibility of polyethylene (PET) granules used in testing of moulds manufactured - N/N. 52/2003-Cus dated 31st March 2003 - alleged wrong availment of exemption accorded to inputs required for manufacture of goods intended for export even though the impugned polyethylene (PET) granules were actually utilised for testing their machines - HELD THAT:- The definition of consumables in paragraph 9.15 of the Foreign Trade Policy (FTP) is broad enough to cover goods that do not go into the final product but, nonetheless, is essential to the final product. An untested product, especially custom-made, as held in re Flex Engineering Ltd, is not a product that will be accepted by the customer and, therefore, undeniably rendering the raw materials used for test production as consumables eligible for exemption. The output of test of manufactured capital goods is distinguishable from test run of installed machinery which precedes actual commercial production and it would appear that the jurisdictional authorities were unable to appreciate the distinction which shifts an input from raw material to consumables for the purposes of the impugned notification. The clubbing of all of these as inputs for the purpose of accountal of eligible quantities of each does not exclude any type of goods used in production and the jurisdictional authorities have not been able to show that the standard input output norms (SION) have not been conformed to - That the polyethylene (PET) granules deployed in production of goods in trial run of moulds manufactured by the appellant have been considered as inputs for manufacture between March 2010 and March 2013 for the purposes of CENVAT Credit Rules, 2004. These are, thereby, procured for manufacture of output and it is not open for Revenue to adopt a contrary stand merely for denial of exemption on procurement under a scheme of the Foreign Trade Policy (FTP). Considering that polyethylene (PET) granules are used during the manufacture of moulds that are the acknowledged export product of the appellant and which, even if not deployed in manufacture of mould, renders the acceptability of the goods for the customer in the absence of which export obligation would remain unfulfilled, it is nothing but consumables which are covered by the omnibus enumeration of eligible requirements other than capital goods, the impugned order has erred in denying the benefit of exemption. The impugned order is set aside - appeals allowed.

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• 2023 (6) TMI 657
  Classification of goods proposed to be imported - Interactive Display System (View Board) - to be classifiable under Chapter heading 8471 4190 of Customs Tariff Act, 1975 or not. It is alleged by the applicant that the subject goods satisfy all the four essential conditions mentioned in Note 5(A) to Chapter 84 and therefore, qualify to be considered as ADPMs, classifiable under Heading 8471. HELD THAT:- The subject goods, Interactive Display System (ViewBoard) has an in-built Central Processing Unit, RAM for execution of programs, pre-installed operating system namely Android 7.0, Open Pluggable Specification Slot to download and install new programmes and operate other operating systems such as Windows, etc. Additional features include, slots for HDMI, VGA, LAN, USB, RS232 and audio ports, high internal storage capacity, UFT (Ultra Fine Touch) Technology to offer more precise writing and faster processing time, air quality sensor, germ resistant screen, two touch pens (stylus), remote control, 70-80% glare free surfaces with a flicker free display, multi-touch interaction, handwriting recognition, freehand touch, go typing and applications such as calculator, stopwatch, buzzer. They are wall mounted, do not incorporating tilt, swivel or height adjustment mechanism and are available in dimensions 55 , 65 , 75 , 86 and 98 . They are used in classrooms for teaching and in companies for presentations, meetings etc. It is pertinent to mention that the principles for classification of goods are governed by the General Rules of Interpretation (GRI) and Harmonized Commodity Description and Coding System (Harmonized System or HSN). According to Rule 1 of the General Rules of Interpretation (GRI), titles of Sections, Chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes. - Chapter 8471 of Customs Tariff Act, 1975 covers, Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included . Whether the features and specifications of the subject goods under consideration meet the criteria as laid down in the relevant chapter note? - HELD THAT:- It is understood that Automatic data processing (ADP) machines have storage capability and also stored programs which can be changed as per the performance of tasks. Digital machines process data in coded form. A code consists of a finite set of characters (binary code, standard six-bit ISO code, etc.). The data input is either automatic through the use of data media such as magnetic tapes or manual by means of keyboards, touchscreen etc. The input data are converted by the input units into signals which can be used by the machine and stored in the storage units. The data is then operated by the CPU and operating system to produce output. From para 2, it is evident that these machines have an in-built CPU, Android operating software and high internal storage capability which is directly accessible for the execution of a particular program and which has a capacity sufficient to store those parts of the processing translating programs and the data immediately necessary for the current processing run. Therefore, the goods satisfy the condition specified in Note 6(A)(i). From the product details submitted, it appears that these goods come with a pre-installed operating system, namely, Android, that is the customized operating system for these device. It has an OPS slot, enabling connection of additional hardware and installing other operating software such as Windows, etc. It is capable of downloading and installing new programmes in accordance with the needs of the user and executing any application/program stored on its memory. Therefore, the goods satisfy condition as per 6(A)(ii). Interactive Display System, perform the arithmetical computations specified by the user which satisfy condition 6(A)(iii) of the chapter notes. Note 6(B) to chapter 84 states Automatic data processing machines may be in the form of systems consisting of a variable number of separate units. Note 6(C) to chapter 84 specifies the conditions for a unit to be classified as being part of an automatic data processing system. Note 6(D) to chapter 84 lists certain separately presented products that are to be excluded from heading 8471, even if they can be classified as part of an ADP system. Note 6(E) to chapter 84 mentions that a machine incorporating or working in conjunction with an automatic data processing machine and performing a specific function other than data processing are to be classified in the headings appropriate to their respective functions or failing that, in residual headings. In a standalone configuration, the devices under consideration process applications compatible with the various Android operating system join wired or wireless networks, access and manipulate folders and files, and perform general computing tasks such as Internet browsing, email, and editing office documents. Therefore, from the working and features of the impugned goods, it appears that these are neither units of ADP machines nor ADP machines presented in the form of systems, but ADP machines themselves. It is found that the subject goods are capable of performing plethora of functions independently on standalone basis and these devices are much more than mere display devices. In fact, display is only one of the features of the goods and cannot be construed to be its only function, much less its principal function. Also, the subject goods satisfy all the conditions laid down under Note 6(A) of Chapter 84, thereby validating the expression automatic data processing machine . Thus, Interactive Display System (ViewBoard) models mentioned in para 1 merit classification under Heading 8471 and more specifically under sub-heading 84714190 of the first schedule to the Customs Tariff Act, 1975.

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• 2023 (6) TMI 656
  Classification of goods proposed to be imported - import of LED socket assembly for the manufacture of Front Fog Lamp for automobile applications - classifiable under heading 8512 2010 or under Heading 8512 9000? - benefit under N/N. 69/2011 dated 29.7.2011 as amended (SI. No. 656) - HELD THAT:- The applicant intends to import LED socket plug assembly (subject goods) for the manufacture of front fog lamp of an automobile. From the submitted information and images it appears that the subject goods are one of the parts to be used alongwith other parts in the manufacture of front fog lamp for automobiles. From the HSN Explanatory notes it is seen that Chapter Heading 8541 of CTA provides for Semiconductor devices (for example, diodes, transistors, semiconductor-based transducers); photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes (LED), whether or not assembled with other light-emitting diodes (LED); mounted piezo-electric crystals. Whereas, it is not the case in respect of the subject goods, i e , LED socket assembly, which as per the information provided, is merely a part for the production of anti-fog lamp for automobiles. Considering the same, the subject goods do not merit classification under Heading 8541. The subject goods namely LED Socket Plug Assembly is a combination of assembly of LED with associated circuit with a fixture for anti-fog lamp for vehicle. Further, this is required to be assembled with other parts viz. Lens, Inner Lens, Holder, Filter, Adjusting Screw Assembly and Body to produce a complete fog lamp for automobiles. CTH 8512 provides for Electrical lighting or signalling equipment of a kind used for cycles or motor vehicles. Headlamps of all kinds including lamps fitted with dimming or dipping attachments diffused driving lamps; anti-fog lamps are covered under this heading - by virtue of Section note 2 of the Section XVI of the schedule Ito the Customs Tariff Act, 1975 read with the general provisions regarding the classification of parts i.e., the General Explanatory Note to Section XVI of Harmonized Commodity Description and Coding System Explanatory Notes, parts of the goods of heading 8512 are also classified under heading 8512 - the subject goods merit classification under Heading 8512 90 00 as parts. Whether subject goods are eligible for the benefit of duty exemption under serial no. 656 of the notification no. 69/2011-Cus. dated 29.7.2011? - HELD THAT:- The entry at serial no. 656 in the said notification provides for eligibility for nil Basic Custom duty in terms of India -Japan Free Trade Agreement upon production of valid Country of Origin (COO) Certificate for all goods falling under heading 8512 90 of the Customs Tariff Act, 1975. The subject goods namely LED socket assembly merit classification under Heading 8512 and more appropriately under sub-heading 8512 9000 of the Customs Tariff Act, 1975 - the subject goods would be eligible for benefit of serial number 656 of notification No. 69/2011-Cus., dated 29.7.2011.

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• 2023 (6) TMI 655
  Maintainability of Advance Ruling application - application filed before proper jurisdictional Advance Ruling Authority or not - Classification of goods proposed to be imported - Supro Nuggets 570 G IP - classifiable under Tariff Item 35040091 of the First Schedule to the Customs Tariff Act, 1975 or not - what is the appropriate classification of Supro Nuggets 570 G IP soy protein nuggets under the Tariff? - HELD THAT:- The copy of agreement entered in to in year 2020 was valid for only one year i.e. up to 31 July 2021. But more importantly, it is observed from its contents that M/s JWL Cold Storage Private Limited has basically agreed to provide services of warehousing, inventory accounting, goods security, organizing and reporting inward and outward movement of the goods and secretarial assistance as a part of logistics support services stipulated in the para 3 of the said agreement to the applicant. On scrutiny of the subject agreement it is also observed that said agreement contains various other responsibilities/assignments for JWL regarding safekeeping /title /sanitisation /taxes /safety and health/insurance/inspection etc. On scrutiny of the application and annexure/submission thereto submitted by the applicant, it is evident and although the address provided by the applicant i.e. 15-45, National Highway 4B, Panvel- JNPT Highway, Village-Padeghar, District Raigad, Taluka Panvel, Maharashtra-410206 falls under the jurisdiction of CAAR, Mumbai but from the agreement referred, it can t be construed as the office address of the applicant. However, an address i.e. 6th Floor, Tower C, DLF Cyber Greens, Sector- 25a, DLF City Phase III, Gurgaon, Gurugram, Haryana, 122002 provided in the said application falls under the jurisdiction of the CAAR, Delhi, in terms of regulation 6 of the CAAR Regulations, 2021 - Attempt of the applicant to falsely project their logistics service provider s address as their office address and the same as falling under the jurisdiction of CAAR, Mumbai requires rejection of application on the grounds of jurisdiction alone as per provisions of Regulation 6 of Customs Advance Ruling Regulations, 2021 read with provisions of Section 28 H of the Customs Act, 1962. CCAR-1 application of the applicant M/s Solae Company India Private Limited is hereby rejected on the ground of lack of jurisdiction with an observation that the applicant has to file the application for seeking advance ruling under section 28- H of the Customs Act 1962 before proper jurisdictional Advance Ruling Authority i.e. CAAR Delhi. Application dismissed.

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• 2023 (6) TMI 654
  Classification of goods proposed to be imported - Provisionally preserved Areca nut - to be classified under tariff entry 0812 9090 or under CTH 0802? - HELD THAT:- The process of preservation is mentioned in the proforma invoice as the provisionally preserved Areca Nuts are solely treated with Sulphur-di-oxide gas in closed chambers for two hours and will be confined in the closed condition for 24 hours or shall be preserved by Blanching with Sodium Benzoate solution and Potassium Solution. These Nuts would require further processing before direct human consumption . The preservatives can be removed before consumption through simple processes carried out with sodium benzoate solution and the nuts can be treated with sodium bi-carbonate and when washed with plain water the excess benzoic acid will get removed and by this way of neutralisation. The chapter note 3 specifies the physical status of the goods along with corresponding processes that could be carried on those goods under this chapter. The areca/ betel nut is mentioned in Heading 0802 as well as 0812. The explanatory note to Heading 0802 states that This heading also covers areca (betel) nuts used chiefly as a masticatory. One of the main uses of the goods under CTH 0802 is masticatory. The provisionally preserved betel nuts are not fit for immediate human consumption and they are more specifically covered under Chapter heading 0812 due to chapter note 4. The subject product is treated with sulphur-di-oxide gas or sodium benzoate solution before packing and export for preservation. The said preservatives can be removed before consumption through simple processes, to make the product suitable for human consumption. It is observed that the subject goods remain unsuitable for immediate consumption in that state and need to be processed further to remove the preservatives to make the same suitable for human consumption. Thus, the conditions of chapter note (4) as mentioned above are duly fulfilled and hence the said goods come within the ambit of Customs Heading 0812. Thus, the subject goods namely provisionally preserved Areca nut merit classification under Chapter Heading 0812 and more specifically under sub-heading 0812 90 90 of the First schedule of the Customs Tariff Act, 1975.

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• 2023 (6) TMI 653
  Classification of goods intended to be imported - Roasted Areca Nuts - to be classifiable under CTH 2008 19 20 of the Customs Tariff Act, 1975 or under CTH 2106 - HELD THAT:- As per General Rules of Interpretation (GIR) 3(a) of the Customs Tariff Act, 1975 when by application of GIR 2(b) or for any other reason, the goods are, prima facie, classifiable under more than one Heading, the most specific description is preferred. When the Chapter/ Section notes along with terms of heading and explanatory notes are examined for both Headings 0802 and 2008, it is observed that roasted nuts which include roasted betel nuts find a specific description in Heading 2008. Therefore, on the application of GIR 3(b), the subject goods merits classification under Heading 2008 and more specifically under Subheading 2008 19 20 as Other roasted nuts and seeds . In view of specific CTH 2008 19 20: Other roasted nuts seeds in chapter 20 of the first schedule to the Customs Tariff, HSN Explanatory note to CTH 2008, various Supreme Court rulings upholding guiding value of the HSN Explanatory notes for deciding classification under Customs Tariff Act, 1975 and previously mentioned two Supreme Court judgments classifying roasted nuts which include almonds, betel nut and other nuts under chapter 20 by taking recourse to HSN explanatory note to Tariff Heading 2008 I hold that roasted betel nuts are correctly classifiable under the tariff item 2008 19 20 of chapter 20 of the first schedule of the Customs Tariff Act, 1975. Thus, the Roasted betel nuts fall under Tariff heading 2008, specifically under Tariff entry 2008 19 20: Other roasted nuts seeds of chapter 20 of the first schedule of the Customs Tariff Act, 1975.

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• 2023 (6) TMI 652
  Classification of the proposed items of import - Optoma Creative Touch 3-series Interactive Flat Panel (IFP) - to be classified under Sub-heading 84714190 or under sub-heading 85285900? - HELD THAT:- On perusal of the comments of the concerned Commissionerate on the application for advance ruling, it is observed that the word, Display in the description of item, Interactive Flat Panel Display; has caught their attention and same has been made basis to arrive at essential/principal function of the subject goods however, it appears that importance of the word, Interactive in the description of the subject goods, has not been discussed much. The word, Interactive, in the description of the subject goods immediately brings to the front various capabilities of the subject goods and on closer examination, the capabilities of the subject goods meet the requirement under Chapter Note 6 (A) of Chapter 84 for a machine to mean as automatic data processing machine . Moreover, once an item has inbuilt input unit, output unit along with processing unit then it is obvious that the item is capable of performing multiple functions - For such an item similar to the subject goods, the issue is to ascertain essential function and terms of the heading read with Section/Chapter Notes for determination of classification of such goods. In light of the foregoing, the issue of classification, in the instant application gets settled in terms of Rule 1 and Rule 6 of General Rules for Interpretation of Import Tariff (GRI) without inviting reference to Rule 3 of GRI. It is also noted that Customs Authority for Advance Rulings, Mumbai examined the question of classification of similar goods and ruled for classification of such goods similar to the subject goods in Sub-heading 84714190, in an appeal filed by M/s Ingram Micro India Pvt. Ltd. [ 2022 (2) TMI 308 - CESTAT NEW DELHI] . Thus, it is evident that the proposed items of import namely, Optoma Creative Touch 3-series Interactive Flat Panel (IFP) (Model- 3652RK, 3752RK 3862RK) merit classification under Sub-heading 84714190 of the First Schedule to Customs Tariff Act, 1975.

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• Corporate Laws

• 2023 (6) TMI 651
  Seeking to declare the Meetings of the Board of Directors of the first Respondent Company/M/s. MetroCorp Infrastructure Ltd. as null void - seeking to declare the Mortgage Deeds signed pursuant to the aforesaid Meetings as null void - direction of removal of the second Respondent from the Board of Directors of MetroCorp. - case of Oppression and Mismanagement or not. HELD THAT:- It is seen from the record that it is an admitted fact by the Appellants themselves that Board Meetings were conducted on 29.10.2008, 25.02.2009, 23.06.2009, 02.09.2009, 27.12.2010, 18.03.2011, 05.10.2011 17.10.2011, but it is the case of the Appellants that the four Board Meetings dated 02.11.2009, 10.11.2009 25.10.2010 were conducted without issuing proper Notice and were not convened as Article 87(iii) of the AoA and that their nominee Director was not present only because due process of service of Notice was not followed. It is seen from the record that the Board Meetings dated 02.11.2009, 10.11.2009 25.10.2010 which the Appellant is strongly contesting are illegal, null void, are the dates falling in between the aforenoted admitted Board Meetings and being a majority Shareholder the Appellant has failed to adduce any evidence in support of his case that these Board Meetings were not conducted as per procedure of Law specifically taking into consideration that Mr. Jason Van Hoong, who has based in Singapore and China has not chosen to attend a single Meeting either personally or through video conference. This Tribunal is of the view that the Appellant has not denied the submission of the Respondent before the NCLT regarding the entries in the passport of Mr. Jason Van Hoong standing testimony to the fact that he had never attended any of these Meetings in India. It is stipulated in Section 283 of the Act that if a Director absents himself from three consecutive Meetings of the Board of the Directors or from all Meetings of the Board for a continuous period of three months, whichever is longer without obtaining leave of absence from the Board, the said Director is ceased to be a Director - The Appellants have not filed any material/documents in support of their contention that being a majority Shareholder they had taken all the steps to be lawfully involved in the Project through their Directors. It is evidenced from the record that a Notice of EGM dated 24.06.2013 for the Meeting proposed to be held on 30.07.2013 was sent through RPAD and the Respondent herein has filed the Postal Receipts establishing that the Notices were indeed sent and served. A Board Meeting was also scheduled to be held on the same date and a Notice was also issued for the same, the agenda being increase of Share Capital to Rs.1,10,00,000/- and to pass special Resolution to allot Equity Shares to the existing Shareholders - This Tribunal keeping in view the fact and circumstances of the case on hand and the documentary evidence holds that both the EGM and the Board Meetings held on 30.06.2013 were legal void. As far as the impugned Mortgage Meetings which the Appellant is contesting, keeping in view the material on record we agree with the finding given by NCLT that though the other Board Meetings held before and after the Impugned Meetings, were admitted by the Petitioner/Appellant, being a majority Shareholder, has indulged in dereliction of their statutory duties and has indulged in filing multiple proceedings before various fora. Subsequent to these developments, a Settlement Agreement was entered into between the parties vide a Share Purchase Agreement dated 29.09.2016 an MoU of the same date and an Escrow Agreement dated 14.02.2017 of the same date. It is the case of the Appellant that a fraud was committed by the Respondents as the Plots which were meant to finance the purchase of the Appellant s shares, have already been sold by the Respondents. The scope and objective of Sections 397, 398 399 of the Act defining Oppression and Mismanagement does not entail the Tribunal to adjudicate on the issues arising from the facts of the attendant case on hand. Even if there is any breach of the Terms of Settlement, it cannot be construed as an issue which would fall within the ambit of the definition of Oppression and Mismanagement as defined under the Act. Appeal dismissed.

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• PMLA

• 2023 (6) TMI 650
  Money Laundering - proceeds of crime - predicate offences - diversion of funds from home-buyers from the accounts of Unitech Limited or its associate company - existence of mens rea - triple test - Flight Risk - Influencing Witnesses and Tampering with Evidence - whether the Proviso to Section 45(1) of the PMLA will be applicable to the applicant being a woman? - HELD THAT:- PMLA does not define a woman . It is neither the intention of the Constitution of India nor the intention of PMLA to classify women on the basis of their education and occupation, social standing, exposure to society, etc. - It is also settled principle of interpretation that while interpreting a statute and/or a Section, the Courts are not to substitute or add or subtract words from the Section. The same would be amounting to supplanting the intention of the Legislature. Once the word woman has been used in the Proviso to Section 45(1) of PMLA, the Court is not to further sub-classify women into different categories and apply the twin condition of Section 45 to some category of women and to exclude some category of women from the twin condition of Section 45. Doing the same would be not only be violative of Article 14 of the Constitution but also be a great injustice to the intention of the Legislature - In Devki Nandan [ 2022 (9) TMI 1216 - DELHI HIGH COURT ] this Court has already held that the proviso to section 45(1) PMLA is an exception and once a person comes within the exception, the twin condition of Section 45 PMLA will not be applicable to such person. This court has observed in Kewal Krishan Kumar [ 2023 (3) TMI 746 - DELHI HIGH COURT ] that the legislature has carved out the proviso to section 45(1) as a lenient provision for persons below sixteen years of age, women or persons who are sick or infirm. Once an accused is a woman, the Proviso to Section 45(1) kicks in and the applicant would fall within the proviso - However, this does not mean that the applicant will not be required to satisfy the triple test for grant of bail. In order to prove mens rea, the respondent/prosecuting agency is required to show something more than merely an allegation. In the present case, though the prosecuting agency has tried to substantiate the allegations by showing transfer of POC as well as section 50 PMLA statements, but what persuades me is that the Applicant has provided a prima facie reasonable, satisfactory explanation for each of the allegations. Whether the prima facie satisfactory explanation crystallises into substantial defence leading to an acquittal or is merely an eye-wash or a sham can only be determined after evidence - The explanations furnished by the Applicant seem reasonable to me to believe that prima facie the Applicant is not guilty of the offence of money laundering. A coordinate bench of this court in Chandra Prakash Khandelwal [ 2023 (2) TMI 993 - DELHI HIGH COURT ] has held that weightage given to section 50 statement is to be analysed at the final stage and not at the stage of grant of bail. Hence, prima facie not much reliance can be placed on section 50 statements in view of inconsistency in the statements of Indrajit Zaveri, Anuj Malik and Pranav Kumar. Triple Test Flight Risk Once the Hon ble Supreme Court has granted liberty to the applicant to move appropriate bail application before the appropriate Court, the appropriate Court has to adjudicate the application on its own merits and the reliance of the respondent on an earlier order prior to the order of 10.08.2022 passed by the Hon ble Supreme Court may not be of much relevance. In addition, the respondents have interrogated the Applicant on numerous occasions and lastly on 15.09.2022. Thereafter the respondents have not felt the need to interrogate the Applicant for a period of more than 7-8 months - Regarding the applicant being a citizen of another country i.e., Dominican Republic, which does not have an extradition treaty with India, the learned senior counsel for the Applicant states that the Applicant is willing to renounce the citizenship of Dominican Republic as a bail condition and is already in the process of taking Indian citizenship. Triple Test Influencing Witnesses and Tampering with Evidence A perusal of the chats show that the messages are with regard to settling of a counter affidavit, exchanging greetings, details of bank accounts asked for by the court, filling of bail bonds and so on and so forth - It cannot be lost sight that the applicant is the wife of Mr. Sanjay Chandra who is in Police custody. The applicant is allowed meetings and regular jail visits. All these messages could very well have been put by her to Mr. Sanjay Chandra during these jail visits. There is nothing incriminating in the messages except the fact that Mr. Sanjay Chandra should not and could not have a telephone while in jail, for which, an FIR has already been registered. There are no messages which have been brought to my notice which show handling of money, monetary transactions, business decisions, siphoning off funds etc. Furthermore, as regarding tampering with evidence is concerned, it is already stated that all the documents are in the custody of the ED and therefore, the allegation of the Applicant tampering with the evidence or influencing the witnesses is not made out. The twin conditions of Section 45 of the PMLA will not be applicable to the applicant. The applicant has to satisfy the triple test which can be taken care of by imposing stringent conditions. The applicant has already been investigated for more than 13 occasions and has been in custody for more than 20 months. The application is allowed and the applicant is granted bail subject to the terms and conditions imposed.

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• Service Tax

• 2023 (6) TMI 649
  SVLDRS - Power of Committee u/s 128 of the Finance Act, 2019 to review - Period of limitation - Issuance of statement to modify the same suo moto on discovering arithmetical/clerical mistake after expiry of 30 days. Whether the Designated Committee once have issued statement on 16.01.2020 vide Annexure P/5 u/s 128 of the Finance Act, 2019 review the same after expiry of 30 days i.e. on 28.02.2020? HELD THAT:- It is settled principle of law in jurisprudence that in cases pertaining to provisions concerning concession/relaxation/discount/rebate, doubt if any has to be resolved in favour of the Revenue. The reason is not far to see. The principal object of a Taxing Statute is to collect revenue for the State. If the said Statute extends a benefit/ relaxation/ concession/ discount/rebate then to ensure that such concessional provisions do not offend the said principal object, the Courts have laid down that such concessional provisions under Taxing Statute are to be read in favour of Revenue in case of doubt. Moreso, it is further settled in law that whenever a statutory provision prescribes a thing to be done within a certain period of time without further stipulating the consequence of failure to do so, then the provision relating to the time period prescribed cannot be treated as mandatory. Going by the principle laid down in the case of Apex Court in UNION OF INDIA VERSUS WOOD PAPERS LTD. [ 1990 (4) TMI 55 - SUPREME COURT] and Novopan India Ltd., Hyderabad [ 1994 (9) TMI 67 - SUPREME COURT] , it is obvious that provision of Section 128 of the Finance Act, 2019 in case of any doubt is to be read in favour of the Revenue. More so, the non-prescription of any consequence for not reviewing the statement within 30 days is a clear indication of the fact that provision of Section 128 of the Scheme is not mandatory. As a necessary fall out, the time period of 30 days stipulated in Section 128 is relaxable if reasons are assigned by the Revenue which do not fall foul of reasonableness clause under Article 14 of Constitution. The factual matrix herein reveals that the power of review u/s 128 of the Scheme was exercised in public interest of avoiding loss to the public exchequer. Due to oversight, CENVAT CREDIT of Rs.23,52,892/- was not included while computing tax dues which led to the ultimate relief of Rs.8,97,037.20 under the Scheme, instead of the due amount of Rs.26,71,509/-. If this oversight was not detected and remedied, the Revenue would have been put to loss of Rs.17,74,472.20 (Rs.26,71,509.00 Rs.8,97,037.20). The reason assigned for delayed review cannot be termed as arbitrary and thus is saved from being sacrificed at the alter of Article 14 of the Constitution - it is obvious that the action of the Revenue which is impugned herein cannot be found fault with. Petition dismissed.

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• 2023 (6) TMI 648
  Jurisdiction - power of Commissioner (Appeals) to remand back the matter - case of Refund of Service Tax - HELD THAT:- This issue has come up time and again before this Tribunal and this Tribunal has taken a consistent view in view of the Hon ble Supreme Court judgment in the case of MIL INDIA LTD. VERSUS COMMISSIONER OF C. EX., NOIDA [ 2007 (3) TMI 8 - SUPREME COURT ] and Hon ble Gujarat High Court judgment in the case of COMMISSIONER OF SERVICE TAX VERSUS VERSUS ASSOCIATED HOTELS LIMITED [ 2014 (4) TMI 406 - GUJARAT HIGH COURT ] whereby it was held that Commissioner (Appeals) has indeed power to remand the matter to the Adjudicating Authority. Thus, it is settled that the Commissioner (Appeals) has power to remand the matter to Adjudicating Authority. Accordingly, there are no error in the order of the Commissioner (Appeals) therefore the same is upheld - Revenue s appeal is dismissed.

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• 2023 (6) TMI 647
  Levy of Service Tax - amounts recovered as reimbursement of expenses while providing CHA service - to be included in value of taxable service when such service is not provided by CHA but by other agencies and CHA has only acted on behalf of its clients to pay such expenses and get reimbursements from clients, or not - HELD THAT:- There is no dispute that the appellant being CHA has been discharging their service tax on the agency service the expenses were incurred on behalf of their client and the same was reimbursed by the client. From the circular no. B43/1/97-TRU dated 06.06.1997r which is relevant to CHA service, it can be seen that during the provision of service of CHA the agency charges shall be taxable and reimbursable expenses incurred by CHA on account of various other expenses on behalf of the client cannot be part and parcel of the CHA service hence, the same cannot be taxable. The adjudicating authority and the Commissioner (Appeals) upheld the demand on reimbursable expenses invoking Rule 5(2) of Service Tax (Determination of Value) Rules, 2006 - Hon ble Apex Court in the case of UOI Vs. Intercontinental Consultants and Technocrats Pvt. Ltd. [ 2018 (3) TMI 357 - SUPREME COURT ] held Rule 5 of Service Tax (Determination of Value) Rules, 2006 as ultra vires to Section 67 therefore, considering this settled legal position, thus the reimbursable expenses incurred by the CHA which is other than the CHA Agency charges cannot be taxable hence, the demand on such reimbursable expenses is not sustainable. Levy of Service Tax - Business Auxiliary Service - incentive/commission received from shipping line or steamer agent for achieving business target - period from 01-04-2003 to 31-03-2008 - services in relation to procurement of customer and verification thereof - HELD THAT:- From the definition of Business Auxiliary Service, it can be seen that one of the service procured in relation to procurement of service against commission is chargeable to service tax. In the present case, the appellant have received the incentive/Commission from shipping line or streamer agent as commission agent, they have received the commission in course of provision of service of shipping line and streamer agent for the service recipient therefore, the commission is liable to service tax - On going through N/N. 13/2003-ST dated 20.06.2003, it is found that the service of Commission Agent was indeed exempted for the period from 01.07.2003 to 08.07.2004 therefore, the demand of the said period is not sustainable as, the same is covered under exemption. CENVAT Credit - input services such as Air conditioner repairs, motor car repair, travelling expenses etc. used in relation to business activities of this appellant - HELD THAT:- The service are indeed used in provision of the output service of the appellant i.e. CHA Service. In many judgments, this service have been held as admissible input service - Moreover, expenses on account of these services are indeed included in the cost of the output service. For this reason also, the input service are admissible under Rule 2(l) of Cenvat Credit Rules, 2004 therefore, it is held that the appellant are eligible for the cenvat credit on the input service in question. Extended period of limitation - penalty - suppression of facts or not - HELD THAT:- As the majority of demand is set aside accordingly, the penalties under Rule 76 and 78 of the Finance Act, 1994 are also not imposable invoking Section 80 of the Finance Act, 1994. Appeal allowed in part.

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• 2023 (6) TMI 646
  CENVAT Credit - invoices addressed to unregistered premises - Reversal of Cenvat credit in terms of Rule 6 of CCR - Service Tax on services provided by AM Best, Hong Kong. CENVAT credit availed by the appellant on invoices address to unregistered premises - HELD THAT:- This issue was considered by a Division Bench of the Tribunal in M/S RAJENDER KUMAR ASSOCIATESS VERSUS COMMISSIONER OF SERVICE TAX, DELHI-II [ 2020 (11) TMI 621 - CESTAT NEW DELHI] , and after placing reliance upon the decision of the Karnataka High Court and decisions of the Tribunal, the Division Bench observed that Once the requirement of rule 4A of the 1994 Rules and rule 9 of the 2004 Rules are satisfied, the benefit of CENVAT credit could not have been demanded. Thus, the Commissioner was not justified in denying the benefit of CENVAT credit on the unregistered premises. In view of the decision of the Tribunl in Rajender Kumar Associatess, it has to be held that the registration of the premises with the Service Tax Department is not a condition for availing CENVAT credit. The demand could not, therefore, have been confirmed. Reversal of CENVAT Credit - denial of benefit of section 73 (3) of the Finance Act to the appellant for the reason that the provision of section 73 (4) of the Finance Act would be applicable - HELD THAT:- Section 73(3) of the Finance Act provides that if service tax has been paid and due intimation has been provided to the Central Excise Officer, then a notice under section 73(1) is not to be issued. This fact that service tax had been deposited and intimation given is not disputed. Paragraph 2 of the show cause notice itself mentions that not only the credit had been reversed but the service tax had also been paid before the issuance of the show cause notice. The question that remains to be examined is whether the provision of sub-section (4) of section 73 of the Finance Act would be applicable. In the instant case, the service tax returns filed by the appellant do disclose the relevant facts. It cannot, therefore, be urged that there was any suppression on the part of the appellant, much less, suppression with an intent to evade payment of service tax. The appellant is also the public sector undertaking and in view of the decision of the Tribunal in the case of the appellant in Oriental Insurance Company Ltd., no mala fide intention can be urged - Such being the position, the provision of section 73(4) of the Finance Act could not have been invoked. The impugned order dated June 17, 2015 cannot, therefore, be sustained and is set aside - Appeal allowed.

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• 2023 (6) TMI 645
  Maintainability of appeal - appeal filed beyond the period prescribed under section 85(3A) of the Finance Act, 1994 - statutory requirement of pre-deposit was not satisfied. Delay in filing appeal - HELD THAT:- In the present case, it is clear from the order passed by the Commissioner (Appeals) that the order dated March 28, 2017 passed by the Additional Commissioner was received by the appellant on April 03, 2017. This finding has been recorded by the Commissioner (Appeals) on the basis of the statement made by the appellant in the Service Tax Form-IV enclosed with the memo of appeal. The appeal could have been filed by June 02, 2017 and only one month further delay could have been condoned by the Commissioner (Appeals), provided a satisfactory explanation was offered by the appellant for this period of one month. The appeal was filed on January 16, 2018 with a delay of about 278 days - Such being the position, it is not possible to accept the contention of learned counsel for the appellant that the provisions of section 5 of the Limitation Act should be invoked even if the delay is beyond the extended period of thirty days or that the Tribunal has a discretionary power to condone any delay in filing the appeal even after the expiry of the extended period of 30 days. Requirement of pre-deposit should have been waived by the Commissioner (Appeals) - HELD THAT:- The Supreme Court in NARAYAN CHANDRA GHOSH VERSUS UCO BANK [ 2011 (3) TMI 1478 - SUPREME COURT] , examined the provisions contained in section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 relating to pre-deposit in order to avail the remedy of appeal. The provisions are similar to the provisions of the Finance Act. The Supreme Court emphasised that when a Statue confers a right to appeal, conditions can be imposed for exercising of such a right and unless the condition precedent for filing appeal is fulfilled, the appeal cannot be entertained. The Supreme Court, therefore, held that deposit under the second proviso to section 18(1) of the Act, being a condition precedent for preferring an appeal, the Appellate Tribunal erred in law in entertaining the appeal. The Supreme Court also held that the Appellate Tribunal could not have granted waiver of pre-deposit beyond the provisions of the Act. The Commissioner (Appeals), therefore, committed no illegality in dismissing the appeal - Appeal dismissed.

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• Central Excise

• 2023 (6) TMI 644
  CENVAT Credit - inputs - Angle, Channel, Beam, TMT Bars, HR Steel Coil, HR Steel, MS Plates and cement etc. - period April 2015 to June 2017 - HELD THAT:- The appellant prima-facie appears to be eligible for Cenvat credit in the light of various judgments. However, the Cenvat credit admissibility can be ascertained only after verifying the fact about use of such steel items and whether the same was actually used. This aspect was not verified by the Adjudicating Authority therefore, the matter needs to be remanded back to the Adjudicating Authority for passing a fresh order after verifying about the use of the inputs in various plants as claimed by the appellant. Appeal allowed by way of remand.

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• 2023 (6) TMI 643
  Valuation - goods cleared from factory to depot on stock transfer basis and eventually sold therefrom - no prevailing depot price on the date of clearance from factory for the purposes of application of Rule 7 of the valuation Rules and neither was there any ex-factory selling price - violation of Rule 7 and 9 of Valuation Rules - HELD THAT:- The Appellant has cleared the goods from factory to depot on stock transfer basis. Since there was no prevailing depot price on the date of clearance from factory, they could not adopt the depot price for the purposes of payment of duty as provided under Rule 7 of the valuation Rules, 2000. The next best option available to the assesse was to adopt the exfactory selling price, if any, available. But, there was no ex-factory selling price available on the date of clearance from the factory to depot. We observe that the adjudicating authority also accepts in the impugned order that no price available as provided in Rule 7 of the Valuation Rules. Since no other value available on the date of clearance from the factory to depot, the Appellant discharged duty on the basis of import parity price as published by Platts, an international organization which notifies the prices of petrochemical products worldwide. The department contested this value and demanded duty on the basis of the ultimate selling price of the goods from the depot. The Appellant stated that there is no provision in the Valuation Rules which permits chasing the selling price of the said goods from the depot and pay duty on the basis of the ultimate selling price from the depot. When there is no other price available at the time of clearance of the goods from the factory to depot on stock transfer basis, the only way available is to determine the assessable value based on the best judgment method. In this case, the Appellant discharged duty on the basis of import parity price as published by Platts, an international organization which notifies the prices of petrochemical products worldwide - when there is no other price available, the adoption of import parity price as published by Platts by the Appellant cannot be faulted. The department has adopted the ultimate selling price of the goods from the depot. It is observed that there is no provision in the Valuation Rules which permits chasing the selling price of the said goods from the depot and pay duty on the basis of the ultimate selling price from the depot. The demand confirmed in the impugned order on the basis of the ultimate selling price of the goods from the depot is not sustainable - Appeal allowed.

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• 2023 (6) TMI 642
  Demand of differential duty - goods cleared to the own unit - valuation is governed by Rule 8 of Central Excise Valuation Rules 2000 or on the basis of the transaction value at which the goods are sold to the independent buyers? - Suppression of facts or not - time limitation - revenue neutrality - HELD THAT:- As regard the merit of the case, the issue has been decided against the appellant in as much as the larger bench in the case of ISPAT INDUSTRIES [ 2007 (2) TMI 5 - CESTAT, MUMBAI ] held that when partly goods are sold to independent buyer and partly to the assessee s own unit, the transaction value of the goods at which the goods is sold to independent buyer shall be taken as transaction value for the goods cleared to the related person by the assessee. However, the learned counsel has vehemently argued on limitation. Since the issue was not free from doubt and the matter was referred to larger bench and only then it attained finality. On the basis of the larger bench judgment the issue involved was of interpretation of valuation rules. Moreover, there is a force in the submission of the learned counsel that the recipient of goods in question are belonging to the same company and the duty payable by the appellant on such clearances is available as cenvat credit to the recipient unit hence, the entire exercise is revenue neutral. On this basis, it can be conveniently viewed that there cannot be any mala fide on the part of the appellant with intent to evade payment of duty. Therefore, in such circumstances the demand of extended period cannot be invoked - The demand for the extended period is set aside. Appeal allowed.

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• 2023 (6) TMI 641
  Valuation - supply by the retail outlets by providing infrastructure such as, tank, pumps, building etc. based on the requirements of such RPO - inclusion of rent recovered (Service Station Licence Fee SSLF ) by the appellant in the assessable value for the purposes of levy of excise duty - HELD THAT:- In the appellant s own case INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER OF C. EX., CHENNAI [ 2006 (9) TMI 440 - CESTAT, CHENNAI] , this Tribunal has held SSLF collected by the assessee from their dealers was in the nature of rental on land, tanks, pumps and kiosks installed by the former for the benefit of the latter. A similar fee was collected by M/s. Hindustan Petroleum Corporation Ltd. (HPCL, for short) from some of their dealers and the same was held to be not includible in the assessable value of the petroleum products supplied by M/s. HPCL to such dealers, by the Commissioner (Appeals), Mangalore. And the same was taken up by this Tribunal in the case of BPCL VERSUS COMMISSIONER OF CENTRAL EXCISE, COCHIN [ 2003 (9) TMI 168 - CESTAT, BANGALORE] where it was held that It is clear from the facts of the case that leasing out of outlets and sale of MS and HSD oil are separate transactions between the appellants and their buyers of MS and HSD. This is clear from the fact that no licence fee is levied from the dealers who have not leased out the outlets of the appellants. In the circumstances, it has to be held that licence fee, which is for a different transaction and consideration than the sale of MS and HSD cannot form part of the assessable value of MS and HSD. Thus, he issue is no more res integra. Accordingly, the SSLF is not includable in the assessable value - appeal allowed.

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• CST, VAT & Sales Tax

• 2023 (6) TMI 640
  Scope of order of the tribunal - Levy of tax on self consumption of petrol - disallowance of shortages regarding evaporation loss - selling of downgraded HSD as LDO - use of the self-consumption - levy of penalty in terms of Section 5 of Jammu and Kashmir Motors Spirit Diesel Oil (Taxation of Sales) Act, 2005 - HELD THAT:- It is settled proposition of law that failure to give reasons amounts to denial of justice. The reasons are live links between the minds of the decision maker to the controversy in question and the decision or the conclusion arrived at by the Tribunal or the Court. It goes without saying that the reasons substitute subjectivity by objectivity. Right to reason is an indispensable part of sound judicial system, which indicates the application of mind to the matter before the Court. Another rationale could be that the affected party can know why the decision has gone against him. One of the salutary requirement of natural justice is spelling out reasons for the orders made, in other words, a speaking order, but in the present case, the orders passed by the Tribunal are silent as no reasons have been spelled out with respect to all the questions of law raised in the applications - The non-recording of reasons could lead to dual infirmities. Firstly, it may cause grave prejudice to the affected party and secondly it hampers the proper administration of justice. These two cardinal principles are not only applicable to the administrative or executive actions, but they apply with equal force and in face with great degree of precision to judicial pronouncements. Reliance is being placed on the Judgment passed in case titled ASSISTANT COMMISSIONER, COMMERCIAL TAX DEPARTMENT, WORKS CONTRACT LEASING, KOTA VERSUS M/S SHUKLA BROTHERS [ 2010 (4) TMI 139 - SUPREME COURT ], wherein the Hon ble Apex Court in similar facts and circumstances has remanded the matter back to the High Court with a request to hear the case de-novo and pass appropriate order in accordance with law. In the case of Principal Commissioner of Income Tax-1 vs. M/s. Bajaj Herbals Pvt. Ltd, [ 2022 (4) TMI 398 - SUPREME COURT ], the Hon ble Supreme Court has held that unreasoned order should be remanded back to decide and dispose of the same afresh in accordance with law and on its own merits. The Tribunal has failed to record any reasons with respect to seven out of eight questions raised in the reference applications. It is well settled law laid down by the Hon ble Supreme Court in various and authoritative pronouncements mentioned supra that reasons must be recorded in a judicial order even when it relates to the non-reference of certain questions raised in the reference applications. The applicants had the right to know that what weighed with the Tribunal in not referring or even discussing the questions raised by the applicants in the applications. It is deemed appropriate to dispose of all the STR s and remand back matter to the Tribunal to decide and dispose of the reference applications afresh in accordance with law and on its own merits. If the Tribunal is of the opinion that proposed questions of law raised in the reference applications are not substantial questions of law and they are on factual aspects, it will be open for the Tribunal to consider the same in accordance with law. Revision disposed off.

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• 2023 (6) TMI 639
  Levy of surcharge under Section 5A of the Orissa Sales Tax Act, 1947 - tax payable under the OST Act is independent of the provisions of the OET Act or not - HELD THAT:- The matter is no longer res integra. It stands covered against the dealer and in favour of the Department in view of the judgment of the Supreme Court of India in Commissioner of Commercial Taxes v. M/s. Bajaj Auto Ltd. [ 2016 (11) TMI 31 - SUPREME COURT] where it was held that on a conjoint reading of Section 5 of the OST Act, Section 4 of the OET Act and Rule 18 of the Rules, we are of the considered opinion that the amount of surcharge under Section 5A of the OST Act is to be levied before deducting the amount of entry tax paid by a dealer. - the question is answered in favour of the Department by holding that the surcharge under Section 5A of the OST Act is to be levied before deducting the entry tax paid by the dealer pursuant to the Orissa Entry Tax Act, 1999. Whether on the facts and in the circumstances of the case the Tribunal is justified in determining the surcharge is to be levied after giving set off- of the entry tax paid by the dealer, when on the conjoint reading of Section 5 of the OST Act, Section 4 of the OET Act and Rule 18 of the Rules, the surcharge under Section 5A is to be levied before deducting the amount of entry tax paid by the dealer? - HELD THAT:- The question is answered in the negative i.e. in favour of the Department and against the Dealer/Assessee. The impugned order of the Tribunal is accordingly set aside. The matter will now be remitted to the Assessing Officer to re-compute the demand - revision petition is disposed of.

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