TMI Tax Updates - e-Newsletter
June 4, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
GST
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Profiteering - supply of “Food Processor” - allegation that the benefit of GST at the time of implementation of the GST, is not passed on - contravention of section 171 of CGST Act - The Respondent is therefore directed to reduce the price of the impugned product as per the provisions of Rule 133 (3) (a) of the CGST Rules, 2017, keeping in view the reduction in the rate of tax so that the benefit is passed on to the recipients.
Income Tax
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Disallowance under section 14A read with rule 8D - no expenses were incurred toward earning of dividend income shares of Dabur India Ltd, which was a strategic investment - contention of the assessee that, investment made for acquiring controlling interest in Dabur India Ltd should not be subject to disallowance under section 14A is rejected.
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Computation of Capital gain - Section 50C applicability - first proviso to Section 50C of the Act, is applicable retrospectively. It does not create any new right between the parties. It simply clarifies the existing position of law. - CIT(A) after referring to first proviso to Section 50C of the Act, directed the Assessing Officer to adopt the guideline value as on 04.08.2012, being the date of agreement and there after compute the assessee’s capital gain. Therefore the Revenue cannot have any grievance in the decision of the CIT(A).
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Benefit of deduction u/s 80IAB - Belated filing of returns - By permitting the Assessing Officer to scrutinize the Income Tax Return filed belatedly by the petition, the 2nd respondent is not really asking the Assessing Officer to straight away allow the benefit of deduction under 80IAB of the Act.
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Revision u/s 263 - estimation of income - Entire exercise of the fact finding in the form of estimation of income under the powers conferred upon the Assessing Authorities to make best judgment assessments, where the books of accounts are validly rejected, does not seem to have been adopted by the authorities below.
Customs
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Valuation of imported goods - Admittedly, it is evident on the face of the record that deductive value was available before the Court below which have not been rejected by a speaking order, thus, violating the provisions of Rule 3 (3) of the Valuation Rules - as the deductive value for calculation have not been rebutted by the Revenue, the same has to be followed for calculation of any adjustment in the transaction value in terms of Rule 3(3) of the Valuation Rules.
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Valuation of imported goods - aluminum scrap - case of the department is that the appellant have given a consent letter to the proposal of the enhancement of the value - It is clear that when the enhancement was not based on any contemporaneous import, in the present case, particularly, when the invoice price of the appellant was not disputed on the basis of any evidence of wrong declaration of the value, the enhancement in the present case is illegal and incorrect.
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Classification of imported goods - Petroleum Hydrocarbon Solvent - restricted item or not - In the absence of evidence that the imported goods meet with all the specifications laid down in supplementary note (c) to chapter 27, for a product to be classified as Kerosene, the case made out by the revenue cannot be sustained.
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Valuation of imported goods - Aluminium Scrap - rejection of declared value - These imports were made subsequent to the imports made in earlier order therefore, the ratio of the above decision of this tribunal is squarely applicable in the present case. The enhancement of the value is absolutely incorrect, arbitrary and without application of mind.
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Jurisdiction - appeal to High Court - appropriate forum - Smuggling - Provisional release of gold jewellery - Allegations in a Show Cause Notice are merely allegations, till proved, in adjudication. Were there to be no material, whatsoever, justifying clearance of the imported goods, such allegations may, conceivably, have a part to play, in examining the request for provisional release.
Corporate Law
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Jurisdiction of Writ Court - Transfer of shares - The Exercise of jurisdiction must be within the well-recognised constraints. It cannot be exercised like a 'bull in a china shop' to correct all errors of judgment of a court, or tribunal, acting within the limits of its jurisdiction.
Service Tax
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CENVAT Credit - input services - no nexus has been established between the availment of Club Membership and the output service of of the appellant i.e. Renting of Immovable Property - credit cannot be allowed.
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Business Auxiliary Service or not - appellants have collected amounts from their clients for payment of statutory charges to Electricity Board, Municipal Corporation, etc., on behalf of the clients - no service has been rendered by the appellant to the clients of the appellants in relation to promotion of business or marketing of the goods - demand do not sustain.
Central Excise
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Reversal of CENVAT Credit - when the appellant have reversed the credit, which should be proportionate credit on the common input service attributed to the exempted goods and also paid interest - the appellant have reversed Cenvat credit which is more than the proportionate credit attributed to exempted goods - The entire demand raised under Rule 6 will not sustain.
VAT
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Levy of VAT - Renting of space - Transfer of Right to use - Though the passive infrastructure of the petitioner are “goods” within the meaning of Article 366(12) of the Constitution of India and Section 2(21) of the TNVAT Act, 2006 yet there is no “transfer of right to use” within the meaning of extended definition of “sale” under Section 2(33)(iv) TNVAT Act, 2006 and Article 366(29A)(d) of the Constitution of India so as to attract levy of VAT
Articles
Notifications
Customs-
26/2020 - dated
2-6-2020
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Cus
Seeks to further amend notification No. 50/2017-Cus dated 30.06.2017 so as to temporarily reduce the import duty on Lentils (Mosur) till 31st Aug 2020.
GST - States-
38/1/2017-Fin(R&C)(03A/2020-Rate) - dated
2-6-2020
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Goa SGST
Seeks to amend Notification No. 38/1/2017-Fin (R&C)(1/2017-Rate), dated 30th June, 2017
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467/XI-2-20-9(42)/17-U.P. GST Rules -2017-Order-(121)-2020 - dated
15-5-2020
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Uttar Pradesh SGST
Governor, appoints the 21st day of April, 2020, as the date from which the provisions of the Uttar Pradesh Goods and Services Tax (Thirtieth Amendment) Rules, 2019, shall come into force.
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445/XI-2-9(47)/17-U.P. Act -1-2017-Order-(118)-2020 - dated
11-5-2020
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Uttar Pradesh SGST
Seeks to extend due date of compliance which falls during the period from "20.03.2020 to 29.06.2020" till 30.06.2020 and to extend validity of e-way bills.
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444/XI-2-9(47)/17-U.P. Act -1-2017-Order-(117)-2020 - dated
11-5-2020
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Uttar Pradesh SGST
Amendment in Notification No. KA.NI.-2-983/Xl-9(47)/17-U.P.Act-1-2017-Order-(42)-2019 Dated 02 July, 2019
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443/XI-2-9(47)/17-U.P. Act -1-2017-Order-(116)-2020 - dated
11-5-2020
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Uttar Pradesh SGST
Amendment in Notification No. KA.Nl.-2-159/XI-9(47)/17-U.P.Act-1-2017-Order-(107)-2018 Dated 31 January, 2018
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442/XI-2-9(47)/17-U.P. Act -1-2017-Order-(115)-2020 - dated
11-5-2020
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Uttar Pradesh SGST
Amendment in Notification No. KA.NI.-2-177/XI-9(47)/17-U.P.Act-1-2017-Order-(03)-2019 Dated 22.01.2019
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441/XI-2-9(47)/17-U.P. Act -1-2017-Order-(114)-2020 - dated
11-5-2020
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Uttar Pradesh SGST
Amendment in Notification No. KA.NI.-2-838/XI-9(47)/17-U.P. Act-1-2017-Order-(08)-2017 Dated 30.06.2017
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439/XI-2-9(47)/17-U.P. Act -1-2017-Order-(113)-2020 - dated
11-5-2020
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Uttar Pradesh SGST
Under section 148 to prescribe the due date for furnishing FORM GSTR-1 for the quarters April, 2020 to June, 2020 and July, 2020 to September, 2020 for registered persons having aggregate turnover of up to 1.5 crore rupees in the preceding financial year or the current financial year under the UPGST Act, 2017
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438/XI-2-9(47)/17-U.P. Act -1-2017-Order-(112)-2020 - dated
11-5-2020
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Uttar Pradesh SGST
Seeks to undergo authentication of the possession of Aadhar Card for special class of people w.e.f 01-4-2020
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2020 (6) TMI 81
Profiteering - supply of Food Processor - allegation that the benefit of GST at the time of implementation of the GST, is not passed on - contravention of section 171 of CGST Act - levy of penalty - HELD THAT:- It is evident from the details furnished in Annexure-17 18 that the profiteering is determined as ₹ 4,53,949/- as per the provisions of Rule 133 (1) of the CGST Rules, 2017. The Respondent is therefore directed to reduce the price of the impugned product as per the provisions of Rule 133 (3) (a) of the CGST Rules, 2017, keeping in view the reduction in the rate of tax so that the benefit is passed on to the recipients. The Respondent is also directed to deposit the profiteered amount of ₹ 4,53,949/- along with the interest to be calculated @ 18% from the date when the above amount was collected by him from the recipients till the above amount is deposited. Since the recipients, in this case, are not identifiable, the Respondent is directed to deposit the amount of profiteering of ₹ 2,26,975/- in the Central Consumer Welfare Fund (CWF) and ₹ 2,26,974/- in the State CWFs as per the provisions of Rule 133 (3) (c) of the CGST Rules, 2017, as mentioned in the Annexures- 17 18, along with 18% interest. Imposition of penalty - HELD THAT:- The Respondent has denied the benefit of reduction in the rate of tax to his buyers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017, and has thus resorted to profiteering. Hence, he has committed an offence under section 171 (3A) of the CGST Act, 2017, and therefore, he appears to be liable for imposition of penalty under the provisions of the above Section - Accordingly, a Show Cause Notice be issued to him directing him to explain why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on them.
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Income Tax
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2020 (6) TMI 80
Revision u/s 263 - finding was based on Audit Objection - Rejection of books of accounts and estimation of income - Assessment Order u/s.143(3) is erroneous and prejudicial in nature in as much as the depreciation and interest were allowed as deduction after estimation of income thereby allowing double deduction to the assessee - HELD THAT:- As the estimation of Income Tax is essentially a fact finding exercise, which becomes final at the hands of the final fact finding authority of Income Tax namely, Income Tax Appellate Tribunal and we would not have entertained this appeal which lies under section 260A of the Act, only on the 'substantial question of law' arising from the order of the learned Appellate Tribunal. But we see glaring perversity in the assessment order itself. The alleged 'market standards' adopted by the assessing authority to jack up the net profit from 1.56% on turnover declared by the Assessee to 8% seems to have been made without any basis whatsoever. There is not even an iota of evidence or reference, to any material or any parallel case referred by the assessing authority to adopt such rate of 8% of turnover. Even grounds or alleged discrepancies which permitted the assessing authority did not appear to be sufficient to reject the books of accounts. Arbitrarily assessed income tax by the assessing authority who had no legs to stand upon, cannot be sustained. More surprising is that even this assessment order which was unduly and falsely in favour of Revenue, (God Knows How??) was found to be erroneous and prejudicial to the interest of Revenue by the learned Commissioner and that is beyond our comprehension. Entire exercise of the fact finding in the form of estimation of income under the powers conferred upon the Assessing Authorities to make best judgment assessments, where the books of accounts are validly rejected, does not seem to have been adopted by the authorities below. We cannot countenance such an approach on the part of the revenue authorities of the Act. Therefore, we are inclined to set aside all the three orders passed under Section 263 of the Act and the order of the learned Tribunal dated 13.4.2016 and remit the matter back to the Assessing Authority to pass fresh assessments in accordance with law giving reasons for particular findings arrived at by the assessing authority.
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2020 (6) TMI 79
Unexplained investment in the purchase of property - Addition made u/s 69 merely on casual diary noting - Independent enquiry should be made by the Department on the market value of the property - Whether entire addition of unaccounted investment under Section 69 of Income Tax Act in the hands of the appellant, when the appellant was only holding 50% interest as co-owner of the said house property? - adjudication done under Section 47 (A) (1) of the Indian Stamp Act - HELD THAT:- A perusal of the order passed by the CIT (Appeals) dated 01.03.2019 as well as the original order dated 08.11.2019 passed by the Income Tax Appellate Tribunal did not deal with the aspect as to the adjudication done under Section 47 (A) (1) of the Indian Stamp Act. As appears from the materials placed in the form of additional typed set of documents dated 04.03.2020 filed by the appellant / assessee that challenging the adjudication done by the Special Deputy Collector, Salem, dated 19.08.2011, further appeal was filed under Section 47 (A) (5) of the Indian Stamp Act before the Chief Commissioner (Stamp), Salem and the value of the site fixed at ₹ 545 per sq.ft has been increased to ₹ 600 per sq.ft and it was also complied with. In the considered opinion of this Court, the said order passed by the statutory authority would definitely have a bearing on the adjudication done by the authorities below and despite the fact that specific ground has been raised before the CIT (Appeals) as well as before the ITAT, the said grounds have not been considered and adjudicated. Therefore, the following substantial question of law raises for consideration: Whether the order of CIT (appeals) dated 01.03.2019, as confirmed by the impugned order of ITAT dated 08.11.2019, as to the non consideration of adjudication done under Section 47 (A) (1) of the Indian Stamp Act as well as adjudication done by the Chief Revenue Officer / Inspector General of Registration, Chennai 28 in the appeal filed under Section 47 (A) (5) of the Indian Stamp Act, is sustainable in law? Substantial Question of Law framed is answered in affirmative in favour of the appellant / assessee,
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2020 (6) TMI 78
Benefit of deduction u/s 80IAB - Belated filing of returns - reasons given by the petitioner for filing the returns belatedly under Section 139 was apparently, on account of paucity of funds and account of the amendment to Section 115JB - HELD THAT:- In this case, the unnamed Chartered Accountant had purportedly advised the petitioner to delay in filing returns. He could also have not signed the report of audit in the prescribed form. It is perhaps the report of the Chartered Accountant who finalized the account for the petitioner later was made available for the assessment and the return was filed belatedly. Explanation offered by the petitioner that in view of amendment to Section 115JB created confusion and that there was paucity of fund for payment of tax under the aforesaid provision which resulted in delay in filing of the returns is of no significance as by not filing the returns in time, the petitioner has not gained any advantage. Petitioner had put to jeopardy to its claim for the benefit of deduction under Section 80IAB of the Income Tax Act, 1961. Though the delay has not been properly explained, issue as to whether the petitioner was otherwise entitled to benefit of the deduction, but for failure to file such return would require examination independently.There is a genuine hardship as the petitioner failed to file return on time to avail the benefit of the deduction. By condoning the delay, the 2nd respondent would be merely allowing the Assessing Officer to examine the petitioner s claim for the benefit of deduction under Section 80IAB of the Act, on merits and nothing more. By permitting the Assessing Officer to scrutinize the Income Tax Return filed belatedly by the petition, the 2nd respondent is not really asking the Assessing Officer to straight away allow the benefit of deduction under 80IAB of the Act. Set aside the impugned order and direct the 1st respondent Deputy Commissioner of Income Tax to examine the claim of the petitioner on merits as to whether the petitioner was otherwise entitled to the benefit of deduction under Section 80IAB.
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2020 (6) TMI 77
Addition u/s 68 - unsecured loan received - observations of the AO that the assessee has failed to satisfactorily explain the cash credit - whether the assessee has satisfied conditions stipulated in section 68 of the Act or not in respect of cash credit availed? - HELD THAT:- Details of accounts along with confirmation, addresses and PAN of the lenders have been furnished to the AO for verification. Even the assessee has furnished copy of assessment orders passed in the case of lender for the relevant year for verification. Apart from that, these funds have been received by the assessee through banking channel, and therefore, all the ingredients necessary for proving cash credit under section 68 has been satisfied by the assessee. Looking to the details provided to the Revenue authorities and copies also available in the paper book, we are satisfied that the assessee has discharged burden put upon it by virtue of section 68 of the Income Tax Act, 1961. Delete the addition - Decided in favour of assessee. Disallowance of expenditure - Disallowance for the reason that the appellant was not engaged in any business during the year under consideration - Stand of the assessee is that, it has received deposits from members who have purchased property in its projects Kaivana Building and of that it has incurred expenditure towards electricity as well as staff salary and other expenses - HELD THAT:- It is pertinent to observe that the assessee has not shown any income or rental income nor it has pleaded before the AO that it was in the business of maintenance of the building. Both Revenue authorities have concurrently recorded a finding that complete details were not submitted. This expenditure has no connection with earning of interest income from the deposits- stand of the assessee, if it is being demonstrated that maintenance of the alleged building is one of its area of business operation and out of maintenance activity it would show income in future. There is nothing that sort of. The assessee was unable to point that any expenditure was claimed in subsequent year on this or any income for maintenance of building was ever shown by the assessee. After considering the finding of the ld.CIT(A), no merit in this ground of appeal. Also no merit in the alternative submissions of the ld.counsel for the assessee as interest income is altogether a separate income, and not linked with this expenditure. - Decided against assessee.
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2020 (6) TMI 76
Penalty u/s 271(1)(c) - Invalid notice - non specification of charge - non-striking of the inaccurate portion in notice - HELD THAT:- The show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. In these circumstances, we are of the view that imposition of penalty cannot be sustained. Case followed M/S MANJUNATHA COTTON AND GINNING FACTORY OTHS., M/S. V.S. LAD SONS, [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] - Decided in favour of assessee.
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2020 (6) TMI 75
Characterisation of Income - capital gain or business income - activity of purchase on sale of the shares - HELD THAT:- In view of the consistent finding of the Tribunal since assessment year 2008-09, respectfully following the finding of the Tribunal for assessment year 2008-09 to 2012-13 [ 2018 (3) TMI 1409 - ITAT DELHI] we set aside the order of the lower authorities and hold the activity of purchase and sale of shares in question as investment activity to be assessed under the head capital gain. Disallowance under section 14A read with rule 8D - expenses on account of the income on which no activity was done in the previous year, was not accepted by the Assessing Officer and the explanation of the assessee that no expenses were incurred toward earning of dividend income shares of Dabur India Ltd, which was a strategic investment, was also rejected - First contention of the assessee that no expenses were been disallowed corresponding to the strategic investment made in the shares of the Dabur India Ltd as promoter.\ - HELD THAT:- In this regard, the Hon ble Supreme Court in the case of Maxopp Investment Ltd Vs CIT [ 2018 (3) TMI 805 - SUPREME COURT] where shares are held as investment in the investee company, may be for the purpose of having controlling interest therein. On that reasoning, appeals of Maxopp Investment Limited as well as similar cases where shares were purchased by the assessees to have controlling interest in the investee companies have to fail and are, therefore, dismissed - contention of the assessee investment made for acquiring controlling interest in Dabur India Ltd should not be subject to disallowance under section 14A is rejected. Whether no dissatisfaction was recorded by the AO on the claim of the assessee of expenses toward earning exempt income? - We agree with the finding of the Ld. CIT(A), that when the assessee itself as computed the disallowance in terms of rule 8D and thereafter reducing the expenses corresponding to earning dividend income from shares of M/s Dabur India Ltd. was not justified. The Assessing Officer in para 4.3 to 4.5 of the assessment order has duly rejected the action of the assessee of reducing the expenses related to earning of the dividend income from the shares of M/s. Dabur India Ltd. Accordingly, we reject the contention of the assessee and upheld the finding of the Learned CIT(A) on the issue in dispute. The ground No. 2 of the appeal of the assessee is accordingly dismissed. Disallowance of business expenditure - HELD THAT:- It is undisputed that 10 percentile disallowance was agreed by the Authorized Representative of the assessee before the AO and therefore the AO did not identify the individual expenditure not related to the business purpose. In view of the admission of the Authorized Representative of the assessee for disallowance of 10% of the expenses as incurred for non-business purpose, we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and accordingly uphold the same. The ground No.3 of the appeal of the assessee is accordingly dismissed.
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2020 (6) TMI 74
Computation of Capital gain - Section 50C applicability - agreement for sale of the property before execution of the sale deed and registration - assessee adopted the guideline value as on 04.08.2012 for computing the capital gain - adoption of guideline value on the date of entering into sale agreement OR based on the execution of sale deed - HELD THAT:- It is well settled principles of law that guideline value is only to guide the Sub-Registrar to find out the correct market value for the purpose of collecting stamp duty. Market value is not a constant figure. It may vary depending upon the various factors. Therefore, the guideline value may not always represent the market value of the property. Because of deeming provision, Section 50C of the Act, the guideline value has to be adopted in case the market value or the agreed price between the parties was less than the guideline value fixed by the Government. When there was a difference between the dates of agreement for sale and the actual execution of registrated sale deed another question may arise, whether the guideline value as on the date of agreement has to be adopted or on the date of execution of sale deed has to be adopted. Once the assessee entered into an agreement of sale of the property, the purchaser has the right to enforce the agreement specifically through a competent civil court. Therefore, the assessee being the vendor cannot claim any more money over and above the agreed sale price merely because there was an obvious revision in the guideline value. Keeping this situation in mind, the Parliament in their wisdom incorporated first proviso to Section 50C of the Act by Finance Act, 2016 with effect from 01.04.2017. This is to clarify the existing position of law and to avoid further litigation. Therefore, this Tribunal is of the considered opinion that first proviso to Section 50C of the Act, is applicable retrospectively. It does not create any new right between the parties. It simply clarifies the existing position of law. CIT(A) after referring to first proviso to Section 50C of the Act, directed the Assessing Officer to adopt the guideline value as on 04.08.2012, being the date of agreement and there after compute the assessee s capital gain. Therefore the Revenue cannot have any grievance in the decision of the CIT(A). - Decided in favour of assessee.
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2020 (6) TMI 73
Disallowance u/s 14A - assessee submitted that admittedly there was no exempt income earned by the assessee during the year under consideration - HELD THAT:- It is not in dispute that the assessee has not earned any dividend income from the investment made during the year under consideration. The question arises for consideration is when the assessee has not earned any exempt income / dividend during the year under consideration, can there be any disallowance u/s.14A read with Rule 8D(ii). This issue was examined by the Madras High Court in Redington India Ltd [ 2017 (1) TMI 318 - MADRAS HIGH COURT] wherein as found that there was no disallowance when there was no exempt income. Madras High Court in the case of Chettinad Logistics Pvt. Ltd. [ 2017 (4) TMI 298 - MADRAS HIGH COURT] examined this issue and by following the judgment in Redington India Ltd., found that there cannot be any disallowance when there was no exempt income. In fact, the Revenue filed an appeal before the Apex Court in Chettinad Logistics Pvt. Ltd. The appeal filed by the Revenue was dismissed. In those circumstance, this Tribunal is of the considered opinion, the CIT(A) is not justified in observing that the judgment of Madras High Court in Redington India Ltd., was overruled by the Apex Court [ 2018 (7) TMI 567 - SC ORDER] There may be difference of opinion with regard to issues arises for consideration. Irrespective of the personal difference of opinion, the CIT(A) while deciding the appeal is bound to follow the judgment of the Apex Court and the jurisdictional High Court. Judicial discipline demand that all authorities in the State of TamilNadu and Pondicherry has to follow the judgment of the Madras High Court including the present CIT(A). Therefore, we are unable to uphold the order of the CIT(A). Accordingly, the orders of both the authorities below are set aside and the disallowance made by the Assessing Officer U/s.14A of the Act is deleted. - Decided in favour of assessee.
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Customs
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2020 (6) TMI 72
Jurisdiction - appeal to High Court - appropriate forum - Smuggling - Provisional release of gold jewellery - section 130 of Customs Act - HELD THAT:- An appeal lies, to this Court, under Section 130 of the Act, only on substantial questions of law . Dealing with an identical expression, as it occurs in Section 130A of the Act, which provides for reference, to the High Court, against orders of the learned Tribunal, and was the provision in existence, prior to 1st July, 2003, when the provision of appeal was introduced. In M/S. KUSHAL FERTILISERS (P) LTD. VERSUS THE COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, MEERUT [ 2009 (5) TMI 13 - SUPREME COURT] , the Supreme Court held that a finding, by the learned Tribunal, to the effect that, as there was no wilful misstatement or suppression of fact, the extended period for issuance of Show Cause Notice, under the proviso to Section 11A of the Central Excise Act, 1944, was purely one of fact, and did not give rise to any substantial question of law. Clearly, provisional release may be allowed, under Section 110A of the Act, of any goods, documents or things seized . The Court, as the interpreter of the legislation, cannot profess to greater wisdom than the legislator. Where the legislature has not thought it appropriate to limit, in any manner, the nature of goods, documents or things which may be provisionally released, under Section 110A, it is no part of the function of a court to read, into the said statutory provision, any artificial limitation, not to be found therein. It is only in exceptional situations, where there is an apparent legislative lacuna, which, if left unfilled, would result in manifest injustice, or frustrate the object of the legislation, that a Court can step in and fill the lacuna and, to that limited extent, perform a quasi-legislative function. Else, the Court must rest content with being an interpreter of existing legislation, and has to accept the legislation for what it is. An executive instruction, which runs contrary to the parent statute and is, therefore, void and unenforceable and, in view thereof, need not be challenged. It is stillborn ab initio, faultily conceived; its evisceration, by legal process, is entirely unnecessary - thus, in exercising our jurisdiction under Section 130 of the Act, to ensure that such exercise regulates within the aforesaid well-delineated boundaries. These are pure findings of fact, returned by the learned Tribunal after examining the record before it. Absent any perversity therein, this Court cannot re-appreciate the said findings, in exercise of its jurisdiction under Section 130 of the Act. Far from alleging perversity, qua these findings, the appeal, of the ADG, DRI, does not contain even a whisper of an averment, disputing or traversing the said findings. There is no submission, anywhere in the body of the appeal before us, which could even obliquely indicate that the above findings, returned by the learned Tribunal, including the finding that the bar numbers of 22 of the 25 gold bars, seized from the workshop of the respondent, were identical to the bar numbers of the gold bars imported vide Bill of Entry No. 2873828 dated 17th April, 2019, using the Advance Authorisation issued to the respondent are incorrect in any manner. Allegations in a Show Cause Notice are merely allegations, till proved, in adjudication. Were there to be no material, whatsoever, justifying clearance of the imported goods, such allegations may, conceivably, have a part to play, in examining the request for provisional release. Where, however, as in the case of the 25400.06 grams of gold jewellery, seized at the Airport in the present case, a duly registered and assessed Bill of Entry was present, the goods were apprised and found to be identical to the goods exported for exhibition, and the Bill of Entry had been signed by the Customs Import Clerk, as well as by the importer, we cannot fault the learned Tribunal in having permitted provisional release of the gold jewellery. There is no reason to interfere with the decision of the learned Tribunal, to allow provisional release of the said 25400.06 grams of gold jewellery, covered by Bill of Entry No. 107190, dated 20th April, 2019 - the decision of the learned Tribunal is set aside, to allow provisional release of the quantity of 25299.68 grams of gold jewellery, seized at the Airport, which was not covered by any registered Bill of Entry. Appeal disposed off.
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2020 (6) TMI 71
Valuation of imported goods - Aluminium Scrap - rejection of declared value - enhancement of declared value - sole reason for enhancement of the value is on the basis of DGOV Guideline vide letter dated 15.11.2018 - Section 128 (1) of Customs Act, 1962 - HELD THAT:- The Assessing Authority reassessed the Bill of Entries by enhancing the value not on the basis of any material evidence which show that the appellant have misdeclared the value even no Contemporaneous Import Data was relied upon. The sole reason for enhancement of the value is on the basis of DGOV Guideline vide letter dated 15.11.2018. Therefore, the Adjudicating Authority has not followed the principle laid down under the Custom Valuation Rules and without application of mind straightway enhanced the value only on the basis of DGOV guildeline - In the present case, no such exercise was carried out, Obviously for the reason that the enhancement of value on the basis of the DGOV guideline. Reliance can be placed in absolutely identical case M/S SUNLAND METAL RECYCLING INDUSTRIES AND OTHERS VERSUS C.C. -KANDLA [ 2019 (10) TMI 113 - CESTAT AHMEDABAD] - In the said case also the value was enhanced on the basis of same DGOV guideline and the tribunal has categorically rejected such methodology of the valuation and allowed the appeals filed by the appellant by passing detailed order. Thus, the issue of method of enhancement of the valuation is as per the DGOV Circular which has been rejected by this tribunal. The present case is not different from the case on which the above order was passed. The only difference is the period. These imports were made subsequent to the imports made in earlier order dated 01.10.2019 therefore, the ratio of the above decision of this tribunal is squarely applicable in the present case. The enhancement of the value is absolutely incorrect, arbitrary and without application of mind. Appeal allowed - decided in favor of appellant.
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2020 (6) TMI 70
Classification of imported goods - Petroleum Hydrocarbon Solvent - restricted item or not - whether classified under Chapter Tariff Heading (CTH) 27101990, or under CTH 27101910 as Superior Kerosene Oil (SKO)? - HELD THAT:- It is not in dispute that for a product to be classified under 27101910 as SKO, it has to meet with the specifications in supplementary Note C to Chapter 27. From a perusal of the test reports of CRCL Delhi and CRCL Kandla, assuming the same to be correct, notwithstanding the difference in the test results between the two qua the parameter regarding final boiling point. It is seen that out of the 8 parameters on which the sample has to be tested for determining whether or not the same meets with the specifications of Kerosene, it is seen from both the test results that test have not been undertaken with respect to 3 parameters - The law on the question that the burden of classification is on the Revenue is well settled by the Apex Court in the case of [ 2006 (4) TMI 1 - SUPREME COURT] where it was held that Department has not shown that the subject product is not bought or sold or is not known or is dealt with in the market as Denatured Salt. Department s own Chemical Examiner after examining the chemical composition has not said that it is not denatured salt. In the absence of evidence that the imported goods meet with all the specifications laid down in supplementary note (c) to chapter 27, for a product to be classified as Kerosene, the case made out by the revenue cannot be sustained. Appeal allowed - decided in favor of appellant.
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2020 (6) TMI 69
100% EOU - Removal/diversion of imported inputs in contravention of Notifications 53/97 dated 3.6.1997 and 52/2003 dated 31.3.2003 - indigenous inputs procured on the basis of CT-3 certificates and diverted in contravention of Notification No.136/94 dated 10.11.1994 as amended and No.22/2003-CE dated 31.3.2003 as amended - duty chargeable on inputs used exclusively for manufacture of goods sold in DTA - Items imported and traded without any manufacture. - Process amounting to manufacture or not - labeling and repacking of the impugned goods. HELD THAT:- As demonstrated by the learned counsel that the recipient in the case is also an EOU, who are otherwise entitled to procure goods by import or on CE-3 certificates as per the provisions of FTP. We find that the provisions of the FTP and the Customs Notification are required to be read in harmony. It is not the case of the department that the imported or domestically procured goods are diverted into open market. The department agrees to the fact that the appellants have transferred the impugned goods to their sister EOU unit in Venkatapur. There is no allegation or proof that the same has been diverted by either of the EOUs. The appellants have submitted a Chartered Accountant certificate correlating transfer and receipt of the goods. They have also made good the duty for deficient items along with interest. Eligibility of olives to be sold in the domestic market - HELD THAT:- The provisions of FTP 2004-2009 as explained by CBEC Circular No.7/2006 are very clear in this regard. We hold that similar goods do not necessarily mean same goods. Looking into the LOP issued to the appellants and the fact that they were exported olives till 2000 under the same LOP, we find no reason as to why the DTA clearance of the same is not permissible afterwards. Alleged trading of jams - HELD THAT:- CBEC Circular No.314/30/97-CE dated6.5.1997 clarifies that it is clarified that a broader view is called for in respect of the interpretation of the provisions of Notification No. 1/95-C.E. and the exemption may not be restricted only to cases where manufacture‟ under section 2(f) of Central Excise Act is involved. It is clarified that the exemption under Notification No. 1/95- C.E. will also be applicable to a 100% EOU engaged in galvanising‟ of black MS pipes. This issues with the approval of the Board. Appeal allowed - decided in favor of appellant.
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2020 (6) TMI 68
Valuation of imported goods - aluminum scrap namely Taint Tabor, Tread, Tense, Zorba, Talk, Troma, terse, Twitch, Telic, etc. - case of the department is that the appellant have given a consent letter to the proposal of the enhancement of the value from USD 990 PMT as per invoice value to USD 1587 PMT - period August 2018 to May 2019 - HELD THAT:- It is clear that when the enhancement was not based on any contemporaneous import, in the present case, particularly, when the invoice price of the appellant was not disputed on the basis of any evidence of wrong declaration of the value, the enhancement in the present case is illegal and incorrect. In the case of COMMISSIONER OF CUSTOMS, NEW DELHI VERSUS PRABHU DAYAL PREM CHAND [ 2010 (4) TMI 360 - SUPREME COURT] , the value was enhanced on the basis of LME price and assessee was not confronted with any contemporaneous material. The Hon ble Supreme Court held that Tribunal order manifesting the detail of any contemporaneous imports or any material undertaking price notified by LME neither referred to by Adjudicating Officer nor such material was placed before Tribunal. Revenue has not been able to controvert the said Tribunal s observations. On the various issues, such as whether after giving consent by the importer, the value can be enhanced, whether enhancement can be made on the basis of DGOV circular have been considered and conclusively held that in such circumstances invoice prices cannot be disputed and enhancement of the value cannot be made - Appeal allowed - decided in favor of appellant.
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2020 (6) TMI 67
Valuation of imported goods - percentage of enhancement to the transaction value - order of loading in the transaction value - Comparable goods or not - HELD THAT:- As the ASD do not import RF products as well as the made to order products , but some products are imported both by the appellant and the ASD, but are not comparable. Such imports constitute a significant part of the total imports made by the appellant. Such imports are in the range of 16 to 51% during the period 2013-14 to 2017-18 or an average of 36% of the total imports made by the appellant. Further, the quantity imported by the appellant is more than 200 times than the quantity imported by the ASD - the ASD placed order for import usually when they have sales order in hand and do not undertake stocking of the products. Whereas the appellant irrespective of the sales orders in hand, the appellant imports in bulk and stocks, and maintains an inventory. Thus they incur much higher selling and distribution cost. Thus, there is no reasonable basis for enhancement of 77% in the transaction value as per the impugned order. The proposition of Revenue that the import price of ASD are comparable to that of the appellant is a vague, in view of the heavy difference in the quantity imported of identical goods. Thus, the appellant and the ASD cannot be treated as a comparable at commercial level. Sub-rule (3) of Rule 3 in clause (b) provides that, in case of sale between the related person the transaction value shall be accepted whenever the importer demonstrates that the declared value of the goods being valued, closely approximate to one of the following values imported at or about same time. Sub-clause (ii) in clause (b) provides for the deductive value of the identical goods or similar goods. In applying the value use for comparison, due account shall be taken of demonstrated difference in commercial level, quantity levels, adjustment in accordance with the provision of Rule 10 and cost incurred by the seller in sales, in which he and the buyer are not related. Sub-rule (4) of Rule 3 further provides, if the value cannot be determined under the provisions of sub-rule (1) of Rule 3, the value shall be determined by proceedings sequentially through Rule 4 to 9. Admittedly, it is evident on the face of the record that deductive value was available before the Court below which have not been rejected by a speaking order, thus, violating the provisions of Rule 3 (3) of the Valuation Rules - as the deductive value for calculation have not been rebutted by the Revenue, the same has to be followed for calculation of any adjustment in the transaction value in terms of Rule 3(3) of the Valuation Rules. This appeal is allowed by way of remand to the Court below to the Deputy Commissioner, SVB to re-determine the adjustment, if any, in the transaction value on the basis of deductive value and computed value - appeal is allowed by way of remand.
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2020 (6) TMI 66
Anti Dumping Duty - condonation of delay in filing appeal - Section 9C (2) of the Customs Tariff Act, 1975 - Notification dated 17 February 2017 - HELD THAT:- The Appeal should have been filed by the Appellant within 90 days from the date of the order i.e. within 90 days from 17 February 2017. The only reason given by the Appellant for not filing the Appeal within the stipulated period is that it was not aware of the addresses of the parties nor documents were made available to them. The request of the Appellant was specifically considered and rejected by the Delhi High Court and this order has attained finality on the dismissal of the Special Leave Petition by the Supreme Court. It is, therefore, not open to the Appellant to again raise the same plea before the Tribunal in the application filed for condoning the delay in filing the appeal. It is not satisfying that the Appellant was prevented by sufficient cause from preferring the Appeal before the Tribunal within time. The delay application is, accordingly, rejected. Appeal dismissed.
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Corporate Laws
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2020 (6) TMI 65
Jurisdiction of Writ Court - Transfer of shares - case of petitioner is that the 2nd respondent illegally misused the DP share transfer forms and committed fraud, cheating, breach of trust by transferring the share of 4.5% in their name, though the said transfer was directed to be kept in abeyance - HELD THAT:- The Hon'ble Supreme Court of India in the decision in JAI SINGH AND ORS. VERSUS MUNICIPAL CORPORATION OF DELHI AND ANR. AND VICE-VERSA [ 2010 (9) TMI 1235 - SUPREME COURT] has considered the nature and scope of power under Article 227 of the Constitution of India and held that The Exercise of jurisdiction must be within the well-recognised constraints. It cannot be exercised like a 'bull in a china shop' to correct all errors of judgment of a court, or tribunal, acting within the limits of its jurisdiction. This corrrectional jurisdiction can be exercised in cases where orders have been passed in grave dereliction of duty or in flagrant abuse of fundamental principles of law or justice. This Court is unable to come to the aid of the petitioner - Petition dismissed.
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PMLA
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2020 (6) TMI 64
Money Laundering - Release of petitioner on bail - loans to shell companies and related known entities - siphoning of funds - HELD THAT:- It is essential to observe that during the course the hearing of the present proceedings, it was suo moto by this Court brought to the notice of both the learned Senior counsel for the petitioner Mr. Mukul Rohatgi and learned Senior Standing Counsel for the State Mr. Rahul Mehra that in Writ Petition Civil Diary No.10829/2020 vide order dated 07.04.2020, the Hon ble Supreme Court permitted the petitioner thereof who had challenged the criterion of the Hon ble High Powered Committee of this Court dated 28.03.2020 putting an embargo to the release on interim bail/ parole of under trials in cases of alleged commission of economic offences and whereby vide order dated 07.04.2020, the Hon ble Supreme Court in the said writ petition thus granted the prayer of the petitioner thereof to withdraw the writ petition with liberty to prefer a representation before the Hon ble High Powered Committee of this Court. Though it is submitted on behalf of the petitioner that merely because another litigant had withdrawn the prayer made before the Hon ble Supreme Court submitting in relation to the alleged arbitrariness of the criteria laid down by the Hon ble High Powered Committee in relation to the economic offences, the same cannot apply qua the submissions made by the petitioner, nevertheless, it is essential to observe that in as much as there are allegations against the petitioner of the alleged commission of economic offences inter alia punishable under the PMLA Act, 2002 as also punishable under Section 409 of the Indian Penal Code, 1860. Application declined.
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Service Tax
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2020 (6) TMI 63
Classification of services - Business Auxiliary Services or not - renting of immovable property service - refund claim - works contract. Classification of services - Business Auxiliary Service or not - appellants have collected amounts from their clients for payment of statutory charges to Electricity Board, Municipal Corporation, etc., on behalf of the clients - HELD THAT:- In view of the decision of the apex court in case of Intercontinental Consultants and Technocrats Pvt. Ltd. [ 2018 (3) TMI 357 - SUPREME COURT ], no service has been rendered by the appellant to the clients of the appellants in relation to promotion of business or marketing of the goods - demand do not sustain. Renting of Immovable Property services - appellant submit that they have discharged service tax on the same and have produced the proof thereof, before the adjudicating authority - HELD THAT:- As the Service Tax stands paid, there are no reason to sustain the demand. Refund claim - works contract - HELD THAT:- The appellant has correctly paid service tax under the Works Contract service, there would be no case for refund. All the demands raised, however, are not sustainable. Appeal allowed - decided in favor of appellant.
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2020 (6) TMI 62
CENVAT Credit - input services - commercial construction services - club membership fee - maintenance charges - Output services provided is of Renting of Immovable Property Services - period June, 2007 to September, 2008. Commercial Construction Services - HELD THAT:- Admittedly, the premises for which commercial construction services were received were let out by the appellant for providing the services of renting of immovable property. These admissions clarify had there been no constructed building there would have been no possibility for any service of being rented out to be provided by the Appellant. Thus, it becomes clear that the services of commercial construction as were received by the appellant for providing the output service have a direct nexus to each other. In fact, in view of above definition such services fall under the inclusive part of the definition of input services - the appellant for whom the said commercial construction services is already been held to be an input service, he is held to have committed no error while taking the Cenvat credit of the payment made towards such service. Club Membership service and the Cenvat credit availed on the fee paid for the same - HELD THAT:- It was the appellant's burden to prove that this was also the service which was required for enabling them to render the output service of renting of immovable property. It is observed that except for the mention that club was used as a place to have contact with the people of standing there is no other submission of the appellant to justify the service to the input service - no nexus has been established between the availment of Club Membership and the output service of of the appellant i.e. Renting of Immovable Property - credit cannot be allowed. Maintenance and Repair Services - HELD THAT:- Perusal of the order of the adjudicating authority below shows that the Cenvat credit on Maintenance and Repair Services has been denied for want of nexus of the said services to the output service provided by the Appellant. In absence of the said Bill but in view of the acknowledgement that the Maintenance and Repair Services were received for the premises which have been rented out by the Appellant and also that the Bill is for the date when the entry became taxable, the Maintenance and Repair Services are also clearly inclusive in the definition of input services and the appellant has rightly availed the Cenvat credit thereof. Time Limitation - HELD THAT:- It becomes clear that there is no wilful suppression on behalf of the appellant as is alleged. It stands clear that the show cause notice since being issued beyond a delay of three years - demand is barred by time - Consequent thereto irrespective that the club membership fee is held to not to be an input service to avail the Cenvat credit by the appellant but the said demand also stands set aside being show cause notice being barred by time. Appeal allowed - decided in favor of appellant.
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Central Excise
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2020 (6) TMI 61
CENVAT Credit - input services - Management Consultancy Services - Security Services - allegation that the invoices did not carry either serial number or service tax registration number - wrongful transfer of credit - lack of nexus on input services - Medi-claim, Vehicle Insurance, Canteen Exp., CHA Bills, Guest House, Vehicle Hire Charges, Membership Charges, Residential Premise - credit on ISD invoices issued by appellant s Mumbai and Ahmedabad branch for services received by the said units prior to their registration - common input services for both exempted and dutiable clearances. Demand of ₹ 3,30,189/- cenvat credit - Allegation that invoices issued in respect of Management Consultancy Services and Security Services have been wrongly availed as invoices for the same did not carry either serial number or service tax registration number - January, 2005 to February, 2011 - HELD THAT:- This is a technical infraction and moreover this error is not on the part of the appellant but on the part of the service provider who issued the invoices. It is not a case of the department that in said invoices, no service tax was paid and there is no dispute about receipt and use of the services, which are the main criteria for allowing Cenvat credit on input service. Therefore, the credit, only on the technical infraction should not be denied. Demand of ₹ 41,94,123/- Cenvat credit - allegation that the credit lying in the account of branches other than Nadiad, has been wrongly transferred under centralized registration without any documents - Period 2011 - HELD THAT:-The appellant undisputedly made necessary recording in the statutory books of transfree's branch. There is no document prescribed for such transfers. There is no case of the department that the transferor branches have transferred excess credit or wrong credit. It is also not a case of the department that the Cenvat credit transferred is not out of the credit availed by the branches - only on the ground that proper documents under centralised registration was not issued for transfer of credit cannot be denied. Demand of ₹ 5,59,851/- Cenvat credit - input services - Medi-claim - Vehicle Insurance - Canteen Exp. - CHA Bills - Guest House - Vehicle Hire Charges - Membership Charges - Residential Premise - demand on the ground that the said services do not have any nexus to the manufacturing activity carried out by the appellant. Period - January 2005 to February, 2011 - HELD THAT:- This issue has been considered time and again by this Tribunal and credit of all the services have been allowed in various judgments - reliance can be placed in the case of COMMISSIONER OF S.T., CHENNAI VERSUS SPECTRASOFT TECHNOLOGIES LTD. [ 2019 (5) TMI 716 - CESTAT CHENNAI] for mediclaim - For Canteen and Insurance Services, reliance can be placed in COMMISSIONER OF CENTRAL EXCISE, BANGALORE-III, COMMISSIONERATE VERSUS STANZEN TOYOTETSU INDIA (P.) LTD. [ 2011 (4) TMI 201 - KARNATAKA HIGH COURT] - for vehicle insurance reliance can be placed in M/S VINAYAK STEELS LTD. VERSUS CCE, C ST, HYDERABAD [ 2017 (7) TMI 346 - CESTAT HYDERABAD] . Demand of ₹ 39,60,634/- Cenvat credit - demand pertains to ISD invoices issued by appellant s Mumbai and Ahmedabad branch for services received by the said units prior to their registration as Input Service Distributors - Period 2010 - HELD THAT:- Hon ble High Court of Karnataka in the case of MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX [ 2011 (9) TMI 450 - KARNATAKA HIGH COURT] has considered the issue of ISD invoices issued prior to registration and held that for this reason Cenvat credit cannot be denied. Demand of ₹ 14,16,83,202/- - amount payable in terms of Rule 6 of the Cenvat Credit Rules for availing Cenvat credit of service tax paid on input services used for both exempted and dutiable clearances - Period August, 2007 to September, 2011 - HELD THAT:- There is no dispute that the appellant have reversed Cenvat credit much more than the Cenvat credit attributed to common input service used in the manufacture of exempted goods. The appellant have also paid interest on such reversal. As per option available under Rule 6, one of the option is that appellant is required to reverse proportionate credit in terms of sub-Rule 3(A) of said Rule on the inputs and input service attributed to exempted goods and therefore, in the present case, when the appellant have reversed the credit, which should be proportionate credit on the common input service attributed to the exempted goods and also paid interest - the appellant have reversed Cenvat credit which is more than the proportionate credit attributed to exempted goods - The entire demand raised under Rule 6 will not sustain. Since the entire demand has been set-aside, consequently penalties and demand of interest are also set-aside. Appeal allowed - decided in favor of appellant.
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2020 (6) TMI 60
Refund of amount/duty paid during investigation alongwith interest - amount was paid under protest - section 11B of Central Excise Act, 1944 - period of closure of the factory as the respondent was engaged in manufacturing and packing of Jarda Scented Tobacco - HELD THAT:- There are no merit in the observation of the ld. Commissioner (Appeals) in allowing the rejected amount of ₹ 29,81,483/- when the respondent himself withdrew the refund claim in absence of documentary evidence of payment of duty for the period from July, 2015 to January, 2016. Since, the said amount was withdrawn by the respondent the adjudicating authority has no occasion to examine its admissibility and record a finding in this regard. The Commissioner (Appeals) finding that the respondent would have paid the duty during the closure of the factory is based on extraneous factors, and thus de hors the records of the case and accordingly devoid of merit, hence unsustainable in law - the finding of the ld. Commissioner (Appeals) allowing the said refund amount is devoid of merit and accordingly set aside. Interest on deposit - relevant date - HELD THAT:- Till the time the show cause notice is adjudicated, the amount paid by the respondent cannot be said to have attained finality and refundable to them. The Tribunal directed the return of the said amount deposited by the respondent during investigation in all fairness attributable to inordinate delay of adjudication of the Show Cause Notice issued by the department. Needless to emphasize it is an interim measure caused to mitigate the hardship to the respondent for the delay in adjudication by the department. But, that does not mean that respondent can retain the said amount even if the issue of classification is decided against them - the ld. Commissioner (Appeals) order directing payment of interest from the date of deposit of the said amount is also devoid of merit and accordingly set aside. Appeal allowed - decided in favor of Revenue.
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2020 (6) TMI 59
Lapse of CENVAT Credit - exemption Notification No. 30/2004-CE dated 09.07.2004 w.e.f. 1st April, 2016 - HELD THAT:- On the plain reading of the above Rule 11 (3) (i) (ii), it is clear that as per sub-clause (2), the credit shall be lapsed only if the exemption under the Notification is absolute that means in case of conditional Notification the provision of lapsing of credit will not apply. In the case of PATODIA FILAMENTS PVT LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST, DAMAN [ 2019 (8) TMI 201 - CESTAT AHMEDABAD] where it was held that In the present case all the conditions enumerated under sub rule 3 (i) has been followed by the Appellant and he is not required to reverse the entire credit lying in balance on the date of opting notification No. 30/2004 CE dated 09.07.2004. Therefore, the balance credit is not liable to be reversed. For the same reason the credit utilised by him for clearance of finished goods or capital goods. It is settled that after reversal of credit in respect of input, input in process and input contained in final products whatever balance is left shall lapse only when the Notification is unconditional. Appeal dismissed - decided against Revenue.
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2020 (6) TMI 58
Adjudication on the SCNs issued against him - issuance of OIO was not clearly and cogently explained by the Respondent - HELD THAT:- The Commission at the outset observed that the CPIO/ FAA did not provide a satisfactory response to the Appellant. The provisions of the RTI Act, 2005 and various judgments on the subject matter clearly establish that it is the duty of the CPIO to provide clear, cogent and precise response to the information seekers. Section 7 (8) (i) of the RTI Act, 2005 also states that where a request for disclosure of information is rejected, the CPIO shall communicate the reasons for such rejection. The Hon ble Delhi High Court in the matter of [ J P Aggarwal v. Union of India (WP (C) no. 7232/2009 2011 (8) TMI 1333 - DELHI HIGH COURT ] clearly stated that the PIO acts as the Pivot for enforcing the implementation of the Act. The Commission also observed that as per the provisions of Section 19 (5) of the RTI Act, 2005, in an Appeal proceeding, the onus to prove that a denial of a request was justified shall be on the CPIO. Neither the Respondent present during the hearing nor the CPIO responding to the RTI application, could justify their position as to how the disclosure of information would be in contravention to any of the provisions enshrined under Section 8 of the RTI Act, 2005. The Commission instructs the Respondent to re-examine the matter and provide a clear, cogent and precise point wise response to the Appellant explaining the updated factual status in the matter within a period of 15 days from the date of receipt of this order - Appeal disposed off.
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CST, VAT & Sales Tax
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2020 (6) TMI 57
Levy of VAT - Renting of space - Transfer of Right to use - petitioner is a provider of Passive Infrastructure service for the Mobile Telecommunication Operators (MTO) - whether within the scope of VAT or not - Section 4 of the TNVAT Act, 2006 - scope of the extended definition of sale in Section 2(33)(iv) under the said Act - HELD THAT:- As per the said definition, transfer of right to use any goods for any purpose for cash, deferred payment or other valuable consideration is a sale. As per the decision of the Hon ble Supreme Court in BHARAT SANCHAR NIGAM LTD. (BSNL) VERSUS UNION OF INDIA [ 2006 (3) TMI 1 - SUPREME COURT ], such transfer should be to the exclusion of the owner and others and exclusively in favour of the person in whose favour such transfer of right to use is made. From the facts that has been disclosed in the documents filed before this court, it is evident that there is no exclusive transfer of the temporary shelter or the transmission tower/mast in favour of any one of the Mobile Telecommunication Operators. The space in the shelter and the transmission tower/mast is given on shared basis and charged separately therefore it would not come within the fold of the extended definition of saleSection 2(33) of the TNVAT Act, 2006. Thus, it is evident that wherever extended definition of sale in Article 366(29-A) are attracted the transaction can be taxed both under the provisions of TNVAT Act, 2006 and under the provisions of Finance Act, 1994. However, it is for Assessing Officers under the respective enactments to determine the value of the two transactions and collect tax - In the present case, no transfer of right to use goods as contemplated under Article 366(29-A) (d) and Section 2(33)(iv) of the TNVAT Act, 2006 is discernable. Even though the temporary shelter and the mast are goods within the means of Article 366(12) and Section 2(21) of TNVAT Act, 2006 yet there is no exclusive transfer to exclusion of others to attract the levy of transfer of right to use . The business model is not based on exclusivity. It is on a shared usage basis of the facility viz., passive infrastructure consisting of temporary shelter, Mast, AC, Genset etc. Therefore, there is no deemed sale within the meaning of Article 366(29-A)(d) of the Constitution of India and Secion 2(33)(iv) of the Act so as to attract a charge under Section 4 of the TNVAT Act, 2006. Though the passive infrastructure of the petitioner are goods within the meaning of Article 366(12) of the Constitution of India and Section 2(21) of the TNVAT Act, 2006 yet there is no transfer of right to use within the meaning of extended definition of sale under Section 2(33)(iv) TNVAT Act, 2006 and Article 366(29A)(d) of the Constitution of India so as to attract levy under Section 4 of the said Act - thus, no tax is payable by the petitioner. Petition allowed - decided in favor of petitioner.
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2020 (6) TMI 56
Recovery of VAT - supply of petroleum crude - TNVAT Act - It is the case of the respective petitioners that the exploration and supply of petroleum crude oil has taken place outside the State of Tamil Nadu and in the Exclusive Economic Zone of India as defined in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976 and therefore no VAT can be levied - HELD THAT:- Petroleum products are liable to pay tax under Entry 41, Part B to the 1st Schedule being declared goods within the meaning of Section 14 of the CST Act, 1956. Therefore, if the sale had taken place within the state, it would be liable to tax under Section 3 of the Tamil Nadu VAT Act, 2006. There is no doubt there was sale between the petitioners and other co-explorers of petroleum crude oil under the Crude Oil Sale Agreement dated 26.9.2003 for the Sale and Purchase of Crude Oil - Whether the sale had taken place within the State of Tamil nadu or not and whether the liability to pay tax would be on the seller and on the buyer under section 3 of the Tamil Nadu VAT Act, 2006 would require determination by the Assessing Officer. There is no mechanism provided for payment of tax on the recipient of good on reverse charge basis under the Tamil Nadu VAT Act, 2006 except in the case of works contract under the Rules made thereunder. An agreement cannot shift the burden of tax on the buyer. It would not be correct to infer that the liability to pay tax can be shifted to the buyer namely Chennai Petroleum Corporation Ltd. However, Chennai Petroleum Corporation Ltd had agreed to pay tax from and on behalf of the suppliers. Each of the oil-producing companies where liable to pay proportionate tax on the crude oil explored and sold to Chennai Petroleum Corporation Ltd provided. However, tax is payable only if the sale had taken place within the State of Tamil Nadu. Whether or not the delivery of crude oil from the development area to the delivery point fell within the territorial jurisdiction of the State of Tamil Nadu or outside is a question of fact which require to be determined before the respondent - as the case involves disputed questions of fact based on the agreements signed between the parties, the present writ petitions are liable to be dismissed. Petition dismissed.
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