TMI Tax Updates - e-Newsletter
June 12, 2018
Case Laws in this Newsletter:
GST
Income Tax
Service Tax
Central Excise
Highlights / Catch Notes
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GST:
Classification of Supply - supply of solar power generating system - Turnkey EPC Contract - split contract for supply of goods and supply of services may not be valid - artificial and colourable device to avoid the legitimate tax or the requirement of the contractee demands separation of contract for better execution - to be ascertained on case to case basis.
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GST:
Classification of goods - Polished/Processed limestone slabs - Polished/Processed limestone slabs are correctly classifiable under heading 6802 of the GST Tariff.
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GST:
GST on cold storage operations for agricultural products - The storage and warehousing of Agriculture produce falls under Service Account Code (SAC) 9986 and not under 9967 - The exemption under N/N. 12/2017 Central Tax (Rate) dated 28.06.2017 under entry no 54(e) is applicable for agricultural produce of both farmers and traders.
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GST:
Determination of rate of tax - pharmaceutical products (i.e. Bulk drugs and Intermediates) - The applicant is eligible to claim the benefit of lower rate of GST i.e., 5%
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GST:
Maintainability of Advance Ruling Application - Transitional Credit - Input Tax Credit - Clean Environment (Energy) Cess - The question sought do not fall under the ambit of Section 97(2) (d) of the CGST Act 2017.
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GST:
Works Contract Services (WCS) provided by the sub-contractor to the main contractor; providing WCS to Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity; will also attract GST at the rate as applicable to the main contractor.
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GST:
Concessional Rate of GST - supply of goods like scientific and technical instruments - The goods intended to be supplied by the applicant to M/s SDSC are not covered under Notification 45/2017-Central Tax (Rate), dated 14.11.2017 and accordingly, the concessional rate is not applicable.
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GST:
Agricultural Soil testing Minilab and its Reagent Refills" are classifiable under Tariff heading 9027 of the GST Tariff and tax rate applicable is 9% CGST +9% SGST.
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Income Tax:
Allowable expenditure u/s 37(1) - Settlement charges paid to SEBI - penalty paid for infraction of law - payment was made without admitting or denying the guilt - claim of expenditure allowed.
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Income Tax:
Settlement charges paid to SEBI - penalty paid for infraction of law - payment was neither in the nature of protection money, nor extortion, nor hafta nor bribe nor a payment for a purpose namely, settlement, which can be said to be “an offence” or which can be said to be “prohibited by law” - allowable expenditure u/s 37(1)
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Income Tax:
If an international transaction is proved to be not genuine, the transfer pricing provisions are not triggered - once we have treated hire purchase agreement as not genuine, it is but natural that the payment of interest made under such hire purchase agreement, cannot be allowed as deduction.
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Income Tax:
Additions u/s 68 - Inquiry u/s 133(6) - it submitted that, the assessee were totally kept in the dark and the enquiries were conducted behind the back of the assessee - AO is bound to furnish a copy of the same to the assessee and has to give opportunity to the assessee to meet it (explain or rebut).
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Income Tax:
Adoption of special auditor's report only in part - estimation made on the assessment - validity of audit report based on sampling made by the Auditor - Auditing and Assurance Standard (AAS)-15-Audit Sampling - no valid ground available to challenge the sampling or the computation of income made based on the special auditor's report.
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Income Tax:
Charitable activity - approval u/s 80G denied - Purchase of land and building by itself would not be sufficient to conclude that the assessee is involved in non-charitable activities.
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Income Tax:
Approval u/s 80G - whether registration under Section 12AA by itself is not automatic for granting approval under Section 80G? - there was no logic in denying approval under Section 80G 5(vi) of the Act.
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Income Tax:
Assessment u/s 153A - Carry forward of business loss - 153A return is deemed to be return u/s 139(1) and that restrictive provisions of section 80 do not apply to this case - AO is directed to allow the claim of carry forward of business loss of assessee
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Income Tax:
Assessment u/s 153A - Unabsorbed depreciation - Claim allowed to be carried forward and allow set off in the next/subsequent years, since it is not covered by the limitation of sec 80 but it is governed u/s 32(2)
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Income Tax:
TDS liability u/s 194A - Interest received on compensation for agricultural land - Award of Compensation - It is infact an enhanced compensation - No TDS liability.
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Central Excise:
CENVAT credit - the debit note containing all the details as required under the rule 9(2) of Cenvat Credit Rules, 2004 is valid documents for the purpose of taking cenvat credit - the appellant is entitled for the Cenvat credit on the debit note.
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Central Excise:
Classification of goods - “Hydent-K” Potassium nitrate with fluoride medicated toothpaste - to be classified as medicament.
Notifications
Circulars / Instructions / Orders
Case Laws:
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GST
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2018 (6) TMI 466
Classification of Supply - supply of solar power generating system - Turnkey EPC Contract - split contract for supply of goods and supply of services - Entry 234 of Schedule I of the Notification No. 1/2017- Integrated Tax (Rate), Entry 234 of Schedule I of the Notification No. 1/2017- Central Tax (Rate) both dated 28 June 2017 and Entry 234 of Schedule I of the Notification No. 1/2017-State Tax (Rate) dated 29 June 2017? Turnkey EPC Contract - Other EPC Contract - supply of solar power plant under ‘Turnkey EPC Contract’ - Held that:- The scope of work in respect of “Turn key EPC Contract” and “Other EPC Contract” includes civil works, procurement of goods and erection and commissioning. Accordingly, “Turnkey EPC Contracts” and “Other EPC Contracts” are not getting covered under supply of ‘solar power generating system’ under Entry 234 of Schedule I of the N/N. 1/2017- Integrated Tax (Rate), Entry 234 of Schedule I of the N/N. 1/2017- Central Tax (Rate) both dated 28 June 2017 and Entry 234 of Schedule I of the N/N. 1/2017- State Tax (Rate) dated 29 June 2017. Supply Contract - supply of ‘solar power generating system - the assembly, erection, and commissioning of the solar power plant is undertaken by the Applicant under a separate contract - Held that:- It depends upon the terms and conditions of the agreements as to whether the split of contract is an artificial and colourable device to avoid the legitimate tax or the requirement of the contractee demands separation of contract for better execution. In case the contract is an artificial split, the Clarification for Issue 2 (two) is applicable. In other case the rate of tax applicable for the supply of goods subject to condition of eligibility of being “device and parts” of the solar power generating system attracts 5% rate of tax as per Entry 234 of Schedule I of Notification No 1/2017 -Central tax (Rate), dated 28th June, 2017. And the supply of service attracts at the rate specified thereon in Notification No. 11/2017 -Central tax (Rate). Supply Contract - the assembly, erection, and ‘commissioning of the solar power plant is undertaken by a third party contractor - Held that:- In this scenario, the goods are supplied by one contractor, and the services were supplied by the other contractor. Therefore the rate of tax applicable for supply of goods as long as it satisfies the condition of being “ device and parts” of the solar power generating system attracts 5% rate of tax as per Entry 234 of Schedule I of Notification No 1/2017 -Central tax (Rate), dated 28th June, 2017. Balance of Plant Supply Contract - supply of ‘solar power generating system - What would be nature of supply i.e. composite supply or mixed supply? - Held that:- The nature of transaction falls under composite transaction as both the goods and services are naturally bundled. Even though the primary commodity has been supplied by the customer, the ancillary goods for the purpose of service are to be supplied by the applicant only. The principle supply in this context is supply of service and the ancillary goods supplied are in conjuction with the services provided - the rate of tax applicable in such transaction is liable at the rate as per the Entry 25 of 25 (Heading 9987) of Notification No. 11/2017 - Central Tax (Rate), dated : 28th June 2017, and attracts 18% rate of tax. Whether contract for assembly, erection, and commissioning of the plant undertaken by the Applicant under a separate contract would be a service contract liable to be taxed under Service heading 9954? - Held that:- The referred contract doesn’t fall under the ambit of SAC 9954, but falls under the Entry 25 of 25 (Heading 9987) of Notification No.11/2017 -Central Tax (Rate), dated: 28th June 2017, and attracts 18% rate of tax. Whether the time of supply of power plant shall be determined under Section 31 (4) of the CGST Act/SGST Act read with Section 12(2) thereof? - Held that:- Yes, the time of supply of power plant shall be determined under Section 31 (4) of the CGST Act/SGST Act read with Section 12(2) thereof.
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2018 (6) TMI 465
Classification of goods - Rate of Tax - Agricultural Soil testing Minilab and its Reagent Refills - whether classifiable under exempted goods falling under Tariff heading 8201 as notified vide N/N. 2/20172017 - Central Tax (Rate), dt.28-06-2017 or otherwise? Held that:- A combined reading of chapter notes and description of goods covered under Tariff heading 8201 reveals that the goods covered under this heading are basically hand tools of a kind used in agriculture, horticulture or forestry - Whereas the main function of the "Soil testing minilab" is todetermine all the important soil parameters i.e., soil pH, EC, Organic Carbon, available nitrogen, phosphorus, potassium, Sulphur and micronutrients like Zinc, boron and iron and hence cannot be classified as a hand tool along with the items of description given under Tariff heading 8201 such as Agricultural implements manually operated or animal driven - "Soil Testing minilab" is basically an instrument/apparatus for physical or chemical analysis of the soil and for determining various parameters viz., soil pH, EC, Organic Carbon, available nitrogen, phosphorus, potassium, Sulphur and micronutrients like Zinc, boron and iron. The Instruments and Apparatus for physical or chemical analysis are classifiable under GST Tariff heading 9027 - By applying the General rules for interpretation of Customs Tariff as applicable to GST Tariff, as the functions being performed by "Soil testing minilab" are similar to that of an Instrument/Apparatus for physical or chemical analysis, the "Soil testing minilab" is correctly classifiable under heading 9027 of the GST Tariff. Ruling:- Agricultural Soil testing Minilab and its Reagent Refills" are classifiable under Tariff heading 9027 of the GST Tariff and tax rate applicable is 9% CGST +9% SGST.
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2018 (6) TMI 464
Concessional Rate of GST - N/N. 45/2017 (Central Tax Rate), dated 14th November, 2017 and N/N. 47/2017 (Integrated TAX-Rate), dated 14th November 2017 - supply of goods like scientific and technical instruments - Adoptability of notification to their supplies - Whether the supplies, made to SRI HARI KOTA HIGH ALTITUTDE RANGE (SHAR.) I SARISH DHAWAN SPACE CENTRE located at Sri Hari Kata, Andhra Pradesh, are eligible for concessional rate of tax as per N/N. 45/2017 (Central Tax Rate), dated 14th November, 2017 and N/N. 47/2017 (Integrated TAX-Rate), dated 14th November 2017? Held that:- As seen from the copy of the certificates Issued by the Satish Dhawan Space Center (SHAR), it is understood that the said Institution falls under ' Public funded research institution'. As per the certificate it Is also mentioned that the said institution is under the administrative control of Department of Space, Government of India. Ruling:- The goods intended to be supplied by the applicant to M/s SDSC are not covered under Notification 45/2017-Central Tax (Rate), dated 14.11.2017 and accordingly, the concessional rate is not applicable.
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2018 (6) TMI 463
Classification of services - Rate of tax - works contract - contract for for Rejuvenation of Amanishah Nallah (Dravyavati River), Jaipur (Rajasthan) Including Area Development on Turnkey Basis, and its Operation & Maintenance (O&M) for a period of 10 Years - correction and strengthening the channel for better performance - sub-contract - Government authority or not? Whether the nature of Services covered under Sl.no.3(vi)(a) of N/N. 11/2017 - Central Tax (Rate) dt. 28th June 2017 amended with N/N. 24/2017- Central Tax (Rate) dated 21.09.2017 and further amended with N/N. 31/2017-Central Tax (Rate) dated 13.10.2017? - What is the Rate of GST applicable for the Project? - If applicable rate of GST @12%, what is the rate of GST applicable on subcontractor leg? Held that:- The Jaipur Development Authority is found to be covered under the Government Authority and Services provided by M/s TPL -SUCG Consortium found to be covered under services mentioned at SI. no.3 (vi) (a) of the N/N. 11/2017 - Central Tax (Rate) dt.28th June 2017 amended with N/N. 24/2017-Central Tax (Rate) dated 21.09.2017 and further amended vide N/N. 31/2017- Central Tax (Rate) dated 13.10.2017. As per serial number 3, for item (vi) in column (3) and the entries relating thereto, Central tax at the rate of 6% is applicable on the Services provided to the Central Government, State Government, Union Territory, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession - The GST leviable is GST @12% (i.e. CGST 6% + SGST 6%). Liability of GST on sub-contractor - Held that:- As per Decisions taken in the 25lhmeeting of GST Council held at New Delhi on 18.01.2018 Works Contract Services (WCS) provided by the sub-contractor to the main contractor; providing WCS to Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity; will also attract GST at the rate as applicable to the main contractor - The GST leviable is GST @12% (i.e. CGST 6% + SGST 6%). The Services provided by M/s TPL - SUCG Consortium to Jaipur Development Authority under Contract awarded to them are covered under N/N. 11/2017 - Central Tax (Rate) dt.28th June 2017 (N/N. F.12(56)FD/Tax/2017-PM-49(S.T.) dt. 29th June 2017), amended with N/N. 24/2017-Central Tax (Rate) dt. 21st Sept. 2017 (N/N. F.12(56)FD/Tax/2017-90(S.T.) dt. 21st Sept. 2017) and further amended vide N/N. 31/2017 - Central Tax (Rate) dt. 13th Oct. 2017 (N/N. F.12(56)FD/Tax/2017-Pt-III-106(S.T.) dt. 13,h Oct. 2017 ) and GST @12% (i.e. CGST 6% + SGST 6%) is applicable on the services provided under the said contract - This rate is also applicable to the sub-contractor leg under the said contract as inserted in the N/N. 01/2018 dt. 25th January 2018 (N/N. F.12(56)FD/Tax/2017-Pt-ll-166(S.T.) dt. 25th January 2018).
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2018 (6) TMI 462
Maintainability of Advance Ruling Application - Clarification of rate of tax - grain based extra neutral alcohol - Whether the grain based extra neutral alcohol comes under 18% or exempted or any other taxes category in GST tax system? - Held that:- On verification of the record submitted by the jurisdictional authority, it was found that the proceedings were initiated well before the filing of application before this authority. Further, the applicant himself admitted that they have preferred writ petition No.7734/2018, dt 07.03.2018 before the Hon'ble High Court of Judicature at Hyderabad on the same issue which is pending for disposal. As the application do not qualify the pre-requisitions, the application will not qualify for admission as per Section 98(2) of CGST ACT2017/APSGST Act, 2017 - the application filed by applicant for seeking advance ruling is here by "Rejected".
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2018 (6) TMI 461
Maintainability of Advance Ruling Application - Transitional Credit - Input Tax Credit - Clean Environment (Energy) Cess - import of Coal - Whether Input Tax Credit is available on Clean Environment (Energy) Cess paid at the time of import of Coal? - Held that:- From the definitions referred for input tax' under CGST Act'2017, it is very clear that the input tax refers to taxes chargeable under SGST, CGST & IGST Acts only. Accordingly, Section 97(2) (d) shall refer to admissibility of input tax credit under GST Acts - The input Tax credit referred by the applicant relates to the transitional relief, which is paid under the Act other than the Acts referred in the definition of input tax under CGST. The question sought do not fall under the ambit of Section 97(2) (d) of the CGST Act 2017. The subject application filed by the applicant is beyond the jurisdiction of this authority, as it is beyond the domain of Section 97(2) of the CGST Act' 2017. Therefore, the application is not admitted under Section 98(2) of the CGST Act' 2017.
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2018 (6) TMI 460
Determination of rate of tax - pharmaceutical products (i.e. Bulk drugs and Intermediates) - EFAVIRENZ, EMTRICITABINE, SUNTINIB MALATE, RALTEGRAVIR POTASIUM, LATANOPROST - Whether the applicant is eligible to claim the benefit of lower rate of GST i.e., 5% under SI. No. 180 of Schedule-I of the rate schedule under N/N. 01/2017- Central Tax(Rate) dated 28.06.2017 read with the corrigendum dated 30.06.2017 on supply of I EFAVIRENZ, EMTRICITABINE, SUNTINIB MALATE, RALTEGRAVIR POTASIUM, LATANOPROST, which also falls under SI. No. 40 of Schedule III? Held that:- The products manufactured by the applicant, even though are bulk drug gets squarely covered under List 1 of SI. No. 180 of the Schedule -I to the N/N. 01/2017 Central Tax (Rate) dated 28.06.2017. Further as it is settled law that, the specific entry overrides the general entry, the commodities dealt by the applicant are covered by specific entries, the rate of tax applicable, is the rate specified against specific entry only. Ruling:- The applicant is eligible to claim the benefit of lower rate of GST i.e., 5% under SI. No. 180 of Schedule-I of the rate schedule under Notification No. 01/2017-Central Tax(Rate) dated 28.06.2017 read with the corrigendum dated 30.06.2017 on supply of I. EFAVIRENZ 2. EMTRICITABINE 3. SUNTINIB MALATE 4. RALTEGRAVIR POTASIUM 5. LATANOPROST.
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2018 (6) TMI 459
Classification of goods and/or services or both - cold storage operations for agricultural products - rate of tax - Whether the storage of Agriculture produce falls under Service Account Code (SAC) 9986/9 or 996721 or some other SAC? - Whether the services falls under SAC 9986/9 the exemption under notification no 12/2017 C7R dated 28.06.2017 under entry no 54(e) is applicable to both farmers and traders? - Documents required to be taken by cold storage operator for availing exemption benefit. Held that:- Heading 9967 deals with support services in transportation. Whereas, heading 9986 deals with support services to agriculture, forestry, fishing, animal husbandry. Accordingly, there is no hesitation to rule out the heading 9967 - As seen from the plain reading of the entry 54 and 55, it is evident that the services provided in activity of cultivation, from the initial stages up to the marketable stage, subject to conditions was 4nil rated - as long as the commodities fall under the purview and ambit of' agricultural produce' as referred in the said notification read with the explanation in the circular referred attracts 'nil' rate of tax Applicability of the exemption under N/N. 12/2017(CGST-Rate) - Held that:- The notification is service specific and not person specific. Hence the entry no 54(e) is equally applicable for agricultural produce of both the farmer as well as the trader. Documents to be maintained for claiming such exemption - Held that:- It does not fall under the purview of advance ruling authority as per the provisions of the CGST/AP GSTAct'2017. Ruling:- The storage and warehousing of Agriculture produce falls under Service Account Code (SAC) 9986 and not under 9967 - The exemption under N/N. 12/2017 Central Tax (Rate) dated 28.06.2017 under entry no 54(e) is applicable for agricultural produce of both farmers and traders.
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2018 (6) TMI 458
Classification of goods - Polished/Processed limestone slabs - In which Chapter the commodity called "Polished/Processed limestone slabs" falls? - Under which HSN Code the above commodity comes? - Can it be classified as "Mineral substances not elsewhere specified or included" which is mentioned under HSN Code 2530? - Can it be classified under any of the HSN Codes 2515/2516/2521? - Can it be retained under HSN Code 25 with inaugural phrase of "Goods not mentioned elsewhere" as mentioned at the start of column of 5%? Held that:- It is very clear from the explanatory notes given for heading 25.15, 25.16 & 25.21 that stones which are roughly trimmed or merely cut by sawing or otherwise into blocks or slabs of a rectangular shape are classifiable in headings 25.15 or 25.16 and the blocks or slabs which have undergone the process of polishing are not classifiable under these headings - A complete reading of the Explanatory notes clearly specifies that limestone slabs which have undergone the processes of cutting and polishing and which have been worked beyond the stage of the normal quarry products of chapter 25are correctly classifiable under heading 68.02 of the Customs tariff as per the Harmonized Commodity Description and Coding System. As the Rules for Interpretation of Customs tariff was made applicable to GST Tariff and General rules for Interpretation of the schedule, the "Polished/Processed limestone slabs" are correctly classifiable under heading 6802 of the GST Tariff. Ruling:- Polished/Processed limestone slabs are correctly classifiable under heading 6802 of the GST Tariff.
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2018 (6) TMI 457
Seizure of goods - Penalty order - requirement of E-Way Bill No.2 - Held that:- The goods of the petitioner along with the Vehicle No.CG15AC0258 may be released without demanding any security - petition disposed off.
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Income Tax
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2018 (6) TMI 471
Assessment u/s 153A - addition u/s 68 - incriminating material which seized has to pertain to the assessment years in question - Held that:- In the instant case addition of ₹ 11,85,00,000/- was made on the basis of statements recorded u/s 132(4) and post-search enquiry and no incriminating material was found/seized during the course of search, therefore we hold that no addition could have been made u/s 153A since the assessment was not abated in the instant case. In view of the above, we hold that the ld. CIT(A) was not justified in upholding the action of the Assessing Officer in assuming jurisdiction u/s 153A - Decided in favour of assessee
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2018 (6) TMI 470
Revision u/s 263 - Held that:- As perused the order passed by the CIT under Sec. 263, dated 25.11.2009 (Page 23-24 of APB) and are not persuaded to subscribe to the contention of the assessee that the A.O while passing the order in pursuance to the directions of the CIT had exceeded his jurisdiction and adjudicated on certain issues which never formed the subject matter of the order passed by the CIT. We are of the considered view that as the order passed by the A.O under Sec. 143(3) r.w.s. 263, dated 16.12.2010 is well in conformity with the directions given by the CIT in his order passed under Sec. 263, therefore, the aforesaid contention so raised by the assessee cannot be accepted Distribution of capital assets on dissolution of a firm - eligible transfer u/s 2(47) - Capital gain - period of holding - LTCG or STCG - Held that:- With the striking off of Sec. 47(ii) and making available of Sec. 45(4) on the statute, vide the Finance Act, 1987, w.e.f A.Y 1988-89, the working of Sec. 2(42A) r.w Sec. 49(1)(iii)(b) subsequent to A.Y 1987-88 stands jeopardised. We find that our aforesaid view stands fortified by the judgment of the Hon’ble High Court of Bombay in the case of CIT Vs. A.N Naik Associates (2003 (7) TMI 46 - BOMBAY HIGH COURT). The High Court in its aforesaid judgment had observed that the result of the amendment carried out by the Finance Act, 1987 by omitting Sec. 47(ii), was that distribution of capital assets on dissolution of a firm would be regarded as a “transfer”. As the case of the assessee before us pertains to A.Y 2005-06 and the firm, viz. M/s Printpals stood dissolved on 16.05.2003 on the death of the other partners, thus the judgment of the High Court of Madras in the case of CIT Vs. M.K Chandrakanth & Ors (2002 (7) TMI 57 - MADRAS HIGH COURT ) relied upon by the ld. A.R would not be of any assistance in the present case Entitlement towards exemption under Sec. 54EC - Held that:- Continuing of the business by the assessee after the dissolution can safely or rather inescapably be taken as the distribution of the assets to him. Thus, in the backdrop of the aforesaid state of affairs, we are persuaded to subscribe to the claim of assessee that the ‘transfer’ of the assets in terms of Sec. 45(4) had occasioned in the hands of the dissolved firm, viz M/s Printpals on 16.05.2003. As the ‘Fair Market Value’ of the assets is to be deemed to be the full value of consideration received or accrued to the firm, hence the ‘Cost of acquisition’ of the asset under consideration cannot be taken at a different figure, but as per our considered view, has to be adopted as the ‘Fair Market Value’ of the same on the date of dissolution and distribution of the assets, i.e 16.05.2003. Direct the A.O to recompute the ‘Capital gain’ in the hands of the assessee by adopting the ‘Fair Market Value’ of the property under consideration, viz. Industrial unit on 16.05.2003, as the ‘Cost of acquisition’ in the hands of the assessee. We thus, are of the considered view that though the contentions advanced by the assessee as regards its entitlement towards exemption under Sec. 54EC has to fail, but those advanced in context of quantification of the capital gains in his hands merits acceptance, in terms of our aforesaid observations - Decided partly in favour of assessee.
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2018 (6) TMI 469
Allowable expenditure u/s 37(1) - Settlement charges paid to SEBI - penalty paid for infraction of law - payment was made without admitting or denying the guilt - Held that:- The payment of settlement charges made by the Respondent was neither in the nature of protection money, nor extortion, nor hafta nor bribe. It was also not a payment for a purpose namely, settlement, which can be said to be “an offence” or which can be said to be “prohibited by law”. The payment so made by assessee was a payment for the purpose of the profession carried on by the aassessee - to save the time, cost and hassle of a long winded litigation as also to protect the reputation of the assessee. Hence, the payment has to be allowed as an expenditure under section 37(1) of the Act.- Decided in favour of assessee
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2018 (6) TMI 468
TPA - selection of comparable for determining the ALP - import of finished formulations from its AE - these formulations are in the nature of super speciality and temperature sensitive products for treating infertility, bed wetting etc.. - providing product developmental services on contract basis for its AE - extraordinary event. Comparable Celestial Labs Ltd. - Held that:- impact of the expenses incurred in connection with IPO as well interest income earned on escrow account wherein proceeds of IPO were kept shall be excluded while computing PLI of the said company for benchmarking international transactions of the assessee with its AE, as it is clearly visible that this extra-ordinary event of IPO happened in the relevant period under consideration before us. Thus, there is a need to further analyse the financial statements of Celestial Labs Limited. Comparable Tonira Pharma Ltd. - Held that:- The setting up of ETP/Waste disposal plants are in line with State Policy and this is not a valid reason for discarding comparable. However, perusal of the Audited Financial Statements for the year ended 31-03-2008 which is placed in file reveals that the said company has two units namely Ankleshwar unit and Nandesari unit. The Ankleshwar unit of Tonira Pharma Limited was hit by an extra-ordinary event of attachment of its inventory by the Excise and Custom Departments The Excise and Custom Department disallowed the clearances of finished goods from the said company’s Tonira Pharma’s Ankleshwar Plant due to litigation with Excise and Custom Department. - matter need to be restored to the file of the AO/TPO for fresh adjudication of this issue of selection of Tonira Pharma Limited as comparable for computing ALP of the international transactions entered into by the assessee with its AE of product development activity is concerned.
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2018 (6) TMI 467
Genuineness of international transaction - Held that:- the learned AR did not press the ground challenging the hire purchase transaction treated as bogus - thus we proceed to treat the hire purchase transaction as not genuine. Disallowances of depreciation - Held that:- since transaction of hire purchase of Rig was not genuine, as a corollary, no depreciation on Rig could have been allowed - entitlement of the assessee to depreciation on all assets falling within the block, other than the ‘Rig’, cannot be marred - thus the matter is set aside and restored to the file of AO for allowing depreciation on other assets of block ‘A’ except Rig. Determination of Arm's Length Price - Held that:- If an international transaction is proved to be not genuine, the transfer pricing provisions are not triggered - once we have treated hire purchase agreement as not genuine, it is but natural that the payment of interest made under such hire purchase agreement, cannot be allowed as deduction - hence the net effect is that neither an income can arise nor any deduction can be allowed on account of such a transaction - AO is directed not to allow the deduction on account of such ‘Loss of Rig Repo’ in the computation of total income.
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2018 (6) TMI 456
Addition u/s 69A - Seizure of jewellery - ownership of the seized jewellery - Addition on basis of statement made on the date of the seizure - voluminous evidence filed by the respondent during the course of the assessment proceedings has been completely ignored on the ground that the same was not produced when the seizure was made - Held that:- There is no requirement in law that evidence in support must be produced only at the time when the seizure has been made and not during the assessment proceedings - evidence led by the respondent during the assessment proceedings establish that the jewellery belonged to his employer - thus the question as proposed does not give rise to any substantial question of law - appeal is dismissed.
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2018 (6) TMI 455
Approval u/s 80G - whether registration under Section 12AA by itself is not automatic for granting approval under Section 80G? - approval was denied on the ground that the assessee was spending more than 5 per cent of the total receipts for religious purposes as pooja expenses and telecast expenses - tribunal recorded as assessee had demonstrated that spending more than 5% of total receipts for religious purposes as pooja expenses and telecast expenses was justified - Held that:- As recorded by the Tribunal that since assessee had been granted exemption under Section 12AA of the Act which was in existence and in case of any violation, the same was subject to variation/withdrawal by the CIT(E), there was no logic in denying approval under Section 80G 5(vi) of the Act. We do not find any reason to differ with the view taken by the Tribunal. Needless to say, in case, in subsequent years, the revenue is satisfied that the activities of the respondent-assessee are not qualified for charitable purposes, it shall be open for the department to initiate action for cancellation of registration - Decided in favour of assessee.
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2018 (6) TMI 454
Charitable activity - approval u/s 80G denied as activities of the respondent-society were not for charitable purposes and 50% of the donations was from the trustees themselves in the absence of any documentary evidence - corpus donation for land building - Held that:- Ordinarily when an assessee-society is established in the initial years it may be required to set up its place of office from where it would operate and also require building to carry on charitable activities therein. Purchase of land and building by itself would not be sufficient to conclude that the assessee is involved in non-charitable activities. CIT(E) before denying approval under Section 80G(5)(vi) of the Act was required to record a definite finding of fact that the funds utilised for land and building was being utilised for private purposes and not for charitable purposes. The action of the assessee-society in such circumstances cannot be held to be for non-charitable purposes. The CIT(E) had acted on mere suspicion and conjectures to deny approval to the assessee-society. Further as per the Income Expenditure Account for the financial year 2015-16, an amount of ₹ 1,03,275/- had been spent on account of student fees out of which ₹ 37,000/- had been spent on a single child on different occasions. This was held to be not qualifying for charitable acts done on a systematic regular basis. This is the result of suspicion alone. This being first year of operation after registration under Section 12AA of the Act which was accorded on 30.11.2015, the approach of CIT(E) declining approval under Section 80G(5)(vi) of the Act cannot be said to reasonable and legally sustainable. - Decided against revenue
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2018 (6) TMI 453
TDS liability u/s 194A - Interest received on compensation for agricultural land - Award of Compensation - nature of income - Held that:- As per section 145A interest received by an assessee on compensation or on enhanced compensation as per the case may be, shall be deemed to be the income of the year in which it is received and shall be chargeable under the head income from other sources u/s 56(viii) - Tribunal has clarified that word interest has been wrongly used. It is infact an enhanced compensation - thus we agree with the learned CIT(A) that impugned amount was additional compensation and not liable to deduction of tax u/s 194A - Decided in favor of assessee.
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2018 (6) TMI 452
TPA - Whether profit margin of the comparable should be applied only to the value of the International Transactions - Held that:- this issue stands concluded against the Revenue by the following decisions of this Court in case of CIT v/s. M/s. Ratilal Becharlal & Sons [2015 (11) TMI 1524 - BOMBAY HIGH COURT]. Whether adjustment of capacity utilization factor can be considered even though it is not prescribed u/s 92CA - Held that:- Taking into account the capacity utilization of the comparable, in the present facts, as it materially affects the profit margin, the invocation of Rule 10B (1) (e)(iii) of the Rules, cannot be found fault with This is self evident position from the reading of the aforesaid provision that all aspects/ difference between the international transactions and the comparable uncontrolled transactions which materially affects the net profit margin had to be taken into account so as to have the fair comparison while determining the ALP of the tested party's transaction. No substantial question of law as Rule 10B (1)(e)(iii) of the Rule is self evident Appeal admitted on the substantial question of law at (c) - Whether on the facts and circumstances of the case and in law, the Tribunal was justified in not appreciating that the Assessing Officer had correctly computed the deduction yearwise as per clause (iii) of Explanation 1 to section 115JB of the Act?
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2018 (6) TMI 451
Method of accounting - valuation of stock - question of law or fact - Held that:- Revenue was not able to show that the inventories were acquired out of borrowings and interest was to be capitalized keeping in view AS-16, issued by ICAI - following the decision of the Apex Court in COMMISSIONER OF INCOME-TAX VERSUS BRITISH PAINTS INDIA LIMITED [1990 (12) TMI 2 - SUPREME COURT], itself the Apex Court has indicted what is profit or trade or business and how it is to be ascertained and the questions analogous to the same, as involved in the present appeal, are essentially questions of fact - thus here no question of law is involved and we are only called upon to adjudicate the questions of fact, the appeal cannot be entertained and the same is dismissed.
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2018 (6) TMI 450
Adoption of special auditor's report only in part - estimation made on the assessment - validity of audit report based on sampling made by the Auditor - Auditing and Assurance Standard (AAS)-15-Audit Sampling - Held that:- AO accepted the sampling done by the special auditor and computed the percentage of cash collection and profit derived, discernible from 8 out of 84 chitty transactions, as arrived at by the special auditor - we find that there is no valid ground available to challenge the sampling or the computation of income made based on the special auditor's report, which the company would have earned from 84 chitties - thus we are of the opinion that there is nothing wrong in the estimation based on the computation made and the assessment carried out by the AO - hence appeal of assessee is rejected.
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2018 (6) TMI 449
Disallowance u/s 14A - Held that:- In the absence of exempt income, the provisions of Section 14A cannot be applied. Grounds of Appeal of assessee are allowed.
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2018 (6) TMI 448
TDS u/s 195 - interest payment made to ICICI Bank Ltd., Singapore branch - non deduction of tds - assessee submitted that since it has made payment to a resident assessee, in terms of the provision of section 194A(3)(iii) any interest paid to a banking company does not come within the purview of section 195 - Held that:- Although the assessee claims that the ICICI Bank Ltd. is the main lender for USD 20 million external commercial borrowings, the facts available on record states otherwise. The agreement between the assessee and the bank dated 15.03.2007 states that ICICI Bank Ltd is acting as an arranger cum facility agent. The said agreement further states in Schedule 1 at pg. 59 states that ICICI Bank Ltd, Singapore branch is original lender. The letter written by the ICICI Bank Ltd., Singapore branch dated 31.01.2007 states that ICICI Bank Ltd., Singapore branch is an arranger and facility agent and the lender of the loan is a group of financial institutions to be assembled by the arranger. The facts are contradictory to each other as per the assessee’s own record. The issue needs to be reexamined by the Assessing Officer in light of the claim of the assessee that ICICI Bank Ltd., Singapore branch is the main lender. The assessee is directed to substantiate its case with further evidences. In case, the Assessing Officer found that ICICI Bank Ltd., Singapore branch is lender of external commercial borrowing, than there is no default in deduction of tax at source u/s. 201(1)/201(1A) - Decided in favour of assessee for statistical purpose.
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2018 (6) TMI 447
Additions u/s 68 - Inquiry u/s 133(6) - it submitted that, the assessee were totally kept in the dark and the enquiries were conducted behind the back of the assessee - No compliance with the notices u/s 131 by directors of the share applicants companies - denial of natural justice - Held that:- though AO is at liberty to enquire even behind the back of the assessee, however if he is proposing to use it against the assessee or draw adverse inference against the assessee, then he is bound to furnish a copy of the same to the assessee and has to give opportunity to the assessee to meet it (explain or rebut). Miscarriage of justice - As only towards the fag end of the assessment proceedings, the AO issued notice u/s 131 to the Managing Director to produce the director of the share-applicants on 30.03.2015 knowing very well that assessment was getting time barred on the very next day i.e. 31.03.2015. When the Managing Director of assessee company appeared before the AO on 30.03.2015, he was told that assessment order has been already framed and passed i.e. on 30.03.2015 without giving an opportunity to the assessee to explain or rebut the materials collected by the AO behind the back of the assessee, which violates the Natural Justice of the assessee and so we hold that assessee did not get proper opportunity before the AO during assessment proceeding. Following decision in Tin Box Company (2001 (2) TMI 13 - SUPREME COURT), we set aside the order of the Ld. CIT(A) and remand the matter back to the file of AO for de novo assessment
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2018 (6) TMI 446
Rectification of mistake - apparent error committed by the Tribunal - principles for exercising powers contemplated in section 254(2) - Procedure for block assessment u/s 158BC - whether diary found during the course of search is to be considered as relatable to the assessee? - Held that:- According to the rule of prudence that once the first statement given by a person without any consultancy, the statement given after two years of search is being presumed to be given after due deliberations and consultation - thus Tribunal has appreciated the evidence according to its understanding and taken one of the possible opinions. Bifurcation of total amounts and as to how ₹ 23,43,08,700/- has been treated by the CIT(A) could be assessable in the hands of Manoj Vadodaria in whose case 153-BD proceedings was allegedly pending - Held that:- Once the Tribunal has taken into consideration whole amount and appreciated the controversy with that angle, reversed the finding of the ld.CIT(A) then not taking into considering this issue separately, is not an apparent error. It is such a minor aspect which has not influenced the decision making processing. Cognizance of the written submission - Held that:- Nothing new is contained in the submissions. It is not something, which if excluded, would change the result or impacted the assessee adversely - thus we are of the view that arguments of the assessee in this respect are devoid of any merit because alleged submissions was one fold of contentions amongst others, and not some discovery of new facts. Failure to take cognizance of various loose papers found at the time of search - Held that:- Assessee is trying to point out very minor apparent error i.e. observation of the Tribunal that diary has a single entry ledger account - we do not see that reference to such small aspects would have bearing on the decision making process - these aspects are not to be looked into in a proceeding u/s 254(2) - we are of the view that the assessee has tried to get the order of the Tribunal reviewed in the garb of pointing out apparent mistake, which is not permissible in law - thus we do not find any apparent mistake in the order of the Tribunal - hence both the MAs. are dismissed.
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2018 (6) TMI 445
Disallowance being 30% of service and supervision charges made by the assessee - Held that:- AO allowed 70% of the total expenses made on account of service and supervision charges as thought fit there was no reason to reject the balance 30% of it. The expenses so incurred in this particular head was also properly recorded in the books of account of the assessee which was neither rejected by the AO. Case of COMMISSIONER OF INCOME TAX VERSUS THE LAKSHMI VILAS BANK LTD [2014 (4) TMI 827 - MADRAS HIGH COURT] followed. Order passed by the ld. CIT(A) confirming the order of addition made by the AO on estimated basis without assigning any reason thereof is incorrect - decided in favour of assessee. Disallowance being 30% as incurred on professional and legal charges - Held that:- We have gone through the materials available on records. We, however, could not justify the attempt and conduct of the assesee to substantiate the genuineness of such expenses in its entirety in the absence of valid documents. We therefore think it fit to disallow 15% of it and delete 15% of the addition made by the AO in this regard. The said ground of appeal is thus partly allowed. Addition for bad and doubtful debts, written back and reduced from the other expenses - Held that:- The action of non acceptance of the genuine claim of the assessee by the lower authorities is unjustified and liable to be deleted. We consider it fair and proper in the interest of justice to set aside the orders of the authorities below on the issue in dispute and restore the matter to the file of the AO to decide the same afresh after giving the assessee proper opportunity of hearing and upon taking into consideration of the entire evidence already available on record as well as other documentary evidence which the assessee may choose to file in support of the claim on the issue.
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2018 (6) TMI 444
Assessment u/s 153A - Unabsorbed depreciation - Disallowance on account of carry forward loss - Held that:- Unabsorbed depreciation should be allowed to be carried forward since it is not covered by the limitation of sec 80 but it is governed u/s 32(2) - thus CIT(A) has rightly directed the AO to verify the claim of depreciation of ₹ 40,35,877/- and allow set off in the next/subsequent years, which does not need any interference on our part - CIT(A) has rightly directed the AO to verify the claim of depreciation of ₹ 40,35,877/- and allow set off in the next/subsequent years, which does not need any interference on our par- appeal of Revenue is dismissed. Assessment u/s 153A - Carry forward of business loss - Held that:- When the AO has accepted the revised return filed by the assessee u/s 153A, no occasion arises to refer to the previous return filed u/s 139 - thus respectfully following the decisions of Hon’ble Delhi High Court decision in the case Commissioner of Income-tax-19 Vs Neeraj Jindal [2017 (2) TMI 1002 - DELHI HIGH COURT] we find merit in assessee’s submissions that u/s. 153A return is deemed to be return u/s 139(1) and that restrictive provisions of section 80 do not apply to this case - thus AO is directed to allow the claim of carry forward of business loss of assessee - Cross Objection is decided in favour of the assessee.
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2018 (6) TMI 443
Disallowance of benefits of section 11 & 12 - activities of the assessee are of commercial nature or not - charging bar code licensing fee - quantum of income - Held that:- following the judgement in case of M/S GS1 INDIA VERSUS DIRECTOR GENERAL OF INCOME TAX (EXEMPTION) AND ANOTHER [2018 (3) TMI 1601 - DELHI HIGH COURT and 2018 (2) TMI 1735 - DELHI HIGH COURT] the activities of the assessee have been held as charitable in nature - thus assessee is entitled to benefit of section 11 and 12 application of income has to be allowed in accordance with law. Whether depreciation can be claimed if assessee claimed the amount incurred on purchase of assets in earlier years as application of income - Held that:- As per the judgement in case of CIT vs. Rajasthan and Gujarati Charitable Foundation, Poona [2017 (12) TMI 1067 - SUPREME COURT] Supreme Court has rejected the contention of the Revenue of double benefit and allowed the depreciation on assets as application of income even though capital expenditure in respect of those assets was already claimed as application of income in earlier years - thus the ground of appeal by revenue is dismissed. Claim of accumulated funds under section 11(2) - Held that:- Since the activity of the assessee are charitable in nature and, thus, the claim of the assessee for carry forward under section 11(2) has been rightly allowed by the Ld. CIT(A), accordingly, we uphold the same.
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2018 (6) TMI 442
TDS u/s 194H - Disallowance of commission paid in relation to security transactions - addition u/s 40(a)(ia) - Held that:- The said payment was made by the assessee in relation to the security transactions carried out by him in the capacity of sub-broker and accordingly the said payment would not be liable for deduction of tax at source in terms of Explanation to section 194H of the Act. This finding was not controverted by the revenue before us - Decided against revenue
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Service Tax
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2018 (6) TMI 441
Valuation - C&F Agency service - inclusion of reimbursable expenses - marketing the products on commission basis - Department was of the view that appellant is liable to pay service tax under C&F Agency service as well as under Commission Agency services - Held that:- The issue whether reimbursable expenses can be included in the total taxable value for quantification of demand has been settled by the decision in the case of in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT OF INDIA], wherein the Hon'ble Supreme Court has held that such reimbursable expenses cannot be made part of total taxable value - the appellant is liable to get the benefit of exclusion of reimbursable expenses - For deciding the said issue and for exclusion of reimbursable expenses on the basis of records furnished by the appellant, the issue is remanded to the adjudicating authority. Penalty u/s 76, 77 as well as 78 of the FA - Held that:- Needless to say that the penalty imposed under Sections 76 and 78 cannot sustain simultaneously - It is brought out from the facts that the appellant was under bonafide belief that they are not liable to pay service tax and was eligible for the exemption under N/N. 14/2004-ST dated 10.9.2004. Moreover, the issue whether reimbursable expenses can be included in the total taxable value was also under litigation - penalties set aside. Matter remanded to the adjudicating authority to requantify the demand after excluding the reimbursable expenses as claimed by the appellant - appeal allowed in part and part matter on remand.
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2018 (6) TMI 440
Refund on unutilized CENVAT credit - denial on the ground that the refund claim is hit by limitation - Rule 5 of the CCR 2004 read with N/N. 27/2012-CE (NT) dt. 18.06.2012 - Whether the rejection of refund claim on the ground of limitation is legal and proper? - Held that:- Circular dt. 26.10.2016 clarifies that in the case of export of services - When the relevant date is reckoned as the date of receipt of foreign currency, the refund claims are well within time - rejection of refund on the ground of time bar is unjustified - appeal allowed - decided in favor of appellant.
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2018 (6) TMI 439
GTA services - appellants are manufacturing and transporting the RMC from their plant to the site of their customers through a specially designed vehicle (Transit Mixed Vehicle) owned by them as well as taken on lease basis - Reverse Charge Mechanism - The department was of the view that such services would fall within the definition of Goods Transport Agency Service and that appellants are liable to pay service tax on the lease amount paid under reverse charge mechanism - Whether the activity of lease of special purpose vehicle for transport of RMC would fall under GTA service? Held that:- The Tribunal in the case of Birla Ready Mix Vs. Commissioner of Central Excise [2012 (12) TMI 736 - CESTAT, NEW DELHI], on similar set of facts held that the said activity would not fall within GTA service - demand cannot sustain - appeal allowed - decided in favor of appellant.
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2018 (6) TMI 438
Valuation - abatement - Commercial and Industrial Construction Service - laying of pipes for BSNL - Department was of the view that the total taxable value when considered after giving the threshold limit, the appellant would be liable to pay service tax - N/N. 6/2005-ST dt. 1.3.2005 - Held that:- The Department ought to have considered the abatement before determining whether the taxable value falls within the threshold limit or not - demand cannot sustain - appeal allowed - decided in favor of appellant.
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2018 (6) TMI 437
100% EOU - Refund of CENVAT credit - unregistered premises - whether credit is admissible even though the premises of the output service provider is not registered? - Held that:- The issue is settled by the decision of the jurisdictional High Court in the case of Commissioner of Central Excise Vs. CESTAT, Chennai [2017 (4) TMI 943 - MADRAS HIGH COURT], where it was held that Rule 5 of the 2004 Rules does not stipulate registration of premises as a necessary prerequisite for claiming a refund - refund allowed. Direction to appellant to file declaration that service provider has remitted the service tax to the Central Government - Held that:- We cannot find any sustenance for this direction either from the CENVAT Credit Rules or the Notification. In view thereof, we set aside this direction of the Commissioner (Appeals). Appeal allowed - decided in favor of appellant.
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2018 (6) TMI 436
Security services - sub-contract - demand of ₹ 13,21,165/- which according to the appellant is the amount received for the security services which have been outsourced by the appellant - Board's Circular No.96/7/2007-ST dated 23.8.2007 - Penalty - Held that:- The issue whether the demand of ₹ 13,21,165/- can sustain or not requires to be reconsidered by the adjudicating authority, for which we remand the matter to the said authority - matter on remand. Penalty - Short payment of service tax - tax collected from customers but not paid - Held that:- The appellant on bonafide belief that they are not liable to pay service tax on services outsourced had not discharged demand on such amount - in respect of services which the appellant was rendering directly, they have discharged the service to the tune of ₹ 17,05,817/- which is much prior to the issue of show cause notice. Therefore, the penalty imposed on this count cannot sustain - penalty set aside. Appeal allowed in part and part matter on remand.
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Central Excise
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2018 (6) TMI 435
CENVAT credit - duty paying documents - improper document (Debit notes) - Documents do not carry necessary details - Whether Central CENVAT Credit can be allowed on the basis of a document which does not carry required details as are provided under Rule 9(1) of CCR 2004? - Held that:- All the particulars as required under Rule 9(2) of Cenvat Credit Rules are undisputedly appearing on the debit note. Therefore the debit note is at par with the documents prescribed under Rule 9(1) of Cenvat Credit Rules 2004. The ratio of judgement in the case of Emmes Metals Pvt. Ltd. vs. Commissioner of Central Excise [2016 (5) TMI 1046 - CESTAT MUMBAI], is squarely applicable in the present case, where it was held that whatever informations required in terms of Rule 4A in the document, more or less all the informations are appearing in the debit notes, therefore the debit notes can be accepted for allowing Cenvat Credit. There is no dispute raised by the department that the service were received and same was accounted for in the books of account of the appellant, therefore, the debit note containing all the details as required under the rule 9(2) of Cenvat Credit Rules, 2004 is valid documents for the purpose of taking cenvat credit - the appellant is entitled for the Cenvat credit on the debit note. Taking into consideration the fact that even first authority while considering the matter has admitted the debit note which was produced though holding it to be in contravention under Rule 9 of the Cenvat Credit Rules, 2004 but in view of the different decisions of the tribunal, the view taken by the tribunal is required to be accepted and the same is accepted. Appeal dismissed - decided against appellant-Revenue.
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2018 (6) TMI 434
Clandestine removal - process amounting to manufacture or not? - activity of redrawing of duty paid SS wire rods and copper/brass tubes/pipes - Revenue alleged that the process of drawing or redrawing amounts to manufacture in terms of Section note 10 to Section XV and Section note 2 to Chapter 74 - benefit of SSI Exemption - extended period of limitation. Whether the process undertaken by the appellant amounts to manufacture insofar as the final product manufactured by them is wire in coil or otherwise? - Held that:- It is seen that to qualify as manufacturer in terms of section note, the final product in the shape of wire has to come into existence. In respect of goods of Chapter 74 and in terms of Chapter Note 2 to Chapter 74, the process of drawing or redrawing itself amount to manufacture - It is seen from the impugned order that the appellant had five redrawing machine, one weighing machine of small capacity, grinding machines, one lathe machine, small cutting machine and three drums for pickling - since there is no coiling machine, the question of making coils does not arise. SSI exemption - rejection on account of failure to file declaration - Whether the appellant is entitled to the benefit of small scale exemption in absence of a formal declaration under N/N. 8/2003? - Held that:- n case of Notification No.8/2003, the filing of declaration is not a mandatory pre-requisite and is more of a procedural nature. Thus it is held that the benefit of small scale notification cannot be denied merely for the failure of the appellant to file the said declaration - benefit of SSI Exemption allowed. Validity of the LRs recovered from various transporters as evidence against the appellant - If the quantum allegedly received by the appellant on the strength of the LRs recovered from the transporters and other third parties is correct or otherwise? - Held that:- It is seen that the addresses appearing in LR could not be verified as some of the addresses were non-existent or bogus - decided against appellant. If the value of goods declared by the appellant is correct or otherwise? - Held that:- As per the statement of Shri Sabir Kadir Khan, manager of the said Services, the said Shri Sabir Kadir Khan also deposed that the said goods were cleared by the appellant without accounting for or making any supporting delivery challan - decided against appellant. Appeal disposed off.
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2018 (6) TMI 433
CENVAT credit - inputs/capital goods - H.R. Plates, H.R. Sheets, M.S. Channels, M.S. Joists etc. used as structural items in their factory - period involved is prior to 07.07.2009 - Credit on MS items used for structural supports has been denied alleging that after fabrication and fixing to the earth, these become immovable property - Held that:- In the case of the Mundra Ports & Special Economic Zone Ltd. Vs CCE & Cus. [2015 (5) TMI 663 - GUJARAT HIGH COURT], it has been observed that the Tribunal has not explained in the decision of Vandana Global [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] as to what is the aid used for considering that the amendment brought forth has retrospective application, and the denial of credit - the disallowance of credit is unjustified - appeal allowed - decided in favor of appellant.
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2018 (6) TMI 432
Classification of goods - “Hydent-K” Potassium nitrate with fluoride medicated toothpaste - Whether the product namely “Hydent-K” Potassium nitrate with fluoride medicated toothpaste manufactured by the appellant is classifiable under Chapter sub-heading 3003.10 or 3306.10 of CETA 1985? - demand of differential duty - Held that:- The decision in the case of ICPA HEALTH PRODUCTS PVT. LTD. VERSUS COMMR. OF CUS. & C. EX., VADODARA [2001 (7) TMI 531 - CEGAT, MUMBAI] is squarely applicable to the facts of the present case, where the principle product is Thermoseal Toothpaste - In case of product Thermoseal, the product of IPCA, the various ingredients other than active ingredients used were 1) Enamel 2) Cementum 3) Dental pulp and dentin. Comparing the ingredients in both the products, it is observed that the principle agent is Strontium Chloride and Potassium nitrate in the product Thermoseal. In “Hydent-K” only pharmacopeia drugs were used like Potassium nitrate B.P. and Sodium Monofluophosphate USP. Therefore the product “Hydent-K” is mainly based on Pharmacopeia drug whereas in Thermoseal in addition to the principle agent, other non-pharmacopeia ingredients were also used. As per the composition of the product “Hydent-K” is on a better footing than “Thermoseal” which has been classified as medicament in the IPCA Health Products Pvt. Ltd. case. Appeal allowed - decided in favor of appellant.
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