TMI Tax Updates - e-Newsletter
July 31, 2023

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. Impact Analysis of “Rate Notifications” issued post 50th GST Council Rate Decisions

   By: Vivek Jalan

2. Traders of second-hand gold ornaments not eligible for GST margin scheme

   By: Bimal jain

3. CLASSIFICATION OF THERMAL PRINTER RIBBON - CUSTOMS AUTHORITY FOR ADVANCE RULING

   By: DR.MARIAPPAN GOVINDARAJAN

4. Payment of dues: IBC overrides provision of the Electricity Act

   By: Bimal jain

News

1. IICA conducts Workshop with top ESG Impact Leaders under IICA Certified ESG Professional: Impact Leader Programme

Notifications

DGFT

1. 21/2023 - dated 28-7-2023 - FTP

Amendment in Export policy of De-Oiled Rice Bran.

GST - States

2. 09/2023- State Tax (Rate) - dated 26-7-2023 - Bihar SGST

Bihar Goods and Services Tax Act - Recommendation of Council - Seeks to amend Notification No. 1/2017-State Tax (Rate), dated the 29th June, 2017

3. 08/2023- State Tax (Rate) - dated 26-7-2023 - Bihar SGST

Seeks to amend Notification No. 13/2017-State Tax (Rate), dated the 29th June, 2017

4. 07/2023- State Tax (Rate) - dated 26-7-2023 - Bihar SGST

Seeks to amend Notification No. 12/2017-State Tax (Rate), dated the 29th June, 2017

5. 06/2023- State Tax (Rate) - dated 26-7-2023 - Bihar SGST

Seeks to amend Notification No. 11/2017-State Tax (Rate), dated the 29th June, 2017

6. 37/GST-2 - dated 27-7-2023 - Haryana SGST

Amendment of Notification no. 105/GST-2, dated 31.12.2018 under the HGST Act, 2017

7. 36/GST-2 - dated 27-7-2023 - Haryana SGST

Amendment of Notification no. 35/ST-2, dated 30.06.2017 under the HGST Act, 2017

8. 35/GST-2 - dated 27-7-2023 - Haryana SGST

Amendment of Notification no. 48/ST-2, dated 30.06.2017 under the HGST Act, 2017

9. 34/GST-2 - dated 27-7-2023 - Haryana SGST

Amendment of Notification no. 47/ST-2, dated 30.06.2017 under the HGST Act, 2017

10. 33/GST-2 - dated 27-7-2023 - Haryana SGST

Amendment of Notification no. 46/ST-2, dated 30.06.2017 under the HGST Act, 2017

Circulars / Instructions / Orders

Income Tax

1. 14/2023 - dated 27-7-2023

Standard Operating Procedure (SOP) for making application for recomputation of total income of a co-operative society engaged in the business of manufacture of sugar, as provided for in the sub-section (19) of section 155 of the Income-tax Act, 1961

DGFT

2. Trade Notice No.18/2023 - dated 28-7-2023

Procedure for allocation of quota for export of broken rice on humanitarian and food security grounds, based on request received from Government of Mali and Government of Bhutan

3. Trade Notice No. 17/2023 - dated 28-7-2023

Procedure for allocation of quota for export of Wheat, Wheat Flour (Atta) and Maida/Semolina on humanitarian and food security grounds, based on requests received from Government of Bhutan

4. Trade Notice No.19/2023 - dated 28-7-2023

Procedure for allocation of quota for export of broken rice on humanitarian and food security grounds, based on requests received from Governments of other Countries

Customs

5. Instruction No. 25/2023 - dated 28-7-2023

Standardizing documentary & information requirements for AD Code Registration / modification in relation to exports

Highlights / Catch Notes

GST

• High Court Orders Fresh Review of Refund Claim Rejected Due to Missing Invoices in GSTR-2A; Reconciliation Submitted.

  Case-Laws - HC : Rejection of refund claim - invoices the details of which are not reflected in GSTR-2A of the applicant at the time of filing of refund - The petitioner had submitted reconciliation statements, and had reduced its claims for refund substantially to restrict the same to the quantum of refund, that according to the petitioner, was due. - Matter restored back for fresh consideration - HC
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• Court Rules Against Retrospective GST Registration Cancellation for Non-Filing; Original Registration Date Stands Valid.

  Case-Laws - HC : Retrospective Cancellation of GST registration of petitioner - the fact that the petitioner had not filed the returns for a continuous period of six months – the ground on which cancellation was proposed in terms of the Show Cause Notice dated 30.06.2021 – does not, in any manner, justify retrospective cancellation from the date that the registration was granted. - HC
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• High Court to Reconsider Refund Rejection for Late Invoice Reporting in GST Returns for Exported Services.

  Case-Laws - HC : Rejection of refunds - Export of services - Proof of date of providing / exporting services - during the month of December 2017, the Invoices/Debit Notes were missed to be reported in the GST returns and on identification of such error, the same was reported in the returns filed in the month of March 2018 and in light of such delay, interest was calculated and paid, while declaring the same in the returns for the month of March 2018 - Matter restored back - HC
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• Court Upholds Time Limit for Claiming Input Tax Credit u/s 16(4) of APGST and CGST Acts 2017.

  Case-Laws - HC : Input Tax Credit (ITC) - Constitutional Validity of Section 16(4) of the APGST Act and CGST Act, 2017 - imposition of time limit for claiming Input Tax Credit (ITC) - It is clear that ITC being a concession/benefit/rebate, the legislature is within its competency to impose certain conditions, including time prescription for availing such right and the same cannot be challenged on the ground of violation of Constitutional provisions. - HC
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• Court Rules on Appeal Deadline for GST Service Order, Enforces Strict Interpretation of Section 169(1) of 2017 Act.

  Case-Laws - HC : Service of order - time period prescribed for filing of appeal expired - Instant case pertains to year 2023 and since nearly six years have expired since coming into effect of new regime on 01.07.2017 the teething issues are over and; therefore, provisions of Section 169(1) of Act of 2017 deserve to be implemented in letter and spirit without implying or reading into it anything which is not expressly provided. - HC
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• High Court Dismisses Petition Against FIR Involving Forgery, Misconduct, and GST Evasion Allegations by GST Officer.

  Case-Laws - HC : Validity of FIR against the petitioner on the basis of Complaint filed by the GST officer - Offence of forgery and misconduct - no E-way bill - evasion of GST - Considering the allegations made in the impugned FIR, prima facie, the involvement of the petitioners in the alleged offence cannot be ruled out. - Petition dismissed - HC
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• AAR Jurisdiction Limited to Current or Proposed Transactions, Not Past Supplies Before Application Filing.

  Case-Laws - AAR : Scope of Advance Ruling application - supplies undertaken prior to the date of filing of the application for advance ruling - The scope of the ruling for Authority for Advance Ruling (AAR) is limited to the transactions being undertaken or proposed to be undertaken on the matters which are not sorted out. - Hence, the case is out of the purview of the Advance Ruling. - AAR
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• Construction Firm Under CIRP Must Transfer ITC Benefits to Consumers as per CGST Section 171; Project Unfinished.

  Case-Laws - CCI : Profiteering - reduction in the rate of tax or benefit of ITC on the supply of construction service - The company was under CIRP proceedings and taken over by the successful resolution applicant - the CC has not been issued till date in respect of this project and it is still under execution. Hence M/s One Group Developers is apparently liable for passing on the benefit of ITC under the provisions of Section 171 of the CGST Act and Rules made there under as it is availing the benefit of ITC - CCI
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Income Tax

• Income Tax Act Amendments: Limitation Period Extended from Four to Seven Years u/ss 201(1) and 201(1A.

  Case-Laws - HC : Orders u/s 201(1) and 201(1A) - period of limitation - True, the provision was amended bringing in a limitation of four years, in 2010 and then later extended to six years and seven years. - It is also pertinent that at first the reasonable limitation period prescribed by the Union Parliament was four years; which was the reasonable time, as deemed by the various High Courts. - HC
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• High Court Orders Reevaluation of Denied Tax Refund Due to 43-Day Filing Delay; Board Failed to Consider Condonation Request.

  Case-Laws - HC : Delay filing return of income - delay of 43 days in filing the return of income - Claim of Refund denied on denial of condonation of delay filling ROI - Board has not considered the prayer for condonation of delay in its proper perspective. It needs to be considered afresh. - HC
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• Tribunal Invalidates Assessment: Section 153A Breached Due to Flawed Approval by Assistant Commissioner u/s 153D.

  Case-Laws - HC : Validity of assessment u/s 153A - Tribunal was right that there was absence of application of mind by the ACIT in granting approval under Section 153D. It is not an exercise dealing with a immaterial matter which could be corrected by taking recourse to Section 292B of the Act.- HC
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• Reopening Tax Assessment on Audit Objection Alone Violates Finality, Says High Court on Section 194C.

  Case-Laws - HC : Reopening of assessment - Non deduction of TDS u/s 194C - reliance on audit objection - it is evident from the assessment order that the AO had already scrutinized the expenses claimed by the assessee during the original assessment. While so, reopening the assessment solely on the basis of an audit objection amounts to a clear case of change of opinion, as observed by the Tribunal. - HC
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• Interest on Fixed Deposits as Business Income: Tax Estimation at 10% for Interest and Discount Credits.

  Case-Laws - AT : Estimation of income @10% - Treatment of interest on fixed deposits as integral part of business activity while estimating the income - The interest income and similarly discount credits shall thus form integral part of the business receipts and shall be subjected to estimation at same rate of 10% as made applicable to contract receipts. - AT
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• Presumption Under IT Act Section 132(4A) Applies to Both Tax Authorities and Taxpayers in Book Rejection Cases.

  Case-Laws - AT : Rejection of books of accounts - Presumption to the books of accounts u/s 132(4A) - . The contents of books and documents found in possession and control of searched person thus shall be deemed to be true and the presumption would apply to both sides and such presumption thus, in effect, a double edged sword. - AT
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• Penalty u/s 271D Waived: No Black Money Involved in Cash Sale of Property Documented Through Registered Deed.

  Case-Laws - AT : Penalty u/s. 271D - Receipt of cash against sale of immovable property - The sale transaction is duly evidenced by the registered agreement / deed. Considering the fact that the provisions of Sec. 269SS are mainly to curb generation of black money by way of dealings in cash in immovable property transactions which is absence in the present case, we would hold that it is not a fit case for levy of impugned penalty - AT
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• No TDS Required on External Development Charges Paid to Government, Says Court; Section 194C Not Applicable.

  Case-Laws - AT : TDS u/s 194C - EDC is a charge levied by Government for carrying out External Development Work to be executed in the periphery of or outside colony/area for the benefit of colony/area. The EDC charge is deposited in the receipt head of ‘TCP Department’ being Government. The assessee is not liable to deduct TDS at the time of payment of EDC as the same was not out of any statutory or contractual liability towards HUDA per se. - AT
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• Appellant Fails to Prove Investment Trail, Additions Confirmed in Appeal Proceedings.

  Case-Laws - AT : Unexplained investment - the appellant failed to submit monetary trail of earlier years closing balance of investments to substantiate its claim that it had invested in three companies as mentioned hereinabove The status whereof remained unchanged in the appellate proceedings - Additions confirmed - AT
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• Capital Gain Tax Assessed for Land Sale in 2003-04; No Transfer Occurred in 1994 or 1995.

  Case-Laws - AT : Capital gain on sale of land - year of assessment - The present case is neither a case of sale nor exchange nor relinquishment or extinguishment of any right in the year 1994 or 1995. Infact, the registered sale deed document was executed by the assessee in favour of the purchaser on 29.08.2003 and therefore, the transfer had taken place in the A.Y. 2003-04. - AT
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Customs

• Court Rules Online Publication of Circular No. 18/2013-Cus. as Adequate Public Notice by DGFT.

  Case-Laws - HC : Effect of the Publication of Notification / Circular on the website - there are no substance in the submission of the learned Counsel for the petitioner that the public notice was not issued regarding Circular No. 18/2013-Cus. dated 29.04.2013. If the said Circular was published on the official website of the DGFT, it amounts that the public notice was given about the Circular. - HC
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• Court Allows Redemption of Confiscated Arecanut with Fine u/s 125 of Customs Act; Considers Mitigating Factors.

  Case-Laws - AT : Absolute Confiscation of imported goods - Arecanut - prohibited goods or not - The Original Authority is directed to give an option to appellant to redeem the goods on payment of fine in lieu of confiscation. The amount of fine shall be reasonable and appropriate, having regards to mitigating factors discussed and to be determined as per provisions under Section 125 of Customs Act - AT
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• Understanding Customs Duty: Exemptions and Limits for Bona Fide Baggage, Exclusions in Annexures I, II, III.

  Case-Laws - AT : Import of Baggage - When the baggage is “imported” as goods, such goods are liable to duty and other restrictions under Trade Policy. However, by virtue certain excuses and Rules, certain relaxations have been given for baggage (which would obvious include the accompanied as well as unaccompanied baggage as also goods on the passenger) from the applicable customs duty and restriction. The baggage Rules provides for duty free clearance for “bona fide baggage” upto certain counts and also excludes specifically from such benefit certain goods falling under annexure-I, II & III from the purview of the rules - AT
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• Officer Must Justify Rejecting Declared Value; Appellant Agreed to Avoid Fees. Case Remanded for Further Review.

  Case-Laws - AT : Valuation - the Proper officer has to provide cogent reasons for rejecting the declared value and the appellant has to be given an opportunity to be heard before enhancement of the declared value. Moreover, in the present case, the appellant had vide letters dated 19.3.2015 and 26.03.2016 had agreed for the enhanced value only to avoid detention and demurrages on the clearance of the goods and also vide letter dated 31.3.2015, appellant had requested for issuance of speaking order. - Matter remanded back - AT
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• Echo Dot (5th Gen) Import Classification: Advance Rulings Under Customs Act, 1962 Don't Determine Exact Duty Rates.

  Case-Laws - AAR : Classification of goods proposed to be imported - Echo Dot (5lh Generation) Model No. C2N6L4 - The provisions laid down under Chapter VB of the Customs Act, 1962, relating to Advance Rulings, do not mandate giving ruling on effective rate of duty on specific goods. - AAR
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• Penalty Overturned: Broker Cleared u/s 112(b) of Customs Act Due to Lack of Evidence on Forged Licenses.

  Case-Laws - AT : Levy of penalty - appellant being mediator acting as a broker in dealing with all trading of advance licence which was forged or obtained fraudulently. - Since, none of the acts referred to in Section 112(b) of Customs Act, 1962 are proved against the appellant, imposition of penalty cannot sustain. - AT
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Corporate Law

• Director/Officer Seeks Bail: Investigating Officer Didn't File Judicial Custody Application Despite Six-Year Investigation Without Arrest.

  Case-Laws - HC : Seeking grant of bail - Director / officer who is in default - the Investigating Officer had not filed any application seeking that the petitioner be placed in judicial custody, even upto the stage when the petitioner appeared before the learned Special Judge on being summonsed. Since the Investigating Officer did not arrest the petitioner during the more than 06-year long proceedings and investigation, evidently, the Investigating Officer did not consider it necessary to do so based on the material in his possession collected in the course of investigation. - HC
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Indian Laws

• Cheque Dishonor Prosecution: Multiple Presentations Allowed u/s 138 of Negotiable Instruments Act in India.

  Case-Laws - HC : Dishonour of Cheque - prosecution based upon second or successive dishonour of the cheque - there is nothing in the provisions of Section 138 of the Act that forbids the holder of the cheque to make successive presentation of the cheque and institute the criminal complaint based on the second or successive dishonour of the cheque on its presentation. - HC
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Service Tax

• Commissioner (Appeals) wrongly upheld demand for terminal handling charges; demand set aside as legally impermissible.

  Case-Laws - AT : Scope of SCN - only issue raised in the show cause notice was whether the services provided by the appellant fall under the category of clearing and forwarding agent Services - Ld. Commissioner (Appeals) in the impugned order dropped the demand under ocean freight but wrongly confirmed the demand relating to terminal handling charges and bill of lading under steamer agent services which is not permissible in law. - Demand set aside - AT
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Central Excise

• Court Finds Insufficient Evidence Against Appellant; Seized Documents Fail to Prove Clandestine Removal of Goods Charges.

  Case-Laws - AT : Clandestine Removal - documents seized by the investigating team from the residence of the Accountant - corroborative evidence or not - The charge of clandestine removal of goods is not sustainable against the appellant - AT
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Case Laws:

• GST

• 2023 (7) TMI 1231
  Violation of principles of natural justice - rejection of refund claim - Non-affording of opportunity to be heard by the Adjudicating Authority - rejection of refund on the ground that the petitioner had changed the value of the inverted rated supply of goods substantially - HELD THAT:- In SCNs it has been mentioned that some invoices included for the purpose of arriving at the amount of Net lTC not found in GSTR-2A returns for the relevant period. In this regard, reference made to Circular No. 135/05/2020-GST dated 31.03.2020 wherein it has been clarified that the refund of accumulated ITC shall be restricted to the ITC as per those invoices, the details of which are uploaded by the supplier in FORM GSTR-1 and are reflected in the FORM GSTR-2A of the applicant. Hence, the refund of accumulated ITC shall not be available to the appellant of those invoices the details of which are not reflected in GSTR-2A of the applicant at the time of filing of refund. In view of the above discussions, mis-match in Net lTC, Inverted rated supply of goods and tax payable on such supplies and adjusted total turnover clearly established and the appellant failed to reconcile the mis-match documentary or otherwise. It is apparent that although the Appellate Authority had flagged issues on the basis of which certain amount of refund as claimed by the petitioner was required to be rejected, however, no exercise was conducted to determine the extent of the refund claimed, which was untenable. The petitioner had submitted reconciliation statements, and had reduced its claims for refund substantially to restrict the same to the quantum of refund, that according to the petitioner, was due. In the present case, the petitioner was not heard by the Adjudicating Authority and no such exercise for determining the amount of refund admissible was undertaken. It is considered apposite to set aside the impugned Order-in-Appeal dated 18.11.2021 as well as the orders dated 31.12.2020 passed by the Adjudicating Authority (annexed with the petition as Annexure P/4) and restore the petitioner s applications for refund before the Adjudicating Authority for determining the amount of refund payable to the petitioner after affording the petitioner an opportunity to be heard - petition disposed off.

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• 2023 (7) TMI 1230
  Jurisdiction - authority of respondents to seize currency during search proceedings under Section 67 of the CGST Act - HELD THAT:- There is no dispute that the respondents are required to act strictly in accordance with the provisions of the statute and the rules thereunder. Clearly the action of the respondents in dispossessing the petitioner or any of the family members of any of their assets in the proceedings under Section 67 of the CGST Act, without seizing the same, is illegal. The respondents cannot continue with the possession of the currency collected from the petitioner s residence. This court is informed that respondents had after taking over possession of the currency from the residence of the petitioner proceeded to deposit the same with Canara Bank in a fixed deposit for a term of twelve months. The assumption that the cash recovered from the locked room was in the possession of the petitioner s daughter-in-law (DIL) is ex facie erroneous. It was recovered from a room that was locked and the record shows that Ms (DIL) did not have the keys to that room - the respondents are directed to refund the amount to the petitioner. To obviate any further controversy in this regard, the petitioner as well Smt. (DIL) shall appear before Respondent No. 3 at the office of Respondent No. 3, on 26.07.2023 at 12:00 noon. Petition disposed off.

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• 2023 (7) TMI 1229
  Retrospective Cancellation of GST registration of petitioner - Failure to file returns for a continuous period of six months - HELD THAT:- In the present case, there is no material on record to justify such retrospective cancellation of GST registration by the Adjudicating Authority. As noted hereinbefore, the reason for proposing cancellation of petitioner s GST registration as stated in the Show Cause Notice dated 30.06.2021 is non filing of returns; thus, absent any other reason, the retrospective cancellation cannot extend to include the period for which returns were filed by the petitioner. There is no dispute that the petitioner had regularly filed his returns till 30.06.2019. Although in terms of Section 29 of the Central Goods and Services Tax Act, 2017, the concerned authority has the discretion to cancel the registration from a retrospective date, however, the said power cannot be exercised arbitrarily - the fact that the petitioner had not filed the returns for a continuous period of six months the ground on which cancellation was proposed in terms of the Show Cause Notice dated 30.06.2021 does not, in any manner, justify retrospective cancellation from the date that the registration was granted. The concerned authorities are directed to on the strength of this order, process the petitioner s application for cancellation of his registration with effect from 30.06.2019 - petition allowed.

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• 2023 (7) TMI 1228
  Rejection of refunds - Export of services - Proof of date of providing / exporting services - during the month of December 2017, the Invoices/Debit Notes were missed to be reported in the GST returns and on identification of such error, the same was reported in the returns filed in the month of March 2018 and in light of such delay, interest was calculated and paid, while declaring the same in the returns for the month of March 2018 - HELD THAT:- It would narrow down to the determination as to whether services were rendered in December 2017, and the case of petitioner that it had omitted to raise Invoice during December 2017, which it has subsequently raised in March 2018 though for the services rendered in December 2017, requires to be re- looked into it and the finding recorded thereon. If the finding regarding rendering of services in December 2017 is recorded and Clause-2 of the Intercompany Master Services Agreement is taken note of and appropriate finding is given that would resolve the controversy. The impugned orders dated 23.03.2020 at Annexure- A and Annexure- B dated 17.07.2019 are set aide - the matter is remitted for fresh adjudication before respondent No.2 - Petition allowed by way of remand.

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• 2023 (7) TMI 1227
  Input Tax Credit (ITC) - Opportunity for personal hearing not given - violation of principles of natural justice - Seeking quashing/reading down the provisions of Section 16(2)(c) of the Central GST Act/Punjab GST Act, 2017 - HELD THAT:- In the present case, after receiving show cause notices dated 03.02.2023 (Annexure P-5 and P-6), the petitioner gave reply on 04.03.2023 (Annexure P-7) and he clicked on the option for personal hearing (at page No. 112 of the paper book) which was not given to the petitioner. In similar grounds, in M/S NARESH AGGARWAL AGENCIES PVT. LTD VERSUS THE STATE OF PUNJAB ANR. [ 2021 (12) TMI 1450 - PUNJAB AND HARYANA HIGH COURT] and M/S RAGHUNANDAN IRON STEEL COMPANY VERSUS STATE OF PUNJAB AND ANOTHER [ 2021 (7) TMI 1416 - PUNJAB AND HARYANA HIGH COURT] were disposed of by granting opportunity of hearing. This petition is being disposed of by giving direction to respondents to give an opportunity of hearing to the petitioner on the show cause notices dated 03.02.2023 (Annexures P-5 and P-6) and then pass fresh order in accordance with law.

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• 2023 (7) TMI 1226
  Input Tax Credit (ITC) - Constitutional Validity of Section 16(4) of the APGST Act and CGST Act, 2017 - imposition of time limit for claiming Input Tax Credit (ITC) - acceptance of Form GSTR-3B returns of March 2020 filed on 27.11.2020 by the petitioner with a late fee - non-service of SCN - Principles of Natural Justice - HELD THAT:- On a careful scrutiny, Section 16 of the APGST Act, 2017 prescribes the eligibility and conditions for a GST assessee to claim credit of Input Tax which was charged on any supply of goods or services or both which were used or intended to be used in the course of furtherance of his business. Precisely while Section 16 sub-section (2) prescribes the eligibility criteria which is sine qua non for claiming ITC, subsection (3) and (4) impose conditions or limitation for claiming ITC - It should be noted Section 16 of CGST Act, 2017 is in pari materia with Section 16 of APGST Act, 2017 with minor differences which are not much relevant in the present context. Hence this section needs no much elaboration. When analyzed, Section 16(2) shall not appear to be a provision which allows input tax credit, rather ITC enabling provision is Section 16(1). On the other hand, Section 16(2) restricts the credit which is otherwise allowed to only such cases where conditions prescribed in it are satisfied. Therefore, Section 16(2) in terms only overrides the provision which enables the ITC i.e., Section 16(1). This is evident from the manner in which Section 16(2) is couched. The non obstante clause in Section 16(2) is followed by a negative sentence no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless . This negative sentence pellucidly tells that unless the conditions mentioned in Section 16(2) are satisfied, no credit will be eligible. This stipulation manifests that Section 16(2) is not an enabling provision but a restricting provision. What it restricts is the eligibility which was otherwise given U/s 16(1). It should be noted, when a non obstante clause is a mere restricting provision, an interpretation that the other restricting provisions will not have effect or that the restricting provision will restrict other restricting provisions cannot be accepted for the reason that there is no contradiction between the restricting clause followed by non obstante and other restricting provisions - in substance Section 16(1) is an enabling clause for ITC; 16(2) subjects such entitlement to certain conditions; Section 16(3) and (4) further restrict the entitlement given U/s 16(1). That being the scheme of the provision, it is out of context to contend that one of the restricting provisions overrides other two restrictions. The issue can be looked into otherwise also. If really the legislature has no intention to impose time limitation for availing ITC, there was no necessity to insert a specific provision U/s 16(4) and to further intend to override it through Section 16(2) which is a futile exercise. In Willowood Chemicals Pvt Ltd. v. Union of India [ 2018 (10) TMI 261 - GUJARAT HIGH COURT] before Gujarat High Court, inter alia the rule 117 of CGST Rules which prescribed the time limit for making declaration of available tax credits as on 30.06.2017 was challenged as ultra vires to the Constitution and it was contended such time limit should be read as directory and not mandatory. It is clear that ITC being a concession/benefit/rebate, the legislature is within its competency to impose certain conditions, including time prescription for availing such right and the same cannot be challenged on the ground of violation of Constitutional provisions. As rightly argued by learned Advocate General, the operative spheres of those Articles is different from that of Section 16. In order to establish legislative arbitrariness, it must be proved that the action was not reasonable or done capriciously or at pleasure, non rational, not done or acting according to reason or judgment but depending on the will alone. Then only it can be held to have violated Article 14 of the Constitution. Non-service of SCN - HELD THAT:- A perusal of impugned Assessment Order dated 14.02.2022 passed by the 1st respondent shows that the present contentions that the notice was not issued in proper form and that no opportunity was granted for hearing etc., which were taken in objections 1 to 10 of the reply by the petitioners were vividly discussed and rejected by the 1st respondent. Hence there are no force in the present contentions. Petition dismissed.

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• 2023 (7) TMI 1225
  Maintainability of petition - availability of alternative remedy of appeal - time period prescribed for filing of appeal expired - HELD THAT:- A bare perusal of statutory provision u/s 107 of Act, 2017 reveals that the Appellate Authority cannot entertain an appeal filed beyond the original period of three months + one month of extended period since there is no power given under the statute for condonation of delay. However, period of three months + one month, as the case may be, is required to be calculated from the day that decision or order appealed against is communicated to aggrieved person. Instant case pertains to year 2023 and since nearly six years have expired since coming into effect of new regime on 01.07.2017 the teething issues are over and; therefore, provisions of Section 169(1) of Act of 2017 deserve to be implemented in letter and spirit without implying or reading into it anything which is not expressly provided. In this view of the matter, the decision rendered by Madras High Court is of no avail to the petitioner - It is a disputed question of fact whether impugned order was communicated to petitioner on 27.06.2023, which has to be looked into by the Appellate Authority. Impugned order set aside - petition disposed off.

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• 2023 (7) TMI 1224
  Violation of principles of natural justice - petitioner would submit that the impugned order is a verbatim repetition of the cyclostyle notice issued in Form GST MOV-09 and suffers from the vice of non-application of mind - HELD THAT:- No prejudice will be caused to the petitioner, if the petitioner is directed to workout its remedy before the Appellate Authority under the respective GST enactments as there are several disputed questions that arise for consideration related to the value, even if the value given in the invoices produced by the petitioner are considered. There is a shadow of doubt, which needs to be cleared. Therefore, it would ideal for the petitioner to workout remedy before the appellate authority/appellate forum. Petition dismissed - However, liberty is given to the petitioner to file a statutory appeal within a period of thirty days from the date of receipt of a copy of this order. If such appeal is filed by the petitioner within such time, the appellate authority shall dispose the appeal, as expeditiously as possible, preferably, within a period of three months from the date of receipt of a copy of this order.

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• 2023 (7) TMI 1223
  Validity of FIR against the petitioner on the basis of Complaint filed by the GST officer - Offence of forgery and misconduct - no E-way bill - evasion of GST - Exercise of powers under section 482 of CrPC - HELD THAT:- It appears from the allegations made in the impugned FIR that while local crime branch of Gandhidham was on petrolling and checking the vehicle, during that time, they have got an information from informant that 5 trailers loaded from D.B. Translink, Gandhidham are going to be unloaded at Rahpar and coals in those vehicles are without documents. Thereafter, they kept watching and found the alleged trailers are passing on the road - It also appears that the petitioners have mis-declared the goods. The drivers are not carrying the e-way bills and different material than what is stated in the bill has been transported with an intention to evasion of GST and therefore, the petitioners have committed the offence against the economy of the country. The petitioners have created false e-way bills, bilty and bills of the coals and involved in the offence of forgery and also committed cheating with the government and thus, they have hatched conspiracy and committed offence punishable u/s. 406, 420, 465, 467, 468, 471 and 120B of IPC and there is no offence registered under the provisions of GST Act. It is not a matter of dispute that the investigation is still going on and it is at present at a crucial stage. Since, the investigation is going on, it would be too premature for this Court to opine on any of the submissions made with regard to lopsided investigation. The Investigation Officer has also not submitted his final report, therefore, any of his comment on the same would be in the opinion of this Court is at a premature stage. In a recent decision of the Hon ble Supreme Court in case of Neeharika Infrastructure Pvt. Ltd. Vs. State of Maharashtra and Ors., [ 2021 (4) TMI 1244 - SUPREME COURT] , is required to be referred to, where it was held that The High Court shall not and as such is not justified in passing the order of not to arrest and/or no coercive steps either during the investigation or till the investigation is completed and/or till the final report/chargesheet is filed under section 173 Cr.P.C., while dismissing/disposing of the quashing petition under section 482 Cr.P.C. and/or under Article 226 of the Constitution of India. Considering the allegations made in the impugned FIR, prima facie, the involvement of the petitioners in the alleged offence cannot be ruled out. Thus, in view of the principle laid down in the aforesaid judgment and the facts and circumstances of the case, this Court does not find this to be a fit case where discretion under section 482 of Cr.P.C. can be exercised in favour of the petitioners - petition dismissed.

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• 2023 (7) TMI 1222
  Suit seeking diverse declarations - direction to the Defendant to pay requisite GST, if applicable, and handover possession of permanent alternate accommodation as agreed - HELD THAT:- The situation which obtains is that the occupation certificate of the redeveloped building has been obtained. The Plaintiff is kept out of possession of the permanent alternate accommodation to which she is otherwise legitimately entitled to. At the same time, it is alleged, the Defendant has not paid the transit rent. The controversy between the parties primarily revolves around the liability to pay GST which is yet not crystallized. In the circumstances, it would be expedient to dispose of the appeal by putting terms on the basis of the undertaking furnished by the Plaintiff as to payment of GST - Appellant-Plaintiff shall deposit the amount of GST before the trial Court, on demand being raised by the competent authority and conveyed by the Respondent-Defendant, within two weeks of such communication.

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• 2023 (7) TMI 1221
  Scope of Advance Ruling application - supplies undertaken prior to the date of filing of the application for advance ruling - Input Tax Credit - GST paid on the advertisement expenses like calendars, t-shirts, pens, open bags etc. printed with company name/logo and distributed in business meetings, workshops for advertisement, business promotion, marketing and to build up and maintain public image of the company - mandatory minimum percentage of the value of loan that should be charged by the directors from the company in lieu of giving personal bank guarantee for sanctioning loan/credit limits to the company or not - HELD THAT:- From the provisions of Section 95, it is seen that this authority is constituted to decide on matters or questions specified in sub-section (2) of Section 97, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. On going through the facts of the case, the applicant has not disclosed the practice already being followed by him in previous period. It is observed that applicant filed their application before the Rajasthan Authority for Advance Ruling (RAAR) on 15.10.2022 i.e. much later from the discharging his GST liability It is also found that Section 17(5) (g) 17 (5) (h) on question no one, Section 15 (1) Section 15(5) on question no 2, and Section 18 (6) on question no 3 are very much clear and there is no ambiguity in these section. We observe that the applicant is well aware about the sections and discharging his tax liability in accordance to them. The scope of the ruling for Authority for Advance Ruling (AAR) is limited to the transactions being undertaken or proposed to be undertaken on the matters which are not sorted out. In the instant case, the application seeking advance ruling was filed on 15.10.2022 before the RAAR with respect to supplies already being undertaken, GST being paid and GST returns has been submitted. Hence, the case is out of the purview of the Advance Ruling.

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• 2023 (7) TMI 1220
  Profiteering - benefit of input tax credit not passed on - Contravention of Section 171 of CGST Act - HELD THAT:- The Commission has carefully considered the Report of the DGAP and the other material placed on record and finds that the DGAP, in pursuance to the Order in SH. VIVEK GUPTA, DIRECTOR GENERAL OF ANTI-PROFITEERING, CENTRAL BOARD OF INDIRECT TAXES CUSTOMS, VERSUS M/S. MAHESHWARI INFRATECH PVT LTD., [ 2022 (10) TMI 369 - NATIONAL ANTI-PROFITEERING AUTHORITY] , has investigated the matter pertaining to the other projects executed by the Respondent in terms of Section 171 of the CGST Act, 2017 and the Rules made there under so as to determine whether there has been any profiteering by the Respondent and found that no other project has been executed by the Respondent except the project U-Faria , Profiteering in respect of which has already been determined by the NAA. The above fact has also been corroborated from the website of the UP RERA as well as the reply of the Commissioner State Tax UP as per the report of the DGAP. The Commission finds that the provisions of Section 171 of the CGST Act, 2017 are not attracted in the case of the other projects of the Respondent and therefore, the proceedings are accordingly dropped against the Respondent.

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• 2023 (7) TMI 1219
  Profiteering - benefit of ITC not passed on to the recipients - HELD THAT:- The Commission has carefully considered the Report of the DGAP and the other material placed on record and finds that the DGAP, in pursuance to the Order in SH. DEEPAK GARG, DIRECTOR GENERAL OF ANTI-PROFITEERING, CENTRAL BOARD OF INDIRECT TAXES CUSTOMS VERSUS M/S. JKG CONSTRUCTION PVT. LTD. [ 2022 (10) TMI 408 - NATIONAL ANTI-PROFITEERING AUTHORITY] , has investigated the matter pertaining to the other projects executed by the Respondent in terms of Section 171 of the CGST Act, 2017 and the Rules made there under so as to determine whether there has been any profiteering by the Respondent and found that no other project has been executed by the Respondent except the project JKG Palm Court , profiteering in respect of which has already been determined by the NAA. The Commission finds that the provisions of Section 171 of the CGST Act, 2017 are not attracted in the case of the other projects of the Respondent and therefore the proceedings are accordingly dropped against the Respondent.

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• 2023 (7) TMI 1218
  Profiteering - reduction in the rate of tax or benefit of ITC on the supply of construction service by the Respondent after implementation of GST w.e.f. 01.07.2017 or not - benefit of ITC passed on or not - Section 171 of the CGST Act, 2017. - The company was under CIRP proceedings and taken over by the successful resolution applicant. Whether the proceedings already initiated against the Respondent viz. M/s. Puma Realtors Pvt. Ltd. under Section 171 of the CGST Act, 2017 and CGST Rules, 2017 in the matter of the project Ire Rise should be continued even after passing of NCLT order dated 01.06.2021 or not? - HELD THAT:- Any claim of not passing on the benefit of ITC to the recipients under Section 171 of the CGST Act and the Rules made there under, would not survive in view of the Order dated 01.06.2021 passed by the NCLT under Section 31 of the Code which extinguishes his all liabilities including any liability on account of passing on the benefit of ITC to the recipients of the Project lreo Rise as the same has not been incorporated in the Approved Resolution Plan. Further the New Management viz. M/s One Group Developers can also not be held liable for the liability of M/s. Puma Realtors Pvt. Ltd. of not passing on the benefit of ITC to the eligible home- buyers/recipients under Section 171 of the CGST Act, 2017 in view of the NCLT order dated 01.06.2021 - the proceedings already initiated against the Respondent viz. M/s. Puma Realtors Pvt. Ltd. for determining the benefit of Input Tax Credit under Section 171 of the CGST Act, 2017 and rules made there under, with regard to the project Ireo Rise shall be discontinued henceforth. Whether directions to investigate M/s One Group Developers which has taken over the project lreo Rise as per NCLT s Order dated 01.06.2021, under section 171 of CGST Act 2017 and CGST Rules, 2017 be passed or not? - HELD THAT:- It is revealed from the material brought on record that by virtue of Order dated 01.06.2021 of the NCLT, the management of M/s. Puma Realtors Pvt. Ltd. (Respondent) has been taken over by M/s One Group Developers under the Code. It is also revealed that M/s One Group Developers is collecting the outstanding installments from the homebuyers/recipients for the project Ireo Rise and is also collecting GST thereon. It is further revealed that the CC has not been issued till date in respect of this project and it is still under execution. Hence M/s One Group Developers is apparently liable for passing on the benefit of ITC under the provisions of Section 171 of the CGST Act and Rules made there under as it is availing the benefit of ITC - the DGAP is directed to investigate M/s One Group Developers with regard to the project Ire Rise for any violation of Section 171 of the CGST Act, 2017.

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• Income Tax

• 2023 (7) TMI 1217
  Assessment u/s 153C - Assumption of jurisdiction and the scope of the additions - incriminating material qua the Assessee found or not? - HELD THAT:- As stated at the Bar that the special leave petition could be disposed of in terms of the judgment of this Court in Principal Commissioner of Income Tax, Central-3 vs. Abhisar Buildwell P. Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT ] Submission of the respective parties is placed on record. Following the aforesaid judgment/order of this Court, the special leave petition stands dismissed.

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• 2023 (7) TMI 1216
  Orders u/s 201(1) and 201(1A) - period of limitation - Tribunal setting aside the order passed by the Assessing Officer finding it to be beyond four years - HELD THAT:- Insofar as the reasonable time, as held by the Hon ble Supreme Court, it is trite that when no period of limitation is prescribed by a statute, even then the Department cannot pass orders after the expiry of a reasonable period. It has also been held in various decisions that the reasonable period can be understood from the provisions of the subject statute, disclosing the scheme of the statute, where limitation is provided with respect to other actions by the Department. The various High Courts, as referred to above, deemed reasonable time to be four years, as is coming out from the various provisions of the Income Tax Act itself. True, the provision was amended bringing in a limitation of four years, in 2010 and then later extended to six years and seven years. Providing a specific period of limitation by the Union Parliament indicates, though it is not applicable to the subject assessment orders, the wisdom of the legislature. The presumable object behind that is not to leave the matter to the vagaries of the Department officials. It is also pertinent that at first the reasonable limitation period prescribed by the Union Parliament was four years; which was the reasonable time, as deemed by the various High Courts. We refer to Union of India v. Kaumudini Narayan Dalal [ 2000 (12) TMI 101 - SC ORDER] Commissioner of Income Tax v. Narendra Doshi [ 2001 (7) TMI 10 - SUPREME COURT] , Commissioner of Income Tax v. Shivsagar Estate [ 2002 (7) TMI 103 - SC ORDER] and Berger Paints India Ltd. v. Commissioner of Income Tax [ 2004 (2) TMI 4 - SUPREME COURT] The established principle is that, if the Revenue has not challenged a declaration of law laid down by a High Court and accepted it in the case of one assessee, then it is not open to the Revenue to challenge its correctness in the case of other assessees, without just cause. Decided in favour of the assessee.

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• 2023 (7) TMI 1215
  Condonation of delay filing return of income u/s 119 - delay of 43 days in filing the return of income - mandation to give proof of genuine hardship - applicant was seeking refund denied on denial of condonation of delay filling ROI - Petitioner explained that the delay was due to the concerned person who was entrusted with the work of filing of return being indisposed due to medical reasons - HELD THAT:- The court has held that the phrase genuine hardship should be construed liberally particularly when the legislature had conferred the power to condone the delay to enable the authorities to do substantive justice to the parties by disposing the matter on merits. While considering this aspect of genuine hardship, the authorities are expected to bear in mind that ordinarily applicant applying for condonation of delay does not stand to benefit by lodging its claim late. In the case at hand where applicant was seeking refund of a large amount of Rs. 82,13,340/-. Refusing to condone the delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. The authorities fail to understand that when the delay is condoned, the highest that can happen is that the cause would be decided on merits after hearing the parties. In our view, the approach of the authority should be justice oriented so as to advance cause of justice. If refund is legitimately due to applicant, mere delay should not defeat the claim for refund. Having said so, we are satisfied that Board has not considered the prayer for condonation of delay in its proper perspective. It needs to be considered afresh. We hereby quash and set aside the order impugned in this petition and remit the matter back to the Board for denovo consideration. We direct the Board to decide the question of hardship as well as that of correctness and geniuineness of the refund claim.

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• 2023 (7) TMI 1214
  Validity of assessment u/s 153A - allegation of non application of mind by the ACIT Tax in granting approval u/s 153D - addition made qua cash deposited in the bank and addition was made with regard to cash introduced via an entry operator - HELD THAT:- The respondent had declared an income amounting to Rs. 87,20,580/-. However, while making the additions, strangely, the AO noted that the returned income was Rs. 11,00,460/-. Despite the additions which would have taken the assessed income well beyond what was crystallised by the AO ACIT failed to notice the error. This aspect was brought to the fore by the Tribunal in the impugned order. The Tribunal, thus, concluded there was a complete lack of application of mind, inasmuch as the ACIT, who granted approval, failed to notice the said error. Tribunal notes that all that was looked at by the ACIT, was the draft assessment order. Approval was granted without examining the assessment record or the search material. Tribunal was right that there was absence of application of mind by the ACIT in granting approval under Section 153D. It is not an exercise dealing with a immaterial matter which could be corrected by taking recourse to Section 292B of the Act. Decided against revenue.

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• 2023 (7) TMI 1213
  Reopening of assessment - assessee firm had not deducted TDS as required u/s 194(C) on the entire hire charges - reliance on audit objection - ITAT, dismissed the appeal of the revenue holding that reopening of the assessment was purely based on a change of opinion - HELD THAT:- Assessee in this case is engaged in the transport contract business and claimed expenses in the returns filed. AO sought an explanation from the assessee regarding the substantial expenses claimed under the category other expenses in the Profit and Loss account which was responded by assessee submitting letter stating that the expenses were related to transport contracts for transporting gypsum and cement to the companies. Upon careful examination of the documents and details provided by the assessee along with the IT statement, the AO completed the assessment u/s 143(3). Assessment order explicitly stated that the AO had examined all the documents and details submitted by the assessee and accepted the income returned. Thus, it is evident from the assessment order that the AO had already scrutinized the expenses claimed by the assessee during the original assessment. While so, reopening the assessment solely on the basis of an audit objection amounts to a clear case of change of opinion, as observed by the Tribunal. Reopening the assessment by AO without any substantive basis or new material would only tantamount to a change of opinion and it is not at all a valid ground for reopening. Therefore, the Tribunal has rightly held that reopening the assessment u/s 147 is indeed a change of opinion, which is not permissible under law, in the light of the judgment of CIT V. Kelvinator India Ltd. [ 2010 (1) TMI 11 - SUPREME COURT] - Decided in favour of assessee.

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• 2023 (7) TMI 1212
  Recovery proceedings - demand payment u/s 143(1)(a) - petitioner company had been wound up - Writ of Mandamus directing the respondent to permit the petitioner company to pay the sum of Rs.1,00,00,000/- in equal ten monthly installments - HELD THAT:- Admittedly, the petitioner company has been wound up and the entire affairs of the company now rest with the official liquidator. The petitioner company does not have any property, which can be easily sold to clear the dues of the respondent herein. However, the intent of the petitioner appears to be sincere despite the odds stacked against them. Therefore, this Court is of the view that the petitioner must be permitted to show their bona fides and settle the dues. With this intent and in the interest of justice, the Writ Petition is allowed permitting the petitioner to pay the amount in installments. The calculation sheet provided by the respondent is taken as the calculation for the repayment of the amount. In the calculation submitted by the respondent, the first installment payable is a sum of Rs.10,00,000/- together with interest of a sum of Rs. 11,29,919/-, totally a sum of Rs.22,30,037/-. This amount would be a little too steep for the petitioner to repay. Therefore, the first installment of Rs.22,30,037/- is split into two installments. The first of which will be a sum of Rs.11,29,919/- and the remaining shall be paid as the 11th installment and the amount due under the 11th installment would be a sum of Rs.10,21,908/-.

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• 2023 (7) TMI 1211
  Reopening of assessment u/s 147 - Ext.P7 order rejecting the objections raised by the petitioner and finding that the reassessment proceedings should continue against the petitioner - HELD THAT:- There is considerable merit in the contentions taken by the learned counsel appearing for the respondent Department. Ext.P7 order cannot be held to be in violation of principles of natural justice as the said order was preceded by a show cause notice and the petitioner was given an opportunity to reply to the same. It is also clear that the petitioner was heard before Ext.P7 order was issued. The contention of the petitioner that the matters set out in the reply to the show cause notice have not been properly considered cannot be stated to be a violation of principles of natural justice. The judgments relied on by the learned counsel for the petitioner indicate that they were rendered in completely different fact circumstances. Ext.P7 order has considered the submission made by the petitioner and has found that the contentions taken have to be examined in the reassessment proceedings which, will follow. The officer holds that the nature of transactions mentioned in the show cause notice which have been explained in the reply of the assessee dated 03.06.2022 require detailed examinations with necessary evidence in support of assessee s claim during the reassessment proceedings. No ground on which Ext.P7 order can be interfered with in exercise of jurisdiction under Article 226 of the Constitution of India. The writ petition fails and it is accordingly dismissed.

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• 2023 (7) TMI 1210
  Penalty u/s 271(1)(c) - Reopening of assessment initiated u/s 147 - Information u/A 28 of the India-France DTAA was received regarding the four undisclosed foreign bank accounts held with HSBC Bank, Geneva, Switzerland - HELD THAT:- Appeal by the Revenue against the order passed by the learned CIT(A) in quantum appeal, the coordinate bench of the Tribunal 2023 (3) TMI 1105 - ITAT MUMBAI] allowed the petition filed by the assessee under Rule 27 of ITAT Rules and held that the AO had no jurisdiction to make the addition under section 147 of the Act. Accordingly, the appeal filed by the Revenue in quantum proceedings was rendered academic and therefore, was dismissed. Since the addition made by the AO while completing the assessment under section 147 of the Act was held to be beyond the jurisdiction by the coordinate bench of the Tribunal vide aforesaid order, we find no basis in the penalty levied under section 271(1)(c) of the Act based on the very same addition. Grounds raised by the Revenue are dismissed.

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• 2023 (7) TMI 1209
  Book profit u/s 115JB resorting to computation u/s 14A r.w.r. 8D - HELD THAT:- We find that the Special Bench of Tribunal in Vireet Investment (P) Ltd.[ 2017 (6) TMI 1124 - ITAT DELHI] held that computation under clause (f) of Explanation 1 to section 115JB(2) is to be made without resorting to the computation as contemplated under section 14A read with Rule 8D of the Income-tax Rules, 1962. Thus, we direct the AO to compute the book profit under section 115JB of the Act, without resorting to computation under section 14A read with Rule 8D.

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• 2023 (7) TMI 1208
  Penalty u/s 271(1)(c) - Defective notice - non specification of clear charge - non striking of irrelevant part - HELD THAT:- AO did not strike off any of the twin charges i.e., concealment of particulars of income or furnishing of inaccurate particulars of income. The case of the assessee is squarely covered by the decision of Mohd. Farhan A. Shaikh [ 2021 (3) TMI 608 - BOMBAY HIGH COURT] wherein held that the defect in notice by not striking off the irrelevant matter would vitiate the penalty proceedings. Accordingly, penalty order passed u/s 271(1)(c) of the Act is quashed. Decided in favour of assessee.

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• 2023 (7) TMI 1207
  Rejection of books of accounts - Presumption to the books of accounts u/s 132(4A) - Estimation of income - bogus purchases - estimations of profits at higher percentage of 10% of contract receipts - violation of Section 40A(3) and verified employee expense - estimation of taxable income and manner and extent of estimations - HELD THAT:- We find that the CIT(A) has given a rather objective consideration to the factual matrix and has analyzed the fact situation, usage of the trade and the common practices adopted in the contract business and has approached the issue in a quite reasonable and fair manner. CIT(A) has given due weight to the nature of business carried out by the assessee. We concur with the findings of the CIT(A) that while the assessee has attempted to correlate and collate the factual matrix to justify the books results, there are visible fill-in gaps which has not been filled, warranting estimates of profits in a fair and nonpartisan manner. Except for making reference to some hand bills remaining unpaid and lack of evidences towards transportation, unsupported statement of low rung employee etc, the AO has also not brought out specific defects in the books despite drastic action of search. CIT(A) to our mind, has rightly rejected the books of account and set aside book results for fair and benign estimations of profits and to shun absurdity in the income assessed. While, the assessee has provided justifications towards large creditors arising year after year, such justifications are largely circumstantial and abstract. The outstanding creditors of such significant amounts in the context do invoke disquiet. It is indeed difficult to appreciate the correctness of book results in an objective manner. The AO has made wide ranging observations against the assessee. - Action the CIT(A) sustained. Presumption to the books of accounts u/s 132(4A) - The Hon ble Kerala High Court in the case of CIT (central), Kochi vs. Damac Holdings (P) Ltd. [ 2017 (12) TMI 1170 - KERALA HIGH COURT ] observed that in the case seizure of documents in the course of search, the presumption under 132(4A) would be equally available to the assessee as well. The contents of books and documents found in possession and control of searched person thus shall be deemed to be true and the presumption would apply to both sides and such presumption thus, in effect, a double edged sword. The presumption of correctness of entries found in the books at the time of search has not been rebutted by the revenue. Excessive estimation of net profit ratio - assessee has challenged the net profit ratio estimated by the CIT(A) @ 10% instead of 8% adopted under presumptive scheme of taxation provided u/s 44AD - HELD THAT:- We do not see merit in the plea of the assessee for such indulgence. The issue is highly factual and varies from case to case. The income estimated at 8% in the case of Subodh Gupta (supra) is based on its own set of facts. The judgment in Subodh Gupta [ 2014 (12) TMI 479 - DELHI HIGH COURT ] cannot be read to mean that net profit ratio of 8% is sacrosanct percentage in all circumstances. The CIT(A), in his wisdom, has estimated profit at 10% after considering host of circumstances such a quality of evidence made available to support other sundry creditors , large cash expenses incurred, the net profit ratio declared and net profit ratio determined by the Assessing Officer etc. The law has not invented any straight jacket formula to judge such estimations precisely. Such estimations are in the realm of probabilities. There is nothing conclusive about it. The estimations carried out by the CIT(A) cannot be said to be marred by any kind of perversity. The estimates of profits by the CIT(A) are not fanciful or whimsical but appears to be guided by the principles of objectivity, fairness and considerations of justice and maintains some sort of equilibrium. We thus are not inclined to interfere and re-estimate the estimations made by the CIT(A) in the absence of any palpable overreach on this score. Treatment of interest on fixed deposits as integral part of business activity - It is common knowledge that the large scale guarantees and securities are required in contract businesses. The factual matrix also underscores the proposition that the fixed deposits have not been placed to enjoy interest income simplicitor out of any surplus money. Circumstantially, large scale outstanding liabilities suggests otherwise. Coupled with this, the assessee has also incurred interest and finance costs. The contention of the assessee accepted, that such FDRs are nothing but integral part of working capital of the assessee kept and expanded for commercial reasons. Hence, the interest income deserves to be treated alike with business contract receipts for the purposes of estimations. The interest income cannot be treated differently from contract receipts merely because such income flows from a different source. - Order of CIT(A) modified to this extent. The interest income and similarly discount credits shall thus form integral part of the business receipts and shall be subjected to estimation at same rate of 10% as made applicable to contract receipts. However, the interest income on IT refunds and NSC deposits will not get the benefit of estimations but will be chargeable as other income in accordance with law. Exclusion of exempted income - Assessee has claimed that share of profit arising from joint venture in some assessment years are fully exempted from taxation u/s 10(2A) of the Act. Needless to say, where the income is exempt from the ambit of taxation under the provisions of the Income Tax Act, same has to be excluded from the taxability at the threshold. Thus, the AO is directed to do so by determining the taxable income. Appeal of the assessee is partly allowed while the appeal of the Revenue is dismissed on all counts.

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• 2023 (7) TMI 1206
  Maintainability of appeal before tribunal u/s 253 against Penalty orders u/s 271FA - HELD THAT:- Section 253 of the Act provides an exhaustive inventory of appeals that can be preferred before the Tribunal Sub-section (1) sets out the orders passed under the relevant sections that an assessee can challenge before the Tribunal. Similarly, sub-section (2) provides a list of sections, the orders passed where under, can be challenged by the Revenue. There is no provision u/s 253(1) entitling an assessee to file a direct appeal to the Tribunal against the penalty order passed by the AO u/s 271FA. Hence, such orders having been appealed before the Tribunal without jurisdiction, cannot be lawfully prosecuted. Similar issue came up for consideration before the Pune Tribunal in several cases including Nanded District Central Co-op. Bank Ltd. vs. Director of Income Tax (Intelligence Criminal Investigation [ 2022 (1) TMI 887 - ITAT PUNE] Tribunal dismissed the appeal preferred by the assessee against penalty order passed by the AO u/s 271FA of the Act. Considering the judgment of Ravi Vijay Anr.[ 2012 (9) TMI 652 - RAJASTHAN HIGH COURT] Tribunal also gave liberty to the assessee for taking recourse to the alternative remedy as suggested in the judgment, if so desired. Appeal dismissed.

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• 2023 (7) TMI 1205
  Unexplained cash deposits u/s. 69A - assessee claims to have received loans from his friends to commence business and the same has been deposited into his bank account - HELD THAT:- Although, the assessee claims to have received loans from friends and relatives, but could not justify his arguments with credible evidences. AO had also not given any conclusive reasons to come to the conclusion that the cash deposits found with bank account of assessee is unexplained income. Therefore, the only possible option left with us is to estimate income from cash deposits found with savings bank account of the assessee maintained with Karur Vysya Bank. Therefore we are of the considered view that the entire cash deposits cannot be treated as unexplained money of the assessee and thus, we direct the AO to allow relief to the tune of Rs. 8 lakhs, because the source for cash deposits to that extent may be loans received from friends and relatives of the assessee. For balance amount assessee could not file any evidence to prove source for cash deposits. Therefore, we direct the Assessing Officer to sustain additions to the extent u/s. 69A of the Act - Appeal filed by the assessee is partly allowed.

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• 2023 (7) TMI 1204
  GP estimation - quantum of contract receipts taxable in the hands of the assessee company - application of net profit rate - CIT(A) to uphold the action of the AO in applying 13% net profit rate on part of the contract receipts in the hands of assessee - contract receipts which were not part of the books of accounts but very much offered to tax as part of the revised return of income - HELD THAT:- There is no dispute that the assessee can be allowed the benefit of indirect expenses only once while working out its taxable income. However, when the same principle is applied to the facts of the present case, we find that the net profit rate of 3.45% has been determined as a percentage of the total contract receipts which includes both types of contract receipts which are reflected in the books of account which are not reflected in the books of accounts. Where the net profit rate is determined as a percentage of the contract receipts it will shown net profit rate of 0.69% after allowing indirect expenses and net profit rate of 13% as a percentage of contract receipt without allowing any double deduction for indirect expenses. We therefore find that there is no double deduction of indirect expenses while determining net profit rate of 3.45% and given that the assessee has already offered net profit rate of 10% on total contract receipts, no further addition is required to be made in the hands of the assessee. Thus, the addition so sustained by the ld CIT(A) is hereby directed to be deleted. Assessee appeal allowed.

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• 2023 (7) TMI 1203
  Disallowance u/s 68 - Bogus share capital and Share Premium received - HELD THAT:- As against the share application money received from five investors - As investors were found to be existing in their given addresses and the respective persons of those companies appeared before DDIT Investigation and confirmed the fact of depositing share application money with the assessee company. Assessee further submitted copies of the audited accounts and bank statements of these investors before the A.O. CIT(A) correctly deleted the additions. Share application money invested by M/s. Balram Vinimay Pvt. Ltd . - As after verification of the same and copies of the audited accounts and bank statements and the share application money has been transferred to the assessee company through banking channels. CIT(A) deleted the additions made by the Assessing officer and also following Supreme Court judgment in the case of Lovely Exports (P.) Ltd. [ 2008 (1) TMI 575 - SC ORDER] . Unsecured loan received from M/s. Jeenma Business Pvt. Ltd. - CIT(A) deleted the addition by holding that the assessee proved the genuineness of the transaction. Before us, the Ld. Sr. D.R. could not produce any contra evidences, which warrant confirming the addition made by the A.O. In the absence of the same, we have no hesitation in confirming the order of Ld. CIT(A) who deleted the additions u/s. 68. Decided against revenue.

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• 2023 (7) TMI 1202
  Addition u/s 68 - accommodation entry taken - initial Burden to prove - HELD THAT:- The initial burden is on the assessee. We find that to discharge the initial burden the assessee has submitted copies of ITR, bank statements, confirmations and affidavits acknowledging receipt of share certificates from the 10 investors companies. We find that the AO has failed to probe / conduct scrutiny of the documents so furnished and could not point out any fault in the documentary evidences so furnished. No material was brought on record by the AO to show that the affidavits filed by the directors of the investors companies were not genuine. No enquiries were conducted about the contents of the affidavits even during the remand proceedings the AO did not make any attempt to discredit the affidavit. The result is that the contents of the affidavits have not been disputed. Applicants were present at the given addresses against whom action could have been taken. In our considered opinion there is no material whatsoever on record for doubting the veracity of the statements made in the affidavits and if the deponents have also not been subjected to cross-examination for bringing out the validity of their statements then authorities would not be justified in doubting the correctness of the statement made by the deponents in the affidavits. Entire addition is based upon the statement of alleged entry operator Himsanshu Verma but he was never produced for cross-examination. The onus of ensuring his presence was on the AO but even the AO showed his inability to produce Himsanshu Verma for cross-examination. Thus assessee has successfully discharged the onus cast upon it by the provisions of section 68 - Decided in favour of assessee. Estimation of profit - deemed profit computed @ 8% of gross revenue from finishing work - HELD THAT:- As without rejecting the books of account the AO has grossly erred in estimating the profit which is against the ratio laid down in the case of National Industrial Corporation Limited [ 2002 (8) TMI 93 - DELHI HIGH COURT] . Since the addition is solely based on estimation without rejecting the books of accounts, we do not find any merit in the impugned addition the AO is directed to delete the same. Ground No.3 is allowed.

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• 2023 (7) TMI 1201
  Penalty levied u/s. 271D - assessee has received cash on sale of immovable property which was held to be in contravention of Section 269SS - AR submitted that applying the rule of Ejusdem generis to the expression advance or otherwise, the phrase otherwise would not cover sale consideration and such sale transactions are excluded from the purview of Sec. 269SS - HELD THAT:- The Explanatory Notes to the Finance Act, 2015, enlarging the scope of Sec. 269SS, clearly provide that in order to curb generation of black money by way of dealings in cash in immovable property transactions, Section 269SS of the Income tax Act has been amended to provide that no person shall accept from any person any loan or deposit or any sum of money, whether as advance or otherwise, in relation to transfer of an immovable property (specified sum) otherwise than by an account payee cheque or account payee bank draft or by electronic clearing system through a bank account, if the amount of such loan or deposit or such specified sum is twenty thousand rupees or more. Very clearly, the intention of the amendment is to include sale consideration also arising out of immovable property within the ambit of Sec. 269SS. This argument raised by Ld. AR stand rejected. Digital signatures on the penalty order could not be verified - DR produced copy of penalty order wherein digital signatures have clearly been affixed on the penalty order. DR submitted that there is no further requirement that the digital signatures should be verified by the web browser. We concur with Sr. DR s plea since the only requirement is that the order should be signed digitally and nothing more. This argument also stands rejected. But facts as emerges that the assessee has sold property for sale consideration of Rs. 50 lacs out of which substantial sale consideration to the extent of Rs. 45 Lacs has been received in Cheques whereas only a small sale consideration of Rs. 5 Lacs has been received in cash. The sale transaction is duly evidenced by the registered agreement / deed. Considering the fact that the provisions of Sec. 269SS are mainly to curb generation of black money by way of dealings in cash in immovable property transactions which is absence in the present case, we would hold that it is not a fit case for levy of impugned penalty - Decided in favour of assessee.

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• 2023 (7) TMI 1200
  Bogus purchases/sundry creditors - assessee failed to produce supporting bills/vouchers for the purchases made from the parties and also not filed bank details and proof of payments - CIT(A) deleted the addition - HELD THAT:- As perusal of the HDFC Bank account makes it very clear regular cheque payments were made by the assessee through the continuation of the business with Kingston Peptech P. Ltd. as well as the Om Enterprise and various other suppliers. CIT(A) deleted the addition made on account of bogus sundry creditors which is in our considered opinion does not require any interference. Purchasers are supported by bills entries in books of account and made payment by cheques. AO did not find any inflation in purchase price, but the addition made only on the ground that the assessee failed to furnish the details during the ex parte assessment proceedings. See M/S NANGALIA FABRICS PRIVATE LIMITED [ 2013 (8) TMI 80 - GUJARAT HIGH COURT] - Decided in favour of assessee.

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• 2023 (7) TMI 1199
  Addition on the basis of dumb/rough documents seized - Unsecured advances obtained - search and seizure operation u/s 132 - HELD THAT:- Addition has been made on the basis of presumptions and assumptions that Shri Mahendra Sethia is engaged in the business of providing accommodation entries of share capital or sale of investment without bringing any corroborative material on record - since the document found during the course of search is not signed by anyone from the assessee company, it is nothing less than a dumb documents which can not be basis of addition alone. The case of the assessee finds support from the several decisions as stated hereinabove. Accordingly on this account the addition cannot be sustained and deserve to be deleted. Addition has been made on the basis of statement of Gopal Agarwal who nowhere named the assessee to be beneficiaries of accommodation entries and also no cross examination was ever provided to the assessee of Mr Gopal Agarwal and therefore as has been held in the case of Andaman Timber Industries [ 2015 (10) TMI 442 - SUPREME COURT] and in case of H R Mehta [ 2016 (7) TMI 273 - BOMBAY HIGH COURT] the addition made with opportunity of cross examination is bad in law. We have also perused the annual audited accounts of the assessee during the year and observe that there has not been any issue of equity share capital or raising of fresh loans. We observe that that whatever little unsecured loans were raised were from the relatives . We direct the AO to delete the addition. Appeal of the assessee is allowed.

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• 2023 (7) TMI 1198
  TDS u/s 194C - Default u/s 201(1) and 201(1A) - Non deduction of tds on payment towards EDC charges to DGTCP Haryana through HUDA without deduction of TDS - HELD THAT:- There is no TDS liability on statutory payments made to Government of Haryana, Town and Country Planning Department is part of Government of Haryana. HUDA is only authorized to accept payment on behalf of Town and Country Planning Department. Furthermore, EDC is a charge levied by Government for carrying out External Development Work to be executed in the periphery of or outside colony/area for the benefit of colony/area. EDC charge is deposited in the receipt head of TCP Department being Government. The assessee is not liable to deduct TDS at the time of payment of EDC as the same was not out of any statutory or contractual liability towards HUDA per se. The issue is no longer res integra. The identical issue has came up for adjudication before the Co-ordinate Bench of Tribunal in the case of Spaze Tower Pvt. Ltd. [ 2022 (5) TMI 1344 - ITAT DELHI] Thus we hold that imposition of demand computed u/s 201(1) and consequential interest u/s 201(1A) is not justified in view of the finding of the Co-ordinate Bench that the assessee has not committed any violation of provision of Chapter XVII B of the Act by making payment towards EDC charges to DGTCP Haryana through HUDA without deduction of TDS. Also decided in UNION BANK OF INDIA VERSUS ADDITIONAL COMMISSIONER OF INCOME TAX (TDS) KANPUR [ 2022 (3) TMI 623 - SC ORDER] TDS provisions for payments made to such Authority are not applicable. Appeal of assessee allowed.

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• 2023 (7) TMI 1197
  Addition on account of commission expenses u/s 37 - selection for scrutiny u/s 143(2) - HELD THAT:- As complete details of the respective parties to whom the commission was paid and the rate at which commission was paid and the details of service rendered by those parties for which commission was paid was not filed and therefore, the addition made by the AO was found to be justifiable by the CIT(A). The same is found to be without any ambiguity, particularly in the absence of any assistance rendered by the assessee before us. The same is hereby upheld. Thus, the appeal preferred by the assessee is found to be devoid of any merit and hence, dismissed. Unexplained investment - no cogent document was filed by assessee - HELD THAT:- As order passed by the Ld. AO, confirmed by the First Appellate Authority, the Ld. AO noted that the appellant failed to submit monetary trail of earlier years closing balance of investments to substantiate its claim that it had invested in three companies as mentioned hereinabove The status whereof remained unchanged before the First Appellate Authority. Needless to mention that source of such investment made by the assessee was not demonstrated neither proved by the assessee. Hence, in the absence of any assistance rendered by the assessee, the order passed by the authorities below, is found to be just and proper so as to warrant interference - Decided against assessee.

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• 2023 (7) TMI 1196
  Capital gain on sale of land - transfer of capital asset u/s 2(47) - year of assessment - AO held that the land was to be taxed to capital gains in the A.Y: 2004-2005 and not inA.Y:1995-1996 - HELD THAT:- Case of the assessee for transfer of immovable property through the oral agreement do not fall in any of the limb of section 2(47) of the Act. The present case is neither a case of sale nor exchange nor relinquishment or extinguishment of any right in the year 1994 or 1995. Infact, the registered sale deed document was executed by the assessee in favour of the purchaser on 29.08.2003 and therefore, the transfer had taken place in the A.Y. 2003-04. Therefore, the view taken by the lower authority cannot be faulted with. In the remand proceedings before the Assessing Officer no evidence of transfer of the land had been filed by the assessee except the letter issued by M/s. Janapriya Projects. Even the said letter does not bear the date of taking over the possession of the subject matter of land and this letter also undated. In the said letter, it was mentioned that the possession was taken over through the Irrevocable General Power of Attorney in the year 1994, however, no such Power of Attorney in respect to the survey no.671 was produced before the lower authority or before us by the assessee. In the said letter of Janapriya Engineers before the Court of law, however, no such evidence was filed before us showing that the land falling in survey no. 671 was subject matter of legal litigation before any Court of Law. Assessee had neither brought on record the evidences of land dispute before us nor before the lower authorities evidencing that the land falling under survey no. 671 was the capital asset in the records of Janapriya Engineers Syndicate w.e.f. 1994. Considering the case from any point of view, we do not find any reasons to interfere with the order of the ld.CIT(A). - Decided against assessee.

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• Customs

• 2023 (7) TMI 1195
  Refund of SAD - introduction of new Circular No. 18/2013-Cus dated 29.04.2013 directing the importer to make an initial payment of 4% SAD in cash instead of scrips - petitioner was unaware of the new Circular - HELD THAT:- Admittedly, when the petitioner has not paid the 4% SAD in cash but in scrips despite Circular No. 18/2013-Cus. dated 29.04.2013, he was not entitled to refund of 4% of SAD - there are no substance in the submission of the learned Counsel for the petitioner that the public notice was not issued regarding Circular No. 18/2013-Cus. dated 29.04.2013. If the said Circular was published on the official website of the DGFT, it amounts that the public notice was given about the Circular. There are no merit and substance in the present writ petition - petition dismissed.

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• 2023 (7) TMI 1194
  Maintainability of petition - availability of alternative remedy of appeal - no order directing modification of assessment - HELD THAT:- The respondent is to be directed to reassess Ext P2 bill of entry, in accordance with law, which will not cause any prejudice to the respondent and in turn do complete justice to both sides. Thus, notwithstanding the plea of alternative remedy, the writ petition is allowed by directing the respondent to reconsider the matter afresh in view of Ext P4 circular. Ext P2 bill of entry is recalled - respondent is directed to reassess Ext P2 bill of entry, in accordance with law, after affording the petitioner an opportunity of being heard - petition allowed.

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• 2023 (7) TMI 1193
  Valuation of imported goods - Petrol Car (unused) - used split air conditioner compressors without gas - rejection of declared value - redetermination of the value - Confiscation - redemption fine - penalty - HELD THAT:- The appellant was not put to notice with regard to the issue of enhancing the declared value of the car. Thus, without having an opportunity to defend the enhancement of the value of the car, as decided by the original authority, the Commissioner (Appeals) has revised the value of the car to demand differential duty. It is brought out from the records that the original authority had accepted the value declared for the car, being a second-hand car and not a popular branded car. The declared value of the air conditioner compressors was rejected and re-determined as USD 300 (C F). Though the Department has not filed any appeal against such order, the Commissioner (Appeals) has, without giving any notice to the appellant, enhanced the value of the car so as to demand differential duty. In the absence of an appeal filed by the Department, the Commissioner (Appeals) ought not to have interfered with the findings with regard to the valuation - the order passed by the Commissioner (Appeals) revising the value of the car requires to be set aside. The Commissioner (Appeals) has reduced the penalty to Rs.25,000/- - the redemption fine of Rs.25,000/- or the reduced penalty of Rs.25,000/-, not disturbed - impugned order is modified to the extent of setting aside the enhancement of the value of the imported car - appeal allowed in part.

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• 2023 (7) TMI 1192
  Absolute Confiscation of imported goods - Arecanut - prohibited goods or not - option to be given to the importer to redeem the goods on payment of fine in lieu of confiscation or not - HELD THAT:- Admittedly, in terms of extant Trade Policy and related notifications referred in the show cause notice and Orderin- Original, the goods covered by both the bill of entries were not meeting the criteria of MIP and therefore were in the nature of prohibited goods. However, there were certain exemptions available from the applicability of the policy restrictions in the case of imports by, interalia, 100% EOU. The appellants are EOU is not disputed. It is also not disputed that good was not meant for sale in DTA. It is, however, obvious that while there was a clear revised policy notification for pepper, the Government, however, had not issued any such notification in respect of Arecanut. The notification issued in 2023 has now exempted the applicability of MIP for Arecanut also, if the imports are for EOU. However, there is no indication contained in notification that the said policy change would be having any retrospective effect. The Adjudicating Authority has rightly held that on the date on which the imports were made, the goods were clearly in the prohibited category for having not met the MIP criteria and hence liable for confiscation. It is well settled law that the goods can be confiscated under Section 111(d) of the Customs Act if it is prohibited under Customs Act or any other law for the time being in force - in view of clear position stated in the EXIM policy, as pointed out by the Learned DR, any policy change has to be given prospective effect only and therefore the exemption from MIP criteria for 100% EOU in respect of Arecanut cannot be extended till the time the revised notification was issued on 14.02.2023. There is no ambiguity in the wordings of notification and therefore there is no need to look for intent or interprete the notification. Absolute confiscation of their goods - HELD THAT:- The power of Adjudicating Authority to confiscate the goods liable for confiscation is governed by Section 125 of Customs Act. It also gives a discretionary power to give importer an option to redeem the goods on payment of fine in lieu of confiscation. While this option is mandatory for other goods , there is a discretion for giving this option in the case of goods deemed to be prohibited under this Act or under any other law for the time being in force. Therefore, though the authority has a right to refuse this option, it has to be exercised having regard to facts and circumstances and is not an absolute power for not giving the option. There are catena of judgments in support that even in respect of prohibited goods, the options to pay fine in lieu of confiscation, can be given by the Adjudicating Authority. Power for giving option to importers to pay fine in lieu of confiscation or otherwise - HELD THAT:- The issue relating to power for giving option to importers to pay fine in lieu of confiscation or otherwise came up before Hon ble Supreme Court in the case of UNION OF INDIA (UOI) AND ORS. VERSUS RAJ GROW IMPEX LLP AND ORS. [ 2021 (6) TMI 778 - SUPREME COURT] has held that an authority acting under the Customs Act, when exercising discretion conferred by Section 125 thereof, has to ensure that such exercise is in furtherance of accomplishment of the purpose underlying conferment of such power. The purpose behind leaving such discretion with the Adjudicating Authority in relation to prohibited goods is, obviously, to ensure that all the pros and cons shall be weighed before taking a final decision for release or absolute confiscation of goods. Therefore, it is apparent Hon ble Supreme Court while upholding the decision of the Appellate Authority for not giving the option for redemption in the given set of facts, also observed that this discretion is not an absolute discretion and the Adjudicating Authority has to taken into consideration various pros and cons and other relevant factors to arrive at his decision. Whether in the given facts of the case, the goods were liable for absolute confiscation or the Adjudicating Authority should have given an option to the importer to redeem the goods on payment of fine in lieu of confiscation, as provided in the Section 125 of the Customs Act? - HELD THAT:- There are several mitigating factors which prove that under the given facts, the Adjudicating Authority should have given the option. Firstly, this is an import by 100% EOU for conversion and re-export back to the principal from where the Arecanut was received. Secondly, Commissioner has himself held in para 68 of his order that this is not a case of mis-declaration or misclassification and it is also not a case of deliberate attempt on the part of importer to circumvent the policy provisions. Thirdly, the importer had a bona fied belief that MIP conditions were not applicable to them in view of similar goods having the same exemptions. The fact that they approached the Ministry of Commerce, who agreed with their submissions and requested the DGFT to issue clarification also relevant. It is a different matter altogether that the DGFT did not issue any clarification/notification till 14.03.2023, which has however been held to have prospective effect only. While the tariff value is fixed in terms of Section 2(40) and Section 14(2) of the Customs Act by way of notification in the Official Gazette and such tariff value becomes the basis for charging duty, whereas the MIP is value which is determined by the DGFT for the purpose of imposing certain provision/restriction on import of goods. Therefore, these two cannot be used interchangeably. In this case, admittedly the goods were for job work by EOU on a free of cost basis and therefore a notional value was indicated. Thus, in view of relevant fats discussed, the penalty imposed appears to be excessive. The penalty therefore, is reduced to Rs. 2,00,000/- from Rs. 10,00,000/-. The Original Authority is directed to give an option to appellant to redeem the goods on payment of fine in lieu of confiscation. The amount of fine shall be reasonable and appropriate, having regards to mitigating factors discussed and to be determined as per provisions under Section 125 of Customs Act - the order of the Commissioner is modified to the extent and the order is remanded back to the Original Adjudicating Authority for giving the option to the appellants for redemption of goods on payment of fine for re-export purpose only, subject to stipulated conditions, if any, indicated in the order. Appeal allowed in part.

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• 2023 (7) TMI 1191
  Maintainability of appeal - Jurisdiction of Tribunal to decide any appeal in respect of any order passed by Commissioner(Appeals), relating to any goods imported or exported as baggage - HELD THAT:- From the facts of the case, it is clear that the golds were found on person of the appellant, when she arrived from abroad and only on interception by the Customs at the time of exiting. A holistic reading of Baggage Rules 2016 and the relevant legal provisions under Customs Act would make it ample clear that under the Customs Act, specially Section 111(l) and 111(m), Section 77, 78 and 79 etc., all goods would be covered within definition of Baggage. Therefore, if any good whether, dutiable or prohibited, is in excess of permissible limit or beyond the scope of Baggage Rules, the same shall be liable for penal action in terms of Section 111(l) and 111(m), even though it will continue to be covered by Baggage Rules itself. Thus, there is a clear understanding that the confiscated goods were in the category of baggage and therefore under Section 129A proviso, this matter cannot be decided by the Tribunal. When the baggage is imported as goods, such goods are liable to duty and other restrictions under Trade Policy. However, by virtue certain excuses and Rules, certain relaxations have been given for baggage (which would obvious include the accompanied as well as unaccompanied baggage as also goods on the passenger) from the applicable customs duty and restriction. The baggage Rules provides for duty free clearance for bona fide baggage upto certain counts and also excludes specifically from such benefit certain goods falling under annexure-I, II III from the purview of the rules - Any goods brought by passenger from abroad is treated as import into India and leviable to applicable customs duty. The baggage may not be covered under Baggage Rules for the purpose of relaxation/duty etc but it does not alter the fact that goods in the accompanied or unaccompanied baggage or on person of passenger have been imported as baggage only by the passenger. In this case the gold were imported by passenger in the nature of baggage, and therefore the appeal is not maintainable before the Tribunal - Further, it is also observed that the appellant might have some bonafide belief that the appeals were maintainable before the Tribunal instead of Revisionary Authority, therefore, she may, if she so desires, prefer an appeal to Revisionary Authority against the order of the Commissioner (Appeals) - Appeal is dismissed as not being maintainable.

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• 2023 (7) TMI 1190
  Valuation - Principles of natural justice - non-speaking order - Can appellant ask for a speaking order with cogent reasons for enhancement of the value in spite of the fact that the enhanced value is accepted only for avoiding the demurrage and other charges? - HELD THAT:- In view of Section 14 (valuation of goods) read with Rule 12 (2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, the Proper officer has to provide cogent reasons for rejecting the declared value and the appellant has to be given an opportunity to be heard before enhancement of the declared value. Moreover, in the present case, the appellant had vide letters dated 19.3.2015 and 26.03.2016 had agreed for the enhanced value only to avoid detention and demurrages on the clearance of the goods and also vide letter dated 31.3.2015, appellant had requested for issuance of speaking order. The impugned order is legally not sustainable and is set aside. The issue stands remanded to the original authority for passing a speaking order on merits after hearing the appellant - appeal allowed by way of remand.

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• 2023 (7) TMI 1189
  Classification of goods proposed to be imported - Echo Dot (5lh Generation) Model No. C2N6L4 - Echo Dot (5th Generation) with clock Model No. C4E8S3 - rightly classifiable under sub-heading 85176290 under Schedule I to the Customs Tariff Act or not - exclusion categories given under serial number 20 of Notification No. 57/2017-Cus. dated 30.06.2017 - HELD THAT:- The heading 8517 of the Import Tariff, which has been suggested by the applicant for the goods in question covers Telephone sets, Smartphones and other Telephone for Cellular Networks or for other Wireless Networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528 - a number of articles regarding launch of Echo Dot 5th Generation in India are available in the public domain on various internet websites such as Times of India, Business Standard etc. where the goods in question have been described as Smart Speakers and emphasis is on the best sound with deeper bass and clearer vocals which are the features related to principal function of the device i.e speaker. Description of Echo Dot 5th Gen by various websites indicates how the goods in question have been perceived and accepted by the general public and how such devices are being introduced before the public, which appears to be the best test to decide principal or essential function of a device and subsequently its classification under the Customs Tariff. In view of the goods in question being described as smart-speaker, it would be appropriate to discuss the coverage of goods under headings 8518. Heading 8518 covers Microphones and stands therefor: Loudspeakers, whether or not mounted in their enclosures: Headphones and Earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more Loudspeakers: Audio-Frequency Electric Amplifiers: Electric Sound Amplifier sets. Moreover, even w/o acting as communication devices for communicating with Amazon cloud/AVS, these devices can connect with smart phone and play songs taking input from the smart phone - as per Chapter Note 5 of Chapter 85, smart phones means telephones for cellular network. Applying the same analogy, smart-speakers would also mean speaker with additional functions. The heading 8517 is meant for, Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network) . The wordings used in the heading does not mean that an apparatus which perform a specific function with the ability to transmit, receive voice, data etc. will get classified under heading 8517. Thus, classification of the proposed items of import, Echo Dot (5th Generation) Model No. C2N6L4 and Echo S Dot (5th Generation) with clock Model No. C4E8S3 will be under Sub-heading 85182210 of the first schedule to the Customs Tariff Act, 1975. Applicability of notifications on import of the goods - HELD THAT:- As regards applicability of exemption from duties, as per serial number 10 of Notification No. 12/2022-Cus. dated 01.02.2022, it is noted that under the said serial number of Notification No. 12/2022-Cus. dated 01.02.2022, concessional rate of duties is applicable on all goods other than hearable devices falling under Sub-heading 851821, 851822, 851829 or 851830 and as per the Notification hearable devices inter-alia means portable Bluetooth speakers comprising of an amplifier and loudspeaker(s) with maximum output power not exceeding 40 Watts, having battery as a source of power and capable of wireless connectivity through Bluetooth. As per the declaration of the applicant that the goods in question are blue-tooth/wi-fi enabled capable of wireless connectivity. Based on the above meaning of hearable devices, goods in question are hearable devices thus exemption vide serial number 10 of Notification No. 12/2022-Cus. dated 01.02.2022 is not admissible. Effective rate of duty on import of Echo Dot devices - HELD THAT:- The provisions laid down under Chapter VB of the Customs Act, 1962, relating to Advance Rulings, do not mandate giving ruling on effective rate of duty on specific goods. The applicant has also mentioned that the devices are not launched commercially in India and requested to ensure that confidentiality thereof is maintained, however in reference to specific question raised, as to if Echo Dot 5th Gen is being imported in commercial quantity, the authorized representative of the applicant has replied in affirmity. Since the commercial import of the goods in question is already underway, the maintaining confidentiality by invoking proviso to rule 27 of the Customs Authority for Advance Rulings Regulations, 2021, is not required in the instant matter.

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• 2023 (7) TMI 1174
  Levy of penalty u/s 112 (b) of Customs Act, 1962 and Rule 209 A of Central Excise Rules, 1944 - penalty imposed on appellant being mediator acting as a broker in dealing with all trading of advance licence which was forged or obtained fraudulently. HELD THAT:- The appellant has acted as broker between the seller of advance licence which are either forged or obtained fraudulently. Under the identical set of facts there were many cases made out. In one of the case decided by this Tribunal s majority decision, the appellant having the same alleged role, the penalty was set aside. In this case of the appellant himself T.S. MAKKAR VERSUS COMMISSIONER OF CENTRAL EXCISE, SURAT [ 2012 (10) TMI 981 - CESTAT AHMEDABAD] , in the said decision there were difference of opinion between the Member (Judicial) and Member (Technical) thereafter on the basis of the third Member s view, the matter was finally decided by the majority order - The third member held that Since, none of the acts referred to in Section 112(b) of Customs Act, 1962 are proved against the appellant, imposition of penalty under Section 112(b) also cannot sustain. From the above decision it can be seen that the present appellant involved in the above case was similarly placed broker for advance licence and by the majority decision, the penalties were set aside - since same facts and issue were involved, following the aforesaid decision in the present case also the penalties are not sustainable. Appeal allowed.

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• Corporate Laws

• 2023 (7) TMI 1188
  Corporate Liquidation and Asset Disposal - Seeking impleadment on account of being a necessary party in the current petition - sole and absolute owner of the properties - claim of the Applicant is that the land could fetch at least a sum of Rs. 75,000/- per month, but the Applicant has been unable to put the same to use in light of the possession by the OL. HELD THAT:- In the present case, the Provisional Liquidator was appointed in 2017. However, the winding up is not at an advanced stage. No auction has been conducted, no claims have been invited. Clearly the winding up process could consume considerable time. Accordingly, the present company petition is transferred to the NCLT. The entire record of the present petition shall also be remitted in the electronic form to the Registrar, NCLT, and the same shall be listed before the NCLT. All the parties appearing before the Court are also permitted to appear before the NCLT on 3rd August, 2023. The OL shall continue to exercise the control over all the properties of the Company under liquidation, subject to any orders that the NCLT may pass in future. Insofar as the securing of assets is concerned, the expenses incurred till 1st August, 2023 shall be paid by the OL. The same shall be reimbursed by SBI, and PNB by 14th August, 2023. SBI and PNB are free to claim the same as part of the debt against the Company. The NCLT shall pass appropriate orders to secure the assets. Until the NCLT passes appropriate orders regarding securing the assets, SBI and PNB shall bear the expenses of the security agencies. List before the NCLT 3rd August, 2023.

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• 2023 (7) TMI 1187
  Seeking grant of bail - petitioner has been implicated for his role as an officer who is in default within the meaning of section 2(60) of the Companies Act - petitioner was a director of the company at the relevant time - fulfilment of twin-conditions imposed under section 212(6) of the Companies Act - HELD THAT:- Section 212(8) of the Companies Act says that an investigating officer of the SFIO has the power to arrest an accused if he has reason to believe on the basis of material available with him that the person is guilty of commission of an offence under section 212(6). Though, no doubt, this power of arrest is meant to enforce police custody in aid of investigation, what is important to note is that arrest is permissible if the investigating officer has reason to believe that the accused is guilty of the offence based on available material. In the present case, the record shows that the investigating officer never arrested the petitioner throughout the investigation, further investigation and other pre-cognizance stages, all of which took more than 06 years. Even at the stage when the final investigation report was filed before the learned Special Judge, the investigating officer did not seek that the petitioner be either arrested or remanded to judicial custody. This was presumably guided by the words of the Supreme Court in JOGINDER KUMAR VERSUS STATE OF UP. [ 1994 (4) TMI 385 - SUPREME COURT] and SIDDHARTH VERSUS THE STATE OF UTTAR PRADESH ANR. [ 2021 (8) TMI 977 - SUPREME COURT] . In view of the verdict of the Supreme Court in SUNDEEP KUMAR BAFNA VERSUS STATE OF MAHARASHTRA ANR [ 2015 (8) TMI 724 - SUPREME COURT ], what is settled is that a person is in custody , no sooner he surrenders before the appropriate court. But that custody does not tantamount to being under incarceration as referred to in SATENDER KUMAR ANTIL VERSUS CENTRAL BUREAU OF INVESTIGATION ANR. [ 2022 (8) TMI 152 - SUPREME COURT ]. Now, the word incarceration has not been defined either in the Code of Criminal Procedure 1973, nor in the Indian Penal Code 1860, nor in the Prisoners Act 1900, nor even in the Prisons Act 1894. Therefore, taking cue from what the Supreme Court has held in Satender Kumar Antil, evidently when the petitioner appeared before the learned Special Judge in compliance of the summons issued to him, he was in custody of the court but not under incarceration . Accordingly, the twin-conditions contained in section 212(6) of the Companies Act did not get actuated. A reasonable interpretation of the twin-conditions leads to the conclusion that since the petitioner had not been arrested throughout the course of investigation; he had appeared before the learned Special Judge against summons - not arrest warrants - issued to him; and most importantly, when the investigating officer had not even sought police custody or judicial custody of the petitioner, the twin conditions would not apply. At that point in time, the twin-conditions stipulated in section 212(6) of the Companies Act did not automatically get actuated. What really transpired was that merely upon appearing before the learned Special Judge, as if by reflex action, the court remanded the petitioner to judicial custody; whereupon the petitioner filed a bail application; which also came to be dismissed there-and-then invoking section 212(6). The learned Special Judge misdirected himself in applying section 212(6) of the Companies Act, on the flawed premise that that that was the stage for grant of bail, whereas, it was the stage of considering whether there was any need to remand the petitioner to judicial custody at all. As discussed above, it was for the Investigating Officer to seek that the petitioner be remanded to judicial custody, for justifiable reasons based on material gathered during investigation, which he did not do - the Investigating Officer had not filed any application seeking that the petitioner be placed in judicial custody, even upto the stage when the petitioner appeared before the learned Special Judge on being summonsed. Since the Investigating Officer did not arrest the petitioner during the more than 06-year long proceedings and investigation, evidently, the Investigating Officer did not consider it necessary to do so based on the material in his possession collected in the course of investigation. This court is inclined to admit the petitioner to regular bail, subject to the conditions imposed - application allowed.

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• Insolvency & Bankruptcy

• 2023 (7) TMI 1186
  Maintainability of application for CIRP under IBC - pre-existing dispute - HELD THAT:- It is in this backdrop that the proceedings under the Insolvency and Bankruptcy Code 2016 for initiating the Corporate Insolvency Process have not been entertained. There is no error in the concurrent findings of fact. Appeal dismissed.

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• 2023 (7) TMI 1185
  Filing of petition with leave to appeal - parties in the proceedings or not - mis-disclosure of facts for seeking condonation of delay - HELD THAT:- It is not required to interfere with the oblique endeavour of the petitioner through the present proceeding as it is their say that their own appeal is pending before the NCLAT. It will be for the NCLAT to take a call on its own merit in the appeal filed by the petitioner and respondent No.1 - M/s Indiabulls Housing Finance Ltd. would have equally all defences available including the plea of limitation. SLP is accordingly dismissed.

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• 2023 (7) TMI 1184
  Condonation of delay in filing appeal - sufficient reason for delay present or not - ex-parte order - Principles of natural justice - HELD THAT:- Section 61(1) provides a statutory right to any person who is aggrieved by an order of the Adjudicating Authority to prefer an appeal to the appellate authority. Section 61(2) prescribes a period of 30 days within which the appeal under Section 61(1) is to be filed before the Appellate Authority, however, Section 61(2) proviso further provides for a period of 15 days for the purpose of extension of time in case the Applicant is able to satisfy the Appellate Authority that there was a sufficient cause for not approaching the Appellate Authority in time with the appeal but in no case the period of 15 days can further be extended. Whether there is a sufficient cause assigned by the Appellant for the purpose of condoning the delay? - HELD THAT:- Although the limitation to challenge the impugned order started w.e.f. 03.03.2022 but even if it is presumed that the Appellant was pursuing its other remedy to challenge the order of exparte itself and had remained unsuccessful till the Hon ble Supreme Court when its Civil Appeal was also dismissed on 06.04.2023 and the period of limitation is to be counted from 06.04.2023, the period of 30 days for the purpose of filing of this appeal had expired on 06.05.2023. If 15 days more are added which are prescribed under Section 61(2) proviso then the period of 45 days would have expired on 21.05.2023 whereas the present appeal has been filed on 22.05.2023, even after the expiry of period of 15 days as well which cannot be condoned in any manner. Looking from any another angle, even if it is taken then that the appeal has been filed on 15th day of the extended period of 15 days even then there is no sufficient cause assigned by the Appellant as to why it had taken exactly 45 days in filing the appeal against the order dated 03.03.2022. The reasons are conspicuous by its absence especially when the Appellant is a Bank who had huge machinery at its disposal for the purpose of preparing the appeal and filing the same within the statutory period of 30 days. There are no reason to interfere in this application because of the absence of sufficient cause for condonation of delay to the satisfaction - application dismissed.

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• 2023 (7) TMI 1183
  Condonation of delay in filing appeal - if the Appellant got the information on 26.03.2023 then she had the opportunity to file the appeal within the statutory period of 30 days up to 26.04.2023 but no appeal was filed nor even certified copy was applied? - HELD THAT:- Be that as it may, the Appellant then took further period of 15 days i.e. the appeal has been filed on the last day of the extended period of 15 days without giving any cogent reason for not preferring the appeal within the statutory period or even before that. The only reason given is that after she came to know the impugned order dated 22.03.2023 on 26.03.2023, she collected relevant documents and filed the appeal. The reason assigned in this application is not at all sufficient for the purpose of condonation of delay and it appears to us that the Appellant is not taking the period, within which the appeal is to be filed, seriously rather it appears that there is a perception that the condonation of delay is a matter of right. There is hardly any ground mentioned by the Appellant in the application and argued during the course of hearing for the purpose of causing the delay in filing of the appeal which may be a sufficient cause, therefore, there is no merit in the present application and hence, the same is hereby dismissed.

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• Service Tax

• 2023 (7) TMI 1182
  Levy of Service Tax - gross amount collected from the subscribers/ultimate customer or only on the gross amount received by them from the Local Cable Operators (LCOs) who are providing the content - It was held by CESTAT that it is concluded that the respondent is liable to pay service tax only on the gross amount received by them from LCOs. HELD THAT:- There are no merit in these appeals. The Civil Appeals stand dismissed.

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• 2023 (7) TMI 1181
  Levy of Service tax - service recipient is the Government - Commercial or Industrial Construction Service - Management, Maintenance or Repair Service - Manpower Recruitment or Supply Agency Service - Supply of Tangible Goods. Demand confirmed on the ground that these services can be taxable only when they are provided to any person , the service recipient being the Government, cannot be held to be any person - HELD THAT:- The Adjudicating Authority did not have the opportunity to go through the reconciliation as given in the rejoinder. Further, it is found that most of the defence of the appellants is on the basis of the amendments to the Finance Act, 1994, by way of insertion Section 97 and Section 98, through Finance Bill, 2012. The Adjudicating Authority had no occasion to follow these amendments. Moreover, considerable number of issues has been since settled by various judgments delivered in this regard. Moreover, copies of certain agreements and details of accounts were not submitted to the Adjudicating Authority. Under these circumstances, it will be in the fitness of things and in the interest of justice, the matter should go back to the Adjudicating Authority. Therefore, the case requires to be remanded back to the Adjudicating Authority, to examine the issue afresh in the light of copies of the documents submitted by the appellant, changes brought out in the provisions of Service Tax and the ratio of the cases decided by this Tribunal and various Courts in this regard. Appeal allowed by way of remand.

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• 2023 (7) TMI 1180
  Benefit of abatement under N/N. 01/2006 - Commercial and Industrial Construction Service - Composite service or not - denial on the ground that the Agreement entered into between the appellant and their clients was for renovation and remodelling and was limited to the completion or finishing of the work - applicability of decision in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] - HELD THAT:- The case of the appellants is squarely covered by the said judgment of the Hon ble Apex Court as it is not in dispute that the service rendered by the appellant is under a composite contract and it is also not denied that material was not the part of service. The Tribunal in M/S. RAJ FURNITURES VERSUS COMMISSIONER OF CENTRAL EXCISE ST, DELHI [ 2018 (5) TMI 1359 - CESTAT CHANDIGARH] has already held that the appellants are not required to pay service tax on the services rendered by them either before or after 01.06.2007. Though, this decision has been rendered in respect of another branch of the appellant, facts of the case being identical, the ratio of the same requires to be followed. Thus, the appellants have rendered service under a composite contract and as such are not liable to pay service tax for the period before 01.06.2007; the demand for the subsequent period i.e. after 01.06.2007 cannot also be sustained having been raised under a wrong Head - there is no merit in the contention of the Department and the appellant s contention has considerable force. Appeal allowed.

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• 2023 (7) TMI 1179
  Levy of Service Tax - Business Auxiliary Service or not - services offered in connection with money transfer service provided by PML are in pursuant to an agreement made with Western Union - demand alongwith interest and penalty - extended period of limitation - HELD THAT:- This issue is no more res-integra and has been settled by various decisions of the Tribunal in the case of M/S PAUL MERCHANTS LIMITED OTHERS VERSUS CCE, CHANDIGARH [ 2012 (12) TMI 424 - CESTAT, DELHI (LB)] wherein the Larger Bench has considered this issue in detail and has held that The consumer of the service provided by the agents and sub-agents of WU in India is the Western Union, located abroad who use their services for their money transfer business not the persons receiving money in India. Since the service provided is Business Auxiliary Service classifiable under Section 65(105)(zzb) read with Section 65(19) of the Finance Act, 2005, and has been provided in relation to business of Western Union located abroad, and the payment for the service has been received in India in convertible foreign currency, the same has to be treated as export of service. The impugned order is not sustainable in law and the same is set aside - Appeal allowed.

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• 2023 (7) TMI 1178
  Levy of Service Tax - Business Support Service/ Business Auxiliary Service - handling and forwarding charges collected by the appellant from their customers - HELD THAT:- From the invoice it can be seen that VAT 12.5% was calculated on the total value i.e. basic price plus handling and forwarding charges and paid to the concerned State authorities. In this fact, as per the above invoice, handling and forwarding charges nothing but part of the sale value of the vehicle sold by the appellant to their customer. It is obvious that sale value consists of various elements and the same cannot be vivisected to contend that some part of the value represent to the sale of goods and some part towards service. Once on total value the VAT is paid then on any part of such value service tax cannot be demanded. From the principle laid-down by Hon ble Supreme Court in the case of CST vs. UFO Moviez India Limited [ 2022 (7) TMI 1064 - SUPREME COURT ], it is settled that when VAT has been paid on the sale of goods, the question to claim service tax thereon does not arise. Even in the worse situation in various cases where the parts and components were used in repair and maintenance of motor vehicle even then merely because the part so used in repairs and maintenance were separately billed and VAT was paid thereon, the Tribunal held that on value of such parts, though used for repair and maintenance service of the vehicle will not be liable to service tax as the same was suffered VAT. The conclusion drawn is that when there is sale of goods and VAT is paid no service tax can be demanded. In the present case, it is undisputed that the element i.e. amount towards Handling and Forwarding charges, the appellant have shown as part of the sale value of the goods and VAT was paid - the present case the demand is not sustainable - Appeal allowed.

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• 2023 (7) TMI 1171
  Scope of SCN - only issue raised in the show cause notice was whether the services provided by the appellant fall under the category of clearing and forwarding agent Services - Ld. Commissioner (Appeals) has traversed beyond the scope of the notice by holding that the service provided by the appellant relating to terminal handling services and bill of lading are classifiable under steamer agent services. HELD THAT:- Admittedly original show cause notice dated 21.10.2010 was issued demanding service tax under the category of clearing and forwarding agent service and the original authority has also confirmed the demand under the category of clearing and forwarding services - it is found that the Ld. Commissioner (Appeals) in the impugned order dropped the demand under ocean freight but wrongly confirmed the demand relating to terminal handling charges and bill of lading under steamer agent services which is not permissible in law. Reference made to the judgment of the Hon ble Supreme Court in the case of COMMISSIONER OF CUSTOMS, MUMBAI VERSUS TOYO ENGINEERING INDIA LIMITED [ 2006 (8) TMI 184 - SUPREME COURT] and WARNER HINDUSTAN LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, HYDERABAD [ 1999 (8) TMI 75 - SUPREME COURT] wherein it has been held by the Apex Court that the Department cannot travel beyond the show cause notice. The impugned order confirming the demand under Steamer Agent Services is not sustainable in law and we set aside the same on this ground alone without further going into other issues and limitation - Appeal allowed.

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• Central Excise

• 2023 (7) TMI 1177
  Maintainability of appeal - Appellant/Revenue submitted that since there is low tax effect in the matter, the appeal may be dismissed on that ground - HELD THAT:- Appeal dismissed.

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• 2023 (7) TMI 1176
  Interest on the delayed refund - Section 11B of the Central Excise Act, 1944 - HELD THAT:- The Tribunal has given adequate reasons in both the orders impugned, including the order by which the Department s application for correction or modification was rejected. According to the Tribunal, the deposit was made at a time when no quantified claim had been made on the assessee. On such basis, the Tribunal found that the deposit had not been made on account of any duty or interest which would attract the implied bar under Section 11B of the Act. It was a possible view taken on the set of facts that presented themselves before the Tribunal and, in this appellate jurisdiction, such interpretation does not call for any interference. Further, as to the quantum of interest awarded, the Tribunal, which is a specialised body dealing in matters pertaining to excise duty, took into account the previous judgments of the Supreme Court, High Courts and the Tribunal itself to justify that the rate of 12 per cent per annum would apply in the facts of the present case. Again, since there is some basis to the award of interest by the Appellate Tribunal, the same does not call for any interdiction. Appeal dismissed.

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• 2023 (7) TMI 1175
  Clandestine Removal - documents seized by the investigating team from the residence of the Accountant - corroborative evidence or not - HELD THAT:- Admittedly, the Revenue has not come up with evidence of receipt of raw materials used for clandestine manufacture of the finished goods, manufacturing of finished goods with the installed capacity of consumption of electricity, labour deployment and payment made to them. No evidences were in regard to the discrepancies in the stock of raw materials and finished goods with reference to the entries in the factory premises and transportation documents, amount of receipts, buyer of the goods etc. No such effect has been made by the Revenue to allege clandestine removal of goods. Although, the said records contains certain names therein, but the Revenue has not examined these persons. The charge of clandestine removal of goods is not sustainable against the appellant - It is also noted that the annual turnover of the appellant is less than the below of threshold limit for availment of exemption Notification No.08/2003-CE dated 01.03.2003. The impugned demand is not sustainable. Accordingly, the same is set aside and the appeal is allowed.

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• 2023 (7) TMI 1173
  Levy of penalty u/r 15 (2) of CCR 2004 - passing on incorrect cenvat credit without applying the formula as set out in Rule 3 (7) (a) of Cenvat Credit Rules, 2004 with respect to clearances made from 100% EOU - deliberate non-mentioning that the goods originated from 100% EOU and as thus passed on excess duty to the buyers - HELD THAT:- It can be seen that the provision u/r 15 (2) of CCR, speaks about wrongful availment and utilization of cenvat credit. The appellant being a dealer has not availed or utilized the credit. Further it is also stated that the manufacturer shall be liable to pay penalty. This means that the manufacturer or the service provider who avails the credit wrongly or utilizes the credit wrongly is held liable to pay penalty for such wrongful act. There is no allegation in the SCN that the appellant availed credit or utilized the same. In such circumstances, the penalty imposed cannot sustain. The impugned order is set aside. Appeal allowed.

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• 2023 (7) TMI 1172
  CENVAT Credit - liability to pay an amount in terms of Rule 6 in respect of iron ore fines being cleared by them on receipt of consideration or otherwise - whether the iron ore fines cleared by the appellants were manufactured goods or not and if they were not, whether they would still be subjected to Rule 6 of CCR, both before 01.04.2015 and after 01.04.2015 or otherwise? HELD THAT:- The iron ore fines emerging in the course of sieving/screening of iron ore lumps, cannot be considered as manufactured goods or as manufactured final goods. Therefore, relying on the decision in COMMISSIONER OF CENTRAL EXCISE, RAIPUR VERSUS SELENO STEELS LTD. [ 2013 (3) TMI 258 - CESTAT NEW DELHI] and TATA METALIKS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-II [ 2010 (1) TMI 1065 - CESTAT MUMBAI] , it would clearly not be covered by Rule 6 for period before 01.04.2015. Even for the period after 01.04.2015 were such non-excisable goods which are to be treated as exempted goods , would still not be covered under Rule 6 for the purpose of reversal of credit or payment of an amount equivalent by relying on the ratio in the case of M/S BALRAMPUR CHINI MILLS LTD. THROUGH ITS GENERAL MANAGER VERSUS UNION OF INDIA, MINISTRY OF FINANCE DEPARTMENT OF REVENUE [ 2019 (5) TMI 972 - ALLAHABAD HIGH COURT] , and UNION OF INDIA VERSUS DSCL SUGAR LTD. [ 2015 (10) TMI 566 - SUPREME COURT] Essentially, unless the good is a manufactured goods, Rule 6 of CCR cannot be made applicable. Even when it is not manufactured and it is refunded to as non-excisable goods, which are required to be treated as the exempted goods, after 01.03.2015, it will not be covered in as much as the exempted goods themselves are also required to be manufactured goods first. Therefore Rule 6 would not be applicable in the given facts of the case. Thus, it is clear that there is no manufacturing process involved and therefore the iron ore fines being cleared for a consideration, is not a manufactured goods. Further, respectfully following the ratio of Hon ble Supreme Court and High Court, unless there is a manufactured product, Rule 6 cannot be invoked. Admittedly, amendment in CCR 2004 with effect from 01.04.2015 has brought non-excisable goods also under the ambit of exempted goods but the said exempted goods has also to emerge as a consequence of some manufacturing process. The Revenue has not been able to establish that the iron ore fines were manufactured goods , which were exempted during the material time and infact they have relied mostly on the amendment made in the CCR 2004 with effect from 01.04.2015 for confirming the demand which also does not help. Since the matter is being decided on merits itself, other arguments on the grounds of limitation, penalties etc are not being considered. Further, with demand not sustaining on merits itself, demand for interest and penalties will also not survive. Appeal allowed.

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• CST, VAT & Sales Tax

• 2023 (7) TMI 1170
  Principles of natural justice - No personal hearing was afforded to the Petitioner before passing the impugned assessment order - Amendment made to Entries 1 and 2 of Second Schedule to the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- The Petitioner was not granted any opportunity to put forth their submission on merits. It was submitted that under similar circumstances, this Court was pleased to direct the Assessing Officer to revoke the assessment after granting an opportunity to the Petitioner to put forth their submission on merits. The impugned assessment order, dated 12.09.2022 passed by the Respondent are hereby quashed and the matters are remanded back to the Respondent for fresh consideration. The Respondent shall pass final orders in accordance with law after granting reasonable opportunity of personal hearing to the Petitioner - Petition disposed off.

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• Indian Laws

• 2023 (7) TMI 1169
  Dishonour of Cheque - prosecution based upon second or successive dishonour of the cheque - HELD THAT:- As per settled law and proviso (a) of Section 138 of the 1881 Act, successive presentation of cheque is permissible within the period of its validity. The issue whether the prosecution based upon second or successive dishonour of the cheque is permissible or not, is no longer res integra and a three-Judges Bench of Hon ble Apex Court in MSR LEATHERS VERSUS S PALANIAPPAN ANR [ 2012 (10) TMI 232 - SUPREME COURT ], held that there is nothing in the provisions of Section 138 of the Act that forbids the holder of the cheque to make successive presentation of the cheque and institute the criminal complaint based on the second or successive dishonour of the cheque on its presentation. Admittedly, successive presentation within the validity period of cheque is permissible. Another proviso (138(b)) requires that demand for payment by notice in writing has to be made within 30 days after information is received about return of cheque as unpaid. Thus once, successive presentation is permissible and cheque can be presented any number of times during its validity period, as a natural corollary of the same, drawee is required to be bound by successive information received about encashment or return, and demand for payment within 30 days from any fresh information can be raised. However, clause (c) makes it mandatory to file complaint in case drawer fails to make payment within 15 days of receipt of notice which means once demand notice is issued, thereafter no presentation is permitted. Reliance placed on the judgment of MSR Leathers is misconceived on two counts. Firstly, it is required to be noticed that in paras 4 and 5 of the complaint, the respondent-complainant has mentioned that the cheque was presented again on an assurance given by the petitioner, while this was not the case in D.V. VANITHA VERSUS S.L. VEZHAVENDHAN [ 2022 (2) TMI 1381 - MADRAS HIGH COURT] and additionally this scenario is specifically covered by the reasoning given in MSR s case - Secondly, in Vanitha s case, Division Bench was exercising revisional jurisdiction after trial has completed and thus was having the benefit of observing and examining all the aspects of the case, while in the present case the trial is at very initial stage only and this Court does not have the benefit of examining the evidence and submissions made from both the sides. When the cheque has been successively presented within its validity period and demand notice in writing has been issued within 30 days of the receipt of information from the bank regarding the return of cheque as unpaid; no ground is made out for any intervention by this Court and accordingly, present petition is dismissed.

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