TMI Tax Updates - e-Newsletter
July 19, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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Income Tax:
Disallowing of Peak load violation charges paid to PSEB - nature of expenditure - assessee failed to prove that the claim was not penal in nature - expenditure was rightly disallowed
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Income Tax:
Levy of penalty u/s 271(1)(c) - The assessee had on the first occasion admitted that it had estimated the income of its ahatas, even before the AO could discover anything adverse to this effect - No penalty
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Income Tax:
Addition u/s 41 - amount collected towards the scheme - cessation of liability - By all accounts, the assessee has treated such amount as its own. The scheme itself terminated many years back. Limitation of claiming amount back has also seized. - HC
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Income Tax:
Reopening of assessment - The entire proceedings u/s 148 stood vitiated since even according to the AO, he initiated proceedings on 18.1.2016 on which date such initiation was clearly time barred. Secondly, the fresh initiation did not have the approval of the Additional CIT, as required by law - HC
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Indian Laws:
Issued cheques in good faith without acknowledgment of its liability - NI Act - The petitioner cannot escape its liability under Section 52 IPC by mere saying that the cheques issued were in good faith only. - HC
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Indian Laws:
Increase in the Compensation Cess rate on cigarettes to make the total tax incidence on cigarettes in GST regime at par with the total tax incidence in pre-GST regime
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Central Excise:
Recovery of duty from the purchaser of property - they have not purchased the business either in whole or in part from the earlier owner, therefore the old dues of earlier owner is not recoverable from the present respondent.
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VAT:
Jurisdiction of state to levy tax - inter-state sale - the levy of the compounding fee and demanding one time tax by the Check Post Officer on a interpretation made by him is without jurisdiction - HC
Articles
Notifications
GST
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03/2017 - dated
18-7-2017
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GST CESS Rate
Seeks to amend notification No. 1/2017- Compensation Cess (Rate), dated 28th, June, 2017 so as to increase the Compensation Cess rates on cigarettes as mentioned in the notification with effect from 18th, July, 2017
GST - States
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38/1/2017-Fin(R&C)(18/2017-Rate) - dated
4-7-2017
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Goa SGST
Amendments in the notification No. 38/1/2017-Fin(R&C)(1/2017-Rate), dated the 30th June, 2017
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38/1/2017-Fin(R&C)(01/2017-Rate)(Corri) - dated
4-7-2017
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Goa SGST
Government Notification No. 38/1/2017-Fin(R&C)(1/2017-Rate) dated 30-06-2017, published in the Official Gazette, Series I No. 13, Extraordinary No. 3 dated 30-06-2017.
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CCT/26-2/2017-18/2/1241 - dated
30-6-2017
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Goa SGST
Harmonised System of Nomenclature (HSN) Codes
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CCT/26-2/2017-18/1/1240 - dated
30-6-2017
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Goa SGST
Notifies the following modes of verification.
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38/1/2017-Fin(R&C)(8) - dated
30-6-2017
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Goa SGST
Recommendations of the Council, hereby fixes the rate of interest per annum.
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38/1/2017-Fin(R&C)(7) - dated
30-6-2017
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Goa SGST
Goa Goods and Services Tax (Amendment) Rules, 2017.
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38/1/2017-Fin(R&C)(6) - dated
30-6-2017
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Goa SGST
Appoints provisions of sections 6 to 9, 11 to 21, 31 to 41, 42 except the proviso to sub-section (9) of section 42, 43 except the proviso to sub-section (9) of section 43, 44 to 50, 53 to 138, 140 to 145, 147 to 163, 165 to 174 of the said Act, shall come into force.
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38/1/2017-Fin(R&C)(17/2017-Rate) - dated
30-6-2017
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Goa SGST
Electronic Commerce Operator
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38/1/2017-Fin(R&C)(16/2017-Rate) - dated
30-6-2017
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Goa SGST
Specified international organisation shall be entitled to claim refund of state tax paid on the supplies of goods or services.
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38/1/2017-Fin(R&C)(15/2017-Rate) - dated
30-6-2017
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Goa SGST
Notifies that no refund of unutilised input tax credit.
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38/1/2017-Fin(R&C)(14/2017-Rate) - dated
30-6-2017
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Goa SGST
Notifies the following activities or transactions undertaken by the Central Government or State Government or any local authority neither as a supply of goods nor a supply of service.
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38/1/2017-Fin(R&C)(13/2017-Rate) - dated
30-6-2017
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Goa SGST
Notifies that on categories of supply of services state tax leviable under section 9
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38/1/2017-Fin(R&C)(12/2017-Rate) - dated
30-6-2017
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Goa SGST
Exempts the intra-State supply of services state tax leviable thereon under sub-section (1) of section 9
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38/1/2017-Fin(R&C)(11/2017-Rate) - dated
30-6-2017
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Goa SGST
Notifies that the state tax, on the intra-State supply of services
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38/1/2017-Fin(R&C)(10/2017-Rate) - dated
30-6-2017
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Goa SGST
Exempts intra-State supplies of second hand goods.
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38/1/2017-Fin(R&C)(09/2017-Rate) - dated
30-6-2017
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Goa SGST
Exempting supplies to a TDS deductor by a supplier, who is not registered, under section 11 (1)
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38/1/2017-Fin(R&C)(08/2017-Rate) - dated
30-6-2017
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Goa SGST
Exemption shall not be applicable where the aggregate value of such supplies of goods or service, exceeds five thousand rupees in a day.
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38/1/2017-Fin(R&C)(07/2017-Rate) - dated
30-6-2017
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Goa SGST
Exempts, supplies of goods the state tax leviable thereon under section 9
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38/1/2017-Fin(R&C)(06/2017-Rate) - dated
30-6-2017
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Goa SGST
Specifies the Canteen Stores claim a refund of fifty per cent. of the applicable state tax paid by it on all inward supplies of goods
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38/1/2017-Fin(R&C)(05/2017-Rate) - dated
30-6-2017
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Goa SGST
Notifies the goods no refund of unutilised input tax credit shall be allowed.
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38/1/2017-Fin(R&C)(04/2017-Rate) - dated
30-6-2017
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Goa SGST
Intra-state supply of such goods state tax shall be paid on reverse charge basis.
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38/1/2017-Fin(R&C)(03/2017-Rate) - dated
30-6-2017
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Goa SGST
Exempts intra-State supplies of goods state tax leviable thereon under section 9.
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38/1/2017-Fin(R&C)(02/2017-Rate) - dated
30-6-2017
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Goa SGST
Exemption intra-State supplies of goods, Schedule, from the whole of the state tax leviable thereon under section 9
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3/2/2006-Fin(R&C)(9) - dated
30-6-2017
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Goa SGST
Goa Goods and Services Tax (Second Amendment) Rules, 2017.
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38/1/2017-Fin(R&C)(5)/2550 - dated
28-6-2017
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Goa SGST
Registered person, whose aggregate turnover in the preceding financial year did not exceed seventy five lakh rupees.
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38/1/2017-Fin(R&C)(4) - dated
21-6-2017
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Goa SGST
Specifies the persons who are only engaged in making supplies of taxable goods or services or both, which is liable to be paid on reverse charge basis
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38/1/2017-Fin(R&C)(3) - dated
21-6-2017
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Goa SGST
Common Electronic Portal
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38/1/2017-Fin(R&C)(2) - dated
21-6-2017
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Goa SGST
The Goa Goods and Services Tax Rules, 2017.
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38/1/2017-Fin(R&C)(1) - dated
21-6-2017
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Goa SGST
Government of Goa hereby appoints the provisions of sections 1, 2, 3, 4, 5, 10, 22, 23, 24, 25, 26, 27, 28, 29, 30, 139, 146 and 164 of the said Act shall come into force.
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38/1/2017-Fin(R&C)(01/2017-Rate) - dated
21-6-2017
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Goa SGST
notifies the rate of the state tax.
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13/2017-STATE TAX - dated
30-6-2017
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Himachal Pradesh SGST
Council, to fix the rate of interest per annum.
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12/2017-State Tax - dated
30-6-2017
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Himachal Pradesh SGST
Notify that the notification No. 12/2017-Central Tax, dated 28th June, 2017
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12-4/78 - dated
30-6-2017
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Himachal Pradesh SGST
“Proper Officer” for various functions referred to in the Act
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10/2017-STATE TAX (RATE) - dated
30-6-2017
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Himachal Pradesh SGST
Exempts intra-State supplies of second hand goods.
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10/2017-STATE TAX - dated
30-6-2017
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Himachal Pradesh SGST
Himachal Pradesh Goods and Services Tax (Second Amendment) Rules, 2017.
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09/2017-STATE TAX - dated
30-6-2017
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Himachal Pradesh SGST
Appoints the provisions of sections 6 to 9, 11 to 21, 31 to 41, 42 except the proviso to sub-section (9), 43 except the proviso to sub-section (9), 44 to 50, 53 to 138, 140 to 145, 147 to 163, 165 to 174 of the said Act shall come into force.
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08/2017-STATE TAX (RATE) - dated
30-6-2017
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Himachal Pradesh SGST
Exemption shall not be applicable where the aggregate value of such supplies of goods or service
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08/2017-STATE TAX - dated
30-6-2017
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Himachal Pradesh SGST
Aggregate turnover in the preceding financial year did not exceed fifty lakh rupees.
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07/2017-STATE TAX (RATE) - dated
30-6-2017
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Himachal Pradesh SGST
Exemption The supply of goods by the Unit Run Canteens to the authorized customers.
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07/2017-STATE TAX - dated
30-6-2017
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Himachal Pradesh SGST
Himachal Pradesh Goods and Services Tax (Amendment) Rules, 2017.
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06/2017-STATE TAX (RATE) - dated
30-6-2017
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Himachal Pradesh SGST
Specifies the Canteen Stores Department claim a refund of fifty per cent of the applicable state tax paid by it on all inward supplies of goods
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04/2017-STATE TAX (RATE) - dated
30-6-2017
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Himachal Pradesh SGST
Specifies the supply of goods, state tax shall be paid on reverse charge basis.
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03/2017-STATE TAX (RATE) - dated
30-6-2017
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Himachal Pradesh SGST
Exempts Petroleum operations state tax leviable thereon under section 9.
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02/2017-STATE TAX (RATE) - dated
30-6-2017
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Himachal Pradesh SGST
Exempts intra-State supplies of goods the Schedule appended to this notification.
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02/2017-STATE TAX - dated
30-6-2017
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Himachal Pradesh SGST
Appointed officers for carrying out the purposes of the State Act.
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01/2017-STATE TAX (RATE) - dated
30-6-2017
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Himachal Pradesh SGST
Notifies the rate of the state tax
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G.O. (P) No. 65/2017/TAXES - dated
30-6-2017
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Kerala SGST
Notification of goods in respect of which the state tax shall be paid on reverse charge basis by the recipient of the intra-state supply of such goods under the Kerala GST Ordinance, 2017
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G.O. (P) No. 62/2017/TAXES - dated
30-6-2017
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Kerala SGST
Notification of rates of State tax on intra-state supply of goods under section 9 of the Kerala GST Ordinance, 2017
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G.O. (P) No. 61/2017/TAXES - dated
30-6-2017
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Kerala SGST
Notification of interest rates under sub-sections (1) and (3) of section 50, sub-section (12) of section 54 and section 56 of the Kerala under the Kerala GST Ordinance, 2017
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G.O. (P) No. 60/2017/TAXES - dated
30-6-2017
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Kerala SGST
Notification of composition levy and aggregate turnover limit of an eligible registered person for opting composition levy under the Kerala GST Ordinance, 2017
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G.O. (P) No. 59/2017/TAXES - dated
30-6-2017
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Kerala SGST
Notification of category of persons exempted from obtaining registration under the Kerala GST Ordinance, 2017
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S.R.O. No. 323/2017 - dated
6-7-2017
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Orissa SGST
Amendment for reduction of GST rates from 12% to 5% on fertilisers
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S.R.O. No. 314/2017 - dated
29-6-2017
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Orissa SGST
Rate of interest per annum under Odisha Goods and Services Tax Act, 2017
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S.R.O. No. 313/2017 - dated
29-6-2017
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Orissa SGST
Composition U/s 10(1) of the Odisha Goods and Services Tax Act, 2017
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S.R.O. No. 311/2017 - dated
29-6-2017
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Orissa SGST
Categories of services the tax on intra-State supplies of which shall be paid by the e-Commerce Operator
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S.R.O. No. 310/2017 - dated
29-6-2017
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Orissa SGST
Specialised agencies entitled to claim a refund of Taxes paid on notified supplies of Goods or services or both
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S.R.O. No. 309/2017 - dated
29-6-2017
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Orissa SGST
Conditions of non-availability of refund of unutilized ITC for supply of services
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S.R.O. No. 308/2017 - dated
29-6-2017
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Orissa SGST
Supplies which shall be treated neither as a supply of Goods nor a supply of services under OGST Act, 2017
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S.R.O. No. 307/2017 - dated
29-6-2017
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Orissa SGST
Categories of Services on which tax will be payable under reverse charge mechanism
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S.R.O. No. 306/2017 - dated
29-6-2017
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Orissa SGST
Exemption on supply of services under OGST Act.
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S.R.O. No. 305/2017 - dated
29-6-2017
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Orissa SGST
Rates for supply of services under OGST Act and value of construction services
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S.R.O. No. 304/2017 - dated
29-6-2017
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Orissa SGST
Exemption of Intra-State supplies of second hand goods received by a registered person
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S.R.O. No. 303/2017 - dated
29-6-2017
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Orissa SGST
Exempting supplies to a TDS deductor by a Supplier, who is not registered
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S.R.O. No. 302/2017 - dated
29-6-2017
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Orissa SGST
State Tax Exemption from Reverse charge up to ₹ 5000 per day
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S.R.O. No. 301/2017 - dated
29-6-2017
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Orissa SGST
Exemption from State Tax supplies by CSD to URC and supplies by CSD or URC to authorised customers notified
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S.R.O. No. 299/2017 - dated
29-6-2017
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Orissa SGST
Specifying supplies of Goods in respect of which no refund of unutilized input tax credit shall be allowed U/s 54(3) OF the Odisha Goods and Services Tax Act, 2017
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S.R.O. No. 298/2017 - dated
29-6-2017
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Orissa SGST
Prescribing reverse charge on certain specified supplies of Goods u/s 9(3) of the Odisha Goods and Services Tax Act, 2017
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S.R.O. No. 297/2017 - dated
29-6-2017
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Orissa SGST
2.5% concessional OGST rate for supplies to exploration and production
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9834/CT - dated
24-6-2017
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Orissa SGST
Notification on assignment of powers & duties
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9830/CT - dated
24-6-2017
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Orissa SGST
Jurisdiction of officers
Circulars / Instructions / Orders
News
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GST exemption for products used by differently abled people
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GST rates so notified are lower than the pre-GST tax incidence on most of the items of mass consumption such as cereals, pulses, milk, tea, vegetable edible oils, sugar, toothpaste, hair oil, soap, footwear, Childrens' picture, drawing or colouring books, etc
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GST : to migrate from a complicated and multi tax system to a simpler tax system
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FM: Organized traders and unorganized sellers in Textile Sector have not been affected by the Goods and Services Tax (GST)
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Government clarifies that accommodation in any hotel, including 5-star hotels, having a declared tariff of a unit of accommodation of less than INR 7500 per unit per day, will attract GST @ 18% ; Star rating of hotels is, therefore, irrelevant for determining the applicable rate of GST
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Increase in the Compensation Cess rate on cigarettes to make the total tax incidence on cigarettes in GST regime at par with the total tax incidence in pre-GST regime
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JITSIC Tackling Global Tax Risks
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RBI has set up an Enforcement Department (EFD) which would serve as a centralised department to speed up regulatory compliance; EFD has been entrusted with the responsibility of enforcement action on commercial banks
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Reserve Bank of India (RBI) has constituted an Internal Advisory Committee (IAC), which arrived at an objective, non-discretionary criterion for referring accounts for resolution under Insolvency and Bankruptcy Code, 2016 (IBC)
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Imposition of charges on frequent banking
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Infusion of capital in Public Sector Banks
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Contribution to UN Fund and Programmes by GOI
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Ordinance {Banking Regulation (Amendment) Ordinance, 2017} has been promulgated on 4th May 2017 authorising RBI to issue directions to any banking company to initiate insolvency resolution process in respect of a default, under the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC)
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RBI Reference Rate for US $
Case Laws:
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Income Tax
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2017 (7) TMI 576
Reopening of assessment - reasons to believe - validity of second notice under Section 148(1) - Held that:- For reasons which are not clear, the Revenue did not pursue the notice dated 23rd March, 2015 issued to the Petitioner under Section 148 of the Act. An attempt was made by Mr Rahul Chaudhary to suggest that since the AO who issued the said notice was replaced by another AO, the said notice was not pursued. He, however, insisted that under Section 129 of the Act it was possible to continue proceedings which commenced with the notice dated 23rd March, 2015 and that was in fact what was done on 18th January, 2016 when the second notice was issued by the incumbent AO. A careful perusal of the notice dated 18th January, 2016 reveals that it does not state anywhere that it is in continuation of the earlier notice dated 23rd March, 2015. There is no noting even on the file made by the AO that while issuing the said notice he was proposing to continue the proceedings that already commenced with the notice dated 23rd March, 2015. Annexure- A to the notice under Section 142(1) of the Act reveals what weighed with the AO when he issued the said notice dated 18th January, 2016. In this document with the sub-heading proceedings u/s 148/147 for AY 2008-2009, show cause notice - reg. . It is plain to understand that according to the AO, the notice dated 18th January 2016 under Section 148 of the Act was issued initiating afresh the proceedings. It was not merely in continuation of the earlier proceedings that commenced with the notice dated 23rd March, 2015. The entire proceedings under Section 148 of the Act stood vitiated since even according to the AO, he initiated proceedings on 18th January, 2016 on which date such initiation was clearly time barred. Secondly, the fresh initiation did not have the approval of the Additional CIT, as required by law. The Court has not been provided with any satisfactory explanation as to why the notice dated 23rd March, 2015 issued by the AO under Section 148 of the Act was not carried to its logical end. The mere fact that the AO who issued that notice was replaced by another AO can hardly be the justification for not proceeding in the matter. On the other hand, the AO did not seek to proceed under Section 129 of the Act but to proceed de novo under Section 148 of the Act. This was a serious error which cannot be accepted to be a mere irregularity. It is not clear why the AO did not wait for the process of supplying reasons to the Petitioner, considering the Petitioner s objections thereto and passing a reasoned order thereon to be completed before issuing the notice under Section 142(1) and 143(2) of the Act. There appears to be non-application of mind by the AO to the legal requirement. - Decided in favour of assessee.
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2017 (7) TMI 575
Reopening of assessment - reasons to believe - Held that:- In the present case that the reasons recorded by the AO for reopening the assessment under Section 147 of the Act do not meet the requirement of the law. The ITAT was, therefore, perfectly justified in confirming the order of the CIT (A) and holding the reopening of the assessment to be bad in law. - Decided in favour of assessee.
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2017 (7) TMI 574
Addition u/s 41 - amount collected towards the scheme which was expired long ago - cessation of liability - Held that:- The assessee had launched a scheme of sales promotion. Under such scheme, the assessee would enroll a member, who would deposit a sum of ₹ 500/with the assessee company. If such a member in turn enrolled four members, he would get one black and white TV set manufactured by the assessee company free of cost. Same benefit would be available to the enrolled members if they fulfilled this condition. The scheme was operative for a period of 12 months. In other words, a member would have to enroll four members within such period of 12 months in order to get the benefit of earning a free TV set. Over a span of couple of years, the assessee collected a huge sum of ₹ 7.87 crores by enrollment membership fee of ₹ 500/each. As is bound to happen, in such a scheme requiring continuous chain reactions, the chain would break at some stage. The amount of ₹ 7.87 crores represents the money deposited by those members. This amount remained with the company over the years without any change whatsoever. The Revenue authorities have found that there was no activity at the hands of the assessee company in connection with the scheme for past several years. Not a single customer had demanded the money back nor the assessee had made any attempt to repay the same. It was only when the Assessing Officer in the present assessment proceedings raised the issue, the assessee made correspondence with the customers. This, the Commissioner (Appeals) correctly categorized as an afterthought. More importantly in all invoices, the signatures of the member customers were missing. Their addresses were not sufficient. Over the years, the company had also invested such amount earning interest and used such interest for its purpose, of course, offering interest income to tax. By all accounts, the assessee has treated such amount as its own. The scheme itself terminated many years back. Limitation of claiming amount back has also seized. There is absolutely no movement or correspondence between the assessee and its members with respect to the claim or with respect to the deposited amounts. - Additions confirmed
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2017 (7) TMI 573
Rectification application - not giving benefit of seized cash for the tax dues and on account of charging of interest under section 234B and 234C - Held that:- It is not in dispute that the search was conducted on the assessee on 30.6.2010 and cash amounting to ₹ 1 crore was seized on that date. It is also not disputed that the assessee had made a request, vide letter dated 23.8.2010 and reminder dated 4.7.2011, for adjustment out of the seized amount towards advance tax liability in respect of assessment year under consideration. We find that the issue of adjustment of seized amount towards advance tax liability has been settled by the Jurisdictional High Court in the case of the assessee in the case of CIT Vs. Ashok Kumar [2010 (9) TMI 771 - Punjab and Haryana High Court] and CIT Vs. Arun Kapoor (2010 (7) TMI 610 - Punjab and Haryana High Court) wherein it has been held that the assessee is entitled to adjustment of seized amount towards advance liability from the date of making the application in that regard. Explanation-2 to section 132B of the Act is prospective in nature applicable w.e.f. 1.6.2013 and is not applicable in the present case, since search was conducted on 30.6.2010. What emerges from the above is that as per the above decisions of the Jurisdictional High Courts, the cash seized is to be adjusted against the advance tax liability of the assessee from the date of making of application. In view of the decisions of the Jurisdictional High Court as above, this is the settled position of law on the issue at hand. Thus, we find that by not adjusting the same in the present case, an apparent error has occurred in the intimation of the assessee under section 143(1) of the Act which ought to be rectified. In view of the above, we direct that the seized cash be adjusted against the advance tax liability of the assessee from the date of making application to this effect, and necessary adjustment be made as a consequence to the interest to be paid under section 234B and 234C of the Act. - Decided in favour of assessee.
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2017 (7) TMI 572
Levy of penalty u/s 271(1)(c)- Held that:- There is no iota of evidence on record to show that the income returned by the assessee was on the lower side. The addition also was made on adhoc basis without any shred of evidence in support of concealment of income to that extent. Clearly, the Assessing Officer accepted the contention of the assessee without making any further investigation either with regard to the income estimated or the income surrendered. The additions made are purely adhoc and mere estimations only which do not tantamount to concealment of particulars of income or furnishing of inaccurate particulars of income. The case laws relied upon by the Ld. CIT(A) while upholding the levy of penalty are mainly related to the attraction of the Explanation to section 271(1)(c), which we find is not applicable in the present case, since there is no finding of concealment of income or furnishing of inaccurate particulars of income in the first place for which the assessee was required to give any explanation. The assessee had on the first occasion admitted that it had estimated the income of its ahatas, even before the AO could discover anything adverse to this effect, which in any case, we find he did not, even after aforesaid admittance by the assessee and surrender of income on this account or for that matter on account of expenses. In view of the above, we set aside the order of the Ld. CIT (Appeals) and delete the penalty levied. - Decided in favour of assessee.
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2017 (7) TMI 571
Levy of penalty under section 271(1)(c) - assessee made an incorrect claim - Held that:- In the present case that there was a transfer of assets for consideration which had been received by way of book entries and hence, the transfer is not a donation. It is evident from this finding of the I.T.A.T. that the explanation of the assessee that mere book entries were passed, crediting the transferors and debiting the corpus fund was found to be correct. But at the same time, it was interpreted on the same set of facts that the transfer was not by way of donation. In such circumstances, the assessee society at best can be held to have made an incorrect claim which does not tantamount to furnishing inaccurate particulars of income. Merely because the assessee did not return capital gains on the impugned transaction, which was added to the income of the assessee, penalty under section 271(1)(c) is not attracted. Mere non acceptance of the plausible enough explanation of the assessee in quantum proceedings will not tantamount to concealment of particulars of income or furnishing of inaccurate particulars of income to attract the levy of penalty under section 271(1)(c) of the Act. - Decided in favour of assessee.
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2017 (7) TMI 570
Exemption u/s 10(10C) - Held that:- Since the Assessing officer has noted in the assessment order that assessee offered an amount of ₹ 5 lakhs to tax by claiming that he does not want to claim deduction u/s 10(10C) of the Act and the appeal of the assessee has not been decided on merit, therefore, in view that matter with regard to the merits of the addition have to be considered by Ld. CIT(A). Set aside the order of Ld. CIT(A) and restore the issue on merit, with regard to the addition of ₹ 5 lakhs, to the file of Ld. CIT(A) with a direction to re decide the appeal of the assessee - Appeal of the assessee is allowed for statistical purposes.
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2017 (7) TMI 569
Disallowing of Peak load violation charges paid to PSEB - nature of expenditure - Held that:- There could be no grievance of the assessee vis-à-vis non-entertainment of claim by the lower authorities. As regards disallowance of the same, we find that the CIT (Appeals) had held the same to be penal in nature. On being confronted by the Bench to adduce evidence to prove that the claim was not penal in nature, the learned counsel for the assessee expressed his inability to do so. In view of the same, we hold that there is no infirmity in the order of the learned CIT (Appeals) in disallowing the claim of peak load violation charges paid. Reduction of excess depreciation credited to the Profit and Loss Account - Held that:- We find merit in this contention of the assessee that claim not made in the return of income can be made during assessment proceedings. The claim of the assessee be entertained. Having entertained the claim we find that the Ld. Counsel for the assessee has shown us the inclusion of the impugned sum in the Profit and Loss Account and has further tried to demonstrate through its computation of income that the same was not reduced. But we find that the facts do not appear to be evident and clear. We, therefore consider it fit to restore the issue to the file of the Ld. CIT (Appeals) to adjudicate the issue in accordance with law. We may add that the assessee be granted due opportunity of hearing and also be allowed to adduce all evidences in support of its contentions. The ground of appeal of the assessee is partly allowed for statistical purposes.
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2017 (7) TMI 568
Disallowance of benefit to the assessee under section 54F - Held that:- The date of agreement to sell as the date of sale of asset, we consider it fit to restore the issue back to the file of the Ld. CIT (Appeals) to examine the documents now produced by the assessee and adjudicate the issue in the light of the decisions cited by the assessee and in accordance with law. We may add that the assessee be granted due opportunity of hearing. Appeal of the assessee is allowed for statistical purposes.
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2017 (7) TMI 567
Levy of penalty u/s 271AAA - surrender of income at the time of search - Held that:- Considering the facts of the case and in the light of the order of the ITAT Chandigarh in the case of DCIT Vs. Sh. Sanjeev Goyal (2015 (11) TMI 1618 - ITAT CHANDIGARH) it is clear that assessee has made surrender of income at the time of search and in the joint surrender of four persons it was explained the amount of the undisclosed income earned was from these food processing business, property business, consultancy and liaisoning income, the details of the same were filed. The undisclosed income was declared in the return of income and tax has been paid which is accepted by the Revenue Department. The issue is, therefore, covered in favour of the assessee by the order of the ITAT, Chandigarh Bench in the case of DCIT Vs. Sanjeev Goyal (supra). Following this order, we set aside the order of the authorities below and cancel the penalty. Appeal of the assessee is allowed.
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2017 (7) TMI 566
Deduction u/s 80IC - disallowance made on account of cash purchases as bogus - Held that:- As for the parties from whom purchases made were held to be bogus since confirmations of their balances was not received the AO, the assessee stated that all bills and vouchers of purchases had been produced before the Assessing Officer time and again and had been examined by the AO also. The Ld. counsel for the assessee further stated that all payments were made to them by cheques or by bank transfers. The assessee also stated that the AO had not doubted the sales by made by the assessee and therefore there was no reason at all to disallow the profit made on account of the purchase and sale transaction attributed to the purchases held bogus Alternatively the assessee stated that the addition made on account of inflated profits had only increased the profit of the business of the assessee and there was no reason or evidence with the AO to hold that the same was on account of income from other sources. Ld.Counsel for the assessee stated that the CBDT had issued a circular No.37/2016 dated 2nd Nov, 2016 wherein it had directed that additions made on account of disallowances made, which resulted in enhancement of profits of assessees eligible to deduction under chapter VIA, should not be denied deduction of the enhanced profits. Thus on all aspects of the addition made the assessee had filed detailed submissions and evidences. A perusal of the order of the CIT(A), on the other hand reveals that she has not dealt with the voluminous submissions made by the assessee but on the contrary has passed a cryptic and non speaking order. The Ld. CIT(A) has merely reiterated the findings of the AO and has miserably failed to deal with the arguments and evidences filed by the assessee in support of its contentions. In the interest of justice therefore, we consider it fit to restore the matter back to the file of the CIT(A) to consider the issue afresh and pass a speaking order in the light of submissions and evidences filed by the assessee and also after taking into consideration the CBDT circular No.37/2016 dated 2nd Nov, 2016 referred to by the assessee in this regard - Grounds raised by the assessee allowed for statistical purposes.
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Customs
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2017 (7) TMI 552
Natural justice - it is the case of the petitioner that while the order was passed ex parte, after noting that despite the grant of several opportunities to the petitioner, the petitioner was not represented at the hearing before the Commissioner - Held that: - by Ext.P4 letter of adjournment, the petitioner had indicated that he would not be in a position to be represented in the personal hearing on 22.02.2017, and an opportunity was sought for a personal hearing in the month of March 2017. Ext.P5 order passed by the respondent is without reference to the said request for adjournment made by the petitioner. At any rate, no prejudice will be caused, if a fresh order of adjudication is passed after hearing the petitioner, considering that there is no period of limitation that will be breached, if a fresh order is passed after hearing the petitioner - appeal allowed by way of remand.
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2017 (7) TMI 551
Refund claim - Was the petitioner entitled in law, to straight away seek refund of duty without having the assessment order modified or revised? - Held that: - In case, the duty qua the goods was re-assessed, and such re-assessment was not accepted in writing by the importer, or the exporter, the proper Officer under sub-section (5) of Section 17 of the Act, is required to pass a speaking order within fifteen (15) days from the date of re-assessment of the BE or the shipping bill, as the case may be - Furthermore, sub-section (6) of Section 17, authorizes the Proper Officer to audit the assessment of duty of imported goods or goods sought to be exported, at his office, or, at the premises of the importer or the exporter, as may be considered expedient, in cases, where, either re-assessment had not been done or a speaking order had not been passed on re-assessment. If, upon verification, examination or testing, the Proper Officer comes to the conclusion that the self-assessment is not done correctly, he is now empowered to re-assess the duty leviable on such goods. In case, the re-assessment, as carried out by the Proper Officer, whether with regard to valuation of goods, or classification, or examination, or concession of duty availed of, consequent to any notification, is different to what had been done via self-assessment procedure and the same is not accepted by the importer or the exporter, he is required to pass a speaking order within fifteen (15) days of such determination - The new regime, therefore, envisages a situation where self-assessment constitutes an order, if regard is had to the amended provisions of Section 17 read with Section 2(2) of the Act, which, includes within the definition of the term assessment, self-assessment. In view of the definitive stand taken in the counter affidavit by the respondents in the present case, that once, a protest was lodged, it was incumbent upon the Department to pass a speaking order, nothing further need to be said on this aspect. However, in the instant appeal, I must also deal with the stand taken by the respondents that no protest was lodged with it, as per the protest record maintained by the Department. Once, an application for refund is filed, it is incumbent on the authority concerned to pass an order under sub-section (2) of Section 27 of the Act, to determine whether whole or part of the duty and interest, if any, paid on such duty, by the applicant is refundable. The refund of duty or interest, if any, paid, is to be made to the applicant, if, it fulfills, the conditions set out in Section 27(2) of the Act. In case, conditions are not fulfilled, then, the duty and the interest, if any, paid on the duty, is to be credited to the Consumer Welfare Fund. Quite clearly, it was not as if the applications for refund contained is defect or were incomplete, as alleged or at all. The applications were returned on the ground that there was no order on record modifying or reviewing the rate of duty determined via the self-assessment mode. This conclusion of the second respondent, in view of what is stated above, is, clearly, wrong - the impugned order, in my view, is flawed in the eyes of law, even on this score. This is more so, in view of the fact that in the refund applications against the column, which requires the applicant to state whether or not personal hearing is required, the petitioner had indicated in no uncertain terms that it would require a personal hearing in the matter. Petition allowed by way of remand.
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2017 (7) TMI 550
Redemption fine - penalty - old and used digital multifunction printing and copying machines with standard accessories - restricted item or not? - Held that: - The goods during the time were not restricted as per provisions of para 2.17 of the Foreign Trade Policy being not per se photocopiers but multifunctional digital printing photocopiers. The restriction in regard to multifunctional digital copiers came into existence in the year 2012 only. However, since the value has been enhanced and the appellants are not contesting the enhancement of value, we are of the considered view that the redemption fine and penalties cannot be set aside in toto - redemption fine of ₹ 1,00,000/- and personal penalty of ₹ 75,000/- would meet the ends of justice - appeal allowed - decided partly in favor of appellant.
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2017 (7) TMI 549
Rectification of mistake - the observation in the order dated 22.03.2017 that there is no provision for filing cross objection is misplaced - Held that: - para 5 of the order dated 22.03.2017 proceeds on the basis that the appellants did not have facility to file cross objection before the Commissioner (Appeals) in the instant case. However, it is noticed that section 129D(4) read with Section 129A(4) clearly prescribes that in case of appeal filed under 129D(2), the assessee can file cross objection and the same have to be dealt with as if it was an appeal presented within the time - it is apparent that an error has crept in the order, therefore para 5 of the said decision needs to be removed - ROM application allowed.
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Service Tax
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2017 (7) TMI 565
Condonation of delay in filing appeal - The Tribunal has attributed negligence to the Assessee in not filing the appeal in time - Held that: - though, the period of delay involved is 370 days, which, by no means, is an insignificant period, the Tribunal ought to have examined, whether the delay was deliberate, as mere negligence, by itself, in our view, would not disable the Assessee from having its matter decided on merits - the Tribunal has not carried out the said exercise, which is so very necessary, while dealing with the application seeking condonation of delay - Tribunal was also required to examine, qualitatively, as to whether the reasons set out for seeking condonation of delay were genuine and bonafide - impugned order set aside - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 564
Pre-deposit - Section 35F(iii) of the 1944 Act - Held that: - the measure given for preferring an appeal under Section 35F(iii), post amendment on 06.08.2014, would be 7.5% of the duty demanded or penalty imposed or both - even if, that measure is applied, the Appellant/Assessee has paid more than the amount prescribed under Section 35F(iii) of the 1944 Act - interim order granted by this Court on 18.06.2014 shall continue to operate till the adjudication of the appeal by the Tribunal - appeal allowed.
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2017 (7) TMI 563
GTA service - reverse charge mechanism - whether the appellant is failed to pay Service Tax which it was liable to pay Service Tax under Section 68 of the Act? - Held that: - the appellant in view of the provisions of Section 2(i)(d)(xii) & (xvii) of the Service Tax Rules, 1994 as validated by Section 117 of Finance Bill, 2003, the appellant was held liable to pay Service Tax on Goods Transport Agency service as recipient of service and further required to file return under the amended Section 71A of the Act. Whether provisions of Section 73(1) of the Act are correctly invoked in the case? - Held that: - the appellant neither filed the mandatory return nor paid the Service Tax on the Goods Transport Agency service availed and thus they suppressed the material facts from the knowledge of the Revenue with an intention to evade tax and as such the provisions have been rightly invoked. Whether show-cause notice issued without quantification of the Service Tax is sustainable in law? - Held that: - reliance was placed on the ruling of the Tribunal in the case of LH Sugar Factories Ltd. Vs. Commissioner of Central Excise, Meerut [2004 (1) TMI 111 - CESTAT, NEW DELHI], where in similar facts and circumstances where SCN was issued, it was held that during the relevant period Section 73 takes only in the case of appellant who are liable to file return under Section 70. The liability of filing returns is cast on the appellant under Section 71A as the receiver of service which was introduced in the Finance Bill, 2003. Thus, during the period in question no notice could have been issued under Section 73 for non-filing of return under Section 70. Accordingly, the Tribunal had held that the assessee-service receiver is not required to file return under Section 73 prior to 2003 - the SCN is vague and the same is time barred. Appeal allowed - decided in favor of appellant.
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2017 (7) TMI 562
Simultaneously Penalty u/s 76 and 78 - Revenue has relied upon the decision of the Tribunal in M/s Akriti Cable Network v. Commissioner of Central Excise, Jaipur [2009 (2) TMI 143 - CESTAT, NEW DELHI], where it was held that penalties are leviable under both the sections - Held that: - The impugned order has placed reliance on the decision of the Hon’ble High Court in the case of COMMISSIONER OF SERVICE TAX Versus M/s FIRST FLIGHT COURIERS LTD [2013 (11) TMI 1360 - KARNATAKA HIGH COURT], which is in accordance with propriety and legality and where it was held that Appellate Authority has not applied its mind with reference to the findings and reason recorded in imposing the penalty in exercise of the power under Section 76 of the Finance Act - appeal dismissed - decided against Revenue.
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2017 (7) TMI 561
Penalties u/s 76 and 78 - GTA services - works contract - case of appellant is that the works contract services provided by them to their client is exempted, thus they are under bonfide belief that they are not liable to pay service tax on the GTA service received by them - Held that: - provision of services under works contract has no relation with liability of appellant to pay service tax on the transportation service received by them. Provisions of works contract service to their client which may or may not be exempted has no relation whatsoever with they are liable for tax with the GTA service. We find that there is no ground of having any bonafide belief in favor of the appellant. Simultaneous penalty u/s 76 and 78 - Held that: - reliance placed in the case of Commissioner of Central Excise Versus M/s. Pannu Property Dealers, Ludhiana [2010 (7) TMI 255 - PUNJAB AND HARYANA HIGH COURT], where it was held that penalties under Section 76 and 78 can be imposed simultaneously. Appeal dismissed - decided against appellant.
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Central Excise
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2017 (7) TMI 560
Jurisdiction of Court to entertain the appeal - pre-deposit - Held that: - by Ext.P4 letter of adjournment, the petitioner had indicated that he would not be in a position to be represented in the personal hearing on 22.02.2017, and an opportunity was sought for a personal hearing in the month of March 2017. Ext.P5 order passed by the respondent is without reference to the said request for adjournment made by the petitioner. At any rate, I am of the view that, no prejudice will be caused, if a fresh order of adjudication is passed after hearing the petitioner, considering that there is no period of limitation that will be breached, if a fresh order is passed after hearing the petitioner - appeal dismissed.
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2017 (7) TMI 559
CENVAT credit - input - M.S.Angles, M.S.Joint beams and TOR Steel - Whether the appellant is entitled to input credit in terms of Rule 2(k) of CCR 2004? - Held that: - decision in the case of M/s.Thiruarooran Sugars and another V. CESTAT and another [2017 (7) TMI 524 - MADRAS HIGH COURT], relied upon, where it was held that structurals, cement, as also, iron and steel, which are used to erect foundations, would come within the definition of 'input' as they form part of the capital goods, which, in turn, are used in the manufacture of final product. The manner in which the Revenue seeks to read the provisions of Explanation 2 is flawed for the reason that the said Explanation cannot restrict the scope and ambit of the main provision, i.e., Rule 2k(i). Explanation 2 cannot be read in a manner that it constricts, the scope and ambit of the main provision, i.e., Rule 2k(i). - appeal allowed - decided in favor of assessee.
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2017 (7) TMI 558
Valuation - the contention of the Appellants/Assessees, broadly, before the Adjudicating Authority was that, the sales made were not institutional sales and, thus, they were assessable Under Section 4A of Central Excise Act, 1944 - Held that: - what clearly emerges in so far as the issue pertaining to how assessable value has to be arrived at, in the instant case, is, admittedly, pending consideration of the Supreme Court in: Civil Appeal Diary No.31455 of 2015 - the decision, on merits, involving Appellants/Assessees before us, would be governed by the final decision of the Supreme Court in the aforementioned Civil Appeals. Since, the Revenue in other cases have kept the SCN in abeyance, by keeping them in the call book [which is a method adopted by the Department], no coercive measures will be taken against the Appellants/Assessees, pending consideration of the of the aforementioned Civil Appeals by the Supreme Court. Appeal allowed - decided in favor of appellant.
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2017 (7) TMI 557
Valuation - freight incurred for removal of goods from the factory gate to the consignment agent - includibility - Held that: - in the appellant's own case the Tribunal vide Final Order No./ 41763-41766/2015 dated 6.7.2015, the Tribunal held that There is no flow back of the freight aspect proved by Revenue showing that the same has come to the manufacturer in disguise. That not being the case, assessable value declared by the appellant remains untouched - demand set aside - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 556
Valuation - transportation cost - differential pricing - commission paid to the commission agents - includibility - Revenue felt that premises are place of removal and transportation cost from the factory gate to place of removal should be included in the assessable value - Held that: - the period involved in the show cause notice is from 2002-2003, 2003-2004, 2004-2005, 2005-2006 and 2006-2007. Admittedly, the definition of place of removal in Section 4(3)(c) (iii) was amended w.e.f. 14.05.2003 to insert the depot/consignment agents in the statute. As per Section 4(3)(c)(iii), in case of sale from depot/place of consignment agents, time of removal shall be deemed to be the time at which the goods are cleared from the factory. In other words, in case of sale from depot/place of consignment agents, duty is payable on the price prevailing at the depot as on the date of removal from the factory - in terms of the explanation 2 to Rule 5, the cost of transportation from the factory to the place of removal where factory is not the place of removal (like in the present case where depot is place of removal after 14.05.2003) is to be included in the assessable value - the transportation/freight charges in show cause notice for the period 14.05.2003 to 31.03.2004, 2004-2005, 2005-2006 and 2006-2007 are liable to be included in the assessable value. However, for the period prior to 14.05.2003 when the definition of place of removal in Section 4 of Central Excise Act, 1944 did not include depot as place of removal, the place of removal will be factory gate and for this period, the transportation/freight charges would not be includible in the assessable value. Valuation - differential pricing - Held that: - the Ld. Commissioner (Appeals) has not given any findings. The Ld. Commissioner (Appeals) is therefore required to examine the issue afresh after giving fair opportunity to the appellants to make their submissions - matter on remand. Commission paid to commission agents - extended period of limitation - The appellants have argued that since the issue of depot sale was in the knowledge of the Department, the show cause notice is barred by limitation - Held that: - there is sufficient ingredient available on the part of the Respondent for deliberate withholding the information in suppression of facts with malafide intention to evade Central Excise Duty. Therefore, I find nother wrong in invocation of extended period of limitation in view of deliberate suppression & misstatement of facts with intention to evade Central Excise duty - finding of deliberate suppression is sustained - demand upheld. Appeal allowed in part and part matter on remand.
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2017 (7) TMI 555
Recovery of duty from the purchaser of property - purchase of property under auction - denial of refund on the ground that under provision of Section 11 (i) and as per Section 11 (e) of CEA, 1944 the Govt. dues of M/s. Bagwe Udyog Ltd is liable to paid by the person, owner ie.e. respondent - Held that: - In case of purchase of property alone under auction from Bank/ financial instituations, Section 11 is not applicable. Section 11 is applicable only in case where the buyer purchases the business in whole or in part from the earlier owner against whom central excise dues are pending - In the present case admittedly the respondent having their own existing business, only purchased the land from the bank in auction, accordingly they have not purchased the business either in whole or in part from the earlier owner, therefore the old dues of earlier owner is not recoverable from the present respondent therefore whatever amount paid by them is clearly refundable - appeal dismissed - decided against Revenue.
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2017 (7) TMI 554
Sugar syrup - taxability - appellant argued that said sugar syrup is not chargeable to duty in view of CBEC Circular 226/60/96-CX dated 3-7-1996 In the said circular it has been clarified that sugar solutions having concentration of 65% by weight will be considered goods for purpose of charging excise duty - Held that: - in terms of Circular of the CBEC the said product would be marketable only if it contains citric acid, in terms of Circular of 3-7-1996 or if revenue produced any evidence of marketability in terms of Circular dated 12-3-2004 - It is apparent that no evidence of marketability has been produced by the Revenue and concentration of sugar in the sugar syrup is not more than 65%. Thus in view of the above circulars of Revenue cited above, it is not open to the Revenue to hold that sugar syrup is marketable and liable to duty. The circular issued by CBEC are binding on the Revenue - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 553
SSI exemption - rural area - use of brand name - whether the assessee who is eligible for the rural area benefit under N/N. 8/2000-CE and N/N. 8/2003-CE can opt not to avail it, so as not to include the value of clearances of goods manufactured with the brand name of another, in the aggregate value of clearances to enable him to avail the SSI benefit of the notification? - Held that: - Sub-clause (a) of Para-3 categorically states that for the purpose of determining the aggregate value of clearances for home consumption the clearances bearing the brand name of another person which is ineligible for grant of exemption only cannot be included. Since the clearances bearing the brand name of Brittania Industries is eligible for exemption based on rural clearances and the value of such clearances also has to be included in the aggregate value of clearances. When so determined, the value of clearances exceeds ₹ 4 crores/Rs. 3 crores and therefore in our view the duty demand raised is right and proper - appeal dismissed - decided against appellant.
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CST, VAT & Sales Tax
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2017 (7) TMI 548
Principles of Natural Justice - the petitioner was instructed to furnish the copy of the audited balance sheet along with trading and profit & loss account statement for the relevant years along with the income tax statement, it was alleged that the petitioner has not produced any of the documents as directed - Held that: - the petitioner was afforded an opportunity of personal hearing, in which they were instructed to produce certain documents, the Assessing Officer could have granted one more opportunity to enable the petitioner to produce those documents - since the matter pertains to five assessment years commencing from the year 2011-2012, this Court is of the view that reasonable opportunity should be granted to the petitioner to submit the documents, which they are in possession to enable the Assessing officer to take a decision on the merits rather than to make a best of Judgment assessment - appeal allowed by way of remand.
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2017 (7) TMI 547
Jurisdiction of state to levy tax - inter-state sale - Detention of goods - the only reason assigned by the respondent in the impugned order is that the importer is a registered dealer in the State of Uttar Pradesh and the imported goods were cleared from Chennai Port and moved to Tvl. NLC India Limited, Neyveli without any Sale Invoice and only with Form-K.K of the Clearing Agent to the Ultimate Buyer, Tvl. NLC India Limited, Neyveli being other than the original importer. Therefore it was held that the Tamil Nadu is the appropriate State to levy tax. Held that: - The petitioner's case itself is that the movement from Chennai Port to Neyveli itself is pursuant to the conditions and it is an instance of contract between the petitioner and the Government of India and therefore, the question of taxing the transaction as a local sale would not arise and all that the Check Post Officer can look into is whether the consignment after clearance by customs on import is accompanied by a copy of the Bill of Entry, declaration in electronic Form-KK generated by Clearing and Forwarding Agent and trip sheet or log book, as the case may be, as per stipulations in Rule 15(14)(c) of the TNVAT Act, 2006 - this Court has no hesitation to hold that the levy of the compounding fee and demanding one time tax by the Check Post Officer on a interpretation made by him is without jurisdiction - petition allowed - decided in favor of petitioner.
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Indian Laws
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2017 (7) TMI 546
Wrong appreciation of evidence and inaccurate applicability of Section 139 of the Negotiable Instrument Act - Held that:- In the instant case the applicant has failed to rebut the presumption to place the onus on the respondent to come with better quality of evidence than the one which already on record. Therefore, the contentions canvased by the learned counsel for the applicant recording wrong appreciation of evidence and inaccurate applicability of Section 139 of the Negotiable Instrument Act deserves to be repelled. Taking this view of the matter the instant criminal revision is hereby dismissed. The applicant is directed to surrender before the Court below on 08.08.2017 to complete the remaining sentence imposed by the Court below. If the applicant has deposited any money in furtherance to the direction issued by the appellate Court or by this Court, same be released to the respondent upon furnishing certified copy of this order. The applicant is further directed to deposit the remaining money, if any, on or before 08.08.2017, failing which the default stipulation indicated in judgment dated 06.08.2015 shall be enforced.
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2017 (7) TMI 545
Issued cheques in good faith without acknowledgment of its liability - NI Act - jurisdiction of this Court under Section 482 Cr.P.C. - Held that:- The act of due care and attention is to be acted by a person who is acting in good faith and he has reason to act so in good faith. Simple belief or actual belief by itself is not enough. Instant is a petition under the Code of Criminal Procedure and Section 52 IPC puts the burden on the petitioner to show that whether the cheques issued were without acknowledging its liability under the aforesaid agreement. Mere escaping the liability by using the word good faith is not enough. The factum of issuance of the aforesaid cheques in good faith without acknowledgment of its liability in the instant petition lies on the petitioner which will be determined during the trial. The petitioner cannot escape its liability under Section 52 IPC by mere saying that the cheques issued were in good faith only. The determination of good faith of issuance of cheques with acknowledgement of outstanding liability remains to be determined during the trial. In the instant petition both the aforesaid facts are emerging as a question of facts and law which unequivocally are giving rise to a mixed question of facts and law which is to be determined during due course of trial. Therefore, invocation of inherent jurisdiction of this Court under Section 482 Cr.P.C. is unwarranted at this stage.
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2017 (7) TMI 544
Cheques dishonored - Held that:- There was an existing liability qua against the petitioner under Section 138 of NI Act and the Apex Court in the case Kusum Ingots & Alloys Ltd. vs. Pennar Peterson Securities Ltd. And Others (2000 (2) TMI 724 - SUPREME COURT OF INDIA) has specifically stated that if the ingredients are satisfied by the complainant then the person who has drawn the cheque shall be deemed to have committed an offence. The six cheques issued by the petitioner to the respondent/complainant-Bank were to meet their liability for the OCC/OD limit of ₹ 50,00,000/- availed by him and the contention of the learned counsel for the petitioner that the it forms part of one single transaction giving rise to one cause of action and the same could not be said to be distinct offences committed in each of the complaint cases to attract the provisions of Section 138 of the Negotiable Instruments, Act having different cause of action is not convincing as there is no plea on record to suggest that the cheques were issued on the same day/time/place/date and were undated which have been misused by the respondent/complainant-Bank by putting different dates on the cheques. The cheques issued are of different dates and the legal demand notices issued by the respondent/complainant-Bank are of different dates constituting separate cause of action. Mere availing of the OCC/OD limit of ₹ 50,00,000/- does not ipso facto suggest that the offence committed is one. Whereas, the cheques issued on the different dates constitute different cause of action under Negotiable Instruments Act. The trial Court correctly awarded substantive sentence to run consecutively rather than to award the sentence concurrently although the cheques issued by the petitioner were to meet their outstanding liability for the OCC/OD limit availed by him qua against the respondent/complainant-Bank but it does not form one single transaction rather constitute separate cause of action.
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2017 (7) TMI 543
Complaints under Section 138 of the N.I. Act - Held that:- In the cases at hand, the complainants challenged the orders of return of their complaints by filing the above referred misc. petitions in this Court in the earlier round of litigation. Notices of the misc. petitions were served upon the accused. The court after hearing the learned counsel representing the parties gave explicit permission to the complainants to seek revival of their complaints in the trial court. Pursuant to such direction, the complainants resubmitted the original complaints with the copy of this Court’s order dated 15.12.2015 in the trial court which directed re-registration thereof by separate orders dated 22.12.2015 which have not been challenged and have thus attained finality. Thus, the challenge laid on behalf of the accused persons that the order taking cognizance is bad in the eye of law is per-se without any merit whatsoever and cannot be sustained. The only order which is under challenge in the set of misc. petitions filed on behalf of the accused is the order dated 26.4.2016 by which, the court directed summoning of the accused persons through warrant of arrest because they failed to appear in the court despite assurance given on their behalf. Though, primafacie, this Court finds no illegality in the said order but in order to secure the ends of justice, the accused persons deserve to be given one opportunity to appear before the trial Court and furnish bail bonds upon which, they shall be released on bail. Misc. petitions filed on behalf of the complainants are allowed; the trial Court is directed to proceed further with the complaints submitted by the respective complainants and to try the accused as per law. The misc. petitions filed on behalf of the accused are dismissed as being devoid of merit while giving them liberty to appear before the trial Court within a period of 30 days from today and furnish bail bonds upon which they shall be released on bail. Failure to do so, would entitle the court below to secure their attendance by adopting coercive methods. The trial Court is further directed to expedite the trials and to try and complete the same within a period of one year from the date of submission of copy of this order.
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