TMI Tax Updates - e-Newsletter
July 30, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
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Income Tax:
Penalty levied u/s 271(I)(c) - Whether "Mens rea" is apparent in this case? - where the two regular appellate authorities have granted the relief to the Assessee by deleting the penalty imposed by the Assessing Authority u/s 271(1)(c), we don't think that it is a fit case for re-imposition thereof, by allowing the appeal of the Department - HC
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Income Tax:
Deemed dividend u/s 2 (22)(e) - advance made by the subsidiary company to the respondent/holding company - Obviously, the department would have been well aware of the fact that the amount of ₹ 3.00 Crores advanced by the subsidiary to its holding company, cannot be taxed twice. When such being the position, we are really surprised to see that the initiation of two separate proceedings for the same transaction is not appreciable. - HC
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Income Tax:
Loss of hedging of foreign currency receivable from exports - Loss on account of futures and options set off against the business profit - No substantial question of law to be arising in the present case at this stage, requiring our consideration or pronouncement on the merits of the case, since the matter has only been remanded to the Assessing Authority - HC
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Income Tax:
Entitled for exemption u/s 47(v) with respect to the transfer of land - Holding company - determination of 100% subsidiary company where 25 shares held by 6 nominees - The individuals are nominees of the holding company and they have no individual right, which facts were also not disputed. Therefore, on facts, it has to be held that whole of the share capital of the subsidiary company is held by the holding company in the instant case. - HC
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Income Tax:
Admission of additional evidences - As in the present case the Assessee could not lead the required evidence before the lower authorities. We are of the view that the evidences which the assessee has filed now have a material bearing on the issue which is before us. - Ends of justice demands the admission of the additional evidences. - AT
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Income Tax:
TP Adjustment - As application of TNMM method has been accepted by the Tribunal for AYs 2005-06 to 2007-08 and no change in facts or circumstances has been demonstrated before us for this year. Therefore, following the rule of consistency and the cited order of Tribunal in assessee’s own case, we hold that TNMM methodology as adopted by the assessee to benchmark the transactions was to be accepted. - AT
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Income Tax:
Validity of notice issued u/s 153C - the seized material found from the premises of the 3rd party in the course of search does not belong to the assessee. Thus in our considered view the proceedings u/s 153C of the Act, cannot be initiated. - AT
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Income Tax:
Deduction u/s 54 denied - LTCG - New house property was purchased in the name of son - it can be seen that the son of the assessee is a direct relation - In a case, Delhi HC has allowed the exemption where assessee had purchased new house in name of his wife - thus, the exemption could not be denied if entire investment had come out of proceeds of old property - AT
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Service Tax:
Valuation - inclusion of reimbursement of expenses in assessable value - pure agent services - this amount is not includable in the assessable value for charging service tax - AT
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Central Excise:
Refund alongwith interest - Recovery of interest from the erring officers - the interest of 6% would be payable up to the date when the amount was credited in the account of the Consumer Welfare Fund. However, after that date the petitioner should be entitled to higher rate of interest say 18% till the date of actual payment and the excess amount of interest so paid to be recovered from the officers found responsible for not making payment in time after due inquiry by the Department. - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2020 (7) TMI 670
Profiteering - Jurisdiction - time limitation - principles of natural justice - commensurate reduction in GST prices to its recipients, by grammage increase - HELD THAT:- Petitioner is directed to deposit the principal profiteered sum of ₹ 2,33,456/- within two weeks. Upon deposit of the said amount, interest amount as well as the penalty proceedings initiated by the respondents shall stand stayed till further orders. List the matter on 24th August, 2020 along with other connected matters.
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2020 (7) TMI 669
Maintainability of appeal - alternative remedy of appeal - Release of seized goods along with conveyance - Confiscation - appealable order or not - section 130 of CGST Act - HELD THAT:- As a final order of confiscation has been passed and the same being an appealable order, we relegate the writ applicant to file a statutory appeal as provided under Section 107 of the Act. Along with the appeal, it shall be open for the writ applicant to prefer a Miscellaneous Application under section 67(6) of the Act 2017 for provisional release of the vehicle pending the final disposal of the appeal. If any such application under section 67(6) of the Act is filed by the writ applicant, then the authority concerned shall look into the same at the earliest and pass an appropriate order in accordance with law - application disposed off.
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Income Tax
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2020 (7) TMI 668
Refund withheld u/s 241A - limited scrutiny under Section 143(2) - only ground for withholding refund is that since case of the petitioner has been selected for scrutiny u/s143(2) assessment is yet not complete and therefore genuineness of the refund claimed by the assessee is yet to be verified - Neither the copy of the order nor the reasons for withholding the refund were provided to the petitioner and accordingly, the present writ petition has been filed - HELD THAT:- The exercise of withholding of refund u/s 241A pursuant to notice u/s 143(2) without recording justifiable reasons, is not in consonance with the legislative intent and mandate of the aforesaid provision. The reasons cited do not support the finding that refund would adversely affect the Revenue. Reasoning given by the Income-Tax Officer is contrary to Section 241A of the Act. Accordingly, we set aside the impugned communication/ order dated 10.01.2020 - grant three weeks' time to the respondents to re-consider the aspect whether the amount found due to be refunded, or any part thereof, is liable to be withheld under Section 241A in line with the decisions of this court as noted above. The entire consideration, with the approval of the Principal Commissioner of Income Tax to the withholding of the refund amount, or any part thereof, should be completed.
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2020 (7) TMI 667
Penalty levied u/s 271(I)(c) - Whether Mens rea is apparent in this case? - HELD THAT:- Imposition of penalty and realisation thereof is not a regular source of income for the Income Tax Department. It is only the justifiably imposition of tax which is intended to be recovered and unless there is a mens rea or a guilty animus on the part of the Assessee, the penalty under section 271(1)(c) of the Act is an exception rather than a rule. In these circumstances, where the two regular appellate authorities have granted the relief to the Assessee by deleting the penalty imposed by the Assessing Authority under section 271(1)(c) of the Act, we don't think that it is a fit case for re-imposition thereof, by allowing the appeal of the Department before us under section 260A of the Act, which lies only on the substantial questions of law arising from the order of the learned Tribunal. No substantial question of law.
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2020 (7) TMI 666
Deemed dividend u/s 2 (22)(e) - advance made by the subsidiary company to the respondent/holding company - HELD THAT:- This Court already has decided the said issue against the same appellant, holding that the sum of ₹ 3.00 Crores received by the respondent company from its subsidiary relevant to the assessment year 2004-05, is not deemed dividend within the meaning of Section 2(22)(e) of the Act. Advance received by the respondent from its subsidiary has been shown in the balance sheet of the respondent, relevant to the assessment years 2002-03 and 2004-05. The department has initiated two separate proceedings for the single transaction and the said proceedings have been dragged up to the level of this Court. Obviously, the department would have been well aware of the fact that the amount of ₹ 3.00 Crores advanced by the subsidiary to its holding company, cannot be taxed twice. When such being the position, we are really surprised to see that the initiation of two separate proceedings for the same transaction is not appreciable. Had the department have applied its mind in a proper manner, they could have avoided these type of vexatious proceedings and it would have saved the precious time of this Court as well as the department. No substantial question of law arising in this appeal.
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2020 (7) TMI 665
Loss of hedging of foreign currency receivable from exports - Loss on account of futures and options set off against the business profit - HELD THAT:- The operative part of the Order of the learned Tribunal clearly shows that the matter has only been remanded to the Assessing Authority with similar directions given by the Tribunal in its earlier decision in the case of Aishwarya Company Private Limited [ 2015 (9) TMI 8 - ITAT CHENNAI] Assessee submitted that while remanding the case to the Assessing Authority, the Tribunal has given certain directions and its views about the Exchange Fluctuations to be treated as speculative loss or business loss and therefore, it is not an open remand which is likely to prejudice the case of the Assessee while the Assessing Authority passes a fresh order upon such remand. Senior Standing Counsel Mr.T.Ravikumar appearing for the Respondent/Revenue has not seriously objected to the Assessing Authority passing fresh orders in accordance with law. No substantial question of law to be arising in the present case at this stage, requiring our consideration or pronouncement on the merits of the case, since the matter has only been remanded to the Assessing Authority.
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2020 (7) TMI 664
Deduction u/s 80P - Assessee is a Cooperative Society carrying on business of Banking - whether the assessee was entitled to deduction under Section 80P(2)(a)(i) as the activity carried on by the assessee being a finance business, it cannot be termed as a Cooperative Society? - HELD THAT:- As decided in M/S. S-1308 AMMAPET PRIMARY AGRICULTURAL COOPERATIVE BANK LTD. [ 2019 (1) TMI 116 - MADRAS HIGH COURT] definitions of the expressions 'members' and 'associate member' under the TNCS Act and held that an 'associate member' is also a 'member' in terms of Section 2(16) of the TNCS Act. Furthermore, the Assessing Officer himself found that the associate members are also admitted as members of the society AO fell into an error in not granting any relief to the assessee society, which was rightly granted by the CIT (A) as confirmed by the Tribunal. In addition to that, the Assessing Officer has not pointed out that loans have been disbursed to all and sundry in terms of the provisions of the TNCS Act and in terms of Clause (b) to Sub-Section (4) of Section 80P of the Act, the society has an area of operation, operates within the taluk and will provide long term credit for agricultural and rural development activities as well. The CIT (A) rightly granted the relief to the assessee as confirmed by the Tribunal. We do not find any good ground to entertain these appeals. - Decided in favour of the assessee.
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2020 (7) TMI 663
Entitled for exemption u/s 47(v) with respect to the transfer of land - Holding company - determination of 100% subsidiary company where 25 shares held by 6 nominees - Tribunal holding that assessee is entitled for exemption under Section 47(v) - whether Tribunal correctly held that whole of the share capital of the assessee/subsidiary company is held by the holding company viz. M/s.Simpson Co Ltd., even though 25 shares were held by persons other than the holding company? - HELD THAT:- Section 47 of the Act deals with transaction not regarded as transfer. Section 47(v) of the Act states that nothing contained in Section 45 of the Act shall apply to any transfer of capital asset by subsidiary company to the holding company if (a) the whole of the share capital of the subsidiary company is held by the holding company, and (b) the holding company is an Indian company. The fact that the company is an Indian company is not disputed. The dispute raised by the Revenue is that whole of the share capital of the subsidiary company is not held by the holding company as there are six individual shareholders. Total number of shares are 80 lakhs, out of which, 79,99,975 shares are held by the holding company. This fact is also not disputed by the Revenue. The remaining 25 shares are held by six individuals. The explanation offered by the assessee is that under the Companies Act, a public limited company should have a minimum of seven shareholders. The individuals are nominees of the holding company and they have no individual right, which facts were also not disputed. Therefore, on facts, it has to be held that whole of the share capital of the subsidiary company is held by the holding company in the instant case. The reliance placed on the decision PAPILION INVESTMENTS (P.) LTD. [ 2009 (8) TMI 832 - BOMBAY HIGH COURT] merits acceptance wherein more or less identical factual situation was taken into consideration and it was held that the beneficial ownership of the holding company is to be taken note of and a proper interpretation is not given to the facts, as it would render the provisions of Section 47(v) of the Act redundant we hold that the order passed by the Tribunal does not call for any interference - Decided against revenue.
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2020 (7) TMI 662
Disallowance u/s 14A - Suo moto disallowance by assessee - HELD THAT:- It is undisputed fact on record that the assessee has made no investment in the Equity Oriented Mutual Fund . Even otherwise, under the SEBI Guidelines, mutual funds charge fund management charges out of the income earned by the fund, which are deducted and net income is made available for the distribution of the unit holders. Even tax auditor in its tax audit report quantified the disallowance u/s 14A of the Act at ₹ 4,86,374/-. Apart from this, the assessee has suo motu reasonably apportioned the salary part of the employee and Finance Director looking after investment made for earning dividend income. As perused the order passed by the coordinate Bench of the Tribunal in assessee s own case for AYs 2009-10 2010-11, having identical facts deleting similar addition made by the AO/CIT(A), which order has been affirmed by the Hon ble Delhi High Court [ 2017 (12) TMI 1768 - DELHI HIGH COURT ] Since there is no change in the suo motu disallowance by the assessee as has been made in AYs 2010-11 2011-12, which has been confirmed by the Hon ble Delhi High Court, making disallowance by the AO without recording satisfaction mandatory u/s 14A(2), is not sustainable. - Decided in favour of assessee. Deduction u/s 80IA - Claim rejected as no books of account were maintained nor requirement of audit as contained u/s 80IA (7) was fulfilled in the present case - HELD THAT:- Keeping in view the fact that the identical issue has already been decided by the coordinate Bench of the Tribunal in assessee s own case for AY 2010-11 [ 2018 (8) TMI 979 - ITAT DELHI] - Grounds No.2 to 2.3 raised by the assessee are remitted back to the AO to verify the claim of the assessee made on the basis of the audited accounts and accordingly grant the deduction u/s 80IA in accordance with law. Appeal of the assessee is allowed for statistical purposes.
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2020 (7) TMI 661
Estimation of income - rejection of books of accounts - GP rate estimation - assessee has prayed for filing of the additional evidences which are in the nature of gate passes/ weight slip/ bought notes/ purchase invoices/ copy of accounts which according to him goes to the root of the matter and which could not be filed before the lower authorities - HELD THAT:- As in the present case the Assessee could not lead the required evidence before the lower authorities. We are of the view that the evidences which the assessee has filed now have a material bearing on the issue which is before us. We further find that assessee had also filed additional evidences before the Co-ordinate bench of Tribunal for A.Y. 2011-12 [ 2019 (12) TMI 147 - ITAT DELHI] and the same were admitted and the matter was restored to the file of AO. Ends of justice demands the admission of the additional evidences. We accordingly admitted the same. Since the evidences which have been filed by the Assessee now before us requires verification and examination by the AO, we restore the entire issue back to the file of the AO and direct him to examine the evidences filed by the assessee and examine the same and thereafter decide the issue afresh. Appeal filed by the assessee and Revenue are allowed for statistical purposes
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2020 (7) TMI 660
TP Adjustment - selection of MAM - TNMM or CUP method - HELD THAT:- Assessee s consistent TNMM methodology has been rejected by Ld. TPO without any sound basis. Although the principle of res-judicate are not applicable to Income Tax proceedings, however, the rule of consistency would debar the revenue to change its stand in difference assessment years without any sound basis, facts and circumstances being identical. The said proposition is well supported by the decision of PCIT v/s. Quest Investment Advisors Pvt. Ltd.[ 2018 (7) TMI 479 - BOMBAY HIGH COURT] wherein it has been held that when a principle has been accepted by the Revenue in earlier years as well as in subsequent years then the Revenue is bound by it unless there is a change in law or change in facts therein, which change has to be pointed out in the assessment Order. As application of TNMM method has been accepted by the Tribunal for AYs 2005-06 to 2007-08 and no change in facts or circumstances has been demonstrated before us for this year. Therefore, following the rule of consistency and the cited order of Tribunal in assessee s own case, we hold that TNMM methodology as adopted by the assessee to benchmark the transactions was to be accepted. Since, the margin of the assessee under this method have been shown to be within ALP range, the impugned adjustment stand deleted.
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2020 (7) TMI 659
TP Adjustment - MAM selection - Comparable Uncontrolled Price ( CUP ) method OR Transactional Net Margin Method ( TNMM ) - rejection of CUP method followed by the assessee and holding the TNMM method as the most appropriate method to benchmark the international transactions with AE's - HELD THAT:- We find that the assessee has been following the CUP method for benchmarking the international transactions which is an accepted industry norm in the year under consideration and the same method was also followed by it in earlier years. We find that the Co-ordinate Bench of Tribunal while deciding assessee's appeal for AY 2006-07 2007-08 had on identical facts decided the issue in assessee's favour. Against the order of the Tribunal for AY 2006-07 and AY 2007-08, Revenue had carried the matter before the Hon'ble Delhi Court. The Hon ble High Court [ 2015 (12) TMI 1513 - DELHI HIGH COURT] had dismissed the appeals of the Revenue. We do not find much force in the argument placed by the Revenue. We further find that the aforesaid decision of Hon ble High Court has not been stayed/overruled/set-aside by higher judicial forum. Considering the totality of the aforesaid facts, we are of the view that the ratio of the decision of Hon ble High Court in assessee s own case for A.Y. 2006-07 and 2007-08 would be applicable to the facts of the case in the year under consideration. AO/TPO was not justified in directing the adjustment to the arm s length price. - Decided in favour of assessee. Disallowing setting off of previous years losses claimed by the Assessee in the return of income - HELD THAT:- e. In view of the submissions of the Ld AR, we restore the issue to the file of AO. If the contentions of the assessee are found correct by the AO, then the AO is directed to grant set off of previous years losses in accordance with law. Assessee is also directed to furnish the necessary details as called for by the AO.
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2020 (7) TMI 658
TP Adjustment - Comparable selection - exclusion of comparable company namely International Flavors Fragrances (I) Ltd (IFF) and inclusion of Ultra Industries Ltd (UIL) - TPO proposed to include IFF as a valid comparable company by taking view that the assessee while making TP research for comparable, rejected this company only on the ground of (RPT) related party transaction - HELD THAT:- Hon ble Bombay High Court in CIT Vs PTC Software [ 2016 (9) TMI 1282 - BOMBAY HIGH COURT] while considering the question of law if the Tribunal erred in excluding comparable only on the ground that the said comparable had prepared the financial for the year ending on June against the assessee as on March. Rule 10B(4) of Income tax Rules, are clear and obligates that the data to be used for comparison should be data relating to the same financial year in which the international transaction were entered by the tested party. The contention of the revenue that mandates of Rule 10B can be ignored as difference of three months was also rejected. The case law relied by ld DR for the revenue in Pangea3 Legal Database System (P) Ltd Vs ITO [ 2017 (3) TMI 267 - ITAT MUMBAI] is not helpful to him as the quarter wise accounts for IFF is not available in the financial statements of this comparable. Even otherwise the decision of Jurisdictional High Court is having binding effect. Thus, considering the decision of the jurisdictional High Court, we affirm the order of ld. DRP for exclusion of IFF. In the result the ground No. 1 of revenue s appeal is dismissed. Comparability of UIL - During the TP proceedings the assessee vide its letter dated 29.10.2012 ask to TPO to include this comparable as the data of this company was not available at the time of search. TPO rejected the prayer of the assessee by taking view that FAR (functions performed asset employed and the risk assumed) analysis was not done, and that in previous year this comparable was not taken though this company was appearing the search process of the assessee. DRP directed to include this comparable on the ground that the activities of this comparable is similar to the assessee. We have seen that the ld DRP has considered the import contents of this comparables as well as Synthite Industries and included solely on the basis of activities. Disallowance of bad debts - HELD THAT:- The Hon ble Bombay High Court in CIT Vs Essar Technology Ltd [ 2015 (1) TMI 252 - BOMBAY HIGH COURT] while considering the question of law whether Tribunal was right in allowing the bad debts claimed by the assessee even the same were not offered as income in the earlier years as per the provisions of section 36(2)(1). The Hon ble Court held that the Tribunal did not commit any error in recording a factual finding that in the present case that the bad debt can be written off as irrecoverable, otherwise that would also have gone contrary to the judgment of the Supreme Court delivered in the case of T.R.F. Ltd. v. CIT [ 2010 (2) TMI 211 - SUPREME COURT]. In the result this ground of appeal is allowed.
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2020 (7) TMI 657
Validity of notice issued u/s 153C - whether the document found from the premises of the 3rd party belongs to the assessee as provided under section 153C prior to the amendment therein which is effective from 1stJune 2015? - Document found from the premises of the 3rd party - HELD THAT:- It is transpired that the document found during the search at the place of searched party must belong to the assessee for initiating the proceedings under section 153C of the Act. The word belong used in section 153C requires that there has to be control and possession of the assessee (person other than searched person) on such document even though the assessee is not legal owner. As such the document found in the case on hand from the premises of the 3rd party, the assessee had no control of whatsoever on such document. Therefore in our considered view such document cannot be termed as belonging to the assessee. Once a document does not belong to the assessee as mandated under the provisions of section 153C of the Act, prior to the amendment, does not authorize the AO to initiate the proceedings against the assessee - See PEPSICO INDIA HOLDINGS PRIVATE LIMITED [ 2014 (8) TMI 898 - DELHI HIGH COURT]. There cannot be any question of initiating the proceedings under section 153C of the Act, until and unless the documents found during the course of search from the premises of the 3rd party belongs to the assessee. Whether the amendment brought under the provisions of section 153C where the word belong was replaced with the word pertain is applicable for the year under consideration? - Provisions of section 153C as applicable on the date of search will be applied to the proceedings initiated therein. Thus there remains no ambiguity to the fact that the provisions of section 153C of the Act prior to the amendment therein, will be applicable in the case on hand which requires the AO to arrive at a satisfaction that the documents found from the premises of the 3rd party in the course of search belongs to the assessee. We have already explained the meaning of the word belongs in the preceding paragraph. In view of the above, we are conscious to the fact that the seized material found from the premises of the 3rd party in the course of search does not belong to the assessee. Thus in our considered view the proceedings under section 153C of the Act, cannot be initiated. Addition on account on-money paid against purchase of agricultural land - HELD THAT:- There was no mention/reference of survey No. 1242 in the excel sheet found during the course of search, therefore we are of the view that there cannot be any addition on account of on money. It is because there was no iota of evidence available with the AO suggesting that there was any on money paid by the assessee. Regarding the land bearing survey No. 1223, we note that this impugned survey number was very much mentioned in the excel sheet found from the 3rd party as discussed above. However that information cannot be the basis of making any addition to the total income of the assessee. It is because it does not suggest that any on money has been paid by the assessee. Furthermore it is a piece of information found from the 3rd party which has no dealing of whatsoever with the assessee. Moreover, no fact has been brought on record by the AO except that the relatives of the assessee has purchased some flats property constructed by ADPL which is not sufficient enough to draw any inference against the assessee based on such excel sheet. Thus in the absence of any documentary evidence about the payment of on money, we hold that there cannot be any addition to the total income of the assessee. Case followed JAWAHARBHAI ATMARAM HATHIWALA VERSUS INCOME-TAX OFFICER [ 2009 (10) TMI 900 - ITAT AHMEDABAD].
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2020 (7) TMI 656
Deduction u/s 54 denied - LTCG - Reopening of assessment - entitlement /claim for deduction or exemption denied under income tax statute on the sole ground that no return was filed - Whether this section does not require that the new residential property shall be purchased in the name of the assessee only? - HELD THAT:- It is pertinent to note that the assessee has demonstrated before the AO as well as the CIT(A) that the purchase of property in the name of the son was acquired by the assessee himself through the consideration received from the sale deed of earlier old property. The bank statement and the cheque issued to the builder as well as the confirmation received from the builder demonstrated that the payment was made by the assessee for purchase of new property within the stipulated time as prescribed u/s 54. Though, the assessee is not filed any return and at that stage never claimed Section 54, once the reopening u/s 148 has been issued, the assessee cannot be denied his entitlement /claim for deduction or exemption under income tax statute on the sole ground that no return was filed. The benefit of income tax act and its provisions related to exemption and deduction has to be taken into account while computing the income of the assessee and it is the proper procedure on the part of the Assessing Officer to follow all the aspect of taxation within the corners of Income Tax Act. As regards the name under whom the property is purchased, it can be seen that the son of the assessee is a direct relation and as per case of CIT(A) Vs. Kamal Vahal [ 2013 (1) TMI 401 - DELHI HIGH COURT] where assessee purchased new house in name of his wife, the claim under Section 54 is held valid. Thus, the exemption could not be denied if entire investment had come out of proceeds of old property. - Decided in favour of assessee.
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2020 (7) TMI 655
Condonation of delay in filing the appeal before the CIT(Appeals) - delay of 331 days in filing the appeal - Sufficient cause for delay - HELD THAT:- We are of the opinion that the delay in filing the appeal before the CIT(Appeals) supported with the reasons explained in the Affidavit can be accepted. Further the litigant will not gain by delaying the filing of appeal. We support our view, relying on the decision of the Hon'ble Apex Court in the case of Collector, Land Acquisition Vs. MST Katiji others [ 1987 (2) TMI 61 - SUPREME COURT]. Delay in filing the appeal before the CIT (Appeals) is supported with sufficient cause and pragmatic approach should be considered for condonation of delay. Accordingly, we condone the delay of 331 days in filing the appeal before the CIT (Appeals) and restore the entire disputed issues to the file of CIT (Appeals) to admit the appeal and adjudicate on merits - Appeal of assessee allowed for statistical purposes.
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Customs
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2020 (7) TMI 654
Clandestine Removal - Absolute Confiscation - Silver - Gold - shortage of goods - notification no.GO 2665 (E) in the Gazette - contravention of the provisions of SEZ Act, 2005 read with the provisions of Customs Act, 1962 - demand based on statement of various persons - corroboration of statements - HELD THAT:- Prior to 9.8.2016 when vide notification no.GO 2665 (E) in the Gazette, the Government in exercise of the powers under sub-section (1) of Section 21 of the SEZ Act, notified the offences contained in Sections 111, 113 and 115 etc of the Customs Act, 1962, as offence under the SEZ Act. Thus, prior to 9.8.2016, Section 111 of the Customs Act is not attracted, when admittedly, the incidence of seizure and inspection was on 3/4th August, 2016. Further, a Coordinate Bench of the Tribunal in the case of M/S CHARISMA JEWELLERY PVT LTD., SHEELU MATHAI VERSUS COMMISSIONER OF CUSTOMS, AIRPORT, MUMBAI [ 2016 (8) TMI 178 - CESTAT MUMBAI] under the fact held that one Shri Abhishekh Parikh, who was found carrying gold pieces without valid documents while exiting from SEEPZ - Sub-Economic Zone. The said person had a daily entry pass for M/s.Charishma Jewellery, a unit in SEZ and a permanent entry pass as employee of Diastar Jewellery Pvt. Ltd. The said Abhishekh Parikh had produced a sale invoice issued by a unit situated outside SEZ, which is a group company of Charisma Jewellery. The appellant had given a cogent explanation at the time of seizure and also the said explanation was supported by the statement of Proprietor of Tarkesh Art Jewellery. Further, the statement has been corroborated with cogent evidence of the statement of karigar as regards shortage of silver. Further, the shortage of gold has also been supported by the cogent explanation which has not been found to be untrue. The contention of the urgency to manufacture silver jewellery is also supported by proforma invoice for sale in favour of Sun Shine Ltd., Hong Kong. Appeal allowed - decided in favor of appellant.
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Service Tax
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2020 (7) TMI 653
Valuation - Reverse Charge Mechanism - Clearing and Forwarding service - Goods and Transport Agency service - inclusion of reimbursement of expenses in assessable value - pure agent services - Department was of the view that appellant adopted a novel modus operandi by which it bifurcated the amount received by it from various service recipients under two different category of services i.e. Clearing and Forwarding services and Goods and Transport Agency service - allegation that the appellant had not declared the taxable value correctly as gross receipts as per section 67 of the Finance Act, 1994 for the purpose of payment of Service Tax - period 2007-2008 to 2011-2012. HELD THAT:- So far as the issue pertaining to reimbursement of expenses incurred by the appellant on account of service recipient working as pure agent for his principals, the same is not includable in the assessable value for charging service tax - This view has been expressed by Supreme Court in Union of India vs. Intercontinental Consultants and Technocrats Pvt Ltd. [ 2018 (3) TMI 357 - SUPREME COURT ] . Demand on an amount of ₹ 4,39,65,823/- received by the appellant for using its own truck for providing transportation service to the principal companies for which it was working as Clearing and Forwarding agent - HELD THAT:- The records indicate that the service recipients such as M/s. Hindustan Unilever Ltd. have confirmed payment of service tax on the transportation of goods service provided by the appellant. However, this needs to be verified after detailed examination of the books of accounts and service tax return filed by the service recipient. Thus, this factual position should be examined by the Adjudicating Authority on the basis of records. Appeal allowed by way of remand.
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Central Excise
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2020 (7) TMI 652
Principles of unjust enrichment - Refund alongwith interest - Assistant Commissioner passed order holding that the petitioner was although entitled for refund, but directed that the said amount may be credited in the account of the Consumer Welfare Fund instead of crediting it in the account of the petitioner - HELD THAT:- The presence of the Assistant Commissioner is directed, who had passed the order not refunding the amount to the petitioner, but on the insistence of Mr. Bhatt that better sense may prevail on the officers and amount would be fully paid to the petitioner within 24 hours, we adjourn this matter for day after tomorrow i.e. 29.07.2020. We further provide that the interest of 6% would be payable up to the date when the amount was credited in the account of the Consumer Welfare Fund. However, after that date the petitioner should be entitled to higher rate of interest say 18% till the date of actual payment and the excess amount of interest so paid to be recovered from the officers found responsible for not making payment in time after due inquiry by the Department. The petitioner should be entitled for costs of the petition which could be fixed at ₹ 1,00,000/-. This amount may also be recovered from the erring officers after due enquiry - On the next date i.e. 29.07.2020 in addition to the amount of refund with admissible interest the respondents would come prepared with drafts / cheques for the proposed additional interest and costs. Subject to hearing the counsel for the parties we will pass appropriate orders regarding additional interest and costs. Let this matter be listed on 29.07.2020.
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CST, VAT & Sales Tax
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2020 (7) TMI 651
Concessional rate of tax - Issuance of C-Form - purchase of High Speed Diesel - inter-State purchase - HELD THAT:- The first respondent is directed to dispose of the on-line application dated 03.02.2020 and the subsequent application dated 06.02.2020 sent by registered post by the petitioner, on merits and in accordance with law and also in the light of the aforesaid decisions rendered by this Court, within a period of four weeks from the date of uploading the copy of this order in the website. Petition disposed off.
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