TMI Tax Updates - e-Newsletter
August 29, 2018

Case Laws in this Newsletter:

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

News

1. Prepare blueprint for long-term growth: FM to Banking Sector- High growth rate must be accompanied by strong macroeconomic fundamentals-Insolvency & Bankruptcy Code has redefined the creditor-lender relationship in India- India has achieved unmatched financial inclusion in last four years

Notifications

DGFT

1. 28/2015-2020 - dated 27-8-2018 - FTP

Amendment in Para 3.24 (j) of Chapter-3 of FTP 2015-2020.

Circulars / Instructions / Orders

Customs

1. 126/2018 - dated 21-8-2018

Dealing with cases, where importer / Customs brokers are submitting multiple DPD intimations (72 hours advance intimations) (sometimes from the different Customs Brokers of the same importer) for the same consignments-Reg.

2. 125/2018 - dated 21-8-2018

Procedure to be followed for obtaining unique DPD code to DPD importers -Reg.

3. 124/2018 - dated 20-8-2018

Simplification and rationalization of AEO-T1 Application - reg.

4. 123/2018 - dated 20-8-2018

Dispensing with the requirements of documents being submitted at the time of “Registration” and “Out of Charge” at “DPD/RMS Facilitation Centre” and CFSs in view of implementation of e-sanchit –reg.

Highlights / Catch Notes

Income Tax

• Altering Stock Valuation Method Unjustified Without Reason; Previously Accepted Method Stands Valid According to Assessment.

  Case-Laws - AT : Valuation of closing stock - the action of the AO of changing the method of valuation of closing stock without pointing out any reason for the rejection of valuation of closing stock which was accepted by the department in earlier assessment year, is not justified.
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• No penalty u/s 271D if loans are accepted as genuine in assessment u/s 143(3) by Assessing Officer.

  Case-Laws - AT : Penalty u/s. 271D r.w.s. 269SS - No penalty u/s. 271D can be levied on an assessee where the loans have been accepted in an assessment u/s. 143(3) of the Act made by the Assessing Officer as genuine.
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• Assessing Officer Disallows Long-Term Capital Loss Claim, Finds Share Transactions a Colorable Device to Offset Gains.

  Case-Laws - AT : Disallowance of assessee’s claim of long term capital loss - as per AO purchase and sale of shares was nothing but a colourable device to generate loss to be set off against capital gain - additions confirmed.
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• Petitioner's Declaration Under Income Tax Disclosure Scheme 2016 Accepted After Error Correction and Timely Installments Paid.

  Case-Laws - HC : Income Tax Disclosure Scheme, 2016 (IDS 2016) - Error in the declaration - As soon as the petitioner realised the error, remaining sum was paid. Such payment was also accepted. Further two installments were also deposited well within the time permitted. - Revenue directed not to reject the declaration.
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• ITAT's Majority Order Overturned Due to Lack of Reason for Recalling Decision u/s 254.

  Case-Laws - HC : Power of tribunal recalling an earlier order in exercise of powers for rectification u/s 254 - ITAT, by majority order, recalled the order - No reason was shown by the tribunal in recalling the order - order set aside
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• Appellate Tribunal's Approval of Additional Stock Quantum Based on FCI Certificate Overturned; Case Involves Notional Sales, Unaccounted Purchases.

  Case-Laws - HC : Determination of additional income - notional sales - unaccounted purchases and stock - To the extent that the Appellate Tribunal accepted the quantum of additional stocks on the basis of the certificate issued by the concerned FCI official, such order is unacceptable and is set aside.
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• Subsidy for Machinery Upgrades Under Technology Upgradation Fund Scheme is a Capital Receipt, Not Taxable Income.

  Case-Laws - HC : Nature of subsidy received under the Technology Upgradation Fund Scheme - revenue or capital receipt - The subsidy was clearly for the purpose of upgrading the machinery and plant and for acquiring capital assets - Cannot be taxed as revenue receipt.
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Customs

• Digital Docs Streamline Customs: No More Physical Submissions at DPD/RMS Centres Thanks to e-Sanchit Implementation.

  Circulars : Dispensing with the requirements of documents being submitted at the time of “Registration” and “Out of Charge” at “DPD/RMS Facilitation Centre” and CFSs in view of implementation of e-sanchit
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• No Penalty u/s 112(a) of Customs Act Due to Lack of Evidence in Tyre Smuggling Case.

  Case-Laws - AT : Penalty u/s 112 (a) of Customs Act, 1962 - Smuggling - In the absence of anything to indicate that appellant played any role in importing tyres in the guise of chappals, the provisions of Section 112 (a) of Customs Act, 1962 are not attracted
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DGFT

• Status Holders' Free Export Limit Changed to 2% of Average Annual Export Realization from Previous Rs One Crore Cap.

  Notifications : The limit of Rs One Crore per year for exports on free of cost exports basis for export promotion for Status Holders is removed and is made 2% of average annual export realization during preceding three licensing years with immediate effect
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Corporate Law

• ICSI Member Found Guilty of Professional Misconduct for Negligence in Filing Form-32; Disciplinary Action Upheld.

  Case-Laws - Other : Guilty of professional or other misconduct - Member of ICSI - basic controversy regarding filing of Form-32 - Appellant was negligent in filing Form-32 on both the occasions and failed to exercise diligence required on his part - order of sentence as awarded by the Disciplinary Committee maintained.
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Service Tax

• Illiterate taxpayer pays due service tax, interest, and partial penalty, resulting in remaining penalty being waived.

  Case-Laws - AT : Penalty - The appellant is an illiterate person, not knowing the provisions of the Service Tax but he paid the Service Tax along with the interest and 25% of the penalty, the remaining penalty on appellant set aside.
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• Free Supplies Excluded from Taxable Value in Construction Services; No Benefit to Service Provider Under Tax Rules.

  Case-Laws - AT : The value of goods and materials supplied free of cost by a service recipient to the provider of the taxable construction service, being neither monetary or non-monetary consideration paid by or flowing from the service recipient, accruing to the benefit of service provider, would be outside the taxable value or the gross amount charged under service tax.
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• SEZ Unit's Service Tax Refund Claim Under Review Due to Ambiguity in Retainership Service Details and Tax Clarity.

  Case-Laws - AT : SEZ Unit - Refund claim - There is no service in the nature of “retainership service” - Unless the nature of the service rendered is clear and the service tax paid is also clear, it cannot be determined whether the appellant in this case will be entitled to refund of service tax or not.
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• Entity Under Societies Act, 1860 Classified as Commercial Coaching Center for Service Tax Compliance.

  Case-Laws - AT : Commercial coaching or training centre services - assessee were registered under the Societies Act, 1860 - appellant is covered under the commercial coaching and training centre services.
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• CENVAT Credit Demand on Tippers Time-Barred Due to Lack of Fraudulent Intent; No Suppression or Misstatement Found.

  Case-Laws - AT : CENVAT credit on the tippers - the demand is hit by limitation as there is no suppression, mis-statement of facts with an intention to evade duty, while declaring that they availed the CENVAT credit of Central Excise Duty paid on tippers, compressors and other machineries of motor vehicles - demand hit by limitation.
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• Refund Denial for Unutilized Service Tax on Exported Services Deemed Unjustified u/r 6A Due to Missing Docs.

  Case-Laws - AT : Refund of unutilized service tax paid - output services that are exported in terms of Rule 6A of the Service Tax Rules - Denial of refund on the ground that certain documents have not been filed. - Rejection of refund not justified.
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Central Excise

• Rebate Claims u/r 18: Must File Within One Year, Comply with Section 11B Procedures.

  Case-Laws - CGOVT : Rebate claim - condition of filing rebate claim within 1 year is squarely applicable to the rebate of duty when dealt [with] by Assistant/Deputy Commissioner of a Division under Rule 18 - Thus Section 11B and Rule 18 are interlinked and Rule 18 is not independent from Section 11B.
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• CRCA Sheets Not Exempt: Denied Classification as Mobile Handset Parts Under Central Excise Regulations.

  Case-Laws - AT : Benefitof exemption - CRCA sheets, howsoever cut to size and used for manufacture of handset and coin operated phones, cannot be considered as parts, components and accessories of mobile handset including cellular phones - benefit rightly denied.
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• Rule 6 of CENVAT Credit Rules not applicable: Credit allowed for inputs used solely in dutiable goods manufacturing.

  Case-Laws - AT : CENVAT Credit - common inputs used in manufacturing activity of dutiable products as well as exempt products - appellant has in fact gone a step ahead and had availed CENVAT credit attributable to those inputs which are used for manufacturing of dutiable goods only - Credit cannot be denied by applying Rule 6 of CCR.
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VAT

• Penalty Imposed for Incomplete Form-38: Missing Bill/Invoice Number Leads to Dismissal of Special Leave Petition.

  Case-Laws - SC : Levy of penalty - it was found that Form-38 being carried with the goods was not complete in various respects and certain columns specially Column No. 6 relating to the Bill/ Invoice number was unfilled. - SLP of the assessee dismissed.
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Case Laws:

• Income Tax

• 2018 (8) TMI 1490
  Valuation of closing stock - assessee is a company engaged in the business of iron ore mining and export - consistency in following the same method of valuation of closing stock - Held that:- As relying on OSWAL WOOLLEN MILLS LTD. VERSUS INCOME TAX OFFICER [1986 (7) TMI 162 - ITAT CHANDIGARH] Assessee applied same principle for valuation of opening stock, which was applied for valuation of closing stock and further same method was being applied consistently even in all subsequent years - Assessing Officer had not given any logical basis for not accepting valuation of work-in-progress - if AO objected to valuation of closing stock, he should have also objected to opening stock on same basis, which was not done - thus the action of the AO of changing the method of valuation of closing stock without pointing out any reason for the rejection of valuation of closing stock which was accepted by the department in earlier assessment year, is not justified. The calculation mistake done by the AO has been corrected by the Ld.CIT(A). The assessee has been consistently following the same method of valuation of closing stock year after year. The AO has been accepting this method in the earlier years also. Hence even on the ground of consistency, the order of the AO on this issue had to be reversed. - Decided in favour of assessee. Disallowance of depreciation on amortized wagon cost - company purchased railway rakes under Wagons Investment Scheme (“WIS”) from Indian Railways - AO disallowed the depreciation on the ground that Indian Railways is the bonafide owner of the wagons and hence the assessee is not entitled to the claim depreciation - Held that:- We find that under the scheme, the assessee would be the owner of the wagon in question. Unless he is the owner of the wagon, the question of transfer of ownership from the assessee to the Railways does not arise. case of CIT vs Rajasthan Syntex Ltd [2008 (5) TMI 276 - RAJASTHAN HIGH COURT] not applicable - In the case on hand, under sub-clause 5.5 of the agreement of WIS, no lease rent whatsoever is to be paid. The assessee has claimed depreciation @ 15% u/s 32 of the Act. Ld.CIT(A) has rightly allowed the claim of the assessee. We uphold the same and dismiss this ground of appeal of the Revenue. - Decided in favour of assessee.

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• 2018 (8) TMI 1489
  Penalty u/s. 271D r.w.s. 269SS - assessee has accepted the loan/deposit of Rs. 1. 70 crores in contravention of the provisions of section 269SS - loans accepted in an assessment u/s. 143(3) - Held that:- No penalty u/s. 271D can be levied on an assessee where the loans have been accepted in an assessment u/s. 143(3) of the Act made by the Assessing Officer as genuine. We find that in the instant case, in an assessment u/s. 143(3)of the Act, the Assessing Officer has accepted the loan as genuine and, therefore we find no good reason to interfere with the order of the CIT(A), which is hereby confirmed and ground of the revenue is dismissed. See OMEC ENGINEERS VERSUS COMMISSIONER OF INCOME-TAX [2007 (9) TMI 27 - HIGH COURT , JHARKHAND] and COMMISSIONER OF INCOME-TAX VERSUS SAINI MEDICAL STORE. [2005 (2) TMI 72 - PUNJAB AND HARYANA HIGH COURT] - decided against revenue

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• 2018 (8) TMI 1488
  Disallowance made u/s 14A r.w.r. 8D - Held that:- As per the settled principle of law as it stands now, in absence of any exempt income earned in a particular assessment year, no disallowance u/s.14A can be made. Therefore, only because the assessee itself has made some disallowance under section.14A of the Act, it cannot be utilized to his detriment as there is no estoppel against law. Thus we direct the Assessing Officer to examine assessee’s claim that in the relevant previous year, it has not earned any exempt income. In case the aforesaid claim of the assessee is found to be correct; no disallowance under section 14A can be made. TDS u/s 194J - Disallowance u/s.40(a)(ia) - payment was made by the assessee towards terminal charges for accessing online information and data base of Bloomberg Data Services Pvt. Ltd - Held that:- The payment made by the assessee not being in the nature of fee for technical services as per the provision of the 194J of the Act, it does not require deduction of tax at source. Therefore, we delete the disallowance made by the Assessing Officer and sustained by the Commissioner (Appeals). Levy of interest under section. 234C - Held that:- Levy of interest under section 234C of the ACT has to be made on the basis of income returned by the assessee. Moreover, there is no clarity on what basis the Assessing Officer has charged interest under section 234C as there is huge difference between the computation of interest under section 234C of the assessee and the Assessing Officer. Therefore, we are inclined to restore this issue to the Assessing Officer for verifying assessee’s claim after due opportunity of being heard. This ground is allowed for statistical purposes.

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• 2018 (8) TMI 1487
  Disallowance of assessee’s claim of long term capital loss - as per AO purchase and sale of shares was nothing but a colourable device to generate loss to be set off against capital gain - Held that:- The same property was the subject matter of two distinct transactions – one with QIPL and the other with CRPL, though ultimately the property was sold to QIPL. This means that when the assessee received part consideration from QIPL, it was well aware that the transaction is going to result into capital gains and to avoid such capital gains liability the assessee used CRPL and VBPL as conduits to generate loss in shares to be set off against the capital gain. Thus, the surrounding circumstances and human probabilities are to be taken into account while considering the evidences emanating from the records. Considering the sequence of events discussed the share transaction is nothing but a sham transaction, a colourable device to avoid capital gains tax liability and, therefore, has to be ignored. The first appellate authority has accepted the transaction without considering the fact that what is ‘apparent’ is not ‘real’ on the facts of the case in hand. We, therefore, set aside the findings of the CIT(A) and restore that of the AO. The assessment order is upheld. The sole ground raised by the Revenue is allowed.

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• 2018 (8) TMI 1486
  Penalty levied u/s. 271(1)(c) - defective notice - assessee was working as Principal of Homeo Medical College, being a Government medical officer, was getting huge income from private practice in the income tax returns filed - assessee did not file return of income for the AY 2002-03 in time but only filed it on 09/04/2003, i.e., after the date of survey - Held that:- As seen from the notice issued u/s. 274 of the Act, the AO has not struck out the irrelevant portion of the notice. In other words, he has not specified whether he is levying penalty for concealment of particulars of income or furnishing of inaccurate particulars of income. As held by the Karnataka High Court in the case of CIT & Anr. vs. M/s. SSA’s Emerald Meadows [2015 (11) TMI 1620 - KARNATAKA HIGH COURT] that the notice issued by the Assessing Officer u/s. 274 r.w.s 271(1)(c) is to be bad in law as it did not specify which limb of section 271(1)(c), the penalty proceedings had been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. This view was confirmed by the Supreme Court in the same case, i.e., CIT & Anr. vs. M/s. SSA’s Emerald Meadows reported in [2016 (8) TMI 1145 - SUPREME COURT] Thus we are inclined to hold that the penalty proceedings initiated by the AO is ab initio void and allow the appeal of the assessee

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• 2018 (8) TMI 1485
  Disallowance u/s. 14A r.w. Rule 8D(2)(iii) - contention of the assessee is that the disallowance u/s. 14A cannot be made beyond the expenditure debited to P & L account in relation to earning of exempt income - Held that:- The total indirect expenditure debited by the assessee to P & L account is to the tune of Rs. 25,78,927/-. The claim of the assessee is expenditure to the tune of Rs. 22,43,620/- is not in relation to earning of exempt income. The expenditure that may be considered for making disallowance u/s. 14A is Rs. 3,35,307/- (Rs.25,78,927/- - Rs. 22,43,620/-). We observe that the assessee had furnished the details of indirect expenditure before the Commissioner of Income Tax (Appeals), however, the Commissioner of Income Tax (Appeals) has not considered the submissions of the assessee on this aspect. We find that in the case of Gillette Group India (P.) Ltd. Vs. Assistant Commissioner of Income Tax [2012 (6) TMI 406 - ITAT DELHI] has restricted the disallowance u/s. 14A to the extent of expenditure debited to P & L account. Similar view has been taken in the case of Income Tax Officer Vs. Pioneer Radio Training Services Pvt. Ltd.[2015 (1) TMI 964 - ITAT DELHI] and in the case of M/s. Search Enviro Ltd. Vs. ACIT [2012 (3) TMI 509 - ITAT MUMBAI] - in principle we agree with the proposition mooted by the ld. AR - the indirect expenditure referred to by the ld. AR needs verification. Accordingly, we deem it appropriate to remit this issue back to the file of Assessing Officer to examine the expenditure relatable to earning exempt income and thereafter made disallowance u/s. 14A accordingly - Decided in favour of assessee for statistical purpose.

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• 2018 (8) TMI 1484
  Addition u/s 68 - proof of genuineness of loan - discharge of onus - Held that:- No defect in the various documentary evidences filed by the assessee to discharge his initial onus could be pointed out by the revenue. The service of notice u/s.133(6) of the Act on the loan creditor proves the existence of the said loan creditor and merely because of not receiving of response from the said loan creditor cannot be taken as an evidence against the assessee. Further in the statement of said Shri Raj Kumar Tharad, neither the name of the said loan creditor nor the name of the assessee is appearing. Thus, the said statement cannot be a basis to draw an adverse inference against the assessee. Thus the initial onus which was on the assessee was duly discharged by the assessee and, thereafter the department could not bring any cogent material on the basis of which, the addition or disallowance made could be sustained. - Additions deleted. - Decided in favour of assessee

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• 2018 (8) TMI 1479
  Income Tax Disclosure Scheme, 2016 (IDS 2016) - Error in the declaration - As soon as the petitioner realised the error, remaining sum was paid. Such payment was also accepted. Further two installments were also deposited well within the time permitted. - Does CBDT have the power to regularise the payments in appropriate cases? - Held that:- Effect of section 191 perhaps would be that tax already paid would become nonrefundable. In other words, the petitioner's entire deposit of tax, surcharge and penalty were nonrefundable and on the other hand, declaration would be treated as nonest that too on account of a genuine bona fide error for a small portion of the installment not been paid for a short time. Under the circumstances, impugned communication dated 18. 9. 2017 is set aside. The respondent shall not reject the petitioner's declaration only on the ground of non payment of installments within time limit. All other conditions of the Scheme would be open for the respondents to verify with respect to which no controversy has been raised before us and we have therefore, not commented upon. The petitioner shall however deposit interest at the rate of 10% per annum for the period of delay in depositing such sum. Decided in favor of assessee.

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• 2018 (8) TMI 1478
  Reopening of assessment - failure to disclose the income from sale of two properties - reason to belief - Held that:- During scrutiny assessment the Assessing Officer had raised queries, inter alia, with respect to such capital gain. In letter dated 24.7.2013, the Assessing Officer asked the assessee to clarify various sales and purchases of the properties which the assessee had undertaken during the relevant period. Additionally, the assessee also asked him to supply the purchase deed, sale deed, mode of payment alongwith supporting evidence. In particular, the Assessing Officer wanted information about the sale of the said two properties. Assessing Officer passed an order of the assessment in which he made no addition on this score. In other words, he accepted the assessee’s computation of capital gain arising out of sale of these two lands. The assertion of the Assessing Officer in the reasons recorded that the assessee had not offered the gain arising out of sale of two lands in the return, is thus palpably wrong. - Decided against the revenue.

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• 2018 (8) TMI 1477
  Power of tribunal recalling an earlier order in exercise of powers for rectification u/s 254 - nature of additional income disclosed - assessee contended that the additional income also arose out of his agriculture operations - ITAT, by majority order, recalled the order - Held that:- Whatever be the correctness of these findings it cannot be stated that the Tribunal arrived at such findings without proper consideration of materials on record. Several issues were presented before the Tribunal and were examined before coming to such specific finding. The Tribunal could not have recalled the entire order under purported exercise of rectification powers. It is well settled through series of judgements of this Court and the Supreme Court that power of rectification are circumscribed with the condition that the same can be exercised for correcting error be of law or facts apparent on record. The jurisdiction to correct errors vested in the Tribunal is not akin to review powers. As noted, the Accountant Member, while showing inclination to exercise rectification powers, had not cited any reason in support of his opinion. Rectification order set aside - Decided in favor of assessee.

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• 2018 (8) TMI 1476
  Reopening of assessment - investment in the real estate - purchase of land in cash - Nil return was accepted without scrutiny u/s 143(1) - during the search u/s 12/133A of another person, various incriminating documents were seized - Held that:- Prima facie, the Assessing Officer has material at his command to form a belief that payments in cash were made not for purchase of land property and these payments were made during the period relevant to the year under consideration. If these facts are ultimately established, the question of taxing the petitioners for such undisclosed investment would immediately arise. Reopening of the assessments therefore cannot be quashed. - Decided against the assessee.

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• 2018 (8) TMI 1475
  Determination of additional income - notional sales - value of the unaccounted purchases made by the assessee - Held that:- CIT(A) found that there was no evidence that the FCI official who had issued the certificate had undertaken any physical verification of the stock at the rice mill of the assessee and the document appeared to have been filled up by the assessee and merely signed by the FCI official. Such part of the order of the Commissioner (Appeals) was unexceptionable and could not have been interfered with by the Appellate Tribunal. To the extent that the Appellate Tribunal accepted the quantum of additional stocks on the basis of the certificate issued by the concerned FCI official, such order is unacceptable and is set aside. The order of the Commissioner (Appeals) in such regard is restored. The additional quantum as discovered during the course of the survey operation will fasten to the assessee. In the circumstances and particularly since the factual findings rendered by the Commissioner (Appeals) as to the quantum of additional stocks have now been restored, the order impugned on the methodology for the ascertainment of the income which escaped assessment would pass muster. The Appellate Tribunal merely directed the gross profit that the additional purchase was capable of generating to be regarded as the additional income for tax to be assessed on such basis. Such view of the Appellate Tribunal does not call for any interference. - Order of ITAT modified. Decided in favor of revenue.

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• 2018 (8) TMI 1474
  Nature of subsidy received under the Technology Upgradation Fund Scheme - revenue or capital receipt - Held that:- The avowed purpose of the scheme was to induce the entrepreneur to undertake investment in modernising the plant and machinery and assets and the objectives of the scheme clearly spelt out such purpose. In the context of the scheme, it could never have been understood to imply that the subsidy was for the purpose of the day-to-day business of the assessee or any entrepreneur qualified to receive it. The subsidy was clearly for the purpose of upgrading the machinery and plant and for acquiring capital assets. - Decided against the revenue.

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• 2018 (8) TMI 1473
  Refund of tax - Rate of TDS - Writ petition - Counsel for the petitioner initially had reservation, but during the course of hearing has agreed to the suggestion given by the counsel for the respondents with hope and trust that there would be independent application of mind by the Commissioner on the facts and circumstances of case without being influenced by the observations on the administrative side. He submits that in case of an adverse order, the petitioner should be given liberty to challenge the order in accordance with law. He also submits that the respondents must adhere to the time schedule. Taking the statements on record, we dispose of the writ petition with liberty to the petitioner, if required and necessary, to challenge the order to be passed by the Commissioner. The Commissioner will adhere to the time schedule of 20 days from today.

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• 2018 (8) TMI 1472
  Rectification of ITAT order u/s 254(2) - Held that:- On being questioned, counsel for the petitioner states that the petitioner would be filing an appeal under Section 260-A of the Act challenging order dated 25th August, 2017. We are not inclined to entertain the present writ petition against the order dated 20th December, 2017 under Section 254 (2) of the Act, leaving it open to the petitioner to raise all contentions and issues in the appeal against the order dated 25th August, 2017. Scope and ambit of interference against an order under Section 254 (2) of the Act is limited and far narrower than in an appeal under Section 260A of the Act. Duplication and multiple proceedings are not required and justified. - Decided against the assessee.

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• Customs

• 2018 (8) TMI 1471
  Penalty u/s 112 (a) of Customs Act, 1962 - Smuggling - automobile tyres were sought to be imported under the guise of chappals - Held that:- Though the shipping line Manager has stated that he was contacting the appellant on his mobile number, it is not indicated in the said statement that it was in respect of the declarations to be made on IGM or in respect of the disputed consignment - It is also to be noted that no role is attributed to the appellant herein and no bill of entry is filed by appellant so as to allege any mis-declaration. In the absence of anything to indicate that appellant played any role in importing tyres in the guise of chappals, the provisions of Section 112 (a) of Customs Act, 1962 are not attracted - appeal allowed - decided in favor of appellant.

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• 2018 (8) TMI 1470
  Benefit of Notification No. 20/2010–CE dated 29.04.2010 - waste and scrap of paper imported by the appellant - Maintainability of appeal - Appealable order - appeal was dismissed summararily on a finding that the appeal has been preferred before him on a note sheet order and it is not an appealable order - Held that:- The lower assessing officer has to pass a speaking order to how he has arrived at conclusion of rejecting the claim of appellant for the benefit of Notification No. 20/2010-CE arrived at - the entire issue needs reconsideration by the Adjudicating Authority - appeal allowed by way of remand.

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• Corporate Laws

• 2018 (8) TMI 1483
  Winding up petition - liquidated damages imposed upon by IOCL for a sum of Rs. 1,70,700/- as the respondent claims that this took place on account of delayed delivery of the goods by the petitioner - Held that:- The only plausible defence appears to be is the liquidated damages imposed upon them by IOCL for a sum of Rs. 1,70,700/- as the respondent claims that this took place on account of delayed delivery of the goods by the petitioner. The petitioner has denied this contention stating that there was no reason or occasion for the petitioner to withhold delivery of goods after having received them from the respondents. It is on instructions of the respondent that the goods were delivered to IOCL. Delivery was affected when instructions were received from the respondent to deliver the goods. Even if we accept the plea of the respondent regarding the imposition of liquidated damages of Rs. 1,70,700/- by IOCL, the fact remains that the respondent remains liable to pay a sum of Rs. 5,71,350/- minus liquidated damages of Rs. 1,70,700/- being a total of Rs. 4,00,650/-. There is no explanation as to why the said amount of Rs. 4,00,650/- has not been paid by the respondent to the petitioner. In my view, the minutes dated October 2013 clearly shows that the respondent has accepted its liability to the above effect. The liability of the respondent to pay its dues does not get washed away by this technical argument. A perusal of the file shows that the petition was filed on 22.10.2013 though it is dated 27.09.2013. The transactions have taken place in September 2012 to June 2013. A statutory notice was sent on 06.08.2013. Even if the petition was filed in September 2013, it does not do away with the liability of the respondent. The plea is completely without merit In our opinion, the respondent is unable to raise any bona fide dispute regarding the dues of Rs. 4,57,125/- Accordingly, admit the petition and appoint the Official Liquidator attached to this Court as the Provisional Liquidator. He is directed to take over all the assets, books of accounts and records of the respondent-company forthwith. The citations be published in the Delhi editions of the newspapers ‘Statesman’ (English) and ‘Veer Arjun’ (Hindi), as well as in the Delhi Gazette, at least 14 days prior to the next date of hearing. However, in the interest of justice, the above order appointing the Official Liquidator as the Provisional Liquidator shall stand suspended for a period of six weeks in case the respondent made the necessary payment to the petitioner of a sum of Rs. 4,00,650/- with simple interest @ 9% p.a. from the date amount fall due.

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• 2018 (8) TMI 1482
  Reduction of Share Capital - affidavit dated 18.9.2017 of the Respondent No.3 was not considered by the Tribunal - Held that:- Going through the impugned Judgement, we do not find that the important issues as raised by Respondent No.3, Regional Director were considered and discussed. When affidavit by an important authority like Respondent No.3 had been filed public interest required to consider it and not ignore it on technicalities. We need to have that views of NCLT on the points raised by Respondent No.3. From the above it is clear that the Tribunal has not considered the observations/opinion given by the Respondent No.3, Regional Director, Ministry of Corporate Affairs. Respondent No.3 filed his affidavit dated 18.9.2017 either before 20.9.2017 or after 20.9.2017 but the judgement was pronouncement on 4.10.2017. Therefore, it is clear that the affidavit dated 18.9.2017 was filed before 4.10.2017. It was in the interest of all the parties that the Tribunal should have given an opportunity to the parties to make their submissions on the said affidavit complying with the principle of natural justice. The said affidavit was not considered while pronouncing the judgement which was filed with the Tribunal before the pronouncement of judgement on 4.10.2017. In view of the above discussions, we are not giving our judgement/decision on the other various issues/counter issues raised by the parties in the appeal. The impugned order dated 4.10.2017 passed by the Tribunal is set aside. The matter is remanded back to the Tribunal to re-hear the matter, NCLT shall take into consideration the affidavit dated 18.9.2017 of Respondent No.3 and after giving due opportunity to all the parties to argue on the same, decide the Company Petition expeditiously in terms of Section 422 of the Companies Act, 2013. Earlier evidence will also be evidence in the cause. The parties are also given opportunity to argue on the other issues as well before the Tribunal.

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• 2018 (8) TMI 1481
  Scheme of amalgamation - dispensing on aspects mentioned and directions for convening of meetings of creditors of appellant no. 3 - Held that:- We have seen the Scheme of Amalgamation. Only because while filing the first motion, the appellant submitted list of Secured Creditors, we are unable to agree that merely because some of the Secured Creditors of appellant no.3, an ongoing concern have later on been paid, the Scheme as such gets changed. We find that if the learned NCLT was of the view that there is no request in the application for amendment of pleading in the first motion application, it should have in the interest of Justice given opportunity to the applicants to amend the first motion application instead of rejecting the CA. No. 384/2017 on such technical grounds. The impugned order does not show that the various documents filed by the applicants/ appellants were considered. If the impugned order is maintained, the appellants/ original applicants will be put to grave inconvenience and costs as well as delays, which is avoidable in the present set of facts. Pass the following order: (i) The impugned order is quashed and set aside. The matter is remitted back to the learned NCLT. CA no. 384(PB)/ 2017 and CA(CAA)50(PB)/2017 are restored to the file of NCLT, New Delhi. (ii) The learned NCLT should give opportunity to the appellants/ applicants to include pleadings and alternative prayer in the first motion application CA(CAA) no. 50 (PB)/ 2017 requesting for dispensing with calling of meeting of Secured Creditors. (iii) The learned NCLT should give opportunity to the appellants/applicants to include pleadings and alternative prayer in CA no. 384 (PB)/2017 to request for reconvening of meeting of Secured Creditors. (iv) After the appellants/applicants are allowed to amend their pleadings, the learned NCLT should give the appellants/original applicants another opportunity of hearing and may then pass any suitable orders deemed fit.

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• 2018 (8) TMI 1480
  Guilty of professional or other misconduct for not exercising due diligence - Member of ICSI - basic controversy regarding filing of Form-32 - Disciplinary proceedings against company secretary (CS) - Held that:- None of the parties filed the original minute books or the resolution passed which are the subject matter relevant to the filing of two forms i.e. Form-32 filed for the appointment of Shri Bishender Singh as an Additional / Promoter Director and secondly, the form regarding cession of Pramod Khosla and his wife as the Directors of the Company under Section 283(1) (g) of the Companies Act, 1956. In this case, it has been clearly held that the Appellant was negligent in filing Form-32 on both the occasions and failed to exercise diligence required on his part. Also gone through the Written Arguments, filed on behalf of both the parties. We are of the considered view that it is not a case where the professional i.e. the Appellant was expected to act as an investigator. What was required for him was to only see the contents of the resolution passed and relied upon in support of Form-32 himself and in case, it was shown to him in minute books, than he should have been very categorical as to who was in possession of minute books shown to him containing the resolutions in question. However, in this regard, no assistance has been provided to us. The Disciplinary Committee after the remand of the matter has gone through the entire controversy in detail, given cogent reasons in holding that the Appellant was Guilty of Professional Misconduct under item (7) of Part-I of the Second Schedule of the Act in as much as he did not exercise due diligence while certifying the two Forms-32 on both the occasions and as such he was grossly negligent in the conduct of his professional duties. We accordingly dismiss the appeal while maintaining the order of sentence as awarded by the Disciplinary Committee in this case, which according to us is not excessive in any manner. We, however, make it clear that since there is a dispute of management by the two sides of Khosla family and parties are already before various forums, observations made by us against the Appellant who is a professional will not be used against him in other litigations.

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• Service Tax

• 2018 (8) TMI 1468
  Demand of Interest and penalty - wrongful availment of CENVAT credit - the appellants have reversed the CENVAT credit availed on being pointed out by the audit - Held that:- The assessee has reversed the service tax credit of Rs. 7,95,153/- vide CENVAT register document No.100116412 dated 23.2.2016 - Further, the appellant has also submitted a Chartered Accountant certificate which is on record and the Chartered Accountant has certified the reversal of credit of Rs. 7,95,153/- in the month of February, 2016 and he has also certified the extract of CENVAT credit register as well as the Service Tax returns for the period October 2015 to March 2016. In the case of Commissioner of Central Excise vs. Bill Forge Pvt. Ltd. [2011 (4) TMI 969 - KARNATAKA HIGH COURT], the Hon’ble High Court of Karnataka has held that if the credit availed is reversed without utilization then interest and penalty cannot be levied. Interest and penalty not levied - appeal allowed - decided in favor of appellant.

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• 2018 (8) TMI 1467
  Penalty - appellant paid the Service Tax along with the interest and 25% of the penalty - Business Auxiliary Service - Held that:- It is a fact that the appellants has not collected the Service Tax from the service recipients - Further, the entire Service Tax along with interest was paid by the appellants partly before the issue of SCN and partly before the passing of Order-in-Original by the Assistant Commissioner. The appellant is an illiterate person, not knowing the provisions of the Service Tax but he paid the Service Tax along with the interest and 25% of the penalty, the remaining penalty on appellant set aside. Appeal allowed - decided in favor of appellant.

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• 2018 (8) TMI 1466
  Utilization of CENVAT Credit - CENVAT credit utilized by the assessee for paying service tax on GTA service - Rule 3(4)(e) of CCR - Held that:- The issue is squarely covered by the decision of the Larger Bench of this Tribunal in the case of Panchmahal Steel Ltd. [2014 (4) TMI 490 - CESTAT AHMEDABAD], where it was held that wherein the Larger Bench has considered decisions of various High Courts and held that credit availed for manufacturing activities could be used for payment of service tax on GTA service even if input services or capital goods were not utilized for providing taxable services inasmuch as there was no bar / restriction for such utilization of CENVAT account under Rule 3(4)(e) of the CCR. There is no bar in taking credit of service tax paid on GTA service and reutilizing the same for payment of service tax - appeal allowed - decided in favor of appellant.

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• 2018 (8) TMI 1465
  Levy of tax - amount collected as fees for coaching rendered in teaching the System of Speedy calculation of mathematics called ABACUS - Held that:- The identical issue in respect of the same appellant for the subsequent period November, 2007 to September, 2008 is decided in their favour in the case of M/S ABACUS BRAIN STUDY (P) LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE (APPEALS), HYDERABAD [2011 (1) TMI 833 - CESTAT, BANGALORE], where it was held that there is a specific exemption provided for recreational training institute and vocational training institute. In our view, the activities of the appellant would more appropriately be classified as recreational. Service tax not levied - appeal allowed - decided in favor of appellant.

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• 2018 (8) TMI 1464
  Restoration of appeal - appeal was dismissed on the ground of non-compliance of the cost ordered - Held that:- The total demand confirmed is approximately Rs. 51,79,564/-, as against the demand of Rs. 42,17,148/-. It transpires from the records, that the appellant had deposited Rs. 16,19,750/- during the proceedings and further Rs. 10,00,000/- in February, 2013. These all are evidenced by the Tribunal. Since, the appellant has deposited almost Rs. 26,00,000/- against the confirmation of Rs. 51,79,564/- and contesting the issue on merits, it is considered that the amount deposited by the appellant herein is enough to hear and dispose of appeal on merits - appeal restored.

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• 2018 (8) TMI 1463
  Rectification of mistake - case of applicant is that Bench has not considered the detailed written submissions made by them in respect of the issue being beyond the scope of the show cause notice as also hit by limitation - Held that:- The appellant is seeking to argue the entire matter on the ground of application for rectification of mistake which is unacceptable - ROM application dismissed.

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• 2018 (8) TMI 1462
  Rectification of Mistake - the first para indicates that both the appeals are in respect of the same appellant is incorrect as the appeals are filed by Deloitte Support Services India Pvt Ltd and Deloitte Tax Services India Pvt Ltd. - Held that:- It is an error apparent on the face of the record in Final Order dated 16.11.2017, in which the Tribunal disposed of two appeals and both the appeals are of different assesses - ROM application allowed. ROM - the para 9 has been mis-interpreted by the authorities. In the said para, Bench is not stating that matter is remanded back for classification purposes, but only stated the fact that the classification of the services is not in dispute - Held that:- It is qualified by the next sentence wherein, Bench has clearly recorded that output services are exported is not being disputed, the question on eligibility of the refund does not arise - there is no error on the face of the records on this point - ROM application dismissed. ROM applications disposed off.

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• 2018 (8) TMI 1461
  Combined hearing of two SCNs, one issued by DGCEI and another issued by the Commissionerate - It is the case of the Revenue in the ground of appeal that the adjudicating authority should not have passed this order - Held that:- On perusal of the said order dated 28.12.2011 and considering the submissions, we find that this Appeal No.ST/470/2009 has become infructuous - appeal dismissed.

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• 2018 (8) TMI 1460
  Cum tax benefit - demand of service tax liability from the gross amount - Held that:- Very same issue was contested on merits in M/S UNITECH POWER TRANSMISSION LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX, VISAKHAPATNAM - I [2018 (5) TMI 1130 - CESTAT HYDERABAD], where the Bench relying upon the retrospective amendment by Notification No. 45/2010- ST set aside the Order-in-Original in toto and allowed their appeal. Since the entire Order-in-Original is set aside on merits, the appeal filed by the Revenue needs to be rejected - appeal dismissed - decided against appellant.

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• 2018 (8) TMI 1459
  Demand of differential service tax - demand based upon the audit conducted at APSPDCL Cuddapah - material used for repairing of transformers - case of appellant is that VAT is paid in material component - Time Limitation - Held that:- In the appeal memoranda the appellant has not annexed any evidences to show that there is vat payment on the materials used for repairing of transformers of APSPDCL - further, on limitation show cause notice issued by reviewing authority is not time barred as it as per Section 84. Appeal dismissed - decided against appellant.

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• 2018 (8) TMI 1458
  Supply of Tangible Goods Service - Extended period of Limitation - additional consideration received on account of receipt of HSD at concessional rate - proviso to Section 73(1) of the Finance Act, 1994 - demand of Service Tax with Interest and penalty. Quantification of demand - benefit of cum tax value as gross value - Held that:- In respect of M/s Kala Mines and Minerals they have charged taxable value on the basis of the “statement of machinery working hours” after deducting the TDS and HSD supplied at concessional rate. Thus, the liability of payment of service tax is not in dispute - the Noticee is liable to pay Service Tax of Rs. 88,49,572/- on the gross payment of Rs. 8,05,22,947/- received by them during the period May 2008 to March 2013. Invocation of extended period - Penalty - Held that:- The fact about receipt of payment from KMM is not in dispute. They have also during the relevant period failed to file the ST-3 returns in the manner as prescribed thereby contravening the provisions of Section 70 of Chapter V of Finance Act read with Rule 7 of the Service Tax Rules, 994. They have also suppressed the fact about provision of taxable service and value of taxable service so provided by them with the intention to evade payment of Service Tax - extended period of limitation as provided by proviso to Section 73(1) of Finance Act 1994 has been correctly invoked in the present case - Also since all the ingredients for imposing penalty under section 78 are present in the matter the imposition of penalty equivalent to the quantum of tax evaded cannot be faulted with. Demand of Service Tax on concessional supply of HSD to the Appellant - Held that:- The issue in this aspect is squarely covered by the decision of larger bench in case of Bhayana Builders [2013 (9) TMI 294 - CESTAT NEW DELHI (LB)], where it was held that The value of goods and materials supplied free of cost by a service recipient to the provider of the taxable construction service, being neither monetary or non-monetary consideration paid by or flowing from the service recipient, accruing to the benefit of service provider, would be outside the taxable value or the gross amount charged, within the meaning of the later expression in Section 67 of the Finance Act, 1994 - the demand of tax in respect of such concessional supply of HSD is dropped and also the penalty amount received to that extent. Appeal allowed in part.

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• 2018 (8) TMI 1457
  Imposition of penalty - non-payment of Service Tax - GTA Services - reverse charge mechanism - period 01.01.2005 to 31.03.2006 - Held that:- The discharge of service tax liability on GTA services under reverse charge mechanism introduced from 01.01.2005 was challenged at various levels had created confusion in the Trade. It is to be noted the TRU Circular dated 17.12.2004 also states of non-imposition of penalty if the services rendered by GTA up to 31.12.2004. Penalties set aside by invoking section 80 - appeal allowed - decided in favor of appellant.

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• 2018 (8) TMI 1456
  SEZ Unit - Refund claim - service tax paid on services used for the authorized operations of SEZ unit as approved by the unit approval committee - rejection of amount paid as retainership fee on the ground that the impugned service is not mentioned in the list approved by the UAC. Held that:- There is no service in the nature of “retainership service”. Retainership, as is understood in the market parlance, is a form of payment for service; either the service provider gets paid for each item of work or he gets paid on a periodical basis certain amount (called as retainership) so that he can make his services available as and when required. The retainership could be for any service such as consultancy, lawyers, technical experts, etc. Unless the nature of the service rendered is clear and the service tax paid is also clear, it cannot be determined whether the appellant in this case will be entitled to refund of service tax or not - this factual matter which needs to be verified - appeal allowed by way of remand.

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• 2018 (8) TMI 1455
  Rectification of mistake - only error that is sought to be rectified by this application is that the name of the appellant is wrongly mentioned on the first page of the order. It is pointed out that appellant is "NCS Industries Pvt Ltd" while it is mentioned as "NCS Storage Systems Pvt Ltd" - Held that:- The error as pointed out by the Revenue is apparent on the face of the records. Application for rectification of mistake is allowed and the name of the appellant is to be read as "NCS Industries Pvt Ltd" instead of "NCS Storage Systems Pvt Ltd". ROM Application allowed.

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• 2018 (8) TMI 1454
  Commercial coaching or training centre services - assessee were registered under the Societies Act, 1860 - first appellate authority has held that if a service provider is registered under the Societies Act, 1860, the said service provider will not get covered under the head “commercial coaching and training centre” - Held that:- The first appellate authority has not touched the merits of the case which were put up in the grounds of appeal before him and has disposed of the appeal only on this point - while upholding that the appellant is covered under the commercial coaching and training centre services, the matter remanded back to the first appellate authority to reconsider the issue afresh on various other grounds of appeal raised by the respondent before him on merits as well as on limitation. Appeal allowed by way of remand.

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• 2018 (8) TMI 1453
  CENVAT credit on the tippers, during the period April, 2006 to September, 2006 - Held that:- The appellant had not declared that they had availed CENVAT credit on tippers, Komatsu PC, Drill Machine, Portable Compressor, etc. - the appellant had been informing the authorities about the availment of CENVAT credit on these kinds of goods and motor vehicles in their monthly returns regularly - the demand is hit by limitation as there is no suppression, mis-statement of facts with an intention to evade duty, while declaring that they availed the CENVAT credit of Central Excise Duty paid on tippers, compressors and other machineries of motor vehicles - demand hit by limitation. CENVAT Credit on tippers, compressors, etc - Held that:- Tribunal in the case of Ganta Ramanaiah Naidu [2009 (9) TMI 261 - CESTAT, BANGALORE] has specifically held that CENVAT credit on such motor vehicles is excluded from the benefit of CENVAT credit as capital goods - the view expressed by the Bench in the case of Ganta Ramaiah Naidu in identical set of facts for denial of CENVAT credit is a correct view - credit allowed. Demand of CENVAT credit on capital goods for the entire amount as being 100% of the duty paid - Held that:- The appellant had not availed the entire CENVAT credit of Rs. 1,96,33,250/- during the period in question. Hence, demanding and confirming the entire amount seems to be incorrect and since this particular plea of the appellant, that they are eligible for 50% of CENVAT credit and balance 50% subsequently is not dealt with by the adjudicating authority in the impugned order, the matter requires re-examination - appeal allowed by way of remand. Demand of Interest - Held that:- The interest liability arises on the amount confirmed and upheld i.e., to the tune of Rs. 3,28,80,899/- and reject the prayers of appellant on interest issue. Penalty - Held that:- Since the entire issue involved in this case is regarding the interpretation of eligibility to avail CENVAT credit on the tippers which are used for rendering output services, the appellant herein could be under bona fide belief that they are eligible to avail the CENVAT credit - penalties imposed on the appellant are unwarranted and is set aside. Appeal allowed by way of remand.

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• 2018 (8) TMI 1452
  Refund of CENVAT credit - export of services - Rule 5 of CCR - refund rejected on Accommodation service and other services on the ground that the same is used for personal consumption - Held that:- As regards accomodation services, the said services are entitled for CENVAT credit as the invoices enclosed herein with the appeal memoranda indicate that these amounts are for the lease/rent of the premises which are in the name of the appellant herein - as regards other services, the said services are in respect of the output services and appellant is able to provide satisfactory explanation to the Tribunal - refund allowed. Refund claim - Registration Service - denial on the ground of nexus - Held that:- This amount is in no way connected with the services rendered by the appellant, accordingly the same stands rejected - refund rejected. Refund claim - excess rejection on registration service of INR 2,26,791/- - Invoice not submitted in case of maintenance services - Invoice submitted only for part of the amount in case of services received from NSK shipping and logistics - Non-submission of the signed invoice in case of services received form Engineer’s Syndicate International - Excess credit claimed in case of rent paid to Kundur Vikram Reddy - Held that:- These claims of the appellant needs reconsideration by the adjudicating authority as it is rejected only on the ground that documents were not submitted and there is a calculation error on the amount claimed as refund - matters remanded back. Appeal disposed off.

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• 2018 (8) TMI 1438
  Refund of unutilized service tax paid - output services that are exported in terms of Rule 6A of the Service Tax Rules - Denial of refund on the ground that certain documents have not been filed. Held that:- The services of consulting engineering have been rendered from Bangalore unit where the appellant has been registered as service provider. It is also a fact that the registered office of the company situated at Pune and they have a centralized registration for Pune office and has also obtained ISD registration at Pune w.e.f. 11/05/2008 and copy of these registrations have been placed on record - It is also clear that these input services were received at Bangalore unit but the payments have been made from Pune bank account which is the Head Office of the appellant. It is also a fact that FIRCs have been received at Pune for the services rendered from Bangalore unit of the appellant. In the case of Mahindra & Mahindra Ltd. [2015 (1) TMI 1086 - CESTAT MUMBAI], it was observed by the Tribunal that when the invoices in the name of the company were issued in the name of branch office and the payments were accounted at the Head Office having ISD registration, then there is no legal infirmity. Rejection of refund not justified - appeal allowed - decided in favor of appellant.

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• Central Excise

• 2018 (8) TMI 1451
  CENVAT credit - service tax paid on sales commission - input service or not - The Tribunal disposed of all appeals with liberty to both sides to approach the Tribunal soon after the verdict of the Hon'ble High Court in the pending appeal against the Division Bench judgement of this Tribunal in case of Essar Steel India Limited [2016 (4) TMI 232 - CESTAT AHMEDABAD] filed by the Revenue. Held that:- The Tribunal is a creation of statute. Section 35C(1) of the the Central Excise Act, mandates the Tribunal to dispose of the appeals on merits. It was simply not open for the Tribunal to jettison the litigation in this manner - It will be open for the Revenue /Department to file note/ application for fixing early date of hearing of Tax Appeal No.444 of 2016, as the decision on the said appeal would have direct bearing in pending appeals before the learned Tribunal, which are reported to be more than 100. Proceedings are remanded to the Tribunal for further consideration and disposal in accordance with law - appeal allowed.

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• 2018 (8) TMI 1450
  Rebate claim - Rule 18 of the Central Excise Rules, 2002, read with N/N. 19/2004-C.E. (N.T.), dated 6-9-2004 - bulk drugs exported out of India for Excise duty paid by the Principal Manufacturer - denial of rebate on the ground that the goods were not directly exported from the factory of the manufacturer as stipulated in the Notification - rejection also on the ground of time limitation. Held that:- It is absolutely clear that there is no dispute about the fact that the goods are not exported directly from the factory of the principal manufacturer or the factory of the applicant. Whereas, as per condition 2(a) of the Notification No. 19/2004, the rebate of the duty shall be available only if the goods are exported directly from the factory or warehouse except as otherwise permitted by the C.B.E. & C. by a general or special order - apart from the condition that the goods should be cleared directly from a factory or warehouse for the export thereof, the first and the foremost condition specified at Para 2(a) of N/N. 19/2004 is that the excisable goods must be exported after payment of duty and thus should be established that the goods exported are duty paid. The applicant has failed to establish that the duty paid goods cleared from the factory of the principal manufacturer have only been exported from their place in Gurugram - the rebate of duty in this case has not been rejected merely on the ground that the goods were not exported directly from the factory of the principal manufacturer, but it has also been rejected for the reason that the applicant has not been able to establish that the goods exported by them from a place other than the place of manufacture are the same which were originally cleared by the principal manufacturer from its factory on payment of central excise duty. Applicability of time limitation of one year to the rebate claims filed under Rule 18 and N/N. 19/2004 - The Government finds no legal force in this argument as for refunds and rebate of duty [under] Section 11B of the Central Excise Act is directly dealing statutory provision and it is clearly mandated therein that the application for refund of duty is to be filed with the Assistant/Deputy Commissioner of Central Excise before expiry of one year from the relevant date - by combined reading of both Section 11B [of Central Excise Act, 1944] and Rule 18 of Central Excise Rules, 2002 it cannot be contemplated that Rule 18 is independent from Section 11B of the Act. Since the time limitation of 1 year is expressly specified in Section 11B and as per this section refund includes rebate of duty, the condition of filing rebate claim within 1 year is squarely applicable to the rebate of duty when dealt [with] by Assistant/Deputy Commissioner of a Division under Rule 18 - Thus Section 11B and Rule 18 are interlinked and Rule 18 is not independent from Section 11B. Revision application dismissed.

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• 2018 (8) TMI 1449
  Penalty u/s 11A(1)(c) of Central Excise Act, 1944 - reversal of wrongly availed CENVAT Credit - Held that:- The appellants has reversed the amount before the issuance of SCN and therefore, the Department should not have issued the SCN itself - reliance placed in the case of RADIALL INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, SERVICE TAX AND CUSTOMS, BANGALORE [2017 (6) TMI 201 - CESTAT BANGALORE], where it was held that the appellant reversed the CENVAT credit on being pointed out by the audit party along with interest and also informed the department about the same before the issue of SCN. In such a situation, as per Sub-section (2B) of Section 11A, the adjudicating authority should not have issued the SCN - appeal allowed - decided in favor of appellant.

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• 2018 (8) TMI 1448
  CENVAT Credit - appellant during the period under dispute had undertaken E-1 sales; had supplied goods from manufacturing premises directly to the customer’s site - Trading activity or not? - Rule 6(3)(i) of Cenvat Credit Rules 2004 - whether the trading activity undertook by the appellant for the period July 2010 to March 2015 is an exempted service? Held that:- Rule 6 casted an obligation on the manufacturer or purchaser to reverse such of the cenvat credit if the input on which the cenvat credit availed is used in or in relation to the manufacture of exempted goods and its clearance upto the place of removal or for provision of exempted services which was introduced w.e.f. 01.04.2011. This being prospective in nature, the amended provision cannot be held to be applicable for the first period, i.e., July 2010 to March 2011 - demand set aside. For the second period i.e. April 2011 to June 2012, the definition of ‘exempted service’ was amended by including trading activity, but however, in terms of Rule 6, the value of non-excisable goods shall be the invoice/agreement/contract value and where such value is not available, the same to be determined by using reasonable means consistent with the principles of valuation. In the third period i.e. July 2012 to March 2015, the appellant has submitted that it had followed Rule 6(3A) and reversed an amount of Rs. 5,72,476/-, which again has neither been countered nor disbelieved by the adjudicating authority - for the third period the situation prevailing during first period applies and therefore, as there was no mechanism in the statute to evaluate an exempted service, there is no question of any liability or obligation. Appeal allowed in part.

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• 2018 (8) TMI 1447
  Restoration of appeal - the day when the matter was called i.e. on 21.08.2017, ld. Counsel for the appellant was dealing the matter in other Court and could not appear before the Bench - Held that:- Initially the matter was listed on 18.04.2017, 06.06.2017 and 14.07.2017. On all occasions, adjournment was sought by the appellant and on 21.08.2017 when the matter was called none appeared on behalf of the applicant. Therefore, the conduct of the appellant shows that the appellant is not interested to pursue the matter on merit - also, while passing the order this Tribunal has considered the submissions on merit. The appellant relied on the decision of the Tribunal in the case of Ballarpur Industries Ltd. [2018 (5) TMI 384 - CESTAT MUMBAI]. In the said case, this Tribunal has not passed the order on merit, therefore, the Tribunal remanded the matter. The facts of that case are different from the facts of the present case. The application for restoration of appeal dismissed.

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• 2018 (8) TMI 1446
  CENVAT Credit - duty paying documents - denial of CENVAT credit on the imported goods based on certain discrepancy found in the bills of entry against which the appellant procured imported goods - Held that:- It is not disputed by the Revenue that the appellant has not received the goods in their factory against the bills of entry in question. When the bills of entry are present against which the appellant has imported the goods and paid duty thereon, mere mention of PAN number of the Director will not disentitle the appellant to take CENVAT credit. After adjustment of cenvat credit if any duty liability arises, the appellant is liable to pay the same alongwith interest - No penalty imposable on the appellants. Appeal disposed off.

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• 2018 (8) TMI 1445
  Rectification of mistake - Valuation - goods which were cleared for supply and paint contract - valuation as per Rule 11 of Valuation Rules or not? - Held that:- The arguments put forth by the Learned Consultant today are seeking to argue the entire cases, which are not mandated for rectifications of mistake applications can be made only when there is an error apparent on the face of the record - in this case, the applications made, seek to be argue the entire cases, we find that, these applications are do not merit any indulgence - ROM application dismissed.

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• 2018 (8) TMI 1444
  Valuation - P or P Medicaments cleared during the period July, 2002 to March, 2005 - value at which M/s PD sells the said Medicaments in the market - value of free supply of machinery, raw material and packing material is not considered - Held that:- It is specifically recorded by the adjudicating authority that the genuineness of the transaction between the respondent and the said PD is not doubted in as much there is no allegation in the show cause notice that debit notes were fake and the show cause notice has not challenged the said debit notes, a finding not effectively countered by Revenue in appeal. The adjudicating authority was correct in relying upon the agreement executed by the respondent (PD) for manufacturing of P or P Medicaments on principal to principal basis, in discharging the Central Excise duty on the value which is arrived based upon cost of production (+) profit margin as is decided by the Apex Court in the case of Pawan Biscuits [1991 (1) TMI 249 - CEGAT, NEW DELHI] - the impugned order is correct and legal - appeal dismissed - decided against appellant.

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• 2018 (8) TMI 1443
  Benefit of N/N. 06/2006-CE dated 01.03.2006 as amended - CRCA sheets obtained without payment of duty - Held that:- The condition attached in the Serial No. 31 of Notification is that procedures of Rules should be followed - the Lower Authorities were correct to hold that CRCA sheets, howsoever cut to size and used for manufacture of handset and coin operated phones, cannot be considered as parts, components and accessories of mobile handset including cellular phones - benefit rightly denied. The benefit of notification if it is not available at the first instant following the procedures laid down in the said Rules, will not entitle the appellant herein the exemption of the duty paid on CRCA sheets. Appeal dismissed - decided against appellant.

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• 2018 (8) TMI 1442
  Activity of fabrication of trusses at the site of Visakhapatnam Steel Plant - demand of duty with penalty - the show cause notice dated 31.01.1990 is demanding Central Excise Duty and seeks to impose a penalty for the activity of fabrication of trusses at the site of Visakhapatnam Steel Plant - Held that:- It is the case of the appellant that the show cause notice has not demanded any duty from them post August, 1989 and the original authority has confirmed the demands for the period of 6 months. Even appeal of the assessee is liable to be rejected as the adjudicating authority has correctly recorded and held that the duty demanded for the period 6 months prior to the date of show cause notice needs to be confirmed because show cause notice itself does not indicate the exact amount of duty for the period - the assessee’s appeal also lacks merit and demand for the period of 6 months from the date of issue of show cause notice is liable to be upheld. Penalty - Rule 9(2) r/w Rule 173 of the erstwhile Central Excise Rules, 1944 - Held that:- The penalty needs to be set aside as the entire issue is regarding classification of the trusses fabricated and is a settled law that penalty need not be imposed, if the issue is of classification - penalty set aside. Appeal allowed in part.

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• 2018 (8) TMI 1441
  SSI Exemption - N/N. 08/2003-CE dated 01.03.2003 - exclusion of value of exemption goods cleared under N/N. 05/2006-CE - Held that:- This Bench in appellant own case has rejected the contentions of appellant that for calculating the aggregate value of clearances under Notification No. 08/2003, the value of exempted goods under Notification 05/2006 should not be included - decided against appellant. Demand of duty on the waste and scrap - Held that:- The First Appellate Authority has not remanded the matter for coming to a conclusion considering various submissions of the assessee - In our considered view, in the facts and circumstances of this case, it is a correct conclusion reached by the First Appellate Authority. Appeal disposed off.

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• 2018 (8) TMI 1440
  CENVAT Credit - common inputs used in manufacturing activity of dutiable products as well as exempt products - Rule 6 of the CENVAT Credit Rules, 2004 - maintenance of separate records - It is the submission of appellant herein that he has in fact gone a step ahead and had availed CENVAT credit attributable to those inputs which are used for manufacturing of dutiable goods - Held that:- If assessee is required to maintain meticulous records of the consumption of materials used for manufacturing of bulk drugs and drug intermediates, we do not find any reason to hold that consumption of inputs for the manufacturing of dutiable goods needs to be done in a different way. It can be seen from the provisions of Rule 6 that the entire emphasis of the said provisions are for non-availment of CENVAT credit attributable to the inputs consumed in the manufacturing of exempted goods, the procedure mentioned in Rule 6(3), envisages one of the ways of maintaining separate accounts for receipt of consumption of inputs for dutiable and exempted goods - the system adopted by the appellant is also resulting in bifurcated availment of credit only in respect of the inputs used in the manufacturing of dutiable goods, which needs to be accepted. Similar/identical issue came up before the Tribunal in the case of IPCA Laboratories Ltd [2015 (10) TMI 2325 - CESTAT NEW DELHI] wherein the Bench held that the appellant therein having not taken and foregone the CENVAT credit attributable to the quantum of the input services based upon the turnover of the exempted products cannot be faulted with. Appeal allowed - decided in favor of appellant.

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• 2018 (8) TMI 1439
  Pipes cleared for various projects - benefit of N/N. 6/2002 dated 01.03.2002 as amended - Case of Revenue is that the pipes are not used for setting up of water treatment plant but used for distribution of water beyond first storage point - Held that:- The condition attached to such exemption is that the assessee needs to produce certificate issued by the Collector/District Magistrate/Deputy Commissioner of District in which the plant is located - on perusal of said certificate produced, it is found that the said certificates clearly indicated that they were issued as required under N/N. 6/2006 dated 01.03.2006 and/or N/N. 6/2007 dated 01.03.2007 - the said factual findings are also not effectively controverted by the Revenue in their grounds of appeal - appeal dismissed - decided against revenue.

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• CST, VAT & Sales Tax

• 2018 (8) TMI 1437
  Levy of penalty - it was found that Form-38 being carried with the goods was not complete in various respects and certain columns specially Column No. 6 relating to the Bill/ Invoice number was unfilled. - Held that:- We do not find any legal and valid ground for interference. The Special Leave Petition is dismissed.

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• 2018 (8) TMI 1436
  Detention of goods with vehicle - power to detain the vehicle - Section 59 of the Act - Held that:- The subject matter of this Writ Petition is covered by the order passed by this Court in Lakshrni Tanker Service Versus The Assistant Commercial Tax Officer [2016 (7) TMI 1466 - TELANGANA AND HYDERABAD HIGH COURT], where the writ petition is disposed of directing the respondents to release the vehicle and the goods forthwith - following the same, the present writ petition also disposed off.

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• Indian Laws

• 2018 (8) TMI 1469
  Insurance policy - Examination of Arbitration agreement - insertion of sub-section 6A in Section 11 of the Act - Arbitration and Conciliation Act, 1966 - Whether clause 7 of the subject Insurance Policy dated 5th September, 2007 posits unequivocal expression of the intention of arbitration or is hedged with a conditionality? Held that:- From the line of authorities, it is clear that the arbitration clause has to be interpreted strictly. The subject clause 7 which is in pari materia to clause 13 of the policy considered by a three-Judge Bench in Oriental Insurance Company Limited [2018 (5) TMI 327 - SUPREME COURT OF INDIA], is a conditional expression of intent. Such an arbitration clause will get activated or kindled only if the dispute between the parties is limited to the quantum to be paid under the policy. The liability should be unequivocally admitted by the insurer. That is the precondition and sine qua non for triggering the arbitration clause - an arbitration clause would enliven or invigorate only if the insurer admits or accepts its liability under or in respect of the concerned policy. Whether the communication sent on 21st April, 2011 falls in the excepted category of repudiation and denial of liability in toto or has the effect of acceptance of liability by the insurer under or in respect of the policy and limited to disputation of quantum? - Held that:- The High Court has made no effort to examine this aspect at all. It only reproduced clause 7 of the policy - the plea taken by the appellants is of denial of its liability to indemnify the loss as claimed by the JV, which falls in the excepted category, thereby making the arbitration clause ineffective and incapable of being enforced, if not non-existent. It is not actuated so as to make a reference to arbitration. In other words, the plea of the appellants is about falling in an excepted category and non-arbitrable matter within the meaning of the opening part of clause 7 and as re-stated in the second paragraph of the same clause. The dispute in question is non-arbitrable and respondent Nos.1 2 ought to have resorted to the remedy of a suit. The plea of respondent Nos.1 2 about the final repudiation expressed by the appellants vide communication dated 17th April, 2017 will be of no avail. Appeal allowed.

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