TMI Tax Updates - e-Newsletter
August 24, 2017

Case Laws in this Newsletter:

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

Highlights / Catch Notes

• Income Tax:

  Addition u/s 69C - CIT(A) confined the addition to only 5% of the amount spent on purchases based on past record of profits - as the provision of Section 69C is not mandatory in nature, the AO has full discretion either to add or not to add the unexplained expenditure in the income of the assessee based upon sound judicial principles - HC
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• Income Tax:

  Exemption u/s 10(26B) - The assessee which is financed and established by the Government for promoting the interest of the members of the scheduled tribes living in the Lakshadweep Islands, is entitled to the benefit of section 10(26B)
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• Income Tax:

  Claim of deduction u/s 80IB - There is inextricable link between the manufacturing activity, payment of Central Excise Duty and its refund. - deduction allowed.
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• Income Tax:

  The payments made by the assessee towards AMC for pest control did not involve any professional or technical services, but as definitely there was a contract of work, therefore, the assessee had rightly deducted tax at source u/s. 194C, and could not be brought within the sweep of Section 194J.
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• Income Tax:

  TDS u/s. 194J - as ‘Web Hosting Charges’ can safely be construed as a facility which is provided to facilitate hosting of a website, therefore, the fee provided by the assessee for availing such service cannot be characterized as a ‘as a fee for technical service’ - No TDS liability.
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• Income Tax:

  Eligibility for claiming deduction u/s. 80P - fulfillment of principal objective of providing agricultural credits to members - a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969 is entitled to the benefit of deduction u/s. 80P(2)
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• Customs:

  Anti-dumping duty - request for Sunset Review (SSR) turned down - there would be irretrievable injustice given the fact that on the expiry of the day, (i.e. tomorrow midnight), the initiation of review would be rendered impossible- HC
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• Customs:

  Claim of Duty Drawback - Period of limitation - the shipping bill itself cannot be construed to be an application for drawback within the meaning of Rule 5(1) of the Rules of 1995 - HC
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• Service Tax:

  Reverse charge mechanism - the appellant cannot be held as a service recipient since foreign broadcaster is engaged in up-linking signals to a satellite outside India and down-linking of signals is done by MSOs/COs in India and appellant technically does not receive any broadcasting service
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• Service Tax:

  CENVAT credit - activity of trading - Rule 6 (3) of CCR, 2004 - The Revenue’s appeal will succeed to an extent of reversal of cenvat credit for normal period along with applicable interest
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• VAT:

  Concessional rate of tax - CST - Such goods, which were purchased for a particular type of end use, have been sold away to the registered dealer and hence, this petitioner is liable to make payment of tax under Central Sales Tax Act at the rate of 10% and not at the concessional rate of 4%. - HC
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Articles

• GOOD NEWS FOR COMMERCE GRADUATES (GOODS AND SERVICE TAX PRACTITIONER)
• Refund in GST - Applicability and Procedure
• All about Imports under GST

Notifications

• GST

• 23/2017 - dated 22-8-2017 - UTGST Rate
  Seeks to amend notification No. 17/2017-UTT(R) to make ECO responsible for payment of GST on services provided by way of house-keeping such as plumbing, carpentering etc

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• 22/2017 - dated 22-8-2017 - UTGST Rate
  Seeks to amend notification No. 13/2017-UTT(R) to amend RCM provisions for GTA and to insert explanation for LLP

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• GST - States

• 19/2017 - dated 18-8-2017 - Karnataka SGST
  Reduction of Rate of tax on Tractor Parts.

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• 02-A/2017 - dated 17-8-2017 - Karnataka SGST
  Enrolment on Goods and Service Tax Practitioner.

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• 01-E/2017 - dated 17-8-2017 - Karnataka SGST
  Condition and Extension of time for filing FORM GSTR-3B.

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• 01-D/2017 - dated 8-8-2017 - Karnataka SGST
  Time perriod for filing of details in FORM GSTR-3.

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• 01-C/2017 - dated 8-8-2017 - Karnataka SGST
  Time perriod for filing of GSTR-3B.

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• 01-B/2017) - dated 8-8-2017 - Karnataka SGST
  Time perriod for filing of details of Inward supplies in FORM GSTR-2.

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• 01-A/2017 - dated 8-8-2017 - Karnataka SGST
  Time perriod for filing of details of Outward supplies in FORM GSTR-1.

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• 04-B/2017 - dated 1-8-2017 - Karnataka SGST
  The Karnataka Goods and Services Tax (Second Amendment) Rules, 2017.

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• FD 48 CSL 2017 - dated 29-7-2017 - Karnataka SGST
  Corrigendum to Notification No.FD 48 CSL 2017 (01/2017) dated 29th June, 2017.

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• 01/2017-GST - dated 22-7-2017 - Karnataka SGST
  Extension of Filing of FORM GST CMP -01 -reg

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• FD 48 CSL 2017 - dated 1-7-2017 - Karnataka SGST
  Corrigendum to Notification No FD 48 CSL 2017(1/2017) Dated 29/06/2017.

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• G.O. (P) No. 79/2017/TAXES - dated 30-6-2017 - Kerala SGST
  The Kerala Goods and Services Tax Rules, 2017.

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• 01/2017 - dated 8-8-2017 - Nagaland SGST
  Time limit for filing details in FORM GSTR-3

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• FIN/REV-3/GST/1/08 (Pt-1) “W” - dated 6-7-2017 - Nagaland SGST
  Amendment of Notification (New entry in Schedule-I of GST rates) - F.NO.FIN/REV-3/GST/1/08 (Pt-1) “D” dated the 30th June 2017.

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• FIN/REV-3/GST/1/08 (Pt-1) “V” - dated 6-7-2017 - Nagaland SGST
  Rate of interest per Annum

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• S.R.O. No. 345/2017 - dated 27-7-2017 - Orissa SGST
  The Odisha Goods and Services Tax (Third Amendment) Rules, 2017.

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• S.R.O. No. 342/2017 - dated 26-7-2017 - Orissa SGST
  The Odisha Goods and Services Tax (Second Amendment) Rules, 2017.

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• G.O.Ms. No. 27/CT/2017-18 - dated 18-8-2017 - Puducherry SGST
  The Puducherry Goods and Services Tax (Fifth Amendment) Rules, 2017.

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• G.O.Ms. No. 19/2017-Puducherry, GST (Rate) - dated 18-8-2017 - Puducherry SGST
  Seeks to reduce CGST rate on specified parts of tractors from 14% to 9% - Tractors Parts.

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• F. No. 3240/CTD/GST/2017/2 - dated 18-8-2017 - Puducherry SGST
  Seeks to notify the date and conditions for filing the return in FORM GSTR-3B for the month of July, 2017

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• G.S.R.026/P.A.5/2017/S.164/Amd.(2)/2017 - dated 18-7-2017 - Punjab SGST
  The Punjab Goods and Services Tax (Second Amendment) Rules, 2017.

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• CHD/0092/2015-2017 - dated 6-7-2017 - Punjab SGST
  CORRIGENDUM - Punjab Goods and Services Tax Act, 2017 - Schedule III

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• F.No.12(56)/FD/Tax/2017-80 - dated 22-8-2017 - Rajasthan SGST
  Amendment in the Notification No. F.12(56)FD/Tax/2017-Pt-I-55 dated the 29th June, 2017. - to make electronic commerce operator responsible for payment of GST on services provided by way of house-keeping such as plumbing, carpentering etc.

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• F.No.12(56)/FD/Tax/2017-79 - dated 22-8-2017 - Rajasthan SGST
  Amendment in notification no F.12(56)FD/Tax/2017-Pt-I-51 dated 29/06/2017 to amend Reverse Charge Mechanism provisions for GTA, explanation for LLP.

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• F.No.12(56)/FD/Tax/2017-78 - dated 22-8-2017 - Rajasthan SGST
  Amendment in the Notification No F.12(56)FD/Tax/2017-Pt-I-50 dated 29/06/2017 to exempt services provided by Fair Price Shops, FIFA Under17, substitute RWCIS and PMFBY for MNAIS and NAIS, explanation for LLP.

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• F.No.12(56)/FD/Tax/2017-77 - dated 22-8-2017 - Rajasthan SGST
  Amendment in notification no F.12(56)FD/Tax/2017-Pt-I-49 dated 29/06/2017 - To reduce SGST rate on specified supplies, option to GTA and motorcab service providers to avail full ITC and discharge SGST at 6%

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• F.No.17(131)/ACCT/GST/2017/2344 - dated 17-8-2017 - Rajasthan SGST
  Notifying Last Date of fiing of GSTR-3B.

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• Indian Laws

• No. L-3(4)/Reg-L.P./2017-18/CCI - dated 8-8-2017 - Indian Law
  Competition Commission of India (Lesser Penalty) Amendment Regulations, 2017

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Circulars / Instructions / Orders

• GST - States - CIRCULAR NO. 07/2017-18 - dated 18-7-2017
  Deduction of Tax at Source (TDS) in respect of works contract executed prior to 30-06-2017 for which payments to be made from 01-07-2017 onwards and tax rate applicable for TDS.
• GST - States - WM-10(31)/2017 - dated 4-7-2017
  Impact of GST on unsold stock of pre-packaged commodities -reg.
• DGFT - 17/2015-2020 - dated 22-8-2017
  Harrnonising MEIS Schedule in the Appendix 38 (Table-2) with ITC (HS), 2017

News

• GST on Selling of space for advertisement in print media – Clarification regarding.

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• NITI Aayog calls for applications for ‘Mentor India’

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• Not considering ban on ₹ 2,000 notes: FM

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• RBI to issue ₹ 200 notes: FinMin

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• Cabinet gives in-principle approval for Public Sector Banks to amalgamate through an Alternative Mechanism (AM)

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• Cabinet approves Closure of loss making Bharat Wagon and Engineering Company

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• Cabinet approves New Central Sector Scheme - "Pradhan Mantri Kisan Sampada Yojana"

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• Cabinet approves MoU between India and Nepal on Drug Demand Reduction and Prevention of Illicit Trafficking in Narcotic Drugs and Psychotropic Substances and precursor chemicals and related matters

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• RBI Reference Rate for US $

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Case Laws:

• Income Tax

• 2017 (8) TMI 859
  Claim for deduction of lease rent - allowable in assessment year wherein the dispute relating to lease rent has attained finality OR wherein the lease rent was fixed by the Government - Held that:- We are of the view that having regard to the nature of issue involved which is a mixed question of law and fact, it would be just and proper to remand the case to the Tribunal for deciding the issue afresh on merits. The need to remand the case to the Tribunal, has occasioned because firstly, the question as to whether the fixation of rent and its payment is statutory or contractual and, if so, its effect while claiming deduction under the Income Tax Act and, if so, in which year of assessment is a mixed question of law and fact. Secondly, it was neither decided by any of the authorities below and nor by the Tribunal and the High Court. It may be that since the Revenue itself did not raise it before the authorities below and raised it for the first time before this Court by simply placing reliance on the provisions of the Act and the two Rules mentioned above, this Court cannot decide the same in this appeal, for the first time for want of factual material and legal issues attached to it. In order to decide the issue of deduction, the nature of fixation of rent, its payment, recovery etc. and whether it is statutory or contractual, has some bearing over the question. It is also clear that the respondent did not get any chance to meet this submission before the courts/authorities below. It is for these reasons, we are of the view that the matter needs to be remanded to the Tribunal for its proper adjudication.

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• 2017 (8) TMI 858
  Addition u/s 69C - CIT(A) confined the addition to only 5% of the amount spent on purchases based on past record of profits - sufficient good cause from submitting the explanation to justify the expenditure Held that:- In the facts and circumstances of the present case, the assessee could not submit the explanation within the time allowed due to his death and the heirs were unable to explain the same as they had no knowledge of the business of their deceased father. The assessee and his heirs were prevented for sufficient good cause from submitting the explanation to justify the expenditure or its source. One cannot loose sight of the fact that in situations where the proprietor of the business dies and his heirs are not in business or are not connected with the business of the deceased they may not be in a position to furnish any explanation about the business. There may be cases where they may be living and serving outside and are totally unconnected with the business of the deceased. Therefore, it is to meet such type of contingency that the legislature in its wisdom has conferred a discretionary jurisdiction upon the Assessing Officer to add or not to add such unexplained expenditure in the income of the deceased even if there is no explanation. It is the most appropriate case where such a discretion ought to have been exercised by the Assessing Authority in favour of the assessee by not adding the unexplained expenditure in the income of the assessee inasmuch as the assessee could not furnish the explanation for reason beyond his control. The question answered in favour of the assessee and against the department and it is held that as the provision of Section 69C of the Act is not mandatory in nature, the Assessing Authority has full discretion either to add or not to add the unexplained expenditure in the income of the assessee based upon sound judicial principles and therefore, the Tribunal has not committed any error of law in affirming the order of the C.I.T. (Appeals) by which the addition under Section 69C of the Act has been confined to only 5% of the expenditure.

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• 2017 (8) TMI 857
  Allowable business expenditure - kickback payment or commission payment - kickbacks demanded by Iraq Government and under this method certain levies were imposed - Held that:- The sum and substance of the lengthy discussion in the Tribunal's order is that even if what is alleged by the Assessing Officer and relying upon the report is taken as true and correct, still, the participation of the assessee was not established and proved. The assessee was not found to have made any kickbacks or payment of that nature which reached the Iraq Government and through the channels indicated in the Volcker Committee Report. There was no material of this nature in possession of the Assessing Officer against the assessee. It is in these circumstances that the Tribunal concluded, and essentially in the peculiar facts of the case of the assessee, that the assessee has not incurred any expenditure for any purpose which is an offence or which is prohibited by law. The essential ingredients of explanation below Sub-Section 1 of Section 37, therefore, were not attracted to the Assessee's payment made to M/s. Galala & Company in Jordon. This is a finding of fact and based on the material placed before the Tribunal. We do not think that the Tribunal committed any error of law apparent on the face on record in reversing the view of the Assessing Officer and the order of the first Appellate Authority confirming it. We have carefully perused the appeal paper book with the assistance of Shri. Pinto and we do not think that the present Appeals of the Revenue raise any substantial questions of law.

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• 2017 (8) TMI 856
  Admitted on the following substantial questions of law. “1) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that, indirect expenses which were not directly relatable to the power units had to be reduced in arriving at the profits of the power units for the purpose of computing deducting under section 80IA of the Act? 2) Whether on the facts and in the circumstances of the case and in law, the Tribunal ought to have adjudicated the Appellant's claim for deduction under Section 80JJA of the Act? 3) Whether on the facts and in the circumstances of the case and in law, the Tribunal ought to have adjudicated the Appellant's claim for deduction under Section 80IA in respect of the integrated power unit No.6 of the Act? 4) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that, Profit on sale of Investments as well as Profit on sale of fixed assets should not be excluded in the computation of book profits under MAT provisions?”

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• 2017 (8) TMI 855
  Reopening of assessment - benefit of the DTAA between India and UAE disclosure - Held that:- In the present case whilst taking the impugned action, we find that there are no specific reasons recorded what was the material which was not truthfully disclosed. As pointed out herein above, the fact that the petitioner was claiming the benefit of the DTAA between India and UAE would clearly disclose that at the relevant time the requirement of period of residence in UAE was not necessary. Whilst completing the regular assessment the queries sought by the Assessing Officer were answered by the petitioner and accordingly, being satisfied, the regular assessment came to be completed. In this background, whilst the action on the part of the respondents-Revenue is a change of opinion, it cannot be the reason for reopening the assessment under Section 148 of the said Act. In such circumstances, we find that the question of reopening the assessment under Section 148 of the said Act would not at all be justified. - Decided in favour of assessee.

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• 2017 (8) TMI 854
  Inordinate delay of 887 days in re-filing the appeal - budgetary constraints of the Department which delayed payment of the differential court fees as a result of the Court Fees Delhi Amendment Act, 2012 which came into force on 1st August 2012 - Held that:- The first ground is entirely unconvincing. Much prior to the initial filing of the appeal, the Court Fees Act applicable to Delhi stood amended. Practice directions issued by the Court pertaining to filing of soft copies of the paper books in tax matters - Held that:- Second ground, again sufficient advance notice had been given to the litigants and Advocates about the filing of soft copies of the paper books. Further, the Registry of the Court had made appropriate arrangements for scanning services at the filing counters to facilitate the making of soft copies so that the inconvenience if any caused to the Advocates and the litigants is minimised. In any event the change could not have entailed a delay of more than two years. Change in the panel of standing counsel - Held that:- It is not possible to accept that no one followed up on the filing of appeals and allowed a period of more than two years to elapse before the appeal could be re-filed. The Department has a cell in the High Court which is under the supervision of a Deputy CIT. He ought to be keeping track of the filing of appeals and should be able to know if any appeal entrusted to the panel counsel for filing has not been listed even once before the Court for a long time. aAplication for condonation of the delay of 887 days in re-filing the appeal is dismissed.

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• 2017 (8) TMI 853
  Condonation of delay in re-filing the appeal - reasons for delay - change of Standing Counsel for the Department and the failure by the earlier counsel to inform the Department about the appeal lying in defect - Held that:- This explanation does not impress the Court. It is not possible to accept that no one in the Department followed up on the filing of appeals and allowed a period of more than three years to elapse before the appeal could be re-filed. The Department has a cell in the High Court which is under the supervision of a Deputy CIT. He ought to be keeping track of the filing of appeals and should be able to know if any appeal entrusted to the panel counsel for filing has not been listed even once before the Court for a long time. Practice directions issued by this Court for e-filing of the appeals - Held that:- As already been observed by this Court in several orders, the practice directions were issued after consultation with the bar and after giving sufficient time for the bar to get acquainted with the requirement of e-filing. Additionally, the Court has also provided scanning machines at the filing counter so that no difficulty is caused to the bar for switching over to the system of e-filing. In any event, the delay of over three years on this ground is wholly unacceptable. Not persuaded to condone the extraordinary delay of 1145 days in re-filing the appeal.

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• 2017 (8) TMI 852
  Expenditure incurred in connection with the issue of FCCB - nature of expenditure - revenue or capital expenditure - Held that:- Expenditure incurred in connection with the issue of FCCB is deductible as revenue expenditure. TDS u/s 195 - Disallowance u/s. 40(a)(i) - non-deduction of tax at source from certain payments - Held that:- We notice that the Ld CIT(A) has accepted the contentions of the assessee and accordingly deleted the disallowance made u/s 40(a)(i) of the Act. We also notice that the assessing officer has made the disallowance in a mechanical manner without examining the nature of payments made to USA companies. No material to contradict the submissions made by the assessee was furnished before us. Hence we have no other option, but to confirm the order passed by Ld CIT(A) on this issue. Disallowance to be made under clause (f) of Explanation-1 to section 115JB for addition u/s 14A - Held that:- In view of the decision rendered by the Special bench of the Tribunal in the case of Vireet Investment (P) Ltd.(2017 (6) TMI 1124 - ITAT DELHI) AO was not justified in adding the amount computed under section 14A of the Act to meet the requirement of clause (f) of Explanation-1 to section 115JB of the Act. We further noticed that the learned CIT(A) has computed the amount incurred for earning exempt income for the purpose of section 115JB at 10% of the dividend income. Considering the volume of dividend and quantum of addition of ₹ 9.22 crores, in our view the same appears to be reasonable. Accordingly, we uphold the order passed by the learned CIT(A) on this issue.

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• 2017 (8) TMI 851
  Mark-to-Market’ losses arising on revaluation of forward contract agreements on the closing date of accounting year - Held that:- he assessee is into the business of import and export of diamonds and restate foreign denominated assets and liabilities at year-end in Indian rupees and recognize resultant profit or gain in the profit & loss account. This accounting methodology is consistently being followed by the assessee and further the same accounting treatment has been given to assets as well as liabilities. The Ld. CIT(A) has noted that the assessee has recognized gain in similar fashion for ₹ 331.86 Lacs in the impugned AY. The foreign exchange contracts have been entered into by the assessee to hedge against the foreign exchange risk arising against import / export transactions carried out by the assessee. It is also an admitted fact that quantum of foreign exchange contracts stands fully covered by the underlying business assets i.e. Sundry Debtors. Therefore, on facts and circumstances, we find that Ld. CIT(A) has clinched the issued in the right perspective. The matter stood in assessee’s favor by several judicial pronouncements as rightly observed by Ld. CIT(A). Foreign currency forward contracts have expired in the next assessment year when actual loss on these transactions has been ascertained. Therefore, in principal, while upholding the decision of Ld. CIT(A), we deem it fit to restore the matter back to the file of Ld. AO for limited purpose of verifying the fact that the actual resultant loss on forward contracts has first been adjusted from the loss claimed by the assessee in the impugned AY and resultant gain, if any, has been offered to tax and there is no double deduction of the losses. The assessee is directed to provide the requisite information / documents to substantiate his claim in this regard failing which the Ld. AO shall be at liberty to decide the matter on the basis of material available on record.

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• 2017 (8) TMI 850
  Capital Gains - Determination of total sales consideration of the lease rights allotted in the land - applicability of provisions of the Section 50C - issue of cost of acquisition (COA) of residential plots - Held that:- AO has completed the assessment u/s. 144/147 of the Act. Further find force in the contention of the Ld. Counsel of the assessee that Ld. CIT(A) has not fully adjudicated the grounds of appeal and also not considered the Written Submissions filed before him and decided the issue against the assessee without considering the same. I further find that assessee has filed the small Paper Book containing pages 1 to 101 in which he filed the copy of written submissions before the ITAT, copy of documents filed with CIT(A) i.e. written submissions (including supporting documents/ annexures); copy of assessment order in case of Sh. Rishipal; documents in relation to share holding (copy of shareholding pattern, joint and individual bank statement). Ld. CIT(A) while considering the appeal of the assessee has not considered the documentary evidences filed by the assessee before him and also not commented upon the written submissions in his impugned order. In view of the above, it is of the considered opinion, that the aforesaid documents needs to be examined at the level of the AO, therefore, in the interest of justice, set aside the issue in dispute to the file of the AO to consider the same, afresh under the law, after giving adequate opportunity of being heard to the assessee and after appreciating the documents filed in the shape of Paper Book, as aforesaid. Assessee is also directed to fully cooperate with the AO and did not take any unnecessary adjournment.

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• 2017 (8) TMI 849
  Eligibility to claim u/s. 10(26B) - proof of promoting the interest of the members of the scheduled tribes - Held that:- Section 10(26B) was inserted by the Finance Act, 1980 as provides for exemption from income tax to any body, institution or association wholly financed by the Central or a State Government, or to a statutory corporation, established for promoting the interests of the members of the Scheduled Castes and/or the Scheduled Tribes. A close reading of the Section 10(26B) also makes it clear that the object for which a statutory corporation, or any other body, association or institution is created is the crucial aspect for determining the eligibility for availing benefit u/s. 10(26B). AO and the CIT(A) wrongly assumed that the activities carried on by the assessee-company are not for the benefit of the scheduled tribes inhabiting the Lakshadweep Islands. According to us, the paramount consideration for eligibility u/s. 10(26B) is to examine the primary objective for establishment of assessee whether it is for promoting the interest of the scheduled tribes or not. If the Government undertaking is established for promoting the interest of scheduled tribes, it would be entitled to the benefit of Section 10(26B) of the Act. In the instant case, apart from the object of creation of the assessee company, being for development and upliftment of the scheduled tribes inhabiting the Lakshadweep Islands, it activities are also directly and indirectly, promoting the interest of the members of the scheduled tribes. The assessee which is financed and established by the Government for promoting the interest of the members of the scheduled tribes living in the Lakshadweep Islands, is entitled to the benefit of section 10(26B) of the I.T. Act. - Decided in favour of assessee.

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• 2017 (8) TMI 848
  Claim of deduction u/s 80IB - denial of claim on the ground of the last year that the assessee was not manufacturing DG sets at Jammu Unit - Held that:- The process flow chart of manufacturing of DG sets filed by the assessee exhaustively describes the manufacturing process which involves three stages i.e. manufacturing of canopy of DG sets, manufacturing of DG set and manufacturing of AMF panel which also includes drilling, cutting acoustic foam pasting, fixing of electrical items, drilling of mounting plate fixing of switch gear, load testing, sound testing etc. The process of manufacturing DG sets does not involve mere ascending of parts but is actually a manufacturing process resulting in the manufacture of new product from the raw materials by giving them new properties. The CIT(A) has gone through the details of plant and machinery and also the copies of bills relating to the purchase of the same filed by the assessee. The CIT(A) has also given clear finding that the Assessing Officer has picked out and highlighted only those machines which are used for lifting and shifting work and ascending on the DG set and ignored the other machines used by the assessee for various purposes deployed by the assessee in its manufacturing process. After careful consideration, the CIT(A) held that the assessee is entitled to claim deduction u/s 80 IB of the Act. There is no need to interfere with the detailed finding on record given by the CIT(A) TDS u/s 194C - addition u/s 40(a) (ia) - Held that:- The provisions of Section 194C (a) does not become applicable in the instant ase because the assessee is an individual being the proprietor of M/s GSP Power Projects and M/s Cromwell Industries with the Assessment Year involved under reference is 2007-08 i.e after 1/6/2007 since for the year under consideration no liability for deduction of TDS u/s 194C (1) is attracted in the present case. The Assessing Officer’s attempt in disallowing the amount u/s 40(a)(ia) is unwarranted. There is no need to interfere with the said findings. Therefore, this ground of appeal for Assessment Year 2007-08 taken by the Revenue is dismissed. Excise Duty refund - Held that:- CIT(A) has rightly relied upon the Hon'ble Supreme Court decision in case of Liberty India [2009 (8) TMI 63 - SUPREME COURT] wherein it is held that the payment f Central Excise Duty had a direct nexus with the manufacturing activity and similarly of the refund of Central Excise Duty also had a direct nexus with the manufacturing activity. The issue of payment of Central Excise Duty would not arise in the absence of any industrial activity. There is inextricable link between the manufacturing activity, payment of Central Excise Duty and its refund. Therefore, the CIT(A) has rightly directed the Assessing Officer to allow deduction u/ s 80IB on the Excuse Duty refund received by the assessee. There is no need to interfere with the same finding.

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• 2017 (8) TMI 847
  Additions towards bogus purchases - parties have not responded to the notice u/s 133(6) - information received from Investigation Wing of Income-tax Department - non actual delivery of goods - Reopening of assessment - Held that:- We find that a similar issue has been arisen for our consideration in the case of M/s Fagioli India Pvt Ltd [2017 (8) TMI 747 - ITAT MUMBAI] under similar circumstances has considered the issue and after analysing the facts of the case and also by relying upon certain judicial precedents has directed the AO to estimate net profit at 12.5% on alleged bogus purchases. Thus we direct the AO to estimate net profit at 12.5% on the alleged bogus purchases. Appeal filed by the assessee is partly allowed

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• 2017 (8) TMI 846
  TDS u/s. 194J - payments made towards ‘Web Hosting Charges’ - whether ‘Web Hosting Charges’ came within the purview of the definition of ‘fees for technical services’? - Held that:- Though the provision of ‘Web Hosting Charges’ by the service provider would involve installation of sophisticated equipment on his part to facilitate rendering of such services to the customers, however the collection of a fee by him for use of such standard facility provided to all those willing to pay for it cannot be characterized and therein brought within the sweep of the term ‘fee for technical services’. We further find that a coordinate Bench of the Tribunal, viz. ITAT, Mumbai Bench ‘D’ in the case of Pacific Internet (India) Pvt. Ltd. Vs. ITO (2008 (12) TMI 429 - ITAT MUMBAI) relying on the judgment in the case of Skycell Communication Ltd. (2001 (2) TMI 57 - MADRAS High Court ) had also held that mere collection of a fee for use of standard facility provided to all those willing to pay for it does not amount to the fee having been received for technical services. We thus are of the considered view that as ‘Web Hosting Charges’ can safely be construed as a facility which is provided to facilitate hosting of a website, therefore, the fee provided by the assessee for availing such service cannot be characterized as a ‘as a fee for technical service’. Thus when web hosting cannot be held to be in the nature of ‘technical service’, therefore the amount paid by the assessee as regards the same would not be liable for deduction of tax at source u/s. 194J. - Decided in favour of assessee TDS u/s 194J - amount paid towards renewal of SAP Licence - whether the payment by the assessee towards renewal of SAP Licence was in the nature of payment towards ‘technical services’/’royalty’, as provided in Explanation 2 of Section 9(1)(vii)/Section 9 (1)(vi)? - Held that:- We respectfully follow the aforesaid judgment in the case of Infrasoft Ltd. (2013 (11) TMI 1382 - DELHI HIGH COURT) and finding ourselves as being in agreement with the aforesaid view arrived at by the coordinate bench of Tribunal in the case of Reliance Industries Ltd. (2016 (6) TMI 96 - ITAT MUMBAI ), are thus of the considered view that the amount paid by the assessee towards renewal of SAP licence for a period of two years, can neither be characterized as a payment for transfer of a copyright, nor the assessee be held as being in default for having failed to deduct tax at source as per Explanation 4 of Sec. 194J, which was not available at the time of making of the said payment. - Decided in favour of assessee Tds u/s. 194H - amount retained by the banks for facilitating sale of goods through ‘credit cards’ - Held that:- M/s. Kotak Securities Ltd. (2012 (2) TMI 77 - ITAT MUMBAI) had therein concluded that on the footing that an assessee remained under no obligation to deduct tax at source u/s. 194H in respect of Bank Guarantee Charges, it could therefore safely be concluded that no such liability was also cast on the assessee in respect of the amounts retained by the Credit Card company/Banks for facilitating the use credit card internet gateway to the assessee. We have given a thoughtful consideration to the issue under consideration and find that the same is squarely covered by the order of the coordinate bench of the ITAT, Hyderabad in the case of M/s Vah Magna Retail (P) Ltd. (2013 (8) TMI 299 - ITAT HYDERABAD ). - Decided in favour of assessee TDS liability on AMC for computers - Held that:- We find that the CIT(A) observing that as each of the respective payments made by the various retail dealers of the assessee company in respect of computer AMC was lower than ₹ 20,000/-, therefore, no liability was cast upon it for deducting tax at source. That during the course of the hearing of the appeal nothing was submitted before us by the ld. D.R to dislodge the aforesaid factual observations of the CIT(A). We thus, finding no infirmity with the order of the CIT(A) on the issue under consideration, therefore, uphold the same. TDS liability on AMC for Pest control - TDS u/s 194C OR 194J - Held that:- CIT(A) being of the considered view that the payments made by the assessee towards AMC for pest control did not involve any professional or technical services, but as definitely there was a contract of work, therefore, the assessee had rightly deducted tax at source u/s. 194C, and could not be brought within the sweep of Section 194J. The ld. D.R could not controvert the aforesaid observations of the CIT(A). We find no infirmity in the aforesaid observations of the CIT(A) and are persuaded to be in agreement with him. TDS liability on AMC for Air conditioners - TDS u/s 194C OR 194J - Held that:- When the AMC charges for air conditioners paid by the assessee were in term with the contents of the composite contract for supply of spare parts and services, therefore, as observed by the CIT(A), the assessee had rightly deducted tax at source u/s. 194C and could not be held to be liable for deduction or tax at source u/s. 194J. We thus finding no infirmity in the order of the CIT(A), thus uphold the same in respect of the issue under consideration. Short/deficit deduction of tax at source in respect of ‘hoarding charges’ - TDS u/s 194I OR 194C - Held that:- The benevolent circulars issued by the CBDT are binding on the department, and there can be no escape on the part of the department to give effect to the same. We thus are of the considered view that now when the CBDT itself had held that the assessee would be liable for deduction of tax at source in respect of ‘hoarding charges’ under Sec. 194C, with the sole exception that where such ‘hoarding rights’ are sub-let by the assessee, the deduction of tax at source in such cases would be under Sec. 194I. We are of the considered view that now when the assessee had paid the ‘hoarding charges’ in respect of advertisements carried out in respect of its products, and had at no stage sub-let its ‘hoarding rights’, therefore, the case of the assessee does not fall in the aforesaid exception and it would remain liable for deduction of tax at source in respect of the payments made towards ‘hoarding charges’ u/s. 194C. We thus finding no infirmity in the order of the CIT(A). Payments towards AMC for computers - TDS u/s 194C OR 194J - Held that:- That as the AMC contract for the computers entered into by the assessee, on a perusal of which alone the fact that as to whether the same was in the nature of normal maintenance contract including supply of spares, or otherwise, could be discerned, is not available before us, we therefore in all fairness restore the matter to the file of the A.O to readjudicate the liability of the assessee after duly taking cognizance of the parameters contemplated by the CBDT in its aforesaid Circular No. 715, dated 08.08.1995. Needless to say, the A.O while re-adjudicating the aforesaid issue shall afford reasonable opportunity of being heard to the assessee, who shall remain at a liberty to adduce additional evidence to substantiate its contention. Levy of interest u/s. 201(1A) for a period of 36 months in respect of the tax determined u/s. 201(1) pertaining to the payments made by the assessee towards AMC for computers. - Held that:- We find that as the said contention of the assessee can only be adjudicated after referring to the facts available on record, which are not there before us, therefore, now when we have pursuant to our aforesaid directions called upon the A.O to carry out a fresh adjudication in respect of the liability of the assessee as regards deduction of tax at source u/s 194J, as well as directed him to verify the liability of the assessee towards ‘tax’ u/s. 201(1), in the backdrop of the claim raised before us that the payee’s had already paid the taxes on the aforesaid amount, we therefore further direct the A.O to also verify the aforesaid contention of the assessee that interest u/s. 201(1A) had wrongly been levied u/s 201(1A) for a period of 36 months, in respect of the aforesaid payments TDS u/s 194C or 194J - payments made to M/s Makani Creative Pvt. Ltd. in respect of the work executed by them - nature of work - Held that:- We find that the nature of services rendered by M/s. Makani Services Pvt. Ltd.(supra) as elaborated by us hereinabove, squarely falls within the sweep of the definition of ‘Professional services’ as stands contemplated in the Explanation (A) of Section 194J of the ‘Act’. We thus in light of our aforesaid observations are not persuaded to accept the contention of the ld. A.R. that it was under no obligation to deduct tax at source u/s 194J in respect of payments made to the aforesaid concern, viz. M/s Makani Creative (P) Ltd., and being of the considered view that the assessee had availed the professional services of M/s Makani Creative Pvt. Ltd. (supra), therefore, hold that the latter was liable for deduction of tax at source u/s. 194J.

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• 2017 (8) TMI 845
  Addition u/s 14A - nexus between the expenditure claimed by the assessee and earning exempt income - adhoc disallowance of certain expenditures - Held that:- In the absence of any direct nexus between expenditure claim to the exempt income, the AO cannot invoke the provisions of section 14A r.w.r. 8D(2) to disallow expenditure. Hence, we direct the AO to delete disallowances made u/s 14A r.w.r. 8D except demat charges of ₹ 574 which is directly incurred in relation to earning exempt income. On further verification of the P&L Account, we find that the assessee has claimed a minimum expenditure of ₹ 3 lakhs against gross receipt of ₹ 238,25,000 which are in the nature of administrative expenses directly attributable to her professional activity except demat charges of ₹ 574. Therefore, we are of the view that in the absence of any direct nexus between expenditure claim to the exempt income, the AO cannot invoke the provisions of section 14A r.w.r. 8D(2) to disallow expenditure. Hence, we direct the AO to delete disallowances made u/s 14A r.w.r. 8D, except demat charges of ₹ 574 which is directly incurred in relation to earning exempt income.

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• 2017 (8) TMI 844
  Sale of land at consideration less than the market value of the land - Applicability of section 50C - addition based on the inference that the assessee could have sold land at higher price as reflected in the records of the stamp valuation authorities - Held that:- The tax authorities assumed that the provisions of Section 50C are applicable in such cases overlooking the fact that Section 50C is only applicable with respect to sale of capital assets and in respect of the transfer of the stock-in-trade, a new provision has been inserted but the same comes into play only w.e.f. 01-04-2014 which clarifies that for the year under consideration, the market value cannot be substituted by the A.O. merely on ipsi dixit. There is no provision under the Act, applicable for the A.Y. 2008-09, under which the A.O. can substitute the market value to the rate at which the assessee sold the property. Therefore, set aside the orders of the A.O. as well as the CIT(A) and hold that only the value at which the assessee sold the land should be taken into consideration for the purpose of computing the assessable income and the provisions of Section 50C are not applicable in the instant case. - Decided in favour of assessee.

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• 2017 (8) TMI 843
  Exemption u/s 54 - disposing of the new house property within one year of purchase for commercial purpose - whether by entering into the Joint Development Agreement (JDA), the property will not loose the status of being residential property? - Held that:- The assessee has invested the sale consideration in the residential property and it is not disputed that the new property is residential. It is only that assessee has not resided nor let out and in the year subsequent to purchase of property, assessee has entered into JDA. In these circumstances, we are of the opinion that the AO cannot deny the exemption u/s 54 because the assessee has not demolished the house even on the day of “JDA”. As per the provisions of section 54, when the assessee transfers the new property within a period of three years, the assessee looses the benefits u/s 54 and the capital gain so claimed is taxable in the year in which the new asset is transferred. In the given case, the assessee has demolished the new asset in the year subsequent to purchase of new asset. Hence, it is an event which occurred subsequently and the AO cannot travel back to the AY in which assessee claimed the exemption u/s 54 and deny the exemption. - Decided in favour of assessee.

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• 2017 (8) TMI 842
  Eligibility for claiming deduction u/s. 80P - fulfillment of principal objective of providing agricultural credits to members - Held that:- As in the case of The Chirakkal Service Cooperative Bank Ltd & others (2016 (4) TMI 826 - KERALA HIGH COURT ) has held that the primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969, is entitled to the benefit of deduction u/s 80P(2). In the instant case, admittedly, the assessee has produced a certificate showing that it is registered as a Primary Agricultural Credit Society under the provisions of the Kerala Co-operative Societies Act, 1969. Since the Hon’ble Kerala High Court [Supra] has categorically held that a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969 is entitled to the benefit of deduction u/s. 80P(2) of the Act, we are of the view that the CIT(A) is justified in directing the Assessing Officer to grant the benefit of deduction u/s. 80P(2) of the Act. - Decided against revenue

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• 2017 (8) TMI 841
  Assessment of income - filing of revised return - Held that:- For the correct computation of income, it is required to start from the income shown in the revised return of income, filed by the assessee, once it is acknowledged that such a return is on record. At the same time, it is also imperative for Assessing Officer to verify what were the differences between the declared income as per the original return and declared income as per the revised return and make enquiries as to what prompted such difference. He has to verify whether there are any items, which were missed out while doing the assessment, and if so, he has to consider it. In the interest of justice, we are of the opinion that the Assessing Officer shall ascertain the reasons for the difference in the income returned in between these two returns, and proceed in accordance with law. Ground no.2 raised by the assessee is allowed for statistical purpose. Disallowance of pre operative expenses - Held that:- Though it has been allowed by this Tribunal in the preceding year, whether the expenditure incurred in relevant previous year was for expansion of existing business or stating a new business is not clear from the records. Though the ld Assessing Officer has mentioned that the expenditure was for setting up units at Chennai and Limda (Vadodara), there is no finding whether it was for expansion of existing line of business or starting a new business. No doubt, as held by the Tribunal, if it was for expansion of existing business the expenditure had to be considered as a business outgo. This aspect, in our opinion, requires a careful verification. We, therefore, set aside the order of the authorities below on this issue and remit it back to the Assessing Officer for consideration afresh Addition u/s 14A - Held that:- If assessee had suo-motu disallowed ₹ 1,08,996/- u/s 14A of the Act in its own computation then the addition of ₹ 98,103/- made by Assessing Officer will be subsumed in it. However, whether such suo-motu disallowance was done by assessee in the original return or revised return has not been looked into by the lower authorities. Therefore, we are of the opinion that this issue also requires fresh consideration by Assessing Officer Disallowance of weighted deduction u/s 35(2AB) - clinical trial expenditure - Held that:- Similar claim made by the assessee in assessment years 2010-11 and 2011-12 wherein the claim for weighted deduction for clinical trial expenditure is allowance. However, we are of the opinion that the amount which is eligible for such weighted deduction have to be computed considering Form 3CLand if the figures in Form 3CL is at variance with the claim the Assessing Officer has to carefully check whether each of the item included in such claim is coming within the purview of section 35(2AB) of the Act. Issue is remitted back to the Assessing Officer for this purpose. Weighted deduction u/s 35(2AB) for R&D expenses - Held that:- Assessing Officer while making the disallowance of the claim u/s 35(2AB) in the impugned assessment year had specifically noted that the facts were similar to the earlier year. As per Assessing Officer the issue in the earlier year was also remuneration paid to Mr Peter Becker for research facility and payment made in earlier year outside India for in-house facility. Since coordinate bench had dealt with these issues in the earlier year and held that claim was within the parameters of section 35(2AB) of the Act, we are of the opinion that claim of weighted deduction could not have been prima-facie denied . However, verification has to be done with figures reported in Form 3CL. Assessee should be able to provide a reasonable justification or variation between its claim and what has been mentioned in Form 3CL. For this limited purpose we remit this issue back to the Assessing Officer. Assessee could not be denied deduction u/s 35(2AB) of the Act purely on the ground that prescribed authority did not furnish form 3CL in time to the department. No doubt, the figures as quantified in Form 3CL, may not be sacrosanct. However, once Form 3CL is received by the Department; we cannot say that it has to be given a go-bye. It can be a useful tool in determining the legitimacy of the claim of the assessee. This is the reason why we are remitting the issue of quantification of the claim of weighted deduction, back to the file of the ld Assessing Officer for consideration afresh Addition for mis-match in the claim of TDS - Held that:- Addition in question is on account of difference in reconciliation of tax deducted at source as reflected in Form 26AS. As per ld AR, a sum of ₹ 32,68,459/- out of this has been booked as income in the subsequent year and taxes paid. Tribunal in assessee’s own case for assessment year 2010-11 and 2011-12 had deleted the addition.Accordingly, we delete the addition to the extent of ₹ 32,68,459/- out of the total addition of ₹ 50,26,767/- . Ground no.8 is treated as partly allowed. Disallowance of provision for commission on which TDS was not deducted at source - Held that:- Similar provision was disallowed by the Assessing Officer in preceding assessment year also and assessee’s appeal before this Tribunal on this issue was unsuccessful. Facts and circumstances for the impugned assessment year also being similar; we are of the opinion that provision for commission on which TDS was not deducted was rightly disallowed by the lower authorities. We do not find any error in the orders of the lower authorities Disallowance of claim u/s 80IA - Held that:- For preceding assessment tears 2010-11 and 2011-12 also assessee had made similar claims on the same windmills, through a letter filed during the course of the assessment proceedings, which was not considered by the lower authorities. In the current year as same occurred we direct the Assessing Officer to examine the claim afresh in accordance with law. TPA - comparability - Held that:- We deem it appropriate to remit the issues relating Transfer Pricing adjustment, if any, required on corporate guarantee and IT enabled services back to the file of the TPO/Assessing Officer for consideration afresh, in line with the directions given by this Tribunal for the preceding assessment year, reproduced above Computing MAT - Held that:- No disallowance was made while computing the income under the normal provision of the Act. This may have been an error committed by the Assessing Officer and, in our opinion, it will not stop the Assessing Officer from making an addition for MAT working, if this was an unascertained liability. No doubt, revenue is having other course open to it, if it is of the opinion that the allowance was erroneously given while computing the income under the normal provision of the Act. Considering the facts and circumstances, we are of the opinion that this issue also requires a fresh visit by the Assessing Officer. We, therefore, set aside the orders of the authorities below and remit the issue relating to MAT back to the Assessing Officer for consideration afresh.

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• 2017 (8) TMI 840
  TDS u/s 195 - assessee treated as an A-I-D for not deducting tax with regard to payments made to RIRCL - P.E. in India - Held that:- The Ireland Co. did not have PE in India, that the assessee was under bonafide belief that it had not to deduct tax for the payment made to RIRCL. Therefore we hold that the assessee cannot be treated as A-I-D and that interest charged by the TDS officer u/s. 201(1A) has to be deleted. Confirming the order of the FAA, we decide effective Ground of appeal against the AO.

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• Customs

• 2017 (8) TMI 816
  Jurisdiction - power of DRI to issue SCN - Held that: - the Hon’ble High Court of Delhi in the case of BSNL Vs. UOI [2017 (6) TMI 688 - DELHI HIGH COURT] has dealt with the identical issue where the notice was also issued by DRI. The Hon’ble High Court of Delhi has considered the judgment in the case of Mangli Impex Vs. UOI [2016 (8) TMI 1181 - SUPREME COURT], which is stayed by the Hon’ble Supreme Court, where the petitioner is permitted to review the challenge depending on the outcome of the appeals filed by the UOI in the Supreme Court against the judgment of the Court in the case of Mangli Impex Ltd. - we set aside the impugned order and remand the matter to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Hon’ble Supreme Court decision in the case of Mangli Impex - appeal allowed by way of remand.

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• 2017 (8) TMI 815
  Jurisdiction - power of DRI to issue SCN - Held that: - the powers of officers working in these organizations to issue notice under Customs Act, 1962 as proper officers has been subject matter of decision by various High Courts - I set aside the impugned orders and remand the matter to the original authority to decide the question of jurisdiction first and thereafter on merit after the matter is settled by the Hon’ble Supreme Court in the pending appeals by the Revenue against the decision of Hon’ble Delhi High Court in the case of M/s Mangali Impex Ltd., M/s Pace International And Others Versus Union of India And Others [2016 (5) TMI 225 - DELHI HIGH COURT] - appeal allowed by way of remand.

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• 2017 (8) TMI 814
  Interpretation of statute - meaning of the term ‘domestic industry’ - Rule 2(b) of the Anti-Dumping Rules - the decision in the case of NIRMA LIMITED Versus SAINT GOBAIN GLASS INDIA LTD. [2012 (10) TMI 832 - MADRAS HIGH COURT] contested - Held that: - we do not consider it necessary to go into the issue(s) arising in the present Special Leave Petitions, namely, the precise meaning of the term ‘domestic industry’ in Rule 2(b) of the Anti-Dumping Rules which issue is left open for adjudication in an appropriate case - SLP disposed off being not maintainable.

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• 2017 (8) TMI 813
  Valuation - Technology Transfer Agreement - Whether royalty paid in terms, is a condition of sale includible in the assessable value - Rule 9(1)(c) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 2008 - the decision in the case of CC, New Delhi Versus M/s Avaya Global Connect Ltd. [2016 (3) TMI 256 - CESTAT NEW DELHI], contested, where it was held that as the Supply Agreement is consistent with the Technology Transfer Agreement, and the supplier had the right to terminate the supplies in case of non-payment of royalties, the payment of royalty is a condition of sale and includible in the assessable value - Held that: - the decision in the above case upheld - appeal dismissed - decided against appellant.

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• 2017 (8) TMI 812
  Permission to withdraw the appeal - Eligibility for concessional rate of additional duty of customs in accordance with N/N. 6/2006-CE dated 1st March 2006 and N/N. 12/2012-CE dated 17th March 2012 - classification of imported goods - ‘external hard disks’ classified under heading 84717030 or 84717040 of the Schedule of the Central Excise Tariff Act, 1985? - the decision in the case of Ingram Micro India Pvt. Ltd. Manoj Gupta, Manish Agarwal, Fortune Marketing Private Limited Versus Commissioner of Customs (Import) ACC, Mumbai [2016 (11) TMI 847 - CESTAT MUMBAI] contested, where it was held that The imports of the appellants are liable to be classified under 84717030 and not 84717020 of the Schedule to the Central Excise Tariff Act, 1985 - Held that: - Permission sought for is granted - appeal dismissed.

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• 2017 (8) TMI 811
  Recovery of Customs Duty - case of petitioner is that the amounts demanded are excessive given that he has deposited the liabilities - Held that: - what appellant is in substance seeking is discharge from his entire liabilities without disclosing if and when the amounts were paid, the Court is of the opinion that there is no question of any fallacy in the demands made. The present petition is a glaring abuse of the process of Court - petition dismissed - decided against petitioner.

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• 2017 (8) TMI 810
  Anti-dumping duty - request for Sunset Review (SSR) turned down - Held that: - The Court is of the opinion that the petitioners/applicants have shown a prima facie case as well as satisfied that there would be irretrievable injustice given the fact that on the expiry of the day, (i.e. tomorrow midnight), the initiation of review would be rendered impossible - a direction is issued to the respondents to - in the course of the day - initiate the Sunset Review in the petitioners’ case - petition allowed.

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• 2017 (8) TMI 809
  Claim of Duty Drawback - Period of limitation - The petitioner had exported goods which it had imported. The petitioner claims to have become entitled to duty drawback in terms of Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 - Rule 5 and Rule 7A of such Rules - Held that: - Rule 5 deals with the manner and time of claiming drawback on goods exported other than by post. The goods of the petitioner comes within the purview of Rule 5 in terms of Rule 5(1). The petitioner was required to file a duty drawback claimed in the form at Annexure II of the Rules within three months from the date of the order permitting clearance and loading of the goods for exportation under Section 51 - The claim contemplated under Rule 5 has to be accompanied by documents specified by under Rule 5(2). Rule 5(4) provides that, in the event there are incomplete particulars, the same is required to be returned to the claimant with a deficiency memo. In the present case, the application which is claimed to be an application for duty drawback is the bill of shipping itself. The bill of shipping does not quantify the rupee equivalent of the claim made by the petitioner. The claim is not made in Form of Annexure II of the Rules. The claim has not been lodged with the necessary documents as specified in Rule 5(2) of the Rules of 1995. The petitioner did not made any representation to the Central Government for relaxation of any of the Rules. Therefore, the shipping bill itself cannot be construed to be an application for drawback within the meaning of Rule 5(1) of the Rules of 1995 - I am not in a position to come to a finding that, the petitioner has made an application for duty drawback within the time prescribed. Since such is the finding, the question of the petitioner applying before an officer not authorised to do so does not arise. A Writ Court is not required to reappraise the entire evidence led before the revisional authority to come to a finding that, the appreciation of the materials placed before the revisional authority was incorrect. The petitioner has not alleged breach of principles of natural justice by the revisional authority in arriving at the impugned order. The petitioner has not been able to substantiate any perversity in the impugned order. There is no allegation of bias or mala fide against the revisional authority. Therefore, no case has been made out to interfere with the impugned order. Petition dismissed - decided against petitioner.

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• 2017 (8) TMI 808
  Compensation for the loss of materials in transit through India - company registered in foreign country (Nepal) - Held that: - Article 226 of the Constitution of India does not limit the exercise of such powers by High Court at the instance of citizens of India only. The Courts, over a period of time, have recognized the availability to the recourse to Article 226 of the Constitution of India to persons other than natural persons who are Indians. A juristic person carrying on business in India has been recognized to be entitled to maintain and obtain relief under Article 226 of the Constitution. A foreign national, has also been recognized to be entitled to approach the High Court under Article 226 of the Constitution of India, in the event of violation of human rights. In the present case, the right to transport the goods from the port of Kolkata to the territory of Nepal has been claimed to be violated by the action or the non-action of the State authorities. Essentially it is a right having its foundational basis and emanating out of Article 19(1)(g) of the Constitution which the petitioner is seeking to enforce. Article 19(1)(g) is available to a citizen of India. Its availability has been extended to juristic persons constituted under the laws of India. A foreign company cannot be allowed to invoke Article 226 founding its claim on the violation of Article 19(1)(g). The treaty does not contemplate that the Indian Government has to pay for the alleged theft of the materials in transit. The culmination of the First Information Report has not been produced on record. It has not been conclusively established that there was any theft. The question of grant of compensation by the Indian Government to the petitioner does not arise - petition dismissed - decided against petitioner.

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• Corporate Laws

• 2017 (8) TMI 802
  Tribunal's general power to amend - mistake apparent on the face of the record - Held that:- The appellant(s) filed the petition under Rule 154, which relates to rectification of order, if there is clerical or arithmetical mistakes in the order or error arising from any accidental slip or omission, as may occur. But such power cannot be exercised to review an order or judgment, in absence of clerical or arithmetical mistakes. We do not agree with the submission made on behalf of the counsel for the appellant that non-reference to any one or other judgment passed by the Appellate Tribunal or any court of law falls within the category of “omission” by the Tribunal. For the purpose of rectification of any order under Rule 154, the omission must be such, which should be related to the case. In absence of any evidence to show that a judgment of Appellate Tribunal or Court was referred, it cannot be accepted to be an “omission” by Tribunal. Further no Court or Tribunal is bound to refer all or any judgment cited by anyone or other party, whether relevant or irrelevant. For the reasons aforesaid and as the Tribunal has no general power to review its own order or judgment, we uphold the impugned orders dated 24th April, 2017 passed by Tribunal. Appeal from orders of Tribunal - Held that:- As per sub-section (3) of Section 421, every appeal is required to be filed under sub-section (1) within 45 days from the date on which the copy of the order of the Tribunal is made available to the person aggrieved. As the Appellate Tribunal is empowered to entertain an appeal after expiry of the said period of 45 days from the date of receipt of the order but such power can be exercised only within a further period not exceeding 45 days that is total 90 days. If order(s) dated 26th September, 2016 were communicated the appellant(s) in October, 2016 [actual date not supplied by the appellant(s)], even then, we find that now more than 9½ months have passed and thereby the Appellate Tribunal has no power to condone the delay. For the said results, we express our inability to interfere with the impugned orders both dated 26th September, 2016 and reject such prayer.

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• Insolvency & Bankruptcy

• 2017 (8) TMI 801
  Corporate Insolvency Resolution Process - Notice issued by the advocate/ lawyer on behalf of the appellant treatment as notice under Section 8 of the ‘I & B Code’ - Held that:- Advocate / lawyer or Chartered Account or a Company Secretary or any other person in absence of any authority by the ‘Operational Creditor’, and if such person do not hold any position with or in relation to the ‘Operational Creditor’, cannot issue notice under Section 8 of ‘I & B Code’, which otherwise can be treated as a lawyer’s notice/ pleader’s notice, as distinct from notice under Section 8 of ‘I & B Code. The demand notice/ invoice Demanding Payment under the I& B Code required to be issued in Form-3 or Form - 4. By the said notice, the ‘Corporate Debtor’ is to be informed of particulars of ‘Operational Debt’, with a demand of payment, with clear understanding that the ‘Operational Debt’ (in default), as claimed, is to be paid, unconditionally within ten days from the date of receipt of letter failing which the ‘Operational Creditor’ will initiate a Corporate Insolvency Process in respect of ‘Corporate Debtor’, as apparent from last paragraph no. 6 of notice contained in form - 3, and quoted above. Only if such notice in Form - 3 or Form - 4 is served, the ‘Corporate Debtor’ will understand the serious consequences of non-payment of ‘Operational Debt’, otherwise like any normal pleader notice/Advocate notice or like notice under Section 80 of C.P.C. or notice for initiation of proceeding under Section 433 of the Companies Act 1956, the ‘Corporate Debtor’ may decide to contest the suit/case if filed, as distinct Corporate Resolution Process, where such claim otherwise cannot be contested, except where there is an existence of dispute, prior to issuance of notice under Section 8. In the present case, as the notice has been given by an advocate/lawyer and there is nothing on the record to suggest that the lawyer was authorized by the appellant, and as there is nothing on the record to suggest that the said lawyer/ advocate hold any position with or in relation to the appellant company, we hold that the notice issued by the advocate/ lawyer on behalf of the appellant cannot be treated as notice under Section 8 of the ‘I & B Code’. And for the said reason also the petition under Section 9 at the instance of the appellant against the respondent was not maintainable.

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• PMLA

• 2017 (8) TMI 800
  Provisions of the PMLA applicability - possession of a property taken over in terms of the provisions of the PMLA - Held that:- In terms of Rule 7 of The Prevention of Money-laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013 (Possession Rules, for short) in cases where the confirmed attached property is in the custody of any court, the authorized officer is required to make an application to such court and that such applications shall contain a relief that such property may be released in favour of the Directorate of Enforcement. Pertinently, the said Possession Rules are of 2013 i.e later to the judgment in the case of Om Prakash Daulatram [2011 (9) TMI 1143 - BOMBAY HIGH COURT]. In view of the said Rule on the particular issue under consideration, the submission of the Ld. Counsel for the Respondent that even when the possession of a property is in the custody of the Court, the possession can be taken over in terms of the provisions of the PMLA without leave of the court is without any merit and is rejected. The impugned order as far as taking over possession of the subject flats are concerned, unconditionally. It is directed that till the appeals are finally decided, action for taking over possession of Flat No. 302, Shri Sai Nirmala Building, Bhavani Shankar Road, Dadar, Mumbai, Flat no. 303 and Flat No. 304, Jacob Apartment, Baburao Parulkar Marg, Bhawani Shankar Road, Dadar, Mumbai-400024 in pursuance of the impugned order and the notices under Section 8(4) of PMLA (if issued) shall remain stayed.

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• 2017 (8) TMI 799
  Attachment orders - PMLA - Arbitration Award - Held that:- Provisions of the Section 8(8) ibid which provides that where a property stands confiscated the Central Govt u/s 8(5), the Special Court may also direct the central government to restore such confiscated property or part thereof of a claimant with a legitimate interest in the property, who may have suffered a quantifiable loss as a result of the offence of the money laundering. Further, in terms of the proviso to the said sub-section, such claims shall not be considered unless the Special Court is satisfied that the claimant has acted in good faith and has suffered the loss despite having taken all reasonable precautions and is not involved in the offence of the money laundering. With regard to the above, it is mentioned that in the present appeal, this Tribunal is considering the appellant’s challenge to the impugned order of the passed by the Adjudicating Authority confirming the provisional attachment of the property in question. The confiscation or otherwise of the attached property is within the domain of the Special Court. However, the said provision does not in any way interfere with the power of the Tribunal in terms of section 26 (4) of the act to either uphold, set aside or modify the impugned order of the Adjudicating Authority including the provisional attachment order in question. In view of facts direct that as far as the immovable property including the factory under attachment is concerned, the same be released from attachment, subject however to the condition that the appellant shall furnish the Fixed Deposit Receipt (FDR) of ₹ 4.67 crores in the name of respondent no. 1 to the Enforcement Directorate within two months of this order as a security amount. The said FDR shall be furnished by the appellant without prejudice. In case the learned Special Court after trial holds that the said amount is not proceeds of crime, the appellant would be entitled to receive back the principal amount of the FDR as well as the interest accrued thereon. In case the finding of the special court is otherwise, the respondent no. 1 shall be entitled to the principal amount of the FDR as well as the interest accrued thereon. Once the FDR as above is furnished by the appellant to the satisfaction of the Respondent-1 within two months of this order, the attached immovable property including the mill be released forthwith to the appellant.

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• 2017 (8) TMI 798
  PMLA - provisional attachment - Held that:- The tainted nature of the property was well known to JMD Media Pvt. Ltd. as well as the buyers. As stated earlier, the Chief Inspector of Registration, Gujarat State, Gandhinagar had issued a circular conveying that where properties have been attached under Section 5(1) of the Prevention of Money Laundering Act, 2002, the properties mentioned in the attachment order should not be registered without prior approval of the concerned Department. Having received the initial payment of ₹ 6 Lakhs on 13.12.2010 M/s JMD Media Pvt. Ltd. thought it prudent to give a notice in the newspaper through their Advocates only on 08.04.2011 as regards any person having objection to the sale of the said property, Still further, an amount of ₹ 5 lakhs was paid by the appellant to M/s JMD Media Pvt. Ltd. on 9th June, 2011 itself, whereas a communication from the Advocate stating that no objection had been received from anyone to the proposed sale of the said property has been received vide certificate dated 22.09.2011 only. As far as registration of sale deed is concerned, the same has not been registered. We agree with regard to the argument that the FIR in the matter was registered on 31.01.2008 and the schedule offence were added on 01.06.2009, the same have no force as the units in questions were sold only in the year-2011. As regards the other arguments of the appellant, the same have no force as each and every plea raised by the appellant before us has been dealt in the impugned order. There is no infirmity in the impugned order. We find no force in the arguments of the appellants that the impugned order dated 10th July, 2012 is arbitrary, unreasonable, high handed, only without jurisdiction and illegal and void. There is no infirmity in the order, we have passed a detailed order in the connected appeal.

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• Service Tax

• 2017 (8) TMI 839
  Maintainability of petition - Alternative remedy - Rule 2A of the Service Tax (Determination of Value) Rules, 2006 - Works Contract Service - composite contract - Held that: - the matter was remanded to the Adjudicating Authority on the sole ground that the authority referred to a judgment of the Supreme Court, Dy. Commissioner of Sales Tax (Law) vs. Advani Coorlikon (P) Ltd. [1979 (10) TMI 90 - SUPREME COURT OF INDIA], which was overruled by the Larger Bench of the Supreme Court. The Court made it clear that setting aside the impugned order will not be taken as a reflection on the merits of the matter. In paragraph 12 of the order, dated 05.12.2016, the Court has summarised the submissions and while doing so, it has made an observation that the question whether the impugned transaction is composite in nature as alleged by the respondent is a mixed question of fact and law. The Court rendered a finding that the impugned transaction whether it is a composite in nature or not, is a mixed question of fact and law. This finding had been accepted by the petitioner, as the petitioner appears to have not canvassed the matter on merits, though the Court observed that an overruled judgment of the Supreme Court has been relied on. Apart from that, the Court also held that it cannot be known as to what extent, the first respondent was influenced by referring to an overruled judgment and as to how the overruled judgment has had a bearing on the manner in which the subject contracts have been viewed. Thus, the petitioner did not canvass the merits of the case and appears to have been satisfied with the order passed by the Court remanding the matter for denova consideration to consider as to what extent the Adjudicating Authority was influenced by the ratio of the overruled judgment in the case of Kone Elevators India Pvt., Ltd.,[2005 (2) TMI 519 - SUPREME COURT OF INDIA], did it have a bearing on the manner in which the subject contracts have been viewed. When the Court at the very threshold held that question as to whether the transaction is composite in nature or not, is a mixed question of fact and law, and it would be the answer to the petitioner's present challenge of the impugned order raising factual questions. The Tribunal being the last fact finding authority in the hierarchy of authorities is entitled to appreciate and re-appreciate the scope of the contract, whether it is composite in nature or otherwise and this exercise cannot be done in a Writ Petition - the petitioner cannot now canvass the merits of the case in a Writ Petition, call upon this Court to examine as to whether the transaction is composite in nature or otherwise, whether the valuation made was correct or incorrect; what is the yardstick to be applied to the sale value, etc. Therefore, the petitioner has to necessarily avail the appellate remedy and the contentions raised by the petitioner being mixed questions of fact and law cannot be adjudicated in a Writ Petition under Article 226 of the Constitution of India. Petition dismissed being not maintainable.

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• 2017 (8) TMI 838
  Reverse charge mechanism - It appeared to the department that fee given by appellant to STARL for this purpose was liable to service tax and since STARL did not have office in India, appellant was to discharge tax liability on reverse charge basis - Held that: - the appellant cannot be held as a service recipient since foreign broadcaster is engaged in up-linking signals to a satellite outside India and down-linking of signals is done by MSOs/COs in India and appellant technically does not receive any broadcasting service - appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 837
  Business Auxiliary Services - whether the appellants are liable to pay service tax under Business Auxiliary Service with effect from 10.9.2004 for the activity of rubber linings of pipes and fittings supplied to M/s. Kudremukh Iron and Ore Company Ltd. and related works? - Held that: - It is clear that the appellant was only discharging job work much amounted to processing of goods and therefore did not involve any production of goods. The amendment was brought forth with effect from 16.6.2005 to include the production or processing of goods for, or on behalf of, the client. Thus, the activity of the appellant has become taxable with effect from 16.6.2005. On perusal of records only one invoice falls beyond the period of 16.6.2005 upon which the service tax levy has to be sustained, which we hereby do - In respect of demand prior to the period 16.6.2005, for the discussions made above, the demand is unsustainable - appeal allowed - decided partly in favor of appellant.

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• 2017 (8) TMI 836
  Air Travel Agent Services - non-payment of service tax - The appellant did not discharge service tax for the period October 2003 to September 2005 and alleging that appellants cannot discharge service tax on the basic fare but have to pay on the commission received, show cause notice dated 4.10.2006 was issued - Held that: - As per rule 6(7) of Service Tax Rules, 1994, the appellant has an option to pay service tax on that part of the basic fare method instead of discharging service tax on the rate applicable for the commission received. There is no procedure contemplated in the provision to intimate the department regarding the option exercised. The main reason for disallowing such option to pay service tax on the basic fare, as revealed from the impugned order, is that the appellant has not intimated the department with regard to the exercise of option. When no procedure is contemplated for such intimation, the option exercised by the appellant which is revealed from the service tax returns filed by them cannot be denied. The conduct of the appellant in filing ST-3 returns by calculating the service tax on the basic fare method in terms of the option available to them under Rule 6(7) is sufficient exercise of option. The department cannot force upon the appellant to pay service tax on the basis of commission received when the rules itself provide an option to the appellant / assessee. Penalties - Held that: - it is clear that there was much dispute and confusion as to whether the discharge of service tax on the basis of basic fare method is sufficient and proper, and the department has not been allowing the appellant to exercise the option which the law provides to them. It is also brought out that there was denial of right to exercise option by the department by which the appellant was put to much difficulties. On such score, the penalties imposed are unwarranted and the same are set aside. The adjudicating authority directed to ascertain the demand in terms of basic fare method - appeal allowed in part and part matter on remand.

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• 2017 (8) TMI 835
  Penalty - The department has taken service tax rate of 8% according to the date of receipt of service whereas the claim of the appellant is 5% service tax as on the date of agreement in respect of the service - Held that: - the rate of service tax is applicable as on date of provision of service and not as on date of receipt of the service charges. Therefore, the view taken by the Revenue is absolutely incorrect and illegal without any support of law. CENVAT credit - debit notes issued by the service provider - Held that: - even though the Rule prescribed challan and invoice as valid document for availing the cenvat credit but if all the information required to be mentioned in the invoice is otherwise appearing on the debit notes, the said debit notes must be allowed for taking the credit - demand set aside. CENVAT credit - repair and maintenance of windmills - Held that: - The electricity generated from the said windmill was partly sold to the Gujarat Electricity Board and partly diverted to their Group Company M/s. Tata Motors. Therefore the windmills is not used either for providing any service or carrying out any manufacturing activity. Therefore the basic requirement of the cenvat credit is not fulfilled, hence the credit on the repair and maintenance service of the windmills is clearly not admissible to the appellant therefore we uphold the demand of ₹ 5,38,278/- on the repair and maintenance service of windmills. CENVAT credit - service of Chartered Accountant for the service of sale of equity share of Tata Home Finance to some other party - Held that: - this service is not related to the output service of the appellant as this service was availed against the investment made by the appellant out of the income generated from the overall business. Therefore it is not related to any output service provided by the appellant therefore the credit is not admissible - demand upheld. CENVAT credit - invoices which do not bear the registration number of service provider - Held that: - merely because the registration number of the service provider is not mentioned of the invoices. Cenvat credit cannot be denied particularly when there is no charge of non-payment of service tax either by the service provider to the government or by the appellant to the service provider - demand set aside. Appeal allowed - decided partly in favor of appellant.

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• 2017 (8) TMI 834
  Penalty u/s 76 and 78 - Section 73(3) of the Finance Act, 1994 - Reverse Charge Mechanism - fees/facility agent fees to Mandatory Lead Arrangers - the appellant availed of External Commercial Borrowings (ECB) from non-resident lenders through Mandated Lead Arrangers (MLAs) - Held that: - there is no dispute on the fact that the issue involved in the present case is of interpretation of service tax law regarding the taxability of the service in the hands of the recipient if it is provided from outside India. In this situation, there was bona fide belief of the appellant for non-payment of service tax in time. It is also fact that the appellant paid the service tax along with interest before issuance of show cause notice and informed to the department. In these circumstances, the appellant case is squarely covered by Section 73(3) of the FA, 1994 - there is no mala fide intention or suppression of fact on the part of the appellant. The case is squarely covered by Section 73(3) of the Act, accordingly the appellant should not have been issued any SCN, consequently no penalty either should have been proposed or imposed in such SCN - appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 833
  CENVAT credit - activity of trading - Rule 6 (3) of CCR, 2004 - Held that: - the Cenvat Credit Scheme is available only in respect of an assessee, who is either manufacturing dutiable final products or providing taxable output service. Admittedly, during the relevant time, trading is not categorized as service at all. It is only in 2011, the explanation was inserted under Rule 2 (e) of CCR, 2004 to the effect that “exempted service” includes “trading”. Prior to that date, trading is not even considered as “exempted service”. Going by this fact, it is clear that no credit is available on any “input service” attributable to “trading” during the material time. When no such credit is eligible, the respondent cannot avail the benefit of cenvat credit scheme. The Revenue’s appeal will succeed to an extent of reversal of cenvat credit for normal period along with applicable interest - appeal allowed - decided partly in favor of appellant.

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• Central Excise

• 2017 (8) TMI 832
  Clandestine manufacture and removal - It appeared that the appellant had not accounted their production of cotton yarn on cones, that the suppressed production was removed without payment of duty to the yarn dealers in R.S.Puram, using the invoices of SGT and SVT - Held that: - Discernably, there is considerable, if not predominant, reliance on the said statements while issuing the SCN. It is also seen that they are hardly any relied upon documents that have been recovered/obtained to corroborate the documents given in those statements. This being so, the Tribunal Final order of 22.09.2004 assumes significance. The Tribunal in that order with regard to duty demand of ₹ 23,26,451/- from Shri V. Madhu, proprietor of the appellant found that the only evidence gathered by Revenue is what is contained in the statements of the appellants as well as S/Shri P. Dinesh, Vijayakumar Parikh and Siddharth Parikh, who are second stage dealers and allegedly received consignments from KGT during 1998-99. The Tribunal also noted that the adjudicating authority found clandestine removal of goods merely on the basis of uncorroborated statements. The adjudicating authority has proceeded with a prejudged frame of mind in respect of guilt of the appellant. The adjudicating authority has also not taken into cognizance or appreciated the raison-detre of the Tribunal in their earlier Final Order dated 22.09.2004. In a matter like this, where the entire basis of the allegations against an assessee is only on statements of various persons recorded by the departmental officers, all efforts have to be made by the adjudicating authority to ensure that the veracity of such statements is got tested and in case they have been retracted either by the individual concerned through a letter or in cross examination, absolute reliance on such statements cannot then continue to be made. This is all the more important when the inculpatory admissions initially made at the time of recording statements are not backed up by sufficient documentary or other corroboratory evidence, as it is the case herein. The confirmation of demand of differential duty and other legal consequences that have been confirmed in the impugned order predominantly on the basis of uncorroborated statements, but which have been subsequently retracted, will render the impugned order unsustainable - appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 831
  CENVAT credit - clearance of capital goods after use - the capital goods was imported on 27.09.2006 and was used for about eight months and then cleared on 10.05.2007 - Rule 3(5) of CCR 2004 - whether the appellant is liable to reverse the cenvat credit on capital goods when the capital goods are removed after being used for about eight months? - Held that: - prior to 13.11.2007 no duty was payable in respect of capital goods which was used before it is removed. In the present case also, the capital goods was imported on 27.09.2006 and was used for about eight months and then cleared on 10.05.2007 without payment of duty under the belief that there was no provision in the Cenvat Credit Rules 2004 to pay cenvat either in full or depreciated amount of cenvat during the relevant period. The Hon'ble High Court of Karnataka in the case of CCE, Bangalore - II Vs. Solectron Centum Electronics Ltd [2014 (10) TMI 596 - KARNATAKA HIGH COURT], after considering the provisions of cenvat credit before its amendment and after the amendment on 13.11.2007 has held that till the amendment of Rule 3(4) of Cenvat Credit Rules 2004 as on 13.11.2007, in respect of used capital goods, there was no liability to pay duty and it was only with the addition of the proviso thereto that the situation changed. Assessee not required to reverse CENVAT credit - appeal allowed - decide4d in favor of appellant.

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• 2017 (8) TMI 830
  Appeal/application filed by the company which is being wound up - Held that: - reliance placed in the case of M/s DSM. Sugar (now M/s Kashipur Sugar Mills Ltd.) and others Versus CCE, Meerut- II [2014 (3) TMI 242 - CESTAT NEW DELHI], where it was held that when an appeal or an application is filed by a company and same is being wound up, the appeal or application shall abate unless an application is made for continuance of such proceedings by or against the successor in interest, the executor, administrator, receiver, liquidator or other legal representative of the appellant or applicant or respondent, as the case may be - The said order of Customs, Excise and Service Tax Appellate Tribunal, New Delhi has not been challenged and, therefore, has attained finality - petition dismissed - decided against petitioner.

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• 2017 (8) TMI 829
  MODVAT credit - Rule 57Q - Whether the benefit of modavat under Rule 57Q would not be admissible upto 23.7.1996 following ratio of Larger Bench of the Appellate Tribunal in Jawahar Mills Ltd.Vs. CCE, [1999 (4) TMI 153 - CEGAT, NEW DELHI], holding Welding Electrodes to be capital goods upto 23.7.1996? - Held that: - on perusal of the aforesaid decision, we find that it did not deal with the issue of modvat credit of capital goods under Rule 57Q, but was concerned with modvat credit on inputs in terms of Rule 57A of the Central Excise Rules. Thus the reliance upon the aforesaid decision by the Tribunal to reject the appellant's claim is not correct - there is nothing on record to indicate the exact manner in which the welding electrodes are used in the appellant's factory. CENVAT credit is dependent upon the manner of use in the manufacture of final products in the assessee's factory. This aspect viz. manner of use of welding electrodes in the appellant's factory has not been examined for the purpose of determining whether the definition of capital goods as provided in Rule 57Q of the Central Excise Rules would be satisfied. This factual determination in the context of Rule 57Q of the Central Excise Rules is necessary before determining whether the welding electrodes in case of appellant, satisfies the definition of capital goods. Therefore, question at this stage cannot be answered. The issue restored to the Commissioner to decide afresh after considering the manner in which welding electrodes are in fact used in the factory of the appellant-assessee - appeal allowed by way of remand.

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• 2017 (8) TMI 828
  Classification of goods - decorative laminated sheets - classified under Chapter 48 or under Chapter 39? - Held that: - the petitioner/assessee will have the benefit under the Heading 4823.90 for the relevant years - appeal allowed - decided in favor of appellant.

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• 2017 (8) TMI 827
  CENVAT credit - dutiable product subsequently becoming exempted product - Whether the CESTAT is right in holding that credit once validly taken need not be reversed if the final products becomes exempted subsequently in view of the Rule 6(1) of CCR, 2002 which mandates reversal of credit in respect of inputs used in exempted final products? - Held that: - the question of law raised is covered by the Division Bench Judgment of this Court rendered in Tractor and Farm Equipment Ltd. Vs. Commissioner of Central Excise, Madurai-II [2014 (12) TMI 905 - MADRAS HIGH COURT], where it was held that If credit can be taken against excise duty on a final product manufactured on the very day, it makes it abundantly clear that there need not be co-relation between the input and the goods cleared and as a result, validly taken credit need not be reversed - appeal dismissed - decided against Revenue.

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• 2017 (8) TMI 826
  Condonation of delay in filing appeal - Section 5 of the Limitation Act - Held that: - the delay caused in preferring the appeal has been sufficiently and properly explained - The Department was bonafidely prosecuting the rectification application and thereafter on rejection of the rectification application, appeal has been preferred challenging the original order passed by the learned CESTAT. Under the circumstances, it cannot be said that there was any deliberate delay on the part of the Revenue/Department in not preferring the appeal - delay condoned - COD allowed.

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• 2017 (8) TMI 825
  Validity of SCN - Time limitation - whether notice was issued within the period of limitation? - Held that: - Section 11A(3) of the Central Excise Act, 1944 provides limitation of one year to the Central Excise Officer to issue notice to the assessee. However sub-section (4) provides that when there is fraud; collusion; any wilful misstatement; suppression of fact and contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, the period of limitation will be five years. The assessee has not misstated any fact; the assessee has not suppressed any facts. The assessee may have been guilty of claiming wrong Cenvat credit but as pointed out by the CESTAT, there continues to be divergence of opinion with regard to the issue whether Cenvat credit can be claimed on such inputs or not. Therefore, it cannot be said to be a fraudulent claim or a claim which has an aspect of dishonesty attached to it. In this view of the matter, limitation would only be one year. Appeal dismissed.

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• 2017 (8) TMI 824
  Valuation - Yeast - appellant sold and transferred the goods from their factory to depots all over the country and in that process they wilfully and deliberately suppressed material information and evaded the payment of excise duty - whether prosecution of petitioners is sustainable even after setting aside the order of Commissioner, Central Excise, Lucknow holding the petitioners liable for valuation of the provisions of the Act and also to pay penalty? - Held that: - in the case of G.L. Didwania v. Income Tax Officer [1993 (11) TMI 3 - SUPREME Court], it was held that that when the order of Commissioner, Central Excise, Lucknow has been set aside by the Tribunal, prosecution of petitioners is also not sustainable and, therefore, it should not be quashed. The prosecution of petitioners is not sustainable and consequently this petition under Section 482 of Cr.P.C. is, therefore, allowed and Criminal Case No. 554 of 2003, under Section 9 of the Central Excise Act, 1944 pending in the Court of Special Chief Judicial Magistrate, (Economic Offences), Lucknow is hereby quashed - petition allowed - decided in favor of petitioner.

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• 2017 (8) TMI 823
  Utilisation of CENVAT credit - Interpretation of statute - Rule 57F(12) of erstwhile Central Excise Rules, 1994 - Whether credit of Additional Duties of Excise can be utilised towards payment of Basic Excise Duty when N/N. 5/94-C.E. (N.T.), dated 1-3-1994 specifically provides that AED shall be utilised only towards payment of duty of excise leviable under the Additional Duties of Excise (Goods of Special Importance) Act, 1957? - Held that: - by insertion of the said proviso, the effect of Rule 57A and the notification issued thereunder is clearly wiped out. It is no more the requirement of law that credit taken for additional duty paid should be utilised only for clearing the goods if additional duty is to be paid in respect of the said goods also - Since the period concerned in this matter is after the insertion of the proviso, the benefit of the proviso should be extended to the assessee - decided in favor of assessee.

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• 2017 (8) TMI 822
  Classification of goods - Integrated Fixed Wireless Terminals CDMA-2000-1X (ETS 2288) - whether appellant is eligible to avail benefit of exemption notification no.6/2003-CE (Sr.no.264) for the CDMA WLL phones manufactured by them? - the decision in the case of M/s. Surana Telecom Ltd. Versus Commissioner of Central Excise, Goa [2016 (12) TMI 1388 - CESTAT MUMBAI] contested, where it was held that benefit of notification 6/2002-CE needs to be extended as the CDMA WLL phones function on cellular technology - Held that: - the decision in the above case upheld - present appeal dismissed.

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• 2017 (8) TMI 821
  Classification - worn out Silver targets - Whether to be classifiable under Chapter Subheading No. 7101.80 attracting 16% rate of duty as per Department or under Chapter Subheading No. 7101.31 which attracts NIL Rate of Duty - the decision in the case of Super Cassettes Industries Ltd. Versus C.C.E., NOIDA [2016 (8) TMI 446 - CESTAT ALLAHABAD] contested, where it was held that worn out Silver Targets are classifiable under chapter subheading No. 7010.31 attracting NIL rate of duty - Held that: - the decision in the above case upheld - present appeal dismissed.

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• 2017 (8) TMI 820
  Valuation - Job worker - manufacture and clearance of intermediary goods to the principal manufacturer for manufacture of final goods - the decision in the case of M/s. Sri Kannapiran Mills Ltd. Versus CCE & ST, Salem [2016 (6) TMI 541 - CESTAT CHENNAI] contested, where it was held that the Tribunal cannot make a new case to create jurisdiction for it to decide the issue not before it. Since the case is covered by Section 4 (3) (b) (i), the present appeal is answerable in terms of Rule 10 read with Section 4 itself - Held that: - the decision in the above case upheld - there is no merit in this appeal for admission - appeal dismissed.

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• 2017 (8) TMI 819
  Rivets - Demand - Limitation - Extended period - Suppression - the decision in the case of AVDEL (INDIA) PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI [2004 (6) TMI 82 - CESTAT, MUMBAI] contested - Held that: - the civil appeal is dismissed for non-prosecution.

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• 2017 (8) TMI 818
  Time limitation - Entitlement of Interest u/s 11BB of the Central Excise Act 1944 - the decision in the case of AMALGAMATED PLANTATIONS (P) LTD. Versus UNION OF INDIA [2013 (11) TMI 589 - GAUHATI HIGH COURT] contested - Held that: - The special leave petition is dismissed on the ground of limitation.

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• 2017 (8) TMI 817
  Imposition of penalty - Cenvat credit wrongly taken - M.S. Angle, M.S. Channel, G.C. Sheet and Welding Electrodes are used for making support structures for the capital goods - The decision in the case of M/s. Eastern Metallizing Ltd. Versus Commr. of Central Excise, Kolkata-II [2016 (5) TMI 897 - CESTAT KOLKATA] contested, where it was held that when conflicting judgments with respect to an issue were available then it cannot be said that appellant had malafide intention to fraudulently take inadmissible credit - Held that: - the decision in the above case upheld - present appeal dismissed.

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• CST, VAT & Sales Tax

• 2017 (8) TMI 807
  Inter-state or intra-state sale - penalty - the revisional authority passed an order dated 23.04.2015, in which, she set aside the appellate order only on the ground that the communication dated 26.11.2010 was not an appealable order. If at all the petitioner was aggrieved by the action of the departmental authorities, he should have preferred appeal against the order dated 04.12.2010 - Held that: - We may recall, in the notice for revision, the revisional authority raised two grounds. One was of the maintainability of the appeal and the other was on the merits of the appellate order. The revisional authority having held that the appeal itself was not maintainable, refused to elaborate on the merit of the order. When we are of the opinion that the appeal was maintainable and that the revisional authority therefore committed an error in reversing the appellate order on the ground of maintainability, we must restore the proceedings before the revisional authority for decision on merits. For such purpose, the revisional order shall have to be set aside. For the same reason the order passed by the Tribunal confirming the revisional order shall also go. The proceedings are restored before the revisional authority - petition allowed - decided in favor of petitioner.

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• 2017 (8) TMI 806
  Natural justice - statutory remedy of appeal before the Appellate Tribunal - failure to furnish C forms and F Forms - Levy of VAT on DEPB - petitioner has not filed any other documents evidencing actual export of goods and also failed to file orders placed by foreign buyers on the exports - HC dismissed the writ petition (2014 (9) TMI 1116 - ANDHRA PRADESH HIGH COURT) - Held that: - it will be just and equitable to grant that opportunity to the appellant, having heard the learned counsel appearing for the State as well - appellant is granted a period of 30 days to challenge the orders by filing a statutory appeal before the Tribunal - appeal partly allowed by way of remand.

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• 2017 (8) TMI 805
  Revision of assessment - levy of tax - dyed polyester yarn - Held that: - the Hon'ble Division Bench of this Court, in the case Popular Thread Factory Vs. Commercial Tax Officer, Chennai, [2001 (9) TMI 1081 - MADRAS HIGH COURT] has allowed the case in favor of the dealer, holding that Tribunal was wholly in error in holding that sewing thread is not cotton yarn and that the assessee can be subjected to tax by treating such sewing thread as not being declared goods - the basis for proposing to revise the petitioner's assessment pursuant to notice dated 13.06.2001 is no longer sustainable - petition allowed - decided in favor of petitioner.

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• 2017 (8) TMI 803
  Concessional rate of tax - Section 8(1) of the Central Sales Tax Act, 1956, as well as under Section 13(1)(b) of the Bihar Finance Act - goods sold to registered dealer under Section 8(1) and 8(3) of the Central Sales Tax Act, 1956 - it appears that the petitioner is relying upon a notification issued by the erstwhile State of Bihar under Section 6(3)(c) of the Bihar Sales Tax Ordinance, 1976 dated 22nd December, 1976, whereby the Government of Bihar was pleased to exempt from levy of ‘Special Sales Tax’ and ‘General Sales Tax’ sale made to the United Nations International Children’s Emergency Fund (UNICEF) of such goods as are certified by them to be required for use of the UNICEF. Held that: - the exemption notification dated 22nd December, 1976 issued under Section 6(3)(c) of the Bihar Sales Tax Ordinance, 1976 is not a ‘sale’ which is generally exempted from the tax to be levied under the Bihar Finance Act - the most important ingredient explained under Section 8(2A) of the Central Sales Tax Act, 1956 is sale or purchase of goods if exempted under the specified circumstances or under the specified conditions and not generally, under the Provincial Sales Tax laws applicable in the State, then they are liable for payment under Central Sales Tax Act, as they are not covered under Section 8(2A) of the Central Sales Tax Act, 1956. The conditions attached in the notification issued by the erstwhile State of Bihar dated 22nd December, 1976 is to the effect that if such goods are certified by them to be required for the use of UNICEF, then only such sales are exempted from the payment of Provincial Sales Tax, meaning thereby to, there is no general exception for, every type of sale of goods, to the UNICEF. Thus, benefit under Section 8(2A) of the Central Sales Tax Act, 1956 cannot be availed by this petitioner. Rate of tax - Sale made to registered dealer of store materials under Section 8(1) and 8(3) of the Central Sales Tax Act, 1956 - For such sale, the rate of tax applicable is 4%, whereas, the respondents-State Authorities have taxed the sale at the rate of 10% - tax to be levied at 4% or 10%? - Held that: - there is no substance in the contention of the petitioner mainly for the reason that the store articles were purchased by this petitioner at a concessional rate for the particular type of end-use. After purchase at a concessional rate, the spare parts, etc. for the manufacturing of a particular type of goods the spare parts have been sold away to the registered dealer. Thus, the goods which were purchased at a concessional rate under Section 8(1) of the Central Sales Tax Act, 1956 or under Section 13(1)(b) of the Bihar Finance Act, cannot be now utilized for any other purposes. Such type of goods, which were purchased for a particular type of end use, have been sold away to the registered dealer and hence, this petitioner is liable to make payment of tax under Central Sales Tax Act at the rate of 10% and not at the concessional rate of 4%. Petition dismissed - decided against petitioner.

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• Indian Laws

• 2017 (8) TMI 804
  Grant of licence - establishment of A4 shops/2-B bars - licence denied on the ground that the premises selected by the petitioners falls within 500 meters to the National Highway No.16 - G.O.Ms.No.391, Revenue (Excise-II), Department, dated 18.06.2012 known as Andhra Pradesh Excise (Grant of Licence of Selling by Shops and Conditions of Licence) Rules, 2012 and same are amended vide G.O.Ms.No.112, dated 22.03.2017 - Held that: - A perusal of the impugned proceedings goes to show that the Projector Director, NHAI, issued letter dated 16.05.2017 stating that earlier notification was not de-notified, deleting the Visakhapatnam from the NH-16, as such, the applications of the petitioners were rejected. Section 2(3) of the Act of 1956 provides that Central Government may, by like notification, omit any highway from the Schedule and on the publication of such notification, the highway so omitted shall cease to be a national highway. Admittedly, the Government of India, Ministry of Road Transport & Highways by notification dated 01.05.2015, substituted S.No.49 of Schedule to the Act pertaining to National Highway-16 and Vishakhapatnam does not find place in the Schedule - When once Schedule to the Act as amended by notification dated 01.05.2015 does not contain Vishakhapatnam, question of denotification or omitting as per Section 2(3) of the Act does not arise. Even as per clarification given by Central Government referred to above, de-notification under sub-section 3 of Section 2 of the Act is not required and the particular stretch in S.No.49 pertaining NH -16 omitted in notification S.O.1150 (E), dated 01.05.2015 cannot be treated as National Highway. Since the rejection of applications of the petitioners for grant of A4 shop licences and Form 2-B Bar licences is on the ground that the proposed shops are within 500 meters of National High Ways only, but not State Highways, as such, this court has not expressed any opinion on that aspect. It is for the licencing authority to consider that aspect while reconsidering the applications. It is also brought to the notice of this Court that some of the petitioners carried on business in the same premises and notices were issued for shifting the premises basing on the judgment of the Hon’ble Supreme Court referred to supra, several writ petitions were filed, wherein this Court granted interim orders. When once ‘Visakhpatnam’ is not found in Schedule to the Act of 1956, as part of National Highway No.16, rejection of applications of the petitioners on the ground mentioned in the impugned order is erroneous and without any application of mind. Petition allowed - decided in favor of petitioner.

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