TMI Tax Updates - e-Newsletter
August 25, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
Indian Laws
TMI SMS
Highlights / Catch Notes
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GST:
Seizure of goods - inter-state transit of goods - Even if the seizure is treated to be under Section 129(1) of the Central G.S.T., as there was no provision of E-Way bill on the relevant date under the Central G.S.T. prima facie the seizure appears to be illegal.
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Income Tax:
Validity of provisions of Section 115JB & 80IC - whether ultravires - the provisions are in accordance with law and the Government has power to introduce such provisions. Apart from that 80IC deduction which is made is from the gross profit and will apply only on the book profit therefore, Section 115 JB & 80 IC both run in different fields.
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Income Tax:
Protective assessment u/s 143(3) r.w.s 153C - since the AO has made the addition substantively in the hands of HUF, in the year 2009-10 and there was no ambiguity in the mind of the assessing officer with regard to the beneficiary, there is no case for making the protective assessment.
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Income Tax:
Levy of penalty u/s 271AAA - additions on account of unaccounted receipts derived from land trading and commission income - In the absence of any inquiry in this regard, the assessee cannot be blamed for non-satisfaction of the exit clause provide under s. 271AAA(2)
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Customs:
Whether when the appellant has paid the entire duty amount alongwith the interest and the penalties, the proceedings would have been concluded - Held Yes.
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Customs:
Import of DVD/CD manufacturing machine - denial of benefit on the ground that the exemption notification is meant for a complete line of DVD/CD manufacturing machine and they had not imported the complete line - when there is doubt in exemption notification, it goes in the favor of revenue - Benefit of exemption denied.
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Customs:
Imposition of anti-dumping duty - goods originated in China, value addition made in Sri Lanka - who would be regarded as exporter country? - when there is an aggregate value addition in the territories of contracting parties of not less than 35% of FOB value of the product under export, then the export is deemed to be from the contracting party, that is in the present case Sri Lanka, which has exported the tiles.
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Customs:
Classification of indicator panel incorporating Liquid Crystal Devices (LCDs) - Since these LCD modules are not meant for electrical signaling apparatus or for indicator panels of chapter heading 8531, they are not parts falling under heading 85319000.
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Service Tax:
Evasion of Service Tax - there is a huge amount of service tax outstanding belonging to the period when the petitioner was one of the Directors of the said Company, therefore he cannot take the plea of not being liable to pay in terms of the “Deed of Settlement” which is alleged to have been executed between other two Co-Directors and him, the dues being statutory duty to be cleared.
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Service Tax:
Business Support Services - the gas storage facility in industrial unit are not fitting into overall scope of infrastructural support services
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Service Tax:
Condonation of delay of 5 months and 3 days in filing appeal before the Commissioner (appeals) - A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk - In order to do justice between the parties, this Court exercising the powers under Articles 226 and 227 of the Constitution of India, condone the delay
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Service Tax:
Jurisdiction - Refund claim - Whether the ld. CESTAT was right in law in holding that the assessee being service recipient was entitled to file the refund claim before its jurisdictional authority instead of jurisdictional authority of the service provider where the service tax was paid? - Held Yes
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Service Tax:
Recovery of amount refunded - Department did not file any appeal against the Order-in-Original granting refund to the appellant which has attained finality and cannot be offset by demand of refund on the ground that it is erroneous.
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Service Tax:
Nature of activity - manufacture or service - The activity of the appellant of strapping the wire rod mill products of their client in the factory of the client with the material supplied by the client, so that the client can, in turn, clear the goods on payment of excise duty, is squarely covered by Notification No.8/2005-ST and therefore they are not liable to pay service tax
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Service Tax:
Classification of service - appellants had been appointed as custodian of imported edible oils under Customs Act, 1962 and had rented/leased out their storage tanks in Kakinada for storage of the imported edible oils to those importers who availed the facility of storing imported oils in these storage tanks - appellant herein would not qualify for taxing under ‘storage and warehousing services.
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Service Tax:
Rent-a-cab Service - Even when they collected the service tax, they have not deposited with the Government. The assessee has also not filed ST-3 returns and thereby suppressed the fact that they have rendered taxable services and collected service tax and retained the same with them - Demand confirmed.
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Service Tax:
Refund of unutilized CENVAT credit availed - The Commissioner(Appeals) has rejected the refund on mere technicalities after accepting that the appellants are eligible for refund. - The substantive benefit cannot be denied on mere procedural infractions.
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Central Excise:
Tribunal as well as two Commissioners of Excise department exceeded the jurisdiction and committed an error in making observations against the High Court and the Supreme Court decisions.
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Central Excise:
Transfer of CENVAT credit - closure of factory - having accepted the closure certificate of Gurgaon Unit, it will not be appropriate to reopen the same almost after four years of issuing notice which raises a serious doubt
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Central Excise:
Method of valuation - manufacture of transformers as well as their installation on a turnkey basis - Captive consumption in execution of contract - The entire amount cannot be considered as the cost of transformer sold to M/s APSPDCL.
Articles
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2018 (8) TMI 1322
Seizure of goods - inter-state transit of goods - Section 129(1) of the U.P. GST Act, 2017 - applicability of IGST Act - Held that:- The provisions of U.P.G.S.T. are applicable to transactions within the State of U.P. whereas I.G.S.T. covers the interstate transactions - Section 20 of the I.G.S.T. makes applicable the provisions of Central G.S.T. in respect to matters relating to inspection, search and seizure under the said Act. Even if the seizure is treated to be under Section 129(1) of the Central G.S.T., as there was no provision of E-Way bill on the relevant date under the Central G.S.T. prima facie the seizure appears to be illegal. The goods seized be released along with the vehicle subject to the petitioner furnishing indemnity bond and security (other than cash and bank guarantee) in respect of the proposed tax and penalty on the value of the goods shown in the documents accompanying the same.
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Income Tax
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2018 (8) TMI 1321
TDS on interest income of the FDR's payable to NOIDA - Held that:- The question of law has already been answered in favour of the assessee and against the department by Hon'ble Apex Court [2018 (7) TMI 664 - SUPREME COURT OF INDIA] - Decided against the revenue.
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2018 (8) TMI 1320
Addition towards unexplained marriage expenses - Additions u/s 68 towards advance against land and unsecured loans - Held that:- additions documents, like sale deed and its confirmation, furnished first time before the Court - The ITAT did not therefore have the advantage to look into those documents and to examine whether or not they would have any bearing on the matter. In view of above, present appeal is disposed of. Impugned judgment dated passed by the ITAT is set aside and the matter is remitted back to the ITAT to examine the matter afresh in the light of aforesaid documents and pass fresh order in the appeal in accordance with law.
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2018 (8) TMI 1319
Sale of agriculture land as plotted land - taxable as business income or capital gains - HELD THAT:- The very nature and purpose of the agriculture land has been changed and the Tribunal therefore upheld the findings recorded by the CIT(A) that such change is an irreversible change where the very nature and purpose of the land has been changed from agriculture to residential. The Tribunal held that it is not a case that the buyers have acquired agriculture plots and subsequently changed it to residential use. In this case, the assessee itself has developed residential plots and then sold it to individual buyers. In view of the concurrent factual finding recorded by the Assessing Officer, CIT(A) and ITAT, in our view, no question of law much less any substantial question of law does arise for consideration by this Court. Tribunal is the final fact finding authority on the subject.
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2018 (8) TMI 1318
Estimation of income - determination of gross profit rate (GP rate) - ITAT reduced the rate from 15% to 12% - enhanced addition made by ld. CIT(A) towards unaccounted stock - difference between the statement submitted by assessee to State Bank of Indore and the actual stock found - during investigation it was revealed that the assessee company and its sister concern had obtained bogus purchase bills from various entry providers who provided bogus sales bills without supplying the goods mentioned in the bills. Held that:- In our considered opinion, the tribunal while considering the matter has rightly observed that either the bills are mainpulated so as to increase stock or the sales has been reduced. - In that view of the matter, the view taken by the authorities is just and proper. Therefore, no substantial question of law arises. Appeals dismissed.
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2018 (8) TMI 1317
Recovery of tax dues - garnishee orders were also passed, because respondents have got specific target to recover the tax amount. - Demand notice - Only three days’ time was given to the Assessee to reply this show cause notice. - Principle of natural justice - adequate opportunity of being heard Held that:- There cannot be an achievement of target, in breach of law. Reasonable time ought to have been given to the Assessee to give reply to the show cause notice and at least, within the time limit of preferring appeal, no such garnishee order ought to have been passed by the respondents. Such speed the respondents must show in their own work for recovery of tax in the matters, which are already concluded. Thus, it appears that in a hot haste the respondents have decided the show cause notice and without waiting for the appeal period, garnishee orders have been issued and the period of payment of demand has also been curtailed. This much speed was not necessary in the facts of the present case. The order set aside - matter remanded back for fresh adjudication - Decided in favor of assessee.
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2018 (8) TMI 1316
Validity of provisions of Section 115JB 80IC - whether ultravires inasmuch as the benefits granted under Section 80IC cannot be withdrawn by introduction of provisions of Section 115JB. - Counsel for the petitioners has contended that in view of the various decisions of the Supreme Court, the provisions which has been introduced by the legislation by amendment of Section 115JB is discriminatory - deduction in respect of unit situated in Uttarakhand and Himachal Pradesh (special category states) Held that:- Before proceeding with the matter, it will not be out of place to mention that while deciding the vires of statute, we have to look at the object of the special introduction of Section 115JB which falls under Chapter 12B which pertains to special provisions relating to certain companies and keeping in mind, the speech delivered by the Finance Minister referred hereinabove. In our considered opinion, the very purpose of the introduction of this provision is to charge minimum tax on book profit. The distinction between the book profit and the taxable book profit is to match with the minimum tax as shown under the Companies Act by the special Act which was introduced. In that view of the matter, the argument canvassed by counsel for the petitioners though attractive but in our considered opinion, is devoid of any merit and the taxing statute is to be looked into for the purpose of interpretation of the introduction of the Section. In our considered opinion, the very object was to avoid net tax liability by the company through book profit from the company. In that view of the matter, while interpreting the statute, the court has to be very cautious in holding it to be bad in law otherwise the object of introduction of the Section will be frustrated. In our considered opinion, the provisions are in accordance with law and the Government has power to introduce such provisions. Apart from that 80IC deduction which is made is from the gross profit and will apply only on the book profit therefore, Section 115 JB 80 IC both run in different fields. Decided against the assessee.
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2018 (8) TMI 1315
Stay of demand - Rectification of an error - application was pending for long time before the AO - Held that:- It appears that pursuant to the request made by the petitioner for an adjournment on four occasions, the respondent is yet to fix a date and has not taken any decision pursuant to the impugned notice In my view, the consequential relief sought for by the petitioner, if considered, would be sufficient to safeguard the interest of the assessee and there would be no necessity to quash the impugned notice, as there is no statutory bar for the Assessing Officer to rectify the assessment order dated 30. 12. 2016 even if an appeal is pending against it. Appellant directed to file the objections and AO directed to adjudicate the same and pass a speaking order on merits and in accordance with law.
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2018 (8) TMI 1314
Disallowance made u/s 14A Rule 8D - Held that:- the provisions of section 14A cannot be invoked as there is no exempt income in the hands of the assessee. - Decided against the revenue.
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2018 (8) TMI 1313
Protective assessment u/s 143(3) r.w.s 153C - ITAT cancelled the protective assessment holding that once substantial assessment is made, protective assessment has no legs to stand - purchase of gold and diamonds. - Held that:- In the instant case the AO has not made any addition on the basis of incriminating material belonging to the assessee, found from the searched person u/s 132 of the Act. The addition was made on the basis of entries in the regular books accounts revisiting the same. Therefore, facts of the case are squarely covered by the decision of this tribunal in the case of Lalitha Devi [2018 (4) TMI 337 - ITAT VISAKHAPATNAM] and the decision of Hon’ble Supreme court in the case cited. The notice issued u/s 153C without jurisdiction and is invalid. Thus the consequent additions made in the order is beyond the scope of section 143(3) r.w.s. 153C and are unsustainable. Further, since the AO has made the addition substantively in the hands of HUF, in the year 2009-10 and there was no ambiguity in the mind of the assessing officer with regard to the beneficiary, there is no case for making the protective assessment. Protective assessment is made when there is ambiguity with regard to the actual beneficiary. - having made addition substantively in the hands of HUF, the addition made on protective basis required to be deleted. - Decided against the revenue. Depreciation of windmill and computation of short term capital gains on sale of windmill - Held that:- the sale consideration of wind mill require to be bifurcated towards the land and the windmill but not the wind mill alone. The revenue during the appeal hearing did not place any material to controvert the finding given by the Ld.CIT(A).The AO has not disputed the basis for apportioning of sale price towards the land cost on the basis of indexed cost of acquisition. - The assessee has not claimed any depreciation on the land, therefore we hold that assessee has rightly allocated the sale consideration towards the windmill and the land and did not commit any error in deducting the indexed cost of land from the sale consideration of the wind mill and offering the balance amount towards the sale price of wind mill. - Decided against the revenue. Income from house property - AO observed that assesse has suppressed the receipt toward rental income - Held that:- Having credited the rent to the books of accounts and shown as debit balance, the assessee cannot deny the same for admission of income. In case, the rent is not realised, the assessee is free to claim the same as deduction as and when the same was written off as per law. The assesse also did not furnish any confirmation letter from the lessee to support the rent due - Additions confirmed - Decided against the assessee.
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2018 (8) TMI 1312
Levy of penalty u/s 271(1)(c) - issue of notice issued u/s 274 r.w.s. 271(1)(c) without striking off irrelevant portion - estimation of income - genuineness of expenditure claimed - Held that:- Even in the assessment order, the AO has initiated penalty proceedings for concealment of income and for furnishing of inaccurate particulars of income. This lapse is continued even in penalty order where the AO has levied penalty under both the limbs, i.e. concealment of particulars of income and furnishing of inaccurate particulars of income. Therefore, we are of the considered view that notice issued by the AO u/s 274 r.w.s. 271(1)(c) is vague and which was issued without application of mind and hence, whole penalty proceedings is vitiated. Consequently, the penalty levied by the AO u/s 271(1)(c) cannot be sustained. - Penalty to be deleted - Decided in favor of assessee.
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2018 (8) TMI 1311
Levy of penalty u/s 271AAA - additions on account of unaccounted receipts derived from land trading and commission income - onus to prove the ‘manner’ in which the undisclosed income has been derived and ‘substantiation’ thereof - Assessee contended that no specific question was asked to the assessee with regard to the manner of deriving income and substantiation thereof while recording the statement under s. 132(4) of the Act or at any later stage in the course of assessment proceedings. The learned AR thus submitted that without being put to query on this subject it was not possible for the assessee to visualize the same. Held that:- In the absence of any evidence or record to show that any specific query made to the assessee and in the absence of any query on the manner and substantiation thereof, the allegation for non-fulfillment of condition of Section 271AAA(2) of the Act does not survive. In view of the binding precedent delivered by Hon’ble Gujarat High Court the onus would shift on the assessee to specify the manner of earning undisclosed income and substantiation thereof only upon requisite inquiry in this regard. In the absence of any inquiry in this regard, the assessee cannot be blamed for non-satisfaction of the exit clause provide under s. 271AAA(2) of the Act. - No penalty - Decided against the revenue.
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2018 (8) TMI 1310
Assessment u/s 153C r.w.s 143(3) - agriculture land - capital asset u/s 2(14) or not - AO observed that the land owned by the assessee at Village Rojka Gujar, District- Sohna, Haryana was a barren and rocky terrain, which was not cultivable and no plantation activities were also permissible on the said land. Held that:- A comparative reading of the pre-amended and amended provisions of section 153C clearly shows that the requirement to initiate proceedings u/s 153C in case of a person other than the person referred to in section 153A as per the pre-amended provisions was only that the books of account or documents seized belong to such person and the same are handed over to the Assessing Officer having jurisdiction over such other person. The amended provisions of section 153A, however, have made a material change in this requirement inasmuch as in addition to the satisfaction of the Assessing Officer having jurisdiction over a searched person about any books of account or documents seized being pertained to any other person or any information contained therein being related to such person and handing over of such books of account or documents seized to the Assessing Officer having jurisdiction over such other person, there is an additional requirement that the Assessing Officer having jurisdiction over such other person shall proceed against such other person in accordance with the provisions of section 153A only if he is satisfied that the books of account or documents seized have a bearing on the determination of the total income of such other person. As already discussed, both the seized documents belonging to the assessee in the present case as relied upon by the Assessing Officer in the satisfaction note were not having any bearing on the determination of the income of the assessee for the year under consideration. As a matter of fact, not only no addition on the basis of the said documents was made by the Assessing Officer in the assessment completed u/s 153C/143(3), but even there was no reference whatsoever to the said documents in the said assessment. The initiation of proceedings u/s 153C in the case of the assessee thus was bad in law and the assessment made by the Assessing Officer u/s 153C/143(3) in pursuance thereof is liable to be cancelled being invalid. We order accordingly and allow the additional ground raised by the assessee. - assessment order quashed - Decided in favor of assessee.
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2018 (8) TMI 1309
Reopening of the assessment u/s 147 - deduction u/s. 54(1) - investment made in the apartment at "Sapphire Heights" - AO observed that capital gain was short term capital gain and not long term, hence not eligible for exemption u/s 54 - Held that:- occupancy certificate was granted to the builder on 18.02.2009 meaning thereby upto 18.02.2009, the Assessee had not even acquired any right to occupy the flat. After occupancy certificate, the agreement to sale was executed on 06.03.2009, meaning thereby the assessee could get the possession of the flat on execution of the agreement of sale on 06.03.2009. This agreement to sell was claimed by the assessee to be sale deed was in fact an agreement to sale. Even the construction of the apartment was not started upto 17.11.2006 and the property was sold on 28.06.2009. From any angle, the capital asset was not held by the Assessee for more than 3 years. We are of the considered opinion the Revenue has rightly held this gain accrued on sale of this property as short term capital gain. Accordingly, we find no infirmity in the order of the CIT(A) and we confirm the same. - Decided against the assessee.
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Customs
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2018 (8) TMI 1307
Interpretation of statute - correct interpretation of the term “preserved” - export under duty entitlement scheme - Contention of the Customs Department was that the exporters did not use any chemical preservatives and hence, there is no processing or preservation effected on the goods so exported by them. Held that:- Drying of marine products and freezing the meat is one method of preservation - Since Sl.No.2 specifically speaks about the processed preserved and frozen marine products, the export of which is undertaken by the respondents herein. The description of the goods as claimed by the respondents is only proper for the purpose of granting duty entitlement. Appeal dismissed - decided against Revenue.
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2018 (8) TMI 1306
Public Interest Litigation - Sensitive materials were brought into India without following due process of law - compromise of national security and safety - Smuggling activities - Held that:- It is noteworthy that the petitioners are business rivals of the companies against whom allegations are made in these petitions. It is evident that the opportunity to import the goods for Aero Show was lost to the rival companies and, therefore, the petitioners have an axe to grind against those companies. The subject matter of these petitions and grounds urged leave nothing to doubt that the petitioners are out to harass the rival companies and are attempting to secure the orders/directions against them on the specious grounds of the loss to exchequer. The cause of action in this matter arose in the year 2009 and the petitioners, after lapse of three years made a complaint to the concerned authority and then, approached this court invoking its extraordinary jurisdiction only in the month of June, 2017. The casual explanation offered is that though the complaint was lodged in the year 2012, the investigation was tardy and the petitioners were pursuing the matter before the investigating officer - In an appropriate case, this Court may refuse to exercise its extraordinary jurisdiction, if there is such negligence or omission on the part of the petitioners taken in conjunction with the lapse of time and other circumstances causing prejudice to the opposite party. Even where fundamental rights are involved, the matter is still within the discretion of this Court. In the present case, the oblique motive and relentless efforts of the petitioners, directed against their business rivals, is more than obvious. Not being satisfied with an earlier attempt, the tirade continues inasmuch as, the petitioners are seeking to invoke the extraordinary jurisdiction of this Court, keeping the affected parties in dark - This Court is of the firm opinion that this is a fit case where the petition should be dismissed while imposing exemplary costs on the petitioners and other non-monetary directions. Petition dismissed while imposing costs.
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2018 (8) TMI 1305
Whether when the appellant has paid the entire duty amount alongwith the interest and the penalties, the proceedings would have been concluded and as to whether the Adjudicating Authorities below have been right while not concluding the proceedings in that scenario? Held that:- Section 28 (1) (A) of the Customs Act, 1962 makes it clear that the same is a beneficial piece of legislation with an intention to reduce the litigation proceedings where the assesse satisfies the condition of the said Section. The language makes it clear that the provisions provide for deemed conclusion of the proceedings against the assesses if the payment as regard the duty, interest and 15% penalty thereof stands made by the assesse within a period of 30 days of the receipt of Show Cause Notice. It is further seen that the provision is applicable even in the cases of demand having been arisen on account of collusion, wilful mis-statement or suppression i.e. even in respect of illegal activity of the assesse, if the same stands accepted by him and the respective duty alongwith proportionate interest and the required penalty stands paid. In the present case, the appellant herein has made the payment against the impugned bill of entry dated 29.09.2015 even prior the issuance of Show Cause Notice i.e. on 01.09.2015 itself with subsequent payment towards the penalty and interest on 07.01.2016 and 18.02.2016 respectively. The requisite TR-6/GAR-7 Challans are attached with the Appeal papers. As per the above provision, the appellant had the time to make the deposit till 08.03.2016 but the payment stands made by 18.02.2016. No doubt Sections 28(5) and 28(6) are applicable without prejudice to the provisions of Sections 135, 135A and 140 of the Customs Act but perusal of Show Cause Notice makes it clear that none of these provisions have been invoked at the time of issuing Show Cause Notice. It has already been observed that in fact the Show Cause Notice, in the present case, was not required to be issued - The present is opined to be a clear case of presumed and assumed interpretation of Section 28(5) and 28(6) by the Adjudicating Authorities below. The Commissioner(Appeals) is held to have committed an error while giving more emphasis to a clarificatory Circular than to the settled provision of the statute. Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1304
Import of DVD/CD manufacturing machine - benefit of N/N. 25/2002 dated 01.03.2002 - denial of benefit on the ground that the exemption notification is meant for a complete line of DVD/CD manufacturing machine and they had not imported the complete line - Whether or not the appellant is entitled to the benefit of Sl.No.25 in Exemption Notification No.25/2002, since they have imported part of the machinery listed therein and not the entire replication line? Held that:- The exemption notification provided exemption to CD/CD-R/DVD/DVD-R manufacturing machinery or replication lines. It is not in dispute that the replication line or manufacturing machinery comprises all the machines listed in the exemption notification and the appellant had imported some of the machinery and not others - there were case laws taking both views with respect to the benefit of exemption notification. Some took a liberal view while interpreting the entitlement of a beneficial exemption notification, while others took a strict view. Constitutional Bench of the Hon’ble Supreme Court in the case of CC, Mumbai Vs M/s Dilip Kumar & Co and others [2018 (7) TMI 1826 - SUPREME COURT OF INDIA] has held that When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favor of the Revenue. The appellant is not entitled to the benefit of the exemption notification - appeal dismissed - decided against appellant.
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2018 (8) TMI 1303
EOU - capital goods procured indigenously as well as imported the same for the purpose of installing the same in the EOU - debonding of unit - Held that:- The adjudicating authority in the impugned order has recorded that the capital goods were used from 1995-97. If that be so, we agree with the learned counsel’s submissions that Board Circular No.14/2004 dated 13.02.2004 will be applicable in the case in hand for the relevant period and the depreciation needs to be allowed till the payment of duty. It is an admitted fact that payment of duty has not yet been done - In the case in hand since the duty liability has not been discharged, no demand can be raised on the appellant - decided against Revenue. Demand of duty foregone on the inputs - Held that:- The appeal memoranda of the revenue is not specifying as to what the exact amount that needs to be confirmed from the assessee. In the absence of any such details in the grounds of appeal, we are unable to consider the revenue’s appeal - appeal rejected. Capital goods - Held that:- Since we have decided the assessee’s appeal on merits itself, no demand of duty liability arises on capital goods on which duty liability has not yet been discharged. Nothing survives in the appeal of revenue - appeal of Revenue dismissed. Appeal dismissed - decided against Revenue.
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2018 (8) TMI 1302
Penalty u/s 112 (a) (b) and u/s 114 A of the Customs Act - illegal imports - import of prohibited/restricted item, under concealment alongwith declared goods, iron scrap - Held that:- Praveen Kumar Jain had unknowingly got involved, without understanding that R- 22 gas is a restricted item. Further it appears that he was interested in learning the process of import export business. Had he known that R- 22 gas is a restricted item, and not freely importable, he would not have been present at the time of inspection by the customs. Accordingly the penalties imposed on Praveen Kumar Jain are set aside giving the benefit of doubt. So far National Steel and its proprietor Shri Shreyansh Jain is concerned, from the appreciation of facts on record, it appears that they were not knowing that their IEC code was being used for import of restricted goods. However they have violated the law by allowing the use of their IEC code by others scrupulous persons. Accordingly the penalty imposed is reduced to ₹ 5 Lacs. So far Praveen Bansal is concerned, he is the kingpin in the whole illicit import of R-22 gas. For making super profit, he has practically arranged all the things required. However under the facts and circumstances, the penalty of ₹ 10 lakhs under Section 112 (a) (b) and further penalty under Section 114AA of the Act are reduced to ₹ 3 lakhs each, under each section. Appeal allowed in part.
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2018 (8) TMI 1301
Rectification of mistake - Held that:- There are apparent typographical errors in the said Final Order - The said mistake are rectified and the respondent's name and address should be read as "Commissioner of Customs, New Customs House, Panambur, Mangaloe - 575 010" and the amount mentioned as “Rs.32.62 crores” in para 2 of the said final order to be read as “Rs.32,62,500” - ROM Application allowed.
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2018 (8) TMI 1300
Valuation - extra fuel required to be maintained in the aircraft for safety of passengers which remains on the board of the aircraft after its return from the international run - demand of Customs duty on such remaining fuel - Held that:- The issue is covered by the decision in the case of M/S. INTER GLOBE AVIATION LIMITED VERSUS CC, NEW DELHI [2017 (9) TMI 926 - CESTAT NEW DELHI], where it was held that The fuel in the tank is part of aircraft in operation. Fuel cost is calculated, and apparently, forms part of commercial consideration while fixing ticket charges for transporting aircraft. No freight element is attributable to fuel in the tank, the usage of which varies on different parameters. Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1299
Imposition of anti-dumping duty - value addition on imported goods - goods originated in China, value addition made in Sri Lanka - who would be regarded as exporter country? - deemed exporter - contracting party. Held that:- On identical issue relating to the same assessee for the earlier period, TILE ITALIA MOSAICS PVT. LTD. VERSUS COMMR. OF CUS. (APPEALS), BANGALORE [2006 (10) TMI 277 - CESTAT, BANGALORE], the Tribunal has taken a decision in favour of the assessee by holding that There is a value addition of more than 40% in terms of the said letter itself. Therefore, in terms of Rule 8 of Customs Tariff (DOGFTA between Sri Lanka and India) Rules, 2000, the goods are deemed to be imported from Sri Lanka as there is value addition of more than 35%. Therefore, the authorities below have overlooked the provisions of Rule 8 which clearly lays down that when there is an aggregate value addition in the territories of contracting parties of not less than 35% of FOB value of the product under export, then the export is deemed to be from the contracting party, that is in the present case Sri Lanka, which has exported the tiles. There is no infirmity in the impugned order which is upheld by dismissing the appeal of the Revenue - decided against Revenue.
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2018 (8) TMI 1298
Classification of imported goods - indicator panel incorporating Liquid Crystal Devices (LCDs) - The Chapter Heading indicated by the appellant was 8531 2000. Revenue felt that the goods under import are not indicators but LCD modules and therefore, classified the same under Heading 9033 0000 - whether the goods merit classification under CTH 9033 0000 or under CTH 8531 2000? Held that:- On examination, it was found that the goods were in the nature of LCD modules having PCB connectors, backlights (optional), ICs (bonded & otherwise), Bezel (metal pressed components) and LCD, other small components like resistors, capacitors, voltage regulators etc. The commercial catalogue submitted by importer does not show it as "indicator panel"; rather it shows it as "LCD Module" - any product is rightly identified by its name and use in the commercial parlance. It is evident that there is no relationship between the nomenclature of the goods imported as declared by the appellant and what is actually marketed by the appellant through their catalogue and website. Therefore, the imported item is a LCD Module, which is used in various instruments. Since these LCD modules are not meant for electrical signaling apparatus or for indicator panels of chapter heading 8531, they are not parts falling under heading 85319000. Since they are component parts to be used in wide range of machines, instruments or appliances, most of which are classifiable under chapter 90 of the Customs Tariff, and are being marketed as LCD modules or LCD alphanumeric modules, these are appropriately classifiable under heading 9033 0000. The impugned items have rightly been classified as parts under chapter heading 9033 000 as parts for machines, instruments or appliances of chapter 90 - appeal dismissed - decided against appellant.
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2018 (8) TMI 1297
100% EOU working under the STP scheme - Private bonded Warehouse - violation of N/N. 141/91 -Cus dt. 22/10/1991 and N/N. 52/2003-Cus. - the only violation alleged against the appellant is that the appellants have violated the condition of the notification and has not used the capital goods on IUT - time limitation. Held that:- In the said N/N. 140/91-Cus, there was no such condition that at the time of IUT, the recipient unit must use the goods. This condition of use by the recipient unit was introduced in the Notification No. 140/1991 by customs notification No.64/2002-Cus dt. 24/06/2002 which is after the transfer of goods to the present unit and therefore this condition of use cannot be made applicable retrospectively. Under the notification No. 140/91, duty can be demanded only from Verifone if there is a violation of any condition of the said notification because the importer of the said goods is Verifone and not the present appellant. Time limitation - Held that:- The demand is also barred by limitation as the officers of the Department visited the unit of the appellant on 28/06/2005 and finally issued the show-cause notice on 02/05/2008 which is much beyond the period of limitation. The impugned order is not sustainable on merit as well as on limitation - appeal allowed - decided in favor of appellant.
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Corporate Laws
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2018 (8) TMI 1308
Liquidation of company - Held that:- This Court is satisfied with the compliance of the statutory provisions more specifically Section 497 of the Act. Even the clearance certificate from the Income Tax Department stands issued. Quite apparently, there is no pending demand of any nature against the said Company. As such, there is no impediment in accepting the request made by the Official Liquidator for it can be said that it is just and expedient that the affairs of M/s Hamirpur Hire Purchase Private Limited, have not been conducted in a manner prejudicial to its members or the public and as such can be dissolved. Accordingly, the Company shall stand dissolved with effect from the date of submission of report which is dated 31.3.2016 which came to be filed on 11.4.2016
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Service Tax
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2018 (8) TMI 1323
Rectification of an order of assessment - Case of petitioner is that the income from restaurant was exempt from tax - rejection of rectification application on the ground that this is not a case for exercising such powers of rectification - Held that:- The Assistant Commissioner has not stated why according to him what the petitioner pointed out was not an apparent error. Secondly, we are informed that the petitioner had, by way of abandoned caution, also filed an appeal. The question of circumventing the appeal route is therefore does not arise. The Assistant Commissioner is requested to pass fresh order of rectification application of the petitioner and specifically comment on the petitioner's contention that though his income from restaurant business was exempt and so treated for part of the period under consideration, the same was added for the remaining part which was an apparent error - rectification application allowed.
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2018 (8) TMI 1292
Evasion of Service Tax - liability of outgoing Director of the company - Summons under Section 14 of the Central Excise Act, 1944 - violation of the provisions of Section 89 (1) (ii) of the Finance Act, 1994 read with Section 174 of the Central Goods & Services Act, 2017 - the petitioner is alleged to have resigned from the directorship of the Company in question i.e. M/s. Proplarity Infratech Private Limited in the year 2016 and therefore he is denying to have any liability towards payment of any dues concerning service tax and is taking the plea that the liability for the same is upon the other two Co-Directors who are still running the business of the said Company. Held that:- The petitioner has also been issued a notice under Section 14 of the Central Excise Act, 1944 as made applicable to service tax matters vide Section 83 of the Finance Act, to interrogate the petitioner, to which the petitioner avoided from appearing before the investigating officer and has taken shelter of court by filing the present writ petition. It is also apparent that as per the scheme of the Finance Act an offence under Section 89 of Act is a cognizable offence by virtue of Section 90 and in Section 91 power of arrest is conferred upon an officer of the Central Excise Department not below the rank of Superintendent of Central Excise nominated by the Principal Commissioner of Central Excise or Commissioner of Central Excise who would adopt the same procedure as provided under Cr.P.C. for arrest. It is also made clear by the respondents that even if any Director resigns, he cannot seek exoneration from liability of making payment of service tax, simply because he resigned from the post of Director, if the service tax due is for the period when the accused was a Director. In the case at hand it is clarified by the respondents that there is a huge amount of service tax outstanding belonging to the period when the petitioner was one of the Directors of the said Company, therefore he cannot take the plea of not being liable to pay in terms of the “Deed of Settlement” which is alleged to have been executed between other two Co-Directors and him, the dues being statutory duty to be cleared. No case is made out in favour of the petitioner to pass any order prohibiting his arrest, if the same has to be carried out in accordance with the provisions as provided under the Finance Act - prayer dismissed.
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2018 (8) TMI 1291
Business Support Services - activities/services provided by the Assessee to its clients/buyers of installing plant and machinery and storage tanks for storage of gases sold by it and of installing all connected pipes, gauges etc. in the factory of its clients/buyers - the contention is that the matter ought to have been remitted back to the authority to distinguish between the excisable goods like oxygen and service rendered - Held that:- The Tribunal has rightly held that the gas storage facility in industrial unit are not fitting into overall scope of infrastructural support services - reliance placed in the case of ROYAL WESTERN INDIA TURF CLUB LTD VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI [2012 (11) TMI 526 - CESTAT, MUMBAI], where it was held that there is no merit in the argument that the renting of office space to the caterer/book maker is liable to be classified as business support service - appeal dismissed - decided against appellant.
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2018 (8) TMI 1290
Condonation of delay of 5 months and 3 days in filing appeal before the Commissioner (appeals) - non-payment of pre-deposit amount - It is the specific case of the petitioner before the 2nd respondent appellate authority that he is an old aged person, and due to ignorance and unavailability of proper assistance, he could not file the appeal within the period of two months as provided under the provisions of Section 85(3A) of the Finance Act. Held that:- It is well settled that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of malafides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk - In order to do justice between the parties, this Court exercising the powers under Articles 226 and 227 of the Constitution of India, condone the delay in filing the appeal in the interest of justice and taking into consideration the age of the petitioner and accepting the cause shown by the petitioner. Delay condoned - petition allowed - matter is remanded to the 2nd respondent to decide the appeal on merits.
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2018 (8) TMI 1289
Jurisdiction - Refund claim - Recipient of service - Whether the ld. CESTAT was right in law in holding that the assessee being service recipient was entitled to file the refund claim before its jurisdictional authority instead of jurisdictional authority of the service provider where the service tax was paid? Held that:- It is always better to allow the assessee to claim from his jurisdictional Commissioner since it is very easy to claim the same and it is settled preposition that the person who paid the amount to an authority, must claim the refund from the same authority. If question is decided to keep open for the assessee to claim on two places, will lead to criminal wastage of time inasmuch as the non jurisdictional Commissioner has to verify from the Commissioner for the payment made and instead of that it is always better for the convenience of the Central Government to keep it with the jurisdictional Commissioner - the view taken by the Tribunal is correct and is accepted. Appeal dismissed - decided against appellant-Revenue.
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2018 (8) TMI 1288
Recovery of amount refunded - duty was paid under protest - Section 11B of Central Excise Act - recovery sought on the ground that the Department has filed appeal before the Hon'ble Apex Court - scope of SCN - Held that:- The original order as well as the appellate order, both have been passed on a ground which is not stated in the show-cause notice and therefore, the demand cannot be confirmed on the basis of a ground which is beyond the scope of show-cause notice. Further the Department did not file any appeal against the Order-in-Original No.51/2005 dt. 25/05/2005 granting refund to the appellant which has attained finality and cannot be offset by demand of refund on the ground that it is erroneous. Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1287
Nature of activity - manufacture or service - activity of strapping wire rod mill products of Visakhapatnam Steel Plant (VSP) - process amounting to manufacture or Business Auxiliary Services - It is alleged that the appellant had not obtained registration for the business auxiliary services and thereby contravened Rule 4 of Service Tax Rules, 1994 r/w section 64 of the Chapter V of Finance Act, 1994. Held that:- Merely strapping the wire rod mill products does not bring into existence a new distinct commodity. It is more in the nature of packing the products manufactured by their client - there is no force in the arguments of the appellant that they are excluded from the definition of business auxiliary services by virtue of the proviso to the definition. The activity of the appellant of strapping the wire rod mill products of their client in the factory of the client with the material supplied by the client, so that the client can, in turn, clear the goods on payment of excise duty, is squarely covered by Notification No.8/2005-ST and therefore they are not liable to pay service tax under the head of business auxiliary services - As no service tax is leviable, the question of interest and penalties also does not arise. Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1286
Levy of Service Tax or VAT - supplies made to airlines towards cost of materials and handling charges - APVAT Act - Held that:- Respondent herein is raising bill/invoice on the airlines wherein amounts are charged separately for the supply of food items and beverages and handling charges for such supplies; appellant is not rendering any services in flight and is required to only delivery the food articles to the airlines - Reliance placed in the case of COMMISSIONER OF SERVICE TAX VERSUS LSG SKY CHEF INDIA (P.) LTD. [2011 (4) TMI 911 - KARNATAKA HIGH COURT], where it was held that The service so rendered by the assessee, which also includes the cost of transporting the food articles constitutes service. Therefore, to this extent alone, the assessee is liable for service tax and not for the entire cost received from the Airlines. Appeal dismissed - decided against Revenue.
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2018 (8) TMI 1285
Storage and warehousing services - appellants had been appointed as custodian of imported edible oils under Customs Act, 1962 and had rented/leased out their storage tanks in Kakinada for storage of the imported edible oils to those importers who availed the facility of storing imported oils in these storage tanks - case of appellant is that they are only renting out their storage facilities and is not covered under storage and warehousing services . Held that:- On perusal of agreement and invoices raised by the appellant on M/s AAL, it is noticed that appellant was charging an amount as tank rental charges from M/s AAL. It is also seen from the records that M/s AAL have charged cargo handling charges from the appellant for storing and handling their consignments of edible oils which are stored in the said tanks - There is nothing on record to show that appellant herein had besides collecting rental charges from M/s AAL had rendered other services and collected any further amount. Similar issue came up before the Tribunal in the case of Finolex Industries Ltd (supra) (wherein, one of us, M.V.Ravindran was a member) [2007 (5) TMI 27 - CESTAT,MUMBAI] has held that mere collection of an amount for leasing of the tanks for the usage of storage tanks cannot be considered as providing of storage and warehousing services - The said decision of the Tribunal was sought to be distinguished by the Learned Commissioner on the ground that M/s BPCL is user of the tanks, hence, the facts are different. In our view, such distinguishing factor may not carry the case of the Revenue any further. The amount collected by the appellant herein would not qualify for taxing under storage and warehousing services - Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1284
Liability of Service Tax - amount received by the appellant from Andhra Pradesh State Road Transport Corporation (APSRTC) for the period 2008-09 to December, 2011 - demand of tax with Interest and penalty - Held that:- On an identical issue this Bench in the case of M.D. Yousuf Pasha and others [2017 (8) TMI 70 - CESTAT HYDERABAD] where it was held that service tax along with interest needs to be upheld, but set aside the penalty - there is no reason to deviate from such a view already taken by the Tribunal. The impugned order to that extent upholds the confirmation of tax liability along with interest is correct and the penalties as imposed by the lower authorities are set aside - appeal allowed in part.
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2018 (8) TMI 1283
Liability of Service Tax - amount received by the appellant from Andhra Pradesh State Road Transport Corporation (APSRTC) for the period 2008-09 to December, 2011 - demand of tax with Interest and penalty - Held that:- On an identical issue this Bench in the case of M.D. Yousuf Pasha and others [2017 (8) TMI 70 - CESTAT HYDERABAD] where it was held that service tax along with interest needs to be upheld, but set aside the penalty - there is no reason to deviate from such a view already taken by the Tribunal. The impugned order to that extent upholds the confirmation of tax liability along with interest is correct and the penalties as imposed by the lower authorities are set aside - appeal allowed in part.
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2018 (8) TMI 1282
Levy of Service tax - amounts received as commission from M/s Maruthi Udyog Limited (MUL) referring clients/purchasers of the cars for insurance purpose and for loan purposes - Held that:- The service tax liability for the amounts received by the appellant during the period July, to September, 2004, from M/s Maruthi Udyog Limited is not taxable, is the view which has been taken by the bench in the case of The Mithra Agencies (supra) (wherein, one of us M.V. Ravindran was also Member) - penalties also set aside - appeal allowed. Tax demand for the period September, 2004 to January, 2007 - Held that:- The claim of the appellant assessee that the said amounts needs to be considered as cum tax amount the amount needs to be accepted and tax liability needs to be worked out for which factual matrix needs to be appreciated - Matter remanded. Appeal allowed in part and part matter on remand.
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2018 (8) TMI 1281
Rent-a-cab Service - It is alleged by the Department they provided taxable services and collected charges for vehicles but were not paying the same to the Government - appellant submitted that whenever their clients reimbursed the service tax to them, the same has been deposited with the Government and the service tax is not paid only when the same is not reimbursed by their clients. Held that:- It was never in dispute the service rendered by them amounts to rent-a-cab service and tax is liable thereon. Even when they collected the service tax, they have not deposited with the Government. The assessee has also not filed ST-3 returns and thereby suppressed the fact that they have rendered taxable services and collected service tax and retained the same with them - The leviable of service tax does not change that whether or not they have collected same from their clients. We cannot accept a new ground of liability of service tax at this stage, proposed by the Learned Counsel for the appellant because there was never a point of contention at the time of Order-in-Original or Order-in-Appeal. Appeal dismissed - decided against appellant.
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2018 (8) TMI 1280
Penalty - Short payment of service tax - suppression of facts or not? - demand of differential service tax liability for the period 2004-2005 to 2007-2008 - entire case of the Revenue is that due erroneous method of calculation followed month after month and differential service tax liability remained evaded and is correctly confirmed by the lower authorities by invoking extended period. Held that:- The copy of the audit report filed by the appellant in appeal memorandum clearly indicates that the entire records were made available to the audit party and audit record specifically states that the service tax of audit is of the Branch accounts and they had pointed out same discrepancy of non-payment of tax on foreign exchange remuneration and income received from the Government transactions, syndication fees, etc. These details indicate that the appellant assessee had in fact produced all the records before the authorities to check and come to a conclusion, whether the tax liability was correctly discharged or otherwise. There are strong force and contentions raised by the Learned Counsel that though they have not contested the tax liability before the Adjudicating Authority they had taken the point of limitation for setting aside the penalties so imposed, this is an acceptable point as, if the tax liability itself cannot survive on limitation the question of penalty does not arise - the penalty imposed on the appellant assessee are liable to be set aside; as also on the ground that the appellant assessee has not been able to discharge the tax liability during the period in question due to clerical error is an accepted position, hence this calls for setting aside the penalty of Section 80 of the Finance Act, 1994 invoking the provisions of Section 80 of the Finance Act, 1994. Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1279
Demand of service tax - services rendered by the appellants in relation to chit funds - benefit of N/N. 6/2005 dt. 01/03/2005 as amended - Held that:- Reliance placed in the Apex Court decision in the case of UNION OF INDIA AND ORS. VERSUS M/S. MARGADARSHI CHIT FUNDS (P) LTD. ETC [2017 (7) TMI 224 - SUPREME COURT OF INDIA], where it was held that the chit funds business was not covered by sub-clause (v) of sub-section 12 of Section 65 even after its amendment by Finance Act, 2007. Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1278
Refund of unutilized CENVAT credit availed - ITSS used in providing output service which are said to have been exported without payment of service tax - refund was rejected on technical grounds - Held that:- There is no infirmity in allowing the refund by the original authority as the appellant has substantially satisfied the requirements prescribed under Rule 4(7) and Rule 9 of CCRs - The Commissioner(Appeals) has rejected the refund on mere technicalities after accepting that the appellants are eligible for refund. The substantive benefit cannot be denied on mere procedural infractions - refund allowed - appeal allowed - decided in favor of appellant.
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Central Excise
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2018 (8) TMI 1277
CENVAT credit - inputs attributable to manufacture of exempted final products - reversal of CENVAT credit - Rule 6 of Cenvat Credit Rules, 2004 - Held that:- Since the assessee had reversed the cenvat credit with interest, no further adverse consequence should follow - This Court in case of Commissioner v. Ashima Dyecot Ltd [2008 (9) TMI 87 - HIGH COURT GUJARAT] has observed that reversal of credit amounts to non-availment - tax appeal dismissed.
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2018 (8) TMI 1276
Allowing credit of duty paid on Capital Goods to be adjusted against duty liability - Rule 57A to Rule 57J. - as per the notification, unutilized credit as on 1.8.1197 shall lapse - by applying the Directions of the Apex Court in the case of Eicher Motors Ltd., original authority extended the benefit. - SC has extended the benefit on the ground that once benefit accrues to the assessee, the same cannot be dined by issuing a notification. By applying the principle of resjudicata, wrongly, authorities and tribunal denied the benefit to the appellant. Validity of observations made by Commissioner Appeal in Appeal Memo - effectiveness of law declared by Supreme Court - lapse of credit lying unutilized. Held that:- It is well settled principle of law that the law declared by the Supreme Court is binding on all and when the Division Bench of this court has held that the judgment is applicable against which no SLP was preferred, any lower authority in rank observing that the High Court was not sure about the similarity of the issue in both the cases otherwise the Bench could have decided the case, in our considered opinion, these observations by Commissioner Appeal in Appeal Memo is not only objectionable but it is not permissible under law. Even the tribunal while setting aside the order of the First two Authorities has not given any reasons and simply accepted the appeal memo and has allowed the appeal without reversing the finding arrived at by both the authorities and observed that the Supreme Court judgment is not binding. The notification dated 1st August, 1997 will lapse on 1st August, 1997 and could not be applied subsequently. The first two authorities rightly observed and allowed the proceedings in favour of petitioner/assessee and tribunal as well as two Commissioners of Excise department exceeded the jurisdiction and committed an error in making observations against the High Court and the Supreme Court decisions. The order of the tribunal is quashed and set aside and that of the original authorities is restored - Petition allowed.
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2018 (8) TMI 1275
Transfer of CENVAT credit - transfer of capital goods Raw Material/Finished goods etc. - surrender of registration - closure of factory - Rule 10 of CCR - Whether the Hon’ble CESTAT was correct in setting aside the applicable interest statutorily required under Section 11AB/Section 11AA of Central Excise Act, 1944 and the equal penalty imposed mandatorily u/s 11AC of Central Excise Act, 1944 on the assessee? Held that:- Taking into consideration, the case of the assessee that closure certificate was issued by the Department of Gurgaon and the same was accepted by the Sales Tax Department of the State, the view taken by the Tribunal is correct and having accepted the closure certificate of Gurgaon Unit, it will not be appropriate to reopen the same almost after four years of issuing notice which raises a serious doubt - the issue is required to be answered in favor of assessee against the Department. Appeal dismissed - decided against Revenue.
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2018 (8) TMI 1274
Extended period of limitation - Oxytetracycline Injectable Solution (Veterinary) manufactured on Loan License basis - Benefit of N/N. 06/2002 dated 01.03.2002 - Held that:- The notification granted exemption only to the formulations mentioned in list No. 2. On careful consideration of list No. 2, it is found that the ingredient used by the respondent “Oxytetracycline” is not mentioned in the products for the manufacture of entry No. 57 - impugned order not sustainable. Time Limitation - Held that:- On perusal of the monthly returns submitted for the period in question, it is found that the respondent had indicated that they are clearing “Oxytetracycline Injectable Solution (Veterinary)” without payment of duty by claiming exemption under Notification. It is also a fact that their ER1 monthly returns indicate number of notification as 06/2003 - the First Appellate Authority was correct in coming to a conclusion that the entire demand in the case is hit by limitation. Appeal dismissed - decided against Revenue.
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2018 (8) TMI 1273
Utilization of CENVAT Credit - case of appellant is that they did not utilize any Modvat/Cenvat credit relating to period from 01.04.2000 to 16.06.2001 since the entire credit has been paid by the appellant on 26.07.2001 in the PLA - Held that:- The adjudicating authority had confirmed the demand of ₹ 17,20,82,858/- by denying them the same. By permitting the appellant to retrospectively opt out of modvat credit scheme on the basis of CBEC vide D.O.F. No. 267/07/2002-CX-8 dated 31.03.2002, the Ld. Commissioner (Appeals) has taken a fair and judicious view in the matter and has rightly rejected the proposal in the order-in-original to demand the full credit taken for the period from 01.04.2000 to 16.06.2001 - the Ld. Commissioner (Appeals) has correctly ordered the re-quantification after allowing the appellants to opt out with effect from 31.03.2001. The appellant have pleaded that the refund of ₹ 40 lakhs was adjusted against the re-quantified demand of ₹ 1.43 Crores - Held that:- There was indeed an ongoing correspondence between the Department and the appellant in this regard and appellant had undertaken to submit a letter withdrawing their claim for refund of ₹ 4.38 Crores. Therefore, the appellant would be at liberty to approach the lower authorities in respect of the appellants' claims that they have paid more duty, than the re-quantified amount. The lower authorities will examine their claim in accordance with law. Appeal dismissed - decided against appellant.
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2018 (8) TMI 1272
Method of valuation - manufacture of transformers as well as their installation on a turnkey basis - Captive consumption in execution of contract - It is alleged that there is a clear sale price of the transformers and they should accordingly be valued as per Section 4(1)(a) of the Central Excise Act based on the transaction value and not under Rule 8 of Central Excise Valuation Rules, 2000 - Held that:- The Learned Commissioner was correct in holding that there was an indivisible turnkey contract for supply of transformers, other materials and also installation and commissioning of the same. The cost of the materials has been given in the schedule but it includes not only the cost of the transformer manufactured by them but also other bought out items as explained by the Learned Counsel for the respondent herein and also as recorded in the draft audit report by the Central Excise Department themselves. The entire amount cannot be considered as the cost of transformer sold to M/s APSPDCL. The correct way of assessing the value of transformer, in such a case, is treating the same as captively consumed by the respondent in executing the contract given to them by M/s APSPDCL. Appeal dismissed - decided against Revenue.
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2018 (8) TMI 1271
Demand of Interest and penalty - credit wrongly availed and later reversed - Held that:- Instead of submitting the data of utilisation on 11-9-2017 the appellants submitted a letter of balance of credit as on 6th of each month. That does not establish that the appellants had not utilised the Cenvat credit. In these circumstances, the claim of the appellants that they have reversed the credit without utilising the credit is rejected as unsubstantiated - demand of Interest sustained. Imposition of penalty - Rule 15(1) of Cenvat Credit Rules - Held that:- The said Rule prescribes that penalty can be imposed if the appellants took any credit wrongly or in any contravention of any of the rules - In the instant case, it is an admitted position of the appellants that they had wrongly availed the credit. The rule does not require establishing any intention to evade duty - the imposition of penalty is upheld. Appeal dismissed - decided against appellant.
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Indian Laws
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2018 (8) TMI 1296
Dishonor of Cheque due to insufficiency of funds - Restoration of order of conviction passed by the learned Judicial Magistrate No.II - Trial Magistrate held that since the respondents have not produced any document to show that they have settled the amount payable by the fifth accused to the complainant and upon comparision of the signature in Ex.P17, statement of account with the cheques in question, concluded that the accused are guilty of the offence. Held that:- The Trial Court has erroneously convicted the respondents 1 to 4 herein without properly appreciating the evidence on record. It appears that Criminal miscellaneous petition was filed under Section 311 of the Code of Criminal Procedure Code to recall the PW1 for re-examination through whom Ex.P17 was marked to show as if the cheque was given to the appellant/ private complainant towards a legally enforceable debt, at the instance of the fifth accused. It is to be noted that during cross examination, (after marking of Ex.P17) the signature in Ex.P17 was specifically denied by the respondents herein. This Court is of the considered view that the first appellate Court is right in entertaining a suspicion with respect to the coming into existence of Ex.P17, which has not been whispered at the earlier point of time but only at the conclusion of the Trial Court. Thus, taking into consideration of Ex.P17, the first Appellate Court has rightly held that there is no proper explanation with respect to liability between the A1 and A5 alleged therein and for the debt due by A-5, A1 has issued the cheque in question - appeal dismissed.
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2018 (8) TMI 1295
Dishonor of cheque - Whether in a case where, the drawer of the cheque denies the liability and refuses to pay the cheque amount and issues a reply notice categorically making his stand clear to that effect, even then, should the payee wait for the expiry of 15 days and only thereafter file a complaint as provided in proviso (c) to Section 138 of the Negotiable Instruments Act? Held that:- The scheme of giving opportunity to the drawer of the cheque is to pay the cheque amount before permitting his prosecution, no matter whether offence is complete, is unique to Section 138 of the Act. It gives chance even to the dishonest drawer to make, amend and escape prosecution - When the notice is given by the complainant demanding payment, the accused must make payment within a period of 15 days of the receipt of such notice. The words ‘the drawer of such cheque fails to make the payment’ are ostensibly different from saying ‘the drawer refuses to make payment’. The legislature has thoughtfully used the word ‘fails’ instead of other expressions, as failure can be due to variety of reasons including disability to pay. Therefore, the offence would be complete, when the drawer ‘fails’ to make payment within the stipulated time, whatever be the cause for such failure. In view of conflicting decisions of two learned single Judges of this Court on the same issue and in view of the importance of resolving the important question of law that has arisen for consideration, this Court deems it fit to place the matter before a Division Bench in order to resolve the conflict and to come out with an authoritative pronouncement - this Court directs the Registry to place this matter before the Hon’ble Administrative Judge, so as to enable the Hon’ble Administrative Judge to consider constituting a Bench in order to hear the issue and to resolve the conflict and make an authoritative pronouncement on the issue.
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2018 (8) TMI 1294
Correctness, legality and propriety of similar orders passed by the Metropolitan Magistrate on 21.07.2015 in the context of two different complaint cases - offence u/s 138 of the Negotiable Instruments Act, 1881 - petitioners are aggrieved by the directions of the Metropolitan Magistrate to refund the amount of ₹ 38 lakhs. Held that:- The settlement agreement though entered upon through the process of mediation where the parties had been referred by the criminal court had been arrived at by the parties on their own free will and volition. There was no direction from the Metropolitan Magistrate for payment to be made. The amount of ₹ 38 lakhs was, thus, paid to the complainant by the accused persons on their own initiation. The question as to whether this amount (assuming it represents the value of the cheques) was due as liability or not will have to be addressed at the trial of the criminal cases which continue to remain pending. The court of Metropolitan Magistrate not having brought about the said payment cannot be converted, midway the process, into a forum for its restitution, refund or recovery. The impugned orders are set aside - petition allowed.
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2018 (8) TMI 1293
Dishonor of cheque due to insufficiency of funds - restoration of conviction passed by Learned Magistrate - it is the case of appellant that First Appellate Court, without considering the facts and circumstances, under wrong perception has reversed the conviction and acquitted the accused - Held that:- It is seen from the records that only after the receipt of the letter Ex.D.1 issued by the accused, the complainant presented the cheque which was issued at the time of borrowing the loan as security purpose. Therefore, it is evident that the alleged cheque was not issued for any legal enforceable debt by the accused. That apart, even according to the complainant a sum of ₹ 2,00,000/- was borrowed by the accused for the interest at the rate of 24% per month. Hence, if the repayment amount is calculated with interest it comes to ₹ 6,00,000/-. But the accused issued cheque only for a sum of ₹ 2,00,000/-. As such the complainant has cleverly issued statutory notice as the cheque was issued only for part of the amount payable by the accused. Therefore, it has to be presumed that the cheque was not at all issued by the accused for any legal enforceable debt. This Court is of the considered opinion that the complainant did not fulfil the requirements as envisaged under Section 138 of Negotiable Instruments Act and it is clear that the complainant has failed to prove his case beyond any reasonable doubts - the lower appellate Court rightly acquitted the accused and reversed the judgment passed by the learned Magistrate, which does not warrant any interference from this Court. Appeal dismissed.
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