TMI Tax Updates - e-Newsletter
August 28, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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Income Tax:
Protective assessment - assessee had declared the income under the income tax declaration scheme 2016 - Once declaration of the same income under the IDS, 2016 has been accepted by the competent authority, there is no reason for reopening the case and making protective assessment in the hands of the assessee.
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Income Tax:
Reopening of an assessment beyond 4 years - deduction u/s 80IB(10) - development of housing project. - One of the conditions thereof being that no person shall be allotted more than one residential unit - purchaser has vacated the second property - no reason to deny the claim by way of reassessment proceedings.
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Income Tax:
Levy of penalty u/s 271(1)(c) - ITAT deleted the penalty - Additions u/s 41(1) - one time settlement with the SBI - Bank has waived a sum including interest - assessee has not furnished bifurcation of principal and interest amount in the total amount waived off by the bank - Penalty deleted by ITAT got confirmed.
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Income Tax:
Additional depreciation @20% u/s 32(1)(iia) - vehicle used for the transport of Ready Mix Concrete (RMC) for use in their construction site, from their own manufacturing unit - assessee is eligible for additional depreciation.
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Income Tax:
Subject : Conduct of assessment proceedings through ‘E-Proceeding’ facility during 2018-19-regd.
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Customs:
Rejection of release of imported goods - restricted item or not? - Biodiesel or HSD? - Director General of Foreign Trade confirmed that import of the goods is free - detention of goods cannot be permitted - the provisional release of goods is directed subject to certain safeguards
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Customs:
Redemption fine and duty imposed on seized vehicle - bonafide purchaser or Porsche Carrera car - The customs duty and redemption fine can be demanded from the person in ownership and custody of the imported goods on an option exercised for redemption, despite there being no liability to duty on any person other than the importer
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Customs:
Valuation of imported goods - Nylon coated and uncoated fabric 60 - There has been violation of principles of natural justice - the adjudicating authority is directed to make available the relevant Bills of Entry and decide the matter refresh
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Indian Laws:
Conviction u/s 138 of the Negotiable Instruments Act, 1881 - the parties ought to be allowed to settle the matter - The offence, therefore, is compounded in terms of the settlement - the order of conviction and the sentence imposed is set aside.
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Service Tax:
Works contract service - commercial or industrial construction - sub-contract - the service tax is not leviable on the sub-contractor activities undertaken by the appellant for construction of roads
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Service Tax:
Import of Online information and data base access or retrieval services - the OIDA service received by the appellant is not in relation to any business or commerce and accordingly the same is not taxable - further, it is found that such service was received by the appellant as a representative of all the educational institutions and as such also, they are not liable to service tax.
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Central Excise:
Validity of second SCN - the assessee cannot be vexed twice for the same set of allegations - the Commissioner of Central Excise and the Tribunal fell in error in coming to the conclusion that the second show cause notice initiated was entirely different and not relatable to the first proceedings.
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Central Excise:
Substantial expansion of industries - area based exemption - North Eastern Region - Filing of supporting documents is simply a procedure therefore late filing of documents, will not destroy the right of the appellant.
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Central Excise:
Jurisdiction - power of departmental authorities in keeping the adjudicating proceedings arising out of the show cause notice dated 27th April 2005 in abeyance, till the judgment of the Supreme Court in the case of Jindal Drugs Limited - It is not the case of the Department that the Supreme Court has stayed the judgment of the Tribunal - Matter cannot be kept pending.
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Central Excise:
Non-reversal of CENVAT Credit - Inputs lost during the process of manufacture are not required to be considered for reversal of credit - credit remains allowed.
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Central Excise:
Classification of Watch (Digital ATM Surveillance Solution) & Iwatch DVR (Digital Video Recording) - Since the prime function of these devices as explained by the Appellant is to record images, it is nothing but a digital camera and needs to be classified accordingly.
Articles
Notifications
GST - States-
G.O.Ms.No. 449 - dated
21-8-2018
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Andhra Pradesh SGST
EXEMPTING INTRA-STATE SUPPLY OF HINDI-CRAFT GOODS.
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G.O.Ms.No. 448 - dated
21-8-2018
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Andhra Pradesh SGST
Notifying the goods on which refund of unutilized input tax credit shall not be allowed -Certain Amendments made.
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G.O.Ms.No. 447 - dated
21-8-2018
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Andhra Pradesh SGST
Amendments in the Notification No. G.O.Ms.No.582, Revenue (Commercial Taxes-II) Department, dated, 12th December, 2017.
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G.O.Ms.No. 446 - dated
21-8-2018
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Andhra Pradesh SGST
Amendments in the Notification issued vide G.O.Ms.No.258, Revenue (Commercial Taxes-II), Department dated. 29th June, 2017.
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G.O.Ms.No. 445 - dated
21-8-2018
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Andhra Pradesh SGST
Clarifying the scope and applicability of the Notification issued vide G.O.Ms.No.259, Revenue (Commercial Taxes-II), Department dated. 29th June, 2017.
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G.O.Ms.No. 444 - dated
21-8-2018
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Andhra Pradesh SGST
Amendments in the Notification issued vide G.O.Ms.No. 261, Revenue (Commercial Taxes-II) Department, dated.29th June, 2017.
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G.O.Ms.No. 443 - dated
21-8-2018
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Andhra Pradesh SGST
Amendments in the Notification issued vide G.O.Ms.No.256, Revenue (Commercial Taxes-II) Department, dated. 29th June, 2017.
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S.O. 228 - dated
21-8-2018
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Bihar SGST
Amendment in Notification No. S.O. No.225, dated the 10th August, 2018
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77/GST-2 - dated
24-8-2018
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Haryana SGST
Amendment in Notification No. 76/GST-2, dated 10th August, 2018
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34/2018 – State Tax S.O. No. 60 - dated
21-8-2018
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Jharkhand SGST
Due dates for filing FORM GSTR-3B for the months from July, 2018 to March, 2019
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33/2018 – State Tax - S.O. No. 59 - dated
21-8-2018
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Jharkhand SGST
Prescribe the due dates for furnishing the details of outward supply of goods or services or both for GSTR1 from July 2018 to March 2019
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31/2018 – State Tax S.O. No. 58 - dated
21-8-2018
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Jharkhand SGST
Seeks to lay down the special procedure for completing migration of taxpayers who received provisional IDs but could not complete the migration process.
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21/2018 – State Tax(Rate) - S.O. No. 57 - dated
16-8-2018
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Jharkhand SGST
SGST rate on intra-State supply of Handicrafts goods
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20/2018 – State Tax(Rate) - S.O. No. 56 - dated
16-8-2018
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Jharkhand SGST
Amendment in Notification No. 5/2017-State Tax (Rate), dated the 29th June, 2017
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19/2018 – State Tax(Rate) - S.O. No. 55 - dated
16-8-2018
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Jharkhand SGST
Amendment in Notification No. 2/2017-State Tax (Rate), dated the 29th June, 2017
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18/2018 – State Tax(Rate) - S.O. No. 54 - dated
16-8-2018
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Jharkhand SGST
Amendment in Notification No. 1/2017-State Tax (Rate), dated the 29th June, 2017
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17/2018 – State Tax(Rate) - S.O. No. 53 - dated
16-8-2018
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Jharkhand SGST
Notification clarifying the scope and applicability of the notification No. 11/2017- State Tax (Rate), dated the 29th June, 2017
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16/2018 – State Tax(Rate) - S.O. No. 52 - dated
16-8-2018
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Jharkhand SGST
Amendment in Notification No. 14/2017- State Tax (Rate), dated the 29th June, 2017
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15/2018 – State Tax(Rate) - S.O. No. 51 - dated
16-8-2018
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Jharkhand SGST
Amendment in Notification No. 13/2017- State Tax (Rate), dated the 29th June, 2017
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14/2018 – State Tax(Rate) - S.O. No. 50 - dated
16-8-2018
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Jharkhand SGST
Amendment in Notification No. 12/2017- State Tax (Rate), dated the 29th June, 2017
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13/2018 – State Tax(Rate) - S.O. No. 49 - dated
16-8-2018
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Jharkhand SGST
Amendment in Notification No. 11/2017- State Tax (Rate), dated the 29th June, 2017
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18/2018-C.T./GST-35/2018-State Tax - dated
21-8-2018
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West Bengal SGST
Extension of due date of filing GSTR-3B for the month of July, 2018 till 24.08.2018.
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1172-F.T. - dated
21-8-2018
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West Bengal SGST
Amendment of Notification No. 1639-F.T. dated 14.09.2017 regarding West Bengal Screening Committee on anti-profiteering.
News
Case Laws:
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GST
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2018 (8) TMI 1415
Carry forward of balance CENVAT Credit as on 30.06.2017 - migration to GST Regime - petitioner did not file return within stipulated time - Held that:- Unless there is some prima facie evidence of genuine attempts at filing the returns having failed on account of technical errors, accepting a bald declaration by the petitioner would virtually amount to extending the time limit for filing the returns and this would lead to chaotic results.
There is nothing on record to suggest that all throughout from 01.07.2017 till 27.12.2017, the petitioner made multiple efforts at filing the returns making necessary declarations of unused CENVAT Credit - In absence of any other material suggesting genuine honest attempt on the part of the petitioner to file the return electronically, the same having failed on account of portal error or some such technical error attributable to the department, it would not be possible to extend the time limit for the petitioner.
Petition dismissed - decided against petitioner.
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2018 (8) TMI 1414
Input Tax Credit - Unable to to upload FORM GST TRAN-1 within the stipulated time - migration to GST regime - Held that:- The Government of India has issued Circular No.39/13/2018-GST, dated 03.04.2018, for “setting up an IT Grievance Redressal Mechanism to address the grievances of taxpayers due to technical glitches on GST Portal - the petitioner may apply to the additional 4th respondent, the Nodal Officer. The petitioner applying, the Nodal Officer will look into the issue and facilitate the petitioner’s uploading FORM GST TRAN-1, without reference to the time-frame - petition allowed.
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Income Tax
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2018 (8) TMI 1433
Settlement of a case - Income Tax Settlement Commission (ITSC) granting immunity from penalty and prosecution under Section 245H - Matter was still pending - Held that:- The Special Leave Petition is dismissed.
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2018 (8) TMI 1432
Carry forward and set off of Depreciation beyond 8 years - unabsorbed depreciation u/s 32(2) - Held that:- We do not find any merit in this petition. - The Special Leave Petition is accordingly dismissed.
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2018 (8) TMI 1431
Retrospective effect of first proviso to section 43B - scope of Amendment to section 43B - omission [deletion] of the second proviso to Section 43-B – Held that:- We do not find any merit in this petition. - The Special Leave Petition is accordingly dismissed.
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2018 (8) TMI 1430
Unexplained investment in purchase of agricultural land - sale agreement and other documents found and impounded during the course of survey under section 133A - Held that:- We do not find any merit in this petition. - The Special Leave Petition is accordingly dismissed.
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2018 (8) TMI 1429
Disallowance u/s 14A - AO applied the formula indicated in Rule 8D (ii) & (iii) of the Income Tax Rules - CIT (A) granted partial relief after analysing the decision but upholding the rejection of the disallowance by the AO offered by the assessee. The ITAT in the impugned judgment granted complete relief to the assessee - Held that:- We do not find any merit in this petition - The Special Leave Petition is accordingly dismissed.
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2018 (8) TMI 1427
Additions u/s 41(1) - additions in the years of transfer to the Reserve Fund of the excess provisions made for establishment and other expenses in earlier years - withdrawal of exemption by insertion of section 80P(4) by Finance Act, 2006 w.e.f 1-4-07. - Held that:- Leave grante - Order of HC stayed.
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2018 (8) TMI 1419
Undisclosed commission income - assessee is a firm and is a distributor of recharge vouchers, SIM Card of Bharti Airtel Limited. - validity of additions without rejecting the books of account - Held that:- A perusal of the papers on record as well as the assessment orders, demonstrate that figure of purchase recorded in the books of account, as well as audited statements do not reflect the correct expenditure incurred by the assessee for purchases. The income receivable by the assessee from Bharti Airtel Ltd., which is paid in kind, is included in the cost purchases. Contra entries eliminating the commission from the cost of purchases have not been passed. Thus in my view the Assessing Officer as well as the Ld. CIT(A) were right not accepting the purchase figure disclosed by the assessee as correct.
When certain addition on account of inflation of purchases has been made, there is no legal requirement of rejection of books of account.
Though we agree with the findings of the Ld. A.O. has confirmed by the Ld. CIT(A), we are of the considered opinion that the valuation of closing stock has to be re-done by the Assessing Officer, by excluding the commission part from the total purchases.
Coming to the issue of commission, the assessee has not demonstrated with the evidence its claim that the amount in question is not commission but reimbursement of expenditure incurred on behalf of the Bharti Airtel Ltd. Hence this ground of the assessee is dismissed.
Decided partly in favor of assessee.
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2018 (8) TMI 1418
Disallowance of expenditure incurred in relation to exempt income - Held that:- there is no merit in the arguments of the assessee that it has not incurred any expenditure in relation to exempt income, when the assessee has not maintained separate books of account for investment activity and its business transactions. We further observe that when common expenditure are incurred towards business as well as investment activity, then possibility of certain expenditure attributable to investment services cannot be ruled out. Therefore, keeping in view of the provisions of section 14A r.w.r. 8D(2), we are of the considered view that 5% of exempt income towards expenditure would meet the ends of justice. - Decided against the assessee.
TDs liability - disallowance of expenses u/s 40(a)(ia) towards liaisoningcharges @25% of such expenses. - any payment made to a non resident for rendering services in India would come within the provisions of section 195 of the Income-tax Act, 1961. In this case, the payment has been made outside India for rendering services outside India. Therefore, the question of withholding taxes on such payment does not arise, consequently, the question of disallowance of such expenditure u/s 40(a)(ia) also does not arise. - Entire additions directed to be deleted - Decided in favor of assessee.
Estimation of income on advance receipts - principle laid down in AS-11 to recognize revenue - Held that:- Once the assessee is following a method of accounting which is in accordance with the method prescribed by ICAI for recognition of revenue from the kind of projects the assessee is undertaking and such method has been accepted by the department in the earlier year, there is no reason for the AO to deviate from the method followed by the assessee without any change in facts and circumstances. In this case, the AO has made addition towards income from the project on advances received without recording any reasons as to how advance received by the assessee forms part of revenue for the current year. - No additions - Decided against the revenue.
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2018 (8) TMI 1428
Payments made towards illegal gratification and bribes - block assessment - validity of Income Tax Settlement Commission - Held that:- The Special Leave Petition is dismissed both on the ground of delay as well as on merit.
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2018 (8) TMI 1417
Nature of income - purchased and sale of equity, mutual funds and bonds - capital gains or business income - Held that:- The order of CIT (A) is corrected, wherein he has directed to treat the impugned income as income from capital gains and not as business income. Since the impugned income is to be treated as income from capital gains, the benefit of indexation will also be allowable to the assessee. - Decided against the revenue.
Disallowance u/s 14A - exempted income - Held that:- the disallowance could not have been made in absence of proper recording of satisfaction by the Assessing Officer. We have no other option but to direct the deletion of this disallowance. - Decided in favor of assessee.
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2018 (8) TMI 1426
Undisclosed investment / income - additions u/s 69C - ITAT has allowed credit additions made towards undisclosed investment / undisclosed income though the applications of were abated by the Settlement Commission u/s.245HA.
Revenue appeal admitted.
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2018 (8) TMI 1425
Disallowance of provision for damaged goods - ITAT deleted the additions - Held that:- concerning this very assessee, Division Bench of this Court in the judgment [2016 (7) TMI 1465 - GUJARAT HIGH COURT] and connected appeals has answered the question in favour of the assessee - Decided against the revenue.
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2018 (8) TMI 1435
Reopening of assessment beyond 4 years u/s 147 - computation of Capital Gain - sale of four agricultural lands - revenue contended that, assessee had no agriculture land for more than two years before transfer and there was no evidence that the land was put to agriculture use in the last two years before sale. - Held that:- The Assessing Officer examined the transactions and the petitioner’s claim during the assessment proceedings. As noted multiple queries were raised. All such queries were answered. Documents called for were supplied. It was only after thorough investigation that the Assessing Officer passed order of assessment.
Additionally, we also notice that in the context of notice of reopening which is issued beyond the period of four years from the end of relevant assessment year, there is nothing on record to suggest that there was any failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment. Thus an essential pre condition to enable the Assessing Officer to issue notice of reopening is not satisfied. - Decided in favor of assessee.
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2018 (8) TMI 1434
Reopening of assessment - reason to believe - protective assessment made - assessee had declared the income under the income tax declaration scheme 2016 - genuineness of share application money - AO had no information at his command to come to the conclusion that the investment owned up and declared by Garg Logistics Pvt Ltd. was not from the funds of the said declarant but was in fact, the unaccounted income of the assessee company.
Held that:- Quite apart from impermissiblity of casting such burden on the assessee, we wonder at which stage would the assessee discharge such burden. Return was accepted without scrutiny. Before issuing impugned notice, no information was called from the assessee by the Assessing Officer.
The reasons so recorded simply lack validity. - The conclusions are based on surmises and conjectures which are not permissible in law and not backed by any material on record. This is so for an amount of ₹ 6.25 crores of share capital investment.
Scope of income tax declaration scheme 2016 - The Scheme thus makes detailed provisions for declaration of income which hitherto was either undisclosed or not charged to tax. Upon such declaration being accepted, declarant would pay tax at the prescribed rate with surcharge and penalty. Upon such amounts being paid, declarant would receive certain immunities. The income so declared would not be included in the total income of any assessment year. Even Benami transactions would not be targeted. The scheme thus appears to have been framed to encourage disclosures of unaccounted income. Upon acceptance of such disclosure, Revenue would collect tax, surcharge and penalty at the prescribed rates. In turn, the declarant would have peace of mind and certain immunities.
In the present case, same amount which the Assessing Officer wishes to tax in the hands of the petitioner company by resorting to reopening of assessment was declared by Garg Logistics Pvt Ltd. under such declaration. Declaration was accepted by the competent authority pursuant to which Garg Logistics Pvt Ltd. in three installments also deposited the entire amount of tax with surcharge and penalty. Any attempt on part of the Assessing Officer to assess the same income in the hands of assessee would amount to charging the same income twice.
It can thus be seen that upon an assessee in whose hands the income is charged, files a declaration, the protective assessment in hands of another assessee would automatically abate, clearly indicating the intention of charging tax on the same income only once. - Decided in favor of assessee.
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2018 (8) TMI 1424
Reopening of an assessment beyond 4 years - deduction u/s 80IB(10) - development of housing project. - One of the conditions thereof being that no person shall be allotted more than one residential unit. According to the Assessing Officer, the assessee had breached this condition - disclosure of truly and fully all material facts - Held that:- the Assessing Officer had gathered relevant facts for issuing notice of reopening the assessment from the assessment proceedings, principally, the return and the accompanying documents. There was thus no failure on part of the assessee to disclose necessary facts. On this ground itself, notice is required to be set aside.
Further, In the context of the allotment of two units to the same person, the assessee had pointed out in his objections that the purchaser Shri Piyushbhai Patel was never allotted two units. He had vacated one of the two units which he had booked and had paid the sale consideration for one of them and accordingly, such unit was sold to him. The Assessing Officer merely brushed aside such objection stating that same is subject to verification which can be done only during the course of assessment.
Notice for reassessment beyond a period of four years therefore, was not valid. - Decided in favor of assessee.
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2018 (8) TMI 1423
Disallowance u/s 14A - the learned Tribunal has recalled its earlier order and has directed re-adjudication of the issue - Held that:- In the Appeal /Appeals, rectification applications were preferred and the same are allowed and the earlier order passed by the learned Tribunal is recalled and the learned Tribunal has directed re-adjudication of the issue of disallowance under Section 14 of the Income Tax Act, and the same cannot be said to be erroneous and /or the same does not call for any interference of this Court in exercise of powers under Article 226 of the Constitution of India. The issue would be at large and ample opportunity will be given to the revenue to put forward their case.
Not required to be interfered with by this Court in exercise of powers under Article 226 of the Constitution of India. - Decided against the revenue.
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2018 (8) TMI 1416
Undisclosed investment - during search, from the locker, 100 gold bars weighing 1 kg. each were found out of which 38 gold bars were seized - Held that:- both the assessees declared income during the course of original search in 2009 in respect of 114 gold bars. That apart, Wealth Tax returns showing so much gold were also filed. Now, in the instant search, only 100 gold bars were found, which number is patently less than the gold bars declared by the assessees during the course of earlier search with the same weight. When the amount of income was offered for taxation in the search carried out in 2009, in our considered opinion, the AO could not have once again made a fresh addition in respect of 100 gold bars found at the time of later search carried out in January, 2012, simply on the ground that the gold bars found in the locker were physically different as these were purchased at a later date from those declared before the Settlement Commission. The assessee has specifically submitted that the gold bars earlier declared were exchanged later on with the new gold bars which were placed in the bank locker and found at the time of search.
The AO simply dislodged the claim of the assesses on the premise that they could not place on record any evidence of such exchange. He has not pointed out anywhere in the orders that the investment in gold bars surrendered by the assessee during the course of the earlier search was liquidated and the amount so realized was utilized elsewhere.
Additions deleted - Decided against the revenue.
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2018 (8) TMI 1422
Levy of penalty u/s 271(1)(c) - ITAT deleted the penalty - Additions u/s 41(1) - one time settlement with the SBI - Bank has waived a sum including interest - assessee has not furnished bifurcation of principal and interest amount in the total amount waived off by the bank and has claimed the entire amount as principal amount without giving any details.
whether the ITAT was justified in holding that the assessee has furnished full particulars of income with regard to the waiver of loan by the Bank in its return particularly when the assessee had not given any particulars of its income under Section 41(1) of the Act neither in the Return filed under Section 139 (1) nor in the Return filed in response to the notice under Section 148 of the Act
Held that:- the dispute between the parties is purely a dispute of facts. We do not find any substantial question of law in the present appeal. - Decided against the revenue.
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2018 (8) TMI 1421
Additions u/s 69C - assessee submitted that, amount was received from the relatives - Which relative gave how much money to the assessee is also not spelt out in the said affidavit nor are there any such details available on record. No evidence from the side of alleged relatives is brought on record - ITAT confirmed the additions - Held that:- In view of these concurrent findings and the further circumstances that no legal issue arises, we are of the opinion that no substantial question of law arises in this appeal under Section 260-A of the Act. - Decided against the assessee.
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2018 (8) TMI 1420
Additional depreciation @20% u/s 32(1)(iia) - vehicle used for the transport of Ready Mix Concrete (RMC) for use in their construction site, from their own manufacturing unit - Held that:- there is no question of the assessee claiming any deduction of a percentage of the entire profits and gains of the business. The income derived from the construction activity or the profits or gains is irrelevant in computing the depreciation available under Section 32(1)(iia). The assessee does not also have a claim that the construction activity leads to a production or manufacture. The specific claim is that, one of the ingredients used in the construction being RMC, is manufactured by the assessee at its unit, which article or thing is captively consumed and also sold to third parties.
The dominant test has no application from the plain meaning of the words employed. Whatever be the business of the assessee, if the assessee is involved in a manufacture or production of articles or thing; then a claim under Section 32(1)(iia) would be permissible to the extent allowed as depreciation.
We are of the opinion that though RMC does not have a shelf-life, the final mixture of stone, sand, cement and water in a semi-fluid state; transported to the construction site to be poured into the structure and allowed to set and harden into concrete is a thing or article manufactured.
RMC is an article obtained as a result of manufacture. - Claim of additional depreciation allowed. - Decided in favor of assessee.
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Customs
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2018 (8) TMI 1413
SEZ Unit - Reexport the consignment of goods which the petitioner desired to import - detention of goods on the ground of wrong valuation - Held that:- Since investigation is still going on, the petitioner would also have full liberty to defend its position in adjudication that may be initiated - there is no observation made to prejudice one side or the other.
What prima facie appears is that now that the goods are allowed to be re-exported, the question of payment of customs duty, on revised valuation even if it were to be ultimately established, would not survive. Of course there would be question of penalty and personal penalties in case the charges of mis-declaration while attempting to import the goods are established - the condition of Bank Guarantee to 25% of the customs duty that may be leviable on the re-determined value of the goods. The condition for providing bond for the remaining value of the goods remains unchanged upon which condition being fulfilled within three weeks, the petitioner may be permitted to reexport the goods.
Petition disposed off.
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2018 (8) TMI 1412
Refusal of release of goods (gold ornaments) despite payment of the entire redemption fee and penalty - case of Department is that certification proceedings are pending before the Additional Chief Judicial Magistrate's (Economic Offences) Court, Ernakulam and hence the release was not being effected - Held that:- Admittedly, there is no stay petition filed by the Department before the first appellate authority. As has been noticed by the learned Single Judge, the order passed under the Customs Act, 1962 is now in force and the Department is obliged to release the goods (gold ornaments) unless there is a stay obtained from the appropriate Forum.
The Department is directed to file a stay application within a period of two weeks from today. If such a stay application is not filed within the period specified, then there shall be immediate release of the goods on expiry of the said period - appeal disposed off.
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2018 (8) TMI 1411
Rejection of release of imported goods - restricted item or not? - Biodiesel or HSD? - Held that:- What prima facie emerges is that the petitioner had placed an order for supply of Biodiesel. The specifications thereof, were that the product would contain not less than 30.1% and not more than 35.0% of Biodiesel meeting the Indian Biodiesel Specification. Correspondingly, it would contain not less than 65.0% and not more than 69.9% of Diesel meeting the Bharat Stage IV Diesel Specifications - the product, other than Biodiesel, be it HSD, was at any rate, less than 70%.
The promulgation of Foreign Trade Policy in terms of Section 5 of the Act would not be sufficient to change the category of a product from being freely importable to the import of which is restricted. Such restrictions are envisaged under sub-section 2 of Section 3 of the Act. No Notification under the said provision has been issued - in the present case, the petitioner had sought a clarification from the Director General of Foreign Trade whether the import of the goods is free. The answer of the Director General of Foreign Trade, as noted, was in the affirmative. The first objection of the authorities, at this stage, therefore, would not be sufficient to permit detention of the goods.
Correct declaration of the nature of imported substance - Held that:- It is nobody’s case, at least as of now, that the fuel contains more than 70% HSD or conversely, less than 30% biofuel. We have already noted that the very definition of Biofuel is that it must have not more than 70% of weight of petroleum oil or oils obtained from bituminous minerals. This is not disputed by the Department. Under the circumstances, we would not prevent the Department from carrying out further investigation. Nevertheless, only on this ground, the detention of goods cannot be permitted.
Correct rate of duty - Held that:- In the facts of the case, therefore, while not preventing the Department from carrying out further investigation and adjudicating the entire issue on both counts, whether the imported goods happen to be Biodiesel as declared or HSD as complained and the correct rate of duty leviable therein, the provisional release of goods is directed subject to certain safeguards - In any case, if it is, ultimately, found that the goods were mis-declared, the Customs Act, particularly, Sections 111 and 112 therein, provide for adequate penalty and other adverse consequences.
The respondents shall permit provisional clearance of goods upon the petitioner providing Bond for the difference in duty between 12% already deposited and 18% of IGST - petition disposed off.
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2018 (8) TMI 1408
Valuation of imported goods - Nylon coated and uncoated fabric 60 - rejection of transaction value - enhancement of value based on contemporaneous imports - Held that:- During the course of assessment proceedings, the appellant has vehemently argued that the imported goods were not first/ prime quality but were stock lot of second/ surplus goods. The learned adjudicating authority has not discussed at all on the said submissions vis-a-vis the cotemporaneous import relied upon by him in rejecting the transaction value - also, there is no evidence to show that copies of these contemporaneous imports Bills of Entry have been handed over to the appellant to advance the submissions on the same.
There has been violation of principles of natural justice - the adjudicating authority is directed to make available the relevant Bills of Entry and decide the matter refresh - appeal allowed by way of remand.
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2018 (8) TMI 1410
Release of confiscated goods - import of used Digital Multifunction Printers/Devices - The respondent challenged Ext.P9 order before this Court in COMMISSIONER OF CUSTOMS VERSUS M/S. PARAG DOMESTIC APPLIANCES [2018 (3) TMI 1560 - KERALA HIGH COURT] and the said appeal was disposed of by this Court - petitioner submits that Customs Appeal No.19 of 2017 was disposed of by this Court on 14.3.2018 and as such, had the respondent been vigilant, the decision therein could have been challenged by now.
Held that:- The registry reports that the respondent has obtained certified copy of the judgment in COMMISSIONER OF CUSTOMS VERSUS M/S. PARAG DOMESTIC APPLIANCES [2018 (3) TMI 1560 - KERALA HIGH COURT] - the writ petition is disposed of directing the respondent to give effect to the decision of this Court in COMMISSIONER OF CUSTOMS VERSUS M/S. PARAG DOMESTIC APPLIANCES, if the respondent does not get favourable interim orders from the Apex Court on or before 20.5.2018.
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2018 (8) TMI 1409
Redemption fine and duty imposed on seized vehicle - Porsche Carrera car - mis-declaration of model, description of the goods and resultant diminution of value on which duty was levied - Importer of vehicle - bonafide purchaser.
Whether Customs Duty and redemption fine can be demanded from the person in ownership and custody of the imported goods? - n what circumstances can a person other than the actual importer be liable to pay Customs Duty and Redemption Fine on goods imported in violation of Customs Law? - Can the imported goods be subject matter of a charge for payment of Customs Duty and Interest due thereon irrespective of whether or not the ownership in these goods have been transferred to a person other than the original importer?
Held that:- In the present case, the redemption fine was imposed at ₹ 6,00,000/- and short levy of duty was collected at ₹ 17,92,847/-. The subsequent bona fide purchaser may not have any liability to duty. However, by confiscation, the State gets the authority to recover the entire market value of the goods, which would definitely be more than the duty. If redemption is not made then the person from whose possession the goods are seized merely looses the property in goods and there could be no further levy of duty on the bona fide purchaser. The Department, despite such confiscation could proceed for recovery of duty too, but only from the importer.
Section 125 comes into play only after there is a confiscation effected by the Commissioner, which gives an option to the owner or the person from whom the goods were seized to apply for redemption. In applying for redemption, the owner or person from whom the goods were seized would have to pay the redemption fine as imposed by the Commissioner under Section 125(1) - The option being a choice of the person, there cannot be any contention raised against payment of short levy of duty, which is a necessary consequence of redemption under Section 125 of the Act.
The customs duty and redemption fine can be demanded from the person in ownership and custody of the imported goods on an option exercised for redemption, despite there being no liability to duty on any person other than the importer - the imported goods on there being a short levy of duty along with interest, would be liable for confiscation.
Appeal allowed - decided in favor of Revenue.
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Service Tax
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2018 (8) TMI 1403
Penalty u/s 76 - late fee u/s 70 of the Finance Act, 1994 read with Rule 7C of the Service tax Rules, 1994 - no suppression of facts - Section 73(3) of Finance Act - Time Limitation - Held that:- There is no allegation of suppression of facts on the part of the appellant. It is a fact on record that appellant has filed ST-3 return on 21.08.2012 with delay and that fact was in the knowledge of the Department, therefore, show cause notice dated 20.04.2015 is highly time barred - on limitation itself demand is not sustainable.
Moreover, in terms of Section 73(3) of the Act, it is clear mandate that if assessee pays service tax on pointing out by the Department, in that circumstances, no show cause notice is required to be issued to the appellant - Admittedly, in this case, it was in the knowledge of the Department that appellant has paid service tax alongwith interest with a delay, therefore, Section 73(3) of the Act is applicable to the facts of this case.
Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1402
Waiver of penalty imposed u/s 77 and 78 of the Finance Act, 1994 - service tax paid on being pointed out before issuance of SCN - invocation of Section 73(3) of Finance Act - Held that:- In the case of Gupta Coal Field & Washeries Ltd. vs. CST, Nagpur [2013 (3) TMI 224 - CESTAT, MUMBAI] the Tribunal held that if assessee pays service tax alongwith interest on pointing out by the Revenue and intimated to the Department, in that circumstances, no show cause notice is required to be issued.
The SCN was not required to be issued to the appellant, therefore, no penalty can be imposed on the appellant - appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1405
Condonation of delay in filing appeal - appeal rejected on the ground that the same was filed beyond the period of limitation - Held that:- Admittedly, the petitioner has filed the Appeal before the second respondent. However, as there was a delay of 13 days in filing such appeal, the second respondent refused to entertain the same - the order of the second respondent in rejecting the appeal only on the ground of limitation cannot be sustained, especially, when the petitioner has stated the reasons for filing such appeal with 13 days delay and when such reasons are not found to be either false or imaginary.
In any event, as the delay is only 13 days, the second respondent ought to have condoned the delay and considered the matter on merits - Writ Petition is allowed in part only by setting aside the order of the second respondent - matter is remitted back to the second respondent for deciding the said Appeal on merits and in accordance with law.
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2018 (8) TMI 1400
Condonable period of delay in filing appeal - relevant date of filing appeal - whether the appellant had filed their appeal within a period of 90 days from the date of passing of impugned order in original before Commissioner (Appeals), i.e. including the condonable period of 30 days?
Held that:- The appellant have filed the appeal on 9.12.2013 which was to be taken to be date of filing though it was filed at the wrong office of Commissioner (Appeals). Accordingly, delay in filing the appeal was within the condonable period - Finding the delay reasonably explained, it is held that appeal was filed within the condonable period and there was reasonable cause for the delay.
The delay in filing the appeal before Commissioner (Appeals) is condoned - matter remanded back to Commissioner (Appeals) to decide the matter on merits - appeal allowed by way of remand.
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2018 (8) TMI 1399
Reversal of CENVAT Credit - appellant provided both taxable as well as exempted service - the appellant had reversed the CENVAT Credit availed by it in respect of the exempted service provided to PWD, by availing the exemption benefit under Notification dated 20.06.2012 and also paid the interest at the appropriate rate.
Held that:- TThe issue arising out of present dispute is no more res integra in view of decision in the case of Ahmednagar Zilla Prathamik Shikshak Sahakari Bank Ltd & Ahmednagar Shahar Sahakari Bank Ltd. v. Commissioner of Central Excise, Aurangabad [2018 (4) TMI 1330 - CESTAT MUMBAI], where it was held that since the appellants have reversed the CENVAT credit and also paid interest on such delayed reversal of credit, demand cannot be confirmed on the appellants.
Demand set aside - appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1398
Works contract service - commercial or industrial construction - sub-contract - construction of roads - construction activities undertaken on behalf of M/s Larsen & Toubro - whether the demand of service tax under the head Works contract service and commercial or industrial construction service justified?
Held that:- It can be seen that the construction of road and activities in relation to construction of road are exempted from the scope of levy of service tax - the activities of the appellant which are in relation to construction of road and highway projects are beyond the scope of levy of service tax by the virtue of exclusions added in the definition of both the service tax categories namely commercial or industrial construction as well as the work contract service.
This Tribunal in its judgment in the case of Ideal Road Builders Pvt. Ltd. vs. CST, Mumbai [2013 (1) TMI 522 - CESTAT MUMBAI] has held that construction of roads has specifically been excluded from the scope of the service tax levy both under commercial or industrial construction service and work contract service. Further repairs and maintenance of roads have also been exempted from service tax retrospectively thus the intention of the Government is to keep out road construction activity from the purview of service tax.
The exclusion clause for activities regarding construction in relation to road also covers the type of the activities undertaken by the appellant - the service tax is not leviable on the sub-contractor activities undertaken by the appellant for construction of roads - appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1397
Manpower recruitment service - whether the appellant, Indian Institute of Technology, Delhi – I, have provided manpower recruitment service in the activity of providing facility for recruitment of their students, wherein they charged some fee for such activity from the students? - Held that:- The appellant is not liable to service tax under manpower recruitment and supply service as they are not a commercial concern nor they have provided any service to a commercial concern - the issue is squarely covered in the appellant’s favor by this Tribunal in the case of Motilal Nehru National Institute of Technology vs. CE & ST, Allahabad [2015 (8) TMI 1138 - CESTAT ALLAHABAD], where it was held that The placement facilitation provided by educational institutions whereunder the placement charges are collected from students and not from an employer or a prospective employer, do not on a fair and reasonable interpretation of the taxable service as defined in the Act, fall outside the purview of either the definitional or enumerative provision of the Act - Accordingly, this issue is decided in favor of the appellant and against the Revenue.
Online information and data base access or retrieval services - services received from abroad - Whether the appellant have received online information and data base access or retrieval services from abroad, whether the same is taxable? - Held that:- The liability of tax arises only if ‘online information and data access or retrieval service’ are received by the recipient located in India “for use in business or commerce” - the OIDA service received by the appellant is not in relation to any business or commerce and accordingly the same is not taxable - further, it is found that such service was received by the appellant as a representative of all the educational institutions and as such also, they are not liable to service tax.
Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1404
Rebate of Service Tax - N/N. 41/2012-S.T. - denial of rebate on the ground that it is not technically possible at this point of time as the electronic Shipping Bills have been filed by the respondent and once the electronic Shipping Bills are filed by the respondent without declaration as per Para 2(d) of the N/N. 41/2012-S.T., dated 29-62012, the refund cannot be filed or sanctioned.
Held that:- While the rebate of Service Tax under Para 3 is normally rejectable for noncompliance of the condition stipulated in Proviso (c) of Notification No. 41/2012S.T. when the exporter is in a position to exercise either of the two options freely and effectively, the Government is of the considered view that the said condition in Proviso (c) is not meant for rejection of the rebate claim of the exporter when they were not having the option to file rebate under Para 2 at all for no fault on their part - The Commissioner (Appeals) in his order has clearly recorded that the EDI facility in the customs formation was not functional and it has not been denied anywhere in the revision application also.
Further in case disbursement of rebate of Service Tax under Para 2 is not technically feasible at this juncture as claimed by the applicant, the rebate of service tax may be given under Para 3 on the basis of actual Service Tax paid by the respondent for which the applicant cannot have any technical difficulty at present. But it is not fair at all to hold a view in this case that the rebate of service tax will not be granted under both the Paras of the notification even when the respondent has undeniably exported the goods by using taxable input services for export of the goods.
Revision application disposed off.
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Central Excise
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2018 (8) TMI 1390
Clandestine removal - shortages of goods - The entire case of the Revenue is based upon the not so confessional statement of Shri Jagdish Prasad - Held that:- Apart from the fact that the statement of Shri Jagdish Prasad was not confessional, we observe that even if the said statement is held to be confessional statement accepting clandestine removals the same cannot be made the sole basis for upholding the allegations of clandestine activity of the appellant. The deponent of the said statement was never put to Examination-in-Chief or cross examination and as such veracity of his statement has never been tested. Otherwise also it is well settled law that clandestine removal allegations cannot be upheld on the basis of the sole statement of one of the employees, unless the same are corroborated by other independent evidences.
The Hon’ble Allahabad High Court in the case of Continental Cement Company V/s Union of India [2014 (9) TMI 243 - ALLAHABAD HIGH COURT] has held that clandestine removal is required to be proved by clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, transportation, the mode and flow back of funds. Such charge is a serious charge required to be proved by Revenue by tangible and sufficient evidences and mere statement of some of the buyers given on the basis of their memories are insufficient without support of any documentary evidences.
Te Revenue has failed to produce any evidence to establish clandestine removal on the part of the appellant. The Order of Commissioner (Appeals) lacks merits and is accordingly set aside.
Shortages of goods - Held that:- It is well settled that mere shortages cannot lead to the allegation of clandestine removal in the absence of any other evidences to reflect upon the fact that such shortages has occurred on account of clandestine clearances - demand set aside - Inasmuch as demand has been set aside, the penalties imposed upon the appellant is also required to be set aside.
Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1396
Validity of second SCN - Time limitation - relevant date for raising demand - Whether, arising from the same set of facts, the Department is entitled to raise two Show Cause Notices, one within the period of limitation of one year and the other beyond the period of limitation on the allegations of clandestine removal and suppression by the appellant?
Held that;- On the date when the second show cause notice dated 27.3.2002 was issued, the Commissioner of Central Excise had no fresh material to justify as a cause of action for the issuance of the second show cause notice dated 27.3.2002. In fact, there is no reference to the Order-in-Original passed by him dated 07.1.2002 nor the proceedings, which were initiated earlier. In fact, that should have been specifically referred to in the second show cause notice, which is an inherent error and it will vitiate the second show cause notice dated 27.3.2002.
Whether, with the same set of facts, the Authority could have issued the second show cause notice, especially when the second show cause notice was issued after the first show cause notice culminated in an Order-in-Original dated 07.1.2002? - Held that:- The answer to this question should be in the negative i.e in favour of the assessee and against the Revenue.
On facts, that the Authority was not justified in doing so in the absence of fresh materials for issuance of the second show cause notice dated 27.3.2002. That apart, in the statement of facts appended to the first show cause notice dated 14.8.2001, it is evidently clear that the entire material was available with the Commissioner and that the question of initiation of fresh proceedings on the same set of facts would amount to double jeopardy or in other words, the assessee cannot be vexed twice for the same set of allegations - the Commissioner of Central Excise and the Tribunal fell in error in coming to the conclusion that the second show cause notice initiated was entirely different and not relatable to the first proceedings initiated vide show cause notice dated 14.8.2001.
Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1395
Substantial expansion of industries - North Eastern Region - N/N. 32/99-Central Excise dated 08.07.1999 - application for “Special Rate” for the financial year 2009-2010 submitted on 23.09.2009 received by the Commissioner on 30.09.2009 - benefit of notification was denied that this application was filed delayed.
Held that:- Keeping in view the benefit extended to the North Eastern Region, hyper technical approach shall not be in keeping with its object. The substantive condition is that the appellant must have filed application up to 30th September, which the appellant has - The Notification No.31/2008-CE dated 10.06.2008 only provide for filing of an application not later than 30th day of September. There is no condition that the supporting documents are to be filed up to 30th day of September of the year - Plain reading suggests that the substantive condition is to file the application up to 30th September of the financial year. The filing of supporting documents subsequent thereto will not negate the competence of the application having been filed within the date i.e. 30th September.
The appellant has made it clear that he has submitted his application on 23.09.2009 which was received by the respondent-Commissioner of Central Excise on 30.09.2009. However, supporting documents could not be submitted in view of non-availability of the auditor due to his sickness. In absence of supporting documents, the application of the appellant was filed within time. Filing of supporting documents is simply a procedure therefore late filing of documents, will not destroy the right of the appellant.
The matter is remitted back to the Commissioner of Central Excise, Shillong for deciding the original application of the appellant regarding the claim on its merits.
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2018 (8) TMI 1389
Non-reversal of CENVAT Credit - violation of provision of Rules 2 & 3 (5B) of Cenvat Credit Rules, 2004 - loss of inputs due to cyclone - Held that:- The provision of Rule 3 (5B) does not require reversal of Cenvat Credit on inputs if it had entered the manufacturing process rather, it calls for reversal only if the inputs are written off in full or any provision to write off in full has been made in the books of alcs. There is no provision of reversal of credit availed on inputs which has been destroyed - credit availed on inputs destroyed in natural calamity including cyclone, need not be reversed as it does not amount to removal of input as such. Inputs lost during the process of manufacture are not required to be considered for reversal of credit - credit remains allowed.
CENVAT Credit - inputs - H.R. coils used in manufacture of capital goods - Held that:- In the present case, the assessee had furnished details of input (H.R. Coils) used in the manufacture of Klin/Stroage Tank. Therefore, there is no reason to disallow Cenvat Credit availed on H.R. Coil used in the manufacture of capital goods - credit allowed.
CENVAT credit - duty paying invoices - original copy of STTG Certificate not available - Held that:- The Chief Commercial Manager of South Eastern Railway, Kolkata has issued statement of Service Tax for the month of August 2014, mentioning the name of the assessee as consignee wherein the amount of Service Tax of ₹ 66,668/- has been detailed. The said statement has been filed by the Consultant in the course of hearing and placed on record - Considering the available document as valid and sufficient proof for availing Cenvat Credit, the credit is allowed.
Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1388
Penalty u/r 15(2) of the CCR 2004 read with Section 11AC of the CEA, 1944 - Held that:- Bombay High Court in the case of CCE, Nagpur vs. Ultratech Cement Ltd. [2010 (10) TMI 13 - BOMBAY HIGH COURT] has held that the assessee is entitled to avail cenvat credit on the services which has been availed by the assessee in case of manufactured goods - Admittedly, the appellant was a manufacture of excisable goods and these services has been availed by the appellant in the course of their manufacturing business. Therefore, on merit itself, the appellant was entitled to avail cenvat credit on the services in question during the impugned period. Therefore, question of imposition of penalty does not arise.
Penalty does not arise - appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1387
Rectification of mistake - Power to tribunal to rectify the mistake apparent from record - refund claim - Held that:- The Tribunal has passed the order on the premises that the said amount has been paid by the manufacturer –buyer. It is a fact on record that the applicant has paid the amount from their own account - the said amount has been paid by the appellant from their own account as per the direction of Hon’ble Additional Session Judge, New Delhi.
The provisions of Section 35C(2) of the Central Excise Act, 1944 gives the power to the Tribunal to modify the order if there is mistake apparent from the record while passing the order - Admittedly, while passing the order, the amount paid by the appellant from their own account has been escaped the attention. Therefore, the mistake is required to be rectified and order to be modified.
ROM Application allowed.
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2018 (8) TMI 1386
Refund of accumulated CENVAT Credit - Deemed Exports - Rule 5 of the Central Excise Rules, 2004 - Held that:- In the case of Sirmaxo Chemicals Pvt. Ltd. vs. CCE, Thane-II [2016 (6) TMI 543 - CESTAT MUMBAI] wherein it has been held that clearances made to SEZ unit is deemed export - As the clearances made to the SEZ are deemed units, in that circumstances, the facts of that case are applicable to the facts of the present case.
Admittedly, due to the clearances made to SEZ unit, the cenvat credit accumulated in their cenvat credit account and remained unutlised. Therefore, under Rule 5 of the Cenvat Credit Rules, 2004 the appellant is entitled to claim refund of cenvat credit remained unutilised in their cenvat credit account.
Refund allowed - appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1385
CENVAT credit - reverse charge mechanism - credit of service tax paid to the commission agent who affected their sales outside India - Held that:- The assessee is entitled to take the cenvat credit on service tax paid commission to the commission agent who has affected the sales on behalf of the assessee - reliance placed in the case of Dwarikesh Sugar Industries Ltd. [2017 (10) TMI 1114 - CESTAT, ALLAHABAD], where it was held that appellants are entitled to avail Cenvat credit on commission paid to the selling agent for selling the goods in terms of Rule 2(l) of the Cenvat Credit Rules, 2004 - credit allowed - appeal dismissed - decided against Revenue.
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2018 (8) TMI 1394
Jurisdiction - power of departmental authorities in keeping the adjudicating proceedings arising out of the show cause notice dated 27th April 2005 in abeyance, till the judgment of the Supreme Court in the case of Jindal Drugs Limited - Held that:- The only ground on which the Department has decided not to proceed further with the show cause notice against the petitioners is that similar issue is pending before the Supreme Court in the appeal filed by the Department. The department concedes that the situation arising in such case i.e., in the case of Jindal Drugs Limited is identical to the present case. Without conceding to the set of cases being identical, the petitioners also heavily rely on the judgment of the Tribunal in the case of Jindal Drugs Limited.
However, this by itself would not be sufficient for the department to keep the proceedings in abeyance. The demand under the show cause notice is considerable. It is not the case of the Department that the Supreme Court has stayed the judgment of the Tribunal in case of M/s. Jindal Drugs Limited, or granted some general injunction against the authorities proceeding in similar cases. The department does not even contend that the judgment of the Supreme Court in case of M/s. Jindal Drugs Limited is likely to be available in the near future.
Revenue authorities directed to adjudicate the case - Petition disposed off.
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2018 (8) TMI 1384
Refund of Central Excise duty - It was observed by the officers of DGCEI that the certificates on the basis of which the exemption was claimed by the manufacturers, were forged - Held that:- In this case, the goods manufactured and supplied by the appellant, suffered duty twice, one by the appellant and other, by the buyer, M/s. Balrampur Chini Mills. Therefore, the duty paid by the appellant, without claiming the exemption benefit, should be available as refund.
However, there is no material available on record to show that M/s. Balrampur Chini Mills Ltd. had discharged the central excise duty liability on the PD pumps supplied by the appellant - for ascertaining the correct factual position, the matter should go back to the original authority.
Appeal allowed by way of remand.
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2018 (8) TMI 1383
Clandestine manufacture and removal - proper accounting not maintained - parallel invoices - case of appellant is that since the entire case was based on the evidence of goods transported through challans and statements of the witnesses, the same should be confirmed only after cross examination of those witnesses - Principles of Natural justice.
Held that:- The order passed by the adjudicating authority which is confirmed by the appellate authority appears to have not followed principles of natural justice. Order imposing duty, penalty, etc., on the appellate without providing them the copies of relied upon documents/evidence and without providing them opportunity of cross examination as well as opportunity of personal hearing is not sustainable and is liable to be set aside.
But, in view of the fact that merit of the case can be determined only after analysis of oral and documentary evidence that passed the test of veracity through cross examination, it is imperative that the case is to be remanded back to the regional adjudicating authority for fresh adjudication after supply of copies of documents relied upon and after matering a provision for completion of cross examination of creditable witnesses as well as affording opportunity of personal hearing to the appellant.
Appeal allowed by way of remand.
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2018 (8) TMI 1393
Invocation of Revisional Jurisdiction - Section 35EE of the Central Excise Act, 1944 - rebate/refund of CVD - CVD on imported inputs and used in the manufacture of final produce is paid under Section 3 of the Customs Tariff Act, 1962 - Held that:- It becomes ineluctable from Exhibit P3 that the only reason for the Revisional Authority to have allowed the application of the first respondent, which was disabled from obtaining the benefit of rebate/draw back/ cenvat credit or cash refund of CVD, was because that 'such procedural irregularities, cannot be then used to the detriment of the assessee - Since the order does not say what the procedural irregularities were and since the second respondent has not concluded as to how such irregularities have impacted the parties concerned, it is certain that the conclusions therein cannot obtain favor of law.
The second respondent is directed to re-consider the Revision Application of the first respondent, which led to Exhibit P3, after affording an opportunity of being heard to both the petitioner - petition disposed off.
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2018 (8) TMI 1392
Manner in which the learned Tribunal has disposed of the appeals - matter decided pending appeals - Held that:- The procedure adopted by the learned Tribunal disposing of the appeals without deciding the same on merits with liberty approach the Tribunal after decision of this Court in the pending appeal is neither correct not proper and the same deserves to be quashed and set aside.
The impugned common order passed by the learned Tribunal is hereby quashed and set aside and the appeals are restored to the file of the learned Tribunal and to avoid any further multiplicity of proceedings /appeals before this Court, it is directed that the appeals on remand be kept pending till the decision of this Court in the case of Essar Steel India Ltd. [2016 (6) TMI 1305 - GUJARAT HIGH COURT] - appeal allowed in part.
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2018 (8) TMI 1382
Abatement claim - period of closure under Rule 96ZP(2) of erstwhile Central Excise Rules, 1944 - rejection on the ground that since the appellant has exercised option to pay lump sum duty under Rule 96ZP(3) of the said Rules - Held that:- Learned C.A. for the appellant could not produce any order whereby, the operation of the judgment of 3 members Bench in the case of Supreme Steels and General Mills [2001 (10) TMI 90 - SUPREME COURT OF INDIA] has been stayed - In absence of any stay, the ratio laid down thereunder be considered as binding precedent.
Appeal dismissed - decided against appellant.
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2018 (8) TMI 1381
Rectification of mistake - Review of order - Held that:- This Tribunal after analyzing the evidence on record arrived at the conclusion that the appellant had fraudulently availed CENVAT Credit without receipt of the inputs and consequently dismissed their appeal. The plea taken by the appellant to reconsider the quantum of penalty, at this stage, would result into the review of the said order, which is contrary to the principles of law - the application seeking the rectification of the order being devoid of merit is dismissed.
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2018 (8) TMI 1380
Rectification of mistake - applicant contended that interest for delayed reversal of CENVAT Credit should be considered upto 16 March 2012, whereas the Tribunal vide order dated 17.11.2017 has considered the period upto 31.03.2012 for such computation - Held that:- Considering the date of effect of Cenvat Credit (Third Amendment) Rules, 2012, formulated under N/N. 18/2012-CE (N.T) dated 17.03.2012, the Tribunal has held that interest is chargeable on Credit availed upto the period of 31.03.2012. Thus, there is no apparent mistake in the said order, which can be rectified through the miscellaneous application - ROM Application dismissed.
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2018 (8) TMI 1379
Refund of Education Cess and Secondary & Higher Secondary Education Cess - area based exemption availed - whether the appellants are entitled to refund of Edu. Cess and Secondary & Higher Secondary Edu. Cess when they availed area based exemption under N/N. 39/2001-CE dated 31.7.2001?
Held that:- The admissibility of refund of Edu. Cess and Secondary & Higher Secondary Edu. Cess paid by the appellant along with excise duty under area based exemption N/N. 39/2001-CE dated 31.7.2001 is considered by the Hon'ble Supreme Court in the case of SRD Nutrients Pvt. Ltd. [2017 (11) TMI 655 - SUPREME COURT OF INDIA], where it was held that The appellants were entitled to refund of Education Cess and Higher Education Cess which was paid along with excise duty once the excise duty itself was exempted from levy.
Refund allowed - appeal allowed - decided in favor of appellant.
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2018 (8) TMI 1378
Classification of goods - various machineries - Department was of opinion that the goods were classifiable under Heading 84729090 and under Heading 85258090 of First Schedule to Central Excise Tariff Act, 1985 - Benefit of N/N. 6/2006 dated 01.03.2006 - Whether the goods are computers or not? - Extended period of limitation - no suppression of facts.
Held that:- It is quite evident that all the goods under consideration are standalone machines capable of performing a specific function. These machines/ equipments can be installed in remote locations for providing host of services to the users as highlighted in the technical literature. From the description of the products and functions performed it is quite evident that the said machine/ equipments are for performing various functions which are part of ordinary banking functions such currency dispensation, cheque deposits, bill payment etc., from a remote location without any human intervention.
Thus in the terms of the submissions made by the Appellant himself their products are quite akin to the ATM machines with a role reversal, i.e. instead of dispensing the cash these machines used for depositing cash/ cheques. Even in terms of HSN Explanatory note for headings 8471 & 8472 the classification of such machines would appropriately be classified under heading 8472.
Items mentioned at Sl No 7 & 8 in table 1 namely I-Watch (Digital ATM Surveillance Solution) & Iwatch DVR (Digital Video Recording) - Held that:- the item the goods in dispute are nothing but digital cameras, which record the image of transaction being undertaken at the remote location. Once the image is recorded it is embossed with other details and then stored for retrieval and viewing either locally or through LAN/ SYSTEM. Since the prime function of these devices as explained by the Appellant is to record images, it is nothing but a digital camera and needs to be classified accordingly. Thus the classification of the said goods cannot be as Automatic Data Processing Machines under heading 8471, but would necessarily be in Chapter Heading 85258090.
In view of discussions made above we are inclined to agree with the classification of goods as has been held by the Adjudicating Authority. Since adjudicating authority has confirmed the demand only for the normal period we do not find any merits in the appeal filed by the Appellant.
Extended period of limitation - The adjudicating authority is correct in making the observations to the effect that party had disclosed all the information in respect of the goods manufactured by them to the departments as early as in 2003. There can be no dispute in respect of the disclosure made by them. There can be error in claiming the classification of the products under 8471. Once they had disclosed the entire information about their products onus was on the department to determine the correct classification and determine the duty liability.
The Department has failed to discharge it function for determining the correct classification at the appropriate time and demand the duty. For the said failure to determine the correct classification department can subsequently not resort to proviso to the Section 11A(1) for demanding the duty by invoking the extended period of limitation.
Appeal disposed off.
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CST, VAT & Sales Tax
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2018 (8) TMI 1377
Recovery of Outstanding Dues - case of petitioner is that having been given the certificate under the Scheme and having accepted the payments, the department cannot start recoveries - time limitation.
Held that:- It is undisputedly true that the petitioner applied for the benefit of the scheme for both the units. The application as well as the accompanying documents make this aspect sufficiently clear - It was perhaps the mistake on the part of the competent authority to include the petitioner's case for benefit under the scheme only in relation to Vapi Unit. Had the petitioner come within time and made the grievance about this distinction, we would have certainly examined the issue further. However, the petitioner willingly accepted such verdict of the competent authority and made payment only of the principal outstanding dues to Vapi Unit. In consequence, the petitioner would be correct in insisting that the interest and penalty relatable to the assessments of Vapi Unit become enforceable by virtue of operation of the scheme.
It would not be possible to put back the clock. The scheme was for a limited period. The application had to be made within prescribed time. If the petitioner, at the relevant time, had approached the authority or the Court for being given benefit under the scheme also for Valsad Unit and had shown willingness to make further payments of principal tax dues in relation to such unit, things would have been different.
Petition dismissed.
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2018 (8) TMI 1391
Confiscation of vehicles seized - Section 67B of the Abkari Act - whether the petitioner could be heard to say that since the abkari case charged against him has ended in his acquittal, the process of confiscation, initiated under Section 67B of the Act, should be construed to be effaced? - Held that:- It is evident from the way of Section 67B is drafted, the power to order confiscation is an independent power, which is not guided or manacled by the fate of the criminal case registered against the offenders. This is obvious from the manner in which Section 67B opens and to obtain its reading - even in the case of acquittal from a criminal case, if launched, would not be a reason to stop or terminate proceedings under Section 67B.
Whether Ext.P5 order has assessed the situation correctly in terms of law and the facts involved and whether it can be found to be tenable in law? - Held that:- The Commissioner of Excise, in the said order, has not specifically stated anything as to how he finds that the vehicles in question were involved in the offence alleged - this stand of the Commissioner in Exhibit P5 order to be tenable in law, specially because it is the specific case of the petitioner that the vehicles were not involved in such an offence and in particular that one among the vehicles was, in fact, parked at the side of the road when it was seized - the Commissioner has a duty to consider this contention and to evaluate it on its merits, before concluding that the proceedings for confiscation is legally valid or otherwise.
The petitioner is directed to appear before the Commissioner of Excise, Thiruvananthapuram at 11 a.m. on 16.07.2018 with all materials and documents that he intends to present before the said Authority and the said Authority will offer him an opportunity of being heard - petition disposed off.
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Indian Laws
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2018 (8) TMI 1407
Settlement of matter by parties themselves - closure of matter before Court - Conviction u/s 138 of the Negotiable Instruments Act, 1881 - rigorous imprisonment for one year with amount of compensation - an affidavit has been filed by the first respondent stating that the matter has been settled at the intervention of the family members and he has no objection if appropriate orders are passed by the Court closing the matter.
Held that:- Having regard to the totality of the facts of the case, we are of the view that the parties ought to be allowed to settle the matter - The offence, therefore, is compounded in terms of the settlement - the order of conviction and the sentence imposed is set aside.
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2018 (8) TMI 1406
Dishonor of cheque - Section 138 of the Negotiable of Instrument Act - The only contention of the respondent/accused was that the respondent has paid the cheque amount to the complainant - Held that:- The provision of Section 139 of the Negotiable Instrument Act, provides for presumption clause, but this presumption mandated by Section 139 includes a presumption that there exists a legally enforceable debt or liability and that is a rebuttable presumption - It would be appropriate to mention here that the respondent accused did not disclose that he has paid the amount in his reply to the notice issued to the respondent under Section 138 of the Negotiable Instrument Act. It would also be appropriate to mention that virtually no such reply has been filed by the respondent-accused. He has not asked any single question to the complainant, at the time of his cross-examining regarding Ex.D/2, nor he confronted the same.
In the present case, there is no supportive evidence and when the accused/respondent did not disclose document Ex.D/2 till the same was filed at the defence stage. No reasonable explanation was offered to explain why the document was not produced or pleaded earlier. It would be unsafe to exercise the power of discretion in favour of the respondent-accused, whereas the hand writing expert examined by the complainant has clearly indicated and opined that Ex.D-2 receipt do not contain the signature of the complainant.
It would be appropriate to hold that learned appellate Court has fallen in error to hold that Ex-D/2 receipt has been issued by or executed by the complainant - The judgment and sentence passed by learned J.M.F.C., Jabalpur is restored with the modification that the complainant-applicant is entitled for compensation of (Rs.1,50,000/- x 9% x 14 years = ₹ 1,89,000/- + 1,50,000/-) ₹ 3,39,000/- under Section 357 of Cr.P.C.
Revision allowed.
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