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TMI Tax Updates - e-Newsletter August 28, 2023 Case Laws in this Newsletter: GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Highlights / Catch Notes GST: Rejection of Refund of IGST - Period of limitation - defective application -The nature of the deficiencies as set out in deficiency memo no. 2 clearly indicate that the application filed by the petitioner was not incomplete in terms of Rule 89(2) of the CGST Rules. Sub-rules (3) and (4) of Rule 89 of the CGST Rules are not applicable in the facts of the present case. - Refund allowed - HC Visit to Get Source GST: Input tax credit - input services - renting/hiring of motor vehicles - ITC is not blocked on the renting of motor vehicles to provide transport facilities to women employees working between 8.00 PM to 6.00 AM as it is obligatory for an employer to provide the same to its employees under the law for the time being in force - Credit allowed - AAR Visit to Get Source GST: Zero-rated supply - It is clear that the supply of information technology enabled services rendered by the applicant to the recipient qualifies to fall under export of services on fulfilling the conditions specified under section 2(6) of the IGST Act, 2017, which in turn is considered as a zero-rated supply in terms of section 16 (l)(a) of the IGST Act, 2017. - AAR Visit to Get Source GST: Supply or not - activities of creating public awareness on COVID appropriate behaviour, Infection Prevention & Control and Community control - The activities undertaken by the applicant in partnership with UNICEF so far as relating to public awareness of preventive health, amounts to supply of service and is exempted from GST - AAR Visit to Get Source GST: Input Tax Credit - GST paid on JCB (including spares) used by the Appellant for movement of goods in its place of business - Credit is available to assessee - AAR Visit to Get Source GST: Input Tax Credit - works contract services - The Applicant is entitled to ITC on the goods and services received towards repair of existing factory buildings (which were already capitalized) to the extent of non-capitalization of expenses in their accounts. - AAR Visit to Get Source Income Tax: Apportionment of income between spouses governed by Portuguese Civil Code - The provisions of Clause (e) of Section 2(22) of the Income Tax Act, 1961, in the present case would, therefore, fully apply to the husband appellant, who would be the owner of the entire 33% share in each of the concerned companies with the entire voting power (which is more than 20% in such company, to the exclusion of the wife) - Claim of the assessee rejected - HC Visit to Get Source Income Tax: TDS u/s 194A - Interest received on Compensation received under MV Act - the interest granted on compensation or enhanced compensation awarded by MACT or this Court from the date of filing of the claim petition till the date of passing of the award or judgment by High Court will not fall in the bracket of income and would not be exigible to tax. - TDS deducted by the respondents shall be refunded to the petitioner - HC Visit to Get Source Income Tax: Validity of assessment - Service of notice, summons, requisition, order and other communication - The Provisions of Income Tax Rules, 1962 under 127 also states that the in case of a company organized under the Companies Act, 2013, notice have to be sent to the address as available in the website of the Ministry of Corporate Affairs. - Matter restored back for passing fresh assessment order - HC Visit to Get Source Income Tax: Limit limit to pass order u/s. 201(1)/201(1A) - default for non-deduction of tax at source (TDS) - A subsequent amendment to the provision cannot give a new lease of life to the time limit which has already exhausted. Hence, for the years under consideration, it is only the sub-section (3) as amended by Finance Act, 2012 with retrospective effect from 01-04-2010, which shall prevail. Resultantly, the orders passed by the AO beyond the stipulated time limit are time barred and hence quashed. - AT Visit to Get Source Income Tax: Addition u/s 50C v/s 45(3) - Capital contribution in the partnership firm by way of transfer of Land (capital assets) by the partner - the consideration in the hand of the partner (present assessee) shall be determined as per the provision of section 45(3) of the Act and not as per the provisions of section 50C. - AT Visit to Get Source Income Tax: Penalty u/s. 271C - Purchase of immovable properties - Failure to deduct TDS u/s 194-IA - as there is a bona fide mistake on part of the assessee in not deducting taxes at source at time of purchase of aforesaid two properties, coupled with the fact that the recipients/sellers have duly accounted for the sale consideration in their respective returns of income - AT Visit to Get Source Income Tax: Determination of fixed place of permanent establishment of assessee in India - CIS was practically the projection of assessee’s business in India and carried out its business under the control and guidance of the assessee and without assuming any significant risk in relation to such functions. Besides assessee has also provided certain hardware and software assets on free of cost basis to CIS. - Existence of PE established - AT Visit to Get Source Income Tax: Reopening of assessment u/s 147 - foreign travel expenses - Since the AO has not brought on record how the escapement of income has occurred by reason of omission or failure on the part of the assessee to disclose fully or truly all material facts necessary of the assessment, therefore the reopening of assessment is bad in law. - AT Visit to Get Source Income Tax: Exemption u/s 10(26AAA) - Sikkimese - the assessee though is not a Sikkimese and is name is not appearing in the Register of Sikkim but as per the residential certificate issued by the District Collector, East District, Gangtok, he is found to be domiciled in the state of Sikkim on or before 26th April, 1975 and, therefore, assessee is well covered by the decision of the Hon’ble Supreme Court and thus, is entitled to exemption u/s 10(26AAA) - AT Visit to Get Source Income Tax: Maintainability of appeal against Levy of interest u/s 234B & C and u/s 220(2) - assessment order passed u/s 143(3) r.w.s. 254 - There is a specified order i.e. order under Section 143(3) of the Act by which assessee is aggrieved and therefore, assessee is entitled to file an appeal in the present case before the learned CIT (A) u/s 246A (1) (a) of the Act. - AT Visit to Get Source Income Tax: Addition towards unrecorded turnover - transaction of buy / sale in Paddy Basmati through National Spot Exhange Ltd. (NSEL) - The assessee kept raising a claim before the AO as well as the DRP that these transactions were recorded in the subsequent year. However, the assessee failed to substantiate his contention. - Additions confirmed - AT Visit to Get Source Income Tax: TDS - u/s 194J and u/s 195 - payment by way of reimbursement to member companies, allowances paid to resident and non-resident personnel and payment to foreign agents - reimbursement of Indian Salary and benefits - Member employer company deducts tax at source under section 192 of the Act from the Indian salary of such employee as they continue to get their salary from his employer member companies. - CIT(A) rightly held that assessee not in default u/s 201(1) - AT Visit to Get Source Customs: Adjudication of SCN after 25 years - about 30 years from the date of import - in the absence of Section 28(2A) of the the Customs Act, the adjudication proceedings have to be completed within a reasonable period and in the facts of the present case, pending adjudication of show cause notice for a period of 25 years cannot be said to be a reasonable period. - SCN quashed - HC Visit to Get Source Customs: Undervaluation - Levy of Additional duty of Customs (CVD) on MRP basis - the goods were imported through different ports. That itself is a valid reason for the difference in price. There is no evidence to suggest that the goods so imported through different ports under different MRP were being sold at same price. Hence, the price difference cannot be attributed to suppression of the value by the Appellant. Accordingly, the demand is not sustainable. - Demand set aside - AT Visit to Get Source Customs: Interest on delayed refund at notified rate of interest (6%) to the appellant - enhanced rate of interest - The Commissioner (Appeals) has relied on the decision of Supreme Court (in another case granting enhanced rate of interest) only to take the view that the appellant is eligible for interest due to delay. This does not mean that an assessee is always eligible for enhanced rate of interest than the notified rate of interest - AT Visit to Get Source Customs: Valuation of imported goods - hydraulic pumps - rejection of declared value - The impugned order has not offered any justification for acceptance of the compared imports as either ‘identical’ or ‘similar’ goods - It is also found that the prices used for comparison are not of contemporaneous relevance. - Demand set aside - AT Visit to Get Source Customs: Valuation of imported goods - rejection of transaction value - Even if the waiver of SCN has been granted by the appellants in this case, still it was incumbent upon the authority passing the original order, to give its reason as to why the documentary evidence by way of invoice, packing list, Certificate of origin or whatever was available had to be rejected. - AT Visit to Get Source IBC: Withdrawal of application u/s 7 which was admitted - Acceptance of the One Time Settlement (OTS) - In view of the fact that CoC has not been constituted in pursuance of the Interim Order passed by this Tribunal, the Applicants (SRS Private Investments Powai Ltd. and ICICI Bank) are at liberty to take appropriate steps in accordance with law. IRP fees and expenses shall be paid within two weeks by the Appellant. - AT Visit to Get Source Service Tax: Delayed adjudication of show cause notice (about 12 years) - Meger of the assessee - There are no acceptable reason in facts or in law, which would make it possible for respondent no. 2, in such circumstances, namely, of two statutory events of merger and amalgamation having taken place, to subrogate the petitioner for IDFC Ltd. for adjudicating the show cause notice nor can the petitioner effectively participate in the belated adjudication of such show cause notice, by having a reasonable chance of defending the same in the absence of any material available to the petitioner, as noted by us above, even assuming the original noticee was to exist. - HC Visit to Get Source Service Tax: Non-adjudication of show cause notice issued 13 years back - Even in absence of the provisions of sub-section (4) (B) of Section 73, respondent no. 2 could not have acted oblivious to the settled principle of law, that a show cause notice would be required to be adjudicated within a reasonable time depending the facts of each case. - HC Visit to Get Source Service Tax: Liability to pay tax - Import of services - reverse charge mechanism (RCM) - the service of storage and warehousing has been received outside India. Hence, it is not taxable service under Section 66A read with Rule 3(ii) of services (provided from outside India and received in India). - AT Visit to Get Source Service Tax: Rejection of the declaration filed by the appellant under VCES - The show cause notice in the present case is time barred and cannot be acted upon. Further, the Circular dated 25.11.2013 in unequivocal words has stated that, Commissioner should ensure that the said time limit of giving the notice within 30 days has to be followed scrupulously. - AT Visit to Get Source Service Tax: Levy of Service tax - corporate guarantee - The appellant having received consideration against providing guarantee to its related company in the form of ‘corporate guarantee’ and ‘credit protection guarantee’ service is liable to pay service tax and, therefore, demand raised against the appellant is justified - However, demand beyond normal period of limitation set aside - AT Visit to Get Source Service Tax: CENVAT Credit - classification of input service - raising bills on the occupant towards the realization of electricity consumption charges - the classification or legality of such payment of tax could have been done at the owner’s end but it can never be a ground for denial for CENVAT credit at receiver’s end, since payment of service tax was accepted by the Appellant. - AT Visit to Get Source Central Excise: Applicability of amendment to Rule 6 of the CENVAT Credit Rules, 2004 with retrospective effect - What was imperative was not issuance of a show cause notice but the pendency of dispute relating to adjustment of credit of input used or exemption on final product relating to the period beginning from 10 September 2004 and ending on 31 March 2008 (both days inclusive), being the pending date on which the Finance Bill received assent of the President. - Tribunal rightly granted the relief - HC Visit to Get Source Central Excise: Recovery of CENVAT Credit - CIRP proceedings undergoing - adjudication has been undertaken without such claims being lodged in the insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 - the claim stand extinguished - Refund of pre-deposit with interest directed to be made - HC Visit to Get Source Central Excise: Suo-moto re-credit - duty paid twice - The appellant being law abiding assessee even though suo-moto credit was available to them, they had reversed the same on pointing out by the audit officers. Thereafter, the department could have regularized by allowing the re-credit but instead the appellant were issued the show cause notice for demand of re-credit made by the appellant suo-moto despite the fact that they had already reversed the same - the show cause notice itself ab initio, void and illegal. - AT Visit to Get Source Central Excise: SSI exemption - affixation of brand name of another person - Firstly the bracelet cannot be said to be a component or part of wrist watches to be used as original equipment in the manufacture of wrist watches. Secondly, it is an admitted fact that for supply of branded bracelets the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 has not been complied with. - Benefit of SSI exemption not available - AT Visit to Get Source Central Excise: Classification of goods - chlorinated paraffin - It is a settled law that any clarification with regard to any Act will always have retrospective effect for the reason that there is no change in the law but the existing law has been interpreted and clarified, therefore, the geneses of law remained intact. Accordingly, any clarification issued shall have a retrospective effect right from the enactment of the relevant law - revenue could not succeed in classifying the goods i.e. Chlorinated Paraffin in liquid form under Sub heading No. 2712 20 10. - AT Visit to Get Source Central Excise: Classification of goods - Neem Blended Organic Manure Gronimix - fertilizer or pesticide - only because the product Gronimix is made pre-dominantly by Neem, it cannot be conclusively said that because of this reason the good is fertilizer as there are pesticides/insecticides made of Neem/Neem oil. - AT Visit to Get Source VAT: Jurisdiction of AP VAT Appellate Tribunal - Poer to entertain the stay application pending appeal - it can be said that the incidental or ancillary power to pass interlocutory orders in the main appeal is inherent or intrinsic in its substantive power of the Appellate Court or Tribunal to decide the appeal pending before it unless such ancillary or incidental power is taken away by an express provision or by necessary implication. - HC Visit to Get Source VAT: Interest on delayed refund sanction - Merely because the Department had revised the order of the Appellate Assistant Commissioner would not mean the petitioner is not entitled to interest. Once the order of the Joint Commissioner has been restored, the petitioner is entitled to interest as calculated by the petitioner- HC Visit to Get Source Articles DELAY IN OPENING OF ‘FCRA’ ACCOUNT WITH STATE BANK OF INDIA ITC not allowed to buyer if supplier did not pay GST to the Government GLOBAL MINIMUM TAX SERIES – PART 17 - Flow Through and Tax Transparent Entities ADJUDICATION ON LAPSED SHOW CAUSE NOTICE UNDER CUSTOMS ACT, 1962 Cash cannot be seized without official seizure under CGST Act RECENT DEVELOPMENTS IN GST No penalty if all taxes are paid before issuance of SCN Notifications Customs 50/2023 - dated 25-8-2023 - Cus Export duty exemption to specified varieties of Rice - Conditional exemption on Rice parboiled - Seeks to amend notification No. 55/2022-Customs dated 31.10.2022. 49/2023 - dated 25-8-2023 - Cus Levy export duty on parboiled rice by including it in 2nd Schedule of Customs Tariff Act @ 20% 62/2023 - dated 25-8-2023 - Cus (NT) Rate of exchange of one unit of foreign currency equivalent to Indian rupees -Turkish Lira - Seeks to amend Notification No. 61/2023-CUSTOMS (N.T.), dated 17th August, 2023 GST 44/2023 - dated 25-8-2023 - CGST Extension of due date for furnishing FORM GSTR-7 for April, May, June and July , 2023 for registered persons whose principal place of business is in the State of Manipur 43/2023 - dated 25-8-2023 - CGST Extension of due date for furnishing FORM GSTR-3B for quarter ending June, 2023 for Registered Persons whose principal place of business is in the State of Manipur 42/2023 - dated 25-8-2023 - CGST Extension of due date for furnishing FORM GSTR-3B for April, May, June and July, 2023 for Registered persons whose principal place of business is in the State of Manipur 41/2023 - dated 25-8-2023 - CGST Extension of due date for furnishing FORM GSTR-1 for April, May, June and July, 2023 for registered persons whose principal place of business is in the State of Manipur GST - States S.O. 235 - dated 18-8-2023 - Bihar SGST Amendment in Notification No. S.O. 132, dated the 17th May, 2023 S.O. 234 - dated 18-8-2023 - Bihar SGST Amendment in Notification No. S.O. 131, dated the 17th May, 2023 32/2023-State Tax - dated 16-8-2023 - Mizoram SGST Seeks to exempt the registered person whose aggregate turnover in the financial year 2022-23 is up to two crore rupees, from filing annual return for the said financial year 29/2023-State Tax - dated 16-8-2023 - Mizoram SGST Seeks to notify special procedure to be followed by a registered person pursuant to the directions of the Hon’ble Supreme Court in the case of Union of India v/s Filco Trade Centre Pvt. Ltd., SLP(C) No.32709-32710/2018 Income Tax 69/2023 - dated 23-8-2023 - IT Exemption from specified income U/s 10(46) – Notifies ‘Swasthya Sathi Samiti’ a body established by Government of West Bengal 68/2023 - dated 23-8-2023 - IT Exemption from specified income U/s 10(46) – Notifies ‘Unique Identification Authority of India' statutory Authority established under the provisions of the AADHAAR Act Circulars / Instructions / Orders GST - States - 12039(31)/93/2023 - dated 11-8-2023 Clarifications regarding applicability of GST on certain services GST - States - 12039(31)/92/2023 - dated 11-8-2023 APGST Act, 2017 Clarification regarding GST rates and classification of certain goods based on the recommendations of the GST Council in its 50th meeting held on 11th July, 2023 News ADVISORY: MERA BILL MERA ADHIKAAR SCHEME CBDT launches revamped National Website of the Income Tax Department www.incometaxindia.gov.in CCI Issues Cease And Desist Order Against Chemists Associations For Indulging In Anti-Competitive Practices Case Laws: GST 2023 (8) TMI 1219 Seeking grant of Regular bail - availment of fraudulent input tax credit - issuance of tax invoices and Excise bills without supply of goods - HELD THAT:- This Court in the case titled as MANINDER SHARMA, VINOD KUMAR SUNNY MEHTA, AND SANDEEP SINGH VERSUS STATE TAX OFFICER, STATE TAX, MOBILE WING, JALANDHAR, PUNJAB. STATE OF PUNJAB ANR., STATE OF PUNJAB THROUGH STATE TAX OFFICER, DEPTT OF EXCISE TAXATION [ 2022 (9) TMI 119 - PUNJAB AND HARYANA HIGH COURT] has held in economic offences involving the IPC or Special Acts or cases triable by Magistrates once the investigation is complete, final report/complaint filed and the triple test is satisfied then denial of bail must be the exception rather than the rule. However, this would not prevent the Court from granting bail even prior to the completion of investigation if the facts so warrant. The veracity of the prosecution case shall be adjudicated upon during the course of trial. Admittedly, the case is triable by the Court of a Magistrate. The petitioner is in custody since 21.07.2022 and 22 out of the 33 prosecution witnesses have been examined so far. Therefore, the trial in the present case is not likely to be concluded any time soon. No serious apprehension has been expressed by the State that the petitioner would abscond from justice, tamper with the evidence or influence witnesses if granted the concession of bail. Therefore, in this situation, the further incarceration of the petitioner is not required. The present petition is allowed and the petitioner, namely, Puneet Sonkar, is ordered to be released on bail to the satisfaction of the Chief Judicial Magistrate/Duty Magistrate concerned. 2023 (8) TMI 1218 Refund of amount deposited by the petitioner under protest during the investigation along with interest - respondents are insisting for deposit of the balance amount of GST demanded under the impugned notices besides interest and penalty - HELD THAT:- Matter requires consideration. As an interim measure, it is provided that the effect and operation of the Circular dated 6.10.2021 (Annexure 2 to the writ petition), impugned SCN shall remain stayed provided the petitioner deposits a sum of Rs. 10 crores with the respondents within three weeks from today which shall be kept in a separate account and submits a bank guarantee of the balance amount other than cash within the same period. List this case after expiry of six weeks. 2023 (8) TMI 1217 Rejection of refund claim - export of services or not - remittance not received in foreign convertible exchange by the appellant - principles of natural justice - HELD THAT:- Since the issues have not been thoroughly adjudicated either by the Adjudicating Authority, namely the 1st respondent or by the Appellate Authority, it is deemed appropriate that the matter should be remanded back to the first respondent to consider all the issues in a holistic manner and take note of the ratio decidendi which can be culled out in various decisions which have been relied by the appellant, more particularly the decisions which were rendered during the service tax regime. The matter stands remanded back to the 1st respondent - appeal allowed by way of remand. 2023 (8) TMI 1216 Withdrawal of petition - HELD THAT:- The learned Deputy Solicitor General of India desires to withdraw the present writ petition to enable the department to approach the Appellate Tribunal as and when constituted as mandated - Petition disposed off. 2023 (8) TMI 1215 Implementation of order passed by the appellate authority - non-constitution of Tribunal - maintainability of petition filed under Article 227 of the Constitution of India. HELD THAT:- Since in the case at hand, appellate Tribunal in terms of provisions contained under Section 109 of the Act, is yet to be constituted, there is otherwise no occasion, if any, for the petitioner to file appeal, laying therein challenge to the order passed by the appellate authority in the appellate tribunal, as a result of which, there is every likelihood of that respondent No.1 would compel the petitioner to implement/comply with the order passed by the appellate authority. Since there is specific provision of appellate Tribunal provided under the Act as detailed, coupled with the settled proposition of law that no person can be rendered remediless, this Court finds no force in the submission of learned Additional Advocate General that petition filed under Article 227 of the Constitution of India is not maintainable, rather this court is of the definite view that in given facts and circumstances of the case, petitioner had no option, but to approach this Court by way of petition filed under Article 227 of the Constitution of India, which otherwise empowers this Court to exercise supervisory powers over all the courts subordinates to it including the authorities exercising quasi judicial powers. In similar circumstances in ROCHEM INDIA PVT. LTD. [ 2023 (2) TMI 878 - BOMBAY HIGH COURT ], High Court of Bombay having taken note of the fact that there is no appellate Tribunal, which was otherwise required to be constituted in terms of Section 109 of the Central Goods and Services Tax 2017 not only entertained the petition under Articles 226 and 227 of the Constitution of India, but also ordered that impugned order shall not be given effect until two weeks after the period prescribed for filing an appeal to the appellate authority under Clause-4.2 of the circular dated 18.5.2020, issued by the Central Board of Direct taxes is over. Since in the case at hand, appellate Tribunal in terms of provisions contained under Section 109 of the Act, is yet to be constituted, there is otherwise no occasion, if any, for the petitioner to file appeal, laying therein challenge to the order passed by the appellate authority in the appellate tribunal, as a result of which, there is every likelihood of that respondent No.1 would compel the petitioner to implement/comply with the order passed by the appellate authority - Since there is specific provision of appellate Tribunal provided under the Act as detailed herein above, coupled with the settled proposition of law that no person can be rendered remediless, this Court finds no force in the submission of learned Additional Advocate General that petition filed under Article 227 of the Constitution of India is not maintainable. This Court finds merit in the present petition and accordingly, same is allowed. 2023 (8) TMI 1214 Issuance of fresh notice by Range Officer - whether the respondent authority can proceed further pursuant to the notice dated 17.04.2023 purported to have been issued under Section 61 of the CGST Act, 2017? HELD THAT:- The scrutiny of return had been done by the Audit Department and audit has been conducted which has resulted in an order under Section 65 of the Act. This being a jurisdictional issue, this court is inclined to pass the following order which will be in force till the writ petition is heard and disposed of. The appeal is allowed, the notice issued by the Superintendent, CGST Central Excise, L-1, Circle-III, Durgapur 1 Division, Durgapur dated 17.04.2023 shall remain stayed till the disposal of the writ petition being WPA 10506 of 2023. The respondent is directed to file the affidavit-in-opposition in the writ petition after which the writ petition will be heard and disposed of on merits and in accordance with law. 2023 (8) TMI 1213 Excess Input Tax Credit - due process of law of affording reasonable opportunity and proper scrutiny of record were not made - non-availing of alternative remedy of appeal u/S 107 of GST Act - HELD THAT:- It is noticeable from the petition as well as the amended petition that para 3 which concerns details of remedies exhausted declares that petitioner has availed all the statutory other remedies available in law. Whereas the reality is, and this fact is not denied by petitioner, that remedy of appeal has not been availed. More so petitioner has approached this Court after expiry of the period of limitation prescribed for the said statutory appeal, which gives an impression that this petition has been filed to avoid obstacle of expired period of limitation. Petition stands dismissed. 2023 (8) TMI 1212 Rejection of appeal filed by the petitioner - rejection on the ground that the appellate authority is not empowered to admit the appeal filed manually as prescribed under Rule 108(1) of A.P. GST Rules - absence of production of evidence by the appellant regarding any notification being issued by the Chief Commissioner (ST), Andhra Pradesh, in terms of Rule 108. Whether the statutory right of filing appeal should be deprived to a concerned Assessee/Dealer? - HELD THAT:- In similar circumstances, a Division Bench of this Court in M/S SRI SIDDHI KALKO BHAGAVAN STONE CRUSHER VERSUS THE ASSISTANT COMMISSIONER ST [ 2019 (8) TMI 1554 - ANDHRA PRADESH HIGH COURT ] has observed that when substantial justice is pitted against technical considerations, it would be always necessary to prefer the ends of justice and allowed the writ petition filed by the petitioner therein and set aside the appeal rejection order passed by the 2nd respondent therein. The said order applies with all its fours. Added to it, in the instant case, the facts would show that the petitioner has made efforts to submit appeal at first electronically and having failed in such attempt only he submitted the appeal in manual form. Therefore, the writ petition deserves to be allowed. The impugned appeal rejection order dated 29.11.2022 passed by the 2nd respondent is set aside - Petition allowed. 2023 (8) TMI 1211 Rejection of Refund of Integrated Goods and Services Tax - Period of limitation - defective application - zero-rated supplies - rejection on the ground that the petitioner s application was filed beyond the period stipulated under Section 54(1) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- An application can be rejected as deficient only where any deficiencies are noted. The contextual reading of Sub-rule (3) with Sub-rule (2) of Rule 90 of the CGST Rules, indicates that the deficiencies referred to in Sub-rule (2) of Rule 90 of the CGST Rules are those that render an application incomplete in terms of Sub-rules (2), (3) and (4) of Rule 89 as stipulated in Sub-rule (2) of Rule 90. Thus, if an application is complete in terms of Sub-rule (2), (3) and (4) of Rule 89 of the CGST Rules, the same cannot be rejected, relegating the taxpayer to file afresh. In any view of the matter, the period of processing the said application under Sub-section (7) of Section 54 of the CGST Act, is required to be counted from the said date. It is clear from the deficiencies as mentioned that the proper officer had noticed certain discrepancies in the documents. In addition, he also required the petitioner to provide certain documents in order to verify its claims for refund. It is also apparent that some of the documents demanded were not relevant as the petitioner s claim was for refund of IGST and not unutilised ITC. The nature of the deficiencies as set out in deficiency memo no. 2 clearly indicate that the application filed by the petitioner was not incomplete in terms of Rule 89(2) of the CGST Rules. Sub-rules (3) and (4) of Rule 89 of the CGST Rules are not applicable in the facts of the present case. The petitioner had, in terms of Clause (c) of Sub-rule (2) of Rule 89 of the CGST Rules, submitted a statement containing the number and date of invoices and the relevant Bank Realisation Certificates/Foreign Inward Remittance Certificates. It was also accompanied by the necessary declaration as specified. In terms of Section 54(1) of the CGST Act, an application is required to be made in the prescribed form and manner before two years from the relevant date. It is clear that the petitioner had complied with the said requirement inasmuch as it had filed an application for refund on 31.10.2019 in the form and manner as prescribed in the CGST Act and the CGST Rules. Thus, in terms of Section 54(1) of the CGST Act, the period of limitation would stop running notwithstanding that the proper officer required further documents or material to satisfy himself that the refund claimed was due to the petitioner. The present petition is allowed and the impugned order dated 13.04.2022 rejecting the petitioner s application for refund on the ground of limitation is rejected. 2023 (8) TMI 1210 Seeking recovery of refund - invocation of extended period of limitation in terms of proviso to Section 73(1) of the Finance Act, 1994 - HELD THAT:- This Court is of the view that since the respondents have taken conscious decision not to file SLP against the judgment 2022 (11) TMI 743 - PUNJAB AND HARYANA HIGH COURT] , the ratio of Genpact India (P.) Ltd s case is directly applicable in this case, where it was held that A bare perusal of the recitals and relevant clauses of the MSA do not in any manner indicate that petitioner is acting as an intermediary so as to fall within the scope and ambit of the definition of intermediary under Section 2 (13) of the IGST Act. Such clauses cannot also be interpreted to conclude that the petitioner has facilitated the services. Petition allowed. 2023 (8) TMI 1209 Seeking grant of Bail - issuance of fake bills in lieu of 5% commission of GST refunds claimed by the various traders through these bills - HELD THAT:- Without expressing any further opinion on the merits of the case, the present petition is allowed. The petitioner is ordered to be released on bail pending trial subject to his furnishing bail bonds/surety to the satisfaction of the trial Court/Duty Magistrate, concerned. 2023 (8) TMI 1208 Lifting of attachment order - seeking direction to 1st respondent to either refund the amount collected illegally or to permit the petitioner to adjust the same against further tax liability - HELD THAT:- It is noticed that a similar issue was considered by this Court in M. ARUL KUMARAN, CHAIRMAN MANAGING DIRECTOR, M/S. ROYAL MERIDIAN IMPEX INDIA PRIVATE LIMITED VERSUS THE JOINT COMMISSIONER, O/O. THE COMMISSIONER OF GST CENTRAL EXCISE, THE DEPUTY COMMISSIONER OF GST CENTRAL EXCISE, THE DEPUTY COMMISSIONER OF GST CENTRAL EXCISE, THE RANGE SUPERINTENDENT OF GST CE, THE SUB-REGISTRAR [ 2023 (1) TMI 235 - MADRAS HIGH COURT ], the Court held that order of attachment passed under CGST Act, 2017, ceases to have effect under Section 83(3) of the said Act. The Writ Petition is disposed of directing the respondents to take suitable steps in accordance with the law. 2023 (8) TMI 1207 Exemption from GST - sub-contract work of Land Reclamation/Solid Waste Management to Municipal Corporation of Grater Mumbai through their main contractor M/s Biomining India Private Ltd. - exemption is applicable to all sub-contracts which the Applicant will undergo both GSST/CGST and MST in future or not - serial number 3 of Notification No. 12/2017 dt. 28.06.2017. HELD THAT:- It is observed that the place of supply is not in the state of Tamil Nadu but in another state. Further, the contract is between M/s Biomining India Private Ltd., who is registered in the state of Maharashtra and Municipal Corporation of Grater Mumbai and the Tax treatment given to the main contractor is not known. As the authority for advance ruling is created under SGST/ CGST Act and the rulings are applicable within the particular state only. As the situs of transaction in question is not within the state of Tamil Nadu, then as per provisions of Section 96 of the Central Goods and service Tax Act 2017 (and similar provision under the TNGST Act), the Tamil Nadu Advance Ruling Authority cannot acquire the jurisdiction over the questions raised, hence no ruling can be given on this question. With regard to advance ruling sought for regarding whether exemption is applicable for all sub-contracts which the Applicant will undergo both GSST/ CGST and IGST in future (both interstate and intra state supply), it is observed each contract entered by the applicant has to be assessed for applicability of exemption based on the terms and conditions of the contract and activities undertaken. Advance Ruling cannot be rendered for cases which are hypothetical in nature. The question is not admitted. 2023 (8) TMI 1206 Applicable rate of tax - works contract services undertaken by the applicant to M/s Tamil Nadu Urban Habitat Development Board and M/s Tirunelveli Smart City Limited with effect from 01.01.2022 consequent to amendment of Notification No. 11/2017-C.T (Rate) dated 28.06.2017 by Notification No. 15/2021-C.T (Rate) dated 18.11.2021 effective from 01.01.2022. HELD THAT:- Tirunelveli Smart City Limited falls under the definition of Governmental Authority within the meaning of explanation in Para 4 (ix) of Notification No. 11/2017-C.T (Rate) dated 28.06.2017, as amended vide Notification No. 31/2017 CT (Rate), dated 13.10.2017. As per definition of local authority given at para 8.2.4, the term local authority inter alia includes certain bodies / authorities, more specifically any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund in section 2(69) (c) of the CGST Act, 2017 - it is clear that Tirunelveli Smart City Limited has been constituted with a different purpose to implement certain functions and it cannot be equated to a local body and hence it can be concluded that Tirunelveli Smart City Limited is not a Local Authority. The effective rate of duty on work executed for Tirunelveli Smart City Limited, which is a Government Authority and the nature of service provided by the applicant is covered under entry in serial number 3(vi) of Notification No. 11/2017-C.T (Rate) dated 28.06.2017 till 31.12.2021. However, after omission of Government Entity from the description of service under the said entry vide Notification No. 15/2021-C.T (Rate) dated 18.11.2021 read with Notification No. 22/2021-C.T (Rate) dated 31.12.2021 with effect from 01.01.2022, the services of the applicant are covered under serial number 3 (xii) of Notification No. 11/2017-C.T (Rate) dated 28.06.2017 and attract CGST of 9%. 2023 (8) TMI 1205 Input tax credit - input services - renting/hiring of motor vehicles with seating capacity of less than thirteen persons (including driver) for providing transport facilities to women employees working beyond 8.00 PM - can ITC be availed for services received from the date of introduction of proviso to section 17(5)(b) (iii) of CGST Act, 2017 with effect from 1st February 2019? HELD THAT:- With effect from 01.02.2019, Input Tax Credit has not been allowed on leasing, renting or hiring of motor vehicles, for transportation of persons, having approved seating capacity of not more than thirteen persons (including the driver) - However, as per the proviso to Section 17(5)(b), input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force. In the instant case, it has been specifically mentioned in the invoices issued by the service providers that the seating capacity of the motor vehicles (including driver) is less than thirteen persons. However, it is obligatory on the part of the Applicant to provide transport facilities to women employees working beyond 8.00 PM, as per the provisions of the Tamilnadu Shops and Establishment Act, 1947 - it is clear that Section 17(5) of the CGST Act blocks input tax credit on motor vehicles used in transport of passengers up to the date of amendment ie., 01.02.2019. With effect from 01.02.2019, ITC is not allowed on leasing, renting or hiring of motor vehicles for transportation of passengers having approved seating capacity of not more than thirteen persons (including driver). The motor vehicles used by the Applicant have seating capacity of less than 13 persons, making them ineligible to avail ITC on such services. ITC is not blocked on the renting of motor vehicles to provide transport facilities to women employees working between 8.00 PM to 6.00 AM as it is obligatory for an employer to provide the same to its employees under the law for the time being in force (Tamilnadu Shops and Establishment Act, 1947) as per Section 17 (5)(b) of the CGST Act, 2017 only from 28.05.2019, which is the date of the Notification issued by the Tamil Nadu Government in this regard. 2023 (8) TMI 1204 Works contract services - Applicable rate of Tax under Goods and Services Act, 2017 - Supply of services by the applicant to M/s Tamilnadu Water Supply and Drainage Board - applicability of N/N. 15/2021-CT(Rate) dated 18.11.2021 r/w Notification No. 22/2021-CT (Rate) dated 31.12.2021 - HELD THAT:- It is clear that TWAD Board has been constituted only to implement certain functions (not all the functions) of local bodies and it cannot be equated to a local body and hence it can be concluded that TWAD Board is not a Local Authority. M/s Tamil Nadu Water Supply and Drainage Board is a 'Governmental Authority' as defined under 2(zf) of the Notification No. 12/2017-CT(rate) as amended effective from 13.10.2017 and thereby supply is made to the 'Governmental Authority' by the Applicant. The works contract services provided by the Applicant to TWAD Board is covered under the above entry and exigible to tax @18%, in as much as TWAD Board qualifies as a Governmental Authority. 2023 (8) TMI 1203 Levy of IGST - export of services - zero-rated supply - export online monitoring software contract work - Contract amount receivable in UK currency only - HELD THAT:- On perusal of the incorporation certificate submitted by the applicant, it is seen that the Applicant M/s. Luksha Consulting Private Limited are incorporated in India under the Companies Act, 2013 with Shri V. Natarajan as Director and the establishment at UK , M/s. Luksha Limited has been incorporated as a Private Limited Company with the Registrar of companies for England and Wales, with Mr. Sakthiraj Natarajan as the Director of the Company. Thus, it is evident that M/s. Luksha Consulting Private Limited in India and M/s. Luksha Limited, UK are not considered as establishments of distinct person as the directors of both the establishments are different persons, as evident from the certificate of incorporation furnished by the applicant. It is clear that the supply of information technology enabled services rendered by the applicant to the recipient qualifies to fall under export of services on fulfilling the conditions specified under section 2(6) of the IGST Act, 2017, which in turn is considered as a zero-rated supply in terms of section 16 (l)(a) of the IGST Act, 2017. The supply of information technology enabled services rendered by the applicant to the recipient qualifies to fall under export of services on fulfilling the conditions specified under section 2(6) of the IGST Act, 2017, which in turn is considered as a zero-rated supply in terms of section 16 (l)(a) of the IGST Act, 2017. 2023 (8) TMI 1202 Supply or not - activities of creating public awareness on COVID appropriate behaviour, Infection Prevention Control and Community control - HELD THAT:- From comprehensive reading of the statutory provisions of the Act and the relevant provisions in Notification No. 12/2017-Central Tax (rate) dated 28.06.2017, the activity as specified in their application which are relating to public awareness of preventive health amounts to supply and is exempted from GST. 2023 (8) TMI 1201 Input Tax Credit - GST paid on JCB (including spares) used by the Appellant for movement of goods in its place of business - HELD THAT:- There is a restriction on availment of ITC in respect of motor vehicles and Input Tax Credit is not available on motor vehicle , unless it is used for specified purposes like transport, training etc. However, we also find that in terms of provisions of Section 2(76) of the CGST Act, 2017, the expression motor vehicle shall have the same meaning as assigned to it in clause (28) of Section 2 of the Motor Vehicle Act, 1988. On the conjoint reading of Section 2(28) of the Motor Vehicles Act, 1988, the FAQ published in GST Sectoral Series - mining and the Hon ble Apex Court judgement Goodyear India Vs UOI [ 1997 (2) TMI 229 - SUPREME COURT ], it is apparent that Clause (28) of Section 2 of the Motor Vehicles Act, 1988, docs not include mining equipments viz., JCB, tippers, dumpers. Consequently, the GST charged on purchase of earth moving machinery like JCB used for transportation of taxable goods is eligible to be allowed as input credit. Manufacturing is most dependent on material handling systems and equipment. Some material handling equipment includes pallet trucks, order pickers, forklifts, Tipper Lorries, Dump Trucks and other machines/vehicles depending on the manufacturing processes as well as suitability felt by the manufacturers. In the instant case, the applicant uses the JCB that has been purchased for transportation of goods inside their factory premises. Manufacturing is most dependent on material handling systems and equipment. Some material handling equipment includes pallet trucks, order pickers, forklifts, Tipper Lorries, Dump Trucks and other machines/vehicles depending on the manufacturing processes as well as suitability felt by the manufacturers. In the instant case, the applicant uses the JCB that has been purchased for transportation of goods inside their factory premises. Thus, the appellant is eligible for GST paid by them at the time of purchase or repairs including spares w.r.t. vehicles-JCB used in the business for movement of goods in its palace of business to be claimed as input tax credit subject to conditions stipulated in Section 17(5)(a)(ii) and Section 17(2) of CGST Act, 2017. 2023 (8) TMI 1200 Input Tax Credit - works contract services used for the repair and maintenance factory building to the extant it is treated as revenue expenditure as per accounting standards - Section 17 of the GST Acts - HELD THAT:- Though Section 17(5)(d) blocks ITC on goods and services received by a taxable person for construction of immovable property on his own account including when it is used in the course or furtherance of business, as per the explanation, the expression construction includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalization, to the said immovable property. Perusal of purchase order/work order revealed that the Applicant has procured certain goods and services towards renovation of factory buildings. But, there is no mention about the actual factory building or deteriorated portion of factory building to be renovated or repaired, so as to ascertain whether repair work has been carried out only for the purpose of preserving or maintaining an already existing factory building, which does not bring a new asset into existence. The Applicant is entitled to ITC on the goods and services received towards repair of existing factory buildings (which were already capitalized) to the extent of non-capitalization of expenses in their accounts. 2023 (8) TMI 1199 Profiteering - project Palm Wood Royale Gulmohar Green - benefit of reduction in the Rate of tax or ITC on the supply of Construction Service by the Respondent after implementation of GST - benefit of Input Tax Credit not passed - contravention of provisions of section 171 of the CGST Act, 2017 - HELD THAT:- It is revealed that the Respondent has executed two Projects viz. Anandam Square (Commercial Project) and Gulmohar Green (Residential Project). In respect of the commercial project Anandam Square the Commission has observed that in the said project ITC as percentage of turnover that was available to the Respondent during the pre-GST period (April, 2016 to June, 2017) was 4.17% and during the post-GST period (July, 2017 to November, 2019), it was 3.89%. It clearly confirms that the Respondent has not profiteered through additional Input Tax Credit in respect of project Anandam Square post-GST. Therefore, he is not required to pass on the benefit of ITC to his buyers. The instant case does not fall under the ambit of Anti-Profiteering provisions of Section 171 of the CGST Act, 2017 - the proceedings initiated against the Respondent under Rule 133 (5) of the CGST Rules, 2017 are hereby dropped. Income Tax 2023 (8) TMI 1198 Deemed dividend - Apportionment of income between spouses governed by Portuguese Civil Code - Addition of income from transaction amongst companies under which assessees hold shares were deemed dividend in the hands of the assessees and their spouses in terms of Section 2(22)(e) of the Act - Assessee spouse, governed by the Portuguese Civil Code - determination of vesting of ownership rights and beneficial interest - Whether the impugned Judgment and Order of the Tribunal holding that under the provisions of the Portuguese Civil Code, spouse of the Appellant does not acquire beneficial interest in respect of the shares of subject Companies held by the Appellant and that such right of the spouses can only be ascertained on termination of the marriage by divorce, separation or death, is based on complete mis-appreciation and misconstruction of the provisions of Portuguese Civil Code which contemplates vesting of ownership rights and beneficial interest IN PRESANTI in Appellant s wife, as a moiety holder with respect to the immovable and movable assets of Appellant which includes shares of the subject Company ? - HELD THAT:- In the present case, the none of six companies in which the three appellants Kamat Brothers are shareholders were registered under the Commercial Code, but were all registered under the Indian Companies Act, 1956. In these circumstances, we would be called upon to examine the interplay between the provisions of the Civil Code applicable to three sets of spouses, the provisions of the Companies Act, 1956, insofar as it concerns specific rights to a member of a company and its shareholders, and the provisions of Section 5A of the Income Tax Act, 1961 read with Section 2(22)(e) and Section 3(32) of the Income Tax Act, 1961. In the present case, none of the companies in which the appellants are shareholders were created under the Portuguese Commercial Code but were all brought into existence under the Companies Act 1956, much after the liberation of Goa. Timblo Irmaos Ltd. [ 1993 (4) TMI 36 - BOMBAY HIGH COURT] in no way supports the argument of the appellants that the provisions of the Companies Act, 1956, insofar as it deals with the beneficial interest of a shareholder under Section 187C are inapplicable to Goan to whom the Portuguese Civil Code would apply. Under no circumstances would the provisions of the Civil Code confer or create an ownership right in the shares, of a company or give the right of voting, in proportion to the share in the capital of the company, to the other spouse. The provisions of Clause (e) of Section 2(22) of the Income Tax Act, 1961, in the present case would, therefore, fully apply to the husband appellant, who would be the owner of the entire 33% share in each of the concerned companies with the entire voting power (which is more than 20% in such company, to the exclusion of the wife). Consequently, we reject the submission that the wife of the spouse, married under the provisions of Portuguese Civil Code, by operation of law, would be entitled to the beneficial ownership of the shares of the husband/spouse. For reasons stated above, we further reject the submission that the provisions of Section 187C of the Companies Act, 1956, are not applicable to persons governed by the Portuguese Civil Code. Consequently, we answer Substantial Questions of Law (A), (B) and (C) against the appellants. Assumption of jurisdiction under Section 153A - HELD THAT:- As all that Abhisar Buildwell [ 2023 (4) TMI 1056 - SUPREME COURT] lays down is that in case incriminating material is unearthed during a search conducted u/s 132, the AO can assume jurisdiction to re-assess the total income taking into consideration the incriminating material, while if no incriminating material is unearthed, no additions can be made by the AO to the income. The judgment, in our view does not lay down what material, could be considered to be incriminating, which is the precise submission made in the present case, that gaining knowledge during the search, of the shareholding pattern of the assesses in various companies, could not constitute incriminating material for the purpose of assuming jurisdiction under Section 153A. CIT (Appeals), in its order passed in the first round of litigation, had come to a categorical finding of fact on page 73 of its order that it was for the first time during the search in the seizure that intragroup transactions and the fact that individual assessees were the beneficiaries of such transactions came to the knowledge of the year and had no opportunity to examine these transactions during regular assessment since these were not made known prior to the search operations. CIT (A) has also noted in this order that it was during the course of the search that the facts were collated and statements were recorded, thus coming to a factual finding that the shareholding pattern of the individual assessees of this company was for the first time discovered during the search. Thus, the CIT (A) had clearly arrived at a factual finding in the first order itself that the discovery of the shareholding pattern during the search found the incriminating material for assuming jurisdiction for issuance of notice u/s153A of the Act. This factual finding was challenged before the ITAT in the first round of litigation, and such ground of challenge to a factual finding was specifically given up. The finding of fact as to what constituted the incriminating material to proceed had become final and could not be re-agitated in subsequent appeals filed by the appellants. In our opinion, therefore, the substantial question of law (D) could not have arisen at all in view of our findings above. 2023 (8) TMI 1197 TDS u/s 194A - Interest received on Compensation received under MV Act - as contented interest received on compensation or enhanced compensation is deemed to be income of the assessee, it may be mentioned that the term income which is inclusively defined in Section 2 (24) of the Act, 1961 does not include interest as income - whether interest received by the petitioner on the amount of compensation/enhanced compensation was liable for deduction of tax? - HELD THAT:- Section 194-A of the Act, 1961 was only a provision for deduction of tax at source and did not govern the taxability of the receipt and the question of deduction of tax at source would also arise only if the payment was in the nature of income of the payee. It had also been observed that the interest was not made chargeable to tax even by Section 56 (2) (viii) of the Act, 1961 only that part of the interest component which deals with income from other sources. Thus the interest granted on compensation or enhanced compensation awarded by MACT or this Court from the date of filing of the claim petition till the date of passing of the award or judgment by High Court will not fall in the bracket of income and would not be exigible to tax. In view of provisions of Section 194-A (3) (ix-a) of the Act, 1961, only that part of the interest component which is treated as income and which when received exceeded Rs. 50,000/- and did not form part of compensation would be exigible to tax. Respondents in this case have already charged tax on the amount of interest which was received by the petitioner along with the amount of compensation granted by MACT and by this Court in FAO filed by the petitioner, by treating the same as income of the petitioner. Since the upshot of the discussion as made above is that no tax was exigible and could be deducted from the amount of interest awarded to the petitioner by MACT from the date of filing of claim petition till the date of passing of the award and interest awarded on enhanced amount of compensation by High Court in the appeal filed by the petitioner, till the judgment of the High Court, the same not being income, therefore, the tax on these amounts so deducted by the respondents is liable to be refunded to the petitioner. 2023 (8) TMI 1196 Validity of reassessment u/s 148 - notices issued in the name of the non- existing entity - scheme of amalgamation approved - HELD THAT:- As relying on case law cited for the petitioner in the case of Maruti SUZUKI India Limited [ 2019 (7) TMI 1449 - SUPREME COURT] , Adani Wilmar Ltd. [ 2023 (2) TMI 864 - GUJARAT HIGH COURT] and Inox Wind Energy Ltd. [ 2023 (3) TMI 723 - GUJARAT HIGH COURT] , the ratio laid down in those judgements would squarely apply and since the notices for the assessment years 2014-15 to assessment years 2017-18 have been issued to the non-existing entity viz. Satyasarthi Estate Organisers Private Limited, such notices are quashed and set aside. Decided in favour of assessee. 2023 (8) TMI 1195 Assessment u/s 153A - whether any incriminating material was found in search? - HELD THAT:- As correctly observed by the Tribunal, the issue is covered by the judgment of the coordinate bench of this court in CIT v. Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT ] The decision in Kabul Chawla s case has been affirmed by the Supreme Court in Principal Commissioner of Income Tax v. Abhisar Buildwell, [ 2023 (4) TMI 1056 - SUPREME COURT ] Given the position that no incriminating material was found qua the AYs in issue, we find no reason to interfere with the impugned judgment.Therefore, according to us, no substantial question of law arises for our consideration. 2023 (8) TMI 1194 Validity of assessment - Service of notice, summons, requisition, order and other communication - Adaptation of the mode of communication electronically - Unexplained income u/s 69 r.w.s. 115BBE(b) - HELD THAT:- There is no doubt, that there was a mistake committed by the petitioner while filing the revised return on 05.06.2020. Instead of giving new address and the new e-mail id, the petitioner has given the old postal address and the old e-mail id. Thus, all the communications pursuant to the aforesaid return that was filed were addressed to the old e-mail The fact also remains that other wings of the Income Tax Department was aware of the shifting of the address of the petitioner from old address. Similarly, the respondents were also aware of the change in email id. The respondents were also aware of the change in e-mail id and address while passing order of refund claim for the subsequent financial year i.e., 2019-2020, the notices/orders were sent to the correct address. The Provisions of Income Tax Rules, 1962 under 127 also states that the in case of a company organized under the Companies Act, 2013, notice have to be sent to the address as available in the website of the Ministry of Corporate Affairs. Mistakes on the part of the petitioner and the respondents are on account of adaptation of the mode of communication electronically in view of Section 282 as amended as inserted by Finance No.2 Act, 2009 with effect from 01.2009. Petitioner has not committed a serious mistake although it has turned out to be fatal to the petitioner. Considering the interest of the parties, court is inclined to quash the Impugned Assessment Order and remit the case back to the respondents to pass a speaking order within a period of forty five (45) days from the date of receipt of a copy of this order. Impugned Assessment Order which stands quashed shall be treated as a corrigendum to the Show Cause Notice for the purpose of final dismissal. The petitioner is at liberty to file a reply to the notice which preceded the Impugned Assessment Order dated 08.09.2021 within a period of fifteen days (15) from the date of receipt of a copy of this order. The petitioner is also at liberty to approach the respondents to lift the lien. 2023 (8) TMI 1193 Reopening of assessment - notice issued u/s 148A - Petitioner claims that though he prayed for more time to respond to the notice but the respondent proceeded on to pass order u/s 148A(d) - Whether at this stage of notice under Section 148, writ Court should venture into the merits of the controversy when AO is yet to frame assessment/ reassessment in discharge of statutory duty casted upon him under Section 147 of the Act ? - HELD THAT:- As the consistent view is that where the proceedings have not even been concluded by the statutory authority, the writ Court should not interfere at such a pre-mature stage. Moreover it is not a case where from bare reading of notice it can be axiomatically held that the authority has clutched upon the jurisdiction not vested in it. The correctness of order under Section 148A(d) is being challenged on the factual premise contending that jurisdiction though vested has been wrongly exercised. By now it is well settled that there is vexed distinction between jurisdictional error and error of law/fact within jurisdiction. For rectification of errors statutory remedy has been provided. We find that there is no reason to warrant interference by this Court in exercise of the jurisdiction under Article 226/227 of the Constitution of India at this intermediate stage when the proceedings initiated are yet to be concluded by a statutory authority. Hence the writ petition stands dismissed. 2023 (8) TMI 1192 Disallowance of future expenses claimed as deduction - unbillable expenses include reconstruction of roads damaged while constructing tunnels and during the other construction activities undertaken by the Assessee - Assessee made provision for expenses - AO disallowed the said provisions - CIT(A) allowed the same on the ground that the provision was not contingent one, but based on the matching expenditure on ascertained liability, also upheld by ITAT - HELD THAT:- There is no grievance by the Revenue so far as the design aspect is concerned. With regard to the provision for expenses towards construction of roads and other civil works, the contention urged on behalf of the Revenue is that AO has not correctly examined the factual matrix. As right in his submission that AO in his order has extracted a copy of the communication between the Assessee and the department, which shows that the Assessee had enclosed technical documents, costs and computation for arriving at a provision for the respective years. This has been noted by the ITAT the impugned order. In addition, ITAT has recorded that AO has noted the details of expenditure in his order and the same has been extracted in ITAT s order also. As urged on behalf of the Revenue that for AY 2013-14 the matter was remanded to the AO. There is no parity insofar as an order of remand is concerned. It is based on the facts of each case. As even for the said AY 2013-14, after remand, AO has accepted the provision made by the Assessee. For the subsequent years, namely AY 2014-15 no disallowance has been made. There is no dispute with regard to the fact that the provision for expenses is made on pro rata basis based on the turnover with reference to total unbillable future expenses of the project. Decided in favour of assessee. 2023 (8) TMI 1191 Validity of order u/s 201(1) and 201(1A) - period of limitation - HELD THAT:- Having regard to this passing of orders under section 201(1) and 201(1A) on a piece meal basis, we are of the considered opinion that the public policy demands that such orders must pass within reasonable time and cannot be extended to limitless period of time. Section 201(3) of the Act was introduced by Finance Act, 2009 w.e.f. 01/04/2010 setting time limit to pass an order under section 201(1) of the Act as four years from the end of the financial year in which the payment was made or credit was given. And later on, it was extended to seven years, by amendment by insertion of a new section by Finance Act, 2014. The order passed u/s 201(1) and 201(1A) of the Act in this case was beyond even the period of seven years. When the Revenue had an opportunity to verify the record on the occasion of the first order dated 06/07/2010, it would be quite unreasonable to accept the order passed four years later, because the order under challenge is passed clearly beyond seven years. In the case of CIT vs. Acer India Pvt. Ltd. [ 2022 (2) TMI 235 - KARNATAKA HIGH COURT] for the assessment year 2009-10, the Hon ble Karnataka High Court held that at relevant point of time, limitation of two years was existing but it was subsequently substituted by Finance Act, 2014. However, a right was accrued to the assessee prior to the Finance Act, 2014 and, therefore, the subsequent amendment will be reviving the period of limitation and take away the vested right accrued to the assessee. We hold that the impugned order u/s 201(1) and 201(1A) of the Act is barred by limitation. Decided in favour of assessee. 2023 (8) TMI 1190 Capital gain - Deduction u/s 54F - FMV determination date of conversion as the cost of acquisition - assessee acquired agricultural land by way of gift from his father, converted the same to stock in trade in the financial year 2012-13, divided into the plots and put the same to sale - HELD THAT:- On a careful reading of the papers including the submissions made by the counsel on either side, the undisputed facts are that assessee acquired 6.55 acres of land on 11/10/2004 and it was converted into stock in trade to be introduced to the partnership firm. This alone is the property that is converted from agricultural land to plots to be introduced as stock in trade of the partnership firm. This alone is in dispute in this case. Though the assessee sold two more plots one at Hosur and other at Gafoornagar villages, there is no dispute and AO himself accepted the capital gains and allowed exemption u/s 54F - We, therefore, deal with this disputed aspect in detail. The entire extent of 6.55 acres which the assessee converted into stock in trade was of an extent of 1,62,470 sq.ft. The conversion took place in the financial year 2012-13. Plots after conversion were sold in the financial - Assessee claims to have computed the capital gains on the sale of these plots by taking the Fair Market Value as on the date of conversion as the cost of acquisition. By indexing the same with reference to the year of sale, the assessee computed the capital gains. It is pertinent to note that though the AO in his order stated that in respect of the sale consideration on the sale of plots which were converted from out of the agricultural land to stock in trade, the same has to be treated as business income and not as capital gains because the activities of the assessee were resembling the adventure in the nature of trade , but by way of additional grounds, the Revenue has taken a plea that such income derived by the assessee on the conversion of the plots constitutes capital gains and on the sale of such plots the assessee would be entitled to exemption u/s 54F only to the extent of the Fair Market Value of such plots as on the date of conversion and nothing more. In the chart furnished by the AR, it is clearly shown that though the sale price of such plots was much more, the assessee computed the capital gains only with reference to the Fair Market Value as on the date of conversion and by deducting the indexed cost of acquisition applicable to the year of sale. From the additional grounds, we understand that the Revenue has no grievance if the capital gains are computed by taking the sale consideration as the Fair Market Value as on the date of conversion. In such an event, Revenue cannot have any grievance and it is only a matter of verification of facts and figures. Without undertaking such an exercise, Revenue preferred this appeal. We, therefore, no merits in the appeal of Revenue Insofar as the principle is concerned. To that extent, we confirm the impugned order. Only thing that has to be verified is whether the assessee computed the capital gains by taking the Fair Market Value as on the date of conversion as the sale consideration and deducting there from the indexed cost of acquisition applicable to the year of sale. If it is so, the addition cannot be sustained. We direct the AO to cause this verification and if it is found that the assessee computed the capital gains by taking the Fair Market Value as on the date of conversion as the sale consideration and deducting there from the indexed cost of acquisition applicable to the year of sale, to delete the addition. Appeal of the Revenue is dismissed. 2023 (8) TMI 1189 Condonation of delay - delay of 988 days in the filing of the appeal - validity of Order passed u/s 201(1)/(1A) - period of limitation - HELD THAT:- The case of the assessee-branches is that they received notice individually about the default in compliance, but were not technically equipped to handle the issue. Some branches appointed consultants at individual level, who also kept on changing. Thereafter, the Zonal office of Bank of India, Nagpur, took up the matter for all the branches of Nagpur zone by appointing a centralized consultant, who filed the appeals for all the branches in coordination with income-tax department and addressed all the pending disputes anent to this issue. The delay in presenting the appeals was neither deliberate nor an act of negligence, but was caused by genuine difficulty and inability to act promptly at branch level due to reasons adduced above. Ex consequenti, we hold that there was a reasonable and sufficient cause for the delay in presenting the appeals before the ld. CIT(A). We, therefore, condone the delay. Limit limit to pass order u/s. 201(1)/201(1A) - default for non-deduction of tax at source u/s 194A on interest paid/credited to its customers - HELD THAT:- As the time limit for the passing of the order u/s. 201(1)/201(1A) for the financial years under consideration came to an end on 31-3-2013 and 31-03-2014. The amendment by the Finance (No.2) Act, 2014 came into force on 01-10-2014. This shows that on 01-10-2014, the time limit for passing the order u/s. 201(1)/201(1A) had already expired qua the financial years 2009-10 and 2010-11. A subsequent amendment to the provision cannot give a new lease of life to the time limit which has already exhausted. Hence, for the years under consideration, it is only the sub-section (3) as amended by Finance Act, 2012 with retrospective effect from 01-04-2010, which shall prevail. Resultantly, the orders passed by the AO beyond the stipulated time limit are time barred and hence quashed. In the absence of the existence of any valid orders u/s. 201(1)/201(1A), the proceedings flowing therefrom also get annulled. We, therefore, overturn the impugned orders holding the assessees to be in default in terms of section 201 of the Act. Assessee appeal allowed. 2023 (8) TMI 1188 Assessment u/s 153C - mandation of recording of satisfaction note by AO of searched person - HELD THAT:- As no satisfaction note has been recorded by AO of searched person i.e., Shri Madanlal D. Chawla but the same has been recorded only in case of assessee for whom an assessment has been framed u/s 153C. Thus, the undisputed position that emerges is that no satisfaction note has been recorded by AO in case of searched person - The argument of Ld. CIT-DR is that since AO of searched person as well as the AO of the assessee is one and the same person, it is sufficient compliance of law if the satisfaction note is recorded in either of the case. Thus recording of satisfaction note by AO of searched person is mandatory but vice versa may not be true. The primary requirement is that AO of the searched person should record satisfaction before transmitting the record to other person having jurisdiction over such other person u/s 158BD. This requirement would apply even if AO of searched person as well as other person is one and the same. Such a satisfaction note could be prepared by AO of searched person at various stages of framing of assessment u/s 158BC. Therefore, in our considered opinion, in the absence of satisfaction note in the case of searched person, the proceedings u/s 153C would be vitiated by law. The recording of satisfaction note in the case of present assessee is not sufficient compliance of law. When proceedings are proposed to be initiated u/s 153C against the other person , it has to be preceded by a satisfaction note by the Assessing Officer of the searched person. Without fulfilling this requirement, no jurisdiction could be acquired u/s 153C. Gain on sale of land - HELD THAT:- The assessee has purchased the plots in joint ownership with Shri Sanjay Chawla. Therefore, we direct Ld. AO to adopt sale rate of Rs. 400/- per Sq. ft. Assessment of income - Head of income - We find that the assessee has consistently developed and sold plot of lands. The intention was to develop and sell the land as real estate dealer. The assessee has also incurred development expenses for plotting out the land and selling the same. The land has been sold as vacant house sites and not as single tract of land. The land has been purchased jointly with Shri Sanjay Chawla who is into real estate business. For all these reasons, the income has rightly been assessed as Business Income . We order so 2023 (8) TMI 1187 Capital gains on sale of land - Nature of land sold - agricultural land or capital asset - No capital gain was offered on the ground that agricultural operations were carried out on the said land and the land is situated more than 8 kms. away from nearest Tambaram municipality - alternate claim of deduction u/s. 54B on the ground that sale consideration was invested in agricultural land in the name of her son - HELD THAT:- We are of the considered opinion that Ld. CIT(A) erred in not admitting additional evidences since the same would have material bearing on the computation of capital gains in the hands of the assessee. It could also be seen that the assessee has made alternative claim u/s 54B which has not been considered primarily in the absence of sufficient evidences. Considering the prayer made before us in the appeal as well as in the cross-objection, we restore the matter of assessment back to the file of Ld. AO to frame fresh assessment keeping all the issues open. Assessee s appeal stand allowed for statistical purposes. 2023 (8) TMI 1186 Addition u/s 50C v/s 45(3) - Capital contribution in the partnership firm by way of transfer of Land (capital assets) by the partner - HELD THAT:- As provision of section 50C(1) of the Act is general provision in the given facts and circumstances whereas the provision of section 45(3) is specific provision dealing with the specific transfer of capital assets by the partner to partnership firm by way capital contribution. It is the accepted rule of construction that special provisions would prevail over general provisions as per the famous latin maxim Generalia Specialibus Non Derogant . When two conflicting provisions of law operate in the same field, the provision that specifically operates in that field would apply over the general rule. In holding so we draw support and guidance from the judgment of State of Rajasthan v. GopiKishan Sen [ 1992 (4) TMI 242 - SUPREME COURT ] In the case on hand, the present assessee is a partner in a firm namely M/s Pooja Buildcon and transfers land property to such partnership firm by way of capital contribution. This is a specific transaction between partnership and partner for which there is special provision enacted by the legislator vide section 45(3) of the Act. Therefore, in our considered view the consideration in the hand of the partner (present assessee) shall be determined as per the provision of section 45(3) of the Act and not as per the provisions of section 50C. Disallowance of indexed cost of improvement from the computation of capital gain - assessee against the sale of land and transfer of land to partnership firm claimed certain amount incurred in different years as cost of improvement which includes interest paid to one Shri Suresh Patel in different years and compensation paid in lieu of cancellation deed executed by the impugned party and parties from whom the assessee purchased the impugned land property - HELD THAT:- We find that the lower authority failed to point out any infirmity in the evidence made available by the assessee but rejected the claim of the assessee merely on the reasoning that the cancellation deed did not contain the detail of payment and party has not offered income on receipt of such compensation. In our considered opinion, the reasons assigned by the AO and by the learned CIT(A) to reject the claim of the assessee is not justified especially considering the documentary evidence made available by the assessee qualifying the payment of compensation. As considering the elaborated factual and legal position, we hereby set aside finding of learned CIT(A) regarding the claim of cost of improvement on account of compensation paid to Om Shri Sanat Non-Trading Owners Association and direct the AO to allow the claim of the assessee in this regard. Hence, in totality the claim of the assessee on the issue raised by him vide impugned grounds of appeal are hereby partly allowed for statistical purposes. 2023 (8) TMI 1185 Deduction u/s. 80IB(10) - Claim denied on the ground that the housing projects were not completed by the assessee within five years period - HELD THAT:- It is an admitted fact that separate building planning permission were obtained by assessee from Local Authority namely AMC for each Block as a separate housing project. Further Building Usage permission was also obtained by the assessee from the Local Authorities namely Ahmedabad Municipal Corporation well within the period of 2 to 5 years. The Lower Authorities without appreciating the above facts denied the claim of deduction u/s. 80IB(10), solely on the ground that the assessee has not started the building project relating to Block Nos. E, F G and thereby wrongly held that the assessee has not completed the housing projects. As decided in the case of Viswas Promoters (P.) Ltd. [ 2012 (11) TMI 1117 - MADRAS HIGH COURT] held that each residential block is a housing project in itself for the purpose of claiming deduction u/s. 80IB(10). Also in the case of Vertex Homes (P.) Ltd. [ 2015 (9) TMI 549 - ITAT HYDERABAD] held that the assessee, a builder, had not completed construction of all blocks of housing project, within stipulated period, would not deprive assessee from availing of deduction u/s. 80IB(10) in respect of each of completed block on stand alone basis. Thus separate planning permission obtained by the assessee for each Block separately and after construction obtained separate Building Usage permission from the Local Authority within 5 years period, therefore the assessee cannot be denied the claim of exemption u/s. 80IB(10) - Decided in favour of assessee. 2023 (8) TMI 1184 Penalty u/s. 271C - order u/s 201(1) - assessee purchased two immovable properties on which no TDS was deducted u/s 194-IA - assessee submitted that the seller of the aforesaid two properties are regularly assessed to tax and they have disclosed income on sale of the aforesaid properties in their return of income and paid taxes - HELD THAT:- There seems to be a bona fide mistake on the part of the assessee in not deducting taxes at source u/s 194-IA - assessee has also furnished relevant documents in support of the fact that the recipients/payees have duly reflected the sale consideration in their respective returns of income have and have also paid taxes thereon. Therefore, it is evident that there is no loss to the Revenue on account of non-reduction of taxes at source by the assessee. Further, it is seen that the assessee has also paid interest u/s 201(1A) of the Act for non-deduction of tax at source in the instant facts. As decided in Bank of Nova Scotia [ 2016 (1) TMI 583 - SUPREME COURT] held that when the assessee s conduct is not contumacious, then penalty under Section 271C of the Act is liable to be vacated. Supreme Court of India made the following observation in the Case of M/s Eli Lilly Company (India) Pvt. Ltd. Ors. [ 2009 (3) TMI 33 - SUPREME COURT] with regards to reasonable cause for failure to deposit tax deducted at source held that only those persons will be liable to penalty who do not have good and sufficient reason for not deducting tax and burden, of course, is on such person to prove such good and sufficient reason. Thus as there is a bona fide mistake on part of the assessee in not deducting taxes at source at time of purchase of aforesaid two properties, coupled with the fact that the recipients/sellers have duly accounted for the sale consideration in their respective returns of income and hence, there is no loss to the Revenue, we are of the considered view that this is a fit case for deleting the levy of penalty u/s 271C - Decided in favour of assessee. 2023 (8) TMI 1183 Revision u/s 263 - Scope and powers of applicability of Section 263 - Deduction u/s 80P(2) - HELD THAT:- As the order passed by AO is not erroneous and prejudicial to the interests of the Revenue for the reason that firstly, AO had examined this issue during the course of assessment proceedings and secondly, various judicial precedents as highlighted above have also adjudicated on this issue in favour of the assessee including the jurisdictional Gujarat High Court in STATE BANK OF INDIA (SBI) [ 2016 (7) TMI 516 - GUJARAT HIGH COURT] and M/S. SURENDRANAGAR DISTRICT CO-OP. MILK PRODUCERS UNION LTD.[ 2019 (9) TMI 978 - ITAT RAJKOT] as held that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction u/s 80P(2)(d). We also need to be mindful of the fact that in 263 proceedings, the scope of proceedings is not as vast as in the case of original assessment proceedings and would the assessment order can be set-aside only within the framework provided u/s 263 of the Act. Hon ble Supreme Court in the case of Shreeji Prints (P.) Ltd. [ 2021 (9) TMI 108 - SUPREME COURT] outlining the scope and powers of applicability of Section 263 we are of the considered view that Ld. PCIT erred in facts and in law in setting-aside the assessment order as being erroneous and prejudicial to the interest of the Revenue in the instant case. Decided in favour of assessee. 2023 (8) TMI 1182 Determination of fixed place of permanent establishment of assessee in India - HELD THAT:- As decided in assessee own case [ 2013 (11) TMI 564 - ITAT DELHI ] employees of the assessee frequently visited the premises of CIS to provide supervision, direction and control over the operations of CIS and such employees had a fixed place of business at their disposal. CIS was practically the projection of assessee s business in India and carried out its business under the control and guidance of the assessee and without assuming any significant risk in relation to such functions. Besides assessee has also provided certain hardware and software assets on free of cost basis to CIS. Thus, the findings of the CIT(A) that assessee has a fixed place PE in India under Article 5(1) of the DTAA is upheld. The ground is decided against the assessee and the order of Ld. CIT(A) in holding that assessee has a fixed place PE in India is upheld. Dependent Agent PE in India - HELD THAT:- This issue is decided in favour of assessee in A.Y. 2006-07 [ 2013 (11) TMI 564 - ITAT DELHI ] as held even assuming, CIS is not an agent of CMC, it does not have any authority to conclude contracts or secure orders on behalf of CMC and hence CMC does not have a Dependent Agent PE in India. Taxability of link charges/IPLC as royalty - HELD THAT:- As decided in assessee own case for A.Y. 2006-07 [ 2013 (11) TMI 564 - ITAT DELHI ] there is no transfer of the right to use, either to the assessee or to CIS. The assessee has merely procured a service and provided the same to CIS, no part of equipment was leased out to CIS. Even otherwise, the payment is in the nature of reimbursement of expenses and accordingly not taxable in the hands of the assessee. Therefore, it is held, that the said payments do not constitute Royalty under the provisions of Article 12 of the tax treaty and the ground is allowed in favour of assessee. 2023 (8) TMI 1181 Assessment u/s 153C - assessment in the case of the 'other person' - period of limitation - CIT(A) quashing the assessment order passed by the AO holding it to be barred by limitation holding that assessment made for assessment year 2014-15 is invalid as 6 previous assessment years from the year of search has to be reckoned from the date when the books of accounts or seized documents were handed over to the Assessing Officer has elapsed - HELD THAT:- Ld. CIT(A) has merely taken into consideration the settled proposition of law of Jurisdictional High Court in the case of CIT vs. RRJ Securities[ 2015 (11) TMI 19 - DELHI HIGH COURT] to give relief to the assessee and ld. DR could not bring anything to show how there was error in applying the law laid in (Supra). Also in Pr. Commissioner Of Income Tax v. Sarwar Agency Pvt. Ltd. [ 2017 (8) TMI 733 - DELHI HIGH COURT] Hon ble Delhi High Court has reaffirmed the law laid in RRJ Securities Case ( Supra) as held in the case of the 'other person' the AO issues notice only subsequent to the notices issued under Section 153 A to the searched person, the starting point for computation of the block period would be the date on which, based on the seized documents, notice is issued to the 'other person' under Section 153C - Decided in favour of assessee. 2023 (8) TMI 1180 Assessment u/s 153A - Undisclosed investment - HELD THAT:- It is admitted fact by the assessee that it has paid only sum of Rs. 5 Lacs to the sellers and therefore, the investment, to that extent, could be considered as undisclosed investment by the assessee. Accordingly, the impugned addition stand restricted to the extent of Rs. 5 Lacs. We order so. The corresponding grounds stand partly allowed. Addition of agricultural income - We find that the assessee has been searched on 21.02.2019. It is undisputed fact that on the date of search, no assessment proceedings were pending against the assessee for the year under consideration. Therefore, this is a year of unabated assessment. We also find that the impugned addition is not based on any incriminating material as found by the department during the curse of search proceedings. In such a case, no addition could have been made by revenue in terms of the recent decision of DCIT vs. U.K. Paints (Overseas) Ltd [ 2023 (5) TMI 373 - SC ORDER] In this decision, Hon ble Court followed its earlier decision rendered in Pr. CIT vs. Abhisar Buildwell Pvt. Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] and held that where no incriminating material was found in case of any of assessee either from assessee or from third party, High Court rightly set aside assessment order passed under section 153C. In the present case, the facts are similar. There is nothing on record which would show that any incriminating material was found during search operation which would show that the agricultural income belonged to the assessee instead of HUF. Therefore, we would hold that the aforesaid agricultural income is not to be considered in the hands of the assessee. The corresponding grounds raised by the assessee stand allowed. The addition on account of gift to wife has already been deleted in the impugned order. Assessee appeal partly allowed. 2023 (8) TMI 1179 TP adjustment related to export commission - HELD THAT:- We find that this issue is squarely covered in favour of the assessee by the decisions of ITAT in its own case for AYs. 2015-16 [ 2021 (5) TMI 949 - ITAT DELHI] 2016-17 [ 2021 (11) TMI 570 - ITAT DELHI] assessee has successfully demonstrated not only the benefits but has also shown that the profitability is higher (as per the charts exhibited elsewhere). Considering all no hesitation in directing the AO/TPO to delete the impugned addition on account of export commission. TP adjustment relating to model fee paid for strips and color change - TPO/DRP have made disallowance by holding that model fee paid by the assessee to its AE is nothing but in the nature of royalty which is already paid separately to the AE - HELD THAT:- Upon careful consideration, we find that the payment is according to an agreement. The disallowance has been made by the TPO not on the basis of any method prescribed under the rules or benchmarking the transactions. The Revenue authorities cannot sit into the shoes of businessman to decide which agreement should be made or which should not be. Hence, in effect, authorities below have opined that payment has no commercial expediency. This, in our considered opinion, is not as per the provisions of the Act. Hence, we accept the submissions of assessee and direct that the expenditure should be duly allowed. Disallowance of signage expenses as capital in nature - nature of expenses - HELD THAT:- As decided in assessee own case 2016-17 [ 2021 (11) TMI 570 - ITAT DELHI] signage expenditure is revenue in nature. Disallowance of sales tools expenses - These sales tools/fixtures are placed at dealer's outlets and are manufactured by third party in accordance with the specifications provided by the assessee - HELD THAT:- As In assessee s own case for assessment year 2015 16 [ 2021 (5) TMI 949 - ITAT DELHI] we hold that sales tool expenditure are revenue expenditure in nature and therefore the disallowance made AO is directed to be deleted. Capitalization of royalty expenses paid to HMJ - HELD THAT:- As decided in assessee s own case for AY 2016-17 [ 2021 (11) TMI 570 - ITAT DELHI] assessee was already engaged in the manufacturing of motorcycle and Scooter and payment of royalty expenses was not with respect to setting up of manufacturing facility. Therefore appeal of the assessee allowed and direct the learned AO to delete the addition on account of capitalisation of royalty expenses holding it to be revenue in nature. Disallowance u/s 80G - assessee made certain donation to approved institutions or funds and claimed 50% of the total donation made as deduction u/s 80G - This amount also formed part of the CSR initiative of the assessee company - AO has disallowed the claim on the ground that anything donation over and above the CSR u/s 80G will be only allowed as the CSR expense is not an allowable expense u/s 37 - HELD THAT:- We find that in the case of Goldman Sachs Services (P.) Ltd. [ 2020 (11) TMI 464 - ITAT BANGALORE] has held that the other contributions made under section 135 (5) of the Companies Act are also eligible for deduction/s 80G of the Act subject to satisfying the requisite conditions prescribed for deduction u/s 80G - issue is remanded to the file of AO to examine the same whether the payments satisfy the claim of donation u/s 80G of the Act. We find that the case law is fully applicable to the facts of the case. There is no restriction in the Act that expenditure when disallowed for CSR cannot be considered u/s 80G of the Act. Hence, we remit the issue to the file of AO to verify whether these payments were qualified as donations u/s 80G of the Act or not, if they qualify as donation u/s 80G of the Act then the requisite amount deserves to be allowed. Disallowance u/s 80JJAA - employees/ workmen employed by the assessee during the year - HELD THAT:- As we agree that AO has erred in applying amended provisions of section 80JJAA of the Act. Hence, we remit the issue to the file of AO to examine the factual aspects in terms of the unamended provisions of section 80JJAA. The issue of liberal interpretation raised by the ld. Counsel for the assessee is not tenable. The AO will act as per the sanguine provisions of the Act. Additional claim of deduction of expenses - Deduction of expenses in respect of technical know-how - Assessee contented that in light of Circular No. 14(XL- 35) dated 11.04.1955, it has been made clarified by the CBDT that the officers of the Department shall genuinely provide reliefs/remedies available to assessee in cases wherein the assessee has missed to claim any relief available to during the assessment and therefore the claim of deduction shall be allowed by the AO - HELD THAT:- As decided in own case 2016-17 [ 2021 (11) TMI 570 - ITAT DELHI] stand of the Revenue that where the assessee itself had not claimed as deductible in its hands, then the same cannot be allowed by the additional ground of appeal is not acceptable as there is no estoppel in law; especially where the issue has been decided by the Jurisdictional High Court on similar facts - we direct the Assessing Officer to allow assessee s claim of deduction in respect of technical know-how payment. Payment of gratuity - assessee submitted that the said disallowance is made without providing any opportunity to assessee and the draft assessment order passed by the NFAC is non- speaking on this ground - HELD THAT:- We find that the issue should be remitted to the AO in the interest of justice. AO shall factually verify the averments of the assessee and decide as per law, by giving the assessee proper opportunity of being heard. Levy of education cess - HELD THAT:- We find that the issue is squarely covered by the decision of Chambal Fertilizers Chemicals Ltd. [ 2022 (12) TMI 1098 - SC ORDER] expounded that term tax under section 40a(ii) of the Income Tax Act should include cess. Ld. Counsel of the assessee in his elaborate submission tried to distinguish this case law. But we are not convinced. Hence, we decide this issue in favour of Revenue. 2023 (8) TMI 1178 Deduction u/s 35(2AB) - revenue expenditure not approved by DSIR - non filing of Form No. 3CL - Till the original assessment proceeding stage, the assessee had not received Form No. 3CL issued by DSIR and therefore the AO disallowed the weighted deduction claimed - assessee though furnished the copy of the order of approval in Form No. 3CM given by DSIR during the assessment proceedings. DSIR issued Form No. 3CL and accordingly, the AO passed an order u/s 154 allowing weighted deduction section 35(2AB) only to the extent of expenditure appearing in Form No. 3CL and remaining revenue expenditure not approved by DSIR disallowed. HELD THAT:- AR furnished the break-up of the allocation of expenditure on clinical trials incurred outside the approved in-house R D facility - As expenses incurred in respect of bio-equivalence study for the drugs and pharmaceutical formulations manufactured/traded by the assessee. We find that as decided in v/s Cadila Healthcare Ltd. [ 2013 (3) TMI 539 - GUJARAT HIGH COURT] held that the benefit u/s 35(2AB) is also available in respect of expenditure on clinical trials outside the approved in-house R D facility. Thus assessee is entitled to claim weighted deduction on expenditure u/s 35(2AB) of the Act in respect of the clinical trial expenses incurred outside the approved in-house R D facility. As regards, the balance expenditure as per the assessee the same was in relation to electricity expenses, which are directly related to the R D centre at the Goa unit. Thus, we are of the view that the said expenditure is also eligible for weighted deduction u/s 35(2AB) of the Act in view of the aforesaid findings. Thus AO is directed to grant weighted deduction on the revenue expenditure u/s 35(2AB) as assessee furnish a copy of the order of approval in Form No. 3CM given by DSIR during the assessment proceedings - Decided in favour of assessee. 2023 (8) TMI 1177 Deduction u/s 32AC - Investment in new plant or machinery - HELD THAT:- In the taxing statute there is no scope for intendment, and if the language is simple, plain, unambiguous and clear, the same has to be applied howsoever harsh the consequences may be. There is no equity in taxing statute, and literal rule of interpretation is to be followed if there is not ambiguity in the provisions and is in simple clear and plain language. Thus, as could be seen from clause(v) of sub-section (4) of Section 32AC, the new asset shall not include any plant or machinery, the whole of the actual cost of which is allowed as deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head Profits and gains of business or profession of any previous year. Thus, in the instant case , Pollution Control Equipment s admittedly carry prescribed rate of depreciation @100%, and hence the entire actual cost of Pollution Control Equipment s is deductible while computing income chargeable to tax under the head Profits and gains of business or profession of any previous year. It is merely because the aforesaid Pollution Control Equipment s were acquired and installed after 30th September, 2013 and were put to use for less than 180 days during the year under consideration, the depreciation allowed shall be 50% in the year under consideration while the remaining 50% depreciation shall be allowed in the subsequent assessment year, but the facts remains which cannot be negated is that the whole of the actual cost of Pollution Control Equipment s is deducted at the prescribed rate of depreciation @100%, and is hit by clause (v) sub-section (4) of Section 32AC, and shall be ineligible for claim of deduction u/s 32AC. The assessee, if it meets all other conditions for grant of deduction u/s 32AC, shall be allowed deduction u/s 32AC in the subsequent year, for which the assessee has to meet all the statutory requirements as mandated by Section 32AC, and the onus is entirely on the assessee to demonstrate and prove with evidence before the AO that it is eligible and entitled for deduction u/s 32AC in the immediately succeeding year as it meets all the conditions as are prescribed u/s 32AC. Assessee submitted that the assessee did not claim deduction u/s 32AC in the return of income filed for immediately succeeding assessment year, as the claim was made in the return of income filed for current assessment year. Be it as it may be, if the assessee meets all the stipulated conditions as are prescribed u/s 32AC for immediately succeeding assessment year for which onus is entirely on the assessee to demonstrate and prove by evidence before the AO that it is eligible and entitled for deduction u/s 32AC, the AO is directed to consider the claim of the assessee for deduction u/s 32AC for immediately succeeding year viz. ay: 2015-16, on merits in accordance with law. Reference is drawn to CBDT circular No. 14 of 1955, dated 11.04.1955. The grounds of appeal numbers 1 to 5 are partly allowed , in the manner indicated above. Disallowance u/s 14A r.w.s 8D - HELD THAT:- We are principally in agreement with assessee that in case if the investments are made out of mixed use funds, the presumption shall apply that the assessee has used its own interest free funds available for making investments in the securities/mutual funds provided the own interest free funds are sufficient to cover the aforesaid investments, but complete facts are not there on record as audited financial statements for relevant period are not filed but are filed for subsequent financial year i.e. 2014-15, and, thus, for limited purposes, we are remitting the matter back to the file of the AO for verification of this aspect and if it is found that own interest free funds are sufficient to cover investments made in securities/mutual funds, no disallowance of interest expenses shall be made as it will be presumed that the assessee has invested its own interest free funds for making investment in securities/mutual funds. The assessee is directed to file relevant records with the AO. So far as disallowance of administrative expenses by authorities below, by invoking provisions of Section 14A read with Rule 8D(2)(iii) is concerned , no serious contentions were raised by the ld. Counsels for the assessee. As in assessee s own case has confirmed the additions made by authorities below by disallowing administrative expenses by invoking provisions of Section 14A read with Rule 8D(2)(iii) of the 1962 Rules. 2023 (8) TMI 1176 Reopening of assessment u/s 147 - foreign travel expenses - reopening beyond period of 4 years - HELD THAT:- We observe from the record that the original assessment u/s. 143(3) was completed on 22.11.2011 and we also observed that assessee has filed all the relevant information before the then AO. It is also fact on record that the issue involved is relating to AY 2009-10 and the notice was issued for reopening of assessment only on 28.03.2016. As clearly reopened beyond four years and we also observed that CIT(A) has dismissed the ground of the assessee filed before him with the observation that the case of the assessee is covered by the main provision and not proviso. The observation of the CIT(A) is against the fact on record and we observe that the issue involved in the present case is falls under the first proviso to section 147. Therefore, as per the proviso to section 147 two conditions are required to be satisfied firstly, the Assessing Officer must have reason to believe that income chargeable to income tax has escaped assessment and secondly he must also have reason to believe that such escapement has occurred by reason of omission or failure on the part of the assessee to disclose fully or truly all material facts necessary for his assessment of that assessment year. Since in the present case proviso to section 147 is applicable, AO has to bring on record both the above said conditions on record. Since the AO has not brought on record how the escapement of income has occurred by reason of omission or failure on the part of the assessee to disclose fully or truly all material facts necessary of the assessment, therefore the reopening of assessment is bad in law. The assessment passed u/s.143(3) r.w.s. 147 is bad in law and it is quashed. Decided in favour of assessee. 2023 (8) TMI 1175 Exemption u/s 10(26AAA) - Scope of the definition of Sikkimese in Section 10 (26AAA) - assessee submitted that assessee who is not a Sikkimese individual but is residing in Sikkim since prior to 1975 and, therefore, as per the recent judgment of Association of Old Settlers of Sikkim and Ors [ 2023 (1) TMI 583 - SUPREME COURT ] as held that Till such amendment is made by the Parliament to the Explanation to Section 10(26AAA) any individual whose name does not appear in the Register of Sikkim Subjects but it is established that such individual was domiciled in Sikkim on or before 26th April, 1975, shall be entitled to the benefit of exemption. HELD THAT:- As we notice that the assessee though is not a Sikkimese and is name is not appearing in the Register of Sikkim but as per the residential certificate issued by the District Collector, East District, Gangtok, he is found to be domiciled in the state of Sikkim on or before 26th April, 1975 and, therefore, assessee is well covered by the decision of the Hon ble Supreme Court and thus, is entitled to exemption u/s 10(26AAA) of the Act for the income earned from carrying out the activity in the State of Sikkim. 2023 (8) TMI 1174 Addition of 20% of expenses incurred for services rendered - CIT (A) accepting the claim of the assessee that there was no profit element involved in the transaction wherein the assessee had provided a highly technical and professional services to the other party, that too by utilising its own funds - HELD THAT:- As decided in own case [ 2020 (11) TMI 868 - ITAT MUMBAI] unless the officer was able to come to the conclusion, on the material before him, that the assessee had really made profits in the transaction, it was not permissible for him to add any fictional income to the assessee's return. In the absence of any evidence to show either that the sales were sham transactions or that the market prices were in fact paid by the purchasers, the mere fact that the goods were sold at a concessional rate to benefit the purchasers at the expense of the company would not entitle the income-tax department to assess the difference between the market price and the price paid by the purchasers, as profit of the company. Thus direct the learned assessing officer to delete the addition made in this year being 20% of the expenditure incurred by the assessee. Accordingly, the order of the learned CIT A is confirmed and appeal of the learned assessing officer is dismissed. 2023 (8) TMI 1173 Maintainability of appeal against Levy of interest u/s 234B C and u/s 220(2) - assessment order passed u/s 143(3) r.w.s. 254 - Whether the appeal filed by the assessee is maintainable or not? - HELD THAT:- Admittedly, the appeal is a statutory right. If the statute does not confer any right on the assessee to file the appeal, same cannot be filed. According to the provisions of Section 246A any assessee who is aggrieved by Specified orders may appeal to the Commissioner Appeal. Therefore, the basic condition to section 246A pre supposes that there has to be an order listed in Section 246A (1) of the Act. There are approximately 28 types of the orders listed. The second condition is that assessee must be aggrieved by those orders. Admittedly, in this case, the order of assessment passed u/s 143 (3) - Therefore, specified order is assessment order passed u/s 143(3) of the Act. This order is listed in section 246A (1) (a) of the Act. Therefore it is one of the specified orders against which appeal can be preferred before the LD CIT (A). There is a specified order i.e. order under Section 143(3) of the Act by which assessee is aggrieved and therefore, assessee is entitled to file an appeal in the present case before the learned CIT (A) u/s 246A (1) (a) of the Act. It is not the case of the Revenue that assessment order is not specified order under Section 246A (1) of the Act and assessee is not aggrieved with that. Therefore, we are not in agreement with the order of the learned CIT (A) that the appeals of the assessee are not maintainable. CIT (A) therefore, should have decided the issue on its merit. Therefore, we categorically hold that the appeals filed before the learned CIT (A) for all these assessment years were wrongly dismissed holding it to be not maintainable. According to us, same is maintainable and those are liable to be decided on the merits of the case. 2023 (8) TMI 1172 Rectification of mistake - late deposit of the Employees contribution towards ESI and PF after the expiry of due date as specified in the relevant statutes -whether there is an apparent mistake in the order of the Tribunal passed? - HELD THAT:- Section 254(2) empowers the Tribunal to rectify any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendment, if the mistake is brought to its notices by the assessee or the AO. The Bench also noted that the Department has simply relied upon the Judgement of Hon ble Supreme Court in the case of M/s. Checkmate Services Pvt. Ltd. [ 2022 (10) TMI 617 - SUPREME COURT ] but it has not mentioned that there is apparent mistake in the order of the ITAT passed in the case of Shri Suman Solanki [ 2022 (8) TMI 923 - ITAT JAIPUR ] wherein some amendment/ rectification is required. The order was passed by the Bench in the case of the assessee on 12-05-2022 in accordance with that time, situation and prevailing interpretation of law by various Hon ble High Courts [ including binding judgment of jurisdictional High Court ] and ITAT Benches across the country wherein the Bench does not find any infirmity or apparent mistake. Bench feels hesitation to concur with the submission of the Department to amend its order. Hence, the Misc. Application filed by the Department is dismissed. 2023 (8) TMI 1171 Addition towards unrecorded turnover - transaction of buy / sale in Paddy Basmati through National Spot Exhange Ltd. (NSEL) - HELD THAT:- As seen that Sauda Summary Report of Anand Rathi Commodities Ltd. showed two sets of transactions of Paddy Buy and Paddy Sell on 19-03-2013 and 11-03-2013, which were not recorded in the books of account for the year under consideration. The assessee kept raising a claim before the AO as well as the DRP that these transactions were recorded in the subsequent year. However, the assessee failed to substantiate his contention. Neither any material could be placed before the AO/DRP to demonstrate the booking of profit from such transactions in the immediately succeeding year, nor the position has improved any further before the Tribunal. In view of the admitted facts that the transactions did take place, and profit from them was neither recorded in the year under consideration nor the next year, we hold that the AO was justified in making the addition. The ground is, therefore, dismissed. Unrecorded transactions - transactions of Gold - HELD THAT:- We have also gone through the ledger of transactions of Anand Rathi Commodities Ltd. with the assessee, whose copy has been placed at page 25 onwards of the paper book, showing Buy Sauda date as 01-02-2013 and the actual transactions date of sale and purchase, namely, 01-03-2013 and 04-02-2013. In fact, there was only one set of transactions of GOLD purchase and sale, but the AO inadvertently additionally took the dates of Contract-cum-bills of purchase and sale as separate and distinct transactions. The addition so made by the AO is, thus, directed to be deleted. Disallowance of expenses - AO held that since the business was transacted only through Anand Rathi Commodities Ltd. and hence, the assessee was not required to incur any further expenditure in relation thereto, disallowed 80% of the expenses by allowing deduction only at 20%, against which the assessee has approached the Tribunal - HELD THAT:- As seen as an admitted position that the assessee did carry on the business in the year under consideration. Even though Anand Rathi Commodities Ltd was acting on behalf of the assessee, still the assessee also was required to incur usual necessary expenses to carry on his business. The expenses claimed are in the nature of day-to-day expenses, such as, Accountant salary, Driver Salary, Car expenses, Travelling and Depreciation etc. We are of the considered opinion that it would be just and fair if the disallowance is restricted to 20% towards personal element in expenses and unverified expenses. The assessee gets the relief accordingly. Transaction in Paddy Basmati - A.Y. 2014-15 - HELD THAT:- Though the assessee made the payment for the purchase of Paddy but could not take the delivery as a sum of Rs. 1.25 crore is still due from NSEL as per the above statement. On one hand, the assessee did not receive the delivery despite making payment for the purchase price, on the other, the AO computed profit from the presumed sale. We fail to appreciate that when the goods were not received in the first instance, where is the question of presuming the corresponding sale and then working out the profit therefrom. We, therefore, order to delete the addition. 2023 (8) TMI 1170 TP Adjustment - comparable selection - functional dissimilarity - HELD THAT:- Admittedly, the assessee is a captive service provider to its AE. FAR analysis of assessee establishes that it does not undertake any risk in terms of projects undertaken or services rendered. The functions carried out by the assessee are strictly on the basis of directions from its AE and the payment by the AE to the assessee is on cost+markup. The comparables sought by assessee herein for exclusion carry out diverse activities and has significant brand values. These companies are owning huge intangibles and also undertakes its own R D which is not the case of the assessee before us. The decisions herein above relied by the assessee on functional dissimilarities goes to establish that these are functionally not similar with that of the assessee. The relevant extract of the observation in case of Yahoo Software Development India Pvt. Ltd. [ 2022 (7) TMI 1349 - ITAT BANGALORE] in respect of Larsen Toubro Infotech Ltd., Mindtree Ltd., Persistent Systems Ltd. and Infosys Ltd direct exclusion from the final list. Exclusion of Nihilent Ltd. and OFS Technologies Ltd. from the final list as not functionally similar to that of assessee. Case followed SUBEX LIMITED [ 2023 (4) TMI 224 - ITAT BANGALORE] Assessee seeking inclusion of only two comparables Maveric Systems Ltd. and Evoke Technologies Pvt. Ltd. - We note that the authorities below has not verified the annual reports to come to a conclusion that the export revenue filter is not satisfied. In the interest of justice, we direct these comparables back to the Ld.AO/TPO to verify the FAR analysis of these comparables with that of assessee and to consider its inclusion in case it satisfies all the relevant filters. Margins of Harbinger Systems Pvt. Ltd. and CG-Vak Software and Exports Limited has been wrongly computed - We direct the Ld.AO/TPO to recompute the margins of these comparables in accordance with law. Considering bad debts and provision for bad debts as non-operating expenses while computing the operating margin of comparable companies - HELD THAT:- As relying on M/S. MAXIM INDIA INTEGRATED CIRCUIT DESIGN PVT. LTD. [ 2020 (11) TMI 563 - ITAT BANGALORE] we direct the Ld.AO to consider the bad and doubtful debts and provision for bad debts to be operating in nature while computing the PLI of the comparable companies. 2023 (8) TMI 1169 Assessee in Default u/s 201(1) 201(1A) - non-deduction of tax at source u/s 194J and u/s 195 of the IT. Act with regard to payment by way of reimbursement to member companies, allowances paid to resident and non-resident personnel and payment to foreign agents - reimbursement of Indian Salary and benefits to members company is termed as fees for technical services as per explanation 2 to Sec. 9(1)(vii) and tax is, thus, deductible at source therefrom u/s 194J and p ayment made to secondees by the assessee who are non-resident, tax is deductible at source as per provisions of Sec. 195 since the payment is chargeable to income tax under Sec. 5(2)(b) - member companies have provided expert personnel to PII/assessee for rendering technical services for which the assessee is also making payment to the member companies - CIT(A) deleted addition - HELD THAT:- CIT(A) has rightly overturned the findings returned by the AO that factum of providing expert personnel of member company to PII for rendering technical services TDS was deductable u/s 194J of the Act by relying upon the provisions contained in the Explanation 2 of section 9(1) by treating the same as fee for technical services on the ground that as per agreement on record between PII and overseas clients it is assessee/PII who is responsible for providing the technical services to the overseas clients and there is no privity of contract between member employer company and the overseas industrial units. Moreover under MOU member companies have placed its employee at the disposal of PII on a net profit basis and employee to fulfill its contractual obligation to the overseas clients. Moreover, member companies have not incurred anything out of pocket for providing these services rather they are fully reimbursed by PII. So we are in agreement with the Ld. CIT(A) that member companies are not rendering technical services to the PII. Member employer company deducts tax at source under section 192 of the Act from the Indian salary of such employee as they continue to get their salary from his employer member companies. Member companies have also continued to deduct statutory deduction like PF, tax, ESI from his salary paid by the member company. Since expert employees continued to get the salary from the member companies during the period of secondment their employer employee relationship continues even during the period of secondment - member company in its books of account does not consider the reimbursement by PII as an item of income but the same is credited to the salary of account and as such the CIT(A) has rightly reached the conclusion that explanation 2 to section 9(1)(vii) is not attracted. Payment made to secondees who are residents - AO reached the conclusion that the tax should be deducted at source under section 194J - CIT(A) decided this issue by considering fact that such secondees to whom payment was made remained abroad for less than 182 days and has rightly analysed the payment in two parts. (1) payment of such allowances made to employees who were residents in India as per section 6(1) of the Act but were working abroad and the payment made to them at the most can be considered as part of the salary and when there is no employee employer relationship between PII and secondees, PII cannot be held responsible for making payment by virtue of section 204 of the Act. CIT(A) has also rightly relied upon the decision rendered in case of CIT vs. H Link [ 1999 (12) TMI 27 - GUJARAT HIGH COURT] that living allowance paid to the employees is a personal advantage and therefore does not constitute pre-requisite which can be subjected to tax. So the tax was not required to be deducted from the payment made to the secondees who were resident under section 194J of the Act as has been rightly decided by the Ld. CIT(A). Payment to non-resident secondees - CIT(A) has rightly reached the conclusion that the foreign allowances, food and out of pocket expenses paid to non resident secondees was not chargeable to tax under section 5(2)(b) of the Act. Because there was no employer employee relationship between PII and secondees and that the services in respect of which allowances in question paid were rendered by the non-resident employee outside India. So we find no ground to interfere into the findings returned by the Ld. CIT(A). Payment to foreign agents - TDS under section 195 - CIT(A) has rightly reached the conclusion that tax was not required to be deducted by the assessee under section 194J of the Act in respect of the payment made to foreign agents on the ground inter-alia that there was no business connection in India between the agents and the assessee nor the agent has performed any job/operation in India; that there was no employer employee relationship between the payer and the payees and therefore payee being the third party cannot enforce his right against the payer. CIT(A) has also taken into consideration affidavit dated 28.08.2000 executed by executive chairman of PII wherein it is duly discussed the issue as to reimbursed expenses to employees deputed outside India by various Indian companies eg. Tata Infotech, State Bank of India, Systime, Bank of Baroda, Engineers India Limited, Tata Consultancy Services etc. who are paying such allowances to the employee deputed outside India but are not deducting tax at source on allowance paid in foreign currency to their personnel and all those personnel who are sent to overseas also draw an Indian salary component as a whole. CIT(A) has rightly held the assessee not in default u/s 201(1) r.w.s. 201(1A) of the Act, hence aforesaid appeals filed by the Revenue are hereby dismissed. Customs 2023 (8) TMI 1168 Violation of principles of natural justice - appellant not represented inasmuch as no one was present to represent the appellant - HELD THAT:- The appellant herein was not present before the Tribunal and, therefore, the appellant herein was not heard in the matter. It appears that even on earlier occasions, namely, 04.10.2016 and 27.10.2016, there was no representation on behalf of the appellant herein. Be that as it may, if the appellant had been heard, possibly the Tribunal would have had the assistance of the representation made on behalf of the appellant herein to counter the submissions made by the respondent/Customs and possibly, the Tribunal having had the benefit of both perspectives, would have passed an appropriate order. It is found that justice would be sub-served, if the appellant is given an opportunity of appearing before the Tribunal and making its submissions so as to effectively contest the appeal filed by the respondent herein before the Tribunal - the matter is remanded to the Tribunal for re-consideration of the appeal filed by the respondent herein in accordance with law and after giving an opportunity to both sides for making their submissions thereon. Appeal allowed by way of remand. 2023 (8) TMI 1167 Appropriate forum - HC or SC? - Classification of goods under the Central Excise Act, 1944 - appellant approached the High Court in exercise of jurisdiction under Section 130 of the Customs Act, 1962 - High Court has refused to exercise its jurisdiction as the appellant must instead file an appeal under Section 130-E of the Act before the Supreme Court - HELD THAT:- This issue is covered by the decision of this Court in COMMISSIONER OF CUSTOMS, BANGALORE-1 VERSUS M/S MOTOROLA INDIA LTD. [ 2019 (9) TMI 229 - SUPREME COURT] where it was held that the High Court was not justified in holding that the appeals are not maintainable under Section 130 of the Customs Act but are tenable before this Court under Section 130E of the Customs Act. The appellant is permitted to withdraw this Civil Appeal with liberty to file an appeal under Section 130-E of the Act within three weeks from today - the civil appeal is dismissed as withdrawn. 2023 (8) TMI 1166 Adjudication of SCN after 25 years - Confiscation of goods imported by the petitioner - redemption fine - penalty - impugned order passed after a delay of more than 25 years from the date of issue of show cause notice and after about 30 years from the date of import - HELD THAT:- Section 28(2A) of the Customs Act inserted by the Finance Act, 2001 provides for completion of adjudication proceedings within a period of six months or one year from the date of notice - this provision is similar to Section 73(4B) of the Finance Act, 1994 and the said provision of the Finance Act, 1994 has been analysed by this Court in paragraphs 14 to 19 in the case of COVENTRY ESTATES PVT. LTD. VERSUS THE JOINT COMMISSIONER CGST AND CENTRAL EXCISE ANR. [ 2023 (8) TMI 352 - BOMBAY HIGH COURT ] wherein, similar provision considered to highlight the time frame for adjudication. In the light of the decision of this Court, the submission made by the Respondents that there is no time-limit in adjudication of show cause notice ought to be rejected. Even otherwise, in the absence of Section 28(2A) of the the Customs Act, the adjudication proceedings have to be completed within a reasonable period and in the facts of the present case, pending adjudication of show cause notice for a period of 25 years cannot be said to be a reasonable period. Looking from any angle, the show cause notice dated 7th May 1997, in the facts of the present case, is required to be quashed and set aside - petition allowed. 2023 (8) TMI 1165 100% EOU - non-inclusion of value of deemed exports in the total value of exports - shortage in the entitlement of the petitioner while clearing its finished goods in terms of paragraph 6.8 of the Foreign Trade Policy - ineligibility for DTA Sale with regard to deemed exports - HELD THAT:- In view of what has been held by the Hon ble Supreme Court in Arvind Cotspin [ 2023 (2) TMI 825 - SUPREME COURT] , the said order is liable to be set aside - It was held in the case that the benefit of deemed exports was liable to be considered and the distinction between deemed exports and physical exports has been done away for the relevant period. The impugned order is set aside holding that the petitioner is not eligible for DTA sale in respect of deemed exports, on the basis of clarification dated 17.11.2008 received from respondent no. 2 which is ultimately based on the Office Memorandum dated 07.10.2008 and taking into consideration the application format for DTA Sale given at Annexure-A to Appendix 14-I-H of Handbook of Procedures, Volume-I and, for issuance of writ in the nature of mandamus directing the respondents to grant the benefit of deemed exports to the petitioner for calculating FOB value of exports in terms of para 6.8(a) of the Foreign Trade Policy. The petitioner is held entitled to benefit of deemed exports while calculating free onboard value of exports in terms of paragraph 6.8(a) of the Foreign Trade Policy. The benefit for the same be calculated and granted accordingly for the period from October-2005 to December-2007. 2023 (8) TMI 1164 Maintainability of petition - issue sub-judice before the Supreme Court - Jurisdiction to issue show cause notice - Power of DRI - HELD THAT:- The first order passed on the proceedings of IDEA CELLULLAR LTD., INGRAM MICRO INDIA PVT. LTD. GE T AND D INDIA LTD., S. KUSHALCHAND AND COMPANY, GLOBAL EXIM, JINESH T. VIKAM, CHANDRESH G. PATEL, VIJAY G. PATEL VERSUS THE UNION OF INDIA, ADDITIONAL DIRECTOR GENERAL, ADDITIONAL DIRECTOR, DIRECTORATE OF REVENUE INTELLIGENCE MUMBAI ZONAL UNIT AND ORS. [ 2023 (6) TMI 1302 - BOMBAY HIGH COURT] , whereby this Court has noted that there is a Review Petition arising out of the decision of the Supreme Court in M/s Canon India Private Limited [ 2022 (8) TMI 888 - SC ORDER] , which is pending before the Supreme Court. Also subsequent the amendment which was brought about by Finance Act 2022, is also challenged before the Supreme Court in the proceedings of Writ Petitions which too are pending - It was held that as the principal issue is sub-judice before the Supreme Court as noted in the order dated 6 June, 2023 passed in Idea Cellular Ltd., we are of the opinion that this petition also needs to be admitted. It appears that the issues are not different from what the Court considered in the case of Idea Cellular Ltd., VIRAL KANUBHAI MEHTA VERSUS UNION OF INDIA ORS. [ 2023 (8) TMI 930 - BOMBAY HIGH COURT] . Impugned order stayed. 2023 (8) TMI 1163 Confiscation - Quantum of levy of redemption fine and penalty - Valuation of imported goods - old and used worn clothing, completely fumigated - enhancement of value - HELD THAT:- This issue came up before this Tribunal in the case of VENUS TRADERS, RAINBOW INTERNATIONAL, AL-YASEEN ENTERPRISES, GLOBE INTERNATIONAL, KRISHNA EXPORT CORPORATION, PRECISION IMPEX, BMC SPINNERS PVT. LTD., SHIVAM TRADERS, LEELA WOOLEN MILLS, M.U. TEXTILES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) MUMBAI [ 2018 (11) TMI 625 - CESTAT MUMBAI ], wherein this Tribunal has observed The failure of the original authority to comply with the direction in remand to disclose the margin of profit that prompted the fine and penalty, the matter would normally have to be remitted back by another remand order. However, the paucity of evidence and the negligible scope for ascertainment at this stage deters us from doing so. Thus, the redemption fine and penalty imposed on the respondents by the adjudicating authority is sufficient to meet the end of justice. Therefore, the redemption fine and penalty confirmed by the adjudicating authority are upheld - appeal filed by the Revenue is dismissed. 2023 (8) TMI 1162 Levy of Additional duty of Customs (CVD) on MRP basis - undervaluation of cement imported from Bangladesh - self-assessment of the Bills of Entry by the importer not challenged by the department - HELD THAT:- It is observed that different lots of the impugned goods were imported by different importers through different land ports though the goods were manufactured by the same manufacturer in Bangladesh. The Appellant stated that the MRP printed on the goods imported through other ports can be different as the Place of importation itself was different and hence difference in MRP is quite natural. In the instant case the goods were imported through different ports. That itself is a valid reason for the difference in price. There is no evidence to suggest that the goods so imported through different ports under different MRP were being sold at same price. Hence, the price difference cannot be attributed to suppression of the value by the Appellant. Accordingly, the demand is not sustainable. The self-assessment of the Bills of Entry by the importer was not challenged by the department. The Hon ble Supreme Court in the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV [ 2019 (9) TMI 802 - SUPREME COURT] has held the claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self-assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act. The impugned order passed demanding differential duty without challenging the original assessment of the Bills of entry is not sustainable. Hence, the demand is not sustainable on this count also - Appeal allowed. 2023 (8) TMI 1161 Confiscation of truck carrying goods and penalty set aside - goods were provisionally released against the Security Deposit - HELD THAT:- The Commissioner (Appeals) has set aside the penalty on the Appellant and also set aside the confiscation of the truck. Against this OIA, the Department has not filed any Appeal. Hence, the conclusions arrived at by the Commissioner (Appeals) remain unchallenged and are final as on date. Therefore, in this case, the Commissioner (Appeals) should have also ordered for release of security deposit of Rs. 2 Lakhs which was deposited by the Late Shri Ishwar Chand Gupta, towards provisional release of the consignment. The Department cannot retain this amount. The Appellant s successor would be eligible to get the refund of security deposit of Rs. 2 Lakhs. Appeal disposed off. 2023 (8) TMI 1160 Interest on delayed refund at notified rate of interest (6%) to the appellant - enhanced rate of interest disallowed - HELD THAT:- In the case of THE COMMISSIONER OF CUSTOMS AIR PORT AND AIR CARGO COMPLEX, BANGALORE VERSUS M/S PFIZER PRODUCTS INDIA PVT. LTD. [ 2015 (9) TMI 34 - KARNATAKA HIGH COURT ] as well as RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. [ 2011 (10) TMI 16 - SUPREME COURT ] there was huge delay in granting the refund. The Hon ble Apex Court had considered all such facts to grant increased rate of interest. The Commissioner (Appeals) has relied on the said cases only to take the view that the appellant is eligible for interest due to delay. This does not mean that an assessee is always eligible for enhanced rate of interest than the notified rate of interest - there are no circumstances in the present case warranting to grant increased rate of interest to the appellant. The decision in the case of M/S BBM IMPEX PVT. LIMITED VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS (PREVENTIVE) , NEW DELHI [ 2022 (8) TMI 1118 - CESTAT NEW DELHI ] is not applicable to the facts of this case as the same is with regard to the refund of pre-deposit. Appeal is dismissed as being devoid of merits. 2023 (8) TMI 1159 Smuggling or not - Betel Nuts - whether the goods in question were being transported from Raxul (Nepal) and were of foreign origin having no licit documents? - burden to prove - HELD THAT:- There is no proper explanation forthcoming as to why the truck has proceeded in the northern direction towards Chhapwa when Patna was located to the south of Motihari. Had the Appellant produced these details before the Adjudicating Authority then they could have claimed that they have provided enough evidence towards legitimacy of the transaction. Having failed to do so, they cannot take the plea that the Department has not discharged their onus. In such cases the onus gets shifted from one party to another. When initially the truck was seized and proceedings were initiated by way of Show Cause Notice, it was for the Appellant to counter the same along with proper documentary evidence. If this was done, it can be taken that the Appellant has shifted onus to the Department, and only in that case, the Department has to counter the same to fortify their initial allegations. As can be seen from the factual matrix, the Appellant has failed to discharge the onus placed on him. There are no merits in the arguments adduced by the Appellant and see no need to interfere with the Order passed by the Appellate Authority - appeal filed by the appellant dismissed. 2023 (8) TMI 1158 Valuation of imported goods - hydraulic pumps - rejection of declared value - enhancement of value at the price at which identical goods imported - HELD THAT:- The adjudicating authority has adopted the value in the bill of entry for assessment of hydraulic pumps imported by M/s Shashi Charu Hydraulics Ltd and these have been deemed as identical goods for comparison. The impugned order has not offered any justification for acceptance of the compared imports as either identical or similar goods - It is also found that the prices used for comparison are not of contemporaneous relevance. Thus, even if rule 10A of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 has been validly invoked, failure to follow through with eligible alternatives under Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 stultifies recourse to section 28 of Customs Act, 1962 and other detriments. The impugned order set aside - appeal allowed. 2023 (8) TMI 1157 Valuation of imported goods - rejection of transaction value on the basis of certain NIDB data - HELD THAT:- Rule 12 of Customs Valuation Rules, 2007 empowers proper officer to seek various invoices, in case the value is doubted by him. Such documents, inter alia, can be invoices, purchase order or any supporting contract and this depends upon whatever was duly given by the appellant. The decision in M/S. SARDA ENERGY AND MINERALS LTD. VERSUS CCE, RAIPUR [ 2017 (9) TMI 1142 - CESTAT NEW DELHI ] also requires if such documents are available, then it is for the Assessing Officer to indicate as to why he is not convinced, despite such documents and given reasons for the same - It is found that even if the waiver of SCN has been granted by the appellants in this case, still it was incumbent upon the authority passing the original order, to give its reason as to why the documentary evidence by way of invoice, packing list, Certificate of origin or whatever was available had to be rejected. The reasons in this case, are not available therefore, there is a breach of provision of Rule 12 of Customs Valuation Rules, 2007 - Appeal allowed. 2023 (8) TMI 1125 Benefit of exemption - Import of Camera - Extended period of limitation - Jurisdiction of DRI to issue Show Cause Notice (SCN) - Proper Officer - Validity of proceeding initiated for Recovery of duty not paid - HELD THAT:- The subject matter of the impugned order would stand covered by the decision of the Supreme Court in Canon India Pvt. Ltd. vs. Commissioner of Customs [ 2021 (3) TMI 384 - SUPREME COURT] ] where it was held that It is necessary that the answer must flow from the power conferred by the statute i.e. under Section 28(4) of the Act. This Section empowers the recovery of duty not paid, part paid or erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts and confers the power of recovery on the proper officer . The obvious intention is to confer the power to recover such duties not on any proper officer but only on the proper officer . Attention also drawn to an order dated 26 June, 2023 passed by this Court in VIRAL KANUBHAI MEHTA VERSUS UNION OF INDIA ORS. [ 2023 (8) TMI 930 - BOMBAY HIGH COURT] , wherein similar issue was involved, the Court considering an order passed by a co-ordinate Bench of this Court in Idea Cellular Ltd. Vs. The Union of India Anr. [ 2023 (6) TMI 1302 - BOMBAY HIGH COURT] . As and by way of ad-interim relief, the impugned order is stayed, however, liberty granted to the respondents to make an application for vacating the said order in the event the respondents are of the opinion that the same ought not to be continued and/or after the decision of the Supreme Court in the pending Review/Writ Petition in the case of Canon India Pvt. Ltd. Insolvency & Bankruptcy 2023 (8) TMI 1156 Withdrawal of application u/s 7 which was admitted - Acceptance of the One Time Settlement (OTS) - No intent to proceed further with CIRP - HELD THAT:- In view of the acceptance of OTS, no purpose shall be served in proceeding the CIRP any further - the CIRP proceedings are closed and the order impugned dated 23.11.2022 is set aside. Liberty is given to the Canara Bank for revival, if any, such circumstances arise. In view of the fact that CoC has not been constituted in pursuance of the Interim Order passed by this Tribunal, the Applicants (SRS Private Investments Powai Ltd. and ICICI Bank) are at liberty to take appropriate steps in accordance with law. IRP fees and expenses shall be paid within two weeks by the Appellant. Appeal disposed off. 2023 (8) TMI 1155 Rejection of application filed u/s 9 of IBC - failure of the Respondent to supply the material within three months of the advance payments - pre-existing dispute between the parties or not - HELD THAT:- The Appellant complied with various clauses of the Sales Contract especially regarding advance payment which the Appellant performed by making two tranches of payment of Rs. 10 Crores on 25.02.2019 and Rs. 5 Crores on 06.03.2019. Upon his making advance payment, the responsibility was on the Respondent as Seller of the material to arrange for the trucks, load the materials on to trucks and deliver the same at the site of the Appellant and then only the liability and risk would have transferred to the Appellant as Buyers of the goods. From the various documents made available including the Sales Contract, there remains no doubt that while the Appellant had paid the advance of Rs. 15 Crores but the Respondent has not been able to supply the material. As per the Sales Contract, the delivery was to be completed preferably within three months and maximum six months from the date of receipt of Rs. 15 Crores advance. It is the case of the Respondent that he asked the Appellant vide his letter dated 07.08.2019, inter-alia, about delivery schedule. We note that the Sales Contract was signed on 22.02.2019 between the Appellant and the Respondent and the Appellant had paid of Rs. 10 Crores on 25.02.2019 and balance of Rs. 5 Crores on 06.03.2019. The three months normal period for delivery of material by the Respondent would have been over by 05.06.2019, much before alleged letter of the Respondent dated 07.08.2019. All these events indicates that perhaps the Respondent was not in a position to supply material and no attempt was made by him in this regard. There are no cogent reason for rejecting the application under Section 9 of the Code and - the Impugned Order passed by the Adjudicating Authority cannot be agreed - Impugned Order is set-aside and the case is remanded back to the Adjudicating Authority who shall pass suitable order in accordance with the law at an early date - appeal allowed. 2023 (8) TMI 1126 Maintainability of application under Section 10 of the IBC - defaults in payment of lease rent by GoAir - interplay between the provisions of IBC, particularly the moratorium envisaged under Section 14 of IBC - legal obligations and rights derived from the Aircraft Rules as well as the lease agreements - Approval of resumption plan - HELD THAT:- Given the time-consuming nature of the approval process, the Court finds it prudent not to pass any judgement on the contentious issues outlined, at this juncture. The impugned interim directives primarily pertain to the inspection and maintenance of the aircrafts, which are designed to prevent cannibalisation and preserve their value and integrity - no severe prejudice would be inflicted upon GoAir in the event the matter is relegated to the learned Single Judge for final disposal of the writ petitions, especially in light of the fact that DGCA would require a minimum of fifteen days to decide on re-commencement of GoAir s flights - it is deemed appropriate in the interest of justice to refrain from entertaining the appeals at this juncture. The learned Single Judge is however requested to endeavour to decide the writ petitions as expeditiously as possible, preferably on the next scheduled date of hearing. The pleadings have not been completed in the writ petitions. Accordingly, a week s time is granted to GoAir as well as the DGCA to file their respective counter affidavits in the writ petitions pending before the learned Single Judge - Appeal disposed off. Service Tax 2023 (8) TMI 1154 Maintainability of appeal - non-compliance with the pre-deposit - Section 35F of the Central Excise Act, 1944 - HELD THAT:- Petitioner no. 1 is deleted from the array of parties. Learned counsel for the petitioners to amend the cause titled of the special leave petition. Issue notice to the respondent on the SLP as well as on the application seeking condonation of delay in filing the SLP. Tag the matter with SLP (C) D. No.29038 of 2020. 2023 (8) TMI 1153 Delayed adjudication of show cause notice (about 12 years) - Interpretation of Section 73(4B) of FA, 1994 - HELD THAT:- From a plain reading of the provisions of Section 73(4B) and more particularly, in the context of the legislative intent in introducing sub- section (4B), such contention as urged by the respondent cannot be accepted that there is no mandate on the concerned officer of the department to decide the show cause notices expeditiously, and / or the timelines which are set out in sub-section (4B) would be required to be held to be merely directory, as the provision would make an allowance for a belated adjudication of the show cause notice. The legislature providing that the determination be made within six months from the date of the notice as provided for in clause (a) of sub-section (4B) is concerned, cannot be read to nullify or attaching no weightage to the timelines so prescribed. It can however, be acceptable that a reasonable / plausible delay beyond six months may in a given case be justified depending on the facts and circumstances of the case, for reasons which do not make it possible for the adjudicating officer to conclude the proceedings of the show cause notice. When the legislature uses the words where it is possible to do so in clauses (a) and (b), the legislature is conscious of some free play which is required to be made available to the adjudicating officer. However, such limited relaxation cannot be intended to mean that it would defeat the sanctity and purpose for which the period of six months and one year has been set out to clause (a) and (b) of sub-section (4B) - The word where it is possible to do so thus cannot be read to defeat the timelines of six months and one year as set out in clauses (a) and (b) of sub-section (4B). Also these words cannot be construed to mean that by use of such words a complete freedom is available to the adjudicating officer to adjudicate the show cause notice at his own sweet will, much less, with such inordinate delay as in the present case which is of almost more than 12 years. There are no acceptable reason in facts or in law, which would make it possible for respondent no. 2, in such circumstances, namely, of two statutory events of merger and amalgamation having taken place, to subrogate the petitioner for IDFC Ltd. for adjudicating the show cause notice nor can the petitioner effectively participate in the belated adjudication of such show cause notice, by having a reasonable chance of defending the same in the absence of any material available to the petitioner, as noted by us above, even assuming the original noticee was to exist. Petition allowed. 2023 (8) TMI 1152 Non-adjudication of show cause notice issued 13 years back - non-payment of service tax on import of service on bank charges under banking and financial services and professional fee under Management Consultancy Services - HELD THAT:- The provisions of Section 73 and more particularly the provisions of sub-section (4)(B) which were inserted by the Finance Act 2014 being the statutory mandate was staring at respondent no. 2 during the pendency of the show cause notice not to conclude the proceedings of the show cause notice. However, the conduct of respondent no. 2 was totally overlooking the mandate of such legal requirement. Even in absence of the provisions of sub-section (4) (B) of Section 73, respondent no. 2 could not have acted oblivious to the settled principle of law, that a show cause notice would be required to be adjudicated within a reasonable time depending the facts of each case. In COVENTRY ESTATES PVT. LTD. VERSUS THE JOINT COMMISSIONER CGST AND CENTRAL EXCISE ANR. [ 2023 (8) TMI 352 - BOMBAY HIGH COURT] , it was held that reasonable time would not be an egregious, unjustified and unexplained inordinate delay. Having perused the reply affidavit, there are no justification whatsoever is given by the Deputy Commissioner in Commissioner not adjudicating the show cause notice - the present case is clearly covered by our decision in Coventry Estates Pvt. Ltd. Versus The Joint Commissioner CGST and Central Excise Anr. in regard to the legal position set out. Petition allowed. 2023 (8) TMI 1151 Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Adjustment of amount paid in excess of predeposit - HELD THAT:- Under Section 124(2) of the SVLDRS, 2019 makes it clear that any amount paid as pre-deposit at any stage of appellate proceedings under the indirect tax enactment or as deposit during enquiry, investigation or audit, shall be deducted when issuing the statement indicating the amount payable by the declarant. Thus, the petitioner is entitled for adjustment of the entire amount of Rs. 5,53,937/- [ Rs. 2,37,403 + Rs. 3,16,535/-] that was pre-deposited at the time of filing of appeal before Customs, Excise and Service Tax Appellate Tribunal (CESTAT). This writ petition deserves to be allowed. It is accordingly allowed. 2023 (8) TMI 1150 Levy of service tax - Business Auxiliary Service or not - appellant is Authorized distributor/Franchisee - dealing with recharge coupon/mobile connection and getting commission from BSNL - HELD THAT:- This issue has been considered by various benches of the Tribunal and has consistently been held that the assessee is not liable to pay service tax under the category of Business Auxiliary Service . Further, in view of the judgement of GOYAL AUTOMOBILES AND NAROTA RAM GOYAL SONS VERSUS COMMISSIONER OF CENTRAL EXCISE CHANDIGARH - II [ 2016 (2) TMI 725 - CESTAT NEW DELHI] which was not challenged by the Revenue before the appellate authority wherein the Tribunal held the commission paid to appellants is also included in the value on which tax has been collected from the customer. The customer is, consequently, the recipient of the full value of services from none other than M/s. Bharat Sanchar Nigam Ltd.; thus, it is no different from the other two products. Further, this Tribunal in the case of M/S. DEVANGI COMMUNICATIONS, M/S. BOOPALAM ELECTRONICS, INDEPENDENT ASSOCIATES, M/S. SOMAYA MARKETING, M/S. VINAYAKA AGENCIES, M/S. MAGNUM VISION, M/S. BHOOPALAM MARKETING SERVICES PVT. LTD. VERSUS THE COMMISSIONER OF SERVICE TAX, THE COMMISSIONER OF CENTRAL EXCISE BANGALORE-II AND CCE VERSUS SHRI V.M. NAYAK BENNE [ 2018 (8) TMI 960 - CESTAT BANGALORE] held that when the telecom operators are discharging service tax on the whole MRP value of SIM cards and recharge cards, then there could be no further service tax liability on the persons who are dealing/selling the said SIM cards or recharge cards to the public. The impugned order is not sustainable in law - Appeal allowed. 2023 (8) TMI 1149 Non-payment of service tax - amount deducted by foreign banks being bank charges - Banking and Other Financial Service or not - period from 1.4.2007 to 31.5.2012 - HELD THAT:- Section 65(105)(zm) of the Finance Act, 1994 falls under Rule 3(iii) of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006. To attract this provision, services must be received in India. In the instant case, no services are received in India. Therefore, it is not a taxable service. A similar matter came to be decided by a co-ordinate Bench of this Tribunal in the case of M/S. SKM EGG PRODUCTS EXPORT (I) LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE (APPEALS) , ANNAI MEDU SALEM. [ 2023 (3) TMI 1384 - CESTAT CHENNAI] , where relying in the case of M/S. THEME EXPORTS PVT. LTD. VERSUS C.S.T., DELHI [ 2018 (5) TMI 825 - CESTAT NEW DELHI] it was held that The foreign banks while remitting the money to the Indian Bank, deduct their charges for collection of bills which in turn are charged by the Indian Banks from the appellants. When it is so, then the appellant are not entitled to pay the service tax. The matter is squarely covered by the judgment - appeal allowed. 2023 (8) TMI 1148 Liability to pay tax - Import of services - reverse charge mechanism (RCM) - services of storage warehouse provided by a person in abroad and warehouses are also situated outside the country but the actual benefit of such services have been received in India by the appellant - HELD THAT:- In this case storage and warehousing service has been received in USA (outside India), the service not being performed in India, it cannot be said that service has been received in India. Storage and Warehousing service under sub-clause (zza) of clause (105) of Section 65 of Finance Act, 1994 will only be taxable as import of service under Rule 3(ii) of taxation of services (Provided from outside India received in India) Rules 2006 when such service has been performed in India. Whereas, in the present case, the service of storage and warehousing has been received outside India. Hence, it is not taxable service under Section 66A read with Rule 3(ii) of services (provided from outside India and received in India). The issue is also covered in favour of the appellant by the judgment of the CESTAT in the case of SUNDARAM CLAYTON LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI [ 2014 (6) TMI 30 - CESTAT CHENNAI] where it was held that Since the warehouses were hired in the USA beyond the jurisdiction of the Indian authorities, no Service Tax can be levied and collected on such services rendered and received abroad. The impugned order is not sustainable in law and the same is set aside - Appeal allowed. 2023 (8) TMI 1147 Refund of excess tax paid - barred by time limitation or not - orinciples of unjust enrichment - Section 11 B of the Central Excise Act, 1944 - HELD THAT:- The order of this Tribunal in the case of PUJAN BUILDERS ENGINEERS CONTRACTORS VERSUS C.C.E. S.T. -VADODARA-II [ 2021 (2) TMI 512 - CESTAT AHMEDABAD] finds mention in the show cause notice as well as the same was relied on by the appellant both before the Adjudicating Authority as well as before the Commissioner (Appeals), which have been passed in similar circumstances, where due to cancellation of some of the invoices, the amount of service tax relating to the cancelled invoices stood in excess, which was credited in TRANS-I under GST law and was reversed along with payment of interest, in view of an objection taken by the GST Department. The Authorities below have seriously erred in not even considering the law laid down by the Tribunal, which was specifically pointed by the appellant and is binding on them - the impugned order deserves to be set aside on this ground alone. The Adjudicating Authority had rejected the refund claim on the ground of unjust enrichment as well as on the ground that the appellant had not paid any excess amount of service tax for the reasons that the appellant had not produced any documentary evidence, in support thereof - Appeal allowed by way of remand. 2023 (8) TMI 1146 Levy of service tax - Manpower Recruitment or Supply Agency Service or not - fabrication of tugs and barges out of raw material like steel plates etc supplied by the clients - HELD THAT:- In the contract, various works contracted with the client shows the labour charges. The Adjudicating Authority has completely mis-understood the term labour charges and concluded that manpower was supplied. In the trade parlance of construction service, there is a term labour charges and material cost . So, wherever there is a term labour charges is mentioned that does not mean that manpower supply and it is only service charges without material. Therefore, the entire case made out by the department is under assumption that since labour charge is mentioned in the contract it is manpower supply service whereas the Adjudicating Authority has ignored the important aspect of job work i.e. fabrication of barges on the material supplied by the client. This Tribunal has considered this issue in various judgments - reliance can be placed in SA ENGINEERING WORKS VERSUS COMMISSIONER OF CENTRAL EXCISE ST, VADODARA-II [ 2023 (6) TMI 699 - CESTAT AHMEDABAD] where it was held that There is no evidence of supply of manpower with details of number and nature of manpower, duration and other conditions for such supply. In absence of such evidence, the job work charges cannot be taxed under Manpower Recruitment and Supply Agency Service . Hence, we are of the considered view that the adjudged demand confirmed on the appellant cannot be sustained. Thus, even though manpower was deployed by the service provider but the job is for specific activity such as manufacture, processing etc. and charges is paid on the basis of job and not on the basis of manpower, the activity was held not to be classifiable under Manpower Recruitment or Supply Agency Service. The ratio of the above judgment is directly applicable in the facts of the present case. The entire service tax demand (except the demand of service tax of Rs. 1,05,12,549/-) in respect of repair service) is not sustainable, hence the same is set-aside - Appeal allowed. 2023 (8) TMI 1145 Rejection of the declaration filed by the appellant under Voluntary Compliance Encouragement Scheme, 2013 (VCES) - enquiry or investigation in terms of Section 106(2) of the Finance Act, 2013 on the basis of which the declaration for VCES has been rejected is of a roving nature or not - SCN is time barred having been received by the appellant beyond the specified period of thirty days, or not - HELD THAT:- The contents of the letter on Service Tax Enquiry, are of very general nature whereby documents have been asked for without any specific details, which in other words would mean that the enquiry which appears to have been contemplated in terms of the said letter was merely of roving nature and would therefore not call for rejection on that ground under section 106(2) of the Act. The show cause notice in the present case is time barred and cannot be acted upon. Further, the Circular dated 25.11.2013 in unequivocal words has stated that, Commissioner should ensure that the said time limit of giving the notice within 30 days has to be followed scrupulously. It is added that the very nomenclature of the scheme is to promote voluntary encouragement by the assessee to make the declaration of the tax dues. Since the very purpose of introducing the scheme is to motivate the registered assessee who had stopped filing the returns to file returns and pay the taxes. The underlying object is to reduce unnecessary litigation, which is evident from the clarifications made in the Circulars. The VCES Scheme as further clarified in the Circulars needs to be implemented so as to give full play which would not only benefit the assessee but also the revenue. The revenue should accept the declaration filed by the appellant - Appeal allowed. 2023 (8) TMI 1144 Levy of Service tax - corporate guarantee against loan obtained from various financial institutions in exchange of credit protection fee - Banking and Other Financial Services or not - invocation of extended period of limitation - HELD THAT:- In the common parlance corporate guarantee is a guarantee of one corporate unit to keep itself responsible for the financial obligations or any other contractual obligations of the principal debtor to the creditor on behalf of principal debtor while bank guarantee is a guarantee given by the bank on behalf of the applicant to cover its payment obligations to third party. What can be observed is that both bank and corporate guarantees are meant to provide assurances to the beneficiaries with same thin line distinction that while bank guarantee relies on the credit worthiness of a financial institutions, corporate guarantee depends on the credit worthiness of the parent-company/guarantor. Further, while bank guarantee involves a third party institution as guarantor, corporate guarantee involves a company within the same corporate group or structure as a guarantor - while referring the provisions contained in Section 65(12) of the Finance Act, 1994, may be because of typographical error or due to oversight of the provision clearly enumerating words as providing bank guarantee under sub-clause (ix) of the said provision, it has been noted that specific enumeration about corporate guarantee was not available for which legislative intent is unarguable. When both corporate guarantee and bank guarantee are held to be akin (similar to something) to each other, the only inference that can be drown is that incorporation of one of it would mean presence of the other. Having said so there are no second opinion on the issue that purpose of corporate guarantee and bank guarantee are one and same and while one is the species the other one is its genesis The appellant having received consideration against providing guarantee to its related company M/s Lavasa Corporation Ltd in the form of corporate guarantee and credit protection guarantee service is liable to pay service tax and, therefore, demand raised against the appellant is justified except for the extended period since the issue remained unsettled due to divergent opinion expressed by different judicial forums - appeal allowed in part. 2023 (8) TMI 1143 CENVAT Credit - classification of input service - raising bills on the occupant towards the realization of electricity consumption charges - HELD THAT:- The submission of Learned Counsel for the respondent cannot be accepted that raising bills on the occupant with service tax component against realization of electricity charges are valid under the Service Tax Laws for the reason that in SRIJAN REALTY (P) LTD. VERSUS COMMISSIONER OF SERVICE TAX, SERVICE TAX COMMISSIONERATE-II KOLKATA AND ORS. [ 2019 (3) TMI 821 - CALCUTTA HIGH COURT] it was categorically held that electricity was defined as goods and thus capable of being traded for which it cannot be covered under the category of service tax nor appellant had any licence to supply electricity under the Electricity Act, 2003, but while such an order was passed treating the activity as the appellant therein had converted high tension electricity supply to low tension electricity supply for the purpose of supplying domestically consumable electric power to the occupant against which it had raised the bill, that was being treated as service and accordingly appellant s plea therein was allowed - This case stands completely on a different footing and this can only be treated as an erroneous payment of service tax since no extra amount was collected towards its service component other than the electricity consumption dues. However, the classification or legality of such payment of tax could have been done at the owner s end but it can never be a ground for denial for CENVAT credit at receiver s end, since payment of service tax was accepted by the Appellant. The appeal is dismissed and the order passed by the Commissioner of Central Tax (Appeals-I), Pune is hereby confirmed. 2023 (8) TMI 1142 Maintainability of appeal - appeal dismissed on the ground having been filed beyond the statutory time limit of 2 months specified under section 85 of the Finance Act, 1994 - condonation of delay application was not filed for condoning the delay in filing the appeal - whether an opportunity can now be provided to the appellant to move an application for condonation of delay or not? - HELD THAT:- The Kerala High Court in THE FEDERAL BANK LTD. VERSUS THE ASSISTANT COMMISSIONER OF CENTRAL TAXES AND CENTRAL EXCISE, ERNAKULAM - I DIVISION, KOCHI, THE COMMISSIONER (APPEALS) , CENTRAL TAX, CENTRAL EXCISE AND CUSTOMS, KOCHI AND THE SUPERINTENDENT (APPEALS) , OFFICE OF THE COMMISSIONER (APPEALS) , CENTRAL TAX, CENTRAL EXCISE CUSTOMS, KOCHI [ 2019 (9) TMI 244 - KERALA HIGH COURT] , in an identical matter, held that if there is delay, the office should have brought the fact to the notice of the petitioner and given an opportunity to explain the delay, more particularly if appeal was registered without noticing that there was any delay. In the facts and circumstances of the case, it is deemed appropriate to provide an opportunity to the appellant to move an application for condonation of delay. In case such an application is filed, an appropriate order shall be passed by the Commissioner (Appeals). Appeal allowed. Central Excise 2023 (8) TMI 1141 Application of the exemption Notification No.4/2006- Central Excise dated 01.03.2006 - HELD THAT:- The findings given by all the authorities on the applicability of the Notification need not be interfered - appeal dismissed. 2023 (8) TMI 1140 Applicability of amendment to Rule 6 of the CENVAT Credit Rules, 2004 with retrospective effect - manufacture of dutiable excisable goods as well as exempted goods, consuming common Cenvated inputs and input services - non-maintenance of separate accounts in respect of input services used / consumed in or in relation to manufacture of excisable and exempted finished goods - procedure specified in sub-rule (3A) of Rule 6 of the CCR 2004 not followed. The periods subject matter of the show cause notice in question are the periods beginning with 10 September 2004 till 31 March 2008 and the subsequent period post 1 April 2008 upto 31 December 2010. HELD THAT:- Rule 6 underwent an amendment in the year 2006, 2007 and in the year 2008. It is relevant to note the amendment as brought about to subrule (3) and incorporation of Rule 3A - It is clearly seen from the reading of sub Rule (3A) of Rule 6 which was introduced for determination of payment of amount payable under clause (ii) of sub-rule (3), that the manufacturer of goods or the provider of output service shall follow the procedure and conditions as set out therein. Further Rule 6 was retrospectively amended by the Finance Act, 2010 which enabled the respondent to make adjustment, namely, that even if the respondent failed to maintain a separate account, in view of the retrospective amendment, it was entitled to reverse the proportionate cenvat credit or option of paying an amount equal to 10% on exempted goods, and that could not have been enforced on the assessee. In the facts of the present case, it is clear from the record and as rightly observed by the CESTAT that under Rule 6 of the CCR, 2004, as amended from time to time, in case of common input services used for manufacture of both exempted and dutiable goods, the respondent had three options available, firstly, to maintain separate accounts in respect of the common inputs and input services used for manufacture of exempted dutiable goods and taxable and exempted service (Rule 6 (2)); or secondly, to reverse the proportionate Cenvat credit in respect of the inputs and input services used for proving exempted goods and exempted services, by following the procedure as prescribed by Rule 6(3)(ii); or thirdly, to reverse the Cenvat credit at the rate of 5% (earlier 10%) of value of exempted goods under Rule 6 (3)(i) as amended from 1 April 2008. It is clear that the respondent was not maintaining separate account in respect of input services used by it, hence, the available option for the respondent was to reverse the proportionate cenvat credit as applicable either under Rule 6(3)(i) or Rule 6(3)(ii). It is also clear that the benefit of reversing the proportionate credit was extended with retrospective effect in cases where common input and input services were used for dutiable and exempted products. Insofar as the period from 1 April 2008 to 31 December 2010 is concerned, even prior to issuance of a show cause notice, the respondent had reversed the entire amount of proportionate credit alongwith interest due in respect of the said period namely an amount of Rs. 1,22,98,068/- plus Rs. 17,49,730/-. What was imperative was not issuance of a show cause notice but the pendency of dispute relating to adjustment of credit of input used or exemption on final product relating to the period beginning from 10 September 2004 and ending on 31 March 2008 (both days inclusive), being the pending date on which the Finance Bill received assent of the President. It is rightly observed by the CESTAT that when for such period the dispute has arisen only in such event, a show cause notice was issued and hence, the case of the respondent for the period 2007-08 was covered by the amendment made by way of insertion of subrule (7) of Rule 6 of CCR, 2004 by the 2010 Amendment. The respondent would be correct in its contention when it submits that in a similar situation the Division Bench of this Court on applicability of Rule 6 had held against the revenue and in favour of the assessee in the case of THE COMMISSIONER OF CENTRAL EXCISE, MUMBAI VERSUS M/S. IVP LIMITED [ 2017 (3) TMI 234 - BOMBAY HIGH COURT] as also in the case of THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. NICHOLAS PIRAMAL LTD. [ 2016 (10) TMI 827 - BOMBAY HIGH COURT] . The question is answered in favour of the assessee and against the revenue - appeal dismissed. 2023 (8) TMI 1139 Refund of pre-deposit with interest - Recovery of CENVAT Credit - CIRP proceedings undergoing - adjudication has been undertaken without such claims being lodged in the insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 - Maintainability of petition - availability of alternative remedy - HELD THAT:- The availability of an alternate statutory remedy by itself is not a bar for the Court to exercise jurisdiction under Article 226 of the Constitution of India. Subject to well-settled parameters, including the matters touching the jurisdictional aspects, the Court could in a given case consider entertaining such proceedings notwithstanding the fact that a statutory remedy is available to the petitioners. According to the respondents since the present proceedings arise out of the adjudication undertaken by the Joint Commissioner, CGST and Central Excise with regard to input tax credit being availed by the petitioners and it having been found that such input tax credit was wrongly availed by the petitioners, the proceedings could not be treated to be recovery proceedings. The petitioners having wrongly utilized the assets in the form of input tax credit it was merely a case of reversal of such credit and the same was beyond the purview of the I B Code, 2016. It is seen from the impugned orders that the Joint Commissioner has proceeded to consider the entitlement of the petitioners to availing the aforesaid Cenvat Credit and on finding the petitioners not entitled to do so, recovery of the said amount with interest has been directed. The provisions of Section 11A of the Act of 1944 pertain to recovery of Central Excise and since such direction is contained in the impugned orders it cannot be said that the said orders merely determined the liability of the petitioners to claim Cenvat Credit. The ratio of the decisions in ALD Automotive (P) Ltd. and TVS Motor Company Limited [ 2018 (10) TMI 814 - SUPREME COURT ] is that input credit is in the nature of benefit/concession extended. The said ratio however cannot be applied in the present facts since the impugned orders also direct recovery to be made. The contention raised by the learned counsel for the respondents that the impugned orders merely determine liability and are not orders of recovery therefore cannot be accepted. Once it is found that the impugned orders direct recovery of the amounts of Cenvat Credit that has been wrongly availed by the petitioners, it would be necessary to consider the challenge based on the decision of the Hon ble Supreme Court in Ghanashyam Mishra And Sons [ 2021 (4) TMI 613 - SUPREME COURT ]. The petitioners contend that in view of the law laid down therein the impugned orders are liable to be struck down as having adjudicated on aspects beyond the jurisdiction of the Joint Commissioner - It was thus held that these Authorities would be bound by the Resolution Plan once it is approved by the Adjudicating Authority which was in the said case the NCLT. While answering the question as framed, it was held that on the date of approval of the Resolution Plan by the Adjudicating Authority, all such claims that were not a part of the Resolution Plan would stand extinguished and no person would be entitled to initiate or continue any proceedings in respect of a claim which is not part of the Resolution Plan. The amendment of 2019 was held to be clarificatory and declaratory in nature. It was thus effective from the date on which the I B Code, 2016 had come into effect. The impugned orders seek to undertake recovery of the amounts with regard to which no claim was made by the respondents Operational Creditor in proceedings under the I B Code, 2016. In view of the decision in Ghanashyam Mishra And Sons [ 2021 (4) TMI 613 - SUPREME COURT ] said claims would stand extinguished and are not liable to be pursued further. The challenge as raised is thus liable to be upheld - By relying upon the decision in M/s Ruchi Soya Industries Ltd. [ 2022 (3) TMI 60 - SUPREME COURT ] in such situation when the proceedings are held to be not maintainable on the ground that the claim was not part of the Resolution plan, the amount of pre-deposit made by the petitioners is liable to be directed to be refunded with accrued interest. Following the aforesaid decision it is held that the petitioners would be entitled to receive the amount of pre-deposit if made alongwith interest at the prevailing bank rates. Thus, it is held that for failure to make any claim of the amounts recoverable under Section 11A of the Act of 1944 the claims in that regard stand extinguished in view of the decision in Ghanashyam Mishra And Sons - amount of pre-deposit if any made by the petitioners shall be refunded with interest at the prevailing bank rates within a period of eight weeks of the date of the judgment - petition disposed off. 2023 (8) TMI 1138 Suo-moto re-credit - restoration of second payment when the duty was paid twice - HELD THAT:- There is no dispute on the fact that the appellant initially paid the duty on export twice, one at the time of clearance of goods and second on the closer of month along with monthly payment of duty. Therefore, there is no dispute that on one clearance duty was paid twice, therefore the duty paid second time needs to be restored to the appellant as credit, the appellant had taken suo-moto credit - if no discrepancy is found as regard the second time payment of duty and suo-moto re-credit thereof then no objection could have been raised by the department. The appellant being law abiding assessee even though suo-moto credit was available to them, they had reversed the same on pointing out by the audit officers. Thereafter, the department could have regularized by allowing the re-credit but instead the appellant were issued the show cause notice for demand of re-credit made by the appellant suo-moto despite the fact that they had already reversed the same - the show cause notice itself ab initio, void and illegal. The appellant has legal right to re-credit the amount of Rs. 1 crore, in their Cenvat Account - appeal allowed. 2023 (8) TMI 1137 Levy of Excise Duty - spent earth arising in the process of oil refining, bleaching process, classifiable under 15220090 of the Central Excise Tariff Act 1985 - HELD THAT:- The issue is that whether the spent earth is liable to Excise duty or otherwise has now been settled in various judgments cited by the Learned Counsel. The judgment in case ofADANI WILMAR LTD VERSUS C.C.E. S.T. -AHMEDABAD-III [ 2023 (3) TMI 535 - CESTAT AHMEDABAD] held that these products are not intentionally manufactured but only arise during the process of refining of crude vegetable oil and therefore should be considered as waste and they are entitled to the benefit of exemption N/N. 89/1995-CE. The issue is no longer res-Integra as has been held that the spent earth arising out of processing of oil is not liable to duty in terms of Notification No. 89/95-C.E. dated 18-05-2019 - demand not sustainable - appeal allowed. 2023 (8) TMI 1136 CENVAT Credit - requirement to pay duty on removal of the Brass Scrap to job worker - Rule 4(5)(a) of the Cenvat Credit Rules - HELD THAT:- This issue is no more res-integra and has been settled by the decision of the Larger Bench in the case of WYETH LABORATORIES LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, BOMBAY [ 2000 (7) TMI 109 - CEGAT, NEW DELHI] wherein it was specifically held that the word waste in Rule 57(F)(4) is to be restricted to such converted inputs which are not desired to be used any further in manufacture of final product - the decision of the Larger Bench has been upheld by the Hon ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE, KERALA VERSUS BINANI ZINC LTD. [ 2009 (10) TMI 133 - SUPREME COURT] . It is found that the lower authority have relied upon the minority view to confirm the demand which is against the settled principle of the law that majority decision is a binding precedents. The Tribunal in the case of COMET BRASS INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, DAMAN [ 2005 (6) TMI 355 - CESTAT, MUMBAI] while referring to the judgment of the Wyeth Laboratories Ltd has held that the entire purpose of setting down the disputed issue is defeated of majority decisions are not followed by the field formations and further the Tribunal set aside the order which was based on the minority view expressed in the Larger Bench s decision in the case of Wyeth Laboratories Ltd. In these appeals also the impugned orders are based upon minority view in the case of Wyeth Laboratories Ltd to confirm the demand which is not sustainable in law - the impugned order is not sustainable in law - appeal allowed. 2023 (8) TMI 1135 Reversal of CENVAT credit - Liability to pay 10%/5% of the value of the exempted goods - common input/ input services used for dutiable as well as exempted goods - assessee has reversed the proportionate Cenvat credit on the input/ input service attributed to the exempted goods - demand dropped for extended period of limitation. HELD THAT:- It is settled that once the assessee reverse the propionate credit along with interest, if there is any delay in reversal, the demand of 10% /6%/5% of the value of exempted goods shall not be sustainable. Reliance placed in the case of COMMISSIONER OF SERVICE TAX-1, KOLKATA VERSUS M/S. SURYA VISTACOM PRIVATE LIMITED [ 2022 (7) TMI 719 - CALCUTTA HIGH COURT] , M/S WELSPUN CORP LTD VERSUS C.C.E., - KUTCH (GANDHIDHAM) [ 2018 (12) TMI 165 - CESTAT AHMEDABAD] , COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD-II VERSUS MAIZE PRODUCTS [ 2008 (8) TMI 365 - HIGH COURT OF GUJARAT AT AHMEDABAD] and COMMISSIONER OF C. EX. VERSUS MAAN PHARMACEUTICALS LTD. [ 2010 (12) TMI 399 - GUJARAT HIGH COURT] . In the case of M/S. SURYA VISTACOM PRIVATE LIMITED it was held that if according to the adjudicating authority, the assessee did not abide by the provisions of Rule 6(3) of the Rules, it was open to the adjudicating authority to reject the assessee s claim as regards the disputed Cenvat credit and it could not mechanically invoke 6% Rule on the assessee. The adjudicating authority has not verified the correctness of reversal during the normal period of limitation. Therefore only for the limited purpose of verification of the amount of reversal, during the normal period, assessee s appeal needs to be remitted back to the Adjudicating authority. Assessee s appeal is remanded to the adjudicating authority, for passing a de-novo order. 2023 (8) TMI 1134 SSI exemption Notification No. 08/2003- CE dated 01.03.2003 - affixation of brand name of another person - whether the goods namely bracelet manufactured by the appellant bearing the brand name of customer i.e. Timex, Titan and Sonata is eligible for exemption Notification No 08/2003 CE? HELD THAT:- The exemption Notification shall not apply to specified goods bearing the brand name or trade name that were registered or not of another person. In the present case there is no dispute that the goods namely bracelet manufactured by the appellant bears the brand name namely Timex, Titan and Sonata which are owned by another person namely M/s. Timex Groups India Ltd and M/s. Titan Industry Limited, therefore, the appellant in terms of para 4 is not eligible for exemption Notification No. 08/2003 CE. However, there is an exception provided in the notification under clause (a) of para 4 according to which if the goods is in the nature of component or part of any machinery or equipment or appliances and the same is cleared as original equipment in manufacture of the said machinery or equipment or appliances by following the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 than even though the goods bears the brand name or trade name of another person, the same shall be eligible for exemption. Firstly the bracelet cannot be said to be a component or part of wrist watches to be used as original equipment in the manufacture of wrist watches. Secondly, it is an admitted fact that for supply of branded bracelets the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 has not been complied with. Hence, the condition for exception provided for branded goods for extending SSI exemption 08/2003- CE has not been complied with. Therefore, the appellant is not entitled for SSI exemption Notification No. 08/2003- CE. In the case of COMMISSIONER OF CENTRAL EXCISE, BANGALORE VERSUS M/S. OTTO BILZ (INDIA) PVT. LTD. [ 2015 (10) TMI 2149 - SUPREME COURT] the goods bearing the brand name of a foreign company were extended benefit of SSI exemption on the ground that the foreign company has assigned the brand name BILZ in favour of the assessee. In that case once the brand name is assigned, the assignee becomes the owner, then it cannot be said that the assessee is using the brand name of another person. Therefore, the ratio of judgment in the Otto Bilz case is not applicable. Penalty imposed on co- appellant Shri Arvindbhai M Limbasiya - HELD THAT:- The issue is of pure interpretation of notification and the goods have been cleared under the cover of invoices to organized companies. Therefore, there is no mala fide intention of any individual. Accordingly, in the facts and circumstances of the case, the penalty imposed on Shri Arvindbhai M Limbasiya under Rule 26 is not sustainable. Hence, penalty is set aside. The appeal of Sonic Chain Pvt Ltd is dismissed and appeal filed by Shri Arvindbhai M Limbasiya is allowed. 2023 (8) TMI 1133 Scope of clarification issued by the Board - Retrospective or Prospective - Classification of goods - chlorinated paraffin - classifiable under Tariff Item No. 38 12 2090 or under 2712 20 10? - Circular No. 950/01/2011-CX dated 01-08-2011 - HELD THAT:- From the above clarifications, it can be seen that the Chlorinated Paraffin Wax (liquid form) is correctly classifiable under Sub Heading 3824 90 of Central Excise Tariff Act - there is no doubt that the goods manufactured by the appellant i.e. Chlorinated Paraffin is in liquid form. As per the Board Circular it was clarified that Chlorinated Paraffin liquid form is correctly classifiable under 3824 90. Though the appellant have declared classification under Tariff Item No. 3812 20 90 but the goods in any case is not classifiable under Tariff Item No. 2712 20 10. It is a settled law that any clarification with regard to any Act will always have retrospective effect for the reason that there is no change in the law but the existing law has been interpreted and clarified, therefore, the geneses of law remained intact. Accordingly, any clarification issued shall have a retrospective effect right from the enactment of the relevant law - Therefore, there are no hesitation to hold that in the present case the clarification issued by the board has a retrospective effect and accordingly, the purposed classification of goods under Tariff Item No. 2712 20 10 in respect of Chlorinated Paraffin in liquid form does not apply. The revenue could not succeed in classifying the goods i.e. Chlorinated Paraffin in liquid form under Sub heading No. 2712 20 10. Therefore, the entire case based on that, will not sustain. Appeal allowed. 2023 (8) TMI 1132 CENVAT Credit - capital goods - CR, SS Sheet, HR, SS Coil, old and used Aluminum structure parts, Aluminum coil etc. falling under chapter 72 76 - time limitation - HELD THAT:- Though the appellant is prima facie entitled for the cenvat credit in the light of various judgments cited by the learned counsel on merit, however, the matter can be disposed of on limitation. The appellant have availed cenvat credit recorded in their records and declared regularly in their ER-1 returns. Moreover, on the legal issue of availability of cenvat credit on the said goods there were various judgments of division bench of this Tribunal, Larger Bench of this Tribunal and also various High Courts, therefore, the issue was purely interpretation of cenvat credit rules. For this reason also no mala fide intention can be attributed to the appellant. In the present case for the period of demand i.e. 19.10.2006 to 14.08.2007 the show cause notice was issued much beyond the normal period of one year i.e. on 25.06.2010. The appellant also cited various judgments on the identical facts and the issue involved in the present case that the demand is time bar. On the issue of invocation of longer period of demand the Hon ble Supreme Court in the case of M/S CONTINENTAL FOUNDATION JOINT VENTURE SHOLDING, NATHPA HP VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I [ 2007 (8) TMI 11 - SUPREME COURT] has held that there cannot be suppression or mis-statement of fact, which is not wilful and yet constitute a permissible ground for the purpose of the proviso to Section 11A. Mis-statement of fact must be wilful. The demand is clearly time bar. Hence, not sustainable on limitation itself - Appeal allowed. 2023 (8) TMI 1131 Classification of goods - Neem Blended Organic Manure Gronimix - classifiable under CETH 31010099 or under CETH 38089910? - extended period of limitation - penalty - violation of principles of natural justice - HELD THAT:- The issue of classification is not free from doubts and it is a debatable one. In the same pamphlet of the product it describes the product as fertilizer and on the same pamphlet it also mentions that the product is pesticide. Moreover, only because the product Gronimix is made pre-dominantly by Neem, it cannot be conclusively said that because of this reason the good is fertilizer as there are pesticides/insecticides made of Neem/Neem oil. The details mentioned in the pamphlet/advertisement of the product were not considered properly. Though there are statements of dealers which states that the product is used as insecticide/pesticide but those dealers have not been cross examined as requested by the appellant. When there are evidence available in the case it becomes incumbent on the adjudicating authority to allow the cross examination of the witnesses. The adjudicating authority has seriously defied the mandatory provision of Section 9D of Central Excise Act, 1944. The appellant has relied upon the test report which states that the product Gronimix is not a pesticide. In the present case the statement of farmers were also recorded who have stated that the Gronimix is used as a fertilizer which was ignored by the Adjudicating Authority - the Adjudicating Authority grossly violated the principle of natural justice while passing the impugned order. The appeal is allowed by way of remand for passing a fresh de novo order after considering various materials available on record in proper prospective. CST, VAT & Sales Tax 2023 (8) TMI 1130 Deletion of amount of tax levied by the assessing authority - rejection of account of books have been confirmed - illegal shifting the burden on the department - HELD THAT:- From perusal of the provision of Section 16 of the UP VAT Act, it is evidently clear that the burden of proof lies upon the dealer/opposite party - Merely showing the purchases through invoices from the registered dealer, will not enough and sufficient to proof that the purchases have been made bona fidely. The Apex Court in the case of THE STATE OF KARNATAKA VERSUS M/S ECOM GILL COFFEE TRADING PRIVATE LIMITED [ 2023 (3) TMI 533 - SUPREME COURT] , while considering the pari materia of section 70 of the Karnataka Value Added Tax Act, 2003, where the burden was upon the dealer to prove beyond doubt its claim of exemption and deduction of ITC, has held that the primary responsibility of claiming the benefit is upon the dealer to prove and establish the actual physical movement of goods, genuineness of transactions, etc. In the case in hand, from the verification of the registration numbers of the trucks provided by the dealer, it was found that some of them are of two-wheeler, passenger vehicles, small three-wheeler and some of them could not be found. Therefore, the dealer has miserably failed to prove the actual physical movement of goods which deemed to have been purchased from ex UP dealers. Once the dealer failed to establish the said purchases and the physical movement of the same, the claim for non-taxability cannot be accepted - Once the dealer has failed to prove its purchases from registered dealer, the levy of entry tax treating the same to be purchases from outside the local area and levying of entry tax on the HDEP bags is also justified. Revisions are allowed with a cost of Rs. 5,000/- each, which shall be deposited with the Department within a period of one month from today. 2023 (8) TMI 1129 Jurisdiction of AP VAT Appellate Tribunal/5th respondent to entertain the stay application pending appeal - recovery of the disputed tax - HELD THAT:- It is true, as rightly submitted by learned counsel for the petitioner, when a substantive power of deciding an appeal is vested with an Appellate Court or Tribunal, the incidental/ancillary power of passing interlocutory orders including stay order shall also be deemed to be vested with the aforesaid Appellate Authority for rendering complete justice as otherwise the appeal will become otiose and the said Appellate Institution will be redundant. This will be against the public interest. In STATE OF ANDHRA PRADESH VERSUS HINDUSTAN SHIPYARD LIMITED AND OTHERS [ 1987 (6) TMI 389 - ANDHRA PRADESH HIGH COURT ] the division bench of Common High Court of Andhra Pradesh was dealing with the question whether the Tribunal has the power to grant stay in appeals pertaining to the Assessment Years fallen prior to 01.07.1985 because w.e.f the said date, Section 21 of APGST Act, 1956 was amended and sub section 6 and 6(a) were introduced. Section 6(a) created an express embargo of granting stay pending disposal of the appeal filed against the order of first appellate authority or deputy commissioner suo moto or in revision. Thus, it can be said that the incidental or ancillary power to pass interlocutory orders in the main appeal is inherent or intrinsic in its substantive power of the Appellate Court or Tribunal to decide the appeal pending before it unless such ancillary or incidental power is taken away by an express provision or by necessary implication. Whether such stay granting power is expressly or impliedly taken away from the AP VAT Appellate Tribunal? - HELD THAT:- While under Section 33(1), a VAT Appellate Tribunal has been conferred jurisdiction to entertain an appeal against the orders specified in that sub-section, including against order passed on appeal under Section 31 as in the present case, Section 31 (6)(b) creates an express embargo on the stay granting power of VAT Appellate Tribunal pending disposal of appeal passed against different orders including the order of the first appellate authority - Therefore, in view of the clear manifestation made by the express provision, the contention of learned GP agreed upon that AP VAT Appellate Tribunal is not vested with the power or jurisdiction to entertain the stay application and pass orders in the present situation. T he petitioner s prayer to declare the action of respondent No. 1 in issuing the notice and Garnishee notice pending the stay petition before the AP VAT Appellate Tribunal as illegal, cannot be considered on that ground - Petition disposed off. 2023 (8) TMI 1128 Interest on delayed refund sanction - HELD THAT:- There is no merits in the contention of the Commercial Tax Department that the petitioner is not entitled to the interest during the pendency of the proceeding before this Court in M/S. SWATHY CHEMICALS LTD. [ 2021 (3) TMI 1187 - MADRAS HIGH COURT ] Merely because the order dated 20.01.1997 of the Appellate Assistant Commissioner was revised by the Joint Commissioner vide order dated 28.05.2003 which was affirmed vide order dated 05.12.2003 pursuant to the show cause notice dated 04.05.1998 would not mean that the petitioner is not entitled to interest during the aforesaid period. Merely because the Department had revised the order of the Appellate Assistant Commissioner dated 20.01.1997 in AP.No.CST 188/95 would not mean the petitioner is not entitled to interest. Once the order of the Joint Commissioner has been restored, the petitioner is entitled to interest as calculated by the petitioner which was also confirmed by the 2nd respondent in its communication dated 30.11.2021. The respondents are directed to refund the interest amount of Rs. 6,21,919.74/- after adjusting any amount if any paid towards interest during the interregnum, within a period of two weeks from the date of receipt of a copy of this order - petition allowed. Indian Laws 2023 (8) TMI 1127 Dishonour of Cheque - insufficiency of funds - validity of issuance of summon to stand trial for the offence under Section 138 of the Act, 1881 - non-application of mind - HELD THAT:- It transpires that the applicant is being tried for the offence under Section 138 of the Act, 1881. On 23.10.2019, due to absence of the applicant in the learned trial court concerned, process under Section 82 Cr.P.C. came to be issued. Admittedly, the present applicant is a woman, who is a senior citizen. The issuance of non-bailable warrant and process under Section 82 Cr.P.C. simultaneously cannot be appreciated in view of law laid down by the Hon ble Supreme Court in Inder Mohan Goswami s case [ 2007 (10) TMI 550 - SUPREME COURT ] and Raghuvansh Dewanchand Bhasin s case [ 2011 (9) TMI 1224 - SUPREME COURT ] as the same is patently illegal and, therefore, unsustainable. In case, the applicant, who is a woman and is a senior citizen, moves an application seeking dispensation of her personal attendance before the learned trial court concerned, the learned trial court concerned is expected to dispose of the same by dispensing with personal attendance of the applicant subject to the fact that whenever the learned trial court concerned finds her physical appearance necessary, she may be directed to appear in person - This Court, on a careful perusal, finds that the applicant has not challenged the order whereby the applicant was summoned to stand trial for the offence under Section 138 of the Act, 1881. In want of specific challenge to the summoning order, at this stage, this Court is not inclined to interfere with the same particularly having regard to the observations made - the present application under Section 482 Cr.P.C. is partly allowed.
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