TMI Tax Updates - e-Newsletter
August 4, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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Income Tax:
Accepting the lease equalization charges adjustment in respect of the property taken on rent and rejecting the same in respect of the property given on rent does not fit it into any logic and it is not permissible for the Revenue to follow the rule of convenience i.e. wherever the amount is added back it is accepted and wherever the amount is reduced it is rejected.
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Income Tax:
Deduction u/s 80G - The assessee could not claim deduction under section 80G of the Act in respect of donations by way of clothes sent to the Prime Minister's Relief fund for Gujarat Earthquake relief the same being in kind and not in cash, cheque or draft. - HC
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Income Tax:
Entitlement for refund - locus of the present petitioner - change in the parties to contract - if the imposition of tax is not referred in the taxing statute, it should not apply even in the case of refund. - HC
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Income Tax:
The netting of the interest paid and the interest received is not permissible. Section 57(iii) of the Income-tax Act also does not help the assessee - the assessee cannot be heard to say that it has spent ₹ 5,33,23,380 for earning interest of ₹ 59,31,141 on the fixed deposit receipt - HC
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Income Tax:
Best judgment assessment - Estimation of income - No court could substitute its "best judgment" for that of the assessing authority - Once the books of accounts have been rejected rightly, even though the courts may think that it is not the most appropriate basis, the assessing authority's estimate cannot be disturbed - HC
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Customs:
Exports under claim for drawback in the GST scenario - Government has dispensed with the requirement of the certificate from GST officer to claim higher rate of drawback - exporter has to submit the self-declaration in the prescribed format.
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Customs:
Exports under claim for drawback in the GST scenario - Self-declaration format / form for claiming higher rate of AIR of duty drawback under column (4) and (5) of the AIR Schedule
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Customs:
Refund of IGST paid on exports and Export under Bond scheme - refund of unutilised input tax credit (ITC) or IGST paid - For the option (b), the shipping bill filed by an exporter shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India
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Customs:
Refund of IGST paid on exports and Export under Bond scheme - unutilised input tax credit (ITC) - Application for refund shall be filed only after the export manifest or an export report, as the case may be, is delivered under section 41 of the Customs Act, 1962 in respect of such goods.
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Customs:
Exports under GST - Duty Drawback - it could be possible that export goods may be manufactured by using both Central Excise/Service Tax paid and CGST/IGST paid inputs and inputs services or only CGST/IGST paid inputs and inputs services - safeguards.
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Customs:
Exports under GST - Drawback - The certificates from jurisdictional GST officer as referred above may not be available during initial days - all field formations shall ensure that exports are not delayed for requirement of the said certificate.
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Customs:
Imports and Input Tax Credit (ITC) - Input tax credit shall be availed by a registered person only if all the applicable particulars as prescribed in the Invoice Rules are contained in the said document, and the relevant information, as contained in the said document, is furnished in FORM GSTR-2
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Customs:
Imports and Input Tax Credit (ITC) - importers are advised to complete their registration process for GSTIN as ITC of IGST would be available based on GSTIN declared in the Bill of Entry.
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Customs:
Full exemption from IGST has been provided on passenger baggage. However, basic customs duty shall be leviable at the rate of 35% and education cess as applicable on the value which is in excess of the duty free allowances provided under the Baggage Rules, 2016.
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Customs:
In the GST regime, for the purpose of levying IGST all the imports under the project import scheme will be classified under heading 9801 and duty shall be levied @ 18%.
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Customs:
EOUs and SEZ - Post GST - In the GST regime, clearance of goods in DTA will attract GST besides payment of amount equal to BCD exemption availed on inputs used in such finished goods. DTA clearances of goods, which are not under GST, would attract Central Excise duties as before.
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Customs:
The EXIM scrips under the export incentive schemes of chapter 3 of FTP (for example MEIS and SEIS) can be utilised only for payment of Customs duties or additional duties of Customs, on items not covered by GST, at the time of import. The scrips cannot be utilized for payment of Integrated Tax and Compensation Cess. Similarly, scrip cannot be used for payment of CGST, SGST or IGST for domestic procurements.
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Customs:
Import of goods - Post GST - Type of duties - Although BCD, Education Cesses and IGST would be applicable in majority of cases, however, for some products CVD, SAD or GST Compensation cess may also be applicable. - For different scenarios the duty calculation process has been illustrated in Annexure
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Customs:
While PAN is identifier at the entity level, GSTIN would be used as identifier at the transaction level for every import and export. Further, in scenarios where GSTIN is not applicable, UIN or PAN would be accepted as IEC. - It is advised that all importers need to quote GSTIN in their Bills of Entry in addition to IEC. In due course of time IEC would be replaced by PAN/GSTIN.
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Customs:
Under the GST regime, Customs duties will be exempted on imports made under export promotion schemes namely EPCG, DEEC (Advance License) and DFIA. - IGST and Compensation Cess will have to be paid on such imports.
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Customs:
Imports of goods - IGST would be levied on cargo which has arrived prior to 1st July but a bill of entry is filed on or after 1st July 2017.
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Customs:
Levy of Fees (Customs Documents) Regulations, 1970, has been amended
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Customs:
Direction issued to all CFSs to give an undertaking that they are responsible to safety and security of cargo during the movement of such containers
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Customs:
Direction to Importers/Customs Brokers - Importers/CBs are required to intimate the shipping line/agents about their option of the destination CFS, atleast 72 hours prior to the arrival of the vessel(Entry inward).
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Customs:
Direction to Shipping Lines/Shipping Agents - Not to insist for submission of Original Bill of Lading (BL) at the time of submission of advance intimation. Original Bill of Lading is required only before issue of delivery order
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Customs:
For any delay in evacuation of container from Terminal (beyond free period allowed by each Terminal Operator), CFss will be responsible for payment of “Port charges” to Terminal [charged by Terminal Operator for keeping the container beyond free period).
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Customs:
For the consignments having entry inward date 01.07.2017 & onwards and where advance/prior BE were already filed prior to 01.07.2017 there will be no charge on the late presentation of Bill of Entry.
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Customs:
GST implementation - Guidance Note for Importers and Exporters
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Customs:
Since new provisions for levy of IGST and GST compensation cess on imports have been introduced under the Customs Tariff Act, 1975, Bill of Entry, Shipping Bill and Courier Regulations and Forms, both Manual and EDI, have been suitably modified
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Customs:
Procedure in respect of discharge and clearance of Liquid Cargo in Bulk for Warehousing in bonded warehouse — all liquid cargo imports discharged through pipelines for warehousing, the shore tank receipt quantity i.e. the quantity ascertained by dip measurement in tanks on shore into which such cargo is pumped from the tanker, has to be taken
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Customs:
Implementation of Express Cargo Clearance System (ECCS) at Courier Terminal – The provisions of this Public Notice, in so far as they are with respect to automation of courier clearance, shall prevail over the provisions assigned to them in the Act and the Regulations.
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Customs:
The work pertaining to fixation of Brand Rate of Drawback under Rule 6 and Rule 7 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, in the GST scenario.
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Customs:
Implementation of GST in Customs–Changes in BE/SB Declaration–Reg. - changes in Bill of Entry and Shipping Bill declarations
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Customs:
Rate of exchange of conversion of the foreign currency with effect from 4th August, 2017 - For import and export of goods
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Customs:
Import of Manganese ore - Customs authorities took a view that the goods imported are not ore but concentrate and hence will not be eligible for the exemption notifications - revenue failed to prove that the Manganese ore has undergone special treatments to hold the goods as concentrate.
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DGFT:
Export policy of Muli-bamboo and bamboo products — Proforma for issue of Certificate of Origin (COO) regarding
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State GST:
Circular regarding Accounting Framework for new Goods and Services Tax (GST) regime - Circular
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Service Tax:
Renting of Immovable Property Services - Joint ownership - benefit of small scale exemption upto ₹ 10 Lakhs to each owner - Benefit of N/N. 06/2005-ST dt. 01.03.2005 extended to each owner.
Articles
Notifications
Customs
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75/2017 - dated
3-8-2017
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Cus (NT)
Rate of exchange of conversion of the foreign currency with effect from 4th August, 2017
GST - States
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FTX.56/2017/073 - dated
12-7-2017
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Assam SGST
The Assam Goods and Services Tax (Third Amendment) Rules, 2017.
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FTX.56/2017/036 - dated
29-6-2017
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Assam SGST
The Assam Goods and Services Tax (Amendment) Rules, 2017.
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F.No.17(131)ACCT/GST/2017/2258 - dated
21-7-2017
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Rajasthan SGST
Extend the period for filing an intimation in FORM GST CMP-01.
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F.No.12(56)FD/Tax/2017-67 - dated
13-7-2017
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Rajasthan SGST
Corrigendum - Notification No. F.12(56)FD/Tax/2017-Pt.-I-41 dated 29.06.2017
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F.No.12(56)FD/Tax/2017-66 - dated
13-7-2017
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Rajasthan SGST
Corrigendum - Notification No. F.12(56)FD/Tax/2017-Pt.-I-40 dated 29.06.2017.
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F.No.12(46)FD/Tax/2017-Pt-II-64 - dated
7-7-2017
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Rajasthan SGST
The Rajasthan Goods and Services Tax (Third Amendment) Rules, 2017.
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F.No.11(24)FD/Tax/2016-61 - dated
1-7-2017
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Rajasthan SGST
Appointment of the officers of Commercial Tax to exercise the powers and discharge duties of officers under the RGST Act, 2017 (Designation under the RGST Act, 2017)
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F.No.11(24)FD/Tax/2016-60 - dated
1-7-2017
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Rajasthan SGST
Appointment class of officers for the purposes of the RGST Act, 2017
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F.No.12(56)FD/Tax/2017-58 - dated
30-6-2017
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Rajasthan SGST
Prescribing Turnover limit, rates and exceptions for Composition Levy.
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F.No.12(56)/FD/Tax/2017-Pt-I-57 - dated
30-6-2017
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Rajasthan SGST
Exemption of supplies of goods by the CSD and the Unit Run Canteens
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F.No.12(56)FD/Tax/2017-Pt-I-51 - dated
29-6-2017
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Rajasthan SGST
Notifying the categories of services on which tax shall be paid under reverse charge mechanism.
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F.No.12(56)FD/Tax/2017-Pt-I-37 - dated
29-6-2017
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Rajasthan SGST
Notification under section 1(3) of Rajasthan Goods and Services Tax Act, 2017 to bring certain sections into force w.e.f. 01.07.2017.
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F.No.12(56)FD/Tax/2017-34 - dated
22-6-2017
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Rajasthan SGST
Notification regarding appointment of Commissioner, Commercial Taxes, Rajasthan as Commissioner of State Tax, Rajasthan under the Rajasthan Goods and Services Tax Act, 2017
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F.No.12(46)FD/Tax/2017-33 - dated
22-6-2017
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Rajasthan SGST
Exemption to persons only engaged in making taxable supplies, total tax on which is liable to be paid on reverse charge basis.
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F.No.12(46)FD/Tax/2017-32 - dated
22-6-2017
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Rajasthan SGST
Notifying www.gst.gov.in as Common Goods and Services Tax Electronic Portal
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F.No.12(46)FD/Tax/2017-30 - dated
22-6-2017
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Rajasthan SGST
Notification to bring certain sections of Rajasthan Goods and Services Tax Act, 2017 into force w.e.f. 22/06/2017
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9/2017-State Tax - dated
30-6-2017
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Sikkim SGST
Effective Date of certain Sections of the SGST Act from 1/7/17
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8/2017-State Tax (Rate) - dated
30-6-2017
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Sikkim SGST
Exemption from reverse charge upto ₹ 5000 per day under section 11 (1) of the Sikkim Goods and Services Tax Act, 2017
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8/2017-State Tax - dated
30-6-2017
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Sikkim SGST
Composition conditions under section 10(1) of the Sikkim Goods and Services Tax Act, 2017
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7/2017-State Tax (Rate) - dated
30-6-2017
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Sikkim SGST
Exemption The supply of goods by the CSD to the Unit Run Canteens
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6/2017-State Tax (Rate) - dated
30-6-2017
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Sikkim SGST
U/s 55 of the Sikkim Goods and Services Tax Act, 2017 - Supply of Services Canteen Stores Department
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3/2017-State Tax (Rate) - dated
30-6-2017
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Sikkim SGST
Exemption from intra-State supplies of goods in excess of the amount calculated at the rate specified
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2/2017-State Tax (Rate) - dated
30-6-2017
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Sikkim SGST
Exemption from intra-State supplies of goods
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2/2017-State Tax - dated
30-6-2017
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Sikkim SGST
Officers and powers under GST
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17/2017-State Tax - dated
30-6-2017
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Sikkim SGST
Electronic commerce operator notifies intra-State supplies services
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14/2017-Central Tax (Rate) - dated
30-6-2017
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Sikkim SGST
Neither as a supply of goods nor a supply of service
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13/2017-State Tax - dated
30-6-2017
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Sikkim SGST
Rate of interest per annum
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12/2017-State Tax (Rate) - dated
30-6-2017
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Sikkim SGST
Exemptions on supply of services under the Sikkim Goods and Services Tax Act, 2017
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12/2017-State Tax - dated
30-6-2017
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Sikkim SGST
Harmonised System of Nomenclature (HSN) Codes turnover wise
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10/2017-State Tax (Rate) - dated
30-6-2017
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Sikkim SGST
Exemption of intra-State supplies of second hand goods received by a registered person
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16/CTD/2017 - dated
22-6-2017
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Sikkim SGST
Effective date of certain Sections of GST from 22.6.17
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15/CTD/2017 - dated
22-6-2017
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Sikkim SGST
State Government notifies www.gst.gov.in as the Common Goods and Services Tax Electronic Portal for facilitating registration, payment of tax, furnishing of returns, computation and settlement of integrated tax and electronic way bill
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14/CTD/2017 - dated
22-6-2017
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Sikkim SGST
Persons not liable for registration under RCM
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001/2017-SGST - dated
28-7-2017
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Tamil Nadu SGST
Extension of time limit for filing intimation for composition levy under sub-rule (1) of rule 3 of the Tamil Nadu Goods and Services Tax Rules, 2017
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04-Re 085/2016 Taxation - dated
12-7-2017
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Tamil Nadu SGST
GST - Proper officer to exercise and the powers and perform the functions - Regarding.
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03-Re 085/2017 Taxation A1 - dated
12-7-2017
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Tamil Nadu SGST
Territorial and Enforcement jurisdiction and Officers appointed - deemed to be the same - Regarding.
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02-Re 085/2017 - dated
29-6-2017
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Tamil Nadu SGST
Notifies the following modes of verification,
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01-Re 085/2017 Taxation A1 - dated
29-6-2017
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Tamil Nadu SGST
Harmonised System of Nomenclature (HSN) Codes
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F.IV-03(15)-TAX/2017 - dated
3-8-2017
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Tripura SGST
Notification regarding classess of Officers with their respective jurisdicition appointed under Tripura State Goods & Services Tax Act,2017.
Circulars / Instructions / Orders
- VAT - Delhi - 12/2017-18 - dated
3-8-2017
Disposal of pending Form DVAT 04 & Form DVAT 07 applications: regarding
- GST - States - F.12(5)FD/Tax/2017-59 - dated
30-6-2017
Circular regarding Accounting Framework for new Goods and Services Tax (GST) regime
- DGFT - 15 /2015-2020 - dated
2-8-2017
Export policy of Muli-bamboo and bamboo products — Proforma for issue of Certificate of Origin (COO) regarding
- Customs - 16/2017 - dated
26-7-2017
Nomination of Nodal Officer to take over pending Brand Rate Applications – Reg.
- Customs - 17/2017 - dated
26-7-2017
Implementation of Express Cargo Clearance System (ECCS) at Courier Terminal – Reg.
- Customs - 94/2017 - dated
11-7-2017
Procedure for chemical examination of cargo of non-hazardous category to be exported in ISO tanks - Reg.
- Customs - 82/2017 - dated
6-7-2017
Exemption from levy of charges for late filing of Bill of Entry- reg.
- Customs - 88/2017 - dated
5-7-2017
Procedure for amendment/conversion of free shipping bills to Export Promotion shipping bills and amendment/conversion of shipping bills from one scheme to another scheme- Reg.
- Customs - 12/2017 - dated
5-7-2017
Fixation of Brand Rate of drawback under Rule 6 and Rule 7 of the Customs, Central Excise Duties & Service Tax Drawback Rules, 1995 in the GST scenario – Reg.
- Customs - 79/2017 - dated
30-6-2017
Guidance Note for Importers and Exporters-Reg.
- Customs - 80/2017 - dated
30-6-2017
Acceptance of late charges (section 46 of Customs Act, 1962)/Amendment fees by NCH on 24 X 7 basis :
- Customs - 86/2017 - dated
30-6-2017
Procedure for grant of Factory/Warehouse Stuffing Permission to the Exporters-reg.
- Customs - 78/2017 - dated
29-6-2017
Implementation of GST in Customs- 24*7 Helpdesk at NCH–Reg.
- Customs - 85/2017 - dated
29-6-2017
Facility of “Priority Assessment” to DPD Importers at JNCH -Reg.
- Customs - 12/2017 - dated
29-6-2017
Advisory for non EDI sites on Customs Operations after the implementation of GST-reg.
- Customs - 83/2017 - dated
28-6-2017
Levy of Fees (Customs Documents) Amendment Regulations, 2017-Reg.
- Customs - 84/2017 - dated
28-6-2017
Finalisation of prior & advance bills of entry, need to issue entry inward properly; reg.
- Customs - 09/2017 - dated
27-6-2017
Implementation of GST in Customs–Changes in BE/SB Declaration–Reg.
- Customs - 77/2017 - dated
27-6-2017
GST roll out and preparation thereof -regarding
- Customs - 81/2017 - dated
27-6-2017
Implementation of GST in Customs–24x7 Helpdesk at JNCH – Reg.
- Customs - 77/2017 - dated
21-6-2017
Compliance of Procedure for movement of import cargo in containers from Port to CFS as prescribed vide Facility Notice No 161/2016, dated 28.11.2016 (and subsequent Public Notices on DPD) and Public Notice No 01/2017, dated 04.01.2017 issued by JNCH in relation to Shipping Lines/Shipping Agents etc under the Provisions of “Handling of Cargo in Customs Areas Regulations, 2009”: reg.
- Customs - 78/2017 - dated
21-6-2017
Processing of shipping bills in manual mode at JN, amendment to Public Notice No 01/2011, dated 04.01.2011, issued by JNCH, Mumbai Zone-II; reg.
- Customs - 79/2017 - dated
21-6-2017
Import of Goods falling in CTH 3808 under Insecticide Act, 1968-reg.
- Customs - 110/2017 - dated
14-6-2017
Procedure in respect of discharge and clearance of Liquid Cargo in Bulk for Warehousing in bonded warehouse — reg.
- Customs - 111/2017 - dated
14-6-2017
Centralised processing of Container Movement Facilitation Cell (CMFC)-merger Of CMFC Kamarajar Port (M/s. Adani Ennore Container Terminal Private Limited) with CMFC Chennai Port —regarding.
News
Case Laws:
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Income Tax
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2017 (8) TMI 132
MAT computation - Unascertained liabilities covered by Explanation (c ) of Section 115JB - added back for computation of book profit of the assessee - Held that:- As decided in Deputy Commissioner of Income-tax, Circle 1(2), Baroda Versus Inox Leisure Ltd. [2013 (2) TMI 353 - GUJARAT HIGH COURT] wherein held no hesitation in upholding the Tribunals view that though actual payment of gratuity may be made at a later point of time upon periodical release of the employees from service, it is provision having been made on actuarial basis it cannot be stated to be an uncertained liability so as to add it back in terms of Clause (c) to Explanation 1 to Section 115JB.
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2017 (8) TMI 131
Deduction in respect of the incentive bonus - Held that:- A Division Bench of this Court in Commissioner of Income Tax Vs. Raza Textiles Ltd. (2005 (5) TMI 20 - ALLAHABAD High Court) has held that where incentive bonus had been paid as a reward of good attendance and efficiency to the workers, it is deductible under Section 37 of the Act.
Stock of incentive sugar has to be valued on the levy price and not the cost price. Commissioner of Income Tax Vs. Bannari Amman Sugars Ltd. [2012 (9) TMI 848 - SUPREME COURT]
Disallowance of guest house expenses under Section 37 - Held that:- In view of subsection (4) of section 37 of the Act which stood at the relevant time all expenses incurred by the assessee on any accommodation of the nature of the guest house after 28.02.1970 are not allowable. Expenditure incurred by the assessee in respect of guest house after 28.02.1970 shall not be allowable.
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2017 (8) TMI 130
Entitlement for benefit of Section 10A - whether business of Unit II and Unit III were independent, distinct and separate? - Held that:- The Unit II and Unit III cannot be said to be formed by reconstruction nor can be said to be an expansion of earlier same business. Though the permission was sought by way of an expansion, the facts on record categorically and succinctly establish that the business of Unit II and Unit III were independent, distinct and separate and are not related with each other or even with Unit I.
Tribunal also considered the letter from Director, STPI, issued to the Assessing Officer dated 10th December 2008, the letter of the Director, STPI, intimating formation of Unit II so also another letter to Director, STPI, seeking permission for bonding facility for Unit II and approval from Director, STPI for Unit II, the letter to the Director, STPI, intimating formation of Unit III, letter to Director, STPI, seeking permission for bonding facility for Unit III and approval from Director, STPI for Unit III. After considering all the documentary evidence and the remand report of the Assessing Officer, the Tribunal agreed with the remand report of the Assessing Officer and held that the assessee would be entitled for benefit of Section 10A of the Act. Tribunal has not committed any error while passing the impugned order. - Decided against revenue
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2017 (8) TMI 129
Penalty under Section 271(1)(c) - Held that:- In the event the revenue files an appeal the rights of the assessee would not be foreclosed and the assessee will have right to urge all contentions. It is not disputed that the revenue did not file appeal against the order of the Tribunal setting aside the order of penalty. The order of the Tribunal allowing the appeal and deleting penalty under Section 271(1)(c) has become final. The assessing officer did not have any jurisdiction to again commence the penalty proceedings on the basis of same additional income for which penalty proceedings were already set aside. The Commissioner appeals has also discussed the said aspect so also the Tribunal. Though the Commissioner Appeals also considered the merits of the matter in our opinion it was not necessary to do so. Their observation and finding that the Assessing Officer could not have revisited the order of the penalty and should not have commenced the penalty proceedings a fresh, is in consonance with the proprietary and judicial discipline.
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2017 (8) TMI 128
Revision u/s 264 in favor of assessee - Charging of interest u/s 220(2) - Waiver of interest u/s 220(2A) - Held that:- the petitioner has not only filed a Petition under Section 264 of the Act, but, it is under Section 220(2A) of the Act as well. Therefore, the first respondent could have very well treated the Petition, as a Petition for waiver under Section 220(2A) of the Act, as the Commissioner has been empowered to deal with such Petition by the Central Board.
In fact, the petitioner has set out in the grounds of this Writ Petition, as to how, they failed to fulfill the parameters, required to be complied with under Section 220(2A) of the Act. Therefore, the first respondent should have considered the said Petition, by treating it as Petition under Section 220 (2A). Therefore, considering the factual situation, it is clear that the petitioner sought for waiver under Section 220 (2A) and it is not revision under Section 264 for revising the earlier order passed by the Assistant Commissioner or for that matter. Hence, this Court is of the view that the matter requires to be re-considered by the first respondent, by treating the Petition as purely a Petition under Section 220(2A) of the Income Tax Act.
Writ Petition is allowed, the impugned order is set aside and the matter is remanded to the first respondent for fresh consideration, who shall consider the Petition filed by the petitioner, dated 23.01.1999, as purely a Petition under Section 220 (2A) of the Act and decided the same, in accordance with law. It is seen that, at the time, when the Writ Petition was entertained, order of interim stay was granted on 06.10.2003, subject to the condition that the petitioner pays 30% of the impugned demand towards interest under Section 220(2) of the Act
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2017 (8) TMI 118
Issue of bogus purchases - net profit rate application - Held that:- We find that the assessee is engaged in the business of Fabrication on contract basis. For this he makes purchases and sales and the sales made by him are not at all doubted. It is also a fact that the assessee has procured bills from hawala parties and made payments by account payee cheques to these parties. Further, the assessee also produced the stock register for raw material and purchases. Once this is a fact that the payments are by account payee cheques, the stock register is maintained and produced the bills from hawala parties, the assessee has used the material for sale which he might have purchased from grey market. It is common presumption which has not be rebutted by the Revenue. Hon’ble Supreme Court in the case of Kanchwala Gems (2006 (12) TMI 83 - SUPREME COURT) wherein Hon’ble Supreme Court has held that the disallowance of bogus purchases is to be restricted to certain percentage of profit, wherein it is held that the purchases from grey market is made. Accordingly, we direct the AO to apply net profit rate @ 8% of the bogus purchases made by the assessee and recompute the income accordingly. These appeals of the assessee are partly allowed.
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2017 (8) TMI 127
Income-tax Settlement Commission under section 245D(2C) - Held that:- Order of the Income-tax Settlement Commission according to a different treatment to the four petitioners does not appear to be justified in the facts and circumstances of the case. If allowed to stand, the impugned order might defeat the very purpose of the companies of the Bindal group applying to the Income-tax Settlement Commission for an early settlement of disputes.
The court is unable to sustain the impugned order dated May 13, 2016, passed by the Income-tax Settlement Commission declining the prayers of the petitioners that their applications before the Income-tax Settlement Commission should be proceeded in accordance with law.
While setting aside the impugned orders, the court directs that the applications of the four petitioners would be entertained and proceeded with by the Income-tax Settlement Commission on the same basis as the six other companies in the Bindal group. The petitioners' applications shall be permitted to be proceeded with.
The writ petitions are allowed and the applications are disposed of in the above terms but, in the circumstances of the case, with no orders as to costs.
The applications of the four petitioners will now be listed before the Income-tax Settlement Commission along with the applications of the six other companies constituting the Bindal group on the date that the Income-tax Settlement Commission may have fixed for further consideration of all the applications of the other six companies.
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2017 (8) TMI 126
Monetary limit prescribed under sub-section (3) of section 255 - maintainability of appeal - MAT applicability - Held that:- Legislature has used the term "computed" in contradistinction to the word "assessed" in sub-section (3) of section 255 of the Act. In the present case, the income of the assessee was assessed by the Assessing Officer at ₹ 12,74,720 but was computed under the MAT provisions at ₹ 96,28,336 under section 115JB of the Act which was much above the limit prescribed under sub-section (3) of section 255 of the Act. The appeal was decided on June 1, 2016 on which date, the limit for hearing appeal by learned single Member of the Tribunal would be taken at ₹ 50,00,000 as the amended provision of sub-section (3) of section 255 of the Act by the Finance Act, 2016, was made operative from June 1, 2016 itself.
In view of the above provision of law, the impugned order dated June 1, 2016, annexure P.3, passed by the Tribunal whereby the single Member had heard the appeal, in both the appeals is set aside and the matter is remanded to the Tribunal to decide it afresh after hearing the parties in accordance with law. The appeals shall be heard by a Division Bench of the Tribunal in accordance with sub-section (2) of section 255 of the Act.
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2017 (8) TMI 117
Reopening of assessment - Sale tax liability - Held that:- From the reasons recorded, it is apparent clear that nothing new material has came in the notice of AO, subsequently in the course of assessment proceeding. The assessee in the Note of Tax Audit Report has clearly mentioned this fact. Moreover, the assessee in its objection dated 05.10.2010 clearly stated that the Sales tax liability to the extent of ₹ 1,88,98,732/- was offered for taxation for AY 2007-08. The same AO taxed the Sale tax collected in earlier year in the AY 2007-08. As per our considered opinion the Revenue is not entitled to tax the same amount twice.
Hon’ble Apex Court in CIT vs. Excel Industries Ltd. [2013 (10) TMI 324 - SUPREME COURT] held that when the rate of tax remain the same and the assessee has paid the tax in the subsequent accounting year then the dispute raised by the Revenue is entirely academic and therefore, there is no need for Revenue to continue with the litigation when it is quite clear that not only it was fruitless but also that it meaning have added anything must to the public coffer.
From the factual discussion and the legal position, we hold that no income was escaped from the assessment. Moreover, the impugned income (Sale tax liability) was offered by assessee in the subsequent AY was merely a change of opinion. The re-opening based on change of opinion cannot per se be reasons of re-opening u/s 147 thus it was invalid. Thus we accepted the appeal of the assessee on ground No.2. As we have held that re-opening of the assessment as invalid. Hence, the discussion on other grounds of appeal is become academic. In the result the appeal of the assessee is allowed.
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2017 (8) TMI 116
Determination of Brought forward losses of the current year - Held that:- There is a factual finding in the impugned order that the audited balance sheet was examined by him, which indicates that unsecured loans has in fact decreased during the period under consideration from ₹ 2,32,70,001/- to ₹ 1,23,03,955/-. The nature of expenses revealed that same expenses were claimed by the assessee in the year under consideration except the provision for doubtful debt (Rs.1,25,48,871/-). We find that the Ld. Commissioner of Income Tax (Appeal) has elaborately discussed the factual matrix and observed that details were duly available on record for which the assessee was claiming expenses. We find no infirmity in the direction of the Ld. Commissioner of Income Tax (Appeal) to determine the loss accordingly and to allow the brought forward losses of the current year and other years accordingly. - Appeal of the Revenue is dismissed.
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2017 (8) TMI 115
Deduction u/s 80IB - Held that:- For claiming the deduction u/s 80IB of the Act, the assessee has to fulfill the conditions contained in sub-section(2) of the section. These conditions has been enumerated/dealt with by the Ld. Commissioner of Income Tax (Appeal) in the order along with the factum of establishing the factory set-up on Daman. There is uncontroverted finding that new industrial undertaking was formed at Daman by transferring more than 20% of the plant and machinery previously used by the assessee in its industrial premises at Bombay.
So far as, the contention of the Revenue that the order of the Tribunal has been challenged before the Hon'ble High Court, is concerned, no contrary decision was brought to our notice, therefore, the order of the Tribunal as on date, stands. The assessee setup the industrial undertaking in industrially backward the state, wherein, certain benefits are extended to the assessee. The operation of Mumbai unit continued during the Financial Year-2003-04 at the normal scale. In the new unit, at Daman, new plant and machinery was installed during the first year of operation and further new additions were made during the Financial Year 2004-05. It is also noted that for Assessment Year 2005-06, the order of the CIT (Appeal) was affirmed by the Tribunal and the appeal of the Revenue was dismissed. Against the said order, the miscellaneous application filed before the Tribunal against the said order was also dismissed. Appeal of the Revenue is dismissed
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2017 (8) TMI 114
Lease Equalization Amount - claim as allowable expenditure - difference in the actual lease amount that is accrued and the amount debited/credited to the P &L A/c due to the following of AS-19 - Held that:- Accepting the lease equalization charges adjustment in respect of the property taken on rent and rejecting the same in respect of the property given on rent does not fit it into any logic and it is not permissible for the Revenue to follow the rule of convenience i.e. wherever the amount is added back it is accepted and wherever the amount is reduced it is rejected. - Claim allowed.
Disallowance u/s 14A - Held that:- We are of the considered opinion that insofar as the finding of the AO is that offering of 10% expenditure has no basis and cannot be accepted, is concerned it does not admit of any interference inasmuch as admittedly, no separate accounts are being maintained in respect of the expenditure incurred in respect of the income exempt from tax. The Hon’ble jurisdictional High Court in CIT VS. Holcim India P Ltd [2014 (9) TMI 434 - DELHI HIGH COURT] and Cheminvest Ltd Vs. CIT (2015 (9) TMI 238 - DELHI HIGH COURT) held that where no exempted income was earned by the assessee in the relevant assessment year no disallowance could be made under section 14A of the Act. Further, at the same time in view of the decision of the jurisdictional High Court in Joint Investments P. Ltd. vs. CIT (2015 (3) TMI 155 - DELHI HIGH COURT) disallowance of expenditure u/s 14A of the Act cannot exceed the amount of tax exempt income, as such disallowance of expenditure as against the exempt income cannot be sustained. We, therefore, direct the AO to limit the disallowance to the tax exempt income.
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2017 (8) TMI 113
Disallowance u/s 14A(2) read with Rule-8D - Held that:- We are of the view that at best, if any disallowance could be made that cannot exceed the exempt income. The Tribunal in the case of Nimbus Communication Ltd. (2016 (5) TMI 166 - ITAT MUMBAI) has made an elaborate discussion and thereafter reached to a particular conclusion, thus, the ratio laid down in the cases mentioned by the ld. Counsel for the assessee, clearly supports the case of the assessee. So far as, the case of Baba Global Ltd. vs DCIT (2016 (7) TMI 247 - ITAT DELHI) relied upon by ld. DR is concerned, even in that case in para-26, there is categorical finding that the disallowance cannot exceed the exempt income. The ratio laid down in Joint Investment Pvt. Ltd. vs CIT (2015 (3) TMI 155 - DELHI HIGH COURT) clearly supports the case of the assessee, thus the case relied upon by ld. DR is of not much help to the Revenue. Thus, the appeal of the assessee is allowed.
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2017 (8) TMI 125
Disallowance u/s 14A - earning the dividend income which was exempt under section 10(34) - Held that:- Assessing Officer after considering the totality of facts and circumstances had disallowed ₹ 1,35,270 under section 14A of the Act following the decision of the Tribunal in the case of Nahar Industrial Enterprises Limited for the assessment year 1997-98 on similar grounds. On appeal by the assessee, the disallowance of ₹ 1,35,270 made by the Assessing Officer under section 14A of the Act was upheld. Further appeal carried by the assessee to the Tribunal was rejected and order of the Assessing Officer and the Commissioner of Income-tax (Appeals) was upheld on this count. It has been recorded by the Tribunal that the disallowance had been computed on a reasonable basis and the same did not show any irrational or irrelevant considerations. Thus, the Tribunal correctly did not interfere with the determination of the amount as made by the Assessing Officer and the Commissioner of Income-tax (Appeals).
Deduction under section 80G - Donation by way of clothes towards Prime Minister's Relief Fund for Jammu and Kashmir Earthquake Relief - Held that:- Learned counsel for the assessee was unable to show in the light of Explanation 5 to section 80G which was inserted by the Finance Act 1976, effective from April 1, 1976 that the deduction was admissible. The assessee could not claim deduction under section 80G of the Act in respect of donations by way of clothes sent to the Prime Minister's Relief fund for Gujarat Earthquake relief the same being in kind and not in cash, cheque or draft. The Tribunal was right in declining the benefit under section 80G of the Act. In view of the express pro vision contained in Explanation 5 to section 80G of the Act, once it was goods, no deduction was admissible.
Assessee appeal dismissed.
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2017 (8) TMI 112
Donations received by trust - Assessing Officer treating the donations received as income under section 68 - Held that:- Full disclosure of income by the assessee and also application of the donations for charitable purposes. It is not in dispute that the objects and activities of the assessee were charitable in nature - Section 68 has no application. See Director of Income-Tax (Exemption) Versus Keshav Social And Charitable Foundation [2005 (9) TMI 662 - DELHI HIGH COURT]
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2017 (8) TMI 124
Review order by tribunal - Held that:- First review application is not entertained, then the appropriate remedy available is to challenge the same by way of writ petition. Second review application is not maintainable.
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2017 (8) TMI 123
Allowable expenditure - excess claim of premium paid on plot - revenue or capital expenditure - assessee claimed the same in its business of ship breaking as it has obtained that plot on lease from GMB - Held that:- The same is held to be revenue expenditure by the learned Commissioner of Income-tax (Appeals) confirmed by the learned Tribunal. The said issue was covered against the Revenue in view of the decision of the Division Bench of this court in the case of Sun Pharmaceuticals Ind. Limited (2009 (3) TMI 587 - Gujarat High Court). In the case before the Division Bench, the Division Bench has held that where the assessee took a land on lease for 99 years at a nominal rent of ₹ 40 per year and paid a sum of above ₹ 48 lakhs as advance rent, as the land was not acquired by the assessee, advance rent was allowable as revenue expenditure and could not be treated as capital expenditure. Similar is the position in the present case. Under the circumstances, no error has been considered by the learned Tribunal in deleting the addition made on account of excess claim of premium paid on the plot. Question No. 1 is answered against the Revenue and in favour of the assessee.
Addition under section 2(22)(e)- Held that:- Identical question came to be considered by the Division Bench of this court and considering the decision the Delhi High Court in the case of CIT v. Ankitech P. Ltd. reported in [2011 (5) TMI 325 - DELHI HIGH COURT] the Division Bench has confirmed the deletion made by the learned Tribunal by holding that from whom loan and advance was taken by the assessee must be a shareholder in the assessee-company.
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2017 (8) TMI 122
Entitlement for refund - locus of the present petitioner - change in the parties to contract - Held that:- Held that:- The appeal filed by the present appellant is on doubted preposition of law and the second principle of the Income-tax Act, the petitioner/appellant as contended by him if he is assessee should have preferred an appeal since he was entitled for refund amount which was their claim under the Income-tax Act. Now, having succeeded before the Commissioner of Income-tax (Appeals) and after the observations made by the Tribunal that Tahal Consulting Engineers Ltd. is not entitled for refund to come in the proceedings at a belated stage are never contemplated by any law therefore, impugned proceedings at a very belated stage is not known to any proceedings.
In that view of the matter, the writ or appeal by the assessee should not be accepted and we are of the opinion that it will not be healthy practice inasmuch as otherwise the other side will take advantage and will add any assessee at any stage treating this precedent having liability to the assessee under the judgment which has been cited in favour of the assessee.
The law has to be assumed for both the sides while refunding or referring to the taxing statute. In that view of the matter, if the imposition of tax is not referred in the taxing statute, it should not apply even in the case of refund. In that view of the matter, for the consistency of law, we are of the opinion that the parties should be continuously joined all throughout proceedings. -Decided against the assessee.
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2017 (8) TMI 121
Netting of the interest paid and the interest received - not setting off the same but taxing the gross receipts - business unit closed - Held that:- The factual matrix reveals that the company was closed on December 2, 1983. It is undisputed that no business was being carried out, the interest accrued cannot be termed as business expenditure and the interest which was paid was in the course of winding up of the company. In view of the fact that the claim of secured creditors against the claim of the workers under section 529 of the Companies Act, 1956, will not take precedence, the fixed deposit receipt was got made. Taking into consideration the fact, the interest income is to be reckoned as income from other sources.
The netting of the interest paid and the interest received is not permissible. Section 57(iii) of the Income-tax Act also does not help the assessee, in peculiar facts of the case, the assessee cannot be heard to say that it has spent ₹ 5,33,23,380 for earning interest of ₹ 59,31,141 on the fixed deposit receipt . Hence, the view taken by the Tribunal is just and proper - Decided against assessee.
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2017 (8) TMI 120
Provisions of section 69 after renovation - Held that:- No doubt it has come on record as argued by Mr. Singhi that it is make to believe but that is block assessment. In our opinion, in view of the provisions of section 69, no error has been committed by the Tribunal. - Decided in favour of the assessee and against the department.
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2017 (8) TMI 119
Estimation of turnover of sales-net profit-addition of 5 per cent - Best judgment assessment - Held that:- The assessing authority while making the "best judgment" assessment no doubt should conclude rationally and unbiased. If the Assessing Officer's estimate is bona fide and rational, that there is no good proof to support that estimate is immaterial. Prima facie, the assessing authority is the best judge of the situation ; it is his "best judgment" and not of anyone else's.
No court could substitute its "best judgment" for that of the assessing authority. The courts should first see, Abdulali asserts, whether the accounts maintained by the assessee were rightly rejected as unreliable. If they conclude that they were rightly rejected, the next question is whether the basis adopted in estimating the turnover has a reasonable nexus with the estimate made. If the basis adopted is held to be relevant, even though the courts may think that it is not the most appropriate basis, the assessing authority's estimate cannot be disturbed.
Assessee could not establish that bill-books accord with the statements of account he submitted to the authorities. Nor has he sustained his defence that the bill-books contained commission transactions, given the tax difference between the State of Kerala and the Union Territory of Pondicherry. Further, important is that any accommodation by way of issuing bills at Mahe to the traders of Kerala for the transactions held only in Kerala is against public policy. The authorities-even if they were to believe the assessee's version-have rightly refused to recognise those illegal transactions. Indeed, emphatic is the judicial dictum of Abdulali [1973 (4) TMI 49 - SUPREME Court] that the Assessing Officer's best judgment did carry an element of speculation and approximation.
As against the initial turnover of ₹ 2.31 crores, the Tribunal has found it to be ₹ 1,95,49,077 based on the Assessing Officer's remand report. As a result, the Tribunal has sustained the net profit rate at 5 per cent. of the turnover. We reckon that the method of calculation and the procedure adopted by the authorities arriving at the undisclosed income has accorded with the statutory mandate under sections 68 to 69C of the Act. We, therefore, find no reason to interfere with the Tribunal's confirming the Assessing Officer's adopting the undisclosed income at 5 per cent. on the revised suppressed turnover.
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Customs
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2017 (8) TMI 93
Refund of SAD - N/N. 102/2007Cus dated 14.09.2007 - denial on the ground that the assessee has not paid the VAT on the imported goods i.e. coils and what is sold subsequently by the assessee and on which VAT is paid is altogether different goods i.e. roof - decision in the case of PROFLEX SYSTEMS Versus COMMISSIONER OF CUSTOMS [2017 (3) TMI 216 - GUJARAT HIGH COURT] contested, where it was held that it cannot be said that what is sold by the appellant to his client is same goods which is imported i.e. coil sheets. Under the circumstances and one of the condition of N/N. 102/2007Cus dated 14.09.2007 has not been complied with - Held that: - the decision in the above case upheld - SLP dismissed.
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2017 (8) TMI 92
Duty Drawback claim - supplementary claim - The petitioner had exported prime mild steel concast billets by two separate shipping bills bearing nos. 5318141 and 5318142 both dated July 12, 2006. The dispute is in respect of shipping bill no. 5318141. The petitioner being entitled to a duty drawback of ₹ 36,10,796/- in respect of the disputed bill had lodged its claim. The same has been denied at the revisional stage - Held that: - the claim for two duty drawbacks were lodged in respect of shipping bills of the same date. The claims were adjudicated upon electronically. It is an admitted fact that, apart from the data being available electronically, the department did not serve any notice or any information to the petitioners in hard form. The respondents have also failed to substantiate that the petitioners had access to the electronic data at that material point of time and, therefore, were aware of the queries made - The petitioners, however, lodged a supplementary claim immediately upon coming to know of the decision of the authorities to scroll the subject shipping bill as zero drawback and sent it to history. Such conduct also establishes that, the authorities have not adjudicated upon the merits of the claim for duty drawback.
The authorities are requested to adjudicate upon the claim for duty drawback - Appeal allowed by way of remand.
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2017 (8) TMI 91
Refund claim - excess amount of cess paid - communication of finalisation of assessment - Held that: - no communication about finalization of assessment of the 20 Bills of Entry had been sent to the appellants. Therefore, the plea of the Revenue that refund cannot be sanctioned to the appellant as they have not challenged the said 20 finally assessed Bills of Entry, is not sustainable.
Even though the adjudicating authority has recorded a finding on the issue of unjust enrichment, which though specifically assailed by the appellants before the ld. Commissioner (Appeals), however, the ld. Commissioner (Appeals) has not dealt the said issue in the impugned order. Therefore, on the issue relating to unjust enrichment both sides fairly agree that the said issue needs to be remanded to the ld. Commissioner (Appeals).
Appeal allowed by way of remand.
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2017 (8) TMI 90
Penalty - whether when the SCN dt. 17.3.2003 had asked the appellant to show cause why penalty should not be imposed only under Section 114A of the Act, whether the adjudicating authority can impose penalty under Section 112 instead? - Held that: - the scope and extent of the two Sections 112 and 114A are different and penalties provided therein are imposed in different situations and reasons. Surely then, penalty proposed under Section 114A in the notice cannot be imposed under Section 112 in the adjudication order. Section 112 and Section 114A are certainly not interchangeable legal provisions nor are they statutory synonyms - decision of the Hon'ble High Court Delhi in CC (Import & General) Vs Care Foundation [2014 (3) TMI 641 - DELHI HIGH COURT], relied upon, where it was unequivocally held that if Section 112 of the Customs Act is not invoked, penalty should not be imposed under it on the ground that it could have been imposed. In the event, we find that penalty imposed under Section 112 on the appellant in the impugned order is not supported by any show cause notice thereat and hence will have to be set aside, which we hereby do.
There is an allegation in the SCN that the appellant had connived with Kunal Overseas in obtaining duty free licence in the name of Kunal Overseas and after taking possessionof the goods were instrumental in illegal diversion and sale in the local market for monetary gain - there is no legal sanction for such adjustment and appropriation of monies deposited by one person towards liability of another. It is not even the case that appellants have given No Objection Certificate or a carte blanche of any sort to the department to go ahead with such adjustment / appropriation. This being so, the impugned adjustment / appropriation is unsustainable in law.
The order of the adjudicating authority for adjustment of ₹ 28,00,000/- (Rupees twenty eight lakhs only) towards penalty imposed on another person will require to be set aside, which we hereby do - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 89
Exemption under N/N. 04/2006-CE dt. 01/03/2006 / Circular No.332/1/2012 dt. 17/02/2012 - import of Manganese ore falling under CTH 2602 of the Customs Tariff Act - Customs authorities took a view that the goods imported are not ore but concentrate and hence will not be eligible for the said notifications - whether the goods which are imported by all the appellants are to be classified as Manganese ore or Manganese concentrate? - Held that: - on specific query from the Bench, as to whether any samples were drawn by the customs authorities to test the same at CRCL or customs laboratories, both sides categorically stated that no samples were drawn and no analysis was done on the imported goods. In absence of any acceptable evidence that the imported goods were not ore but concentrate, we find that the lower authorities have not shifted the burden of proof on to the appellants. It is the claim of importers/appellants herein that they have imported ore and it is the case of the Revenue that the imported ore is nothing but concentrate, in order to classify the product under concentrate, it is expected out of the Revenue authorities to adduce some evidence that the said products were concentrate merely relying on the interpretation of HSN explanatory notes will not suffice to shift the burden of proof on to importer appellants. In the absence of any such evidence, we have to hold that the Revenues case fails.
Concentrate term will apply to ore which have had part or all of the foreign matter removed by special treatments. In all these cases in hand, Revenue has not able to bring on record or state categorically that the Manganese ore which is imported by these appellants has undergone special treatmentsto hold the goods as concentrate. In the absence of anything to indicate that the goods which are imported were in fact put through special treatments, Revenue cannot take their case any further.
The impugned orders are set aside and the appeals are allowed holding that the goods imported by the appellants are nothing but Manganese oreand eligible for exemption of CVD under relevant notification - appeal allowed - decided in favor of appellant.
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Corporate Laws
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2017 (8) TMI 83
Transparency for sale of lease hold rights - oppression or mismanagement - Held that:- The petitioners have not produced any corresponding sale deeds executed within the vicinity where the company property is situated to show that the property in the vicinity was sold at a higher value than the value at which company property was sold. Thus, the petitioners have utterly failed to discharge the burden except merely contending that the company property should have been sold at higher price than the price at which it was sold. So, in the absence of any proof from the side of the petitioners, the Tribunal cannot conclude that there was an element of fraud involved and the property was not sold at a price at which it was expected to have been sold.
The petitioners have utterly failed to establish any substantial ground to grant reliefs as prayed. On the other hand, there is material from the side of respondents to establish that a decision was taken by the Board of Directors to sell the leasehold rights and that the same was also approved by the EGM and majority shareholders have given consent for the sale of leasehold rights and in the light of the above discussion, petitioners are not entitled for any relief and further they utterly failed to establish any act of oppression or mismanagement on the part of respondents. Therefore, the petition is liable to be dismissed.
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2017 (8) TMI 133
Powers conferred u/s 97 of the Companies Act, 2013 - holding of Annual General Meeting - Held that:- As per the provisions of Section 97 of Companies Act, the Tribunal is enshrined with the power to call the Annual General Meeting
Thus we hereby consider that this is a fit case to exercise the powers conferred u/s 97 of the Companies Act, 2013. It is hereby directed that the Annual General Meeting should now be held within 30 days on receipt of this Order as prescribed under the Statute. A compliance report thereafter should also be submitted to the concerned RoC. It is paramount as well as the intension of the Companies Act to protect the functioning as well as the interest of the Company. Therefore, it is always desirable to convene and call all the meetings as prescribed under the Act so that the Company should not infringe the provisions of the Act or to be treated in default. Holding of AGM is a statutory obligation.
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Insolvency & Bankruptcy
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2017 (8) TMI 84
Initiation of Corporate Insolvency Resolution Process - Section 7 of the Insolvency and Bankruptcy Code, 2016 - Held that:- The provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor as may be specified is not to be terminated or suspended or interrupted during the moratorium period.
The Interim Resolution Professional shall perform all his functions contemplated interalia by Sections 15, 17, 18, 19, 20 & 21 of the Code. It is further made clear that all the personnel connected with the Corporate Debtor, its promoters or any other person associated with the Management of the Corporate Debtor are under legal obligation under Section 19 of the Code to extend all assistance and cooperation to the Interim Resolution Professional as may be required by him in managing the affairs of the Corporate Debtor. In case there is any violation the Interim Resolution Professional would be at liberty to make appropriate application to this Tribunal with a prayer for passing an appropriate order. The Interim Resolution Professional shall be under duty to protect and preserve the value of the property of the 'Corporate Debtor' as a part of its obligation imposed by Section 20 of the Code and perform all his functions strictly in accordance with the provisions of the Code.
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Service Tax
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2017 (8) TMI 111
CENVAT credit - suppression of facts - whether the appellant had availed inadmissible credit of ₹ 16,27,181/- during the period 2006-2007 to 2009-2010, by suppressing and/or mis-declaration of facts? - extended period of limitation - Held that: - even though they have availed credit against various input services, namely, jetty charges, wharfage charges etc., but the same was mentioned under the category of 'input'. Needless to mention inputs and input services are separate categories under which cenvat credit is admissible under the Cenvat Credit Rules, 2004. No plausible and convincing explanation has been furnished in this regard. Cumulatively, considering all these facts, there cannot be any doubt that to escape from the notice of the department, the appellant had taken credit of the service tax paid on various input services, but intentionally the declared it under the heading input in the relevant ST-3 returns. Therefore, the inadmissible credit has been availed by mis-declaration of facts, hence, recoverable from them with interest. As far as carrying out audit on the records and no discrepancies was noticed by the Department, therefore larger period of limitation cannot be invoked.
No evidence has been brought on record to show that the visiting audit party had been specifically made aware of the fact of availing of credit on input services which were used in providing trading activity of imported goods. Therefore, the authorities below had rightly confirmed the demand invoking larger period of limitation.
Appeal allowed - decided partly in favor of appellant.
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2017 (8) TMI 110
CENVAT credit - providing of taxable as well as exempted services - non-maintenance of separate set of books - Rule 6(3) of the CCR, 2004 - Held that: - In the SCN, no details have been provided and it has been merely issued on the ground that the respondent has availed certain amount of Cenvat Credit on capital goods & input services and as per Rule 6(6) of Cenvat Credit Rules, 2004, they are entitled to avail on 20% of credit, therefore, they are required to reverse the Cenvat Credit excessively availed by them but there is no bifurcation has been given in the show cause notice whether this entire Cenvat Credit pertains to the services other than enumerated under Rules 6(5) of Cenvat Credit Rules, 2004 or capital goods. In the absence of that evidence, the Revenue cannot alleged at this stage that the Ld. Adjudicating Authority has not verified the records - Revenue has not come with any evidence on record contrary to the verification conducted by the Ld. Adjudicating Authority - appeal dismissed - decided against Revenue.
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2017 (8) TMI 109
Renting of Immovable Property Services - Joint ownership - benefit of small scale exemption upto ₹ 10 Lakhs to each owner - N/N. 06/2005-ST dt. 01.03.2005 - Held that: - the identical issue came up before this Tribunal in the case of Anil Saini and Others Vs. CCE, Chandigarh-I [2017 (1) TMI 101 - CESTAT CHANDIGARH], where it was held that co-owners of the property cannot be considered as liable to pay Service Tax (jointly or severally) as the Revenue has identified the services provider and the service recipients for imposing the Service Tax liability which are individuals, thus, the Service Tax liability is not sustainable.
The demand of Service Tax against the appellants is not sustainable as the appellants are entitled to benefit of N/N. 06/2005-ST dt. 01.03.2005 - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 108
Rejection of refund claim - N/N. 41/2007 – ST dated 06.10.2007 - THC charges - bills of lading charges - origin haulage charges - repo charges - denial on the ground that these are not port services - Held that: - the said services were used/utilized by the appellant within the port, facilitating exportation of goods. Thus, irrespective of the classification of service made by the service provider, the same should be considered as “Port Service” for the purpose of refund benefit - refund allowed.
Refund claim - rejection also on the ground that proper invoice/documents were not submitted by the appellant - Held that: - Since it is the responsibility of the exporter to produce the documents, correlating the same with the export goods, the same should be filed/ produced by the appellant before the original authority, who shall on verification and co-relation with the export goods, allow the refund benefit if found admissible. Therefore, for verification of the documents, the matter is remanded to the original authority - matter on remand.
Appeal allowed - decided partly in favor of appellant.
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Central Excise
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2017 (8) TMI 106
Penalty - Shortage of inputs - Jurisdiction - Whether the CESTAT was justified in imposing penalty u/s 11AC of the Act, ignoring the fact that the Appellant has voluntarily paid the amount of duty equivalent to cenvat credit availed on the shortage of inputs as such issuance of show cause notice itself is without jurisdiction in view Section 11A(2B) of the Central Excise Act, 1944? - Held that: - the excise duty not levied or paid or short-levied or short-paid or which is erroneously refunded if deposited before the issuance of show cause notice under Sub-Section (1) of Section 11A of the Act, the Central Excise Officer on receiving information of the said deposit shall not issue any show-cause notice as contemplated by Sub-Section (1) of Section 11A of the Act. The use of the expressions " in respect of the duty" and "in respect of the duty so paid" in Sub-Section (2B) of Section 11A of the Act clearly establishes that it refers to the notice for the purposes of realisation of the excise duty and the payment thereof. This is also clear from the language of Sub-Section (1) of Section 11A of the Act which requires issuance of show cause notice in respect of the excise duty only - Section 11A of the Act has no application in respect of realisation of penalty if any imposed under Section 11AC of the Act - the imposition of penalty under Section 11AC of the Act is justified even though the duty of excise has been paid voluntarily by the assessee and the notice issued for imposing penalty was neither without jurisdiction or in violation of Section 11A(2B) of the Act which in fact was not applicable - decided against assessee.
Quantum of penalty - Whether in the alternative, the CESTAT was justified in not considering that duty was paid much prior to the passing of the order by the adjudicating authority, as such there was no justification for imposing 100% penalty and at the most 25% penalty may have been imposed in view of the proviso to the Section 11AC of the CEA, 1944? - Held that: - There is no provision under the Act which places any obligation upon the adjudicating authority to first determine the penalty equal to 25% of the excise duty not levied or short levied or erroneously refunded and in the event it is not paid within 30 days to proceed to levy penalty of 100% of the deficient excise duty - There is no dispute that the assessee had deposited the duty determined and the interest even prior to determination of it by the Central Excise Officer but 25% of the penalty amount was not deposited by it within 30 days of the order which means it disentitled itself from the benefit of the reduced penalty as per the second proviso to Section 11 AC of the Act.
Section 11AC of the Act neither requires the Central Excise Officer to determine the quantum of penalty to be 25% of the duty nor it require the Central Excise Officer to communicate the option available to the assessee under Section 11AC of the Act with regard to payment of 25% of the penalty - The determination of duty and penalty by itself is sufficient on part of the Central Excise Officer. It is then upon the assessee to pay 25% of the penalty within the stipulated period of 30 days to avail the benefit of the reduced penalty or to pay the whole of it.
The benefit of reduced penalty of 25% is available to the assessee only on depositing the deficiency in duty determined with interest but also 25% of the duty determined by way of penalty within the stipulated period - The assessee not having deposited the said amount of 25% of the duty by way of penalty within 30 days of the communication of the order determining the duty and penalty, the assessee dis-entitled itself from the benefit of the reduced penalty - decided against assessee.
Appeal dismissed - decided against appellant-assessee.
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2017 (8) TMI 105
Refund claim - doctrine of "unjust enrichment" - Whether the CESTAT is justified in allowing the appeals of the respondent assessee and in permitting refund of excise duty to it under Section 11B of the Act even though the presumption of Section 12B of the Act was not successfully dislodged by the respondent assessee?
Held that: - when no presumption arises under Section 12B of the Act, it is not for the respondent assessee to dislodge any such presumption by adducing evidence to the contrary rather the burden lies upon the revenue to prove that the incidence of tax-duty was passed on by the respondent assessee to third parties which it had utterly failed to discharge - in the absence of any sale of any component or photo-copier drums to the customers in terms of the FSMA, there is no question of passing over the incidence of excise duty on anyone and the duty deposited under protest by the respondent assessee is out of its own pocket.
A Division Bench of this court in Commissioner of Sales Tax NOIDA Vs. Atrenta India Pvt. Ltd. [2017 (4) TMI 563 - ALLAHABAD HIGH COURT] in connection with the refund of Cenvat Credit Rules, 2004 held that where refund is otherwise admissible the interpretation should justify refund to the party as department cannot retain legally refundable revenue.
Appeal dismissed - decided against appellant.
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2017 (8) TMI 103
Shortage of stock - The main contention of the ld.Consultant is that stock verification had not been undertaken properly and in the absence of any responsible person available in the factory, no representative was present at the time of stock verification - Held that: - I find that Shri Arun Kr. Das, partner of the assessee firm was present at the factory and also recorded the statement dated 26.03.1999 during stock verification. It is seen that on 26.03.1999, Shri Arun Kr. Das, Partner of the assessee and Shri Joydeep Sutradhar, Manager of the assessee signed the stock verification reports. Therfore, I do not find any force in the submission of the ld.Counsel that the stock taking was undertaken in the absence of any responsible person in the factory.
Excess quantity of labeled packed Biris without packing - Held that: - The ld.Counsel admitted a part of the shortage of unbranded/unbaked Biris ascertained on the basis of the notebooks and disputed the demand of duty on the balance quantity as the Revenue failed to prove the charge of clandestine removal. I am unable to accept the contention of ld.Counsel for the reason that the appellant cannot accept the evidence of note books partly, unless it has submitted a statement of reconciliation of the said notebook. In the present case, the appellant failed to reconcile the entries in the notebooks and therefore, the demand of duty on the balance quantity, shortage of unbranded and unbaked Biris is justified.
The appellant had not placed any reconciliation of the entries in the notebooks with the statutory records. The ld.Counsel had not disputed the recovery of the notebooks from the premises of the assessee. It has also not disputed the corroboration of the entries of the note book and in the aeized private packing serial register. Therefore, the contention of the ld.Counsel is without any force on this ground also.
Penalty u/s 11AC - Held that: - the appellant accepted partly the shortage of unbranded/unbaked Biris by way of adjustment of excess labeled Biris based on the notebooks and rough private books. They cannot deny the demand of duty on the balance quantity on the basis of the same evidence, as they fail to clarify the details of entries in the said notebook as observed by the adjudicating authority. As it is a case of charge of clandestine removal of goods, the imposition of penalty under section 11AC is warranted.
Penalty on partners - Held that: - the penalty on the assessee was imposed under section 11AC of the Central Excise Act, 1944. In such situation, imposition of penalty on the partners are excessive.
Appeal allowed - decided partly in favor of appellant.
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2017 (8) TMI 102
Clandestine manufacture and removal - copper wire of 5.38 mm thickness - whether the appellants had manufactured and cleared 1751.240 kgs. of finished goods without payment of duty? - Held that: - The Revenue has calculated that from the excess raw material of 3748.240 kgs. after deducting the admitted quantity of 1997.1 kgs. the remaining quantity must have been used in the manufacture of equal quantity of finished goods and cleared without payment of duty. Except the said presumption by the Revenue, no other evidence has been brought on record including the statement of the partner Shri Bharatkumar Kaluram Heda. The partner Shri Heda on the other hand stated that all the raw materials purchased by them had been duly accounted for in the records, no contrary evidence has been placed by the Revenue.
The impugned order is modified to this extent of setting aside confirmation of duty of ₹ 1,02,382/- and penalty against the appellant M/s Vinayak Industries, and the appeal is partly allowed to that extent - appeal disposed off.
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2017 (8) TMI 101
CENVAT credit - common inputs used in exempted as well as non-exempted unit - non maintenance of separate account - demand of interest - penalty - extended period of limitation - Held that: - the reversal of the credit was not done voluntarily but it was done after it was detected and pointed out by the audit - reliance was placed in the case of Hindustan Insecticiedes Ltd. Versus Commissioner Central Excise, LTU [2013 (8) TMI 225 - DELHI HIGH COURT], where it was held that in the said case notice of payment for interest was issued after four years and it was held that it was beyond a reasonable period and the department could recover the amount from the Assessing Officer, who had not taken steps for four years and not from the respondent-assessee therein. The finding of the Supreme Court on interpreting the applicable Act was that no limitation period was prescribed, therefore, proceedings for recovery could be initiated within a reasonable time - the demand of interest is clearly unsustainable.
Penalty u/r 15 of CCR, 2004 read with Section 11AC - Held that: - the adjudicating authority was not convinced that the elements of Section 11AC were present. However, in the operative part of the order, the adjudicating authority has imposed penalty of ₹ 1,00,000/- but the same has been done under Section 11AC of the Act read with Rule 15 of CCR, 2004. Penalty under Section 11AC cannot be imposed in the absence of allegation of suppression in the show cause notice. Besides, discretion to reduce mandatory penalty does not vest with adjudicating authority. Considering the inherent contradiction in the show cause notice and the patently perverse nature of the order passed by the adjudicating authority in relation to penalty, the same is set aside.
Appeal allowed - decided in favor of appellant.
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2017 (8) TMI 100
CENVAT credit - various input services - Catering Service - Housekeeping Service - Renting of Immovable Property Service - Security (Driver) Services - Held that: - the Cenvat credit availed by the assessee is correct - appeal allowed - decided in favor of assessee.
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2017 (8) TMI 104
Principles of Natural Justice - Shortage of MS Ignots - difference between the book stock and the physical stock - whether the petitioner should be granted an opportunity to go before the respondent by directing a de-novo proceedings to be conducted on the ground that they did not file their reply to the show cause notices and were not afforded an opportunity of personal hearing? - maintainability of petition - Held that: - this is not a case, where the petitioner has not been afforded reasonable opportunity to putforth their submission, but it is a case of deliberate failure on the part of the petitioner to avail the opportunity granted to them. The petitioner places much reliance on the floods, which affected the Chennai City in December 2015. However, the record of proceedings show that the proceedings commenced much earlier and all the documents were taken from the factory of the petitioner, which was not at Chennai, but at Karaikal and the respondent Commissionerate functioned from Trichirappalli and the request made by the petitioner were complied with. However, it is alleged by the petitioner, the documents collected from the respondent, were sent to the head office at Chennai. It appears that this stand has not been substantiated before the respondent nor before this Court by way of any documents.
The facts would lead to irresistible conclusion that the petitioner, despite having knowledge of the proceedings, did not choose to submit their reply to the show cause notices, inspite of sufficient indulgence granted to them. Thus, the fault lies with the petitioner and they cannot claim that it is a case of violation of principles of natural justice.
This Court is not inclined to entertain the Writ Petitions challenging the Order-in-Original on the ground that the petitioner has an effective alternate remedy before the CESTAT under Section 35G of the CEA, 1944 - petition dismissed being not maintainable.
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2017 (8) TMI 107
Condonation of delay - Cement - benefit of concessional rate of duty in terms of Sl. No. 1C in N/N. 4/2007-CE dated 01.03.2007 - the decision in the case of CCE, Bhopal Versus M/s Maihar Cement [2016 (12) TMI 275 - CESTAT NEW DELHI] contested, where it was held that the sales made directly to various actual users will not be covered by the category of “retail sale” - Held that: - delay condoned - appeal admitted.
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2017 (8) TMI 99
Valuation - Transportation Charges recovered from the buyers - includibility - Held that: - the purchased order issued by M/s Caparo Engineering India Pvt. Ltd., Pithampur, Distt. Dhar (MP) which shows that the price is excluding Sales Tax, Excise Duty, Transportation Charges and corresponding invoice also shows that the appellant has charged transportation charges separately - The issue is squarely covered by the decision of this Tribunal in their own case for the earlier period [2016 (2) TMI 145 - CESTAT NEW DELHI], where it was held that when the sale and delivery take place at the factory gate and freight charges, which are in relation to an independent transaction is mentioned separately in the invoices, the amount of freight has no relevance for valuation purposes.
The transportation charges are not includable in the assessable value - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 98
CENVAT credit - rejected goods - whether the appellants are eligible to avail credit on the rejected goods under Rule 16(1) of the CCR, 2002? - Held that: - the duty paid on the transaction value was more than the credit availed on the rejected goods, whereas in few cases, there was marginal short payment of credit, totalling to ₹ 36,803/-. The Ld. Advocate fairly accepts that in the event, the process is considered is not amounting to manufacture than as per Rule 16 (2) of CCR, 2002, they are required to reverse the credit availed on the rejected goods. Therefore, the appellant is required to reverse excess credit of ₹ 36,803/-.
Penalty - Held that: - the appellant had duly maintained registers/records in the receipt and disposal of the rejected goods supported by evidences like rejected Memos, LRs etc. Thus, they have correctly availed the Cenvat credit; accordingly, imposition of penalty under Rule 15 (2) of CCR, 2002 readwith Section 11AC of the CEA, 1944 is unwarranted/unjustified.
Decided partly in favor of appellant.
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2017 (8) TMI 97
CENVAT credit - transfer of CENVAT credit - Rule 10 - eligibility or otherwise of the assessee to avail cenvat credit of ₹ 1,44,10,817/- relating to their Vasai unit which was again taken in their books of accounts after transfer of their unit to Guntur - Held that: - Rule 10 of the Rules facilitates transfer of cenvat credit available on record in situations when a factory is shifted or transferred on account of change in ownership, sale, merger etc. The procedural requirements tied to such transfer are very simple indeed. Obviously, the intention of the legislature is to ensure that when such a situation arises, as they often do in the course of trade and commerce, the transition, at least from the CE point of view, should be as simple and seamless as possible and not weighted down with onerous procedural requirements.
Where there is only a mere shifting of factory involved, the proceduralities are even more simple. In our view, assessee cannot be faulted for not having intimated the jurisdictional CE authorities, initially those in charge of the erstwhile factory and subsequently to the Guntur CE authorities. As seen above, Vasai CE authorities have even confirmed the availability of ₹ 1,44,10,817/- lying as balance in the cenvat credit account of the erstwhile factory. This being so, and without any allegation that stock of inputs, goods in process / finished products or capital goods have not been transferred from Vasai to Guntur factory, but otherwise diverted or sold clandestinely, it would be puerile to cast any allegation on the assessee that they are not entitled to enter the same account of credit in their registers / books of account of their Guntur factory.
The assessee has substantially complied with the procedural requirements of Rule 10 of CCR 2004 and substantive benefit extended vide that rule, namely, facilitating transfer of cenvat credit/PLA from their erstwhile Vasai factory to their new Guntur factory, cannot be then denied - appeal allowed - decided in favor of assessee.
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2017 (8) TMI 96
Clandestine removal - shortage of finished goods - the demand of ₹ 1,77,922/- have been confirmed in respect of finished goods, which were found short vis.-a-vis the balance recorded in the RG-1 register - Held that: - Although the authorised representative of the appellant could not immediately explain such apparent shortage, it does not lead to the inevitable conclusion in absence of corroborative evidence that the appellant have indulged in clandestine clearance of such shortage. Further, the loose slips found at the time of search maintained with respect to activity of the production floor are private report/records and the same are not reliable for drawing adverse conclusion against the appellant in absence of any corroborative evidence of clandestine manufacture and removal. Further, I find that save and except assumption and presumption of clandestine removal for the apparent shortage, no clandestine activity and evidences have been brought on record. Under such facts on record, I find that the allegation of clandestine removal is not established - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 95
Method of Valuation - MRP based or transaction value - wholesale package - Whether the appellant assessee have paid excise duty correctly under the provisions of Section 4 of the Act, instead of Section 4A? - extended period of limitation - manufacture of 9gm. purias/pouch of their product with effect from 01/03/2004 to 31st of March 2008 - Held that: - wholesale package have been defined in the Package Commodity Rules as meaning a package containing -(i) Retail packages, where such first mentioned package is intended for sale, distribution or delivery to an intermediary and is not intended for sale direct to a single consumer, or (ii) a commodity sold to an intermediary in bulk to enable such intermediary to sell, distribute or deliver such commodity to the consumer in similar quantities, or (iii) packages containing 10 or more than 10 packages provided that the retail packages are labeled as required under the Rules. Accordingly, we find that the larger pouches containing more than 10, under the admitted facts, 20/27 Purias are wholesale packages. Further we End that there is no material on record that such wholesale packages were marked with MRP or where intended for retail sale.
The appellant was entitled to assessment to duty under the provisions of Section 4 of the Central Excise Act in respect of the retail packages in question - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 94
CENVAT credit - receipt of rejected goods - rejection of credit on the ground that the appellant had not maintained separate records of receipt, use and disposal of the rejected/returned goods nor they could establish that these goods were rejected by the customer and later received in the factory - Held that: - Ld. advocate for the appellant placed a chartered accountant's certificate to show that all these rejected goods were appear on payment of duty after the removal of the defects and the duty paid was more than the credit availed on the rejected goods. All these claims and counter claims need to be scrutinized in detail by the adjudicating authority. For verification of the said facts, both sides fairly accept that the matter needs to be remanded to the adjudicating authority - appeal allowed by way of remand.
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CST, VAT & Sales Tax
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2017 (8) TMI 88
Whether the dis-allowance of claim of deduction on sales return cash discount to the customers for the turnover of ₹ 2,60,454/- assessed at 4% is to be sustained or not?
Whether the dis allowance of the claim of concessional rate of tax for the states effected to ESI Corporation for ₹ 4,99,230/- assessed at 10% is to be sustained or not?
Held that: - the issues are squarely covered by the decision of the Hon'ble Division Bench of this Court in the assessee's own case in W.P.No.960 of 2005 dated 15.05.2009, wherein, the Division Bench dismissed the writ petition filed by the State - petition allowed for this part.
Whether the interstate sales of ₹ 1,86,109/- assessed at 10% for the non submission of ''c'' Forms is to be sustained or not? - Held that: - the finding of the second respondent is sustained and to that extent, the writ petition is dismissed.
Petition allowed - decided partly in favor of petitioner.
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2017 (8) TMI 87
Validity of assessment order - The petitioner's contention was that the order passed under Section 55 of the Act merged with the order of assessment - Held that: - similar issue decided in the case of P.C.W. Castings Private Ltd. Versus The Assistant Commissioner (CT) , The Appellate Deputy Commissioner (CT) [2016 (12) TMI 314 - MADRAS HIGH COURT], where it was held that as against the order of rectification passed, resulting in the modification of the original order, there was a right of appeal before the Appellate Commissioner.
The impugned order passed by the Appellate Assistant Commissioner calls for interference - matter is remanded to the Appellate Assistant Commissioner for fresh consideration.
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2017 (8) TMI 86
Maintainability of appeal - Shortage of stock - Held that: - We are, infact, informed by the learned counsel for the petitioner, that neither any reply has been filed nor has any application been filed with Tribunal, to bring the issue articulated before us, which is that, the appeal is not maintainable, to its notice - the instant writ petition is disposed of, with liberty to the petitioner, to approach the Tribunal, either by filing a reply or an appropriate application, bringing to its notice, the submission made before us, that the appeal filed by the Revenue is not maintainable, against the order of the AAC (CT) - appeal dismissed being not maintainable.
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2017 (8) TMI 85
Revision of assessment - mismatch between the Annexure 1 and Annexure 2 returns filed by the petitioner and the other end dealer - Held that: - It may be true that unless and until the dealer furnishes the proper details, the Assessing officer cannot embark upon an enquiry - In the present cases, the Assessing Officer has taken certain efforts to furnish the invoice numbers and other details, though it may be true in respect of certain transactions, the full details have not been mentioned. In any event, wherever full details have been given, the dealer was bound to give proper explanation. If the dealer wants further information, he should have asked the Assessing Officer by submitting a representation. However, in the instant case, the dealer did not resort to such a procedure, but merely, submitted an objection without giving any proper details and only referring to two judgments of this Court. Therefore, substantial part of the fault lies on the dealer.
The petitioner can be afforded one more opportunity to explain with regard to the transactions where full details have been given to them - petition allowed by way of remand.
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Indian Laws
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2017 (8) TMI 82
Proof of legally enforceable liability - offence under Section 138 of the Negotiable Instrument Act - Held that:- The petitioner has rebutted the presumption under Section 139 of the Negotiable Instrument Act by raising a probable defence which creates a doubt about the existence of a legally enforceable debt or liability. On the other hand, the respondent failed to prove the existence of the legally enforceable debt by acceptable evidence, both the Courts below without considering the case in a proper perspective, has convicted the petitioner. In the above circumstances, the judgment of the Courts below are liable to be set aside. and the petitioner is entitled for acquittal.
In the result, the criminal revision case is allowed. The conviction and sentence imposed on the petitioner by the Principal District Court confirming the Judgment passed by the learned Judicial Magistrate is hereby set aside and the petitioner is entitled for acquittal and bail bond, if any, executed by him shall stand cancelled and the fine amount paid by him is ordered to be refunded forthwith.
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2017 (8) TMI 81
Complaint under Section 138,141 and 142 of Negotiable Instrument Act - Held that:- There has been no rejoinder caused by respondent. Ex.P2 in both cases are Statements of Account marked by respondent. Though invoice numbers have been provided in the Statement of Accounts, the particular invoices had not been marked before the trial Court. It is seen that payment to the tune of ₹ 43,07,000/- is acknowledged but dates of receipt thereof are not informed. The Statements of Account marked as Ex.P2 in both cases can only be seen as self-serving statements.
Though the trial Court has accepted the Statement of Accounts, there is a specific finding of the appellate Court that the same cannot be accepted. Even so, the appellate Court makes an error of informing a finding of conviction on the basis thereof. Respondent/ complainant has admitted in cross that he has received back 576 skins. The Account Statements do not inform of any adjustment there towards. It is the contention of petitioner that in his reply notice it had been informed that about 5500 pieces of sheep nappa skins were defected. As stated supra, no rejoinder has been caused by respondent. A series of transactions between the parties is admitted. In the circumstances, the defence contention of a genuine dispute regards the dues has failed to receive consideration. The burden cast on the accused u/s.139 of the Negotiable Instruments Act is light. This Court is of the view that petitioner has discharged the same. Therefore, it is for the respondent/complainant to prove the debt. This, in our considered opinion and for the reasons above informed, respondent/complainant has failed to do.
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