TMI Tax Updates - e-Newsletter
September 22, 2023
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
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GST:
Seizure of Cash - Power of the GST authorities to seize the cash of a dealer - cash seized is not ‘stock in trade’ - The respondents are directed to release the cash seized from the petitioners and credit the same to the account of the petitioners within a period of five days from today - HC
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GST:
Denial of benefit of ITC which was not reflected in GSTR 2A - Merely on the ground that in Form GSTR-2A the said tax is not reflected should not be a sufficient ground to deny the assessee the claim of the input tax credit. - Matter restored back for fresh adjudication - HC
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Income Tax:
Jurisdiction to issue notice u/s 148 - Income escaping assessment - Assessee submitted that, it was required to get the re-assessment done in a faceless manner, rather than being assessed by the jurisdictional officer - the procedure adopted by the respondent-Department is in contravention to the statute i.e. the Finance Act, 2021, at the first instance. Secondly, it is also in direct contravention to the directives issued by the Hon’ble Supreme Court in the case of Ashish Agarwal - HC
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Income Tax:
Revision u/s 264 in favor of assessee - CIT rejected the application - Petitioner has not filed the revised returns u/s 139(5) of the Act but he has admitted to an inadvertent error in declaring total income as Nil vide a rectification application. Admittedly, he is entitled to a refund of Rs. 72,370/- for excess amount of tax deduction at source. - CIT directed to accept the rectified ITR and process the same in accordance with law - HC
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Income Tax:
Protective assessment - Addition in the hands of the Assessee Firm on protective basis - since the substantive addition has not been survived on account of being time barred, consequently, the protective addition made in the hands of the assessee herein also will not survive, accordingly, we delete the protective addition by setting aside the order of the Lower Authorities. - AT
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Income Tax:
Revision u/s 263 - Applicability of provisions of 56(2)(vii)(b) - Documentary evidence available in the records which the AO admits to have verified the veracity thereof amply demonstrate that the AO made the requisite enquiry. If that be so, a mere non-discussion or non-mention thereof in the assessment order could not lead to assumption that the AO did not apply his mind or that he had not made inquiry on the issue. - Revision order set aside - AT
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Income Tax:
Deemed dividend u/s. 2(22)(a)/2(22)(d) r.w.s. 115-O - purchase/ buyback of its own shares by the company - It is to be noted that as per the proviso to Sec. 2(22), only buyback u/s. 77A is excluded from the definition of dividend u/s. 2(22). In other words, any other form of buyback, including purchase of own shares u/s. 391-393 would fall back under the definition of Sec. 2(22), because, which entails release of all or part assets of a company to its shareholders. This is further fortified with the fact that there was reduction of share capital and distribution of accumulated profits, and thus, purchase of own shares would come within the ambit of dividend u/s. 2(22). - Additions confirmed - AT
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Income Tax:
Non-genuine unsecured loan u/s. 68 - When part of the loans taken from the same lender has been accepted by the Assessing Officer as genuine, then it is not understandable as to why the balance loan taken from the same lender should be treated as non-genuine on the ground that no “confirmation” from the said the lender has been filed. - AT
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Income Tax:
Capital gain computation - real owner of asset - the land was purchased in the individual name of the assessee, and not as director of the company. Funds for the purpose of the land was also not found to be contributed by the company. The land having neither been purchased in the name of the company nor paid for by the company there is no case for treating the land as belonging to the company. - AT
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Income Tax:
Addition of income u/s 69A or Business income - surrender of income during survey proceedings - when all the incomes earned by the assessee are only from the business income of the assessee, there do not arise any question as to application of provisions of section 69A and hence taxing such income at special rate as per section 115BBE is improper. - AT
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Income Tax:
Addition u/s 69A - cash deposited in bank on various dates during the demonetization period - cash received from sale of milk during the demonetization period as regular business activity - the averments made by the Appellant, which in our view are supported by the documents furnished, went uncontroverted. Addition made by the AO u/s 69A of the Act is deleted. - AT
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Customs:
Preferential rate of duty - Eligibility of FTA duty benefit - denial of benefit on the ground that country-of-origin certificate was not produced by the respondent at the time of filing the Bill of Entry - It is explained by the respondent that they could not obtain it from the foreign supplier due to Covid-19 pandemic - Matter restored back for fresh consideration - AT
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Customs:
Refund of anti dumping duty wrongly paid by the assessee - Refund of anti dumping duty wrongly paid by the assessee - Denial on the ground that the refund sought under Section 27 cannot be given to the party as Customs Act And Customs Tariff Act, 1962, and Customs Tariff Act, 1975 are different legislations - The stand of revenue is not sustainable - refund allowed - AT
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Customs:
Valuation of Export duty on Iron ore - The entire process of Adjudication and appeal proceedings before the Commissioner (Appeals) have been carried out in a very casual and careless manner. The Commissioner (Appeals) after holding that the Adjudicating Authority was in error in going with enhancement still has rejected the appeal - Demand set aside - AT
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Customs:
100% EOU - Refund of excess self-assessed Excise duty - During the intervening period between the date of no objection certificate by the Central Excise Authorities and the date of issue of final debonding order by the Development Commissioner, an EOU can export the finished goods under claim for advance authorization/DEPB/duty draw back and that no excise duty can be charged in respect of such goods as the same have not been cleared into DTA. In view of this, the impugned order rejecting the refund claim is not sustainable. - AT
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Customs:
Ex-parte order - Appellant could not represent its case due to medical conditions - Smuggling - Gold of Foreign Origin - Matter restored back for fresh adjudication - AT
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Service Tax:
Extended period cannot be invoked to demand service tax for mere inaction or failure or negligence on the part of the Appellant. There must be deliberate defiance of law to invoke extended period, which is not there in this case. The Notice has also not brought in any evidence of deliberate defiance of law warranting invocation of extended period of limitation. - AT
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Service Tax:
Extended period of limitation - The Appellant in the present matter has also provided all the details/documents/records related to the disputed activity before department. In this circumstances charge of suppression or willful misstatement do not survive against the Appellant. Thus extended period of limitation is not invokable in the present matter - The show cause notice was issued on 19.10.2012 for the period covered 2007-08 to 2011-12, which is clearly beyond the normal period of limitation. - AT
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Service Tax:
Exemption from payment of tax or not - Educational Institute or commercial training or coaching centre - ICFAI has not been considered as an Educational Institution granting degrees recognised by UGC. Therefore, in the present case, the appellant claim that they have rendered services to Educational Institution cannot be accepted. - AT
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Central Excise:
Availability of benefit of exemption subject to conditions - the appellants have availed the exemption contained in Notification No.06/2006 dated 01.03.2006 only after the receipt of a Certificate issued by the jurisdictional Deputy Commissioner, in charge of their customer. The Department has not got the Certificate nullified/ modified/ withdrawn. - Duty cannot be demanded from the appellants - AT
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Central Excise:
Waste item or not - Benefit of exemption - waste arising out of manufacture of vegetable oils - waste, gums, fatty acids etc. arising during the course of manufacture of vegetable oils are eligible for the exemption Notification No.89/95. - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2023 (9) TMI 959
Levy of GST and Service Tax - royalty payable to the Government on mining of minerals - HELD THAT:- An interim order dated 15.11.2021 has been passed by a coordinate Bench of this Court in M/S A.D. AGRO FOODS PRIVATE LIMITED VERSUS UNION OF INDIA [ 2021 (12) TMI 656 - ALLAHABAD HIGH COURT ] as has been placed, where Reliance has been placed on a Constitution Bench decision of the Supreme Court in INDIA CEMENT LIMITED VERSUS STATE OF TAMIL NADU [ 1989 (10) TMI 53 - SUPREME COURT] , wherein it was held that, nature of royalty payment was considered and it was opined to be in the nature of tax. In view of the referred interim orders passed by Hon'ble Supreme Court and an interim order passed by a coordinate Bench of this Court , it is found that the petitioner has made out a case for interim relief. List after expiry of four weeks before the appropriate Bench along with M/s. A.D. Agro Foods Private Limited and other similar writ petitions.
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2023 (9) TMI 958
Seizure of Cash - Power of the GST authorities to seize the cash of a dealer - cash seized is not stock in trade - HELD THAT:- The Division Bench of this Court in SHABU GEORGE, GIGI MATHEW VERSUS STATE TAX OFFICER (IB) STATE GOODS SERVICES TAX DEPARTMENT, JOINT COMMISSIONER (IB) STATE GOODS SERVICE TAX DEPARTMENT, COMMISSIONER OF STATE TAXES STATE GOODS SERVICE TAX DEPARTMENT [ 2023 (4) TMI 252 - KERALA HIGH COURT] has held as the respondent has retained the seized cash for more than six months and is yet to issue a show cause notice to the appellants in connection with the investigation, there can be no justification for a continued retention of the said amount with the respondent. Against the said judgment, the State had preferred an SLP before the Supreme Court and the same was dismissed. The respondents are directed to release the cash seized from the petitioners and credit the same to the account of the petitioners within a period of five days from today - Petition allowed.
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2023 (9) TMI 957
Seeking release the goods and the vehicle seized by respondents by accepting penalty in terms of section 129 (1)(a) of the GST Act - HELD THAT:- In view of the fact that the department does not dispute the petitioner's assertion that the goods in transit were carrying necessary documents in the form of E-Way bill and invoice etc, the department ought to have considered the petitioner's prayer for release of goods and vehicle upon compliance of the provisions contained U/s 129 (1) (a) of the Act. A direction accordingly is issued to the respondents to act in terms of the circular dated 31.12.2018 and release the goods upon compliance of the condition stipulated U/s 129(1)(a). Petition disposed off.
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2023 (9) TMI 956
Validity of SCN issued under Section 74 of the Maharashtra Goods and Service Tax / Central Goods and Service Tax Act, 2017 - impugned order does not record any reasons/findings in regard to such contentions as urged by the Petitioner - HELD THAT:- It is clearly seen in the paragraph titled findings , that none of the contentions as urged by the Petitioner are recorded as also there is no discussion whatsoever on the issues as raised by the Petitioner. This more particularly, when the impugned order raises a demand against the Petitioner on interest payable under Section 50(3) of the CGST Act, 2017 as also a penalty being imposed under Section 122 of the CGST/SGST Act, 2017 read with Section 73(9) of the CGST/SGST Act, 2017. It is also the case of the petitioner that in the show cause notice, there was no invocation of the provisions of Section 122 in regard to the penalty. On such contentions, learned counsel for the petitioner would submit that the order impugned is defective and illegal on the ground that it records no reasons hence it would be an order without application of mind. The orders dated 18th January 2023 as impugned in both the writ petitions as passed by the Deputy Commissioner, Sales Tax are quashed and set aside with liberty to the Department to issue a fresh show cause notice to the petitioner within a period of four weeks from today - Petition disposed off.
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2023 (9) TMI 955
Validity of assessment order - Input Tax Credit - Denial of benefit of ITC which was not reflected in GSTR 2A - HELD THAT:- If the seller dealer (supplier) has not remitted the said amount paid by the petitioner to him, the petitioner cannot be held responsible. Whether the petitioner has paid the tax amount and the transactions between the petitioner and seller dealer are genuine are the matter on facts and evidence. The petitioner has to discharge the burden of proof regarding the remittance of tax to the seller dealer by giving evidence as mentioned in the Judgment of the Supreme Court in THE STATE OF KARNATAKA VERSUS M/S ECOM GILL COFFEE TRADING PRIVATE LIMITED [ 2023 (3) TMI 533 - SUPREME COURT] . The impugned Exhibit P-1 assessment order so far denial of the input tax credit to the petitioner is not sustainable, and the matter is remanded back to the Assessing Officer to give opportunity to the petitioner for his claim for input tax credit. -If on examination of the evidence submitted by the petitioner, the assessing officer is satisfied that the claim is bonafide and genuine, the petitioner should be given input tax credit. Merely on the ground that in Form GSTR-2A the said tax is not reflected should not be a sufficient ground to deny the assessee the claim of the input tax credit. The assessing authority is therefore, directed to give an opportunity to the petitioner to give evidence in respect of his claim for input tax credit. Petition allowed by way of remand.
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2023 (9) TMI 954
Non-filing of Appeal before the Appellate Commissioner under Section 107 of the GST Act - failure to respond to the impugned order as well as notice - mis-match between the GSTR 1 and GSTR 3B - difference in ITC between GSTR 3B and GSTR 2A - HELD THAT:- The petitioner has not filed a Statutory Appeal before the Appellate Commissioner under Section 107 of the GST Act and in view of the decision of the Hon'ble Supreme Court in Assistant Commissioner (CT) LTU, Kakinada and others Vs. Glaxo Smith Kline Consumer Health Care Limited [ 2020 (5) TMI 149 - SUPREME COURT ]. The petitioner has now filed this writ petition on 21.08.2023 with a delay of 58 days. Although the Hon'ble Supreme Court in Glaxo Smith Kline Consumer Health Care Limited has declared that orders cannot be challenged under Article 226 of the Constitution of India beyond the statutory period of limitation for filing appeal, Court is inclined to dispose this writ petition. Considering the above, the delay in filing the appeal is condoned. The petitioner is directed to file a Statutory Appeal within a period of 30 days from the date of receipt of a copy of this order. The Appellate Commissioner shall number the appeal and dispose the same on merits in its turn. The petitioner shall pre-deposit the amount that is required to be pre-deposited in terms of Section 107 of the GST Act, 2017 - Petition disposed off.
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2023 (9) TMI 953
Maintainability of petition - appealable order or not - Section 129(3) of the SGST Act, 2017 read with corresponding provisions of the CGST/IGST Act, 2017 - HELD THAT:- The impugned order is an appealable order under Section 107 of the CGST/SGST Act, 2017. Therefore, this Writ Petition is dismissed without expressing any opinion on merits of the case, giving liberty to the petitioner to file a statutory appeal before the Appellate Authority within a period of thirty days from the date of receipt of a copy of this order.
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Income Tax
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2023 (9) TMI 952
Education Cess allowed as an expenditure - HELD THAT:- Respondent states that the respondent Sesa Goa Ltd. (now known as M/s. Vedanta Ltd.) had not claimed the Education Cess as an expenditure in the return. The claim was made in the appellate proceedings before the CIT(Appeals). It is stated that no amount has been refunded to the respondent. AO will examine these statements and pass appropriate orders. Appeal is allowed in above terms.
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2023 (9) TMI 951
Jurisdiction to issue notice u/s 148 - Income escaping assessment - Assessee submitted that, it was required to get the re-assessment done in a faceless manner, rather than being assessed by the jurisdictional officer - Faceless Jurisdiction of the Income Tax Authorities Scheme, 2022 - e-Assessment of Income Escaping Assessment Scheme, 2022 - Department has not proceeded against the petitioner under the substituted provisions of the Finance Act, 2021. Rather, it proceeded with the unamended provisions of law - HELD THAT:- After the introduction of the above two schemes, it becomes mandatory for the Revenue to conduct/initiate proceedings pertaining to reassessment under Section 147, 148 148A of the Act in a faceless manner. Proceedings under Section 147 and Section 148 of the Act would now have to be taken as per the procedure legislated by the Parliament in respect of reopening/ re-assessment i.e., proceedings under Section 148A of the Act. Parliament had by virtue of the Finance Act 2021, brought certain amendments to the provisions of the Income Tax Act, more particularly, in respect of the manner in which the reassessment and the procedure to be adopted by the Income Tax Department. The amendment was brought with an intention to make the law more transparent and effective. The Hon ble Supreme Court also while deciding the case of Ashish Agarwal, supra, as is discussed with in the preceding paragraph had specifically directed the Union of India to proceed further in terms of the substituted provisions brought in by way of Finance Act 2021. What is also relevant to take note of the fact that the Hon ble Supreme Court ASHISH AGARWAL [ 2022 (5) TMI 240 - SUPREME COURT] while exercising its power under Article 142 of the Constitution of India has also not relaxed the applicability of the Finance Act 2021. Rather, the Hon ble Supreme Court in very clear and unambiguous terms had held that the notices issued under the un-amended provisions, which were struck down by the High Court, shall be treated as a notice under new amended provisions and the Union of India was directed to proceed further from that stage in terms of the amended provisions of law. In spite of such specific clear directions by the Hon ble Supreme Court, the Union of India for reasons best known again proceeded with the procedure as it stood prior to the amended provisions which came into force from 01.04.2021. It is by now very clear that the procedure to be followed by the respondent-Department upon treating the notices issued for reassessment being under Section 148A, the subsequent proceedings was mandatorily required to be undertaken under the substituted provisions as laid down under the Finance Act, 2021. In the absence of which, we are constrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute i.e. the Finance Act, 2021, at the first instance. Secondly, it is also in direct contravention to the directives issued by the Hon ble Supreme Court in the case of Ashish Agarwal, supra. The impugned notices issued and the proceedings drawn by the respondent-Department is neither tenable, nor sustainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed. Decided in favour of assessee.
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2023 (9) TMI 950
Revision u/s 264 in favor of assessee - Deduction u/s 54F - Petitioner has sold his house property in India and invested the sale proceeds in a residential house in USA, out of the capital gain on the sale of the property in India, within the specified period - Scope of amendment - HELD THAT:- The language of Section 54(F) of the Act before its Amendment was that the assessee should invest capital gain in a residential house. It did not mention any boundary. It is only after the amendment to Section 54(F) of the Act, which amendment came into effect from 1st April 2015, that the condition that the assessee should invest the sale proceeds arising out of a sale of capital asset in a residential situated in India within the stipulated period was imposed. Thus, a plain reading of the pre-amended Section 54(F) of the Act, leaves no room for doubt that the assessee need not restrict his investment only in India. The only condition was that sale proceeds should be invested in a residential property within the stipulated period of time. We find that the language of Section 54(F) of the Act prior to the amendment is neither ambiguous nor vague. The intention of the legislature to insert the words in India with effect from 1st April 2015 is not uncertain or confusing and hence the applicability of the amendment cannot but be prospective. It is also clear that Petitioner has not filed the revised returns under Section 139(5) of the Act but he has admitted to an inadvertent error in declaring total income as Nil vide a rectification application. Admittedly, he is entitled to a refund of Rs. 72,370/- for excess amount of tax deduction at source. The sale deed placed on record also discloses the exact amount of consideration. It is undisputed that Petitioner has deposited Rs. 75,00,000/- in the CGAS. In the circumstances, it is clear that rejection of the revision petition on the grounds mentioned therein cannot be sustained. Petition deserves to be allowed.
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2023 (9) TMI 949
Addition in the hands of the Assessee Firm on protective basis to protect the interest of the Revenue - addition in capital accounts of the Partnership Firm - why addition in partners capital account may not be added back to the income of the assessee? HELD THAT:- It is brought to our notice that the said reassessment proceedings u/s 147 of the Act against the partners of the Assessee Firm was dropped on account of same becoming time barred as per the provision of Section 153(2) of the Act on 31/03/2023, which was not disputed by the DR. It is well settled proposition of law that when substantive addition does not survive on account of being time barred, then the protective addition also does not survive. The said view of ours have been fortified by the order of Ramesh Chand Prem Raj Soni (HUF) [ 2003 (5) TMI 225 - ITAT JODHPUR] . Accordingly, since the substantive addition has not been survived on account of being time barred, consequently, the protective addition made in the hands of the assessee herein also will not survive, accordingly, we delete the protective addition by setting aside the order of the Lower Authorities.
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2023 (9) TMI 948
Revision u/s 263 - Applicability of provisions of 56(2)(vii)(b) - PCIT applying Explanation 2 to section 263 held the impugned assessment as erroneous and prejudicial to the interest of Revenue; set it aside and directed the Ld. AO to refer the matter to District Valuation Officer ( DVO ) to examine the FMV of the property as on the date of purchase/registration and examine the issue of purchase of property for a consideration lower than the stamp duty value in the light of the provisions of section 56(2)(vii)(b) - HELD THAT:- We agree with the contention of the AR that the provision of section 56(2)(vii)(b) is not applicable to case of a company and that section 56(2)(x) which may apply to case of a company has been inserted by the Finance Act, 2017 w.e.f. 01.04.2017 and is accordingly applicable to AY 2018-19 and onwards whereas the case of the assessee company pertains to AY 2015-16. In this view of the matter, the direction of the PCIT is not sustainable, being not in accordance with law. Documentary evidence available in the records which the AO admits to have verified the veracity thereof amply demonstrate that the AO made the requisite enquiry. If that be so, a mere non-discussion or non-mention thereof in the assessment order could not lead to assumption that the AO did not apply his mind or that he had not made inquiry on the issue. Assumption of jurisdiction u/s 263 of the Act by the Ld. PCIT was not justified. Accordingly, we vacate his order. Appeal of the assessee is allowed.
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2023 (9) TMI 947
Deemed dividend u/s. 2(22)(a)/2(22)(d) r.w.s. 115-O - transactions of purchase of its own shares - assessee contends that the purchase of own shares amounts to buyback but not u/s. 77 of the Companies Act, 1956 - HELD THAT:- In the present case, if you go by the scheme, the conditions prescribed u/s. 77A of the Companies Act, 1956, are not satisfied, because, the purchase of its own shares by the assessee is more than 25% of the total paid up share capital and free reserve which is evident from the facts brought on record by the authorities, where, it has been observed that 54.70% of capital has been reduced after the scheme was given effect. Therefore, once the buyback is not u/s. 77A of the Companies Act, 1956, then, it will fall back u/s. 391-393 r.w.s.100-104 of the Companies Act, 1956, because, without any reference to Sec. 100-104 of the Companies Act, 1956, no company can buy back its shares u/s. 391-393 alone. Therefore, in our considered view, the AO the Ld.CIT(A) have rightly held that the transactions of purchase of its own shares is nothing but distribution of accumulated profits and reduction of capital which falls under the definition of dividend u/s. 2(22)(d). Further, the term buyback is used in the Companies Act, 1956, only in Sec. 77A and not in any other place. Similarly, the term buyback was defined u/s. 115-QA of the Income Tax Act, 1961, to mean buyback u/s. 77A only. The arguments of the Ld. Counsel for the assessee that purchase of own shares by a Scheme of Arrangement Compromise u/s. 391-393 of the Companies Act, 1956, is taxable u/s. 115QA of the Act, only after amendment to the term buyback by the Finance Act, 2016 w.e.f. 01.06.2016 is in correct. Because, there is no dispute on the law in so far as buyback of shares u/s. 77A of the Act, and therefore, the amendment to Sec. 115QA by the Finance Act, 2016, is nothing to do with the present tax treatment, when the companies Act has amended by insertion of Sec. 77A of the Act, in the year 2016. Simultaneously, a new provision has been inserted under the Income Tax Act, 1961, by way of Sec. 115QA to tax consideration paid for buyback of shares to shareholders in the hands of the company. The provisions of Sec. 115QA has been amended so as to include all forms of buyback of shares under any provisions of the Companies Act, 1956, because, there are some divergent views has been expressed by various Courts Tribunals on this issue and to overcome such views amendment has been made to extenuation buyback u/s. 115QA. Therefore, the arguments of the Ld. Counsel for the assessee that purchase of own shares u/s. 391-393 is de hors provisions of Sec. 77 r.w.s.100-104 of the Companies Act, 1956, is incorrect. In any event, assuming without conceding that purchase of own shares amounts to buyback, but not buyback u/s. 77A, which would still be taxable u/s. 115-O of the Act. It is to be noted that as per the proviso to Sec. 2(22), only buyback u/s. 77A is excluded from the definition of dividend u/s. 2(22). In other words, any other form of buyback, including purchase of own shares u/s. 391-393 would fall back under the definition of Sec. 2(22), because, which entails release of all or part assets of a company to its shareholders. This is further fortified with the fact that there was reduction of share capital and distribution of accumulated profits, and thus, purchase of own shares would come within the ambit of dividend u/s. 2(22). The assessee had also taken another stand that the consideration paid for purchase of its own shares is to be taxed only in the hands of the shareholders u/s. 46A of the Income Tax Act, 1961, as capital gains - The words used in Sec. 46A are identical to the language in Sec. 77A and a reading of the Memorandum explaining the provisions of the Finance Act, inserting Sec. 46A, makes it clear that it was done to clarify that buybacks u/s. 77A necessitated a clarification as to whether the same ought to be taxed as capital gains or dividends. The insertion of Sec. 46A was contemporaneous to the insertion of Sec. 77A and in the proviso to Sec. 2(22) excluding the same within ambit of dividends. Lastly, the explanation to Sec. 46A also states that even the words specified securities would have the same meaning attached to it u/s. 77A. Therefore, normally words in parimateria, would have to be construed in the same sense, and therefore, Sec. 46A can only apply to buy-back u/s. 77Aof the Companies Act, 1956. In any event, assuming without conceding that Sec. 46A applies to all forms of buyback, but Sec. 115-O contains a non-obstante clause which would override the provisions of Sec. 46A of the Act. Therefore, the contention of the assessee that consideration paid for purchase of its own shares, is only taxable in the hands of the shareholders as per provisions of Sec. 46A of the Act, is devoid of merits. Sec. 115QA was amended in 2016 and the present transaction would only be taxable as per the amended provision - Firstly, there is a distinction between purchase of own shares upon reduction of share capital and buyback. Buyback is a term used only in respect of transactions covered u/s. 77A. In fact, assessee itself stated in the scheme that it is not a buyback of shares in terms of provisions of Sec. 77A of the Act. Therefore, the object behind amendment of Sec. 115QA has to be read. In our considered view, the amendment to Sec. 115QA was brought in to clarify that the provisions would apply to buyback of shares u/s. 77A as well as to buyback of shares u/s. 391-393 of the Companies Act, 1956. Secondly, assuming without conceding that Sec. 115-QA would govern the transactions from the date of amendment, it would not preclude the transaction from being subject to tax u/s. 115-O of the Act, because, amendment can also be brought in to shift tax incidence from one provision to another. If all conditions of Sec. 115-O r.w.s.2(22) are satisfied, the same cannot be impliedly excluded on the basis of the amendment to Sec. 115QA of the Act. We are of the considered view that consideration paid by the assessee for purchase of its own shares in accordance with scheme sanctioned by the Hon ble High Court of Madras in terms of provisions of Sec. 391-393 of the Companies Act, 1956, amounts to distribution of accumulated profits which entails release of all or part of assets of a company on reduction of capital which attracts provisions of Sec. 2(22) of the Income Tax Act, 1961. CIT(A) has discussed the issue at length in light of plethora of judicial precedents and held the transaction of purchase of own shares by the appellant company is distribution of accumulated profits within the meaning of section 2(22) - Therefore, we are of the considered view that there is no error in the reasons given by the Ld.CIT(A) to treat the transactions of the assessee as dividend u/s. 2(22)(a)/2(22)(d) r.w.s. 115-O of the Income Tax Act, 1961, and thus, we are inclined to uphold the findings of the CIT(A) and dismiss appeal filed by the assessee.
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2023 (9) TMI 946
Non-genuine unsecured loan u/s. 68 - assessee submitted that the assessee s husband expired and business was carried out by the assessee with the help of family members - brother of assessee s late husband arranged for the aforesaid unsecured loan in question and the loan was accepted by cheque and was repaid during the year itself from the account of brother of assessee s late husband and since the funds were arranged through a broker, there was no direct contact with the lender and hence, confirmation could not be placed on record - HELD THAT:- As assessee had furnished details regarding the lender Shri Hariom Enterprise viz. postal address, PAN number, ledger account, ledger of lender in the books of AG Brothers (proprietary concern of brother of assessee s late husband), bank statement of AG Brothers etc. and therefore, in our view, the assessee had discharged the initial onus which was cast upon the assessee under Section 68 of the Act. As observed in the preceding part of the judgement, when part of the loans taken from the same lender Shri Hariom Enterprise has been accepted by the Assessing Officer as genuine, then it is not understandable as to why the balance loan taken from the same lender should be treated as non-genuine on the ground that no confirmation from the said the lender has been filed. It has also been accepted that part of the loan has been repaid back to the aforesaid lender as well in the very same year. Accordingly, looking into the facts of the instant case, we are of the considered view that Ld. CIT(Appeals) has erred in facts and in law in confirming the addition made by the AO u/s 68 - Appeal of the assessee is allowed.
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2023 (9) TMI 945
Addition u/s 68 - AO treated the call money received by the assessee towards share capital and share premium from two investor companies to be unexplained cash credit - primary onus of establishing the identity and creditworthiness of the creditors as well as the genuineness of the transactions proved or not? - HELD THAT:- Once the issue was examined in the year of initial investment and allotment of share by the Assessing Officer and the transaction was found to be genuine, a part of the very same transaction cannot be questioned and held to be non-genuine in the subsequent assessment year, when there is no change in the factual position. Thus, in our view the AO could not have taken an adverse view with regard to call money received in the impugned assessment year. Therefore, in our opinion, the addition made by AO in the impugned assessment year is unsustainable Even, otherwise also, the assessee has a strong case on merits as well. On going through the detailed factual analysis made FAA after verifying the documentary evidences, it is observed that the assessee has discharged its primary onus of establishing the identity and creditworthiness of the creditors as well as the genuineness of the transactions. Not only the assessee had furnished the confirmations of the investing companies supported by bank statements but all other relevant documents such as audited Balance Sheets, Income-tax returns etc. were filed. On going through the audited financial statements of the investing companies, FAA has given a factual finding that both the investors had sufficient funds available with them to make the investments in the shares of the assessee company. He has further found that the source from which the investing companies received the funds to invest in the assessee company also stood explained. The documentary evidences furnished by the assessee, not only prove the source from which the assessee received the investment but the source from where the investing companies generated the funds to invest in the assessee company. From the detailed factual analysis recorded by the First Appellate Authority as well as the facts and evidences available on record, we find, the assessee has, indeed, proved the identity and creditworthiness of the investing company as well as the genuineness of transactions. Revenue has failed to bring any contrary material on record to challenge the factual finding of Learned First Appellate Authority. Thus, in such scenario, the findings recorded by FAA cannot be disturbed. We are inclined to uphold the decision of Learned First Appellate Authority by dismissing the grounds raised.
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2023 (9) TMI 944
Re-computation of the long term capital gains - Reference valuation of capital asset to a Valuation Officer for ascertaining the fair market value of a capital asset - HELD THAT:- As per the provisions of the Act, the AO may refer the valuation of capital asset to a VO for ascertaining the fair market value of a capital asset, if the AO is of opinion that the value claimed by the assessee is at variance with its fair market value. We have gone through the order of the AO and find that no justification has been given by the AO while referring the matter to the DVO. AO mentions that he was not satisfied about the correctness of the report without bringing any material on record as to how the valuation report given by the assessee is not acceptable. Hence, at the outset, the reference to the valuation officer by the AO cannot be upheld. We have gone through the valuation report submitted by the assessee. FMV has been determined by the registered valuer taking into consideration, the sale deeds from the Income Tax Department auction and from the other comparable registries. The land rate has been determined per sq. yards and cost of construction is determined at Rs. 120/- per sq. ft. as on 01.04.1981. On the other hand, the departmental valuation officer determined the cost of land at Rs. 6,895/- per sq. yards and cost construction was determined at Rs. 53/- per sq. ft. DVO has not considered any comparable cases of the relevant year while determining the value.The DVO has worked backwards deducting 1.5%/month for 27 months from the value of 1983 rates. DVO deducted 41.41% from the value of the properties in 1983 for determining the value in 1981. DVO assumed a rise of 41% from 1981 to 1983. Hence, the methodology applied by the DVO has got inbuilt incongruencies, hence cannot be validated. Ergo, we hold that the re-computation of the long term capital gains made by the AO as confirmed by the ld. CIT(A) cannot be sustained.
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2023 (9) TMI 943
Capital gain computation - real owner of asset - In whose hands the short term capital gains on sale of land is to be assessed - whether in the hands of the assessee as claimed by the Revenue or the company, to which with the assessee attributes the transaction? - HELD THAT:- In a nutshell the concurrent finding of facts, both by the AO and the ld. CIT(A) which have remained uncontroverted before us, are that the impugned land was purchased in the individual name of the assessee out of sources which are not attributable to the company viz. KIDPL ,to which the assessee relates the transaction pertained to;that the assessee had entered into agreement with the KIDPL for development of the said land, and the sale proceeds from sale of the land was also received by the assessee. In view of the same we see no reason to interfere in the order of the Ld. CIT(A) who has correctly appreciated the facts of the case, found the transaction of purchase and sale of land completed in the hands of the assessee and accordingly held the short term capital gains earned thereon as being the income of the assessee. The claim of the ld. counsel for the assessee that the land was purchased by the assessee, as director of the company, clearly falls flat. AO and the ld. CIT(A), we find, have clearly mentioned that the land was purchased in the individual name of the assessee, and not as director of the company. Funds for the purpose of the land was also not found to be contributed by the company. The land having neither been purchased in the name of the company nor paid for by the company there is no case for treating the land as belonging to the company. Decided against assessee. Addition u/s. 68 - cash found in the bank account, source of which remained unexplained - HELD THAT:- As counsel though was unable to meet the adverse findings of the Ld. CIT(A), albeit relating to one bank account but at the same time the contention of assessee that the CIT(A) did not consider the other bank account of the assessee is also true. What emerges therefore is that the issue has not been considered in the complete perspective and needs to be considered afresh by CIT(A). We therefore restore the issue back to the Ld. CIT(A) to adjudicate it afresh after giving due opportunity of hearing to the assessee.
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2023 (9) TMI 942
Addition of income u/s 69A or Business income - surrender of income during survey proceedings - Charge tax as per provisions of Section 115BBE - HELD THAT:- During survey proceeding the assessee surrendered total income of Rs. 29 lacs out of which amount was related to other discrepancies/miscellaneous business income which was treated as income u/s 69A and calculated tax under special rate during assessment. There entire addition is certainly without forming proper basis for conversion into business income to non-business income. The revenue was not able to submit any evidence during assessment and appeal proceeding that the said income is not connected with the business income of the assessee or accumulated from non-recognising source. Hence, when all the incomes earned by the assessee are only from the business income of the assessee, there do not arise any question as to application of provisions of section 69A and hence taxing such income at special rate as per section 115BBE is improper. It is a settled principle in law that when there is no other/separate source of income identified during the course of survey or during the course of assessment proceedings, any income arising to the assessee shall be treated to be out of the normal business of the assessee only. During survey proceeding the assessee filed surrendered letter and in statement assessee also recorded and income was surrendered. We respectfully relied on the order of Sh. Harish Sharma M/s. Sham Jewellers [ 2021 (5) TMI 482 - ITAT CHANDIGARH] and case of Daulatram Rawatmull [ 1966 (4) TMI 73 - CALCUTTA HIGH COURT] . In considered view, the conversion of business income into other income and application of section 69A is bad and illegal. Accordingly, levy of tax u/s 115BBE on the income amount liable to be quashed. Assessee appeal allowed.
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2023 (9) TMI 941
Stay petition - recovery proceedings - whether a prima facie case had been made out by the assessee and whether balance of convenience is in favour of the assessee? - HELD THAT:- As in order to come to a conclusion whether a prima facie case has been made out or not itself requires extensive verification of facts and documents. In view of the provisions of section 254(2A) read together with its proviso thereon, we deem it fit and appropriate to direct the assessee to pay 20% of the outstanding demand in two equal instalments in August and September, 2023. The assessee shall produce the proof of remittance of stipulated instalments before the Bench by 15.09.2023. In the alternative, the assessee is also entitled to furnish security equivalent to the value of 20% of the outstanding demand in favour of the Income tax Department on or before 15.09.2023. The assessee is directed to ensure compliance of the aforesaid contentions before the Bench on or before 15.09.2023. Subject to the aforesaid conditions, the demand raised by the Revenue is kept in abeyance for a period of 90 days from the date of compliance as mandated to the assessee before the Bench, i.e. 15.09.2023 or till the disposal of the appeal, whichever is earlier. It is hereby made clear that till 15.09.2023, no recovery proceedings shall be initiated on the assessee for the demand.
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2023 (9) TMI 940
Apportionment of Project management fees - Year of assessment - Project developments fees earned by the assessee which it had apportioned over the period of the project, but the AO had treated it as taxable in entirety in the year of receipt - HELD THAT:- Assessee has placed before us copies of the concessionaire agreement entered into between the assessee and one M/s.Khurana Infrastructure Toll Road Pvt. Ltd., drawing our attention therefrom to the fact that the by virtue of the agreement certain services were the responsibility of the assessee including shifting of services and utilities; clearance for cutting trees and transportation. Therefore, the fact that the assessee was required to render services for smooth conduct of the contract work is not denied. In the light of the same, we are in agreement with the CIT(A) that since the contract work could not be completed within the year, the services to be rendered by the assessee would automatically spill over to the succeeding years of contract period. The project development fee received by the assessee for the same, we hold, has been rightly apportioned over the period of the respective projects. We are in agreement with the ld.counsel for the assessee that since the project development fees apportioned to the subsequent year has also been returned to tax by the assessee in the said years, the department in any case has not been deprived of any tax. The decision of the Hon ble apex court in the case of Excel Industries [ 2013 (10) TMI 324 - SUPREME COURT] referred to by the Ld.Counsel for the assessee before us, squarely applies in such circumstances requiring no addition to be made where the question merely relates to year in which income is to be subjected to tax and the Revenue has not been deprived due taxes on the said income . We see no reason to interfere in the order of the ld.CIT(A) deleting the addition made on account of taxing the entire project development fees received by the assessee during the impugned year itself. We may add here that since the Revenue has pleaded that the assessee has claimed benefit of TDS on the entire amount of project development fees received during the year, though the same has not been returned to tax in entirety during the year, we direct the AO to grant benefit of TDS in accordance with law. Claim of expenses with respect to certain projects against which no income was allegedly booked by the assessee - HELD THAT:- The case of the Revenue being that no income has been booked against the same, then the logical course of action was to determine whether the assessee failed to book income against the same or has not treated a particular receipt as income .The entire effort of the Revenue ought to have been to bring the concerned income to tax. In the absence of the same, the Revenue could not have been gone on to disallow the expenses incurred by the assessee, which otherwise admittedly were incurred wholly and exclusively for the purpose of business. For this reason alone, we agree with assessee that the disallowance made by the AO was rightly deleted by the ld.CIT(A). Even otherwise on facts, we find that the ld.CIT(A) has noted, that with respect to the Rajkot-Jamnagar project, the assessee had booked income also. This fact has not been controverted by the Revenue before us. Therefore, the very basis with the AO for disallowing the expenses incurred in relation to Rajkot-Jamnagar project does not survive, and the ld.CIT(A), therefore, we hold, has rightly deleted the disallowance of expenses relating to this project. Vis- -vis the railway over-bridge(ROB) projects, CIT(A), we hold, rightly appreciated the contentions of the assessee that this work was carried out by the assessee for the benefit of the public at large without any assistance from the Government by way of grants. Revenue has not controverted this contention of the assessee that it carried out these projects without any assistance by way of grants from the Government or without any remuneration for the same. And as has been held by us above, the absence of any income against any expenditure incurred, would not invalidate the claim of expenditure, which otherwise has been undisputedly incurred wholly and exclusively for the purpose of business of the assessee. No reason to interfere in the order of the ld.CIT(A) deleting the disallowance of expenses incurred on projects. Addition made by the AO on account of unutilized grant - HELD THAT:- As in assessee own case for AY 2008-09 ITAT held that the said unspent grant could not be treated as income of the assessee.ITAT noted that in the said decision also the unspent grant, treated as income of the assessee by the AO, was rejected by the ITAT noting that the assessee was a mere nodal agency to implement certain schemes of the Government of Gujarat and the unspent grant remained property of the Government and had to be returned to the Government as and when demanded; that therefore, there was no question of treating the grant as income of the assessee - since the issue stands decided in favour of the assessee in earlier years by the ITAT, we see no reason to interfere in order of the ld.CIT(A), deleting the addition made on account of unspent grant. Addition being interest on deposit from GSFS - HELD THAT:- As evident the interest earned on surplus funds, was not freely available to the assessee so as to utilize it in the manner it desired and make profits out of it. In view of the same, the Gujarat Municipal Finance Board case [ 1996 (5) TMI 71 - GUJARAT HIGH COURT] will clearly apply to the present case and the interest received on the surplus funds by the assessee, therefore, cannot be treated as income of the assessee.The addition therefore made to the income of the assessee by treating the interest on surplus funds as income of the assessee is directed to be deleted. Ground no.1 of the assesses appeal is allowed.
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2023 (9) TMI 939
Addition u/s 69A - cash deposited in bank on various dates during the demonetization period - Appellant being a milk supplier was exempt under the Government/RBI notification and as such the source of the cash deposits stood explained satisfactorily - CIT(A) dismissed the appeal by simply stating that the Appellant has not been able to show that the Appellant is entitled to claim benefit of Notification No. S.O. 3408(E), issued by Ministry of Finance (Department of Economic Affairs), dated 08.11.2016 as the Appellant has not filed any material to establish that the Appellant qualify as a milk booth operating under authorization of Central or State Government - HELD THAT:- The approach adopted by the CIT(A) cannot be countenanced. Notification No. S.O. 3408(E), provided that SBNs would continue to be legal tender for purchase of milk at GCMM. Thus, in our view, AO as well as CIT(A) were incorrect in holding that the Appellant was not covered by the notification. Even if for the sake of arguments it is believed that that though the Appellant was not covered by the aforesaid Notification, the Appellant had a bonafide belief that the Appellant was entitled to the benefit of the Notification and therefore, permitted to receive SBNs, and that the Appellant did accept SBNs as valid tender. Appellant had provided explanation about the source and nature of the cash deposited in the bank account as cash received from sale of milk in the normal course of business. The explanation furnished by the Appellant was rejected by the AO and CIT(A) by merely holding that the Appellant could not have received SBNs as legal tender and therefore, cash deposited by the Appellant was undisclosed income without verifying the documents and testing the explanation offered by the Appellant by examining the actual purchase/sale of milk. Thus, the averments made by the Appellant, which in our view are supported by the documents furnished, went uncontroverted. Addition made by the AO u/s 69A of the Act is deleted. Present appeal preferred by the Appellant is allowed.
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Customs
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2023 (9) TMI 938
Preferential rate of duty - Eligibility of FTA duty benefit - denial of benefit on the ground that country-of-origin certificate was not produced by the respondent at the time of filing the Bill of Entry - prayer in the appeal before the Commissioner (Appeals) to remand the matter and the appeal being allowed by Commissioner (Appeals) - HELD THAT:- Though it is seen that Commissioner (Appeals) has made various observations with regard to eligibility of FTA benefit, the prayer of the respondent before the Commissioner (Appeals) was only to remand the matter for reassessment. It is an admitted fact that respondent could not produce the COO certificate at the time of filing the Bill of Entry. It is explained by the respondent that they could not obtain it from the foreign supplier due to Covid-19 pandemic - a lenient view has to be taken and the delay in producing the certificate has to be condoned. The Commissioner (Appeals) has made some extraneous discussions with regard to eligibility of notification also, which may be the reason for the Review Cell in directing to file this appeal. The matter requires to be remanded to the adjudicating authority who is directed to consider the eligibility of the notification on the basis of the COO certificate produced by the respondent. The prayer in the appeal before the Commissioner (Appeals) being to remand the matter and the appeal being allowed by Commissioner (Appeals), there are no grounds to interfere with the impugned order. The original authority shall reconsider the eligibility of notification benefit after receiving the COO certificate produced by respondent - Appeal filed by department is dismissed.
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2023 (9) TMI 937
Valuation of imported old and used worn clothing - restricted item or not - enhancement of value - confiscation - imposition of redemption fine and penalty - HELD THAT:- This issue came up before this Tribunal in the case of VENUS TRADERS, RAINBOW INTERNATIONAL, AL-YASEEN ENTERPRISES, GLOBE INTERNATIONAL, KRISHNA EXPORT CORPORATION, PRECISION IMPEX, BMC SPINNERS PVT. LTD., SHIVAM TRADERS, LEELA WOOLEN MILLS, M.U. TEXTILES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) MUMBAI [ 2018 (11) TMI 625 - CESTAT MUMBAI ], wherein this Tribunal has held that the failure of the original authority to comply with the direction in remand to disclose the margin of profit that prompted the fine and penalty, the matter would normally have to be remitted back by another remand order. However, the paucity of evidence and the negligible scope for ascertainment at this stage deters us from doing so. In the light of the admitted failure to comply with the licensing requirements, we uphold the confiscation of the goods under Section 111(d) of Customs Act, 1962. However, it is our opinion that the ends of justice would be served by reducing the redemption fine to 10% of the ascertained value and penalty to 5% - Against the confirmed duties and the penalties the Redemption Fine imposed by the Adjudicating Authority, the Respondent has not filed any appeals. The redemption fine and penalty imposed on the respondents by the adjudicating authority is sufficient to meet the end of justice. Therefore, the redemption fine and penalty confirmed by the adjudicating authority are upheld - there are no infirmity in the impugned order and the same are upheld - appeal of Revenue dismissed.
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2023 (9) TMI 936
Refund of anti dumping duty wrongly paid by the assessee - Denial on the ground that the refund sought under Section 27 cannot be given to the party as Customs Act And Customs Tariff Act, 1962, and Customs Tariff Act, 1975 are different legislations and anti dumping law and provisional and final impositions are dealt with under Customs Tariff Act - HELD THAT:- The notification relied upon by the AR remains confined to enlisted refund cases as are mentioned in Section 9AA, which are typically in the nature of refund cases, which arise due to differential duty being imposed at preliminary and final stages. In fact the title of the Notification itself says this goods may be called the refund of anti dumping duty (paid in excess of actual margin of dumping). Section 9AA Customs Tariff Act deals only with those specified cases of refund where done the limitation is governed by the aforesaid Notification No. 05/2012-Customs (Non-Tariff). However there is no bar on the refund arising otherwise in distinct situations to be allowed. In view of the fact that refund in this particular case arose due to pronouncement by court of law that anti dumping duty whatsoever was not payable by the party - the situation is very much governed by Section 27 of the Customs Act, due to same having been borrowed in the Customs Tariff Act by Section 9A(8), which clearly indicates that even Custom Tariff Act envisages situations, where refund could arise even in anti dumping otherwise in listed situations. There are no difficulty in holding the order of the lower authority is not sustainable. Appeal is accordingly allowed.
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2023 (9) TMI 935
Valuation of Export duty on Iron ore - enhanced rate taken up by the Customs for levy of export duty - reliance placed on the contemporaneous prices noticed during that period - process of Adjudication and appeal proceedings before the Commissioner (Appeals) have been carried out in careless manner - HELD THAT:- From the findings of the Commissioner (Appeals), it is observed that he admits that proper procedure was not followed by the Adjudicating Authority while enhancing the transaction value. It is also seen from the Table 10 of the Order-in-Original that the Adjudicating Authority has not mentioned quantity involved in each of such exports, country to which such exports are made and quantity of such exports. Unless, all these parameters are taken up together and compared, the Department cannot directly arrive at the contemporaneous value. The entire process of Adjudication and appeal proceedings before the Commissioner (Appeals) have been carried out in a very casual and careless manner. The Commissioner (Appeals) after holding that the Adjudicating Authority was in error in going with enhancement still has rejected the appeal. He has directed the Assistant Commissioner to produce the documentary evidence to the appellant now, which has no meaning after the entire process has been completed. Impugned order set aside - appeal allowed.
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2023 (9) TMI 934
100% EOU - Refund of excess self-assessed Excise duty - manufactured finished goods and manufactured waste lying in Closing Stock as on 15.10.2009 - debonding from the EOU Scheme vis- -vis its subsequent removal/clearance from the factory to the domestic and export market at a reduced price - HELD THAT:- The refund is not arising out of a difference in the rate of excise duty but on account of the value adopted for the purposes of discharge of excise duty on the stock of manufactured FG and waste as in existence on the cutoff date i.e. 15 October 2009. The Ld. Appellate Commissioner accepts that the refund claim was filed within the period of limitation prescribed under the Central Excise Law. However, he has treated the letters dated 2.12.2009 and 30.12.2009 as confirmation of the provisionally assessed excise duty payment by the Appellant resulting in finalization of the value declared by the Appellant. The Appellate Commissioner further observed that subsequent variation in prices of these goods is of no avail either to the Appellant or to the department. The letters dated 2.12.2009 and /or 30.12.2009 were only verifying the duty discharged by the Appellant pursuant to their application for debonding and could not be construed as final assessment order as there was no quantification of any confirmed liability. Moreover, no provisional assessment was sought by the Appellant under Rule 7(1) of the Central Excise Rules and no order finalizing provisional assessment was passed under Rule 7(3) of the Central Excise Rules. On going through the provisions, of Appendix 14-I-L, it is found that in terms of Note-(ii) to this Appendix, a 100% EOU must be continued to be treated as EOU/EHTP/STP unit till the date of final exit order. Based on this note, the Tribunal in the cases of COMMR. OF CUS. C. EX., VADODARA VERSUS SOLITAIRE MACHINE TOOLS P. LTD. [ 2002 (11) TMI 165 - CEGAT, MUMBAI] has held that a unit would continue to be treated as EOU unit till the date of final exit order and would be subject to monitoring of the stipulated obligations under the relevant schemes. During the intervening period between the date of no objection certificate by the Central Excise Authorities and the date of issue of final debonding order by the Development Commissioner, an EOU can export the finished goods under claim for advance authorization/DEPB/duty draw back and that no excise duty can be charged in respect of such goods as the same have not been cleared into DTA. In view of this, the impugned order rejecting the refund claim is not sustainable. The same is set aside. The appeal is allowed.
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2023 (9) TMI 933
Ex-parte order - Appellant could not represent its case due to medical conditions - Smuggling - Gold of Foreign Origin - HELD THAT:- Para 20(b) of the Show Cause Notice dwells with the role of the appellant and it only indicates the details of other caes where too the notice is said to be involved in smuggling of gold - it is further that the dates as indicated in medical records of the appellant overlap, coincide and are around the time period herein. Though the appellant has enclosed his medical history for the years 2004-2010 and onwards, it is however noted from the case records, that around the time in January/February 2015, the appellant was undergoing medical tests and treatment at various hospitals and medical college at Guwahati and Delhi and therefore, may have been constrained to cause appearance before the authorities. It is clear from the medical records that almost since January/February of 2015, the appellant has been under constant medical treatment and has been stated to have been admitted at a medical facility subsequently. There are merit in the appellant s plea that he was in not in a physical and mental state to even in the least focus on the issue, concerning the present matter. It appears from the medical history submitted that the diagnosis of suffering from Pituitary Adenoma has been done as early as, sometimes in January-February 2015. The appeal filed by the appellant is allowed by way of remand to the original authority.
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Corporate Laws
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2023 (9) TMI 932
Seeking restoration of the name of the Appellant Company in the register maintained by the Registrar of Companies, Mumbai - petitioner (Appellant herein) failed to provide necessary information and proper financial statement - HELD THAT:- The company was making efforts to start mining activity and that its mining licence was under consideration of the Government, which should have been considered by the NCLT. Hence, impugned order dated 18.11.2019 is set aside. The appeal filed by the appellants before the NCLT is restored to the original file subject to condition that Appellant Company shall pay costs of Rs. 50,000/- to the Registrar of Companies, Mumbai within six (6) weeks from the passing of this judgment. The NCLT is requested to hear the parties after issuance of notice, and pass reasoned order in accordance with law at an early date. Appeal disposed off.
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Insolvency & Bankruptcy
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2023 (9) TMI 960
Maintainability of application u/s 7 of IBC - default prior to the Section 10 A period - Application barred by Section 10A or not - HELD THAT:- The Adjudicating Authority has noticed and returned a finding that the default recorded in the NESL is 31.01.2020. The default on 31.01.2020 is obviously prior to the Section 10 A period. When default has been committed by the Corporate Debtor prior to Section 10A period, any default committed during the Section 10A period can not be held to bar the application which is filed on the basis of default prior to Section 10A and subsequent to Section 10A period. The Application which has been filed under Section 7 gives the detail for Part-IV of the Application which part of the appeal itself indicate the date of default as 31.01.2020. In appeal book, the date of default due date has been mentioned as 31st March, 2019 for the financial year 2018-19. Reading of the Application indicates that default was committed by the Corporate Debtor prior to Section 10A period. Thus, no error has been committed by the Adjudicating Authority in admitting Section 7 Application. There is no merit in the Appeal, the Appeal is dismissed.
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Service Tax
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2023 (9) TMI 931
Levy of penalty - entire service tax liability along with interest paid - Renting of immovable property service - constitutional validity of the levy is yet to be decided - dispute is interpretational in nature - applicability of section 80 of the Finance Act, 1994 - HELD THAT:- Renting of Immovable Property Services have been brought under the purview of Service tax with effect from 1.6.2007. Hon'ble High Court of Delhi, in the case of HOME SOLUTIONS RETAILS LTD VERSUS UOI AND ORS [ 2010 (5) TMI 3 - DELHI HIGH COURT] held that renting per se cannot be regarded as service. Hence, no service tax could be levied on the activity of renting per se. Subsequently changes made by the Finance Act, 2010 in respect of enlargement of scope of Renting of Immovable Property Services' was challenged by the assessees PAN India and during the impugned period, the courts had taken a view that the amendment was unconstitutional and had even granted a stay in this regard. Further, the Apex Court vide its order in UNION OF INDIA AND ORS. VERSUS UTV NEWS LTD. [ 2018 (5) TMI 1367 - SUPREME COURT] , while examining a question directly relatable to the scope and ambit of Entry 49 of List II of the Seventh Schedule to the Constitution of India dealing with Taxes on lands and buildings has categorically ordered all the cases on this issue to be deferred until the matter before the nine judges Bench in MINERAL AREA DEVELOPMENT AUTHORITY ETC. VERSUS M/S STEEL AUTHORITY OF INDIA ORS [ 2011 (3) TMI 1554 - SUPREME COURT] is decided. In a case where the constitutional validity of the levy is yet to be decided the dispute is interpretational in nature. Hence reasonable cause has been made out for delayed payment of duty. In fact, due to legal complexities, the appellants are in the second round of litigation before this Tribunal. The part of the impugned orders passed by the Commissioner of Central Tax (Appeals), Coimbatore relating to penalties alone are set aside and the appeals are allowed.
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2023 (9) TMI 930
Invocation of extended period of limitation - Suppression of facts or not - Exemption from payment of service tax under the Notification made effective from 01.07.2010 - advance payment received through cheques issued on or before 30.06.2010 but realized after 01.07.2010 - HELD THAT:- There is no finding by the Commissioner (Appeals) that this fact had been suppressed by the appellant with an intent to evade payment of service tax. The proviso to section 73(1) of the Finance Act stipulates that where any service tax has not been levied or paid by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Chapter or the Rules made there under with intent to evade payment of service tax, by the person chargeable with the service tax, the provisions of the said section shall have effect as if, for the word one year , the word five years has been substituted. In PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [ 1995 (3) TMI 100 - SUPREME COURT] , the Supreme Court examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since suppression of facts‟ has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty. It would transpire from the aforesaid decision that mere suppression of facts is not enough and there must be a deliberate and wilful attempt on the part of the assessee to evade payment of duty. In the absence of any intention to evade payment of service tax, which intention should be evident from the materials on record or from the conduct of the assessee, the extended period of limitation cannot be invoked. Thus, mere non disclosure of the receipts in the service tax return would not mean that there was an intent to evade payment of service tax. In the present case, the Commissioner (Appeals) did not even record a finding that the appellant had any intention to evade payment of service tax since all that has been recorded in the impugned order by the Commissioner (Appeals) is that the correct facts came to the notice of the department only when the audit was conducted. In the absence of a finding that suppression of facts was with intent to evade payment of service tax, which is absolutely necessary, the extended period of limitation could not have been invoked. The entire demand confirmed by the Commissioner (Appeals) falls in the extended period of limitation. Impugned order set aside - appeal allowed.
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2023 (9) TMI 929
Eligibility of 85% abatement - advertising agency - revenue is of the view that the assessee is availing 85% exemption on the value of taxable service from payment of service tax without any authority of law during the impugned period and also not incorporated the entire value of taxable service in their ST-3 return as detected from their profit and loss accounts, resulting in non-payment of service tax - HELD THAT:- The facts of the case are not in dispute that the assessee is advertising agency and providing service in relation to the advertisement for print media and paying service tax on 15% of the total amount of commission received by them. The said issue has been decided by this Tribunal in the case of DRISHTY COMMUNICATION PRIVATE LIMITED VERSUS C.C.E. S.T. -RAJKOT [ 2023 (1) TMI 297 - CESTAT AHMEDABAD] , wherein the Tribunal observed that It is seen that no evidence has been placed from record to establish that the appellant were providing Advertising Agency Services. The role of appellant was limited to being an intermediary in the sale of space/ time for media agency on commission basis. In terms of Notification No.1/96-ST, the assessee is not liable to be included the amount paid for space and time in getting the advertisement published in print media. Therefore, the said amount is not includible in the value of taxable service provided by the assessee. Further, on discount received by the appellant, no service tax is payable as the same has not been received in consideration of providing the taxable service by the appellant. It was further found that the advertisers themselves have paid service tax on behalf of the appellant, therefore, if the same is demanded from the assessee, it would be double taxation on the service - As in the case in hand, the service tax has been paid by the advertisers on behalf of the appellant, therefore, same is treated as paid by the appellant. Accordingly, no demand is sustainable against the appellant. On the services provided by the appellant to the Government, the appellant is liable to pay service tax - The assessee is liable to pay service tax on the services provided to the Government of India and Rest of the demand against the assessee are set aside. The appeal filed by the assessee, is partly allowed.
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2023 (9) TMI 928
Refund claim - rejection on the ground of limitation and unjust enrichment - reverse charge mechanism - HELD THAT:- The Hon ble Karnataka High Court in the case of COMMISSIONER OF CENTRAL EXCISE (APPEALS), BANGALORE VERSUS KVR CONSTRUCTION [ 2012 (7) TMI 22 - KARNATAKA HIGH COURT] have held that no limitation is applicable for refund of tax paid under mistake. Further, the Larger Bench of this Tribunal has held that under such facts and circumstances, where tax is paid by mistake, no limitation is applicable. Further, it is found that admittedly, it is the appellant, who has borne the tax. Admittedly, the appellant have paid the part of tax by challan and part of the tax has been deducted by the Rajasthan Housing Board from their bills, and deposited under RCM. Accordingly, the appellant is entitled to the refund under dispute. The Commissioner (Appeals) have erred in travelling beyond the scope of show cause notice by observing that RHB may have availed the cenvat credit and further observing that the appellant have not challenged self-assessment, at any point of time and further, it is found that the where the tax is paid under mistake and the same has been accepted by the Revenue, there is no question of filing appeal against such self-assessment. Moreover, the Revenue have entertained the claim of appellant and adjudicated the same on merits. The Adjudicating Authority is directed to disburse the refund within a period of 45 days from the date of receipt of copy of this order along with interest as per rules - appeal allowed.
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2023 (9) TMI 927
Non-payment of service tax - Supply of Tangible Goods Service - suppression of gross amount received by them in respect of services - invocation of extended period of limitation - penalty u/s 78 of FA. The demand notice was issued based on the data received from the Income Tax Department. HELD THAT:- The impugned order concluded that in these Bills the Appellant has charged rent on the tangible goods namely, JCB and Trucks, on the basis of number of days of hire. Prior to 01.07.2012, such supplies were liable to service tax under the category of 'Supply of tangible goods' as defined under Section 65(105)(zzzzj) of the Finance Act, 1994. With effect from 01.07.2012, the transfer of goods by way of hiring, leasing, licensing or any such manner without transfer of right to use such goods has been declared as 'deemed service'. Accordingly, the impugned order has justified the demand of service tax by treating the entire amount shown in the AS26 statements as amount received towards rendering of taxable service. From the records it is observed that no effort has been made by the department to ascertain whether the right to use the JCBs and Trucks have been transferred to the customers or retained by the Appellant. Without such ascertainment, it would not be possible to conclude whether the service would fall within the ambit of 'deemed service' or not. The Appellant relied on the decision of the Tribunal in the matter of M/S KUSH CONSTRUCTIONS VERSUS CGST NACIN, ZTI, KANPUR [ 2019 (5) TMI 1248 - CESTAT ALLAHABAD] and contended that the liability of service tax cannot be determined merely on the basis of Income Tax Returns / Form 26AS - From the decision cited, it is observed that the demands confirmed merely on the basis of the data available in the Income Tax Returns/AS26 Statements is not sustainable. It must be established that the amount shown in the AS26 statements are actually received in connection with taxable service rendered by the Appellant. As the department has not brought in any positive evidence to substantiate the allegation that the amounts received are towards rendering of taxable service liable for service tax, the demand confirmed in the impugned order is not sustainable. Imposition of penalty under section 78 of the Finance Act, 1994 - HELD THAT:- No evidence has been brought on record to establish that the appellant has rendered any taxable service liable for service tax. As the liability of service tax on the Appellant was not established, the question of evasion of tax or having an intention to evade tax does not arise. Accordingly, no penalty is imposable under Section 78 of the Finance Act, 1994 and the same is set aside. Appeal allowed.
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2023 (9) TMI 926
Service or not - service of promoting and marketing the products - demand issued based on the data recovered from M/S SSOMPL is sustainable, without adducing any corroborative evidence - invocation of extended period of limitation - penalty u/s 78 of FA. Whether the activities undertaken by the Appellant would fall within the ambit of Service as defined under Clause (44) of Section 65B of the Finance Act, 1994? - Whether the demand issued based on the data recovered from M/s.SSOMPL is sustainable, without adducing any corroborative evidence? - HELD THAT:- It is observed from the records that the Notice was issued to the Appellant based on the data recovered from the premises of M/s SSOMPL, during the course of investigation at their end. The impugned order has confirmed the demand based on this data and the statements recorded from Shri. Rajat Verma, Director of M/s.SSOMPL. It is observed that there is no information available on record to indicate that what type of commission mentioned above was received by the Appellant in this case. No investigation was carried out with the Appellant to ascertain the nature of service rendered by them to M/s.SSOMPL and whether the amount received was towards rendering of any taxable service or not. In the impugned order Service tax has been demanded on the gross amount of commission received by the Appellant and no distinction has been made between the commission earned by a Distributor from M/s SSOMPL based on his/her own volume of purchase and the commission earned by him/her on the basis of the volume of purchases of M/s SSOMPL products made by his/her sales group. As no investigation was conducted with the Appellant to ascertain whether the Appellant has rendered any taxable service as defined under, section 65B(44) of the Finance ACT, 1994, the demand confirmed in the impugned order merely on the basis of the data received from M/s.SSOMPL alone is not sustainable. Whether in the facts and circumstances of the case, extended period invocable or not? Consequently, penalty under Section 78 of the Finance Act, 1994 is imposable or not? - HELD THAT:- In the present appeal also the Appellant did not apply for Service Tax Registration, did not file ST-3 Returns and did not declare their activities to the jurisdictional central excise authorities. The contention of the Appellant is that on these ground alone it cannot be inferred that there was a wilful act with an intent to evade payment of service tax - It is observed that extended period cannot be invoked to demand service tax for mere inaction or failure or negligence on the part of the Appellant. There must be deliberate defiance of law to invoke extended period, which is not there in this case. The Notice has also not brought in any evidence of deliberate defiance of law warranting invocation of extended period of limitation. In the case of UNION OF INDIA VERSUS M/S RAJASTHAN SPINNING WEAVING MILLS AND COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE VERSUS M/S. LANCO INDUSTRIES LTD. [ 2009 (5) TMI 15 - SUPREME COURT] , Hon ble Supreme Court held that if there is no element of deception or malpractice, neither extended period of limitation invocable nor penalty under Section 11AC would be imposable. In the case of M/S. MAHADEV LOGISTICS VERSUS CUSTOMS AND CENTRAL EXCISE SETTLEMENT COMMISSION (PRINCIPALBENCH) , THE COMMISSIONER, CENTRAL EXCISE, CUSTOMS SERVICE TAX, NALWA STEEL POWER LTD. [ 2017 (4) TMI 1180 - CHHATTISGARH HIGH COURT] , the Hon ble Chhatisgardh High Court held that the presence of mensrea is absolutely necessary for imposition of penalty under Section 78 of the Finance Act, 1994. The ratio of the decisions cited above is squarely applicable in this case. There is no mensrea or intention to evade payment of duty established in this case. In fact, there was no verification done at the Appellant s end to ascertain their liability of service tax. Accordingly, the demand confirmed in the impugned order by invoking extended period is not sustainable. For the same reason, penalty under Section 78 is also not imposable. Appeal allowed.
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2023 (9) TMI 925
Seeking the amount (Service tax) paid to be deposited and appropriated in terms of Section 73A(2) of Finance Act, 1994 - Not availing the benefit of exemption from service tax on the job work - Exemption as per the N/N. 8/2005-ST dated 01.03.2005 - HELD THAT:- From the sub Rule-2, it is clear that even if any amount of service tax is not required to be paid and the same is collected, it needs to be credited in the Central Government account. In the present case, there is no dispute whether or not service tax payable by the appellant and if the same is collected by the service recipient, it was admittedly deposited to the Central Government. Therefore, no further appropriation under Section 73A(2) is required. Section 73A(2) is required only when the assessee, if not required to pay any service tax but collected from the service recipient and not deposited to the Central Government, same needs to be recovered. In the present case, there is no dispute that the appellant have deposited service tax recovered from the service recipient to the central Government. Therefore, no further action is required. The entire case has been made out as the appellant was not supposed to pay service tax in terms of Notification No. 8/2005-ST. On this ground, it is not disputed that the service provided by the appellant is taxable service but by virtue of Notification No. 8/2005-ST, since the Notification No. 8/2005-ST exempts but the same is admittedly on certain conditions and is not absolutely exemption notification and in terms of Section 5A of Central Excise Act, 1944 which is applicable to the service tax matters. It is option for the assessee to avail or not to avail the conditional exemption, therefore, the appellant opted not to avail Notification No. 08/2005-ST is not illegal or incorrect. For this reason also the entire proceedings against the appellant is not sustainable. The issuance of show cause notice and adjudication thereupon vide the impugned order was not correct - appeal allowed.
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2023 (9) TMI 924
Rectification of mistake - reduction in demand - Adjudicating Authority can rectify its own order in terms of Section 74 of FA or not - error apparent on the face of record or not - HELD THAT:- From the plain reading of above Section 74 it is clear that Adjudicating Authority can rectify own order only for the limited purpose i.e. if there is apparent error on the face of the order. The rectification of the order was not made only on apparent error but the issue in the rectification of order was mixed question of law and fact that on which date service tax is leviable even the Cenvat credit issue also involve a detailed scrutiny. Therefore, the adjudication order does not suffer from apparent error whereas the issue under rectification was required a detailed analysis and therefore such issue could not have been decided by rectifying the order nor the issue which was rectified by the Adjudicating Authority was required to be agitated in an appeal and not by way of rectification. Moreover, the appellant have not attended the hearing and the order was passed ex-parte. The rectification was made on the date provided subsequently to the Adjudicating Authority therefore, at the time of passing the order the data was not available before the Adjudicating Authority. On this ground also the rectification of order was not correct and legal in terms of Section 74. The remaining issues raised before the Commissioner (Appeals) by the appellant through their appeal is related to penalty. The order of the learned Commissioner (Appeals) in the Revenue s appeal before him is correct and legal. As regards the appellant s appeal which is related to penalty on the demand, the same needs to be decided along with the demand of service tax - Since the adjudication order was passed without any hearing and as per the order there was error in computing the demand, the matter needs to be remanded to the Adjudicating Authority for passing denovo adjudication order after considering the appellants submission to be made. Matter on remand.
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2023 (9) TMI 923
Classification of services - Works Contract Services - Erection, Commissioning or Installation Services - case of revenue is that the electrical installation works undertaken by the appellant during the disputed period is to be classified under the Works Contract Services and under the Erection, Commissioning or Installation Services - time limitation - HELD THAT:- From the definition of Works contract, it is found that only erection, commissioning or installation of electrical and electronic devices are covered under the above entry whereas appellant are engaged in works of electrical light fittings, laying of cables, earthing works, fitting of poles, electric wiring, etc. In the present matter revenue nowhere provided any invoices or any documents by which it can be concluded that the appellant are engaged in erection, commissioning or installation of electrical and electronic devices. Therefore the Service tax demand in the present matter is not sustainable under works contract service on appellant's activity. The Tribunal in the case of COMMISSIONER OF CE CUSTOMS, NASHIK VERSUS S.Z. DHANWATE ENGG. WORKS [ 2016 (1) TMI 676 - CESTAT MUMBAI] , where it was held that The words used in the Notification are for the services relating to transmission and distribution of electricity and undisputed facts are that NTPS Nashik are engaged in power generation and supply of electricity . The supply of electricity cannot take place except by way of transmission and distribution. Time Limitation - HELD THAT:- In the facts of the present case that firstly the issue involved is of pure interpretation of legal provisions and classification of services therefore, it cannot be said that the Appellant had any mala fide intentions and have suppressed any fact with intention to evade payment of service tax. It is also on record that the Appellant have represented the matter before department during the investigation of case. This clearly shows that there is no suppression or willful misstatement on the part of the Appellant. The Appellant in the present matter has also provided all the details/documents/records related to the disputed activity before department. In this circumstances charge of suppression or willful misstatement do not survive against the Appellant. Thus extended period of limitation is not invokable in the present matter - The show cause notice was issued on 19.10.2012 for the period covered 2007-08 to 2011-12, which is clearly beyond the normal period of limitation. Therefore, demand is time barred and, therefore, cannot sustain. Penalties - HELD THAT:- The penalties imposed upon the appellant also cannot be upheld. The impugned order is required to be set aside - Appeal allowed.
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2023 (9) TMI 922
Exemption from payment of tax or not - Educational Institute or commercial training or coaching centre - renting of immovable property services to M/s Institute of Chartered Financial Analysts of India (ICFAI) - HELD THAT:- It has been held time and again that ICFAI is not an Educational Institution and is held to be a commercial training or coaching centre - reliance placed in the case of M/S. THE INSTITUTE OF CHARTERED FINANCIAL ANALYSTS OF INDIA, HYDERABAD (ICFAI) VERSUS CC CE, HYDERABAD [ 2013 (6) TMI 446 - CESTAT BANGALORE] . In this case, the issue is as to whether the ICFAI was eligible for exemption from Service Tax for the fee collected from their students. ICFAI was claiming that since they were providing education to the students they were eligible to get the exemption for service tax. The Tribunal after going through the factual details held the assessees were providing to their students training or coaching for a consideration and would ipso facto fall within the ambit of commercial training or coaching centre envisaged in the explanation to Section 65(105)(zzc) of the Finance Act, 1994. As this explanation has retrospective effect from 01/07/2003, the activities undertaken by all the assessees during the periods of dispute would get covered within the meaning of the phrase training or coaching imparted for consideration occurring in the text of the explanation. From the above decision of the Bangalore Tribunal, it is clear that ICFAI has not been considered as an Educational Institution granting degrees recognised by UGC. Therefore, in the present case, the appellant claim that they have rendered services to Educational Institution cannot be accepted. The appeal is dismissed.
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2023 (9) TMI 921
Classification of services - port services or not - barge activity carried out by the Appellant - wrongful availment of Cenvat Credit by the Appellant or otherwise - HELD THAT:- It is found that taxable services under the net of Port Service means any service rendered by a port or any person authorized by such port. As such, the services which can be taxed under the said category have to be either services rendered by port itself or any person authorized by such port - Admittedly, repair of the vessel is not being done by the port. The lower authority has held the appellant to be a person authorized by such port to undertake the activity of repairing of vessel. The decision cited by the revenue in the matter of CAIRN ENERGY INDIA PVT. LTD. VERSUS CCE C, VISAKHAPATNAM-II (VICE-VERSA) [ 2019 (3) TMI 815 - CESTAT HYDERABAD] is not applicable in the present matter. In the said case the assessee rendered pilotage service in a minor port based on the authorization granted by the Port Authority. Here Appellant was not authorized by the port for rendering the activity on behalf of port. Therefore, the respective services in question rendered during the relevant period by the present appellant within the port area cannot be charged service tax under the category of port service . Availment of Cenvat credit on inputs/capital goods by the appellant - HELD THAT:- On close reading of input definition under Rule 2(k) of the Rules as above, it is clear that Clause (i) covers all goods, except as specified, used in or in relation to the manufacture of final product. On the other hand, Clause (ii) in Rule 2(k) covers all goods except specified therein, used for providing any output service. In short, Clauses (i) and (ii) are applicable for manufacturer and output service provider respectively. The present case relates to output service provider. There is no dispute that the appellants herein are not manufacturer and covered under Clause (ii) of input definition. The words all goods , if read with used for providing any outpu service in Clause (ii) of Rule 2(k) of Rules, 2004, make it clear that any goods other than specified in the said clause, used for providing any output service, would be treated as input and covered under the said definition - The present case relates to output service provider. The inputs on which appellant availed credit was used for the purpose of repairs of barges and vessles which in turn were used for providing output service of appellant. The appellant is entitled for Cenvat credit on such inputs utilized for repairing and manufacture of barges. Extended period of limitation - HELD THAT:- The issue involve is pure interpretation of taxability of the service. On the very same issue in the appellant s own group company s matter in M/S. SHREEJI SHIPPING. VERSUS CCE. ST. - RAJKOT. [ 2014 (4) TMI 445 - CESTAT AHMEDABAD] similar demand was set aside by Tribunal. Therefore, in the present case the period is subsequent to the earlier one and in the light of Apex Court judgment in the case of NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP [ 2006 (4) TMI 127 - SUPREME COURT] any subsequent show cause notice on the same issue, extended period cannot be invoked - in the present case also the demand for the extended period is not sustainable also on the ground of time bar. Appeal allowed.
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2023 (9) TMI 920
Levy of Service Tax - Clearing Forwarding Agent services - Loading Charges - Unloading Charges - Service Commission - HELD THAT:- The Appellant claims that their agreement with My Home Industries Ltd., specifies that they would be reimbursing the loading and unloading charges. He further submits that the invoices raised by them towards loading and unloading charges are purely on account of reimbursement. In the interest of justice, the Appellant should be given an opportunity to produce all the relevant documents before the Adjudicating Authority to canvass these submissions. Appeal allowed by way of remand.
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2023 (9) TMI 919
Classification of services - Site Formation Services or mining service - works executed for ECL for excavation of coal - Construction of Complex Services or Works contract service - works contract of construction of house project in West Bengal - Demand alongwith interest and penalty u/s 76 and 78 of FA. Site Formation Services or mining service - HELD THAT:- The nature of work executed by the assessee is a comprehensive contract for mining of coal consisting of excavation, loading and transportation of overburden/overburden/top soil (within the mines area), dewatering of mines, excavation of benches for extraction of coal , drilling, blasting with explosives (including cost of explosives), extraction of coal, backfilling of excavated area, loading of raw coal at face and transporting to surface, unloading an stacking at surface. The said activity is in relation to mining of coal and not site formation. The similar issue has been dealt by this Tribunal in the case of M RAMAKRISHNA REDDY VERSUS COMMR. OF C. EX. CUS., TIRUPATHI [ 2008 (10) TMI 115 - CESTAT, BANGALORE] wherein the activity as executed by the assessee is having merit classification under Mining Service - thus the service the merits classification is Mining Service and no service tax has been demanded from the appellant under Mining Service. Construction of Residential Complex Services - HELD THAT:- The said service has been provided by the appellant along with the materials , the merits classification on the said services is Works Contract Service as held by the decision of the Hon ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] wherein the Hon ble Apex Court has held that he finding that Section 67 of the Finance Act, which speaks of gross amount charged , only speaks of the gross amount charged for service provided and not the gross amount of the works contract as a whole from which various deductions have to be made to arrive at the service element in the said contract. We find therefore that this judgment is wholly incorrect in its conclusion that the Finance Act, 1994 contains both the charge and machinery for levy and assessment of service tax on indivisible works contracts - thus, the merits classification for the said service is Works Contract Service , no demand has been made from the assessee under Works Contract Service - the demand confirmed under the category of Construction of Residential Complex Services is also not sustainable. Penalty - HELD THAT:- As no service tax is payable, therefore, the question of imposition of penalty on the assessee does not arise. Appeal allowed.
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Central Excise
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2023 (9) TMI 918
Refund of amount deposited during the course of investigation - The issue of levy of Excise Duty is pending for adjudication - purified/ graded Hydrogen gas supplied by M/s. Vadilal Gases Limited to M/s. Vadilal Chemicals Limited prior to 01.03.2008 - Valuation of Central Excise Duty - related party transaction or not - value of clearances of hydrogen gas effected/ sold by M/s. Vadilal Chemicals Limited directly to their customers or from their depots should be taken for the purpose of calculation of Central Excise duty or not. Dutiability of the purified/ graded Hydrogen gas prior to April 2008 - HELD THAT:- The matter has been decided by Hon ble Supreme Court in the appellant s own case COMMISSIONER OF CENTRAL EXCISE, VADODARA VERSUS M/S VADILAL GASES LTD. ORS. [ 2017 (1) TMI 1311 - SUPREME COURT ] where it was held that the Tribunal has rightly observed that if no treatment was given to the gas purchased by the appellant, the customers of the appellant would not have been purchasing helium from the appellant at a price 40% to 60% above the price at which the appellant was purchasing. The issue regarding determining whether the related party transaction exist in this case or not, as per Section 4(1) (b) of Central Excise Act, 1944 read with Rule 9 of Central Excise (Valuation) Rules, 2000 is concerned, since the matter has already been remanded back to the original adjudicating authority by impugned order-in-appeal dated 31.03.2015, the Adjudicating Authority while deciding related party issue should also re-adjudicate the matter of dutiability of the purified/ graded Hydrogen gas as per the Hon ble Supreme Court decision in the appellant s own case COMMISSIONER OF CENTRAL EXCISE, VADODARA VERSUS M/S VADILAL GASES LTD. ORS. [ 2017 (1) TMI 1311 - SUPREME COURT ]. Since the matter has already been remanded back by the Commissioner (Appeals) to the original adjudicating authority and forgoing paras, the entire issue needs to be decided afresh by the lower authorities. The issue with regard to refund should also be clubbed with the main issue and need to be decided by the competent Adjudicating Authority. In view of above, this matter is also remanded back to the Additional Commissioner for taking up the issue pertaining to refund amount deposited during the course of investigation while deciding the main show cause notice. Appeal allowed by way of remand.
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2023 (9) TMI 917
Availability of benefit of exemption subject to conditions - Notification No. 06/2006 dated 01.03.2006 - procedure laid down under Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 followed - Clearance of goods on the basis of a Certificate given by the Deputy Commissioner of Central Excise having jurisdiction over the customer M/s Natura Green Foods Products Private Limited - HELD THAT:- This Bench in the case of M/S. HERO ELECTRIC VEHICLES PVT. LIMITED VERSUS COMMISSIONER OF CUSTOMS, LUDHIANA [ 2018 (6) TMI 141 - CESTAT CHANDIGARH] held that goods having essential character of the items listed under Notification No.06/2006 dated 01.03.2006 are eligible for exemption. Hon ble Apex Court has upheld this decision. Moreover, Tribunal in the case of M/S. RAVIN CABLES LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-III [ 2017 (2) TMI 375 - CESTAT MUMBAI] held that the liability to discharge duty is on the end-user of goods. Thus, it is evident that the appellants have availed the exemption contained in Notification No.06/2006 dated 01.03.2006 only after the receipt of a Certificate issued by the jurisdictional Deputy Commissioner, in charge of their customer. The Department has not got the Certificate nullified/ modified/ withdrawn. Therefore, in view of the settled legal position, the Department has not made out any case for recovery of duty from the appellant - even if it is held that the appellant is not eligible to avail the exemption, their customer is liable to pay duty in terms of the bond. On this count also, duty cannot be confirmed on the appellants. The impugned order is not sustainable and the same is set aside - Appeal allowed.
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2023 (9) TMI 916
Levy of penalty under Rule 26 of the Central Excise Rules , 2002 - clandestine removal - evasion of duty - HELD THAT:- It is found that whether the appellant have cleared the goods to M/s Paras Bhavani Steel Pvt. Ltd., Ahmedabad clandestinely or otherwise, It can be decided only after the adjudication of the show cause notice dated 03.10.2012 issued to M/s. Laxcon Steels Ltd. and others. However, the said show cause notice is pending for adjudication. In these circumstances, deciding this appeal at this stage shall be premature as the entire case is based on clandestine removal of raw material of M/s Paras Bhavani Steel Pvt. Ltd., Ahmedabad by M/s Laxcon Steel Ltd. The matter involved penalty against the present appellant should be re-adjudicated only on the basis of the outcome of the show cause notice F. No. DGCI/AZU/36-228/2012-13-2829 dated 03.10.2012. Accordingly, the penalty against the appellant is set aside for time being and matter remanded to the Adjudicating Authority to decide this matter after the outcome of the show cause notice dated 03.10.2012 issued to M/s. Laxcon Steels Ltd. The appeal is allowed by way of remand to the Adjudicating Authority.
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2023 (9) TMI 915
Payment of interest on Central Excise duty - revenue neutrality - HELD THAT:- It is an admitted fact that it is a case of revenue neutrality, which means whatever duty has been paid by the appellant and the same is entitled as cenvat credit to the appellants themselves. As it is a revenue neutral situation, it is held that no interest is payable by the appellant as held by this Tribunal in the case of M/S. JAI BALAJI INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, BOLPUR [ 2023 (6) TMI 1102 - CESTAT KOLKATA] wherein it has been held that we hold that it is the revenue neutral situation, no duty is payable by the appellant therefore whatever duty paid by the appellant Cenvat credit of the same has been availed by the sister unit, question of payment of interest does not arise. Thus, no interest is payable by the appellant as it is a revenue neutral situation. Accordingly, the demand of interest is set aside - appeal allowed.
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2023 (9) TMI 914
Waste item or not - fatty acids, acid oils, gum and sludge, waxes and spent earth etc. - benefit of N/N. 89/95-CE dated 18.09.1995 denied - Applicability of the Notification No.10/96 dated 23.07.1996 to the plastic/ tin containers manufactured by the appellants - HELD THAT:- The issues raised in the impugned orders are no longer res integra after the decision of the Larger Bench in the case of M/S RICELA HEALTH FOODS LTD., M/S J.V.L. AGRO INDUSTRIAL LTD., M/S KISSAN FATS LIMITED VERSUS CCE, CHANDIGARH, ALLAHABAD [ 2018 (2) TMI 1395 - CESTAT NEW DELHI] where it was held that the removal of unwanted materials resulting in products like gums, waxes and fatty acid with odour cannot be called as a process of manufacture of these gums, waxes and fatty acid with odour. The process of manufacture is for refined rice bran oil. As submitted by both sides, the decision of Larger Bench was affirmed by the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I VERSUS MARICO LTD. [ 2022 (10) TMI 1174 - SC ORDER] . Coming to the Department s contention that the decision in the case of COMMISSIONER OF CENTRAL EXCISE, JALANDHAR VERSUS AG FLATS LTD. [ 2011 (7) TMI 968 - CESTAT, NEW DELHI] , which was affirmed by Hon ble Supreme Court, was not discussed by the Larger Bench will not be of any avail as the decision in the case of M/s Marico Limited is the latest one and requires to be followed, therefore, by following the principles of judicial discipline, it is opined that waste, gums, fatty acids etc. arising during the course of manufacture of vegetable oils are eligible for the exemption Notification No.89/95. Applicability of the Notification No.10/96 dated 23.07.1996 to the plastic/ tin containers manufactured by the appellants - HELD THAT:- Whatsoever, that plastic/ tin containers manufactured and used for packing of the final products i.e. vegetable oils are eligible for exemption Notification No.10/96 dated 23.07.1996. All the appeals are allowed.
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2023 (9) TMI 913
Valuation of manufactured goods - to be valued under Section 4A or section 4 of the Central Excise Act, 1944? - Physician sample of Medicaments sold to the dealer for free distribution to the Doctors on which not for sale is mentioned - HELD THAT:- The appellant have manufactured and cleared the goods i.e. Physician sample mentioning clearly on the pack that it is not for sale. Since the goods is not for sale and no MRP is affixed on the product, the goods cannot be valued under Section 4A as the same is not for retail sale. Accordingly, the correct provision for valuation of physician sample is section 4, where the Excise duty is payable on the transaction value. This issue is no longer res-integra as the same has been finally decided by the Hon ble Supreme Court in the case of COMMR. OF CENTRAL EXCISE CUSTOMS, SURAT VERSUS M/S SUN PHARMACEUTICALS INDS. LTD. ORS. [ 2015 (12) TMI 670 - SUPREME COURT] the relevant order of the Hon ble Apex Court has held that Excise duty is payable in terms of section 4(i)(a) not under section 4A but on pro rata value of good cleared under section 4A i.e. on the transaction value between the assessee and distributor to whom, the physician samples were sold. In view of the above Hon ble Supreme Court judgment in the appellant s own case issue is finally settled in favour of the appellant. Appeal allowed.
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2023 (9) TMI 912
Process amounting to manufacture or not - appellant has been receiving basic raw materials from their principals and were fabricating the goods - Levy of personal penalty on Managing Director - HELD THAT:- The detailed findings show that the appellant was indeed engaged in activity amounting to manufacture in terms of Section 2(f) of CE Act 1944 and has also indulged in suppressing the facts which have come to light because of the investigation undertaken by the Department. Accordingly, there are no merits in the Appeal filed by the appellant, both on account of merits as well as on account of limitation. The Appeal filed by Sri Sai Ram Industrial Equipments Pvt Ltd is dismissed. In case of personal penalty imposed on Shri K. Rambabu, Managing Director, since the Adjudicating Authority has not brought out the role of appellant resulting in the non-payment of service tax which nevertheless is a negligence on his part, the penalty of Rs 5,00,000/- is reduced to Rs 1,00,000/-. Appeal disposed off.
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CST, VAT & Sales Tax
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2023 (9) TMI 911
Refund of excess Input Tax Credit - purchases from dealers covered by the Deferment Scheme, 2005 notified under section 62 of HP VAT Act - presumptive taxation - it was held by High Court that the appellant is entitled for refund - HELD THAT:- There are no merit in the Special Leave Petition. SLP dismissed.
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