TMI Tax Updates - e-Newsletter
September 4, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
Indian Laws
Highlights / Catch Notes
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GST:
Input tax credit (ITC) - Section 16 of the CGST ACT, 2017 as amended - Reversal of credit after 180 days if not paid - Since upon payment of the due amount to the supplier, the recipient shall be eligible to avail ITC of the said amount, it is believed that liability to pay interest is too onerous and should be removed.
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GST:
Input tax credit (ITC) - Section 16 of the CGST ACT, 2017 as amended - “bill-to-ship-to” situations - the registered person is deemed to have received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of the said registered person - It is now proposed to provide this deeming fiction in case of services as well which will be taxpayer-friendly.
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GST:
Time of supply of services. - Section 13 of the CGST ACT, 2017 as amended - The amendment seeks to correct a drafting error as the provisions for issuance of invoices/other documents are also contained in other sub-sections of section 31.
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GST:
Time of supply of goods. - Section 12 of the CGST ACT, 2017 as amended - The amendment seeks to correct a drafting error in the earlier law, as the issuance of invoice/other documents are also contained in other sub-sections of section 31.
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GST:
Composition levy. - Section 10 of the CGST ACT, 2017 as amended - to allow the composition taxpayers to supply services (other than restaurant services), for up to a value not exceeding ten per cent. of turnover in the preceding financial year, or five lakh rupees, whichever is higher.
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GST:
Composition levy. - Section 10 of the CGST ACT, 2017 as amended - The limit is being raised from ₹ 1 crore to ₹ 1.5 crore as a measure of trade facilitation, as already recommended by the GST Council.
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GST:
Levy and collection of GST on Reverse charge Basis - Section 9(4) of the CGST ACT, 2017 as amended - Government enabled to notify a class of registered persons who would be liable to pay tax on reverse charge basis in case of receipt of goods from an unregistered supplier
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GST:
Scope of supply - Section 7 of the CGST ACT, 2017 as amended - supply of goods or supply of services as referred to in Schedule II will be taxable supply only if they constitute supply u/s 7(1)
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GST:
Meaning and scope of the term "Services" - Definitions. - Section 2(102) of the CGST ACT, 2017 as amended - Although ‘securities’ has been excluded from the definition of ‘goods’ and ‘services’, if some service charges or service fees or documentation fees or broking charges or such like fees or charges are charged in relation to transactions in securities, the same would be a consideration for provision of service and chargeable to GST.
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GST:
Local Authority - Definitions. - Section 2(69) of the CGST ACT, 2017 as amended - Article 371J of the Constitution grants special status to 6 backward districts of Karnataka - Hyderabad region. - It is being added now based on the request received from the State of Karnataka.
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GST:
Cost Accountant Definitions. - Section 2(35) of the CGST ACT, 2017 as amended - To correct an inadvertent typographical error.
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GST:
Business vertical - Definitions. - Section 2(18) of the CGST ACT, 2017, as amended - Clauses (18) omitted.
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GST:
Business - Definitions. - Section 2(17)(h) of the CGST ACT, 2017 as amended - to ensure that all activities related to a race club are included. - The term “services” (Now deleted) in this clause leads to ambiguity, as actionable claims have been defined as ‘goods’ in the CGST Act.
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GST:
Adjudicating authority - Definitions. - Section 2(4) of the CGST ACT, 2017 as amended - National AntiProfiteering Authority constituted by the Central Government under section 171 of the CGST Act excluded from the definition of ‘adjudicating authority’ - Reference ot CBEC changed to CBIC
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Income Tax:
Selective approach of the department result in revenue leakage or perpetuation of wrongs affecting adversely the collection of revenue. The public at large is at a loss to understand as to why the Department/Revenue consistently loses the battle in the higher Courts. This could be then termed as a deliberate or intentional act.
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Income Tax:
TDS liability on Interest u/s 194A - Since there is neither any borrowing of money nor incurring of debt on the part of the assessee, in the present factual scenario, interest as defined under section 2 (28A) of the Act can have no application to such payments.
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Income Tax:
The entire contributions paid by the appellant/assessee to the LIC as premium for the policy obtained for indemnification of the gratuity liability towards the employees even for the prior years, when the employees were in the employment of the Company taken over would be eligible for deduction under Section 36(1)(v).
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Income Tax:
Claim of depreciation - Revision u/s 263 - Since such issue in respect of the same immovable property had been conclusively dealt with in orders passed by authorities superior to the Commissioner, the Commissioner, in exercise of his powers u/s 263 of the Act, could not have reopened the same issue. It was a closed chapter
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Income Tax:
Depreciation on assets - temporary building - The fact that WBSEB and WBSEDCL had claimed depreciation at 10% on these temporary structures cannot be the basis to disallow a legitimate claim of depreciation at 100% on temporary structures which is otherwise allowable to the assessee in law.
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Income Tax:
Disallowance of loss on Joint Venture in USA which was written off during the year by the appellant - AO directed to delete the additions.
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Income Tax:
Reopening of assessment - Assessing Officer framed the impugned order within 16 days of disposing of the objections of the assessee - AO should have allowed four weeks’ time to the assessee to seek their legal remedies after rejection of the objections of the assessee.
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Income Tax:
Netting off of interest is permissible. Interest earned from the bank and interest paid to the bank has to be netted off and only surplus interest becomes income of the assessee.
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Income Tax:
Section 40((a)(ia) refers to commission payable to a resident. Hence, this provision is not at all applicable. Section 40(a) is applicable in respect of payments to non-resident - the sum is commission and the word commission is not specifically mentioned in Section 40(a) - No addition can be made u/s 40(a) for non-dedcution of TDS on commission paid to non-resident.
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Income Tax:
Reopening of assessment - Any assessment year wherein further proceedings are barred by limitation, the same cannot be reopened merely by virtue of an opinion expressed by any higher forum at a later date i.e. subsequent to the date of limitation period.
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Income Tax:
Meaning of "balance-sheet" in relation to any company, not being an Indian company, defined - Meaning of expressions used in determination of fair market value (FMV) - Rule 11U of the Income-tax Rules, 1962 as amended.
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Income Tax:
Determination of fair market value (FMV)for inventory for the purpose of Section 28(via) - conversion of stock-in-trade / business assets into Capital Assets - Rule 11UAB of the Income-tax Rules, 1962
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Customs:
Recovery of Short Levy - Tribunal has not cared to examine the order of the Development Commissioner and has merely relied on the fact that there was dropping of the proceedings without verifying as to which proceeding was dropped by the Development Commissioner.
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Customs:
Refund of SAD - N/N. 102/2007-Customs - rejection on the ground that the claim was beyond the time limit of one year from the date of payment of duty - The appellant is eligible for refund, despite the fact that its claim of refund was belated (by 10 days) - Refund allowed.
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Indian Laws:
Dishonor of Cheque due to insufficiency of funds - it was necessary for the complainant to specifically aver and demonstrate as to how each one of accused directors were incharge and responsible for the conduct of the business of accused company. Therefore, the order of issuance of process passed by the learned Magistrate cannot be allowed to be sustained.
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Service Tax:
Service Tax Audit - Vires of sub-rule (2) of Rule 5A of the Service Tax Rules, 1994 as substituted by notification no. 23/24/ST - it would be appropriate to grant interim stay of the proceedings.
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Service Tax:
Construction of Road - If the contract recognizes the two activities as separate activities, even though the construction of the road is in connection with the commercial complex, the benefit has to be allowed. As such the fact whether the road is being constructed for public utility purpose or as a part of a commercial complex is not relevant.
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Service Tax:
Extended period of limitation - non-payment of service tax and the payment of service tax along with interest was made only after detection by the department - as per sub-Section (4) of Section 73, the benefit of Section 73(3) is not available to the appellant - Demand with penalty confirmed.
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Service Tax:
Reversal of cenvat credit - Input Service - the deposit by way of reversal cannot be held to be a delayed deposit. Thus, question of any interest and penalty thereof does not at all arise.
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Service Tax:
Classification of services - Erection, Commissioning and Installation Services or Works Contract Services? - Providing the said services to government organisation - they are not engaged in any commerce, industry or any other business or profession - benefit of exemption allowed.
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Central Excise:
100% EOU - Clandestine manufacture and removal - If there were excess sale of copper ingots other than what is provided in the statutory records of the appellant-assessee then some investigations should have been done to prove it
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Central Excise:
Valuation - MRP based Valuation - The adoption of MRP from the website of ‘BESTON-S’ brand is nowhere justified in the light of the market enquiry conducted by the Department which supports the quotations submitted by the Appellant of the comparable brand
Articles
Case Laws:
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GST
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2018 (9) TMI 119
Migration to GST Regime - problem in filing GST Returns - Held that:- Issue notice of the writ petition as well as stay application to the respondents returnable in four weeks.
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2018 (9) TMI 118
Levy of CGST, SGST and IGST - duty free shops at international airports in India - seeking of interim direction be issued to the Board through member GST to issue necessary clarification regarding eligibility of refund of accumulated credit of CGST, SGST and IGST paid by the duty free shops on goods and services supplied by the Indian supplier. Held that:- The learned Counsel for the respondents is directed to seek instructions from the Board for issuance of clarification and response - List immediately after ten days.
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Income Tax
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2018 (9) TMI 117
Non removal of office objections by revenue - Tribunal has followed its view for the Assessment Year 2009-2010 and applied it for the Assessment Year under consideration, namely, 2010-2011 - Held that:- On numerous occasions, this Court has brought to the notice of the Department of Revenue, Ministry of Finance, Government of India through the Commissionerates that the Revenue has been selective in its approach. It picks either the assessee or the assessment years pertaining to that assessee for challenging the orders in relation to them, before the higher forums. This results in revenue leakage or perpetuation of wrongs affecting adversely the collection of revenue. The public at large is at a loss to understand as to why the Department/Revenue consistently loses the battle in the higher Courts. This could be then termed as a deliberate or intentional act. If the Department of Revenue, Ministry of Finance, Government of India is going to conveniently overlook this and not bring the guilty persons to book by initiating disciplinary measures against them, then, no purpose will be served at all. We know that the Appeal for the prior Assessment Year may not be properly drafted or does not contain the relevant details, much less the precise question of law and if that is dismissed, there will be definitely an impact on the Appeal relating to the Assessment Year under consideration. Hence, this is not a short term exercise, but a major surgery which will have to be performed.
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2018 (9) TMI 116
Settlement Commission order - visit by the Chairman of the Settlement Commission in Mumbai on 2nd August, 2018 - Held that:- We find that the Petitioners are not precluded from challenging the manner in which the Chairman intervened in this matter at a later stage. We would not like to interfere with the pending proceedings for then we would commit the same mistake, if at all, committed by the learned Chairman. It would not be proper to presume at this stage that the Proceedings are necessarily going to an end, with final orders, but adverse to the Petitioners’ interests. For all we know the settlement may go through to the satisfaction of all parties before the Settlement Commission. In the event the apprehension comes true and the Chairman’s meeting and discussion with the members of the Commission results in an adverse order as apprehended, then, while challenging such final orders and if they are found to be influenced by the Chairman’s alleged uncalled for and undue intervention, the Petitioners can raise appropriate pleas and urge before this Court that they have not been dealt with fairly by the Settlement Commission. There is a uncalled for interference in judicial proceedings and none including the Chairman can direct a particular course of action to be taken or a particular order being passed in pending judicial proceedings. Thus, the out-come of judicial proceedings cannot be controlled in this manner. We keep open all such pleas of the Petitioners, despite their participation in the hearing before the larger Bench. In the event the final orders are adverse, then, amongst other grounds to challenge them, the Petitioners can raise appropriate pleas in relation to the impugned Communications.
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2018 (9) TMI 115
Assessment u/s 153A - time barred assessment - Held that:- It was not necessary that the special audit report should be received within the period of limitation to avail the benefit of clause (iv) to Explanation 1 and the first proviso to Section 153, rather receipt of the special audit report beyond the original time prescribed would not matter in view of the exclusion under clause (iv) to Explanation 1. Time or period excluded is not counted and accordingly the period of limitation is to be computed. Further, benefit of the first proviso cannot be denied when upon exclusion, the time left for passing an order is less than sixty days. Clause (iv) to Explanation 1 and the first proviso would certainly apply in the present case as special audit was directed by the Assessing Officer before the expiry of prescribed period and only six days were left to complete the assessment. Statutory time period is fixed by the Act. The same enactment can also provide for exclusion of period, and extension of time. We must abide by the legislative enactment. Substantial question of law is answered in favour of the appellant-revenue and against the respondent-assessee. The draft assessment order was passed within the prescribed time and was not barred by limitation.
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2018 (9) TMI 114
TDS liability - Payment of interest on delayed delivery of plot - nature of interest as defined in Section 2(28A) - provision of Section 40(a)(ia) applicability - Held that:- The payment made by the assessee to the allottee was in terms of the agreement entered between them where the liability of the assessee would arise only if it failed to make the plots available within the stipulated time. Hence, the payment made under the relevant clause was purely contractual and as rightly held by the Tribunal, in the nature of compensation or damages for the loss caused to the allottee in the interregnum for being unable to utilise or possess the flat. The flavor of compensation becomes evident from the words used in the particular clause. The expression interest used in Clause 7 may be seen merely as a quantification of the liability of the assessee in terms of the percentage of interest payable by the State Bank of India. Since there is neither any borrowing of money nor incurring of debt on the part of the assessee, in the present factual scenario, interest as defined under section 2 (28A) of the Act can have no application to such payments. There was no obligation on the part of the assessee to deduct tax at source and consequently no disallowance could have been made under section 40(a)(ia) of the Act. - decided in favour of assessee
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2018 (9) TMI 113
Allowable deduction u/s. 36(1) (v) r. w. Rules 104 or u/s. 37 - initial contribution to approved gratuity fund in respect of employees taken over; for the period they were employed with the previous employer, on the basis of contract of employment entered into at the time of take over - Held that:- Rule 104 comes in Part XIV of the Income Tax Rules, 1962 under the head “Approved Gratuity Funds” permitting any initial contribution made by an employer to a fund constituted even in respect of past services of an employee admitted to the benefits of a fund, to the extent of 81/3 % of the employee's salary for each year of his past service with the employer. The Assessing Officer and the appellate authorities seem to have laboured under the misapprehension that the words 'employed with the employer' would take in only the benefits accrued under a particular employer. The entire contributions paid by the appellant/assessee to the LIC as premium for the policy obtained for indemnification of the gratuity liability towards the employees even for the prior years, when the employees were in the employment of the Company taken over would be eligible for deduction under Section 36(1)(v). We answer the question of law in favour of the assessee and against the Revenue.
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2018 (9) TMI 112
Allowability of provisions for warranty expenses - Held that:- We cannot accept the Revenue’s submission that such expenditure goes outside purview of Section 37 of the Act. Next question, which was urged, was that the sum claimed was made on the basis of the arbitrary estimate. But we find both the Commissioner and Tribunal found the estimation to be reliable. It is finding of the Tribunal that the assessee had filed the data on the basis of which the provisions of warranty expenses was made but the same was not considered by the assessing officer. Hence, we do not want to interfere with their findings on facts. In our opinion, issue raised by the Revenue is covered by the decision of the Hon’ble Supreme Court of India in the case of Rotork Controls India Pvt. Ltd. [2009 (5) TMI 16 - SUPREME COURT OF INDIA] and no substantial question of law arises in this appeal.
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2018 (9) TMI 111
Revision u/s 263 - capital gain addition - Held that:- It was only after the apportionment of the areas upon the construction on the land being completed that the developer could have rightfully retained possession of the developer’s 61% share and resisted dispossession by discharging his obligation under the agreement and seeking refuge in terms of Section 53A of the Act of 1882 despite the formal conveyance pertaining to the developer’s entitlement not having being executed. In any view of the matter, the right of the developer to retain possession and protect such possession under Section 53A of the Act of 1882 could never have arisen prior to the construction being completed and the apportionment effected. There is also a minor matter of the opening words of Section 45 of the Act of 1961 being given some effect while reading such provision. In terms of Section 45(1) of the Act, the expression “chargeable to income tax under the head "Capital gains”, operates on “Any profits or gains arising from the transfer of a capital asset …”. There can be no tax payable unless there is any profit or gain that has arisen. It could never have been the Revenue’s case that there was any monitory profit or gain that accrued to the assessee at the time of the execution of the agreement of February 7, 2007. In the light of the discussion above, the first ground urged by the Revenue does not appeal and the order of the Appellate Tribunal does not call for any interference as it set aside the erroneous view taken by the Commissioner in the order passed under Section 263 of the Act. Claim of depreciation - whether the land had to be regarded as a current asset which could be dealt with by the assessee in its usual course of business or it had to be treated as a fixed asset of the assessee, probably deriving income - Held that:- CIT (Appeals) passed an order on such aspect of the matter on August 20, 2010 and on September 8, 2011 the Tribunal passed its order, holding that the immovable property had to be regarded as a fixed asset of the assessee and depreciation calculated accordingly. Since such issue in respect of the same immovable property had been conclusively dealt with in orders passed by authorities superior to the Commissioner, the Commissioner, in exercise of his powers u/s 263could not have reop ened the same issue. It was a closed chapter and the Assessing Officer’s acceptance of the quantum of depreciation based upon the assessee’s representation that such asset had to be treated as the assessee’s fixed asset could not have been questioned.
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2018 (9) TMI 110
Reopening of assessment - employee’s contributions of provident fund - Time period for filing an annual return under Section 139(1) - Held that:- In the facts of present case, the employee’s portion of the provident fund was paid on August 8, 2006. It was paid within the due date for filing the annual return for the financial years. Therefore, the petitioner was entitled to the deductions as claimed before the assessing officer. In the facts of the present case, the assessing officer had a tax audit report which disclosed the deductions claimed by the petitioner. It had shown, in the tax audit report that, the employee’s contributions of provident fund for the month of June 2006 was paid in the month of August 2006. Since the payment was made within the time period for filing an annual return under Section 139(1) of the Act of 1961, it cannot be said that there was any delay on the part of the petitioner to claim the deduction. Moreover, there was no new material before the assessing officer to form an opinion under Section 147 of the Act of 1961. - Decided in favour of assessee
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2018 (9) TMI 109
Disallowance u/s 14A r.w.r. 8D - Tribunal invalidating the decision of AO who disallowed certain expenditure claimed by the assessee under Section 14A - Held that:- No reason to interfere with the Tribunal’s decision on the same issue in relation to assessment year 2007-08, when Rule 8D of the Income Tax Rules 1962 had not become operational and the Tribunal found on fact that the expenditure already disallowed was sufficient. Apply the block assets concept in respect of certain properties of the assessee - Tribunal opined that block assets concept ought to be applied in terms of Section 32 in case of the assessee - No error in law on the part of the Tribunal in its decision on this point. Determination of annual value of certain property of the assessee, being a firm house near New Delhi - Held that:- The assessing officer had undertaken a valuation exercise to come to his conclusion that the rent disclosed by the assessee is much lower than the market value. He has referred to a website www. 99acres. com. from which he has referred to higher figures of rent. But this Court has consistently held that agreed rent would be the determinant factor for valuation and not the rent revealed from the market search. The authorities on this point are Commissioner of Income Tax Vs. Kishanlal and Sons (Udyog) Pvt. Ltd. [2002 (10) TMI 62 - CALCUTTA HIGH COURT] and Commissioner of Income Tax vs. Indra Co. Ltd. [2003 (12) TMI 25 - CALCUTTA HIGH COURT]. The point urged by the Revenue is thus covered. We decline to admit the appeal of the Revenue on this point also. We admit the appeal on the following point, which in our opinion, involves substantial question of law:- “Whether the assessing officer had properly construed the provisions of Section 14A in rejecting the assessee’s claim of deduction for business expenditure and applying the formula in Rule 8D of the Income Tax, 1962, which decision was ultimately overruled by the Tribunal?"
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2018 (9) TMI 108
TDS u/s 194C - payment of transmission charges by the assessee to the West Bengal Power Development Corporation Ltd. - Held that:- The assessee is engaged in the business of transmission of power from the power generating companies in West Bengal to the distribution companies. It is clear from the order of Tariff Regulatory Commission that the amount in question is not in the nature of transmission charges. Therefore the very basis on which the AO proceeded to make the disallowance by holding that the payment in question was liable to TDS u/s 194C of the Act was erroneous. Once it is held that the provision of section 194C of the Act is not attracted as a natural corollary no disallowance can be made u/s 40(a)(ia) of the Act. - decided in favour of assessee Depreciation on assets classified as temporary building - Held that:- Both the Commissioner and the Tribunal came to concurrent finding that the structures of the assessee ought to be treated as purely temporary erections such as wooden structures. The Commissioner, in his order, observed that the temporary structures comprised of wooden structures with asbestos roofs constructed for facilitating the transmission works of the appellant and decided the issue in favour of the assessee.This finding of CIT(A) has not been contested as incorrect by the revenue. The fact that WBSEB and WBSEDCL had claimed depreciation at 10% on these temporary structures cannot be the basis to disallow a legitimate claim of depreciation at 100% on temporary structures which is otherwise allowable to the assessee in law. We are therefore of the view that the conclusions of CIT(A) on this issue do not call for any interference - decided in favour of the assessee
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2018 (9) TMI 107
Revision u/s 263 - records did not reveal any inquiry being conducted by the Assessing Officer - Held that:- n the revisional authority’s order, there is no specific discussion on the question as to whether the assessee comes within the ambit of Section 70 of the 1961 Act or not and the revisional authority appears to have proceeded on the basis of that the assessee’s case is covered by Section 73 of the Act. The main reasoning of the Commissioner exercising his jurisdiction under Section 263 of the Act for remanding the matter to the Assessing Officer was that the records did not reveal any inquiry being conducted by the Assessing Officer. The Tribunal, however, found on fact that such inquiry was made and this appears from the above quoted passages of the decision of the Tribunal. In course of hearing Mr. Mitra contended that the fact that such inquiry was made did not appear from the assessment order and hence, there was no error in the decision of the Commissioner. But that is not the specific factor which had persuaded the Commissioner to remand the matter. As we have already observed, the Commissioner’s view was that no inquiry was made. The Tribunal found otherwise. In the event such inquiry was made, we do not think it was necessary that the nature and scope of such inquiry ought to have been clearly spelt out in the assessment order. Tribunal has come to a finding that the Assessing Officer did make sufficient inquiry and on law also, the Tribunal has given its finding. We do not find the decision of the Tribunal to be erroneous.
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2018 (9) TMI 106
Revision u/s 263 - expenditure on commission on sale - Held that:- Discount allowed to wholesale dealers from the listed retail price and commission paid to the selling agents did not come within the purview of Section 37(3A) inasmuch as trade discount merely represents lesser realisation of the sale price itself and the commission paid to selling agents are actual selling expenses. The order of assessment has considered disallowance under Section 37(3A), dealt with it elaborately and has given reasons for its findings. The revisional authority is incorrect when it say that the assessing officer did not consider disallowance under Section 37(3A) of the Income Tax Act, 1961. The first ground in the impugned notice is not available to the department to claim that, there is an error of assessment and that, the same has resulted in prejudice to the department. Question of disallowance under Section 37(3A) in the present case, it appears that, the jurisdictional facts required for the purpose of the revisional authority to invoke jurisdiction under Section 263 of the Act of 1961 were not present. In fact, as on the date of issuance of the notice, the second ground based on Shri Shubhlaxmi Mills Ltd. (1989 (3) TMI 2 - SUPREME COURT) may have been available to the revisional authority. However, the subsequent amendments to Section 37(3A) with retrospective effect, took the same way also. As the writ petition is pending since 1990, no useful purpose would be subserved by requiring the petitioner to reply to the show cause notice for the purpose envisaged under the Act of 1961 to decide thereon.
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2018 (9) TMI 105
Deduction u/s 80HHC - face value of Duty Entitlement Pass Book Scheme (DEPB) would fall under Section 28 (iiib) - differential between the sale value and face value of such instruments would fall under Section 28(iiid) thereof or not - Held that:- Following an earlier decision of the Tribunal in the assessee’s own case for the assessment year 2003-04, the Tribunal remanded the matter to the assessing officer for re-computation. In the decision of the Hon’ble Supreme Court of India in the case of TOPMAN EXPORTS Vs. COMMISSIONER OF INCOME TAX [2012 (2) TMI 100 - SUPREME COURT OF INDIA] it has been held that when DEPB is sold by a person, his profit on transfer thereof less its face value would represent the cost of the said instrument and not the entire sum received by him. Nature of expenditure - whether expenditure for laying down power evacuation line to connect the assessee’s plant to the grid belonging to the State Electricity Board would constitute revenue expenditure or capital expenditure? - Held that:- In CIT –vs- Gujarat Mineral Development Corporation (1997 (9) TMI 101 - SUPREME COURT) it was held that amount paid to Electricity Board for laying electric cables and electric supply transmission lines etc. for assessee’s benefication plant for separating waste material from useful material was held to be of revenue expenditure. In National Organic Chemical Industries Ltd. –vs- CIT (1993 (2) TMI 48 - BOMBAY HIGH COURT), it was held that expenditure on construction of jetty for facilitating trading operation of the assessee is a revenue expenditure in spite of the fact that the property of the jetty is to remain with the government but the assessee was responsible to keep the jetty in good order.
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2018 (9) TMI 104
Assessment u/s 153A - Held that:- In view of the law laid down by Hon’ble jurisdictional High Court in Kabul Chawla (2015 (9) TMI 80 - DELHI HIGH COURT) case, we are of the considered view that when no incriminating material has come on record during the search and seizure operation conducted at the premises of the assessee rather assessment has been based upon special audit report whereas such facts were already brought on record by the assessee by filing original return of income along with computation, the assessment framed u/s 153A read with section 143 (3) is not sustainable in the eyes of law, hence the assessments for AYs 2002-03 & 2003-04 are ordered to be quashed.
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2018 (9) TMI 103
Disallowance of loss on Joint Venture in USA which was written off during the year by the appellant - Held that:- The Hon'ble Bombay High Court in a similar case in CIT Vs. Colgate Palmolive [India] Ltd [2014 (12) TMI 846 - BOMBAY HIGH COURT] held the company wrote off loss on sale of shares and the facts of the case in hand show that the assessee could not recover investment amount on liquidation of joint venture company thereby sustaining a loss of ₹ 2,92,23,186/-. Finding parity in the facts of the case in hand with the facts considered by the Hon'ble High Court of Bombay [supra], we respectfully following the decision of the Hon'ble Bombay High Court [supra] , set aside the order of the CIT(A) and direct the Assessing Officer to delete the addition of ₹ 2,92,31,861/-. - decided in favour of assessee
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2018 (9) TMI 102
Reopening of assessment - Assessing Officer framed the impugned order within 16 days of disposing of the objections of the assessee - Held that:- The answer is given by the coordinate bench in the case of Metaplast Engineering P. Ltd [2018 (4) TMI 1558 - ITAT DELHI] wherein the co-ordinate bench has considered the judgment of the Hon'ble Bombay High Court in the case of Bharat Jayantilal Patel [2015 (5) TMI 950 - BOMBAY HIGH COURT] wherein held learned AO should have allowed four weeks’ time to the assessee to seek their legal remedies after rejection of the objections of the assessee. The assessment order dated 30.12.2016 framed u/s 147 r.w.s 143(3) of the Act is bad in law and deserves to be quashed. - decided in favour of assessee
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2018 (9) TMI 101
Maintainability of appeal - monetary limit - Held that:- It is observed that the demand/ tax effect in the Revenue’s appeal in question is below ₹ 20.00 lacs . Under the powers vested by section. 268A(1) of the I T Act, CBDT has recently issued Circular No. 3/2018 dated 11th July, 2018 (F No. 279/Misc. 142/2007-ITJ(Pt) instructing the authori ties below that departmental appeal should not be filed before ITAT where the demand/tax effect does not exceed ₹ 20 lacs. The circular is specifically mentioned to be applicable for all pending appeals. Subject to some exceptions, it is further directed by CBDT that all the departmental appeals pending before ITAT where the demand/tax effect is not exceeding than 20 lacs should be either withdrawn or not pressed by the departmental representatives. The present appeal is not covered by any exceptions mentioned in the said CBDT circular. Since the tax demand in dispute in this departmental appeal is below the limit set out by CBDT for the appeal, the appeal of the assessee is not maintainable in view of CBDT Circular No. 3 of 2018 dated 11.07.2018.
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2018 (9) TMI 100
Disallowing set off of interest income - netting off of interest - deduction for the payment of interest u/s 57 - Held that:- There is no dispute that the Assessing Officer has himself accepted that the Fixed Deposits made in ING Vysya Bank were out of the surplus funds of bank loans. Hon'ble Supreme Court in the case of ACG Associated Capsules [P] Ltd [2012 (2) TMI 101 - SUPREME COURT OF INDIA] has categorically held that netting off of interest is permissible. Interest earned from the bank and interest paid to the bank has to be netted off and only surplus interest becomes income of the assessee. Assuming, yet not accepting that interest earned by the assessee has to be taxed under the head income from other sources, then also the assessee is entitled for deduction for the payment of interest u/s 57 of the Income tax Act, 1961. Thus Interest income has to be netted off and we direct the Assessing Officer to allow netting off of interest earned from interest paid. - decided in favour of assessee
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Customs
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2018 (9) TMI 98
Jurisdiction - power of Additional Director General, Directorate of Revenue Intelligence to issue SCN - Held that:- It appears that, the show cause notice is eight years old being issued on September 13, 2010. The petitioner did approach the writ Court earlier in WP No.7278(W) of 2013 which was disposed of by an order dated June 13, 2013. At that stage, the writ petitioner did not question the jurisdiction of the authority to issue the show cause notice - Navneet Kumar (supra) is under consideration by the appeal Court. In such circumstances, it is not minded to grant any order of stay of the proceedings at this stage - The authorities are at liberty to proceed with the show cause notice, in accordance with law. Needless to say that, such proceedings will abide by the result of the writ petition.
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2018 (9) TMI 97
Recovery of Short Levy - Is the finding of the CESTAT that the finding of the Commissioner (Appeals) is not correct in terms of the Board's circular as the Development Commissioner has satisfied himself with regard to the export obligation, legally sustainable in the facts and circumstances of the case especially when the customs department confirmed the demand only after getting the written approval from the Development Commissioner on 06.03.2002? Held that:- The unit had achieved export of ₹ 375.25 lakhs by 31.03.2000, but it did not achieve the stipulated NFEP by that date and therefore was not able to acquire the DTA sale entitlement. Upon which, the short levy was sought to be recovered from the respondent. The Commissioner of Appeals had also specifically spoken of the Development Commissioner's order dated 08.03.2002 dropping proceedings, which proceedings is stated to be confined to the review of export obligation of the applicant up to 31.03.2004. Despite the said finding, the Tribunal has not cared to examine the order of the Development Commissioner and has merely relied on the fact that there was dropping of the proceedings without verifying as to which proceeding was dropped by the Development Commissioner. The Tribunal had relied on Notification No.13/1981 to find that, without the Development Commissioner's sanction, there could be no levy of short duty collected by the Customs authorities. We do not see applicability of Notification at 31/1981 to Notification No.2/1995 and in any event, the Deputy Commissioner, who passed the original order, has by way of abundant caution ensured that the Development Commissioner's permission was obtained, as is evident from Annexure H - the order of the Tribunal is liable to be interfered with. Appeal allowed - decided in favor of Revenue.
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2018 (9) TMI 96
Jurisdiction of Appellate Tribunal - dilution of terms for provisional release - electronic goods - Whether the Appellate Tribunal has jurisdiction to dilute the security terms for provisional release of goods having regard to the provisions of Section 110A of the Customs Act read with Section 2(1) thereof? Held that:- Power for laying down the security terms and conditions has been vested under the Act in the adjudicating authority and the Board or the first and second Appellate Authorities have been specifically excluded from the ambit of the expression adjudicating authority - import of the provisions of Section 110A and 2(1) of the Act would remain confined to laying down the terms at the first instance and the exclusivity of the adjudicating authority to determine that question cannot extend to an appeal proceeding, where the decision of the adjudicating authority can be modified under the aforesaid provision of the statute. Main ground on which this decision is assailed on merit is that it was DRI who had conducted the search and seizure proceeding and without going through their materials on valuation, it was improper on the part of the Tribunal to lay down fresh security terms. We are satisfied that the Tribunal ought to have examined this question in greater detail. Neither the decision of the adjudicating authority nor the Tribunal reflect the manner in which valuation of goods were done, which had its impact in laying security terms. Matter remanded to the Tribunal setting aside the decision under appeal and direct the Tribunal to rehear the matter within a period of four weeks from the date of communication of this order - appeal allowed by way of remand.
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2018 (9) TMI 95
Refund of SAD - N/N. 102/2007-Customs dt.14.9.2007 as amended by N/N. 93/2008 dt.1.8.2008 - rejection on the ground that the claim was beyond the time limit of one year from the date of payment of duty - Held that:- In terms of Notification No.102/2007, an importer is entitled for refund of SAD that was levied at the time of import after he files necessary documents to prove that proper Sales Tax or VAT as the case may be, has been paid. As settled by various higher judicial forums, the purpose of imposing SAD is to protect and ensure collection of appropriate sales tax or VAT that is payable on imported goods, which is paid upfront at the time of imports. SAD is not credited and set off from the sales tax or VAT, which is refundable to an importer after ascertaining the appellant to appropriate Sales Tax / VAT. The appellant is eligible for refund, despite the fact that its claim of refund was belated (by 10 days) - appeal allowed - decided in favor of appellant.
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Corporate Laws
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2018 (9) TMI 99
Petition for winding up - proceedings deemed to have commenced - Held that:- The weight of authority is clearly in favour of the view that winding up proceedings would be deemed to have commenced on the date of recommendation by the BIFR that a Company be wound up and respectfully agree with the said view. In any event, whether one were to take as the relevant date to commence the winding up proceedings, the date of recommendation, i.e., 22nd January 2007, the date of receipt by this Court of the recommendation, i.e., 5th July 2007, or the date of admission of the winding up proceedings, i.e, 27th August 2009, the Consent Decree dated 9th July 2009 falls within the period stipulated in Section 531 of the Companies Act, 1956 for an enquiry as to whether a transaction constitutes a fraudulent preference. Apart from the fact that the Consent Decree itself is liable to be set aside, applicant also acquired no title or interest in the Satara Property merely by virtue of the attachment. Applicant is no more than an unsecured creditor who has no prior right in law over any other lender for payment out of the sale proceeds of the Satara property. The interest of all stakeholders would therefore be far better served if leave as sought for by applicant is refused and the property is sold by the Official Liquidator. The cause of action in favour of Official Liquidator can be held to be complete only on his becoming aware, from the suit proceedings, of the nature of the fraud perpetrated by applicant in collusion with the Company. As such the directions sought by Official Liquidator are clearly within time. Refund of amounts withdrawn - It is applicant’s case that Official Liquidator is, in any event, not entitled to apply for refund by applicant of the amounts withdrawn by it - The formulation of this argument is problematic. The distribution was effected not under orders passed by DRT - The order dated 21st April 2016 of this Court permitting such distribution was careful to qualify the order by the observation that it would be an interim arrangement subject to final outcome of the issue on status of the creditors of the Company (in liquidation) and that the order was being passed at the instance of Kotak Mahindra Bank and applicant and “without prejudice to the rights and contentions of the Official Liquidator”. As such, this order merely permitted an adhoc distribution of the sale proceeds and did not conclude any rights between the parties. Indeed, this issue regarding the illegality of the Consent Decree sought to be enforced by applicant was neither considered nor determined by either the DRT or this Court. (a) the leave sought by applicant under Section 446 of the Companies Act 1956 to enforce the Consent Decree dated 9th July 2009 is refused; (b) the Consent Decree dated 9th July 2009 is declared illegal and void as a fraudulent preference; and (c) applicant is directed to refund with interest at 12% p.a. the amount of ₹ 10,17,03,493/withdrawn by it from the sale proceeds of the Ambattur property.
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Insolvency & Bankruptcy
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2018 (9) TMI 121
Corporate Insolvency Resolution Process - default in repayment of the outstanding amount - default in payment of the financial debt - Held that:- In the case in hand the respondent company has committed default in repayment of the outstanding amount. In reply respondent company has not raised objection against admission of the present application filed by the financial creditor. That apart the present application of the financial creditor is complete and there is no disciplinary proceeding pending against the proposed IRP. We are satisfied that the present application is complete and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been clear default in payment of the financial debt. As a sequel to the above discussion and in terms of Section 7 (5) (a) of the Code, the present application is admitted.
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2018 (9) TMI 120
Corporate Insolvency Resolution Process - default committed by the respondent company - non repayment of loan - Held that:- The material on record clearly goes to show that respondent had availed the loan facilities and has committed default in repayment of the loan amount. There is no dispute that the applicant bank has filed the relevant statement of accounts duly certified in accordance with Banker Books Evidence Act, 1891 as per requirement of Form 1 part V column 7 of the application. Certified copy of statement of account kept during the course of banking business basing on which the claim has been raised can be termed as sufficient evidence of financial debt. In the case in hand there is no dispute that the respondent company has committed default in repayment of the outstanding amount. Moreover, the application of the financial creditor is complete and there is no disciplinary proceeding pending against the proposed IRP. We are satisfied that the present application is complete and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been a default in payment of the financial debt. As a sequel to the above discussion and in terms of Section 7(5)(a) of the Code, the present application is admitted.
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Service Tax
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2018 (9) TMI 92
Service Tax Audit - Vires of sub-rule (2) of Rule 5A of the Service Tax Rules, 1994 as substituted by notification no. 23/24/ST dated December 25, 2014 - declaration is sought that sub-rule (2) of Rule 5A of the Service Tax Rules, 1994 as substituted by notification no. 23/24/ST dated December 25, 2014 is arbitrary and in conflict with provisions of Section 72A of the Finance Act, 1994. Held that:- Since sub-rule 2 of Rule 5A of the Service Tax Rules, 1994, as substituted by notification dated December 25, 2014 was declared ultra vires by Mega Cabs Pvt. Ltd. [2016 (6) TMI 163 - DELHI HIGH COURT], it would be appropriate to grant interim stay of the proceedings. Such stay will continue till November 30, 2018 or until further orders whichever is earlier.
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2018 (9) TMI 91
Commercial or Industrial Construction Service - Construction services or not? - embedding of interlocking bricks at the site of the customers for laying of internal roads and approach roads to the compound of the building on labour basis as per Section 65(105)(zzq) - Department alleged that the appellants are providing construction services during the period September 2004 to November 2005 - CBEC vide Circular No.B1/6/2005-TRU dated 27.2.2005 - Held that:- Construction of roads if undertaken as a part of contract for construction of a commercial complex or industrial building, is taxable. In the instant case, the appellants have not undertaken any such activity and their contract with their buyers was limited to laying of interlocking paver blocks and the approach roads. Therefore, the findings of the impugned order appear to be beyond the scope of provisions of law and the Circular issued. The Tribunal in the case of Shilpa Construction Pvt. Ltd. [2010 (6) TMI 175 - CESTAT, AHMEDABAD] has held that If the contract recognizes the two activities as separate activities, even though the construction of the road is in connection with the commercial complex, the benefit has to be allowed. As such the fact whether the road is being constructed for public utility purpose or as a part of a commercial complex is not relevant. Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 90
Extended period of limitation - suppression of facts - Manpower Recruitment or Supply Agency services - whether the appellant is required to pay service tax under Manpower Recruitment or Supply Agency services? Held that:- The ingredients for invoking the extended period as well as for imposing penalty under Section 78 are same - Despite change in the definition of Manpower Recruitment and Supply agency made on 16.06.2005 and the service recipient was an excisable unit therefore, there was no reason either for the appellant or for the service recipient about ignorance from changes in the law. Therefore, the reasons stated by the appellant that as per advice of their service recipient they were under bonafide belief that the services are not taxable, do not appears to be satisfactory - the appellant could not make out a case of reasonable cause for non-payment of service tax. Reliance on the provisions of Section 73(3) - Held that:- This is clear from the fact of non-payment of service tax and the payment of service tax along with interest was made only after detection by the department. Moreover, the extended period was invoked on the ground of suppression of facts, therefore, as per sub-Section (4) of Section 73, the benefit of Section 73(3) is not available to the appellant. Also, the penalty was rightly imposed under Section 78 by the lower authorities. Appeal dismissed - decided against appellant.
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2018 (9) TMI 89
Input Service Credit - The Department alleged that appellant has wrongly availed input service tax credit for a period October, 2007 to June, 2012 - Reversal already made by way of deposit - SCN dated 16.07.2015 was served upon the appellant raising a demand of service tax under proviso to Section 73(1) of the Act read with Rule 14 of Cenvat Credit Rules, 2004 (CCR for short) alongwith the equal amount of interest and penalty. Held that:- It is appellant’s own admission that he wrongly availed the credit. Thus, the demand confirmed for one year by the Order under challenge has no infirmity nor while limiting the same to normal period of one ear. It is also apparent from record that the appellant deposited the said wrongly availed credit only after the Department brought it to the appellant’s notice. However, the simultaneous fact is that the time of filing the ST-3 return for the period of October, 2008 to July, 2012 qua the said utilisation had not yet expired. The said ST return was filed on 24.04.2013 since the credit availed was being returned on 16.04.2013, i.e. prior filing of return, it is clear that the stage of suppressing the fact as alleged by the Department has not yet come - the deposit by way of reversal cannot be held to be a delayed deposit. Thus, question of any interest and penalty thereof does not at all arise. The Order under challenge confirming the said demand however limiting it to the normal period of one year is though upheld but demand of equal amount of penalty and of applicable interest is set aside - Appeal allowed in part.
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2018 (9) TMI 87
Maintainability of appeal - Section 35G of the Central Excise Act, 1944 - Whether the particular transaction or the activity carried on by the respondent-dealer would result in a service to MIBL and MFL, and as a consequence, would be covered under the Finance Act, 1994 as a business auxiliary service? - Held that:- Section 35G provides for an appeal to the High Court from every order passed by the Appellate Tribunal on or after the 1st July 2003; not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment. The issue would have to be agitated before the Honorable Supreme Court under Section 35L - The appeals are, hence, dismissed as not maintainable reserving the right of the Department to agitate their cause under Section 35L.
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2018 (9) TMI 86
Classification of services - Erection, Commissioning and Installation Services or Works Contract Services? - appellant provided services to various clients including M/s. Uttar Haryana Bijli Vitran Nigam, Shri Guru Granth Sahib World University, M/s. H.P. Singh & Others, M/s. Greater Mohali Area Development Authority, M/s. Punjab Small Scale Industries & Export Corporation Limited etc.re engaged in the supply and installation of electric works, laying/ shifting of High Transmission lines, street lightning system etc. Held that:- It is fact on record that the appellant has provided the services in question along with material. Therefore, the classification of the services is Works Contract as per the decision of Hon’ble Apex Court in the case of Larsen & Toubro [2015 (8) TMI 749 - SUPREME COURT] wherein the Hon’ble Apex Court held that any service provided along with material falls under the category of Works Contract, therefore, prior to 01.07.2012, the service tax liability is not sustainable against the appellant under the category of ‘Erection, Commissioning and Installation Services’. For the period post 01.07.2012, in terms of exemption Notification No. 25/2012-ST dated 20.06.2012, the services provided to government organisations or a local authority, by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of civil structure or any other original works meant predominantly for use other than for commerce, industry or any other business or profession was exempt from payment of duty. Admittedly, the appellant is providing the said services to government organisation namely M/s. Uttar Haryana Bijli Vitran Nigam, Shri Guru Granth Sahib World University, M/s. Greater Mohali Area Development Authority, M/s. Punjab Small Scale Industries & Export Corporation Limited are not engaged in any commerce, industry or any other business or profession. In that circumstance, in terms of Notification No. 25/2012-ST dated 20.06.2012, the services provided to these organisations under contracts mentioned at Serial No 1 to 12 (except serial No. 2 and 3) are exempted from payment of duty. Works contract or Erection, Commissioning and Installation Services? - services provided to Guru Granth Sahib University and M/s. H P Singh - Held that:- The work was completed before the negative list regime and the service has been provided by the appellant along with goods - it merits classification of the said services under Works Contract - demand of service tax is not sustainable under ‘Erection, Commissioning and Installation Services’. Time Limitation - Held that:- There is no specific allegation against the appellant that they have not paid the service tax with intent to evade payment of service tax. In fact, the appellant was providing services to the organisations which are not engaged in any commerce, industry or any other business or profession - extended period of limitation not invocable. Appeal allowed - decided in favor of appellant.
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Central Excise
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2018 (9) TMI 88
Revival of appeal - By the impugned order CESTAT refused to revive an appeal - irregular availment of MODVAT Credit. Held that:- The right of appeal sought to be exercised by the petitioner, is a statutory right. Such right flows out of a statute. It is available to any litigant governed by the appeal provisions in respect thereof. The petitioner herein, as a litigant, has the statutory right of appeal. Such right of appeal was sought to be put under suspended animation by the CoD mechanism. The CoD mechanism, then governing the field, postulates, that the right to appeal would revive upon CoD granting the clearance in respect thereof. CoD mechanism was put in place by various decisions of the Hon’ble Supreme Court in respect of an authority within the meaning of Article 12 of the Constitution of India. The appellant, before CESTAT, the petitioner herein, was granted leave to apply for restoration upon obtaining CoD clearance. Since the CoD mechanism was done away with, CESTAT ought to have taken such fact into consideration when the petitioner approached it. The impugned order does not look into the problem in such aspect. It proceeds to find that, the appellant continues to suffer from the lack of grant of clearance by COD. The right to prefer the appeal revive been done away, CESTAT ought to consider and decide such appeal on merits. Petition allowed.
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2018 (9) TMI 85
100% EOU - Clandestine manufacture and removal - suppression of production - copper ingots - Department has entertained a doubt that appellants are under-reporting the recovery of copper from copper scrap procured by them and by indulging into lower recovery, they are suppressing the manufacturing and clearance of copper ingots and thereby evading central excise duty - Held that:- For establishing the clandestine manufacture and clearance, the department has not made any sincere efforts to establish that appellant-assessee have manufactured and clandestinely cleared the copper ingots over and above what was declared by them in their statutory records. The law is fully settled that in every case of alleged clandestine manufacture and clearance, the onus is on the revenue to prove what it alleges with positive and concrete evidences - the average recovery of copper from five consignments of copper scrap cannot form concrete evidence to demand duty over and above the declared quantities of clearances of copper ingots. The department should have gathered some more precise evidences to prove unrecorded manufacture of copper ingots and sale of same. If there were excess sale of copper ingots other than what is provided in the statutory records of the appellant-assessee then some investigations should have been done to prove it but here the department has not even bothered to undertake any investigations on this side to prove that the assessee has manufactured and cleared certain quantities of copper ingots which are not recorded in the bookds of accounts - the charges of clandestine manufacture and clearance is not established on the basis of available evidences. There is no merit in demand of duty and same is not sustainable and accordingly the order in original is set aside - Since the demand itself is not sustainable on merit and therefore, question of imposition of penalties under Section 11AC of the Act on the firm and under Rule 26 of Central Excise Rules on the partners does not arise and thus, same are also set aside - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 84
SSI Exemption - use of Brand Name - Held that:- The brand name ‘BESTON-S’ is registered in the name of Mr. Balram Nathani, the main Director and shareholder in the appellant company along with other family members - the denial of SSI exemption on the ground of use of brand name of another person is unjustified and untenable - SSI exemption cannot be denied. Valuation - MRP based Valuation - Section of 4A of CEA - Held that:- The adoption of MRP from the website of ‘BESTON-S’ brand is nowhere justified in the light of the market enquiry conducted by the Department which supports the quotations submitted by the Appellant of the comparable brand - the variation made on account of valuation is also untenable. Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 83
CENVAT credit - benefit of N/N. 22/2003-CE dated 31st March 2003 - inputs cleared as such to a 100% Export Oriented Unit against CT-3 certificate without reversing the CENVAT credit - Held that:- There is no doubt that the consignee of the goods is entitled to exemption from all duties on procurement of inputs; however, such exemption can be availed of by the manufacturer of inputs when supplying to 100% export oriented unit. A third party cannot take it upon itself to accord that exemption through availment of CENVAT credit. Contention of appellant of revenue neutrality may apply to goods manufactured by them whereas, if allowed on inputs procured by them, it would be tantamount of exemption from duty to the appellant who, not being a 100% export oriented unit, is not entitled to that privilege. Reversal of credit as prescribed in rule 3(5) of CENVAT Credit Rules, 2004 is inescapable. Appeal dismissed - decided against appellant.
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2018 (9) TMI 82
Maintainability of appeal u/s Section 35-G (2) of the Central Excise Act, 1944 - issue involved is determination of any question having relation to the rate of duty or excise or to the value of the goods for the purpose of assessment - whether the appeal shall lie under Section 35-L or under Section 35-G of the Central Excise Act, 1944 to the High Court? Held that:- The appellant / department is permitted to withdraw this appeal and direct the department to assail the order by filing an appeal under Section 35-L of the Central Excise Act, 1944 before the Apex Court - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE, PANCHKULA VERSUS SPECIAL MACHINE [2009 (8) TMI 143 - PUNJAB AND HARYANA HIGH COURT], where it was held that the substantial questions of law raised in these appeals, which are stated to have been arising from the Tribunal, relates to determination of a question having relation to the rate of duty of excise, therefore, we are of the considered view that for determination of such question, remedy of appeal lies to Supreme Court under Section 35L. Appeal dismissed being not maintainable.
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Indian Laws
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2018 (9) TMI 94
Dishonor of Cheque due to insufficiency of funds - Order of issuance of process and the proceedings filed against the applicants by respondent no.02 - Section 138 of the Negotiable Instruments Act, 1881 - Held that:- No doubt, all those things which had happened before the National Company Law Tribunal were not put before the learned Magistrate when the complaint was filed and the order of issuance of process was passed. Each and every complainant is expected to be fair in prosecution and, therefore, the circumstances in which the cheque came to be issued in favour of the complainant ought to have been disclosed by the complainant. The prohibitory orders and appointment of I.R.P. were made by the National Company Law Tribunal on 24.07.2017 - if the complainant had knowledge about the proceedings and the prohibitory orders, whether cheque would have been issued by the Finance Officer or Advisor or Manager of accused no.01, is a question. Further, though the cheques were given on the aforesaid dates, the cheque in S.C.C. No. 7882 of 2017 was presented by the complainant for encashment on 11.09.2017. That means, with full knowledge that I.R.P. has taken over the affairs of accused no.01, the said cheque was presented. In Form "B", the complainant has not whispered that such cheques were given by the responsible officer of accused no.01 - definitely, some cloud has been created on the issuance of cheque. No doubt, all these facts would be required to be addressed by the trial court at the time of final hearing. As regards the legal position about maintainability of the complaint is concerned, it can still be kept open for the simple reason that the proceedings is also instituted against accused no.01. Accused no.01 is not a party in this proceedings. Directors of accused no.01, who are in-charge and responsible for the conduct of the affairs of the company - Held that:- Admittedly, accused nos.02 to 12 are not the signatories to the disputed cheques. In fact, in para no.05 of the complaint, the complainant has stated that accused nos.01 to 12 issued a cheque. None of them i.e. accused nos.02 to 12 had issued that cheque but somebody else is the signatory to the cheque. This fact is also suppressed by the complainant - it was necessary for the complainant to specifically aver and demonstrate as to how each one of accused nos.02 to 12 were incharge and responsible for the conduct of the business of accused no.01. Therefore, the order of issuance of process passed by the learned Magistrate cannot be allowed to be sustained. Applications allowed - The orders of issuance of process passed on 16.11.2017 in Summary Criminal Case No. 7882 of 2017 and on 02.11.2017 in Summary Criminal Case No. 7504 of 2017, by the learned Judicial Magistrate (F.C.), Court No.07, Aurangabad, as well as both the proceedings are hereby quashed and set aside as against the present applicants i.e. original accused nos.02 to 12.
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2018 (9) TMI 93
Time Limitation - Leave to defend - suit filed under Order XXXVII of the Code - application for leave to defend has been rejected by the trial court on the ground of unexplained and inordinate delay - dishonored cheques - Held that:- In the judgment and order impugned dated March 17, 2018 the trial court recorded that on February 26, 2018 the summons were returned unserved with the postal endorsement “unclaimed” when Advocates of both the parties were present and no petition for leave to defend was filed on behalf of the defendant on the ground that the defendant did not receive the summons for judgment - The trial court held that a mere statement that some representatives of the defendant were not in station was not good enough to explain the delay of 29 days particularly in a suit for summary judgment under Order XXXVII of the Code. It does not appear that the trial court erred in law or took any irrelevant consideration into account while deciding the matter. Order XXXVII of the Code provides for strict time limits and such time limits must be adhered to. In the instant case, the entirety of the claim is founded on three dishonoured cheques. There does not appear to be any dispute that these cheques were issued by the defendant to the plaintiff. It is evident from the material available that the cheques were dishonoured upon presentation. In such circumstances, it would require a very high case on the part of the defendant to rebut the presumption that the amounts represented by the three cheques were not immediately payable to the opposite party-plaintiff - Since the high defence that the petitioner herein was called upon to produce before the trial court may not have been available, it is evident that dilatory tactics as avoiding to accept the service or coming in to apply for leave to defend at a belated stage were resorted to by the defendant. It is evident that the defendant had and has no defence to the claim of the opposite party. Order dismissed.
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