TMI Tax Updates - e-Newsletter
September 9, 2017
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:
Credit of duty paid on import of old dore bar - Validity of Notification dated 17th August 2017 - Rule 44A in the Central Goods and Services Rules, 2017 - till the next date of hearing, no coercive steps shall be taken by the Respondents to recover the credit already availed by the Petitioners. - HC
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GST:
Petitioner cannot urge and/or seek directions to the respondents to postpone the decision to implement GST with effect from 1.7.2017, for simple reason that herein levy and collection of taxes on goods and services has sanction of law. - HC
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Income Tax:
TDS u/s 195 - Interest u/s 201(1A) - Purchase of property from non-resident - On behalf of NRI, the Payment made to GPA Holder / bank - Payments made to both the parties constitutes the payments made to the non-resident and the TDS is deductible as per the provisions of section 195
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Customs:
BCD reduced on import of on raw sugar[1701] upto a quantity of 3 lakh MT from 50% to 25% subject to the Tariff Rate Quota Allocation Certificate or license issued by DGFT - See Sr. no. 88A with conditions no. 7 and 9 of the amended notification
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Central Excise:
Classification of goods - Potato flakes or Aloo Mash - whether classified under CTH 11052000 or under CTH 20052000? - the subject goods have been admittedly subjected to the process of flaking and there is no process carried out to form a mash of potatoes in the factory of the appellant - the subject goods are classifiable under Tariff Item No. 11052000
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Central Excise:
Manufacture - even though the Natural Gas is transported to the customers premises in compressed form, such process of compression has been done for the purposes of transportation only. Such process cannot be considered as a process of manufacture, since the goods are sold not as CNG but as Natural Gas
TMI Short Notes
Articles
Notifications
Customs-
74/2017 - dated
7-9-2017
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Cus
seeks to further amend notification No.50/2017-Customs dated the 30th June, 2017, so as to reduce the BCD on raw sugar[1701] upto a quantity of 3 lakh MT from 50% to 25% subject to the Tariff Rate Quota Allocation Certificate or license, as the case may be, issued by DGFT
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85/2017 - dated
7-9-2017
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Cus (NT)
Defining jurisdiction of customs officers for the purpose of audit
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1/2017-Customs(CVD) - dated
7-9-2017
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CVD
Seeks to impose definitive Countervailing duty on the imports of "Certain Hot Rolled and Cold Rolled Stainless Steel Flat Products" originating in or exported from China PR
DGFT-
27/2015-2020 - dated
7-9-2017
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FTP
TRQ for Raw Sugar: Amendment in import policy of raw sugar classified under Exim Code 170114 of Chapter 17 of ITC (HS), 2017-Schedule-1 (Import Policy)
GST - States-
23/2017 - dated
22-8-2017
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Karnataka SGST
Amendments in the Notification No. (17/2017) dated the 29th June, 2017
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22/2017 - dated
22-8-2017
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Karnataka SGST
Amendments in the Notification No. (13/2017) dated the 29th June, 2017
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21/2017 - dated
22-8-2017
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Karnataka SGST
Amendments in the Notification No.(12/2017) dated the 29th June, 2017.
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20/2017 - dated
22-8-2017
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Karnataka SGST
Amendments in the Notification No. (11/2017) dated the 29th June, 2017
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01-F/2017 - dated
22-8-2017
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Karnataka SGST
Extension of time limit for filing of GSTR3B.
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FA-3-57/2017-1-V-(100) - dated
7-9-2017
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Madhya Pradesh SGST
The Madhya Pradesh Goods and Services Tax (Amendment) Rules, 2017
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2017 (9) TMI 389
Deferment of implementation of GST - Held that: - petitioner cannot urge and/or seek directions to the respondents to postpone the decision to implement GST with effect from 1.7.2017, for simple reason that herein levy and collection of taxes on goods and services has sanction of law. That from written submission, it is much evident that all such necessary steps are taken by the respondents to ensure implementation of the GST, as it appears (i) over 65 Lakhs tax-payers have already migrated to GST network and obtained registrations, (ii) the rates and taxes have been notified; (iii) rules have been framed and notified ; (iv) wide publicity is given in public domain; (v) entire machinery has been geared up not only to accept new challenge but to ensure GST is implemented effectively. - petition dismissed - decided against petitioner.
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2017 (9) TMI 388
Credit of duty paid on import of old dore bar - Validity of Notification dated 17th August 2017 - Rule 44A in the Central Goods and Services Rules, 2017 - Rule 44A is challenged as being ultra vires Section 140 of the CGST Act as well as the rule making powers under Section 164 thereof. It is contended that the impugned Notification is in grossly discriminatory and unreasonable and has imposed the restrictions which are applicable only to imported gold dore bars - Held that: - The Court is of the view that the Petitioners have made out a prima facie case for grant of interim relief in their favour. Further, the balance of convenience is in their favour for grant of interim relief - till the next date of hearing, no coercive steps shall be taken by the Respondents to recover the credit already availed by the Petitioners.
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Income Tax
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2017 (9) TMI 431
Provision for warranty made @1% of weighted average turnover - AO disallowed the warranty Provisions -Nature of Contingent Liability - Matching Concept - Provision made on scientific estimation keeping in mind the anticipated liabilities likely to arise in the future. - Held That :- matter remitted back to the file of the Assessing Officer to examine the entire details of the provisions made by the assessee in the earlier years and also in the subsequent years and also to see whether such a provision made has some rational and scientific evaluation and no excess provision is being made with this direction. -Appeal of revenue is allowed for statistical purposes. Cash Discounts for early payments - Disallowances on basis of no material evidences - Quantum of Cash Discounts - MUL provided statement of claims of cash discounts of its purchases on weekly basis - Held That:- Tribunal set aside this issue to the file of the Assessing Officer to verify the details of cash discount and if it is found that the customers while making the payment before 30 days have deducted the cash discount, then same is to be allowed. - Appeal of revenue is allowed for statistical purposes.
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2017 (9) TMI 430
TDS u/s 195 - Interest u/s 201(1A) - Purchase of property from non-resident - On behalf of NRI, the Payment made to GPA Holder (for purpose of facilitating transactions in India) and Dewan Housing Limited(Housing loan taken by seller) - Amount not paid directly to NRI - Held That:- Payments made to both the parties constitutes the payments made to the non-resident and the TDS is deductible as per the provisions of section 195. - Decided against assessee. Long Term Capital Loss - NIL Demand - deductee filed the return claming that the long term capital gains resulted into capital loss which resulted into nil demand. - Held That:- When there is no tax payable by the deductee on sale of land, there is no question of charging interest u/s 201(1A) of the Act, as per instruction No.2 of 2014 dated 26.2.2014 and the circulars are binding on the Departmental officers. - Decided against assessee.
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2017 (9) TMI 429
Advance Commission shown as Sundry Creditors for advances - inaccurately treated the Commission as Advance Commission to defer the tax liability willfully adjusted in future P&L A/c and added back to income- Disallaowance of Commission paid to various parties including spouse - Recorded reason and notice u/s 148 is issued - Set off of House Property Loss against Business Income - penalty proceedings u/s. 271(1)(c) initiated for concealing/ furnishing inaccurate particulars of income - Held That :- Since this issue has been adjudicated by the then Ld. CIT(A)-XXIV, New Delhi in the assessee’s own case for the AY 2010-11 in detail in his favor. Hence, the Ld. CIT(A)-17, New Delhi has rightly followed the above decision and reject the ground raised by the Revenue
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2017 (9) TMI 428
Adhoc disallowance of 20% - absence of verifiable vouchers - Conveyance, Telephone and Sundry Expenses - reasonable estimate - As assessee is unable to explain element of personal nature in above expenses AO disallowed 1/5th of the same and also confirmed by CIT(A). Held that:- 20% of disallowance on these type of expenses is on higher side and accordingly, we restricted the disallowance at 10%. - Assessee's appeal is partly allowed. Disallowing interest paid to parties u/s 40A(2)(B) - charging Notional Interest @12% - CIT(A) confirming and enhancing disallowance @18% made by AO - Held that:- CIT(A) has not given any reason for enhancing the income and there is no indication as to how he has applied the provision of section 40A(2)(b) of the Act.- Decision in the case of CIT vs. Indo Saudi Services (Travel) (P.) Ltd. [2008 (8) TMI 208 - BOMBAY HIGH COURT] followed - Additions deleted - Decided in favor of assessee.
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2017 (9) TMI 427
Income from House Property - fixation-of annual rent - inclusion of notional interest - tenant of the property is Principal Shareholder of Holding Company of Assessee Company - Holding Company has taken Foreign Currency Loan of 90.28 Crores & invested in 0% Optionally convertible debenture in assessee Company - Conservative estimate of interest @10% on interest free loan given by holding to assessee company treating as rent to tenant - Held That:- In the light of the judgments of the Calcutta, Bombay & Delhi High Court, in arriving at the annual value of a house property for the purposes of Section 23 of the Income-tax Act, 1961, notional interest on the interest free loan or deposit cannot be considered to be a relevant factor. Such notional interest cannot be included in the fair rent of the property. - Decided against revenue
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2017 (9) TMI 426
Addition on account of unexplained expenditure - CIT(A) confirmed disallowance of 25% of the alleged bogus purchases -Information received from the Sales Tax Department and also from the office of the DGIT(Inv), Mumbai that assessee is beneficiary of accomodation entries from bogus hawala dealers - Held That:- the facts of the present case indicate that assessee has made purchase from the grey market which gives the assessee savings on account of non-payment of tax and others at the expenses of the exchequer. - a 12.5% disallowance out of the bogus purchases would meet the end of justice - Decision in the case of Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] followed - Decided partly in favor of assessee.
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2017 (9) TMI 425
Denial of exemptions under section 10(23C)(vi) - AO observed that expenditure has been remitted to the Head Office in the USA and the surplus has not been utilized in India for the charitable purpose - Matter remanded back to AO for fresh adjudication in term of the decision of Hon ble Bombay High Court [2010 (6) TMI 68 - BOMBAY HIGH COURT] - Appeal of assessee allowed for statistical purposes
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2017 (9) TMI 424
Claiming deduction u/s 10AA - ITES and Consultancy Services - Declaring NIL Income - Section 10AA of the Act being analogous to sec. 10A - reduction of the reimbursement of expenditure incurred in foreign currency - Held that:- when certain expenses are excluded from the export turnover for the purposes of claiming deduction admissible under the Act, like u/s. 10A of the Act, such expenses are also to be excluded from total turnover, as export turnover forms part of total turnover. - Decision in the case of Tata Elxsi Ltd., (2011 (8) TMI 782 - KARNATAKA HIGH COURT) followed. - appeal of revenue is dismissed
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Customs
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2017 (9) TMI 404
ADD - initiation of sunset review - imports of ‘Metronidazole’ originating in or exported from China to India - whether the ADD that was imposed by the Notification No. 40/2012-Customs dated 30th August 2012 and which expires today, i.e. 29th August 2017, should be continued as a consequence of this Court having directed the Respondents to initiate the SSR? - Held that: - it must be noted that in all earlier instances when the domestic industry came to the court seeking relief against a decision of the Central Government declining to initiate the SSR for some reason, it was not prior to the expiry of the notification imposing the ADD - the Petitioner representing the domestic industry has approached the Court prior to the actual cessation of the ADD under the original notification which is why the Court has placed the matter for hearing today itself. There is no delay in the Petitioner approaching the Court. The impugned order is dated 22nd August 2017 and the present petition was filed immediately thereafter and heard first on 25th August 2017. Whether the Petitioner having made out a prima facie case which weighed with the Court to persuade it to direct the initiation of the SSR as an interim measure, can be refused the consequential relief of continuation of ADD in the circumstances that the Petitioner points out? - Held that: - the Court finds that the conclusions reached by the DA, which have been summarised hereinbefore, do not prima facie appear to have accounted for the detailed statistics placed before the DA by the Petitioner some of which have been referred to earlier by the Court. In particular, the possibility of the undercutting of the price at which the product may be sold by the domestic industry has not been adverted to by the DA. Also, the present annual capacity of the entities in China PR which are unutilized and which far exceed the Indian demand of 2200 MT per year does not appear to have been discussed by the DA. The Court is satisfied that the balance of convenience in directing continuation of the ADD pending the conclusion of the SSR subject, of course, to the outer limit of one year as stipulated in the 2nd proviso to Section 9A(5) of the CTA, is in favour of the Petitioner. The Court would like to add that, by way of balancing the equities, in the event ultimately it is found that the decision of the Central Government not to initiate the SSR was correct, the ADD collected from the importers of the product from China PR during the period of the SSR can be refunded to such importers. The Court directs that the ADD that was initiated by Notification No.40/2012 dated 31st August, 2012 will continue till the conclusion of the SSR initiated by the Central Government on the direction of this Court by the order dated 25th August, 2017 - the continuation of the ADD will be only till such time, the SSR continues and in any event will not exceed the one year period stipulated in the 2nd Proviso to Section 9A(5) of the CTA. Application disposed off.
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2017 (9) TMI 403
Jurisdiction - validity of SCN - Challenge to the show cause notice is only on the ground that it is wholly without jurisdiction, as for the very same allegation and for the very same period, earlier notice was issued to the petitioner, on 31.10.2014 - Held that: - The Court came to the conclusion that in the light of categorical assertions and findings in the show cause notice dated 02.07.2014, no useful purpose would be served in asking the petitioner to submit a reply to the show cause notice. It was pointed out that, at the stage of issuance of show cause notice, the first respondent should only have an open mind and if mind is closed with pre-determined conclusions, the requirement of giving an opportunity to show cause becomes nugatory. Based on the very same set of allegations one more show cause notice cannot be issued by the respondents, as done in the impugned show cause notice - the impugned show cause notice cannot stand in the eyes of law - petition allowed - decided in favor of petitioner.
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2017 (9) TMI 402
Duty Drawback - export incentive - export of consignment of power loom ready made garments - principles of natural justice - Held that: - original authority had no opportunity to examine as to the correctness of the stand taken by the petitioner that the bank certificate of export and realisation has been obtained by them. Since it was an ex parte proceedings, the appellate and the revisional authority did not embark upon such exercise and they dismissed the appeal/revision on technical grounds. Thus, the petitioner having come into possession of the bank certificate of export and realisation should not be nonsuited on technical grounds and therefore, this Court is inclined to issue necessary directions in this regard - matter is remanded to the 3rd respondent for fresh consideration, who shall take into consideration the bank certificate of export and realisation dated 13.12.1997 - appeal allowed by way of remand.
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2017 (9) TMI 401
Release of confiscated goods - import of old/reusable Tyres - whether the Commissioner (Appeals) is justified in the case of import of old/reusable Tyres, allowing the same to be released for home consumption, subject to payment of redemption fine and penalty? - Held that: - the issue, herein have been decided in favor of the respondent-importer by decision of Hon’ble Allahabad High Court in the case of M/s Jibran Overseas [2015 (11) TMI 1020 - CESTAT NEW DELHI], wherein a Division Bench of this Tribunal allowed clearance of imported used old tyres on payment of redemption fine and penalty - confiscated goods allowed to be released - appeal dismissed - decided against Revenue.
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2017 (9) TMI 400
Interest on delayed refunds - the original order of assessment was passed as early as 6/1/1995. The refund claim of the respondent was originally made before the authorities on 7/10/1996 - The adjudication of the dispute has a checkered history - Held that: - The question of payment of interest by revenue authorities for delayed payment of interest has come up before the Hon’ble Supreme Court in the case of Ranbaxy Laboratories Ltd. [2011 (10) TMI 16 - Supreme Court of India], where it was held that liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made. Interest allowed - appeal dismissed - decided against Revenue.
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2017 (9) TMI 399
100% EOU - clandestine clearance of duty free imported fabric in domestic area without payment of duty - imposition of penalty - Held that: - as regards penalty on Shri Govind Hariram Khubchandani, It is established on record that he is not concerned with any other aspect expect storage of goods & receiving rent. Therefore with regard to serious offence of duty free imported goods removed by M/s Mayur Impex, the Appellant cannot be held responsible therefore penalty imposed upon him is not sustainable - penalty set aside. Penalty u/s 112 (b) of Customs Act, 1962 upon the Appellant Shri Jairaj Kalyani and Shri Pawan Lulla - Held that: - it could not be proved that these Appellants have physically received offended import fabric. In their statement recorded under Section 14 of Central Excise Act, 1944 / 1.08 of Customs ACT, 1962 there is no admission regarding the dealing of said offended goods. Merely on the basis of call details, it cannot be concluded that Appellant might have dealt with offended goods. These call details at the most lead to suspicion. However the same cannot take the place of tangible evidence. Therefore on the basis call details, the alleged guilt of Appellants cannot be proved - penalty set aside. Appeal allowed - decided in favor of appellant.
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2017 (9) TMI 398
Preferential rate of duty - import of Gold jewellery - N/N. 46/2011-cus dt. 01/06/2011 as amended read with N/N. 189/2009-Cus(NT) dt. 31/12/2009 - The assessing officer denied the exemption holding that the impugned gold jewellery do not qualify as "originating goods" in terms of Rule 4 of Customs Tariff (Determination of origin of Goods under the Preferential Trade Agreement between the Government of Member States of the Association of Southeast Asian Nationas (ASEAN) and the Republic of India) Rules, 2009 - The bone of contention of the Revenue in this case is regarding the non-maintenance of records by the supplier M/s. PT. Antam. It is also the Revenue's case that they sought retroactive check as per Rule 16 of the said Rules which communicated that the supplier M/s. PT. Antam has not maintained any acceptable inventory records to ascertain the origin of gold used for manufacturing of imported jewellery - whether respondent herein is eligible for preferential rate of duty in terms of Notification No.46/2011-cus dt. 01/06/2011 as amended read with Notification No.189/2009-Cus(NT) dt. 31/12/2009 for import of gold jewellery of 5.0244 kgs. or otherwise? Held that: - the adjudicating authority, as rightly held by the first appellate authority, cannot go beyond the provisions of notifications and come to a conclusion based upon an assumption and presumption that the gold mined by the exporting country could not have been used by the supplier / manufacturer for producing the imported gold jewellery. The first appellate authority was correct in recording that notification provides for detailed verification process in case of reasonable doubt. It is on record, as stated by the Departmental representative that verification report received from the Indonesian authorities were inconsistent with each other, but there is no denial as to the fact that the said verification report clearly indicates that all the documents with imported consignments were genuine. In the absence of any suspicion on documents, the adjudicating authority could not have gone beyond the provisions of notifications. This kind of preferential trade agreement between the member state of ASEAN and the Republic of India is a reciprocal arrangement between the countries in order to facilitate free movement of trade, will be hampered if the exemption sought under the said Rules is denied on some pretext which are based on assumptions and presumptions and is uncalled for and would render the entire exemption notification otiose, more so when on the face of the records the documents like certificate of origin is not disputed. Benefit allowed - appeal dismissed - decided against Revenue.
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2017 (9) TMI 397
Penalty u/s 112 - case of petitioner is that provisions of Section 112 cannot be attracted in this case since the appellant as not an importer of the goods but only carried the goods on request by' an individual whom he met at Hyderabad Airport - Held that: - the claim of the appellant that he was innocent seems to be unacceptable as he could have told Customs Authorities that he had one bag which -he is carrying for some other person. Another claim of the learned counsel that he was not aware that the bag contained gold biscuit is also unacceptable in as much, a person if he is handed over 12 gold bars which is weighing approximately 1.3 Kgs, could have definitely asked for questions to the person who is giving him the bag. In my considered view both the lower authorities were correct in coming to a conclusion 'that the appellant needs to be penalised for carrying contraband with him - appeal dismissed - decided against appellant.
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2017 (9) TMI 396
Smuggling - Baggage Rules - 5000 grams of 'Iridium metal' procured from illegal channels and smuggled into India - Confiscation - penalty - release of petitioner on Bail - case of Revenue is that the ‘Iridium metal’ in 5 bottles having collective gross weight of 5500 gms. and provisionally valued at ₹ 1 Crore was seized under panchanama dated 23.09.2011 under the reasonable belief that it was smuggled into India and hence liable for confiscation under the provisions of the Customs Act, 1962 - Held that: - the Revenue have failed to exercise jurisdiction vested in them, as investigating officers failed to make inquiries and/or record statement from KPS who was found to be kingpin - also, there was strong presumption, in view of the circumstantial evidence, and seizure of Iridium, which as per the Revenue is not available normally in India in such large quantity. As such based on assumption and strong presumption, the Revenue have held that the seized Iridium is smuggled, originated from outside India and brought into India by way of smuggling - Considering the totality of evidence brought on record it is evident that aal the three appellants were in league and have aided and abetted in possession and carriage of Iridium metal. All the three appellants have failed to explain adequately the source of acquisition of Iridium metal from any licit source within the country and as such the conclusion by Revenue that it is smuggled, is upheld. Further, in view of the factum of smuggling been proved by way of circumstantial evidence only, as the Revenue failed to interrogate the said KPS, the penalty imposed under Section 112(a) of the Act is on higher side - the penalty imposed, on Mr. KPS penalty is reduced from ₹ 30 lakhs to ₹ 5 lakhs and on Mr. Ravinder Singh from ₹ 20 lakhs to ₹ 2 lakhs and Mr. Bhupinder Singh from ₹ 20 lakhs to ₹ 50,000/-. Appeal allowed - decided partly in favor of appellant.
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Corporate Laws
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2017 (9) TMI 392
SEBI proceedings - discretion on SEBI to pass ad interim orders - unnatural or unreasonable delay on the part of the SEBI in passing the impugned order - Held that:- It is true that Section 11, 11(b) and 11(4) do confer wide discretion on SEBI to pass ad interim orders in order to protect the investors’ interest and for a healthy and orderly growth of the capital market. It is also equally true that by way of various judicial pronouncements this Tribunal has consistently held that the power conferred under 11, 11B and 11(4), particularly after introduction of Section 11(4), SEBI do empower it to issue ad interim ex-parte orders to achieve the twin objective enshrined in the SEBI Act, i.e, the protection of investors’ interest and orderly growth of capital market. If market abuses likely to occur, SEBI shall invoke such powers subject to the satisfaction of the Board/Members of SEBI. This discretion is a vital discretion conferred upon SEBI to be used sparingly and not in a routine manner. In normal, routine cases where investigation reveals some mischief or fraud being conceived or perpetrated in the market, SEBI should resort to adjudicating proceeding by appointing an Adjudicating Officer as per Chapter IV-A of the SEBI Act. But keeping in view the gravity of the matter, SEBI was not unjustified in invoking such extra-ordinary power. Similarly, SEBI has justified the delay of few months in passing the impugned order against the Appellant. Similarly, there is no unnatural or unreasonable delay on the part of the SEBI in passing the impugned order. In this context, a perusal of the original file on which the case of Dr. Vijay Mallya was processed reveals that decision to initiate action against the Appellant was taken at the highest level in SEBI to look into the matter and take action as per law. So it cannot be argued that no investigation or inquiry was pending against the Appellant when the SEBI invoked powers under Sections 11(1), 11(4)(b) and 11B of the SEBI Act.We are inclined to dismiss the appeal with a direction to the appellant to appear before SEBI, in person or through a legally authorized representative, and make his submissions before SEBI within 21days from today. Thereafter, SEBI shall consider the same and proceed further in the matter and pass final orders expeditiously and preferably within a period of four months in accordance with law to give finality to the issue. We make it clear that after receiving Mr. Vijay Mallya’s reply, if SEBI considers it appropriate to relax any of the conditionalities prescribed in the impugned ad-interim ex-parte order it shall be free to do so as early as possible and according to law. Ordered accordingly.
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2017 (9) TMI 391
Winding up proceedings - Interim Insolvency Resolution process - Held that:- The matter has been quite well settled by the Hon'ble Appellate Tribunal in JK Jute Mills Co. Ltd. v. Surendra Trading Company [2017 (6) TMI 254 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, ALLAHABAD] wherein it was held that the seven days' period for the rectification of the defects as stipulated under the proviso to the relevant provisions of sections 7, 8, or 9 is required to be complied with by the Corporate Debtor, whose application otherwise being incomplete is fit to be rejected. It was thus held that the proviso to the aforesaid section made to remove the defects within seven days are mandatory and on failure to do so the application is fit to be rejected. However, the learned counsel for the petitioner submits that the Interim Insolvency Resolution Professional could not be named because of non-availability of the Chief Executive Officer of the petitioner Society for sometimes, but that cannot be the reason to grant extension in respect of the period of seven days, the same being mandatory in nature.In views of the above, the instant petition is rejecting.
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Insolvency & Bankruptcy
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2017 (9) TMI 390
Proceedings under Insolvency and Bankruptcy Code, 2016 - admission of application and appointment of the Interim Resolution Professional - Held that:- A perusal of the application and the annexures goes to show that the application is complete. The applicant has recommended name of Interim Resolution Professional. The applicant has also filed written communication given by the proposed Interim Resolution Professional. The applicant is admitting the existence of financial debt and occurrence of default in payment of financial debt. The books of account of the applicant company also substantiate the same. In view of the above discussion, the application filed by the Corporate Applicant (Corporate Debtor) is admitted under Section 10(4)(a) of the Code. Section 13 of the Code enjoins upon the Adjudicating Authority to exercise its discretion to pass an order to declare a moratorium for the purposes referred to in Section 14, to cause a public announcement of the initiation of Corporate Insolvency Resolution and call for submission of claims as provided under Section 15 of the Code. Sub-section (2) of Section 13 says that public announcement shall be made immediately after the appointment of Interim Insolvency Resolution Professional. Hence, Shri Premraj Ramratan Laddha, having IP Registration No. IBBI/IPA-001/IP-P00060/2016-17/10138 and residing at 304, Abhijit-3, Above Pantaloon, Mithakhali, Law Garden Road, Ellisbridge, Ahmedabad - 380 006, is appointed as “Interim Insolvency Resolution Professional”, who filed Form- 2 and Certification of Registration issued by the Insolvency and Bankruptcy Board of India. This Adjudicating Authority also directs the Corporate Applicant to make a public announcement in terms of Clause (b) of sub-section (1) of Section 13 of the Code.
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Service Tax
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2017 (9) TMI 423
SEZ unit - Refund of service tax paid - whether the appellant is eligible for refund of the service tax paid under reverse charge mechanism in respect of services received by him from foreign supplier or otherwise? - Held that: - it is an admitted fact that appellant being an SEZ unit is not required to pay any service Tax either to service provider or under reverse charge mechanism and even if he pays the same, he is eligible for the refund of the service tax liability so discharged - The bone of contention in these appeals being that the service tax liability was discharged correctly and when it was discharged the said services were not mentioned in the list of approved services, this cannot be a reason for rejection of refund claim as it is an avowed policy of the Govt of India that SEZ unit should not be burdened with any taxes in order to make them competitive - refund allowed. Appeal allowed - decided in favor of appellant.
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2017 (9) TMI 422
Penalty u/s 76, 77 and 78 - payment of tax with interest before issuance of SCN - Held that: - appellant did not disclose service tax liability to the department at the relevant time, accordingly they have suppressed the facts. Whether simultaneous penalty can be imposed under Section 76 and 78 during the relevant period? - Held that: - the issue has been considered in various judgments and finally it was held in the in case of BCCI Vs CST Mumbai-1, [2014 (9) TMI 598 - CESTAT MUMBAI], where it was held that penalty under Section 76 ad 78 can be imposed simultaneously. As regard the penalty under Section 77, the penalty of ₹ 5000/- was rightly imposed on the appellant as they have not submitted ST-3 returns correctly at the relevant time. As regard the submission of the Ld. Counsel regarding the option of 25% penalty not given by the adjudicating authority, we find that adjudicating authority must give option in the impugned order for 25% penalty. This issue has been considered by the Board Circular No. 208/07/2008-CX-6 dated 22-5-2008 and clarified that the adjudicating authority must give an option of reduced penalty of 25% penalty in the adjudicating order. Appeal allowed - decided partly in favor of appellant.
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2017 (9) TMI 421
CENVAT credit - input/capital goods - Whether the Cenvat credit taken for the input/capital goods used for manufacturing excisable goods could be utilised for payment of service tax on the output services? - Held that: - this matter is covered by the Tribunal’s decision in the case of S.S. Engineers Vs. CCE, Pune-I [2013 (10) TMI 611 - CESTAT MUMBAI] which has held that cross utilisation of credit of Excise and service tax is permissible, as a general proposition - Cenvat credit taken for the input/capital goods used in the manufacture is allowed for payment of service tax on the output services - demand set aside. What is the rate applicable for levying service tax: - whether it should be the rate as applicable on the day, when the services were provided or it should be the rate applicable for the day when the debit notes were issued by the service recipient? - Held that: - the Tribunal in the case of CST Vs. Lea Associates South Asia P. Ltd. [2014 (8) TMI 456 - CESTAT NEW DELHI] has held that service tax is to be charged at the rate prevailing at the time of rendition of taxable service and not the rate in force on the date of receipt of payments for such services - the demand of service tax of ₹ 2,06,000/- against the appellant M/s R.G. Pigments Pvt. Ltd. is sustained - the facts do not indicate any wilful, misstatement or suppression of facts, fraud or collusion with intent to evade payment of service tax on the part of the appellant, the equivalent penalty of ₹ 2,06,000/- imposed on the appellant M/s R.G. Pigments Pvt. Ltd. under Section 78 of the Finance Act, 1994 is hereby dropped. Appeal allowed - decided partly in favor of appellant.
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2017 (9) TMI 420
Business Auxiliary Service - the appellant have carried out the activity of chemist association and was charging some amount from the manufacturers to circulate the product information among its members - whether the activity carried out by appellant would be taxed under the head Business Auxiliary Services? - Held that: - the identical issue has come up before the Tribunal in the case of Federation of Gujarat State Chemist & Druggist Assn. Vs. CCE, Rajkot [2012 (7) TMI 501 - CESTAT, AHMEDABAD], where it was held that the purpose is to help the members of the association to know the margins and also to ensure that by at correct price and get the proper margins in their business, mere publication of name of the company and the details explained above cannot amount to sale or promotion - demand set aside - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 419
Simultaneous Penalties u/s 76 and 78 - evasion of service tax conducted after 10.5.2008 - case of appellant is that the penalties under both Sections 76 and 78 cannot be imposed simultaneously for the period prior to 10.5.2008 when the amendment was made in the Section 78 of the Finance Act stating that where penalty is payable under Section 78, the provision of Section 76 shall not apply - Held that: - for the offence of evasion of service tax for the period after cut off date of 10.5.2008, only one penalty i.e. under section 78 can be imposed. Therefore, the penalty imposed under section 76 for the tax evaded for the period post 10.5.2008 only is hereby dropped but for the period prior to 10.5.2008 penalties imposed under both Sections 76 and 78 are sustained. As the facts do not make it clear that how much / what is exact quantification of the tax evaded separately for these two periods i.e. prior to 10.5.2008 and post 10.05.08, the matter is remanded to the original adjudicating authority for quantification of the tax demand for these two periods - appeal allowed by way of remand.
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2017 (9) TMI 418
Stock broking services - services provided to the clients located in Jammu and Kashmir - levy of tax - Held that: - Tribunal in the case of Religare Securities Ltd. Vs. CST Delhi [2014 (4) TMI 588 - CESTAT NEW DELHI] has held that in terms of the section 64 of the Finance Act 1994, discharging of service tax has been exempted in the case of services provided in Jammu and Kashmir region - demand set aside - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 417
Construction services - N/N. 01/2006 - denial of benefit on the premise that the services provided by the appellant are in relation to completion and finishing services, and as such abatement not available - Held that: - the impugned order has not fully examined the facts and submissions of the appellant where they state that their civil construction work not exclusively in the nature of completion and finishing services and that in case of the construction of the buildings for use by SWF, the buildings were to be used for the purpose of social welfare and for non-commercial activities - matter requires reconsideration - appeal allowed by way of remand.
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2017 (9) TMI 410
CENVAT credit - canteen services - medical treatment expenses - penalty - Held that: - The appellant has asserted that the service provider is registered as outdoor caterer with Service Tax Department and has paid service tax as is apparent from the bill. In these circumstances, the service provided has to be treated as outdoor catering service and credit allowed. Workman injured in the factory - medical treatment expenses - Held that: - It is seen that the appellant has not produced any evidence to the lower authorities or to the Tribunal to the effect that the person treated was indeed a workman and not somebody else. In absence of evidence, credit of the same cannot be allowed. Penalty - Held that: - the amounts are very small and there is no specific evidence of any suppression or mala fides of the appellant. In these circumstances, invoking Section 80, the penalties are set aside. Appeal allowed - decided partly in favor of appellant.
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Central Excise
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2017 (9) TMI 432
Collection of un-dated/post-dated cheques - Seizure/detention of goods - provisional attachment of property - Held that: - the conclusion in para 4.4 that "the responsibility of accepting undated cheques from the assessee cannot be fixed on any individual officer" since "they have acted in the best interest of Govt. revenue" being contrary to fact and law cannot therefore be accepted. Administering a mere 'warning' to the officers involved underplays the seriousness of the issue. Learned counsel appearing for the CVC referred to Section 8 of the Central Vigilance Commission Act, 2003 (CVC Act) which delineates the functions and powers of the CVC. The Court directs that a copy of the affidavit be filed by the Revenue be served on the counsel for the CVC to examine if the report dated 25th May 2017 of the Superintendent (Vigilance) of the anti-evasion enclosed with it as Annexure A/2 discloses the commission of an offence which may be punishable under the Prevention of Corruption Act, 1988. The Court requests the CVC to place before it, before the next date, a note on what possible regulatory framework can be put in place to strengthen the vigilance system in the Ministries and Departments of government concerned with collection of indirect taxes, with particular reference to excise duty, customs duty and service tax.
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2017 (9) TMI 416
Condonation of delay - Cement and clinker - whether the cement cleared by the appellant to the customers covered under serial No.1C of the N/N. 4/2006-CE dated 01.03.2006 read with Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and whether such consumers can be categorized as institutional or industrial consumer? - the decision in the case of Ambuja Cements Ltd. Versus C.C.E. Raipur [ 2017 (1) TMI 1130 - CESTAT NEW DELHI] contested - Held that: - delay condoned - petition admitted.
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2017 (9) TMI 415
Denial of the benefit of N/N. 6/2006, dated 1-3-2006 - anchor rings and load spreading plates - the decision in the case of Rakhoh Enterprises Versus Commissioner of Central Excise, Pune [2016 (11) TMI 1207 - CESTAT MUMBAI] contested - Held that: - In deciding the issue of entitlement of the respondent Assessee to the benefit of exemption under the Notification in question (No.6/2006 dated 1st March, 2006) the Tribunal has relied upon the decision of a larger Bench. The said decision of the larger Bench is not under challenge - present appeal dismissed.
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2017 (9) TMI 414
Utilization of CENVAT credit suo moto - payment of disputed duty through PLA along with interest - Revenue was of the view that the appellants should have filed refund claim under Section 11B and should not have taken Cenvat Credit suo moto - Held that: - reliance placed in the case of The Commissioner of Central Excise, Mumbai-III Versus M/s CEAT Ltd. [2013 (7) TMI 568 - BOMBAY HIGH COURT], where it was held that the debits were held to be of no consequence when the assessee was required to pay duty initially discharged using AED (GSI) credit - credit allowed - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 413
Manufacture - clearances made in cascades - case of Revenue is that the goods are cleared from the factory of the assessee-Respondents in the form of Compressed Natural Gas (CNG) in cascades. In terms of Note 5 to Chapter No. 27, the Natural Gas which is compressed for use as a fuel or for any other purpose shall amount to manufacture and, therefore, the assessee-Respondents are required to pay duty on such CNG - Held that: - even though the Natural Gas is transported to the customers premises in compressed form, such process of compression has been done for the purposes of transportation only. Such process cannot be considered as a process of manufacture, since the goods are sold not as CNG but as Natural Gas - demand set aside - appeal dismissed - decided against Revenue.
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2017 (9) TMI 412
CENVAT credit - rental of premises taken for business, which have not been included in the registration certificate of the appellant for the period 2008-09 and 2009-10 - Held that: - the said premises have been used for business and also subsequently, included in the Registration certificate - matter remanded to the adjudicating authority to allow the CENVAT credit subject to satisfaction that the premises in question have been included in the GST Registration certificate of the appellant. Penalty - Held that: - the transaction is recorded in the books of accounts ordinarily maintained by the appellant. It is case of only a venial breach of the provisions - penalty set aside. Appeal allowed by way of remand.
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2017 (9) TMI 411
CENVAT credit - freight - place of removal - whether CENVAT credit have been rightly disallowed on the inputs (freight output) service for transporting and forwarding of the goods beyond their place of removal, for being exported out of India? - whether the place of removal is the factory gate of the appellant or the port of loading? - Held that: - the SCN have been issued on the basic charge that the place of removal under the facts and circumstances is factory gate and not the port of export or the load port - I find the said allegation to be not sustainable in the facts and circumstances under the scheme of the Act and the Rules and also particularly in view of the ruling of Hon'ble Gujarat High Court in the case of Dynamic Industries Ltd. [2014 (8) TMI 713 - GUJARAT HIGH COURT], where it was held that in the case of export, the place of removal is the port of loading. It is clear that the appellant is obligated to deliver the export goods upto the place of foreign buyer, therefore, in India, the place of removal is the port of export. Appeal allowed - decided in favor of appellant.
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2017 (9) TMI 409
Liability of interest - amount paid by appellant prior to the finalization of provisional assessment - Held that: - issue is covered by the decision in the case of CEAT Limited Versus The Commissioner of Central Excise & Customs, Nashik [2015 (2) TMI 794 - BOMBAY HIGH COURT], where it was held that The liability to pay interest arises on any amount payable to Central Government and consequent to order for final assessment under Rule 7 subrule (3). The liability to pay interest on any amount payable to Central Government consequent to order for final assessment is not a situation to be found in the present case - the demand of interest cannot be sustained - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 408
Classification of goods - Potato flakes or Aloo Mash - whether classified under CTH 11052000 or under CTH 20052000? - demand of differential duty - revenue contended that, the appellants appeared to be manufacturing Aloo Mash and preservative were also added - Held that: - Revenue could not establish that statement of original authority in Para-31 of impugned Order-in-Original that a sample of Aloo Mash manufactured by appellant was sent for chemical examination was recorded on the basis of facts - on going through the submissions made by the appellant before the original authority the process of manufacture stated at Para-28 of the Order-in-Original, the meaning of Mash submitted by the Learned Counsel for appellant and chapter notes of Chapter 20 and the processes which are covered under Chapter 7, 8 and 11, the subject goods have been admittedly subjected to the process of flaking and there is no process carried out to form a mash of potatoes in the factory of the appellant - the subject goods are classifiable under Tariff Item No. 11052000 - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 407
CENVAT credit - penalty - rejected inputs - credit availed on xerox copies of invoice - case of appellant is that the unit is closed and he may not be able to produce original invoice for availment of CENVAT credit - Held that: - Availment of CENVAT credit on the xerox copy of the invoice seems to be totally irregular and appellant is not able to explain the situation which led to availment of CENVAT credit on the xerox copies of invoices - Keeping in mind that there are no detailed finding as to erroneous availment of CENVAT credit on the rejected inputs and how it has to be attended to, the equivalent amount of penalty imposed by the lower authorities seems to be excessive - penalty is reduced to ₹ 1,00,000/-. Non-payment of central excise duty on the goods manufactured and cleared under job work - it is the claim of the appellant that they were functioning under the provisions of N/N. 214/86 that mandates that the recipient of goods is the manufacturer, on whom the duty liability arises - penalty - Held that: - learned counsel is not able to produce the declaration under Notification No. 214/86, which has to be filed along with acceptance of the job work with the jurisdictional authorities. In the absence of any such declaration, in my view the penalty imposed by the lower authority seems to be correct - penalty upheld. Penalty u/r 25 - Held that: - there being contravention of the provisions of CER, 2002, imposing penalty under Rule 25 is correct, however, keeping in mind the factual submissions that the appellant's unit is closed, the ends of natural justice will be met if the penalty imposed for this issue of contravention of Central Excise Rules 2002 is reduced to ₹ 75,000/-. Appeal allowed - decided partly in favor of appellant.
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2017 (9) TMI 406
Rebate claim - export of goods - reverse charge mechanism - rejection of rebate on the ground that the said case does not come under the purview of the provisions of Export of Service Rules, 2005 nor under Rule 18 of Central Excise Rules, 2004 - Held that: - there is no dispute that the said amount of ₹ 8,84,750/- was paid by the appellant as Service Tax on the input service and they were eligible for availment of Cenvat credit of the same. Therefore, it is apparent that they were eligible for refund of said claim of ₹ 8,84,750/- under Rule 5 of CCR, 2004 and that the defects in the said application dated 23/08/2007 which continued even through the written submission dated 25/01/2008 cannot debar the appellant from the substantial benefit allowed by the law - rebate allowed - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 405
Principles of Natural Justice - Valuation - appellant has repeatedly failed to appear before that authority and lead proper evidence - Held that: - Looking to the attitude of the appellant by repeated absence to place evidence before the authority as well as explain the reasons of the deduction claimed, appeal of the assessee is liable to be dismissed - this order has been passed in the absence of appellant. But the facts and circumstances narrated by the adjudicating authority, demonstrate that this appeal is an abuse of process of law for the dilatory tactics followed by the appellant - appeal dismissed - decided against appellant.
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CST, VAT & Sales Tax
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2017 (9) TMI 395
Branch Transfers - Form-F - Whether under the facts and circumstances, the learned Tribunal erred in allowing the production of F-Forms without insisting the production of evidence? - Held that: - If apart from non furnishing of F forms, the Assessing Officer had disputed about the movement of goods, the transactions could not have been taxed as inter-State sales. If the department was aggrieved by the same, it was open for the department to challenge the same before the first appellate authority. Not having done so, the department cannot reverse the situation - appeal dismissed.
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2017 (9) TMI 394
Maintainability of petition - time limitation - Validity of Revision Order - challenge on the ground that the Revision authority had acted on the opinion of the audit party without independent application of mind - Held that: - after the Tribunal passed its impugned order on 04.02.2005, the Government took no steps to challenge the same for close to 10 years when for the first time rectification application came to be moved before the Tribunal. This application was filed on 03.02.2015. Thus, for 10 long years there was no action on part of the department. It may be that the rectification application came to be dismissed by the Tribunal on 16.02.2015. Nevertheless, the delay has to be seen in light of the overall facts. Even after the Tribunal rejected the rectification application, the department took two years to move the present petition - petition dismissed on the ground of delay.
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2017 (9) TMI 393
Validity of assessment order - levy of tax - tax not deducted at source - Held that: - This Court is aware of the fact that there is no privity between the first respondent and respondents 4 and 5. Therefore, there is no statutory duty on his part to cause such verification. Nevertheless, the first respondent, being the Assessing Officer of the petitioner has to ensure that there is no double taxation - slight departure can be made in the instant case, where the first respondent using his official machinery can verify from the respondents 4 and 5 as to whether the taxable turn over pertaining to the subject construction has been reported with the respondents 2 and 3 in their returns and whether taxes have been paid or in the alternative, the first respondent may address the respondents 4 and 5 for issuance of necessary declaration as sought for - petition allowed by way of remand.
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