CASE LAWS

2016-TIOL-696-HC-DEL-ST

AHLUWALIA CONSTRUCTION GROUP Vs CST: DELHI HIGH COURT (Dated: April 1, 2016)

ST - Tax demand of Rs.6,02,71,598/- was confirmed along with interest and penalties under Commercial or Industrial Construction Service (CICS) - CESTAT holding that even CICS is a limb of works contract service and ST liability under compositional scheme under works contract service and with 67% abatement under CICS is approximately the same - Holding that appellant would be prima facie eligible for 67% abatement, pre-deposit of Rs.1.8 crores along with proportioned interest was ordered - appeal to High Court - Appellant submitting that jurisdictional issue of the exigibility of the works contract executed by the Petitioner to service tax by wrongly classifying it as 'construction service', despite having been specifically urged by the Appellant before it, has not been taken note of by the CESTAT - also SC decision in Larsen & Toubro - 2015-TIOL-187-SC-ST not considered. 

Held: In a similar appeal by a sister concern of the Appellant, High Court by an order dated 12th October, 2015 in Service Tax Appeal No.1/2015 (Ahlcons India Pvt Ltd v. Commissioner of Service Tax) - 2015-TIOL-2565-HC-DEL-ST noted a similar contention of the Appellant and remanded the matter to the CESTAT for consideration of the Appellant's application for waiver of the pre-deposit afresh in accordance with law - impugned orders dated 28th July 2015 and 9th February 2016 set aside reviving the stay application filed by the Appellant before the CESTAT for a fresh decision - Appeal disposed of: High Court [para 4, 5, 6]

Matter remanded

2016-TIOL-695-HC-DEL-CUS

DAYA ENTERPRISES Vs CC: DELHI HIGH COURT (Dated: April 1, 2016)

Cus - Provisional release of the goods - Conditions imposed by Commissioner of Customs (Export) are (a) Execution of bond for an amount of Rs.1,65,49,893/- which is equivalent to the re-determined value of unbranded goods (b) payment of Rs. 50,42,172/- that is the total duty involved on the value re-determined as above of unbranded seized goods or execution of Bank Guarantee equivalent to said amount with auto renewal clause (c) execution of Bank Guarantee of Rs.41,37,473/- which is equivalent to 25% of the re-determined value of seized goods for the purposes of securing fine and penalty, with auto renewal clause - Writ Petition filed claiming that these conditions are onerous. Held: Court had on earlier occasions dealt with similar issues in Spirotech Heat Exchangers Pvt. Ltd. 2016-TIOL-344-HC-DEL-CUS& Navshakti Industries Pvt. Ltd. 2010-TIOL-204-HC-DEL-CUS and had modified the conditions imposed for provisional release of the goods - consequently, High Court directs the provisional release of the goods in question in favour of the Petitioner subject to the Petitioner executing a bond in the sum equivalent to 100% of the re-determined value of the goods and furnishing security in the form of bank guarantee for a sum equivalent to 30% of the differential duty, with an auto renewal clause and as per RBI guidelines - Writ Petition is disposed of: High Court [para 4, 6, 8]

Cus - existence of Alternate remedy against order of provisional release. Held - since the Respondent does not appear to be inclined to follow the aforementioned orders in Spirotech Heat Exchangers & Navshakti Industries and the binding order of the Supreme Court, and are compelling exporters and importers to approach the High Court every time for relaxation of the conditions imposed for the provisional release of goods, the Court is of the view that relegating the Petitioner to a statutory remedy would not be efficacious: High Court [para 5]

Petition disposed of

2016-TIOL-811-CESTAT-MUM

KORTEN PHARMACEUTICALS PVT LTD Vs CCE: MUMBAI CESTAT (Dated: February 29, 2016)

CX - CENVAT - Input Services - Rule 2(l) of CCR, 2004 - Maintenance of Xerox machine installed in the appellant's factory and of Cars registered under company's name are services used for the factories activity which is related to the business activity of the appellant - Credit admissible: CESTAT [para 5]

Appeal allowed

2016-TIOL-810-CESTAT-MUM

PRISTINE SWITCHGEAR INDIA PVT LTD Vs CCE: MUMBAI CESTAT (Dated: February 8, 2016)

CX – Whether assessee is required to pay 10% of the value of goods cleared to Special Economic Zone (SEZ) developers prior to amendment by Notification 50/2008-CE(NT) dated 31.12.2008? Held: Though the specific amendment was made in CCR, 2004 vide Notification No. 50/2008-CE(NT), according to which the assessee is not required to pay 10% of the total value of the goods cleared to SEZ developers, however, even prior to this amendment, Rule 6(3)(b) had no application for the reason that supplies to SEZ developers is considered as export as provided in Special Economic Zone Act, 2005, therefore, demand of 10% payment was wrongly confirmed by the Adjudicating authority and upheld by the Commissioner (Appeals) – On this issue much water has flown in view of various judgments cited – Order set aside & appeal is allowed with consequential relief, if any: CESTAT [para 5]

Appeal allowed

2016-TIOL-482-ITAT-KOL

NHAI Vs ACIT: KOLKATA ITAT (Dated: March 9, 2016)

Income Tax - Sections 201(1), 201(3) & 201(1A)

Keywords - Limitation period - TDS

Whether interest can be imposed on the assessee for delay in deposit of TDS when the same happened due to late clearing of cheques or non-availability of authorized signatories of cheque - NO: ITAT

Assessee's appeal allowed

2016-TIOL-481-ITAT-MUM

Income Tax - Section 40(a)(ia).

Keywords - hawala transactions - retrospective effect - TDS.

Whether the second proviso to section 40(a)(ia) is declaratory and curative in nature and has retrospective effect from 1st April, 2005 - YES:ITAT

Whether such transactions cannot be treated as hawala transactions, when assessee has explained the purchases made from dealers with all the supporting records which proved that the assessee had received the materials as evidenced by the delivery challan and other records - YES:ITAT

Assessee's appeal allowed

2016-TIOL-480-ITAT-AHM

ACIT Vs KRISHNA CORPORATION: AHMEDABAD ITAT (Dated: February 26, 2016)

Income Tax - Sections 37, 40(a)(ia) & 40(a)(ic).

Whether section 40(a)(ia) can be invoked when the impugned provision for expenses in question was created on 31-03- 2009 i.e. in the month of March and the assessee has paid the TDS in question before the deadline date falling on 31-05-2009 - Whether the CIT(A) was justified in deleting addition made by the AO on the basis of 26AS report when the assessee has duly recorded the purchase of timber in its books of accounts against the TCS - Whether the fringe benefit tax can be allowed as an expenditure incurred wholly and exclusively for the purpose of the business u/s 37.

Revenue's appeal partly allowed

2016-TIOL-11-COMPAT-CACT

P RAJA Vs CCI: COMPETITION APPELLATE TRIBUNAL NEW DELHI (Dated: March 28, 2016)

The Competition Act, 2002 - Section 4, 26(2) and 53-B

Keywords - spare parts - frequent breakdowns - deficiency in services - unreasonable prices - discriminatory prices - abuse of dominance

Whether there is any competition issue involved when there is gross deficiency in the after-sale services along with unreasonably high prices for replacement of spare parts - NO:COMPAT

Monetary Policy Report - April 2016