FDI
Govt notifies Consolidated FDI Policy effective from August 28, 2017
ST se GST tak
GST, Rule 6(4) of CCR, 2004 and Transitional ITC - An aberration
CASE LAWS
2017-TIOL-1678-HC-DEL-MISC
MOHIT MINERALS PVT LTD Vs UoI: DELHI HIGH COURT (Dated: August 25, 2017)
GST - Clean Energy Cess - Crux of the Petitioner's submission is that Section 18 of the COI 101st Amendment Act does not enable the Parliament to levy any cess which stood abolished in terms of the Third Schedule of the Taxation Laws (Amendment) Act, 2017. Held: Court sees prima facie merit in the contention of the Petitioner, based on the history of the abolition of the Clean Energy Cess and the introduction of the GST regime, that the power of Parliament to enact the impugned Act cannot be traced to Section 18 of the COI 101st Amendment Act, therefore, a prima facie case is made out as regards the legislative competence of the Parliament to enact the impugned Act - Court, is of the view that, the Petitioner has made out a prima facie case for partial ad interim relief subject to conditions - As far as the additional levy on the stocks of coal on which it has already paid the Clean Energy Cess in terms of FA Act, 2010, the Petitioner should not be required to make any further payment - However, on stocks of coal on which no Clean Energy Cess under the FA, 2010 was paid, any payment made in terms of the impugned Act would be subject to the result of this petition - It is made clear that, in the event of the Petitioner succeeding in the present petition, the Petitioner would be entitled to a refund of amounts of Clean Energy Cess paid under the Act and on such terms as the Court may determine in the final order - it is necessary for the officers of the Department concerned, charged with the responsibility of levying and collecting Clean Energy Cess on coal to depute a team to the Petitioner's business premises to verify on how much of the stock of coal Clean Energy Cess under the FA, 2010 already stands paid - Subject to the Petitioner furnishing to the satisfaction of the officers proof of such payment, the Petitioner will be given credit for such payment and will not be required to make any further payment under the impugned Act for effecting sales and clearances - Till such time the said exercise is completed, no coercive steps will be taken against the Petitioner to recover the levy under the impugned Act - It is also made clear that on those stocks for which the Petitioner is not able to produce a satisfactory proof of already having paid the Clean Energy Cess under the FA, 2010, the Petitioner will be required to pay the cess under the impugned Act – Matter to be listed on 26 October 2017: High Court [para 8, 13, 14, 15, 16]
Partial Ad interim relief granted
2017-TIOL-1679-HC-DEL-MISC
KUNDAN CARE PRODUCTS LTD Vs UoI: DELHI HIGH COURT (Dated: August 25, 2017)
CGST – CENVAT - Petitioners challenge Notification 22/2017-CGST dated 17th August 2017 inserting Rule 44 A in the CGST Rules, 2017 requiring reversal of 5/6th of the CENVAT Credit which had already accrued to the Petitioner on account of payment of additional duty of customs levied under Section 3(1) of the Customs Tariff Act, 1975 paid at the time of importation of gold dore bar; that the said CVD was allowed to be carried forward in full as a transitional measure under Section 140 of the CGST Act, 2017 – Petitioner contends that the impugned notification issued in exercise of rule-making powers under Section 164 of the CGST Act, 2017 is grossly discriminatory and unreasonable and has imposed restrictions which are applicable only to imported gold dore bars; that the impugned Notification has singled out only imported gold dore bars resulting in imposition of a higher burden of tax on these goods as compared to other imported goods as well as compared to any similar domestic goods; that if the interim orders are not granted then the credit of CVD already availed and utilized for payment of tax on finished goods by the Petitioners would be electronically reversed and they would have to deposit cash. Held: Court is of the view that the Petitioners have made out a prima facie case for grant of interim relief in their favour; that the balance of convenience is in their favour for grant of interim relief - it is directed that till the next date of hearing, no coercive steps shall be taken by the Respondents to recover the credit already availed by the Petitioners – Matter to be listed on 25 September 2017: High Court [para 4, 6]
Ad interim relief granted
2017-TIOL-1677-HC-HP-IT + Story
ALTRUIST TECHNOLOGIES PVT LTD Vs DCIT: HIMACHAL PARDESH HIGH COURT (Dated: July 13, 2017)
Income Tax - Writ - Sections 80-IC , 139, 143(3), 147 & 148.
Keywords: Excise Classification - Erroneous jurisdiction - Manufacture - NIC code - Reasons to believe - Reopening & Statutory deductions.
The Assessee-company is engaged in the business of information technology services and Call Centre as specified in the Fourteenth Schedule with three separate units, one at Baddi and two at Shimla. The Assessee filed its return and claimed Sec 80IC benefits. However, for the AY 2010-2011, the AO held that the Assessee would not have obtained Central Excise 4/6 Digit classification or National Industrial Classification (NIC) Code in 1998, hence, the Assessee was not eligible for statutory deductions. With respect to the subsequent F.Ys. the very same view was taken holding that the Assessee was ineligible for the statutory deductions. The AO issued notices u/s 148 disclosing that he had reasons to believe that with respect to previous A.Ys. 2007-2008, 2008-2009 & 2009-2010, income had escaped assessment, as per sec. 147.
The HC held that,
Whether, for the purpose of Sec 80IC, registration under the Central Excise or NIC Code is mandatory for even a business which does not fall under the category of 'manufacture' - NO: HC
++ the only objection being that since the Assessee does not possess NIC code and Excise Classification, it is not entitled to the statutory deduction. It is here, we find the AO to have committed grave illegality in correctly and completely construing the provisions of the Schedule. In fact, from the observations of the AO, it stands admitted that the code/ classification, is required only for such of those activities, which fall under the category of 'manufacture'. Assessee is running a Call Centre. It does not deal with computer hardware or is in the business of manufacturing information and communication technology. It is not into the business of manufacture or production of any articles referred to in item at Sr. No.13. It carries out operation of such items, which do not require registration or necessitate obtaining permission under the provisions of the Central Excise Act or National Industrial (Activity) Classification, 1998;
Whether it amounts to travesty of justice if the AO insists on 'manufacturing' condition for a Call Centre business before it claims Sec 80IC benefits - YES: HC
++ if the Assessee is otherwise not subjected to any of the provisions of the Statute, Rules, Notifications, circulars, under the said provisions, and when it does not relate to the activity of operations, so carried out by him, that of running a Call Centre, for which, in any event, the aforesaid provisions are not applicable, then obviously it would be incorrect and illegal to read the provisions relating to the code into the expression 'Call Centre', which is an activity, totally distinct and separate from 'manufacture' or 'production of information and communication technology'. It is in this backdrop, we find the AO to have erred in forming its opinion or reason to believe that the Assessee, was not entitled to statutory deductions. The interpretation is perverse, resulting into travesty of justice;
Whether when the AO expresses an opinion against the objections raised by the assessee against Sec 147 proceedings, it is to be seen as the AO exceeding his jurisdiction - YES: HC
++ opinion of the AO in reopening the assessments for these years is on the ground that even though the activity carried out by the Assessee was not manufacturing of the items specified in the Schedule and was otherwise not required to obtain the code, but since it otherwise did not have the same, was not entitled to statutory deductions. It is in this backdrop, we find the action initiated by the Revenue in trying to reopen the assessments, beyond a period of four years, i.e. with respect to the years 2007- 2008, 2008-2009, to be barred by limitation. Significantly, no such action is contemplated with respect to the assessment carried out in the first year i.e. Assessment Year 2006-2007;
++ it is true that notice is only subjective satisfaction and not final opinion, but then the AO has decided the objections, already expressing an opinion on the Assessee's entitlement for statutory deduction. The question is not whether the action taken is in good faith or not. What is important is that the AO has exceeded its jurisdiction erroneously. Which, in our considered view, he has so done, rendering the action to be absolutely illegal and unsustainable in law. The impugned action cannot be said to be only in the nature of SCN.
Assessee's writ allowed
2017-TIOL-1676-HC-DEL-CX
COMMISSIONER GST Vs UNITECH CONTAINERS PVT LTD: DELHI HIGH COURT (Dated: August 11, 2017)
CX - the respondent-assessee firm was engaged in the manufacture of cardboard cartons, but was unregistered with the department, due to its turnover being lower than the threshhold limit - The department alleged that the assessee was manufacturing excisable goods through dummy units managed & controlled by the directors of the assessee firm - Duty demand was imposed vide SCNs issued to the assessee firm & its directors but none were issued to the dummy units - The assessee claimed that the four dummy units were independent of each other, and in fact two of them were incorporated before the assessee, thereby their clearances could not be clubbed, without issuing SCN - Later, the Tribunal relying on certain precedents, set aside the demands.
Held - Considering the judgment in the case of Diwan Sahib Fashions Pvt. Ltd., wherein both units whose turnovers were clubbed were issued SCN, there was no legal infirmity found in the Tribunal order: High Court (Para 2-8)
Revenue appeal dismissed
2017-TIOL-1675-HC-DEL-CX
COMMISSIONER GST Vs VIMLA ROLLING MILLS PVT LTD: DELHI HIGH COURT (Dated: August 11, 2017)
CX - the respondent-assessee firm's premises and the residences of its directors were searched by DGCEI - Stocks of copper ingots & wire rods were noted & seized for allegedly being unaccounted for - Currency seized from the residence of one director was confiscated as being proceeds from sale of goods clandestinely removed - Statements of the director and an employee were recorded - Duty demand with interest & personal penalties were imposed for alleged clandestine removal of finished goods - The Tribunal later held that the revenue's case was propped up on retracted statements, inconsistent statements and uncorroborated documentary evidence - No investigation was done in the procurement of additional raw material required for manufacture of such huge quantity of goods alleged to have been clandestinely cleared - Nothing has been brought on record regarding payment received for such clandestinely cleared goods - Hence the Tribunal set aside the duty demand with penalty for the alleged clandestine removal.
Held - Considering the detailed findings of the Tribunal exposing various discrepancies in the revenue's case, the order of the Tribunal could not be called incorrect - No question of law raised by revenue: High Court (Para 1-10)
Appeal dismissed
2017-TIOL-1674-HC-MAD-CX
SURANA INDUSTRIES LTD Vs GOVT OF INDIA: MADRAS HIGH COURT (Dated: July 10, 2017)
CX - an order was passed by the Jt. Secy. to the Govt. of India, in exercise of revisional power u/s 35EE of the Act - Such order was passed to override an order of the Appellate authority - The petitioner assessee filed the present writ, challenging the jurisdiction of the Jt. Secy. to pass such an order.
Held - The High Court of Punjab & Haryana in its decision in NVR Forgings 2016-TIOL-1066 -HC-P&H-CX considered the issue as to whether or not a Jt. Secy. had the jurisdiction to pass an order countermanding an order passed by the Commr.(A), - The Court answered the issue in the negative - Such decision of the High Court was challenged before the Apex Court & the SLP was dismissed - Thus, the High Court decision would be binding on the present case - Hence, the impugned order of the Jt. Secy. merits being set aside: High Court (Para 2-8)
Writ petition allowed
