CCE, C & ST Vs GUJARAT ALKALIES AND CHEMICALS LTD : GUJARAT HIGH COURT (Dated: September 21, 2017)
CX - The assessee availed Cenvat credit of service tax paid on 'Outdoor Catering Service' - The revenue sought to deny such credit on grounds that the input service in question had no relation to the manufacture of final product, and were not covered under the definition of 'input service' - Duty demand for recovery of credit along with interest & penalty was imposed - The assessee's appeal was dismissed by the Commr.(A) - The Tribunal relied on the precednt decisions in Commr. Of C. Ex., AhmedabadI v. Ferromatik Milacron India Ltd. and Commissioner Of C. Ex., Nagpur v. Ultratech Cement Ltd. and allowed the assessee to avail such credit.
Held - Considering the findings of the Gujarat High Court in Commr. Of C. Ex., AhmedabadI v. Ferromatik Milacron India Ltd. and also that an identical view was expressed by the Bombay High Court in Commissioner Of C. Ex., Nagpur v. Ultratech Cement Ltd., the revenue's appeal was dismissed: High Court (Para 2,3,4,5)
Appeal Dismissed
2017-TIOL-2083-HC-AHM-VAT
MINAXI TEXTILES LTD Vs DCCT: GUJARAT HIGH COURT (Dated: September 22, 2017)
Gujarat VAT Act - Writ - Section 37 & 40(1).
Keywords: Breach of condition - Eligibility certificate - Eligible unit - Entitlement certificate - Final assessment - Provisional refund & Textile policy.
The Assessee-company was engaged in manufacturing and weaving of cotton and was granted eligibility certificate under notification issued by Government of Gujarat in exercise of powers under section 40(1) of the VAT Act authorizing the Commissioner to grant refund to an eligible unit the amount of tax separately charged by a registered dealer from whom such eligible unit had purchased the taxable goods. The notification contained various conditions for granting eligibility certificate, entitlement certificate to an eligible unit and other conditions, upon which, such refund would be granted. A certificate of entitlement was also granted to the Assessee for the total incentive amount of Rs.1143.24 lakhs for the period between 18.09.2013 to 17.09.2021. The Assessee filed online application in prescribed form for granting provisional refund.and accordingly, the commissioner passed an order granting provisional refund under section 37 of the VAT Act to the Assessee of a sum of Rs.1,21,50,000/-. Thereafter, the commissioner issued a notice to the Assessee pointing out that under government's textile policy for that period, it was necessary to examine whether condition no.19 of the notification was fulfilled or not and Assessee was therefore required to clarify whether the it had made any purchases from the dealers who are enjoying eligibility certificate under said notification and whether with respect to such purchases, the Assessee had claimed refund or not.
The Assessee contended that there was no breach of condition no.19 in any of the it's refund claims because whether the dealers were also entitled to exemption and whether they themselves had paid the tax or not would not be within its knowledge and it had made purchases from the dealers registered within the State and had thereby complied with the condition no.19 of the notification. But, the commissioner did not accepted such explanation and passed the order directing the Assessee to refund the said sum with interest.
in Writ, the High Court held that,
Whether excess provisional refund granted u/s 37(4) can be disturbed and recovery can be demanded, even in pendency of final assessment - NO: HC
++ under sub-section (1) of section 37 thus, it is open for a registered dealer to apply for a provisional refund pending assessment. Under sub-section (2), it is open for the Commissioner by imposing necessary condition to grant such provisional refund. Such provisional refund can be disturbed only in terms of sub-section (4) of section 37 if on assessment, the provisional refund granted is found to be in excess. In order to disturb the provisional refund already granted what is therefore necessary is to assess the return of the Assessee. The reference to "if on assessment" in sub-section (4) of section 37 cannot be interrupted as assessment of the refund claim of the Assessee, keeping the return of the Assessee unassessed, to be assessed later on. A provisional refund once granted under sub-section (4) of section 37 can be disturbed and recovery can be demanded only on final assessment and not otherwise. In can be appreciated that during the assessment, many issues may come up and ultimate tax liability of an assessee can be judged only on final assessment. There cannot be a stand alone assessment of a refund claim in isolation, keeping the rest of the return unassessed. In the present case, no such assessment is framed. In that view of the matter, orders in both the petitions are set aside. It would be open for the authorities to proceed further in accordance with law and if on final assessments, the refund provisionally granted to the Assessee is found to be in excess, it shall be open to recover the same in accordance with the statutory provisions.
Assessee's Writ allowed
2017-TIOL-2082-HC-AHM-CX
CCE, C & ST Vs BELGIUM GLASS AND CERAMICS PVT LTD: GUJARAT HIGH COURT (Dated: September 21, 2017)
CX - The issue in the present appeal pertained to the rate of duty and valuation of the subject goods - Subsequently, the revenue's appeals were dismissed by the Tribunal, as being non-maintainable - The Tribunal had reasoned that u/s 35G of the Central Excise Act, an appeal involving the issue of rate of duty or valuation was not maintainable before the Tribunal and that the proper forum for entertaining such appeals was the High Court.
Held - The reasoning of the Tribunal was not contested by the revenue - Considering such decision, the revenue appeals were dismissed: High Court (Para 1,2)
Appeal dismissed
2017-TIOL-2081-HC-MUM-ST
SHREE SAMARTH ASSOCIATES Vs CCE : BOMBAY HIGH COURT (Dated: September 12, 2017)
ST - the assessee is engaged in providing temporary laborers to various service recipients, and is registered under the heading "Manpower Recruitment Agency service" - Duty demand with interest & penalty was imposed along with penalty u/s 77 & 78 - The Commr.(A) reduced the duty demands with the penalty, apart from reducing the penalty imposed u/s 78 and upholding the penalty imposed u/s 77 - Such O-i-A was upheld by the Tribunal.
Held - from a perusal of the impugned order of the Tribunal, it emerges that it did not record the gist of submissions made before it, and the findings recorded therein were cryptic - Further the Tribunal had not adverted to the findings of the Commr.(A) and merely held that the O-i-A was well-reasoned, warranting no interference - Moreover no reasons insupport of its findings were recorded by the Tribunal - Hence impugned order of Tribunal set aside and appeal remanded back to Tribunal, for de novo adjudication: High Court (Para 3,4,5,6)
Case remanded
2017-TIOL-2080-HC-MUM-IT
CIT Vs BHARATI VIDYAPEETH : BOMBAY HIGH COURT (Dated: September 25, 2017)
Income Tax - Section 260A.
Keywords: Conditional order - Law of limitation - Office objections & Restoration application.
The Assessee- a Deemed university and a group of higher educational institutions, had filed its return. The CIT(E) admitted that the Revnue's matter was listed before the Prothonotary and Senior Master, where a conditional order was passed. Since the office objections were not removed, thereafter the Appeal was dismissed for non-removal of office objections, which was self operative orders. However, the said conitional order was set aside by the High Court and directed that apart from the Chamber Orders filed by the Revenue, no separate application was warranted. Further, the Court also asked to file additional affidavit, if any within two weeks and an advance copy of the same would be furnished to the Assessee's Representative.
On appeal, the High Court held that,
Whether if office objections were not removed within a stipulated time frame, it shows that the Revenue officials are grossly negligent and hence, the delay cannot be condoned - YES: HC
++ we deemed it proper that restoration application of this nature, which is seriously contested, ought to have been placed by the Prothonotary and Senior Master before the Court. His order restoring the Appeals on his own and though there was a delay of more than three years, is not mere irregularity but an illegality going to the root of the case. It is the prerogative of the Court whether to sustain such dismissal orders and particularly when they were supported by the Assessee;
++ if a memo in a Tax Appeal filed in this Court cannot be notified for removal of office objections. The office objections are noted on the memo itself and the Advocate or the litigant is given 30 days time to remove these office objections. If they are not removed, the matter shall be placed before the Prothonotary and Senior Master for directions, who may reject the said Appeal for non-removal of office objections. If the I-T Department is the guardian and protector of public revenues, then, it is but natural that it should be vigilant and must pursue the cases filed with promptness and diligence;
++ as far as this Court is concerned, whatever may be the mode or procedure of filing Appeals and which was known to departmental panel Advocates engaged earlier, which has now been stated to be dissolved and independent Advocates are entrusted with the duty to file Appeals, nothing of this nature will prevent the Revenue officials in-charge of the concerned Departments or wings from following up their matters;
++ the papers being handed over to the Advocate, their responsibility does not come to an end. There has to be a follow-up and the Revenue Advocates as also their officials can learn a lesson or two from their counterparts or adversaries, namely, the Assessees. That Advocates or officials are underpaid or not paid on time and Government matters remain neglected because of several reasons, some of which may be intentional and deliberate, does not mean such explanations have to be necessarily accepted. It is time and again held by the Supreme Court that Government and its Departments including the Department of I-T is not a special litigant. The law of limitation does not exempt it. If 30 days' time was given to remove office objections, they were not removed and no application was moved within the next 30 days to set aside the conditional order and there is a delay in this case, as is brought on record by the Assessee, of 958 days, then, this is no explanation for the same;
++ the Revenue officials are grossly negligent, we hold that there is no sufficient cause for condoning this enormous delay. The explanation on affidavit is devoid of any particulars, vague and general in nature. It is rejected. The Applications for restoration are dismissed.
Revenue's appeal dismissed
2017-TIOL-2079-HC-MUM-IT
CIT Vs P N WRITER AND COMPANY PVT LTD : BOMBAY HIGH COURT (Dated: September 25, 2017)
Income Tax - Sections 14A, 140A , 143(1)(a), 244A & Rule 8D
Keywords: Grant of interest - Identical facts & circumstances - Judicial discipline & Self-assessment.
The Assessee-company, had filed its return declaring a total income of Rs.60,80,880/-. The return was processed whereby, notices were issued and served upon the Assessee. The AO observed that the addition u/s 14A r/w Rule 8D is made in past almost all the AYs. The assessment was completed whereby, the AO made addition of Rs. 30,38,149/-. Aggrieved Assessee, challenged the assessment order before the CIT(A) and raised an additional ground of non-granting of interest u/s 244A on the payment of Rs. 4.50 crores on estimation basis. However, the CIT(A) disposed of the appeal by reducing the disallowance from Rs.30,38,149/- to Rs. 26,08,125/- and refused the relief of interest since the Assessee failed to produce any material which would demonstrate how this tax was worked out. The matter went to the Tribunal, where the order of the CIT(A) was upheld. However, the Assessee further raised a plea for grant of interest. It was held by the Tribunal that the tax paid by the Assessee for a sum of Rs. 4.50 crores was nothing but tax paid under self-assessment for the purpose of Section 140A and once that was so, the Assessee was entitled to interest.
On appeal, the High Court held that,
Whether judicial discipline demands a Division Bench's judgment to be discarded having similar facts, when it is not shown to be per incuriam - NO: HC
++ we do not think that it would be fair for the Revenue to demonstrate to us that the Division Bench judgment of this Court in Stock Holding Corporation of India Limited, which discusses all these questions and answers them against the Revenue and in favour of the Assessee, should be brushed aside or ignored. It is not shown to be per incuriam, nor is it demonstrated that this judgment has not been accepted by the Revenue, and therefore, challenged in the Supreme Court of India and that challenge is pending or this judgment has been reversed;
++ in the absence of such material on record, we do not think that the Division Bench judgment, which discusses all the questions and which are identical to the present case, should be discarded in this manner. Judicial discipline demands that we follow and apply it to the case at hand because the facts and circumstances are identical and equally the legal provisions;
++ in view of the Division Bench judgment of this Court in Stock Holding Corporation of India Limited, we answer each of these questions against the Revenue and in favour of the Assessee. They are not substantial questions of law at all. The Appeal is therefore devoid of merits and is dismissed. There shall be no order as to costs.
Revenue's appeal dismissed
2017-TIOL-2078-HC-AHM-IT
Pr.CIT Vs RADHE INFRASTRUCTURE AND PROJECTS INDIA LTD : GUJARAT HIGH COURT (Dated: July 19, 2017)
Income Tax - Section 271(1)(c).
Keywords: Claim of deduction - Penalty proceedings - Pending litigations - Sale of land & Untenable and unsustainable claim.
The Assessee-company was engaged in construction activities. The Assessee had filed its return for the relevant AY. During the assessment proceeding, the AO found that the Assessee had raised totally untenable and unsustainable claim. The assessment was completed in addition to making disallowances, also instituted and later on imposed penalty. Both the CIT(A) and the Tribunal concurrently found that the Assessee had made full disclosures and had set up a claim which ultimately was not accepted by the Revenue. However, that by itself would not give rise to penalty. Therefore, the Tribunal confirmed the view of the CIT(A) relying on the judgement of the Supreme Court in case of Reliance Petroproducts Pvt. Ltd.
On appeal, the High Court held that,
Whether mere rejection of Assessee's claim for deduction, implies that the said claim was mischievous or not bona fide and hence, liable for penalty proceedings - NO: HC
++ the record would suggest that the Assessee had claimed deduction in respect of certain blocks of land on the ground that the lands were under dispute and there were litigations pending. The Assessee was asked to justify the claim of deductions. The Assessee made detailed explanation. However, the AO did not accept the explanation. He was of the opinion that only the profit element on sale of the land would be allowed as deduction and not the entire sale consideration;
++ it can thus be seen that the Assessee had put up a claim, which the AO did not accept. That by itself would not be sufficient to give rise to penalty proceedings. Mere fact, that during the assessment the Assessee agreed to such disallowance also would not mean that the claim itself was at the very outset mischievous or not bona fide made. Tax appeal is, therefore, dismissed.
Revenue's appeal dismissed
2017-TIOL-3580-CESTAT-DEL + Story
PARLE BISCUITS PVT LTD Vs CCE : DELHI CESTAT (Dated : September 1, 2017)
CX - As lessee had not transferred their business to the appellant, provision of Rule 10 of Cenvat Credit Rules, 2004 have not been complied with - Therefore, the appellant is not entitled to avail cenvat credit on work in process, on capital goods and inputs of M/s Mound Trading Co. Pvt. Limited. - impugned order denying credit is upheld and appeal is dismissed: CESTAT [para 7, 8]
Appeal dismissed
