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2018-TIOL-NEWS-001 | Monday January 01, 2018
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DIRECT TAX |
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2018-TIOL-01-HC-KERALA-IT
CIT Vs All Koshys All Spices
Whether Certification for 100% EoU is sine qua non for availing Sec 10B benefits even if a unit commenced manufacture much prior to certification - YES: HC
Whether, for the purpose Sec 10B benefits, it is not the date of commencement of manufacture but the certification for 100% EoU status is critical - YES: HC - Revenue's appeal dismissed : KERALA HIGH COURT
2018-TIOL-07-ITAT-KOL + Story
Gaurav Seksaria Vs ITO
Whether credit card expenditure incurred by the assessee on behalf of the employer company, included in the FBT return filed by the company, can be taxed in the hand of the assessee as perquisite - NO: ITAT -Assessee's appeal allowed : KOLKATA ITAT
2018-TIOL-06-ITAT-KOL + Story
DCIT Vs Alliance Broad Band Services Pvt Ltd
Whether when expenditure are made in relation to technology upgradation charges, which requires frequent replacement due to rapid change in technology and constant need for upgradation, the same will be treated as revenue in nature - YES: ITAT
Whether when assessee is incurring expenses towards the replacement of optic fibre on a monthly basis, and there is no enduring value benefit, then such expenses should be allowed as revenue expenditure - YES: ITAT - Revenue's appeal dismissed : KOLKATA ITAT
2018-TIOL-05-ITAT-KOL
Bhoruka Investment Ltd Vs DCIT
Whether when assessee has sufficient non-interest bearing funds to cover the investments made in shares, there is no case for the Revenue to make disallowance of interest expenses by invoking provisions of Rule 8D(2)(ii) - YES: ITAT
Whether investments which do not yield any exempt dividend income can be taken into account while working out the average value of investments for the purpose of applying Rule 8D(2)(iii) - NO: ITAT
Whether loan or advances given by the company, in which public is substantially interested, to a beneficiary shareholder having 10% or more of the voting power is outside the provision of section 2(22)(e) of the Act and hence, cannot be taxed as deemed dividend - YES: ITAT
Whether loan or advances given by the company to assessee in the ordinary course of the business cannot be construed as deemed dividend within the meaning of section 2(22)(e) of the Act - YES: ITAT - Assessee's appeal allowed : KOLKATA ITAT
2018-TIOL-04-ITAT-KOL
Bla Jv Vs CIT
Whether when assessee fails to produce supporting evidence and details of related work executed, claim of expenses u/s 36 and 37 are not sustainable - YES: ITAT - Assessee's appeal dismissed : KOLKATA ITAT
2018-TIOL-03-ITAT-KOL
ITO Vs Devenderjeet Singh Kler
Whether since assessee provided certified copies of the sale deeds, which proves existence of the buyers and sellers, the Revenue is not justified in raising controversy with regard to land revenue records and making addition on account of unexplained cash credit u/s 68 of the Act - YES: ITAT
Whether assessment made on AO's own estimation observing the luxurious life style of the assessee is not sustainable, where he is getting support from his son and father for meeting family expenses - YES: ITAT - Revenue's appeal dismissed : KOLKATA ITAT
2018-TIOL-02-ITAT-MUM
Bajaj Electricals Ltd Vs ACIT
Whether no disallowance of interest u/s 36(1)(iii) is warranted if assessee has sufficient own interest free funds to undertake the capital work in progress and no borrowed funds are used for the same - YES : ITAT - Assessee's appeal allowed : MUMBAI ITAT
2018-TIOL-01-ITAT-AHM
Damjibhai Jivabhai Hadial Vs ITO
Whether when Revenue has evidences available on record for forming belief that taxable income of the assessee has escaped assessment, reopening of assessment is justified - YES : ITAT
Whether when loans are taken in personal relation capacity without negotiation of interest and other terms and conditions, evidences produced by assessee are sufficient to discharge his onus as contemplated u/s 68 of the Act - YES : ITAT - Assessee's appeal partly allowed : AHMEDABAD ITAT
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INDIRECT TAX |
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SERVICE TAX SECTION
2018-TIOL-11-CESTAT-MUM + Story
Mrudula Pradeep Mehta Vs CST
ST - Rule 7C of STR, 1994 envisages penalty for delay in furnishing prescribed return but is silent on penalty if the ST returns are filed in time manually but are not filed electronically - Imposition of penalty not called for - appeal allowed with consequential relief: CESTAT [para 1, 2] - Appeal allowed : MUMBAI CESTAT
2018-TIOL-10-CESTAT-DEL
Sercon India Pvt Ltd Vs CST
ST - Assessee provides event management services and recovers consideration from service receivers - Department noticed that assessee has paid ST on full value of service received in certain cases - In certain other cases, assessee has issued separate invoices for professional fee as well as reimbursable cost, but paid ST only on professional fee - Case of revenue is that ST is payable on gross amount charged by service provider, including expenses incurred by assessee and subsequently reimbursed by service receiver.
The period involved is from Oct 2002 to March 2007 - It covers the period covered under old and new section 67 of Finance Act - For period prior to 01.05.2006, question for decision is whether the amount reimbursed are to be considered as part of gross amount charged by service provider from service receiver - Tribunal perused some of sample invoices issued by assessee for reimbursement of cost - By considering the nature of service provided by assessee, all such expenditure would go towards provision of event management services by assessee - The service itself cannot be completely rendered without such equipments or services - Hence, such amounts are to be considered as part of gross amount charged by assessee.
W.e.f. 01.05.2006, Section 67 as well as Rule 5 of Valuation Rules specifically provide for exclusion of certain value from taxable service subject to fulfilled of all conditions specified in rule 5(2) of Valuation rules - To decide whether the assessee was acting as a pure agent, Tribunal need to refer to rule 5 (2) of Service Tax Valuation Rules 2006 - Reimbursed expenditure is for activities which are part of overall event management services - Some of them are towards services employed by assessee in process of providing event management service - Consequently, all such cost incurred by assessee and reimbursed by client are nothing but a part of overall consideration towards rendering of event management service - By issuing separate invoices for professional fee as well as reimbursable cost, assessee has attempted to avoid payment of ST.
Having decided the issue against assessee, Tribunal turn to quantum of ST to be demanded - Same has also been disputed by assessee - He had submitted to adjudicating authority, a chartered accountant certificate indicating the actual amount reimbursed by clients, but the same has not been considered by adjudicating authority - Case is required to be remanded to adjudicating authority for re-quantification of demand for consideration of misgivings of assessee - For this limited purpose the issue is remanded with direction to the adjudicating authority to pass orders after hearing the assessee - Penalties are also to be decided in de novo proceedings keeping in view the revised demand which will arise: CESTAT - Appeal partly allowed : DELHI CESTAT
2018-TIOL-09-CESTAT-CHD
Veer Overseas Limited Vs CCE & ST
ST - Assessee filed two refund claims of ST paid as recipient of service on services received from Foreign Commission Agent under BAS - The claims were filed on the ground that said tax was paid by them inadvertently as same was otherwise exempt under Notfn 13/2003-ST as amended - Assessee is in business of export of Rice - Claim of assessee had been rejected by both lower authorities on the ground that refund was filed beyond the statutory time limit of one year prescribed under Section 11B of CEA, 1944 - ST was paid in category of BAS on account of payment of Service Tax for Foreign Commission agents - Amendment in Notfn 13/2003 wherein agricultural produce was inserted in preamble and by way of an explanation was brought about on 09.07.2004 - In said explanation, rice was also included - As a result of further amendment in Notfn 13/2003 , clause (i) of explanation was deleted - The CBEC clarification dt. 26.05.2011 made it clear that commission agents stationed abroad were covered by Notfn 13/2003-ST - Clarification dt. 26.05.2011 did not exist on the date of payment of Service Tax - Hence, clearly the activity of foreign commission agents was not covered in said notfn as it referred to Section 66 (2) of FA, 1994 and not to Section 66 A of FA, 1994 or Rule 2 (I) (d) (iv) of Service Tax Rules - So, payments made by assessee on the dates of payment were not on account of any mistake of law or mistake of fact - In their defence before adjudicating authority, assessee had submitted that they had to deposit Service Tax on impugned service being recipient of service provided by foreign commission agents - Subsequently, they filed refund claim on 01.02.2010 contending that Service Tax was paid inadvertently - Thus, as a result of this clarification dt. 26.05.2011, benefit of exemption notfn 13/2003 became available to assessee and amount collected by Revenue was therefore without any authority - It is settled position in law that beneficial circular has to be applied retrospectively while oppressive circular has to be applied prospectively - However, on question of limitation, there are conflicting decisions of Division Benches of Tribunal on whether statutory time limit under Section 11B of CEA, 1944 is applicable to claim for refund of tax which was collected without authority of law - It is worthwhile to mention that decision of XL Telecom Ltd. 2006-TIOL-1982-CESTAT-BANG was not brought before the Bench considering the issue in case of Monnet International Ltd. 2017-TIOL-1023-CESTAT-DEL - In view of divergent views of Tribunal on same issue, therefore as held by Supreme Court in case of M/s Gammon India Ltd. 2011-TIOL-60-SC-CUS , matter requires reference to President for constitution of a Larger Bench - Hence, matter referred to President for constitution of a Larger Bench of Tribunal: CESTAT -Case deferred : CHANDIGARH CESTAT
CENTRAL EXCISE SECTION
2018-TIOL-08-CESTAT-MUM + Story
Commissioner of CGST Vs Western Refrigeration Pvt Ltd
CX - No requirement of double registration by importers issuing CENVATable invoices - Notfn. 30/2016-CX (NT) is a trade facilitation measure, hence clarificatory and applicable retrospectively - moreover, respondent had availed the credit on the basis of invoice issued by the dealer who was admittedly registered with the Revenue and their registration number along with all other particulars were duly reflected in the invoice - all conditions for availment of credit satisfied, hence no cause to deny credit - Revenue appeal dismissed: CESTAT [para 5] - Appeal dismissed : MUMBAI CESTAT
2018-TIOL-07-CESTAT-MUM
International Transmission Product Pvt Ltd Vs CCE
CX - Appellant had raised commercial invoice in respect of freight and insurance charged to the customer whereas the freight was not shown in the Central Excise invoice - Revenue contended that by not showing the freight in the CE invoice the appellant has contravened the provisions of rule 5 of CE Valuation Rules, 2000 and, therefore, the said amount is includible in the AV - adjudicating authority set aside demand but in Revenue appeal, the Commissioner(A) confirmed the charges in the SCN - appeal by assessee before CESTAT.
Held: Even though freight is not shown in the excise invoice but by raising the commercial invoice the freight amount has been separated from the total sale value, therefore, irrespective of the fact that whether it is shown separately in the excise invoice or it is charged separately in the commercial invoice, it is one and the same thing - At the most, by not showing in the excise invoice, it can be a procedural lapse, but only for minor procedural lapse the substantial valuation cannot be altered which is governed by the statutory provision of Section 4 read with Rule 5 of Central Excise Valuation Rules 2000 - Order of adjudicating authority was just and legal and should not have been interfered with by the Commissioner(A) - impugned order does not sustain, hence set aside and appeal allowed: CESTAT [para 5, 7] - Appeal allowed : MUMBAI CESTAT
2018-TIOL-06-CESTAT-MUM
Liberty Oil Mills Ltd Vs CCE
CX - Refund - Appellant had applied for a refund of Rs 1,00,535/- consequent upon an order of the Settlement Commission which was sanctioned by the original authority but credited to the Consumer Welfare Fund on the ground that the applicant had failed to discharge the burden to establish that the duty liability on the goods had not been passed on to the customers - appeal to CESTAT.
Held: It would appear that there is no dispute of the fact that the duty claimed as a refund had been collected long after the goods had been cleared - There is no evidence available with the Central Excise authorities that such duties were collected subsequently - appellant has placed on record the certificate of a Chartered Accountant to the effect that the burden of duty has been borne by them - findings in the impugned order are not established to be in conformity with the facts - impugned order cannot sustain and is set aside - appeal is allowed with consequential relief: CESTAT [para 5, 6] - Appeal allowed : MUMBAI CESTAT
2018-TIOL-05-CESTAT-MUM
Maneesh Pharmaceutical Ltd Vs CCE
CX - Rule 6 of CCR, 2004 - Demand of 6% on value of exempted goods - Appellant contends that department has made out a case that the goods which were cleared under exemption are not exempted and duty demand was raised, which matter is pending in CESTAT.
Held: Since demand case is pending with Tribunal, no decision can be taken at this stage on the issue related to provisions of rule 6(3)(i) of CCR, 2004 - Therefore, matter is remanded to the original adjudicating authority for passage of denovo adjudication order after outcome of the demand case pending in appeal before Tribunal - Matter remanded: CESTAT [para 4] - Matter remanded : MUMBAI CESTAT
2018-TIOL-04-CESTAT-MUM
NRB Bearings Ltd Vs CCE
CX - CENVAT credit on inputs used in R&D has been denied on the premise that the samples manufactured are kept in the R&D and same have not been sold. Held: Admittedly, the goods manufactured as samples are excisable goods, therefore, rule 6(1) of CCR, 2004 is not applicable - CENVAT credit on inputs used for manufacture of samples which are dutiable cannot be denied in terms of rule 6(1) as rule 6 is applicable when assessee is manufacturing dutiable as well as exempted goods - impugned order is not sustainable, hence set aside and appeal allowed with consequential relief: CESTAT [para 4, 5] - Appeal allowed : MUMBAI CESTAT
2018-TIOL-03-CESTAT-MUM
Pepsico (I) Holdings Ltd Vs CCE
CX - Appellants are manufacturing Aerated Water and clearing the same on payment of duty - Audit found that sale of finished goods as reported in ER-4 returns is less than that reported in ER-1 returns filed by the appellants - appellants explained that difference in figures is due to breakages of finished goods and CENVAT credit attributable to the finished goods lost due to breakages was reversed - proceedings initiated against appellant to appropriate amount already paid and impose penalties - demand confirmed and penalties imposed - appeal to CESTAT.
Held: Revenue has failed to bring on record the evidence that the appellants did not pay duty due to fraud, collusion, wilful mis-statement etc. - As conditions mentioned in provision of s.11AC of the CEA, 1944 are missing, no penalty is imposable - further, penalty u/r 26 is imposable on co-appellant subject to the provisions of section 11AC of the Act - since provisions of s.11AC of the Act are missing, penalty on co-appellant is also not warranted - impugned order set aside and both appeals are allowed: CESTAT [para 6, 7] - Appeals allowed : MUMBAI CESTAT
CUSTOMS SECTION
2018-TIOL-02-CESTAT-AHM
Anita Exports Vs CCE, C & ST
Cus - the assessee-company is an SEZ unit & is permitted to import goods into SEZ, process them & re-export them - The assessee imported old used goods without payment of duty, processed & then exported them - Goods which could not be processed were cleared to DTA, after undertaking mutilation - On payment of Customs duty, the goods were seized in the DTA, and were inspected - It was alleged that the goods were not properly mutilated - Even though the report of appraiser was in favor of the assessee, duty demand was raised with imposition of interest & penalty - The goods were confiscated & option of redemption fine was given - Held - The present appeals can be disposed off simply on pure question of law as to who is the importer of the goods - Considered definition of 'importer' u/s 2(26) of the Act - Thereby in the present facts, the appellant cannot be considered as an importer - Hence, no duty liability arises and hence even if goods liable for confiscation, no duty can be demanded: CESTAT (Para 3,6,7) - Appeals Allowed : AHMEDABAD CESTAT
2018-TIOL-01-CESTAT-ALL
CCE Vs Bundelkhand Udyog
Cus - There was intelligence received that huge quantity of pulses has been exported to Nepal on tractor trolleys and trucks illegally through off routes, located at the Indo Nepal border - Pursuant to investigations and enquiries, it appeared to revenue that Sushil Kumar Agarwal, Proprietor of M/s Shivdutt Rai Sushil Kumar/Authorised Signatory of M/s Mayank Traders, Siliguri was supporting in supply of pulses to Nepal by way of managing the records of sale - Actually, it was bogus sale and all the pulses were supplied in contravention of provision, imposed on export of pulses - The said delivered consignments to be crossed over the border in tractor trolleys and headloads through the transport to Nepal from India - Accordingly, vide different SCNs, it was proposed to hold the consignments liable to confiscation under Section 113 (d) of Customs Act and further penalty was proposed on Dal Mills and Sushil Kumar Agarwal, proprietor of Shivdutt Rai Sushil Kumar, Siligury under Section 114 (i) of Customs Act - Further, penalty under Section 114 (i) of the Act was also proposed on Sushil Kumar Agarwal, proprietor of Shivdutt Rai Sushil Kumar, Siligury.
It has been urged by revenue that Commissioner (A) has overlooked the fact with regard to statement of Ajay Gupta, duly corroborated by statement of Sushil Kumar Agarwal, which confirms that his firm did not have any godown, that he never received the pulses physically invoiced to him by the Dal Mills, he used to receive papers/invoice regarding such Dal consignments on commission of Rs.5/- per Quintal in respect of all such transactions, that he received invoice or the bill pertaining to about 20,000MTs of pulses from Kanpur based Dal Mills - There is no seizure of pulses, even in small quantity - It is nowhere on record that either the Dal Mill owner or the broker or said Sushil Kumar Agarwal, Siliguri have indulged in activity amounting to smuggling - None of these persons have carried the pulses for purpose of smuggling in any Customs area or near the border proximity thereof - It is admitted fact on record that pulses have been dispatched to a place in India and same ultimately reached a place in India - There is no allegation that post delivery of Dal to a dealer located near the Indo Nepal Border, within India, was in violation of provisions of the Customs Act or the respondents were involved in presumed smuggling - The whole case of the revenue is based on presumptions and assumptions and lacking any corroboration and moreover suspicious how so ever strong cannot take place of legal proof - Accordingly, no merits found in these appeals: CESTAT - Appeals dismissed : ALLAHABAD CESTAT
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