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2018-TIOL-NEWS-003 | Wednesday January 03, 2018
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Dear Member,
Sending following links. Warm Regards,
TIOL Content Team
TIOL PRIVATE LIMITED.
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TIOL TUBE VIDEO |
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DIRECT TAX |
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2018-TIOL-15-HC-KERALA-IT
CIT Vs Kerala State Financial Enterprises Ltd
Whether decision given by writ court concerning same assessee and identical circumstances, does not deserves variance in absence of any contrary - YES: HC - Revenue's Appeal Allowed: KERALA HIGH COURT
2018-TIOL-14-HC-AHM-IT
PR CIT Vs Veer Gems
Whether addition can be made in the hands of partner, and not in the hands of partnership firm, dwhen unexplained capital is introduced by partner in a partnership firm - YES: HC
Whether disallowance of foreign travel expenses can be deleted, where the expenses were incurred on employees of a partnership firm travelling abroad for business purposes, despite them not being partners in the firm - NO: HC
Whether disallowance made u/s 40(a)(ia) can be deleted, where the TDS was reconciled with the quantum on which TDS was deducted - NO: HC
Whether a small hike in labour expenses in comparison with preceding AY, can per se be grounds for disallowing labour expenses - NO: HC - Revenue's Appeal Partly Allowed: GUJARAT HIGH COURT
2018-TIOL-13-HC-AHM-IT
PR CIT Vs Asahi Songwon Colors Ltd
Whether deduction u/s 10B can be computed based on turnover rather than on actual basis, where the assessee regularly maintained separate accounts for eligible & non-eligible units - NO: HC - Revenue's Appeal Dismissed: GUJARAT HIGH COURT
2018-TIOL-12-HC-MUM-IT
CIT Vs Blue Star Ltd
Whether the Revenue can defend the validity of a re-assessment order, where the grounds for re-opening of assessment were dictated and notice u/s 148 issued, but the assessment order was signed on the following day - NO: HC - Revenue's Appeal Dismissed: BOMBAY HIGH COURT
2018-TIOL-11-HC-KERALA-IT + Story
Norka Roots Vs CIT
Whether when the charitable body is found to have spent more on administrative charges than the charitiable activities and largely made use of only the Govt subsidy and not the income derived over the years, the Revenue is right in denying registration u/s 12A - YES: HC - Assessee's Appeal Dismissed: KERALA HIGH COURT
2018-TIOL-10-HC-AHM-IT
PR CIT Vs Sabarkantha District Co-Op Purchase And Sale Union Ltd
Whether mere involvement in trading activities will take the assessee out of the ambit of cooperative society - NO: HC
Whether when AO takes a plausible view, the assessment order cannot be said to be erroneous or prejudicial to the interest of the revenue and therefore, doesn't calls for reassessment u/s 263 of the Act - YES: HC - Revenue's appeal dismissed: GUJARAT HIGH COURT
2018-TIOL-09-HC-AHM-IT
PR CIT Vs Safari Fine Clothing Pvt Ltd
Whether since items brought into existence by the assessee like rags, wipers or chindi are used as raw material for production of some other items and definitely usable as such, the same will not fall within the ambit of the expression 'scrap' as envisaged in clause (b) of the Explanation to section 206C of the Act - YES: HC
Whether therefore, sale of such items doesn't calls for collection of tax at source - YES: HC
Whether when additional material in the nature of clinching evidence is obtained by the first appellate authority on its own motion, which leave no further room for any doubt or controversy, there is no need to forward such evidence to the AO to obtain his report - YES: HC - Revenue's appeal dismissed: GUJARAT HIGH COURT
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INDIRECT TAX |
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SERVICE TAX SECTION
2018-TIOL-20-HC-MAD-ST
Aluminium and Glazing Vs Commissioner (Appeals-I)
ST - As per the directions of Tribunal, Commissioner (A) was required to consider the questions of law, facts and evidence including the law laid down in case of Uniworth Textiles Ltd. 2013-TIOL-13-SC-CUS and shall pass appropriate orders - - However, Commissioner (A), while taking note of submissions made by petitioner, did not go into the plea that demand for the period beyond one year would be time barred - Apart from that, Commissioner (A) has not taken into consideration the decision of Supreme Court in case of Uniworth Textiles Ltd ., though in his order, Commissioner (A) extracted the order passed by Tribunal - Useful reference can be made to the decision of Supreme Court in case of Kamalakshi Finance Corporation 2002-TIOL-484-SC-CX-LB wherein it has been held that directives of Superior Authorities are binding on Lower Authorities - In the light of said dictum, Commissioner (A) is bound by directions issued by Tribunal and is required to consider the submissions made by petitioner - Thus, Court is satisfied that impugned order is not in terms of directions issued by Tribunal in appeal filed by the petitioner - Matter is remitted back to respondent for a fresh consideration: HC - Case remanded : MADRAS HIGH COURT
2018-TIOL-45-CESTAT-MUM
Kotak Mahindra Asset Management Company Ltd Vs CST
ST - CENVAT – Input Service – Rule 2(l) of CCR, 2004 - appellant is engaged in providing Banking and Other Financial Services and is duly registered with the department - Cenvat Credit availed in respect of various services like employees insurance, vehicle insurance, rent a cab and mandap keeper services was denied on the ground that the same cannot be held to be Cenvatable services – Commissioner(A) disallowed the credit relating to services of vehicle insurance and employee insurance - appeal to CESTAT.
Held: Both the services stand held as CENVATable by various precedent services – following the same, impugned order set aside and appeal allowed with consequential relief: CESTAT [para 2, 3] - Appeal allowed: MUMBAI CESTAT
2018-TIOL-44-CESTAT-MUM
Brightest Circle Jewellery Pvt Ltd Vs CST
ST - Appellant had availed the taxable services provided by the foreign concern in respect of promotion and marketing of jewellery of the brand Nakshatra in India - Appellant had neither disputed the payments made nor also proved tht such payments was not reciprocal for the promotion of appellants business - There was integral connection of the service provided by the foreign concern, which was proved by Revenue - adjudicating authority has brought out the arrangement between the parties in para 6.2 and 6.3 of his order demonstrating the manner how the appellant was connected with the foreign promoter for the promotion of business in India - There was discharge of payment by the appellant to the foreign party - That is taxable in consonance with law under reverse charge mechanism - no scope to interfere with the impugned order, appeal dismissed: CESTAT [para 6, 7] - Appeal dismissed: MUMBAI CESTAT
2018-TIOL-43-CESTAT-MUM
CST Vs Bharat Petroleum Corpn Ltd
ST - Respondents are engaged in manufacture and sale of various petrochemical products for retail sale of these products - Various sales outlets in the shape of petroleum pumps etc. are established and to operate those, dealers are appointed - agreements are entered between the respondent and the dealers in terms of which the respondent recovered license fees from dealers – It is the case of the Revenue that license fees is subject to service tax under the head Francise service – Demand notices were dropped by the Commissioner vide the impugned order on the grounds that the service provided by the respondent is not in the nature of Franchise service but it is service in the nature of supply of tangible goods service which is chargeable to service tax only w.e.f. 16.5.2008 – Revenue in appeal before CESTAT.
Held: From the clause (1) of the agreement, it is apparent that the purpose of the agreement is to grant rights to use the premises which are ready for operation (as in company controlled outfit) or right to use the storage tanks, pipes, pumps etc. as per design of the respondent (in case of dealer controlled outfit) - Thus the preliminary purpose of the agreement would clearly be the grant of rights to use the premises and/or equipment - clause (10) which Revenue relies upon nowhere grants representational rights to the dealers – no merit in the appeal of the Revenue, hence the same is dismissed: CESTAT [para 4] - Appeal dismissed: MUMBAI CESTAT
CENTRAL EXCISE SECTION
2018-TIOL-19-HC-MAD-CX
Sri Kamalaganapathy Steel Rolling Mills Ltd Vs Additional Director General
CX - Petitioners submitted that a representation was given requesting for copies of eight documents, which have not been supplied to them and also the Compact Disc, which was seized from their factory and computers, which were seized from M/s.V V Iron and Steel Company (P) Ltd. - There is no specific denial with regard to the stand taken by respondents that all the documents have been provided - In fact, there is a vague averment stating that petitioners re-iterate the fact that conditions under Section 36B of CEA, 1944 have not been complied with and electronic evidence has been handled in a haphazard manner - Therefore, petitioners have not denied the averment set out by respondents in counter affidavit, which goes to show that they have been provided with print-outs of CDs seized on 07.03.2012 and with regard to data taken from the hard-discs of other units, which were certified by person in-charge, copies of the relevant portions concerned with the transactions by petitioners herein have already been provided and the hard-discs seized from others premises contain not only the details of M/s.SKSRM, but also the details of other transactions and therefore, parting away with those details will be detrimental to the business interest of those concerned firms - Further, it has been stated that all the relied upon documents were provided to petitioners and when the correspondences were in progress, the present writ petitions have been filed - Thus, Court is fully convinced that the stand taken by petitioners is only to stall the adjudication proceedings under the guise that petitioners have not been provided with the documents - Thus, there is absolutely no basis for issuing any direction to the authorities to provide any further documents or copies of the compact discs: HC - Writ petitions dismissed : MADRAS HIGH COURT
2018-TIOL-42-CESTAT-MUM + Story
Altaz Technology Pvt Ltd Vs CCE
CX - Upgrade unit is only one of the parts/sub-assembly and not being complete system cannot be classifiable as complete machine under CSH 8473.00 - upgrade units though helps in enhancing the capacity of the computer but unit itself is not complete machine, therefore, it cannot fall under chapter 8471.00 since upgrades units being sub-assembly, therefore, the impugned order is correct and legal and it does not require any interference - even after change of computer upgrades the other parts such as computer system, monitor, keyboard, mouse etc. are unchanged - Impugned order upheld and appeal dismissed: CESTAT [para 5]
2018-TIOL-41-CESTAT-MUM
Savita Oil Technologies Ltd Vs CCE
CX - CENVAT - Revenue denied credit of duty paid by the input supplier of bulk liquid cargo to the extent such cargo was lost during transit and consequently short received by the assessee - although the issue stands decided against Revenue in assessees own case, the lower authorities distinguished the same on the technical ground by observing that appellant have obtained claim for the loss either from the insurance or from supplier - appeal to CESTAT.
Held: Such claim of loss from the insurance or from the input supplier has got nothing to do with the assessee's entitlement to avail the full CENVAT Credit of the duty paid by the supplier - input recipient is entitled to the entire duty PAID by the input supplier and the same cannot be varied at the recipients end especially when there is no allegation to show that the goods have been diverted during transit to other person - Admittedly, the less receipt of liquid cargo is on account of the transit loss, which is bound to happen in the transportation of the liquid cargo, in which case the credit to that extent cannot be disallowed, especially when there is no variation in the quantum of duty paid by the input supplier - impugned order set aside and appeal allowed with consequential relief: CESTAT [para 4, 5] - Appeal allowed: MUMBAI CESTAT
2018-TIOL-40-CESTAT-MUM
Om Sai Enterprises Vs CCE
CX - Based upon the comparison of sales figure in their ER-1 return as also appearing in the Balance-sheet, it is alleged that goods have been removed clandestinely without payment of duty and demand has been confirmed – appeal before CESTAT.
Held: There is no evidence produced by the Revenue indicating clandestine manufacture and clearance of the appellant's final product - It is well settled that such difference in figures cannot be made the basis at the time of making the case for clandestine removal - no justifiable reason to uphold the impugned order – accordingly, same is set aside and appeal is allowed with consequential relief: CESTAT [para 2] - Appeal allowed: MUMBAI CESTAT
2018-TIOL-39-CESTAT-MUM
CCE Vs Loreal India Pvt Ltd
CX - Whether the respondent is entitled to service tax paid on the services utilized for removal of hazardous waste – Revenue in appeal against order of Commissioner(A).
Held: Lower appellate authority holding that disposal of hazardous waste generated in the process of manufacture, following the requirement of Pollution Control Board, is related to the manufacturing activity is proper in law in view of decision of Tribunal in Tube Investment India Ltd. - 2017-TIOL-4129-CESTAT-MAD – no infirmity in impugned order – Revenue appeal rejected: CESTAT [para 3, 4] - Appeal rejected: MUMBAI CESTAT
2018-TIOL-38-CESTAT-MUM
Candico India Ltd Vs CCE
CX - Issue is as to whether Tattoos placed inside the bag of chewing toffees or chewing gums would be Cenvatable item or not.
Held: Punjab & Haryana High Court in the case of Wrigley India Pvt. Ltd. as upheld by the Supreme Court has held that such Tattoos cannot be considered to be packing material and hence not Cenvatable - as issue is of legal interpretation of Modvat provision, no malafide can be attributed to the assessee - penalty set aside - appeal is partly allowed: CESTAT [para 2] - Appeal partly allowed: MUMBAI CESTAT
CUSTOMS SECTION
2018-TIOL-18-HC-MAD-CUS
Vanick Oils and Fats Pvt Ltd Vs Deputy.CC
Cus - The petitioner's case is that in terms of Notfn 2/2007, the actual duty payable on imported goods is NIL - On coming to know of the same, petitioner had made a representation on 22.11.2008 requesting to extend the benefit of said Notfn and if same is done, petitioner would be entitled to refund of the amount - Said representation was sent on 22.11.2008, which has been received in office of respondent on 01.12.2008 - In representation, petitioner referred to the decision in case of M/s. Bhoppern Stop Limited - Said application is pending till date and no orders have been passed - In fitness of things, respondent should pass a speaking order on the request made by petitioner or else the petitioner would be left without a remedy - If petitioner is not entitled for the relief sought for, respondent should say so by passing a speaking order - On the other hand, if respondents feel that the claim made by petitioner is justified, then, consequence should follow - Therefore, there cannot be a stalemate in the matter and that appears so since 2008 and even before this Court from 2009 onwards, as no counter affidavit has been filed by respondents: HC - Writ Petition disposed of : MADRAS HIGH COURT
2018-TIOL-37-CESTAT-DEL
Sarda Energy And Minerals Ltd Vs CCE
Cus - Assessee engaged in manufacture of ferrow alloys in their plant at Raipur - They have been regularly importing iron and steel scrap to be used as input in their manufacture - Dispute relates to valuation of such imports made by assessee - The only basis for enhancement of value by assessing officer is that certain imports of similar items were assessed with higher value around the same period - Assessee did submit the invoice, purchase order and supporting contract documents with reference to impugned consignments - Nothing more is required with importer to further substantiate the value - In such situation, it is for assessing officer to discount the documents with valid reasons in order to reject the declared value and thereafter to proceed with re-assessment, after due enhancement - Due examination about this crucial aspect has not been done by assessing officer and comparison based on the contemporaneous import is not proper - Further, contractual arrangements and invoices should not be rejected in absence of any evidence to question their authenticity - As submitted by assessee, NIBD data is a guidelines and an indicator for assessing officer and it cannot be a substitute for assessable value - The assessable value for imported items has to be invariably arrived at applying Section 14 read with Customs Valuation Rules, 2007 - Reliance placed by assessee on decision of Tribunal in case of Topsia Estates Pvt. Ltd. 2015-TIOL-351-CESTAT-MAD is appropriate to the facts of present case - Impugned orders cannot be legally sustained: CESTAT - Appeals allowed: DELHI CESTAT
2018-TIOL-36-CESTAT-MUM
Sahara India Commercial Corporation Ltd Vs CC
Cus - Appellant who is owning and operating 18 hole Golf Course at Aamby Valley, Punehad imported Polaris All Terrain Vehicles under EPCGlicence issued by DGFT at concessional rate of duty - appellant had by mistake filed the bill of entry under CTH 8703 1010 and, therefore, Revenue demanded duty - Importer in appeal submitting that this was a mistake in the Bill of entry inasmuch as the classification was made wrongly instead of the proper one under 8703 1090.
Held: As per the CTH, the goods was classifiable under heading 87031090 which has been wrongly mentioned by the CHA as CTH 87031010, in the entry the last digit 10 was made instead of 90 - It is a minor mistake for which substantial justice cannot be waived - When the goods are matching with the licence as well as in the Bill of Entry, then the appellant is entitled for concessional rate of duty under EPCGlicence - Order set aside and appeal allowed: CESTAT [para 5, 6] - Appeal allowed: MUMBAI CESTAT
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MISC CASE |
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2018-TIOL-02-HC-MP-GST
Nirmal Constructions Vs State of Madhya Pradesh
GST - Challenge by the petitioner is to a communication by the State Government, informing its decision dated 05.08.2017 that for future contracts offers should be invited by excludng the amount of GST, and thereby cancelling the tender in which the petitioner participated.
Held: Letter of acceptance of the contract has not been communicated to the petitioner, therefore, it is not a case of concluded contract - In the absence of concluded contract, the petitioner cannot claim right to seek grant of contract only on the basis of the offer submitted by the petitioner at one stage - Consequent upon introduction of GST, tax regime has undergone change, therefore, State Government's decision not to act upon the tenders invited with effect from 1.7.2017 to 5.8.2017 cannot be said to be illegal or arbitrary - no merit in the petition, hence dismissed: High Court [para 2, 3] - Petition dismissed : MADHYA PRADESH HIGH COURT
2018-TIOL-01-HC-KERALA-GST
Shankar Mohan Vs Intelligence Inspector
GST - Section 129 of the CGST Act & Kerala State GST - Petitioner seeks release of detained goods. Held: Identical matter disposed of by Division Bench directing expeditious completion of adjudication and permitting release of the goods pending adjudication in terms of rule 140(1) of Kerala GST Rules, 2017 - Adjudication to be completed within one week and if petitioner complies with rule 140(1) supra, goods detained shall be released forthwith: High Court [para 2] - Petition disposed of : KERALA HIGH COURT
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