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2018-TIOL-NEWS-004 | Thursday January 04, 2018
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Dear Member,
Sending following links. Warm Regards,
TIOL Content Team
TIOL PRIVATE LIMITED.
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DIRECT TAX |
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2018-TIOL-26-HC-MAD-IT + Story
Cholamandalam Investment and Finance Company Ltd Vs ACIT
Whether when the CBDT itself has not accepted the audit objection, the verbatim reproduction of the same constitutes a valid ground for the AO to resort to re-assessment - NO: HC - Assessee's Writ allowed: MADRAS HIGH COURT
2018-TIOL-26-ITAT-MUM + Story
Knight Riders Sports Pvt Ltd Vs ACIT
Whether in absence of enduring benefit, the payment of the franchise fee to the BCCI for IPL Season-1 facilitating the participation in the league, is to be considered as capital expenditure - NO: ITAT
Whether when the league deposit paid by the franchisee is related to the date of the first match but no match of IPL Season-2 was played till date, therefore, no part of the same can be claimed as an expenditure - YES: ITAT - Assessee's appeal partly allowed: MUMBAI ITAT
2018-TIOL-24-ITAT-BANG
Indiabuild Realty Pvt Ltd Vs DCIT
Whether expenses which are not directly related to the project of Company and for which no nexus has been established, can be allowed as Revenue expenses - NO: ITAT - Assessee's appeal dismissed: BANGALORE ITAT
Globus Projects Pvt Ltd Vs DCIT
Whether when AO has made all possible enquiries to the issue, the CIT is justified in invoking revisionary power u/s 263 to set aside the original assessment order without proving inadequate enquiry and un-sustainability for the same – NO: ITAT - Assessee's Appeals Allowed: DELHI ITAT
Naini Resorts and Floriculture Pvt Ltd Vs DCIT
Whether additions can be made on account of undisclosed capital gain, by merely presuming that bills of construction expenses have been created to increase cost of acquisition, without bringing any evidence on record - NO: ITAT - Assessee's appeal allowed: DELHI ITAT
PBA Infrastructure Ltd Vs ACIT
Whether additions on account of bogus purchases made during previous years, needs no modification in subsequent A.Ys, when there is no change in facts - YES: ITAT - Assessee's appeal partly allowed: MUMBAI ITAT
Singhania Foundation Education Trust Vs DDIT
Whether simultaneous exemption can be claimed by a trust and a university, in case the trust had provided donation to such university approved u/s 10(23C) of Income tax Act for charitable purpose, when it is subject to verification of the basic information - NO: ITAT - Case Remanded: KOLKATA ITAT
2018-TIOL-14-ITAT-MUM
ACIT Vs Fancy Diamonds India Pvt Ltd
Whether when purchase of material actually takes place from grey market then addition can only be extended upto profit element embedded in these purchase transactions - YES : ITAT - Revenue's appeal partly allowed: MUMBAI ITAT
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INDIRECT TAX |
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SERVICE TAX SECTION
2018-TIOL-25-HC-MAD-ST
Fifth Avenue Sourcing (P) Ltd Vs CST
ST - The petitioner is challenging an O-I-O passed by the respondent - Admittedly, as against the impugned order, petitioner has an effective alternative remedy before the CESTAT and without availing the same, petitioner is before this Court - When this question was posed to the petitioner, it is pointed out that respondent has dismissed the petitioner's appeal on the sole ground that the petitioner has not produced records, whereas all records are available - The question would be as to whether there were any documents placed by the petitioner or not and if documents were available, whether they were sufficient to show that the case requires to be decided in favour of petitioner are all factual issues which the petitioner has to necessarily agitate before Tribunal - The Tribunal being a fact finding authority is entitled to re-examine and examine the facts which may be placed before it and then come to a conclusion - Merely because there will be a burden on assessee to make pre-deposit cannot be a reason to byepass the appeal remedy available under the Act: HC
2018-TIOL-69-CESTAT-MUM + Story
Bavikara Constructions Pvt Ltd Vs CCE & ST
ST - Beautification and landscaping of Panaji Municipal garden - essential character of this composite work is reflected as that of construction service - instead of "Management, Maintenance or Repair Service", service is appropriately classifiable under 'Commercial or Industrial Construction Services' - since this service is being provided to Corporation of the City of Panaji, which is a local government body, it cannot be said that the construction work is of commercial nature - It is a settled law that construction service provided to government and government bodies are outside the purview of the 'Commercial or Industrial Construction Services', demand not sustainable, therefore, question of consequent actions like interest and penalty do not arise and this is based on the oft cited maxim of law sublato fundamento , cadit opus (means the foundation being removed, the structure falls) - Appeal allowed: CESTAT [para 4] - Appeal allowed: MUMBAI CESTAT
2018-TIOL-60-CESTAT-MUM Commissioner of CGST Vs Shree Pre-Coated Steels Ltd
ST – Respondent was paying service tax on GTA services so received by them on reverse charge basis - Proceeding was initiated against them on the ground that such service tax cannot be paid out of CENVAT Credit – Commissioner(A) held in favour of assessee and, therefore, Revenue in appeal arguing that the appellate authority has quantified the demand by allowing the abatement in terms of Notification No. 01/2006-ST dated 01.03.2006 without examining the condition of the said notification.
Held: Tribunal in an identical issue in the case of Kisaan Sahakari Chini Mills Ltd. has held that inasmuch as the transporters were not registered with the service tax department and which is a sufficient fact to establish that no credit was being availed by them – since issue stands decided, no merit in Revenue appeal and, therefore, rejected: CESTAT [para 5] - Appeal rejected: MUMBAI CESTAT
2018-TIOL-59-CESTAT-MUM
J M Financial Institutional Securities Ltd Vs CST
ST - CENVAT - Input Service - Rule 2(l) of CCR, 2004 - Period involved is prior to April 2011 - Car hire, car leasing and tours and travel charges, group insurance, subscription charges and expenses pertaining to clubs and hotels, office interior decorator charges, catering services are Input services as per the decisions of the Tribunal and the High Court - no reasons to deny the CENVAT credit - order set aside and appeal allowed with consequential relief: CESTAT [para 3, 4] - Appeal allowed: MUMBAI CESTAT
CENTRAL EXCISE SECTION
Ambur Co-Op Sugar Mills Ltd Vs Addl.CCE
CX - Petitioner is aggrieved by an order passed by Additional Commissioner by which the premium earned by them on account of transfer of export quota to other sugar mills has been treated as a service to fall within the ambit of BAS and ST has been demanded from petitioner apart from demanding interest and imposing penalty - It is submitted that extended period of limitation cannot be invoked, as there is no specific plea raised by parties to show that there has been suppression and in impugned order, there is no specific finding as to what is suppression which has been made by petitioner - Petitioner can be granted opportunity to file an appeal by taking into consideration peculiar facts of the case; firstly, the petitioner is a Cooperative Sugar Mill registered under Tamil Nadu Cooperative Societies Act - Secondly, the activities of sugar mill is supervised by Tamil Nadu Co-operative Sugar Federation Limited - That apart, the day-to-day administration of petitioner's sugar Mill vest with Government of Tamil Nadu and is under the Managing Director, who has been appointed by Government of Tamil Nadu, who is in cadre of Joint Registrar in Tamil Nadu Co-Operative Service - That apart, entire tax, as quantified in impugned Assessment order and penalty have been remitted by petitioner - Further, it is submitted on affidavit that on account of frequent change in officers, petitioner could not immediately take steps to file an appeal before Commissioner (A) - The distinct and distinguishing factors call for indulgence to be granted to petitioner to file an appeal before Commissioner (A): HC - Writ petition disposed of: MADRAS HIGH COURT
2018-TIOL-23-HC-MAD-CX
Executive Officer Vs Addl CCE & ST
CX - The petitioner was served with SCN invoking the extended period of limitation under Proviso to Section 73(1) of FA, 1994 and demanding ST under Section 73 of said Act - The first respondent passed an order dated 14.12.2012 stating that extended period of limitation is invocable and confirmed the demand in SCN - On appeal, Commissioner (A), by an order dated 20.5.2015, dismissed the appeal as time barred - Immediately, the petitioner did not take any steps to approach the Tribunal nor come before this Court - Only after the impugned recovery notice dated 08.8.2017 was issued by second respondent, the petitioner has rushed to this Court - Considering the fact that petitioner is a Local Body, manned by an Executive Officer without an Elected Body and considering the administrative issues faced by the Local Body, Court is inclined to exercise its discretion in this matter and give an opportunity to the petitioner to establish before the Appellate Authority as to the exact date of receipt of O-I-O - Though the order passed by the Appellate Authority has not been directly challenged in this writ petition, considering the hard facts, this Court is inclined to grant appropriate relief - Matter is remitted back to Commissioner (A) for a fresh consideration: HC - Case remanded: MADRAS HIGH COURT
2018-TIOL-68-CESTAT-MUM + Story
Kamani Oil Industries Vs CCE
CX - MODVAT - CVD paid by debit in DEPB passbook - when prohibition in Para 4.3.5 of the Exim Policy of denying MODVAT/CENVAT when duty is paid through debit in DEPB passbook was removed w.e.f 28.01.2004, credit in respect of bills of entry post this date is admissible - SCN does not bring out any malafide intention on the part of the Appellant to avail ineligible credit and even the issue involved is of interpretation, therefore, demand dated 10.05.2005 for the period prior to 28.01.2004 is hit by limitation - Commissioner(A) passing order beyond scope of Revenue appeal, hence unsustainable - Appeal allowed: CESTAT [para 4, 5] - Appeal allowed: MUMBAI CESTAT
2018-TIOL-58-CESTAT-BANG
Bosch Limited Vs CCE & ST
CX - Assessee is a manufacturer of automobile parts for domestic and export markets - They have availed cenvat credit on certain common inputs services that were used/utilized in or in relation to their trading activity which resulted in the issuance of SCN - Demand confirmed alongwith interest and penalty - Department was well aware of trading activity carried on by assessee which is clear from the letter dated 03.03.2010 which was written by Department to the assessee asking for the details of credit commonly attributable to manufacturing and trading and thereafter the details were supplied to the Department vide letter dated 09.04.2010 by assessee - But Department issued the SCN only after two years on 30.03.2012 - When all the facts were in knowledge of Department then the meaning of suppression and invoking the extended period of limitation is not sustainable in view of judgment in case of Essel Propack Ltd. 2015-TIOL-212-SC-CX - During the relevant period there was no provision with regard to reversal of credit on common input services relating to trading activity - Further all the details regarding trading activity was provided by assessee in their Balance Sheet on the basis of which the Department has raised the document which shows that there is no suppression of any fact with intent to evade payment of duty - Therefore, longer period of limitation is not legally invocable - Impugned order set aside: CESTAT - Appeal allowed: BANGALORE CESTAT
2018-TIOL-57-CESTAT-BANG
Hindustan Calcined Metals Pvt Ltd Vs CCE, C & ST
CX - Assessee engaged in manufacture of sponge iron and availed the benefit of cenvat credit of duty paid on input/input services and capital goods - It was noticed during course of audit that assessee have availed cenvat credit on MS angels, plates, channels and joists during the period from 07/2007 to 04/2008 and these items were used for fabrication and erection of structures which are embedded to earth - It appeared that the credit availed on said items is irregular in as much as these items are neither inputs nor capital goods - Since assessee did not reverse the irregular credit, SCN was issued proposing to deny the credit, besides proposal to demand interest and proposal to impose penalty - Issue has been considered by Madras High Court in case of India Cements Ltd. 2015-TIOL-650-HC-MAD-CX , wherein it has been held that the assesse is entitled to avail CCR on various iron and steel items which are used as components for capital goods or for structure support of capital goods which is embedded to earth and thus becoming immovable property - Impugned order is not sustainable in law and therefore, same is set aside: CESTAT - Appeal allowed: BANGALORE CESTAT
2018-TIOL-56-CESTAT-ALL
CC & CE Vs LML Ltd
CX - Assessee engaged in manufacture of two wheelers and clearing the goods in domestic market as well as exporting the goods manufactured by them - Assessee submitted application for refund of accumulated unutilized balance of Cenvat Credit under Ruled 5 of CCR, 2004 - Same was rejected by adjudicating authority but allowed by Comissioner (A) - The main ground of Revenue is that the entire credit involved on inputs used in goods exported during the quarter ending March, 2006 was exhausted and there was nothing as unutilized credit in respect of inputs used in goods exported - Further the grounds also included that assessee did not submit the quantity of inputs lying as such, quantity of inputs contained in goods in process and quantity of inputs contained in finished goods which was essential to ascertain and arrived at quantum of unutilized credit in respect of goods exported - After submission of application for refund, Original Authority issued show cause notice wherein the Original Authority did not raise the issue that there was no Cenvat Credit at balance as on 31.03.2006 and further the Original Authority through O-I-O also has held that the accumulated Cenvat balance would have been used by assessee for clearance of possible clearance of goods from the factory after factory resumes back the activities after termination of lockout - Therefore, during the proceedings it was undisputed that Cenvat Credit of Rs. 3,09,38,664/- was left unutilized as on 31.03.2006 and, therefore, no merit found in grounds raised by Revenue: CESTAT - Appeal dismissed: ALLAHABAD CESTAT
2018-TIOL-55-CESTAT-AHM
Sew Eurodrive India Pvt Ltd Vs CCE & ST
CX - Whether the assessee is eligible to avail cenvat credit of service tax paid on outdoor catering services and courier services during the relevant periods - Both the issues are covered by judgments of Gujrat High Court in case of Ferromatik Milacron India Ltd. relating to eligibility of credit of the service tax paid on Outdoor catering service(canteen service) and this Tribunal's judgment in M/s Hyldyn Glass Ltd.'s case relating to eligibility of credit of service tax paid on the courier service - However, it is not clear from the records, whether proportionate credit attributable to the amount collected from the employees in providing the outdoor catering services (canteen service), had been reversed or not even though claimed by assessee - Therefore, to verify the said limited fact, matter remanded to the adjudicating authority - Whereas, the appeals which involves the issue of 'courier service' only, are allowed: CESTAT - Appeals partly allowed: AHMEDABAD CESTAT
CUSTOMS SECTION
Vee Vee Clearing and Forwarding Pvt Ltd Vs CC
Cus - Renewal of petitioner's Customs Broker License was rejected on the alleged ground of suppression of a criminal prosecution initiated against the Managing Director of the Petitioner, which is pending before Additional Chief Metropolitan Magistrate, Egmore - Further more, the loss of original Customs Broker License is reported to be missing and when the petitioner has produced Non Traceable certificate, the 1st respondent has expressed certain doubts regarding the genuineness of said certificate - Petitioner's case is that they made a full disclosure of four DRI cases pending along with declaration in application for renewal of Customs Broker License - The CESTAT by its order dated 20.07.2016 ordered revocation of Customs Broker License and this Court in 2017-TIOL-1192-HC-MAD-CUS , directed the petitioner to appear before the respondents for passing further orders, however, the 1st respondent, noticed that CBI prosecution in respect of criminal case registered by CBI against Managing Director of Petitioner Company under Prevention of Corruption Act, is pending and the same has not been disclosed and therefore, rejected the renewal of licence - It is further submitted that in case registered by CBI, Officials were arrayed as accused and they have been discharged - All the issues being factual, petitioner has to necessarily approach CESTAT by filing appeal against impugned rejection order passed by Original Authority - Thus, Writ Petition is not maintainable: HC - Writ Petition disposed of: MADRAS HIGH COURT
2018-TIOL-54-CESTAT-CHD
Metro Tyres Ltd Vs CC
Cus - Assessee imported Carbon Black N 330 against advance authorization issued in terms of Para 4.5.1.3 of Foreign Trade Policy - The Department found that said goods in terms of Notfn 4/2012-Cus (SG) were also leviable to safeguard duty under Section 8C of Customs Tariff Act, 1975 at the rate of 30% ad valoram minus anti dumping duty payable when imported from China - Accordingly, demand confirmed alongwith interest - Issue in question is no more res integra and stands settled by Bombay High Court in case of Balkrishna Industries Ltd. 2015-TIOL-2888-HC-MUM-CUS wherein it has been held that safeguard duty imposed under Section 8C of Customs Tariff Act, 1975, vide Notfn 4/2012-Cus is leviable, as the same is country specific, whereas the other two notifications are not country specific - In said decision, before the Bomaby High Court, assessee imported Carbon Black from China against the advance authorization in terms of Notfn 96/2006-Cus, which exempts the goods from payment of safeguard duty under Section 8B of Customs Tariff Act - High Court held that inasmuch as there is no exemption from safeguard duty leviable under Section 8C, which is imposed on the goods imported from China, the importer has to pay safeguard duty, in terms of Section 8C - In as much as issue stands decided and assessee has not placed any contrary decision on record, by following the decision of Bombay High Court in the case of Balkrishna Industries Ltd. no merit found in the present appeals: CESTAT - Appeals rejected: CHANDIGARH CESTAT
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by Shailendera Kumar 
