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2018-TIOL-NEWS-012 | Saturday January 13, 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-13-SC-IT
CIT Vs Vasisth Chay Vyapar Ltd
Having heard the parties, the Supreme Court dismisses the appeal thus concurring with the opinion of Writ Court on the issue of treatment of interest on ICDs, as non taxable, on the ground of non accrual of income. - Revenue's appeal dismissed: SUPREME COURT OF INDIA
2018-TIOL-12-SC-IT
ITO Vs Canyon Financial Services Ltd
Having heard the parties, the Supreme Court condoned the delay and dismisses the SLP, thus concurring with the opinion of Writ Court on the issue of 'satisfaction note of AO'. - Revenue's SLP dismissed: SUPREME COURT OF INDIA
2018-TIOL-80-ITAT-MUM
Balaji Motion Pictures Ltd Vs DCIT
Whether the Revenue is free to include any voluntary disclosure made u/s 132(4) made by another group of assessee or any third person so as to make additions in the assessee's hands - NO: ITAT
Whether the quantum additions accepted by the assessee in order to avoid litigation/disputes, is sufficient for the Revenue to start penalty proceeding u/s 271(1)(c) - NO: ITAT - Assessee's appeal allowed: MUMBAI ITAT
2018-TIOL-79-ITAT-MUM
International Tobacco Co Ltd Vs DCIT
Whether the observation made by the CIT(A) without considering assessee's submissions with reagrd to its claim can be considered as a cryptic one hence, calls for restoration - YES: ITAT - Case remanded: MUMBAI ITAT
2018-TIOL-78-ITAT-DEL
ITO Vs Count Trade Link Pvt Ltd
Whether the AO is free to make additions in absence of any nexus between interest free advances made out of borrowed fund - NO: ITAT
Whether merely because non-interest bearing funds are more than non-interest bearing loans, disallowance u/s 36(1)(ii) is attracted - NO: ITAT - Revenue's appeal dismissed: DELHI ITAT
2018-TIOL-77-ITAT-KOL
DCIT Vs Associated Pigments Ltd
Whether when payments are made by the agents of the foreign shipping lines to its PEs in India, provision of section 172 will apply instead of Section 194 & 195 - YES: ITAT
Whether the Appellate Authorities is vested with a power to consider a new claim even if the AO himself has accepted the assessee's claim on merit but same has been disallowed only for want of revised return - YES: ITAT - Revenue's appeal dismissed: KOLKATA ITAT
2018-TIOL-76-ITAT-JAIPUR
DCIT Vs Idea Cellular Ltd
Whether the cellular company is liable to deduct tax at source u/s 194H in respect of discount/commission paid to its prepaid distributors - NO: ITAT - Revenue's appeal dismissed: JAIPUR ITAT
2018-TIOL-75-ITAT-HYD
ITO Vs Kamineni Builders
Whether if assessee enters into an agreement to share the profits but not the losses, then this agreement amounts to only application of Income - YES: ITAT
Whether appropriation of the profits by way of a separate arrangement, should only be treated as application of income, but not diversion at source - YES : ITAT
Whether distributing high margin of profits, for discharging obligation of repayment of loan, can be considered as diversion of income - NO: ITAT - Revenue's appeal allowed: HYDERABAD ITAT
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INDIRECT TAX |
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SERVICE TAX SECTION
2018-TIOL-15-SC-ST Air India Ltd Vs CST
ST - Publication of in-flight magazine Swagat - Appellant entered into an agreement with MTIL, which envisaged print and delivery of "Swagat" magazine to the appellant on a monthly basis; MTIL is paying a fixed monthly amount to the appellant for permitting the usage of the appellant's name and the magazine for generating the revenue - Revenue entertained a view that MTIL is acting as a representative of the appellant and accordingly, the amount received by the appellant, as stated, is liable to service tax under the category of "Franchisee Service" – demand confirmed with penalty – In appeal, CESTAT held that t he magazine is fully identified with the appellant and MTIL is getting profitable advertisement revenue by representing such magazine of the appellant with various clients and, therefore, Air India is required to pay service tax under ‘Franchisee service' for amounts received from MTIL – Appeal before Supreme Court. Held: After condoning delay, permission granted to file additional documents – Issue notice: Supreme Court - Issue notice: SUPREME COURT OF INDIA
2018-TIOL-185-CESTAT-DEL
CST Vs Oxigen Services India Pvt Ltd
ST - Assessee engaged in business of trading in Electronic Recharge Coupons (ERCs) and also in collection of payment of post paid bills for various telecommunication operators from their subscribers - The dispute in the present case relates to activities of assessee with reference to transaction in ERC - Original Authority examined the terms of various contracts involved in present case - He concluded that assessee was not acting as agent of telecom operators even in cases, where they were receiving "commission" for marketing and promotion of service of such telecom operators - He concluded that allegation that assessee provided services of marketing the services of telecom operators is not supported by terms of various agreements - There was no relationship of agent and principal between assessee and the telecom operators - Dispute involved in present case was earlier subject matter of decision by Tribunal in Chotey Lal Radhey Shyam 2015-TIOL-2394-CESTAT-ALL, Goyal Automobiles 2016-TIOL-562-CESTAT-DEL and G.R. Movers 2012-TIOL-2012-CESTAT-DEL, wherein it is held that when the telecom operators paid service tax on full MRP of such ERCs/SIM cards, there is no liability on assessee, who are involved in sale of such ERC/SIM cards to subscribers - Said view has been upheld by Madras High Court in Bharti Televentures Ltd. - Telecom operators have paid service tax on full MRP of ERC, which was further sold by assessee - In such situation, the ratio of decisions mentioned will squarely apply to the present dispute - Accordingly, no merit found in appeal filed by Revenue - Accordingly, the appeal filed by Revenue is dismissed: CESTAT - Appeal dismissed: DELHI CESTAT
2018-TIOL-184-CESTAT-MAD
Sheladia Associates Ltd Vs CCE
ST - a duty demand with interest & penalties u/s 76, 77 & 78 was raised on the assessee-company, demanding tax on the TDS portion of amount received, and on reimbursement expenses - The assessee contested imposition of penalty, claiming that the assessee was under a bona fide belief that tax was payable only on net amount received -
Held - Considered the decision of the Tribunal in Margarpatta Township Dev. & Construction Co. Ltd. Vs. Commissioner of Central Excise, Pune wherein penalty imposed in similar circumstances was set aside - Therefore, penalties imposed u/s 76 & 78 set aside - Moreover, the equal amount of penalty imposed u/s 77 was beyond the provisions of law - Hence penalties set aside in toto: CESTAT (Para 1,4) - Appeal Partly Allowed: CHENNAI CESTAT
CENTRAL EXCISE SECTION
2018-TIOL-14-SC-CX
CCE Vs Featherlite Products Pvt Ltd
CX – CENVAT - Assessee had applied for transfer of un-utilized cenvat credit to their unit at Bangalore, where, according to it, it had shifted its assets and stock, which were lying at the Hosur unit - Revenue took a view that transfer of cenvat credit was not permissible under Rule 10(1) of the CCR 2004, upon shifting of factory since there was no reference to a relocated unit in the latter part of the provision – Tribunal set aside the order of the lower authorities and allowed the credit – In Revenue appeal, the High Court held that the word "shifts" which occurs in the first limb of Rule 10(1) of CCR, 2004 will include a situation where a unit is relocated to another site and that any other interpretation would lead to absurd results; that view taken by Revenue that transfer of cenvat credit was not permissible, under Rule 10(1) of the 2004 Rules, upon shifting of factory since there was no reference to a relocated unit in the latter part of the provision was held to be misconceived; that conclusion arrived at by Tribunal was sustained and Revenue appeal was dismissed – Revenue in appeal before Supreme Court. Held: After condoning the delay, the SLP was dismissed by observing that there is no ground to interfere with the impugned order: Supreme Court - SLP dismissed: SUPREME COURT OF INDIA
2018-TIOL-183-CESTAT-MUM
Exide Industries Ltd Vs CCE
CX - CENVAT - Credit denied on certain invoices received from M/s JPPL on the ground that JPPL had issued sale invoices without actual supply of finished goods and the primary evidence is mis-match between the vehicle number and the toll records - inasmuch as appellant had shown receipt of said goods through transport vehicles other than those mentioned in the respective invoices issued by M/s JPPL - appeal to CESTAT.
Held: Argument of the appellant that the truck might have broken down enroute from Jammu & Kashmir to the factory premises cannot be believed for the reason that odds that all five trucks breaking down enroute are minuscule - In these circumstances, the difference of the vehicle number appearing in GRN of the appellants being different from invoices in all five cases is relevant - appellants failed to match the number of truck with the number mentioned in the invoice - it is apparent that the appellants were deliberately involved in the operation and were totally negligent - invocation of extended period is fully justified - appeal dismissed: CESTAT [para 4.3, 5] - Appeal dismissed: MUMBAI CESTAT
2018-TIOL-182-CESTAT-DEL
Indore Bottling Company Vs CCE
CX - On the basis of investigation conducted at the end of Parle Export Ltd. wherein discrepancies were found between the sale accounted and quantity of goods manufactured and cleared by assessee as reflected in their records duty was demanded from assessee on account of clandestine removal of goods - The matter was adjudicated, demand of duty along with interest was confirmed against the main assessee - Penalties on all assessees was imposed - The figures as accounted by Parle Export Ltd. are corroborative by annual sales plan of each year signed by assessee which was reflected in actual sales of previous year - Further, assessee paid advertisement charges to Parle Export Ltd. taking the same figures in books of Parle Export Ltd. to be correct - On identical facts, a case was booked against Chandigarh Bottling Company, an another assessee who was manufacturing goods for Parle Export Ltd. the said case travelled upto this Tribunal wherein this Tribunal held that without investigation the source of concrete or other inputs like pilfer proof caps to be produce the quantity of final products held to be clandestinely manufactured is weak, therefore, demand against assessee is not sustainable in the light of decision in case of Chandigarh Bottling Company - Impugned order is set aside: CESTAT - Appeals allowed: DELHI CESTAT
2018-TIOL-181-CESTAT-MAD
Stanpacks India Ltd Vs CCE
CX - The allegation raised against the assessee is that they under-invoiced the goods supplied to VVM with the connivance of the partner Shri S. Chandresan of VVM - Secondly, that they had also under-invoiced the waste and scrap cleared by them for which amount was received by cash - The assessee had received the under-invoiced money from VVM through bearer cheques issued to the employees of assessee - All the employees have given statements to the effect that they have encashed the bearer cheques and given the amounts to the directors as directed by them - The statement recorded from Shri S. Jaishankar working as PRO in assessee-company has stated that a cheque of Rs.10,50,000/- was drawn in his name and he had presented the cheque for payment and the amount was given to Shri G.P. Ramaraj of JBL - Similar statements have been given by other employees Sivaraman, Manager (Finance) and Ganesan - The department has conducted investigations with regard to the bank account and found that there has been withdrawal of amount by these employees - All these would sufficiently prove the allegation raised in SCN that assessee has been under-invoicing the goods and receiving the consideration by way of cash, thus thereby not accounting the clearance of the goods - The second allegation is that they were under-invoicing scrap sold by them - At the time of search, cash of Rs.1,25,850/- was found in the cabin by the income tax authorities and Shri G. Gopinath, Vice President of assessee, deposed that such amount was received by sale of scrap which was not accounted - From such evidence, no ground found to interfere with findings of the authorities below - Commissioner (A) has given sufficient benefit to the assessee by setting aside the personal penalties - Appeal is devoid of merits: CESTAT - Appeal dismissed: CHENNAI CESTAT
CUSTOMS SECTION
NOTIFICATION
ctariffadd18_001
Clear Float Glass imported from Pakistan, Saudi Arabia & UAE to attract anti-dumping duty; HC stay on Notification withdrawn
DGFT PUBLIC NOTICE
dgft17pn052
Amendments in ANFs 4A, 4E, 4F, 4G, 4H & 4I of Handbook of Procedures 2015-20
CASE LAWS
2018-TIOL-77-HC-MAD-CUS
National Glass Emporium Vs Customs & Central Excise Settlement Commissioner
Cus - Petitioner engaged in import of glassware and enamelware - It is alleged that petitioner has been undervaluing their imported goods - Consequent upon which, a search was conducted in the place of business of petitioner as well as the residential place of proprietor which has resulted in issuance of SCN - The petitioner filed an application before Settlement Commission under Section 127B of Customs Act, 1962 - The petitioner admitted a duty amount of Rs.79,76,642.19/- and with regard to the remaining, contended that there was a calculation error which has been noted by Settlement Commission in impugned order - Commission has admitted the settlement case and settled the matter by directing the petitioner to pay entire duty of Rs.89,45,851/-, as demanded in SCN - After taking note of admitted amount, which was remitted by petitioner viz., Rs.79,76,642/-, the petitioner was granted fifteen days time to pay remaining amount of Rs.9,69,209/- - The correctness of order is tested in this writ petition - The conclusion arrived at by Commission could be negatived for more than one reason - Firstly, the Commission did not undertake any exercise to find out as to whether the plea raised by petitioner that there was calculation error is correct or not - In fact, sub-section 5 of Section 127 of the Act, empowers the Commission to do so - The Commission did not do such exercise, nor it called for any report from Jurisdictional Commissionerate - The second reason is that if Commission was of opinion that for some reason, application cannot be entertained on account of non-cooperation by assessee, the case should have been sent back to appropriate officer under Section 127I of the Act - This was also not done by Commissioner, rather he admitted the case - Thus, the reasons assigned in impugned order are completely flawed and the matter requires to be re-examined afresh: HC - Matter remanded: MADRAS HIGH COURT
2018-TIOL-76-HC-MAD-CUS
Neycer India Ltd Vs ACC
Cus - Writ petition has been filed challenging an order passed by first respondent addressed to second respondent/Bank, requesting them to honour the bank guarantee furnished by petitioner as a part of condition stipulated under EPCG scheme - The bank guarantee was sought to be enforced by impugned order on account of the fact that petitioner did not complete the export obligation and did not produce the discharge certificate - This writ petition was filed on account of fact that the petitioner has been declared as SICK industrial undertaking and the matter is pending before BIFR - Writ petition is disposed of by remanding the matter to first respondent for fresh consideration - The first respondent shall issue a notice to petitioner, who shall appear through their authorised representative and place all the papers referring to revised re-habilitation scheme as framed by the BIFR and after affording an opportunity of personal hearing, the first respondent shall pass orders on merits and in accordance with law - The bank guarantee furnished by the petitioner shall be kept alive and abide by the fresh orders to be passed by the first respondent: HC - Matter remanded: MADRAS HIGH COURT
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MISC CASE |
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