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2018-TIOL-NEWS-030 Part 2 | Monday February 05, 2018
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DIRECT TAX |
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2018-TIOL-198-HC-MUM-IT
CIT Vs Kalyani Hayes Lemmerz Ltd
Whether non-application of mind by AO while carrying out assessment can lead to conclusion that there has been any failure on the part of Assessee to truly and fully disclose all material facts necessary for Assessment - NO: HC - Revenue's appeal dismissed: BOMBAY HIGH COURT
2018-TIOL-211-ITAT-DEL
Aasho Charitable Trust Vs CIT
Whether the CIT(E) can reject a society's application for registration, without examining the claimant's stated objectives or without producing any evidence proving that the claimant's activities are not charitable in nature - NO: ITAT
Whether the CIT can delve into examining the genuineness of a society's activities and recording satisfaction before granting registration, where the claimant society has not carried out any activities - NO: ITAT - Assessee's Appeal Allowed: DELHI ITAT
2018-TIOL-205-ITAT-AHM
Transpek Si Lox Industry Ltd Vs ACIT
Whether no disallowance of deduction u/s 80IB for alleged improper allocation of expenses should be made, following the previous order of Tribunal on similar issue in assessee's own case, when nothing contrary is proved by Revenue - YES: ITAT
Whether weighted deduction u/s 35(2AA) can be availed without submitting Form 3CI as prescribed under Rule 6(6) of the Income tax Rules - NO: ITAT - Assessee's appeal partly allowed: AHMEDABAD ITAT
2018-TIOL-204-ITAT-HYD
Citizen Co-Operative Society Ltd Vs DIT
Whether a penalty order u/s 271FA is directly appealable order before the Tribunal - NO: ITAT - Assessee's appeal dismissed: HYDERABAD ITAT
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INDIRECT TAX |
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SERVICE TAX SECTION
2018-TIOL-440-CESTAT-AHM
Shreeji Shipping Vs CCE & ST
ST - Assessee while providing port services, provided water supply at port wherein they arranged for water to be supplied from a supplier of water as a pure agent to the Port - Case was made against assessee that, as supply of water is an exempted service and assessee is providing taxable as well as exempted services, is not maintaining separate accounts for input services, therefore, in terms of Rule 6(3) of CCR, 2004, assessee is required to pay 5%/6% of the value of services provided by them for exempted services - For providing supply of water, assessee is not getting anything therefore, assessee is working as pure agent and for that, they cannot be penalised, being the issue of interpretation of provisions of service Tax - Therefore, penalty on assessee is set-aside - Further, as Commissioner has not quantified the amount of reversal required to be reversed, matter is remanded to adjudicating authority for quantification of demand of amount of reversal attributable to exempted services: CESTAT - Matter remanded: AHMEDABAD CESTAT
2018-TIOL-439-CESTAT-DEL
DGM Maintenance Vs CCE
ST - Assessee engaged in providing telecommunication service and is registered with department for payment of Service Tax - They were availing Cenvat credit on input services in terms of CCR, 2004 - The dispute in the present case related to Service Tax paid on input service of "Interconnectivity Usages Services" provided by other telecom operators - The objection of Revenue is that input inter-connectivity should be used for output inter-connectivity and if such direct connection is not there then the Cenvat Credit of tax paid on input inter-connectivity shall be denied - This proposition is not factually or legally sustainable - Inter-connectivity of services of various telecom operators is a basic requirement for providing telecommunication service - No telecom operator operates alone - In the present case DGM (Maintenance) is managing inter-connectivity inward as well as outward for BSNL who is providing telephone service to the ultimate consumers - Interconnectivity is between the telecom operators only - No legal justification found to deny the credit on such input service which are essentially required for providing telecommunication service of further inter-connectivity and telephony - Similar dispute in respect of the same assessee came before the Tribunal wherein it is held that Cenvat credit being a substantial benefit cannot be denied on account of procedural defects of minor nature and accordingly allowed the credit - Denial of credit in present case is not justified: CESTAT - Appeal allowed: DELHI CESTAT
CENTRAL EXCISE SECTION
2018-TIOL-201-HC-MUM-CX
Abhilasha Associates Vs CCE
CX - This appeal was heard at length on 16-1-2018 and the order was passed - In continuation of that order, matter was placed now so that court can finally dispose of the appeal - When the matter was called out, Revenue make a statement that complete satisfaction of condition imposed on assessee while granting interim relief/stay has not been made and calculation and computation made by assessee is incorrect - The correct calculations are now provided to him by Revenue officials - In terms of this corrected calculation, compliance will have to be made - When a copy of these particulars, which are taken on record, were provided to assessee, he makes a statement, that in terms of these calculations if there is any deficit or shortfall, assessee will make that good within a period of two weeks - Statement accepted as an undertaking to the Court - In the event, compliance is made within this additional period: HC - Appeal allowed: BOMBAY HIGH COURT
2018-TIOL-438-CESTAT-DEL
Bio Veda Action Research Pvt Ltd Vs CCE
CX - the assessee-company manufactured branded Ayurvedic and cosmetic products & availed area-based exemption under Notfn. No. 50/2003 - The Revenue alleged that the assessee cleared goods from their factory at Himachal Pradesh to their godown in Delhi - The Revenue further alleged that the assessee affixed labels on these products & then cleared them - The Revenue alleged that such labelling amounted to manufacture - Duty demand was raised, invoking extended limitation, with imposition of equal penalty on the assessee-firm - Penalties were also raised on the directors of the assessee firm - Such demands were upheld by the Commr.(A) - Held - The demand is contested on limitation grounds - There is no allegation that the semi-finished goods from unit in Himachal Pradesh were shifted to finish any process of manufacture other than the deemed manufacture of labelling - Apparently, the goods manufacutured in Himachal Pradesh require labelling, in compliance with statutory requirements - Such compliance was being made in the Delhi unit - Thus, the assessee could not have gained anything by having labelling done in godown & intending to evade duty on a product, which was anyway eligible for area-based exemption - Hence, there is no sustainable ground for alleging intention to evade payment of duty - Thereby, the justification to invoke extended limitation is not provided - The order in question warrants being set aside on limitation grounds: CESTAT (Para 1,4) - Appeals Allowed: DELHI CESTAT
2018-TIOL-437-CESTAT-KOL
CCE Vs Great Eastern Energy Corporation Ltd
CX - Assessee engaged in extraction of Natural Gas from Coal Bed Methane Wells and brings the same to their factory through underground pipelines - At the factory, they undertake compression of Natural Gas and filled into cascades/cylinders - The CNG is cleared in cylinders to M/s Indian Oil Company Ltd. on payment of Central Excise Duty - The dispute, however, is with reference to clearances made in cascades during the period October, 2008 to April, 2010 - Such clearances were made to the premises of their customers where they had installed Pressure Reducing Skids (PRS) wherein CNG was subjected to decompression to make Natural Gas which was delivered to their customers - No Central Excise Duty was paid by assessee on such clearances - Department was of the view that Central Excise Duty will be payable on such gas - Original authority confirmed the demand of Central Excise Duty and imposed penalty as well as interest - Even though the Natural Gas is transported to customers' premises in compressed form, such process of compression has been done for purposes of transportation only - Such process cannot be considered as a process of manufacture, since the goods are sold not as CNG but as Natural Gas - No reason found to interfere with impugned order and same is hereby sustained: CESTAT - Appeal dismissed: KOLKATA CESTAT
2018-TIOL-436-CESTAT-MAD
Jeevan Diesels And Electricals Ltd Vs CCE
CX - Assessee engaged in manufacture of Diesel Generating Sets - On verification of records of assessee namely General Ledger and Debit notes, it was noticed that assessee had collected certain amounts in addition to the amount charged from buyers and it was also reflected in Annual sales tax return that such amounts collected was sales tax - Assessee being under sales tax holiday vide notfn 15/74 issued by Government of Pondicherry, for the disputed period, department was of the view that the amount received as sales tax from customers and not remitted to the government is an additional consideration and the same is liable to be included in the assessable value - Assessee has explained the background on which assessee had started collecting 10% Central sales tax - The notice as well as assessment order produced by CTO clearly shows that assessee has disclosed the collection of amount in sales tax return - The assessment order also observes that assessee was given time to produce C Form - If the said amount is assessed by sales tax authorities, then the same cannot be considered as additional consideration so as to be included in the assessable value - For verifying these aspects, matter remanded to the adjudicating authority: CESTAT - Matter remanded: CHENNAI CESTAT
2018-TIOL-435-CESTAT-ALL
CCE Vs Sarin And Sarin
CX - Assessee engaged in manufacture of Pan Masala and Chewing Tobacco - Assessee filed a request for sealing of one no. of packing machine of Sada Pan Masala RSP 4/-, the only machine installed in factory of assessee on 16.08.2013 - Same was sealed on 21.08.13 under a panchnama dated 21.08.13 - The factory remained closed till 09.10.2013 and assessee filed claim for abatement of duty paid for the period 22.08.13 to 31.08.13 (nine days) and filed another abatement claim for the period from 01.10.13 to 09.10.13 (nine days) - The adjudicating authority in both these cases have denied the abatement by holding that intimation for sealing of machine was not filed at least 03 clear working days prior to the commencement of said period - Issue is no more res-integra and stands settled by ruling of Allahabad High Court in case of Rajat Industries Pvt. Ltd. where the appeal filed by revenue against Tribunal's decision, which stands followed by Commissioner (A), was rejected - Further, the Tribunal in case of Classic Tobacco Products has also dealt with an identical issue and have observed that in as much as the Revenue sealed the machines even on two days notice, they cannot be now allowed to adopt Rule 10 for denying the abatement claim - In case of M/s Sarla Enterprises the non filing of advance intimation was held as not adverse to the assessee's claim - In as much as, the issue stands decided by said referred decisions, no merit found in the appeal filed by Revenue: CESTAT - Appeal rejected: ALLAHABAD CESTAT
CUSTOMS SECTION
NOTIFICATION
dgft17not049
Updation in Para 4 (A) of General Notes Regarding Import Policy of ITC (HS), 2017, Schedule - I (Import Policy)
CASE LAWS
2018-TIOL-199-HC-DEL-CUS
Deepak Enterprises Vs UoI
Foreign Trade (Development & Regulation) Act, 1992 [Act] - Petitioner before High Court, inter alia, impugning orders dated 5.6.2013, 23.1.2014 and 28.8.2014 [impugned orders] rejecting the petitioner's claim for refund of Terminal Excise Duty [TED] for supplies made by the petitioner to 100% Export Oriented Units [100% EOUs] during the period January, 2012 to April, 2013 - petitioner has also impugned the minutes of the meeting of the Policy Interpretation Committee held on 4.12.2012, inter alia, seeking to clarify that “refund of cenvat credit provisions are available under Excise Rules and Cenvat Rules, hence refund of such credit by DGFT does not arise”
HELD - It is well settled that unless the statute conferring the power to make delegated or subordinate legislatures expressly provide that the same can be made with retrospective operation, no such power would be inferred - thus, it is apparent that the Central Government is not empowered to make any retrospective changes in the export and import policy - in view of the settled position of law, the Central Government could also not make any substantive changes in the Foreign Trade Policy [FTP], which had the effect of taking away any vested right - in the present case, the FTP expressly provided for the refund of TED in certain cases - it is not disputed that the goods supplied by the petitioner to the EOUs constituted 'deemed exports' and, thus, the petitioner had a vested right to claim refund of excise duty in respect of goods supplied during the period prior to 18.4.2013 in terms of the then applicable FTP - this Court is also not persuaded to accept the policy circular issued by the DGFT [Policy Circular No.16 (RE-2012/2009-14) dated 15.3.2013] seeking to clarify that no refund of TED should be provided in cases where the supplies of goods are ab initio exempted from payment of excise duty, is binding - the same is clearly beyond the powers of the DGFT - the role of the DGFT is limited to advising the Central Government in formulation of the export import policy and to exercise certain other powers of the Central Government, which are exercisable under the Act - however, that does not include the power to either frame or amend the FTP - in the present case, the plain language of paragraphs 8.2, 8.3(c) and 8.5 of the FTP as applicable prior to 18.4.2013 was unambiguous and thus, the question of the DGFT issuing any clarification in that regard did not arise - it is perhaps for this reason that the Central Government has subsequently amended the FTP - the DGFT is responsible for carrying out the FTP as framed by the Central Government - thus, any circular or notice issued by the DGFT that is inconsistent with the FTP would be clearly beyond the powers of the DGFT - there is no dispute that the petitioner had discharged the excise liability on the goods supplied to the EOUs - thus, in terms of plain language of paragraph 8.3(c), as applicable prior to 18.4.2013, the petitioner would be entitled to refund of TED - the fact that the Cenvat Rules do not mention “deemed exports” would be of little relevance considering that paragraph 8.3(c) of the FTP expressly provided for refund of TED in cases of deemed exports - in Kandoi Metal Powders Mfg. Co. Pvt. Ltd. [ 2014-TIOL-230-HC-DEL-EXIM ], the Division Bench of this Court had held that the Cenvat regime under the Central Excise Act, 1944 operate on its own terms and is independent on the rights and liabilities of the parties under the import export policies framed under the Act - the said decision squarely covers the controversy in the present case - in view of the above, the petition is allowed - the impugned orders rejecting the petitioner's claim for refund of TED in respect of the goods supplied between January, 2012 and 17.04.2013 on the ground that the said goods were exempted from excise duty, are set aside - the minutes of Policy Interpretation Committee dated 4.12.2012 and the Policy Circular dated 15.3.2013 insofar as the same are relied upon to reject the claim of the petitioner for refund of TED are set aside - the respondents are directed to process the petitioner's claim for refund of TED : HIGH COURT [para 9, 11, 12, 14, 15, 16, 18, 20, 26] - Writ Petition allowed: DELHI HIGH COURT
2018-TIOL-441-CESTAT-ALL
Prem Kumar Manchanda Vs CC
Cus - Assessee was detained by Customs officers on the charges of smuggling gold into India - Said gold was detained and subsequently seized and assessee was issued with a SCN wherein it was stated that gold that was found in possession of assessee was third country origin, foreign mark gold and importation of which into India was prohibited by Notfn 9/1996-Cus issued under Section 11 of Customs Act, 1962 and, therefore, it was liable for confiscation under Section 111 of Customs Act, 1962 - Any passenger entering into India is empowered to make a declaration of his baggage before entering into India as provided under Section 77 of Customs Act, 1962 - Further, if it is found that the goods accompanying him which are also called as baggage, import of which is prohibited and in respect of which true declaration has been made under Section 77 the proper officer may at the request of passenger detain such articles for the purpose of being returned to him on his leaving India under Section 80 of Customs Act, 1962 - As stated in grounds of appeal, assessee appears to have proposed such option before the officers of Land Customs Station, Sonauli - However, said option was not exercised and officers seized the goods and detained the passenger - Therefore, assessee was entitled for benefit of provision of Section 80 of Customs Act, 1962 - The option under Section 80 of Customs Act, 1962 shall be exercised at Land Customs Station, Sonauli: CESTAT - Appeal allowed: ALLAHABAD CESTAT
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