2018-TIOL-NEWS-036, Dated: Monday, February 12, 2018

2018-TIOL-NEWS-036 | Monday February 12, 2018

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	Clause by Clause Discussion on Finance Bill 2018 by VAISH ASSOCIATES ADVOCATES

DIRECT TAX


	2018-TIOL-251-HC-DEL-IT + Story CIT Vs Gee Kay Finance & Leasing Co Ltd Whether reopening proceedings after expiry of limitation period of four years, should not be initiated before obtaining necessary sanction u/s 151 - YES: HC- Revenue's appeal dismissed: DELHI HIGH COURT 2018-TIOL-249-HC-AHM-IT PR CIT Vs Jitendra H Modi Huf Whether satisfaction note recorded after completion of proceedings u/s 158BC, can be sustained, only if such recording was done immediately after completion of block assessment - YES: HC - Revenue's appeal dismissed: GUJARAT HIGH COURT 2018-TIOL-248-HC-AHM-IT Gunvantbhai Somabhai Patel Vs DCIT Whether the requirement of "reason to believe" will apply even in the cases where reopening of assessment is being resorted for not making scrutiny assessment previously - YES: HC - Assessee's Writ petition allowed: GUJARAT HIGH COURT 2018-TIOL-247-HC-AHM-IT PR CIT Vs Claris Life Science Ltd Whether a question as to validity of revised return filed by assessee, can be agitated by the Department, if nothing required after attained finality: YES: HC - Revenue's appeal dismissed: GUJARAT HIGH COURT 2018-TIOL-230-ITAT-DEL Pragathi Krishna Gramin Bank Vs ACIT Whether it is correct to complete the TDS assessment and pass the orders u/s 201(1)/201(1A) without affording the assessee sufficient time and opportunity to collect the relevant information from all its branches - NO : ITAT Whether therefore case can be remanded in that situation for reconsideration wherein AO should carry out proper verification of the TDS made on interest payments before passing order - YES : ITAT - Case Remanded: DELHI ITAT 2018-TIOL-229-ITAT-DEL ACIT Vs Nahid Finlease Pvt Ltd Whether when the property purchased is duly disclosed in the regular books of account by assessee then it can not be treated as undisclosed or incriminating material in nature in proceedings u/s 153C of the Act- YES : ITAT. Whether addition of income from house property in proceedings u/s 153C of the Act can not be made without reference to any material, found during the course of search - YES : ITAT - Revenue's appeal dismissed: DELHI ITAT

INDIRECT TAX

SERVICE TAX SECTION

2018-TIOL-511-CESTAT-MAD

Vit Consultancy Pvt Ltd Vs CST

ST - the assessee-company, engaged in export of services, sought refund of accumulated Cenvat credit, under Rule 5 of CCR, 2004, which was sanctioned by the jurisdictional Asst. Commr. - The Revenue challenged the same before the Commr.(A) on grounds that the refund claim should have been filed before a different commissionerate, which was vested with the proper jurisdiction - The Commr.(A) set aside the order of the Asst. Commr. -

Held - The sole basis for rejecting the refund claim is that the claim ought to have been filed before a different commissionerate - Neither the legality of the claim is disputed nor is the assessee's eligiblity for refund - Hence the Commr.(A) unjustifiably set aside the refund claim - In case the officer who granted refund lacked the jurisdiction to grant it, the assessee could simpy have been pointed in the direction of the proper commissionerate or the claim could have been transferred to it - Hence, O-i-A in question set aside & order of Asst. Commr. restored: CESTAT (Para 1,2,3,5.1,5.2) - Appeal Allowed: CHENNAI CESTAT

2018-TIOL-510-CESTAT-DEL

Ballset Entertainment Pvt Ltd Vs CST

ST - the assessee-company engaged in providing services of field publicity & event management - The assessee provided services on behalf of event managing companies and received consideration from them - Since, the assessee did not organize the events directly for the client, the services rendered were sought to be taxed as Business Auxiliary Service (BAS) - The assessee also claimed to provide services to UNICEF, for which it claimed exemption under Notfn. No. 16/2002 - Such exemption was denied on grounds that services were not provided directly to the UNICEF - Duty demand was raised, with penalties u/s 77 & 78, and the same was upheld by the Commr.(A) -

Held - Considering the first service, though the assessee provided only part of the service which was agreed upon between these two parties and the ultimate client, the same would be squarely covered under heading BAS - Assessee's claim in this regard dismissed - Further, w.r.t. the other service, it is clear from a perusal of the bills that the services were provided for UNICEF, although the bills were raised through another party - Hence, benefit of exemption under Notfn. No. 16/2002 cannot be denied - Assessee's claim in this regard upheld: CESTAT (Para 1,3,5) - Appeal Partly Allowed: DELHI CESTAT

CENTRAL EXCISE SECTION

2018-TIOL-517-CESTAT-MUM + Story

Praveen Pharma Pvt Ltd Vs CCE

CX - CENVAT - Inclusion of the cess in the consideration for sale price of imported goods is commercially sound - however, it does not confer a licence to the customer to avail of credit beyond that permitted in CCR, 2004 - No evidence is available on record that the customers of the appellant had availed of credit of cess on the basis of invoices issued by them - describing such transaction as ‘passing on of cess' and compounding of such misdescription with penal consequences is not contemplated in law - impugned order set aside and appeal allowed with consequential relief: CESTAT [para 5, 6] - Appeal allowed : MUMBAI CESTAT

2018-TIOL-509-CESTAT-AHM

VVF Ltd Vs CCE & ST

CX - the assessee claimed rebate - The amount was sanctioned but outstanding interest amount pertaining to pending dues against the appellant, was adjusted against the said rebate claims - The balance amount was paid to the assessee - On appeal, the Commr.(A) reduced the amount of appropriation - When the assessee requested disbursement of the balance amount, such claim was denied as being time barred - Such denial was upheld by the Commr.(A) -

Held - The wrong appropriation of a part of the rebate claim, cannot be considered as a separate refund amount and its claim is barred by limitation when the assessee requested for release of the said amount - Where the amount which was initially claimed as refund if reduced by the adjudicating authority, but later restored by the Commr.(A), second refund claim need not be filed again in claiming that amount - O-i-A rejecting rebate claim set aside: CESTAT (Para 1,5) - Appeal Allowed: AHMEDABAD CESTAT

2018-TIOL-508-CESTAT-ALL

Tirupati Bakers Pvt Ltd Vs CCE

CX - Assessee destroy 1214 cartons of 50gm/packet, 1216 cartons of 100gm/packets and 2595Kg of loose biscuits as the same were not fit for human consumption/sales - These biscuits were destroyed at the direction received by them from M/s Parle Biscuits Private Ltd - It appeared to Revenue that assessee have clandestinely removed the biscuits - Occurrence of rejects and/or process loss is a normal feature in the biscuit industry - It is found that assessee had given proper intimation to Revenue Authority of proposed destruction and same was destroyed after about two weeks from the date of such intimation - Further, there is no evidence on record of any clandestine activity and/or attempted removal on the part of assessee - Whole SCN is presumptive and accordingly, it is not maintainable - Impugned order set aside: CESTAT - Appeal allowed: ALLAHABAD CESTAT

2018-TIOL-507-CESTAT-ALL

Romsons Juniors Vs CCE

CX - Assessee and its Partner are engaged in manufacture of various instruments and appliances used in medical, surgical dental or veterinary sciences including I.V. Cannulas - The dispute arose whether the subject goods fall within the scope of term "Disposable and non-disposable cannula for aorta, vena cavae and similar veins and blood vessels and cannula for intra-corporal spaces" - Whether the "subject goods" would fall under such description and eligible for exemption - The issue regarding coverage of subject goods by such description was already decided and also approved by Supreme Court in Sabharwal Surgical Pvt. Ltd. - Under similar facts and circumstances, Tribunal have allowed the appeal in case of Becton Dickinson India Pvt. Ltd. and Eastern Medikit Ltd 2015-TIOL-2223-CESTAT-DEL - The decisions in said cases have followed the earlier decision in case of Sabharwal Surgical Pvt. Ltd. - It is further contended that in any case matter being wholly interpretational, demand for extended period is not at all tenable - Following the precedent decisions of Tribunal, assessees are eligible for exemption for i. v. cannula manufactured by them: CESTAT - Appeals allowed: ALLAHABAD CESTAT

2018-TIOL-506-CESTAT-ALL

Birla Transasia Carpets Ltd Vs CCE

CX - Assessee is before the Tribunal on the ground that adjustment of so-called outstanding demands without giving them any opportunity of hearing, out of the amount of refund and interest is bad and accordingly, have prayed for setting aside such adjustments with further direction that full refund may be granted - Grant of refund has been finalized by Tribunal along with interest - Further, Allahabad High Court in petition of assessee has been pleased to direct that assessee is entitled to refund with 12% interest, being order dated 6th July, 2000 - Against said order, Revenue had preferred Civil Appeal which was dismissed by Supreme Court by its order dated 29/04/2003 - Under such facts and circumstances, subsequent SCN issued by Department is void ab initio and accordingly quashed - Impugned order set aside as the same is apparently hit by principles of 'doctrine of merger' and 'hierarchy of Courts' - Adjustments have been made by Courts below, from the refund amount as well as interest payable to assessee, under the powers vested in Authority under Section 11 of Central Excise Act - However, before such adjustment assessee was required to be given notice and opportunity to be heard, which have not been followed, causing prejudice to assessee - Adjustments made by Courts below, out of refund and interest are set aside and matter remanded with the direction to issue a fresh SCN, giving the details of adjustments proposed to be made: CESTAT - Matter remanded: ALLAHABAD CESTAT

2018-TIOL-505-CESTAT-AHM

CCE & ST Vs Anchor Soap Pvt Ltd

CX - Assessee had availed credit of capital goods during financial years 2004-2005 and 2005-2006 and later these capital goods were removed after being used for more than one and half year in the year June 2006-2007 - At the time of clearance of capital goods, assessee had paid duty on transaction value to which Revenue did not accept and demanded the reversal of total credit availed initially at the time of receipt of capital goods in their factory premises, considering the clearances of capital goods 'as such' - Due to conflicting views on subject matter by High Court and Tribunal, the issue was referred to Larger Bench in Navodhaya Plastic Industries Ltd.'s 2013-TIOL-1773-CESTAT-MAD-LB more or less involving similar circumstances - Before the Commissioner (A), aforesaid decision of Larger Bench of Tribunal was not available, therefore, it is prudent to remand the matter to Commissioner (A) to decide the issues afresh taking into consideration the principle of law laid down by Larger Bench of the Tribunal in Navodhaya Plastic Industries Ltd.'s case - The other connected issues which were not decided would be addressed by Commissioner (A) while disposing of the appeal: CESTAT - Matter remanded: AHMEDABAD CESTAT

CUSTOMS SECTION

2018-TIOL-245-HC-MAD-CUS

Knitwin International Vs DCC

Cus - Petition filed against order of adjudicating authority directing the petitioner to pay a sum being the draw back on the ground that petitioner failed to produce evidence of realization of export proceeds in respect of exported goods within the period allowed under FEMA and Central Excise Duties and Service Tax Drawback Rules, 1995 - If the petitioner produces evidence to show that sale proceeds have been realized within the time provided by the R.B.I., which is one year in instant case, then, petitioner would be entitled for being repaid the amount, so recovered - However, it is not very clear as to whether such recovery has been done from the petitioner - Petitioner's case is that, within a period of one year, i.e., five months of availment of drawback, the amount has been realized and Bank Realization Certificate was issued - Therefore, if such is the factual position, then, petitioner cannot be proceeded against by recovering the drawback or in the event, it has been recovered, he is entitled to prayer for repayment to be considered in accordance with drawback rules - Impugned orders set aside and matter remanded to first respondent for fresh consideration: HC - Writ Petitions allowed: MADRAS HIGH COURT

2018-TIOL-244-HC-MAD-CUS

Micromax Informatics Ltd Vs PR CIT

Cus - Petitioner's refund claims have been rejected for want of reassessment under Section 27 of Customs Act, 1962 - The petitioner has raised several grounds, challenging the impugned order, and in particularly, stated that revenue was bound by decision of this Court in W.P. dated 18.04.2017 questioning the correctness of impugned order - Interestingly, Department themselves have preferred an appeal against impugned order before Commissioner (A) - In grounds of appeal, Department has contended that Lower Adjudicating Authority passed the order without examining the reasons mentioned in order passed by this Court, dated 18.04.2017 - Thus, Department themselves seek for remand of matter to the Adjudicating Authority - While petitioner may not have reservation on the matter being sent back, but, would submit the reasons for rejection of petitioner's refund claim is wholly unjustified, and there should be a direction to process the application and grant refund - As Court has found that impugned order is not consonance with earlier direction issued by Court dated 18.04.2017, and Department themselves have realized the same, Court is inclined to allow Writ Petition: HC - Writ Petition allowed: MADRAS HIGH COURT

MISC CASE


	2018-TIOL-246-HC-MAD-VAT All India Marathon Sports Vs ACCT Whether Revenue can attach assessee's bank account, even when certain part of the disputed tax for each of the assessments under both PVAT & CST Act is paid - NO: HC Whether the terms 'application' and 'applicant' occuring u/s 77(3), can be referred to only a dealer who has approached the authority u/s 77 of the Act - YES: HC - Case Remanded: MADRAS HIGH COURT 2018-TIOL-243-HC-MUM-SERVICE + Story Hemant Atmaram Shinde Vs UoI Service Matter - the petitioners herein are employees of the Preventive Unit of the Customs Department - The issue herein is w.r.t. seniority between direct recruits and promotees, for the post of Preventive Officer - The promotees were those who had regularly been promoted since 1991 and having worked continuously since then, protested the denial of seniority from the date of their initial promotion - Thereafter the Tribunal held in their favor and stated that the promotees were entitled to seniority in the cadre of the Preventive Officers from the date of their initial ' ad hoc ' promotion - Thereafter the Promotees were promoted to the rank of Superintendent and the Department relased a Seniority List to such effect - However, such order of the Tribunal was contested by one officer who was a Direct Recruit, contesting the promotion of the promotees to the post of Superintendent - Such appeal was allowed - Thereafter the Department released a fresh Seniority List, wherein the Promotees were placed much below the Direct Recruits, from 200 to 400 places - Also the cut-off date was the date of vacancy instead of date of joining - When the Promotees challenged such list before the Tribunal, their appeal was dismissed - Hence the present writ. Held - Considered relevant findings of the judgment in favor of the Direct Recruits - Also considered relevant findings of the Apex Court in Keshav Chandra Joshi & ors. Vs. Union of India & ors. - Herein the Court clearly held that the rule of quota, being statutory, must be strictly implemented & it is impermissible for the authorities concerned to deviate from the rule due to administrative exigencies or expediency - The result of pushing down the promotees appointed in excess of the quota may work out hardship, but it is unavoidable and any construction otherwise would be illegal, nullifying the force of statutory rules and would offend Articles 14 and 16(1) of the Constitution - Also, the Apex Court in Uttaranchal Forest Rangers held that the promotion in excess of quota made an employee an ad hoc employee and seniority could not be given to such employees on the basis of ad hoc promotion - Hence there is no merit in the submission for the promotees, that publishing the seniority list by following quota rule would amount to violating or nullifying the decision of the Tribunal in favor of the Promotees - On objection raised by Direct Recruits the seniority was recast - Hence, upon consideration of the entire materials and upon carrying out a detailed exercise the revised seniority list was published - Thereby, no error can be attributed to the Department in finalising the seniority list which is in consonance with the provisions of law - Such exercise cannot be called illegal or contrary to law, as the previous promotion would be regular only from the date of vacancy within the quota and not from the date of earlier promotion: High Court (Para 4-22, 28-38) - Writ Petition Dismissed : BOMBAY HIGH COURT

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