2018-TIOL-NEWS-036 Part 2, Dated: Monday, February 12, 2018

2018-TIOL-NEWS-036 Part 2 | Monday February 12, 2018

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DIRECT TAX


	2018-TIOL-54-SC-IT Sinhgad Technical Education Society Vs DCIT Having heard the parties, the Supreme Court is not inclined to interfere in the impugned order of the High Court. However, the assessee society has been left with the remedy of approaching the High Court to tender an unqualified apology and also to make the offer of payment/deposit as made before this Court. The High Court is however free to pass such order/orders as may be considered appropriate. - Assessee's SLP dismissed: SUPREME COURT OF INDIA 2018-TIOL-253-HC-AHM-IT Deloitte Haskins And Sells Vs DCIT Whether assessment framed after scrutiny can be reopened after expiry of limitation period of four years, only if there was any failure on the part of Assessee in disclosing truly and fully all material facts - YES: HC - Assessee's petition allowed: GUJARAT HIGH COURT 2018-TIOL-250-HC-MUM-IT PR CIT Vs Satara District Central Cooperative Bank Ltd On appeal, the High Court had admitted the issue on account of deleting the addition made by the AO towards voluntary retirement payments made to the staff at the time of their leaving the employment without taking into account sec 35DDA. - Revenue's appeal admitted: BOMBAY HIGH COURT 2018-TIOL-232-ITAT-AHM ITO Vs Sunflower Pharmacy Whether penalty should not be imposed when the very basis for imposing penalty has been removed and commission paid stands allowed - YES : ITAT - Revenue's appeal dismissed: AHMEDABAD ITAT 2018-TIOL-231-ITAT-MUM DCIT Vs Provogue India Ltd Whether no disallowance of expenditure u/s 14A can be made in the proceedings initiated u/s 153A in the absence of incriminating materials found during search when this issue has already been concluded on assessment u/s 143(3) originally - YES : ITAT Whether addition of 12.5% of the bogus purchase is a reasonable estimate of addition when purchases are made from grey market - YES : ITAT - Revenue's appeal dismissed: MUMBAI ITAT

INDIRECT TAX

SERVICE TAX SECTION

2018-TIOL-513-CESTAT-MAD

Villavarayar And Son Vs CCE

ST - the assessee is a partnership firm, providing CHA & Stevedoring service - Duty demand with interest & equal amount of penalty u/s 78 was raised under 'Port Services' for Stevedoring service rendered during the period of dispute - The Revenue alleged that the assessee had not paid tax for services rendered - Penalties were also raised u/s 76 & 77 - Held - The assessee did not contest duty liability, but sought remand so as to determine credit eligibility for input services used in providing Stevedoring service - Hence, matter remanded for verification of the same - Further, w.r.t. penalties, the issue of Stevedoring services being covered under 'Port Services' was unclear and in litigation and was settled later by the Tribunal - Since the matter involved interpretation of law, no penalties could be imposed - Hence all penalties set aside: CESTAT (Para 1,5,6,7) - Appeal Allowed: CHENNAI CESTAT

CENTRAL EXCISE SECTION

2018-TIOL-514-CESTAT-CHD

Saraswati Agro Chemicals India Pvt Ltd Vs CCE

CX - Assessee engaged in manufacturer of pesticides and insecticides - They were issued a SCN raising demand of duty for the period 2006-2007 to July' 2010 and another SCN also within the limitation period alleging that they have cleared final product in packets of 25Kg and have paid duty in terms of provisions of section 4 of CEA, 1944, whereas, they were required to pay duty under Section 4A of the said Act - Demand confirmed alongwith interest and penalties - Said order was challenged before Tribunal and vide its Final Order dated 02.03.2012 , Tribunal remanded the matter to the lower authorities to appreciate the assessee's contention that packages of 25kg did not require fixation of MRP in terms of Provisions of Standards of Weights and Measures Act (packaged commodities) Rules, 1977 and as such there was no requirements for payment of duty - Commissioner has denied the benefit to assessee and has again upheld the differential duties - He also upheld the invocation of extended period of limitation - Tribunal directions have not been carried out by adjudicating authority in spirit and no efforts have been made by them to find out to whether 25Kg packages sold to M/s Bayer, required affixation of MRP under Weight and Measures Act - Similarly, there is no evidence produced by Revenue that such 25kg packages are ultimately sold in retail either by assessee or by M/s Bayer Crop Sciences, thus requiring affixation of MRP - The limitation aspect has not been examined from Revenue neutrality angle - As such, impugned order set aside and matter remanded to Commissioner for fresh decision, in terms of direction contained in the earlier order of Tribunal: CESTAT - Matter remanded: CHANDIGRAH CESTAT

2018-TIOL-512-CESTAT-BANG

Maini Precision Products Pvt Ltd Vs CCE

CX - Issue is regarding refund of an amount paid in excess by assessee - The lower authorities have rejected the said refund claims on the ground of limitation - Facts are not much in dispute and the dates as stated by revenue on filing of refund claims for relevant period in question was definitely beyond the period of limitation of one year from the date of payment of duty - The provisions of section 11B of CEA, 1944 are very clear that any refund application arising for any reason, the relevant date would be the date of payment of such an amount - The plea of assessee that these debits are under mistake of law, needs to be rejected that they had paid this amount under the provisions of Rule 6 (3) of CCR, 2004 holding as the goods cleared for export as exempted - Decision on identical issue of this Tribunal in case of Prince Alloys Pvt. Ltd. 2016-TIOL-2982-CESTAT-BANG and Auto Steels is in favour of revenue - Impugned orders are correct and legal and does not require any interference: CESTAT - Appeals rejected: BANGALORE CESTAT

CUSTOMS SECTION

2018-TIOL-515-CESTAT-ALL

JP Rice Exports Pvt Ltd Vs CCE

Cus - Assessee filed Shipping Bills for export of Basmati Rice by declaring the same as "Indian Cream Sella Basmati Rice" brand name "Green Falcon" - After the let export orders were made and after drawing samples, which were sent to Basmati Export Development Foundation, Modipuram, it was found that goods were not Basmati Rice and export of the same was prohibited - Presence of other rice grain including red grain is to the extent of 43.85% when viewed in light of specifications laid down in Schedule 2 to Basmati Rice (Export) Grading and Marketing Rules, 1975, same does not confer status of Basmati Rice to the consignment in question - In view of Delhi High Court's decision in case of Orion Enterprises 2015-TIOL-1991-HC-DEL-CUS , it has to be held that said specifications are applicable and would convert the consignment into that of a Non-Basmati Rice consignment - Redemption fine is reduced from Rs. 15,00,000/- to 13,00,000/- - As regards penalty, same is already on lower side and requires no further reduction - However, keeping in view that Export Unit has been penalized by way of redemption fine as also by way of penalty, no justification found to impose a separate penalty on the director of company: CESTAT - Appeals partly allowed: ALLAHABAD CESTAT

MISC CASES


	2018-TIOL-254-HC-MUM-FEMA + Story Lalit Kumar Modi Vs Directorate Of Enforcement FEMA - The petitioner herein claimed to be a Vice President of the Board of Control of Cricket in India (BCCI) & also claimed to be the Chairperson of a council governing a cricket tournament called the Indian Premier League (IPL) - The petitioner was one of several parties who were served several SCNs by the Enforcement Directorate (ED) , based on a complaint that the petitioner made payment of an amount in USD to an entity located outside India - Such amount was equivalent to approx. Rs 243 crores - The ED also claimed that such payment was made without permission from the RBI, thus contravening Section 3(b) of the FEMA - Proceedings were issued against the petitioner and imposition of penalty was proposed - The petitioner alleged that he was denied copies of reply to the SCN filed by the other co-noticees, including the BCCI - The petitioner also claimed that other documents were provided belatedly after several requests - The petitioner also alleged that he was denied copies of statements given by officials of the BCCI - Subsequently, the petitioner's request to cross examine the persons whose statements were recorded - Hence the present writ. Held - Considered the provisions of Sections 13, 14 & 16 of the FEMA - Also considered the findings of the Apex Court in M/s. Barelilly Electricity Supply Co. Ltd. vs. The Workmen and Others - Herein, the meaning of the term 'evidence' was examined, to mean that material which has to withstand cross-examination by the person against whom it is sought to be used - A perusal of the SCNs and the complaint on which the SCNs are based, shows that the adjudicating authority expressly relies upon these statements given by the persons whose names were enlisted in the SCNs - These statements have been recorded in connection with the violations and breaches of the FEMA and its rules - They have also been recorded in connection with and have direct nexus to the IPL, which was conducted in South Africa - The persons connected with the affairs of the BCCI and others, who have given these statements, are referred to with names in the annexure - This is not a merely referred material - These statements are proposed to be expressly relied upon - If they are relied upon, then, it is incumbent upon the ED to allow the petitioner to cross-examine these persons during the course of the adjudication - Such view is echoed by the decision of thw Bombay High Court in Nirmal Seeds Private Limited vs. The Union of India and Anr. and that of the Delhi High Court in Shahid Balwa vs. The Directorate of Enforcement - Therefore, order in question set aside and opportunity of cross examination granted: High Court (Para 5-18, 38-46) - In favour of Petitioner: BOMBAY HIGH COURT 2018-TIOL-53-SC-SERVICE-LB Kudrat Sandhu Vs UoI Selection of Tribunal's Chairperson - SC approves Centre's guidelines THE Supreme Court in its significant order today, has accepted the suggessions made by Government for interim appointment of Search-cum-Selection Committee in respect of Chairman/Judicial Members and Administrative Members. Except for accepting certain modifications sought by the Attorney General under the said suggestions, that all appointments to be made in pursuance to the selection made by the interim Search-cum-Selection Committee shall abide by the conditions of service as per the old Acts and the Rules; and that all the selections made by the interim selection committee and the consequential appointment of all the selectees as Chairman/Judicial/Administrative members shall be for a period as has been provided in the old Acts and the Rules, the Apex Court directed that the same shall be made applicable for selection of the Chairpersons and the Judicial/Administrative/Technical/Expert Members for all tribunals. Hence, the suggesions that will prevail, untill the matter will be listed for further hearing after two weeks, are as follows: 1. Staying the composition of Search-cum-Selection Committee as prescribed in Column 4 of the Schedule to the Tribunal, Appellate Tribunal and Other Authorities (Qualification, experience and other conditions of service of members) Rules, 2017 both in respect of Chairman/Judicial Members and Administrative Members. A further direction to constitute an interim Search-cum-Selection Committee during the pendency of this W.P. in respect of both Judicial/Administrative members comprises that (i) Chief Justice of India or his nominee will be the Chairman, (ii) Chairman of the Central Administrative Tribunal shall be the Member, and (iii) Two Secretaries nominated by the Government of India will also be taken as Members; 2 . Appointment to the post of Chairman shall be made by nomination by the Chief Justice of India. 3. Stay the terms of office of 3 years as prescribed in Column 5 of the Schedule to the Tribunal, Appellate Tribunal and other Authorities (Qualification, experience and other conditions of service of members) Rules, 2017. A further direction fixing the term of office of all selectees by the aforementioned interim Search-cumSelection Committee and consequent appointees as 5 years. - SUPREME COURT OF INDIA

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