2018-TIOL-NEWS-039 Part 2, Dated: Thursday, February 15, 2018

2018-TIOL-NEWS-039 Part 2 | Thursday February 15, 2018

Dear Member,

Sending following links.

Warm Regards,
TIOL Content Team

TIOL PRIVATE LIMITED.

For assistance please call us at +91-78385-94748 or email us at helpdesk@tiol.in.

TIOL TUBE VIDEO



	Capital Gains \| The Learning Curve

DIRECT TAX


	2018-TIOL-62-SC-IT CIT Vs Tripada Education Trust Having heard the parties, the Supreme Court condoned the delay and issued notices to respective parties, directing their appearences for further hearing on the issue of "treatment of admission fees in the hands of educational trust". - Notice issued : SUPREME COURT OF INDIA 2018-TIOL-61-SC-IT PR CIT Vs Hindustan Organics Chemicals Ltd Having heard the parties, the Supreme Court condoned the delay and issued notice to respective parties directing their appearences for further hearing on the issue of "impact of inclusion of excise duty in the value of closing stock". - Notice issued : SUPREME COURT OF INDIA 2018-TIOL-287-HC-ALL-IT + Story ACIT Vs Agra Development Authority Whether mere engagement in charitable activity, is not sufficient for a trust to claim exemption on its income, unless it has been granted registration u/s 12A - YES: HC Whether such registration granted to a trust can be treated as null & void, in absence of any allegation that the registration has been obtained by practicing fraud or concealment of any material fact - NO: HC Whether when a trust is fully eligible for the registration on the date of granting such registration, then the same cannot be said to have suffered from any fundamental defect - YES: HC Whether registration u/s 12A can be cancelled with retrospective effect, so as to affect past transactions, in absence of any express legislative intent and without any adverse inference being drawn against the trust in terms of section 13(8) - NO: HC Whether receipts of income in excess of Rs.10 lakh as per proviso to sec 2(15) in one particular year, shall not be consequencial for cancellation of registration granted to a trust u/s 12AA(3) - NO: HC - Case Remanded: ALLAHABAD HIGH COURT 2018-TIOL-280-HC-AHM-IT Pr.CIT Vs Kjww Engineering India Pvt Ltd Whether penalty can be imposed for making a wrong claim for deduction, where the wrong claim was based on a bona fide belief that the conditions for making such claim were satisfied - NO: HC -Revenue's Appeal Dismissed : GUJARAT HIGH COURT 2018-TIOL-274-HC-AHM-IT Pr.CIT Vs Adani Agro Pvt Ltd Whether under any circumstances, AO can disallow administrative expenses in excess of total administrative expenditure incurred by the assessee for earning tax free income: NO: HC - Revenue's appeal dismissed: GUJARAT HIGH COURT 2018-TIOL-273-HC-MUM-IT Pr.CIT Vs Black & Veatch Constuling Pvt Ltd Whether d eduction u/s 10A has to be given at stage when profits and gains of business are computed at first instance - YES: HC - Revenue's appeal dismissed: BOMBAY HIGH COURT

INDIRECT TAX

SERVICE TAX SECTION

2018-TIOL-557-CESTAT-DEL

Ajay Enterprises Vs CC (ADJ)

ST - Real Estate Agent Service - Appellant was put to ST liability on the charges collected [transfer charges] for change of name of the owner of the property in the residential complex originally built and promoted by the appellant - appeal to CESTAT.

HELD: the tax liability against the appellant was upheld in the earlier proceedings by this Tribunal - appellant praying that the said ratio cannot be continued to apply for all time - appellant submitting that they can establish material facts to the effect that they were never acting as Real Estate Agent - the representative of revenue categorically submitting that nowhere in the appeal papers, it is clearly brought out that the appellant is owner of the residential complex, which was sold to various buyers and they continue to maintain records of the owners of the property - no such finding has been recorded anywhere - impugned order set aside and matter remanded to the Original Authority for a fresh re-look mainly to the effect as to whether there is a change in the facts of the case as pleaded by the appellant -if that be the case, after verification of the supporting evidences, the Original Authority can take a fresh decision on that basis - appeal allowed by way of remand : CESTAT [para 6, 7] - Matter remanded: DELHI CESTAT

CENTRAL EXCISE SECTION

2018-TIOL-560-CESTAT-DEL

Navom Infra Power Pvt Ltd Vs CCE & ST

CX - Appellantsare engaged in supply of various bought out items known as "BPL Kits" to provide the electricity connection to below poverty line (BPL) households – the BPL Kits comprise of various items – department demanded duty on these items – being aggrieved, appellants before CESTAT – for computation of period of 5 years which goes against the SSI exemption, department also before CESTAT.

HELD: Identical issue had come up before this Tribunal for consideration in the case of TGL Enterprises Pvt. Ltd. [Final Order No.58605-58606/2017 dated 28.12.2017] wherein the appeal filed by the assessee was allowed by holding that appellants have not manufactured any dutiable item attracting central excise levy and the appeal filed by the Revenue was dismissed – by following the same, impugned order set aside and appeal filed by the appellants allowed – appeal filed by the department is dismissed : CESTAT [para 7, 8] - Assessee appeal allowed/Department appeal dismissed : DELHI CESTAT

2018-TIOL-559-CESTAT-DEL

Jindal Saw Ltd Vs CCE & ST

CX - Appellant has various sister units andone of the sister unit is Coke Oven Plant -waste heat is transferred to the Power plant through a duct -the Power plant generates the power and supplies to its various sister units - appellant claimed that it was captively consumed but the department is of the view that extra power generated is diverted which is excisable -the department is of the view that claim of cenvat credit under Rule 6(3) of the Cenvat Credit Rules, 2004 at the rate of 5% will apply – appeal to CESTAT.

HELD: Electricity generated is consumed by the sister concerns which are producing excisable items -the issue has come up before the Tribunal in the case of Shree Cement Ltd. - 2017-TIOL-2076-CESTAT-DEL as well as in the case of Ind Synergy Ltd. - 2017-TIOL-3953-CESTAT-DEL wherein the assessees' appeals were allowed – by following Tribunal's earlier orders, impugned order set aside and appeal allowed : CESTAT [para 4, 5] - Appeal allowed : DELHI CESTAT

2018-TIOL-558-CESTAT-DEL

Ergen Plastic Industries Vs CCE

CX - Appellants engaged in the manufacture of excisable goods and availing cenvat credit of duties paid on inputs under the Cenvat Credit Rules, 2004 [Rules] -however, they opted out of Cenvat Credit Scheme w.e.f. 1.4.2007 and switched over to the exemption from duty based on the value of clearances under notification no.8/2003-CE dated 1.3.2003 as amended -as per the requirement of rule 11(2) of the CC Rules, the appellants deposited an amount equivalent to the cenvat credit (including Cess) allowed to them in respect of inputs lying in stock or in process or contained in final products lying in stock on the date of switch over - later, appellants filed refund claims, which was denied - appeal to CESTAT.

HELD: On perusal of the decisions of the Punjab & Haryana High Court in the case of CNC Commercial Ltd. - 2007-TIOL-796-HC-P&H-CX and Supreme Court in the case of Sonalac Paints & Coatings Ltd. - 2015-TIOL-77-SC-CX , it is evident that rule 11(2) as well as rule 11(3) of the Rules do not deal with a situation in which the balance in the cenvat credit is not adequate to cover the duty attributable to the inputs as well as finished products in stock on the date of opting out of Cenvat Credit Scheme - by following the decision of Punjab & Haryana High Court as well as Apex Court, there is no requirement for the appellants to pay the balance amount in cash - consequently, they will be entitled to the refund of such amount, if already paid - in the result, appellants succeed in their appeal - impugned orders are set aside and appeals are allowed : CESTAT [para 8, 9, 10] - Appeals allowed : DELHI CESTAT

CUSTOMS SECTION

NOTIFICATIONS

cnt13_2018

CBEC modifies forex conversion rates for import & export of goods

cnt12_2018

CBEC modifies tariff rates of Crude oil, Palm oil, Palmolein, Poppy Seeds, Gold & Silver

CASE LAW

2018-TIOL-556-CESTAT-DEL

CC Vs Daxen Agritech India Pvt Ltd

Cus - Dispute relates to correct classification of bulk Reishi Gano Powder, bulk Ganocelium Powder imported by the respondent -the claim of the respondent is to classify the product as Ayurvedic Proprietary Medicine under heading 30039011 - Revenue intended to classify the product as food supplement under CTH 21069099 -the Original Authority held against the respondent -on appeal, by the impugned order, the Commissioner (Appeals) held that the classification will be as claimed by the respondent under Heading 30039011 – Revenue before CESTAT - Revenue submitting that the very same products now in dispute were examined for classification by the Tribunal, Chennai in the case of DXN Manufacturing (India) Pvt. Ltd. [DXN] and it was held that the product should be classified as miscellaneous food supplement under heading 2108 of the CET, as it was existing during the relevant time -the assessee took the matter to the Supreme Court - on the direction of the Apex Court, the Tribunal decided the matter afresh vide order dated 8.11.2017, after examining all the evidences and submissions made by both the sides in detail, and concluded that the products were to be classifiable under CETH 2108.99.

HELD - The products under examination before the Bench are the same as before the Tribunal, Chennai - the only serious contention of the respondent is that the ratio of the decision by the Tribunal, Chennai will have no application to the present case -the whole thrust is on the recognition of the product by the Drug Control Authorities – on this aspect, the Tribunal has categorically recorded that a drug licence by itself cannot be the basis for classification -the second important aspect emphasised by the respondent is that the product ingredient has been recognised and listed in the authoritative granth by Ayurvedics–the Bench notes that the product is based on specific species of mushroom -the text relied by the respondent is for mushroom in general -it is a common understanding that mention of mushroom in general will not make all of them as ayurvedic medicine -the Bench notes that the impugned order distinguished the decision of the Tribunal, Chennai passed in the first round of litigation - based on the direction of the Apex Court, the Tribunal, Chennai went into the dispute in much more elaborate manner with all the evidences placed before them and this Bench has no reason to differ from the ratio and finding arrived by the Tribunal, Chennai -accordingly, following the same, the Bench holds that the impugned order has erred in classifying the product as Ayurvedic medicine and it should have been correctly classified as food supplement as pleaded by the Revenue -accordingly, impugned order is set aside -appeal by the Revenue is allowed : CESTAT [para 5, 6, 7] - Appeal allowed: DELHI CESTAT

MISC CASE

2018-TIOL-279-HC-MAD-VAT

NG Brothers Vs ACCT

Whether registration of a dealer can be cancelled without following the prescribed procedure, for not filing annual returns, when in fact the assessee filed returns electronically & even had an acknowledgment receipt - NO: HC -Assessee's Writ Petition Allowed : MADRAS HIGH COURT

2018-TIOL-272-HC-MAD-VAT

Centuary Processing Mills Vs Assistant Commissioner (CT)

Whether input tax credit can be denied to an assessee without proper examination of records or personal hearing, where notice for the same was later modified and was not responded to by the assessee - NO: HC - Assessee's Writ Petition Allowed: MADRAS HIGH COURT

FLASH NEWS

Anti-dumping duty on flat base steel wheels - India commences review proceeding

Leading Mumbai-based jeweller key suspect in PNB mega fraud case

Exports of herbal, Ayush and surgical products register positive growth